12-16-19 HRA Complete AgendaR E G U L AR H O U S IN G AN D R E D E V E LO P ME N T AU T H O R IT Y MEET IN G
R IC H F IE L D MU N IC IPAL C EN TER, C O U N C IL C H AMB E R S
D E C E MB E R 16, 2019
7:00 P M
C all to Order
Approval of the Minutes
A pproval of the mi nutes of the: 1) C oncurrent HRA , C i ty C ouncil and P lanning C ommi ssi on Work S ession of
November 18, 2019; 2) Regular H R A meeting of November 18, 2019.
AG E N D A AP P R O VAL
1.A pproval of the A genda
O T H E R B U SIN E S S
2.C onsideration of a transfer of funds from the Housing and Redevelopment General F und to the Gramercy Tax
Increment F und and to the Interchange Tax Increment F und for administrative expenses.
S taff Report No. 41
H R A D IS C U S S IO N IT E MS
3.H R A D iscussion Items
E X E C U T IV E D IR EC TO R R E P O R T
4.E xecutive D i rector's Report
C L AIMS
5.C laims
6.A djournment
Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96
hours in advance to the C ity Clerk at 612-861-9738.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Concurrent Housing and Redevelopment
Authority, City Council and Planning
Commission Work Session
November 18, 2019
CALL TO ORDER
The work session was called to order by Chair Supple at 5:45 p.m. in the Bartholomew Room.
HRA Members Mary Supple, Chair; Erin Vrieze Daniels; Pat Elliott; Maria Regan
Present: Gonzalez; and Sue Sandahl.
Council Members Maria Regan Gonzalez, Mayor; Edwina Garcia; Mary Supple; Simon
Present: Trautmann; and Ben Whalen.
Planning Commission Allysen Hoberg, Chair; James Rudolph; Kathryn Quam; Sean Hayford Oleary;
Members Present: Peter Lavin; Bryan Pynn and Susan Rosenberg.
Staff Present: Katie Rodriguez, City Manager; John Stark, Director of Community
Development/HRA Executive Director; Julie Urban, Housing Manager; and
LaTonia DuBois, Administrative Assistant.
Others Present: Representatives from the Locus Architects, NHH Properties, Boisclair
Corporation development team and Representatives from Broadway Investors
Item #1
CONSIDERATION OF TWO POTENTIAL DEVELOPMENT PROPOSALS FOR 6501
PENN AVENUE SOUTH.
Julie Urban, Housing Manager, gave background on this site, a brief recap of the work session
in September and outlined the direction needed from policy makers and some key talking points.
Housing Manager Urban also mentioned an evaluation form for policy makers to complete to help with
guidance.
Housing Manager Urban introduced development team Locus, NHH and Boisclair. The Locus,
NHH and Boisclair, the development team presented their vision focused on people, place and
possibility. They expressed their desire to focus on affordability and equity using a 3 phase approach
to the development, focused on future development and the need to be inclusive. Phase A; increases
commercial potential, dwelling unit count up to six stories. Phase B; creates an L shape plan to
include townhomes, about 10 units, with a large green space in the center. Phase C; expands to the
South offering more commercial on ground floor and bringing more street activity to Penn Avenue.
Concurrent City Council, HRA and Planning
Commission Work Session -2- November 18, 2019
The Locus, NHH and Boisclair development team presented the intent to offer a variety of
subsidy depending on financing, they intend to submit application to the Minnesota Housing
requesting either a 9 or 4 percent tax credit, proposing income averaging of 30 – 80 % AMI also
proposing S811 units, project based rental assistance administered from Minnesota Housing, with
referrals coming from the Department of Human Services. They explained the accessibility of the
proposed development, including units for hearing and vision impaired and full accessibility.
Chair Supple read questions submitted by Disability Advocates, to which the development
team responded they would be all inclusive and accessibility would be available to the outside
sidewalk without using the parking lot.
The development team offered more ideas pertaining to commercial space and open/green
space to feed the residents and the neighborhood.
Planning Commissioner Hayford Oleary inquired about Phase B; and how much the three
properties are worth versus how much would be required to develop the 10 townhomes and about
moving on with Phase A with the assumption that Phase B would work and why they chose
townhomes opposed to apartments.
The development team agreed that Commissioner Hayford Oleary’s assumption was correct
and the land cost would be high, but that they plan to work with different programs through Met
Council and the state to make the figures work. Mentioned that site plans change throughout the
development process and this is step one.
Council Member Whalen inquired about the competition to receive funding and how the project
and affordability would change without the funding.
The development team explained that they are affordable housing developers and they would
keep working to get the funding and they have the experience to score high.
Planning Commissioner Lavin was discouraged by language being used regarding the time
line and uncertainty about the townhomes and concerns for partial development.
The development team explained the time line is part of the affordability process. Spoke of a
HUD pilot program that allows faster underwriting time.
Chair Supple called on the next development team, Broadway Investors.
