03-19-84 agendaHOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 14
Agenda March 19, 1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Authorization to Purchase g10 and 1016 West Street
Dear Commissioners:
This letter discusses the multi-year housing project at Rae Drive and 66th
Street. It requests the HRA to authorize the purchase of two additional
properties and reports on the status of negotiations regarding a third parcel.
During the summer of 1983, Dr. David Elasky, the owner of 910 West. 66th
Street, sought to have his property rezoned from residential to commercial
use._ He wished to locate a dental office there. There was strong negative
reaction from the neighborhood. The neighbors requested the assistance of the
HRA. The HRA directed the staff to examine alternatives which would strengthen
the residential. character of the block bounded by 66th Street, Rae Drive and
the Coach Homes Condominiums, and depicted on the attached map marked Site Plan
A.
To strengthen the residential character and prevent the encroachment of
commercial uses into the block, some facts were considered:
There were eight dwelling units on the block. Five of the units, or
62.5, were or seemed likely to become, rental units. One of them
was perhaps going to be converted to commercial use. Three of the
rental units were located on large parcels adjacent to 66th Street.
The land was under-utilized.
Thus, it seemed that investor-owned houses on under-utilized land adjacent
to 66th Street and commercial uses to the east would always be a source of
instability. A successful strategy to maintain and .strengthen the residential
quality of the area had to deal with .this conclusion. Staff proposed a
strategy to utilize the Voluntary Acquisition Program, the Vo-Tech Program and
CDBG funds. With assistance from a professional architectural firm, a site
plan was prepared. This plan is attached to this letter and marked Site Plan
B. In August, 1983, the proposal was presented to the HRA. It envisioned
acquiring property at g20 West 66th Street from Hennepin County and the
property at 1016 West 66th Street. CDBG monies could be utilized. A multi-
year Vo-Tech project would result in the construction of six dwelling units on
land previously occupied by two units. The units would be marketed to owner-
occupants.
HRA LETTER N0. 14 PAGE TWO
There was a flaw in the strategy. Both the HRA and staff recognized the
potential problem. The two parcels closest to the commercial area were not
involved in the process. (At the time, 910 West 66th Street was being
considered for rezoning by the Planning Commission and the City Council.) With
encouragement from the HRA, staff talked with the owners of 910 West 66th
Street and 901-03 Rae Drive for several months.
The implementation of this strategy was initiated in September, 1983.
The HRA authorized the purchase of g20 West 66th Street from Hennepin County.
Subsequently, a contract with Vo-Tech was executed which will result in the con-
struction of two townhome units. This structure should be completed in the
fall of 1984.
Staff has now concluded negotiations with Mr. Nordstrom owner of 1016 West
66th Street. This is a three-bedroom rental property located on a large
parcel. The parcel is large enough to be subdivided into two. lots each with
approximately 11,358 square feet. Mr. Nordstrom has placed a value of $92,500
on his property.
An independent appraiser retained by staff, Mr. Brad Bjorklund, appraised
the property at $91,000. That is, the parcel with the house was valued at
$70,000. The excess land was valued at $21,000. This parcel would be
purchased under the Voluntary Acquisition Program. Mr. Nordstrom. has agreed to
waive his rights to receive relocation benefits. The tenants would, however,
be eligible.
The property at g10 West 66th Street is owned by Dr. Elasky. It is a two
bedroom house. He is prepared to sell the property for $75,500. Two units of
housing could be developed on this site. Mr. Bjorklund appraised this property
as well and set its value. at $63,000. Dr. Elasky feels justified in selling
for a higher price because he claims to have expended $19,440 subsequent to
purchase of the property. Structural improvements such as cleaning,
remodeling, etc. totaled $1.1,640. Title work and survey fees totaled $2,459
and plan preparation work related to office conversion was $5,350.
Mr. Nordstrom also owns 901-03 Rae Drive. He has indicated an interest in
selling this property as well. This parcel could be combined with the property
at g10 West 66th Street and four units of housing could be developed on the
sites. A purchase price has not yet been discussed, but with support from the
HRA, negotiations will be pursued.
CDBG funds would be utilized for these acquisitions. With the reallocation
of funds which had been committed to the Lincoln Hills School site and other
activities, there is $373,062 currently available in Year IX monies. Last
fall. an application was submitted to Hennepin County for additional CDBG funds
to be used specifically on this block. The city was awarded $59,600. Thus,
there is a total of $432,662 available for acquisition during 1984.
HRA LETTER N0. 14 PAGE THREE
In evaluating the purchase of these properties, there are several factors
to consider. The objective to be achieved is to strengthen the residential
quality of the block. The strategy which is being implemented will achieve
that objective. However, the owners of the remaining property, Mr. Nordstrom
and Dr. Elasky, are informed sellers, but funds are available to acquire their
property. By acquiring this property, there is the potential of developing a
total of ten new housing units over the next three to four years. These units
would be marketed to young owner-occupant families. The stabilizing influence
of these ten units would positively impact the three single family homes on the
block at Rae Drive as well as the adjacent Coach Homes.
It is recommended that the .HRA encourage staff to negotiate for the
purchase of 901-03 Rae Drive and adopt the attached resolution authorizing the
acquisition of 1016 West 66th Street for $92,500 and 910 West 66th Street for
$75,500.
PRELIMINARY FINANCIAL SUMMARY
COSTS
Acquisition 1016 West 66th Streets $ 92,500
Acquisition 910 West 66th Street 75,500
$1 8,000
Vo-Tech Contract ~~
Six dwelling units x $55,000 ~ $330,000
Miscellaneous Site Work 10,000
Sub-Total $508,000
INCOME
Sale of six dwelling units x $75,000*------ $450-,000
Difference *~* -$ 58,000
~ CDBG monies which are a grant from Federal Government
*~ The units would be sold at approximately $75,000 each. However, the
mortgage amount would approximate $55,000 which would make the. units
.affordable to moderate income families. The monies would pay the
Vo-Tech contract. A second lien would be filed by the HRA against each
home for $20,000. At the time the initial purchasers sold. the property,
the HRA would recover the $20,000.
~~~ The difference is the subsidy- provided by CDEG funds.
R spectf ubmitted,
John G. Cartwri t
Executive Director
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HRA Resolution No.
Resolution .Authorizing the. Acquisition of
1016 and 910 West 66th Street
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 property at 1016 West 66th
Street, legally described as:
Parcel 1: Lot 1, Rae Addition
Parcel 2: All that part of Section 28, Township 28, Range 24 in the
County of Hennepin and State of Minnesota, described as follows: to-
wit: Beginning at a point marked "Judicial Landmark: on the East and
West Quarter section line of said. section distant 410 feet west
measured along said line from the East Quarter corner of side Section
28; 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 is 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 monument marked "Judicial Landmark";
thence South 79 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 71 32' West 405.09 to a point of
beginning of the tract hereby to be described; thence continuing North
71 32' West a distance of T40.53 feet; thence North 13 East a
distance of 165.9 feet; thence South 83 50' East 140.9 feet; thence
South 13 West a distance of 196.1 feet to point of beginning; and
WHEREAS, the owner, Elmer Nordstrom, has volunteered to sell this property
for $92,500; and
WHEREAS, the HRA desires to acquire the real property at 910 West 66th
Street, legally described as:
Lot 7, Rae Addition, Hennepin County; and
.WHEREAS, the owners, David and Jeanette Elasky, have volunteered to sell
their property for $75,500; and
WHEREAS, the Planning Commission has found. the acquisition of tYiese parcels
for residential purposes to be consistent with the Comprehensive Plan; and
WHEREAS, Community Development Block Grant (CDBG) funds will finance the
acquisition of these parcels.
-2-
1Jow, Therefore, Ee It Resolved by the Housing .and Redevelopment Authority.
in and for the City of Richfield, Minnesota:..
That the HRA Chairman and Executive Director are authorized to take
necessary action to purchase the property located at 1016 West 66th
Street for $92,500 and the property located at 910 West 66t1: Street
for $75,500 utilizing CDBG funds.
Passed by the Housing and Redevelopment Authority in and for the City of
Richfield this 19th day of March, 198.
