04-30-84 agenda
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CITY OF RICHFIELD, MINNESOTA
Office of City Manager
Council Letter No. 163
Agenda April 30, 1984
The Honorable Mayor
and
Members of the City Council
City of Richfield
Subject: CONSIDERATION OF LEGIO14 LAKE DEVELOPMENT
CONCERNING HOUSING AND PARK IMPROVEMENTS
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Council Members:
BACKGROUND
On April 2, 1984, the City Council, HRA, Planning Commission
and Community Services Commission met to discuss the future of
Legion Lake and the potential for developing housing on the site
on the east side of Portland Avenue at 64th Street. Discussion
centered on the future physical development of the Legion Lake
area and the development of townhouses at 64th Street and
Portland Avenue for first time homebuyers. The major point of
consideration was the impact each activity would have on the
other.
The Mayor requested the staff to study the issues raised
during that meeting. Timing, as it relates to the park planning
process and the need to inform MHFA of the plans for use of the
tax exempt housing revenue bonding authority by September 1,
1984, was a special concern.
STATUS OF MASTER PARK PLAN
The first step in the preparation of a master plan for
Legion Lake requires the following engineering data: (1) a
topographic manp; (2) boundary survey; (3) study of the lime
sludge pits: (4) storm sewer/ponding requirement study; and,
(5) soil borings.
1). The topographic map has been ordered. Mark Hurd will
have the area flown and complete the topographic on or
about June 1, 1984.
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2). Orr-Schelen-Mayeron and Associates, Inc. (OSM) has been
engaged to do the boundary survey. The boundary survey
is to be complete the first week of June, 1984.
Council Letter No. 165, Page two
3). A study of the lime sludge pits will be done for
economic and space considerations. OSM is scheduled
to complete the lime sludge pit study on or about the
end of May, 1984.
4). An agreement has already been made between the City and
OSM for a storm sewer/ponding requirement study to meet
the requirements of watershed management organizations.
It is anticipated OSM will complete the Legion Lake
storm sewer study sometime between June 1 and June 15,
1984.
5). Soil borings are scheduled to be done by Geotechnical
in two phases. The initial phase should be complete in
May, 1984. The second phase is scheduled to answer any
questions raised by the data gathered in the first
phase, to incerspace additional borings as needed, and
to coordinate with the storm sewer study. This second
or follow-up phase is scheduled for completion by the
end of June, 1984.
When the above technical data is complete, the information
is coordinated into a composite map. This work is usually done
® by a landscape architect. The period of July and August does
not apepar to be sufficient to complete both the composite map
and a master plan for Legion Lake prior to September 1, 1984.
Gair and Associates, a subsidiary of OSM, can provide the
necessary engineering background to coordinate the composite map
so that all the necessary elements are included and there is no
duplication of effort. Roger Martin of the University of
Minnesota offers experience in preparation of master plans and
his work with advanced architectural students has provided for
the countless hours needed to research a master plan and add the
creativity so important to such a plan.
It is the conclusion of the Community Services Department
staff that although a master plan for Legion Lake cannot be
complete by September 1, 1984, the city should proceedf with the
gathering of technical data as outlined above and enter into an
agreement with Gair and Associates and Roger Martin to provide a
composite map of Legion Lake by September 1, 1934 and a master
plan of Legion Lake to be completed by the end of calendar year
1984.
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Council Letter No. 163 Page three
HOUSING STATUS
The staff of the Department of Community Development has pursued the questions
related to use of the MHFA bonding authority. Research of these questions
resulted in three written communications to the HRA which were discussed at
their April 16, meeting. A copy of each communication is attached and a
synoposis appears below.
HRA letter number 17 responds directly to issues raised at the April 2, 1984
meeting. It indicates there is no flexibility with the September 1 reporting
deadline. It is law. That is, by that date, Richfield must indicate to MHFA
whether or not any of the $4,000,000 in bonding authority will be utilized in
1984. If bonds will not be sold during 1984, the authorization will be lost.
With regards to other issues, the letter indicates that the housing development
program may be modified somewhat so long as its basic integrity is not
substantially altered. Thus, units must still be affordable to first time home
buyers with an income between $25,000 and $35,000 and the ratio of "non-bond
proceeds" must be at 29.82 percent or greater. (The income limits may be
lower, but not higher). However, the site location for the housing may be
• shifted and the number of units modified. The letter indicates again
that the PADA site is still the most desirable location but discusses a
reduction in units to approximately 30. The remaining 10 units could be
located near 66th and Rae Drive where the HRA is currently developing new
housing and purchasing property (see attached site plans).
Memorandum number 17 explores three thoughts; (1)the use of the bonding
authority to finance the purchase of existing housing, (2)the importance of
housing programs in receiving grants for park improvement projects, and (3)the
apparent intended use of land aquired by the city in the PADA area. The letter
contains details on each point, however, it is appropriate to repeat here that
use of the bonding authority to permit the purchase of existing housing was
found to be financially infeasible because it would require substantial cash
contributions from the City and/or the HRA. Housing developments for families
such as the one proposed at PADA and the one proposed at Rae Drive are
important for obtaining a high Policy 39 ranking. A high rank results in
increased elgibility for grants for park development.
Finally, memorandum number 16 is a copy of a recent newspaper article. It
indicates that quality, affordable housing is being constructed in the Twin
City Metro area.
The result of the HRA review of these communications on April 16th, was the
adoption of a motion that staff proceed with an evaluation of the following
sites in order of preference:
40
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Page Four
-Rae Drive/PADA combination (40 units; 30 at PADA, 10 at Rae Drive)
-PADA alone (30 units)
-Rae Drive alone (10 units)
The three projects prioritized by the HRA and three other alternatives have
been studied by staff. Each alternative was evaluated according to four
criteria listed below. The results of the evaluation follow:
-whether the non-bond proceed contribution to the bond issue would drop
below 29.82 percent;
-what affect utilizing CDBG funds to acquire the property at 66th Street
and Rae Drive would have on marketing new units to moderate income
families who purchase them with tax exempt mortgages;
-the cost implications of developing housing on more than one site and
reducing the number of units in the project;
-whether a modified project can be developed to meet the MHFA
deadline of September 1, 1984.
