06-23-75 agendar
CITY OF RICHFIELD, MII~TNESOTA
Office of Executive Director
HRA Letter No. 15
Agenda June 23, 1975
Housing and Redevelopment
Authority Commissioners
City of Richfield
Gentlemen:
Subject: Report on the New Home Program
At the December 23, 197$, meeting of the Housing and Redevelopment
Authority, the commission requested a report on the possibility of establishing
a "spot renewal" on the new home program in Richfield. The purpose of this
letter is to report on such a program and to propose an agreement between the
HRA and the City for the purpose of establishing the terms of operation and for
funding such a program .
In February of this year, the city counsil approved the City's application
for community development block grant funds which included $50, 000 for the
new home program. In addition to these federal funds, it is anticipated that
the sale of fifteen lots in the New Ford Town neighborhood will make it possible
to establish a rebuilding fund of up to $100 , 000 to support the new home program .
The attached report outlines the new home program's proposed goals and methods
of funding .
Also attached is a proposed agreement which has been prepared by the
city attorney. This agreement between the HRA and the City provides for the
operation and funding of this program.
At the present time, the planning department is in the process of completing
an investigation of existing vacant lots and substandard residential buildings .
This information and the operating details of this program should be completed in
October of this year. However, in order to make preparations to initiate this
program late this year or early next year, it is desirable that the HRA approve the
proposed agreement with the City and authorize the staff to initiate and process
methods of finding certain city owned parcels in New Ford Town to be surplussed
property and to arrange for the sale of this property.
Respectfully submitted,
~t~
~~ ;~t-~
C
Wayne S . Burggraaff
Executive Director
WSB/bab
cc: Planning Director
•
1e~1t' 1~~~~%G PROGP~~ti~~t
Repo~r•t I
Staff Report
i~lajr, 175 ~
i
Ili
Nllti' II0'ri~~ PROGR~i~I
Report I
New l-lame Program It~orl; Progr~un
Goals
j - To eliminate the blighting influence of. substandard vacant
housing thus inri~roving residential neighborhoods.
~
f - To promote the development of vacant lats with new housing.
To pron~ate the development of new housing t-o replace
substandard vacant housia~g.
~
i Program Objectives
i Pre~ar~e Preliminary R__. wort
1. Surrey existing city 1_ota .
I ?., Secure funds .
II •
3. n
D.,~relap policies
~ _ a. Selling c. Purchase
~
I b. Marketing d. I"fork iai_th local develapors asld. realtors.
Iii 4. Determine program costs.
S. l~`ork with New Ford To~vm~ neighbors
I Action F1_em~nts
- lII~'~ review of preliminary report
.
i - IIRA policies adopted
t
-
Transfer of lots to IIIZA or Development Corporation
- Market existing lots
Pre ;are Re ort
__._.}_____.____I? _____
1. Survey vacant substandard homes.
' 2. Survey vacant lots.
3. Work with developers and realtors
G. Develop administrative procedures
5. Develop marketing procedure .
i
•
.Action Eleme-nts
-2'
- HRA review
- Authorization to pure}-lase and sell vacant substandard homes .
- Authorizatio3_L to purchase and sel_1 vacant lots.
Evaluation of poi_icies and procedures .
Evaluation. of ~uanitative. goals.
Revise program policies and. procedures as needed.
Securing Funds
T`he mayor source of funds for the program will be the funds received from t:he
sale of city o~vned resideriti.al. lots in Nei•~ Ford Town and the Conununity
Development block grant Bids. This concept of funding ~ti~as approved as
part of the Con~t~u.nity De~.Telop:nent. Plan by the city council on February 1.8, 7..975.
Nec~~ Ford Toh~n Lots
In 1.972 the city purchased 28 lots from the "•letropalitan :~i rports Conu~lission.
Eleven lots iti~ere used for Mew Ford. Tot-vn Park. Two lots are o~~nied by t:he
park department and as of yet are undeveloped. Fifteen lots are presently
undeveloped (development lots).
