07-15-91 agendaS E~
HOUSING AND REDEVELOPMENT AUTHORITY
JULY 15, 1991
.7:00 P.M.
COUNCIL CHAMBERS
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF (1) REGULAR HRA MEETING OF JUNE 17, 1991;
AND (2) SPECIAL HRA MEETING OF JULY 8, 1991
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON
THE AGENDA
2. CONSIDERATION OF RESOLUTION AUTHORIZING SUBMISSION OF
APPLICATION TO HUD WHICH REQUESTS ALLOCATION OF SECTION 8
HOUSING PAYMENT ASSISTANT jZ,~e S l-~-a ~-~-
HRA LETTER N0. 22
3. CONSIDERATION OF AUTHORIZING EXECUTION OF COMPLETION
CERTIFLCATES TO MARV ANDERSON HOMES, INC. FOR EXPANDED NEW
HOME PROGRAM PROPERTIES AT 7223 AND 7145 JAMES, 1016 AND 2S [.~~
1020 MILDRED DRIVE, 6425 15TH AVENUE AND 7320 FIFTH AVENUE
HRA LETTER NO. 23
4. CONSIDERATION OF AUTHORIZATION TO IMPLEMENT EXPANDED NEW HOME
PROGRAM REVISIONS
HRA LETTER NO. 24
5. CONSIDERATION OF RESOLUTION ESTABLISHING JUST COMPENSATION
AND AUTHORIZING PURCHASE OF 7639 EMERSON AVENUE
HRA LETTER NO. 25 R`te' ~' Z (~
6. CONSIDERATION OF LEGISLATION TO EXEMPT ILN REDEVELOPMENT
PROJECT FROM PAYMENT OF FISCAL DISPARITY CONTRIBUTIONS
HRA LETTER NO. 26
7. EXECUTIVE DIRECTOR REPORT
8. CLAIMS AND PAYROLL
ADJOURNMENT
Housing and Redevelopment Authority
HRA Letter No. 26
Agenda July 15, 1991
Issue Statement:
Formulation of legislation to exempt the ILN redevelopment
project from the payment of fiscal disparity contributions.
Background•
The fiscal•disparities law was enacted by the State Legislature
in the early 1970's. It requires metropolitan area communities
to share a portion of the growth in their nonresidential tax
base. Communities share up to 40~ of that growth, the remaining
60o is retained within the community.
The majority of Richfield's growth in nonresidential tax base has
taken place within redevelopment projects. The LHN, established
in 1975, is a pre-1979 TIF and thus is exempt from paying fiscal
disparities. All the tax base growth within the project is
available for project costs. With the tax increment laws of
1979, and projects created thereafter, the exemption ended.
Nonresidential tax base growth resulting from redevelopment had
to be shared through the fiscal disparities pool. At the time a
project was established, the community either elected to
contribute the growth directly from the project, in effect making
it a project expense, or to pay the contribution from property
outside the district.
In 1985, when the ILN was established, it was decided that the
fiscal disparities contribution would come from within the
project. The context within, which this decision was made, is
important to recall. In the fall of 1985, at the same time the
Planning Commission, HRA and City Council were considering the
establishment of the ILN, CDR was executing development contracts
with minimum value agreements of approximately $70 million. The
development was programmed for the Cloverleaf site. It was
virtually undeveloped and the assistance needed by the developer
was relatively modest. There was to be ample funds available for
not only upgrading 77th Street within the ILN but also for the
fiscal disparities contribution.
In 1991, the situation is significantly different. Prospective
developers continue to express interest in the ILN. However,
that interest has consistently focused on the area between
Lyndale and Emerson Avenues, a high cost area to redevelop in
comparison to the Cloverleaf site. The costs of redeveloping the
Lyndale to Emerson Avenue area are putting Richfield at a
competitive disadvantage. It is increasingly difficult to
establish financial feasibility for developments which make sense
in todays market. There are land write down costs, 77th Street
improvement costs and fiscal disparities costs. It is hoped that
the legislation, recently adopted, will make it possible to
diminish the need for a new development to finance 77th Street
costs. It would also be desirable to remove the cost of the
fiscal disparities contribution from that which needs to be
supported by new development.
By proposing legislation during the 1992 legislative session, this
change could be made. Shifting the contribution on behalf of the ILN
to the balance of the City would significantly improve our
competitive position.
Publicorp has recently completed an analysis of the financial impact
of this proposed change. The Robert Larsen proposal was used as a
basis for the modeling. The Larsen proposal was to have a value of
$33.5 million. If the fiscal disparities contribution was shifted
from the ILN to the balance of the City, an additional estimated 57.8
million in tax increment revenue would be available over the
remaining life of the district or until the year 2012. The impact of
the availability of these additional funds on the feasibility of
redevelopment would be significant. However, the impact on
properties outside the district would be minimal. For example, the
additional taxes on a commercial property valued at $500,000 would
approximate 5125 annually. On a homesteaded property valued at
$83,000, the taxes would increase approximately $8 annually. It is
interesting to note that under the current law if this development
took place and the fiscal disparities contribution came from the
redevelopment project, taxes on an 583,000 home would increase $3.
On a $500,000 commercial building, the increase would be $39
annually. Therefore, the net impact of the change is $5 and S86
respectively for the residential and commercial examples.
Recommended Motion:
Request the City Council to support this concept by directing staff
to include this proposal in the 1992 legislative priority package.
Basis of Recommendation:
1. The cost of the fiscal disparities contribution puts
redevelopment in the ILN at a competitive disadvantage
over other sites in the market area.
2. The impact on property outside the ILN is minimal while
at the same time having a significant impact on the
feasibility of development within the district.
3. The change in project economic conditions between 1985
and 1991 vary significantly and now warrant a change in
the source of the fiscal disparity contribution.
Alternative Recommendation:
1. Delay action.
2. Reject the proposal.
Discussion/Decision Mode:
By proceeding now, there is adequate time to prepare the legislation
and work with our legislators in advance of the 1992 session.
Resp lly submitted,
Jame Prosser
Exec ive Director
JDP:ds
Housing and Redevelopment Authority
.HRA Letter No. 25
Agenda July 15, 1991
Issue Statement:
Adoption of resolution establishing just compensation and
authorizing the purchase of 7639 Emerson Avenue.
Background:
In the fall of 1985, the Interstate/Lyndale/Nicollet (ILN)
Redevelopment and Tax Increment Financing Plan (Plan) was
approved. The purpose of the Plan was to establish a long range
strategy for redevelopment of the area. The Plan, in accordance
with statutory authority, authorized the HRA to undertake site
assembly activities. An integral part of the Plan provided for
separation of the residential and commercial uses through the
upgrading of 77th Street.
