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08-17-81 agenda=~,;, HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 30 Agenda August 17, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Granting of Easement Across"Adams Property" Northwestern Bell Telephone Company is in the process of burying underground telephone utility lines in the area north of 65th Street and west of Lyndale Avenue, within: the L/H/N redeyel- opment project area. To complete this undergrounding project, it is necessary for NW Bell to traverse the property previously owned by Nirs. Adams; recently purchased by the HRA. If this segment of telephone: lines is buried, there will. be no overhead utility lines remaining in this area of the L/H/N. Richfield Bank and Trust, which is providing the mortgage to the Lyndale Garden Center for the construction project, has indicated that the easement is accept- . able to them. The owners of the Garden Center are also agreeable to the easement. They will also provide P1W Bell with an easement .across a portion of the property which they already own. A copy of the resolution and the easement agreement will be presented to the HRA at the meeting on Monday evening. It is recommended that the HRA adopt the resolution, granting an easement to NW Bell to permit burying telephone lines across the former Adams property. Respectfully submitted, Karl Nollenberger Executive Director cc: Community Development Director .Housing and Redevelopment'Coordinator KN/eja • RESOLUTION NO. RESOLUTION DEDLCATING AN EASEMENT WHEREAS, the Richfield Housing and Redevelopment Authority (hereinafter referred to as HRA) has established a redevelopment project under Minnesota Statutes 462.4.11 et seq; and, WHEREAS, a redevelopment plan has been adopted by the HRA and City Council; and, use of space; and, WHEREAS, objectives of that plan are to create a:, more attractive and safer environment, and provide for a better more efficient WHEREAS, the HRA ownes property in the area on and under which Northwestern Bell Telephone Company, on Iowa Corporation desires, to place buried cables and appertenances; and, WHEREAS the property owned by the HRA is legally described as: Description of Parcel: • • That part of Government Lot 3, Section 28, Township 28, Range 24, Hennepin County, 1!4innesota described as follows: Beginning at a point on the Easterly. line of said Government Lot 3, distant 1176.30 feet South from the Northeast corner thereof; thence S 82i°00'W a distance of 442.58 feet; thence S12°~.6'44E a distance of .75.00 feet to the actual point of beginning of the tract of land to be described; thence N12°16`.44W a distance of 75.00 feet; thence N82°00'E a distance of 442.-58 feet to the East line of said Government Lot 3; thence North along said East line a distance of 115.36 feet; thence at a right angle Westerly a distance of 176.50 feet; thence at a right angle Northerly a distance of 16.00 feet thence at a right angle Westerly to the point of intersection, with the Southerly extension of the Westerly line of Aldrich Avenue South as platted in the recorded plat of Ray's Lynnhurst 2nd Addition; thence Southerly along the Westerly line of said Aldrich Avenue South to a point 225.00 feet South of the . Southeasterly corner of Lot 4, Block 2, said Ray's Lynnhurst. 2nd Addition, as measured along the Southerly extension of the Westerly line of said Aldrich Avenue South; thence Westerly parallel with the Southerly line of said Lot 4, Block 2, to its intersection with the Southerly extension of the Easterly line of. the North-South .alley as platted in Block 2 of said Ray's Lynnhurst 2nd Addition; thence Northerly along the Southerly extension of said alley 11.00 feet, more or less, to the Southerly line of the East-West alley as platted in Block 2, said Ray's Lynnhurst 2nd Addition; thence Westerly along the Southerly line of said East-West alley to the Easterly line of Bryant Avenue South as platted in said Ray's Lynnhurst 2nd Addition; ,thence Southerly along the Southerly extension of the Easterly line of said Bryant Avenue South a distance of 170.00 feet; thence Southeasterly. • to the actual point of beginning; Except that part thereof lying Easterly of a line drawn parallel with and. 176.5,0 feet Westerly of the East line of said Government Lot 3; Description of Easement: The East line of said-Government Lot 3 is assumed to be a line bearing due North for the purpose of this description:. Said 5.00 foot wide easement strips of land over, under and across the above property, described as follows: The East 5.00 feet as measured at a right angle to the East line of said property described above. Together with an easement 5.00 foot in width described as the North-5.00 feet of the East 128.47 feet. as measured at aright angle to the North line of said property described above. NOW, THEREFORE, be it resolved by the Housing and Redevelop- . ment Authority of the City of Richfield, Minnesota as follows: 1. The Chairman and Executive Director, are directed to grant Northwestern Bell Telephone Company its successors and assigns a perpetual easement by executing an easement agreement. 