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06-18-84 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 27 Agenda of June 18, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: A Proposal to Expand Affordable Housing Opportunities: (1) Acquire 1016 West 66th Street and 901-03 Rae Drive; (2) Proceed with a Developer Selection Process; and (3) Continue Evaluating Uses for the $4 Million MHFA Housing Revenue Bond Authority Dear Commissioners: During, 1884, to assist the development of housing opportunities.., the HRA has: -applied for and secured $4 million in housing mortgage revenue bond authority from the Minnesota Housing Finance Agency (MHFA) to finance first time home buyer housing; -evaluated and deferred consideration of developing 30 to 40 units of affordable family housing at Legion Lake; -evaluated the development of 10 units of family housing at Rae Drive/66th Street; -been provided an allocation of CDBG funds which is programmed by the City Council to acquire properties for development of affordable family housing; -authorized acquisition of 9.10 West 66th Street, a site where one absentee owned house could be redeveloped for two units of family ownership housing; -authorized negotiations at 901/03 Rae Drive, a site where two absentee owned units could be redeveloped as two units of family ownership housing. -declined to purchase 1016 West 66th Street, a site where one absentee owned house and a large vacant lot could be redeveloped for four units of family ownership housing; and , -entered into a contract for the development of the Market Plaza project; a portion of the project will have 147 condominium type units for people 55 years of age and older. HRA Letter No. 27 -2- This letter discusses the relationship of these actions and recommends a future course of action. The HRA is requested at their June 18, 1g8~, meeting to determine: -how to utilize the available CDBG funds during 198; and -to develop 10 units of housing at the Rae Drive/66th Street project or to seek scattered sites throughout the community. The status of the MHFA bonding authority will also be discussed. Utlizing the CDBG Allocation: CDBG funds have been allocated for acquiring properties that can be utilized for developing family housing. Funds not expended in the next six to twelve months will be distributed to other communities. Future opportunities to secure additional funds will be hurt if Richfield loses the monies now available. Also, future funding will be reduced by federal budget cutting and community competition within Hennepin County. Approximately $370,000 of CDBG funds are now available. Most were originally budgeted for CDBG Years VII and VIII ('81-'82 and '82-'83) to acquire Lincoln Hills school. With the fate of Lincoln Hills. resolved, a portion of the funds were used to acquire g10 and g20 West 66th Street. (The funds available also included a special allocation from Hennepin County of $60.,000 to acquire the remaining properties within the Rae Drive/66th Street project). The City Council recently reprogrammed the Year-VII and VIII funds as acquisition funds for CDBG Year IX. Year IX funds must be expended by June 30, 1985 or be lost. They may not be reprogrammed to a subsequent year. However, as time passes problems arise: -the site selection, negotiations, and acquisition process require several months. Properties must be acquired voluntarily, and relocation claims for tenants often follow aquisition by 3 to ~ months. To be able to demonstrate "complete expenditure" before June 30, 1985, acquisition should be completed by the end of 198. -if the HRA does not acquire 1016 West 66th Street and 801- 03 Rae Drive, it will be necessary to advertise for owners interested in selling additional scattered site properties located thoughout Richfield and identify the sites by July -the PACAC (citizens committee to which Betty Carr is our representative), Hennepin County, and various county communities are monitoring Richfields lack of expenditure regarding property acquisition funds. The lack of expenditure could hurt negotiations with Hennepin County for a new CDBG contract which will be effective in 1885. HRA Letter No. 27 -3- Western suburban communities will point to our lack of expenditure and attempt to use that as a basis for increasing their allocation and decreasing Richfieldfs. Staff is prepared to expend the acquisition funds on Rae Drive/66th Street or on other scattered sites which would hopefully be brought to the HRA for consideration in July. The most important point is the funds must be spent as quickly as possible in the manner which provides the most family housing opportunities at the least cost per unit. The 10 units of duplex housing at Rae Drive/66th Street would cost approximately $33,000/unit in CDBG funds. A scattered site single family home project would cost approximately $50,000/unit in CDBG funds. The May 21, 1984, HRA letter No. 25 discusses the requirements tied to the use of CDBG funds: -51~ of the housing units produced from CDBG funded acquisitions must benefit persons having Section 8 qualifying annual income levels: Family Size Maximum Income 2 $20,200 3 $22,750 4 $25,300 5 $26,850 6 $28,450 -producing housing affordable to families with these income levels requires reduced construction costs, reduced interest rates, and increased monthly housing payment assistance. The Rae Drive/66th Street project is the most desirable option for expending CDBG funds in terms of time and cost. Rae Drive/66th Street Project As a result of the May 21, 1884, HRA meeting, staff was directed to: -obtain specific project development proposals; -determine developer interest and willingness to make financial contributions to the project; -address housing design issues; and, -determine the costs and timing of acquisition. Securing quality development proposals requires that an established process be followed. To bring a single developer to the HRA it would be necessary to: -identify developers that are experienced in building affordable townhouses and single family homes (the HRA has not settled on whether it would pursue townhouses HRA Letter No. 27 -4- at Rae Drive/66th Street or single family homes on scattered sites where "garage homes" presently exist) -Narrow the list of identified developers by requesting them to respond to a "request for proposals" (RFP). A developer usually responds in writing to an RFP indicating: -price range of units -amenities/options to be made available -site plan/unit plan drawings -his or her experience in developing/building residential housing -the type of financing to be utilized and the amount of the financial contribution to be made by the developer. -Staff must evaluate the proposals based on the above items as well as its conformance to a "design guide". The guide defines minimum requirements for the housing such as energy efficiency, exterior appearance, and siting requirements. This helps to ensure quality construction and visual satisfaction. If the Richfield HRA was determined to select a developer before making further decisions about a project at Rae Drive the timing would approximate the following: -June/July - Draft RFP, Design Guide -AugustlSeptember - Solicit developers, receive proposals and evaluate them -October/November - HRA evaluates proposals and selects developer Using this approach would risk the loss of the MHFA bonding authority or other mortgage assistance from MHFA that may be available for the project. It also significantly reduces the time available to staff for acquiring property utilizing CDBG funds. Developer interest is sometimes minimized when specific sites have not been identified and are not under control of the HRA. Instead of pursuing this lengthy process, staff took a different approach to provide responses to the HRA's concerns. Minneapolis, St. Paul, and Dakota County have programs underway with developers who are producing affordable housing. Approximately 55 developers are producing affordable housing in St. Paul, 40 in Minneapolis, and 12 in Dakota County (Cities of Lakeville, Rosemount, Farmington). Complete lists of the developers involved in these programs are attached to this letter. HRA Letter No. 27 -5- From the list of over 100 developers working in these areas, six were selected and interviewed during a telephone conversation. The six developers are: Duraps, Inc. Developed the market rate "Coach Homes" project in the LHN and more recently was involved in constructing 40 town homes affordable to younger families in St. Paul. George Branton Construction Co. A Bloomington firm that is building townhouses and single family homes in Lakeville. Branton Construction took second place in the Metropolitan