Thomas E. Harms, Chairman
Attest:
Joan Helmberger, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 13
Agenda March 19,1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Reconsideration of Purchase of 6405-35 Lyndale Avenue
Dear Commissioners:
In October, 1983, the HRA directed staff to initiate negotiations for the
possible purchase of .the property located at 6401-35 Lyndale Avenue which was
owned by the estate of Mr. Opdahl. The property subsequently was probated and
the Probate Court appointed a trustee, Mr. Adrian Warren, to sell the property
for the heirs of the estate.
The property is located at the entrance of the L/H/N on the east side of
Lyndale Avenue between 64th and 65th Streets. The site is irregular in shape
and has an approximate area of 52,633 square feet which encompasses a strip-
type shopping center. Parking is restricted to the north and south ends of the
parcel with additional, but limited., parking in the rear. Roughly, the. current
site has less than 60 off-street parking spaces and the site should- have about.
120 spaces,.
On December 19, 1:983, the HRA was requested to authorize purchase of the
property for $640,000. This was based on several appraisals of the property.
O.J. Janski and Associates appraised the property at $600,000 and Robert T.
Mausser valued it_at $715,000. The HRA's review appraiser, Don Hennessey,
reviewed the appraisals and recommended a market value of $635,000. Staff
later received a copy of a appraisal report ordered by Adrian Warren on behalf
of the estate which was completed by C.E. LaSalle. His report valued the
property at $810,000. Don Hennessey reviewed this report. Based upon his
previous review of the HRA appraisal reports and of Mr. LaSalle's report, Mr.
Hennessey recommended a value. of $b50,000. Thus, staff negotiated a purchase
price of $640,000. The special assessments of $34,813.38 for CP 705 and the
1977 Permanent Street Improvement project would be assumed by the HRA.
However, it is anticipated that all or a portion of these assessments would be
assumed by a developer of the site. Relocation benefits from $50,000 to
$75,000 may also be payable.
The December 19th meeting concluded with the HRA delaying action on this
property. Staff was directed to contact potential developers with regards to
their interest in the site, and to attempt to reduce the purchase price of the
property.
HRA LETTER N0. 13 PAGE TWO
Staff solicited proposals from four potential private developers; Mr. Mark
Ahlquist, Foxboro Corporation, Lincoln Properties, and Security Development,
Inc. The response has been positive. Mr. Ahlquist submitted a proposal for a
two story commercial rental project with potential-fora third floor of
several condominium housing units. The two-story structure would have an
approximate gross area of 32,000 square feet .with 60 below-grade parking
spaces. The proposal suggests the first level would be primarily for retail
use, and the second level for office space.. The proposal also indicates that
the city would be requested to provide IDRB financing. It is based on the
assumption that the~HRA would acquire the property; relocate occupants, clear.
all existing structures and sell the parcel for approximately $300,000. The
written proposal is attached to this letter.
Foxboro Corporation indicated that in their preliminary evaluation they
would likely. pursue a combination rehabilitation and new construction project.
However, they later indicated that they would need more time to prepare a
proposal. Lincoln Companies verbelly indicated they would be submitting a
proposal in .the near future. Security Development is not interested. Staff is
of the opinion that these reactions indicate there is developer interest in
this property. "
Staff has also continued to negotiate on the purchase price of the property
with the trustee and attorney of the estate. They have recently agreed to a
purchase price of $630,000 which is $10,000 less than the previous price of
$640,000.. The HRA will still assume the special assessments and negotiate a
repayment of those with a redeveloper.
For the purchase of this property to occur, it is 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 this 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 the
exclusive development of housing units. Thus, the attached Modification No. 5
would modify the Land Use Plan 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 Opdahl 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 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 March 27, 1984
meeting. The recommendations of the Planning Commission would then be
presented to the City Council. The Council could consider the matter at a
public hearing at the April 9, 1984 City Council meeting. With a favorable
response from the City Council, the purchase could then be made.
HRA LETTER N0. 13 PAGE THREE
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 reallocated 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 this property could be through the expenditure of $161,243 of
CDBG funds and $468,757 from the L/H/N Capital Fund.
It is recommended that the HRA direct the staff to continue to work with....
interested developers and adopt the attached resolution which authorizes the
following:
1. Adopts Modification No. 5 and No. 6 to the L/H/N Plan;
2. Requests the recommendation of the Planning Commission on Modification
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. Authorizes the purchase of the property for $630,000 with monies to be
provided by the L/H/N Capital Fund and CDBG. The purchase cannot
occur without Council approval of the plan modifications.
PRELIMINARY NET FINANCIAL SUMMARY
COST
Acquisition $630,000
Special Assessments 34,813
Relocation Benefits 75,000 (50-75,000 est.)
$739,813
INCOME
Developer Payment of SA $ 34,813
' Resale of Land 300,000
CDBG Funds 161,243
L/HIN Capital Fundy 243,757 (468,757-300,000)
$739
Balance of L/H/N Capital Fund $1,293,000
Respectfu submitted,
~/ ~
John G. Car`twri t
Executive Director
JCG/e ja
RESOLUTION N0.
APPROVING MODIFICATIONS NO. 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/Hub/Nicollet
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, the Plan designated certain properties for acquisition
by the HRA; and
WHEREAS, it has. been determined that the land use plan for
certain properties should be changed to more 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 L'ot 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 1-and
use 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 Develop-
merit 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 $630,000.
-2-
NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and
Redevelopment Authority that.:-
1. The Land Use Plan is hereby modified according to
Modification No. 5 which is attached as Exhibit A.
2. The Plan is hereby modified according to Modification
No. 6 which is attached as Exhibit Baby 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 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.
5. That $630,000 is determined to be just compensation
for the subject real property.
6. 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 Develop-
ment fund.
7.• That the Executive Director be, and hereby is authorized
to effectuate the purchase of this real estate subject
to approval of Modifiactions No.. 5 and No. 6 by the
City Council.
Passed by the Housing and Redevelopment Authority of the
City of Richfield this 19th day of March, 1984.
Thomas E. Harms Chairman
ATTEST:
Joan Helmberger Secretary
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Modification No. 6
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 Property Acquisition Map, page 34 is
hereby modified for a portion of the prop-
erty lying between 64th and 65th Streets.
adjacent to the east side of Lyndale Avenue
generally know as 6401 - 35 Lyndale Avenue
.and lying northwesterly of aline lying 25
feet southeasterly of the northwesterly line
of Lot 18, Block 6, Lyndale Oaks Addition as
indicated on the attached map.
3/19/84
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Modification No. 5
The Lyndale-Hub-Nicollet Commercial
Improvement Program
"Amdendments 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 northwesterly
line of Lot. 18, Block 6, Lyndale Oaks Addition from
multi-family to commercial or, commercial and multi-
family; and, southeasterly of sail southeasterly line
from multi-family to commercial.
3/19/84
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COMMERCIAL IMPROVEMENT
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MAftK AHLQUIST
ATTORNEY AT L•AW
6449 LYNDALE AVENUE SOUTH, SUITE 107
RICHFIELD, MINNESOTA 55423
OFFICE TELEPHONE
6 1 2-866-21 7 0
March 5, 1984
Mr. Dennis Kraft
City of Richfield
6700 Portland Avenue South
Richfield, Minnesota 55423
Re: Opdahl redevelopment.
Dear Dennis:
Per your solicitation, enelosec7 are
plans and documentation related
development of the Opdahl parcel. We
observations:
RESIDENCE TELEPHONE
6 7 2-869-a27 7
extremely preliminary site
to our proposal for the
wish to make the following
1. We have carefully examined the potential for rehabili-
tation of the existing structures on the parcel, and have con-
cluded that rehab is not practical from our viewpoint for the
following reasons: the existing building footprint is does not
lend itself to any useful site arrangements, thus requiring
removal of portions of the building; the existing front setback
is far below the required, requiring that a variance be obtained
to allow extensive rehab; the existing improvements have had no
ongoing maintenance for ten or more years, making the cost of
rehab much greater; and once rehabed, we (and the City} would be
left with an expensive parcel of poor design which would be worth
only a small fraction more than its present assessed value: much
of the cost of the rehabilitation would not be recoverable
through increased rents or on sale..
2. Since rehab is not viable from our perspective, we have
examined several different levels of intensity of development
that we feel could be done on the parcel, ranging from a single
level building -with all parking above grade to a two or three
floor building with underground parking over essentially the
entire land area of the parcel. It was our conclusion that the
best alternative was a two story structure with below-grade
parking under the building .proper.