2. The HRA attorney is directed to record the perpetual easement against the property. Passed by the Housing and Redevelopment Authority of the City of Richfield this 17th day of .August, 1981. Attest: Michael Freeman, Secretary Thomas E. Harms, Chairman HOUSING AND REDEVELOPD4ENT AUTHORITY Office of Executive Director • HRA Letter No. 29 Agenda August 17, 1981 Housing and Redevelopment Authority Commissioners City of Richf field Dear Commissioners: Subject: Public Hearing on Sale of Property at 6500 Standish Avenue Through a cooperative effort between the Richfield HRA and Hennepin Technical Centers, the house located at 6500 Standish Avenue has been rehabilitated and is ready for sale and occupancy. A public hearing has been scheduled for the August 17, 1981 HRA meeting to consider disposition of the property. The planning commission has found the sale of this property for residential use to be in conformance with the city's comprehensive plan. On April 20, 1981, the HRA authorized the staff to advertise for purchasers, receive applications, select eligible applicants, and submit the applications to United Mortgage for evaluation. A five member family, the Larsons, have been evaluated by United Mort- . gage and appear to be eligible for a Section 235 mortgage. However, a purchase agreement must be executed so that the Larson's eligibility can be finally determined by FHA. The Larson .family has been invited to attend the August 17, 1981 meeting. To purchase the home, the Larsons are required to: -have a Section 8 program income level: for a five member family this is an income with the range of $15,000-$20,050; -pay the sale price of $52,800., with $8,800 required as a down payment; -be subject to second and/or third mortgages by the HRA and the Department of Housing and Urban Development (HUD). This last requirement is explained in the following paragraphs. As mentioned in HRA Letter No. 11, April 20, 1981, the house wall sell for $52,800. However, the property had an FHA appraised value of $70,000. To prevent a speculative resale after the initial sale by the HRA, and to return funds which. could be used to provide addi- tional moderate income housing opportunities, a second mortgage is anticipated. This intent has been complicated by changes in the FHA Section 235 program since April, 1931. HRA Letter No. 29 -2- August 17, 198.1. The most significant change was a provision which HUD and Congress. call "recapture". HUD intends to recapture all, or part, of the assistance paid on a purchaser's behalf. The repayment would be the lesser of all the interest subsidy that HUD pays each year ~~ (approximately $3,600), or fifty percent of the increase in value of the property over the original purchase price. The interest sub- sidy owed after five years would be approximately $18,000. A prop- erty appreciating at 10 percent each year from an ititial value of $70,000 might have a value of $118.,000 in five years. This a $48,000 increase in value. Thus, after five years, the purchaser owes the lesser of $18,000, or fifty percent of the $48,00.0 increase, or _ $24,000. With the HRA's mortgage added to HUD's mortgage, the Larson could anticipate owing approximately $35,000 if they sold after five years. The Larsons could reduce the amount owed on a second or ~ thixd mortgage if the first mortgage was assumed by another moderate income family. ~~_ ~ ~- ~ i ~33„0~0 -9 , v Jo Q~~ After the purchase .agreement is executed and while the FHA eval- uates the Larsons' application for a mortgage, it is anticipated that the Larsons will rent the house at 6500 Standish Avenue. If occupied, the risk of vandalism to the property would be lessened. While there is also some risk to the HRA relating to their care of the house during the rental period, the advantages. of occupancy seem warranted to protect-the house. The proceeds from the sale of :the house will be utilized to pay • the costs of the project. This includes the contract with Hennepin Technical Center ($44,760), the contract with the city for purchasing the house and land ('approximately $..3,000) and any miscellaneous costs, such as legal fees. that have accumulated during the project. It is recommended that the HRA adopt the attached resolution, authorizing the Executive Director to enter into a purchase agree- ment with the Larson family. It is also recommended that the HRA authorize the sale of 6500 Standish Avenue to the Larsons, with the stipulation that they receive approval for the