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HRA 04/27/1983 - 29374CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING APRIL 27, 1983 CALL TO ORDER: Vice - Chairperson Prieditis called the April 27, 1983, Housing & Redevelopment Authority meeting to order at 7:43 p.m. ROLL CALL: Members Present: Elmars Prieditis, Carolyn Svendsen, Duane Prairie, Walter Rasmussen Members Absent: Larry Comers Others Present: Jerrold Boardman, City Planner Nasim Qureshi, City Manager Sid Inman, City Finance Director Dave Newman, City Attorney Bob Olmstead, Fridley Lions Bob Cook, Fridley Lions Norm Reznicow, Fridley Lions Mike Murphy, Fridley Lions APPROVAL OF MARCH 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: 'MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE MARCH 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF MARCH 31, 1983, SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES: Mr. Prieditis recommended that the approval of these minutes be delayed until Mr. Commers could be present. 1. CENTER CITY DISTRICT A. Hardware Building Update 1. Status on Existing Lease Property (Memo #83 -23 from Executive Director) Mr. Newman stated Clothing Liquidators, Inc., has been removed from the hardware building by an unlawful detainer, and the City has commenced action against them for the unpaid rent. Mr. Carson has filed an answer which means the City has to go to*trial to get the judgement. He suspected the case would come to trial within the next 3 -4 months, and then there would be the problem of trying to • HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 2 collect the rent. It was his understanding that Mr. Carson does not have much in the way of assets, but they will take certain steps to find out what he does have. If he hasn't much, there isn't much the City can do but wait and hope that sometime within the next ten years, Mr. Carson acquires some real estate so the City can collect the rent. Mr. Rasmussen asked if the HRA had collected any money at all from Mr. Carson as nothing was indicated on the breakdown of "HRA Rent ". Mr. Boardman stated they did not receive-any-rent, but did receive a deposit. Mr. Inman stated the breakdown refers only to rents and not to deposits. Staff was requested to report only the rents. They do not consider the first time deposits to be rent, but under the new process, they are going to consider the first and last months as a security deposit. Actual rent received was "none ". Mr. Rasmussen asked about any liens against the property for improve- ments made by Mr. Carson. 0 Mr. Boardman stated there is one lien and that is about $1,200. Mr. Newman stated the lien is part of the lawsuit filed against Mr. Carson. He thought the total amount due the HRA is around $11,000. Mr. Rasmussen asked what the legal work is costing the City. Mr. Newman stated the hourly rate is $50. He stated they have put about 3 -4 hours into this particular project. They have a separate action they have filed for restitution of the property. Mr. Rasmussen stated he felt it was fair to find out exactly where they stand with this property. He did not like to spend a lot of money on something they probably cannot collect. Legal fees mount up. Mr. Newman stated that as far as collecting a judgement against Mr. Carson, they can do that rather speedily. As far as a lot of legal time, it is going to take some waiting to get into the courts. He did not think the total time for attorneys' fees was oing to be significant, particularly when they are talking about a 11,000 sum owed the HRA and considering the fact that the judgement is valid for a minimum of ten years and is accruing interest as they wait. Mr. Prairie stated he thought the HRA should have a breakdown of all Is the transactions concerning Clothing Liquidators, Inc. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 3 Mr. Inman stated there was a $1,291 deposit paid on Dec. 6, 1982. Mr. Carson owes four months' rent at $3,140 /mo. for a total of $12,560. Mr. Prairie stated that a deposit is usually one month's rent. Mr. Newman stated that in looking at the lease, it was his recollec- tion that the HRA reduced that deposit because of certain repairs to the building which Mr. Carson has made. Mr. Newman stated he thought Mr. Carson made in excess of $3,000 in repairs to the property. Mr. Rasmussen stated he recalled that they were going to receive one month's rent and now that amount has been reduced to $1,291. Mr. Prieditis asked Mr. Newman how much he expected a case like this to cost-in legal fees. Mr.Newman stated it depended upon how much Mr. Carson tries to contest the case. If Mr. Carson does not do much, he would think the legal work would take another 6 -10 hours in drafting the necessary docu- ments and making the necessary court appearances. • Mr. Rasmussen stated he felt the HRA should know exactly what the HRA has spent in this process. He felt the HRA has to have that informa- tion. He was not trying to deny good legal work, but to go ahead and spend a lot of money trying to collect a "dead horse" was as bad as leasing the building to Mr. Carson in the first place. Mr. Prairie stated if they have been unable to collect the rent now, he felt the chances of collecting the rent in the future were very slim. Mr. Rasmussen stated he would like to see them send this