The financial speculations enclosed are based on such a
structure, intended for retail use on the first level and office
1
use on the second, with underground parking-only under the build-
ing footprint. The structure assumed has a gross floor area of
about 32,000 square feet exclusive of the underground garage and
a proposed enclosed atrium at the break in the direction. Park-
ing for about 60 cars would be provided underground, and surface
parking for 80 to 90 cars would be allowed, for a total site
parking of up to 150 vehicles. Principle accesses to the site
would be from 64th Street on the north, and through the existing
median and curb cut in Lynda~.e on the south.
3. An interesting possibility which should be further
investigated would be the addition of a third level on the
building, allowing the building and sale of eight to twelve large-------
condominiums. From our viewpoint as developers, there is some
small incentive to do so (realization of the profit from their
sale), but there may be a larger reason from your perspective,
since such an addition would add about a million dollars to the
value and tax basis of the project.
Another possible method of increasing the intensity would be
to overhang the upger floor(s) over the drive/parking areas on
the northwesterly and southerly side of the building; such use
would not reduce the surface parking area while increasing the
available floor area.
The pro forma financials enclosed do not reflect these
possible increased intensities at all.
4. We .would require that .the City provide IRDB funding
for the major costs of the project; given the uncertainty in-the
status of this bond program, any proposal is highly speculative
until and unless Congress decides under what terms, if any, this
funding program will continue.
5. Please note that our proposal assumes that the HRA will
acquire, relocate occupants, and clear all existing structures
from the site, and sell the parcel to us for the approximate land
value (assumed to be about $300,000 in the worksheet). We would
also expect satisfactory evidence that the soils are acceptable
for the proposed structure.
Given the magnitude of this proposal, we would also require
that some level of rental commitments (or sales, in the case of
condominiums) be reached prior to beginning the project.
2
As noted above, all of this information. is highly speculative;
however, we feel that the site can be developed, and that further
investigation is warranted if the HRA is in fact interested in
participating in a renovation on this parcel.. However, we would
like some direction from the HRA and staff before we invest
further time (or future money} in the development research
needed.
Please don't hesitate to call either of us at 866-2110 if you
need further information.
hank you,
1
Ma Ahlquist
;~
~/ %
Don Hedquist
MA:gd
Encl.
3
This worksheet and proforma was designed to be flexible. If your proposal
envisions rental or sale of a renovated structure or construction of a new
building, it is appropriate. Because of this flexibility it may not be
necessary to provide some information requested. Expenses and income should b
rounded to the nearest hundred. Please type responses.
I. General Information
Name of Development Entity Mark Ahlquist/Don Hedquist
Address 6449 Lvndale Avenue Sont-h' M'innaannl i ~„~ MN 55474
Contact Person Above
Telephone No . 866-2110 or 869-2673
Probable Architect: Name .Del Hall
Address
Probable Prime Contractor : Name Hobco Inc .
Address 6449 Lyndale Avenue South, Minneapolis, MIS' 554
.Probable Marketing/Leasing Agent: Name Tt„k.,~~,,,,
Address
Probable~Property Management Co.:
Name Unknown
Address---- -- -- - -- -
Reason for Development (check one):
Deve~.oper Occupancy
g Rental
For Sale
Type of Development Entity (check one):
Nonprofit
Limited Profit
Profit
Individual
X Partnership
Corporation
Limited Partnership
-~-
~ --
II. Proposal Summary
X New Construction Rehabilitation
Discuss brieflg building type, number of stories,.
exterior materials, etc. See attachments
Use (New Construction or Rehabilitation):
. X Office - Square feet 16,000
X Retail Square feet t6 ..000 ,
Restaurant ~ of seats
(. X Other (specify) Square feet 16,000 possible residential.)
. Type and ownership (merchandise and whether developer will occupy, or
rental of condominium or co-op)
Setbacks : Front 35 to 40 Side 40 ,
Rear 25 Side '
__-
Parkingrequired by ordinance: 144 spaces
Parking to be provided: 144 spaces
-~.._
Amount to be paid HRA for purchase of property in "a-a-~" cleared
condition $ 300, 000
Date of
Anticipated construction start springy, 1985
Anticipated completion of Construction 4-6 months
Completion o f lease up or sale Spr1.riQ, 1986
' Depreciation schedule to be used Unknown
If a rental development, provide estimates of the following for period
during which property will be held:
Estimated number of years to be held Indefinite yrs .
Estimated rate of appreciation in real estate value Unknown. ~
Estimated rate of inflation in rental income Unknown ~
Estimated rate of inflation in expenses ~ Unknoam ~
Public Assistance Requested:
Type ~ Amount
HRA to provide cleared site at land value; soil tests and title to be satisfactory;
IRDB funding to_be provided; special assessments to be paid.
-~-
Section II Detail on Occupancy and Revenue
Type of Use .Net Rentable Annual Base Rent* or Sales Price
r each or Saleable Per Sc~. ft. at, Per Square
:.dace Square feet Lease-Up feet
Below Grade 16,000 =0-
1st Level 16;000 511-14/
2nd Level 16.000 $10-12/
3rd Level 8-12 condo. units ~ 80-120,000/unit
*Lease Terms: Real estate taxes paid by X Owner Tenant
Insurance X Owner Tenant
. Maintenance -common areas X Owner Tenant
Utilities Tenant Areas Owner. X Tenant
Corunon Areas X
~ Owner
_ Tenant
Owner Tenant
' Owner Tenant
Other ~ ~ Owner Tenant
*Additional rental terms,.-if any,
For., rental properties (first full year of operation):
Total potential base annual rental income $38+,000
Total projected additional annual rental income $ -0-
Total ~ $
Section III Capital Pro forma
A. Income Total
1. Financing $~ 2 000 , 000
Sources : IRDB
2. Equity $ 100 .000
Sources : Partners
3. Interest on undisbursed
proceeds $ Nominal
4. Sales Proceeds $ -0-
5. Developer's profit &
risk .$. . ~ ... .
6. Other (Specify '
~ $.
7. Total Income
B. Exp enses
1. Construction costs/renovation
costs
a. demolition ~ $ -0-
b . .building $ 1, 200, 000
c . parking $~ 100, 000
d. Other (specify
~ ; . $.
e. Other (specify
f. site work
g. utility connections,
etc:
). $
$ -0-
$" 25 , 000
$ 2,100,000
h. subtotal
i. general requirements
( ~ of lh (e.g.,
permits )
j. .builder's overhead
( ~ of lh)
k. builder's profit
( 0 ~ of lh)
1. Other (specify
m. gross construction
2 .. Fees
a. arch. & eng.
( ~ ~ of lh)
b . legal
c. appraisal
d. accountant
e, underwriting
f. market study
g. marketing, leasing
h . Other ( specify
Contingencies )
$ 1.325.000
c
r
$ 50.000
15,000
$ 1,000
$ Unknown
$ 5.000
$ Unknown
$ 29,000
$ 1,325,000
i . Total $ 100 , 000
3. Financing and Carrying Charges
a. Debt service during construction: (1)
Principal
(Interest @ 1 ~ for mo.)
b. Taxes during construction
c. Insurance during construction
d. Title and recording
e. Operating deficit through lease update
f. Points, fees and closing costs-
Construction Fin. pts.
Permanent Fin; ~ 5 pts.
g. Bond or other expenses
h. Other (Specify )
i. Total
Real Estate Acquisition
a. Site Acquisition (to be paid HRA)
b: Special Assessments (2)
C. Other (Specify )
d. Total
5. Other (Specify )
6.~ Subtotal (B1-4)
7. Developer's profit & risk allowances
8. Debt service reserve fund
9. Total Development Costs (B1-8)
NET INCOME OR (DEFICIT)
-~-
$ Nominal --
$ 120,000
$ 12.000
$ 4.000
$ 2.000
100,000
$ 5.000
$ 243,000
$ 300,000
$ -0-
$ 3.00,000
$ 1.968,000
(Part A minus Part B)
1) Debt service during construction should reflect the fact that not all of the
funds will be expended at the beginning of the project, by showing either
(a) (at line B.3.a.) only the debt service due on funds actually drawn-down,
or (b) (at line B.3.a.) the debt service due on the total loan amount and
(At Line A.3.) the amount of interest earned. on undisbursed funds.
