12-29-1994 Special
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CITY OF RICHFIELD, MINNESOTA
SPECIAL CITY COUNCIL MEETING
DECEMBER 29, 1994
MEMBERS PRESENT: Martin Kirsch, Mayor; Michael Sandahl; Susan
Rosenberg; Russ Susag; and Don Priebe.
STAFF PRESENT: James Prosser, City Manager.
The meeting was called to order by Mayor Kirsch at 8:00 a.m. at
the Lafayette Country Club, Minnetonka Beach, Minnesota.
The City Council conducted a workshop session led by consultant
Jim Lynn regarding team building, goal setting, and strategic
planning.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 4:4 p.m. .
Date Approved : 1 f g/ 95 ~~G~~~~° % - ~-
Martin J.'K rsch Mayor
Thomas P. Ferber
City Clerk
~ : -1.~:--~-.~-/
J es D. Prosser
C anager
CITY OF RICHFIELD, MINNESOTA
SPECIAL CITY COUNCIL MEETING HELD CONCURRENTLY WITH THE
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
DECEMBER 29, 1994
CITY COUNCIL
MEMBERS PRESENT: Martin Kirsch, Mayor; Michael Sandahl; Susan
Rosenberg; Don Priebe; and Russ Susag.
HRA MEMBERS
PRESENT: Thomas Harms, Chair; Joan Helmberger; Russ
Susag; Vern Luettinger; and Michael Sandahl.
STAFF PRESENT: James Prgsser, City Manager; Thomas Ferber,
- City Clerl~; and Byron Wallace,•Community
Development Director.
A concurrent meeting of the City Council and Housing and
Redevelopment Authority was called to order by Mayor Kirsch at
5:30 p.m.
Item #1 CONSIDERATION OF PRELIMINARY RESOLUTION AUTHORIZING USE
OF REVENUE BONDS TO BE UTILIZED BY DOMINION INC. TO
ACQUIRE CENTURY COURT APARTMENTS LOCATED IN RICHFIELD
AT 7431-7521 LYNDALE AVENUE, 7600-7720 PENN AVENUE AND
6301-6335 LYNDALE AVENUE. C.L. NO. 351
City Manager Prosser reviewed Council Letter No. 351
regarding consideration of a resolution giving preliminary
approval to the issuance of tax exempt revenue bonds and
authorizing Holmes & Graven, Chartered to prepare and submit
applications for allocation of bonding authority for tax exempt
financing to the State of Minnesota Department of Finance. He
indicated the HRA was present in order to be informed about this
pro3ect and its implications related to HRA housing policies.
Barb Portwood, Holmes & Graven bond counsel, stated that
Dominion, Inc. had requested a modification to the application
and resolution. She stated the modification called for. the
submittal of three $7 million applications instead of one $21
million application. She indicated Dominion Inc. felt they may
have a better chance of securing some of the statewide bond pool
allocation this way. Ms. Portwood explained that the bonds would
be secured by the apartment properties, not city assets. She
stated the interest of the City would be to investigate and
assure the credit of the developer. Ms. Portwood presented
copies of the modified proposed resolution and applications.
Council Member Priebe asked if there would be any impact on
the City's credit rating.
Ms. Portwood stated there would be none.
Council Member Priebe asked about the impact of Dominion's
proposal on the property value.
Special Meeting Minutes -2- December 29, 1994
City Manager Prosier stated the assets are basically sound
now. He indicated Dominion's proposal would help maintain the
value from declining and hopefully increase it, however, further
information would be necessary to analyze this issue.
Council Member Priebe asked if there would be large rent
increases with Dominion's proposal.
Jack W. Safar, Dominion, Inc. principal,_stated it was their
intent to maintain the market rate rent structure. He reviewed
some of the pro}~osed financing information stating the purchase
price was $18 million. Mr. Safar reviewed and answered questions
about the anticipated improvements to the properties as outlined
in their preliminary tax exempt bond inducement request.
City Manager Prosser indicated the City would need to review
the use of funds to provide further information to the HRA and
City Council before final action.
HRA Chair Harms stated that it appears this proposal would
be compatible with the HRA's goal to address maintaining and
enhancing rental housing.
Ernie Lindstrom, 7406 Fremont Avenue, suggested further
information and public input be obtained before the Council goes
forward with these bonds. He indicated that the City should look
at what has happened with the rental housing in a northern suburb
and consider the default on revenue bonds in Lakeville and St.
Paul. Mr. Lindstrom questioned the public purpose of the bonds
and the benefit for citizens of Richfield. He stated concerns
about the precedent that might be set. He indicated a great many
people in the community were interested in this issue and
cautioned the Council to go slowly and examine this issue more
closely before going forward.
Bill Watson, 6329 Harriet Avenue, stated satisfaction with
the level of-maintenaince and existing management of the Century
Court complex in his neighborhood. He stated he wanted to know
more about Dominion, whether they would maintain the same high
standards, and stated concern this action could cause this
complex to be some type of public housing project.
Jack Safar, Dominion, Inc., stated that Dominion would work
closely with the City, HRA, and the neighborhood. He stated
their intent is to maintain and improve the properties as market
rate rental units.
HRA Chair Harms stated that these rental properties are
important to the community to maintain the tax base and all
options such as the one proposed should be examined.
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Special Meeting Minutes -3- December 29, 1994
Ernie Lindstrom, 7406 Fremont Avenue, urged that other
options besides the one proposed should also be considered. He
cautioned that he felt that if the issuance of the bonds was
challenged, it would be difficult to show public purpose. He
stated concern about who would receive the. money from the
purchase. Mr. Lindstrom stated questions remain for which public
input is needed so citizens can help address the problems rather
than contentious proceedings.
Barb Portwood, Holmes & Graven, reviewed and responded to
questions about procedural and legal questions related to the
future public hearing and council actions necessary for
consideration of_final approval of the proposed revenue bonds.
City Manager Prosser indicated staff would perform "due
diligence" examination of such issues as references, financial
ability of the developer, management, tenant selection, credit,
and reinvestment. He stated this information would be presented
to the HRA for their recommendation to the City Council.
City Manager Prosser stated that staff would also review the
issues raised by Mr. Lindstrom and Mr. Watson.
HRA~Chair Harms volunteered to assist staff with these
issues.
Council Member Susag also suggested Dominion meet with the
neighborhoods during this time.
M/Susag, S/Sandahl that the following resolution be adopted;
that it be spread in the resolution book and that it be made part
of these minutes:
RESOLUTION NO. 8213
GIVING PRELIMINARY APPROVAL TO THE ISSUANCE OF TAX-EXEMPT BONDS
AND AUTHORIZING APPLICATION FOR ALLOCATION OF BONDING AUTHORITY
Motion carried 5-0. This resolution appears as Resolution
No. 8213 in Resolution Book No....64.
ADJOURNMENT
The Concurrent Special City Council and Special HRA meeting
was adjourned by unanimous consent at 6:25 n.m.
Date Approved : 1 / 9/ 9 5
Thomas P. Ferber
City Clerk