The Fifteen Devei~r~ent Lots
The city has imTested botl~~ time and funds in the lots . These funds shoal ci be
xein?bursed to the city. The residual will be used to finance the New Nome
Progr~un. T}xe city's imrestment, lot's market value and marketing costs are
estimated as fol.loi~as
The city's investment is broken do~~.~n as follows:
Purchase px-ice
Total back taxes paid
Storm sewer total
b'Jater connection
Attorney fees
$2,933.79
14 , 344.91
6, 2,58.06
2,750.00
36.75
Total present investment $26,353.48
ICE YT:FY
S:•.ES ~
l0T
II f S:;ovrY '.
r
'.F„
I c-E
I IVw- ET l~ ;~~
va.'.'E ti~„ti\
'
"
~ uC v - '
r
I ~~.e,.F-~ RET~"N ~H~C
v,ATE .
~ ~~ I
`7
~
i A'V.~.
; ~
~~
ATrvE
I , ~` r•
~ ~ `
~.~-,
i
CEvE'~Ca_
.u
~'ro_
~ {
4
P" ,
I i +
0
~~ ~~
, a~..J rFT_
i
~
FO:~CY
~-~-- ~ S';.T
~ ~~ 1
j I'. Vc~.a
I
. ~L~J
~_
~
~ ~ ~ JCIY~:
-
X.
~
I Lu'. ~
~
f ~ OEVEt.Oa-
' ERs co,v-
TRnc'
{
•
II Iv',aRCH
If
~' APRiL
I~ ~ .
,
,E
X~
.
;Y ~ .
~',^-Cp
vncauT I
'~.."~.~
r :~CV.iMI$- L ,.
T"1,~~\ J ivtY .Tpl ,~,-;y'L [~ Tc~ FOfi• TnX j
"""-'1 L...` "C',~~vCR. T~ ~ fi ~ I- t_:..-----''' L1 Y R 7Vnv I
IS~''V"Y I nFi~--IRETURt: ~n.s~ ~ ~a.~~1 f i
' C ~ if LAI7K LT ~t
' iCA~E I'CATI~[ ~ _...f iA~~'iKrt 'F"~~~~ ~.`• ~ ~i
VALUE I ~ ZOti~~~
pEteOUT-~ ~ ~
^"~ ION ZQvING I AS$ES$' i
JLF~P C~ '
SEWER Ei1J HiIA >4n^,?
`v;a. ER ' ~ AE~'RT I.1~,.t_~~F ,
I r:Tlot!
,• , ~ .. ~
'~~>;: ~F 'EL NA4R. `RErCRT I I~ ~. ~ .._.__ .... ... .. .... i
1t - e:~:~~ f i
+__.-1
U,i_i;~- REPI i - - - ~
{ll t
l ,
I aC'A ; 1:. ~ I
1 ~PR^CEDUR
' ~ I
r~-y f
f L
't.~f~RxET-I
1,-J~
n~:C r,. u'v CG:i i
~~J"RaCT,_._. ~ J GcT ~'' I i ICT., i ~ ~J't ~ E 1 ~
. .-----, f--~u i I
I. AOM! IN,.- I I
ALES
i ..
' i ~
MAY JUNE JULY ,~UGL'S'i' SEPT. 1 ~C.,.
S97a .~ ~ ,
` -3-
• ]_.ot Value
___. ~ ,
•
~ - • are
> j-
`Ihz, 7vcw Ford Tokan lots 50' ~: 13S ` G?SO sc ua.z•e feet (tri_th a fe~a
d
~
excepti.ons). The city assessor has a market value of X6,000 on each lot.
1\n appraisal made GI1 a hall- of lot illdicated a value of $2,500 or $5,000 a l.ot.
llssulrzing a market value of $6, 000 tl.e gross revenue front the lots i,rould be
X90,000. The fifteen lots gcnc.r~:.to approx_n~ztely X3,000 in tax revenue
02.60.40 each) . The cii.y received $41 from tilt se lots at the preselat tine.
Marketing. ~.
~; The estimated cost to sel_1 t}-ic Lots a.ssun~ialg the III:~1. ivas the seller will.
be $10,490. In detail the m~,xx:eting cost arc as follows:
~dmini.stra.tive ~b,870
Marketislg 24 S
• llpprai_sals 500 •
~~II • Certificate of Survey __1,875
Total ° • X10,450'• XSee appendi.<t for detai.I.s.
C~ Invc~s tn~ent and i~larketillg
City investment $26,354
Marketing 10 , 4 9 0
Total City Investment X36,844
Estimated Direct Net Revenue
'~I ~-._._~ ~ 90 000
Lot purc}k~se price $ ,
Total City Investment -3G,g'}'I .
