07-17-1995CITY OF RICHFIELD, MINNESOTA
HOUSING AND REDEVELOPMENT AUTHORITY MEETING
July 17, 1995
HRA MEMBERS PRESENT: Thomas Harms; Joan Helmberger; Vern Luettinger; and
Russ Susag.
HRA MEMBERS EXCUSED: Michael Sandahl.
STAFF PRESENT: James D. Prosser, Executive Director; Steven Devich,
Administrative Services Director/ Acting City Clerk;
Bruce Patmborg, Acting Community Development
Director; and John Dean, HRA Attorney.
The meeting was called to order by Chair Harms at 7:00 p.m.
APPROVAL OF MINUTES
M/Susag, S/Luettinger to approve the minutes of the Regular HRA meeting of
June 19, 1995.
Motion carried 4-0.
ITEM #1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA
No one wished to address the HRA.
ITEM #2 PUBLIC HEARING AND CONSIDERATION OF RESOLUTION
AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT
6645 LIPTON AVENUE TO STEVEN M. GRANT HOMES, INC. TO BE
KNOWN AS STEVEN-MARLIN GRANT HOMES, INC. IN
ACCORDANCE WITH DEVELOPMENT AGREEMENT. HRA LETTER
N0.41
HRA Meeting Minutes -2- July 17, 1995
Executive Director Prosser reviewed HRA Letter No. 41 regarding public
hearing and consideration of resolution authorizing sale of Richfield Rediscovered
property at 6645 Upton Avenue to Steven M. Grant Homes, Inc. to be known as
Steven-Marlin Grant Homes, Inc. in accordance with development agreement.
M/Luettinger, S/Susag to close the public hearina.
Motion passed 4-0.
M/ Luettinger, S/Susag that the following resolution be adopted• that it be
spread in the resolution book and that it be made dart of these minutes:
HRA RESOLUTION NO. 552
RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6645
UPTON AVENUE TO STEVEN M. GRANT IN ACCORDANCE WITH
A DEVELOPMENT AGREEMENT
M®tiran carried 4-A. This resolution appears as Resolution No. 552 in
Resolution Book No. 4.
ITEM #3 CONSIDERATION OF RESOLUTION RECOMMENDING APPROVAL
OF AGREEMENT FOR PURCHASE AND SALE AND PROMISSORY
NOTE; SAGE COMPANY. HRA LETTER N0.38
Executive Director Prosser reviewed HRA Letter No. 42 regarding consideration
of resolution recommending approval of agreement for purchase and sale and
promissory note; Sage Company.
Attorney Dean reviewed the agreement for purchase and addenda for the three
apartment building communities. Mr. Dean stated that there are a number of trigger
mechanisms to allow the HRA to cease the purchase process upon certain unfavorable
events to the HRA. In the end, the newly created corporations of the HRA, not the HRA
itself, would be the ultimate purchaser of the properties.
Commissioner Luettinger stated that he was concerned that this purchase not
attract an undesirable tenant population in these buildings. He stated that he does not
mean to imply that low income people are undesirable.
Mr. Prosser stated that in this process the HRA staff is encouraging a strong
effort in responsible tenant selection and reinvestment in multiple family housing. He
stated that Richfield is a community which already has sufficient housing for low and
moderate income families.
HRA Meeting Minutes -3- July 17, 1995
Commissioner Susag asked if the agreement language relating to the
underground storage tank was adequate to include the vaulting and monitoring systems
now needed.
Mr. Dean stated that this has been considered.
Commissioner Helmberger asked about the relationship between asset value
and outstanding mortgage.
Mark Ruff, Publicorp, stated that the asset value of the buildings is $2 million
greater than the mortgage obligation. In the first full year of operation, the project is
expected to produce a positive cash flow of $225,000 net of taxes and other
obligations.
Mr. Susag asked if there is a time restriction on refinancing as there is on the
resale.
Mr. Ruff stated that there was not, except that there was a finance lockout on
one property until 1998.
There was a series of technical questions by the Commissioners regarding the
language of the purchase agreement. Attorney Dean explained each of the provisions
in detail to the Commissioners.
Mr. Susag asked if Stuart Nolan conducted an inspection of the entire three
apartment complexes.
' Mr. Nolan stated that they inspected about 418 units out of 422 units. Only 11
units were vacant and on balance the properties were in very good condition, although
some isolated units are in poor condition. Mr. Nolan also mentioned that the HRA may
want to replace some boilers. He concluded that the HRA is getting their moneys'
worth and more in this transaction.
Mr. Harms reviewed the procedure under consideration for those in the
audience. He stated that the HRA is taking action on this matter at this time. He invited
anyone from the audience to address the HRA on this matter.
No one came forward.
Mr. Harms stated that he believed that this issue has been well researched by
staff and presents itself as an excellent opportunity for the HRA and our community.
He thanked the Sage Corporation for the opportunity.
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:
HRA Meeting Minutes -4- July 17, 1995
HRA RESOLUTION NO. 553
RESOLUTION ACCEPTING PURCHASE AGREEMENTS AND DIRECTING
APPROVAL OF SAME (HAMPTON PLACE, CRESTWOOD, HERITAGE
SQUARE EAST)
Motion carried 4-0. This resolution appears as Resolution No. 553 in
Resolution Bopk No. 4.