to a collection agency before spending any more money in legal work. He did not mind spending money for good legal work if there was some kind of recovery. Mr. Boardman stated the way it should have been and the way they have set the process up now is to have the first month's rent and the last month's rent before letting a leasee move in. In the lease the HRA looked at, it was set up that because of the amount of expenditures, the deposit was reduced. Mr.Prieditis stated he would like Staff to get all the documentation together on the hardware building lease - -past minutes, expenses, copies of agreements, what has been collected, etc. �j HOUSING & REDEVELOPMENT AUTHORITY-MEETING; APRIL 27; 1983 PAGE 4 Mr. Newman stated they do not intend to do anything on this for the next 30 days anyway so he did not have any problem with delaying this for 45 days until the HRA has had a better chance to review all the information. Mr. Boardman stated he would get that information together for the HRA. Mr. Newman stated that if the HRA does decide to go to a collection agency, he would suggest that Staff get an opinion from the collec- tion agency on what the chances are of collecting with or without a judgement. 2. Lease Process Mr. Boardman stated that in the agenda is the Standard Lease Process the HRA asked Staff to establish. It is for the HRA's review. Also included are a couple of standard letters that would be sent out as a matter of the process for non - payment within a certain period of time. Mr. Boardman stated that also included in the agenda was a breakdown of the rents, the leasees, monthly rents, and the arrears. This • information was requested by the HRA. The leasee owing the most rent, of course,was Clothing Liquidators, Inc. Gary's, the garage just north of City Hall, is behind in rent. At this time, Gary has paid but is still behind in one month's rent at $225 plus interest. A letter has been sent to him, but no response has been received. He stated Gary's has been in operation in this location for many years, and did the HRA want to take an unlawful detainer to have the business removed? Mr. Rasmussen suggested Mr. Boardman talk to the owner of Gary's personally to see what the problem is before making any further decision. Mr. Prairie stated he would agree with Mr. Rasmussen's suggestion. At least this leasee continues to pay rent, even though he is behind. Mr. Prairie stated that #2 under "New Leases" in the Standard Lease Process stated that: "There will be a staff review of required financial documentation (such as asset /liability report, bank/ financial credit reference checks, financial statements of existing businesses, etc.). This review shall include the HRA Executive Director, City Manager, Finance Director, and the HRA Attorney." He felt there would be some worth to include the HRA in that review. Mr. Boardman stated he had no problem with including the HRA in the review of the financial documentation. • HOUSING & REDEVELOPMENT AUTHORITY MEETING; APRIL 27; 1983 PAGE 5 MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO AMEND #2. UNDER "NEW LEASES" TO INCLUDE "THE HRA" AFTER THE "FINANCE DIRECTOR ". Mr. Rasmussen stated that if the HRA agrees to #2, be thought they would be going through an exercise that is going to be quite costly. He thought a very simple report from the Executive Director with normal credit references and a financial statement was all that was necessary for the HRA to review. He thought it was too expensive to include the legal review and other staff review. If, in review - ing the report from the Executive Director, there was something the HRA did not like, then they could turn down an obvious bad lease or they could include the attorney at that time. Mr. Boardman stated he would rewrite #2 and bring it back to the HRA. MS. SVENDSEN WITHDREW THE ABOVE MOTION WITH THE CONSENT OF THE SECONDER. Ms. Svendsen asked if the HRA could get a report on the status of all leases and rent payments on a regular basis. • Mr. Inman stated the HRA will be receiving that information on a monthly basis. Mr. Rasmussen stated he did not like the wording of #3 under "New Leases ": "The signing of the lease must be approved by the HRA with a report from the Executive Director with written approval from the HRA attorney." If the city attorney is going to do the approving, why was the HRA needed? He felt that statement was a little top- heavy. Mr. Boardman stated the following process would be followed for new leases: (1) All leases would be executed on standard lease forms; (2) The Executive Director would provide a report to the HRA with all the financial documentation. He stated that if, at that time, the HRA felt it was necessary to go to the attorney for further review of the lease, they could do so. However, he would like to send the lease to the attorney as a standard process to make sure all the legal things are taken care of. The attorney is not necessarily approving, but changing any wording that is- necessary it) the contract itself. The approval will come from the HRA when they look at all the financial documentation. He felt it was very important to include the attorney, but it was up to the HRA whether they wanted the attorney involved in the beginning or the end of the process. Mr.Rasmussen stated he felt it would be better to involve the attorney afterwards as he felt the HRA could probably intelligently weed out some of the leases that were obviously bad leases. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 6 Mr. Boardman stated the HRA has to take into consideration the fact that all of the leases are temporary leases. All they are trying to do is occupy the buildings to keep some income coming in. They try to set up the leases on a month -to -month basis so the HRA can take the .property within 30 days if there is a project. Ideally, they would rather not own any property at all. When the hardware building was purchased, the HRA felt they had a pretty good package, and there was some matching federal monies to reduce the cost. The building was empty at the time, and some additional money was saved in relocation and moving costs. Mr. Rasmussen stated it seemed they just keep putting out money as though it is never going to end, and there is no master plan for any of it. There is a proposal on the agenda from some very responsi- ble people from Fridley, and the HRA would really like to help them, but without a major plan, again they are getting into the same "flea market" kind of thing. He felt there should be a major plan that is going to encompass everything, rather than handling one crisis at a time. Mr. Prieditis stated this should probably be a subject for discussion when their agenda is not so lengthy. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO CONTINUE DISCUSSION ON THE STANDARD LEASE PROCESS UNTIL THE NEXT MEETING, BASED ON -THE PREVIOUS DISCUSSION. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Inquiry by Lions Club on Hardware Building Property Mr. Bob Olmstead stated he was from the Fridley Lions Club and was standing in for John Gargary, who previously made some inquiries about the hardware property. Mr. Olmstead stated the Fridley Lions Coub is a substantial club, and they are in their 30th year. They are interested in the hardware building. He stated they have gone through the club process, the Board, and the general membership, and that is why they are at this HRA meeting. Mr. Olmstead stated they have been informed by some city officials that to bring the hardware building up to code and to use it as a club /meeting place and assembly area, there would need to be some extensive repairs. The Lions Club would like to know if the HRA would be willing to lease the hardware building to them on a long term lease or possibly even purchase the building. The reason they need a long -term lease (5 yr.) is because of the repairs needed to bring the building up to code. It has to be economically feasible to them. A conservative estimate on bringing the building up to code is $40- 50,000. If they did lease or purchase the building, they would make the building a credit to the community. The club intends . HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 7 to stay in Fridley and the club needs a home. Right now their club meetings are held in a retail restaurant. Mr. Olmstead stated the building would be used as,a club meeting place. They have bingo two nights a week, Thurs. and Sat. evenings, with two club meetings a month on the second and fourth Tuesdays. They would be interested in putting in a wall and getting some income by having a rental hall for community and private functions. Mr. Prairie asked how many vehicles were generated by the bingo. Dr. Reznicow stated there are approximately 95 -100 people on Thurs. nights now, and about 160 -165 people on Sat. nights. Maximum cars would probably be about 100. Parking would have to be arranged with Mr. Levy. Mr. Prieditis stated that, as Mr. Rasmussen had stated earlier, the HRA is really going to have to seriously look at the future for the west side of University. He thought they should spend a whole meeting discussing what would be a realistic development for that area. He liked the Lions Club proposal, but he did not want the HRA to mislead them or the public. • Mr. Bob Cook stated that surprised him as he was under the impression that there was some kind of overall plan for this area. Mr. Rasmussen stated that even though the Lions Club is an outstand- ing organization, he would suggest they try to develop a major plan before they start piecemealing parcels away. That was why he was not in favor of leasing the hardware store to Clothing Liquidators, Inc. Mr. Prairie stated that at one time, there was a plan for the whole area, divided up into phases. This area was Phase 3. There were two developers who felt they needed all the acreage to make the project viable and it included tying the hardware building into the shopping center. However, after 3 -4 years of not being able to get the area developed, the HRA should discuss if there are better uses for that area than was originally proposed. Mr. Boardman stated it was going to take more than a discussion by the HRA to make those determinations. If the HRA really feels they would like to develop a plan for the area, it is going to take a market analysis on that property so they can determine what is and what isn't feasible. With that market analysis, there is the expense of drawing up the plan. It could cost around $20- 40,000 and will take time. Before the HRA takes that kind of step, they should discuss it. 0 HOUSING & REDEVELOPMENT'AUT_HORITY