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06-16-80 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 22 Agenda June 16, 1980 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: Urban Design Elements, LHN Redevelopment Project At the June 16 HRA meeting, there will be a discussion of the design criteria which are being utilized in the LHN. Slides will be utilized to illustrate the design concepts, as they have been applied to various buildings in the LHN area. Please bring your copy of the Urban Design Elements booklet to the meeting. Respectfully submitted, ~~ ~o Karl Nollenberg r Executive Director KN/jf cc: Community Development Director City Council Members HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 21 Agenda June 16, 1980 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners: Subject: Adoption of Resolution, LHN Redevelopment Project, Rehabilitation of Lvndale Hardware Property In March, 1979, the Richfield HRA and City Council adopted a modification to the redevelopment plan establishing rehabilitation as the desired treatment for the commercial property south of 66th Street and west of Lyndale Avenue. The Lyndale Hardware Store is within this area. Mr. John Seiff, representing the corporation which owns the Lyndale Hardware Store building expressed an interest in purchasing the property in the fall of 1979. For several months, negotiations involving the HRA, the Bards, Mr. Seiff, and his attorney have been underway. More recently, the negotiations have been between Mr, Seiff and the Bards. To encourage the negotiations between the two parties to a successful completion, a resolution will be presented to the HRA at the June 16, 1980 HRA meeting. The resolution will provide the operty. The HRA would then pursue rehabilitation with a third party. With the adoption will also be requested tions between the part of this resolution by the HRA, the city council to take some actions to f acilitate neaotia- HRA Letter No. 21 -2- June 16, 1980 r financing places no financial obligation upon the city, but provides funds at below market interest rates. The cost of purchasing the prop- erty and rehabilitating it are eligible expenses under the Act. On June 23, 1980, the city council will be requested to set a date for a public hearing to consider such financing. given this proposal, an agreement would of Richfield and Mr. Seiff. In addition schedule for the mortgage, the agreement rehabilitation requirements for the could be the exterior facade and rear ,1r~ al~c~ include provisions for the sale city for the Lyndale Avenue and 66th Street im- An easement adjacent to each street is necessary. Respectfully submitted, Karl Nollenberger Executive Director KN/jf cc: Community Development Director City Council Members It is recommended that the HRA adopt the resolution providing for the rehabilitation of the Lyndale Hardware property. This resolution will be provided by the HRA attorney on Monday evening. RESOLUTION RELATING TO REDEVELOPMENT OF LYNDALE HAP,DWARE SITE WHEREAS, the plans and programs of the Housing and Redevelopment Authority of Richfield, rMinnesota include the redevelopment and upgrading of the Lyndale-Hub- Nicollet Redevelopment Area ("LHN Area"), and WHEREAS, the Lyndale Hardware store site (the "Site") is located within the LHN Area, such Site being legally described as Lots 1, 2 and 11 through 17 inclusive, all in Block 1 Fairwood Shores Addition, and WHEREAS, it appears necessary and desirable to redevelop the Site in accordance with the redevelopment standards and guidelines for the LHN Area, and WHEREAS, the owners* of the Site have not heretofore indicated a willingness to develop or .redevelop the Site in accordance with the plans and programs applicable to the LFiN Area, and WHEREAS, the plans and programs for the LHN Area cannot be fully achieved and realized without the redevelopment of the Site, NOW THEREFORE, BE IT RESOLVED by the Housing and Redevel- opment Authority of Richfield, Minnesota as follows: 1. The owners of the Site shall be and they are hereby requested and directed to take immediate steps to redevelop the Site in accordance with the plans, programs and guidelines applicable to the LHN Area. 2. In the event that the owners of the Site are unable or unwilling to take such action, they are hereby requested and directed to sell and transfer the Site to some other party who will promptly take mea- sures to redevelop the Site in accordance with such plans, programs and guidelines. 3. In the event that the owners of the Site have failed to take action under the foregoing Para- graphs 1 and 2 within 90 days of the date hereof, the -2- executive director of this Authority is hereby authorized and directed to institute eminent domain proceedings for the acquisition of the Site for the purposes of accomplish- ing the redevelopment of the Site in accordance with the plans, programs and guidelines app]_icable to the LHN Area. * The owners of record of the Site are: Helen A. Bard, Roslyn Tarshish, Sara Jean Rotstein, Ernest Goldblatt (now deceased), Stephen A. Bard and Richard Goldblatt, co-executors; (n/5) Sara Rotstein, Sam I. Pichey and Irving Pichey, also known as Israel Chaim Pichey; (1/5) HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 20 Agenda June 16, 1980 Housing and Redevelopment Authority Commissioners City of Richfield ~ ~~ Commissioners: Subject: Status Report on LHN Redevelopment Project Development Proposals There are a number of development proposals at different stages of implementation within the LHN. At the HRA meeting of June 16, 1980, there will be a discussion of each of the proposals and their status. Projects to be discussed will include: - Summit Bank and Richfield Medical Group - The Hub Center - Lyndale Garden Center - Lyndale Hardware - The Godfather Block - Knutson Proposal - Richfield State Agency--Richfield Bank & Trust - Coach Homes of Richfield Lake Please bring to the meeting the L/H/N and CP705 reports that were discussed in April. Respectfully submitted, ! `~ l ~l ~~ Karl Nollenber er Executive Director KN/jf cc: Community Development Director City Council Members ^ HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 19 Agenda June 16, 1980 Housing and Redevelopment Authority Commissioners City of Richfield Commissioners Subject: Voluntary Acquisition Program New regulations formulated by the Department of Housing and Urban Development make it possible for the HRA, under certain conditions, to purchase property without following the previously established pro- cedures required by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Uniform Act). Under these regula- tions, it would be possible for the HRA to purchase property in Rich- field outside of the LHN Project, utilizing CDBG monies, and to forgo the payment of relocation claims to the property owner. Attached to this letter is a program proposal which, if adopted, would permit the HRA staff to implement these new regulations in conjunction with our CDBG bonus grant application and subsequent property purchases. To fully appreciate the new regulations, it may be beneficial to review the procedures currently mandated by the Uniform Act. The Uniform Act of 1970, also known as Public Law 91-646, was approved on January 2, 1971. (The word uniform is a misnomer as there are thirteen. federal agencies which nave developed their own interpretations of the Act.) The significant procedural requirements and benefits follow: Acquisition Process 1. The HRA determines it is interested in acquiring a property. 2. The property owner is sent a preliminary notice, indicating the HRA's interest in purchasing the property, along with an explanation of the procedures to be followed (discussions with the property owner would have already preceded the letter). 3. An appraisal is ordered. At least one appraisal by a pro- fessional appraiser is required. If the property has a high value or presents a complex appraisal problem two appraisals are recommended. The property owner must be offered an opportunity, in writing, to accompany the ap- praiser. The appraisals must result in a fully documented appraisal report. The firm of O. J. Janski and Associates has been the HRA's appraisal firm. They are highly regarded and, when necessary, present testimony in court very capably. HRA Letter No. 19 -2- June 16, 1980 4. A professional review appraiser must review the appraisals and determine the f air market value of the property. (Mr. Donald Hennessy, a member of the National As- sociation of Review Appraisers, is our review appraiser. He has ten years' of appraisal experience and functions in this capacity for other HRAs as well.) 5. Just.Compensation is'"then established by the HRA governing body. Just Compensation establishes. the fair market value . set by the review appraiser. 6. The formal written offer to purchase the property is made to the owner. The offer must be.the amount of Just Com- pensation, and the offering letter must also explain the appraisal process which resulted in establishment of that value. 7. Negotiations to purchase follow the offer. There is limited flexibility in settling with an owner at a value above Just Compensation. However, an owner may hire his own appraiser and obtain an appraisal report. Up to $300 of the cost of such an owner requested appraisal is reimbursable by the HRA. The owners report is reviewed by the review appraiser and may result in a recommendation to adjust Just Compen- sation higher. 8,~. If negotiations are successful, a purchase agreement is executed and a closing scheduled. If agreement on a value is not possible, the proposed purchase would either be dropped or the HRA board may initiate eminent domain pro- ceedings. Relocation Benefits The information presented here will relate only to the types of assistance provided by the HRA and not to the details of the complete process. Relocation assistance is of two types: providing referrals for dwellings to which the relocatee may move, and financial payments of various types. Outside of the LHN project area, the HRA has until recently purchased vacant lots or property with vacant structures on it, where relocation services were not needed. However, vacant structures in Richfield have been virtually eliminated, and most of the remaining substandard property in the city is occupied. The five properties purchased with HUD bonus grant funds in 1979, were the first occupied properties purchased. Mr. Jack Bagley and Mr. Tom Donahue have been utilized to provide the required reloca- tion assistance. They provided the referral service and prepared claim documents for financial assistance and submitted them to the HRA. Mr. Bagley and NIr. Donahue are the principals of Federal-State Relocation Consulting Services, Inc. The services of the firm were retained by the HRA in 1977, to provide relocation services within the LHN project area. ~'a~:~r ... ... HRA Letter No. 19 -3- June 16, 1980 Relocation benefits can include the following: Residential Owner-occupants - Costs for moving personal property up to fifty miles are paid. Payment is based on a fixed schedule re- flecting the number of furnished rooms with a maximum of $500 of the actual expenses incurred utilizing a professional mover selected from competitive bids. - Replacement Housing Payment of up to $15,000. This compensation is based on three elements: o An allowance to compensate for the dif- ference in the amount paid for the ac- quired property; and the cost of a com- parable dwelling which is "decent, safe and sanitary'' ; o A payment to cover the interest differen- tial which would probably exist between the mortgage on the acquired property and the replacement dwelling; e Reimbursement for incidental expenses in- curred on the closing for the replacement dwelling. With the cost of housing increasing dramatically, the re- locateeis usually eligible for the maximum amount. - Rental supplemental Payment of up to $4,000 is available if an owner chooses to rent a replacement unit. A rental value is computed for the acquired dwelling and the