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04-17-89 agenda0 ?- • 0 HOUSING AND REDEVELOPING AUTHORITY HRA Letter No. 12 April 17, 1989 Issue Statement: Adoption of resolution approving the issuance of a Certificate of Completion, Richfield Shoppes Developers. Background: A Contract For Private Development provided for the expansion and renovation of Richfield Shoppes. The contract was dated October 26, 1983. Article IV, paragraph 4 provides for the issuance by the HRA of a Certificate of Completion at the request of the developer. The project has been completed except for the installation of a fire suppression system. (Fire Division personnel report about one-third of the space is not sprinkled). The developer has requested the Certificate because of his desire to refinance the project. Recommendation: Adopt the attached resolution approving the issuance of a Certificate of Completion subject to the developer entering into an agreement to complete the installation of the fire suppression system. Alternative Recommendation: 1) Do not adopt the resolution. 2) Adopt the resolution without requiring an agreement. Discussion/Decision Mode: The developer has requested that the Certificate be made available in a timely manner. Respectfully submitted James . Prosser Execu ve Director JDP:sae HRA RESOLUTION NO. 349 THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA AUTHORIZING EXECUTION OF A CERTIFICATE OF COMPLETION FOR RICHFIELD SHOPPES WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) entered into an Agreement with Richfield Shoppes Developers (Developer), dated October 26, 1983, pursuant to and in furtherance of the LHN Redevelopment Project heretofore adopted by the City and the HRA; and WHEREAS, the Agreement obligated the Developer to construct certain improvements to property identified in that Agreement; and WHEREAS, Article IV of the Agreement required the HRA to inspect the project and furnish the Developer with a Certificate of Completion upon completion of the construction; and WHEREAS, the Agreement establishes the form for the "Certificate of Completion in Exhibit F; and WHEREAS, Community Development and Public Safety personnel have inspected the improvements and found them to be in • accordance with the terms of the Agreement, except to the extent the agreement requires a fire suppression system as required by the State Fire Code. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: That the Chairman and Executive Director are directed to execute the Certificate of Completion and deliver same to the Developer subject to the Developer entering into an agreement with the City calling for the completion of the installation of the fire suppression system. Passed by the Housing and Redevelopment Authority of Richfield this 17th day of April, 1989. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary 10 • CERTIFICATE OF COMPLETION The undersigned hereby certifies that Richfield Shoppes Developers, a partnership consisting of Thomas DuFresne and James Lupient, general partners, has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", dated October 26, 1983, between the Housing and Redevelopment Authority in and for the City of Richfield (HRA) and Richfield Shoppes Developers (Developer), with respect to construction of the Improvements in accordance with the approved construction plans and is released and forever discharged from its obligations under such above- referenced Article. Dated: April 17, 1989 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Executive Director By Its Commission Chairperson HOUSING AND REDEVELOPMENT AUTHORITY . HRA Letter No. 11 April 17, 1989 Issue Statement: Adoption of a resolution authorizing execution of an Annual Contribution Contract (ACC) to receive Section 8 Voucher Housing Assistance Payments from the Department of Housing and Urban Development (HUD). Background: On February 21, 1989, the HRA authorized staff to request voucher renter assistance from HUD. Because of agreements with the Metropolitan Council HRA (Metro HRA), this opportunity is available to exchange Metro HRA program assistance in Richfield for Richfield assistance directly from HUD. On March 29, 1989, the HRA was notified by HUD that an allocation of housing assistance was being made available. A summary of this allocation follows: -HUD will provide $620,799 annually and $3,103,995 over 5 years for housing payment assistance to clients and administrative fees to the HRA. Approximately $76,000 of the annual amount is for administration. Metro HRA would have provided Richfield approximately $20,200 to administer 123 units. • -Approximately 123 households can be served, depending on a unit mix (37-1 bedroom, 80-2 bedroom, 6-3 bedroom) which is subject to slight adjustment with HUD. If additional 3 bedroom units were served, which appears to be useful given present client