03-15-82 agendaHOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 18
Agenda March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Status Report on Tax Increment Project
There is an item on the March 15, 1982 HRA agenda providing
for review and discussion of the overall L/H/N tax increment
project, tax increment proceeds, and effect:. of the project on tax-
payers of the City of Richfield. This-item is for the purpose of
giving HRA commissioners and the public background information on
the tax increment project in our community.
Attached to this letter is a chart depicting the cash flow
and revenue projections for the two bond issues currently out-
standing which financed improvements in the tax increment district
(the K-Mart bond issue and the General Improvement bonds for City
Project 705.). The chart has been prepared in an effort to analyze
the stability of the L/H/N project financing.
In the last year and one-half, the tax increment fund has
benefitted greatly from inflationary increases in valuation as well
as the great number of projects which have been built in the L/H/N.
Originally, we projected a difficult period from 1984 to 1990 for
the tax increment flows. It was for that reason we built up as
much reserve from the two bond issues as we could in order to
carry the project to 1990 when the tax increment flows would rap-
idly outpace the the debt service needs. It now appears that the
cash flow of increment has built to the point that we may not have
to use the reserve accumulation, but rather will benefit greatly
by the interest income being made on those reserves
There will be adequate revenues received from tax increment,
special assessment payments (in the case of CP 705) and interest
earnings on the cash balance to meet our total debt service obli-
gations. Because of the conservative nature of our estimates,
I believe that actual revenues received to support these two
components of the L/H/N project will be more than adequate to meet
each year's debt service obligations for the entire life of the
bonds.
The projected assessed value used for tax increment receipts
in the attachment are expected to increase by 4.8 percent annually,
M
HRA Letter No. 18 -2- March 15, 1982
which has been our actual annual experienced increase excluding
any new development. If any new development occurs in the project
area after this time, the additional evaluation of that new devel-
opment will further increase the tax increment, as well as the
accumulative effects of high inflation being likely to increase
the tax increments by more than 4.8 percent. Similarly, we have
assumed interest earnings of 3 1/2 percent on the beginning cash
balance for each year. Because of the timing of the debt service
payments, a large portion of the cash balance is drawn down early
in the year, and it is necessary to project the interest earnings
for the entire year on a fluctuating cash balance. Nonetheless,
I believe the 4.8 percent inflation assumption and the 3 1/2 percent
assumption for interest earnings are both conservative. In our
original sale of the CP 705 bonds, it was anticipated that the
Richfield State Agency project would be required to help finance
the debt service. When the RSA project is built, it will provide
surplus increment to the project fund as will expansion of the
Hub and any other expansions or rehabilitations of property within
the project area.
The attached chart does not include any data for the bond
issue which will be sold to support the HRA's costs related to the
Lyndale Garden Center, Lake Shore Drive housing project, or start-
up costs related to the Godfather block properties. You might re-
call that projections for that bond issue which we have developed
as part of seeking to market those bonds indicate that those projects
will be fully self-supporting. For this reason, there should be no
change in the status of the tax increment feasibility of the project
in its entirety resulting from sale of these new bonds.
In analyzing any effect that the tax increment project may
have on the remaining taxpayers of the City of Richfield, it is
necessary to consider the original assumptions of the tax increment
program. Much of the rede~eiopment effort would not have occurred
without the initiative of the city and the HRA. Redevelopment such
as the K-Mart project or the Lake Shore Drive housing project would
certainly not have occurred solely at private sector initiative,
without HRA acquisition of the property, demolition and resale of
the land to the developer. It would simply have been financially
infeasible for a developer to undertake such development activity
on that scale in light of the costs of land accumulation. The real
temporary loss to the other city taxpayers in a tax increment project
results from loss of the inflated value of the property within the
district to the overall city assessed value. In the case of the
L/H/N tax increment project, the original L/H/N assessed value of
$.7,521,225 as of January 1, 1975 remains in the tax base for all
taxing entities within the city. Any assessed value in excess of
that $7,521,225 is allocated to the-tax increment program to help
pay for costs associated with the redevelopment activities. This
valuation beyond the frozen value and the taxes which are yielded
by that excess valuation, becomes the "tax increment" which is
being used for retirement of the city's and the HRA's indebtedness
related to the redevelopment process. The 1981 assessed value for
HRA Letter No. 18 -3- March 15, 1982
for the tax increment district is $11,804,705, an increase of
$4,283,380 over the frozen valuation for the district. While the
inflation rate of the Twin Cities has been substantial since 1975,
when the district was formed, the basic theory underlying the use
of tax increment financing is that the blighting effect of proper-
ties within a tax increment redevelopment area offsets some, or
all, of any increase in property value which might result from
inflation. Of course, it is virtually impossible to determine how
much the assessed value in the project area would have inflated had
there not been a tax increment project, although I feel it is cer-
tain that any increase in value would have been minimal, because of
the deteriorated nature of the property in the project area at the
time the district was formed. The actual increase in the assessed
value in the L/H/N area for the past six years has been 4.8% when
the new developments stimulated by the city and the HRA are ex-
cluded. To evaluate the impact of the tax increment on the city's
taxpayers, it is necessary to assume that either 1) the improve-
ments would have occurred without the tax increment district being
formed, or 2) that inflation would have increased values in the
district by 4.8 percent per year. In either case, the lass in
assessed value, or the increase in valuation over the frozen
$7,521,325 figure and the resultant tax consequences on the
valuation is that difference which must be borne by the city's other
taxpayers.
The actual 1982 tax increment is estimated to equal $443,330
excluding delinquent tax payments for 1981. The 1982 tax_ increment
if the district had increased by 4.8 percent per year as discussed
in the second option above would have-been $252,8&4. Since this
tax increment is the actual difference in taxes paid on the higher
valuation over the taxes paid on the frozen valuation, dividing
this tax payment by the assessed valuation of the city as a whole
to derive a city wide mill levy loss will provide an estimated
cost to each taxpayer. The following paragraphs are an attempt to
develop that analysis.
1. Assuming the Improvements Would Have Been made Without
A Tax Increment Project by the City/HRA -
On all commercial development except tax increment projects
before 1979, the metropolitan wide fiscal disparities pool
takes 40 percent of the increased assessed value for
commercial and industrial redevelopment. Since the L/H/N
area is a commercial area, virtually the entire increase
in valuation is caused by increases in commercial assessed
value. This means that 40 percent of the $443,330 (or
$177,332) would have been lost and not available to local
taxing entities, leaving $265,998 in local tax revenue.
The $265,998 of local tax revenue translates to 1.32
mills of the tax rate for 1982, based on the city wide
assessed value for taxes payable in 1982 of $201,102,004.
The average market value of a house in Richfield is about
$68,000. The assessed value in January, 1981 of a $68,000
house in Richfield is $14,180. 1.32 mills times the
HRA Letter No. 18 -4- March 15, 1982
assessed value of $14,180, equals $18.72 of property tax
for the average Richfield house. This is the gross
effect of the tax increment project on the average Rich-
field house, before state aids.
However, other factors must be taken into consideration
to determine the net effect on the Richfield taxpayer.
The 1982 total property tax bill for the average Richfield
hor;2e is $1 , 468 . The average Richfield .home qualifies for
the maximum homestead credit allowance of $650. Even if
the property tax bill were reduced by the $18.72 attribu-
table to the tax increment project, the average homeowner
would still qualify for the maximum homestead credit allow-
ance. However, the state has a circuit breaker tax refund
program which assists individuals with property tax pay-
-ments, based on income guidelines. The average Richfield
household income in 1980 was $21.,695. Based on the 1982
average property tax bill, and the 1982 circuit -breaker
tax refund program, it appears that the average Richfield
homeowner would receive at least one-half of the property
tax due to the tax increment project back through the cir-
cuit breaker. For instance, the average Richfield home-
owner with an income of $21,695 will receive a circuit
breaker refund of $224 this year. If the tax increment
project were not in place, the property tax bill for that
homeowner would have decreased by $18.72. However, the
circuit breaker refund would have decreased by only about
$9, making the net impact of the tax increment project
equal to approximately $9 for the average Richfield property
homeowner with the average Richfield household income.
2. Assuming that Inflation Would Have Increas_e_d Values in
The District by 4.8 percent per Year
If the property values in the district would have increased
by 4.8 percent per year without the project, the 1982 tax
increment would have been $252,884. Forty percent of this,
or $101,153 would have been lost to the fiscal disparities
pool, leaving a local tax revenue of $151,731. This is
equivalent to .755 mills of the 1982 tax rate.
