12-08-80 ageanda~/
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 41
Agenda December 8, 1980
Housing and Redevelopment
Authority Commissioners
City of Richfield
Commissioners:
Subject: Public Hearing on Disposition of Property,
Lake Shore Drive Cooperative Site
The Knutson Companies and the Richfield Methodist Church are pro-
posing to develop a 169-unit cooperative apartment building for
people 60 years of age and older. Since September, reservations have
been sold for the units to be constructed', with many more reservations
made than units are available.
The development is proposed for the site south of 66th Street,
in the vicinity of Graham Avenue (see attached map), which is desig-
nated in the L/H/N development plan for multi-family housing. Prop-
erty outside of the LHN development district is also included as
part of the site. The parcel at 6615 Lake Shore Drive is owned by
the HRA. The area in the vicinity of the existing Lake Shore Drive
and adjacent to it on the west, is also included within the site.
This area will become available with the relocation of Lake Shore
Drive which is to be accomplished in conjunction with the improvements
to be constructed to West 66th Street during 1981. When this area
has been purchased by Hennepin County, it will be made available to
the developer. The area within the LHN project boundaries was desig-
nated for multi-unit development in March, 1979, by both the HRA and
city council. Prior to that time, the area was identified in the
LHN plan for purchase and redevelopment as a Home Improvement Center.
Thus, since 1975, purchase of this property for development purposes
has been contemplated.
The mortgage which provides for construction of this project
will be insured by FHA. Before the insurance is provided, FHA will
undertake an extensive evaluation of the project. The FHA review is
divided into two stages: conditional and firm processing. Condi-
tional processing will be initiated in December, and firm processing
in the Spring of 1981.
The project will be submitted by Knutson to FHA on December 15,
1980, for conditional processing. All preliminary project plans will
be reviewed in detail by FHA. In addition to submitting to the plan
review, Knutson Companies must demonstrate that it has control of
the site and can follow through on construction. The Planning Com-
mission and City Council have already considered items related to
rezoning, street and alley vacations, and the sale of those portions
of the site owned by the city, which are necessary for Knutson to
successfully implement this project.
HRA Letter No. 41 -2-
December 8, 1980
It is proposed that the HRA sell the site to the developer. The
parcels now owned by the city are to be conveyed to the HRA. Under
state law, the HRA must hold a public hearing on the sale of land.
Accordingly, an advertisement has been placed in the Richfield Sun,
announcing the hearing on sale of this land for December 8, 1980.
By holding the hearing at this time, and adopting the attached reso-
lution, the HRA will establish its intent to sell the property to
the Lake Shore Drive Cooperative, a Minnesota non-profit corporation.
The appraisal firm of O.J. Janski and Associates has established
market value of the site at approximately $310,000. This value as-
sumes that the site is available on an open market, cleared of exist-
ing structures, with utilities available at the property line.
In early 1981, the HRA and city council will consider a devel-
oper's agreement for this project. The agreement will establish all
the conditions for construction of the cooperative and identify the
specific responsibilities of the HRA, the city and the developer.
These considerations will impact the final value of the site and will
probably reduce it to approximately $250,000. Two important consid-
erations for the HRA will be the necessity to return $91,000 to the
CDBG program, since that was the source of funding to purchase 6615
Lake Shore Drive, and utilizing the land sale income to help reduce
the amount of bonds needed to pay the HRA site assembly costs.
It is recommended
proposed land sale, as
directing the staff to
for sale of the site to
that the HRA hold the public hearing on the
scheduled, and adopt the attached resolution
negotiate a developer's agreement providing
the Lake Shore Drive Cooperative.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/jf
cc: Community Development Director
Housing & Redevelopment Specialist
City Council
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