MEETING; APRIL 27; 1983 PAGE 8 Mr. Mike Murphy stated he is the incoming president of the Lions Club. He stated from what he understood, the HRA would first have to come up with a comprehensive management plan which would take time. Then they would have to get a market analysis which could take another six months. It was also his understanding that there was no developer or any financial backing to develop at this time, and a couple of developments have already fallen through. It could be at least five years before anything happens and,in the meantime, the Lions Club could be paying rent and the building would not be sitting empty. He hoped the HRA would take this into consideration. Mr. Prieditis suggested the HRA set up a special meeting to discuss their ideas and plans for this area so they can respond to the Lions Club. The HRA set a special meeting for Wednesday, May 4. 1983. B. Property Acquisition Update 1. Dr. Ryan Automotive (Resolution HRA 6 -1983) Mr. Boardman stated the HRA's appraisal was $113,000 on the land with $19,746 for fixtures. That offer was made to Dr. Ryan. His attorney responded recommending condemnation action. Through the quick -take process (90 days), they have worked out an agreement with Dr. Ryan to take the property sooner than that. Mr. Boardman stated they have contract documents they have to meet with Columbia Park Properties. With this process, they will meet those-contract documents. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE RESOLUTION HRA 6 -1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY DIRECTING CONDEMNATION AND DETER - MINING THE NECESSITY FOR AND AUTHORIZING THE ACQUISITION OF CERTAIN PROPERTY BY PROCEEDINGS IN EMINENT DOMAIN ON LOTS 12, 13, AND 14, BLOCK 4, REE'S ADDITION TO FRIDLEY PARK, 6389 UNIVERSITY AVE. N.E. ". UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Community Credit (Resolution HRA 7 -1983) MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIEy TO APPROVE RESOLUTION HRA 7 -1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY DIRECTING CONDEMNATION AND DETER- MINING THE NECESSITY FOR AND AUTHORIZING THE ACQUISITION OF CERTAIN PROPERTY BY PROCEEDINGS IN EMINENT DOMAIN ON THE LEASEHODD INTEREST HELD BY COMMUNITY CREDIT CO., 6339 UNIVERSITY AVE. N.E. " -. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 9 Mr. Boardman stated they need to get a leasehold appraisal on Community Credit. Community Credit's objection is that the HRA is hurting their leasehold interest. He stated he has gotten a couple of quotes - -one around $900 and one around $800. He would like authorization to proceed with the lowest quote. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO PROCEED WITH THE LEASEHOLD APPRAISAL WITH THE LOWEST QUOTE. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Svendsen stated it was her understanding that when the HRA bought Gus Doty's building, the HRA paid some additional monies over the appraised value of the property to go for buying out leases to prevent this type of thing from happening. Mr. Boardman stated they will first have to determine if there is any leasehold damage. If there is leasehold damage, they will have to determine if they should go back to Gus Doty with that leasehold damage based on the intent of the sale. • 3. Awarding Bids on Sale & Removal of 332 - 64th Ave. N.E. (Resolution HRA 8 -1983) MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION HRA 8 -1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY APPROVING THE SALE OF THE RESIDENTIAL STRUCTURE AT 332 - 64TH AVE. N.E. AND AWARDING THE BID TO SAFEWAY MOVERS ". UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. II. GENERAL RESERVE SYSTEM DISCUSSION: Mr. Boardman stated Mark Haggerty and representatives from O'Connor & Hannan and Piper, Jaffray were at the March,10th HRA meeting to make a presentation on the General Reserve System. The HRA gave the authorization to go ahead and prepare materials. He stated he, Mr. Qureshi, and Mr. Inman have been working with Piper, Jaffray and O'Connor & Hannan for the last 3 -4 weeks to put a package together. They felt it was best to bring this back to the HRA to discuss Staff's feelings about the General Reserve System. Mr. Boardman stated he would review the purpose of the General Reserve System. Generally, under a normal industrial revenue bond, a company comes in and requests money for development. That money for development comes from indus- t10 rial development bonds (ID B). If they choose to sell those, industrial development bonds are classified as tax exempt bonds and the tax exempt bonds reduce the interest rate. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 10 • Mr. Boardman first reviewed the present system of industrial revenue devel- opment bonds to show the similar(acharacteristics of the two systems. Under the present system, the City Council approved the bond sale after an in -depth review of the company's financial report. The ID bonds then go to the market as a tax exempt issue. As a part of that issue, the bond holders require (1) one year debt service to be deposited with the trustee as security on default. Interest that is generated from that debt service account goes to the property owner for bond payments or other property related costs. In the General Reserve System, the basic principal is the same as a normal IDB except the City /HRA is giving additional security to the bond holders by setting up two reserve pools of funds that could be used in case of any default. This additional security is what allows the bond holders to reduce the interest rate on a particular issue by as much as 2% or allow a rated bond on a project that may not normally be rated. The first reserve pool is made up of those funds that are held as (1) one Year debt service funds under the normal IDB process. The only difference is that under the general reserve system, all of these funds from the IDB sales are pooled and are used as protection against all IDB's. This pool' of funds are called the "Common IDB fund ". If, for example, a- company defaults on their IDB, the one year debt service for that company is drawn .on first, then, if necessary all other funds in the pool can be drawn on. The more companies involved in the system,:; the better the security on one single issue. The second reserve pool is called the general reserve fund. This fungi is made . up of money placed in reserve by the City /HRA from tax increment sources. This pool is called the secondary reserve because it backs up the common IDB fund. The fund is initially established with a minimum amount and a maximum ceiling. As is apparent with the system, the pool of funds is most important in the early stages until the Common IDB fund is so strong that the secondary system is no longer a factor of security. The minimum reserve is generally $200,000 to $250,000 with a maximum-ceiling of five million. The minimum and maximum will be determined by the HRA in the final documents with input from the financial consultants. The general reserve fund is increased in several ways. Initially, the HRA will put in funds from TIF reserves or from a specific project to the minimum amount necessary to operate the fund. From that point on, the HRA will increase the fund based on new project imcome and interest earnings from both the Common IDB fund and the General reserve fund. An example of this; if a company wants to develop in the tax increment district with the system and requires a $1,000,000 IDB issue, $100,000 or approximately 10% (1 year debt service) would go to the Common IDB fund. The HRA through Tax Increment would put in $150,000 or 15% of the IDB issue into the General Reserve fund. The $150,000 would come from the TIF bonds that would be sold for assistance as needed. In this situation, we will say that the TIF that is generated by this develop - ment is $500,000. This means that $150,000 is taken for the reserve fund, $350,000 is still available for other assistance as needed for development. The benefit to the company is an overall reduction of interest rated on the IDB issue of approximately 2% (or approximately $200,000 on a $1,000,000 issue). The benefit to the HRA is that the $150,000 in TIF funds that is put into the general reserve fund is an investment that will eventually be returned to the HRA as the system grows. When the system grows, the general reserve fund HOUSING AND REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 11 eventually reaches the maximum ceiling so that TIF funds are no longer needed to support the system. In fact, at that point the HRA will start drawing off any excess funds from the system for use with project development. The example that was shown was with eleven IDB's equalling $30,000,000 of issues with the upper ceiling of $3,000,000 already reached. The HRA could draw -off between $300,000 and $600,000 per year depending on interest earnings from the common IDB funds. These funds would go back in the HRA for additional projects. This sytem could provide a long term source of assistance to the City that could continue even after the use of tax increment districts or Industrial Development Bonds. An important issue to now consider is the security that is provided by the system. To do that we have to look at the default stream, or what are the steps and protection that is available if a company defaults on the IDB and TIF bonds. Under the current system with an IDB and TIF bonds sold on a specific development, if the IDB goes into default, the TIF sold on the development based on tax income would fall back on the HRA to carry until the IDB bond holders foreclose on the project and put the project back on the market as a taxed property. The IDB default stream is as follows: 1. Trustee begins forclosure on building. 2. Trustee begins suit against personal security. 3. One year debt service is drawn off to make bond payments. • 4. Building goes to Bond Holders for disposal. In the meantime, taxes are not being paid, so the County after four years, starts tax forfeit procedure. Bond payments fall on the HRA for that period of time until the building is leased or sold. The HRA is highly restricted in its recourse. Under the Reserve System, the company is making monthly payments to the trustee for the City /HRA as owners of the property. The company is removed within 30 -60 days in case of default on its lease payment. The City /HRA immediately begins efforts to re -lease or sell the building. In the meantime, the City /HRA begins a personal guarantee suite against the company. Because the reserve system in in place, the City /HRA has several levels of security backing up the default. 