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05-14-79 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 20 Agenda May 14, 1979 ~~` --t.~SL~ `.> - LLJ l Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: Establishment of Just Compensation and Authoriza- tion to Initiate Negotiations for Purchase of Property in the L/H/N/ Area Mr. Warren Gallagher has requested that the Richfield HRA purchase a single family home he owns at 6607 Lake Shore Drive. This property is within the L/H/N/ redevelopment project boundaries, and within the area designated for multi-family development. The property is presently vacant. Because the HRA has no acquisition funds at this time, it will be necessary to borrow from the city to purchase the property. The borrowing procedure provides that the HRA execute an agreement with the city for a loan, before the HRA can negotiate an option to purchase the property from Mr. Gallagher. The estimated amount of the loan will be $76,500. This amount should be sufficient to cover the purchase price of the property, which has not yet been negotiated, and the cost of relocation. The one and one-half story structure was built in 1945 and contains approximately 1,254 square feet on the first floor, including three bedrooms. Two appraisals were made of the property; one by the city assessor for $65,000, the second by Janski at $80,000. The HRA's review appraiser has established the value at $74,000. It is recommended that the HRA establish just compensation for this property at $74,000. The loan from the city will be paid back with interest at the end of three years. The interest rate on the loan will be five per cent (5%) per annum, or approximately $3,825 per year on the unpaid balance. It is proposed that the property be rented until it is needed for the L/H/N project. Even with an annual operating deficit, purchase of the property at this time will result in substantial savings to the HRA. The attached management proforma indicates that an annual operating loss for this property could approximate $2,210. However, it is estimated that this property is increasing in value at twelve per cent (12%) per year, which means that postponement of the acquisition could significantly increase the HRA's costs. HRA Letter No. 20 -2- May 14, 1979 It is recommended that the HRA adopt the attached resolution authorizing executive of the loan agreement with the city, to borrow $76,500, establishing just compensation for this property at $74,000 and authorizing the staff to negotiate for the purchase of this property. It will be necessary for the HRA to take final action on the purchase after a negotiated agreement has been reached with Mr. Gallagher. Respectfully submitted, ~~ .~ ~} once Wilde ting Executive Director JLW/skb cc: Planning and Redevelopment Director Finance Director •~ Annual Housing P~anagement Proforma 6607 Lake Shore Drive Income $360 x 12 = $4,320 Expenses Interest at 5% $3,825 Taxes $1,700 Insurance $450 Advertising $25 h1aintenance $350 Vacancy Factor $180 Total Expenses $6,530 Annual deficit $2,210 ~ ~_ _ - - - ~ I \~~\ i i _ \~~ -_~-~'-r~^~-' ~-r ~- 1~11~E~EE~EEaEE~Hi1= EME~RSONrA E '~ \~~~ \~\~ J .~~ i i-~T I ~ ~ 1 _ --~~*~~_ ?T1 T~ \>% it _ j// { -~ ,-a ;~ ~~ s~ _~= -,_ i -- Q ~ ~~~ HAAS / a ~y; ~ ~ ~ `rye r ~~\ ~ x f o~i < ~ ~ I ~~ ~ ~r _ - / (6 ~ ~~a ~ '. ,~! ~C 1D ~ \ m ~ ~ '' i \ .., ~~,~ ~t i~ ~m I ' I ~ II ~ ,~'i~ ~ }m ~ I o ~o,~ t i` s N 1-~ rj N ~~~ ~w L_L m I~T I I __ -~-~ S ~a a i~ p I O ~~ v I ~ O i H ~ ~3i N I~ i~, N t p I y ~ Iii .1 ~ ~ ~ ~~~ ei. .`r-~~ ' -L- -~---- ~ 9 ~ ~ I i O n C z 0 ' ~~ i i P 1 i a _ a j ~ - - ~~~ j~ wm p ' j I I~ J am z i Hop I j• mom ~ I ~ r ~ I 'll I ~~ ~ I mp ~ NT I~ I v I I m i_ 'IEEE -' NICOLLET AVE. N1 I ~~s _ ml ~ ~;~ % ,l> ~ s !! Pc _ I I ~-T ~ A ~. ~~ F ~ r---~ ~ I b ---~ ~' ~~ ~ '' CDLEAX AVE_ -~I~ i~i ~ ~ j dli~L AAYANT AYE. ~' ~ ~ ~~fl~ ~~~ HARRIET ~ AVE. .. i--~ __I., I GRAND AYE. ~-"I T ,_~. ii I ~~ ~ ! I_ PLEASANT AVE. T1 I fl f _ 1. _I ~~ !,1.~_~_i_, PILLSBURY AVE. I L_I~~~. -- WENTWORTN AVE ~ 1 ~i ~i i I ,' ! l i BLAISDELL AYF. z O N N O Z x f ~ %~~ $ ~ ~ LYNDALE /HUB / NICOLLET ~ ~ ~ ~ '~ COMMERCIAL IMPROVEMENT PROGRAM RICHFIELD, MN HRA RESOLUTION NO RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT TO BORROW MONEY FROM THE CITY OF RICHFIELD AND PROVIDING FOR THE COh1MENCEMENT OF NEGOTIATIONS FOR THE PURCHASE OF REAL PROPERTY 6dHEREAS, the Richfield Housing and Redevelopment Authority (HRA) desires to borrow money for the purpose of purchasing certain real property pursuant to and in furtherance of the L/H/N Redevelopment Project hertofore adopted by the City of Richfield (the "City") and the HRA, said real property being described as follows: Lot 14, Block 3, Fairwood Shores Addition, Hennepin County, Minnesota, and WHEREAS, the HRA has caused appraisals of the subject property to be made and has carefully considered such appraisals, and WHEREAS, the HRA is authorized by Minnesota Statutes, Section 462.445 to purchase real property and to borrow money from the City therefore, and WHEREAS, the City is authorized by Minnesota Statutes, Section. 