HRA 04/09/1992 - 6369HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, APRIL 9, 1992
7:30 P.M.
� � •� • ice.
CITY OF FRIDLEY
A G E N D A
JOINT CITY COUNCIL /HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, APRIL 9, 1992, 7:30 P.M.
Location: Meeting Room 1 (Lower Level)
Fridley Municipal Center
6431 University Avenue N.E.
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: March 12, 1992
DISCUSS TIF POLICIES . . . . . . . . . . . . . . . . . . . 1 - 1H
DISCUSS HOUSING GOALS . . . . . . . . . . . . . . . . . . 2 - 2K
HRA ACTION ITEMS:
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . . 3 - 3A
CONSIDERATION OF FUTURE ADVERTISING EFFORTS . . . . . . . 4 - 4B
HRA INFORMATION ITEMS:
SAM'S CLUB EXPANSION . . . . . . . . . . . . . . . . . . . 5 - 5B
REAPPOINTMENT OF JIM MCFARLAND . . . . . . . . . . . . . . 6
BOB'S PRODUCE UPDATE . . . . . . . . . . . . . . . . . . . 7
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . . 8
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 12, 1992
CALL TO ORDER:
Chairperson Commers called the March 12, 1992, Housing &
Redevelopment Authority minutes to order at 7:30 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, John Meyer,
Jim McFarland
Members Absent: Duane Prairie
Others Present: William Burns, Executive Director of HRA
Rick Pribyl, Finance Director
Jim Hoeft, HRA Attorney
Doug Erickson, Fridley Focus
APPROVAL OF FEBRUARY 13, 1992, HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the
February 13, 1992, Housing & Redevelopment Authority minutes with
the following amendment on page 5, paragraph 2, 6th line: Change
"subsidiaries" to "subsidies ".
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONKERS DECLARED
THE MOTION CARRIED AND THE MINUTES APPROVED AS AMENDED.
1. CLAIMS AND EXPENSES:
MOTION by Mr. McFarland, seconded by Ms. Schnabel, to approve the
Expenditure Approval List dated March 6, 1992, check numbers 2198-
2206.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
2. STATUS OF JOINT MEETING WITH CITY COUNCIL:
Mr. Burns stated the joint meeting with HRA and City Council has
been scheduled at the regular HRA meeting on April 9. He stated
Ms. Dacy and he would like the Council and HRA to participate in
some group discussion techniques on the housing issue. They
believe it is important to identify values and philosophies toward
housing and set some basic guidelines for follow- through by staff.
HOUSING & REDEVELOPMENT AUTHORITY MTG., MARCH 12, 1992 - PAGE 2
Mr. Commers stated he would like staff to provide the HRA with the
TIF policies information and criteria which was presented to the
HRA at a recent meeting. This might be helpful for this
discussion.
Mr. Burns stated he would include that information with the next
agenda packet.
3. RICE PLAZA UPDATE:
Mr. Burns stated that the original estimate on refurbishing the
former Norge Village dry cleaning space was $10,000- 15,000. Staff
has received a revised estimate in the amount of $38,046. It would
take in excess of two years to recover that cost. It is staff's
recommendation not to spend any more money on the property at this
time.
Mr. Meyer asked that if they do not go forward with the
refurbishing of this tenant space, what implication does that have
on the center?
Mr. Burns stated that the Norge Village space has been vacant for
quite some time. As long as they do not have any more vacancies,
they can hold their own.
Mr. Commers stated the building continues to deteriorate. If it
is not economically feasible to do any refurbishing, the HRA might
have to make some decisions as to what to do with the property.
4. MISSISSIPPI STREET IMPROVEMENT PROJECT:
Mr. Commers stated that this is an informational item that Anoka
County is anticipating an early to mid -July bid opening and an
August 1, 1992, start date for this project. This project.has
already been approved by the HRA.
ADJOURNMENT:
MOTION by Mr. Meyer, seconded by Mr. McFarland, to adjourn the
meeting. Upon a voice vote, all voting aye, Chairperson Commers
declared the March 12, 1992, Housing & Redevelopment Authority
meeting adjourned at 7:52 p.m.
gRes ec tfully s witted,
e Saba
Recording Secretary
I
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 2, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, .Community Development Director
SUBJECT: Discussion of TIF Policies
Background
The City Council discussed the proposed TIF policies on November
25, 1991, and January 13 , 1992 . The HRA discussed the TIF policies
on December 12, 1991, and January 9, 1992. As a result of the City
Council discussion on January 13, 1992, the Council requested a
joint meeting with the HRA to gain consensus on the TIF policies
and also to talk .about housing goals and priorities.