Applying this mill rate to the average Richfield property
results in a property tax of $10.71, which is the gross
tax impact. of the project on the average Richfield home-
owner under this assumption. Again, the average Richfield
homeowner qualifies for the full amount of the homestead
credit, and a reduction in his tax bill of $10.71 would
not alter the homestead credit which he would receive.
However, the circuit breaker provisions would remain the
same, and the reduction in the circuit breaker which would
result from the decreased property tax would be approxi-
mately one-half of the amount of the property tax decrease,
or approximately $5 to $5.50 in this case.
HRA Letter No. 18 -5- March 15, 1982
As the tax increment to the city increases, the burden of this
project on the average Richfield property taxpayer will also in-
crease. That burden will peak at a point just prior to the final
payoff of the bonds which have been issued for the redevelopment
area. While that time is a number of years away, a successful
record of receipts so far may enable the early retirement of the
indebtedness for the project. At any rate, the $5 to $10 net
property tax bill which might be attributed to the tax increment
project seems a small price for any individual homeowner to pay for
revitalization of the city's central business district in the way
that we have witnessed in the LjH/N business area.
Respectfully submitted,
.~. fV~~s-~,~~,,c..~~~'-~
Karl Nollenberger
City Manager
cc: Director Administrative Services
Director Community Development
Housing and Redevelopment Coordinator
Finance Coordinator
City Council
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HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 17
Agenela March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richf field
Dear Commissioners:
Subject: Discussion of Potential for Housing
Projects
There is an item scheduled on the March 15, 1982 HRA
agenda providing for a discussion of the potential for new
housing projects in the City of Richfield. The Executive
Director of.-the HRA will be present at this meeting to
verbally report on possible sites within the city.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/eja
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HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 16
Agenda Niarch 15 , 1 982
Housing and Redevelopment
Authority Commissioners
City of Richfield
De:ar Commissioners:
Subject: Bond Sale
There is an item on the HRA agenda of March 15, 1982, provid-
ing for HRA consideration of a resolution which would request the
city council to authorize sale of bonds in the amount of $4,100,.000
to recover the HRA's financing costs related to the Lake Shore
Drive condominium, Lyndale Garden Center, the three houses on
Graham Avenue, the Richfield State Agency development and property
acquisitions on the western half of the Godfather block. Summary
of the costs for these projects is as follows:
Previous Bond Issue Authorized $2,450,000
Richfield State Agency 791,000
Godfather Block (West End) 859,000
Dotal $4,100,000
The previous bond issue authorized but not sold, included all
of the project costs for the Lake Shore Drive condominium project,
Lyndale Garden Center and the three houses on Graham Avenue. The
project cost for the Richfield State Agency totals $789,600 (plus
$1,400 for issuance costs) which represents the HRA's cost of
acquisition, relocation, etc. for the Bjorn Hagen and Kentucky
Fried Chicken properties and relocation of the utilities that are
described in the developer's agreement with Richfield State Agency.
The costs related to the Godfather block total $857,130 (plus $1870
issuance costs) and are related to acquisition and relocation for
the Phillips property, the Stanton Realty building, the Craswell
building and Larry's Auto Body property.
The capitalized interest on the project relates almost entirely
to the Lake Shore Drive condominium project. The Garden Center
will yield taxes in 1983, and the revenues identified to support
the Richfield State Agency and the Godfather block costs will be
available as soon as the debt service obligations are incurred.
You might recall that the agreement between the HRA and the Richfield
State Agency provides that, if the project is not underway and does
not yield sufficient tax increment to retire the HRA's costs re-
lated to the debt service, the Richfield State Agency will pay the
city sufficient monies to meet those debt service obligations.
HRA Letter No. 16 -2- March 15, 1982
It appears reasonable to include the costs related to the
Godfather block acquisitions in this bond issue for several reasons,
as well:
1. These costs have already..-been incurred by the HRA;
2. The development of the western half of the Godfather
block as an entity separate from the entire block is
financially and physically feasible, should the dis-
cussions with Derrick Development Corp. break down, and
development of the entire block not be feasible. It is
reasonable that the HRA could expect to find a developer
for just the western portion of the block;
3. It appears financially advantageous to the HRA to maintain
as large as possible a balance in the capital fund, to in-
sure that adequate monies are available to meet frontend
costs of any additional or future developments. Placing
this project on permanent financing will enable repayment
of the capital fund., and increase the balance in that
fund.
The resolution which will be presented to the HRA on Monday
night provides for the HRA to request that the city council author-
ize sale of the bond issue to recover these costs. The bonds are
to be retired by tax increment from the overall project area and
from the guaranteed payments by the Richfield State Agency, should
the project not get underway in accordance with the current time-
table. If revenues from these two sources should not be adequate
at some time to meet the debt service obligations on the bonds,
it is the recommendation of the staff that the interest earnings
from investment monies in the L/H/N capital fund be pledged for
that purpose.
The city council will consider the HRA's request to sell these
bonds at its March 22, 1982 meeting. The bond sale is tentatively
scheduled for April 7, 1982. The city's financial advisors have
indicated that, because of the recent downturn in the market, it
may be possible to sell the bonds for a.20-year period at an inter-
est rate of approximately 11.5 percent. HRA members might recall
that a previous attempt to market bonds for a portion of these
costs, i.e., the Knutson-Lyndale Garden Center-Graham Avenue pro-
jects, resulted in receiving no bids, since the bond market was ex-
ceeding the 12 percent state interest limit. For this reason, it
appears advantageous for the HRA and the city council to authorize
this bond sale, and to actually conduct the sale as soon as possi-
ble in hopes that the bond market will continue to dec-line as it
has over the past ten days to two weeks. The legislature is ex-
pected to pass a bill on Saturday, March 13, which will lift the
interest rate ceiling on city bonds and peg the new limit to an
interest rate of one percent over the bond buyers index (a comp-
utation of what bonds are selling for across the nation).
HRA Letter No. 16 -3- March 15, 1982
It is recommended that the HRA adopt the resolution request-
ing the city council to authorize sale of the bonds.
Respectfully submitted,
~~ ~~~~-~
Karl Nollenberger
City Manager
cc: Community Development Director
Housing and Redevelopment Coordinator
Administrative Services Director
Finance Coordinator
KN/eja
1
HRA RESOLUTION N0.
A RESOLUTION
DETERMINING THE NEED FOR FINANCING
REQUIRING THE CITY COUNCIL OF
THE CITY OF RICHFIELD TO AUTHORIZE
THE ISSUANCE OF GENERAL OBLIGATION
DEVELOPMENT BONDS TO FINANCE
PUBLIC REDEVELOPMENT COSTS IN THE
LYNDALE-HUB-NICOLLET REDEVELOPMENT AREA
BE IT RESOLVED by the Housing and Redevelopment Authority of the
City of Richfield, Minnesota, as follows:
Section 1. Findings
1.01. This Authority has pursuant to Minnesota Statutes, Section
462.411 to 462.716 (the "Housing Act") duly adopted a Redevelopment Plan.
(the "Plan") for a redevelopment project described as the Lyndale-Hub-
Nicollet Redevelopment Project (the "Project Area") and commonly referred
to as the LHN Project. The Plan and the Project Area have been duly
approved by the City Council of the City of Richfield (the "City") with
the Housing Act.
1.02. This Authority and the City have entered into a Tax Increment
Agreement (the "Agreement") dated May 9, 1977 in accordance with the Housing
Act and Minnesota Statutes, Section 273.71 to 273._75, the Tax Increment
Financing Act (the Housing Act and the Tax Increment Financing Act collec-
tively referred to as the "Act") for the purpose of authorizing the issuance
of general obligations of the City, payable from tax increments in the Project
Area, to finance Public Redevelopment Costs within the Project Area. The
Agreement authorizes the issuance by the City of its general obligations for
such costs at the request of this Authority.
1.03. The Plan has been duly modified and amended in accordance with
the Act to provide for the acquisition and improvement of certain lands in
the Project Area for the purpose of facilitating the construction of a
multifamily housing development and related improvements (collectively
"the Project") and to provide for the financing of other related Public
Redevelopment costs of the Project Area. This Authority has authorized
the execution of development agreements in connection with the acquisition
and disposition.of land for the Project.
1.04. This Authority has incurred Public Redevelopment Costs for
the Project and other costs for the Project Area, and it is found and
determined that it is necessary for the sound financial management of the
LHN Project Area that general obligations of the City be issued to finance
all or a portion of such costs.