Direct Net Revellue ~53,1G5
_. ___..
Tllis reverrze wou]_d be used by the III:A alonU t~~ith CD funds to implement the
Neva Home Program
Estimated Indirect Revenue
Of course the developer who purchased the lot ~ti~ould be rec{uired to biz:+.ld a
stasidard home on the ].ot. `I he taxes derived from the ne~~ home ti~`ould be:
4
Asstnrzing fifteen - 1,100 square foot homes Each Total
Btzilding Value $35,200 $528,000
La??d Value 6,000 90,000
Total Value $41,200 $618x000
Homestead Tax $1,2.15 x 15-$18,2.25 Non}iomestead $1,735 x 15=$26,025
City Sliale((15.6~) 190 x 15= 2,850 271. x 15= 3,965
County (3Z,o) 389 x 15= 5,735 555 x 15= 8,37,5
School D_i_st(52.4%} .637 x 1.5= 9,555 909 x 15= 13,635
Gon~mzn~~ Deti?elo~~ment Block Grant
The city will receive $182,85f3 in 1.976 from the federal goverrvnent. The city
plans %o invest $50,000 of these C.D funds (Federal housing and Cos~mlunity
Development funds) into the necv home program. `I.'llis source of fiznding wi].~~
begin in the late sun~:~er of ]_976. 'The total city investment (sale of ]ots
and CD funds} will be $1.03,156. T}iese total ftzrids will be. used to est«.blish
a rc:val_ving new home program f:tzrid .
• IZevo].vin~ rand
The revol.vi.ng fund tiai11. be used to purchase vacant substandard houses acid
vacant lots. T'l1e revo].vin~ ftt~ci twill be rerlenished by th:~ sale of lots a.~d
capitalization on the funds. For example the I~tA would purchase a substandard
}louse, demolish the house tizrid sell. the lot to a residential builder.. Tln_z_>
reple~zi.shi_ng the revolving fund.. A subsequent report ~ti~il1 deal titi~ith the
met:hod of pzzrchasi_ng lots, costs, capitalization, etc.
Marl_:oting Policies
It sh~.~ll be the polic}~ of the city to
' -Offer the city oivrred Ne~•.' Ford 'Tolvn lots for sale to the HIZA equal to the
city's im~estment in t}~~e lots .
- Provide $50,000 of I1'1976 Con~nuni.t}' Development funds to the HP~l1 far the
purpose of establishing a Ne~~~ home Progra~~~ Revolving Fund.
It shall be the policy of tl,e IIP.A to:
- Offer the city owner `Jew Ford. 'Town lots for sale to a resident:ial builder
at the appraised value.
&:
•
•
-5-
- Require a contract for sale o{ land {or priti~ate development.
- Require Certificate of Completion. and Release of Forfeiture.
•
•
-b-
Appendix
•
Selling Costs
Ac~~niru_stsative
Telephone information $ 30.00
Shoti~~ing 300.00
Sales negotiation 300.00
Closing
Title binder - $50 each 750.00
Closil~g fee - $30 each 450.00
AbStr.act ext. - $36 each 540.00
Attorney fee - $300 4,500.00
Subtotal ad>>uni.stration $6,870.00
I`larket. i7-ig
Sun Newspaper $ 10.00
Finance ~ Con~~IC~rce (10 days) 30.00
Star ~ Tribune Sunday through bVed. 125.00
lVaterbills/~l~a~.irterly report --0-
i.nt-l-r7- to 1~~~~al. realtnrs 5.00
L,eti.er to housing i_nstit~ate 5.00
Letter to selected. developers 10.00
Letters to rie.ighbors 30.00
HRA-NIlI;RO 30.00
Subtotal marketing $ 245.00
A n~aisal.s
$100 each x 15 $1,500.00
Su~.~ve~~
$125 each x 15 1,875.00
Subtotal appraisal. and survey $3,375.00
TO'}~~, $10,490.00
•
Ap~~encl _~~
vACtL~a~r su~s~rl~~~wan_r~ Ilor.~s~;s A?~rll vACnhz.~ z.o~rs
~~a ca.~ ~t L,ot
53 vacas~~: lots in Ri chfic~lcl..
