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01-18-1994CITY OF RICHFIELD, MINNESOTA . - HOUSING AND REDEVELOPMENT AUTHORITY MEETING January 18, 1994 HRA MEMBERS PRESENT: Thomas Harms; Joan Helmberger; Russ Susag; VernLuettinger; and Michael Sandahl. STAFF PRESENT: James Prosser, City Manager; Thomas Ferber, City Clerk; and Bruce Palmborg, Housing & . Redevelopment Coordinator. The meeting was called to order by Chair Harms at 7:00 p.m. APPROVAL OF•MINIJTES M/Sandahl, S/Luettinger to aoorove the minutes of the Regular HRA Meeting of December 20. 1993. Motion carried 5-0. It was the consensus of HRA Commissioners to allow the presentation of the CSM Status Report, which was scheduled as Agenda Item #9, to be first on the .agenda. Item #1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ANY ITEM NOT LISTED ON THE AGENDA. No one wished to address the HRA. Item #2 CONSIDERATION OF ELECTION OF OFFICERS FOR 1994. HRA LETTER N0. 1 ~ . M/Luettinger, S/Helmberger to a~orove the election of Tom Harms as Chair of the HRA for 1994. Motion carried 5-0. M/Harms, S/Susag to a~Drove the election of Joan Helmberaer • as Vice Chair of the HRA for 1994. Motion carried 5-0. M/Harms, Susag to aovrove the election of Vern•Luettincrer as Secretary of the HRA for 1994. Motion carried 5-0.' HRA Meeting Minutes . -2- January 18, 1994 Item #3 CONSIDERATION OF DESIGNATION OF ACTING EXECUTIVE DIRECTOR FOR 1994. HRA LETTER NO. 2 M/Helmberger, S/Luettinger to approve the designation of Steven L. Devich, Administrative Services Director, as the Actinq Executive Director of the HRA for 1994. Motion carried 5-0. Item #4 CONSIDERATION OF DESIGNATION OF OFFICIAL NEWSPAPER FOR 1994. HRA LETTER NO. 3 M/Luettinger, S/Sandahl to approve the designation of the Richfield Sun-Current as the official newspaper of the HRA for the year 1994. Motion carried 5~®. . L_J Item #5 CONSIDERATION OF RESOLUTIONS DESIGNATING OFFICIAL DEPOSITORIES FOR 1994, INCLUDING APPROVAL OF COLLATERAL. HRA LETTER NO. 4 M/Sandahl, S/Helmberger that the following resolutions be adopted; that it be spread in the resolution book and that it be made part of these minutes: HRA RESOLUTION N0. 494 A RESOLUTION DESIGNATING CERTAIN SAVINGS AND LOAN ASSOCIATIONS AND BANKS AS DEPOSITORIES FOR THE INVESTMENT OF THE HOUSING AND REDEVELOPMENT AUTHORITY FUNDS IN 1994 Motion carried 5-0. This resolution appears as HRA Resolution No. 494 in Resolution Book No. 4. HRA RESOLUTION NO. 495 A RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF THE HOUSING AND REDEVELOPMENT AUTHORITY FUNDS IN 1994' Motion carried 5-0. This resolution appears as HRA Resolution No. 495 in Resolution Book No. 4. HRA Meeting Minutes _ -3- January 18, 1994 HRA RESOLUTION NO. 496. A RESOLUTION DESIGNATING THE FIRSTAR HANK A DEPOSITORY OF FUNDS OF THE HOUSING AND REDEVELOPMENT AUTHORITY FOR RICHFIELD FOR THE YEAR 1994 AND APPROVING COLLATERAL Motion carried 5-0. This resolution appears as HRA Resolution No. 496 in'Resolution Book No. 4. ' ~ Item #6 CONSIDERATION OF AUTHORIZATION FOR STAFF TO DRAFT AGREEMENT WITH TOLD DEVELOPMENT COMPANY TO MARKET AND FACILITATE REDEVELOPMENT OF CLOVERLEAF SITE. HRA LETTER N0. 5 Executive Director Prosser reviewed HRA Letter No. 5 regarding a proposal from TOLD Development Company to~market and facilitate redevelopment of the Cloverleaf site. Chair Harms raised issues regarding the financial impact on the feasibility of developing the property of having a potential developer go through TOLD. He suggested that the agreement be non-exclusive so as not to discourage a potential developer from proposing a development independently to the HRA. Executive Director Prosser discussed three options: 1) continue to passively market the property, 2) solicit proposals from other. developers, 3) negotiate a non-exclusive agreement with TOLD Development Company.. Commissioner Sandahl questioned whether TOLD would accept a non-exclusive agreement. Executive Director Prosser suggested that staff would seek to negotiate an escape clause with a 30 day notice of termination and that if the HRA chose a new developer, the reimbursement costs could come from the earnest money of the new developer. M/Harms, S/Sandahl to authorize staff to draft an agreement as directed for subseQUent presentation to the HRA which would _ establish the parameters for a marketing and development ~roQram . to be implemented by the TOLD Development Comvanv. Motion carried 5-0. HRA