462.5.81 to make loans to the HRA in aid of projects, NOW, THEREFORE, BE IT RESOLVED BY THE RICHFIELD HOUSING AND REDEVELOP- MENT AUTHORITY: 1. That the Chairman and the Executive Director by, and hereby are authorized to execute, as agents of the Richfield Housing and Redevelopment Authority, an agreement with the City of Richfield (entitled 'Loan Aareement') a copy of which is hereby given Clerk's File No. and is ordered placed on file. 2. That the Executive Director be, and hereby is directed to present said agreement to the City of Richfield for its consideration and acceptance. 3. That $74,000 is determined to be just compensation for the subject real property. 4. That the Executive Director and the HRA's attorney are authorized and directed to commence negotiations for the purchase of the real property described in the above agreement upon acceptance and execution of the above agreement by the City of Richfield. The owner of the subject property shall be offered the sum of 74,000 dollars for sale of said property. 5. That the Executive Director is hereby directed to notify, in writing, the owner of the subject property, as soon as possible, that the HRA presently intends to acquire his property provided negotiations result in the determination of a mutually agreeable sale price. The Executive Director shall include with such notification a statement which complies with the requirements of regulations of the Department of Housing and Urban Development, 24 C.F.R. ~ 42.135. 6. That upon the completion of the negotiations, the Executive Director shall report back to the HRA with a proposal for the purchase of said real property which is acceptable to the land owner, and shall report his recommendations relating to said proposal. Passed by the Housing and Redevelopment Authority of Richfield this day of oren L. Laww C airman ATTEST: V. L. Luettinger Secretary LOAN AGREEMENT THIS AGREEMENT, entered into as of this day of 1979, by and between the Housing and Redevelopment Authority of Richfield, Pinnesota, a body public and corporate (hereinafter the "HRA"), and the City of Richfield, a municipal corporation organized and existing under the laws of the State of P-1innesota (hereinafter the "City"). WITNESSETH: WHEREAS, the HRA desires to borrow money for the purpose of purchasing certain real property pursuant to and in furtherance of the L/H/N Redevelop- ment Project heretofore adopted by the c;ty and the HRA, said real property being described as follows: Lot 14, Block 3, Fairwood Shores, Hennepin County, P~linnesota, and 4JHEREAS, the purchase of said real property is necessary to accomplish the purposes of said L/H/N Project, and GJHEREAS, the. City desires to lend money so that said purchase may be accomplished, and WHEREAS, the HRA is authorized by P~innesota Statutes, Section 462.445 to purchase real property and to borrow money from the City therefore, and L~JHEREAS, the City is authorized by Minnesota Statutes, Section 462.581 to make loans to the HRA in aid of projects. NOIrJ, THEREFORE, for and in consideration of the mutual tenants and agreements herein set forth, the HRA-and the City do hereby agree as follows: I. The City agrees to advance to the HRA money in an amount to be determined by the HRA at such time as a decision has been made by the HRA to purchase such property, said amount to be equal to the purchase price of said property plus any relocation benefits payable', and II. The HRA .agrees to repay the sum so advanced, plus interest,, as follows: A. Interest shall accrue on unpaid principal at the rate of 5.00% per annum from the date of advancement until repaid. B. Payments shall be applied first to reduce interest accrued at the date of payment, and the remainder, if any, shall reduce the principal balance. C. The HRA may make payment or payments in any amount and at any time, provided that the entire unpaid. principal together with accrued interest shall be repaid no later than three years from the date of advancement of funds to the HRA. III. This agreement shall be void and of no effect if advancement of funds by the City as provided herein is not made before July 31, 1979. HOUSING AND REDEVELOPP~ENT AUTHORITY By Its Chairman Dated: By Its Executive Director CITY OF RICHFIELD Dated: By Its Mayor By Its City Pianager HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 19 Agenda May 14, 1979 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: Change Order for K-Mart Site Demolition Contract There is an item on the May 14, 1979, HRA agenda providing for HRA approval of a change order in the demolition contract with A. Kamish and Sons, Inc., for the K-Mart site. This change order provides for the removal of footings, back filling and compaction of the trenches made by the removal of footings on unknown structures on the K-Mart site. The original contract did not provide for the removal of footings on unknown structures. However, when the contractor was removing the existing buildings and preparing the site according to the contract specif i- cations, the footings of three buildings which had previously existed on the site, but been removed sometime in the