• THE NON-BOND PROCEED CONTRIBUTION
The attached table (A) indicates the type and percentage of contribution for
six alternative projects. The six projects are the original proposal of 40 to
48 units at PADA; 40 units, with 30 units at PADA and 10 units at Rae Drive; 30
units at PADA; 18 units, with 8 units at PADA and 10 units at Rae Drive; 10
units at Rae Drive; and 8 units at PADA. The number of units, density,
size of bond issue, non-bond proceed contribution, and percentage of contribu-
tion attributable to each source, varies from alternative to alternative. Note
in column one, the original PADA proposal was 40 to 48 units at 12.5 to 15
units/acre, and a 29.82 percent non-bond contribution for a $4 million bond
issue. Seventy five percent of the contribution would come from tax increment
proceeds from the development and would be utilized to help keep interest rates
in an affordable range. The HRA was contributing approximately 13 percent of
the nonbond proceeds as land writedown and administrative expenses incurred in
acquiring the site and preparing the program. The developer was contributing
approximately 12 percent of the nonbond proceeds. To retain the integrity of
the original bonding authority application, alternative proposals would have to
equal or exceed the 29.82 percent contribution. However the number of sites,
number of units, and percentage of non-bond contribution attributable to each
source could vary.
By examining the columns and project alternatives, it can be determined that
all alternatives except the one in column 6, (8 units at PADA with a 25.8
percent contribution) appear to be feasible. The contribution attributable to
• each source varies with each project. The land writedown increase at Rae Drive
occurs because of the need to acquire privately owned improved property. CDBG
funds would be used for this purpose. The reduction in tax increment is the
• Page Five
esult of a decrease in the number of units and the higher property value at
Rae Drive because of existing structures. The percentage of non-bond
contribution in columns 2 through 5 exceeds 29.82b. Thus, it may be possible
to return some of the CDBG subsidy to the HRA in the future through the use of
a second lien which has been utilized in the past with Vo-Tech houses. If all
of the tax increment is not needed, a portion of it could be ;Wade available to
other taxing jurisdictions.
EFFECTS OF UTILIZING CDBG
As indicated in the original PADA bond program and application to MHFA,
the housing units would be marketed to families having incomes in the
$25,000 to $35,000 range. However, if CDBG funds were committed to a Rae
Drive site, there would be additional income limit requirements for
those units. Since site acqusition would be financed with CDBG funds, all
ten units would be marketed to families of the following sizes and incomes:
Family Size Maximum Income
2 $20,200
3 $22,750
4 $25,300
5 $26,850
6 $28,450
Some of the eligible families would fall slightly below the Richfield median
income of $24,941. While it is more difficult to qualify families
in the $19,000 to $23,000 income range, there are methods for reducing interest
rates further than the tax exempt rate, if necessary, by utilizing a new CDBG
interest rate reduction concept that was recently discussed by the City Council
and/or tax increment generated by the project and committed to interest
reduction. Further analysis of the need for additional interest reduction and
the amount of funds available is needed.
COST IMPLICATIONS OF HOUSING ON MORE THAN ONE SITE
There are three general catagories of costs that are affected by decreasing the
number of units in the development and/or increasing the number of sites. Tax
increment revenues are also impacted. Costs affected include those for
construction; marketing; bond issuance; and, tax increment revenue.
Construction costs are increased because housing on more than one site requires
additional planning preparation costs (site, buildings, surveys, soils), and
additional building materials (particularly since Rae Drive units would be
duplex units rather than 4 to 6 units per building). With fewer units, the
cost per unit increases. Construction costs could also increase if two
developers rather than one would be responsible for development.
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Page Six
Marketing costs may increase since there are two different sites to advertise.
A larger marketing staff would also be necessary.
Bond issuance costs per unit increase as the size of the project (number of
units) is reduced. Cost of issuance include: services of bond counsel and
the underwirter, bond marketing to the public, expenses of the trustee and
administration, and a default reserve. The original 40 unit project at PADA
(or 30 units at PADA and 10 units at Rae Drive) would have an approximate
issuance cost of 12.5 percent of the size of the issue ($500,000 for $4 million
in bonding authority). An 18 unit project would have an approximate issuance
cost of 16.6 percent of the size of the issue ($300,000 for $1.8 million in
bonding authority). A 8 to 10 unit project would have an approximate issuance
cost of 20.0 percent of the size of the issue ($200,000 for $1 million in
bonding authority). Costs may be reduced by undertaking a joint issue with
another community which is also selling bonds. (Please note, these are not out
of pocket expenses to the HRA since they are paid by the bond issue and the
developer.)
Tax increment is affected by the present value of structures and other
• improvements on a proposed site and the number and value of new units to be
constructed. The PADA site contains only two structures so that the present
value is relatively low and a number of new units would be constructed which
would result in an increased increment. The Rae Drive site has several
existing structures and thus, has. a relatively high present value. Also, the
number of new units constructed would be low. Ten units at Rae Drive would
produce an estimated increment of $135,000 over 20 years or $10,500/unit
(column #5). That same unit, at PADA, would produce a tax increment of $22,443
over 20 years (column 1). The $135,000 increment at Rae Drive may be
insufficient to provide enough interest subsidy to make the units
affordable to those families which must be eligible when CDPG funds are
utilized for site acquisition. However, this issue needs further evaluation
before a definitive statement may be made.
MEETING THE SEPTEMBER 1, 1984 DEADLINE
The HRA can meet the deadline with the PADA, PADA/Rae Drive, or Rae Drive
sites. The HRA and City already own the PADA site. The HRA has negotiated
or is in the process of negotiating the needed sites for the Rae Drive/66th
Street development in conjunction with another concept. It is assumed the
sites may be acquired from their owners on a voluntary basis. There are
sufficient CDBG funds available to acquire the needed property. However,
further direction is needed to determine which concept staff should pursue.
With information presented at the meeting of April 2 to the HRA, City
Council, Planning Commission, and Community Services Advisory Commission, and
• on April 16 to the HRA, it should be possible to determine whether Richfield
should utilize the $4,000,000 in bonding authority to produce family housing
at PADA or elsewhere. Since the April 2 meeting, staff has determined:
• Page Seven
-the September 1 deadline for notifying MHFA of the intent to sell bonds
;rust be met.
