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02-06-84 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 8 Agenda February 6 , 19f34 Housing and Redevelopment Authority Commissioners City of Richfield Subj ect : Update on Derrick Project Dear Commissioners: City staff and Roger Derrick and his representatives met at the city attorney's. off ices on Monday, Janu ary 30. The purpose of the meeting was to review and discuss the most re-cent draft of a development agreement -; between the City/HRA and Derrick for the redevelopment of the Godfather Block. As a result of the meeting, several issues remain to be resolved. Foremost among these issues is the timing of the HRA conveyance of property to Derrick and Derrick providing evidence of financial commitments and construction contracts to the HRA. While it is expected that all of the HRA property will be conveyed at one time after Derrick provides the financing and construction commitments, both parties are trying to resolve how this might occur early enough to allow significant buj_lding during 1984. Risk increases, particularly for the HRA, if construction is delayed until 1985, since the HRA's financing for the project assumes significant con- struction in .19$4. Another issue of concern to staff is Derrick's ability to con- struct the project if congressional action limits the availability of Industrial Development Revenue Bonds or Housing Revenue Bonds. At the January 30, 1984 meeting, Roger Derrick said he believes other financing could be available, perhaps through a partnership with an insurance company. Other issues remaining to be resolved in the development agreement include the form of the developer's guarantee of the tax increment payments to the City/HRA, the proration of title insurance costs and other less significant issues. The city attorney's office is proceeding in the acquisition of the Strom property. As previously authorized by the HRA, this acquisition will involve a quick-take procedure to allow a more prompt taking of the land by the HRA. HRD staff are making signi- ficant progress in :the relocation of various tenants of the Strom property.. Negotiations have not commenced, of course, for acquisition of the Godfather Restaurant (Heilicher) property. The timing of this HRA Letter No. 8 -2- February 6, 1984 acquisition is very much related to the successful completion of the development agreement and the expected time of conveyance of all of the property to the developer which in turn is dependent upon the developer providing financial commitments and construction contracts. A meeting between John Dean of the attorney's office, and Mr. Derrick's representatives was to be held on Friday, Febru ary 3, 1984.. The HRA attorney and the Executive Director may, as a result of the Friday meeting, be able to provide a further update to the HRA. ctfu~ly, J~~fa.nitted% VINV ohn G. C,rt right xecutive Di ctor JGC/ej a HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 7 Agenda February 6 , 198.4 Housing and Redevelopment Authority Commissioners City of Richf ie ld Subject: Cedar Avenue Redevelopment Discussion Dear Commissioners: The staff has met on two occasions during the past two weeks with representatives of Lincoln Properties, Inc. and they have in- dicated some interest in the redevelopment of the Cedar Avenue site. They are specifically interested in the area from 63rd Street Southward to 66th Street, or 67th Street. While the devel- oper does not have specific plans drawn at this point, redevelopment would Generally be restricted to the land which lies east of Cedar Avenue and west of Highway 7?. Lincoln Properties has retained the services of an architect and they will be preparing conceptual and schematic drawings for the site during the next month. The in tended reuse of the s ite would be f or an office/warehouse complex. It is envisioned that this would be a staged-type of de- velopment which wou ld occur over a period of several years and would consist of the construction of several office/warehouse "modu les". The Lincoln Properties representatives have also been told that they need to potentially accommodate a Richfield Liquor Store on the northeast corner of 66th Street and Cedar Avenue.. They have been told that this is by no means a final decision, but that this particular location would be very visible from Highway 77 and would represent a much better site than. the present one occupied by the Cedar Avenue Liquor Store. Financial information has been compiled in only a very prelim- inary manner at this point and .the staff is not presently in the position to comment on the financial feasibility of the project. The city is also going to utilize the services of Beverage Marketing Incorporated, the consulting firm that the city has been using for the past two years to advise us on the location al