- 2-
Section 2. Public Redevelopment Costs
2,01. The Executive Director has submitted to the Authority a list
of Public .Redevelopment Costs of the Project Area which are presently
estimated to be as follows:
Multifamily Site Costs
Acquisition $ 880,696
Site Improvements 28,325
Relocation 107,510
Demolition .4,200
Project 705 Special Assessments 78,626
Disposition Expense 15,000
Administration Expense 44,938
Contingencies 91,271
Property Management Expense 60,816
Legal Costs 12,000
Lyndale Garden Center Costs
Acquisition $ 205,002
Relocation 18,063
Administration Expense 50,893
Richfield State A~encv Costs
Acquisition $ 552,500
Site Improvements 126,000
Relocation 30,000
~ Administration Expense 44,684
Contingencies 25,000
Legal Gosts 12,000
Godfather Block (West End) Costs
Acquisition $ 597,000
Relocation 24,905
Demolition 23,273
Administrative Expense 90,072
Contingencies 77,880
Property Management Expense 44,000
Other Proiect Area Costs
Administrative Costs - LHN Project $ 177,700
Multifamily and Commercial Rehab,
General Administrative Costs 100,376
Financing Costs
Legal and Fiscal $ 25,000
Capitalized Interest 471,970
Bond Discount 80,300
Total Bond Issue Required 54100,000
1
-3-
Section 3. Issuance of Bonds
3.01. This Authority hereby requests the City to issue and sell its
general obligations in an aggregate principal amount not to exceed $4,100,000
to finance all or a portion of the Public Redevelopment Costs identified in
Section 2.
3.02. The Agreement is hereby ratified and confirmed in all respects.
3.03. This Authority renews and reaffirms its statement in HRA
Resolution No. 32 of May 9, 1977, concerning its intent to request additional
series of bonds in the future to finance the Public Redevelopment Costs in
the Project Area and restates its request that all such series of bonds be
on a parity with each other such series of bonds so issued, and be equally
and ratably secured by the pledge of the Agreement.
3.04. The Executive Director is authorized and directed to transmit
a certified copy of the resolution to the City forthwith.
Passed by the Housing and Redevelopment Authority of the City of
Richfield, Minnesota this 15th day of March, 1982.
Thomas E. Harms Chairman
ATTEST:
Michael Freeman Secretary
HOUSING A~'D REDEVELOPMENT AUTHORITY
Office of Executive Director
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
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HRA Letter No. 15
Agenda March 15, 1982
Subject: Assistance to Small Businesses
Over the past year, the staff has been giving consideration
to the goals that the HRA and the city council expressed concern-
ing further commercial rehabilitation in the city outside of the
L/H/N redevelopment area. Areas that have been identified are
Lyndale Avenue (74th Street to 78th Street), Penn Avenue (62nd
Street to 68th Street), and Cedar Avenue (63rd Street to 67th
Street). The nature of these commercial areas is quite different
than the L/H/N and requires us to have different goals than those
adopted for the L/H/T1. Similarily, the financial tools used in
the L/H/N area will not be transferable to these other areas that
consist of smaller types of businesses and industry.
There is an extensive lead time to prepare for major rehab-
ilitation efforts. The businesses in the Lyndale Avenue area
have already expressed some interest in pursuing rehabilitation
of their commercial area. For these reasons, I believe it is
incumbent upon the HRA to respond to these needs by beginning
to accumulate the necessary resources to provide services to our
business community.
One of these resources is the SBA 503 program. Briefly, the
program's objective is to provide long-term, low interest rate
loans to businesses for expansion, purchase of real property, new
construction, and purchase of machinery and equipment. The pro-
gram requires that a Conununity Development Corporation (CDC) of
25 members, with a f ive-member board of directors, be established.
The CDC would contract for services with the HRA. The staff
would evaluate loan applications and present them to the CDC board
for approval. Ten percent of the loan would be provided by the
borrower, 40 percent by the SBA, and 50 percent from a private
lender. The program would also help achieve HRA goals for the
L/H/N area and other conunerc ial areas of the c ity .
As a result of discussions at the January HRA meeting, the
staff was directed to meet with representatives of local lending
institutions to determine their support for the program. Repre-
sentatives of both Summit State Bank and Richfield Bank and Trust
indicated that they would support formation of a CDC, and partic-
ipate as lenders in the 503 program. However, the 50 percent
portion of the 503 loan that they would provide is not presently
saleable on the secondary loan market. This would be a limiting
factor ir. loan participation unless a secondary market could be
developed.
Staff training and the organizing of a CDC must take place.
The National Development Council (NDC) provides training and
technical assistance in use of the SBA program. The NDC was
organized in the early 1970's with the primary purpose of helping
cities establish economic development programs. The NDC is under
contract to HUD and SBA to assist their staff in implementing
programs. They are also under contract to many cities, including
the City of St. Paul, which is recognized nationally as a leader
in neighborhood commercial revitalization utilizing the SBA pro-
grams. The city staff would need to be trained in operating this
program.
The proposed schedule for implementation of the program is
as follows:
Phase I - June-July,- 19.2
Initiate contact work for establishing CDC. Begin process to
identify a prospective borrower to use the 503 program. Staff
training could be completed by June 1, 1982.
Phase II - August-September, 1982
Establish a CDC, have organizational meeting, etc. Draft a
contract for services to be executed by the HRA and CDC. Identify
a prospective borrower.
Phase TII - October-November, 1982
Package and submit a prospective borrower to SBA. Identify a
second prospective borrower.
Phase IV - December and after
Make the comrlunity aware of the program through public relations
efforts and prepare as many loan packages as possible.
The staff is also investigating the design of a plan for
implementing a new state law designed to facilitate the rehabil-
itation of existing commercial buildings. A bill has been passed
by the P•Zinnesota House and the. Senate, which would make it possi-
ble for cities to sell revenue bonds to provide funding for re-
habilitation. The bonds would be retired by the borrowers and
would not become a liability of the city. The proposed law makes
it possible for a city to designate the HRA as the administrator
of the program. We are reviewing this legislation now and monitor-
ing its status in St. Paul.
111 L~...~v. ~.s.~ l~v. ~.r v __~-___ ~ ~ - _
There is an additional program which has recently been estab-
lished by the state and is administered by the P•linnesota Small
Business Finance Agency. Under this program, monies are provided
through the sale of tax exempt notes. This agency is able to pro-
vide this type of financing in amounts less than $100,000. Ordin-
arily, it is too expensive to administer issues with a value of
less than $400,000, however, the state has streamlined the process
to reduce the administrative and overhead costs, thereby making
smaller amounts feasible. Monies from this program are now avail-
able to businesses in Richfield and throughout the state. This
program is very similar (except on a smaller scale) to the tax
exempt financing provided by the city to various developers in the
L/H/N area, such as Lyndale Hardware.
I believe it is important for the HRA to authorize the staff
to begin the process of developing tools for the use by small
businesses in our community in light of our goals statement. This
process will not be allowed to compete with the completion of the
L/H/N major goals, but will supplement these goals by providing
opportunities for small businesses in the L/H/N also (Trestman
Music, Star Auto, Opdahl property, etc.). In order to facilitate
the process it will take some allocation of HRA resources in 1982.
The general fund of the HRA has adequate monies to begin this
process and provide the necessary training for staff members. As
we identify tools and further resources, we would discuss them
at future HRA meetings. For 1982, I anticipate we would be allo-
cating approximately $8,000 of the general fund of the HRA to
this effort. The fund balance currently has in excess of $150,000.
It is recommended that the HRA authorize the staff to invest-
igate and pursue a program of incentives for enhancing construction
and rehabilitation of small businesses in the community.
Respectfully submitted,
~ \, n ~. „ .
Karl Nollenberger
Executive Director
cc: Admin. Ser. Director
Community Dev. Director
Housing and Redevelopment Coordinator
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 14
Agenda March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richfield
Commissioners:
Subject: Establishment of Just Compensation and
Authorization to Purchase Real Property in
the L/H/N Area
In March, 1979, the city council and HRA identified the
"Godfather Block" for acquisition and redevelopment. In August,
1980, the HRA began purchasing property in this block when it
became available for sale. The HRA presently owns 744 West 66th
Street and 738 West 66th Street. As of this time, the owners
of Larry's Auto Body, 735 West 65th Street, and Craswell Studio,
732 West 66th Street, have also indicated a willingness to sell
their property to the HRA.
Larry's Auto Body, 735 West 65th Street
Nir. Terry Duggan is the owner-occupant of this property. The
two-story concrete, commercial building has no basement and was
constructed in 1971. The building contains approximately 3,210
square feet; and the land area contains approximately 12,280
square feet, including off-street parking facilities.
