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03-16-2020 HRA Complete AgendaR E G U LAR H O U S IN G AN D R E D E V E LO P ME N T AU TH O R ITY ME E TIN G R IC H F IE L D MU N IC IPAL C E N TE R, C O U N C IL C H AMB E R S MAR C H 16, 2020 7:00 P M C all to Order Open F orum Approval of the Minutes A pproval of the minutes of the regular Housing an Redevelopment A uthority meeting of F ebruary 18, 2020. AG E N D A APPR O VAL 1.Consent Calendar contains several separate items which are acted upon by the H R A in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further H R A action on these items is necessary. However, any H R A Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for H R A discussion and action. All items listed on the Consent Calendar are recommended for approval. A .C onsideration of the adoption of a resolution approving a S ubordination A greement related to the C edar P oint II apartments. S taff Report No. 11 2.C onsideration of items, if any, removed from C onsent C alendar O T H E R B U S IN E S S 3.C onsideration of a resolution granting the E xecutive D irector authority to extend Housing and Redevelopment A uthority contracts and agreements in the event of an emergency. S taff Report No. 12 H R A D IS C U S S IO N ITE MS E X E C U T IV E D IR E C TO R R E P O R T C LAIMS 4.A djournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting February 18, 2020 CALL TO ORDER The meeting was called to order by Chair Supple at 7:01 p.m. in the Council Chambers. HRA Members Mary Supple, Chair; Maria Regan Gonzalez; Sue Sandahl; and Present: Pat Elliott. HRA Members Erin Vrieze Daniels Absent: Staff Present: Julie Urban, Acting Executive Director/Housing Manager; Melissa Poehlman, Assistant Community Development Director; Kate Aitchison, Housing/Communications Specialist; and LaTonia DuBois, Administrative Assistant. OPEN FORUM Commissioner Supple explained the Open Forum and invited members of the audience to speak. David Snyder spoke of the need for affordable and accessible housing and the need to seek out developers that share the vision of this need for the community; he also thanked the HRA for all of their work. James Jaffe spoke of his appreciation for the recent work session on affordable housing and looks forward to seeing how it translates into policies. Spoke of his appreciation for the consensus that moving forward the City Council and HRA will continue conversations about affordability, social justice and equity. APPROVAL OF THE MINUTES M/Regan Gonzalez, S/Sandahl to approve the minutes of: 1) Concurrent Housing and Redevelopment Authority and City Council Work Session of January 21, 2020; and 2) the Regular Housing and Redevelopment Authority meeting of January 21, 2020. Motion carried 4-0 HRA Meeting Minutes -2- February 18, 2020 Item #1 2019 HRA/EDA YEAR IN REVIEW Assistant Community Development Director, Melissa Poehlman; Acting Executive Director/Housing Manager, Julie Urban; and Housing/Communications Specialist Kate Aitchison presented the 2019 HRA/EDA Year in Review. Commissioner Sandahl commended staff on their great work. Commissioner Regan Gonzalez also complimented staff on their work and addressed community members and small business owners to inform them of the many things the HRA and staff are here to offer support for. Chair Supple also complimented staff on their work and mentioned the work done with People with Capes to address the needs assessment at Richfield Towers, their report and efforts to support residents. Commissioner Elliott also complimented staff and expressed appreciation for the information provided by staff to the HRA. Item #2 APPROVAL OF THE AGENDA M/Elliott, S/Sandahl to approve the agenda. Motion Carried 4-0 Item #3 CONSENT CALENDAR Acting Executive Director/Housing Manager Urban presented the consent calendar: A. Consideration of a Second Amendment to the Contract for Private Development for 6812 Emerson Lane. (S.R. No. 8) Commissioner Regan Gonzalez inquired about full cooperation with the property owners regarding a piece of property behind their homes. Acting Executive Director/Housing Manager Urban explained that all residents would have to be in agreement regarding the piece of property behind homes. Chair Supple explained where the strip of land is located. Commissioner Elliott suggested reaching out to property owners about purchasing the land. Acting Executive Director/Housing Manager explained the piece of property behind homes could be addressed at a later date. HRA Meeting Minutes -3- February 18, 2020 M/Regan Gonzalez, S/Elliott Motion Carried 4-0 Item #4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR None Item #5 CONSIDERATION OF A