1. First,the Individual IDB one year debt service can be drawn on. 2. Second, the remainder of common IDB fund can be drawn on. 3. Third, the existing general reserve funds can be drawn on up to the amount in the fund. 4. Forth, the building as security would go back to the bond holders. This sytem of security is so solid and gives the City such a quick recourse that it gives the HRA immediate protection on TIF bonds sold for that development. The City /HRA can initiate immediate action to release or sell instead of waiting for the County to foreclose for non - payment of taxes. HOUSING AND REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 Page 12 This is as simple as we can describe a very complex program and looked at it very carefully at staff level prior to presenting it to the HRA and the City. Mr. Inman and Mr. Qureshi are also here in case you have any questions of them about the system. Mr. Prieditis asked Mr. Inman that the system seems too good, are there any regatives to that program that he sees. Mr. Inman responded that the staff has looked at the system wtih O'Conner & Hannon; Piper, Jaffrey & Hopwood; and feels that the system is very sound and as far as he can see, has no negative aspects over the present system. Mr. Boardman stated the City Council discussed this on Monday, April 25, at their conference meeting and approved it informally. At their next meeting, they will be approving a resolution based on those discussions. He stated they are looking for approval from the HRA of the Reserve System process. He stated there is still a lot of work and legal documents to be done, but this would just authorize Staff to work with O'Connor & Hannan. He stated Mr. Commers has approved of the concept of this system, but if the HRA would prefer to wait until their May 12th meeting to give this approval, that was all right. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO PASS RESOLUTION HRA 9 -1983 APPROVING THE RESERVE SYSTEM PROCESS AND TO AUTHORIZE STAFF TO WORK WITH O'CONNOR 6 HANNAN. Mr. Qureshi stated there are some areas regarding the roles of the HRA and the City that will have to be discussed and negotiated between the HRA and the City Council. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. III. MOORE LAKE DISTRICT: A. Request for Assistance by Tom Brickner for Property Development at 6211 Central Ave. N.E. (Memo #83 -37 from Executive Director) Mr. Boardman suggested the HRA discussion on this item be tabled until he had gotten more information from Mr. Brickner. B. Request for "Right of Development for '202' Application by St. Phillips Human Services, Inc. Mr. Boardman stated he has given St. Phillips the date of May 12th to come back to the HRA with more information. He stated it looked like the project will be 40 units rather than 60 units because of the number of units HUD is giving out. With tax increment monies, the amount of money the HRA has available is about $310- 315,000. The estimates on 40 HOUSING & REDEVELOPMENT AUTHORITY MEETiNG,' APRIL'27, 1983 PAGE 13 the acquisition in the amount of property needed for the project are about $355,000. There is a shortfall in that level and also a shortfall in the actual amount needed - -about $25,000 needed for soil correction. Mr. Boardman stated that Judy Lee of the Ebenezer Society asked him if the City Council was going to be giving any block grant monies like they did last time. He told her that at this time there is no commitment for block grant monies. Ms. Lee stated it was necessary for them to have a block grant commitment to even submit an application to HUD. He had suggested they approach the City Council and request block grant monies if block grant monies are available in 1984. That was a question he could not answer. Mr. Boardman stated more information will be coming to the HRA at their May 12th meeting. One question the HRA has to consider is: With 40 units rather than 60, do they still want to proceed with the project? IV. FINANCIAL REPORT: A. Financial Report Mr. Inman stated the HRA had the Cash Flow information Mr. Commers had requested for the new figures on the plaza, the quarterly report, and • the unaudited annual report. No action was needed. B. Check Register MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHECK REGISTER DATED 4111183 IN THE AMOUNT OF $25,911.28 AND CHECK REGISTER DATED 4112183 IN THE AMOUNT OF $32,500. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. V. OTHER BUSINESS: A. Authorization of Payment for Demolition of Fridley Garage Mr. Boardman stated the Fridley Garage has been demolished and the work has been completed satisfactorily. H & S Asphalt was the low quote on the project. He stated the bill was just received, and he would like authorization to pay $3,750 to H & S Asphalt. He stated this check will show up on the next check register. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO AUTHORIZE PAYMENT OF A CHECK IN THE AMOUNT OF $3,750 TO H & S ASPHALT FOR THE DEMOLITION OF THE FRIDLEY GARAGE. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. . HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 14 ADJOURNMENT: MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE APRIL 27, 1983, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10 :30 P.M. Respectfully submi tiled, Lynno Saba Recording Secretary