Council "Affordable Homes Competition" for building townhouses in the $56,000 to $60,000 price range. Sherman - Boosalis A Minneapolis developer that has been building innovative affordable town- houses such as those adjacent to Interstate g~ and West Broadway Street in North Minneapolis, called "The Boardwalk". Baton Corporation A Minneapolis developer that took first place in the "Affordable Homes Competition" for building townhouses in the $60,000 to $75,000 price range in Robbinsdale. Northland Mortgage A Bloomington mortgage lending firm that is developing affordable family housing in Lakeville. Northland buys land and sells the land to builders with the potential of builder and buyer financing being secured from Northland. Orrin Thompson A Minnetonka developer constructing affordable housing in Rosemount. Four questions were asked of each developer. The questions and representative answers follow: How do your perceive Richfield as a market for family housing development: "Nicest suburban community, and absolutely good for families" (Duraps) "Excellent,... location very important" (Branton) "OK ...but have not really examined" (Sherman-Boosalis) HRA Letter No. 27 -6- "Nice area to live in ...there is a market for townhouses and scattered homes" (Northland) "Row after row of single family homes" (Orrin Thompson) *Note: Baton did not respond directly to this question Have you considered building in Richfield in the last 5 years? Why why not? "Resale good ... people like area ... location" (Duraps) "Didn't know there was any land" (Branton) "Didn't think of Richfield ... usually work in communities requesting our participation" (Baton) "Have just worked in Minneapolis ... would be interested in reviewing potential of Richfield" (Sherman - Boosalis) "Not aware there was any land" (Northland) "No ... want 20 to 30 acres" (Orrin Thompson) Would you be interested in building affordable housing units (sale price between $ 0,000 to $70,000 in Richfield? "Building townhouse units for $67,500 to $72,500 in St. Paul" (Duraps) "Very much so ... absolutely ... building units in the $58,000 to $63,000 price range now" (Branton) "Sure ... won competition for townhouses in that range" (Baton) "Yes ... we've produced housing in that price range" (Sherman - Boosalis) "Don't develop ... just sell land to builders ... but know slot of builders who could build such units and would be interested in doing it" (Northland) "Not at that price range our units (two bedroom condominiums) are selling in the $75,000 price area" (Orrin-Thompson) Often, to make a project financially feasible even with revenue bond reduced interest financing, additional project contribu- tions are required. The HRA may be able to writedown its costs HRA Letter No. 27 -7- of land acquisition as a contribution to a project. Have you had experience or an interest in providing cash or additional buy down assistance to a project if' it meant you woultl be the selected developer': "Duraps likes it ... loves working with housing revenue bond programs ... St. Paul project involves this concept" (Duraps) "Accustomed to and believe in it ... has some leeway, low overhead, wears slot of hats, so there is money available to contribute." (Branton) "Have offered similar assistance in the Minneapolis/MeKnight Housing Fund and Robbinsdale scattered site project" (Baton) "Have done 'buy downs', bought down mortgage costs, before" (Sherman - Boosalis)" "Have not had this role before because of past experience" (Northland) "Not familiar with the buy down/cash contribution" (Orrin Thompson) To provide further information regarding the marketability of housing at this location, to answer additional questions of the HRA, and briefly discuss their interest and experience in the type of project being considered at Rae Drive, Nancy Phillips of Duraps, Inc. and George Branton of George Branton Construction Company will be available at the June 18, 1984, HRA meeting. The market for affordable family housing in Richfield is strong. There appears to be ample developer interest and a willingness to build affordable housing even that which may require financial contribution from the developer. At the May 21, 1984, meeting, the HRA discussed housing design at Rae Drive/66th Street (site plan attached, Map A). The concerns about massing (location and size) would be dealt with in a design guide which developers would use in preparing a proposal. The proposed density, at approximately 8 units per acre, is only slightly above the density in single family home neighborhoods where it approximates 5 units per acre. Coach Homes is 16 units per acre. The two units under construction (g20-924 West 66th Street) are on the smallest of the parcels being considered for development. At 1,400 square feet each, the units are probably the largest which would be constructed. Thus, the buildings appear more confined on this parcel than would units on the adjacent parcels. Increasing the height of buildings along Rae Drive to three stories does not appear practical. Higher buildings often occur in condominium type structures being constructed for single and two person households. The higher units are not HRA Letter No. 27 -8- an attractive environment for family ownership housing. Because of the sloping grade along Rae Drive, it appears that two story townhouses with tuck under garage space might be desirable and appear to result in "three story units". However the design of the buildings will have to minimize height to prevent "walling off" the east portion of the development area. As mentioned in the May 21, 1984, HRA letter (No. 25), the estimated costs of acquisition, relocation and site preperation to produce 10 units of housing at Rae Drive/66th Street is $332,400 (approximately $33,000/unit). This is perhaps the way to achieve the lowest per unit cost. The estimated cost to acquire 1016 West 66th Street at this time is $92,500 (see attached Map B). This is not expected to go up because of an increase in property values or seller manipulations. Rather, the cost of the property may increase because the owner is making improvements to the property by adding a double garage. Subdvision costs would also be added should he choose to sell the vacant lot separately. Delaying acquisition may make the property more expensive for these reasons. Delaying acquisition of additional property at this site until the Vo-Tech project at 920-924 can be sold will limit the ability to secure mortgage financing using revenue bonds: Also, the expenditures of CDBG funds for future acquisition would be delayed until the end of 1984. It appears it will take until the end of 1984, to complete the units at 820-24 West 66th Street, market them, qualify the buyers, and close. The negotiations for 901/903 Rae Drive have been hindered somewhat by decisions related to the sale of 1016 West 66th Street. Mr. Elmer Nordstrom owns both parcels. Some additional delays at 801/03 have included the completion of some improvements to the property by the owner and scheduling the appraisal to fit the property owners schedule. The appraisal is now being completed and it is estimated that the value of the property will be in the $82,000 to $90,000 range. Mr. Nordstrom has suggested a sale of approximately $95,000. (The acquisition of 901-03 Rae Drive would also require relocation of two tenant households). In conclusion, alternatives that the HRA should consider regarding Rae Drive/66th Street include: 1) Acquire 1016 West 66th Street (structure and vacant lot) and 901-03 Rae Drive, and, in combination with 910 West 66th Street, develop 8 units of housing by a private developer. There appears to be developer interest in this project and it provides for the most timely expenditure of CDBG funds. 2) Acquire 901-03 Rae Drive and combine with 910 West 66th Street, remove existing structures, and contract with a HRA Letter No. 27 -9- private developer to construct four units of housing for families. An alternative scattered site would be acquired for the 1884-85 Vo-Tech project and additional scattered sites would be acquired for construction of family housing by private developers. 3) Acquire only the vacant lot at 1016 West 66th Street and develop two units of housing as part of a scattered site private developer new construction project. Vo-Tech could rehabilitate 910 West 66th Street into a two unit structure. (It is likely that existing structures at 1016 West 66th Street and 901-03 Rae Drive would remain tenant occupied properties). 