-the bond application and program may be modified if it does not affect the
percentage of non bond proceed contribution and eligibility of first time
home buyers within the stated income limits,
-the unit density at PADA may be reduced and all the bonding authority can
still be utilized by including the Rae Drive site as part of the PADA
development proposal,
-providing housing affordable to moderate income families assists in
funding park development,
-the open space adjacent to the existing houses at 6425 and 6429 Portland
Avenue can be utilized for any public purpose including housing and/or
park.
As a result of followup to the April 16 HRA meeting, staff has determined:
-That each of the development concepts prioritized by the HRA is feasible:
Priority 1 - family housing at PADA/Rae Drive (30 units at PADA, 10 at Rae
Drive)
Priority 2 - PADA housing (30 units)
Priority 3 - Rae Drive housing (10 units; although the need for interest
• writedown and the availablility of tax increment and CDPG for
the purpose requires further evaluation);
-That a concensus of opinion must be reached concerning the pursuit of PADA
housing at this time so that the HRA may proceed with development and
utilize the $4,000,000 in bonding authority;
-That if PADA is not pursued further and there is a concensus to proceed on
Rae Drive, the HRA will assume the lead role with project implementation.
To proceed with development at PADA and/or Rae Drive, the HRA must be prepared
to:
-Accept higher bond issuance costs for only a 10 unit project at Rae
Drive
-further analyze the need for reducing mortgage interest rates at Rae
Drive and the availability of funds to do so,
-request a special use permit to develop duplex type housing at 1016
West 66th Street and 901-03 Rae Drive
-find acceptable the negotiated price for property at 1016 West
66th Street and 901-03 Rae Drive.
-solicit development proposals for a Rae Drive and/or PADA concept.
The City Council must be prepared to:
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Page eight
-Accept or reject a PADA housing development concept at this time with
its need for rezoning and an amendment to the Comprehensive Plan
-Consider a special use permit request for duplex type housing at Rae
Drive/66th Street
The Planning Commission must be prepared to:
-Accept or reject a PADA housing development concept at this time
with the need for rezoning and an amendment to the Comprehensive Plan
-Consider a special use permit request for duplex type housing at Rae
Drive/66th Street
It is now time for the City Council, HRA, Planning Commission and Community
Services Commission to consider the importance of housing opportunities for
families and park development and the interrelationship of these two elements
and to then make a decision.
ALTERNATIVES
The alternatives include:
1. Place the PADA project on hold until 1985 while proceeding with
the preparation of a Legion Lake Park master plan;
2. Proceed with a PADA housing project in 1984 while preparation of
the Legion Lake master plan proceeds; and
3. Undertake an alternatiave housing project of ten dwelling units
at the alternative site on Rae Drive while proceeding with the
preparation of a Legion Lake Park master plan.
ANALYSIS BY CITY MANAGER
In 1982, the Planning Commission found the purchase of property in the 6400
block of Portland Avenue for park and open space purposes to be consistent with
the Comprehensive Plan. The Planning Commission did not officially comment on
the location of housing on this site at that time.
During 1983, HRA staff proceeded with the PADA housing project plans. Once
MHFA bonding authority was obtained, the Planning Commission was once again
asked to amend the Comprehensive Plan. Rezoning of the PADA site was also
presented.
The Planning Commission at its February, 19814 meeting voted 9-0 on the motion
to recoirmend to the City Council that the comprehensive plan not be amended,
• and that rezoning of the area should be denied at the Portland Development Area
(PADA) .
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Page Nine
The Planning Commission said in support of their action that when the PADA site
was purchased by the City it was made very clear the land was for city park
purposes. Also, it was noted that without a park development plan for Legion
Lake, the redevelopment jof the area as a whole should be further studied.
The first step in development planning calls for master or comprehensive plan.
This is no less true for the park site at Legion Lake. Once a plan is adopted,
then development issues abutting the spark site can be better evaluated.
Richfield will be eligible to seek MHFA bonding authority in the future. It
may be possible to consider a park project in 1985. The public subsidy to do
just a ten unit housing project may be too excessive. An analysis is underway
by staff at the time of dictating this report and will be available at the
April 30 meeting. At this point, it can only be said that a limited 10 unit
project at Rae drive may be financially justified.
RECOMMENDATIONS BY CITY MANAGER
1. Complete the park master plan for Legion Lake by
December 31, 1984;
• 2. Delay any consideration of a housing project for Portland
Avenue until completion of the park master plan; and
3. Continua the feasibility analysis for 10 unit housing at
Rae Drive.
Respectfully submitted,
John G. Cartwrig t
City Manager
JGC/eja
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COLUMN * 1 2 3 9 4 5 0
Program PADA #1 PADA/Rae Drive#1 PADA #2 PADA/Rae Drive #2 Rae Drive #1 PADA #3
Number of 40 to 48 40 units 30 units 18 units 10 units 8 units
units: (40 to 48 (30 at PADA) (30 at PADA) (8 at PADA) (10 at Rae Drive) (8 at PADA)
at PADA) (10 at Rae Drive) (10 at Rae Drive)
Density:* 12.5 to 15/acres
Size of $410007000
bond issue:
Percentage
non-bond 29.82%
-?roceed ($1,192,826)
contribution:
% of local contribution
attributable to each source:
8 to 9/acre 9.4/acre
$4,000,000
33.8%
($1,352,101)
$2,500,000
35.85%
($ 896,386)
8 to 10/acre
$1,800,000
38.4%
($ 691,277)
8/acre
$1,000,000
43.3%
($ 433,715)
10/acre
(38,452 s.f. site)
$1,000,000
25.8%
($ 257,561)
Tax 75% 56% 69% 33% 31% 35%
Increment: ($897,700) ($755,777) ($620,415) ($229,653) ($135,362) ($90,290)
Land 10% 31% 17% 52% 61% 38%
Writedown: ($120,234) ($413,634) ($151,234) ($358,934) ($262,400) ($96,534)
Developer: 12% 10% 10% 9% 7% 12%
($1401000) ($1401000) ($ 86,000) ($ 60,000) ($ 32,000) ($32,000)
HRA 3% 3% 4% 6% 1% 15%
Administration:($34,892) ($ 42,690) ($ 38,737) ($ 42,690) ($ 3,953) ($38,737)
*To help evaluate these densities the following should be helpful. The typical block in Richfield developed with single family
homes has a density of about 5 or 6 units per acre. The density at Coach Homes is approximately 15 units per acre. The 700
units at Century Court Apartments on Lyndale Avenue are at a density of about 30 units per acre. The recently completed Lake
Shore Drive condominium with 178 units is at a density of approximately 44 units per acre.