2) Special assessments levied against the property total $34,813.00 They may
be paid in a lump sum or annually which ever is appropriate. If paid
annually, a payment should be indicated in operating pro forma..
- ti -
Section IV Operating Pro Forma (For Rental Properties)
First year Second Third Lease-up
after Year Year Period
- lease-up ( Months)
198 198_ 198_
A. Income
1.~ Potential $ $ $ $
rental income $ 384 .000 $ $ $
other income $ _ 0_ $ $ $
~-
2. Vacancies @ ~ $ $~ $ $
3. Other income
(Specify ) $ -0- $~ $ $
Total Effective
Income $ $ $ $
3. Operating Expenses
1. Legal and accounting $ $ $ $
2. Management fee $ $ $ $
3. On site management
payroll $ $ $ $
4~. Advertising $ $ $ $
5. Other administrative $ $ $ $
6. Maintenance .payroll $ $ $ $
7. Contract Services $ 5. 000 $ $ $
8 . Supplies $ 2, 000 $ $~ ~ $.
9. Grounds, snow
removal $ 12, 000 $ $ $
10. Other maintenance $ $ $ $
I1. Sewer and water $ $ $ $
12. Electricity $ 4, 000 $ $ $ •
13. Gas and/or oil $ $ ~$ $
i4. Insurance $ 6, 000 $ $ $
-a-
' First year Second Th2rd Lease-up
after Year Year Period
lease-up 198 198 (
Months)
198 8 _
15. Real estate taxes
(assessor's estimate) $ 90,000 $ $ $
16. Special Assessments $ _p_ $, $ $
17. Reserves for re-
placement $ _0_ $ $ $
I8. Other Reserves $ $ $ .$
Total Operating Expenses $ $ $ $
.. Net operating income .
~. Return on Equity at
~ or Coverage
(Ratio of Income Dept.
Serv. ) $ $~ $ $
~. Available for Debt
Service (C - D) $ 265~OOQ $~ $ $
'. otal Debt Service $_ 264.000 $ $ $
Orig. Prin. $ _ Z•OOQ•000
Interest Z2 ~/yr.
Amort. Over hrs.
X Mo. pmts.
OR '
Yr. Pmt.
. Net Additional return or
(Deficit) (E-F) $ 1.000 $ $ $
. Total return or
(Deficit) (D + G) $ $~ $ $
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HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA•Letter No. 12
Agenda March 19, 1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Resolution Authorizing Continuation of the Voluntary Acquisition
Program
Dear Commissioners:
Since 1980, the HRA has administered a voluntary property acquisition
program called the "Voluntary Requisition Program". The program utilized CDBG
funds and is permitted by HUD regulations. Under this progam, property owners
may offer real estate for sale to the HRA. Then staff, using criteria
contained within the program guidelines (copy attached), negotiates a purchase
price, purchases the property if authorized by the HRA, and provides for the
construction of additional housing units. The cost of site assembly is often
reduced because property owners must. agree to waive relocation benefits.
Tenants, however, are entitled. to receive benefits. The last phase of the
Voluntary Acquisition Program ended in January, 1984. To continue in 1984, the
program must be reauthorized by the HRA.
Without the Voluntary Acquisition Program, the HRA is required to pay re-
location benefits to property owners. These benefits include a maximum payment
of up to $15,000 to a homeowner for assistance in securing a replacement
dwelling; a maximum payment of $4,000 should an owner choose rental housing
when relocating; and full payment for moving personal property. Renting
property is considered a business, thus the property owner would also be
eligible for up to $10,000 in relocation benefits because of a buisness loss.
For single family and duplex housing, the amount is usually $2,500. By
participating in the Voluntary Acquisition Program, the owners waive these
benefits. However, tenants remain eligible to receive relocation benefits
which may be up to $4,000, to help pay for the increased cost of rent at a
replacement unit, as well as payment of their moving costs.
Acquisitions within the program are financed with CDBG funds. This program
permits the construction of new homes or the substantial rehabilitation of
existing homes. By doing so, "garage houses" may be removed, underutilized
residential parcels are redeveloped, and vacant lots are developed. The City
Council recently reallocated CDBG funds for acquisition purposes.
Approximately $385,000 is available to the Voluntary Acquisition Program in
1984. At the April 2 meeting of the HRA, City Council, Planning Commission
and the Community Services Advisory Commission, the history of this program
and its impact on the city will be presented.
HRA Letter No. 12 Page Two
One recent acquisition (October, 1883) was the property located-at 920 West
66th Street. The Vo-Tech School, in cooperation with the HRA, is constructing
two townhome type units where a vacant single family .home previously existed.
Purchases require approval of the HRA. Negotiations will be initiated only
on property which meets the program objectives and criteria. An emphasis is
being placed on acquiring properties along arterial roadways that have large
lots. Such lots make it possible to construct two housing units where only one
may have existed.
It is recommended that the HRSA adopt the attached resolution authorizing
the continuation of the Voluntary Acquisition Program for the period March,
198 through February, 1985•
Respectf~,y ubmitted,
.~
John G. Car wr' t
Executive .Director
JGC/eja
HRA RESOLUTION N0.
AUTHORIZATION TO CONTINUE
VOLUNTARY ACQUISITION PROGRAM
WHEREAS, from time-to-time, the Housing and Redevelopment Authority in and
for the City of Richfield (HRA) acquires property on a scattered site basis for
creating housing opportunities; and
WHEREAS, the Department of Housing and Urban Development (HUD) has
regulations collectively called the "Uniform Act", which the HRA .must adhere to
when acquiring property with Community Development Block Grant funds; and
WHEREAS, the HRA has operated a Voluntary Acquisition Program in accordance
with those regulations, and wishes to continue operating this program.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority
in and for the City of Richfield:.
That the Executive Director may .proceed in administering the Voluntary
Acquisition Program from March, 1984, to February, 1.985.
Passed by the Housing and Redevelopment Authority in and for the City of
Richfield this 19th day of March, 1984._
Thomas E. Harms,. Chairman
ATTEST:
Joan Helmberger, Secretary
VOLUNTARY ACQUISITION PROGRAM
GUIDELINES.
Program Objectives
-Eliminate the blighting influence of substandard
housing, thus improving residential neighborhoods.
-Increase the supply of available standard housing
in the city through new construction and substan-
tial rehabilitation.
-Alleviate tYie shortage of standard housing for low
and moderate-income families.
These objectives will be achieved through acquisition of improved property or
vacant lots.
nafinif_innc
HRA: Housing and Redevelopment Authority in and for the City of Richfield
HUD: The Department of Housing ,and Urban Development
Voluntary. Acquisition: The acquisition (purchase) of real property which
results from a voluntary proposal to sell from the owner in response to a
public invitation or solicitation for offers.
Purchase Procedures
1) Property will be purchased on a "Solicitation of Sale" method of
advertising in accordance with HUD regulations and direction. A sample
solicitation is attached as Exhibit A.
2) Sale to the HRA must be on a voluntary basis. It is the
responsibility of the property owner to respond to a "solicitation"
by indicating in writing a willingness to sell with a voluntary
waiver of relocation benefits. Tenants are entitled to receive
relocation benefits prescribed by HUD regulations.
3) Once a "willingness to sell" written offer has been received, a
purchase dependent on funding availability and HRA authorization.
4) 'The HRA. will not buy the property unless a mutually satisfactory
negotiated purchase price is determined.
5) The negotiated price will be a justifiable public expenditure.
6) Once a negotiated price has been reached, a purchase agreement and
"waivzr of relocation payment" form (Exhbit B) may be executed by the
-2-
seller. These seller authorized agreements are effective only if the
HRA authorizes the purchase.
7) Purchase may proceed once the acquisition is authorized by the HRA.
8) HUD must review and approve the program. The approval will be for
one year.
Property Selection Criteria
Property will be inspected, evaluated and recommended for purchase if it meets
criteria ~~1 , a or b or c or d; and 4~2 or ~~3
1) The property is:
a. Substandard as to condition, size or usage.
b. obsolete and of faulty design for the 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 parcel could become
site for new housing or
3) Property which has been
owner which in the judge
the shortage of housing
if acquired.
a marketable lot which could provide a
substantially rehabilitated housing.
voluntarily proposed for purchase by the
=ment of the HRA would help alleviate
for low and moderate-income families
Exhibit A
THE RICHFIELD HRA IS BUYING HOUSES IN RICHFIELD
We're paying cash for the right property with no sale fees!