4) Completion of 920-924 West 66th Street and initiation of the 1984-1985 Vo-Tech two unit rehabilitation project at g10 West 66th Street (g10 is owned by the HRA). The expenditure of CDBG funds to acquire selected scattered sites throughout the community to be privately developed then would be undertaken. Option 1 provides the best total environment for families, allows the timely expenditures of CDBG funds, and produces the largest number of units at the lowest density and least cost per unit. The results of the developer survey also support the feasibility of the project. MHFA Bonding Authority Status The three major requirements for utilizing the housing mortgage revenue bond authority in the time allotted are: 1) identifying a project which can utilize the bond revenues in a manner consistent with the original Legion Lake Portland Avenue Development Area (PADA) program proposal. The non-bond proceeds must be the same or greater than 29.82 percent. The most likely sources for these proceeds were to be tax increment, land write down, and developer contribution. 2) responding to MHFA prior to September 1, 1984 with an indication of HRA intent to issue bonds before the end of 1984. 3) amending the original housing program to describe new programs. The amendment process requires public hearings and program review by the Metropolitan Council and MHFA. The goal is to utilize this bonding authority to provide affordable housing opportunities for young first time home buyer families. As mentioned previously, the ability to issue bonds is dependent on pending Congressional action. HRA Letter No. 27 -10- Staff is presently working with bond counsel, David Kennedy, the bond underwriter, David Liddle of Dain Bosworth, and Jim Solem, Executive director of the MHFA, to determine ways to utilize the entire $4 million allocation. The most recent concept considered at a meeting was a rollover housing and new construction program. Elderly persons that desire to sell their existing Richfield homes could finance the sale of the home to a first time homebuyer using revenue bond financing. The elderly sellers would then move to the proposed Market Plaza condominiums. Approximately $3 million of the $4 million bonding authority would be used for "rollover". The other $1 million portion would be committed to financing new construction family housing at Rae Drive/66th Street or other scattered sites. Mr. Solem, who has experienced numerous new contruetion, existing housing, and rollover financing programs has cautioned staff and bond counsel that "rollover" is not advised in present economic conditions: -Congress has yet to finalize legislation regulating the issuance of revenue bonds. -If Congress does complete its task in the next few months, it forces those states and local agencies that must sell bonds based on 1984 authority (including Richfield) to enter a fluctuating bond market prone to high interest rates. -The interest rate at which the bonds are sold this fall could well be higher than the interest rate in effect at the time people are selling their homes to occupy Market Plaza many months hence. Our bond proceeds and resulting mortgage would thus be more expensive. Also, the amount of "non bond proceeds contribution" which would be applicable to the rollover concept, are questionable at this point. Although the contribution to Market Plaza in tax increment alone is approximately $5.2 million, this contribution assists the elderly development more than it does family housing opportunities. Thus, in the opinion of some, the use of the bonding authority for rollover would vary substantially from our application. It may be necessary to have the Attorney General's staff forumlate an opinion on this issue. Mr. Solem, bond .counsel and the bond underwriter all appear to agree that financing aproximately 10 units of new construction housing can occur more cost effectively in another way than utilizing a portion of the $4 million bonding authority. If the HRA surrendered its $4 million bonding authority, MHFA could, utilizing a program called "Local Participation", allocate a portion of the bonds it sells to HRA Letter No. 27 -11- finance housing state wide, to Richfield. Richfield might secure approximately 10 mortgages at favorable rates if this option is pursued. However, MHFA must also wait to issue bonds until Congress resolves the legislative issues. Mr. Solem has also indicated that before Richfield determines how to utilize its bondng authority, staff may have access to two mortgage commitments to finance the sale of 920 and 924 West 66th Street. These commitments appear to be available without surrendering our bonding authority or waiting for Congress. It is recommended that the use of the bonding authority continue to be analyzed rather than surrender it in advance of the September 1 notification deadline. Staff will pursue securing two mortgage commitments for 920 and 924 West 66th Street. Conclusions and Recommendations This letter has discussed the necessity of expending CDBG funds in a timely manner, the development alternatives at Rae Drive/66th Street and the status of the HRA's housing mortgage revenue bond authority. To achieve the goals of providing new affordable family housing opportunities, and the timely expenditure of CDBG funds, it is recommended that the HRA: 1) Adopt the attached resolution authorizing the acquisiton of 1016 West 66th Street for $92,500; 2) Reaffirm proceeding with negotiations for acquiring 901- 03 Rae Drive; and 3) Authorize staff: -to proceed with a developer selection process for a Rae drive/66th Street project that could be finalized by selection of a developer in November or early December; -to secure alternative financing for 920 and 924 West 66th Street (such as MHFA financing discussed above); and , -to continue evaluating uses for the housing mortgage revenue bond authority. HRA Letter No. 27 -12- Also, the HRA must direct the staff at the June 18, 198 meeting to either proceed with the Rae Drive affordable housing plan or proceed to identify scattered site properties appropriate for acquisition. Failure to act on one of these two choices will result in the loss of the remaining $250,000 Community Development Block Grant funds earmarked for afforable housing. The outlook for Richfield in 1985 for the new home program is fewer CDBG funds, possible as low as $50,000. Respect 1 submitted, John G. Cart fight Executive Director JCG/eja _2_ Now, Therefore, Be It Resolved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: ?hat the HRA Chairman and Executive Director. are authorized to takenecessary action to .purchase the property located at 1016 West 6bth Street for X92,500 utilizing CDBG funds. Passed by the Housing and Redevelopment Authority in and for. the City of Richfield this 18th. day of June,. 198. ATTEST: Thomas E. Harms, Chairman . ~ . Joan Helmberger, Secretary /"' 1016 __ ____ ~. ~•7 \ F O~i. ~~ ~'~'T ~~ fT MAP A `- f ~ A m m m m r O m a ~~~ ~~~ i ~' ~ ~ ~: w ~. C ~ /. x • Q z -~ s • . _ MAP B SITE Pl~AN ~~`- `o I~ 1 -~~~~ e - ~ • - ~ A a~ ~ . ~ a~ y w p s:='~ ~.z-. ,,,~ ,. • r~•-- ~~ ~ ate, ~ T ~. ~ ~ ~~ i ~~.../ ' ~~~~0~ ~ ~ i •' ~ r // ~ "`~~ • ` _~` - i • • / /.! ~.. .. p~ ~ ~RryF -~.~ ,. --- ~~ _~.:~. HRA Resolution No. Resolution Authorizing the Acquisition of 10i6 West 65th Street p. WHEREAS, the Housing and Redevelopment Authority (HRA) in and for the City of Richfield does acquire property and relocate and rehabilitate structures for residential purposes; and WHEREAS, the HRA desires to acquire the real progerty,at 1016 West 66th Street,. legally described as: Parcel 1: Lot 1., Rae Addition. Parcel.. 2: All that part of Section 28, Township. 28, ange 24 in the County of Hennepin and State of Minnesota, described as follows: towit: Beginning at a point marked- "JudiciaS Landmark: on the East and West Quarter section line of s-aid section distant 410 feet west measured along said line from the East Quarter corner of side Section ZS; thence south at right angles to said East and West Quarter section line 74.6- feet to. a point on the. original Military Reservation line, which point. i 83.5 feet southeasterly measured along said. reservation line from its intersection with the East and. West- Quarter section line of said point being, marked by a ~uonument marked: "Judicial Landmark"; thence South 790 38' West 140.14 feet to a point marked. "Judicial Landmark"; thence South 7° 10' West 115.44 •feet to a point in the traveled road.; thence.