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10-19-81 agenda ~' f HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 36 Agenda October 19, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Authorization to Advertise for Bids • ~~. `,. ~~, • The site of the multi-family project, which is being developed by the Knutson Companies, was bisected by Auto Lane, an alley located between Lyndale Avenue and West 66th Street. This alley provided access to garages adjacent to the homes along Graham Avenue and Lake Shore Drive. ~ vt.~t~r1 ~aF' R ~ d~~ ~r°t The alley right-of-way'has legally been vacated, and construction on the project has eliminated ingress/egress at 66th Street. Three occupied homes fronting on Lake Shore Drive, outside the L/H/N project boundaries, continue to need the alley for access to their property. In meetings with these home owners and representatives of the Knutson Companies during the last several weeks, a design has been developed which appears acceptabled to all affected parties. % The alley sloped downward from Lyndale to 66th Street. During the summer season,. ingress and egress were possible from either street. However, in the winter, it was usually necessary to exit onto 66th Street. Exiting onto Lyndale was difficult for some residents because it meant driving uphill. With the existing grade, the owners of 6617 and 6633 Lake Shore Drive would have much difficulty using the alley in the winter because of the necessity to travel uphill. The alley has now been dead-ended, so there is no practical way for service vehicles to turn around once they have entered the alley from Lyndale Avenue To alleviate these problems, it is proposed that the existing alley be regraded in the area adjacent to the three houses at 6617, 6633 and 6639 Lake Shore Drive, thereby resulting in a more gradual slope. Two turn-around areas will be provided, as shown on the attached map. (The HRA will retain the right for the city to utilize these areas.) The turn-grounds and regraded portion of the alley will be paved with 2.5 inches of asphalt. To prevent problems with water runoff, it will be necessary to install a catch basin on Lake Shore Drive. ' HRA Letter No. 36 -2- October 19, 1981 The total estimated cost of the grading, asphalt treatment and catch basin installation is $19,000. The. installation of the catch. basin and-storm sewer will cost approximately $14,000. The ~ balance will be for grading the alley, installing the asphalt, ents i f th t {F mprovem ese o and engineering administration. The cos t~~ ~~~ will be financed through the bonds proposed for sale to recover `~L~~~' ~~~ ' the HRA's costs for the multi-family site. Minnesota Statutes ~' ~~' require work costing in excess of $.5s, 000 to be bid. Thus, the ~~~'~ catch basin and storm sewer will be undertaken by a contractor ~~~' selected through the competitive bidding process. However, it may , be possible to obtain a contractor- to undertake the grading and ~ , paving to specifications for less than $,000. Thus, at the same ~ time bids are being solicited for this work, the staff will be contacting contractors for informal bids. It may be necessary for the HRA to formally approve only one contract. The next regularly scheduled HRA meeting is November 16, 1981. To complete this project, it would be desirable to award the contracts in early November. A brief special meeting early in the month should be considered. It is recommended that the HRA authorize the solicitation of bids for construction work to Auto Lane. Respectfully submitted, • KN/sh Karl Nollenberger Executive Director cc: Community Development Director Housing and Redevelopment Coordinator AUTO LANE _. _. _ - - _ ._ - o 13fl 5 W E*di~e of dr. ~ ' :~ _...14.0 F -- -~ edge ~ _.__ _-_.._.. i _3.=-~ IiNfl .~f drive ~ I l3,iR 'i(7r IiJP dijCr dhor !i4i: j ~~• t J m o- -- - -- - -~ - - _o ~ + + r i t i .,• HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 35 Agenda, October 19, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Section 8 Moderate Rehabilitation Program • During the summer of 1979,. the Metropolitan Council HRA (Metro HRA) inquired about our. interest in participating in the Section 8 Moderate Rehabilitation Program. In August, 1979, we responded affirmatively. This program, administered by the Metro HRA, provides rehabilitation loans at 11 percent interest to private rental housing owners. Improvements to the rental units eligible for financing through this program include updating electrical, heating, and plumbing systems and improving energy conservation. Eligible properties include rental single family homes, duplexes and apartment complexes. In receiving this financing, the owner agrees that the improved units will be rented to low and moderate income persons for a minimum of 15 years, utilizing the Section 8 rent subsidy program.. As indicated in previous communications, the Metro HRA has been in contact with Richfield staff to help locate interested Richfield rental property owners. Public notices were placed in local papers and workshops were held. in May, 1980, to distribute program information.. The initial phase of this program has been completed. Metro HRA is ready to begin a second phase; however, this time they they have requested that the attached resolution be adopted by the HRA. The Metro HRA administers the program, and provides all services to the rental property owners, including processing loan applica- tions, loan counseling, specification writing and providing the guaranteed Section 8 commitment. With the aid of city inspectors,. Metro HRA would evaluate the eligibility of interested owners' units. This aids in determining city code violations and priori- tizing improvement work for the individual units. The Public Safety Department indicates that this responsibility is acceptable and manageable within their normal work schedules. To