RESOLUTION APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE HRA AND ENCLAVE DEVELOPMENT, LLC FOR REDEVELOPMENT OF PROPERTY AT 65TH STREET AND LYNDALE AVENUE. (S.R. NO. 9) Assistant Community Development Director Poehlman presented Staff Report No. 9. Assistant Community Development Director Poehlman addressed questions received prior to the meeting and explained how the use of Tax Increment Financing (TIF) is determined to be used and explained what the next steps would be. Assistant Community Development Director Poehlman explained specifically the preliminary development agreement being considered means the HRA agrees the property is considered a mixed use site, that it is in agreement with what our Comprehensive Plan says and that the HRA is willing to study the project more and consider Tax Increment. Chair Supple brought up a question about TIF, how it is analyzed and how TIF affects other Taxing authorities such as the school district. Assistant Community Development Director Poehlman explained how TIF works and that the school district would not receive less funding if this project was approved for TIF. Chair Supple addressed the questions about how this project would affect low income housing, if any Naturally Occurring Affordable Housing (NOAH) would be removed for this project, the long term effect of the project if it does not offer affordable housing, and the possibility of displacement. Assistant Community Development Director Poehlman explained that she is not aware of any NOAH housing being removed, but that there is one single family home owned by the property owner, that would be a question for the property owner, and that it is a commercial development that no housing is currently located in the buildings. Commissioner Regan Gonzalez inquired about long term impact, our roll of providing TIF to developments and what the options to consider different types of proposals would be. Assistant Community Development Director Poehlman offered explanation of what the preliminary development agreement entailed. Commissioner Elliott inquired about interest from other developers for the property. HRA Meeting Minutes -4- February 18, 2020 Assistant Community Development Director Poehlman explained that there are developers interested in land in the area but no other developers have reached out to staff for this property specifically. Chair Supple mentioned concern about the small businesses currently located in the area and about any programs available for displacement or relocation. Assistant Community Development Director Poehlman explained the new Economic Development Authority (EDA) programs that were adopted last month to help small businesses, but the possibility of what a relocation program might look like is still being discussed among staff. Poehlman also explained that the property owner and developer have a worked out a purchase agreement that would not close on the property for a year and that would offer current business owners close to a year to find new space and there are current retail vacancies in the area. Chair Supple inquired about the timeline of the agreement and asked the developer about their plans to reach out to the current tenants and community. Austin Morris, Enclave Development addressed the HRA and explained the risk of the developer reaching out and using resources without a predevelopment agreement in place. Commissioner Sandahl clarified that the developer does not currently own the property and the developer would not be in a current position to reach out to the tenants. Property owner Bruce Hinks spoke of desire to sell the property and how often he is approached to sell the property and how he would like to work with the proposed development team. There was further discussion regarding the process of the preliminary development agreement and what the next steps will be, which portions will be brought to the Planning Commission, back to the HRA and to the City Council. M/Sandahl, S/Elliott to 1) approve a preliminary development agreement between the Housing and Redevelopment Authority and Enclave Development, LLC for development of properties of the northeast corner of 65th Street and Lyndale Avenue; and 2) authorize execution of the Agreement by the Housing and Redevelopment Authority Chair and Executive Director Motion Carried 4-0 Chair Supple explained to a member of the audience (a business owner at the property location, who spoke from the audience and did not sign in to provide his name and proper spelling) that by voting to allow the preliminary development agreement allows the developer to have discussion with current tenants. Commissioner Regan Gonzalez asked the property