- North 7io 32' i~Test k05.09 to a point of beginning of the tract hereby to be described; thence continuing North 71° 32' West- a distance of 140.53. feet; thence North 13o East a distance of165.9 feet;. thence South 830 50' East 140.9 feet; thence South 13° West a distance of 196.1 feet to a point of beginning; and WHEREAS, the owner, Elmer Nordstrom, has offered to sell this property for $92.,500; and 'dHEREAS, the Planning Commission 'nas found the acquisition of these parcels for residential purposes to be consistent with the Comprehensive Plan; and WHEREAS, Community Development 31ock Grant (CDBG) funds will finance the acquisition of t'nese parcels. -'' DAKOTO COUNTY 1984 SINGLE FAMILY HOME MORTGAGE REVENUE BOND PROGRAM SELECTED BUILDERS/DEVELOPERS rarmington Builders/Developers Therese A. Reisinger T & J Development, Inc. 20521 Akin Road - - Farmington, MN 55024 463-8798 John A. Benedict Evergreen Investments, Inc. 20515 Akin Road Farmington, MN 55024 463-2632 Rosemount Builders/Developers Timothy T. Broback Henry Construction 3480 Upper 149th Street Rosemount, MN 55068 423-1660 Stephen J. Gergen Wind's. Crossing Company P.O. Box 83 Rosemount, MN 55068 423-2248 Steven Scott Broback Broco Contracting Company 9860 Arkansas Path Inver Grove Heights, MN 55075 454-3172 ~; J. W. Franks. Orrin Thompson Homes 1712 Hopkins Crossroad Minnetonka, MN 55343 544-7333 Lakeville Builders/Developers Ronald. C. Helmer Northland Mortgage Company 3500 West 80th Street Minneapolis, MN 55431 893-7500 Richard ~. Sloom Derrick Land Companies , 1650 She~arc+ Tower Minneapolis, MN 55426 546-2276 Joseph. M. Miller J~Seph M. Miller Construction, Inc. i 33 Cedar Avenue South Farmington, MN 55024 454-4753 April 23, 1984 .,, Jack Lankas Dior Development, Inc. P.O. Box 807 ' Lakeville, MN 55044 469-3904. Ken Larson Nationwide Realty/Creative Shelters, Inc. 14300 Nicollet Court, Suite 110 Burnsville, MN 55337 435-5050 George E. Branton George E. Branton Construct ion Company 8117 Abbott Avenue South Bloomington, MN 55431 469-3733 -2- a "~ '~ NEW DEVELOPMENTS TO BE BUILT UNDER THE PROGRAM ...STAGE. 'II HOUSING-MPLB ST . P . FUND __ - - _ _ __ ___.._ _ Saint Paul Baker. West, 7 Single Family Homes Raymond near IIniversity Contact: Ron Ankeny or Duane Rell Redevelopment Resources 645-6806 Arlington at Arundel 23 Single Family H©mes . Contact:. Kenneth Bacchus Inc.. 771-8828 Upper Afton Road near Rennard 13 Townhomes. Contact: Kenneth Bacchus. Inc. 771-8828 Winifred Street at Lafayette Road 6 Townhomes Contact: Gray Construction Inc.. 227-1475 Brown at Curtice 20 Townhomes and 3 Single Family Contact: Derrick Land Company Dick Rrier 546-22.76 George at Gorman 9 Townhomes for Mature Households Contact:. E. T. Hughes Construction 4.50-0424 or 450-0495 Como at Luther 19 Condominiums for Mature Households Contact:. Luther Place Housing Corporation 645-0371. Etna-Birmingham 60 Coach homes Contact: Gaughan and Hadd Partnership 786-6320 Sims near Hazelwood 8 Single Family Homes Contact: Hennen Construction Co. 738-254.0 Wheelock near Jackson 90 Coach homes Contact:. Trout Brook Development Co. Reith Pederson or Howard. Young 227-7667 609 Laurel, duplex 597 Holly, duplex 1244 Lincoln, duplex Contact: Justin Properties 227-9842 Minneapolis Markley Square 40 Townhomes 3500 4th Ave. So. Contact: Powderhorn Residents Group Karen Dewar Saxton 827-5527 Prairie Oaks Cooperative 16 Townhouses 26th St. and Oakland Ave.- , Contact: Powderhorn Residents. Group Karen Dewar Saxton 827-5527 2nd Avenue and Lavern Ave. So. 4 Townhomes Contact: Rainbow: Development Developers Services, Inc. 941.-1030 5th Street So. and I9th Ave. So. -- 13 Townhouses and Single Family-Homes Contact: West Bank Development Corp.,. Barb Broen 332-6910 Emerson Avenue and Lowry Avenue North 24 Condominium Units plus. 97 Condominium Units for Mature Families Contact: Bremer Way Partners. Owen Oxley 854-1447. 3805 15th Avenue South 4 Townhomes Contact: Powderhorn Community Council Julie Hiebert 827-6290 I3th Avenue So. & East 23rd St. 42 Townhomes Contact: Trucker Development°and Schwarz Weber Development Jan Koehler or Sherwin Taradash 874-6420 Scattered Locations 44 New or Renovated Homes Contact: Greater Minneapolis Metropolitan Housing Corporation Darryl Hall 529-9541 • STAGE I ~~ 26,19u HOUSING-MPLS/ST.P. FUND - SAINT PAUL BUII.DER/D£VELOPERS DEVELOPER PROJECT LOCATION DWELLING UNILL., Samson Carporatlon Field and So. Prior l0 silk !amity romae aka Progeess Realty Christk Place ~ 6 towMousea 227-73u lancer. k~e. N.& Carver of lgkhart 8 Dale Sts. a towMquses 439.9!06 N.W. Corner of Robpat d: Isabd 20 towNpuas Gray Consauetien Parcel 27 ~ 22 tewnhaees 227-2133 Winifred and vented Eroam . Design Consultants 1643 N. Dunlap itownhoipes of Mimeaota, !no 22aus3 P.7. Gaughan, Lfc. Tarahills J6 towMOUaes AI Name! (Cohanaey St. South of ldaro Ave. ) 964.7400 1603 CNistk Plus 12 towMoufes Lewis Park 7owMOmes 23 towNioufes Hannan Development, Inc. Germain Cant 17 single fimiiY Mmes 733-2340 lxu Goodrich 6 singkbmilY romes Jenks ac Bradley ~ ~ !single LamUy home Sntteted 3 single family romes Katrwth W. eaeehus, Inc. Larpanteur and Payne 13 single famUy hems 771-1121 Larpentaurand Parkway Conway between VanDykt and Haze! !1 single lamilY Mmes Durapb Ina "Pathways" 40 toamho~aa (Ruth and Bums) 20 conrbminuuat 73!.0949 T 8 W Properties,lne. Comer of Eaten and F.uclld 3 towNtaaes 644.4670:_ ' Robert A. Buittz, Jr. 461-472 Marshall Ave. 6 mwN~ams Mark C+ristenaen 443 Igkharr 1 towNpufes 297-g()46 or Karen l(ustritz 223-S37i bMson, Williams Investment Farrington St. 22 towMatsea Karen Erink between Cottage and Mlington 4g7.2111 , P di G Conteaetfng, Inc. St. Mthony dc: Prior 4 towN~otws 439-6403. • -__ =:Roy'E:&edah4 Jr;~:-_.. -- -- --_.- -- Hazelwood do Caa:_ __. _- __2 twin Mmes 694.1462 ___._._. 3 single family homes ENa)r Corp. Central YWags 34 toa+nhewes Shernwt Rutzik ' 292-3777 .. Amos Corp Otto/Mercer 11 towMOUSee 331.1000 Crown Construction Mlington St3wo1 Site ~ 9singkfamily Mmes ---...._.. 770-4394- Ames Site 4 single bmily romp Scattered Sites 2 single bmily romp Deemb Postma Rtn School Site 4 mwNwuaes 464-4277 Panama Flats Eschange d: CMsmut 16 eondominiums Len LilyMim 227-7663 Marv Anderson Scattered Sites l0 ai~k family homes ' 1g1-266!,733.7339 Nide Oavis 733 Marahall 2 condominiums 221-9133 Cres Ffotzler ~ JO Irvine Pule 2 raWominktms 227-3609 Mib Pinkerton 631 Ash1aM 2 condominiums - 227-0143 13arid Vanlandseiwot 227.9342 ar Bob Laming 7u_s27o Donovan McCain 333 !sure! 4 Condominiums Randy Schotd 227-3737 George Manderud 614 Elfelt 1 single hmUy Mme 431.0092 Morgan Nelson 610 Marshall 1 single family Mme 291-0lEl 493.x99 Dayton 3towMouses Herb isntsch Scattered Sites a single fatuity romes 122-4711 ' -' Mike Dahl Scattered Sites 9 single Lmily romp 777-2779 Brad Hokanson 317 Marshall 1 single family home 731-7700 or 926-2310 - O Vs<~2 - s u il dars e St ~ 3 singL bmitlr Mnrs ~~ 1se l v it 739.3033 or739_3623 _ . t :. ... . 3.ti. Meese ~ Larperrteur/Yfcmris l l akrgk tamih Mmes 4iistt3 g CrrMy Summit Place 7 condominiums ~ . . 2!1_0303 a 131-7973 lltomss-Dale Commtnity . 76S lsbond ... 1 single family Mme Oetebpmant Cap... • - Sendl Meetis .- . 293.3061 . Harwood Taeraoe Associates 443.469 Iglehart 10 twin Mmd Ken Hauth . 437.2111 Starling Corutnretias Co. 92 St. AlDarn 2 twin James Peter Doyk 293_1273 Ron Soderberg Laurel kKant - lE townhouses. . 4it-1930 JoMMt:Qd1Wt 4071aueel 2condom6rurms Camerm Devebpment Co. Afton tells 22 towNnwes 432.1210 t230.3601Nomingside Circle) 6 single bmRY homes Sherman 1'm. Carp , Atkwright k Nevada 22 mndomktiums 2f2.1177 Athero Conat. tr~ Mlingten k Arkwright 7 sbfgle family homes ]salt Tucei 771A704 Woodmark, kfe. MdCbtby Stftoo/ Ste 11 towMoises (DsXurik Builders) Dsva Briggs Larpenxur 6' Desoto 24 condominiums 770.9100. Kenweod Properties Case between BarcltY & Hazelwood E tewnlwtmes Val Burmaister 7 sktgb family homes 4aa-1636 and 731+7661 Pu~ ebpmmt Sfie~d Benson at Madjson 40 ca+ebminiums t 69a-0302 " Rainbow Devebpment S.W. Cana Marshall dt Xent 4 townhouses John. GauBoe. _ 339-U17 MikalFrana E27-a31 Ashland 4 towttltotass James Mlles 726.9122:. Greenspan, tnc. St. Mthany Preens 00 townhaaas Perry Bolin 1.1Jis Ave. at Seal St. in 332_3944 So. St. Mthony Rlchud Properties 739_761 Lafend Ave. 2 towtJtouses 431.0326 613 Van Buren 1 single family Mme Okl Town Restorations 216 N. Arundel 4 towadwusaa 220.3337, Bstty Krueger, 69x.2431 FA eve do Sons Hewitt, Pierce Butler dt Griggs 12 condominiums 432.9667 Dynamic Oesi;nets 302 k 304 Sidney- 2 single family Mmes Art Fretag Scattered Stes S single famlly Mmes 360.3970 P,ael Brown Snttered Std IS singlet famllY Mmes 7n_ala4 Polar Custom Btdn. Z4xx StewaR 4 single family homes Dennis Campbell 739.9332 Cardinal Flume Bidra. WIlson Ave. & Third Street l3 singlet family homes - Tom Wiener Sottered Stes 739-E033 Sirnyl7a~bar Virginia k Orange 6 townhouses John Simy 77_79 Cook 3 townhouses b34-6204 Upper Afton xJ+ool site E tewMOUSes Art Werthatner 1332-1390 Oesete - ruin Mmes 699.1994 Steve Madok 912 Laurci 1 single family Mme 291-7117` E.T. Hughes ~ 14sz Galtier, 14x: Albemarle, 4 single family Mmes 733.5793 lOxx holes. 