dif- ference between that rent amount and the rent subsequently paid. The difference is paid up to $4,000 for a four year period. Tenants - Moving benefits are the same as for owners. - Rental Supplement Payment not to exceed $4,000 is avail- able to cover the difference between the rent at the acquired dwelling and the replacement dwelling. ~;.; ,\.;,.,,,. - Downpayment Assistance up to $4,000. The eligible ten- ant receives $2,000 automatically. The second $2,000 is available on a dollar for dollar matching basis. Rental Property Owner - Rental property is regarded as a business. Thus, the owner of a rental property may be eligible for a business HRA Letter No. 19 -4- June 16, 1980 relocation payment known as a fixed payment in lieu of a payment for actual moving and related expenses. This payment between $2,500 and $10,000 is an amount equal to the average annual net earnings of the business. Eligi- bility is based on three tests: • The business cannot be relocated without a substantial loss of existing patronage; ~ The business is not part of a commercial system with other establishments of a similar nature; ® The business had average annual gross receipts of at least $2,000 during the two taxable years prior to displacement or average annual net earnings of less than $1,000 during the previous two taxable years. Last Resort Replacement Housing Relocatees must be relocated to affordable decent, safe and sani- tary housing. The relocatees determine if they want to rent or buy such housing. If the benefits outlined above are not sufficient to provide such housing, within a reasonable period of time, it may be necessary to provide additional monies above the amount indicated. In the fall of 1979, the HRA made a payment under the program because the regular relocation benefits were not adequate to provide affordable decent, safe and sanitary housing. While the Uniform Act of 1970, has required the above-mentioned procedures and payments, the new regulations eliminate many steps in the acquisition process and eliminate the need to make relocation pay- ments to owners. Considerations in formulating an acquisition program under these regulations are as follows: - The offer to sell property to the HRA must be the result of a community wide public solicitation for offers. The HRA cannot identify specific properties and approach the owners regarding a sale. Nor can the properties be part of a site planned for public purchase in the forseeable future. - Owner-occupants and absentee owners of rental property can be required to forgo relocation benefits. Tenants must be provided with full benefits. - Appraisals are not required. However, in spending public money there must be a procedure to estimate the value of property to justify the purchase price. Owners also have a right to expect to be treated fairly and equitably. HRA Letter No. 19 -5- June 16, 1980 - An owner may donate all or part of the value of the property. However, in this instance, appraisals must be made, Just Compensation established and the owner informed of that value. With the above information as background, the staff has prepared a proposal for a voluntary acquisition program, a copy of which is attached to this letter. If you approve the program, it will be sub- mitted to HUD immediately for their review and approval. It will be implemented in conjunction with the bonus grant application, if ap- proved, or with properties purchased utilizing regular CDBG funds available to the HRA. It is recommended that the HRA approve the suggested guidelines establishing a voluntary acquisition program. Res ectf/ully submitted, JV o Karl Nollenberger Executive Director KN/jf cc: Community Development Director City Attorney City Council Members 6/16/80 Voluntary Acquisition Program Guidelines The objectives of the program are to: 1. Eliminate the blighting influence of substandard housing, thus improving residential neighborhoods. 2'. Increase the supply of available standard housing in the City through new construction and substan- tial rehabilitation. 3. Alleviate the shortage of standard housing for low and moderate income families. These objectives will be achieved through acquisition of improved property or vacant lots. The following guidelines will be used in purchasing homes and vacant lots under the Voluntary Acquisition Program. I. Purchase Procedures 1. Property will be purchased on a "Solicitation of Sale" method of advertising in accordance with HUD regulations. 2. Sale to the HRA must be on a voluntary basis as defined by HUD regulations. 3. Owner must be willing to sign relocation waiver, which will be attached to the purchase offer. Tenants, however, are entitled to receive benefits as perscribed by HUD regulations. 4. An appraisal shall be made by the HRA to determine fair market value. 5. The HRA Board shall authorize negotiations after con- sidering staff recommendations. 6. Property can be purchased for less than fair market value, but the owner must receive a written statement of value of property. Owner must state in writing he will sell for less than market value. 7. HUD must review and approve the program. The approval will be for one year. To implement a second year, HUD will review and evaluate program performance. .~ II. Property Selection Criteria Property will be inspected, evaluated and recommended for purchase if it meets criteria #l, a or b or c or d; and #2 or #3. 1. The property is: a. ~substandard~as to condition, size or usage. b. obsolete and of faulty design for the block and area in which it is located. c. a deteriorating factor which has caused blight to other adjoining properties. d. detrimental to the safety or health of abutting properties in the block. 2. The parcel could become a marketable lot which could provide a site for new housing or substantially rehab- ilitated housing. 3. Property which has been voluntarily proposed for purchase by the owner which in the judgment of the HRA would help alleviate the shortage of housing for low and moderate income families if acquired.