Three appraisals of the property have been completed. O.J.
Janski and Associates, Wiley Appraisal, Inc. and Don Hennessey,
the city's review appraisor, appraised the property and made
recommendations. Based upon the appraisals, the HRA has made an
offer of $151,344. Mr. Duggan has executed a purchase agreement
accepting the offer, subject to HRA approval. The closing date
would be May 4, 1982. In addition to the cost of purchasing the
property, the HRA must pay relocation benefits, estimated at
$8,656.
Craswell Studio, 732 West 66th Street
Lorraine and Bill Brady are owners of the property and
occupants of a portion of the building. Farmers Insurance Group
presently has a month-to-month verbal lease which allows them
to occupy approximately 352 square feet of office space in the
building. A son, James Brady, occupies the second floor and
operates a computer-related business. The total building area
is approximately 3,924 square feet, and the land area is approx-
imately 21,704 square feet. The one and one-half story building
was constructed in 1942; the addition was constructed in 1958.
HRA Letter No. 14 -2-
March 15, 1982
Three appraisors, O.J. Janski and Associates, Wiley Appraisal,
Inc. and Don Hennessey have also appraised this property. Based
upon their recommendation, the HRA made an offer of $135,000 for
purchase of the real estate. The Bradys have executed a purchase
agreement which is subject to approval by the HRA. The date of
closing is set for July 2, 1932. One-half of the purchase price
would be paid on this date, with the balance to be paid January 3,
1983. In addition to the acquisition of the real estate, the HRA
would pay relocation benefits to Craswell Studio of $9,957; to
James Brady of $948; and to Farmers Insurance Group tenants of
approximately $10,000. Monies for the purchase of these properties
would become available from bonds to be sold during 1982.
It is recommended that the HRA adopt the attached resolution
establishing just compensation at $151,344 for Larry's Auto Body,
and $135,000 for Craswell Studio, as well as authorizing the
Executive Director to execute the purchase agreement for acquisition
of these properties.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/sh
cc: Community Development Director
Housing and Redevelopment Coordinator
Finance Coordinator
Director Administrative Services
RESOLUTION NO.
RESOLUTION ESTABLISHING JUST
COMPENSATION, AND AUTHORIZING
THE PURCHASE OF 735 WEST 65TH STREET
WHEREAS, the Housing and Redevelopment Authority of
Richfield, Minnesota (HRA) did on October 15, 1975, approve
a redevelopment plan for an urban renewal project for the
Lyndale-Hub-Nicollet area of Richfield entitled "Lyndale-
Hub-Nicollet Commercial Improvement Program" (The "Plan");
and
WHEREAS, it as been determined pursuant to and in
furtherance of the Plan that the acquisition of certain
real property is necessary, said real property being
described as follows:
Tract E, Register Land Survey 1318, Hennepin County,
Minnesota 27-028-24-23-0073. (735 West 65th Street)
WHEREAS, the HRA has caused appraisals of the subject
property to be made and has carefully considered such appraisals,
and recommends establishing just compensation at $150,000; and
WHEREAS, a purchase .agreement has been executed by the owner
subject to HRA board approval; and
WHEREAS, funds to provide-for the purchase of this
property will be available from the Bonds of 1982.
NOW, THEREFORE, BE IT RESOLVED BY THE RICHFIELD HOUSING
AND REDEVELOPMENT AUTHORITY:
1. that $151,344 is determined to be just compensation
for the subject real. property; and
2. that the monies for the purchase of this property
are to be made available from the proceeds of the Bonds of
19 82 ; and
3. that the Executive Director be, and hereby authorized
to execute, as an agent of the Richfield Housing and Redevelop-
ment Authority, the Purchase Agreement for the purchase of
said real estate.
Passed by the Housing and Redevelopment Authority of
Richfield this 15th day of March, 1982.
Thomas E. Harms, Chairman
Michael Freeman, Secretary
RESOLUTION NO.
RESOLUTION ESTABLISHING JUST
COMPENSATION AND AUTHORIZING
THE PURCHASE OF 732 W. 66TH STREET
WHEREAS, the Housing and Redevelopment Authority of Rich-
field, Minnesota (HRA) did on October 15, 1975, approve a
redevelopment plan for an urban renewal project for the Lyndale-
Hub-Nicollet area of Richfield entitled "Lyndale-Hub-Nicollet
Commercial Improvement Program" (The "Plan"); and
WHEREAS, the City Council of Richfield, Minnesota (the
"City") did on November 24, 1975 approve the Plan; and
WHEREAS, it as been determined pursuant to and in
furtherance of the Plan that the acquisition of certain real
property is necessary, said real property being described
as follows:
That part of Government Lot 1, Section 27, Tract 28,
Range 24, described as beginning at a point of the South
line of said Government Lot 1 distance 64.8 feet East from
the Southwest corner of said Government Lot l; thence East
along said South line a distance of 88 feet; thence North,
parallel with the West line of said Government Lot 1 and
its extension North, to the Southerly line of Registered
Land Survey No. 1318, Files of the Registrar of Titles,
County of Hennepin; thence Southwesterly along the Southerly
line of said Registered Land Survey No. 1318 to it
intersection with a line drawn North, parallel with the
West line of said Government Lot 1 and its extension North,
from the point of beginning; thence South along the last
described line to the point of beginning. That the East
boundary line of said tract has bEen judicially deter-
mined and Judicial Landmarks set pursuant to Torrens Case
No. 17641 (732 West 66th Street); and
WHEREAS, the HRA has caused appraisals of this subject
property to be made and has carefully considered such appraisals;
and recommends establishing just compensation at $135,000; and
WHEREAS, a purchase agreement has been executed subject
to the HRA board approval; and
WHEREAS, funds to provide for the purchase of this property
will be available from the Bonds of 1982.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority of Richfield, Dinnesota:
1. that $135,000 is determined to be just compensation
for the subject real property; and
2. that the monies for the purchase of this property are
to be made available from the proceeds of the Bonds of 1982; and
-2-
3. that the Executive Director be, and hereby authorized
to execute, as an agent of the Richfield Housing and Redevelop-
ment Authority, the Purchase Agreement for the purchase of
said real estate.
Passed by the Housing and Redevelopment Authority of
Richfield this 15th day of March, 1982.
Thomas E. Harms, Chairman
Michael Freeman, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 13
Agenda March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richfield
Commissioners:
Subject: Resolution Appointing a Responsible Authority
and Defining Duties for Purposes of Implementing
the Minnesota Data Practices Act
There is an item on the March 15, 1982 HRA agenda providing
for discussion of the Minnesota Data Practices Act as it relates
to the HRA. That legislation provides that all government data
collected, created, received, maintained or disseminated is
public information unless classified as not public, private or
confidential by state statute, federal law or the Minnesota Com-
missioner of Administration. The act also requires that govern-
mental entities establish a data practices policy and appoint a
Responsible Authority to administer that policy. The City of
Richfield designated the city manager as Responsible Authority
and assigned him the duties of administering the Data Practices
Act some time ago. However, since the HRA is legally a separate
jurisdiction from the city,: the HRA attorney has advised us that
it would be desirable for the HRA to take separate action with
regard to implementation of the Data Practices Act.
The first step in implementing the requirements of the Data
Practices Act provide that the HRA appoint a Responsible Authority
and assign that person the duties of administering the Act. Attached
to this letter is a resolution which would designate the HRA exec-
utive director as the Responsible Authority. The Responsible
Authority may select certain other persons in the organization as
designees in charge of particular files or types of data. The
designees represent the Responsible Authority in administering and
applying provisions of the Data Practices Act with regard to the
data they manage. It is likely, for instance, that individuals
such as the Community Development Director end the Housing and Re-
development coordinator might be selected by the Responsible
Authority as designees since both of those individuals maintain
specific types of HRA records and information and would best be able
to determine which types of their information fall within which
categories for data established by the legislation.
HRA Letter No. 13 -2-
March 15, 1982
According to the Minneoota Data Practices Act, the Responsible
Authority is required, after appointment, to prepare a public
document containing the procedures which will be used to admin-
ister the act. The City of Richfield has developed such a doc-
ument which defines its procedures with regard to information
collection and classification. I would anticipate that the HRA
Data Practices Policy will be virtually identical to that already
drawn up by the city, since many of the categories of information,
particularly information on individuals, are virtually identical.