17xs Reaney W. W.OrLeld Blair Fbuse 40 condominiums Mule Christensen ~tameriy Mgus) 297.x046 a Karen Kustritt , 22S-SS7E - *3. *4. *5. *6. 'i. c~ . ~9. 10. 11. *12. '~ 13 . *14. *16. '~17. '~I8. J . ~ZO. 21. F22. `23 . C2a . '2~. '26. ---i .r~o~~ci cu LuL~ Adams Associate Realtors (757-6400) 3642: Stinson Bivd Nc . Marv Anderson Construction{881-2561)Scattered Lots Associated Inves`anents(831-1228) ; 1611 & 1701 Glenwood Av. Barr/Nelson,Inc. {425_9399)- 28th: & Port1 and. Av .So 8th & Irving Av.No. Baton Corporation{8716823) 43rd & Wentworth Brighton. Deveiopment(922-1232) 25th « Blaisdell C & J Builders (827-6121) Scattered South Lots Curry Construction (545-8602) 4853 Camden North Cy's Building (420-3746) Scattered North Lots DeVries Builders (425-7583) Scattered north Lots DeWitt f:nterprises{544-6555} Scattered Lots Diamond Construction(872-8141) 1720 3rd Av.So. Diversified Equities(338-8572)::. 52nd « 40th Av.So. ~:.M. Durham (521-8881) 36th & Penn Av.No. Scattered Lots Estate Builders(560-5600) 36th & McY.in7ey St.NE Excel Bui7ders(432-2838) Scoattered Lots Forsythe Inyestments(789-4311) -lI1:I Fiil~re St NE Greater Minneapolis Metropolitan . -Scattered Lots Housing Corp. (339-0601) H & M Construction (224-5391) Heggemeyer Developers (884-0044) hennen Development (738-2540) Home Pride Bldrs.(478-5712) Hometown Bldrs. .(666-4505) Honeywell (870-6411) Kerwin Development (332-7383) 'Zi. Krutzig Construction{537_9382) 2G 3C 31 32 33 3a 35. 36. ;a. 39. 10 r. ~s . M2jor-Construction(542-8359} Nationwide Housing (375-1655) . Neighborhood Improvement Co. (s47-4955). . Pleasant Properties (874-0381) . Phillips Neighborhood Improvement (72.1-55.91) . Portrait Names, Inc(89r-7303) Powde-~ orn Community Council (827-3747) Powderhorn Residents'Group (348-8900) Project far Pride in Living (874-8511) P,idgewood Properties(542-9957) Sherman-Boosa7is(872-1100)- Swager Brothers (439-7810) 20th & Franklin 18.14 Hillside Scattered Lots Scattered North Lots Scattered North Lots Scattered South Lots Ni col i et Isl and- Grove Street Flats Scattered North Lots Scattered Lots 24th « Franklin 812 So. 10th St. & 92.6-930 Chicano Av. 2417 Emerson Av.So. Scattered South Lots Scattered Lots 36th & Chicago 25th & E13iot Scattered South Lots 3000 East Franklin 18th Av. N. & 4th St.N. P]ymouth & Lyndale 4th St. « 51st Av.N. of 2-5-82 still have units available. ~u must make application through the Builder/Developer., 1~ 5~ngie Famiiy « Condos I Singie Family.Home 8 Single Famiiy Homes 18 Townhouses 4 Condos 10 Single Famiiy~22 Twinho 26 Townhouses 7 Townhouses 3 Single Famiiy Homes: 1 Singie Family Home 3 Singie Family Homes 3 Singie Famiiy t-fomes S Single Famiiy Homes 18 Condos ~- 68 Condos.8 Townhouses 40 Condos « Townhouses 6 Townhouses 15 Single Famiiy Homes 4 Single Famiiy85 Twinhome: 1 Singie Famiiy Nome 22 Condos & 31 Single Family. 46 Condos 1 Singie family Nome 9 Singie Family Homes 10 Single Famiiy. Homes 2 Singie Family 8 2 Twinho~ 20 Condos & 1 Singie Famiiy 18 Condos r 6 Townhouses, 4 Twinhomes ~ 1 Singie Famiiy 6 Condos « 2 Twinhomes 40 Condos 32 Condos 9 Condos Singie Family « Townhouses 10 Single Family ~ Townhouses 30 Townhouses 30 Singie Famiiy & Townhous 25 Condos 33 Townhouses 29 Townhouses 19 Single Famiiy - STAGE I Housing Fund-Minneapolis/St, Paul Modification No. 5 The Lyndale-Hub-Nicollet Commercial Improvement Program "Amendments to the Lyndale-Hub-Nicollet Commercial Improvement Program," approved March 12, 1979 by the Housing and Redevelopment Authority, and the City Council on March 26, 1979 is hereby modified as follows: The Land Use Map, page 31, is hereby modified for the property lying between 64th and 65th Streets adjacent to the east side of Lyndale Avenue, and northwesterly of a line lying 25 feet southeasterly of the north- westerly line of Lot 18, Block 6, Lyndale Oaks Addition from multi-family to commercial or, commercial and multi-family; and, southeasterly of said southeasterly line from multi-family to commercial. 6/18/84 . ~~ ____. _~. . _. _ _.__ _~ .. _. _ ._ .. __-----~. -EMERSON AVE. _ \ ~_` ~ _- 'I ~/ ~ _ ~ ~- ~' ~ ` D ~' ~ \ it G I i ~._ s ee~ _ [~ ~ /r 1 I ~/ + C I _I \y~,y as I °s ~ ~1TT- ~~° ~ ~. ~ ~ m ~-~ \` ~ m .A _~ 9 i ~ ~_ / ' / \ ~ I I I I i ' ' ~ NARMET AV4 '. -~~ _. _. __ ~ _.._ _. - _- ANO AVL. .__. _.~.. A O fD 1 A 3 r ° D o a Z n ~ 3 ..t ~ 'C/~ (3D ~ N A o m ~ in - m o> > D a Mj W M~ C WA M T m,; ° ! T ~ ! LYNDALE /HUB / NICOLLET ~~ ~ ~ o ~~ COMMERCIAL IMPROVEMENT e ~ .; PROGRAM RICHFIELD, MN Modification No. 6 The Lyndale-Hub-Nicollet Commercial Improvement Program "Amendments to the Lyndale-Hub-Nicollet Commercial Improvement Program," approved March l2, 1979 by the Housing and Redevelopment Authority, and, the City Council on March 26, 1979 is hereby modified as follows: The Property Acquisition-Map, page 34 is hereby • modified for a portion of the property lying between 64th and 65th Streets adjacent to the east side of Lyndale Avenue generally known as 6401 - 35 Lyndale Avenue and lying northwesterly of a line lying 25 feet southeasterly of the northwesterly line of Lot 18, Block 6, Lyndale Oaks Addition as indicated on the attached map. ° 6/18/84 - 35 ~~ ~ _ __ ~ ~ A ~T'~~ ~ ~: \ y, \ ' ~ ` ~ ~ \ I ` `~ ~ C ~ ~. l /L `\. S ~ ~ ~~~ ii// ~ \``\ /, / \ ~I YC `---- J/ 'fix,; - ( y'~'' .... I i i ' I ~ ~~.`..h. ~!I ;~ ~ I ~ i i _I O oa ~~ ~~ ~_ O D 7 ~J 3 n ~ X.1 Q~ C ~ ~ ~ O A Z i~ m I o m g m D g < m O .~ ~. 1 [M[R[OM W[ ~) . ~ ~ ~ O _ ~ f ~ .. -.- - ~ ~ ji `~ ~ _ ~1 r ~' ~ _~_ ~, CD[fl[ 11Y[_ _ ` I 1 1 ~ ~' [[ _ _ _ , _ V . t[T[XT •Y[. i ; . I ~ ~ ~ / / 1 ~ ~ - L10[ICX LY[ I ~~ ~ I l T_ ~ ~' ~I ~ ~ I I i ~ I i l I i ,,l \ c -~ ~ i z ! _ _ --~ err-- ~" ~~ I I s:~- i t ~ I ~v .:a.:~::: XARRI[T AYC ' i I~~ I i ~- I I I I '~~ i I l l i ~~ [lulln .. wt. -- -i ~ ,T ICI --t i~' ,~Ili~~ /lLA[MT [K ~ ~ I ~ _ I i I I ~ i~! I ~ i I ~ ' r[afw.. ~ Mrc ,~ ' ::iii i i -~- ; ~ w[wrwwTX MI[. I I ~ ! I I ~ I I I i I !I ~ ~I ~ I I i I I I ~ '~ I~L1..~ I [lAl[O[L[ AYC - XICOLL[T AY[. - \ \ :I ~ ~ ~~ i ' I I I i ~ I i ', \\ i l._~ ~ I l i l I ~ I ~ I I ! I ~ i ~ I i i ~~ ~'1 ~_~! i I I I~r~ 1 ~ I I I I ! ~ I I i I ~ I i ~ I I LL1 i l I l i i II I ~ ~~ ~ f I I I I i. tN W[. LYNOALE /HUB / NICOLLET ~ ~ I = ~ COMMERCIAL IMPROVEMENT • PROGRAM A~cHF~EI.o, MN RESOLUTION N0. APPROVING MODIFICATIONS N0. 5 AND N0. 6 IN THE LYNDALE/HUB/NICOLLET COMMERCIAL IMPROVEMENT PROGRAM, 6401-6435 LYNDALE AVENUE SOUTH WHEREAS, the Housing and Redevelopment Authority of Richfield Minnesota (HRA) did. on October 15, 1975, approve a redevelopment plan for an urban renewal project for the "Lyndale/HublNicollet Commercial Improvement Program" (the "Plan"); and WHEREAS, -the City Council of Richfield, .Minnesota did on November 24, 1975, approve the Plan; and WHEREAS, the Plan has subsequently been amended; and WHEREAS, the Plan designated certain land uses for particular parcels; and WHEREAS, it has been determined that the land use plan for certain properties should be changed to' m-ore appropriately reflect current conditions; and WHEREAS, it has been determined that the acquisition of certain additional property described as: Lots 12, 13, 14, 15, 16, 17 and the Northwesterly ` 25' of Lot 18, Block 6, Lyndale Oaks, Hennepin. County, Minnesota is necessary to implement the Plan and to carry out the purposes of the Plan; and WHEREAS, Minnesota Statutes 462.356 require the Planning Commission's finding as to the conformance of the proposed land use modification, acquisition map modification and proposed purchase and disposition. with the Comprehensive Plan; and WHEREAS, Minnesota Statutes 462.525 Subdivision 6 requires the City Council to hold a public hearing on Plan Modifications and to approve Modifications No. 5 and No. 6; and WHEREAS, the monies for the purchase of this property are available in the L/H/N Capital Fund and from the Community Development Block Grant allocation; and WHEREAS, the property is deteriorated and blighted within the meaning of Minnesota Statutes 462.411 et seq; and WHEREAS, the HRA has caused appraisals of the subject property to be made and has carefully considered such appraisals, and recommends establishing just compensation at 644,900. -2- NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority that: 1. The Land Use Plan is hereby modified according to Modfications No. 5 which is attached as Exhibit A. 2. The Plan is hereby modified according to Modification No. 6 which is attached as Exhibit B by adding as property designated for acquisition the subject property. 3. The opinion of the Planning Commission regarding the conformance of the proposed Modifications No. 5 and No. 6 with the Comprehensive Plan is hereby requested. 