The City Council has authorized the expenditure of Municipal
State Aid (MSA) revenues for purchase of property west of Lyndale
Avenue within the expanded right-of-way. MSA funds are derived
from state gasoline tax revenues. The Minnesota Department of
Transportation (MNDOT) makes the funds available to cities. The
funds may be used for a variety of activities related to
construction of new roads and maintenance of existing roads. In
this situation, the money is being used to purchase right-of-way,
and pay relocation benefits. Site clearance and road construction
will be dealt with later.
To implement the upgrading of 77th Street, it is necessary to
purchase 16 homes. To date, 15 homes have been purchased from
owners who have voluntarily indicated a desire to sell.
MNDOT rules prescribe the process to be followed when purchasing
property. The property was appraised by Ron Lachenmayer of BCL
Appraisals, Inc., a firm which has done appraisals for the HRA in
the past. A certified review appraiser, Mr. Don Hennessy,
reviewed the appraisal report and concurs with the analysis and
the value conclusion for the property. Mr. Hennessy has
recommended setting just compensation at the value indicated in
the resolution, 573,000. The property is a single family rambler
style home; wood shake exterior; about 36 years of age; partially
finished basement; three bedrooms, bath, living room and kitchen
on the first floor. The owner would also be eligible for
relocation benefits as required by State Statute and MNDOT
procedures.
Recommended Motion:
Adopt the attached resolution which sets just compensation and
authorizes staff to negotiate and purchase the property at the
value indicated. The Executive Director and HRA Chair are also
authorized to execute a purchase agreement in the amount of just
compensation.
Basis for Recommendation:
1. The property has been identified for acquisition in the
approved Plan.
2. MSA funds are available for the acquisition.
3. The owner has voluntarily indicated an interest in
receiving an offer to purchase.
4. Applicable MNDOT procedures are being followed.
Alternative Recommendation:
Not authorize negotiations and purchase.
Discussion/Decision Mode:
Respond to the owner's interest in receiving an offer to purchase
as soon as possible.
Respe 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 ESTABLISHING JUST COMPENSATION AND AUTHORIZING
PURCHASE OF REAL PROPERTY LOCATED AT
7639 EMERSON AVENUE
WHEREAS, the Richfield Housing and Redevelopment Authority
(HRA) desires to purchase certain real property pursuant to and
in furtherance of the ILN Redevelopment Project (Project)
heretofore adopted by the City of Richfield (City) and the HRA,
said real properties being described as follows:
N 75 feet of S 160 feet of W 1/2 of E 1/2 of NE 1/4 of SW 1/4 of
SE 1/4 except street (33.028 24).
WHEREAS, the HRA in and for the City of Richfield, is
authorized by Minnesota Statues Section 469.012 to acquire real
property within its area of operations; and
.WHEREAS, the Project identifies the location of this
property as the site for public improvements to be constructed by
the City; and
WHEREAS, the HRA is acquiring these properties on behalf of
the City to permit the installation of public .improvements; and
WHEREAS, the HRA has caused appraisals of the subject
properties to be made by a qualified independent professional
- real estate appraiser to determine its fair market value; and
WHEREAS, a Certified Review Appraiser has reviewed the
appraisal report, and has prepared a written report setting forth
his opinion as to fair market value; and
WHEREAS, the funds are available from the Municipal State
Aid (MSA)-made available by the State to the City.
NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and
Redevelopment Authority:
1. That dust compensation is determined to be $73,000.
2. That the Executive Director is authorized and directed to
commence negotiations for the purchase of said real property.
3. That the Chair and Executive Director are authorized to
execute a Purchase Agreement for the amount of dust
compensation set forth in this resolution.
4. That the Executive Director is hereby directed to notify in
writing the owners of subject properties as soon as possible
that the HRA intends to acquire his/her property.
5. That the conveyance of title to said real properties to the
City at the appropriate time is hereby authorized.
Passed by the Housing. and Redevelopment Authority this 15h
day of July, 1991.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary
Housing and Redevelopment Authority
HRA Letter No. 24
Agenda July 15, 1991
Issue Statement:
Authorization to implement Expanded New Home Program revisions.
Background:
At the June 17, 1991 HRA meeting, staff was authorized to modify the
program in the following ways:
® end the .exclusive relationship with Marv Anderson Homes, Inc.;
® expand program marketing efforts;
® modify program procedures to provide more flexibility in working
with builders and buyers and housing design.
The propose of these modifications is to market the remaining seven
lots owned by the HRA. These changes will also help set the stage
for additional acquisitions once the seven lots have been sold. This
letter and attachments present the proposed program modifications.
The modifications include the following:
® In accordance with the HRA action of June 17, 1991, the exclusive
relationship with Marv Anderson will end as of July 22, 1991.
Proper notice was served to terminate the contracts on the seven
lots.
~ A list of builders who will be invited to consider participation
has been prepared and is attached.
® The "Richfield Rediscovered" marketing theme previously developed
(but not implemented) has been modified for implementation under
the new program design.
In June, 1991, Sable Advertising prepared a more extensive marketing
strategy to assist Marv Anderson to sell the model homes and
inventory of lots held by the HRA which were to be sold to Marv
Anderson. However, Marv Anderson chose not to implement the program
as proposed without a financial contribution from the HRA.
The estimated cost of the initial marketing effort, from August to
November, 1991, would be 59538. However, that would be implemented
in two stages. The first phase would cost $5338. The second phase
costs $4200. The second stage would only be implemented if it
appeared to be necessary to sell the remaining seven lots. (See the
attached budget titled Marketing Program Budget.) Monies are
available from the ENHP funds to support this cost. A $500 per lot
fee to be charged to developers will help offset this cost.
The program procedures have been modified in four areas: developer
requirements, process for acquisition of substandard properties,
design guidelines, and program marketing. The changes provide an
opportunity for more developers to participate. This will increase
staff responsibility in administering the program. Staff is also now
assuming primary program marketing responsibility. To partially
offset the increased staff work, the responsibility for demolition of
substandard houses has been shifted to the builders.
The cashflow analysis by Publicorp indicates there continue to be
sufficient funds to return the principal amount of the loan borrowed
from the water and sewer funds and the LHN tax increment fund. This
assumption is based on an average annual market value increase for
each property of 2$ over the life of the district. This is the same
assumption presented in July of 1990, when funds were made available.
Recommended Motion:
Authorize staff to proceed with the revised Expanded New Home
Program, as presented at the July 15, 1991 HRA meeting and the
implementation of the advertising program in conjunction with Sable
Advertising.
Basis of Recommendation:
1. Program experience has indicated a need for the proposed
revisions.
2. A marketing strategy and revised program procedures have
been formulated and will provide the best chance of
identifying builders, locating buyers, and initiating
construction of new homes prior to the end of 1991.