The city has, in the past, had many problems in responding
to requests from media representatives and members of the public
for information, particularly for public safety information. The
HRA has historically experienced but very few requests for infor-
mation, so that we have been able to evaluate such requests on a
case by case basis with regard to the act. However, I believe it
is important that HRA members become generally familiar with the
contents of the Minnesota Government Practices Data Act, including
the penalties and liabilities for failure to properly administer
the act. After the policy for classification and dissemination of
HRA information is finalized, we will provide copies of that
document to HRA members.
It is recom*~ended that the HRA adopt the attached resolution,
appointing the Executive Director as the Responsible Authority and
assigning duties in accordance with provisions of the Minnesota
Government Data Practices Act.
Respectfully submitted,
t1 n
~a,,.x. ~i:~~ca.,,;~.¢n..
Karl Nollenberger
Executive Director
KN/sh
cc: HRA Attorney
Community Development Director
Housing and Redevelopment Coordinator
City Clerk
RESOLUTION N0.
RESOLUTION APPOINTING A RESPONSIBLE AUTHORITY
AND ASSIGNING DUTIES REGARDING HOUSING AND REDEVELOPMENT AUTHORITY DATA
WHEREAS, the Minnesota Government Data Practices Act, Minnesota Statutes, Sections
15.1611 to 15.1698 as amended, requires that the Housing and Redevelopment Authority
appoint one person as the Responsible Authority to administer the requirements for
collection, storage, use and dissemination of data on individuals, government data,
and summary data, within this city, and
WHEREAS, the Housing and Redevelopment Authority is concerned with the responsible
use of its data and wishes to satisfy this concern by immediately appointing an admin-
istratively qualified Responsible AutY~.ority as required under the Act and assigning
duties to that person;
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority of the
City of Richfield, Minnesota:
1. The Housing and Redevelopment Authority of Richfield, Minnesota, appoints the
Executive Director as the Responsible Authority for the purpose of meeting all require-
ments of the Minnesota Government Data Practices Act, Minnesota Statutes, Section 15.1611
through 15.1698, as amended.
2. The Responsible Authority may designate an Housing and Redvelopment Authority
employee or employees to assist in the administration and enforcement of the duties of
the Responsible Authority and to be in charge of individual files or systems containing
government data and to receive and comply with requests for government data. If the
Responsible Authority appoints a designee or designees, this appointment must be in
writing, and the Housing and Redevelopment Authority shall be provided a copy of the
appointment. If designees are appointed, the Responsible Authority shall instruct the
designees in the requirements of administering and enforcing the Minnesota Government
Data Practices Act.
3. The duties of the Responsible Authority are as provided in Minnesota Statutes,
1980, Sections 15.162 - 15.1698, commonly known as the Minnesota Government Data
Practices Act.
4. This resolution implementing the Minnesota Government Data Practices Act
shall remain in force and effect until modified by the Housing and Redevelopment
Authority.
Passed by the Housing and Redevelopment Authority of the City of Richfield, this
15th day of March, 1982.
Thomas E: Harms Chairman __.__
ATTEST:
Michael 0. Freeman Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 12
Agenda March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richfield
Commissioners:
Subject: Metropolitan Council Policy 39
At the January, 1982 HRA meeting, during a discussion on
residential preference for housing programs, the HRA indicated
a desire for additional information about the Metropolitan
Council's Policy 39. The staff had indicated that it was ad-
vantageous, under Policy 39, for the HRA to refrain from adopting
a Richfield resident preference system. Discussion of this policy
was scheduled for the February, 1982 HRA meeting. However, at
that meeting, the HRA deferred discussion on the policy to the
March 22, 1982 meeting. The following information is presented
to the HRA to more fully inform you on Policy 39.
~- 4~-~;,`--tv,~ ~Gl I ~
Since 1971, the Metropolitan Council has used its _~,
imposed plan review responsibilities for all grant applications
involving state or federal funds, to reward communities which plan
for, and provide,- low and moderate income housing opportunities.
The Council has done so based on Policy 39 of the Housing chapter,
Metropolitan Development Guide. Policy 39 establishes funding
priorities based upon each community's lower cost housing oppor-
tunities, and its plans, policies and programs to provide such
housing in the future. Communities are ranked, based on criteria
which measure local housing performance. The ranking is then
applied when applications from local governments are submitted
for state or federal funding. Grants for transportation, criminal
justice, parks and open space, and aging programs can be ranked
and awarded, based in part on the Policy 39 ranking.
As measured by Policy 39, Richfield presently ranks seventh
out of the 190 communities in the metropolitan area in its housing
efforts. The city of St. Paul ranks first, followed by Minneapolis,
Rosemount, Coon Rapids, Hopkins, Shakopee, and Richfield. Twenty-
five criteria are utilized to evaluate housing programs and
establish the ranking. A copy of the ranking data used by the
Metropolitan Council is attached. Richfield can maintain its
ranking by:
HRA Letter No. 12 -2- March 15, 1982
- continuing to receive proposals from developers for subsidized
housing;
- building more attached forms of housing (townhouses, condo-
miniums) each year as has been done with the Duraps Ltd.,
Coach Homes of Richfield and the Knutson Lake Shore Drive
condominium project;
- utilizing a variety of financing techniques, such as tax
increment, CDBG, or local funds to develop housing;
- utilizing CDBG and locally initiated financing techniques
for maintaining and rehabilitating housing; and
- continuing to conform with the Metropolitan Council's goals,
policies and programs.
Of course, maintaining our ranking assumes that the other 189
communities do not increase their ranking trhough improved hous-
ing performance.
Richfield can improve its ranking by:
- increasing the stock of owner-occupied housing affordable
to low, moderate and modest-income persons;
- increasin the stock of affordable rental housing;
- adopting ordinances and authorizing resolutions that either
directly assist the development of housing affordable to low
and moderate income persons (waiving of permit fees and zoning
changes) or "promote inter-jurisdictional mobility" (no
residency preference policy);
- removing ordinance requirements for minimum unit sizes in
multi-family housing; and
- adopting an ordinance permitting the creation or expansion
of mobile home parks.
Richfield's ranking is important for receiving grant monies
for park and open space development. When the city applies for
either a federal Land and Water Conservation Act (LAWCON) grant
or a State of Minnesota Legislative Commission on Minnesota Resources
(LCMR) grant, the Metropolitan Council will consider Policy 39
when processing the application. In evaluating a LAWCON or LMCR
grant request, one-third of the ranking evaluation is based on a
community's rank with Policy 39. Because Richfield has performed
well in housing, we have ranked high in application evaluations
for park and open space grant monies.. The city has reveived LAWCON
and LMCR grants totalling $143,750 for the development of Monroe
Fairwood Park, and $166,000 for the development of Adams Hill Park.
An LMCR grant was also responsible for inprovements at Sheridan
HRA Letter No. 12 -3- March 15, 1982
Park, the Wood Lake Nature Center boardwalk, and the Taft Park
fishing dock. Since these grants can cover as much as 75 percent
of project costs, they have been significant in reducing the
amount of local funds for park development. Repayment of these
grant funds is not required.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/sh
.,.
POLICY 39 HOUSIfif~ PERFORMANCE SCORES
(11-10-81)
Community Points Community Points
St. Paul C2.O Falcon Heights 43.5
Minneapolis £31.5 Hound 42.5 '
Rosemount 7?_.5 Neva Brighton 42.0
Coon Rapids 69.0 Roseville 41.5
Hopkins 67.0 4Jayzata 41.5
Shakopee 66.5 Apple Valley 41.5
Richfield 64.5 Burnsville 41.0
Eden Prairie 62.5 Lexington 41.0
Eagan 62.5 Cottage Grove 40.0
Stillwater 6?..O Champlin 39.5
Chaska 62.0 Inver Grove Heights 39.0
Oakda 1 e 59.5 l~Ji 11 ern i ~? 3~c3.5
Anoka 5`x.5 1~lhite Gear l_akP 37.5
Fridley 57.5 Excelsior -X7-,5. '~'o•S
North St. Paul 57.5 Loret*_o 37.0
Blaine 57.5 Chanhassen 37,0
Prior Lake 57,0 St. Anthony 35.5
Forest Lake 57.E tiillton 35.0
South St. Paul 57.0 Cologne 34.5
Robbinsdale 56.5 t'endota 34.5.
Pl vrnouth 55.0 St . Parr 1 P.?rk 34.5
[3r~ok 1 yn Center 54 , , Arden Fti 1 1 s 3 + . 5
Hastings F4,0 Little Canada 34.0
Be11P Plaine. 54.0 Carver 34.0
Maplewood 53.5 t~?ayer 3'1.0
St. Louis P.?rk 53.5 Center; i 11~ 3~:.f1
tiamburq r;?.0 ',Jhite Ef~ar Lake T~.,p. 33.5
Bl~~mington ^2.:~ Louisville T~r:p, 33.E
,'pi,~ Grove r?.~ Crystal 33.0
t;e~,~ Hope 5? .O Lino ;.~::es .32.5 '
Oak Park E1ei~~htS F!.:~ '.:aodh'~rY 32.`?