con- siderations for the Cedar Avenue liquor store. HRA Letter No. 7 -2- February 6, 1984 The staff will be available at the HRA meeting to answer any questions on this project. JrC/ej a HOUSING AND REDEVELOPMENT AUTHORITY Off ice of Executive Director HRA Letter No. 6 Agenda February 6, 1984 Housing and Redevelopment Authority .Commissioners City. of Richfield Subject: Report on Proposed Airport Zoning Ordinance for .the Area Surrounding the Minneapolis-St. Paul International Airport Dear Commissioners: On January 18,.1984, the Minneapolis-St. Paul International Air- port Joint Airport Zoning Board adopted an Airport Zoning Ordinance which would apply to a portion of Richfield. The property affected by the proposed Airport Zoning Ordinance is land lying within 14,000 feet. of the airport's runways. Only the east side of Richfield falls within the 14,000 feet airport zoning district. The types of restrict- ions proposed for each area are set forth in detail in the proposed ordinance and official maps. Official maps are available at the city hall offices for inspection. The precise restrictions which would be imposed vary, depending upon the location of the property. The restrictions generally regu- late the height of structures, their location or size, the use of buildings, and the density of population. The ordinance is designed to prevent new development from becoming a safety hazard. The Joint Zoning Board does not anticipate that any existing land uses in Rich- field will be affected by the ordinance. - The proposed airport zoning ordinance would have minimal effect on Richfield. No areas in Richfield-are within Safety Zone "A". A small portion of southeast Richfield is in Safety Zone "B". However, because the land uses within Safety Zone"B" were developed before July 2, 1979, they are classified as an established residential neighborhood in a built-up urban area and, therefore, are exempt from the use restrictions of the ordinance.- Safety Zone "A" is the area immediately adjacent to the end of the runway. This zone is subject to both height restrictions and extensive land use restrictions. Safety Zone "B" is subject to height restrictions and has limitations on land use which only allow low density uses. Zone "B" extends from the outer limits of Zone "PP for a distance .of 2,333 feet in all dir- ections. Safety Zone "C" is essentially all land within a radius of 10,000 feet from the ends of all runways, which is not within either Zone "A" or Zone "B.". Zone "C" has only a height restriction of 150 feet above the established airport elevatfion. There are no land use limitations in Safety Zone "C". HRA Letter No. 6 -2- February 6, 1984 The ordinance height restrictions for Zone "C" height re- strictions do apply to that part of Richfield lying generally east of Nicollet Avenue, since a majority of this area is within. Safety Zone "C". Nothing in this area can be built which would ex- ceed the elevation of 991 feet above mean sea level.. The highest point within the Zone "C" is approximately 859 feet above mean sea level so a structure could be built which is 132 feet high and still meet the ordinance restriction (this would allow a building of 8-12 stories, depending on use and story height).. The southeast corner of Richfield is within the precision instrument approach zone and is subject to more. stringent height restriction. The precision in- strument approach zone begins near the end of the runway and angles upward at a 50-1 slope. The most stringent .restriction would be in the area of 73rd and Cedar Avenue. A structure could not be built. in that area which exceeds 42 feet in height. Farther away from the end of the runway in the precision instrument approach zone, ...the maximum height allowed increases to 130 feet. These height restrictions shouldn't have a sign if icant effect on Richfield because our zoning ordinance is equally, or .more re- strictive.. The maximum height for a dwelling in an "R" single family zoning district is 25 feet and for other structures is 42 feet. The maximum height allowed in commercial .zoning. districts is 40 feet. The only thing to be immediately aware of is radio and TV antenna heights in southeast Richfield. However, the new height restrictions would have to be taken into account. in planning .new land uses or zoning changes in these areas. Rick Jopke, city planner, and Vern Luettinger serve as Richfield's representatives on the Joint Airport Zoning Board. Mr. Jopke will be present at the Febru ary 6, 1984 HRA meeting to present an admin is- trative report to the HR.A on this ordin ance. Re pect~ submitted, ohn G..