08-11-80 agenda
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HOUSING AND REDEVELOPMENT AUTHORITY
Off ice of Executive Director
HRA Letter No.~
Agenda August 11, 1980
Housing and Redevelopment
Authority Commissioners
City of Richf field
Dear Commissioners:
Subject: Possible Amendment to HRA By-laws
For Meeting Times
I am enclosing with this HRA letter a council letter dis-
cussing the city council's desire to meet-with boards and
commissions on a periodic basis in order to discuss activities
of those bodies.
There will be discussion at the joint HRA/City Council
meeting on August 11, 1980 concerning this matter. Depending
upon the outcome of the discussion, the HRA may desire to move
their meeting time from 7:00 p.m. to 7:30 p.m. This can be
done by a simple amendment to the by-laws of the HRA which can
go into effect as early as the September 15, 1980 HRA meeting.
Respectfully submitted,
Karl Nollenberger
City Manager
KN/eja
cc: City Council
Director Administrative Services
Director Community Development
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HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 29
Agenda August 11, 1980
Housing and Redevelopment
Authority Commissioners
City of Richfield
Commissioners:
Subject: Establishment of Just Compensation and Authorization
to Purchase Property in the L/H/N Area
In March of 1979, the City Council and HRA identified the "God-
father Block" for acquisition and redevelopment. The HRA owns no
property in the area. However, on March 24, the HRA authorized nego-
tiations to purchase 738 West 66th Street. As of this time, the HRA
and the owner have not been able to agree on a purchase price and
negotiations are stalled.
The Phillips Petroleum property at 744 West 66th Street has been
vacant for several years. It is approximately 52,000 square feet in
size and comprises approximately 22 percent of the block. A repre-
sentative of the owner has recently indicated their willingness to
sell the property to the HRA. ,Their asking price is $250,000.
It would be desirable to purchase this property at this time.
It is vacant and does not necessitate the payment. of relocation bene-
fits. Owners of fast food type businesses have expressed interest in
this property. If such a development took place, it would be consid-
erably more difficult to formulate a financially feasible redevelopment
package for the block, because the location and size of the site give
it a strategic position in the block.
The property represented a complex appraisal problem. There is
excess land in that the site is considerably larger than needed to
support a service station. Secondly, the site was originally of a
low elevation and has been filled. The soil has not been properly
consolidated. Valuations were requested from a professional fee ap-
praiser, O.J. Janski and Associates, Inc. ($210,600), Vern Anderson,
City Assessor, ($200,000) and a review appraiser. Our review ap-
praiser examined the valuations of b1r. Janski and Mr. Anderson and
consulted with a Civil Engineer regarding the soil conditions. He
concluded that if the site were to be purchased for clearance and
redevelopment its value would be $217,000.
' ~ HRA Letter No. 29 -2- August 11, 1980
To purchase the property, it is recommended that the HRA borrow
monies from the HRA's Tax Increment Fund for a period of three years.
The peculiar nature of this property will make it diffidult to pro-
duce substantial rental income. The annual 5 percent interest on the
loan would approximate $10,850.. Taxes would approximate $8,800 per
annum. This operating loss would be covered by other LHN project
funds.
It is recommended that the HRA adopt the attached resolution,
establishing just compensation at $217,000 and authorizing the staff
to negotiate the purchase of this property as well as authorizing
execution of a loan agreement between the HRA,Godfather block project
and the Tax Increment Fund.
Respectfully submitted,
Karl Nollenberger
Executive Director
KN/jf
cc: Community Development Director
Administrative Services Director
Housing and Redevelopmentâ˘Director
Finance Coordinator
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(744 West 66th Street)
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE
EXECUTION OF A CONTRACT TO
BORROW MONEY FROM THE L/H/N TAX
INCREMENT SPECIAL REVENUE FUND FOR
THE PURCHASE OF REAL PROPERTY
WHEREAS, 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 heretofore adopted by the City of
Richfield (the "City") and the HRA, said real property being
described as follows: That part of government Lot 2 lying East
of Graham Avenue, North of West 66th Street, and South of West
65th Street as opened, Section 28 Township 28, Range 24, Hennepin
County, Minnesota (744 West 66th Street) and,
WHEREAS, the HRA has caused appraisals of the subject
property to be made and has carefully considered such appraisals,
and,
WHEREAS, funds to provide for the purchase of this property
are available in the Tax Increment Special Revenue Fund,
NOW, THEREFORE, BE IT RESOLVED BY THE RICHFIELD HOUSING
AND REDEVELOPMENT AUTHORITY:
1. That $217,000 is determined to be just compensation
for the subject real property.
