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03-15-1993• CITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MEETING March 15, 1993 ' HRA MEMBERS PRESENT: Thomas Harms; Joan Helmberger; Russ Susag; Vern Luettinger; and Larry Wozniczka. STAFF PRESENT: James D. Prosser, Executive Director; Steven Devich, Administrative Services ' Director/Acting City Clerk; Byron Wallace, Community Development Director; and Bruce Palmborg, Housing & Redevelopment Coordinator. OTHERS PRESENT: _ Sid Inman and Mark Ruff, Publicorp. The meeting was called to order by Chair Harms at 7:00 p.m. APPROVAL OF MINUTES A corrected first page was distributed. M/Luettinger, S/Susag to approve the minutes of the HRA meeting of January 19, 1993. Motion carried 5-0. ITEM#1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA Mike Wozniczka, 6304 Dupont, addressed the HRA regarding a denial by HRA staff of his bid for the purchase of 6318 Nicollet. He asked that his bid be reconsidered stating that he felt he was discriminated against because he is single. Executive Director Prosser stated that the general criteria for purchase of that home was for a two to four person family and he described the criteria for income limits. Mr. Prosser stated that the HRA could change the guidelines and readvertise if they so desired. He added that the HRA should also consider the issue of selling a property to someone who is in the immediate family of a Commissioner and of the perception associated with such a situation. Chair Harms asked about the income limits involved. Mr. Prosser responded that the issue of income limits would not necessarily be a problem because there was no problem with down payment in this case. He said the income limit could be ' waived, but that the family size was the issue. The Executive Director stated that while the house is small, it would be large enough for a two or three member family. HRA Minutes -2- March 15, 1993 Chair Harms stated that until the house is marketed further, he is not prepared to change the family criteria. He further stated that he would prefer to defer the issue of sales to immediate family members of Commissioners. Commissioner Luettinger said he favors staying with the current criteria. Commissioner.Wozniczka said that the HRA should move to market this property. He felt a reconsideration of the policy is in order. He said the current criteria are too restrictive: Chair Harms said the HRA should watch this property carefully and if it cannot be sold to a family the HRA may need to change the criteria to open it up to a single person. Commissioner Wozniczka asked if HRA Commissioners could view the property, if applicants would be able to see the property before they bid on it and if a "for sale" sign could be placed in the yard. Executive Director Prosser responded that Commissioners could view the property if they wish. He'added that staff time is a consideration in responding to Commissioner Wozniczka's suggestions and that the marketing process used in the past has been successful. '. Ralph Robinson, Told Development, addressed the HRA regarding a development concept for the ILN. He reviewed a brief history of Told Development and summarized the office market in the Twin Cities. He stated that the office market is now severely overbuilt. Jerry Severson, Continental Properties, stated that he has worked very closely with the K-Mart Corporation in the past and is now in a position of seeking a new location for the Richfield K-Mart and Bloomington Builder's Square. Mr. Severson described a project containing two office buildings and a retail complex consisting of a K-Mart and Builder's Square in the ILN area. There was no potential tenant available for the office component of this project at this time. Executive Director Prosser 'asked if the developers had explored a potential hotel for the site in place of the office buildings. ' Mr. Robinson stated that they have not to this point because they wanted a reaction to the proposal first. Mr. Severson also stated that the K-Mart Corporation is looking at a 25 year lease with a minimum assessment agreement. 1 Chair Harms stated his initial reaction is that he would be opposed to this project, in the hope of attracting a more dense development in the future. HRA Minutes ~ -3- March 15, 1993 Commissioner Helmberger also stated that she is opposed to this type of project for the ILN. Commissioner Luettinger stated his opposition to the . proposal. Commissioner Wozniczka said he hasn't seen all the numbers, but if it could be built without tax increment help he could be swayed in favor of it. Commissioner Susag stated that he was too new to this process to comment on it at this puncture. Executive Director Prosser stated that he wanted to add that Told Development is the type of firm that Richfield would like to work with even though this project does not appear to work. He thanked Mr. Robinson for his efforts in this proposal. ITEM #2 CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTION OF SOUTH HENNEPIN VOCATIONAL TECHNICAL SCHOOL CONTRACT FOR 1993-94 NEW CONSTRUCTION PROJECT AT 6634 FOURTH AVENUE IN THE AMOUNT OF $77,720 HRA LETTER N0. 9 Executive Director Prosser reviewed HRA Letter No. 9 regarding consideration of resolution authorizing execution of South Hennepin Vocational Technical School Contract for 1993-94 new construction project at 6634 Fourth Avenue in the amount of $77,720. Mr. Prosser indicated that this was the largest vo-tech project to date. . . Commissioner Susag asked what other houses vo-tech has constructed. Mr. Prosser responded that there are a number of them and gave Commissioner Susag the addresses of some previous vo-tech projects. Commissioner Helmberger asked is there was any problem with a large house like this on a small lot. Mr. Prosser responded that there hasn't been and that it is an issue of design. Commissioner Wozniczka asked about the specific dimensions of the house. Mr. Wallace, Community Development Director, distributed a copy of the floor plan of the home. - HRA Minutes -4-• March 15, 1993 • Commissioner Wozniczka said he is not comfortable with this project and that it will create a blight in the neighborhood for two years. He said it is also a 5105,000 house without a garage. M/Susag, S/Luettinger 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. 