`Ca twrig City Manager JGC/ej a HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director Housing and Redevelopment Authority Commissioners City of Richf field HRA Letter No. 5 Agenda February 6 , 1984 Subject: Results of Competition for Housing Mortgage Revenue Bond Authority Dear Commissioners: The city and HRA have successfully secured $4 million in hous- ing mortgage revenue bond authority. This allows bonds to be sold to finance mortgages for housing within the Portland Avenue Devel- opment Area (PADA) at Legion Lake, provided that congress passes favorable legislation this year.,. This memo with attachments, summarizes the results of the anal- ysis performed by the Minnesota Housing Fin ance Agency (MHFA),. On December 30, 1983, the plan and program .adopted by the city council and HRA for PADA was submitted to MHFA. Richfield requested a $4 million share of the $27.5 million bonding authority that MHFA allocates to cities-each year. Although the federal laws which regulate the issuance. of housing mortgage revenue bonds have "sunset" , MHFA continues to proceed in evaluating proposals under the assumption that cities will be able to issue bonds in the future.. This assumes that new federal legislation will be enacted this spring, and that revenue bonds for housing can once again be issued. Six governmental entities submitted requests::which totaled $56.445 million. The requests were from Richfield, Dakota County, (for Lakeville), Dakota County (for Rosemount and Farmington), Chaska, Shakopee, and South St. Paul. The determination of which communities would share in the $27.5 million is based on the percentage of "non- bond proceeds" contributed relative to the size of the issue. As a result. of our proposed contribution of $1,192,826 (or 29.82 percent), Richfield was ranked first. The detail of the request for authority, the percentage of non-bond proceeds, and the dollar. amount of non-bond proceeds is summarized in the following table: plicant Richfield Dak.Cty (Lakeville) Dak. Cty (Rosen~aunt Farmingtcxi ) Chaska Shakopee South St. Paul Dollar Request $ 4,000,000 $10,000,000 $14,945,000 $10,000,000 $10,000,000 $ 7,500,000 Non-bid Perc . 29.82% 21.48 % 21.48% 19.75% 16.61 % 16.21% Actual Dollar ($1,192,800) ($2,148,000) ($3,210,186) ($1,974,900) ($1,661,000) ($1,215,750) HRA Letter No. 5 -2- February 6, 1984 Dakota County had to reduce its request for funds. since it exceeded the amount available. The other communities did not receive funding. With the end loan financing secured, Richfield can continue to proceed in its planning of a housing development at PADA. However, the bonding authority allocation cannot be utilized in 1984-until federal legislation again permits the issuance of tax exempt revenue bonds. For that reason, MHFA has qualified its award to Richfield by saying "MHFA has reserved. the right to cancel its decision and re-evalu ate the process depending upon what happens in Congress." It is very difficult. to project the outcome of congressional action. Further bond issuance restrictions may make it difficult to issue any tax exempt bonds. A reduction in the "cap" for .single f am- ily mortgage revenue bonds may not affect Richfield since it was sel- ected first. In addition, the failure to resolve issues relating to Industrial Revenue Bonds will prevent issuing single family bonds .since the two are tied together in one congressional bill. Thus, it remains very important that the message continue to be sent to our congressional representatives that the tax exempt revenue bond problems must be resolved as early as possible in 1984. The success of the Richfield program depends on it. R ectfu l bmitted, John G. Cart 'gh City Manager JGC/ej a cc: Mayor and Council Members ~V~~~N~ MHFA Board Agenda Item: 5.0.(3). GATE: January 26, 1984 ~ (~/Yf SUBJECT: Allocation Of 527.5 Million Of Qualified Mortgage Bonds BACKGROUND The Municipal Housing for an allocation Bond Tax Act of 1980. 1983, the Agency Chapter 46X.09. The bonds. The Agency million. Programs Act (Chapter 462C) allows communities to apply ~f the State's bonding authority under the Mortgage Subsidy Although the Mortgage Subsidy. Bond Tax Act expired in intends to proceed with the. process outlined in Agency will allocate 527.5 million of qualified mortgage received six applications requesting a total of 556.445 The law, Chapter 46X.09, states that: u...the Minne-sofa Housing finance agency shall only approve tfiose programs based upon the following factors and based solely upon the program with accompanying information submitted to the agency." The Minnesota housing finance agency shall determine. the following factors for each program: (1) The proportion of the proposed issue which is reserved for a period of not less than six months for persons and families with incomes below 80 percent of the limits on adjusted gross income provided in section 4Cr2C03-,--subdivi-s-ion 2; (2) The proportion of the proposed issue which is reserved for a period of not less than six months for persons and families with incomes below 90 percent of the limits on adjusted