Vacan ~ St~bstand and I aoizs cs
3 Subst.anc~rd vacant, houses i_n Richfield
601 Elli oi: Avenue Souf_iz
7418 PorLla~;d Avc,nue South
f 330 Oliver Avenue Sc~ut.h
•
•
•
comprehe~nsi~/e development plan
for the crty of r~chf~eld
LAND USE:
description density principol uses
Combination of multiple
dwellings, office, research
Mixed Land Use High industrial, hotel, motel,
institutional, and recoil
commercial
Combination of office,
institutional, light and
® Mixed Land Use High/Medium research oriented industrial,
~' recall commerc(al,
and multiple dwellings
Combination of office, retail
commercial, entertainment and
Central Business eating establishments, small
® District High/Medium comparison shopping and service
Mixed Land Use businesses, institutional,
limited cultural, recreational
facilities, and multiple
dwellings
Combination of single family
dwellings, multiple dwellings
Mixed Land Use Medium townhouses, and neighborhood
convenience commercial
Light and research oriented
Industrial Medium industrial uses.
Multiple units with related
Multiple High accessory uses.
Convenience
in
Sho
Area
Low
Grocery, drug, hardware stores.
pp
g
Single family Or two fomily
Single Family Low u nits and accessory uses
Residential co~r~pazible with single Or
two fomily units
COMMUNITY FACILITIES:
~. • .
y
~u,
-----
Public parks and open space
{
~
„~
-"~.
----- Public schools
Churches or Church-related
L~ ----- facilities
Other public, quasi-public, or
----- private institutional facilitie
•TRANSPORTATION:
----- Major arterial thoroughfare
adopted by eh• city of richfield this I5th day of Jonu ar y ,~y 73
• • •
. ,o~ ,..
.r~,
Y 6 _ _ _ _ _
caw a. L
awn a.; /^/~\
})
a.
,aMn.
. ~ ~ ~ ~ ~ . a x ~ ~ ~ ~ a 3 0 W a ~ m ~ _ ~ ~ t s m s _ ., ~ ~ ~ .. ~ o . ~ ~ W - - - - - - - - ~ _ a ~ n ~ ., a
7
_ ., s
G t
r
AGI2EEI~IENT
THE AGREEMENT, made this day of , 19 ,
by and between the housing and Redevelopment Authority in and for
the City of Richfield, a body politic and corporate under the laws
of .the S gate of I~iinnesota, party of the. first part, hereinafter
•called "The Authority", and the City of Richfield, a municipal
corporation, under the laws of the State of Minnesota, party of the
second part, hereinafter called "The City".
WITT~IESSETH:
+J+~
7
C
E
t
f
1
3
WHEREAS, the Authority has the power, under the provisions of
Minnesota Statutes, Section 462.445, Subdivision l (7), within its
area of operation, and without the adoption of an urban renewal
plant, to acquire, other than by the exercise of the power of
eminent do~«ain and without the adoption of a resolution provided for
in Subdivision 1 (6) of .said section, real property, and to demolish,.
remove, rehabilitate or reconstruct the buildings and improvements Y
or to construct new buildings or improvements thereon, or to grade,
fill and construct foundations or .otherwise prepare the site for
improvements, and to dispose of said property pursuant to Minnesota
Statutes, Section 462.425, provided that the provisions of Minnesota
Statutes, Section 462.525 requiring conformance to an urban renewal
plant shall not apply, and to finance such .activities by means of
the redevelopment project fund or by means of tax increments or tax
increment bonds or by the methods of financing provided for in
Minnesota Statutes, Section 462,545, or by means of contributions from
;:
,:
r
-2-
a municipality, pro~rided for in Minnesota Statutes, Section
462.581 {9), or by any combination of such means; provided that,
real property with buildings or improvements thereon sha11 only be
acquired when the buildings or improvements are substandard. For
the purpose of this subparagraph, substandard buildings or improve-
ments mean buildings or improvements that are dilapidated or
obsolescent, faultily designed, lacking adequate ventilation, light
or sanitary facilities, or any combination of these or other factors.