FHA Section 235 mortgage from FHA.. Respectfully submitted, t f; , Karl~_Nollenberger Executive Director cc: Community Development Director Housing and Redevelopment Coordinator KN/ ej a :~ HRA RESOLUTION NO. . RESOLUTION AUTHORIZING SALE OF P1mPERTY AT 6500 STANDISH AVENUE SOUTH WHEREAS, the Housing and Redevelopment Authority of Richfield, Minnesota, (hereinafter referred to~~as the HRA) owns certain real property located at 6500 Standish Avenue South, said property being legally described as follows: Lot 23, Block 6, New Ford Town, Hennepin Chanty; and WHEREAS, the property was acquired by the HRA from the city so -that the South Hennepin Vocational Technical Center could relocate and rehabilitate. a house on the site and subsequently sell the home to a.mxlerate income family utilizing the FHA Section 235 program; and WHEREAS, the relocated structure has been rehabilitated and can. now be sold; and WHEREAS, the HRA authorized soliciting, receiving, and reviewing applica- tions from those interested and qualified to purchase the property; and WHEREAS, in cooperation with the lender, a purchaser, the 'l~rrance and Patricia Larson family, has been selected; and • WHEREAS, to complete the purchaser qualifying process, a purchase agreeirent mast be executed and FHA must determine whether or not Larsons are qualified for. the FHA Section 235 mortgage; and WHEREAS, the conditions of sale include the maximum sale price of $52,800, the maximum mortgage amount of $44,000, and provisions for sewnd and third mortgages by the HRA and the Departirent of Housing and Urban Ihvelognent (HUD) ; and WHEREAS, if feasible, the HRA desires a second mortgage position requiring repayment of $17,200 when the property is sold by the original purchaser; but if feasible, will accept a third position after HUD, if a second position is not possible; and WHEREAS, the purchaser will also be subject to any requirements imposed by HUD or FHA; and WHEREAS, the HRA has completed a public hearing on the proposed disposition. NC7W, THEREFORE, BE IT .RESOLVED BY THE IIOUSING AND REDEVELOPMENT AUI'fiORITI' OF RICHFIELD, MINNESOTA: 1) that the Executive Director is directed to execute a purchase agreement for ,selling the property located at 6500 Standish Avenue South; 2) that the Terrance and. Patricia Larson family are the appro~-ed purchasers for the property contingent on their qualifying for the FHA Section 235 mortc_;3ge as verified by FIiA and the lender; and ~'a C' 3) that the Executive Director and staff are authorized to take such steps that may be necessary to effectuate this resolution and any sales agreement.. - Passed by the Housing and Redevelopment Authority of Richfield this 17th day of August, 1981. Thomas E. Harms, Chairman ATTEST: Michael Freeman, Secretary HOUSING ARID REDEVELOP1uENT AUTHORITY Office of Executive Director HRA Letter No. 28 Agenda .August 17, 1981 Housing and .Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Development of EHA Section .235 Homes On July 20, 1981, the HRA authorized execution of a construction agreement with Lida Construction, Inc., to construct two F~iA Section 235 homes. .However, in completing .the draft contract, our legal counsel determined that the HRA may not enter into the con- tract without first receiving formal competitive bids for the construction work. -Thus, the HRA must advertise for bids, have a public bid opening, anal select the lowest responsible bidder before a contract may be entered into. Lida Construction would be invited to submit a competitive bid. • The HRA first discussed a Section 2.35 project utilizing Lida .Construction on April 20, 1981. Prior. to that, the staff had eval- uated possible construction companies by contacting those still involved in constructing Section 235 housing in the metropolitan area. The qualifications of companies who had submitted proposals for the summer, 1980 bonus grant housing construction program were also reviewed. After receiving informal bids for the cost of the work from six builders, it was determined that only one, Lida Con- struction, could construct four bedroom homes meeting Section 235. Program requirements without the HRA incurring part of the con- struction and sales expenses. It was intended that all construet- ion and sales expenses be paid through the sale proceeds of the .houses.. After the HRA gave its preliminary approval, Lida Con- struction responded by submitting ,plans and specifications accept- able to the HRA and FHA for mortgage commitments. The specifications that will be included in the advertising for bids will be similar to those provided by Lida Construction. Each home will have four finished bedrooms, 1 and 3/4 finished baths, oak interior trim, oak finish cabinets and vanities, ceramic the surround on full bath, vinyl floor covering on