3. The application of the revisions will continue to provide
an adequate cash flow.
4. Marv Anderson Homes, Inc. has been notified that the
exclusive relationship it has with the HRA will end.
Alternative Recommendation:
1. Continue working exclusively with Marv Anderson Homes, Inc.
if they would be agreeable.
2. Request staff to consider additional marketing and procedural
changes prior to implementation; returning to the HRA in
August with those changes.
Discussion/Decision Mode:
It is anticipated that revised builder solicitation would be
distributed by the end of July. Staff would report on program
progress at the August HRA meeting.
Resp ly submitted,
Jame Prosser
Execu ive Director
JDP:ds
Attachments
Initial Builder Solicitation List
Revised ENHP
Builders that have built in Richfield, past 5 years: (Source:
Building permit records)
-Okness/Tancor Construction; 1986, 1988
-Gunderson; 1986, 1987, 1989
-Marv Anderson; 1990, 1991
-Rich/Merv. Construction; 1989
-D.L. Russell Co.; 1991
-Foshen; 1987
-Rogers; 1990
-Boe; 1986
Builders that indicated an interest in participating in ENHP when
the program was developed in 1990:
-Marv Anderson Homes, Inc. -Design Craft Builders
-Dahle Bros. Inc. -Redmond Builders
-Good Value Homes, Inc. -College City Construction
-The Pemtom Company -Ken Roelofs Construction
-RSM Homes, Inc. -Allen Homes Construction
-Sunshine Construction -Dave Reimer Construction
-Parsley Builders -David William Realty and
-Tony Emmerich Construction Construction
-Timberline Custom Design -Hipp's Construction Co.
-Hansen Home Tech, Inc. -Findell Cement
Resume
Sable Advertising Systems, Inc.
Sable Advertising of Minneapolis, is a full service marketing
communications firm specializing in the areas of advertising,
marketing, and public relations. Marilyn Reites, Vice President,
Account Supervisor, and the Richfield HRA's contact, has a broad
advertising background in new home construction and specializes
in marketing/communication strategies. A partial listing of
Sable clients includes:
- Minneapolis Builders Association
- Minneapolis Gas Association
- Andersen Windows (regional ads)
- Whirlpool Appliances (regional ads)
- Minnesota Title Sketchbook
- Polaris Industries
- Marv Anderson Homes
- President Homes
[CDAdmin]ENHPRevision-Attach
Summary and Discussion of Program Marketing
Objective: A highly visible and continuous effort which
markets the buy Richfield/buy new theme of
"Richfield Rediscovered".
General Target Groups: -Move-up Buyers
-Empty Nester Buyers
-First Time Buyers
Specific Recipients: -Residents
-Realtors
-Builders
-Mall of America
-494 Hospitality Industry
-Northwest Airline
-MAC Staff
-CDP Staff
-Corporate Relocation Specialists
Specific Methods of Contact: -Promotional Signs at Building Sites
-Direct Mail
-Open House-Community Promotion
-Promotional Brochure
The specific marketing plan summary of costs, and qualifications
of Sable advertising are attached. Expanded New Home Program
funds would finance the marketing effort with partial
reimbursement through builder fees.
~®
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Ad~.~~:~r~tising Sysf~~,r~s, ltrc.
CITY OF RICHFIELD
New Hanes Marketing
July 10, 1991
2730 Nevada A,~enue FY°'~~~[h
IV'inneapo`i~, lt~`~nneso±a 55427
612-544-8588 • FAa 612 5-;-. ~_ , ?`
BACKGROUND
Richfield has always been a first-time buyer community. Just
after World War II, street after street of smaller, starter homes
was heavily developed. Today, 99.7 percent of the city is
developed.
Richfield Rediscovered, a city-sponsored new home program, was
announced and introduced last fall at an open house at the
Richfield City Hall to the residents of Richfield. The city-
sponsored program purchased selected smaller, older homes from
owners who wanted to sell. The acquired buildings were torn down
and lots were sold to Marv Anderson Homes, to construct new
single-family homes to fulfill the community's market for a "new
home buyer" within their own neighborhood.
CURRENT SITUATION
Sales are moving slower than anticipated. Seven lots need to be
sold by the city of Richfield HRA:
7129 First Avenue South
6612 Second Avenue South
6321 Humboldt Avenue South
6401 Bloomington Avenue South
6538 Bloomington Avenue South
6415 15th Avenue South
6407 15th Avenue South
CONCERNS AND NEEDS
Define the "Richfield" new home the market wants - in advertising
and signage.
Define the Richfield buyer-
Be specifying price and zeroing in on attractive financing
By type/style of home
By neighborhood - young families vs. empty nesters
OPTIONS AND RECOMMENDATIONS
Phase I
A. Increase visibility and create renewed awareness that this is
a "city-sponsored program" - show the "Richfield" home the
market wants.
News release
Display advertisements in newspaper, local and metropolitan
signage on all available home sites for sale
City of Richfield - New Homes Marketing
_ Page 2
B. PR/Ice Cream Social Open House in the Park
Create renewed awareness.
Hold the event at Veteran's Memorial Park (64th & Portland)
around 2:00; Farmers market, bike paths, playgrounds, pool --
lots of people and activity to draw upon already at location.
Free balloons (logo of Richfield Rediscovered); Free ice
cream
Displays (three easels) - showing below market financing from
the City of Richfield. and estimated costs of $85-$95,000 for
a new home; choose your own builder - location of home sites
available; some renderings and floor plans of interested
builders
Free Drawing - Registration slips can be used as a good
resource for the City of Richfield to follow up with
potential buyers; direct mail, etc.
Flyers/posters announcing event in local business'
Press release to local publications
Advertising in local community newspapers, zoned in Star
Tribune, plus small ad in Shelter section, Your City/Your
Schools (if timing appropriate)
Phase II
Direct Mail - that targets the "Richfield buyer"
A. Develop 3-fold brochure/handout/direct mail piece
Target buyers by zip code, age, income, homeowners vs.
renters. Use list for telemarketing follow-up.
Use as a brochure to give to relocation specialists/major
employers close to Richfield such as Northwest Airlines, Mega
Mall, CDP, etc.
Use as a handout to people requesting information on
locations.
Direct mail every two weeks (select zips) August through
November, as needed.
Marketing Program Budget
Activity Cost
Phase I
News releases prepare copy S 293
Community Event/Ice Cream Social 957
Site Signs (10)
Copy, layout and production 1,151
Display ad for local and Metropolitan
papers, copy and layout 1,522
Publication of ads 1,415
Sub-Total 55,338
Phase II
Direct market brochure copy and
layout, printing $2,200
Postage 2,000
Sub-Total 54,200
GRAND TOTAL 59,538
Richfield Expanded New Home Program
Summary of Modifications to the Procedural Guides
Modifications have been made in four areas: Developer
Requirements. Acquisition of Substandard Properties, Design
Guidelines, and Program Marketing.
