12-23-74 agenda,~
_.
CITY`OF RICHFIELD , MINNESOTA
'Office of City~Manager
HRA Letter No .. 5
" December 23, 1974
Housing.. and;' Redevelopment
Authority= Coinm~is~sfoners
City. of Richfield
Gentlemen:
~•'~.
-• Subject: Report on .Spot~.~Program
At the December 9 ,: 1974 , meeting of the Housing, and' Redevelopment Authority, .,
commissioners:asked for a:brief report on~,tYie types of spot. renewal which could be
accomplished in=`R'ichfield. Staff has reviewed three aypes of spot: renewal in `
residential areas and feels that a program should be:developed. • However, the-staff
_ is of the opinion that further study and planning is necessary before any Housing-and
Redevelopment`Authorityaction is: taken. The three types are as follows:
1. Rolbinsdale: spot. renewal consisted. of designating the entire city as a proj ect
,~ area ..1'kre~ Robbinsdale plan :is an-.effective way of providing-for spot renewal
by~us-ing~ Tax: Increment Frlancing; to finance the renewal activities.
However.; the inherent risks'. relative:to designating the entire community
as'a project. area outweigh,, in.our opinion, the short term :rewards in financing
therenewal activity.. Theis .is: true. for the following reasons .
a ._ It corrupts. the .idea of the project area: as : a tool for. eliminating
deterioration in: particular areas of the community.
b. . It over uses the concept of project areas and creates the risk:of it
bec~rming;an unpopular tool. due to overuse.
c. Thy possibility of unsound investment and haphazard development
-exists if the ~ development district: is not controlled ~ and specified .
d: ~There:is a: ack_of immediate:turnaround possibilty,• (purchase; sale)
in~the~project area v~hich creates undue financial risk. This ties up
tax• increment funds_ for long periods of time . Given the :effect. of
•~ .° creating::unnecessary-risk and long:-term. possibilities of creating
an:irnosity. 'phis' type of spot. renewal is not. in .our opinion warranted.
2'.. The~lVlinrFeapolis method is to purchase: structures and!lots which are vacant
and`for sale on the open mark~t..This method is financed through revenue .
bonds which are repaid from-.the resale of the land and the overall taxable
gains on lie new structure on~thee:-land. It does not involve>direct tax
increment. financing, nor does it involve- projectareas or development
..districts .
HRA Letter No. 5 -2~ :December 23,_ 1974
The purchased lots and structures 'are written down<andresold to a private
.developer who builds housing`to specifica ions (code) on the lots. The
developer •is responsible for construction on .the lots and sale of the new
.housing°units. This method allows fora voluntary change in vacant
structures and vacant lots over a period' of time o However, the method
does not allow for the removal or change in~substan.dard or deteriorating:
hour ing which is not vacant o
3. It is the opinion of the staff that it would be possible to pursue.'a combination
of the Minneapolis' and Robbinsdale spot renewal methods . This combination:
would camsist of a limited project area or development district in which tax
increment financing would be used to finance the project.. Community
Development funds could be used for relocation. This would .consist of taking
one, two, or three.or more lots a year and creating a development district
with these three -lots. The substandard homes on the lots would then be
'removed and-.the property. would then beywritten down and sold to the developer
who would construct a new home on the: lots . This would allow for the `^
voluntary removal of substandard .housing, and construction of new: housing.
Tax incre~rrrents would be>used to pay off the demolitoncosts and.wrte down
on the property, The second part of the' combination would be to use the
I~iinneap®lis plan to purchase,. on the open market, the .substandard vacant
housing and vacant lots . The housing would then be demolished, written
down, sold to a developer and new housing would be constructede The
combination plan in our opinion provides for the greatest flexibility to mee
the problems `that exist in Richfield.
We have provided a brief concept of the types of-spot renewal which .are occurring in
our immediate area o It is suggested that. the Housing and Redevelopment Authority
instruct the executive drector'to further study the different alternatives and' provide a
poaicy plan for spot renewals. It is imperative that the total impact of this type of
activity be understood before financial action is taken. St is also suggested that the
:initiation of spot renewal not take place until at least the following have occurred:
1 o The spring of the year when the vacant housing market is at its peak:. This
will create the probability of a faster turnover rate.
2 , The mo~~gage-.market is a little bit "harder" . The ability of a buyer to purchase
the housing from the developers on kie open market will: be easier. -This
will allow the HRA to turn over its investment at a faster rate., thus being
able to recover the investment. at: a;faster rate and replenish the revolving
revenue bond' fund
Respectfully submitted,
r
Wayne S . Burggraaff
WSB/eja Executive Director
cc: Planning .Director
CITY OF RICHFIELD, MINNESOTA
Office of City Manager
HRA Letter No. 4
December.23, 1974
Housing.:and Redevelopment
Authority Commissioners
City of Richfield
Gentlemen:
Subject: joint Meeting of the Planning Commission and the.
HRA to Receive the Lyndale/Hub/Nicollet Commercial
Improvement Phase I Report
.Initially, it had been anticipated that the city staff and representatives of
Bather-Ringrose-Wolsfeld, Inc. would make separate reports on this project at
the December 17 planning commission. meeting and the December 23, 1974 city
council meeting. However, in the interest of making it possible to provide in-
formation to the commercial improvement committee as well as to residents living
near the area, the scheduling. for the city presentations has been changed.
A .joint meeting of the HRA and the planning comrr~~ission has been scheduled for
Monday, January 6, .1975 at 7:00 p.m, in he city hall council chambers, At this
.time the formal .presentation of Phase I will be made to both the HRA and the plan-
ning commission and it will also be possible to report on the initial reaction of
the improvement committee and residents living in the area .
Council members have already received a copy of the bus.inessman's census
for this area as well as a preliminary draft of a summary economic potential report.
Prior to the. January 6 meeting we will distribute copies of the resident census and
final copies of the ;e:~onomic potential analysis.
The Housing and Red"evelopment Authority should act to establish a special meet-
ing for January 6, 1975 to receive this report in conjunction with the planning
commission e
Respectfully submitted,
UU~
Wayne S. Burggraaff
Executive Director
WSB/eja
cc: Planning Director
t
CITY OF RICHFIELD, MINNESOTA
Office of City Manager
HRA Letter No . 3
December 23, 1974
Housing and Redevelopment
Authority Commissioners
City of Richfield
Gentlemen:
Subject: Report on Knutson/House of Prayer Housing Project
At the December 9, 1974 HRA meeting, the commissioners requested that the
executive director investigate the proposed Knutson/House of Prayer housing
project and make a status report at the next HRA meeting:...
In'connection with this request the planning director has contacted represent-
~: atives of the Ho~ise of Prayer Lutheran Church, the Knutson Company. and the
Minnesota I2~ou~in~; Finance Agency. The information. which we received is that'
while there appear to be a number of problems with the proposed project, it has
not as yet'been dropped and it is still under consideration. It is possible that.
the- sponsors of the project might work .with the'Minnesota Housing Finance Agency,
but our conversations with that agency. indicated that they have not -been contacted
as of this date.: Part of the problem involves uncertainty in the funding of the
Housing and Community Development Act and-.the fact that final regulations supp-
. orting that legislation have not as .yet been promulg~ged.
Respectfully .submitted,
/ ~ . /
Wayne-S. Burggraaff
Executive Director