4. The opinion of the Planning Commission with regards to the conformance of the proposed acquisition and disposition- to the Comprehensive Plan is hereby requested. 5. The City Council is requested to hold a public hearing on the proposed Modifications No. 5 and No. 6 and to consider the public testimony and, opinion of the Planning Commission in its deliberations and to approve the Modifications. 6. That $b~4,900 is determined to be just compensation for _._ _ _ the sub feat- real__ proper_t~. and .fixtures., __ 7. That the monies required by the HRA for the. purchase of this property are. to be made available from the L/H/N .Capital Improvement. Fund and the CDBG Economic Development fund. 8. That the Executive Director be, and hereby is authorized to effectuate the purchase of this real estate subject to opinions of the Planning Commission and approval of Modifications No. 5 and No. 6 by the City Council. Passed by the Housing and Redevelopment Authority of the City of Richfield this 18th day of June, 198. Thomas E. Harms Chairman ATTEST: Joan Helmberger Secretary HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 26 Agenda of June 18, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Acquisition of 6401-35 Lyndale Avenue Dear Commissioners: There have recently been changes in the status of this property which the HRA has previously considered for acquisition. Because of these changes, it is appropriate for the HRA to again consider purchase. In October, 1983, the HRA directed staff to iniate negotia- tions for the purchase of the property located at 6401-35 Lyndale which was owned by the estate of Mr. Opdal. On December 19, 1983, the HRA was requested to authorize purchase of the property. The basis of the purchase was $640,000 and assumption of the special assessments of $34,873• The HRA would attempt to pass the specials onto a developer. The purchase price was based on several appraisals of the property. Two HRA appraisals valued the property at $600,000 and $715,000. The estate appraisal valued the .property at $810,000 (on the premises that the building was in excellent condition, which, of course, it is not). The HRA was uncomfortable with the price especially because there was no developer. Staff was directed to contact potential developers with regard to their interest in the site and to .reduce the negotiated purchase price of the property. In March, 1984, staff indicated three developers were interested in the site; Lincoln Companies, Foxboro and Mr. Mark Ahlquist. A renegotiated acquisition price of $630,000 plus special assessments was also presented. However, staff was directed to continue to negotiate a lower price and to firm up developer interest.. HRA Letter No. 26 -2- Mark Ahlquist and his associate, Don Hedquist, appeared before the HRA in May to present their plans for redevelopment of the property. Mr. Ahlquist presented a plan for the construction of a 3-story mixed use development, including retail, office and residential units. He indicated that there would be surface and below grade parking. The proposed value of the building would be $2 - $2.5 million for the 2 stories and the below grade parking. Up to an additional $1 million could be realized from a third story of residential units. The marketability of this development is based upon Mr. Ahlquists experience with owning property and operating his business in the immediate area. Subsequently, Probate Court selected a new trustee for the estate. The Trust Department of Richfield Bank and Trust and Mr. Galen Schmick is now the estate trustee.. Mr. Ernie Lindstrom is the Trust Department Attorney. Mr. Schmick and Mr. Lindstrom met with staff, in May to discuss the HRA's interest in pursuing the acquisition of th property. Mr. Lindstrom indicated that a party had submitted a written offer to purchase the property for cash in an approximate amount of $620,000, including special assessments and all taxes. The purchaser is prepared to close in June. It seeems likely that such a buyer would make only minimum improvements in the property. However, the improvements would add value to the property even though the structure would probably not be a long term asset to the community. Staff has been negotiating with Mr. Lindstrom. Discussions have centered on $600,000 for the real estate and fixtures and assumption. of special assessments of $31,978 and second half 1984 taxes of $12,922 for a total of $644,900. The HRA would also need to provide the tenants with relocation benefits. Presently there are eleven businesses occupying the property on the basis of 30-day leases. Staff estimates a relocation cost of approximately $82,500. This figure excludes "physical changes" which has been an allowable compensible payment required by HUD regulations and state law in the past. Recent legislation passed and signed 3, 1984, makes "physical changes" no relocation benefit. (Projects in effect the new law would be governed by the contain a provision for "physical compensation). by the Governor on May longer a compensible prior to the signing of old regulations which change" relocation A financial analysis has been completed based on the negotiations. If the HRA purchased the property for $644,900 and paid relocation benefits to the tenants, and demolished the structure and incurred other typical site assembly costs and sold the land for $300,000, development valued at $1.9 million would pay for this project in 16 years. HRA Letter No. 26 -3- There are two sources of funds for this acquisition. When the purchase was first considered, the funds were to be provided by the L/H/N Capital Fund. In the interim, CDBG funds have been made available by the City Council. The Council allocated $161,243 for economic development. One of the eligible activities for the expenditure of these funds is the purchase of blighted, property. Thus, the purchase of the property could be through the expenditure of $161,243 of CDBG .funds and $483,657 from the L/H/N Capital Fund. If the HRA authorized the purchase of this property, the closing would not take place until late summer following the bond sale for the Market Plaza Project. Another consideration related to the purchase of this property is IDRB's. Mr. Ahlquist has indicated a need for this financing. Congress is currently trying to work out a solution for the use of IDRB tax exempt financing. It is difficult to project when they will resolve the issue and the nature of the resolution. Another influence on the availability of IDRB's is Chapter 582 recently adopted by the Minnesota Legislature. It contains a formula for allocating IDRB authority within the state. The Department of Energy and Economic Development is charged with administering the allocation based on a formula contained within the law. Local issuers who have issued an average of $1,000,000 per year of IDRB's in three of the last four years are classified as "entitlement" issuers which is a preferential category Richfield is in this category. In each of the years, 1980, 1981 and 1983 over $1,000,000 of IDRB's were issued. Congress is currently seriously considering allowing each state to issue up to $150 per capita per year of IDRB's. On the basis of that "cap", and the new state law, the Department of Energy and Economic Development has allocated to Richfield a total of $3,556,065 of IDRB's for 1984 and an equal amount for 1985. It will be necessary to carefully evaluate how that limited authority will be utilized in the city. To date, obligations have been issued for all projects for which a preliminary inducement resolution has been adopted except for the Market Plaza commercial center. The Market Plaza inducement resolution was adopted February 16, 1982 for $9,850,000. However, Market Plaza Corp. and E.J. Plesko anticipate seeking the issuance of about $3.5 million in obligations. These obligations would consume virtually all of our authority for one year, either 1984 or 1985. Mr. Krier of Market Plaza has indicated that if interest rates do not climb too high they would seek issuance of the obligations in 1984, assuming that Congress acts and IDRB's do become available in 1984. Thus, Mr. Ahlquist's proposal could be funded in 1985. However, if for some reason IDRB's are not available in 1984, our 1984 authority would be lost. Market Plaza would then utilize the entire 1985 allocation. In conclusion, both developers are expressing a desire for IDRB's. But both proposals cannot be funded in he same year. Thus, the Council Letter No. 26 -4- availability of IDRB~s for Mr. Ahlquist is uncertain at this time. It may be possible for him to utilize another program with favorable financing- terms, but one has not yet been identified. For the purchase of this property