needs, the number of 2 bedroom units would be reduced. The HRA authorized its first ACC, for 59 units, in September of 1988. Staff exchanged Metro HRA Vouchers for Richfield HRA Vouchers during the month of November, 1988. The continuing exchange with a new ACC allocation would occur during a client's regular annual requalifying/renewal process. Clients due for this process in May, June, July, and August would receive a Richfield Voucher until all funds were committed. Clients not served would continue to receive Metro HRA Certificate assistance until additional allocations are available from HUD. The program configuration by August, 1989 would approximate the following: Number of Units Ty 182 180 362 Total Units With the quick program manual client file mai: longer possible. With oe of Assistance Vouchers Certificates growth, staff has ztenance and progrl the authorization Administering Entity Richfield HRA Richfield HRA on behalf of Metro HRA reached the point where 3m administration is no of this ACC, and the additional administrative revenues available, staff is finalizing • computer hardware and software needs. More information will be made available to the HRA once cost estimates are finalized. By previous actions, the Richfield HRA has authorized the Executive Director to execute administrative documents including, but not limited to, rent assistance contracts with clients, checks, financial reports, and budget documents. In authorizing a new ACC, the Executive Director would continue these administrative responsibilities. Recommended Motion: Adopt the attached resolution authorizing execution of an ACC which provides $620,799 annually and $3,103,995 over a five year period from HUD for Section 8 Voucher housing payment assistance and administrative fees. Basis of Recommendation: 1) The HRA and City Council have previously directed staff to proceed with the establishment of an independent program. 2) HUD has offered an allocation of budget authority to Richfield. 3) Officials representing HUD and Metro HRA are cooperating in the allocation to and exchange of benefits for Richfield • households. 4) The new allocation completes half of the exchange in less than one year. It was originally projected that an exchange might take two to six years. 5) Staff has the experience and resources available to receive and process the assistance in a timely manner. 6) It is financially advantageous for the HRA. Alternative Recommendation: 1) Direct staff to withdraw the application. However, this will prolong the time it takes to become independent and cause confusion at HUD and Metro HRA. Metro HRA would be provided the allocation instead. 2) Authorize and execute the ACC by the HUD imposed deadline of May 29, 1989. However, staff has already arranged the exchange from Metro HRA to Richfield HRA of approximately 25 clients for May 1 lease up. Discussion/Decision Mode: Staff will submit executed ACC if the HRA has authorized this will ensure that the program is JDP:sae n LJ and supporting documents to HUD, on April 17. This authorization operational by May 1, 1989. Respectful,ky submitted, James Prosser Execu ve Director v HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF AN ANNUAL CONTRIBUTION CONTRACT WITH THE U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WHEREAS, on March 29, 1989, the U. S. Department of Housing and Urban Development (HUD) notified the HRA that an allocation of rental assistance was being made available to Richfield; and WHEREAS, the HUD allocation will provide $620,799 annually for five years and will assist approximately 123 households; and WHEREAS, to secure the allocation, in furtherance of an independent rental assistance program in Richfield, it is necessary for the HRA and HUD to execute an Annual Contribution Contract outlining the obligations of the parties with regard to the program; and WHEREAS, the Annual Contribution Contract has been presented to the HRA by HUD and has been reviewed by the HRA staff and legal counsel; and WHEREAS, the HRA must also submit other documentation to HUD to meet HUD rental assistance program requirements. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Executive Director and Chairperson of the HRA are hereby authorized to execute the Annual Contribution Contract and supporting documents with HUD on behalf of the HRA. 2. The HRA staff is authorized to prepare the additional documentation required by HUD for participation in the rental assistance program and to submit such documentation along with the executed Annual Contribution Contract to HUD. 3. The HRA staff is authorized and directed to take any additional actions reasonably necessary to utilize the allocation in furtherance of an independent rental assistance program by the HRA. Passed this 17th day of April, 1989, by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary ?? HOUSING AND REDEVELOPMENT AUTHORITY • HRA Letter No. 10 April 17, 1989 Issue Statement: Authorization to submit a funding request to MHFA to deliver a "Local Participation Home Improvement Loan Program" in Richfield. Background: The Local Participation Program was established by MHFA in 1983. The program provides cities an opportunity to secure a set aside of state funds for home improvement. The HRA participated in this program with Richfield Bank and Trust in 1985. Staff believes that in subsequent years two occurrences reduced the usefulness of the program and lender interest: -Interest rates were more favorable in the market place so that homeowners had affordable choices besides MHFA financing. -A maximum program income limit of $35,000 did not assist moderate income homeowners that more likely would have disposable income to invest in home improvements. The 1989 program provides Richfield a unique opportunity to meet needs by: 1. Providing funds not otherwise available to stimulate housing investment at a time when interest rates are rising. 2. Serving Richfield homeowners with incomes between $27,000 and $42,300. 3. Providing the loans at an attractive below market interest rate of 9.75%. A homeowner would apply directly to a participating Richfield lender to secure these loan funds. Up to $15,000 can be secured to finance repairs as well as remodeling, updating, additions, and expansions. Current market interest rates of approximately 13.5%, have discouraged or prevented many homeowners in the stated income range from making these types of improvements. Yet staff experience also indicates that these incomes are high enough to be able to assume the additional debt. A decision by a local lender to participate with the HRA has many considerations including: lender program priorities, staffing, rehab loan program familiarity, usefulness of revenues received, and branch banking requirements. Richfield Bank and Trust (RBT) has agreed to participate with the HRA to provide home improvement loan funds. As of this writing, the amount of loan funds has not been determined. First Western and First Minnesota considered and declined participation at this • time. Loan application, processing and servicing would be handled by RBT. HRD staff would prepare and submit the MHFA program application and provide the marketing required to promote the program. Expenses, primarily staff time, would be minimal. RBT will pay a fund reservation fee of 3% of the total amount requested. The program would be available through RBT from May 1, 1989 to March 31, 1990 or until the funds are expended. Recommended Motion: Authorize staff to: 1. Submit an application to MHFA for Local Participation Program funding. 2. Coordinate program delivery with Richfield Bank and Trust and enter into program agreements with MHFA if funds are received. 3. Authorize staff to develop a public information program regarding this program. Basis of Recommendation: 1. MHFA has offered Richfield a unique Home Improvement loan program with minimal staff involvement. 2. The HRA has an opportunity to provide low-interest loan funds to moderate-income homeowners not previously eligible to receive this benefit. 3. RBT is willing to administer the program in cooperation with the HRA. Alternative Recommendation: Do not authorize staff to submit a funding application and coordinate the program with a local lender. This would prevent the opportunity to provide Home Improvement loan funds to a group of Richfield homeowners that previously could not benefit. Discussion/Decision Mode: Authorization must be received at the April 17th meeting to allow for submitting an application to MHFA on or before April 24th. submitted, RespecYDProsser James Execu irector JDP:sae • • I0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 9 April 17, 1989 Issue Statement: A public hearing has been scheduled to consider the sale of the HRA owned, Vo-Tech developed property at 6632 5th Ave. South. Background: The new construction project at 6632 5th Avenue South was authorized by the HRA in August, 1987, as a cooperative project with Vo-Tech. The project is nearing completion with sale anticipated in May. The Henderson's, a four member, income qualified family, have been identified as purchasers having met the requirements provided in Attachment A. HRA authorization to sell the property is required prior to final processing. The home is being sold for an estimated market value of $83,800. The Hendersons are making a downpayment of $5,000 and, with staff assistance, securing an MHFA mortgage at approximately 8.5%, in the amount of $62,000. The difference between the initial purchase price and the estimated market value, $16,800, is provided from the HRA as a second mortgage. Since project costs are covered in the amount provided by the Hendersons, the second mortgage accomplishes the following: 1) Makes the initial purchase affordable 2) Prevents a speculative arrangement in which the buyer might benefit from selling the home quickly. 