:'adnais Heights ~,~1.r~ '1rOno 31.5
Lone Lake 5~.~~ "ounc';s :'ie~.: ~::, 28.5
St. rrancis 50.rJ ~a~~p~~rt 31.5
Far^rington -;-,1~:±`~-- 5(,.O !_aud•a~.,~?le ?0.5
t;orrrc?od ..a.ti Ceephav~~n ?~~,~
Columbia Heights ~9.n Shore~,;rod 30.E
,lordan ~'~. - East 3et',~l "'Q.S
t.}~•.•rport ~:`',±1 Si~oreviF~~,•r ?_9.5
St. ?nni`s?cius ~'~' !~ '•'ir,n~~t,-;sta '9.O
rJacc~n i a :7 ,'1 '.e•~.~ G,-r~•r>n•,~ '~~.5
;~. _ ._
?,-c~~,': l yn ? rk :'; , n ? l .? i:,~ i T:•r;~ . 37.5
.. 1 t t ~) n ~ U .. '.. i.. .. .
~~.;;t~~,.., ,fit
.~ ,!1
~SSE'C~ ~-
__ .')
ti
Community
Points
Community
Points
Coates ?_3.5 ~•tarshan Tti•rp. 16.0
flew Scand is Tarp. 23.5 St. P•larys Point 16.0
Spring Lake Twp. 7_:1.0 Hampton 15.5
Sprinct Park 22.5 Greenfield 15.5
Randolph Tarp. 2?_.5 Lakeland 15.5
Lavrrence Tvrp.
St 22.5 Young America Twp. 15.5
.
Hollya!ood Tvrp. 22.0 Credit River Tv;p. 15.5
Belle Plaine Tvrp. 7.1.5 Qurns Tt•rp. 15.0
Andover 21.5 Sciota Twp. 15.5
Tonka Qay _ 21.5 Hampton Twp. 14.5
Spring Lake Park ?1..5 Afton 14.5
Eiirchwood 21.0 Sand Creek Twp. 14.5
Randolph 2?.0 Douglas Tvrp. 14.5
Helena Tvrp. 21.0 Dahlgren Twp, 14.0
Forest Lake Tvrp. 2.0.5 Laketot•rn Tvrp. 14.0
Lake St. Croix Beach 20.5 Nininr~er Twp. 14.0
Nevr Market 20.5 i~tedina lr'+.0
Ramsey 7.0.5 Hassan T~:rn. 13.5
Rogers 20.0 Vermillion T~:rp. 13.5
Cedar Lake Twp. 20.0 Hancock Tvrp. 13.5
Qethel 20.0 Colu~r.hus Tvrp. 12.5
Independence 1Q.5 Rockford 12.5
Huqo ?9.5 t•loodlanH 12.5
Empire Twp. 19.0 ~•tarine-on-St. Croix 1?_.5
Watertown Tarp. ] 9.0 Oak Gr~v~ T~:rp. 12.0
Davton ?3.5 San Fr:nciscn Twp. .12.0
Vermillion 13.0 !•tay Tvrp . _ 11.5
Greenv:ood l".0 Landfall ll.a
Gre•v Cloud Island Twp. 13.0 ~'endnta Heinhts 11.0
daeon i a T~•ro. l ^ .0 Hanover 10.5
Eur-eka Tarp, 13.0 i•tinnetenica Qeach 10.0
Chaska Twn. 13.0 Victoria 10.0
Castl•~ Pock T~:;n. '.?,, Camd_n T~•vp. 9.5
;•taple ?lain t7.5 "Adicir:e L•~':e 9.r
':laterford Tarp. 17.5 Rave~.n' T'~~p• Q•5
Corcoran 17.5 Laken^d Shnrr•s 9.~
~~e•,v Trier 17.E .~ties•Ji l le 7.5
'fie+•r Market Twn, 17.5 Denm3r'~ "•rrD. 7.~1
Lilvdale ':1.0 Grznt T::o, 7.0
Greenvale T•;rp. 17.0 Ping Sprinns 6•`~
Still~•rat~r T`,vo. '_7.0 Dell•,:or.d 5.0
!lam Late Two. 17.0 ~;ortn "a~:s `~•.
Jackson T~•;p. 15.`3 ~,est La~:alanti T.rp. 3.5
Eltio ? ~.0 ?entnn T~rp. 3.7
Bavto•;rn T•~•rC+. ?^.~? Sur:ris~~ La'•:~ 2.5
L'~'?7C
.'
~_
`~.
GUIDELINES FOR PRIORITY FU?dDING FOR HOUSI'IG PERFORM^.A'1CE
POLICY 39 EVAL'JATIO"1 CRITERIA
The following are the factors which the Metropolitan Council
uses to evaluate a community's housing performance. The
relative weight of each factor is indicated.
AFFORDABLE A;ID DIVERSE HOUSIaIG
Points
0 to 5~ 1. Low- and Moderate-Income Homeownership ''nits -
Municipalities are ranked according to the
percentage of their total homesteaded hcusing
units in 1980 cahich are affordable to low= and
moderate-income persons based or: 1980 mar',cet
value data compiled by the county. The
percentage of mobile homes is added to arrive
at a total percentage.
0 to 5'~ 2. Loca- ar.d ModQrste-Inco^~e Re^.ta'_ Units -
Municipalities are ranked according to tie
percentas~e of their total rental housi:~K in a
price ra^ge affordable to low- and :node^~te-
income perscns based on t!:e most curre.^.t
census data. The per^-entage of substan,iard
rental units is subt^acted to arrive at a
total pe.^ce.^.tase, {For ex?:^p' e - units
t„e., t j .~~ `v^ ~ j.: '.~ Qr less , 1 ~,' t ~ men $'~:s . i
0 to 5 * 3 • Subs ? ~ a e~' ''c~.:s i -:~ U^ _ is - ^
~'ua_c_pa__.._es are ra::xed acc~^''_^g t~ t::e
per^pnta~~ o.' t'~ejr total !~cusi:~-~ stoc't that
r v subs i~ ' ~ d ~.: is constr•:c ted,
is comp ised o~ ~- e
pure'.^.ase~', ass_stec' or approved by t:'P `•-^'d_^g
J '
app?.^.C:eS i Or CO:+st.^'1Ct10:7, ~::!'^..^:3Se O"•
assistance i.^. t'.^e cc^..runrty_ °or to°~- ar.r
oerscr.s. {'^c'.:des ~T~D _ow
^g^` publ_C ti:CUS:.^.~, ••°-~;~ S::^~_°!.le.^.~ C.C'°C~S,
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°oints
0 to 10* 4. Allocation Plan Achievement -
Mur.icipalities are awarded points based on
the percentage of the 1980-1983 Subsidized
Housing Allocation Plan's~* fa:~ily and large
family Qoals which the co:rmunities ^ave
achieved as follows:
~ 00+ - 10 points 50 -5~ ~ - 5 points
9 0 -9 9 ~ - 9 ~ 0 -'-: 9 ° - !a
80-89 0 - 8 30-39 ; - 3
70-79p - 7 20-29 0 -
60-69 ~ - 6 1-19 0 - 1
Municipalities not allocated individual
numerical goals in the 1980-1983 plan but
providing subsidized housing opportunities
during the period of this plan through the
allocation to the "balance of the '~!etropoiitar.
Area" receive a point for each family or large
family unit achieved up tc 10 points.
5
0 to ~ ~
J
C :~ 5 }
5. Fa~~ ilv Subsidized Housing Ac.".ieve^~e.^.t -
Municipalities in whic:: two per^ent or morQ of
the total housing'stock is low-Van-' moderate-
inco:~s Subsi di..eri !^aOci ~~A f':.~n -~pi r~ ~c i ~' ~~
Y ~ i
percent or more of such-housi^g is not
specifically designated as elderl;~ units,
5• Proposed S~~Ss:dze~; uousin~ -
Municipalities receive an addition=_'_ two
t r t C2n ve'^' °. i
pOin S L. ;7eJ lid/ t,:;a„ i!1 tie ,,^vaSt two
years they have received a propcsa_ for a
family subsidized 'Housing deve'op~:en~ not yA}
selected for fund'_ng by HUC, ~'~~ ;, or Pm;,A J
s+h'_c:^. is consistent ~,+ith rpgic^'= 5cais a^~'
pc'__c_es, any? .cr which t"ey Ha•;e _ntQd
necessary :~ur._,._pal a^provals =_..~ ",,,~~-~ _ s
a ~'=~--~=::~ ;:if?.^~~_~ Cn c-~n `~e!:1C.^.S~.^3«.~ ~,.+ S l1A
to ..ne deve~cpr:en~.