date, Richfield rental property owners have shown little interest in the program. The program stipulates that dwelling units must be in need of at least $1,000 worth of improvements. This criteria may have discouraged owners of apartment buildings because the general condition of rental units in Richfield does not warrant such extensive improvements. The 15-year Section 8 contract requirements may have discuraged others, although guaranteed rents and the improved condition of their buildings may be an offset. Since the city inspection divisior, routinely inspects the larger apartment complexes for safety and maintenance, it is hoped that many participants will be the owners of smaller complexes, duplexes, and single family rental homes. HRA Letter No. 35 -2- October 19, 1981 The Section 8 commitments that are tied to the rehabilitation loans will remain available through Metro HRA even if federal funding cuts occur. With increased awareness of the program, and as our rental housing ages, it is expected that participation. within Richfield will increase. This program could help us. achieve our own housing assistance goals of rehabilitating-approximately 30 rental units in 1981 and 1982. Metro HRA anticipates funding to be available for this number of rehabilitations. This program is important to Richfield in that it could increase the supply of housing for low and moderate income house- holds and help maintain our aging rental housing stock. It is recommended that the HRA approve the attached resolution, author- izing participation in this program. Respectfully submitted, ~. Karl Nollenberger Executive Director KN/sh cc: Community Development Director Housing and Redevelopment Coordinator • z HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE METROPOLITAN COUNCIL TO IMPLEMENT THE SECTION 8 MODERATE REHABILITATION PROGRAM WITHIN THE CITY OF RICHFIELD WHEREAS, the Metropolitan Council has been duly organized pursuant to Minnesota Statutes 473.06, Subd. 3 and Minnesota Laws 1975, Chapter 13, Section 6, Subd. 3; Section 21, Subd. 1; and Section 24, and has all of the powers and duties of a housing and redevelopment authority pursuant to Laws 1975, Chapter 13, Section 24 under the provisions of .the Municipal Housing and Redevelopment Act, Minnesota Statutes Section 462.411 to 46.2.711, and acts amendatory thereof; and WHEREAS, the Housing and Redevelopment Authority (H RA) in and for the City of Richfield is authorized by Minnesota Statutes 462.415 to establish a housing policy that will insure the sound growth, development and financial stability of the community;. and WHEREAS, the Richfield HRA and the Metropolitan Council desire to assist lower income families and individuals to obtain adequate housing in the City of Richfield at a price they can afford, and to accomplish this purpose, desire to undertake a program of subsidizing rent payments to landlords who provide adequate housing • to such individuals and families; and WHEREAS, the Richfield HRA has determined .that a program to encourage the rehabilitation of rental units is consistent with the housing goals of the city. NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA: 1. that the Metropolitan Council is hereby authorized to implement a Section 8 Moderate Rehabilitation Program to encourage rehabilitation of private rental housing units and to provide rent assistance to lower income families within the City of Richfield,. and 2. that the Richfield HRA Executive Director is hereby authorized to enter into an agreement with the Metropolitan Council for operating the program within the city. Passed by the Housing & Redevelopment Authority in and for the City of Richfield this 19th day of October, 1981. Thomas E. Harms, Chairman ATTEST: Michae Freeman, Secretary • HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director _ __ HRA Letter No. 34 Agenda October 19, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Authorization to Enter into a Joint Project with the South Hennepin Vocational Training School • A substantial housing rehabilitation project has been proposed by South Hennepin Vocational Technical Center (Vo-Tech) as a joint effort with the Richfield HRA. The last project, 6500 Standish Avenue South, was completed in July, 1981. As with the Standish Avenue project, the new proposed project requires relocating a city-owned house from city-owned park land to a city-owned vacant lot. The HRA is requested to act on the attached resolution, which would authorize acquisition of the house and vacant lot from the city, and allow the project to commence in cooperation with Vo-Tech in late October. The city acquired the property at 6244 16th Avenue in 1978, when it became aware of storm water runoff problems experienced on the property. The HRA has managed rental of the house since that time. The lease for the tenants expired September 1, 1981, so the house is now vacant. The lot at 6413 22nd Avenue is the last uncommitted developable city-owned lot in the New Ford Town area, originally obtained from the I~letropolitan Airports Com- mission. On October 12, 1981 ttze city council authorized transfer of the house and the land on 22nd Avenue to the HRA providing that the HRA approves the Vo-Tech contract. The amount the HRA must pay for the land and house will be equal to the balance that remains after all costs related to the project have been paid, and is anticipated to be $1,000 - $2,000. The Planning Commission has found the sale of this property for residential purposes to be in conformance with the city's comprehensive plan. A deed for purchase of the land and a contract for purchase of the house has been drafted by legal counsel, and will be executed if the HRA approves the Vo-Tech contract. ' HRA Letter No. 34 -2- October 19, 1981 The Vo-Tech has found the house and site suitable for the rehabilitation project. Plans and cost estimates submitted by the