If you own a small house, a house located toward the rear. of the lot, a house
in need of considerable repair, or a vacant lot, the Richfield Housing and
Redevelopment Authority may be interest in purchasing it. The purpose of
acquiring these parcels is for the development of family housing.. The cash
sale must be on a voluntary basis and a mutually satisfactory purchase
agreement must be negotiated before the HRA will acquire the property. The
owner-seller must submit a written offet to sell which mentions a willingness
to waive relocation benefits. If you own rental property with tenants, they
may be .eligible to- receive relocation assistance. Offers will be accepted
198 to , 198 Qualifying properties will be
considered for purchase as funds. become available.
Written offers and questions. regarding the program may be directed to:
Exhibit B
WAIVER OF RELOCATION PAYMENTS
RELOCATION RIGHTS OF PROPERTY OWAtERS UNDER THE UNIFORM ACT
The Uniform Act
Under the Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (Uniform Act) eligible property owners who are
displaced by a public project receive:
1. Payment for Moving Expenses
This maybe either a fixed payment,. including dislocation
allowance, up to $500, or a payment for actual moving costs.
2. Replacement Housing Payment
This may be a payment up to $15,000 to purchase a home or a
payment up to $4,000 to rent a dwelling.
3. Fixed Payment in Lieu of Moving and Related
The owner of a rental property may be eligil
which ranges from $2,500 to $10,000. If the
be acquired qualifies for this payment, the
is determined by the income produced. during
tax years.
Expenses
ale for this payment
rental property to
.amount of benefits
the two previous
4. Other Relocation Assistance
This includes housing referrals and. other assistance to help the
owner relocate to a comparable, decent, safe, and sanitary dwelling.
Under the regulations of the Deparment of Housing and Urban Develop-
ment (HUD), the owner cannot be required. to move from his home unless
he is given reasonable opportunities ro relocate to a comparable,
decent, safe,. and sanitary dwelling that he can afford..
I, am the owner of the property at
I have voluntarily submitted an offer to
sell this property to the Housing and Redevelopment Authority of Richfield.
On a representative, of the Richfield. HRA discussed
with me the relocation payments and other asssistance provided under the
Uniform Act. It was explained to me that I cannot be required to sell this
property to the Richfeild HRA unless I am given. these relocation payments and
other assistance. It was further explained that the Richfield HRA will not
acquire the property from me unless I voluntarily enter into the agreement of
sale and also agree to waive my rights under the Uniform Act.
-2-
I understand the basic requirement of the Uniform Act. I know that I cannot be
required to sell the property to the Richfeeld HRA unless given tree relocation
assistance required by the Uniform Act. However, I VOLUNTARILY WAIVE NTY
RIGHTS TO PINY RELOCATIGN PAYMENTS AND OTHER RELOCATIGN ASSISTANCE UNDER THE
UNIFORM ACT FOR WHICH I N1AY BE ELIGIBLE iid CONNENCTION WITH SUCH A SALE.
This waiver shall expire on , unless by that date the
Richfield HRA has entered into a written agreement to buy the property from me.
Signature
Date
Witness
Date
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 11
Agenda March. 19, 1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Modifying the Income Limit for the Community Development Block
Grant Richfield Home Rehabilitation Deferred Loan Program
Dear Commissioners:
Staff is currently committing the remainder of CDBG Year VIII funds as
deferred loans to qualifying Richfield residents who have applied. Eligible
low income applicants receive rio interest, no monthly payment loans to make
improvements to their single family homes. The loans are repaid when the
property is sold or forgiven if ownership continues for 30 years. (HRA Letter
No. 7, February 23, 1983, discussed the program in more detail). To ensure
that CDEG Year IX funds are committed in a timely manner, it is proposed that.
the maximum adjusted annual income for eligible applicants be increased from
the current $7,500 to $12,500. This letter discusses the justification for the
proposed increase.
An increase of the maximum adjusted annual income is necessary for the
following reasons:
-the current income limit of $7,500 does not provide a large enough pool
of eligible applicants to ensure that funds can be committed in a timely
manner . -- - ---------_ __ _ . _---
-Extensive advertising within the past few months for deferred loan
applicants at the $7,500 income limit has resulted in two applications.
A recent advertisement in the City of Richfield Community Services
Bulletin, which reaches every Richfield home, suggested a proposed increase
to $10,000. One response to that ad was received. Staff has also worked
with local social service agencies which in recent months, have had little
success in finding income eligible persons for the program. These.
outreach attempts suggest that the program has "saturated" those persons
in the lowest income market who are aware of this program and wish to
participate.
-The increased income limit of $12,500 would still allow the program to
serve the "low income" Richfield residents.
HRA Letter No. 11 -2-
-A current balance of approximately $80,000 in uncommitted Year IX funds
must be expended as deferred loans to Richfield residents by December,
1984. Inability to expend these funds could result in their return to
the county for reappropriation to other communities. An analysis of
income group data assembled from the 1980 census suggests that an income
limit increase should provide an adequate number of applicants to reach
this expenditure goal.
The Hennepin County Office of Planning and Development for which Richfield
is a sub-grantee in the expenditure of CDHG funds, must also monitor and review
all changes to our procedural guidelines.- The county authorized the increase
in adjusted income limits to $12,500 providing the HRA concurs. Other large
Hennepin county comunities have used. a $12,500 income limit for two years and
have an adequate applicant flow to ensure fund commitment. These communities
include Crystal, Robbinsdale, Edina, Plymouth, Minnetonka, Eden Prairie, New
Hope, St. Louis Park and Champlin. At the April 2, 1984 joint meeting of the
HRA, City Council, Planning Commission and Community Services Commission, the
history of this program will be presented.
It is recommended that the attached resolution which revises the Richfield
Home Rehabilitation Deferred Loan Program procedural guides to increase the
maximum adjusted annual income from the current $7,500 to $12,500 be approved
by the HRA.
Respectf y ubmitted,
John G. Car wri t
Executive Director
JCG/eja
HRA RESOLUTION No.
Authorizing Modification Of Income Limit In The
Richfield Home Rehabilitation Deferred Loan Program
WHEREAS, the. Housing and Redevelopment Authority, in and for the City of
Richfield (HRA), has established the Richfield Home Rehabilitation Program for
the improvement of single family, owner-occupied housing in Richfield; and
WHEREAS, it is necessary .from time to time to revise the procedual
guidelines of the. Rehabilitation Deferred Loan program to provide a more
effective program to Richfield residents; and
WHEREAS, an increase of the program income limit from the current $7,500 to
$12,500 is necessary beginning with Year IX; and
WHEREAS, this increase will provide an adequate resource of applicants to
ensure that Community Development Block Grant (CDBG) funds can be expended in a
timely manner; and
WHEREAS, the increased income limit proposal has been reviewed by Hennepin
County and found acceptable subject to concurrence by the HRA.
NOW, THEREFORE, be it resolved by the Housing and Redevelopment Authority
in and for the City of Richfield,. Minnesota: _
1. That the procedural guidelines is modified,. increasing the income
limit of the Rehabilitation Deferred Loan Program from $7,500 to $12,500
2. That. the Executive Director is authorized to administer the modified
Rehabilitation Deferred Loan Program beginning with CDBG Year IX funds
programmed for rehabilitation
Passed by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 1gth day of March 19, 1984.
Thomas E-. Harms, Chairman
ATTESTED:
Joan Helmberger, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 7
Agenda February 22,-1983
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Consideration of Changes to the Repayment
Agreement and Procedural Guidelines for the
Richfield Home Rehabilitation Program
_,,-!
For the past several months, the city staff has been work-
ing with the Hennepin County Office of .Planning and Development
(OPD) to develop a new procedural guide and repayment agreement
for the Richfield Home Rehabilitation Grant Program. As dis-
cussed in HRA Letter No. 33, August 16, 1982, and No.,36 of
September 20, 1982, the intent in seeking chancres in procedure
and repayment was to develop a.program that recovers and recycles
rehabilitation funds for future housing programs.' Hence, it is
proposed that the primary rehabilitation assistance program,
which is CDBG funded, become a deferred loan program rather than
a grant program.
