Loading...
02-17-81 agaendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director • HRA Letter No. 10 Agenda.February 17,1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Federal Legislation Position Statements There is an item on the February 17, 1981 HRA agenda providing for HRA review and discussion of policies and. issues related to legislation which is likely to be-.before the federal legislature in its present session. Attached to this HRA letter is a brief summary of some of these legislative issues, their impact on Richfield, and a recomm- ended policy stand. which the HRA might wish to adopt for transmittal to our federal legislators. Respectfully submitted, C Karl Nollenberger Executive Director KN/eja • RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY FEDERAL LEGISLATIVE POSITION STATEMENT NUMBER 1 - February 17, 1981 SUBJECT: Industrial Revenue Bonds The purpose of this statement is to indicate support for legislation to prohibit abuses in the Industrial Development Revenue Bond finan- cing. Position of the Richfield_HRA There has been much discussion both on-the state and national level in recent years regarding the use of tax exempt industrial revenue development bonds by municipalities to solicit and support certain types of development within their communities. The Minnesota State Legislature in the last session, and likely again in the 1981 session, has discussed legislation designed to prohibit abuses in the industrial development revenue bond financing area: In addition, Congress is addressing this issue in the 1981 session. The use of tax. exempt bonds for financing of private enterprise actions. most likely has an effect on the ultimate. c ost of borrowing for gen- eral obligation purposes of the city. -We believe it is appropriate for the legislature and all other public bodies to be concerned about. the uncontrolled use of tax exempt financing in terms of the • ultimate impact of that financing on the general cost of borrowing and the basic debt service obligations of the public sector. City councils authorizing industrial redevelopment bonds in Minnesota presently do not have to make any specific set of findings relating to the need for tax exempt financing. Similarly, it is not necessary that city councils have a specific policy, or statement of goals and objectives, which a potential IDR financed project must meet before authorizing that financing plan. It is the position of the Richfield HRA that any legislative effort to narrow the scope of an application of IDR bonds. include the follow- ing features.: A. Require city councils, via legislative action, to make a set of findings prior to authorization to issue .industrial development revenue bonds. B. Require that those findings conform with some broad previously established, standard of goals and object- . fives for the IDR financing process. C. Require that the findings include a need for public sector stimulation of development. • D. The findings should also address the limitations of other financing alternatives to support said develop- ment. J ~J E. Any. such legislative restrictions should relate only to the use of IDR bond financing for commercial de- velopment, and should not apply to projects_in areas classified as_-industrialor located in designated re- development area , which would remain fully under local control. ~~ . ~ , ~- ~~'~ _~ • HOUSING AND REDEVELOPMENT AUTHORITY FEDERAL LEGISLATIVE POSITION STATEMENT • NUMBER 2 February 17, 1981 SUBJECT: Relocation Assistance The. purpose of this statement is to apprise you of the diffi- culty and substantial expenses which the City of Richfield incurs as a result of provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Current Legislation Minnesota Statutes provide that any city in Minnesota which acquires property for municipal purposes, must provide. all reloca- tion assistance, service, payments and benefits provided by the Uniform Relocat-ion Assistance and Real Property Acquisition Policies -' Act of 1970, and any implementing.regulations-developed by the U.S. Department of HUD. Legislation has been. pending in congress (Senate Bill 1108) to amend this act. Impact on the City of Richfield The City of Richfield is required to meet the relocation assist- ance provisions of the federal legislation by state law and by virtue . of the federal act and regulations applying to redevelopment activi- ties assisted under Commur_ity Development Block Grant programs. .The major impact of this legislation on the City of Richfield has occurred-in implementation of the L/H/N redevelopment project. Development plans for this area call for HRA acquisition of a sub- stantial number of properties. The intent of congress in passing the Relocation Assistance law is to provide for equitable treatment of citizens by the government when the government is taking property, be it through purchase or through eminent domain. The government's responsibility is to insure that persons affected be