Vo-Tech detail a 12' x23' addition, which will expand the existing structure from two bedrooms and one bathroom to four bedrooms and two bathrooms. The finished floor area of the expanded structure would have 1,575 square feet. Other improvements include a new basement, new roof, windows, doors, wiring, plumbing and heating systems, additional insulation, driveway and off-street parking space, and landscaping. Kitchens and bathrooms will be supplied with new cabinets and plumbing fixtures. All interior finishes will be improved, including new sheetrock, carpet and flooring. A11 plumbing, electrical, heating, excavating, and concrete work will be done by professional tradesmen. Carpentry, cabinet-making, painting, decorating and landscaping will be done by students. This type of rehabilitation project produces basically a new house utilizing the existing frame. Vo-Tech estimates that the cost for relocating and rehabilitating the house will be $46,479. This is approximately $1,500 more than last year's contract, and results primarily from inf lation-increased costs . The house -~n-~~:-1 -~~'' be sold to a moderatE~ income family that qualifies under the FHA Section 235 program, providing the program is continued by the present federal administration. If necessary, alternate financing mechanisms will be considered and brought to the HRA for review, as the time for resale of the house gets closer. The selling price for the rehabilitated home is expected to be • $52,800, if financed through Section 235. Regardless of the financing mechanism, the HRA will recover the difference between the sale price and its estimated market value when the property is resold. At this time, the staff is investigating other possible equity increase sharing mechanisms. The construction agreement between Vo-Tech and the HRA is essentially the same as the one utilized for previous projects. The Hennepin Technical Center Board of Education authorized executing the contract with the HRA on October 8, 1981. The important elements of the contract include: - that the Vo-Tech will act as the general independent contractor with responsibility for a.ll labor, materials and work; - that a maximum cost $ 4 6, 4 7 9; witi~ file Vo-Tech the HRA paying the Vo-Tec August 31, 1982; - that the completion for all work performed by the Vo-Tech is ad~:~ancing money to pay for the work and after the property is sold, or by v date will be on or before July 1, 198; - that the supervision of labor and insurance coverage is the responsibility of Vo-Tech; - that the I3 RA approvc~ the compl~,tc~d wor;<; - that there be a provision rc~quiri.nq a ont,-year warranty for defects caused by faulty workmanship or defective materials, a two-year warranty on installation of plumbing, electrical, heating or cooling systems; and ten-year. warranty on structural defects. HRA Letter No. 34 -3- October 19, 1981 The last element is the only new part of the contract. The warranty provision has been added because the State of Minnesota passed legislation requiring all rehabilitation work to include the warranty protection, starting in 1982. It is recommended that the I-IRA adopt the attached resolution, authorizing execution of the rehabilitation contract, with the Vocational Technical Center and acquisition of the house at 6244 16th Avenue South, and the land at 6413 22nd Avenue South, for housing purposes. Respectfully submitted, Karl Nollenberger Executive Director KN/sh cc: Community Development Director Housing and Redevelopment Coordinator HRA RESOLUTION NO. . A Resolution Authorizing a Joint Housing Rehabilitation Project with the South Hennepin Vocational-Technical School and Authorizing the Acquisition of Property at 6244 16th Avenue South and 6413 22nd Avenue South WHEREAS, the City of Richfield owns certain property located at 6244 16th Avenue South and 6413 22nd Avenue South, said property being legally described as follows, respectively: Lot 13, Block 9, Girard's Parkview Addition Lot 4, Block 13, New Ford Town Addition, County of Hennepin; and WHEREAS, the property at 6244 16th Avenue South has been acquired by the city and it is recommended the existing structure be removed; and WHEREAS, the vacant lot at 6413 22nd Avenue South is avail- able as a relocation site; and WHEREAS, the Housing and Redevelopment Authority of Richfield (H RA) does acquire, relocate, and rehabilitate structures with the cooperation of the area vocational technical school; and • WHEREAS, the HRA desires to acquire the structure at 6244 16th Avenue South, to relocate it to 6413 22nd Avenue South, to rehabilitate it in cooperation with the Suburban Hennepin County Vocational-Technical Schools, and to sell the home to a moderate income family utilizing the FHA Section 235 program; and WHEREAS, to initiate this activity, the HRA will have to execute a contract with the Vocational-Technical School and acquire ownership of the structure and title to the lot at 6413 22nd Avenue; and WHEREAS, the cost of acquiring the structure and lot will be equal to the amount of funds that remain after subtracting the HRA program costs from the sale price of the rehabilitated house; and WHEREAS, according to the FHA Section 235 program, the sale of the rehabilitated property should not exceed $52,800. NOW THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD, MINNESOTA: 1', that the contract for rehabilitation of a house at 6413 22nd Avenue South by the South Hennepin Vocational-Technical School can be executed. 2. that the Executive Director is granted authority to execute the purchase of the structure at 6244 16th Avenue South from the city. 3. that the Executive Director is granted authority to execute the purchase of the lot at 6413 22nd Avenue South. i Passed by the Housing and Redevelopment Authority of Richfield this 19th day of October, 1981. Thomas E. 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