past, were discovered. In order to meet provisions of the developer's agreement with Financial Properties Developers, Inc., it was necessary for this additional demolition work to be done. Attached to this HRA letter is a map showing the location of these footings. In addition to the unknown footings, it was necessary for the contractor to cut off and block two wells. The total cost of this change order is $3,000. Recommendation The work included in this change order has already been com- pleted, and was necessary to satisfy provisions of the developer's agreement. Therefore, it is~the recommendation of the public works director, in which I concur, that the HRA approve a change order in the amount of $3,000 to the contract with A. Kamish and Sons, Inc. provided for demolition services on the K-Mart site. Respectfully submitted, o ce Wilde Acting Executive Director JLW/skb cc: Public Works Director Planning & Redevelopment Director Finance Director Z W Q N N J ~y LJ ~ U ~ ~ ~ a a~ J Q J --~ Q Q- ~~ ~z 0 Z ~ O ~ . W I- J ~ U ~ LiJ W ~- n rn ~~~/~ VI '~'~~~'~ ~ ~, s s w HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 18 Agenda May 14, 1979 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: MHFA Grant Agreement In August, 1976, the Richfield HRA requested that the Met- ropolitan Council apply to the Minnesota Housing Finance Agency for funds to provide rehabilitation grants to low-income Richfield homeowners. Since then, the Richfield HRA has received an annual allocation of these monies for disbursement as low-income housing rehabilita- tion grants. The HRA received an original allocation in 1976-77 of $32,500; during that year, $32,822 was disbursed in low- income grants. In 1977-1978, the HRA was allocated $31,733 and disbursed $38,539. For 1978-1979, we have been allocated $31,734. For the three years Richfield has participated in the program, we have also received bonus funding amounting to almost $15,000. Since August, 1976, thirty-two homeowners have received home improvement grants through this program. Through an oversight, the contract agreement between the Metropolitan council and the Richfield HRA for 1977-78 was never executed. This agreement established, the annual funding alloca- tion to the HRA, as well as establishes the amount that may be used to defray local administrative costs. It is recommended that the HRA authorize the chairman and Acting Executive Director to execute the attached contract agree- ment with the Metropolitan Council. This agreement is comparable to the agreements executed with the Metropolitan Council for the MHFA grant program in previous years. Respectfully submitted, J L. Wilde cting Executive .Director JLW/jef cc: Planning and Redevelopment Director Finance Director ~~, >. ': CONTRACT N0. _. - ~ , M E T R O P O L I T A N C O U N C I L Suite 300 Metro Square Building, Saint Paul, Minnesota 55101 COOPERATIVE REHABILITATION GRANT PROGRAM CONTRACT WITH MUNICIPALITY THIS AGREEMENT, entered into this day of , 19 between the Metropolitan Council (hereinafter referred to as~the Council), and the Housing and Redevelopment Authority of the City of Richfield, (hereinafter referred to as the HRA). WITNESSETH: . WHEREAS, the Council is engaged in a program for .the disbursement of grants to improve residential property for eligible families and individuals in the Metropolitan area; and WHEREAS, the Council has entered into an .agreement .with the Minne- sota Housing Finance Agency ("MHFA") to act as an administering entity for the utilization and disbursement of such grant funds; and WHEREAS, the HRA has indicated its desire to partici- pate in this program and to assist such individuals and families to improve their housing in the City; and WHEREAS, the Council desires to purchase certain necessary administra- tive services from the HRA in connection with carrying out the pro- gram; and WHEREAS, the Council is authorized to execute an agreement for the purchase of program services and to take all action specified or contemplated herein pursuant to Minnesota Statutes, Section 473.195, and has all of the powers and duties of a housing and redevelopment authority pursuant to the above described statute under the pro- visions of the Municipal Housing and Redevelopment Act, Minnesota Statutes Section 462.411 to 462.711 and acts amendatory thereof; NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties agree as follows: 1. ALLOCATION OF REHABILITATION GRANT FUNDS a. The Council shall allocate grant.'funds in the aggregate ' sum of Dollars ($ 34.122 ) for the utilization by the HRA in accordance with the provisions of this Agreement. b. To the extent ~.t does not have funds available from other sources, the H~ may apply up to, but not in excess of 5% of the grant funds allocated to it (which amounts to $ ~ 7nti 1~) to defray the cost of administering the grant program and to provide technical assistance to grant ~ l `'. ,O . Y w recipients. Thus, the amount of funds actually available for home improvements grants is $ 31,733.46 . 