that are detrimental to the safety or health of the community;
WHEREAS, the Authority has the power under the provisions of
Minnesota.Statutes, Section 462.445, Subdivision 4 (2) within its
area of operation to determine where substandard, slum or blighted
areas exist or where there is unsafe, unsanitary or overcrowded
housing; and
VJHF;IZEAS, the City is authorized under the. provisions of
Minnesota Statutes, Section. 462..581 (9) to furnish funds available
to it from any source, to an authority to pay all or any part of
.the-cost of the Authority of the activities authorized by Minnesota
Statutes, Section 462.445 Subdivision 1 (7);_and
WHEREAS, the City has certain funds available for the execution
of a New Home Program;. and
WHEREAS, the City is desirous of transferring to the Authority
certain sums. of money as hereinafter provided for the purpose of
carrying. out said New Home,Program within the area of operation of
the Authority;
_.~_
R
• NOW, THEREFORE, IT IS HEREBY AGREED, between the parties
hereto as follows:
1. The City, upon execution of this agreement, shall provide,
as such funds become available to it, the sum of not to exceed One
Hundred Thousand Dollars ($100,000) to the Authority. The source
of said funds shall be:
(a) $50,000 from Community Development Block Grants,
or such sum as is received by the City in such grants in the
Community Development program year of 1974-1975.
(b) The proceeds of the sale bf city-owned parcels of
land known as "Surplus Metropolitan Airports Commission
Property'°; provided, however,. that if said parcels are
transferred to-the Authority for sale, any sale proceeds in
• excess of the amount necessary to supply the total sum of
$100,000 specified in this paragraph shall be transferred
by the Authority to the City. If, for any reason,. the Community
Development Grants specified above are not made available
to the city in the program year 1974-1975, this agreement
shall be of no effect. Funds provided pursuant to this
paragraph shall be used to defray all costs of the new home
program.
2. (a) The Authority, upon the receipt of said funds, shall
undertake performance hereunder; and shall continue to provide such
staff, facilities and assistance as in its opinion are needed to
carry out the activities of the New Iiame Program, until such time
•
-4-
as the Agreement is terminated as provided for herein..
(b) The Authority shall return all monies received by
it in the course of this contract to-the account and fund originally
.supplied by the City, to be used as a revolving fund in~carryixig
out the. terms of this contract.
3, The Authority shall keep accounting records of all funds
received, and additional recards in such detail as may be reasonably
required by the City.
4. The Authority shall make, in such detail as may be
reasonably required by the City,. and forward to the City an annual
report in writing as to the actual progress of the Authority with
respect to the Phew Home Program.
5. This. Agreement maybe terminated by either party upon 60
days-written notice. Upon termination of the contract, the Authority
" shall pay to the City a•11 money remaining in .the fund established
by. Paragraph l and 2 (b) of this contract.
6, The administrative costs of the Authority. shall not exceed
an average of seven percent of the purchase price of all property
..acquired under this Agreement.
'7, The Authority agrees to hold the City of Richfield harmless
from any and all claims or lawsuits that might result from activities
under this Agreement.
g. 'The City of Richfield agrees to hold the Authority harm-
less from any and all claims or lawsuits that might result from
any activities of the City of Richfield under-this Agreement..
r
~j~
9. ~~'his ~greenlent incor_1~arat.es }.ay re:Lerence the 1>rovisi_on
of t}ie ~iocw:n~nt entitled "~['ern?s of O~er_at_i_or~ attaci)ec_i
l _ hE.r_c:t:o ~.~~ E<:n.,_,~.i. c.
~~ ~; -,
A a_aa ,Y::_c.c~ a part l~ercof." ri~}iis Aareen,:en-c shell also inc:Orl?Oratc:
anti }~c su},ijc~ct to a~.]_ the provisio.is =i_n 1?art II, hex-eto ai:tacllc~c~.
lI~T [''7I`J'i'`_',~SS j^~~1j1;_~~)_~r i=i.1L' ~7a?='t1'8 17c?VC' OI1 tll~. Qc~y czll!7 yC'ar ~1I:S'G
above written duJ_y ey~:c~~t:~~~d this zlg.reer,~e~.~t. by thei}.- czul.y aut}=o,~ized
officers.
1"l~r~ HOli~~T~vrG E:_i~D p1 D1~J~;LOPi~9.1,I~~1
~~TJ'~}lOr1'l,v lit ~7'Ji~ ~~J1 m}~}'. C1-r~}ZT
OF' RICi3t'ILLD
LV
Its Chairan«rz~ ~~ _
__ _ ___.
Ly
)_ts Secr_etary
CI~i'Y Uz~' f.ICtll' -; }LLD
~y
~1`1tAk'Or
P~ttE'~;t
City ClE_rk
Countersiaized
-City I~an~c,cr
City I~t_torrey
e
i
1,pproved as to Legali_t.y