Developer Requirements
The existing guidelines require:
- One builder be selected to develop a group of lots.
- An assessment agreement be executed with the development
agreement to establish a minimum market value for tax
purposes.
- The builder pays cash at closing for the vacant lot cost.
- The HRA is responsible for demolition.
- Preferential consideration be given to builders who have
in-fill experience, are members of the Minnesota Builders
Association and have built at least three homes a year
for the past five years.
The Guidelines have been Modified:
- The program will be open to more than one builder.
Because a builder may only build one home under the
program, it is anticipated that a number of smaller
volume builders may be interested in participating.
Builder preferential consideration has been removed.
However, standards have been retained to ensure
financial capability and product quality.
- The assessment agreement will not be required.
Agreements of this type on single family homes cause
builder and buyer resistance to participate in the
program.
- Builders will be required to pay a participation fee of
$500. This fee will be used to finance a portion of the
cost of program marketing and staff processing costs.
- Builders must have a purchase agreement with a buyer
prior to entering into a development agreement with the
HRA.
- At closing with the HRA, the builder must provide a
letter of credit in the amount of the HRA subsidy or the
vacant lot cost, which ever is greater. To obtain a
letter of credit from a lender, a builder must have a
sound credit history. The letter of credit is an
indication of a builder's financial stability in addition
to ensuring that the HRA can recover its subsidy in the
event of performance default.
- Payment of the price of the lot will be due to the HRA
upon sale of the completed property by the developer.
To protect the interest of the HRA and ensure development
performance, the development agreement will contain
provisions which favor the HRA. They remain essentially
unchanged from the development agreement used with
Marv Anderson. In the event a builder does not perform,
the HRA can repossess the property, as well as
retain the letter of credit.
- The builder will be responsible for demolition. The HRA
will provide a credit to the builder for the estimated
cost of demolition.
Acquisition Procedures for Substandard Properties
The existing guidelines require:
- Purchase agreement between HRA and a seller be entered
into only after a development agreement is executed.
- A property must be able to support a new home with a
minimum value of $110,000.
The guidelines have been modified:
- Purchase agreement with a seller will be entered into by
HRA prior to a development agreement being executed. The
purchase agreement will be contingent upon a development
agreement between HRA and a builder. The purchase
agreement will have a 90 day term. If a developer for
the property is not identified within that time, the
seller will have the option of cancelling the purchase
agreement or renewing it for another 90 day period.
- Minimum values for new homes will be determined on a case
by case basis reflecting a reuse appraisal and
neighborhood values.
Design Guidelines
Existing guidelines require:
- The home shall have a minimum of 3-4 finished bedrooms
and two bathrooms.
The guidelines have been modified to:
- Require a minimum of two finished bedrooms and easily
finished space for a third bedroom, and a minimum of one
full bathroom and a rough in for a 1/2 bath. This
modification allows more design and price flexibility.
- Emphasize that construction equipment, workers and
building materials may not enter neighboring properties.
- Require air conditioning units to be located in the back
yard rather than side yards to minimize noise disturbance
to neighbors.
- Require basement safety egress window area wells be
located in the back yard unless they can be located a
minimum of five feet from the side yard property line.
Program Marketing
Existing guidelines require:
- Marketing to be the responsibility of the builder.
The guidelines have been modified:
- The HRA assumes primary responsibility for marketing.
Program marketing will need to occur to solicit
builders and generate buyer interest.
[Housing]ENHP-Mod
[New-Home-Program]
RICHFIELD
EXPANDED NEW HOME PROGRAM
PROCEDURAL GUIDELINES
7/15/91
Table of Contents
Paae Number
Statement of Purpose ................... 1
Program Objectives ..................... 1
Definitions ............................
Data Privacy ...........................
Seller Solicitation Procedures..........
Property Selection Criteria ............
Property Evaluation Procedures .........
Acquisition Procedures .................
Developer Selection Criteria ...........
Housing Design and Site Development
Criteria ...............................
Developer Solicitation Criteria ......
Developers Selection Procedures ......
Procedures for Sale to Developers ....
Property Closing Procedures ............
Plan Review Process ....................
Procedures for Evaluation
and Demolition .........................
General Program Marketing ..............
Internal Fund Management ...............
Demolition Costs and Estimates .........
1
1
1
2
3
5
7
8
10
11
11
12
13
13
14
15
16
Richfield
Expanded New Home Program
Procedural Guidelines
Statement of Purpose
This document has been developed as a guidance tool for Program
Administration. This document should not be interpreted as
constituting any contractual agreement or liability by the City
or HRA.
Program Objectives
- Replace small lower value housing on scattered sites
throughout the City with larger, new, higher value housing
designed for families.
- Eliminate the blighting influence of substandard housing,
thus improving residential neighborhoods.
- Alleviate the shortage of standard housing for families.
These objectives will be achieved through the acquisition of
property and the development of new single family homes.
Definitions
HRA - Housing and Redevelopment Authority in and for the
City of Richfield
Voluntary Acquisition - The acquisition (purchase) of real
property which results from a voluntary proposal to sell
from an owner in response to an invitation or
solicitation for offers (seller).
Developer - Developer or Builder who has entered into a
Development Agreement with the HRA to purchase a
specific lot or lots and develop them with new single
family homes.
End Buffer - The buyer of a new house sold by a developer.
Data Privacy
All files and information which identifies property and persons
is private and cannot be released. All information secured
through the program is subject to the Data Privacy Act.
Seller Solicitation Procedures
1. HRA staff will solicit for sellers by direct mail,
advertisement, or other method. The number of
1
properties purchased will be determined by the availability
of resources and properties.
2. Sale to the HRA must be on a voluntary basis. Interested
sellers are required to respond to the HRA solicitation in
writing, with an offer indicating:
a. An interest in selling their property to the HRA.
b. A willingness to waive relocation benefits.
c. Statement of tenant interest in the property at the
time of offer.
d. Consent to the release of relevant information to
potential developers and end buyers.
3. Owners who have expressed an interest in selling must
be contacted to inform them of the estimated project time
line and solicit the required written response.
Property Selection Criteria
HRA staff will prepare property fact sheets for properties which
owners have expressed an interest in selling, and make a driveby
inspection. Properties will be evaluated based on the following
criteria. To be eligible for acquisition properties must meet
criteria #1 a, b, c or d; and #2, through #6.
