11-21-83 agendaHOUSING AND REDEVELOPMENT AUTHORITY
.Office of Executive Director
HRA Letter No. 37
Agenda November 21, 1983
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Proposed Development - Godf ather. Block
Members of the city staff and representatives of Derrick
Land Company, the proposed developer of this project, will meet
with the city attorney on Monday afternoon, November 21, 1983.
A verbal report on this 'project will be presented at the
HRA meeting on Monday evening.
R spectf~yllyi s mined,
~ / '
,~ ~
John G. ..Car fight
:~ Execut~ve 1irector, l
JGC/eja
HOUSING AND REDEVELOPMENT AUTHORITY
Off ice of Executive Director
HRA Letter No. 36
Agenda November 21, 1983
Housing and Redevelopment
Authority Commissioners
City of Richf field
Dear Commissioners:
Subject: Lincoln Hills School Site
The city staff has met recently with Jerry Kjorlien of the
School District, and with Dick Krier, their consultant, about
the possible .development of the Lincoln Hills School Site.
The city proposal seeks acquisition to retain the playground
as a park/open space site and to demolish the school building and.
replace it with a housing project. Several total development cost
schedules. have been prepared dealing with this site.
The housing project would utilize five acres. The units
per acre would range between 16-20 units per acre. The zoning
ordinance for multi-family dwelling districts may permit as many
as 22 units per acre. The housing proposal consists of 60 two-
bedroom units and 20 three-bedroom units. The land cost per unit
would range from $5,000 to $8,000.. The sale price of the units
may range from $72,000 to $80,000 depending upon the cost paid
for the site.
The source of funding for the project could be from one or
more of the following possibilities:
1. Tax increment financing;
2. Special revenue fund for the park site;
3. Sale of the land to a developer; and
4. Community Development Block Grant funds.
City staff received encouragement from the school district
to proceed. Final data will be obtained on what amoun t would be
generated from a 12, 15 or 20-year tax increment financing plan.
A separate memo dated November 9, 1983, entitled "Development
5cenerio Preference for Lincoln Hills", sets forth the staff's
opinion on the types of housing most in need for Richfield. The
highest priority is alternative type .housing for young families
(i.e., townhouses, ~ondominiu ms). Moderate cost ownership is im-
portant, with housing for senior citizens another high priority.
One scenerio suggests that if Richfield Senior citizens were to
HRA Letter No. 36 -2-
purchase a condo {LSD), the city could possibly use MHFA
mortgage revenue bonds for below market rates to Richfield
first time family home ownerships if they purchased the home
from a senior citizen who has relocated to the Lincoln Hills
condo project .
An alternative approach could be to have the school dis-
trict implement the above program. However, without a land
writedown feature, the dwelling units would be priced too high
to meet the modest home ownership purchase price of $70,000 to
$80,000.
ctfu,Xly;' ~i'bmitted ,
( ~ /~
ohn G, ~a~ wrigh
City Ma~iager I
JGC/ej a
~;ovember 8 , 19 83 -
Develocment Scenerio Preference for Lincoln _11s
;.ss~.:-~ction
Approximately the western 2 of the site woulc be utilized as open
space.
The followinc scenerios for housing are resented with the
understanding that before ,a fznal selection S made, the market-
ability of the ccncepts would be evaluated. "-he arguments for and
against each scenerio follows.
1. Owner-occupied townhouse type units for young families (2-3
bedrooms) with a sales price of approxim~~ely $72,000. The
HRA and school district would jointly par'"~icipate i~ provid"ing
the necessary assistance (i.e. land writedown, delayed land
payment, tax increment fin ancing). "
Since 1975, the majority of public sNbsidy has been directed
.toward providing housing"for the elc~2rly (Richfield Tower
149 units, LSD Condo 178 units and ~~2ction S existing
about 60~ of units cr 14a). This sU4gests that it would
be appropriate to now focus public c~veiopment assistance
or. housing for young families.
Townhouses are an efficient type of ~;aelling unit thus
Operation COStS are 1C47~ ar: aCVa_^.tage tG f i _"St-tlme
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I. a ~ t5 ? Drogram Ob jeCt.Ve iS aCh i eyed, ( . e . COnStrt:~Ct10'
on 3G 4o O~rTner-occupied townhouses .or veur~g families
::~arke ~- place .or L'^a sa:^e bu;~ers as t:o.vn^o~.zses at
inn ~~ ( ~. ~ .J .
1
Richfield is a community of owner-occupied 'Housing (66% of
units are owner-occupied).
Richf t eld is a community of moderate income fa_*nilies and
households suggesting that moderate cost housing is
appro riate. The median household's income in 1980 was
\$20,4.4, the median family income was $24,941. The house.
hold i :come level is about the same as the County and regio=
The f~Ztiiy income is slightly less tha~^ the County at
$25,1- 3 ar_d }..he region at $27 , 931 . ---
In 190, 92a of the housing was valued at less than $80,000.
The srte is not close to supporting retail =acilitias
anC 1~j better SL'1t2'.1 fOr younger famil~2S W~"10 are .more
:iiOb=~
preSt:h~~dl_! t."_e c~~01:'ii_^_~ Cp^c.n Space :d7.~1 ~Je =0r more
phys iC all-, 3Ct1.ve reCreati Onal purposes, P..Ore CC,::patlbie
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with family 'r:ous ir:g .