This letter contains a brief summary of the objectives of
__the Richfield Home Rehabilitation Grant Program, discusses the
role of Hennepin County OPD in program administration, and describes
the proposed changes .for administering CDBG Year VIII (1982-83)
and future funds. The status of the MHFA Deferred Loan Program
and the .CDBG .Flood Grant Program is also discussed. The HRA is
being requested to adopt these proposed changes and permit a de-
ferred loan program to commence. Hereafter, the title, °Rich-
-field Home Rehabilitation Grant Program" would drop the word "Grant"
to more accurately reflect the CDBG and MHFA deferred loan and
CDBG Flood Grant elements.
Objectives of the Rehabilitation Program
The primary objective of the Richfield Home Rehabilitation
Program is to upgrade and maintain the existing housing stock
owned by low-income persons. The program also is important as it
helps the city fulf ill its housing performance goals. To date,
approximately $350,000 in CDBG funds have been committed to 168
homeowners for home improvements. MHFA grant funds in the amount
of approximately $20.0,000 were received by 51 households before
that program was discontinued in 1981.
HRA Letter No. 7 -2- February 22, 1983
Role of Hennepin County
CDBG funding for the rehabilitation program comes through
.. Hennepin County from the Department of Housing and Urban Devel-
opment (HUD). The city council designates a portion to be used
for housing rehabilitation. Because of its role in monitoring
fund expenditures, it is necessary that Hennepin County review
and approve our procedural guidelines before implementing a pro-
gram. The procedural guidelines are modified routinely each
program year to fit the needs of Richfield residents and other
communities that participate through the county ire similar re-
habilitation programs.
Changes in Rehabilitation Program
The development of a Rehabilitation "Deferred Loan" Pro-
gram was proposed in August, 1982 as a means of continuing to
provide assistance to :low income residents, yet insure that the
city could recover a majority of the funds for use in the future.
The deferred loan program would require that loan funds received
by the .recipient for rehabilitation be repaid to the city at the
time.. the property is transferred (i.e. sold, conveyed, assigned,
leased, etc.). Repayment is required up until the 30th year
anniversary date of the loan, at which time the .loan is forgiven.
No .interest accrues on the loan principal and no monthly install-
ment payments are required.- Thus, the previous grant repayment
agreement, which reduced the. amount owned on a grant by 25% each-
year after the third year until nothing was owed in .the seventh
year, is proposed t~ be changed to a deferred loan program requir-
ing repayment of 100% of the loan_up until the 30th year of the
loan term.
Forgiveness of the loan after the 30th year is a slight de-
parture from what was originally proposed to the HRA. and was
the xesult of joint discussions between .the HRD, OPD and HUD
staff. HUD and OPD felt that requiring repayment at the end of
the term was unsatisfactory as most funded repairs would have
lost their useful life; been re-repaired or replaced; and with-
out other resources, a property sale might be forced. However,
it is expected that a vast majority of the loans will be repaid
before reaching a 30-year maturity., For those few loans -that
do reach full-term, administrative costs to the HRA .and hard-
ship to the loan recipient resulting from a lump sum repayment,
will be lessened by satisfying the lien rather-than requiring
repayment.
In addition to the basic concept of developing a deferred
Loan program, there are a number of items addressed in the
procedural guidelines and repayment agreement that are changes
from those used previously. These .include:
1. Repayment of the-loan being due and payable within
30 .days of the date at which the recipient trans-
fers the property. .Types of property transfers in-
clude voluntary sales, involuntary sales (such as
death related), formation of life estate, and an
HRA Letter No. 7
-3- February 22, 1983
uncorrected default on a contract for deed. If
payment is not made within 30 days, interest
would accrue at the highest rate allowable by law
(pursuant to Minnesota Statute 47.20 - 1982- this
rate would be the "monthly index of the Federal
National Mortgage Association auction yields for
the first preceding calendar month, rounded off
to the next highest quarter of one percent per
annum").
2. The deferred loan would not be due and payable under
.the following circumstances r
a) if the property is transferred from one joint
tenant to another (i.e: death of spouse);
b) if a joint tenancy is created with the recip-
Tent-and another involving no monetary consid-
eration from the third party (i.e. addition of
spouse or children to title):
c) if an heir, intending to reside in the residence,
is determined t-o have an eoonomic status where
repayment of the .loan. could only occur by sale
of the estate.. T he method for determining econ-
omic status would . be outlined in the guideline as
a formula tied to the metropolitan area average
family income. .T he .goal would. be to .have a pro-
gram administrato r be able.to evaluate an heir's
income during the next 30 years and determine
that it met the g oals of the original program
(i.e. lower income assistance). The formula and
examplesfollow:
Percentage of Heirs Present
$28,600-Median Qualifying Unadjusted
Family. Family Income Income Grant Recipients
Size (1983 ) (1.983 ) Income (1983)
1 31% $ 8,866 $ 8,250
`2 33% 9,438 9,000
3 35% 10,101 9,500
4 37% 10,582 10,000
5 39% 11,154 10,500 .
6 40% 11,440 11,000
7 42% 12,012 11,500
8 44% 1.2,.584 1.2,000
The percentage figures were determined by taking normal ad-
justments (family size, child care, medical expenses) to our
current maximum adjusted income limits for the program, $7,500,
and dividing that into the current median family income figures
for the metropolitan area, $28,600. Use of these percentages in
combination with future median income figures should result in
an income level comparative to that used as an eligible .income
today. It is proposed that the adjusted income remain at $7,500
for the deferred loan program.
HRA Letter No. 7 -4- February 22, 1983
d) Transfer of title when recipient has paid off a
contract fcr deed.
3. The maximum loan amount should be increased to $8,250.
This is consistant with a change proposed by the
Hennepin County OPD. This is a 10% increase over the
previous limit. of $7,500, and seems adequate to cover
the increase in costs of undertaking rehabilitation
work.
4. The HRA would not accept or subrogate its lien position
when a loan was made, ._a repayment was filed, or during
the term of the .lien,- if the property .had mortgages,
pledges or encumberances exceeding 8-0% of the estimated
market value as determined by-the Hennepin County
Assessors Office. Our .lien would then be adequately
secured to ensure repayment.
All other sections of our guidelines which the board re-
ceived and adopted September 1~, 198.2 remain unchanged. The
term °'grant" has been changed to "deferred loan" throughout, ex-
cept as it may apply to the special section of the Flood Grant
Program.
The MHFA Home Improvement Grant Program, administered in
Richfield until 1981, was replaced with an MHFA Rehabilitation
Deferred Loan Program. Phase I of this new program, provides
lower income participants a no interest or variable interest
rate loan, depending on .income. TY~is is currently being admin-
istered by the .Hennepin County OPD staff. Richfield HRD staff
will receive training from OPD staff to administer the remaining
Phase I funds and all following phases. To date $5,96 has been
expended to .one Richfield homeowner in the program. A maximum
income and grant amount for the loan .program is $b,000.
The Richfield Flood Grant Program utilizes an annual set
aside of $15,000 in .CDBG funds for repairs related to storm
water f ooding of low and moderate income persons homes. At the
.end of each program year, uncommitted funds would be recycled
back to the Rehabilitation Deferred Loan Program. The Flood
Grant Program will .remain a "grant." with a seven-year depreciat-
ing repayment and maximum grant amount of $6,000. Income limits
will remain at Section 8 .limits. Flood grant .program guidelines
would remain as approved by the-HRA on September 15, 1.981.
It is recommended .that the attached resolution be adopted
by the .HRA which modifies the CDBG grant program to become a
.deferred loan program, changes "Richfield Home Rehabilitation
Grant Program" to become the "Richffield Home Rehabilitation
Program", and revises the procedural guidelines accordingly.
Respectfully submitted,
Karl Nollenberger
Executive Director
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 10
Agenda March 19, 1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Development Proposals for Cedar Avenue Liquor Store Site
Dear Commissioners:
At the HRA meeting of January 16, 1884, two developers discussed their
redevelopment concepts for the Cedar Avenue liquor store site. Mr. Ralph
Bruins, a developer representing Mr. James Madden, expressed interest in
developing a bowling/restaurant/lounge facility. It would include 48 bowling
lanes, a restaurant and lounge and a 150 seat meeting/banquet facility.