7. ~''Od°s`-~t;S .: r.^on~npnsh j ~j^' -
_/ °S -r° .+7 .~•J q(. acs.. ~. ~'.. _. ..~ v e
~°-.^Ce.^...3,;° of`-ne.. tot31 !?C^.o~'°3^°'~ !;O'.'S::1
units in 930 which a^e wi~^_ a ,cries`-co g
range based cr. 1980 markst va^.:e ~a~a co:-psled
Via[..^._C1C3._.._?S 3.^O ^ana~.; 3C"..^~_. ., .^. ~.^.a
.gip !`^°n ~']YO ~. ~j'P ~. ~.^. ~a_ ren .,` +..s
',
- ~:~:~
-:;`=?
~,.:.~
<.,,'
Points
0 to 5~
9. New Modest-Cost Housing Achievements -
Municipalities are awarded~po~nts upon
verification of new modest-cost housing units
rented or homesteaded within their
jurisdiction for the first time during the
previous calendar year. Points will not be
awarded when rental units given points in
previous criteria are converted to ownership
units. Points will be awarded for the city's
regional fair share new modest-cost private
market housing achievement according to the
following percentages:
10+ percent - 6 points
6-9 percent - 4 points
3-5 percent - 2 points
0-2 percent - 0 points
The Council will adjust the unit value and
rent limit for modest-cost housing annually
based on HUD-determined income categories
fcr the S~iSA. The number of modest-cost units
produced in a single year which exceeds ten
percent of a municipality's fair share goal
may be carried over and counted toward the
next year's achievement.
0 to 5
10. Alternative Housing Tvices -
;~Sunicipaiities are ranKed according to t".e
percentage of their total new housing unit or
occupancy per:~its issued in the previcus
calendar year for dwelling units other than
traditicnal, detached single-family homes,
suc:, as all for~as of =ttac.".ed housing, mobile
hcmeS O.n Z?n0-10~ iine Un: ~$ • :.^.°
mun i c ~ pal_`.;~ yust ^ave ^e^::,itt2~' at least f :v?
new U.'~i~tS Or a rii:~4Je.n iihic^ ncnnaSpntJ f i'Je
percent (at least f:•re un_ts)+o_ :ts
'crecasted heusehc'_d g^c'.~t^ throug^ ~9~0
aCCCrd:ng t0 JeVeIOD~:.en`. ".^a.".:?4%G:"'< .fC.neC3StS.~*
1' . House^~ =cr SoPcia' 'Iee~'s -
~1un1~'~Ja~l ~°_S are `a wG:'~pd ..w~i ~o _::tJ ar
J . `
wi ~j'i_.^1 t!':e_.^ jU'~~Sv_C~_J*1. i ~ ` °-'~?:"3-, St:*e ~
cc'.:r`• Cr _cc3'_ fu.^.ds cr t^o$e c: a nc^.-cr^: _..
..
o^~ r._..at.cn ^a••P ~ee.^. used ..c ... ^;;?;e and
.. Pr'~~~ n~j~~~?^.,_al ~.._..s ~.. ^J ;'~'J_~P _... en SP's
~.... ..
...:?^.C?.nom ,. ? ~---'~•'•°---.• '`'..~ci ;^^ ?) 3
_ _ _ _ ':
`~',? ^..•'$.~a__'J ..^.3^.''._:3~^~ar+~ :1?^.t3_~y ice:,
Wenta_ :'~_':.~.":a_.''.^.^ ..^°'~iC31 aano;;'.~.e.^.t 1S
.~
3
GOALS A~1D IMPLEMENTATION PROGRAMS TO PROVIDE
"~ HOUSING OPPORTUNITIES
Municipalities receive points as indicated if their
comprehensive plan includes goals and imD_lemer.tation programs
as described below:
Points
3 12. Low- and '~!oderate-Income Housing Oooortun.ties
Goal -
A numerical low- and moderate-income housing
opportunities goal consistent with the
Council's ten year fair share plan for low-
and moderate-income housing opportunities.**
3 13. Modest-Cost Housir.? ODDOrtunities Goal -
A numerical modest-cost housing apportunities
goal consistent with the Council's ten year
fair share plan for new modest-cost private
mar!"cet housing opportunities.'''
3 14 . Programs to ACh; e~iA the TOW- a^d !~Ioderate_
Income t?ousir,? Goal -
Speciic local, regional, state or .federal
programs to be used to achieve the coc;*~un i tv' s
low- and moderate-income housing opportunities
goal.
15 . Pro~r?r~s to Achieve Housinr~ uainter.ance ano'
Se:^.abi~ i ta` ~ ~^ Gce._s -
Specific rehabilita~ion loan and grant
programs or local funding efforts to be uses'
t0 acti:l?Ve the comi'1u211ty'.9 hOUS.ng ~a2ntenannc
and re::^.abilita~icn goals.
Cr _.^. _ „ _? „ _'iac S': C.^. 3S tax-?:{ °'"^ ~ ^C.^''.T3,So
ra.ipnue tJC.^.`yS, ~3X inc..or..cnt - -~'S"^--'~''S ="°--a`a~
V
to :;cus_^g, cr ^_GHG cr l^cal f'.:rds to ass_st
.,
the deve lop:aezt of new ~ ow- an^ .:.eder3 ~?-
; -:come cr modest-cost ::cusi^g o^portur:_t.es
are a~~ar~'ed t::o ac_^ts for eac^yactiv.•' .
PC?.^.~S 3.^O_ 3::a^'~ed O^Ce fOr e3C^ t'i^.e O.°
act_v_`. ar.d are ~:a_^tai-:ed fcr tao~ yea~~ ,r
as lc^^_s ..::e actiY.';i is ccnt_^~.:_n
g
~!ax_.mu~: cf six cc_^ts.
~~~ ~_ '. 4
.y.
' -: ~
=,..~;
Points
6 17. Local Housing Initiatives - Official Controls -
Municic_alities are awarded two points for
each of several additional activities for
which it can be demonstrated that new lower-
cost housing ODDOrtUnitieS have been created
in the communit~r. The activities may be
official controls used specifically to assist
the development of new low- and mcderate-
income or modest-cost housing such as the
waiving of permit fees or dedications, the
establishment of mandatory inclusionary zoning
requirements, the provision of density
bonuses or the implementation of policies or
programs which promote interjurisdictional
mobility such as the elimination of residence
preferences for assisted housing. Points are
awarded once for each type of activity and are
maintained for two years, or as long as the
activity is continuing. ~!aximum of six points.
Official controls for which points are
subsequently awarded u..^.der Codes and
Ordinances (below) are not awarded points in
this criterion.
6 18. Local Housir.~ Initiatives - ?reservation of
Housing Stock
~lur.icipalities are awarded two points for each
use of a fiscal device, initiative or
i:~plementatior. o° an official control whic.":
assists in the prese.^vaticn of housing stock.
These initiatives may be official ccr.trc_s
such as a housi.^.g maintena^ce code, a
main~er.a^ce code en: crce~:ent pro3^a^! c^
., g
S_^1_3.^ ::iC.^._`..^,r_. occO.+t t0 'J!"ey°^. .,
dete^'_or..,ion, cr the i::itiat_ve ^:ay to a
..°iSCa~ Ve'liC° cr tOCI ~J~:_C.^. ',.OU'_d n0~
Ot:'.°_rwiSe ~e _'!3__abl°_ ri.,.^.OU~ ~CCaI
ini~~at_'Je SL'^.^. aS ~::e use of C03C or fecal
.°',:..^.dS for .^.CUS _.^.~ r°.^.a ~ _ l _ ~a ~ iOP. 3C ~ _ ! _ . _ °S .
?CintS a.^e 3wz.^^.?d fv^*' eaC^ ~;/^~? 0.° aC~_7_~,J
and are ^ai^tai.^.ed fOr two yea^S, Or 3S '_~^g
aS ~he aCt:'Ji';: iS CC:1t_.'I'.1_7.; u3xi~1L':1 O:
SiX CC1ntS.