2. Owner-occupied tow-nzouse tV'Oe ~.~nits for elderly linked to a
"roll over" (below-market mortcage} crocram crovidir.a Tor the
.-~ ~ .~_ :ie eicer5 ~ :14~e-ia:~~ '~i :LOi"le ~~ .~.. 'JL:.~.4 _C1.'.m~ ~ <t
The a.u~^.b?r c- cersons ~ er !:ouse~old is declirlirg
=roi'": ~ ...~ _^ 1 ~ % V .O 2 . "~? _"' lys~ ?"'?iC Sugge LS
underutilization of the existing reusing stock .
______Providing access to the housing for young growing
families would be desirable.
Older home.oc~rners are often equity rich and cash
poor. The sale of their home could result in an "
_ ~
improved life style. As .well as allow more physically •
able young families to maintain the existing housing.
The elderly benefit from congregate housing. .
The marketing of the LSD Condo project suggests that
Richfield elderly home owners are reserved when offered
a high-rise condominium housing alternative, and may
have similar reservations about a tO~rll:house development.
3y using t-?HRa as the source =c= "roll ever" mortgage
financing, a cash reso~,:rce or non-bond proceeds
would be needed.. Wit: housi_^.g on Lincoln Hills ~
requiring Su'DS1dy, there may not be much additional
-4-
cash resource available for th~.s orocram.
~.cccr:;,~ng .o ~~`~nneapolis area 3oar~: oT Realtors, the
average male _rice o= P.ic:=ie1d homes was $71,273 in
_: 02 . ---e "'~..,__..~_., sale ~: _ce .o_ '''_H= _. ~:t; ~- _ ;,~ nn
programs 1S $ % ~,~~ Indicating a *iiark2t mail e<{13t fOr d
rt?,.vll O'•, ern .J :^Ogr=_.~^ .
3. Owner-occupied townhouse type units oriced at market based on
an agreement between a developer and the school district.
The supply of housing for middle to upper income should
be increased.
City resources would be utilized in a manner typical
for private develop:rent .
With the limited land and finar_cial resources, the
very few opportunities to provide moderate cost rousing
would•be lost.
A rental project is not acceptable because a large subsidy would
onls~ result in units priced at about a market rate. Richfield
~~readV has an ample Supp1V Of rental Un1tS that wOUld CCmpete With
such r_`w units . (~:Z 89 ur:i t develoLment cvith 2>> 3 bedrooms and
$600 rents, and 75, 2 bedrooms wit:: $~00 rents could "afzord" only a
$200, 000 "up `rout" lard .cost.)
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HRA RESOLUTION NO.
RESOLUTION AMENDING SALES CONDITIONS AUTHORIZED
BY THE HRA FOR 6822 QUEEN AVENUE SOUTH
WHEREAS, on August 15, 1983 the HRA, in HRA Resolution #227,
authorized the sale of the property located at 6822 Queen Avenue
South, said property legally described as follows:
Lot 6, Block 2
Tingdale Bros., Lincoln Hills Third Addition
Hennepin County
WHEREAS, a six-member, moderate income family has received
preliminary approval for an MHFA Home Mortgage Loan to purchase
the property, and
.WHEREAS, MHFA requires the existing home at 6822 Queen Avenue
South have a sale price of no more than $75,000, and
WHEREAS, therefore, it is necessary to reduce the HRA second
mortgage interest on the property from $22,500 to $20,000 to meet
MHFA sales price guidelines.
NOW, THEREFORE, be it resolved by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota:
1) that the HRA amend HRA Resolution #227, changing the
second mortgage amount from $22,500 to $20,000; and
2) that the Executive director is authorized to execute
all closing documents effectuating such a change.
Passed this 24th day of October, 1983.
Thomas E. Harms, Chairman
Joan Helmberger, Secretary
HRA RESOLUTION N0. 227
RESOLUTION AUTHORIZING SALE OF PROPERTY
AT 6822 QUEEN AVENUE SOUTH
WHEREAS the Housing and Redevelopment Authority of
Richfield, Minnesota.fhereinafter referred to as the HRA) owns
certain real property located at 6822 Queen Avenue South, said
property legally described as follows:
Lot 6, Block 2
Tingdale Bros. Lincoln Hills Third Addition
Hennepin County; and
WHEREAS, the property was acquired by the HRA so that the
South Hennepin Vocational Technical Center (Vo-Tech) could
relocate and rehabilitate a house on the site and the HRA could
subsequently sell the home to a moderate income. family; and.
WHEREAS, .the rehabilitation work is .completed and dispo-
sition of the. property would allow for the timely payment of
the Vo-Tech. contract; and
WHEREAS, as the. result of advertising, and in cooperation
with the lender, a qualified purchaser for 6822 Queen Avenue
South. has. been selected and it is likely that .they will be found
eligible by FHA. or MHFA; and
WHEREAS, a purchase agreement must be authorized by the
HRA; and
WHEREAS, the conditions of sale include a sale price of
$55,0.00, a mortgage amount of $50,000, and provisions for a
second mortgage by-the HRA in the amount of $22,5.00; and
WHEREAS, the purchaser will also be subject to any require-
ments imposed by FHA or MEiFA; and
WHEREAS, the HRA has completed a public hearing on the
proposed disposition of 6822 Queen Avenue South.
NOW,. THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVEL-
OPMENT AUTHORITY OF RICHFIELD, MINNESOTA:
1) that the property located at 6822 Queen Avenue South
can be sold in accordance with the conditions of sale; and