Parking for 500 vehicles would also be included.
Foxboro Corporation, the second development company, proposed a co-op
development. They envisioned 72-84 cooperative owner-occupied housing units
and up to 12,000 square feet of retail/office space.
Lincoln Companies., a third .development company, recently submitted a
proposal for the site. They are proposing a 45,000 square foot office/service
center facility. The one story high ceiling space would be flexible-and
adaptive for office space, storage, warehouse and/or light assembly. Access
would not be provided from 1$th Avenue, and the landscape strip would be
maintained and enhanced, thus minimizing the impact on adjacent residential
property.
The Lincoln Companies proposal booklet (copy attached) delineates the
concept further. Development. issues are discussed including design
considerations. An elevation drawing and site plan are also included. This
proposal may call for the Richfield Cedar Avenue liquor store to be relocated
to another site (i.e., NE corner of 66th Street and Cedar Avenue).
T1.. L.. .L1. ._. ~ _ .1
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interested and working on proposals. The Lincoln Companies concept is
presented at this time for your information. A staff analysis and evaluation
will be presented to the HRA at a further meeting when all proposals have been
received.
~._:
RICHFIELD OFFICE/SERVICE CENTER ~ %t
Development Proposal ~''
Cedar Avenue Site
March S, 1984
Prepared by:
The Lincoln Companies
For Submission to:
Richfield Housing do Redevelopment Authority
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March S, 1984
.City of Richfield Housing and
Redevelopment Authority
Richfield City Hall
6700 Portland Avenue South
Richfield, MN 55422
I..INCOLI'~
PROPERTIES, ~.G
Re: Richfield Office/Service Center
Dear Ladies and Gentlemen:
The Lincoln Companies is pleased to submit this praposal for the redwelopment of the
current Richfield Municipal Liquor Store site at 6636 Cedar Avenue South, Richfield,
Minnesota. We are proposing that the site be used to construct an approximately 45,000
square foot office/service center..
We elected. to propose this use of the site for the following reasons:
1. Existin Market Need. The development and design of traditional
office- ware Ouse ac~i s ~ undergone significant changes in, recent years. In
the past, these structures consisted of a small portion of office space joined to
large. warehouses, hawing a ratio of IO-20% office to 90-80% warehouse. The
structures themselves were not aesthetically pleasing and o#ten times located in
marginal areas.
'~ The growth and. expansion of new industries, especially in the high technology
fields, created a new market need for a facility which provides a greater proportion
• of office space, a stronger location, and a high quality, office-like appearance. The
development community has just begun to respond to this market demand.
The subject property is highly suited to meet the requirements of these facilities.
It has excdllent visibility and efficient access to major highways. The site is unique
in its proximity to both Minneapolis-St. Paul International Airport and downtown
Minneapolis. Our proposed development highlights these factors with a strong,
office-oriented design. Our preliminary market studies indicate a strong potential
response to this development.
One of The Lincoln Companies
5740 Green Circle Drive, Minneronka, ivfinnesora 55343 (612) 938-9000.
i
March 5, 1984
City of Richfield Housing and
Redevelopment Authority
Page 2
2. Effective Use of Site. Our review of the subject site, made jointly with city
staff, indicated that this particular project would: be an extremely efficient use of
the site. The proposed building covers approximately 35% of the total site but is
able to provide ample parking. An attractive appearance will be presented to all.
four sides of the property. Necessary accesses are provided without damaging
existing traffic patterns. As the enclosed site plan demonstrates,. our proposed
design envisions significant landscaping.
3. Neighborhood Comparability. The Richfield Office/Service Center will be
an excellent neighbor to the surrounding residential and commercial areas.
The adjacent residences will be effectively bu#fered through heavy landscaping,
using mature trees and berming. The principal hours of operation of the project's
tenants will be 7:30 A.M. to 5:30 P.M. weekdays, which will protect the quiet
evenings and weekends of the neighborhood setting.. The project's presence will not
bring with it the excessive lighting, traffic, or patron use associated with
d retail/commercial facilities.
II Further, the nature of the project is such that truck deliveries are much less
frequent than .that associated with traditional office-warehouse facilities. As
stated above, we have designed the project. to offer a larger proportion of office
_ use. The-project will not be a large-scale manufacturing or assembly-type facility:
Instead, it will house smaller enterprises, probably in the high technology/electron-
ics industry, using principally smaller, delivery type vehicles rather than large
semi-trailers.
In addition, the persons who work in the new facility will turn to adjacent
commercial areas for dining and, quite probably, some shopping.
4. Business and Em 1o ment Growth. At present, Richfield does not have a
modern, commercial industrial presence. According to our current estimates, the
Richfield Office/Service Center will house from two. to -six small companies or
• corporate divisions. According to studies prepared by the National Association of
Industrial and Office Parks, it is reasonable to project that this facility will serve
from 60-80 employees. Many of these positions. will be held by skilled workers and.
middle management persons.
Thus, the project will invite new businesses to join the City of Richfield and expand
the community's employment base. It must also be noted that these positions will
offer career. oriented, permanent employment.
5. Improved Tax Base. The development of the project will geatly improve the
City's existing property tax base. The facility will have a construction cost of
approximately $1,300,000.00 which will generate significant property taxes.
u March 5, 1984
Y City of Richfield Housing and
Redevelopment Authority
n Page 3
4 In conclusion, we believe. that this Proposal responds to the City's need fore sensible,
quality development and the needs of the marketplace as well. The project will enhance
Richfield's employment opportunities and tax base. The combination of the design
concept and the quality of the materials to be used, together with significant landscaping
and open areas, protects adjacent areas and minimizes environmental impacts.
The Lincoln Companies is already a neighbor in the City of Richfield. The sense of
partnership between our firm and the City, created through our mutual efforts in the
Richfield Shoppes project, leads us to our strong belief in the bright future for this
community. The Lincoln Companies has a tremendous pride in Richfield and its
revitalization. We believe that the Richfield Office/Service Center will be a positive
contribution to the City in a variety of ways and is the best possible use of .the site.
We look .forward to the opportunity to work in concert with the City and its residents to
make -this project a reality.
Very truly yours,
THE LINCOLN COMPANIES
1.~~ ~,
Charles W. DuFr sn
Executive. Vice P s ent
CWD:ds
RICHFIELD OFFICE/SERVICE CENTER
Project Summary
The Richfield Office/Service Center will be a 45,000 square foot office facility, providing
a flexible combination of, office space and storage/warehouse/assembly area, located on
Cedar Avenue between 66th and 67th Streets. The project will focus entrance. areas on
the northeast and southeast points of the building. A total of 100 parking spaces are
provided on the north and south areas of the project site,
Vehicular ingress and egress is designed to provide adequate access to the site without
undue interference of existing .traffic patterns.
Extensive landscaping will be used to protect the surrounding residential. areas.
The completed project will have a cost of approximately $1,300,000.00.
RICHFIELD OFFICE SERVICE CENTER
DESIGN NARRATIVE
The development ofthe Richfield Office Service Center is perceived. as a
unique and exciting opportunity to create a significant office development
meeting community demand for quality flexible office space.
Located at the southwest intersection of 66th Street and Highway 77, encompas-
sing 2.99 .acres, this parcel of land enjoys an envious presence in close
proximity to the airport/I-494 strip. It is unique in its location, and prox-
imity to major transportation arterials, visibility, access and area identifi-
cation. It represents an exceptional opportunity to locally oriented
businesses and firms who would be accessible to the strip while-benefiting
from the economies afforded by this location. It is our intent to create an
environment of the highest quality with emphasis. on producing an attractive
.presence, visibility and image.
The design solution evolved into a sensitive, articulated building providing
maximum flexibility for 45,000 square feet of office/service space. The
combination of shared entrances and 14' clear height through out .provides for
the flexible spatial needs of various size businesses while maintaining a low
profile, organized office development. The "sawtooth" design maximizes
exterior office space overlooking inviting landscaped "plazas", and orients
the development toward the high visibility intersection of Cedar Avenue and
66th Street. Extensive use of glass and brightly finished metal soffit panels
set within the warm brick exterior result in an extremely attractive develop-
ment.