?--?. c A
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 17
Agenda April 16, 1984
Housing and Redevelopment
Authority Commissioners
City of Richfield
SUBJECT: Information concerning MHFA Financed Housing Proposal at the
Portland Avenue Development Area (PADA)
Dear Commissioners:
On April 2, 1984, the HRk, City Council, Planning Commission, and
Commtmity Services Advisory Commission met in a study session to consider
housing development within the area of Legion Lake known as PADA and the
impact housing may have on park development. A number of issues were
discussed. Staff was directed to evaluate these issues and answer
questions raised during the session. The Mayor requested staff to make a
recommendation to the four groups within a month. 1%.4.3 letter responds to the
issues related to developing housing. It provides some initial responses and
proposes a modification to the DADA housing proposal which may make it more
acceptable. If the modification.is acceptable to the HRA, and staff' determines
it is feasible, the $4,000,000 in bonding authority.for financing housing may
be retained and affordable family housing may be built.
Some of the major issues discussed April 2, included:
-The proposed density of the PADA development 12.5 to 15 units/acre was
thought to be too high;
-A need for another comprehensive plan of the Legion Lake area to
determine appropriate park uses and whether additional new housing on the
fringe of Legion Lake would be desirable. (Zhe Setter, Leach and
Lindstrom study supported housing adjacent to Portland Avenue. However,
this study has been questioned as to its comprehensiveness.)
-Utilizing the authority granted to the City/HRA by MHFA to issue up to
$4,000,000 in tax exempt housing mortgage revenue bonds during 1984.
-Relocating the housing proposed for the PADA project to another site (s).
Discussions with MHFA and bond counsel have resulted in the determinations
indicated below. MHFA indicated that:
-there is no flexibility with the September it 1984 reporting deadline to
the MhFA which requires confirmation of our intent to issue bonds before
the end of 1984. September 1, 1984, is it; or the bonding authority is
lost.
4.
HRA Letter No. 17 -2-
-the PADA housing program may-be modified through an amendment process
provided our bond counsel determines that modifications to the program
submitted to MHFA (for which bonding authority was granted) would comply
with state law and not affect the tax exempt status of the bonds.
-there is some flexibility in site selection for utilizing the $4,000,000
since there are no specific rules or administrative guidelines that
prevent changing sites.
Followup discussions with our bond counsel further clarified MHFA comments.
Bond counsel determined that the PADA housing program could be modified
without affecting the integrity of our application if these conditions were
met:
-The percentage of HRA and City contribution to the project (ie. "non-bond
proceeds") must be the same or greater than in the original application.
The application indicated an amount equivalent to 29.82 percent of the
issue, or approximately $•1.2 million was to be contributed. The
contribution sources included tax increment from the proposed project,
the land write down to the developer, the developer and lender
contribution and expenses incurred by the HRA in assemblying the site and
establishing project feasibility. Each of these are indicated as sources
of contribution to the PADA project.
-The program's purpose remains the same as originally presented. The bond
proceeds would be utilized to finance mortgages for first time
homebuyers. The units constructed would have an estimated maximum sale
price of $72,000. Buyers would have annual incomes in the $25,000 to
$35,000 range.
With a clearer understanding of what modification may be made to the PADA
program while still retaining the authority to issue bonds, it is appropriate
to evaluate possible alternatives to the PADA site. As discussed during the
study session, there are seven sites of one acre or more which are vacant or
underutilized which have development potential. During the study session
someone indicated an eighth site should be considered; another part of Legion
Lake. Staff has identified a ninth alternative. The ninth alternative will-be
discussed as a new concept following a brief review of the sites identified
April 2. The review which follows is a comparative analysis of PADA and the
alternative sites.
PADA The site is 3.2 acres in size, is located adjacent to an
arterial street, is isolated and development will have
minimal impact on adjoining uses, is readily available
for development at minimal acquisition cost, but
requires modification of the Comprehensive Plan
,
rezoning from single family to multi-family and a
housing design sensitive to airplane noise. This
development would be compatible with the already exist-
ing development adjacent to Portland Avenue. It is
located in noise zone 3 which is suitable for family
housing. The need for a Legion Lake park master
plan has been identified as first priority in the
process to determine if housing should be located
at the proposed site.
MA Letter No. 17 -3-
66th and Cedar The site is approximately 2.9 acres in size. It is in
noise zone 2, closer to the airport than PARA. This zone
had been deemed as an inappropriate location for family
housing by the Metro Council and MN Pollution Control
Agency. Their guidelines discourage housing which would
have outdoor activity space for families.
At a density of 10 units/acre, the number of units would
approximate 29. This would produce a tax increment smaller
than that which would be generated by the three development
concept proposals already discussed by the HRA. A high tax
increment is needed to help finance redevelopment
activities north of 66th Street adjacent to Cedar Avenue.
Because of these conditions, this site is not suitable for
family housing.
16th and 77th The site is about 1 acre in size. It is in noise zone 1
and is located directly under a high airplane noise flight
pattern. There is no direct public access. The most
reasonable access would be through park land. Soil
conditions are questionable. The Comprehensive Plan and
zoning ordinance would have to be amenaeo Vrom singie-
family to multi-family.
This site is not appropriate for family housing. It's
availablility for purchase is not known.
77th and Colfax The site is about 2.75 acres. It is not adjacent to an
arterial street. It is within the ILN study area. A
portion of the site may be needed to resolve traffic
circulation problems in the area. The highest and best
use of the site may be development of greater intensity
than family housing, such as apartments or commercial uses.
Staff believes the commercial environment of the site is
not conducive to housing and marketing ownership housing
at this location may be difficult. Finally, the avail-
ability of this parcel for purchase is not known.
77th and Emerson The site is approximately 1.1 acres, and is not adjacent
to an arterial roadway. The development of this parcel
should be related to a higher density comprehensive
development concept which reflects its proximity to 1494
and 135W. This site is also within the ILN study area.