2. That the monies for the purchase of this property
are to be borrowed from the L/H/N Tax Increment Special Revenue
Fund for a period of three years at a rate of 5 percent per
annum.
3. That the Chairman and the Executive Director be, and
hereby are authorized to execute, as agents of the Richfield
Housing and Redevelopment Authority, an agreement (entitled
'Loan Agreement') a copy of which is hereby given Clerk's File
No. and is ordered placed on file.
4. That the Executive Director be, and hereby is directed
to present said agreement into the records of the HRA of the
City of Richfield for its recording.
5. That the Executive Director and the HRA's attorney are
authorized and directed to commence negotiations for the purchase
of the real property described above.
6. 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
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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. X42.135.
7. That the Chairman and Executive Director are authorized
to execute a purchase agreement for just compensation for the
purchase of said real estate.
8. That if the negotiations result in a proposal for the
purchase of said real estate greater than just compensation,
said proposal shall be presented to the HRA.
Passed by the Housing and Redevelopment Authority o.f
Richfield this day of August, 1980.
T omas arms C airman
ATTEST:
V. L. Luettinger Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
Office of Executive Director
HRA Letter No. 28
Agenda August 11, 1980
Housing and Redevelopment
Authority Commissioners
City of Richfield
Dear Commissioners:
Subject: Discussion of Concept for Development of
the Multi-Family Site, L/H/N Redevelop-
ment Project
The purpose of the joint City Council and HRA meeting scheduled
for August 11, 1980 is to hear a presentation for development of the
multi-family site in the vicinity of Graham Avenue south of 66th
Street, in the L/H/N redevelopment project area.
The Knutson Companies is proposing to construct a multi-unit
housing project on this site. The one and two bedroom units would
be owned on a cooperative basis by people 60 years of age and old-
er. The units would be constructed on the site identified for
purchase and redevelopment by the HRA. One additional property,
at 6615 Lake Shore Drive, would be included_ This property is al-
ready owned by the HRA. Within the site on Graham Avenue, there
are three residential properties still in private ownership.
Two different types of financing are being contemplated for
the development. The HRA would utilize tax increment financing and
the sale of bonds to provide funds for the site assembly. The in-
creased taxes from the new development would amortize the bonds.
Financing for construction of the cooperative housing units would
be through the sale of multi-family housing revenue bonds. The
city would authorize the sale of these bonds, which would enjoy a
below market interest rate, thus helping to keep the housing costs
low.
Before the concept can be pursued further, its marketability
must be tested. The willingness of people to buy into the coop
must be measured. This will be accomplished through a public
survey, advertising campaign, and preliminary reservation sales.
Because of the public nature of this activity, and the location of
the site within the L/H/N, an informational presentation to the
HRA and city council is appropriate. It will be necessary for
this proposal to be subjected to the normal review process, which
involves the Commercial Improvement Committee (CIC), the Resident-
ial Impact Neighborhood Group (RIrdG) and the planning commission,
as well as the HRA and the City Council.
HRA Letter No. 28 -2- August 11, 1980
The concept will be presented on Monday evening. Specific
issues such as identification of the non-profit sponsor, building
height, and monthly cost, will be dealt with later. The market
test will determine the number of one and two bedroom units which
could be marketed. When these numbers are known, the details of
the development can be fixed. However, at this time it seems
that there may be approximately 160 units in a building ten to
twelve stories high.
Representatives of several organizations have been invited to
the joint meeting on August 11. All the members of RING, CIC, and
the planning commission were invited by letter. Leaders of churches
and service and fraternal organizations also received letters of
invitation.
It is recommended that the HRA and City Council give their
endorsement to this housing concept, and authorize the developer
to proceed with a market test to fully establish the feasibility
of the proposal.
Respectfully submitted,
K ~
Karl Nollenberger
Executive Director
KN/eja