Broadway Investors presented three different options. First Option; A being a Mixed Use 5
story building located on the current Bumper to Bumper site. Second Option; B would be a Mixed Use
building that scrolls over to the East and covers the three residential parcels to the East. Option; C
incorporating the first two options as well as the property to the South with a Mixed Use Commercial
building lower level units and 4000 square feet of restaurant, co-working office space and a tap
house. Levels 2-5 will consist of approximately 160 apartment units with affordability being 20% of
units at 50% AMI, explained parking options, green space. Plans to use relationship built with Fraser
for accessibility, current plan offers 3-4 ground level accessible units. Broadway Investors explained
overall design features and vision with an innovative and active space providing walkability,
accessibility and rooftop decks.
Planning Commissioner Lavin inquired about excess parking due to popularity of a tap room.
Broadway Investors explained the current plan falls in line with parking requirements.
HRA Commissioner Vrieze Daniels inquired about mix of unit size and the green wall.
Concurrent City Council, HRA and Planning
Commission Work Session -3- November 18, 2019
Broadway Investors explained the units would be a mix of 1 bedroom, 2 bedrooms, 1.5
bedroom and studio apartments and they are looking into plants that can withstand cold Minnesota
winters for the green wall.
Planning Commissioner Lavin inquired about acquiring the lots to the East.
Broadway Investors spoke of already having a contract with one of the single family home and
are still under negations with others.
Chair Supple asked Broadway Investors to define what they mean by fully accessible.
Zero step into units as well as bathrooms, roll under cooktops, etc. and roll in showers. People
would be able to get into the building without accessing the parking lot.
Planning Commissioner Hayford Oleary asked for clarification on eastern parking and green
wall and expressed dislike about blank wall on surface lot facing Oliver.
Director Stark went over staff thoughts and offered explanation.
ADJOURNMENT
The work session was adjourned by unanimous consent at 6:55 p.m.
Date Approved: December 16, 2019
Mary B. Supple
HRA Chair
LaTonia DuBois John Stark
Administrative Assistant Executive Director
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
November 18, 2019
CALL TO ORDER
The meeting was called to order by Chair Supple at 7:00 p.m. in the Council Chambers.
HRA Members Mary Supple, Chair; Pat Elliott; Maria Regan Gonzalez; Sue Sandahl; and
Present: Erin Vrieze Daniels.
HRA Members None
Absent:
Staff Present: John Stark, Executive Director; Myrt Link, Community Development
Accountant; and LaTonia DuBois, Administrative Assistant.
APPROVAL OF THE MINUTES
M/Sandahl, S/Vrieze Daniels to approve the Regular Housing and Redevelopment Authority
meeting of October 21, 2019.
Motion carried 5-0.
Item #1
APPROVAL OF THE AGENDA
M/Elliott, S/Sandahl to approve the agenda.
Motion carried 5-0.
Item #2
CONSIDERATION OF THE CONSENT CALENDAR
Executive Director Stark presented the Consent Calendar:
A. Consideration of the transfer in the amount of $39,309 of Non-Tax Increment Funds
from the City Bella Tax Increment Financing District to the Richfield Housing and
Redevelopment’s Development fund. (S.R. No. 38)
Commissioner Elliott asked for clarification of what funds could be used for. Director Stark
explained.
HRA Meeting Minutes -2- November 18, 2019
M/Vrieze Daniels, S/Sandahl to approve the consent calendar.
Motion Carried 5-0.
Item #3
CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM CONSENT CALENDAR
None.
Item #4
CONSIDERATION OF A RESOLUTION DECERTIFYING THE GRAMERCY TAX
INCREMENT FINANCING DISTRICT. (S.R. NO. 39)
Community Development Account Link presented staff report No. 39.
M/Regan Gonzalez, S/Sandahl to adopt a resolution decertifying the Gramercy Tax
Increment Financing District.
Motion Carried 5-0
Item #5
CONSIDERATION OF A RESOLUTION DECERTIFYING THE INTERCHANGE TAX
INCREMENT FINANCING DISTRICT. (S.R. NO. 40)
Community Development Account Link presented staff report No. 40.
Commissioner Sandahl spoke of the benefits of decertifying Tax Increment Financing
Districts early. Director Stark praised past management, policy makers and staff.
M/Sandahl, S/Vrieze Daniels to adopt a resolution decertifying the Interchange Tax
Increment Financing District.
Motion Carried 5-0.
Item #6
HRA DISCUSSION ITEMS
None.
Item #7
EXECUTIVE DIRECTOR REPORT
Executive Director Stark shared updates regarding the Emerson Lane proposal and the
next steps involved.
HRA Meeting Minutes -3- November 18, 2019
Item #8
CLAIMS
M/Supple, S/Elliot that the following claims be approved:
U.S. BANK 07/15/2019
Section 8 Checks: 131195 – 131272 $158,037.64
HRA Checks: 33746 - 33761 $37,096.61
TOTAL $195,134.25
Motion carried 5-0.
Item #8
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:15 p.m.
Date Approved: December 16, 2019
Mary B. Supple
HRA Chair
LaTonia DuBois John Stark
Administrative Assistant Executive Director
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #2.