to occur, it will also be necessary to involve the Planning Commission and the City Council. The L/H/N Land Use Plan and Acquisition Map must be modified. The Land Use Plan indicates multi-family residential use for the site. In 1975, it was contemplated that the Lyndale Garden Center property and this parcel would be developed with apartments. The Garden Center did not relocate and this property is not suitable for exclusive development of housing units. Thus, the attached Modification No. 5 would modify the Land Use Plan by permitting commercial development or commercial and multi-family. Exclusive multi-family use would not be permitted. The commercial property immediately to the south of the Opdal property which is owned by Mr. Ahlquist is also identified on the Land Use Plan as multi-family residential. Because of the extensive rehabilitation undertaken by Mr. Ahlquist, Modification No. 5 also changes the land use of this property to commercial. Modification No. 6 would identify the Opdal property for acquisition. If the HRA would like to proceed with the purchase of this property, it should adopt Modification No. 5 and No. 6. The modifications would then be considered by the Planning Commission at their June 26, 1984, meeting together with the finding related to the acquisition and disposition of the property by the HRA. The recommendations of the Planning Commission would then be presented to the City Council. The Council could consider the matter at a public hearing during July, 1984. With a favorable response, from the City Council, the purchase could then be made. It is recommended that the HRA authorize the acquisition of this property contingent upon a favorable response from the Planning Commission and City Council and adopt the attached resolution which: 1. Adopts Modification No. 5 and No. 6 to the L/H/N Plan; 2. Requests the opinion of the Planning Commission on Modfication No. 5 and No. 6; 3. Requests the City Council to hold a public hearing and to consider the adoption of the Modifications following the hearing; 4. Establishes just compensation and authorizes purchase of the property for $644,900 with monies to be provided by the L/H/N Capital Fund and CDBG. HRA Letter No. 26 -~- If the HRA cannot act favorable upon the above recommendation, as an alternative, the staff recommends to the HRA that .this HRA letter be carried over to the next HRA agenda. .,This will allow staff additional time to: 1. Learn if Congress will act upon IDRB in the next 30 days or less; 2. Work with Mr. Ahlquist to explore alternative financing for the development; and, 3. Continue negotiations with the trustee for the Opdal property. Respectf ly submitted, John G. Cartw 'ght _ Executive Director JCG/eja HOUSING AND REDVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 25 Agenda of June 18, 1984 Housing and Redevelopment Authority Commission City of Richfield Subject: Authorization to Execute the Certificate of Completion, Lyndale Fruit and Vegetable Market, Inc. (Lyndale Garden Center.) Dear Commissioners: On March 18, 1981 a contract for Private Development (Contract) was executed between the Housing and Redevelopment Authority (HRA) and Lyndale Fruit and Vegetable Market Inc. (Developer). The contract identified all the terms and conditions which were to be met to construct a new garden center structure of approximately 45,000 square feet. The major terms and conditions which were to be met prior to providing a Certificate of Completion, Section 4.4 are as follows. -The Developer is obligated to construct a project having a minimum market value of $1,690,700 by January 2, 1982. -The Developer is to construct the improvements in accordance with the applicable ordinances and regulations. -The HRA shall convey the real estate identified in Exhibit A as Parcels 2 and 3 to the Developer via a deed in recordable form. (This is the land which has been developed with a parking tot and a portion of the outdoor merchandise display area.) -The' HRA is required to inspect the construction upon completion to determine whether such improvements were completed in accordance with the approved plans and specifications. The Community Development Department staff and the Public Safety Department staff inspected the project and found it to be in conformance with the plans approved by the Housing and Redevelopment Authority. Because of title problems, it was not possible to convey a portion ofthe property with clear title unitl December 19, 1983• Now, all of the conditions of the development contract described above have been met. HRA Letter No. 25 -2- It is recommended that the HRA adopt the attached resolution authorizing the Executive Director and Chairman to execute a Certificate of Completion for the- Lyndale Fruit and Vegetable Market, Inc. LYNDALE GARDEN CENTER 1982, 1983 AND 1984 ESTIMATED MARKET VALUES 1982 1983 1984 LAND $ 848,400 $ 873,700 $ 873,700 BUILDING $1,128,000 $1,161,700 $1,231,500 TOTAL $1,976,400 $2,035,400 $2,105,200 Respect lly submitted, John G. art fight Executive Director JCG/eja RESOLUTION N0. AUTHORIZING EXECUTION OF A CERTIFICATE OF COMPLETION FOR LYNDALE FRUIT AND VEGETABLE MARKET, INC. WHEREAS, the Housing and Redevelopment Authority entered into an Agreement with the Lyndale Fruit and Vegetable Market, Inc. (Developer) a Minnesota business corporation, dated March 18, 1981, pursuant to and in furtherance of the. L/H/N Redevelopment Project heretofore adopted by the City and the Richfield Housing and Redevelopment Authority, and, WHEREAS, the Agreement obligated the Developer to construct certain improvements to property identified in that Agreement, and WHEREAS, Section 4.4 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 other obligations of the agreement, and WHEREAS, the Agreement establishes the form for the Certificate of Completion in Exhibit F, and, WHEREAS, Community Development .and Public Safety staffs have inspected the improvements and found them to be in accordance with the terms of the Agreement. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority that. the Executive Director is directed to execute the Certificate of Completion and deliver same to the Developer. Passed by the Housing and Redevelopment Authority of Richfield this 18th day of June, 1984. Thomas E. Harms Chairman Attest: Joan Helmberger Secretary HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 24 Agenda of June 18, 1984 Housing and Redevelopment Authority Commissoners City of Richfield Subject: CDBG Contract With Hennepin County Dear Commissioners: The City of Richfield receives annual CDBG funds from Hennepin County based on law, HUD regulations and a contract with the. County. As the attached Hennepin County memo indicates, the contract expires September 30, 1984. The Hennepin County memo raises a number of issues related to contract renewal. A significant issue is point number 6, Entitlement. .Allocation Process. During the last 3 years, Richfield has received 7-8~ of the funds available to Hennepin County. The City received $299,323 in 1982 - 1983, $288,000 in 1983 - 1984, and $209,450 in 1984 - 1985. In each of those years, the HRA received $243,000 or 81~ of the city's allocation; $214,200 or 74% and $146,350 or 70~. These monies are virtually the sole source of revenue for operating the New Home Program and the Rehabilitation Loan Program for low income owner-occupants. As the memo suggests, there are several reasons for modifying the allocation process. However, one of the reasons not directly noted is that some of the communities in western Hennepin County now receive little or no funds. They are supporting a modification. It seems likely that an increase in their funding level would result in lesser funds for Richfield, especially since the total allocation to Hennepin County will decrease. A meeting of participating communities and Hennepin County staff will be held on June 18, which city staff will attend. More specific information about potential changes to the allocation formula will be presented at the June 18 HRA meeting. HRA Letter No. 24 -2- It is recommended that-the HRA direct the Executive Director to express to the City Council their concern about possible loss of future CDBG funds because of possible modifications to the allocation process and, direct the City Manager .and Executive Director to present reports from time to time to the HRA and City Council regarding the status of discussions related to the drafting of a new contract. s e tf 11 mitted, f" ~~ ~ ~~ ohn G. Ca twrigh=t I Executive D' ect'or JCG/eja .