Its availability for acquisition is not known.
35W and 1494 The site is about 11 acres. This site is not appropriate
for family housing as the highest and best use would be
commercial and/or office and multi unit housing at greater
densities such as 30 to 40 units per acre. The site is
presently for sale at seven dollars per square foot. It is
within the ILN study area.
i HRA Letter No: 17 -4-
62nd and Queen The site is approximately 1.4 acres. It has no access from
a public street and questionable soil conditions. This is
the lowest parcel in the area and collects run off water
which flows to a catch basin at the north edge of the
property. Commercial and residential uses abut this parcel
with no contiguous rights-of-way. The Comprehensive Plan
would need to be amended. The zoning is multi-family.
This parcel does not have an environment suitable for
family housing because of its close proximity to both
commercial development and Highway 62.
The availablity of this parcel for acquisition is not
known.
Taking site characteristics into consideration, it is understandable why ?ADA
has been identified as the most desireable site for developing family housing.
It is the largest parcel which is readily available, it is already owned by
the city and HRA; it is adjacent to uses that are likely to remain after
park development (ie. The American Legion and Funeral Home) and it has been
evaluated for soil, water, and topographic conditions and found buildable.
Because PADA is one continuous site (versus a number of smaller sites), there
are economies to be achieved in the cost of acquisition and building
construction. The coordination of construction and the marketing of the
completed project is also more efficient.
This is not meant to infer that there are not other sites where family housing
would be suitable. An eighth site on another portion of Legion Lake was
mentioned April 2; a ninth alternative site could be considered, a limited
number of smaller scattered sites (sites less than one acre in size) could be
considered for combining into a project and a combination of the six less
desireable sites mentioned above could also be considered.
A question was raised about the possiblity of relocating to another area of
Legion Lake adjacent to 66th Street. Some concerns about a 66th Street
location include:
-Conflict with present park uses such as swimming pool, ice arena parking,
and archery range.
-Neighbors adjacent to an alternative site will likely be as concerned as
neighbors to PADA.
-The vista of Legion Lake from 66th Street would be blocked.
-Soil conditions at other locations are unknown.
-relocating the housing development means 3.2 acres of potentially prime
land would be lost from the proposed 105 acre park development, whereas
only approximately 2 acres of marginal park development land would be lost at
the PADA site since the balance is already a residential use.
-the requirement to modify the Comprehensive Plan and rezone regardless of
the location adjacent to Legion Lake.
HRA Letter No. 17 -5-
A limited number of smaller sites (sites less than one acres) could be
considered for combining into one scattered site multi unit development for
families. Concerns with this approach are:
-there are not enough readily identifiable sites to develop approximately
40 units of housing.
-the efficiency of building on one site would be lost, thereby
increasing the cost of each housing unit and perhaps missing the
moderate income target of the program.
-no site negotiations have been initiated and the availability of land
for purchase is unknown.
-the smaller sites are likely already developed with housing and it would
be difficult to secure the amount of tax increment a project such as PADA
generates to meet the requirement of the bond application.
e
there are not enough funds to acquire enough sites to accomplish a 40 unit
type project.
-there is not enough time to pursue the acquisitions, modifications to the
comprehensive plan, rezoning requests, and other procedures which would
likely be required and still keep the revenue bond allocation.
Some combination of the six larger, less desireable sites could be made to
produce a project, however, for the reasons discussed above, it would be a
less desirable alternative for both the city and potential homebuyers. Other
communities could perhaps provide more suitable sites with the bonding
bonding authority we did not use.
There remains a ninth alternative that the staff is presently investigating.
The concept includes utilizing the PADA site with another site. PADA would be
developed jointly with the site adjacent to 66th street and Rae Drive. Vo-
tech is presently constructing a twin home on the site occupied by 920 West
66th Street. The HRA has authorized the acquisition of 910 West 66th Street.
Staff did negotiate a purchase price for 1016 West 66th Street, but the HRA
recently decided not to proceed with this acquistion. And the HRA has
authorized negotiations for acquiring 941-03 Rae Drive. By assembling these
four parcels into a 1.25 acre site, eight new twin home type units could be
constructed. (Contractors other than Vo-Tech may be involved in construction).
When combined with the two units now being developed 1.0 units of ownership
housing for first time home buyers would result. The resultant density
would be eight units/acre. By developing 10 units on 66th Street, the PADA
development could be reduced to approximately 30 units instead of the proposed
40 to 48 units. The PADA density would be reduced from 12.5 to 15 units to 9.4
units per acre. The result would be two family housing developments with a a
duplex type density. A typical block with single family detached housing would
have a density of five to six units/acre.
The feasibility of this concept would be determined by responses to the
following concerns:
,,s -whether the "non bond proceed" contribution to the bond issue would drop
below 29.82 percent
HRA Letter No. 17
-what affect utilizing
Rae Drive would have
tax-exempt mortgages
-6-
CDBG funds to acuire the property at 66th Street and
on marketing units to moderate income families with
-the cost implications of developing housing on more than one site
-whether this modified project can be developed in time to meet the MHFA
deadline of September 1, 1984.
To retain the FIFA bonding authority and provide for the construction of
new affordable family housing there appears to be only two options; pursue PADA
as originally proposed or further evaluate the potential of the two site
concept at PADA and Rae Drive and pursue it if feasible. The pursuit of either
of these options will require the committment of additional resources. For
the PADA project as originally proposed, this intially includes the administra-
tive costs necessary to prepare for amending the comprehensive plan and
rezoning the parcel, completing the development guide and site survey,
soliciting development proposals, preparing development plans, and preparing
bond documents. If the Rae Drive concept is added, the additional resources,
would include CDBG funds already budgeted for acquisition;,901 - 03 Rae drive
and 1016 West 66th Street would be acquired. Because of the additional
resouces needed, it would be important to proceed only if the HRA strongly
supports this concept.
It is clear that in selecting a course of action, there remains a number of
persons, members of the City Council, Planning Commission and Community Services
Commission that will have to be convinced that housing at PADA will not
jeopardize the development of a recreational area at Legion Lake, and that the
benefits of affordable housing for young families is important to Richfield.
It is recommended that the HRA adopt a motion directing staff to proceed
with an evaluation of the PADA/Rae Drive concept.