3) Provides new housing at an initial cost significantly below the average sale price of a Richfield home which approximates $77,300. Funds received when the second mortgage is repaid are returned to the New Home Program for financing housing activities of the HRA. At a previous meeting this year, the HRA had discussed the importance of housing maintenance for completed homes. In response, staff has modified the promissory note of the second mortgage to more clearly require maintenance of the property in accordance with city standards as a condition of financing. In addition, an information manual for new homeowners, being developed by staff, will provide summary information about: -City code requirements -home maintenance and repair tips -home security and safety practices -referral to useful services. n U • The manual will be provided and reviewed with the buyer at closing. The HRA will pay up to 4 points fo: (approximately $2560) and the cost (approximately $200), at closing. contract of $52,800 will be paid. anticipated in the 1989 budget and of sale. r mortgage discounting of title insurance After closing, the Vo-Tech These costs have been will be paid by the proceeds If the family is found ineligible by the lender, although indications present no problems, the purchase agreement is void and earnest money released. Prior to sale, the HRA will have an opportunity to inspect the work during an "open house". May 15th is the anticipated open house date. Recommended Motion: Adopt the attached resolution which authorizes the disposition of the HRA owned property at 6632 5th Avenue South. Basis of Recommendation: 1. A purchaser, the Henderson family, has been identified. 2. A purchase agreement cannot be processed further by the lender prior to HRA authorization of sale. 3. A purchase agreement is necessary to obtain a firm financing commitment. 4. A public hearing notice has been published which allows the HRA to consider the sale at the April meeting. 5. The home is nearing completion. Alternative Recommendation: Do not adopt the resolution authorizing the disposition of property at 6632 5th Ave. So. This would cause a delay in the sale of the property, and increase HRA holding costs. Discussion/Decision Mode: Authorization of the sale of 6632 5th Ave. South is required at the April 17th meeting so that buyers can secure MHFA financing when mortgage funds become available in late April or early May. Respectfu y submitted, Jam Prosser Exe Vtive Director JDP:sae • NEW HOME PROGRAM ELIGIBILITY REQUIREMENTS FOR HOME BUYERS ATTACHMENT A -have a 3-6 member family (a family is defined as persons related by blood, marriage or operation of law) -be a first time home buyer; (or have not owned in 3 years) -have the following maximum annual income depending upon family size: Family Size Maximum Income 3 $29,150 4 $32,400 5 $34,450 6 $36,450 This income is 80% of the metropolitan area median income - an accepted CDBG program income level. -have the ability to pay an initial sales price of $67,000, $5,000 down, and closing costs. -indicate a willingness to be subject to a second lien by the HRA for the difference between the initial sales price and the actual value. . -j • HRA RESOLUTION NO. RESOLUTION AUTHORIZING SALE OF PROPERTY AT 6632 5TH AVENUE SOUTH WHEREAS, the Housing and Redevelopment Authority (HRA), owns certain real property located at 6632 5th Avenue South, legally described as: Lot 9, Block 2 McCutchan's Portland Avenue Park, Hennepin County WHEREAS, the HRA acquired the property so that the South Hennepin Vocational Technical Center (Vo-Tech) could construct a new single family home at 6632 5th Avenue South, to be sold by the HRA to a moderate income family; and WHEREAS, construction work is nearing completion; and WHEREAS, the Keith and Meridith Henderson family has been identified as qualified purchasers for 6632 5th Avenue South; and WHEREAS, the conditions of sale include a total sales price of $83,800, a first mortgage of $62,000 payable to the lender, a second lien of $16,800 payable to the HRA, and a $5000 downpayment; and WHEREAS, the sale of 6632 5th Avenue South must be authorized by the HRA following public hearing on the proposed disposition of the property; and WHEREAS, that hearing has been held following proper publication of notice. 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 execute the purchase agreement and other required documents so that the disposition of HRA owned property at 6632 5th Avenue South occurs as presented herein. Passed by the Housing and Redevelopment authority in and for the City of Richfield, Minnesota this 17th day of April, 1989. Thomas E. Harms, Chairman ATTEST: Joan Helmberger, Secretary