ITEM #4 CONSIDERATION OF ESTABLISHING THREE NONPROFIT
CORPORATIONS TO OWN APARTMENT COMMUNITIES KNOWN AS
HAMPTON PLACE, HERITAGE SQUARE AND CRESTWOOD, HRA
LETTER NO. 43
Executive Director Prosser reviewed HRA Letter Illo. 43 regarding consideration
of establishing three nonprofit corporations to own apartment communities known as
Hampton Place, Heritage Square and Crestwood.
M/Luettinger, S/Susag to approve the Articles of Incorporation and Bylaws for
Crestwood apartment community.
Motion passed 4-0.
M/Helmberger, S/Susag to approve the Articles of Incorporation and Bylaws for
Heritage Square apartment community.
Motion passed 4-0.
M/Susag, S/Helmberger to approve the Articles of Incorporation and Bylaws for
Hampton Place apartment community.
Motion passed 4-0.
At this time, the HRA opened a concurrent meeting of the Boards of Directors of:
• Hampton Place Apartments, Inc.
• Heritage Square Apartments, Inc.
• Crestwood Apartments, Inc.
and conducted a 20 minute meeting closing at 8:10 p.m.
HRA Meeting Minutes -5- July 17, 1995
ITEM #5 CONSIDERATION OF RESOLUTION SELECTING STUART SHELARD
MANAGEMENT CORPORATION TO MANAGE CRESTWOOD,
HERITAGE SQUARE AND HAMPTON PLACE. HRA LETTER N0.44
Executive Director Prosser reviewed HRA Letter No. 44 regarding consideration
of resolution selecting Stuart Shelard Management Corporation to manage Crestwood,
Heritage Square and Hampton Place. Mr. Prosser presented a detailed review of the
criteria used to select a management firm and why the current recommendation was
made.
Chair Harms asked how Executive Director Prosser planned to manage these
properties as a business.
Mr. Prosser distributed a Business Plan outline which would be used to model
the operation. Mr. Prosser described a group of internal and external personnel who
would be established as the core of a team to provide the overall direction in this
project. Mr. Harms asked that two items be added to the Business Plan outline:
8. Information regarding successes and failures to be shared with other RAMA
members.
9. Financial reporting and evaluation - At least quarterly financial reporting and how
the projects are meeting targets.
Mr. Harms asked that the HRA be given a background briefing on how the
reporting will be made. He stated that while the reporting must be adequate it need not
be overdone. Mr. Harms stated that the management firm should be able to submit
financial reports to be reviewed by Deloitte & Touche.
Elaine Swenson and Lisa Moe, Stuart Shelard, addressed the HRA regarding
their business. They described similar complexes they currently manage and briefly
described the methods and procedures they would use to manage the properties
including on site staffing.
M/Susag, S/Luettinger that the following resolution be adopted: that it be
sAread in the resolution book and that it be made part of these minutes:
HRA RESOLUTION NO. 554
RESOLUTION ACCEPTING SELECTION OF PROPERTY MANAGER AND
DIRECTING APPROVAL OF SAME (HAMPTON PLACE, CRESTWOOD, HERITAGE
SQUARE EAST)
HRA Meeting Minutes -6- July 17, 1995
Motion carried 4-0. This resolution appears as Resolution No. 554 in
Resolution Book No. 4.
ITEM #6 CONSIDERATION OF SELECTION OF CONSULTANT FOR LYNDALE
AVENUE COMMERCIAL FRONTAGE; ILN REDEVELOPMENT
PROJECT. HRA LETTER N0.45
Executive Director Prosser reviewed HRA Letter No. 45 regarding consideration
of selection of consultant for Lyndale Avenue commercial frontage; ILN
Redevelopment Project.
Dan Linnihan, Chair of the Planning Commission, addressed the HRA
regarding how the Planning Commission came to select the Hoisington Group.
Mr. Prosser stated that the study group will review the intersection at 77th and
Lyndale to ascertain if more of the business properties could be preserved in the
expansion of the intersection.
M/Susag, S/Helmberger to aRprove the execution of a contract with the
Hoisington Koegler Group. Inc. for an eight month period endipg in February 1996 not
to exceed $54.090.
Motion passed 4-0.
ITEM #5 CONSIDERATION OF RESOLUTION ACCEPTING CERTAIN
MORTGAGES AND RELEASING LETTER OF CREDIT; CSM, PHASE II.
HRA LETTER N0.46
Executive Director Prosser reviewed HRA Letter No. 46 regarding consideration
of resolution accepting certain mortgages and releasing letter of credit; CSM, Phase II.
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:
HRA RESOLUTION NO. 555
RESOLUTION ACCEPTING CERTAIN MORTGAGES
AND RELEASING LETTER OF CREDIT
HRA Meeting Minutes -7- July 17, 1995
Motion carried 4-0. This resolution appears as Resolution No. 555 in
Resolution Book No. 4.
ITEM #6 EXECUTIVE DIRECTOR REPORT
Executive Director Prosser asked HRA Commissioners to review the current
draft of the Communications Plan.
There was a brief general discussion concerning the proposed plan.
ITEM #7 CLAIMS AND PAYROLL
M/Susag, S/Luettinger that the following claims and payroll be approved:
FIRSTAR BANK
Checks: HRA: 8110-8228; 13539-13589; 13681-13726 $6,324,847.62
Section 8: 1092 $ 97,883.00
Motion carried 4-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:57 p.m.
Date Approved: $/21/95
omas E. Harms
Chair
n L. Devich am s D. Prosser
Acting City Clerk x cutive Director