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101810completeagenda
CITY OF RICHFIELD, MINNESOTA MONDAY, OCTOBER 18, 2010 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA Call to order Roll call 1. Approval of minutes of (1) Regular HRA Meeting of September 20, 2010 and (2) Special HRA Meeting of September 22, 2010 2. HRA approval of agenda 3. Consideration of property management agreement with 33rd Company, Inc. for management of HRA-owned residential rental properties Staff Report No. 35 Notes: 4. Discussion of preliminary proposals for redevelopment of 2517 West 76th Street Staff Report No. 36 Notes: 5. Consideration of resolution authorizing purchase of real property located at 2517 West 76th Street utilizing Community Development Block Grant funds contingent upon finding of consistency by Planning Commission Staff Report No. 37 Notes: 6. Executive Director report Notes: 7. Claims and payroll Adjournment 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. richfield: October 2010 Page 1 of 1 it is ie e Calendars Net Navigate. 2009 Jan Fe..b.. Mar A:pr M_ay Jun. Jul. Aug. S.e...p. Oct Nov Dec 20'1..1.. October 201.0 Nloncla ~ 'Icuesclati~ '4~'eclnesdsa > 'I"hu~°sclav "rittati 27 .4ep 2~ 2~ ~0 1 Oct 7 PM Planning 7 PM Regular City 7 PM Special Friendship Commission Council Meeting City Commission CANCELED Meeting @ Richfield Community Center, 7000 Nicollet Avenue 4 ~ ~ ~ ~ 5:30 PM Special City 7 PM Human Rights 7 PM Transportation 7 PM Arts Commission Council Worksession Commission Commission @ Community Center l1 12 13 l4 1S 7 PM Special Planning 8 AM Civil Service 7:00 PM Bike Task Commission Study Commission Meeting Force @ Maintenance Session Facility Lunchroom 5:30 PM Special City Council Meeting (commission interviews) in Executive Conference Room 6 PM Special City Council Worksession 7 PM Regular City Council Meeting 1 f3 1 ~) 2 (} 21 22 6 PM Advisory Board of 5:30 PM Hearing 4:30 PM FOWL Board Health Examiner in Heredia Meeting @ WLNC Room 7 PM HRA Meeting 7 PM Friendship City 7 PM Community Commission Services Commission @ (rescehduled to Oct. 28) Community Center 2s 2~ ?~ ~~ 2~ 7 PM Planning Commission 7 PM Regular City Council Meetin 7 PM Friendship City SATURDAY, OCT. 30 g Commission 9:30-10:30 AM Mayor's Hour @ Farmers Market mvuu~ ._v_vccn, 4JAl/_ CIOGK LISL. l..,Or1.gEflSed, AI)S -------- __._!_.._e. a endars: Search Add Events: Daily Duration. Periodic Administer: This_Calendar All meetings held at City Hall (6700 Portland Avenue) unless indicated otherwise Calendars Net free online interactive web calendars http://www.my.calendars.net/richfield 10/14/2010 J HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES r Richfield, Minnesota Regular Meeting September 20, 2010 CALL TO ORDER The meeting was called to order by Chair Sandahl at 7:00 p.m. ROLL CALL HRA Members Present: Sue Sandahl, Chair; Joan Helmberger; David Gepner, Doris Rubenstein and Steven Quam. Staff Present: John Stark, Acting Executive Director; Karen Barton, Community Development Manager; and Nancy Gibbs, City Clerk. Item #1 HRA APPROVAL OF MINUTES M/Gepner, S/Quam to approve the minutes August 16 2010 regular HRA meeting. Motion carried 5-0. Item #2 HRA APPROVAL OF AGENDA M/Rubenstein S/Helmberger to approve the agenda. Motion carried 5-0. Item #3 PRESENTATION AND CONSIDERATION OF RICHFIELD HRA ANNUAL TAX INCREMENT DISTRICT STATUS REPORT S.R. NO. 30 Rebecca Kurtz of Ehlers and Associates presented the HRA annual tax increment district status report. HRA Meeting -2- September 20, 2010 M/Gepner, S/Quam to accept the Richfield HRA annual tax increment district status report. Motion carried 5-0. Item #4 CONSIDERATION OF SUBORDINATION AGREEMENT FOR HRA TRANSFORMATION HOME LOAN AT 7020 NEWTON ABVENUE. S.R. NO. 31 Community Development Manager Karen Barton presented Staff Report No. 31. Chair Sandahl asked to see a copy of the subordination policy. The HRA unanimously decided to move on to item # 5 and return to Item # 4 after they receive a copy of subordination policy. After receiving a copy of the subordination policy, the HRA unanimously agreed to deny the subordination agreement of the transformation loan at 7020 Newton Avenue. M/Gepner, S/Quam to dent/ the subordination agreement for the HRA transformation home loan at 7020 Newton Avenue. Motion carried 5-0. Item #5 CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 7220 RUSSELL AVENUE THROUGH RICHFIELD REDISCOVER PROGRAM S.R. NO. 32 Acting Executive Director John Stark presented Staff Report No. 32. M/Rubenstein, S/Gepner that the following HRA resolution be adopted and that it be made part of these minutes: HRA RESOLUTION NO. 1080 RESOLUTION AUTHORIZING THE PURCHASE OF REAL PROPERTY LOCATED AT 7220 RUSSELL AVENUE THROUGH RICHFIELD REDISCOVER PROGRAM. This resolution appears as HRA Resolution No. 1080. Motion carried 5-0. This resolution appears as HRA Resolution No. 1080. Item #6 PUBLIC HEARING REGARDING RICHFIELD HRA ANNUAL PUBLIC HOUSING AUTHORITY PLAN FOR SECTION 8 HOUSING ASSISTANCE PROGRAM S.R. NO. 33 Community Development Manager Karen Barton presented Staff Report No. 33. M/Gepner, S/Sandahl to close the public hearing. HRA Meeting -3- September 20, 2010 Motion carried 5-0. M/Sandahl, S/Quam to accept the annual public housing authority plan for Section 8 housing assistance program. Motion carried 5-0. Item #7 DISCUSSION REGARDING POTENTIAL FUTURE REDEVELOPMENT OF 2517 WEST 76T" STREET S.R. NO. 34 Community Development Manager Karen Barton presented Staff Report No. 34. The HRA directed staff to proceed with the purchase of the property. Item #7 EXECUTIVE DIRECTOR'S REPORT Acting Executive Director Stark reported on the following: • Status update on Woodlake Plaza development. • Staff hopes to have an agreement signed soon with CVS pharmacy. • Updates on the 66th Street planning process and Lakes at Lyndale marketing plan. Item #8 CLAIMS AND PAYROLL M/Helmberger, S/Quam that the following claims and payrolls be approved: U.S. Bank 01/19/2010 Section 8 Checks: 119455 - 119576 HRA Checks: 30987 - 31012 TOTAL Motion carried 5-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 8:23 p.m. Date Approved: Nancy Gibbs City Clerk $ 155,098.43 $ 48, 544.40 $203,642.83 Suzanne M. Sandahl Chair John Stark Acting Executive Director J SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota September 22, 2010 HRA Commissioners Present: Sue Sandahl Chair; Steven Quam; Joan Helmberger; David Gepner. HRA Commissioner Not Present: Doris Rubenstein Staff Present: John Stark, Community Development Director; Julie Urban, Housing Specialist; and Michelle Lewis, Housing Specialist. The meeting was called to order by Chair Sandahl at 4 p.m. The HRA attended a tour of three foreclosed homes purchased and remodeled through the Neighborhood Stabilization Program: 7220-17th Avenue; 6915-17th Avenue and 6407 Bloomington Avenue. The meeting adjourned at 5:20 p.m. Date Approved: Nancy Gibbs, City Clerk Suzanne M. Sandahl, Chair Steven L. Devich Executive Director AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 18, 2010 3 REPORT PREPARED BY: JULIE