1. The property is:
a. Substandard as to condition, size or usage.
b. Obsolete and faulty design for block and area in which
it is located.
c. A deteriorating factor which has caused blight to other
adjoining properties.
d. Detrimental to the safety or health of abutting
properties in the block.
2. The estimated market value of the property is within
appropriate limits established by the HRA for tax increment
feasibility. An effort will be made to provide a
geographic mix of properties.
3. The site can be developed with a single family home
within city code requirements, including zoning and
conformance with the Comprehensive Plan.
4. The property must be owner-occupied or vacant before the
owner should consider offering it to the HRA. Tenant
occupied properties will not be considered for purchase.
2
5. The relationship of the property to other projects does not
cause a negative impact on development. Other projects to
be considered are:
a) Established Commercial Redevelopment areas.
b) R-O-W improvement projects 494/35W/62nd/77th/66th/other
c) Airport noise exposure zones:
- 65 to 69 Ldn.
- 70 to 74 Ldn
d) Storm Water Flood Prevention Improvements Projects
e) Other
6. Prior to acquisition by the HRA, properties over 50 years old
must be evaluated for historical significance. This will be
accomplished by forwarding general property information
and a property photo to the Minnesota Historical Society for
review. This should be confirmed prior to signing a purchase
agreement. The HRA will not purchase property which
qualifies for the National Registry of Historical Structures.
Property Evaluation Procedures
1. Based on the above information, HRA staff will identify the
best candidates for acquisition. The following will be
considered in that evaluation:
a. Properties must be immediately available to meet the HRA
development time frame.
b. Properties with one or more of the following
characteristics should be considered first:
- lowest values
- poorest visible conditions
- located in average to better neighborhoods
c. Properties purchased should be equally distributed by
location and value through the districts when possible,
and provide a viable financial mix of properties to
support program financial requirements.
Given the above considerations, each site will be evaluated
on a case by case basis.
2. Once an offering letter is received, HRA staff will contact
the owners of the properties and arrange an inspection of the
interior for blight qualification. The following information
will also be obtained during the inspection:
3
a. Demolition information for estimating demolition credit to
builder. (See Procedures for Demolition).
b. A determination as to the existence of any hazardous
materials on the property. This includes:
- a visual inspection
- a statement from the seller regarding any knowledge
of the properties use for production, storage, deposit,
or disposal of any toxic or hazardous wastes or
substances or asbestos products whatsoever, during the
time seller owned property and prior to the date of
seller purchased property. Properties with
environmental problems or hazards may be considered if
the purchase price is reduced sufficiently to cover
increased site clearance and preparation costs.
3. If a property meets the blight test, acquisition procedures
can continue. If the blight test cannot be met, the
property cannot be considered for acquisition.
4. If a variance is required to redevelop the property, the
HRA may, at its sole discretion, chose not to acquire the
property. This determination will be made based on the
project time lines, available resources, and availability
of more desirable properties which do not require a variance.
5. If the HRA chooses to continue with the acquisition, a fee
appraisal will be ordered to determine the purchase price
of the property (to present to the seller), the reuse
value as a vacant lot, and a finished price range
for new single family construction (to present to the
developer).
The independent fee appraiser will be carefully instructed
to document in specific terms the conditions of the
property; details regarding structural condition and
floor plan. The acceptance of these conditions in the
market place should be discussed in the report. The
appraisers value judgement should reflect these conditions.
6. If the seller agrees to the purchase price and signs a
purchase agreement the property will be included in the
HRA marketing program The purchase agreement will be
contingent on•
- A purchase agreement with a builder to buv the
property.
- The completion of an Environmental Phase I Audit
indicating no evidence of hazardous waste on the
property.
4
7. A builder must be identified for acquisition procedures
to continue The builder, in turn, must have a
purchase agreement with an end buyer.
8. When a builder is identified, sellers will be asked to
provide the Abstract or RPA (as applicable) to the HRA to
facilitate the rendering of a Title Opinion. The cost
of updating the Abstract or RPA will be the sellers if a sale
occurs. If no sale occurs, the HRA will bear the entire cost
of updating the Abstract or RPA. The HRA will provide a
written receipt when receiving and returning an abstract
or RPA.
9. Legal Counsel will be responsible for having the Abstract
or RPA updated and will contact staff as quickly as possible
with an oral opinion of title. A written opinion will
follow shortly thereafter.
10. If the Title Opinion indicates the property has marketable
title, purchase procedures will continue. If the Title
Opinion does not indicate a marketable title, the HRA, at
its sole discretion, may choose not to acquire the property.
The HRA may determine remedies and evaluate their
resolution, including the additional time and expense to
provide marketable title. The HRA may proceed to correct
title deficiencies once a Purchase Agreement is executed
by the seller.
11. Simultaneously with the Title Opinion, an environmental
Phase I audit will be obtained from an independent
Environmental Engineering firm or other firm performinct
such service. If environmental hazards are found on the
site, the HRA may choose not to acquire the property.
Acquisition Procedures (Sale to HRA)
1. When a purchase price has been determined, the seller
will be informed of:
a. The purchase price
b. How the purchase price was determined.
c. If negotiations fail, and the offer is not accepted,
the HRA will not acquire the property.
2. Once a negotiated price has been reached, a purchase
agreement and "waiver of relocation payment" form
must be executed by the seller for the acquisition process to
continue. The relocation benefits which the seller agreed to
waive must be clearly explained at this time if not explained
previously.
3. The purchase agreement with the seller will have a term of 90
5
days If a developer for the property is not found within
~~ that time, the seller has the option of cancelling the
purchase agreement or renewing it for another 90 day oeriod.
4. The Richfield Planning Commission must determine whether
the acquisition and disposition of the property is in
conformance with the Richfield Comprehensive Plan. Several
properties may be simultaneously presented to the Planning
Commission for review. (This is an administrative finding
that does not require public hearing).
5. The HRA will be requested to simultaneously authorize:
a. Purchase Agreements
b. Development Agreements
c. Public Hearing of Disposition to Developer
(Agreements for several properties may be presented
to the HRA at one time).
6. Following HRA authorization of these agreements:
a. A simultaneous closing will be scheduled with the
seller, HRA and Developer.
b. Developer will be requested to provide evidence of
insurance and financial security prior to closing.
c. Seller will be requested to assemble or supply all
required documentation prior to closing.
7. The seller must be prepared to vacate the property on the
day of closing.
8. The developer shall provide, at closing, financial security
in the form of a letter of credit in the amount of the HRA
subsidy or the vacant lot cost which ever is greater, final
evidence of insurance and a certified check equal to the
estimated demolition cost. (See Procedures for Developer
Selection and Sale to Developers).
Special considerations durna the acquisition process:
a. Non-homestead vacant property will be considered for
acquisition.
b. Tenant occupied property cannot be acquired.
c. Property expenses related to maintenance, taxes, and
insurance, are not anticipated since the HRA will not
retain title to the property.