gross income provided in .section 46X.03, subdivision 2; and (3) The amount of non-bond proceeds, if any, as a percentage of the proposed issue, which are to be contributed to the program.. Programs shall be ranked based upon the percentage determined for factor (1) with the program having the highest percentage receiving the highest ranking. If two or more programs have the same percentage, then they shall be ranked based upon the percentages determined for factor (2) with the program receiving the highest percentage receiving the highest ranking. If two or more programs have the same percentage for factors (1) and (2), then they shall be ranked based upon the percentages determined for factor (3) with the program having the highest percentage receiving the highest ranking. If two or more programs have the same percentage for factors (1), (2), and (3), then their ranking shall be 333 Sibley Street. St. Paul, Minnesota 55101 (612) 296.•7608 Gn~~~l P1n~.r.~f~~n~1~.~ 4-~n~~cinA Ar1(j Fnual C~PfffAftUnltV Emelovment determined. by lot. The Minnesota housing finance agency shall then approve programs based upon the ranking until an amount equal to 21-1/2 percent of the state ceiling for the calendar year, reduced by any amount of bonds which are allocated by law to specif'ed cities, is allocated pursuant to this subdivision. Approval of a program shall constitute an allocation of a portion of the state ceiling for mortgage revenue bonds equal to the proposed bond issue or issues contained in the program, provided that. the allocation for the lowest ranked program that receives an a7 location may be equal to or less than the amount of the bond issue or issues proposed in the program. DISCUSSION Pursuant to 4620.09 the Agency has reviewed applications for an qualified mortgage bonds. The communities and the allocations of requested are shown in Table 1. The rankings on the three factors Tables 2-4. Table 1 Dollar Amount Appli-cant of Request Dakota County {Lakeville) 310,000,000 Dakota County (Rosemount 314,945,000 and Farmington) Chaska 310,000,000 Shakopee 310,000,000 South St.-Paul 3 7,500.,000 Richfield 3 4 000 000 TOTAL 56,445,000 Table 2 allocation of mortgage bonds are shown in RANKING ON PERCENT OF ISSUE RESERVED FOR SIX MONTHS AT 80x OF PROGRAM INCOME LIMITS Percent Applicant Reserved Ranking Dakota County (Lakeville) Dakota county (Rosemount and Farmington) Chaska Shakopee. South St. Paul Richfield 100x ~ 1* 100X 1* 100x 1* 100x 1* 100x 1* loox 1* *Indicates ties. Table 3 RANKING ON PERCENT OF ISSUE RESERVED FOR SIX MONTHS AT 90% OF PROGRAM INCOME LIMITS Percent Applicant Reserved Rankin Dakota County 100% 1* (Lakeville) Dakota County 100% 1* (Rosemount and Farmington) Chaska 100% 1* Shakopee 100% 1* South St. Paul 100% 1* Richfield 100% 1* *Indicates ties. TABLE 4 RANKINGS OF NON-BOND PROCEED PERCENTAGES Applicant Percentage Rankin Richfield 29.82 1 Dakota County 21.48 2* Lakeville Dakota County 21.48 2* Rosemount and Farmington Chaska 19.749 3 Shakopee ~ 16.61 4 South St. Paul 16.21 5 *Indicates tie. rage 4 REQUESTED BOARD ACTION The Board should approve the allocation of qualified. mortgage bonds shown in Table 5. TABLE 5 Applicant Allocation Richfield $ 4,000,000 To Be Determined By Lot* $23,500,000 TOTAL $27,500,000 *POSSIBLE OUTCOMES Applicant/Request Dakota County {Lakeville)/$10 million Dakota County (Rosemount and Farmington)/$14.945 million Outcome A $10 million $13.5 million Outcome B $8.555 million $14.945 million ~~'~~~,,~~~±±TA ~~~~~~L7 MHFA BOARD AGENDA ITEM: 6.D.(4}(c) ~'~~~~~~ ~~1~~~ DATE: January 26, 1984 SUBJECT: Richfield Local Housing Bond Program - Single Family. Mortgage Program DISCUSSION Pursuant to Minnesota Statutes Section 462C (Act), the Minnesota Housing Finance Agency (Agency) has completed its review of the Richfield program (see Table 1 for a summary of the program). The. Act directs the Agency to review each program and determine: a) Whether the program furthers statewide housing policies; b) Whether the program is capable of implementation without material adverse effect on financing programs of the Agency, without subjecting the interest of future bonds of the Agency to federal income tax, and without exceeding the limitation provided in Section 7, Subdivision 2; c) Whether the program provides for administrative and bond issuance costs that are reasonable; and d) Whether the program complies with all other requirements of section 1 to 8. The Richfield program is in compliance with all applicable sections of the Act. REQUESTED BOARD ACTION The Board should approve the program contingent upon the revenue bonds or other obligations being sold for more than 97% of the principal amount of such bonds or obligations. 333 Siblev Street. St: Faul. Minnesota 55101 (612) 296.7608 c_....i n.,.,__,.._. .. _ _. ,.. ,, ,. .,.,.~ C.,,,o1 (lnrnrt~~nity ~rr~~lnvrnont