Proposed Policies
Colored copies of the proposed policies are attached. Adjustment
to the written policies under II. are indicated by underline.
These adjustments were presented to the City Council on January 13,
1992 .
The TIF policies consist of the definitions, general guidelines,
and the chart of maximum amounts of developer/user subsidy.
Recommendation
Staff recommends that the City Council and the HRA concur with the
proposed TIF policies as presented.
BD/ls/dn
M-92-225
1-q
• I. DEFINITIONS
A. Cost versus a subsidy
1. Cost is the amount of money needed to acquire land,
prepare the site, or construct public improvements.
2. A subsidy is the amount of assistance to a developer
that allows the developer to acquire the site below
its fair market value.
B. Redevelopment versus Economic Development
1. Redevelopment usually refers to improved and/or
blighted properties.
2 . Economic development usually refers to unimproved
properties.
C. "But-For Test"
1. Where does it come from? M.S. 469. 175, Subd. 3 (2)
2 . The "But-For Test" is as follows: "That the
proposed development or redevelopment in the opinion
of the municipality would not reasonably be expected
to occur solely through private investment within
the reasonable foreseeable future and therefore the
use of tax increment financing is deemed necessary."
D. Eligible Expenses
1. Land acquisition
2 . Site work including demolition/site clearance,
grading/ back-filling/compaction of fill, erosion
control, and paving; include costs of base
construction up to laying of asphalt
3 . Utility hook-up
4. Traffic control lights/signs
5. Relocation
6. Landscaping on public right-of-ways
7. Public right-of-way costs including lighting,
signage, driveway aprons, curbs, sidewalks, and
boulevards
f. �
1-B
Definitions - continued
8. Interest cost during construction period of eligible
expenses
9. Administrative costs including supervision,
contractors fees, inspection fees, and overhead
10. Consultant's fees including architectural/design.,
engineering, financial consulting, and legal/bond
counsel
11. City assessments, including sanitary sewer, storm
sewer, streets, and any costs listed above that are
assessable
12. Contingency
13. Interest rate buy-down for housing only
E. Project Costs are the cost of land, building, and
equipment that are incurred within the first year from
the start of project construction.
1-C
II. GENERAL GUIDELINES
• A. TIF policies are not law, but are guidelines only. They are
subject to change based on annual review of redevelopment
priorities and projects. The guidelines may have to be
exceeded based on the project's contribution toward community
needs as determined by the HRA and the City Council. .
B. The subsidy should be proportional to the size of the project.
C. Every district should be self-supporting; however, in certain
areas the HRA's redevelopment costs may greatly exceed the
value of tax increment revenues generated in projects that
fulfill redevelopment goals (i.e. housing rehabilitation
projects or redevelopment from commercial to residential) .
D. The City should not suffer as a result of HRA funding a
project.
E. Any developer/user must justify the requested assistance
("But-For Test") .
F. Whenever possible, the HRA should recapture its subsidy from
the project.
G. The captured tax capacity shall not exceed 15% of the total
tax capacity.
H. Pooling of TIF revenues is desirable as a means of
accomplishing difficult redevelopment goals (i.e. housing
rehab) .
I. Wherever possible, the amount of TIF assistance for a project
should be limited through the use of alternative financial
incentives e.g. SBA 504 financing, industrial revenue bonds,
or economic recovery fund grants.
J. The amount of TIF given to any project must be related to the
contribution of the project to the City's redevelopment goals
including creation and retention of jobs, enhancing the tax
base, preserving the decline of tax values, eliminating blight
and deteriorated properties, or meeting affordable
housing/other housing objectives.
K. Developers and users should demonstrate the financial
feasibility of the project.
• 1-D
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Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403
Office (612) 342-2277 • Fax (612) 332-4765
MEMORANDUM
TO: WI,ILLIAM BURNS
1,BILRBARA DACY
FROM: MARY E. MOLZAHN
JAMES R. CASSERLY
DATE: DECEMBER 2, 1991
RE: POTENTIAL TAX CAPACITY FOR ADDITIONAL TIF DISTRICTS
It has been proposed that the City and HRA of Fridley adopt a TIF
Policy that would limit the amount of tax capacity contained in
TIF Districts to 15. 0% of the City' s total tax capacity.