6
d. Review appraisal services may be part of the
negotiating process to determine purchase price if the
fee appraisal report values the property below the current
assessor's market value.
e. Number of acquisitions is determined by available resources
(funding and staff).
Developer Selection Criteria
Private developers will be approved by the HRA to construct new
single family homes on identified lots. Developers must meet the
following requirements:
1. Have a valid purchase agreement with an end buyer for the
lot they would like to purchase. The developer and end
buyer must sign a statement indicating that the purchase
aareement is valid and true. This statement will be
attached to the purchase aareement.
2. Provide a participation fee of 5500 paid at the time
of application, b~ a certified or cashiers check made out
to the Richfield HRA. This fee is non-refundable.
3. Provide preliminary plans, if available. Preliminary Plans
must be submitted within 30 days of application.
4. Demonstrate financial capability by:
a. A statement from a financial institution of sufficient
construction capital to complete the project; and
b. A letter of credit in the correct amount, as required
by these procedures;
c. Summarizing the financial condition of the company.
based on the most recently prepared and audited
financial statement.
5. Provide favorable references from:
a. Five satisfied customers.
b. Three major suppliers, one being the construction
lumber supplier.
c. Building Inspectors from two cities in which the
developer has constructed new housina within the
past three years.
6. Demonstrate proof of Builder's risk, comprehensive general
liability, and worker's compensation insurance coverage.
insurance as specified in Developers Agreement.
7
7. Possess H.O.W. insurance or equivalent to perform warranted
repairs required by MN State statute.
8. A_aree to the terms of the Development Agreement. A draft
copy of the aareement will be provided upon reauest. The
developer must enter into the development agreement within
30 days of application Development Agreement includes a
provision which returns the ownership of the site to the
HRA if the developer does not perform as specified.
9. Agree to complete construction within the time frame
specified in the Development Agreement. Every effort
will be made to complete construction by December 31st of
the construction year, for purposes of tax increment
capture.
Housing Desiam and Site Development Criteria
Siding materials, exterior facade presentation, roof, window,
siding and building line variability, finished landscape,
interior space function and use are all important considerations.
The development of all sites shall meet the development
objectives listed below. The guidelines were created to insure
that the homes built on the identified lots blend in with the
surrounding neighborhood and respond to specific concerns of the
HRA.
1. General:
a. Each home shall be single-family, owner occupied.
b. The value of each new home must meet or exceed the
value specified for each property in the development
agreement.
2. Site Standards:
a. The entire grounds shall be finish landscaped to be
aesthetically pleasing in all seasons. Land forms and
plants materials shall be used to define the site and
blend with adjoining property.
b. Utility meters shall be screened from street view;
locations must be specified on plans.
c. Site drainage shall be accommodated on the site so that
water is directed away from the new home and the
neighboring properties. Neighboring properties should
not be disturbed to create drainage swales.
d. Existing trees shall be preserved when possible. Care
should be taken to preserve existing root systems. A
8
tree wrap, with board reinforcement shall be used on
trees directly adjacent to active grading and
construction areas.
3.
e. -The construction site, neighboring property and
adjacent public streets shall be kept free of
construction debris at all times.
f. All air conditioning units must be located in the
rear ward of the house.
g. Egress window area well foundations must meet side
setback requirements (be a minimum of 5' from the
pro~ert~r line), or be located in the rear yard of
the house.
h. No construction workers, construction eauipment or
construction material shall enter neighborina
properties.
Building Standards:
a. Three and four bedroom homes are preferred. However,
a minimum of two finished bedrooms and easily finished
space for a third bedroom will be acceptable.
b. Two full bathrooms are preferred. However, a minimum
of one full bath and a 1/2 bath roughed-in will be
acceptable.
c. A two car garage, attached or detached, must be
provided on the site for single family detached units.
A minimum of one enclosed parking space per unit will
be required for attached single family units.
d. Exterior materials (siding, soffit, doors and windows),
should be low maintenance. Aluminum and vinyl are
preferred. Natural cedar lap is acceptable if properly
stained or painted. Hardboard panels or hardboard lap
siding, are not acceptable.
e. Unit height and mass of the new homes shall be
compatible with the scale of the surrounding
neighborhood.
f. Plans must present a balanced and pleasing distribution
of wall and window areas from all views.
g. A full basement shall be provided in the house unless
the selected design results in a split level, garden
level type of basement.
h. All building plans must have been prepared in
consultation with an Architectural Designer with a
9
minimum two year technical degree. An Architect may
also be consulted.
i. All construction must conform to the Sound Attenuation
Building Standards for properties located in 65-69
and 70-74 Ldn zones. A copy of the Sound Attenuation
Building Standards Specifications will be provided
to developers building in those zones.
Developer and End Buyer Solicitation Criteria
1. The HRA will advertise in professional publications or
newspapers, by direct mail, or other methods as deemed
appropriate, to solicit developer and end buyer interest.
The initial solicitation will include general program
information, specific properties may be identified.
2. A program information package will be available upon
request to all interested developers. The information
package will include the following:
a. Developer requirements and application, (See Developer
Selection Criteria).
b. Program summary information to include:
- Program Objectives
- Housing Design Criteria
- Plan Review Process
- Developer Selection Process
- Demolition Requirements
- Procedures for Sale to Developer
- Construction Time frame
c. Sample Development Agreement
d. Informational City Map indicating:
- School locations
- Parks
- Bus routes
e. The time frame of property availability. This is
dependent upon the seller purchase agreement with
the HRA.
f. This package may include specific property,
identification.
3. An information package containing a list of available
properties will be available upon request, to interested end
buyers The package will clearly indicate that:
10
a. Only drive by inspections can be made as the
properties are occupied and not yet owned by the HRA.
b. The time frame of property availability.
c. Purchases must be made through a qualified developer
of the buyers choice.
Developer Selection Procedures
1. Upon receipt of applications, HRA staff will evaluate
developers based on requirements set forth in the "Developer
Selection Criteria".
2. HRA staff may reject or accept proposals at its sole
discretion. Developers selected must adequately
meet the Developer Selection Criteria.
3. Lots will be made available to developers on a first come,
first serve basis If more than one builder expresses
interest in a lot or lots at the same time, a developer
will be selected by lottery Other builders will be ranked
in the order drawn, as alternates._
Procedures for Sale to Developer
1. The vacant lots will be sold to develop
value as determined by HRA staff. The
value process considers independent app
estimated finished value. The estimate
will be deducted from the lot price.
Procedures).