owner and developer to hold a public meeting regarding the development. Assistant Community Development Director Poehlman explained the neighborhood meeting is a part of the process after the preliminary development agreement is in place. Peter (owner of the Enchanted Rock Garden, did not sign in to provide proper spelling of last name) spoke of his desire to establish an opportunity to comment on the development and discussed his lease agreement. HRA Meeting Minutes -5- February 18, 2020 Item #6 CONSIDERATION OF HOUSING AFFORDABILITY CONCEPTS PROPOSED BY PENN INVESTMENTS, LLC FOR THE DEVELOPMENT OF 6501 PENN AVENUE SOUTH, AND 6500 AND 6504 OLIVER AVENUE SOUTH. (S.R. NO 10) Housing Manager Julie Urban presented Staff Report 10 and gave a brief explanation of both options. Commissioner Elliott inquired about why the Boisclair development team was chosen and expressed concerns with both options and recused himself. Housing Manager Urban explained the majority of feedback received from policy makers indicated the Boisclair development teams’ proposal was more desirable. Commissioner Sandahl expressed concerns with 100% affordability in a single building and spoke of accessibility options. Chair Supple spoke of needs for more affordable housing. Commissioner Regan Gonzalez expressed her support for Option 1 for more affordable housing and spoke of the overall need for maintain and creating more affordable housing. Commissioner Elliott suggested further educating the community on affordable housing. M/Regan Gonzalez, S/Supple to approve Option 1 of the two affordable options and direct Penn Investments, LLC to continue to explore the feasibility of option 1 for 6501 Penn Avenue South and 6500 and 6504 Oliver Avenue South. Motion Failed 2-2 Item #7 HRA DISCUSSION ITEMS The People with CAPES report on Richfield Towers was mentioned. Commissioner Sandahl spoke of the lack of support services. Housing Manager Urban gave history on the support services and informed that the support services position has been filled. Item #8 EXECUTIVE DIRECTOR REPORT None Item #9 CLAIMS HRA Meeting Minutes -6- February 18, 2020 M/Regan Gonzalez, S/Elliott that the following claims be approved: U.S. BANK 2/17/2020 Section 8 Checks 131432-131515 $162,722.04 HRA Checks 33798-33810 $66,097.85 Total $228,819.89 Motion carried 4-0 Item #10 ADJOURNMENT The meeting was adjourned by unanimous consent at 8:59 p.m. Date Approved: March 16, 2020 Mary B. Supple HRA Chair LaTonia DuBois John Stark Administrative Assistant Executive Director AGENDA SECTION:Consent Calendar AGENDA ITEM #1.A. STAFF RE P ORT NO. 11 HOUSING AND RE DEVELOPMENT AUT HORIT Y MEET ING 3/16/2020 RE P O RT P RE PA RE D B Y: J ulie Urban, Housing and Redevelopment Manager O THE R D E PA RTM E NT RE V IE W: E X E C UTIV E D IRE C TO R RE V IE W: J ohn S tark, E xecutive D irector 3/12/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consideration of the adoption of a resolution approving a Subordination Agreement related to the Cedar Point II apartments. E X E C UT IV E S UM M ARY: On September 17, 2018, the Housing and Redevelopment Authority (HRA) approved a contract for private development (Contract) with NHH Companies, L L C, now doing business as C P I I Development, LLC (Developer), to redevelop a portion of the Cedar Point I I redevelopment area (63rd to 65th Street and 16th Avenue to Richfield Parkway) with 218 market-rate apartment units. As part of the Contract, the HRA agreed to sell the HRA-owned property located along Richfield Parkway to the Developer. The Contract includes a Right of Reverter (Reverter) provision and Right of Purchase and Right of First Refusal Agreement (Agreement) to ensure that in the event of Default by the Developer, the HRA would have the right to regain title of the property. The Developer plans to close on a portion of its construction financing this month in order to acquire the property from the HRA and begin site work. The Lender is requesting a subordination of the Reverter and Agreement in order to close on the property acquisition and site work portion of the loan. Under the terms of the Contract, the Developer may request that the HRA subordinate the Agreement to the construction and/or permanent financing loan. RE C O M M E ND E D AC T I O N: By motion: Adopt a resolution approving a Subordination Agreement related to construction financing for the apartment component of the Cedar Point II redevelopment project, and granting the Housing and Redevelopment Authority Attorney approval of the final form of the subordination document. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T The HRA entered into a Contract to provide assistance to the apartment portion of the redevelopment project on September 17, 2018. The Developer is seeking acquisition and site work funds from its construction lender in order to acquire the HRA property for the development. The Lender is requiring that the HRA approve a subordination of the Reverter provided for in Section 9.4 and Right of Purchase and Right of First Refusal Agreement provided for in Section 9.9 of the Contract prior to issuing the loan. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): Under the terms of the Contract, the Developer may request that the HRA subordinate the Reverter and Agreement to the construction and/or permanent financing loan. C.C R IT IC AL T IMIN G IS S U E S: The Developer is anticipating closing on a portion of their construction financing and the HRA's property by March 31. Prior to making the loan, their Lender is requiring a Subordination Agreement from the HRA, subordinating the Reverter and Agreement to the construction loan. D.F IN AN C IAL IMPAC T: The Agreement and Reverter will be subordinate to the construction loan. I f the project were to default on the Contract, and the HRA had to employ the right to re-purchase the land, the land would revert to the HRA but be subject to the lien from the construction loan. E.L E GAL C ON S ID E R AT ION: The HRA retains its rights under the Contract. The HRA Attorney will approve the final form to be executed by the HRA Chair and Executive Director. ALTE R N AT IV E R E C O MME N D ATIO N(S): Deny the Subordination Agreement request. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: N/A AT TAC H ME N T S: D escription Type Resolution Resolution L etter C ontract for P rivate D evelopment B ackup Material HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION APPROVING SUBORDINATION OF CERTAIN RIGHTS RELATING TO CONTRACT FOR PRIVATE DEVELOPMENT WITH CPII DEVELOPMENT LLC WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) entered into a Contract for Private Development, dated September 17, 2018, with NHH Companies L.L.C., a Minnesota limited liability company (“NHH”), as assigned by NHH to CPII Development LLC, a Minnesota limited liability company (the “Developer”), pursuant to an Assignment of Contract for Private Development, dated January 15, 2019, was (the “Developer”), and as further amended by the First Amendment to Contract for Private Development, dated September 16, 2019 (collectively, the “Development Agreement”), between the Authority and the Developer, pursuant to which the Developer agreed to acquire certain real property (the “Development Property”) and construct thereon a development which will include (i) multifamily housing with approximately 218 units; (ii) a parking ramp with approximately 188 spaces; and (iii) necessary public infrastructure, including streets and utilities (the “Minimum Improvements”); and WHEREAS, the Developer is in the process of obtaining construction financing from Bridgewater Bank (collectively with any other lender providing a loan to the Developer, the “Lender”) for the Minimum Improvements; and WHEREAS, as a condition to providing the construction financing, the Lender will require that the Authority subordinate certain of its rights under the Development Agreement, including but not limited to the Authority’s right of reverter under Section 9.4 of the Development Agreement and the Authority’s right of purchase and right of first refusal under Section 9.9 of the Development Agreement, to the rights of the Lender under the construction loan financing documents (collectively, the “Loan Documents”); and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Authority’s rights under Sections 9.4 and 9.9 of the Development Agreement are hereby subordinated to the rights of the Lender under the Loan Documents. 2. The Chair and the Executive Director are hereby authorized and directed to execute a subordination agreement (the “Subordination Agreement”) with the Developer and the Lender for and on behalf of the Authority upon approval of a form of Subordination Agreement by general counsel to the Authority and the Executive Director of the Authority, the execution of such Subordination Agreement to constitute conclusive evidence of the Authority’s approval of any and all modifications therein. The Subordination Agreement shall include the specific terms of the Authority’s subordination of its rights under the Development Agreement. 3. The Chair and the Executive Director are hereby authorized to execute and deliver all additional documents deemed necessary to carry out the intentions of this resolution. 2 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of March, 2020. Mary Supple, Chair Maria Regan Gonzalez, Secretary RC125-366 (JAE) 642724v1 AGENDA SECTION:OTHER BUSINESS AGENDA ITEM #3. S TAFF REPORT NO. 12 HOUSING AND RE DEVELOPMENT AUT HORIT Y MEET ING 3/16/2020 RE P O RT P RE PA RE D B Y: J ohn S tark, E xecutive D irector O THE R D E PA RTM E NT RE V IE W: E X E C UTIV E D IRE C TO R RE V IE W: J ohn S tark, E xecutive D irector 3/13/2020 I T E M F O R C O UNC IL C O NS ID E RAT I O N: Consideration of a resolution granting the Executive Director authority to extend Housing and Redevelopment Authority contracts and agreements in the event of an emergency. E X E C UT IV E S UM M ARY: At the J anuary 21, 2020 meeting, the Housing and Redevelopment Authority (HRA) authorized its Executive Director to administratively approve contracts and agreements with a monetary value of less than $50,000. Given the possibility of local government closures in the future for a variety of possible reasons (federal government shutdown due to budget impasse, natural emergency, health emergency, etc.), staff is recommending that the HRA further authorize its Executive Director to extend the performance and expiration dates in all agreements and contracts (regardless of monetary value). Staff is recommending that the duration of such an extension would equal the number of days that the City of Richfield has emergency staff reductions that impact any staff position(s) that receives at least 50% of their personnel funding through the HRA plus an additional 30 days. RE C O M M E ND E D AC T I O N: By motion: Approve a resolution granting the Executive Director authority to extend Housing and Redevelopment Authority contracts and agreements in the event of an emergency. B AS IS O F RE C O M M E ND AT I O N: A.H IS TOR IC AL C ON T E X T To date, there have been no local government closures that have affected contracts or agreements, although there have been some instances where a federal government shutdown threatened to result in such situations. B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc): Staff believes this is a good policy to enact in order to avoid issues that would leave the HRA exposed to possible financial or legal impacts. C.C R IT IC AL T IMIN G IS S U E S: W hile there are no closures foreseen, the current coronavirus (C OV I D-19) situation makes this a timely topic. D.F IN AN C IAL IMPAC T: Staff believes this is a good policy to enact in order to avoid issues that would leave the HRA exposed to possible financial impacts (such as affecting a planned closing on real estate purchases that would incur in additional costs if delayed, deferred or cancelled). E.L E GAL C ON S ID E R AT ION: Staff believes this is a good policy to enact in order to avoid issues that would leave the HRA exposed to possible legal impacts (such as the HRA being unable to fulfill contractual obligations due to staff unavailability). ALTE R N AT IV E R E C O MME N D ATIO N(S): None. P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G: N/A AT TAC H ME N T S: D escription Type Resolution Resolution L etter HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. ______ RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD TO EXTEND CONTRACTS AND AGREEMENTS WHEREAS, the Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) has previously authorized the Executive Director of the Authority to approve and execute contracts and agreements on behalf of the Authority so long as such documents or agreements do not provide for the expenditure of funds in an aggregate amount of more than $15,000, all without prior action by the Authority; and WHEREAS, in anticipation of pandemic or other emergencies resulting in local government closures or significant reductions in staff due to emergency protocols, the Authority proposes to authorize the Executive Director to extend performance dates in all contracts and agreements regardless of the monetary value of such contracts and agreements; and NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The Executive Director is hereby authorized, on behalf of the Authority, to extend performance dates in all contracts and agreements regardless of the monetary value of such contracts and agreements, all without prior action by the Board; provided, however, that the duration of such an extension shall equal the number of days that the City of Richfield has emergency staff reductions affecting staff position(s) receiving at least 50% of personnel funding through the Authority, plus an additional 30 days. 2. This resolution shall be in full force and effect as of the date hereof. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of March, 2020. Mary Supple, Chair Maria Regan Gonzalez, Secretary RC125-1 (JAE) 642933v1