Careful consideration is given to the preservation of the mature row of dense
evergreens along the west property line. This natural feature is utilized as
a truly effective buffer to the adjacent residential area. In addition, ail
service vehicle traffic is routed through the site, around the building and
directly towards the access ramp onto Highway 77. In doing so, it is proposed
that the portion of 67th Street between Old Cedar Avenue and 18th Avenue be
vacated. This will eiimnata the existing traffic volume generated through
the neighboring residential area towards the ramp at Highway 77 and also
allows for additional landscaping to the south.
Generous landscaping is provided throughout the development. The articulation
of the building complements the highly landscaped entrance plazas. Selective
placing of landscaped parking islands, and gentle berms, results in an
aesthetically pleasing environment.
Careful consideration has been given to the interrelationsh p of the building
to the site, massing of the structure, site forces, roadway patterns and adja-
cent development. The Richfield Office Service Center, evolving from these
factors, results in a strong architectural statement and exciting addition to
the City of Richfield.
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RICHFIELD OFFLCE/SERVICE CENTER
City Participation
In order to develop the. project as described in this proposal, the developer will require the
approval and participation of the Housing ,and Redevelopment Authority and the City
Council concerning the following items:
1. Negotiate and close sale of the subject site.
2. .Vacate 67th Street between 18th Avenue and Cedar Avenue.
3. Establish appropriate zoning classification or variance for light-commercial
use.
4. Approve issuance of industrial development revenue bands. (This item is not
an absolute requirement to the feasibility. of the project. Our request is subject to
amendments to existing federal law governing the issuance of such bonds.)
THE DEVELOPMENT TEAM
The following is a brief overview of the principal. components of the development team
that will be involved in the Richfield Office/Service Center..
THE LINCOLN COMPANIES
The Lincoln Companies will be the developer of the Richfield Office/Service- Center. The
Lincoln Companies is a diversified yet integrated commercial real estate group involved in
~1 real estate development, leasing, management and brokerage. It consists of Lincoln
Development Services Corporation, Lincoln Properties, Inc., Lincoln Property Manage-
ment Company, and Lincoln Securities Corporation. With experience spanning: three
decades, The Lincoln Companies has enjoyed extensive participation in the areas of office
buildings, retail centers, and multi-#amily housing, both on a ,large and small scale.
Each phase of a successful development is handled by experienced Lincoln personnel.
Development, leasing, and management are performed by Lincoln subsidiaries, providing a
level of continuity, control, and responsiveness that is not often matched by traditional
developers.
Examples of recent projects in which Lincoln has been involved include:
1. Richfield Shoppes North and Richfield. Shoppes South shopping centers, a
90,000 square foot renovation and new construction retail facility, Richfield,
_ Minnesota.
~ 2. International Centre;. a 340,000 square .foot office condominium develop-
rnent, Minneapolis, Minnesota.
3. Irvine Park Towers, a fourteen story mixed-use development, St. Paul,
Minnesota.
4. The Crystal Gallery, a 90,000 square foot retail/office center, Crystal,
Minnesota.
5. Becker Park Manor, a 91 unit elderly residence project, Crystal, Minnesota.
• 6. Northome Shopping Center, a 45,000 square foot shopping. center renovation,
Falcon Heights, Minnesota.
7. Ford Shopping Center, a 50,000 square foot retail renovation, St. Paul,.
Minnesota.
8. Fairdale Shoppes, a 60,000 square foot shopping center, Roseville,
Minnesota.
in addition, Lincoln is currently involved in the management and leasing of many othec
projects on a local and national level.
Specific financial data and detailed project experience can be furnished, on a confidential
basis, to the City upon request.
EXPERIENCE
Korsunsky Krank Erickson Architects, Inc.
__.._.
Korsunsky Krank Erickson Architects, Inc. was founded in 1968. Based on our
philosophy of growth through professional service, we have grown to a profes-
sional staff in excess of 70. The firm is an active member of the Minnesota
Society of the American Institute of Architects. The architects on our staff
are registered throughout the country and hold N.C.A.R.B. certification.
Our planning and design capabilities have been enriched by experience in the
widest range of private and public development work -- large multi-use comp-
lexes, corporate headquarters, investment office buildings, shopping centers,
apartments,. .condominiums, hotels, urban development and recreation.
A basic reason for the firm's growing recognition and capability is through
assistance to developers in achieving maximum investment results without
premium cost. Our method of accomplishing this objective is two-fold -- a
design process that produces imaginative yet simple development concepts and a
team of staff and consultants which. represent experience in many fields and
areas of expertise including architecture, land planning, energy, engineering,
zoning and transportation.
This experience means that the right questions are asked at the outset begin-
ning with development programming/land planning, and continuing through each
stage of development. Therefore, the developers are provided with numerous
options during each successive stage of the development.
Our fundamental work of analysis and planning enables us to provide the deve-
1 open with a .more complete understandfing- of-i ni ti-a~- and continuing costs
together with realistic projections of development.
In addition to-our design services, we serve as consultants and inspecting
architects for many of the leading financial institutions including Travelers'
Insurance Company, Norwest Bank of Minneapolis, Twin City Federal Mortgage
Corporation, Prudential Insurance Company, Norwest Midland and Tower Mortgage
Company. We are currently providing these services for numerous. projects with
an aggregate construction volume in excess of 100 million dollars.
Through a separate division, SPACES, we provide space planning and interior
design services.
KORSUNSKY KRANK ERICKS~N ARCHITECTS. INC. ARCHITECTS • PLANNERS • NVTERIOR DESIGN
OFFICE/SERVICE PROJECT SUMMARY
SIZE
PROJECT LOCATION (SQ. FT,
Kawasaki Motors R & D Headquarters Shakopee, Minnesota 30,000
Built 1973
Twin City Fan & Blower Co. Minneapolis, Minnesota 67,200
Built 197b
3
Overland Express Blaine, Minnesota 33,490
Built 1979
Stratoflex, Inc. ~ Plymouth, Minnesota 33,000
Built 1978
The Press, Inc. Chanhassen, Minnesota 25,000
Bu~i 1 t 1.979
Twin City Fan & Blower Co.
Phase II
Built 1979
Instant Web, Inc. Chanhassen, Minnesota 150,000
Preliminary Design
Micro Component Technoloc~ St. Paul, Minnesota 30,000
Corporate Offices
& Production Facility
Reply Systems, Inc. Chanhassen, Minnesota 15,000
Built 1980
Park-One Chanhassen, Minnesota 40 Acres
Schematic Design
Kraus-Anderson Yard Operations Blaine, Minnesota 30,000
B.u i 1 t 1980
Gorgen Company Minneapolis, Minnesota 13,300
built 1980
570 GALAXY BUILDING 330 SECOND AVENUE SOUTH MINNEAPCUS, MINNESOTA 55401 (612)339-4200
OFFICEJSERVICE PROJECT SUMMARY
PAGE 2
PROJECT LOCATION SIZE (SQ. FT.)
Micro Component Technology Minneapolis, Minnesota 21,740
Addition
Built 1980
Urban East Minneapolis, Minnesota 836,000
Schematic Design
Superior Plating, Inc. Minneapolis, Minnesota 125,000
Preliminary Planning -
Braun's,Fashions, Inc. Eden Prairie, Minnesota 75,000
Built 1981
McGlaughlfn Gormley King Company Coon .Rapids, Minnesota 60,000
Preliminary Planning
Employers Overload Bloomington, Minnesota 30,.0.00 ,
Built 1972
Kraus-Anderson Building Company. Minneapolis, Minnesota 13,000
Built 1974 •
Parkway-Building - Burnsville, Minnesota 30,000
Built 1979
Galaxy Building Minneapolis, Minnesota 250,000
Built 1980
Sentinal Office Building Edina, Minnesota. 60,000
Preliminary Design
Walman Optical Company Minneapolis, Minnesota 50,156
Construction 1982
Midwest Machine and Tool Fridley, Minnesota 15,998
Construction 1981
Instant Web, Inc. Chanhassen, Minnesota 210,000
Office and Production Area
Built 1983
Micro Component Technology Shoreview, Minnesota 180,000.
Office and Production Area
Built 1983
Prime Professional Center Edina, Minnesota 30,000
Built 1983