. CODES AND ORDI:`1ANCES
Municipalities receive points as indicated for current codes _
and ordinances as described below:
Points 4
2 19. Single-ramilt~_DeveloDment Densities -
Zoning ordinances or standards which permit
single-family residential development at
densities consistent with the Council's land
use. advisory standards.~'~
2 20 . Multi family Development Densities -
Zoning ordinances or standards which permit
multifamily residential development at
densities consistent with the Council's land
use advisory standards.*~
2 21 . S i nstle-c amity ~-ious insr Size -
No 'rouse size requiremen~s for single-family
housing.
2 22. i•'ult' °amily Uni'- Size -
No unit size requirements for multifa~^ily
housing.
2 23 S.^:~le-Fa^li lv CZraQo Reou.•°nlartg -
Local land use regulation whi cC: does not
require the construction of a s3arage or
covered park i.^.3 space with a single-family
detached housing unit.
2 ZU . Mug * i.°aTi~ v Ga^a~e Reoui^e^~e^.` -
Local land use regulation '.~::ic'.^. does r.ot
rey•.:_re t^e construction of a garage or
covered par'.~c _^S sp ce w..`: S _^5 e-. ami' y
a~......~,.^.°'~ or ^~u_.._°a.,,_'•r nous.-:x+ur._~J un_ess
pr ^CSa_S ~C. S'~C.^. •.rCe J. ''e'r?_^C^.:?'l~S ~o '1C ..
..::C_'.:de ~..^,at ,...^.? :".L.^.-C Ca--~~r CC^.S_''e••S ~C ~P
3C'°_^y ::3te un.`. St.^.r3a7,° ~3Cil_`..°_S.
'~'.ob__e ::^c~e .,cn_^~ cr other local la^d ~ase
re~,::13tiCnS Or or~i.^.3.^.Ces W!':ic::?er~i~ ~^e
cr~aticr. or expansion of .~:obile ^or!e
' develcpraents.
3t _e33t C^.e :.^. _ ,. ... 3 ::::....":'C^ ::t.:.~S2r C.: u.^.. ~S 3S r+aSC.^ .:;a~
6
HOUSING AND REDEVELOPP-1E:~'T AUTHORITY
Office of Executive Director
HRA Letter No. 11
Agenda March 15, 1982
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Public Hearing Concerning the Sale of
Property at 6413 22nd Avenue
In October, 1981, the HRA approved entering into a contract
with South Hennepin Vocational Technical Center (Vo-Tech) to sub-
stantially rehabilitate a structure located at 6413 22nd Avenue.
Under the contract, the structure was removed from a lot located
adjacent to Taft Park, and relocated to the present site. Re-
habilitation work is scheduled to be completed in July, 1982, at
which time the house will be sold, and the $46,479 contract will
be paid with the proceeds of the sale.
In order to assure mortgage financing for the project, it
is necessary to execute a purchase agreement now. Before a pur-
chase agreement is signed, the HRA must hold a public hearing
on the disposition of this property. A public hearing has been
scheduled for the March 15, 1982 HRA meeting. The Planning
Commission has found the disposition of this property to be in
conformance with the city's comprehensive plan.
The HRA wa's able to secure one of the few remaining FHA
Section 235 "preliminary commitments This makes it possible to
finance the sale of the home to a moderate income family at a
lower than market rate interest, or 8 percent. The FHA has
established a statutory deadline of March 31, 1982, requiring
all Section 235 mortgages to receive a "firm commitment" by that
date. A Section 235 mortgage will not be available after that
date. Since it is only necessary for FHA to receive a firm comm-
itment at this time, the closing will be scheduled after completion
of the rehabilitation work.
In order to meet the March deadline, the selection process
to determine a purchaser began on January 24, 1982. The selection
criteria required the applicants to:
-have a 5 to 8 member family to best utilize a four bed-
room home;
-have an income between $17,000 and $27,200 depending
upon family size (this is 80°s of the metro area wide
median income); `
HRA Letter No. 11 -2- March 15, 1982
-pay the sale price of $55,000, with $5,000 required
as a down payment;
-be subject to a second and third lien by the IiRA
and HUD, respectively. These liens are discussed in
detail later in this letter;
-be a first time home buyer.
Advertisements for qualified purchasers were published in
the Richfield Sun, Minneapolis Star and Tribune, St. Paul Dis-
patch and .the Twin Cities Courier. Richfield area churches,
libraries, and school counselors received copies of the ad and
were asked for assistance in finding local eligible families.
Southern suburb Section 8 rental complexes and other metropol-
itan area HRA's were also contacted.
Four applications were received and preliminarily evaluated.
Two of the applicants were qualified (one exceeded the required
income limits and one owned a mobile home). The two qualified
applicants were then ranked by a lottery held on February 10,
~n 1982. The six member McCune family, renting in Edina, was
K~c~l~°'=~-'~ ~``"'~~'`~drawn as the applicant who would first be evaluated for eligibil-
ity. The seven member Hanson family, renting in Richfield, was
drawn as the alternate and would be evaluated if the McCune's
were found to be ineligible. The McCune's are currently being
evaluated by Northwestern Bank and appear to be eligible for an
FHA 235 mortgage.
In order to receive the firm commitment by March 31, a pur-
chase agreement must be executed before the McCune family can be
determined eligible by FHA. The McCune's have executed a purchase
agreement, but it is "subject to authorization by the HRA and is
void and earnest money released in the event authorization is
not received."
The purchase agreement also explains the type of liens the
HRA and HUD are considering. Both the HRA and HUD intend to re-
cover program costs of the project. The initial $55,000 purchase
price is enough to cover the HRA's costs. After the $50,000
first lien mortgage to the lender and the $5,000 down payment,
the purchaser is responsible for paying an additional $10,000 to
the HRA. This amount is the difference between the $55,000 sales
price and the $65,000 FHA estimated value of the property. Since
this amount is not needed to cover project costs, it would not
have to be paid by the purchaser until, and if, the house was
sold at some future time. The $10,000 would not accure interest
during this period. With a third lien, the purchaser is responsi-
ble to HUD for approximately $125,000 of mortgage subsidy over
a 30-year period, or 50 percent of the equity appreciation in
the house, whichever is less. Like the IiRA's second lien, the
third lien takes effect when the property is sold by the purchaser.
It is not known at this time if the applicant is definately
the qualified purchaser. The FHA can make that determination
HRA Letter No. 11 -3- March 15, 1982
once a loan package and purchase agreement are received. How-
ever, because the lender has found them acceptable, FHA will
probably find them acceptable also.
It is recommended that the HRA adopt the attached resolu-
tion authorizing the disposition of property at 6413 22nd Avenue
and the execution of a purchase agreement by the Executive
Director.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/eja
cc: Community Development Director
Housing and Redevelopment Coordinator
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING SALE OF PROPERTY
AT 6413 22ND AVENUE SOUTH
WHEREAS, the Housing and Redevelopment Authority of
Richfield, Minnesota, (hereinafter referred to as the HRA)
owns certain real property located at 6413 22nd Avenue
South, said property legally described as follows:
Lot 13, Block 4
New Ford Town Addition
Hennepin County; 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 moderate income family
utilizing the FHA Section 235 program; and
WHEREAS, the Department of Housing and Urban Develop-
ment has required that a firm commitment be secured for
FHA Section 235 no later than March 31, 1982; and
WHEREAS, as the result of a lottery and in cooperation
with the lender, qualified purchasers for 6413 22nd Avenue
South have been assigned a position establishing eligibility
for purchase as follows:
John and Lauri McCune,
Terry and Noel Hanson; and
WHEREAS, a purchase agreement has been executed with
the first ranked family, John and Lauri McCune, to allow
FHA evaluation for an FHA Section 235 mortgage; and
WHEREAS, the conditions of sale include a sale price of
$55,000, a mortgage amount of $50,000, and provisions for
second and third mortgages by the HRA and the Department of
Housing and Urban Development (HUD) respectively; and
WHEREAS, if the McCune- family is found not to be qualified,
the alternate purcYiaser will be considered and qualified as
established above; and.
WHEREAS, the purchaser will also be subject to any require-
ments imposed by HUD or FHA; and
WHEREAS, the HRA has completed a public hearing on the
proposed disposition of 6413 22nd Avenue South.
NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING AND
REDEVELOPMENT AUTHORITY OF RICHFIELD, MINNESOTA:
1) that the property located at 6413 22nd Avenue South
can be sold in accordance with the conditions of sale;
2) that the Executive Director is authorized to execute
a purchase agreement; and
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 15th day of March, 1982.
Thomas E. Harms, Chairman
Michael Freeman, Secretary