2. PROGRAM OBLIGATIONS OF THE HRA a. The HRA agrees that in all aspects of carrying out the rehabilitation grant program it will comply with the pro- visions of this Agreement and regulations set forth in the MHFA Home Improvement Grant Program Procedural Guides, Appendix A attached hereto and hereby incorporated as part of this Agreement. b. For~the purpose of this Agreement, requirements, duties, obligations and warranties of an'"administrative entity" established by the MHFA Home Improvement Grant Program Procedural Guides shall constitute requirements and duties of the HRA. Obligations and warranties of an "administra- tive entity" to the MHFA created by the MHFA Procedural Guides shall constitute obligations and warranties of the IRA to both the Council and the MHFA. c. The HRA shall commence to make grants complying with the terms hereof from and after the date on which the Agreement becomes effective by providing publicity about the program and technical assistance to grant recipients in complying with the terms and conditions of the MHFA Home Improvement Grant Procedural Guides. 3. .PROGRAM OBLIGATIONS OF THE COUNCIL a. The Council shall use its best efforts promptly and with due diligence to provide training to HRA staff on procedures and techniques for administering and providing technical assistance to grant recipients; and shall disburse grant funds allocated to the HRA .according to the terms and con- ditions of the MHFA Home Improvement Grant Program Pro- cedural Guides. b. The Council shall reimburse the HRA for the costs of adminis- tering and providing technical assistance to grant recipients up to the maximum allowable pursuant to paragraph l.b.:of this agreement. Such reimbursement shall be made upon request of the HRA after all grant funds have been committed and upon itemized documentation as to the nature of the expendi- tures. 4. TERM OF AGREEMENT The services to be purchased and furnished and the allocation of rehabilitation grant funds under this Agreement shall commence on Auc,~zst 31 , 19 77 and shall continue through December 31 , 19 78 ,, }~ 5. TERMINATION OF AGREEMENT. -3- This agreement may be terminated at any time by either party upon ten days prior written notice to the other party. In the event of such termination, the Council shall thereafter dis- burse grant funds with respect to all individual grant applica- tions which, prior to the effective date of said notice of termination, shall have received MHFA approval and authorization to commence work and each party shall be required to carry out the terms of the agreement with respect to each of such grants. 6. AMENDMENT OF AGREEMENT The terms of this agreement may only by mutual agreement of the changes or modification shall be of written amendments signed by be amended, changed or modified parties hereto. Such amendments,, effective only upon the execution the Council and the ~~• 7. AUDITS AND INSPECTION. The HRA agrees (a) to keep and maintain during the performance of this contract and for a period of three years following, records and files relating to (1) the financial aspects of the contract, including payrolls, times records, invoices, receipts, vouchers, grant payments, and (2) the services performed hereunder, and (b) to allow the Council and designated federal or state personnel to enter on the Consultant's premises and to (1) inspect, copy and audit the above records, files and premises, and (2) inspect and review the equal employment opportunity and affirmative action programs of the Consultant. 8. LIABILITY. The HRA agrees to indemnify and save and hold the Council, its agents and employees, harmless from any and all claims or causes of action arising from the performance of this contract by the ~_H~ or HRA agents and employees. This clause shall not be construed to bar any legal remedies the HRA may have for Council's failure to perform its obligations pursuant to this agreement. 9. ASSIGNABILITY. The HRA shall neither assign nor transfer any rights or obliga- tions under this contract without the prior written consent of the Council. 10. EQUAL EMPLOYMENT OPPORTUNITY; AFFIRMATIVE ACTION. The HRA agrees not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin and to take affirmative action to assure that applicants and employees are treated equally with respect to the following: employment, upgrading, demotion, transfer, . ~'~ ~' • -4- recruitment, layoff, termination, rates of pay and other forms of compensation, and selection for training. The HRA further agrees to comply with any and all federal, state, and local laws regarding equal employment and affirmative action. 11. SEVERABILITY. If any term or provision of the Agreement is finally judged by any court to be invalid, the remaining terms and provisions shall remain in full force and effect, and they shall be interpreted, performed, and enforced as if said invalid provision did not appear herein. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed on the day and year first above written by their authorized representatives. METROPOLITAN COUNCIL By Char es Weaver, Chairman Approved as to legal form and adequacy: 0 ice o Sta Counse The Housing and Redevelopment Authority of Richfield BY Its Chairman /cy 3.12.79