Meeting Minutes -4- January 18, 1994 Item #7 CONSIDERATION OF RESOLUTION TO CONFORM LYNDALE/HUB/ NICOLLET COMMERCIAL DEVELOPMENT IMPROVEMENT PROGRAM WITS RSA MEDICAL OFFICE FACILITY APPROVED DURING LAST QOARTER OF 1993; MODIFICATION NO. 7. HRA-LETTER NQ. 6 Executive Director Prosser•reviewed HRA Letter No. 6 regarding consideration of a resolution to approve Modification No. 7 to conform the Lyndale/HUB/Nicollet (LHN) Commercial Development Improvement Program with the RSA medical office facility approved during the last quarter of 1993. M/Helmberger, S/Susag that the following resolution be adopted: that it be spread in the resolution book and that it be made part of these minutes: HRA RESOLUTION NO. 497 t`~r`~rYt©~v'YT~G PSI©DYl~ICATY©I~ T~®. ~7 I1~ TFTE LYNDALE/HUB/NICOLLET COMMERCIAL IMPROVEMENT PROGRAM: TRANSMITTING THE MODIFIED PLAN TO THE PLANNING COMMISSION: REQUESTING THE RICHFIELD CITY COiJI~'CIL• TO CONDUCT A PUBLIC HEARING THEREON: RECOMMENDING APPROVAL OF THE MODIFIED PLAN Motion carried 5-0. This resolution appears as HRA Resolution No. 497 in Resolution Book No. 4. • Item #8 CONSIDERATION OF TRANSFORMATION HO[JSING: REVIEW OF 1993 ACTIVITY AND PROGRAM PROPOSAL FOR 1994. HRA LETTER N0. 7 Executive Director Prosser reviewed HRA Letter No. 7 providing a detailed summary of a transformation housing program concept proposal for 1994 and asking for feedback or suggested modification from the HRA. ~J Commissioner Susag asked about the source of funding for the program. Executive Director Prosser stated the propdsed source of funding for the program would be approximately $190,000 from the Richfield Rediscovered land sale income which would then not be returned to the Development Fund. HRA Meeting Minutes ~~ -5- January 18, 1994 Chair Harms discussed his desire that this program be linked to the needs of the property owners who are being relocated ~~ because of the New Ford Town/Rich Acres buyout. He advocated that staff meet with these property owners, determining interest and. identify financially qualified buyers to match .with the builders/developers who will do the transformation housing projects. Chair Harms stated his preference that the program not use grants or forgiven loans but rather a program where the loan to the p=ope~cty owner would be carried as a second mortgage. He stated this mortgage would be paid back to the HRA upon the sale of the property. He also discussed a bridge loan for financing the transformation to cover the gap, before the increased value is realized, that banks are hesitant to finance. He stated this way the HRA could "recycle" the money and assist more projects. Commissioner Sandahl stated that the proposed program concept is a stand alone program that shouldn't dust be tied to New Ford Town/Rich Acres property owners, although some of them may be interested. Chair Harms stated that in the short term there is the opportunity to market the program to New Ford Town/Rich Acres property owners which could serve as a test market for the transformation housing program to be used over the long term in the community. Commissioner Luettinger stated support for giving New Ford Town/Rich Acres property owners first chance at this program. He asked if it would take resources to market this to the New Ford Town/Rich Acres property owners. Chair Harms stated the costs would be limited to staff meeting with the New Ford Town/Rich Acres property owners, explaining transformation housing and costs, determining interest; and getting basic qualification information from them. He stated he favored more flexibility in the program other than the grant/loan proposal, otherwise the transformation housing concept is acceptable. Executive Director Prosser stated that staff did receive some interest in the program from New Ford Town/Rich Acres property owners at the MAC information open house, but timing of the buyout and finances .were an issue. He stated income level, equity level, and interest in this housing concept were three . variables in dealing with the New Ford Town/Rich Acres property owners. Executive Director Prosser stated that this is a threshold issue.for the HRA, as whether the outline of the program or a revised form is a program to pursue. HRe Meeting Minutes - -6- January 18, 1994 Scott Sharpe, 2028 West 68th Street, a Richfield remodeling contractor, stated support for a transformation housing program and interest in being involved in~the