kitchen and bath floors, carpeting in all other finished areas, stove, refrigerator vented hood, sodded yard, driveway parking pad., drain the on basement foundation, energy efficiency to meet code, patio door to deck or patio off of the kitchen area. ~._- Preferance will be given to a contractor that has a bid less • than $50,160 and .can provide housing coMpatible with the neigh- borhood as determined by the HRA. This includes costs of labor, HRA Letter No. 28 -2- August 17, 1981 materials, permits sewer availability charge, final cleanup upon completion, insurance costs, costs of construction loans to completion, and costs of a 10 percent bid bond and 100 percent construction performance bond. The HRA will use the balance of .$2,640 from. the $52,800 sales price to cover its anticipated ex- penses. Costs of site acquisition, site clearance, surveys, appraisals, installation of sewer and water lines to the prop- erty boundary lines, and entrance curbs, will be paid with CDBG Bonus Grant funds. • If the HRA authorizes the advertising of bids, the advertise- ment will appear in the Richfield Sun on August 19 and 25, 1981, in accordance with State Statutes.. A public bid opening. can occur as early as September 2, 1981. A special HRA meeting, perhaps late in he afternoon on that date could then. be scheduled to award the contract. There is some risk that both the 235 reser- vations, as well as .the planning work already done by Lida Con- struction, could be lost. However, by .acting expeditiously, this risk can be minimized. a contract with Lida Construction, and releases Lida Construction's $10,000 letter of credit. It is ,recommended that the HRA adopt the attached resolution, authorizing the advertising for bids .f or construction of two FHA Section 235 houses. This resolution also removes the authority granted to the Chairman and the Executive Director to enter into Respectfully submitted, ~ ` Karl Nollenberger Executive .Director KN/ ej a ccs City Attorney Community Development Director Housing and Redevelopment Coordinator City Council HRA RESOLUTION N0. RESOLUTION AUTHORIZING ADVERTISING FOR BIDS FOR MODERATE INCOME HOUSING AND RELEASING AUTHORITY GRANTED TO ENTER INTO A CONSTRUCTION CONTRACT t~REAS, the Housing and Redevelopment Authority (HRA) has determined a need for moderate inccane housing in the City of Richfield; and WHEREAS, the sites to be acquired for this housing are legally described as: Part of Lot 9, Block 2, Kendale Addition; and Part of Lot. 5, Block 4, Betcher's Addition, Hennepin County, Minnesota; and WHEREAS, specifications have been developed by the HRA for construction at each site, and these specifications are heretofore approved; and WHEREAS, .the HRA received. informal bids from contractors and one contractor, Lida Construction Inc., demonstrated it was economically feasible to develop the property within F~iA Section 235 .program guidelines; and WHEREAS, the HRA authorized Lida Construction to develop plans and specifications for. FHA mortgage commitn~nts and accepted .a letter of credit for the amount of $10.,000 from Lida-which demonstrated Lida's intent to • enter into a construction agreement; and WHEREAS, the HRA, in resolution no. 171, passed July 20, 1981, authorized the Executive Director to enter into the instruction agreement with Lida, since the plans and specifications had been approved by FHA; and WHEREAS,. it has now been determined that the contract for construction work at each site cannot be executed without having first selected the lowest responsible bid after advertising in accordance with state statute 462.461. ' NOW, 'THEREFORE, BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD: 1) that the Chairman and Executive Director are authorized not to execute a construction agreement with.Lida Construction, Inc. as previously passed by resolution; 2) the Executive Director is authorized and directed to release the $10,000 letter of credit, submitted by Lida Construction, Inc.; and 3) that the HRA shall prepare and cause to be inserted in the Richfield Sun, an advertisement for bids in accordance with specifications. Toe advertise- ment shall be published August 19 and August 26, 19.81, shall specify the work to be done, shall state that the-bids will be received by the HRA until 11:00 a.m. on September 2, 1981, at which time they will be publically opened, will 'then be tabulated,. and will be considered by the HRA at its next scheduled meeting, and that no bids will be considered unless sealed and filed with the HRA and acccgnpaned by a bid bond, payable. to the Housing and. Redevelopment Authority of Richfield for 10 percent of the bid amount. Passed by the Housing .and Redevelopment Authority of Richfield this 17th day of August, 1981.. ATTEST Thomas E:. Harms, Chairman Michael FreemanR Secretary •