469 RESOLUTION RELATING TO VO-TECH AGREEMENT FOR -6634 FOURTH AVENUE Motion carried 4-1. (Commissioner Wozniczka opposed.) This resolution appears as Resolution No. 469 in HRA Resolution Book No. 4. ITEN #~ P~~a~ ~aa~a~RaN~ ~ CANSIDERATIAN A~' ~~~a~,~~a®aa AUTHORIZING SALE OF A PORTION OF CLOVERLEAF SITE TO CITY TO PROVIDE FOR CONSTRUCTION OF 77TH STREET HRA.LETTER NO. 10 Executive Director Prosser reviewed HRA Letter No: 10 concerning the public hearing and consideration of resolution authorizing sale of a portion of Cloverleaf site to the City to provide for construction of 77th Street. Commissioner Helmberger asked what the HRA will do with the funds received for this sale. ' Mr. Prosser said they will be returned to the T.I.F. Fund where they come from. • There was general discussion concerning how the price per square foot was arrived at. Commissioner Wozniczka asked that the resolution be amended with a stipulation added to state that the proceeds be returned to•the ILN T.I.F. district. Commissioners agreed. M/Helmberger, S/Susag to close the public hearing. Motion passed 5-0. r--. M/Luettinger, S/Susag that the following resolution, as •amended, be adopted; that it be spread in the resolution book and that it be made part of•these minutes: HRA Minutes -5- March 15, 1993 RESOLUTION NO. 470 RESOLUTION AUTHORIZING THE SALE OF•REAL PROPERTY LOCATED AT 7600 FREMONT AVENUE AND 7644 EMERSON AVENUE AND THE GRANTING OF A TEMPORARY EASEMENT TO THE CITY OF RICHFIELD FOR THE 77TH STREET PROJECT • Motion carried 5-0. This resolution appears as Resolution No. 470 in HRA Resolution Hook No. 4. ITEM #4 CONSIDERATION OF ESTABLISHMENT OF DEVELOPMENT FUND TO SUPPORT HRA ACTIVITIES, HRA LETTER NO. 11 Executive Director Prosser reviewed HRA Letter-No. it regarding establishment of a Development Fund to support HRA activities. Sid Inman, Publicorp, addressed the HRA on this issue. He stated that Richfield is not a pioneer in this regard and indicated that many cities in Minnesota have already established such an account. He indicated that establishment of the fund would not affect the HRA's ability to pay debt in the T.I.F. pro,~ects and does not limit the HRA's ability to use the funds. Commissioner Luettinger asked if this would jeopardize the Tax Increment Financing (T.I.F.) districts' ability to pay debt service. Mr. Inman said no. Commissioner Wozniczka asked for a recheck of the effect of the $83,000 tax levy example used by Mr. Inman. He asked if this Development Fund would extend the life of the T.I.F. districts and where the money came from. Mr. Inman said that the district would not be extended and that the money comes from interest income from T.I.F. proceeds and land sale proceeds. Commissioner Wozniczka asked if the Development Fund wasn't established could the T.I.F.'s be retired early. Mr. Inman said yes but that it didn't necessarily make economic sense to do so. Mr. Prosser said that the benefit of paying off the district is an impact of only 17~ on the dollar. HRA Minutes -6- March 15, 1993 Mark Ruff, Publicorp, reported on an analysis of the impact of`Tax Increment~Financing on the School District. The City of Edina has used T.I.F. extensively in areas included in School District 280. Executive Director Prosser reviewed the specific programs that may be included in a Development Fund. Mr. Prosser added that he was not looking for any action on this item at this time, but wanted instead to inform HRA Commissioners about this redevelopment tool. Chair Harms described another program utilizing neighborhood block parties for remodeling ideas. Betty Carr, 6633 Lynwood Boulevard, suggested that a computer aided design concept could be considered as part of a remodeling program. There was general consensus by Commissioners Helmberger, S~nsag, Harms and Luettinger that there Baas support for proceeding with the Development Fund concept and to bring it before the HRA at a future meeting. Commissioner Wozniczka said he had strong reservations about this program. Mr. Prosser asked Commissioners to forward their questions and concerns regarding this issue to him as soon as possible. ITEM #5 EXECUTIVE DIRECTOR REPORT Executive Director Prosser ~ceviewed HRA Memo No. 6 covering a status report on a number of issues and properties in the City. Commissioner Wozniczka asked why staff or immediate family of Council or HRA should be dissuaded from buying properties through Richfield Rediscovered or houses like 6318 Nicollet. Mr. Prosser responded that we must be very careful to not even suggest an appearance of impropriety, especially iri a program like this where we are underwriting the costs of the homes. Chair Harms felt that it was especially important that any hint of impropriety be avoided and full disclosure be followed in these matters. There was general discussion regarding the matter, with most Commissioners agreeing that any hint of impropriety be avoided. HRA Minutes -7- March 15, 1993 Mr. Prosser stated that Bruce Nordquist has been nominated to the State NAHRO Hoard. If elected, he would have three regional meetings annually and one or two national meetings. Mr. Prosser asked if there would be support for this travel if he would be elected. Commissioners Harms, Helmberger, Susag and Luettinger were in favor of this travel. Betty Carr, 6633 Lynwood Boulevard, stated that it is important to support this type of opportunity for employees. ITEM #6 CLAIMS AND PAYROLL M/Luettinger, S/Susag that the following claims and payroll be approved. FIRSTAR HANK Checks: 2/16/93 HRA: 4772-4891; 11310-11323;11588-11619 $302,832.19 Section 8: 1062 89,000.00 3/15/93 HRA: 4892-5007; 11324-11328; 11751-11784 $658,178.13 Section 8: 1063 89,000.00 Motion carried 5-0. ADJOURNMENT The meeting was adjourned by unanimous c nsent at 9:27 p.m. Date A rowed : 4/ 19/ 93 Thomas Harms Chair I I pp I Steven L. Devich J s D. Prosser Acting City Clerk E e utive Director