~ " ,,. ~ ~`_„T''. DATE: June 8, 1984 JUG 1I 198 ~K`t { T~; Urban Hennepi n County Communities City of Richfield• -~ HEN N EP! N FROM: Hennepi n County Office of P1 anni ng and Development URBAN HENNEPIN COUrlTY CDBG ISSUES SUBJECT: GENERAL MEETING OF PARTICIPANTS JUNE 1$, 1984 The existing Joint Cooperation Agreement. binding Hennepin County and forty-two other participating communities together as an Urban County entitled to receive funds from the federal CDBG program will reach its three-year term of effectiveness September 30,.1984. At that point each participant has the option of dropping from the program or continuing to share in its benefits. The opportunity ~s also provided for others not currently participating to join. During the last three years program changes have been initiated by HUD (most in response to legislative direction), administrative experience has uncovered some difficulties in operation and HUD has expressed concern over program progress. Furthermore, a new entitlement program (Rental Rehabilitation) and the availability of two others (Section 312 Rehab Loan Program and round three of the Rental Rehabilitation Demonstration program) have expanded the scope of CDBG participation and responsibility. It seems appropriate, therefore,. to examine these issues at this milestone in the Urban Hennepin County CDBG program and perhaps formalize how they can be dealt with effectively. Generally, HUD Has acted to increase the level of responsibility of Hennepin County as the entitlement CDBG recipient to ensure that all funded. activities are implemented in a-timely manner and consistent with local objectives and federal regulations. At the same time, the Urban Hennepin County CDBG program has striven to provide each participant with the maximum amount of flexibility in selecting local program activities and scheduiing~their implementation. This paradoxical situation, coupled with the operational issues experi- enced over the last three years, the opportunity for assessing new programs and the requirement that Urban Hennepin County be reconstituted for another three years (Federal Fiscal Years 1985, 1986, 1987) strongly suggest that a meeting of participants and potential participants be scheduled to address the status and the future of the program. Please set aside the afternoon of Monday, June 18,.1984 for such a meeting g. An agen a an of er etas s wi a mai a or receipt ater t is wee . It is envisioned that some changes may well be required in the Joint Cooperation Agreement to satisfy program continuation. How to examine and deal with the Agreement will therefore be central to the meeting. Those issues which are most obvious and have relevance to program directives and impact on the Agreement are enumerated below for preview: ~' ~' {. ;R~ ` ~ 1. Expenditure Rate `~- Currently, the unexpended funds in the Urban Hennepin County CDBG program approximate X7,000,000 or 25%~of all CDBG grants received ~ since 1975. HUD i5 currently proposing regulations limiting a grantee's fund balance to 125% of its annual entitlement, which at the present level of funding is about half of the Urban Hennepin County unexpended CDBG. For the past three years-the Urban Hennepin County program has been under increasing pressure from HUD to accelerate the expenditure rate of grant. funds and to take funding sanctions against those participants who continue to demonstrate an inability to effectively implement activities. To meet the unexpended balance ratio being proposed by HUD, the expenditure rate for Urban Hennepin County would have to increase from 73% to 84%. It is recognized that a small number of participants currently meet or exceed this expenditure rate, but the majority do not,and improvements are needed. 2. Number of Activities In terms of funded activities, a total of 339 for Years VII, VIII, and IX, and an additional 110 for Year X, Urban Hennepin County has one of the largest urban county programs in the country. The .number of program activities relates directly to the slow expenditure rate and the increasing cost of administering the program at both the community and county level and increases the 1 i abi 1 i ty of al 1 program ~parti ci pants . 3. Fund Reductions. As presented in the Year X Program Development memo of February 16, 1984, the Urban Hennepin County entitlement grant was reduced by $776,000, primarily due to the reduction in overcrowded housing units. The Year X grant amount of $2,976,000 is expected to remain constant through Year XII, although this is subject to change through national policy. When coupled with a modest inflation rate of 3% per year, the 20% grant reduction will represent approximately a 30% reduction in the value of the grant funds between 1983 and 1986 . 4. Administrative Costs The cost of administering any program is a function of mandated responsibilities,and of how many activities/participants those responsibilities must be applied to. Consistem with the national policy direction of delegating responsibility to local government, HUD is assigning more responsibility to the program grantee to ensure compliance with program requirements such as labor standards, equal opportunity, fair housing, use of minority/women business enterprises and procurement. HUD also is demanding that costs of running new programs of a community development nature be drawn from the basic CDBG. In many cases, it takes as much staff time to administer a small 02,000 - X10,000) project as a large project - ~.~,:. ~` _ f i., . ~. (550,000 - 5250,000). As program administration costs continue to increase and are charged against the grant, the actual benefit resulting from the available grant dollars decrease. 5. Program Benefit As grant funds available to address local housing and community development needs decrease, there is increasing pressure from compe- ting demands and a need to establish priorities for use of the available resources. The quality and appropriateness of each activity proposed for funding needs to be examined in terms of who is benefitting--the city budget or low and moderate income persons. Although the HUD grant review and approval process has changed, the question of appropriateness will continue to be a major thrust in monitoring and auditing of the program by HUD and others. 6. Entitlement Allocation Process Since 1975, the annual. Urban Hennepin County CD8G entitlement has been distributed between the participant communities based on the Joint Cooperation Agreement which provides the county with a fixed percentage of the basic grant (currently ZO%) and allocates the remainder to other participants based upon a three factor formula. This allocation process was adopted to expedite distribution of the grant and provide a fair means of allocation consistent with the formula used by HUD. Based on recent comments by HUD, the four Planning Area Citizen Advisory Committees and several participant communities concerning the allocation process and the generally slow expenditure of funds, it appears there is a cause-and effect relationship. The. allocation process should therefore be looked at for possible change to help improve the expenditure rate and better satisfy program objectives. The. following potential options are presented to stimulate thought and serve as a basis for discussion: -- Continue to utilize the current grant allocation process. -- Use the existing formula to determine Planning Area funding allocations for which corrnnunities within each Planning Area could apply. The Planning Area Citizen Advisory Committee would review all applications. Based upon their review of each activity, .the committee would submit a prioritized funding schedule to the County Board for approval. -- Operate the program in a manner similar to the State of Minnesota Small Cities Development Program, where each participant community may apply for up to 20% of the annual grant amount. A11 appli- cations would be reviewed against program objectives and approved by the County Board upon PACAC recommendation. -- Use the existing distribution process, then adjust participant communities' planning allocation based on a comparison of its expenditure rate for the grant funds against the overall Urban ;:Y ~ f f~ A`~~..4 s~. Hennepin County expenditure rate. -- Provide each participant community with a basic grant equal to fifty percent of the allocation provided for through the existing formula. The remaining amount is to be distributed based on expenditure rate performance. •' -- Operate a totally discretio-nary program in which all project proposals would be judged against the Urban Hennepin Covnty Statement of Objectives and previous performance utilizing a numerical rating system.. Any questions, comments or additions can be directed to your planning representative. Remember the 18th, the meeting looms important and interesting . mlg 4