Respectf y?ubmitted,
44V x?- t&
John G. Cartwri t
Executive Director
JCG/eja
i
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
April 16, 1984
HRA Memorandum No. 17
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
SUBJECT: Further analysis of an MHFA Housing Mortgage Project
This memo discusses the opportunity for an "existing housing" mortgage
revenue bond program, the impact of Metropolitan Council Policy 39, and the
apparent intent of acquisition of land proposed for inclusion within PADA.
"Existing Housing" Mortgage Revenue Bond Program"
An "existing" program provides the HRA a method for financing the sale of
affordable existing housing to young couples in their family formation years.
Related to this is the opportunity to provide older homeowners, "empty
nestors", a mechanism to sell their homes to younger families, particularly if
the older family has suitable housing alternatives to relocate to (ie. a
rollover program such as one in connection with the Market Plaza development).
The HRA/City Council approved Housing Plan indicates "the size of the affordable
existing housing supply in Richfield and the rate of sales of that housing"
indicate there is an adequate housing market for this type of bond
program to facilitate family ownership. A majority of the existing [Richfield]
single family homes have an estimated market value below $75,000 (a requirement
for existing housing sales by MHFA programs)."
Richfield could utilize its $4,000,000 in mortgage revenue bond authority for
an "existing" program provided the following concerns were adequately
addressed:
-There was adequate time prior to September 1, 1984,to develop a program
(Adequate time appears to be available).
-The HRA's position of November 15, 1982, when staff presented an
"existing" revenue bond program for consideration, had significantly
changed and that the HRA was now prepared to support the program with
necessary funds. At that time the HRA was requested to contribute between
$300,000 to one million dollars to make a competitive application. The
application was not prepared because the HRA felt the cash needs were to
high.
•
-2-
-The funds necessary to proceed with an alternative to PADA and ensure the
integrity of the bond application would require an approximate $1.2
million cash contribution from the HRA. (The HRA has provided
approximately, $200,000 to the PADA project, the balance of the
contribution, $1,000,000, would come from tax increment, developer
contribution, and lender contribution. In an "existing" program, none of
the aforementioned sources of funding would be available. CDBG monies may
not be used for this purpose).
-Bond Counsel determines that an "existing" program has not dramatically
changed the application to MHFA and that it is similar to new
construction, and therefore a suitable change. Preliminary indication is
that a change could be made. Bond Counsel would find this change
acceptable.
-The question of affordability since new housing is more affordable to
first time buyer because energy and maintenance costs are lower.
-The population increase would be less with?an existing housing program.
New construction adds additional units to the housing supply and results
in an increased population. Existing housing sold without MHFA mortgages
would rollover and produce additional population through the operation of
the normal market forces.
-MHFA routinely provides below market interest rate financing for the
purchase of existing housing by first time homebuyers. Thus, utilizing
the $4,000,000 for an existing housing program may not be the best use of
these limited funds.
-Based upon the aforementioned preliminary research, the rollover housing
concept does not appear to be financially feasible for Richfield. If $3
million were allocated to this program, the local per unit subsidy would
be approximately $22,500. This can be contrasted to a PADA local per unit
subsidy of $5,000. (It is assumed that $1 million will be allocated to
the Rae Drive project).
Metropolitan Council Policy 39
Since 1971, the Metropolitan Council has used its responsibilities for
reviewing all grant applications involving state or federal funds, to reward
communities which plan for, and provide, low and moderate income housing
opportunities. The Council has done so based on Policy 39 of the housing
chapter, Metropolitan Development Guide. Policy 39 establishes funding
priorities based upon each community's lower cost housing opportunities, and
its plans, policies and programs to provide such housing in the future.
Communities are ranked, based on criteria which measure local housing
peformance. The ranking is then applied when applications from local
governments are submitted for state or federal funding. Grants for
transportation, criminal justice, parks and open space, and aging programs can
be ranked and awarded, based in part on the Policy 39 ranking.
0
-3-
Richfield's ranking is important for receiving grant monies for park and open
space development. When the city applies for either a federal Land and Water
Conservation Act (LAWCON) grant or a State of Minnesota Legislative Commission
on-Minnesota Resources (LCMR) grant, the Metropolitan Council will consider
Policy 39 when processing the application. In evaluating a LAWCON or LMCR
grant request, one-third of the ranking evaluation is based on a community's
rank with Policy 39. Because Richfield has performed well in housing, we have
ranked high in application evaluations for park and open space grant monies.
The city has reveived LAWCON and LMCR grants totalling $143,750 for the
development of Monroe Fairwood Park, and $166,000 for the development of Adams
Hill Park. An LMCR grant was also responsible for improvements at Sheridan
Park, the Wood Lake Nature Center boardwalk, and the Taft Park fishing dock.
Since these grants can cover as much as 75 percent of project costs, they have
been significant in reducing the amount of local funds for park development.
Repayment of these grant funds is not required.
Richfield is currently ranked 8th of 188 communities. The. ranking for the
first 12 communites follows:
Rank Citv Points
1 St. Paul 85.5
2 Minneapolis 84.5
3 Farmington 83.0
19 4 Rosemount 78.5
5 Coon Rapids 77.5
6 Maple Wood 77.5
7 Hastings 71.5
8 Richfield 70.5
9 Prior Lake 70.0
10 Belle Plaine 69.5
11 Robbinsdale 69.5
12 Mound 69.0
Six of Richfields 70.5 points were provided because of the approvals given the
PADA project by the City Council and HRA during 1983. Not issuing bonds or
developing new project such as PADA reduces our points by 4 since 2 points
could be retained by substituting another housing program. An "existing"
housing-mortgage program could receive only four of the six points PADA
received because it does not have a new construction element.
The Intended Use of Accuired Land
The City and HRA acquire property for a number of public purposes. Some of
these include housing, redevelopment, right-of-way and parks. The HRA acquired
the properties at 6425 and 6429 Portland Avenue to develop affordable housing.
In analyzing the area, it was determined that a portion of the adjacent open
space of Legion Lake was necessary for a feasible project. Hence, a limited
amount of park property was included within PADA.