assisted in order to relocate without incurring a substantial hardship. How- ever, the City of Richfield has acquired at least five properties in conjunction with the L/H/N Project implementation which appear to be distortions of the congressional intent. All five of these properties were placed on the market due to conditions in no way created or encouraged by the L/i3/N project. In one instance, a property was sold because tree property owner purchased a business in another state. In another, a property was sold because of re- marriage, where the new spouse did not wish to live- in a property which .had been occupied by a previous spouse. In each of these instances, and at least three others, the availability of the prop- erty on the real estate market and the HRA subsequent purchase of the property, were related to personal events in .the lives of the property owners, rather than events in the marketplace or pressures created by the redevelopment activity. however, for each of these acquisitions, the city was required to pay relocation assistance to the property owner or to tenants occupying the property. Proposed Changes The City of Richfield supports the concept that government should provide assistance to persons displaced or in some way harmed by its actions. However, it is the City of Richfield's position that there should be a recognition in the law that not .all occupants of project properties are displaced by reason of the project, and that some persons would have relocated anyway. In such circumstances., it is our position that the acquiring authority should not be required to provide relocation assistance. The City of Richfield supports. provisions in the proposed legislation now before congress which would bring greater uniformity to. administration of the Act, including those dealing with eligibility of benefits. We also support some moderate adjustment of the benefit limits to reflect economic changes which have occurred since the limits were established.' The City of Richfield opposes some of tYie legislative proposals which would increase the variables related to relocation-{1) by removing limits altogether, or increasing the burden upon the public, such as eligibility for benefits being extended to persons indirectly affected by acquisition, (2) a replacement housing payment with no dollar... limit, (3) a one-time payment for the property tax differential be- tween the acquired dwelling and the replacement dwelling, (4) doubling of the payments for tenants and certain others and apparently not requiring relocations with standard dwellings, and (5) requiring the • public agency to pay for two appraisals for property being purchased. Under current rules, the public agency can reimburse the owner for one appraisal, up to $300. However, our usual practice is to obtain three appraisals, thus insuring that four appraisals are usually completed. RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY FEDERAL LEGISLATION POSITION STATEMENT • NUMBER 3 February 17, 1981 SUBJECT: Community Development Block Grant • The purpose of this statement is to indicate the City of Richfield's encouragement for continuation of the Community Development Block Grant Program. Current Legislation The Community Development Block Grant program authorization runs through 1983, with slightly increased levels of funding each year. Since 1975, Richfield has received $1,698,000 through the Community Development Block Grant grogram. Impact on the C itY of Richf field The City of Richfield has used CDBG monies to support development of numerous community facilities, as well as for. most of our low and moderate income housing programs.. This funding source. is virtually the only federal grant program now available to help cities in general renewal and redevelopment efforts, as well as the major source of housing assistance for low and moderate income persons. However, every year since the program has been implemented, changes in program regulations have narrowed the scope of activities eligible for assist- ance .through the CDBG program. This tightening of regulations. has drastically reduced the city's ability to use CDBG funds for devel- opment activities, as well as narrowing some of the possible uses of these monies for housing, as well. The City of Richfield strongly opposes. any further. restrictions. of the Community Development Block Grant program, and encourages continuation of the "block grant" funding. concept whereby jurisdictions can allocate CDBG funds flex- ibly to their local priorities for development and housing needs. HOUSING AND REDEVELOPMENT AUTHORITY FEDERAL LEGISLATIVE POSITION STATEMENT NUMBER 4 February 17, 1.981 SUBJECT: Housing Mortgage Revenue. Bonds The purpose of this statement is to describe the City of Rich- field's position with regard to housing mortgage revenue bonds. Current Legislation Public Law 96-595 permits issuance of mortgage revenue bonds by states and local governments if their proceeds are to be