program. Steve Parsley, 1600 West 66th Street, Parsley Builders, stated he liked the program and suggested assisting the builders/remodelers to purchase and transform the houses which then could be sold to purchasers. Chair Harms discussed the need for seed money to bridge the financing gap for this type of housing transformation. Dave Sumnicht, 6620 Logan Avenue, QSA, stated it was a positive factor that the HRA is willing to consider funding such a program for the community. He indicated that the economics of purchasing a house at retail for transformation is a problem because of the value "lost"~in the transformation. Mr. Sumnicht discussed the need for "raw materials" {houses to transform) from willing sellers and the financing problems created by the loan to value issue. He stated an incentive is needed to assist in transformation housing. Chair Harms discussed how a subordinated loan could provide this incentive. Discussion followed regarding no interest loans to owner occupied transformation projects, means testing, subordinated loans, and investment in the community. Steve Quam, 6421 James Avenue, QSA, discussed the subordinated loan idea and the relationship to the 15 percent subsidy to project cost. He stated that he would prefer being charged interest on bridge financing and receive the 15$ grant. Gary Olsen, 7213 First Avenue, stated support for a transformation housing program to help people like him stay in Richfield and expand his home. Chair Harms stated staff should proceed with the design of the Transformation '94 Program with the additional input provided by HRA this evening. Executive Director Prosser summarized components as that of the basic program concept for existing owndrs remodeling homes (not higher value homes), a concept for "vacant" home redevelopment concept with financial assistance of some type or bridge financing, and some type of grant not to exceed the same amount of funds provided to the homeowner. Chair Harms stated staff should not leave out the concept that the homeowner assistance doesn't necessarily have to be a forgiven loan, it can be a repay loan. HRA Meeting Minutes ~~ -7- ~ ~ January 18, 1994 Discussion followed regarding the incentive of a grant program verses a repay loan program. Pat Elliot, 6720 Oliver Avenue, stated those who wish to invest in their home to stay in Richfield are investing in the house and not for future equity. Chair Harms stated that the program should not be a giveaway program but an incentive for investment in the community. Steve Quam stated the builders/developers are willing to meet with staff and lenders regarding this program.. Commissioner Luettinger stated he did not favor a pure grant without repayment. It was the consensus of the HRA.that staff proceed to develop the 1994 Transformation Housing Program. . Item #9 PRESENTATION OF CSM STATUS REPORT David Garland, CSM Corporation, presented an update on the status of the CSM Corporation proposed development. in the ILN area between Lyndale and Emerson Avenue including the following: * Press Publicity The recent newspaper article had impact on current tenants and contained some inaccurate information.' * Meeting with Property Owners • CSM has met with the major property owners with some progress, however, price is still an,issue with some property owners. * Emerson-Avenue Congregational Church CSM has found the church to be very cooperative regarding- relocation and an architect has been commissioned for drawings for a possible new church on part of the Cloverleaf property. * Feasibility of Project CSM expects to determine feasible to proceed with Chair Harms acknowledged Vivarium Pets, 6519 Nicollet project because it would"have by the end of the month if it is the proposed project. the receipt of a letter from avenue, opposed to•the CSM proposed a large Petsmart warehouse store. ARA Meeting•Minutes -8-' January 18, 1994 Item #10 ERECUTIVE DIRECTOR REPORT The HRA acknowledged the receipt of HRA Memorandum No. 1 Item #11 CLAIMS AND PAYROLLS • M/Sandahl, S/Helmberger that the following claims and payrolls be •agnroved: • FIRSTAR BANK • HRA 12/30/93: 11434-11436; 123659-12370 $ 33,002.74 HRA 1/18/94: 6045-6159; 11437-11440; 12374-12390 $ 180,358.14 Motion.carried 5-0. ADJOURNMENT The meeting was adjourned by una ous consent t 9:09 p.m. Date A roved: 3/21/•94 !! homas Harms Chair n ~~ ~' I ! Thomas P. Ferber J es Prosser City Clerk Ex cut ve Director