-4-
If this property was at some time limited to development for park purposes
only, it would not be appropriate to propose a housing use. However, according
to legal counsel, none of the Certificates of Title or underlying deeds contain
restrictions which discuss the use of the property within PADA for park
purposes. Further, resolutions which authorized the acquisition of properties
within the PADA site appear sufficiently broad to permit any appropriate
public use. Thus, housing at PADA appears not to be restricted by any
previous actions.
ectfu b Led,
ohn G. C rtwri t
Executive Director
•
is
0 HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
April 16,1984
HRA Memorandum No.-16
Housing and Redevelopment
Authority Commissioners
City of Richfield
Subject: Affordable Housing Construction
Dear Commissioners:
Staff ha-s proposed the construction of affordable townhouse
units at PADA. The Minneapolis Star and Tribune of April 14,
contained an article in the Shelter section entitled, "Some area
builders prove 'affordable' is not just a dream". It is
attached. The article helps to illustrate that quality and
affordable housing may be constructed.
The Metropolitan Council recently completed a competition
for developers who construct homes in the under $75,000 price
range. There were two categories for townhouse condominiums;
$60,000 to $75,000 and under $60,000.
•
.espectfu y tted„
ohn G. Part right ?
xecutive Dir ctor
?J
0
0 0 0
Some area buWers
prove `affordab e'
is not just a dream
By Ingrid sondstreax
Shift Heller
How's this for an affordable house:
A 166square tool, (wo-bedroom
rambler with cuslom built oak
cnhlneis, triple glared alpdows, a
full, unfinished basement end
gninge on a halt-orre, landscaped
M.
For $81,000.
Five percent down ($2.200).
And monthly payments, Including
principal, Inlerest. Inwlrance and
(rues, of around $640.
fiord to believe, you say? Well,ll's
true. And this very house, built by
Marv Ilnrl:uen Conslruclloa Co. Of
Victoria, won a lop prize this week
Ia The Metropolitan Council's
affordable housing competition. It
look first place In The under-
$10,000, single-fnmlly-home division
of the compolllan.
And there's more. In fact, there ore
11 more winners, all of which were
anookinrcd Friday py 7aanne
Irnt 1,)n, hmulny, plern!r of the
council.
"We want to show off the best of
whnl's available around The Toils
t'llui In she area In The $75.000•
owl under range of housing,"
Barron said.
Inlesesl roes and finsnrlog
Ph- kah(s OW bel;e1` now (ol (list-
time hook.- buyers who have been
Uniting for the chance to enter The
housing rnarkel. (louses priced
within their reach are Indeed being
built by Twin Cllles builders, and
the counril wanted to set the word
out.
Even though the competition only
was nrgotutred In roily February.
area builders from Ilaslinip to New
Hope. Vlctnrin to Anoka already In
the socalled "aftordoble housing"
market submllled 58 entries,
Including single family homes,
eondomlulums and townhouses.
The competitors were judged by a
team of six housing and building
Professionals on the basis of value
for the money, general appeal.
Ilreab1111y, energy efficiency, an of
space, workmanship and how The
home, fit into the neighborhood.
Ike requirements were that They
be priced under $75,000 and
located In an area alreody served
by public sewer and water.
The council held affordable-
housing competitions In 1177 and
117$, the 81`31 outgrowth of
recommendations by The council's
model-cost housing advisory
commlllee, appointed at [be
direction of the Minnesota
Legislature under the 1171 Ilnd
Planning Act
"We wooled to figure out how to get
store affordable housing built,"
Barron said. "And we wanted to
give sonic public exposure to
housing el the lower end of like
price range." ,
The competitions were
discontinued because of lack of
money for prizes. This year there
still was no money, wid Barron, but
"there ere so many new things
appearing on the market that we
wanted to hold the ecmpelltlos
anyway. We went The pubik.l(y and
to get the public out to see the
homes."
For that purpose, the council will
sponsor a public tour of the winning
homes April 2621.
"This sort of competition, like the
Parade of Homes. alerts everyone
that (here Is affordable housing for
the first-lime buyer," sold Mae
Control continued on page 2S
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sew M..".?„i --.k.:..«z: -....?.....u W...:.i. _..? -,.... - .. -. :.k ....- ?.M.--'a-.a..ri
Winner In $58,000 S60.0O0 townhouse dlvlelon, 813 23rd Av.1tE.
Stall Photos by Dunk! Olack
Winner In $60,000 576,000 townhouse division, 2945 Francs Av. N.. Bobbinadata.
First place for staple-fsmlty home, under $70,000; 1100 771h fit., Vicloris.
a?=Hi, ill'", n« x n w r n M xc`:
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t: „^. of ,°. °?ia g?RAe i ,g°P°8 x P ?i ? M?t ~P
^ ""?njn''4;"_?Nm ho??p ?;?nS. 9S? °?.pv ? n•? G1 f?° p?w??.wa
3a????4Gxcwh SrS?bS S?y..6GG S n ?A v gF..3 u
9a C °ao I 4 !7g `fir"n "?° 11n^ S g Va
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r w o pp n? ('? « N. N ti i
?e1Ct W;; oe ^Y°Y ??? owl ?r'n ?.°<iC ?'+1 ?s ? ?i a ?V RRp ?^ ? ^ 77 p a ?..
0a7 3'? {`pj•- ?c?'e ,c •S ??? ? eS ?5?? ?R? s
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21
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Minneapolis Star and Tribune
4S Sat.. April 14, 1984
0 . Contest
Continued form page 2S
Coachman Oaks of Eagan.
The winners in the under-556.000
townhouse division were:
¦ First placm 102E Shore Dr.,
Circle Pines, $55,600, Northway
Construction Co. of Shoreview.
¦ Second place: 10617
Hummingbird St. NW., Coon Rapids,
$33,900, Mardon Homes of Arden
Hills.
¦ Honorabie mention: 679 Desoto
SL. St. Paul, $53.71175, East Side
Neighborhood Development of St.
` Paul.
The winners in the $56,000-to-560,000
townhouse division are:
¦ First place: 813 23rd Av. NE,
Minneapolis, S59,900. Baton Corp. of
Minneapolis.
¦ Second place: 20215 Hunter Court,
Lakeville, $5000, George Branton
Construction Co. of Bloomington.
¦ Honorable mention: 15560 Cornell
Trail. Rosemount, $57.900, Winds
Crossing Co. of Rosemount.