STAFF RE P ORT NO. 41
HOUSING AND REDE V E LOP MENT AUT HORIT Y
ME E T ING
12/16/2019
RE P O RT P RE PA RE D B Y: J ohn S tark, HRA E xeutive D irector & Myrt L i nk, C ommunity D evelopment
A ccountant
O TH E R D E PA RTM E NT
RE V IE W:
E X E C U TIV E D IRE C TO R
RE V IE W: J ohn S tark, E xecutive D irector
12/10/2019
I T E M F O R C O UNC I L C O NS I D E RAT IO N:
Consideration of a transfer of funds from the H ousing and Redevelopment G eneral Fund to the
G ramercy Tax Increment Fund and to the Interchange Tax Increment Fund for administrative
expenses.
E X E C UT IV E S UM M ARY:
At the November 16, 2019 meeting, the Housing and Redevelopment Authority (HRA ) authorized the
decertification of the Gramerc y and I nterchange Tax I ncrement Financing D istricts.
As with every prior TI F (Tax I nc rement Financing) Distric t dec ertification, a thorough final financ ial review
was c onducted on these funds. Among the findings of this review is that the administrative expenses incurred
for these Distric ts exc eeds the c umulative 10% statutory limits. The excess in the Gramerc y TI F District is
$17,888 and the excess in the I nterchange TI F Distric t is $46,528.
As a result, the HRA will need to transfer funds in from another source. Administrative expenses c onsist
mainly of staff time, legal costs and financial consultant costs. There are funds available in the HRA General
Fund to make the needed transfers (the current balanc e of this fund is $1.2 million).
The c ause of this financial situation is the the fac t that the external financial obligations of these TI F Districts
have been met prior to the conc lusion of the term of each of the Districts. As a result, the HRA is obligated to
decertify the D istricts early. Administrative expenses are disproportionately borne in the early y ears of a TI F
Distric t. Due to the early decertific ations, however, there will be several years worth of TI F that will have
been foregone resulting in a lack of a funding sourc e to pay the outstanding administrative costs. I n the case
of the Gramerc y Distric t, 10% of the annual inc rement has been approximately $42,700 during the past three
years and for the I nterc hange Distric t, the 10% has been approximately $16,700 annually during this period.
I f the HRA would have been able to keep the districts func tioning for their full term, all of the administrative
expenses would have been paid.
I n addition, the Gramerc y Distric t has also reac hed the 15% statutory pooling maximum and will be returning
$121,911 to Hennepin County in Exc ess I ncrement. This amount will be redistributed among the taxing
jurisdic tions and approximately one-third ($40,637) will be returned to the City of Ric hfield.
The I nterchange D istrict does have approximately $337,762 still available that could be used for pooling.
W hen this District was established, the HRA did not foresee pooling TI F for the Distric t. Staff will be working
with our financ ial analy sts (Ehlers) and HRA legal counsel to determine if the use of these pooled funds for
eligible costs within the City of Richfield would be valid or if these funds would need to be returned to
Hennepin County for redistribution.
RE C O M M E ND E D AC T IO N:
By Motion:
1. Approve the transfer of $17,888 from the H R A G eneral Fund to the Gr amercy Tax Increment
Financing D istrict.
2. Approv e the transfe r of $46,528 from the HR A Ge ne ral Fund to the I nte rchange Tax
Increme nt Financing District.
B AS IS O F RE C O M M E ND AT IO N:
A.H IS TOR IC AL C ON TEXT
The Gramerc y Tax I ncrement District was established in April 1999 and was to be dec ertified in 2025,
but was ac tually decertified 6 years early because all of the obligations were met. Because our
administrative expenses are cumulative and anticipated to be spread out over a 25 y ear period they were
over the 10% statutory maximum in 2018, therefore needing additional funding.
The I nterc hange Tax I ncrement District was established in April 1997 and was decertified in November
2019. The maximum statutory decertifiac ation date was 2023 so it was dec ertified 4 y ears early
bec ause all of the obligations were met. Because our administrative expenses are c umulative and
anticipated to be spread out over a 25 year period they were over the 10% statutory maximim in 2018,
therefore needing additional funding. Also adding to this shortage, is in 2016 we had to pay Hennepin
County back $330,676 for an over settlement due to a tax court ordered adjustment on a parcel in the tax
increment district. All inc rement received since this time has gone to pay bac k this amount, none has
gone to pay administrative expenses.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
All transfers must be approved by the HRA Board.
C.C R IT IC AL T IMIN G ISSU E S:
These transfers must be approved/made before y ear-end.
D.F IN AN C IAL IMPAC T:
The HRA General Fund has funds available to transfer.
Hennepin C ounty will return approximately $40,637 to the City of Ric hfield, whic h is the City's
share of returned increment. The City c ould opt to give this to the HRA which would reduce the
impac t of these transfers to the HRA.
E.L E GAL C ON S ID E R AT ION :
None
ALT E R N AT IV E R E C O MME N D AT IO N(S):
Do not approve the transfer of funds.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G:
None