Hers at fair market
determination of
~raisal and the
~d cost of demolition
(See Demolition
2. A development agreement will be presented to the developer
for consideration. The development agreement is of a
standard form which includes conditions for acquisition,
demolition and development of property. The HRA will
provide recommended end values for each property.
3. The selected Developers will be required to execute
Development Agreements for each property being developed.
A purchase agreement can then be signed by the seller.
4. The following items specified in the Development Agreement
may require discussion and negotiation with the developer:
- Construction start and completion dates.
- Guaranteed minimum value of property upon completion.
- Demolition requirements.
- Design Criteria.
11
5. Following execution of Purchase Agreements by the sellers
and subsequent Development Agreements by the Developer, the
HRA will be requested to authorize:
- Purchase Agreements
- Development Agreements
- Public Hearing on disposition of property
6. Following HRA authorization of these items, a simultaneous
closing will be scheduled with the seller, HRA and developer.
7. Prior to closing, the developer will be required to provide
evidence of insurance and financial capability as identified
in the Development Agreement.
Property Closing Procedures
A simultaneous closing will take place with the seller, HRA and
developer. The HRA ownership of the property will pass to the
developer at closing. The HRA will not retain title to the
property longer than the closing meeting. The following will be
required at the closing:
1. The seller will be required to provide a Warranty
Deed to the HRA.
2. The HRA will convey the property to the developer by
Quit Claim Deed.
3. The Developer must provide evidence that all closing
agreement requirements to proceed with construction, have
been met. This includes but is not limited to insurance
documents and letters of credit. The letter of credit
will be the greater amount of the HRA net contribution
or the vacant lot cost. The letter of credit must be
from a local Minneapolis/St Paul Metropolitan Area
financial institution.
4. The developer will pay to the HRA, upon sale of the
property to the end buyer the price, as identified in
the developers agreement, of the vacant lot.
5. The HRA will prepare all statements, affidavits,
documents, and general release forms required for
closing.
6. The developer, may obtain the HRA's Environmental
Phase I Audit report for a fee of 1/2 the cost
incurred by the HRA for the report.
7. The development agreement or a promisorv note and
mortgage deed must be filed with the County immediately
after closing to ensure payment to the HRA by the
developer upon resale to the end buyer.
12
Plan Review Process
1. The following must be provided to the Building Official,
by the developer:
- Plans (2 copies)
- Land Survey (2 copies) with building elevations,
site drainage patterns and easements.
- Energy Calculations
- Any engineering plans (curb cuts, etc.) to be routed
through Building Official to the engineering division.
2. The Building Official will be asked to review plans for
structures located in the Ldn 65-69 and 70-74 for
conformance to sound attenuation building standards.
3. The Building Official will forward the plans to HRA staff
for review.
4. HRA staff will review all plans to assure conformance with
Housing Design and Site Development Criteria.
5. If any element of the plan is in conflict with the above
criteria, HRA staff will notify the Building Official. The
Building Official will notify the developer of any conflicts.
6. The developer must resubmit the revised plans for final
approval unless resolved to the satisfaction of the Building
Official by modification to original office copy of
submitted plans.
7. Each plan review by HRA staff, will be completed in a timely
manner. Review time approximates one week. Each plan
submitted will be processed individually. Upon completion
of review by the HRA, a review checklist will be signed
and attached to the plans, and the plans returned to the
Building Official.
8. At the time flans are submitted to the Building Official.
the developer will provide one set of plans to HRA staff.
HRA staff will refer the plans to the County Assessor to
make a preliminary determination of value based on plans
and amenity package.
9. Housing design and site development criteria have been
reviewed and approved by the HRA.
Procedures for Demolition of Structures
DEMOLITION•
1. The developer will be responsible for demolition and site
clearance of acQUired properties.
13
2. The HRA will provide a credit to the developer for
demolition. The amount of this credit will be estimated on
a site by site basis based on the Demolition Cost_Estimates.
(See Demolition Costs and Estimates)
3.
demolition occurs within the time frame specified in the
development agreement, the check will be returned to the
developer If demolition is not completed by the specified
date, the HRA maw, at its sole discretion retain the funds
represented by the check.
4. Demolition must occur within thirty days following the HRA
sale of the property to a developer or at such other time
as specified in the development agreement.
5. Soil corrections and compaction, if any, will be the
responsibility of the developer.
6. The sale of structures to house movers will not be
recommended based on the following:
a. The properties purchased are small and blighted,
generally not desirable to movers.
b. Movers require a minimum of 60 days following award
of bid, to remove a structure. House mover's
schedules and unanticipated weather conditions could
prolong this time. Delays cannot be accommodated
in the HRA's development schedule.
General Program Marketing
Marketing for the sale of the new homes will be the
responsibility of the HRA.
Program marketing by the HRA will include the following:
1. End Buffer Solicitation
a. The HRA will market the program to end buyers
through promotional articles, direct mail, or
other methods as deemed appropriate End buyers
may include:
- First Time buyers
- Move-up buyers
- Empty nesters
b. A marketing consultant may be used.
2. Developer solicitation.
a. The HRA will market the program to developers
by advertising in professional publications or
newspapers, by direct mail, or other methods as
deemed appropriate.
14
3. Public Promotion.
a. The HRA will periodically provide information about
the program through articles or information pieces
in the "Your City, Your Schools" publication to
promote community awareness.
b. When possible, a public open house will be held to
provide an opportunity for residents .and other
interested parties to collectively view the
finished homes.
c. Marketing through the schools.
Internal Fund Management
The program is financed with tax increment and other resources
made available to the HRA from the City. The following
conditions apply:
1) No bonds will be sold.
2) The City Council and HEtA will designate the funding sources
which will be borrowed.
3) The funds will be made available in a separate account
to be drawn as needed to cover project expenses.
4) The funds that the HRA borrows will be repaid to the City
over a 25 year period if sufficient funds are generated
through Tax Increment. Interest may be paid if the funds
generated exceed the principal amount borrowed.
5) The payment to the City from the HRA through tax increment
would be made following receipt of property tax
payments from Hennepin County.
15
DEMOLITION COSTS AND ESTIMATES:
Demolition costs may be estimated based on the following: (This
assumes a 24'x24', wood frame house, no backfill and
1990/1991 price data)
Demolition - 1 sty. house $2750
without bsmt.
- garage $ 500
Public Utility $ 550
Disconnection (sewer/water)
Well capping $ 500
Curb/gutter -0- (development expense)
Soil correction/Compaction -0- (development expense)
Private Utility -0- (utility companies
Disconnection cut lines no expense)
Adjustment will be made for the following:
- 24' x 24' x 8' basement - Add $750
- Excessive concrete - Add $850
- 1-1/2 story house - Add $500
- 2 story house - Add $750
- Out buildings (6"x8') - Add $ 50 (each)
* Demolition costs are accurate based on averages of
previous demolition work.