The winners in the 560.0004&&5,000
townhouse category are:
¦ First place: 2945 France Av. N„
Robbinsdale. $73,900, Baton
Construction Co. of Minneapolis.
¦ Second place: 10665 Sherman Dr.,
Eden Prairie, $66.900, Baton
Construction Co.
¦ Honorable mention: 102C South
Dr., Circle Pines, S63,900, Northway
Construction Co.
¦ Special energy-consciousness
consideration 4460 McColl Dr.,
Savage. $67,900. Glendale Woods,
Inc., Burnsville.
•
•
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10 UNITS
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RAE DRIVE DEVELOPMENT AREA
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•
14
Gjg7aNO WPr-f5F-
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30 UNITS
9/ACRE
PORTLAND AVENUE DEVELOPMENT AREA
WITY OF RICHFIELD
h?
Co MMO t-f ,!5
Gjeg55N t3ul:;,F9r-
"P?uP?TY Lr? ?
C
-3-
M/Hoverson, S/Kauth, to recommend approval of the special use permit to allow
the addition of a solarium on the Burger King restaurant.
Motion carried: 9-0
M/Luettinger to recommend denial of additional parking facilities through use
of adjacent property.
Motion failed for lack of a second.
M/McDermott, S/Hoverson, to recommend approval of the s ecial use permit
request which would allow parking on adjacent property bezeen 11 a.m. and
2 p.m., Monday through Friday, with the foAowing stipulations:
1. That a gate be provided which would permit pedestrian access to the
adjacent apartment parking lot.
2. That orderly pick-up of litter on the apartment parking lot site and
throughout the neighborhood be maintained.
3. That the parking lot on the apartment site be closed to access from the
Burger King site on federal holidays.
4. That the city be given the right to cancel the portion of the special use
permit related to parking on the apartment site upon a 30-day written
notice to the landowner and Burger King.
5. That overflow parking only be accessible on weekdays between 11 a.m. -
2 p.m., and that the access gates remain locked on weekends.
Motion carried: 8-1. Voting against: Luettinger.
ITEM #5, INFORMATIONAL LETTER #6, CASE #84-RZ-2 - PORTLAND AVENUE DEVELOPMENT
AREA
City Planner, Rick Jopke, presented the staff report.
Commissioner Quam asked about airport noise on the site and Mr. Jopke responded
that the project was designed to limit outside activities and would be reviewed
by Metropolitan Council.
Commissioner Anderson asked about the source of this housing proposal; Mr.
Kraft responded that it was a part of the proposal of a consultant who was
hired to study the Legion Lake site as a park.
Commissioners Hoverson and McDermott pointed out that the property concerned
was acquired some time ago for park purposes and was found by the Planning
Commission to be in conformance with the Comprehensive Plan only if used for
park purposes.
-4-
Commissioner Ahlquist asked if development of Legion Lake as a park was
assured, given federal and state budgets.. Mr. Kraft said that only with
federal and private sources would development occur soon, and this was now not
assured.
Mr. Logeland (didn't give address or spell name) appeared to voice his concerns
about the project and to indicate his desire for the property to remain park
land.
Art Thole, 6339 Portland Avenue South, said that he was concerned that the site
would be extremely crowded with over 40 families residing on a very small site.
Lyndon Barsness, 6334 Portland, said that overcrowding of the site would
depreciate property values and put a stress on the neighborhood. He questioned
whether the townhouses would be constructed with quality materials and voiced
his strong support of maintaining plans to use the property as park land.
Mrs. Jacobson, 6436 Portland Avenue South, said that putting a townhouse
development on the site would be a perfect example of spot zoning.
John Swanberg, 6329 Portland, expressed his opposition to use of the site for
townhouse development.
Eugene Matthews said
maintained so that it
Mary Jo Nohrer, 6345
of a townhouse devel
moving in and out.
purpose.
he was concerned about how the site would be built and
would not look unsightly.
5th Avenue South, said she moved to Richfield to get out
opment which was very loud and had a lot of residents
She epxressed opposition to using the site for that
M/Jensen, S/Hoverson, to close the public hearing.
Commissioner Hoverson said that she was concerned that architects had worked on
site plans, and that the city had applied for money for a townhouse project
before the comprehensive plan was amended. When the acquisition of the site
was approved as in conformance of the comprehensive plan, she said, it was made
very clear by the planning commission that the site should be used only for
park development. She said that she was not in favor of amending the
comprehensive plan for this project, because she did not see any benefit which
the city would receive from this development. It would be spot zoning.
Moreover, since the street has been deemed "undesirable" for single-family
residential use because of noise and traffic, that same site should then also
be deemed unsuitable for a housing project which would attract a large number
of families with children.
M/Hoverson, S/Kauth, to recommend to the city council that the comprehensive
plan not be amended, and that rezoning of the area should be denied at the
Portland Development area.
Commissioner Luettinger said that he would like to see moderate income housing
and would vote for rezoning of that area.
-5-
Commissioner Ahlquist said that given the uncertain status of the Legion Lake
property as a park sil-e, the redevelopment of that area as a whole should be
further studied.
Motion carried: 9-0
ITEM #6, INFORMATIONAL LETTER X67 - 76TH STREET/HIGHWAY 77 INTERSECTION
Rick Jopke presented the information to commissioners.
ITEM #7, INFORMATIONAL LETTER #8 - REPORT ON AIRPORT ZONING ORDINANCE
Rick Jopke presented the information to the commissioners.
ITEM #8, INFORMATIONAL LETTER #9 - MTC SUBREGIONAL TRANSIT STUDY
Rick Jopke presented the information to the Planning Commission.
ITEM #9 INFORMATIONAL LETTER #10 - ORDINANCE AMENDMENT TO ALLOW PROFESSIONAL
OFFICES `-N "R" RESIDENCE ZONING DISTRICTS BY SPECIAL USE PERMITS
The commissioners changed two items in the ordinance as presented. In item 4,
the words "or collector" were deleted: In item 8, the clause should be changed
to read:
"Any such permit issued by the City of Richfield shall be issued for use by
the owner or by an entity controlled by the owner, and shall terminate if
the usage or ownership of the site changes."
M/Hoverson, S/Kauth, to forward the proposed ordinance amendment to the city
council with those two changes.
LIASON REPORTS
Liaison reports were given.
•