used to pur- chase residences costing no .more than 90 percent of the average purchase price for homes in an area, or 110 percent if the homes are located in targeted areas. .This legislation limits the total bonds that may be issued in a state each year to the greater of two figures: $200 million or 9 percent of the average annual amount of mortgages orig- inated in the state. The legislation further provides that the ef- fective interest rates on the mortages may be no more than one percent above .the yield to the purchasers of the bonds. The Omnibus Reconciliation Act of 1980 further restricts the use of tax free bonds, by prohibiting their use for construction of coop- eratives, putting cooperatives in the same category as single family • .homes.., and prohibiting persons who have owned a home within the past 3 years from participating in a housing development supported by this type of financing. Impact on the City of Richfield Provisions of the Omnibus Reconciliation Act of 1980 related to cooperatives appear to have halted a major moderate income housing development, the Lake Shore Drive Cooperative, in Richfield. This development would provide a major, much-needed, alternative housing type in Richfield, while potentially freeing up detached single family homes within the city. Proposed Changes Richfield strongly supports modification of the Omnibus Recon- ciliation Act of 1980 to classify cooperative housing as "multi- family",:rather than "single family" housing, and to remove the restrictions related to persons who have been homeowners within the past 3 years. HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director • HRA Letter No. 9 Agenda February 17, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: Purchase of Adams Property At the HRA meeting of February 2, a'developer's agreement between the HRA and Lyndale Garden Center was approved. Under the terms of that agreement, the HRA is implementing a policy decision-made in March of 1979 to provide land for the expansion of the Lyndale. Garden Center. The staff has been negotiating with an attorney for Mr. Adams on the purchase of the property in the LHN area. The. negotiations have included two separate land areas; the "upland area".-and the "lowland area". The upland area is to be utilized by the garden cen- ter in their development project as approved by the city.. council and. the HRA. The lowland area is physically part of the Richfield Lake lake-bottom and it is desirous for the.-city to own and control this area as part of the storm water collection pond function of Richfield Lake. Mr. Adams has refused the 'offer made to him and has given little indication of being wil ng'to negotiate. The upland area. must be made available to the garden center by late summer to permit the installation of the parking lot on the north side of the new structure. Because of the. impasse in negotiations and limited availability. of time, it is necessary to initiate eminent domain and quick-take proceedings against--this property. At the HRA meeting on February 17, the HRA will be presented with a resolution and a joint agreement related to the eminent domain proceedings. The resolution-will- establish just compensation for the entire Adams property. at $175,000. This figure is the result of an appraisal by O.J. Janski and Associates. The valuation includes two single family expansion bungalows of approximately 1,000 square feet each at 6335 .and 6329 Aldrich Avenue, a vacant area on the west side of Aldrich and the lake bottom. The land area totals approximately 141,000 square feet. The one house at 6335 contains two bedrooms, living room, .kitchen and bathroom on the first floor. The second floor is finished. At 6329, there are similar living spaces with two bedrooms, living room, kitchen and bathroom on the first floor. The- second floor is finished and a garage is associated with this struc- ture. In addition to establishing just compensation, the resolution will also authorize staff to initiate the eminent domain proceeding and quick-take. Quick-take is a procedure which would help. assure the availability of the property to the developer in a timely manner. • HRA Letter No. 9 -2- February-17, 1981 • ~~, Finally, the-join agreement will be between the city and the HRA. Under the agreement, the interest of both the city and HRA in the Adams property will be pursued in one eminent domain proceeding. Thus, the city council will also be requested to authorize eminent domain proceedings. It is recommended that the HRA. take the following actions; 1) adopt the resolution setting just compensation and authorizing the initiation of eminent domain and quick-take.. and 2) authorize the Chairman and Executive Director to execute a joint agree- ment with the city for pursuing the proceedings. Respectfully submitted, ~~~ ~~ ~~ ~ 1c~.c Karl Nollenberg r Executive Director KN/jf cc: City Council Members Director of Community Development Housing and Redevelopment Coordinator s