[HOUSING]<NEW HOME PROGRAM>
16
Housing and Redevelopment Authority
HRA Letter No.23
Agenda July 15, 1991
Issue Statement:
Authorization to issue Completion Certificate to Marv Anderson
Homes, Inc. for Expanded New Home Program properties at 7223 and
7145 James, 1016 and 1020 Mildred Drive, 6425 15th, and 7320 5th
Avenues.
Background:
The HRA authorized development of the above referenced properties
in September, 1990 by Marv Anderson Homes. An element of the
development agreement provides for the issuance of a Certificate
of Completion when construction is completed. Construction was
completed in late June, 1991. Three homes, at 7223 and 7145
James, and 7320 5th Avenues, have been sold and occupied. Three
homes, at 1020 and 1016 Mildred Drive, and 6425 15th Avenue, are
completed and available for sale. A Letter of Credit in the
amount of $111,277 was used as security to ensure performance.
Performance requires completion of construction to a minimum
value.
Recommended Motion:
Authorize the Chair and Executive Director to execute Completion
Certificates for the referenced properties in accordance with the
attached resolution.
Basis of Recommendation:
1. Construction has been completed.
2. Marv Anderson Homes, Inc. has performed in accordance with
construction agreements and requested the issuance of a
Completion Certificate and the release of the Letter of
Credit performance security.
Alternative Recommendation:
Do not issue a Certificate of Completion at this time.
Discussion/Decision Mode:
The HRA may not unreasonably withhold approval of this request.
Respectful submitted,
James Prosser
Exec t' a Director
JDP:ds
HRA RESOLUTION NO.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION RELATING TO THE ISSUANCE
OF COMPLETION CERTIFICATES FOR
EXPANDED NEW HOME PROPERTIES AT
7223 AND 7145 JAMES, 1020 AND 1016
MILDRED DRIVE, 6425 15TH AND 7320 5TH
AVENUES
WHEREAS, on September 17, 1990, the Richfield Housing and
Redevelopment Authority (HRA) and Marv Anderson Homes, Inc.
entered into contracts for construction of single family homes;
and
WHEREAS, the homes are located at 7223 James Avenue, 7145
James Avenue, 1020 Mildred Drive, 1016 Mildred Drive, 6425 15th
Avenue and 7320 5th Avenue; and
WHEREAS, the construction agreements required the
construction of homes and upon completion, the issuance of a
Completion Certificate and the release of performance security;
and
WHEREAS, staff has verified by visual inspection that
construction is completed and that performance security in the
amount of 5111,277 can be released.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield that:
1) A Completion Certificate be issued for the following
properties; 7223 James Avenue, 7145 James Avenue, 1020
Mildred Drive, 1016 Mildred Drive, 6425 15th Avenue and
7320 5th Avenue.
2. The Letter of Credit performance security be released.
Passed by the Housing and Redevelopment Authority of
Richfield this 15th day of July, 1991.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary
EXHIBIT A
FORM OF CERTIFICATE OF COMPLETION
The undersigned hereby certifies that Marv Anderson Homes,
Inc., has fully and completely complied with its obligations
under Article IV of that document entitled "Contract for Private
Development," dated between the Housing and
Redevelopment Authority in and for the City of Richfield,
Minnesota 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:
By
Its Chairperson
By
Its Executive Director
Housing and Redevelopment Authority
" HRA Letter No.22
Agenda July 15, 1991
Issue Statement:
Adoption of a resolution authorizing submission of an application
to HUD which requests an allocation of Section 8 housing payment
assistance.
Background:
HUD has recently announced the availability of a limited number
of Section 8 rent assistance vouchers on a competitive basis.
The application is due July 29, 1991.
Since late 1988 at the direction of the HRA, staff has worked in
cooperation with the area HUD office and the Metropolitan Council
HRA (Metro) to complete the transfer of the Section 8 program to
Richfield. This latest offering of units by HUD provides an
opportunity for this process to continue. To date, Richfield has
secured 208 vouchers and continues to administer a Metro HRA
certificate program with approximately 50 clients.
To fulfill the objective of complete program independence from
Metro, it would be appropriate to finalize the program transfer
and request 50 vouchers. Determinations made by HUD during the
competitive process may modify the number of units provided.
Units not needed to complete the transfer would be used by staff
to serve the waiting list of eligible persons that live and/or
work in Richfield and typically pay more than 50 percent of
income for rent.
It is anticipated that the additional workload which results from
a successful application can be handled with present staff
resources.
Recommended Motion:
Adopt the attached resolution authorizing an application and
other documentation to be submitted to HUD to secure additional
Section 8 housing assistance.
Basis for Recommendation:
1. The HRA and City Council have previously directed staff to
proceed with the establishment of an independent program.
2. Section 8 housing assistance cannot be secured from HUD
without submitting the application.
3. Officials representing HUD and Metro HRA are cooperating
in the application for and exchange of benefits to
Richfield households and it is anticipated this will
continue to occur.
4. An application, if funded, would bolster the Section 8
budget.
5. An additional 50 units would complete the transfer of
existing Metro HRA clients to the Richfield program.
Alternative Recommendation:
Direct staff to not submit the application. However, this will
prolong the time it takes to become totally independent.
Discussion/Decision Mode:
An application would be prepared and submitted by July 29, 1991,
the due date. The HRA would consider contracts for specific
dollar and unit amounts following notification of an allocation
from HUD.
Respectf lly submitted,
Ja s D. Prosser
Ex c tive Director
JDP:ds
HRA RESOLUTION N0.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION RELATING TO AUTHORIZING HOUSING
PAYMENT ASSISTANCE APPLICATION
WHEREAS, the Housing and Redevelopment Authority, in and for
the City of Richfield (Richfield HRA) has the desire and
capability to contract directly with the United States Department
of Housing and Urban Development (HUD) to provide housing
assistance in the City of Richfield; and
WHEREAS, HUD on August 2, 1988, has determined that the
Richfield HRA is legally organized under Minnesota state law; and
WHEREAS, HUD and the Metropolitan Council HRA are cooperating
in ensuring a successful transition to an independent program for
Richfield; and
WHEREAS, an allocation can be processed by HUD provided the
Richfield HRA authorizes preparation of an application and
supporting financial and administrative documents; and
WHEREAS, an application to provide housing assistance to
approximately 50 households will be prepared and submitted for
consideration.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield, that
the Executive Director is authorized to submit to the United
States Department of Housing and Urban Development, an
application and other documentation in continuing support of a
request for housing assistance payments to serve Richfield
residents.
Passed by the Housing and Redevelopment Authority of
Richfield this 15th day of July, 1991.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary