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07-27-1999 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota Regular Meeting July 27, 1999 CAtL TD°ORDER The meeting was called to order by Chair Harms at 7:00 p.m. ROLL CALL. HRA Members Present: Thomas Harms; Joan Helmberger; Michael Sandahl and Russ Susag. Michael Sandahl arrived at 7:03 p.m. G HRA Members Not Present: Kristal Stokes. Staff Presenf: Steven Devich, Acting Executive Director; Thomas Ferber, City Clerk; Bruce Palmborg, Community Development Director; Jon Starks, Community Development Manager; and John Dean, City Attorney. APPRDUAL OF MINUTES M/Susag, S/Helmberger to approve the minutes of the June 21, 1999 HRA Meeting. Motion carried 3-0. HRA Meeting Minutes -2- July 27, 1999 Item #1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA. No one wished to address the HRA. Item #2 CONSIDERATION OF REPORT FROM. CSM'PROPERTIES, INC. REGARDI111G THEIR PROPOSAL FOR CONTINUATION Of INTERCHANGE WEST REDEVELOPMENT PROJECT. HRA LETTER NO. 38 Acting Executive Director Devich reviewed HRA Letter No. 38 regarding consideration of a report from'CSM Properties, Inc. regarding their proposal for continuation of the Interchange West Redevelopment Project stating that the HRA had deferred action until this meeting at which CSM was to provide the following: Evidence thaf CSM has met with impacted Interchange West residents and is prepared to present a plan to address their concerns caused by the delay in closing. A schedule setting the completion date for each of the specified steps necessary for progressing with the redevelopment. A letter acknowledging that failure to meet the completion date for any of the steps in the schedule may result in a termination of the Contract for Private Development with CSM for the redevelopment of Interchange West. Chair Harms stated that CSM had submitted the letter acknowledging that failure to meet the completion date for any of the steps in the schedule that they submitted may result in a termination of the Contract for Private Development with CSM for the redevelopment of Interchange West. . Murray Kornberg, Vice President of CSM Properties, Inc., discussed how CSM had responded to the three requirements. He described the five block meetings with property owners and other efforts to meet with residents. He stated CSM would renegotiate purchase agreements with property owners one on one to address each individual circumstance. He stated contingency removal would occur in December 31, 1999, with closings in April 15, 2000. He submitted a petition to the HRA signed by 37 homeowners, two thirds of those who attended the block meetings, supporting CSM to continue as the developer of the project. Mr. Kornberg submitted the following Interchange West Redevelopment Schedule: Meet with homeowners prior to HRA 7/27/99 meeting July 20, 1999 HRA consideration of "But For" Analysis August 16, 1999 Submit ISP Application August 31, 1999 Submit draft EAW for staff review October 13, 1999 Submit Rezoning Application October 15, 1999 Submit CUP Application October 15, 1999 C i HRA Meeting Minutes -3- July 27, 1999 Submit FDP Application Administrative Review Committee Staff submittal of EAW to EQB EAW comment period begins First Reading -rezoning Planning Commission -zoning/CUP/FDP EAW comment period ends City Council final approval of rezoning/ CUP/FDP/EAW negative declaration (Special meeting) Issuance of purchase offers to residential owners III commence immediately after 7/27 Hearing) Acceptance of residential purchase offers Issuance of purchase offers to commercial owners (Several already issued) Acceptance of commercial purchase offers Sale/leasing of new residential redevelopment Sale/leasing of new commercial redevelopment Satisfaction/waiver of conditions to purchase agreements Request for HRA land acquisition through eminent domain (Commercial and Residential Property) Notice of eligibility for relocation benefits Closing (subject to satisfaction of conditions) October 15, 1999 October 20, 1999 October 25, 1999 November 1, 1999 November 8, 1999 November 23, 1999 December 1, 1999 December 13, 1999 continuing through 12/31/99 continuing through 12/31/99 continuing through 12/31199 continuing through 12/31/99 continuing through 12/31/99 continuing through 12/31/99 December 31, 1999 First HRA hearing in January, 2000 January 15, 2000, or one day after first HRA hearing in January, 2000 April 20, 2000 or 90 days after relocation notice Mr. Kornberg reiterated that CSM had also submitted a letter acknowledging that failure to meet the completion date for any of the steps in the schedule may cause the termination of CSM's contract. He stated that CSM has no signed commitments yet for the commercial space as marketing continues. He stated Ron Clark and Rottlund are the townhouse developers. Mr. Kornberg stated a commitment to communication with residents and the HRA. He requested that HRA authorize staff to amend the Contract for Private Development to allow CSM the additional time to complete the site assembly activities. Jim Bergin, 7627 Oliver Avenue, stated concerns about whether CSM would go through with its commitments to go forward with the project and the purchase of houses. He stated that if Mr. Kornberg is so certain the project will occur, the risk should be more on CSM than the residents and more money should be given to the residents as a result of their property being tied up for two years. Terry Ahlstrom, 7600 Morgan Avenue, stated concern that the redevelopment risk has become the residents and that CSM should show evidence that the same situation will not occur at the end of December. HRA Meeting Minutes -4- July 27, 1999 Lorraine Schreyer, owner of 7615 Morgan Avenue, discussed the physical, mental and emotional impact of the uncertainty regarding the purchase of their homes. She appealed to the HRA to ask the City Council to buy out the homes. Ron Matheson, 7649 Penn Avenue, stated concerns about the impact on the residents indicating the following: • Houses would be very difficult to sell because of the uncertainty. • Some have let past the time for insurance recoverable damage from last years storms. • Some have purchased other homes because they trusted CSM, the HRA and the City. • Redevelopment is likely to occur and it should proceed as fast as possible. • The December 31 date must be adhered to. • CSM should give $10,000 earnest money instead of $5,000. • CSM should be flexible on the closings. Kevin Anderson, 7644-46 Logan Avenue, asked that the HRA ask that the City Council provide assistance to homeowners such as forgiving the second half of 1999 property taxes. He stated homeowners were in a difficult position and there seems to be few alternatives. He requested better communications from the HRA, staff and CSM. Wally McCarthy, owner of McCarthy's Oldsmobile car dealership, stated that CSM appears not to be in a position to go ahead, but that CSM is a good developer. He stated the car dealership is not for sale and it would have to be taken by condemnation. He stated the HRA should ask how the City would benefit from the project. He stated it is important to know if it will happen, so that if the dealership remains it will be cleaned up or to know it will close. Chair Harms stated Mr. Anderson was correct, that communications need to be better and that steps will be taken to improve them. He stated the City does not have the money to buy out all the homes nor the authority to forgive property taxes since the majority of those taxes go to other jurisdictions such as the school district and Hennepin County. He stated that he would propose to the HRA and make a motion that the HRA grant CSM the extension based on the schedule presented with the following condition: That the extension with CSM be on a nonexclusive basis. He stated that if another developer could demonstrate that they could complete the redevelopment faster and better than CSM, then the HRA could award that developer the project. Mr. Kornberg stated concerns that fair, objective criteria be used to evaluate any proposal. Discussion followed regarding the non-exclusivity issue and the development of objective criteria in the best interests of residents and the HRA. HRA Meeting Minutes -5- July 27, 1999 M/Harms, S/Susag to grant CSM an extension based on the Interchange West Redevelopment Schedule submitted by CSM with the following two conditions: 1. That a clause be added to the agreement providing a clear termination clause by failure to meet any of the timetables in the schedule. 2. That the Redevelopment Agreement be made nonexclusive based upon the HRA's right to consider and act upon a proposal by another developer which meets certain criteria establishing that it is a development proposal better for the community and better for the_residents and that staff develop these criteria to put into the text of the agreement. Discussion of the motion followed. Chair Harms stated that in general terms the criteria may include such things as: • Qualifications and experience of the developer • Value of the project • Timing • Impact on the neighbors • Enhanced value over CSM's proposal • Does the new developer take into consideration and resolve economic hardships created upon the sub-developers Rottlund Homes and Ron Clark Construction for preapproval development costs Commissioner Sandahl stated he wished some things had been done differently, but there is no good answer to solve each individuals problem. He stated that the proposal to allow CSM to move forward would have the least negative impact for the most people, knowing that this is not the best solution for everyone. Commissioner Susag stated if there was another developer ready to go he would support them, but this is not the case so he would support Mr. Harms motion. Ernie Lindstrom, 7604 Fremont Avenue, asked for clarification on the status of the purchase agreements previously negotiated by CSM with homeowners. Chair Harms stated they expired and are no longer valid. Sherri Keep, 7643 Newton Avenue, asked questions about the guarantees for developers to perform. Cindy Triggs, 7639 Penn Avenue, stated concerns that CSM would not commit to taking into consideration the financial, hardship caused by delays. Mr. Kornberg stated that each case would be dealt with on a case by case basis and hardship cases would be considered. Barb Gresbrink, 7609 Oliver Avenue, suggested that the definition of hardship include medical conditions caused by stress. HRA Meeting Minutes -6- July 27, 1999 Kevin Anderson, 7644-46 Logan Avenue, stated that the HRA required minimum standards for the developer, but that he would like to see minimum requirements for the HRA and City to communicate to homeowners. Chair Harms stated this was not an unreasonable request and better communications mechanisms will be developed. Bob Guthe, 7634 Oliver Avenue, stated that CSM did not have too much trouble getting the purchase agreements for the residential property, but the real problem is getting the commercial property first. Ron Matheson, 7649 Penn Avenue, stated concern about how things would work if a homeowner signed a purchase agreement with CSM and then another developer was chosen. Dave Bakke, 7601 Morgan Avenue, suggested that CSM pay anon-refundable down payment to the homeowners. Discussion followed regarding eminent domain issues and processes and how they relate to this type of project. Tom Haley, 7620 Oliver Avenue, asked how long until the criteria would be developed and available. Chair Harms stated HRA Attorney Dean would have them prepared shortly and present them to the HRA at their next meeting. Pat O'Brien, a business owner in the 76~' Street and Lyndale Avenue area, criticized the HRA for allowing so many delays and putting the people at risk. Commissioner Helmberger stated support for Mr. Harms motion and developing clear criteria. Chair Harms called for a vote on the motion before the HRA. Motion carried 4-0. Chair Harms directed Acting Executive Director Devich to develop a communications plan including the ombudsperson. Chair Harms called for afive-minute recess at 8:40 p.m. and reconvened the meeting at 8:45 p.m. 1 r r HRA Meeting Minutes -7- July 27, 1999 Item #3 CONSIDERATION `OF APPOINTMENT OF HRA ADVISORY COMMITTEE TO RECOMMEND POLICY REGARDINGREPLACEMENT OF AFFORDABLE HOUSING. HRA .LETTER. NO. 39 Acting Executive Director Devich reviewed HRA Letter No. 39 regarding a staff recommendation that an advisory committee be implemented to recommend policy regarding replacement of affordable housing in a manner consistent with the City's adopted Livable Communities housing goals, the Comprehensive Plan and the Mitigation Plan. M/Sandahl, S/Helmberger point an advisory committee to recommend policy regarding replacement of affordable housing with the following conditions: 1. The Richfield Community Council will facilitate the process for securing members from the following. organizations: • League of Women Voters • Familink • Richfield Public Schools • Community Churches • City Council • H RA • Richfield Apartment Management Association • Community Development Department • Public Safety Department 2. Meetings shall be facilitated by Jeanne Massey from the South Hennepin Human Service Agency (SHERPA). 3. The policy recommendations shall be completed by December 31, 1999 for presentation to the HRA at their January 17, 2000 meeting. 4. The cost of formulating the recommendations shall not exceed $5,000. (Ryan. Companies. U.S. will reimburse the HRA for the cost.) 5. The Chair and Acting Executive Director are authorized and directed to sign an agreement effectuating this relationship with SHERPA. Motion carried 4-0. HRA Meeting Minutes -8- July 27, 1999 Item #4 PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF 5U& EAST 67~" STREET TO RICKY A. ANQ ANN L. GARLAND, OWNERS OF 500 EAST fi7T" STREET. HRA LETTER NO. 40' Acting Executive Director Devich reviewed HRA Letter No. 40 regarding the proposed sale of the property at 506 East 67~' Street to Ricky A. and Ann L. Garland for $2,100. M/Sandahl, S/Susag to close the public hearing. Motion carried 4-0. M/Helmberger, S/Sandahl that the following HRA resolution be adopted, that it be spread in the HRA resolution book and that it be made part of these minutes: HRA RESOLUTION N0.718 RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 506 EAST 67TH STREET TO RICKY A. GARLAND AND ANN L. GARLAND Motion carried 4-0. This HRA Resolution appears as HRA Resolution No. 718 in HRA Resolution Book No. 6 Item #5 CONSIDERATION OF RICHFIELD REDISCOVERED AND TRANSFORIIIIATION HOMES PROGRAM' FUNDING PLAN AND REQUEST. OF CITY COUNCIL: TO AUTHORIZE. SALE OF GENERAL OBLIGATION TAX. LNCREMENT REVENUE BONDS. HRA LETTER NO.41 Acting Executive Director Devich reviewed HRA Letter No. 41 regarding a proposed Richfield Rediscovered and Transformation Homes Program funding plan and a request that the City Council authorize the sale of general obligation tax increment revenue bonds. Sid Inman, Ehlers/Publicorp, Inc., responded to questions from Commissioner Susag regarding City Council actions required authorizing the bond sale indicating that there is no statutory requirement for a public hearing for this type of bond. Commissioner Susag stated that in the spirit of the City Charter provisions regarding public hearings on capital improvement expenditures, the City Council should conduct a public hearing regarding this bond sale. Acting Executive Director Devich stated this would be done. r 1 HRA Meeting Minutes -9- July 27, 1999 Discussion followed regarding when the funding for the bond sale would become available for the Transformation Homes Program. M/Sandahl, S/Helmberger to authorize thetwo-year Richfield Rediscovered and Transformation Homes Program funding plan requesting the City Council to authorize the sale of general obligation tax increment revenue bonds and authorize the HRA Chair and Acting Executive Director to execute agreements related to the funding plan for the Richfield Rediscovered and Transformation Homes Programs. Motion carried 4-0. n ~~ Item #6 CONSIDERATION OF RICHFIELD ENTERPRISE FACILITATION PROGRAM STATUS REPORT. HRA LETTER NO. 42 Acting Executive Director Devich reviewed HRA Letter No. 42 regarding the Richfield Enterprise Facilitation Program. Rob Smolund, the Enterprise Facilitator, reviewed and answered questions regarding the Richfield Enterprise Facilitation Program mission statement, process flow chart and activity report. Item #7 CONSIDERATION OF COMMUNITY APARTMENT PROGRAM .STATUS REPORT. HRA LETTER' NC3.43 Acting Executive Director Devich reviewed HRA Letter No. 43 regarding the Community Apartment Program. Julianne Manship, Coordinator of the Community Apartment Program, reviewed and answered questions regarding the following program elements: • Richfield Apartment Managers' Association (RAMA) • FOYER Program . • Livable Community Team • Collaborations • Library Pilot Project for Hispanic Children HRA Meeting Minutes -10- July 27, 1999 Item #8 CONSIDERATION Of RESOLUTION AUTHORIZING EXECUTION OF CERTIFICATE OF CaM'PLETION FOR GALYA:N'S TRADING COMPANY 12ETAFL STORE REDEVELOPMENT PROJECT. HRA LETTER'N0. 44 Acting Executive Director Devich reviewed HRA Letter No. 44 regarding a request for issuance of a Certificate of Completion for the Galyan's Trading Company retail store redevelopment project. M/Sandahl, S/Susag that the following HRA resolution be adopted. that it be spread in the HRA resolution book and that it be made part of these minutes: HRA RESOLUTION N0.719 RESOLUTION AUTHORIZING EXECUTION OF A CERTIFICATE OF COMPLETION FOR THE GALYAN'S TRADING COMPANY RETAIL STORE REDEVELOPMENT PROJECT Motion carried 4-0. This HRA Resolution appears as HRA Resolution No. 719 in HRA Resolution Book No. 6. Item #9 CONSIDERATION OF RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LlM1TS ESTABLISHED 'BY MINNESOTA STATUTES 466.04. HRA LETTER N0.45' Acting Executive Director Devich reviewed HRA Letter No. 45 regarding consideration of a resolution affirming the Municipal Tort Liability limits established by Minnesota Statutes 466.04. M/Sandahl, S/Helmberger that the following HRA resolution be adopted. that it be spread in the HRA resolution book and that it be made part of these minutes: HRA RESOLUTION N0.720 RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY MINNESOTA STATUTES 466.04 Motion carried 4-0. This HRA Resolution appears as HRA Resolution No. 720 in HRA Resolution Book No. 6. i [' HRA Meeting Minutes -11- Item #10 EXECUTIVE DIRECTOR REPORT None. Item #11 CLAIMS AND PAYR©LL July 27, 1999 M/Sandahl, S/Helmberger that the following claims and payrolls be approved: FIRSTAR BANK Section 8 Checks: 13877 -13990 $133,738.64 HRA Checks: 20759 - 20766;.=20884 - 20938 $170,208.06 Motion ca-ried 4-0. 1 J ADJOURNMENT The meeting was adjourned by unanimous consent at 9:13 p.m. Date Approved: August 6. Thomas P. Ferber City Clerk Harms ~S#e~/e~ L. Devich Acting Executive Di