URBAN/MICHELLE LEWIS, HOUSING SPECIALIST NAME, TITLE REPORT PRESENTER: KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAMI', TIME DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a Property Management Agreement with 33rd Company, Inc. for the management of residential rental properties. I. RECOMMENDED ACTION: By Motion: Approval of a Property Management Agreement with 33rd Company, Inc. for the management of Housing and Redevelopment Authority-owned residential rental properties, subject to revision by the Housing and Redevelopment Authority's legal counsel approval. II. BACKGROUND The Housing and Redevelopment Authority (HRA) currently owns a single family residential property at 6608 17th Avenue. Because of the property's location in the Cedar Avenue Corridor, the HRA intends to retain ownership and rent it until such time that the property is needed for a redevelopment project. The previous property management contract was cancelled, effective September 30, 2010. Staff is proposing to hire 33rd Company, Inc. to manage the property for 8.75 percent of the rent collected and other fees comparable to other property management companies. 33rd Company, Inc. specializes in leasing single family 09202010 property management agreement residential properties and currently manages several privately-owned, single-family properties in Richfield. 33rd Company, Inc. proposed their standard Property Management Service Agreement. However, the language in the standard contract is designed for work with individual homeowners and does not adequately reflect the specific legal requirements of the HRA. The HRA attorney has provided feedback on the specific language changes for the contract. A draft of the proposed contract is attached. HRA staff will work with the HRA attorney and the property management company to develop contract language that meets the HRA's requirements. III. BASIS OF RECOMMENDATION A. POLICY • The property at 6608 17th Avenue was purchased in anticipation of the construction of the roundabout at 66th Street and 17th Avenue. The property was not ultimately needed for the road project. It is appropriate to rent the property until such time that the property is needed for a future redevelopment project. • It is essential for the HRA's legal requirements to be reflected in the Property Management Service Agreement. B. CRITICAL ISSUES • The HRA does not have adequate staff resources to manage the property. • 33rd Company, Inc. has been managing single family rental properties for nearly 10 years. The company currently manages several privately-owned single family properties within Richfield. • 33rd Company, Inc. staff members are responsive to the Richfield Housing Inspectors concerns and repair notices. • The agreement allows 33rd Company to sign a lease with a tenant for up to one year in length on behalf of the HRA. A longer term requires the HRA's consent. • The Agreement would also enable the HRA to use 33rd Company, Inc.'s services for any future single family rental properties. • The management company will be responsible for o Securing and maintaining tenants o Responding to HRA inquiries o Financial accounting for property management o Administering maintenance services. • The Agreement with the previous management company was terminated as of September 30, 2010. • The property is currently vacant. C. FINANCIAL • 33rd Company, Inc. charges the following fees: 0 75 percent of the first months' rent for a Leasing Fee 0 0 percent of the rent for Lease Renewals 0 8.75 percent of the rent collected per property for the Monthly Management Fee o Maintenance charges plus 10 percent up to $250; if charges are over $250, HRA staff will be contacted for approval o $99 per month when property is advertised for lease o $25 per hour for additional management services, at the HRA's request to 33rd Company, Inc. • 33rd Company, Inc: will determine the final rent amount (estimated between $1,000 and $1,200) once the Agreement is approved by the attorney. • It is anticipated that the rental receipts will be more than adequate to cover the cost of the management fee and required maintenance and repairs. D. LEGAL • The HRA Attorney and the City's insurance agent have both reviewed the Agreement. IV. ALTERNATIVE RECOMMENDATION(S~ • Decline to approve the Agreement with 33rd Company, Inc. V. ATTACHMENTS • Proposed Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A ,3~r1~" ^^ 33`d Company, Inc. COm an ~~ 2165 Woodlane Drive, Suite 101 Woodbury, MN 55125 Office: (651) 777-5500 Fax: (651) 777-5501 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT THIS AGREEMENT is entered into this day of , 20 by and between hereafter, whether one or more, referred to as "OWNER", and " 33`d COMPANY, INC:" (A Minnesota Corporation) hereafter referred to as "PROPERTY MANAGER". WITNESSETH WHEREAS, PROPERTY MANAGER is in the business of providing rental financial management services to owners of residential properties; WHEREAS, OWNER owns and has authority to enter into this exclusive Agreement:("Agreement") for the residential property identified below and desires to engage PROPERTY MANAGER to manage the rental of said residential property, WHEREAS, PROPERTY MANAGER desires to enter into this exclusive Agreement to provide such services on the terms and conditions set forth herein; NOW THEREFORE, the OWNER and PROPERTY MANAGER agree to the following: 1. EXCLUSIVE RIGHT TO LEASE. AND MANAGE: The .OWNER hereby employs the PROPERTY MANAGER exclusively; giving the PROPERTY MANAGER the exclusive right to manage under the terms and conditions as hereafter set forth for the OWNER'S real property ("Property") covered under this Agreement located in the State of Minnesota, in the County of , with a Property address of It is agreed that the PROPERTY MANAGER into be considered the sole procuring cause of any lease, written or oral that may be negotiated during the term of this Agreement, even if said lease may have been negotiated either directly or indirectly by the OWNERS themselves. 2. LISTING TERM.: The Listing Term ("Listing Term") portion of this Agreement is entered into by the parties for afullTisting term which begins on and ends at 11:59 P.M. on (Minimum of 90 dhys) /~ Owner Initials Page 1 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT ~~ Between 33rd COMPANY, INC. and RICHFIELD HRA 3. POST LEASING TERMS /AUTOMATIC RENEWAL /TERMINATION: The management portion of t/:is Agreement is entered into by the parties hereto for the full Lease Term ("Lease Term") of tenant and automatically renews for successive twelve (l2) month periods. a) Either party may notify the other in writing not later than two (2) months prior to the end of said initia4 term or any renewal or extension thereof of either party's intent to terminate this Agreement. b) Either party may terminate this Agreement without cause by giving the other party written notice of such termination 30 days in advance of the effective date. If the Owner terminates the Agreement the Owner will provide the Manager 50% of the fees that would have been collected to the end of the contract period, less any funds that Manager has on account for the Owner. If the funds on account for the Owner total more than 50% of the-fees that would have been collected by the end of the Agreement the Manager will reimburse the Owner to allow the Manager a total of 50% of fees. c) Either party may terminate the Agreement immediately for breach by the other part of its obligations hereunder, and such breaching party's failure to cure such breach following 10 days' written notice of same: Upon termination hereof, neither party shall have any future obligation to the other, except for amounts owing at the date. of termination. d) In the case of redevelopment, the OWNER may terminate the AAgreement by giving the PROPERTY MANAGER written notice at least 30 days in advance of the effective date. In this case, the PROPERTY MANAGER will provide to the OWNER all funds held on account for the OWNER, less a fee of $150.00: On receipt of proper notice, PROPERTY MANAGER will provide a vacate:notice to the tenants. 4. REQUIREMENTS OF COMMENCEMENT: This Agreement shall not commence until OWNER has executed this Agreement and provided to PROPERTY;MANAGER the following items: (a) $375.00 Lease Fee Retainer ("Lease Fee Retainer") to 33`d Company, Inc.; (b) Proof of Public Liability Insurance, covering the Property, but not the property of any Tenant or the PROPERTY MANAGER, with reasonable limits <of coverage; and which the OWNER is to maintain during the course of the Agreement pursuant to Section 20; (c) Proof of ownership (deed or couni~ 1'1D confirmation); (e) Keys to the Property delivered to the PROPERTY MANAGER. (f) Any Applicable Home `Owner Association documents or other existing covenants, restrictions or issues governing or affecting the Property. Additionally, this Agreement shall nat commence until the PROPERTY MANAGER has executed this Agreement and provided to the OWNERthe following items: (a) Acknowledgement that PROPERTY \-1NAGER has been provided a copy of MN Statute 466 and understands its requirements. (b) Evidence. of Comprehensive General Liability Insurance and "Employee Dishonesty" insurance pursuant to Section 20, 5. RIGHT TO COMPENSATION: In consideration for the services to be rendered by the PROPERTY MANAGER, the OWNER agrees to pay the PROPERTY MANAGER any and all of the following forms of compensation as may be applicable. A. FOR LEASING: A leasing Fee ("Leasing Fee") of SEVENTY FIVE PERCENT (75%) of first month's rent or of $750.00 (minimum), whichever is greater. The OWNER shall pay to PROPERTY MANAGER a non-refundable Lease Retainer Fee ("Lease Retainer Fee") of $375.00 in advance upon signing this Agreement. The Lease Retainer Fee will be applied to the Leasing fee upon signing of a new lease. Advertising and any required property inspection costs shall be billed separately to the OWNER. B. FOR MANAGEMENT: A monthly management fee ("Management Fee") of EIGHT & THREE QUARTERS PERCENT (8.75%) of gross rentals due on the Property. The full monthly fee shall be assessed during any month that a tenant remains in full or partial occupancy, or there is an active lease agreement in place. A minimum Monthly Management Fee of $100 applies per rental unit. The property management fee will not be prorated. Check in/out property surveys are conducted as a free service. C. FOR LEASE RENEWALS: When PROPERTY MANAGER renews an existing lease with a tenant; OWNER shall be charged a lease renewal fee in the amount of ZERO dollars (S 0.00). Owner Initials Page 2 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT Between 33`d COMPANY, INC. and RICHFIELD HRA D. FOR MAINTENANCE & REPAIRS: A maintenance fee ("Maintenance Fee") to OWNER of 10% of the maintenance invoice ($25 minimum fee per incident) will be added to each repair activity for Tenant coordination, bids, procurement, installation, and payment services provided by PROPERTY MANAGER. PROPERTY MANAGER agrees to attempt to first notify the OWNER for Maintenance or Repair expenses estimated in excess of $350 for repair invoice total. Emergency Repairs consist of the following: 1) protect the Property or adjacent property from damage; 2) maintain services to the tenant(s) under the lease or applicable law; 3) to protect the health or safety of any individual; 4) repair code compliance requirements or other work required by order of government authority; OR In the event of an Emergency Repair, if the PROPERTY MANAGER cannot contact the OWNER, the PROPERTY MANAGER is authorized by the OWNER to make necessarn repairs. The OWNER shall pay PROPERTY MANAGER for all costs to: make or cause to be ntadc. supervise repairs and alterations, purchase supplies, and/or pay bills. When Tenant(s) are responsible to correct damages, the PROPERTY MANAGER will directly debit repair costs to the Tenant(s) or Tenants' security deposit. OWNER shall pay PROPERTY MANAGER for all. costs to make or cause to be made and supervise repairs and alterations; or to purchase supplies and pay bills. Vendor provided volume pricing will be provided to the OWNER; all other vendor incentives (if any) accrue to PROPERTY MANAGER. In the event that a single repair would cost more than $5,000 the"PROPERTY MANAGER must consult with the OWNER to determine the OWNER'S intention to continue leasing the PROPERTY. E. FOR TENANT LATE FEES: PROPERTY MANAGER will retain any late or NSF fees received from tenant(s) to offset collection costs incurred in ectllecting rent or other costs from tenant(s). 6. PROPERTY MANAGEMENT SERVICES: For the purposes of this Agreement PROPERTY MANAGER and OWNER hereby defuse tee based property management services to include the following (a) Day- to-day tenant relations; (b) Monthly collection and"recording of rent; (c) Processing monthly and yearly,accountingstatements; (d) Leasing Services, including Teigant cdictions (e) Collections. ofrents not received; (f) Check in/out property surveys; (g) Coordinating tenant maintenance requests; (h) Administrative recording of maintenanceRservices. Investment services are explicitly not provided under this Agreement and no partnership has been established. The services provided are not exclusive to OWNER, and PROPERTY MANAGER and its principles shall at all times be free to perform the same or similar services for others as well as engage in business activities which may be competitive with OWNER. 7. RENT/LEASE READY: OWNER shall provide the Property in "move-in" condition upon the beginning of LISTING TERM. The Property must meet code, city ordinance, and safety requirements and be presented in good repair and cleanliness. OWNER is responsible for cleaning the home prior to beginning of LISTING TERM (i.e. cleaning carpets, painting etc.). If home is not found in good condition, OWNER understands that PROPERTY MANAGER may take steps to make sure home is presentable at OWNER'S expense, or to terminate this Agreement. OWNER shall immediately disclose to PROPERTY MANAGER in writing any known information about lead-base paint and/or lead-based paint hazards or other hazards on the Property. 8. LEASING: PROPERTY MANAGER will use its best efforts to lease or rent the Property within a rental range of ~ and ~ per month. PROPERTY MANAGER shall present all 3 -3 COnlI110f1t [mjtlll]: Question for 33`d Company: What would these incentives be? Owner Initials Page 3 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT Between 33`d COMPANY, INC. and RICHFIELD HRA offers meeting the screening guidelines for OWNER'S consideration. OWNER understands that the OWNER and PROPERTY MANAGER must provide EQUAL OPPORTUNITY. During the performance of this contract the PROPERTY MANAGER and OWNER shall not discriminate against any applicant because of race, creed or religion, color, sex, national origin, marital status, familial status, disability, status with regard to public assistance, sexual orientation, or age. PROPERTY MANAGER is given exclusive right to execute rental agreements and renewals for a maximum of 1 year at a time, unless otherwise approved by OWNER; to engage brokers to obtain prospective tenants; to screen and lease to prospective tenants; to terminate tenancies and to serve such notices and institute eviction proceedings. 9. TENANT CONTACT: OWNER is PROHIBITED from direct contact with tenant regarding the lease, repairs, or complaints about the PROPERTY MANAGER whether placed or not placed by 33`d Company, Inc. and or affiliates. All tenant contact shall be directed through 33`d Company, Inc. Contact includes but is not limited to face to face, mail, fax, email, third party and or phone. The OWNER may make contact regarding its other responsibilities as a public entity in the Citypf Richfield. 10. ACCESS TO THE PROPERTY: A. AUTHORIZING ACCESS: Authorizing access to the Property means giving permission to enter the Property, disclosing access codes to the Property to such persons, and lending key to the Property to such person either directly or through a key box. To facilitate showing and leasing of the Property, OWNER instructs PROPERTY MANAGER to authorize real estate agents, brokers, inspectors, appraisers, and contractors to access the Property at reasonable times. OWNER is not allowed to access the property during active leases except as approved by the PROPERTY MANAGER on a case by case basis. B. A KEYBOX is a locked container placed o~ithe Property holding a key to the Property. Key boxes make it more convenient for cooperating real estate agents, brokers, inspectors, appraisers, and contractors to show, inspect, or repair the Property. The use of the key box will probably increase the number of showings, but involves risks (i.e. theft, property damage, or personal injury). OWNER hereby AUTHORIZES the use of a key box, and assumes all risks of loss, damage, or injury. 11. LEASING AUTHORITY: OWNER hereby gives PROPERTY MANAGER the following authority and powers as follows; A. To sign, renew and/or cancel leases for the Property and any part/thereof, as deemed appropriate by PROPERTY MANAGER. B. To advertise the Property by means and method as PROPERTY MANAGER determines in any media, ..including the internet at OWNER'S cost, to display signs thereon, to show the Property and to rent the same; to place interior and exterior photographic images of the Property in any advertisements, including the internet; to place a "For Rent /Lease" sign on the Property and remove all other signs offering the Property for Lease or Sale; C. To furnish comparative marketing and leasing information about other properties to prospective renters; to disseminate information about the Property to other leasing agencies and to prospective tenants; to disclose the leasing price and terms of leasing to other leasing agencies; D. To place information about this Listing and a transaction for the Property on any electronic platform; E. Lawn care (mowing & trimming shrubs) and snow and ice removal is typically made the responsibility of the tenant(s) per the Lease agreement. Other services like fertilization, pest control, watering, planting, gutter cleaning, etc. are generally done at OWNER'S request and expense. Consumables (i.e. light bulbs, softener salt, A/C filters) shall typically be made the responsibility of the tenant(s) per the Lease agreement. OWNER remains liable if tenant fails to pay for or perform these services. During vacancies all expenses, utility costs, periodic inspections, and maintenance shall done and be paid for directly by the OWNER. 3 ~~ Owner Initials Page 4 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT Between 33`d COMPANY, INC. and RICHFIELD HRA 12. MANAGEMENT AUTHORITY AND RESPONSIBILTIES: The OWNER expressly grants to the PROPERTY MANAGER herein the following authority and responsibilities: A. To prepare and negotiate new leases and renewals and terminations of existing leases as deemed appropriate by the PROPERTY MANAGER. OWNER expressly authorizes PROPERTY MANAGER to execute leases, lease renewals and terminations for and on behalf of the OWNER, naming the OWNER as the Lessor and the PROPERTY MANAGER as an Agent for the OWNER.. B. Full management and control of said Property with authority to collect all rent and other monies and securities from tenant in Property and issue receipts thereof. The OWNER shall be responsible for and shall reimburse, or pay in advance as requested by PROPERTY MANAGER, ALL third party expenses incurred or to be incurred by PROPERTY MANAGER pursuant to this Agreement. Owner Distributions (the net total of Gross Rent Received less the monthly Management Fee- and Repair Costs) shall be forwarded to OWNER within 30 days from receipt provided OWNER is in compliance with the REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT. C. To collect and disperse security and pet deposits from renters. All security and pet deposits are held in an escrow account until dispersed at the end of the Lease Term. Interest from security deposits shall be paid to tenants per State Statute. Any excess interest shall be retained by PROPERTY MANAGER to cover the costs of maintaining this escrow account. D. To select, at PROPERTY MANAGERS sole -discretion, vendors and contractors to perform repair and maintenance activities, and to provide for any and all negotiating and contractual arrangement (in the name of the OWNER) by the PROPERTY MANAGER'S maintenance division or independent contractors for any and all repair items deemed necessary by the OWNER and/or the PROPERTY MANAGER, and to pay the PROPERTY MANAGER'S maintenance division or independent contractors for these services, repairs and improvements from the OWNER'S funds. PROPERTY MANAGER shall make a reasonable effort to select qualified and reasonably priced .contractors and vendors: PROPERTY MANAGER shall have no obligation to use OWNER referred contractors, warranty service companies, or other OWNER requested service providers, and may elect not to use such providers at any time. All costs for repairs and maintenance shall be the responsibility of the OWNER and shall be billed directly to OWNER or deducted from OWNER funds: E. To serve legal notices upon tenants and to prosecute'in the name of the OWNER, or in the name of the PROPERTY MANAGER.. and at the OWNER'S expense, legal actions to evict tenants, recover rents, damages, and attorney fees, and to terminate tenancies, employing for these purposes a reputable attorney. Such attorney shall be deemed to be the attorney of the PROPERTY MANAGER, and OWNER hereby specifically agrees that PROPERTY MANAGER may use said attorney as PROPERTY MANAGER'S attorney in any dispute between OWNER and PROPERTY MANAGER. OWNER acknowledges and agrees that any communication between OWNER and attorney shall not be deemed to be an attorney/client communication in any action between the OWNER and the PROPERTY MANAGER. OWNER further authorizes the PROPERTY MANAGER to compromise and settle claims on the OWNER'S behalf as necessary in the PROPERTY ~LANAGER'S judgment. F. INTEREST received on any PROPERTY MANAGER'S holding Accounts, (if any) shall belong to the PROPERTY MANAGER to assist in offsetting the expenses of maintaining the account. OWNER agrees that PROPERTY MANAGER may require releases from all parties in the event of a controversy before dispersing funds. G. The PROPERTY MANAGER agrees to comply with the requirements of MN Statutes, Section 471.425 regarding the prompt payment of subcontractors. Those provisions are incorporated by reference at this point. PROPERTY MANAGER acknowledges that it has been provided a copy of that statute and understands its requirements. 13. OWNER'S AUTHORITY AND RESPONSIBILITIES: In consideration of property management services to be rendered by PROPERTY MANAGER under this Agreement, OWNER agrees to the following authority and responsibilities: A. To promptly furnish PROPERTY MANAGER with all documents and records to properly manage the Property, including but not limited to, leases (including amendments and pertinent correspondence relating thereto), rental licenses, status of rental payments, loan payment information, copies of existing service contracts, citations, Property related notices, utility delinquency notices or other Property related communications sent directly to OWNER from any source. B. To reimburse PROPERTY MANAGER, within 10 days of receipt of invoice, or from rent collected, to the full extent of all monies advanced by PROPERTY MANAGER for OWNER'S account in carrying out the purpose of this Agreement. However, the PROPERTY MANAGER is not obligated to make advances on behalf of the OWNER to carry out the purposes of this Agreement. Owner Initials Page 5 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT `r Between 33rd COMPANY, INC. and RICHFIELD HRA C. OWNER agrees that OWNER is solely responsible for the condition, code compliance, and maintenance of the home at all times and for paying ALL mortgage, property tax, assessments, association or condominium fees, utility, service or maintenance agreements, and insurance or other payments regarding the subject Property and in doing so on a timely basis. OWNER is responsible to annually renew and pay for Rental License. PROPERTY MANAGER is acting only as an Agent for the OWNER. OWNER agrees to indemnify PROPERTY MANAGER pursuant to paragraph 17 of this Agreement. PROPERTY MANAGER does not manage, inspect, or maintain home during vacancies. OWNER is responsible for periodic inspections, repairs, maintenance, and/or for winterizing the home while the home is vacant. OWNER is responsible for paying all utilities during vacancies and pre-lease period, and for unpaid or uncollectible tenant expenses that may occur during lease. D. If Property should sell during the Lease period, OWNER agrees to provide a notice to vacate, in writing, to the tenant 90 days in advance of the vacate date. In the Lease, the tenant will be notified about the possibility of redevelopment at this location. The tenant will be asked to waive their relocation benefits due to sufficient. notice of the possibility of redevelopment. E. If PROPERTY MANAGER provides a qualified renter for the Property and",'OWNER fails to give possession of the premises for any reason, OWNER understands that the entire management fee will be due to 33rd Company, Inc., as they will have performed in accordance with the contract. These fees will also apply if Property is rented by OWNER or anyone else. OWNER will be liable for Lease. F. OWNER acknowledges that PROPERY MANAGER does not warrant or guarantee the ability of any renter(s) to pay rent, or prevent violations of the lease. PROPERTY MANAGER shall provide its best efforts service to manage the rental activity in the best interests of he OWNER. G. In the event the Property is sold to anytenant or prospective tenanf during this Agreement or within eighteen (18) months after the termination of this Agreement, OWNER`agreesto pay the PROPERTY MANAGER a three percent (3.0%) commission'of the,gross selling price: 14. TEMPORARY FUNDS: From time to time PROPERTY.MANAGER may extend temporary funds to OWNER in advance ofreceiuing fully cleared'funds from tenant:,OWNER is responsible for reimbursing PROPERTY MANAGER if tenant's funds do not clear PROPERTY MANAGER'S Bank (i.e. NSF). 15. AGENCY ACKNOWLEDGEMENT & DISCLOSURE: OWNER and PROPERTY MANAGER hereby acknowledge and consent to the following agency relationship in this Agreement: 33`d COMPANY, INC. (PROPERTY MANAGER);°acting in the capacity of an independent contractor is hereby contracted as OWNER'S exclusive Agent to perform property management services for the real Property described herein. Agent shall owe the OWNER he following affirmative duties: (a) To deal honestly and in goodTaith; (b) To maintain as confidential the financial information obtained from the OWNER, except under subpoena, court order or as otherwise required by applicable law and except as permitted by the OWNER, except for illegal acts committed by OWNER; (c) Disclosure; (d) Following the instructions of the OWNER; (e) To exercise reasonable care and diligence; (fj To account in a timely manner for the funds received or disbursed on behalf of the OWNER. 16. AGENCY AUTHORIZATION: OWNER gives PROPERTY MANAGER "LIMITED POWER OF ATTORNEY" for the purpose of executing and delivering all leases, renewals, modifications, enforcing the lease, terminations, negotiating settlements, engaging contractors, and initiating repairs all at the sole discretion of the PROPERTY MANAGER. 17. DAMAGES AND RISKS: PROPERTY MANAGER is not responsible for damage to the premises or items missing, switched out, lost or damaged under any circumstances, including but not limited to theft, vandalism or negligence of tenants and/or guests, or hidden damage. OWNER grants PROPERTY MANAGER the full and exclusive authority to make. damage cost assessments and to charge tenant accordingly. PROPERTY MANAGER hereby carries Comprehensive General Liability Insurance to cover liability from unclaimed or undiscovered damages. OWNER acknowledges that damage deposit may be inadequate to cover the damages to home, and Owner Initials Page 6 of I 1 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT Between 33`dCOMPANY, INC. and RICHFIELD HRA accepts the liability. OWNER has read and approved the Lease agreement terms and conditions that will be used by PROPERTY MANAGER, and agrees to indemnify and hold PROPERTY MANAGER harmless for errors or omissions that they may contain. 18. OWNER'S REPRESENTATION & WARRANTIES: OWNER hereby represents and warrants to PROPERTY MANAGER: (a) that the undersigned OWNER is the true and sole OWNER of the Property and has full authority to enter into this Agreement; (b) all references to "OWNER" herein shall include each and every joint and several owner of the Property, and this Agreement shall be binding on each of them jointly and severally; (c) as of the date of this Agreement the Property is leaseable without any association or condominium restrictions on rental property, mortgage restrictions in converting the Property to a rental status;, not in a foreclosure or default status, and warranted by OWNER to be in good repair, free from material defects, and conforms with all Laws and Ordinances. 19. ADDITIONAL SERVICES : PROPERTY MANAGER and OWNER agree that PROPERTY MANAGER shall be paid a fee for any services that are in addition to the management services provided in this Agreement. All services not specifically aisted in Section 6 of this Agreement shall be considered additional services. The OWNER and PROPERTY MANAGER shall agree; in writing, on additional management services and fees for said services; said agreement will be attached to`Agreement as an Amendment. 20. SAVE HARMLESS & INDEMNITY -INSURANCE.: OWNER and PROPERTY MANAGER agree to indemnify the other, their respective representatives, heirs, successors, and assigns from any cause of action based upon any action or inaction by the indemnifying party hereunder, except for claims which are caused by the willful conduct or negligence of the other party. Such indemnity shall not be'construed as a waiver of the OWNER'S liability limits under MN Statutes Chapter 466 or other law. The OWNER agrees to carry and.: keep in force during the term of this Agreement, and any extension thereof, at OWNERS expense, Public Liability Insurance, covering the Property, but not the property of any Tenant or the PROPERTY MANAGER, with reasonable limits of coverage, upon PROPERTY MANAGER'S request; the OWNER shall provide. the PROPERTY MANAGER with a certificate or other proper.evidence of said coverage at the time of execution of this Agreement. The PROPERTY MANAGER agrees to carry and keep in force during the term of this Agreement, and any extension thereof, Comprehensive General Liability Insurance in amounts acceptable to the OWNER covering claims for loss, damage, injury, or deathsthat might arise out of the management, operation, and maintenance of the Property. The PROPERTY MANAGER`will also carry and keep in force during the term of this Agreement, and any extension thereof, "Employee Dishonesty" insurance with respect to the Property in an amount acceptable to the OWNER. Evidence of such coverage will be provided to the OWNER at the time of execution of this Agreement. 21. ATTORNEY .FEES: The OWNER and the PROPERTY MANAGER do hereby agree that in the event legal proceedings are necessary to enforce any of the provisions of this Agreement that the prevailing party shall be entitled to recover reasonable.attorney's fees and costs. In the event PROPERTY MANAGER successfully defends an action (including, but not1imited to the Courts, the Better Business Bureau, mediation or any administrative state agency) arising out of this transaction brought by OWNER or another party, OWNER shall reimburse PROPERTY MANAGER for their reasonable attorney fees and costs for time spent defending such action. 22. WAIVER OF JURY TRIAL: The parties herby waive their right to a jury trial on any issue arising from the subject matter of this Agreement regardless of whether or not that cause of action is a tort or contract action. The parties knowingly and voluntarily agree that all issues arising out of this relationship shall be resolved individually and not as part of any class action and additionally shall be resolved by a Judge sitting without jury. 23. CANCELLATION: If home has not been rented after the Listing Term, this Agreement shall automatically renew for 30 day increments, unless terminated in writing by either party with 30 days advanced written notice. Any and all expenses that PROPERTY MANAGER has incurred on behalf of the OWNER (including advertising) will be payable by OWNER to PROPERTY MANAGER upon termination. Owner Initials Page 7 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT `~ Between 33`d COMPANY, INC. and RICHFIELD HRA 24. MN DATA PRACTICES ACT: Both parties agree to comply with the requirements of the MN Data Practices Act. 25. NOTICES & SEVERABILITY: For purposes of this Agreement, all notices required herein shall be deemed to have been served upon the other party on the date mailed to any of the following addresses or to such other addresses including electronic, as shall be changed in writing, properly notifying the other party. If any provision or provisions of this Agreement shall be held to be invalid, illegal, unenforceable or in conflict with the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired and such remainder provisions shall be valid and enforceable. OWNER'S NAME: Richfield Housing and Redevelopment Authority SOC. SEC. NO.: E-MAIL ADDRESS ADDRESS: 6700 Portland Avenue South, Richfield, MN 55423 PHONE: 612-860-9778 ALT. PHONE: 612-861-9760 PROPERTY MANAGER: 33rdcoMeANY INC. (A Minnesota Corporation), OFFICE (651) 777-5500 10451 GLEN EAGLE CIRCLE, ST'PAUL, MN55129 25. ACKNOWLEDGEMENT, RECEIPT OF DOCUMENTS: This Agreement shall become binding upon the heirs, successors and assigns of the parties hereto, OWNER hereby acknowledges that they have FULLY read the Agreement. OWNER'S, by their signatures below, acknowledging that they have read and received a complete copy of this. REAL .ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT. IN WITNESS WHEREOF, the said parties have executed this Agreement the day and year as set forth below; OWNER(S) Print Name Signature Date Print Name Signature Date 33rd COMPANY, INC.: By• Print Name Its President /Broker Date Standard Form Property Management Service Agreement. Revised 70/012009 O 2009, 33t° Company, Inc. Owner Initials Page 8 of 11 REAL ESTATE PROPERTY MANAGEMENT SERVICE AGREEMENT Between 33rd COMPANY, INC. and RICHFIELD HRA PROPERTY INFORMATION AND LEASING RESTRICTIONS ADDENDUM Date Property will be Available for Lease: Pets are ALLOWED /NOT ALLOWF,n with an additional deposit $ , ($500 recommended) a) Maximum number of Pets Maximum size of Pets b) Other Pet Restrictions 2. Smoking is NOT AT,LOW ~ D. 3. APPLIANC"FS (Rnecifically indicate Features inchtded with Rental home Included Appliance i Included Other (\) ~ r~~1~1.~ ~-1~.,drL1"«u. if:icailah~e) WASHER ~ (\1 (Fillinasappropriate) .Sprinkler System: Y' / N DRYER Vendor Name: STOVE /OVEN MICROWAVE Appliance Warranty Program*x: DISHWASHER (*'~`Subjectto a per incident coordination fee ) REFRIGERATOR Owner Provided Services: FURNACE Lawn'Service: AIR CONDITIONER Snow Service: WATER SOFTENER Other: SECURITY SYSTEM Garage Code: MailBox #: . ~~~, wrttact mro i Haatttonal Appliances /Other Information: OWNER PROVIDED DOCUMENTS;. I. Current Rental Property liability insurance, which OWNER shall maintain during the course of this Agreement$IM General Liability with 33rd Company listed as an "additional insured" 2. Proof of ownership (deed) or county PID confirmation; 3, 3 sets of keys including'I original if possible. Garage Door Openers (1 for each car stall) 4. Applicable. Home OwnerAssociation documents or restrictions governing Property. 5. Rental License. from City (where applicable): must be obtained by Owner. 6. Check for $375:00 for Lease Fee "Retainer" (Per Vacancy, applies towards lease fee) OWNER(S) Print Name Signature Date Print Name Signature Date 33rd COMPANY, INC. By' Print Name Its President /Broker Date Standard Farm Property Management Service Agreement. Revised 10/01/2009 ©2009, 33`" Company, Inc. Owner Initials Page 9 of 11 3 - ~o Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning Statement Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, lessors must disclose the presence of known lead-based paint and/or lead-based paint hazards in the dwelling. Lessees must also receive a federally approved pamphlet on lead poisoning prevention. Lessor's Disclosure (a) Presence of lead-based paint and/or lead-based paint hazards (check (i); or (ii) below): (i) Known lead-based paint and/or lead-based paint hazards are present in the housing (explain). (ii) Lessor has no knowledge of lead-based paint and/or lead-based paint hazards in the housing. (b) Records and reports available to the lessor (check (i) or (n) below): (i) Lessor has provided the lessee with all available records and reports pertaining to lead-based paint and/or lead:-based paint hazards in the housing (listdocuments below). (ii) Lessor has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the housing. Lessee's Acknowledgment (initial) (c) Lessee has received copies of all information listed above. (d) Lessee has .received the' pamphlet Protect Your Family from Lead in Your Home. Agent's Acknowledgment(initial) (e) Agent has informed the lessor of the lessor's obligations under 42 U.S.C. 4852d and is aware of his/her responsibility to ensure compliance. Certification of Accuracy The following parties have reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate. r.essor Date Lessor Date Lessee Date Lessee Date Agent Date Agent Date Form V V -9 Request for Taxpayer (Rev. O °`ober 2°°') Identification Number and Certification o=:~~~henr .~rth ~ Give form to the requester. Do not ~ r~=~°~y m:er~,~, Revenue 5eivioe send to the IRS. Name (,as shown on your income tax return) N B i us ness name, if different from above z. o ~ ~ N I heck a , r£ ro riat b C , pp p e ox ~ 0 IndiviouaUSole proprietor Corporation Partnership a r_I Limited liability company. Enter the tax classification (G=disregarded entity, C=corporation, P=partnership) ~ o ^ Exempt -- ~ i ~ Ctiher (sae ins'ructicns) -~--- payee 5 c I NUdress (numher, street, anrJ apt. or suite no.) Requesters name and address (optional) a`~ .~ ~ Citr y, state, and ZIP code Q I to List account numler(s) here (optional) Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid backup withholding. For individuals this is your social sec rit b Social security number ~ , u y num er (SSN);Nowever, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page.. 3. For other entities it is _ ~ I , your employer identification number (EIN). If you do not have a number,.seeHow to get a TINon page 3. Or Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose I number to enter. Employer identification number i Rcrfiif" afiiOn Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer idehtibdatiom number (or I am waiting far a number to he issued to me), and 2. I am not subject to backup withholding because: (a) I am exempf from backup withholding, or (p) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. citizen or other LLS. person (defined below). Certification instructions. You must crossout item,2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to. report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than)nterest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. See the instructions on page>'4. Sign ~ Signature of General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Purpose of Form A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income .paid to you, real estate transactions, mortgage interest you. paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRAN Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income. Note. If a requester gives you a form other than Form W-9 to request your TIN, you must use the requester's form if it is substantially similar to this Form W-9. Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are: • An individual who is a U.S. citizen or U.S. resident alien, • A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, • An estate (other than a foreign estate), or • A domestic trust (as defined in Regulations section 301.7701-7). Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax on any foreign partners' share of income from such business. Further, in certain cases where a Form W-9 has not been received, a partnership is required to presume that a partner is a foreign person, and pay the withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid withholding on your share of partnership income. The person who gives Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States is in the following cases: • The U.S. owner of a disregarded entity and not the entity, 3- I~ Cat. No. 10231:4 Form W-9 (Rai. 10-2007) AGENDA ITEM # 4 REPORT # 36 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 18, 2010 REPORT PREPARED BY: REPORT PRESENTER: KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAMLs, T17Z,E KAREN BARYON, COMMUNITY DEVELOPMENT' ASSISTANT DIRECTOR NAML, TI%1,/5 DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of preliminary proposals for the redevelopment of 2517 West 76th Street I. RECOMMENDED ACTION: By Motion: No formal action required; for information purposes only. II. BACKGROUND The property located at 2517 West 76th Street is asix-bedroom single-family home situated on three lots. The home is currently vacant and has been for sale for several years. The property is abutted by multi-family residential buildings to the east and south, 76th Street to the north, and Sheridan Avenue to the west. The property is currently zoned R, single-family residential, but is guided for medium- density multi-family housing in the Comprehensive Plan. Due to the location of the home and its large size, it has been difficult to find a buyer interested in purchasing the home for single-family occupancy. The Richfield Housing and Redevelopment Authority (HRA) is considering purchasing the property utilizing Community Development Block Grant funds (CDBG) for the future development of affordable multi-family housing. 10182010 2517 W 76th St development options HRA staff solicited preliminary proposals from several developers for the redevelopment of the property: Accessible Space, Inc. (ASi), Greater Metropolitan Housing Corporation (GMHC), and The Cornerstone Group. Representatives from each of the developers will be present at tonight's meeting to discuss their preliminary proposals for the property. Since these are preliminary proposals, the HRA is not being requested to take formal action at this time. The purpose of the preliminary proposals is to .provide general information regarding possible redevelopment scenarios for the property should the HRA acquire it. However, the HRA may choose to direct staff to pursue working with one or more of the developers. III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Comprehensive Plan calls for the City to "Promote the development, management, and maintenance of affordable housing in the City." B. CRITICAL TIMING ISSUES • ASi must choose to pursue this project or another project in the next few weeks and may have to choose another project if the HRA does not choose to work exclusively with them at this time. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION~S~ • N/A V. ATTACHMENTS • Photos of the property • Map of the area VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Dan Billmark, ASi • Beth Pfeifer and Colleen Carey, The Cornerstone Group • Representatives from Greater Metropolitan Housing Corporation ~~ 3, r '~ ~ ~a, ~ ~ ~;:. ~, ~. ,.g° ~i . ~~ ~ n .. ~~ ~ ~ ~ ~ ~.. ~~ ~ ~a~~q rR, ~ : E: zs~~-W. -~~er" Sr- y -3 ~j" = 2617 w. 7r TH $r y- S 2517 W 76th St 533 532 533 532 533 7536 Legend 7539 7539 7539 7538 7539 .'7545 Highlighted Feature 7545 7544 7545 7544 7545 7544 House Numbers ~> City Limits /~ 78TH ST W 5treet Ce nr rli nas 7601 7600 7601 7600 ~ --- ~j Oryen N.'atcr 7609 7608 7609 7608 2517 ~~ I- l ParAs ~ Parcels V1 7615 7614 7615 7614 ~ = i m y, G 7621 7620 7621 7620 a 7627 7626 7627 J626 = _ ~ 7633 7632 7633 7632 76'39 7638 ~ 7639 7638 7620 . 7645 7644 ; 7645 7644 D 7600 ~. ~ ~ 1 77TH 5T yy 4` , / ~ 7701 7700 q ~ ]las ]las 74 1 J q 7715 7714 7721 7720 f 7727 7726 I ~1I J l 7733 7732 _~~~~ J _ 2814 2808 2800 _ --"''~~ ~Y ~_f 78TH ~ O Wg;494 ~~k ST A~ INTERSTATE 494 INTERSTATE 494 E8 I494 Tp ~Nly AVE S ~!!Y~ r ~' p 7 ~ P p 9 rs Y Ir PID: 3202824440001 ~ 2517 76TH ST W RICHFIELD, MN 55423 AGENDA ITEM # REPORT # J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING OCTOBER 18, 2010 REPORT PREPARED BY: KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a resolution authorizing the purchase of real property located at 2517 West 76th Street utilizing Community Development Block Grant funds contingent upon a finding of consistency by the Planning Commission. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the purchase of real property located at 2517 West 76th Street through utilizing Community Development Block Grant funds contingent upon a finding of consistency by the Planning Commission. II. BACKGROUND The property located at 2517 West 76th Street is asix-bedroom single-family home situated on three lots. The home is currently vacant and has been for sale for several years. The property is abutted by multi-family residential buildings to the east and south, 76th Street to the north, and Sheridan Avenue to the west. The property is currently zoned R, single-family residential, but is guided for medium- density multi-family housing. Due to the location of the home and its large size, it has been difficult to find a buyer interested in purchasing the home for single-family occupancy. 10182010 2517 W 76th Acquisition KAREN BARYON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR The Richfield Housing and Redevelopment Authority (HRA) receives federal Community Development Block Grant (CDBG) funds annually to facilitate the development of affordable housing. The HRA currently has approximately $335,000 available in CDBG funding for the acquisition of property for the future development of affordable housing. $167,000 of the CDBG funding must be spent or under contract by December 31, 2010 or the HRA may be required to forfeit the funds. Staff is proposing utilizing the CDBG funds to acquire the property at 2517 West 76th Street and subsequently contracting with a developer to redevelop the property with multi-family housing. CDBG requires that at least 51 % of the units developed be affordable to households at or below 80% of the area median income ($64,000 for a family of four). A purchase agreement has been submitted to the listing agent and is awaiting preliminarily acceptance by the sellers. The offer is contingent upon HRA approval. The agreed purchase price of the property is $300,000 plus closing costs and will be paid through the Community Development Block Grant Fund. This expense is provided for in the 2010 Revised Budget. The HRA will be asked to approve the eventual proposed development on the property at a later date. III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Comprehensive Plan calls for the City to "Promote the development, management, and maintenance of affordable housing in the City." B. CRITICAL TIMING ISSUES • The HRA may be required to forfeit $167,000 in CDBG funds if the funds are not spent or under contract by December 31, 2010. • A purchase agreement was submitted for the acquisition of the property contingent upon HRA approval. • The HRA would close on the property on or before November 30, 2010. C. FINANCIAL • The HRA currently has approximately $335,000 available in CDBG funds for the purchase and clearance of property for the future development of affordable housing. • The purchase price is $300,000 plus closing costs not to exceed $10,000. • The 2010 County Assessed Market Value for the property is $319,000. D. LEGAL • Legal Counsel has reviewed the purchase agreement. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not authorize the purchase of the property V. ATTACHMENTS • Resolution Refer to Item 4 VI. PRINCIPAL PARTIES EXPECTED AT 1VIEETING • N/A J'~ HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 2517 West 76t" Street WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota ("the HRA") desires. to purchase certain real property pursuant to and in furtherance of the Community Development Block Grant program, said property being described as: 2517 West 76t" Street N 258 FT OF W 170 FT OF THAT PART OF SE'/ OF SE'/ LYING E OF JACOBSON AND QUIST SECOND ADD EX STREETS; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, Community Development Block Grant Funds are available for acquisition purposes. NOW THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield: The purchase price for the property identified is approved at $300,000, plus closing costs, not to exceed $310,000. 2. The Chairperson and Executive Director-are authorized to execute a Purchase Agreement and to take other actions necessary to purchase the property for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota on this 18th day of October, 2010. Suzanne M. Sandahl, Chair ATTEST: Joan Helmberger, Secretary 10182010 2517 W 76th Acquisition