The City' s total taxable tax capacity for payable 1991 is
$28, 555, 450. Of this total tax capacity, 10 .82% or $3, 090,842 is
contained within existing TIF Districts. Assuming the proposed
limitation of 15. 0%, a maximum of $4, 283, 318 in captured tax
capacity would be available to be located within TIF Districts.
Deducting the City' s current captured tax capacity of $3, 090, 842
from the maximum of $4, 283, 318, approximately $1 , 192, 476 in tax
capacity would be available for inclusion in existing or proposed
TIF Districts.
In order to generate $1 , 192, 476 in tax capacity the following
types of construction would be necessary:
864, 000 square feet of manufacturing/industrial space
432, 000 square feet of commercial/office space
876 units of rental apartments
1 , 656 units of homestead townhomes
Or, assuming a mixed usage of 1 /3 each of manufacturing/
industrial, commercial/office and rental apartments, the
following would apply:
288, 000 square feet of manufacturing/industrial space
144, 000 square feet of commercial/office space
292 units of rental apartments
•
1-F
Page 2
City of Fridley
December 2, 1991
Attached please find a brief analysis illustrating the above
information. Please keep in mind, however, that these figures
are based on data applicable for payable 1991 only; they will
change annually.
s 1-G
TAXCAP CITY OF FRIDLEY, MINNESOTA 02-Dec-91
c '
POTENTIAL CONSTRUCTION UNDER PROPOSED TIF GUIDELINES
Pay 1991 Tax Capacity 28,555,450
Pay 1991 Captured Tax Capacity 3,090,842
Proposed Limitation for TIF Policy 15.0% 4,283,318
Available Tax Capacity for Potential TIF Districts 1 , 192,476
ESTIMATED CLASS ESTIMATED ESTIMATED
CATEGORY MARKET VALUE RATE TAX CAPACITY CONSTRUCTION
Manufacturing/Industrial 30 /Square Foot 4.6% 1, 192,320 864,000 Square Feet
Commercial/Office 60 /Square Foot 4.6% 1 , 192,320 432,000 Square Feet
Rental Apartments 40,000 /Unit 3.4% 1 , 191 ,360 876 Units
Homestead Townhomes 72,000 /Unit 1 .0% 1 , 192,320 1 ,656 Units
Combination Development- 1/3 Each:
Manufacturing/Industrial 30 /Square Foot 4.6% 397,440 288,000 Square Feet
Commercial/Office 60 /Square Foot 4.6% 397,440 144,000 Square Feet
Rental Apartments 40,000 /Unit 3.4% 397, 120 292 Units
PREPARED BY CASSERLY MOLZAHN & ASSOCIATES
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2
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 2, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Housing Goals and Priorities
We would like to achieve the following goals at the joint meeting:
1. Identification of housing priorities to guide/focus our
initial programming.
2. Concurrence with a suggested planning process to create
a plan for immediate and long term strategies.
Because the housing issue is so complex, I have developed three
group discussion exercises to help the HRA and City Council
accomplish goal #1. They include prioritizing values towards
housing, brainstorming, and ranking recommendations from the
Maxfield study.
Secondly, we would like the City Council and HRA to authorize staff
to utilize a strategic planning model to create a housing plan.
The outcome of the planning process is to create a ten year housing
plan which would identify housing strategies and long term housing
strategies. We could accomplish the planning process within the
next three month period and identify immediate and long term
strategies at the Council and HRA meetings in July.
Note that attached to this memo is an inventory of federal, state,
and other housing programs that are usable in the City of Fridley.
This research needs to be augmented by additional research. •
If the Council or the HRA needs an extra copy of the Executive
Summary of the Maxfield study, please contact me and I will arrange
to have a copy forwarded to them.
BD:ls
M-92-222
c �
2-A
/ Community Development Department
I \ HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 1, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Lisa Campbell, Planning Associate
SUBJECT: Preliminary Survey of Existing Housing Programs
We have compiled a list of potential housing programs and their
usability in Fridley. The attached chart summarizes our findings.
Detailed explanations of each program are detailed below.
The Department of Housing and Urban Development
HOME
The purpose of the Home Investment, and Affordable Housing
Partnership Act (HOME) is to increase the supply of affordable
housing for very low and low income families and individuals,
typically households below 80% of median income. HOME funds may
be used for transitional housing, a first-time homebuyers program,
housing rehabilitation, new construction (large families only) ,
education/training on tenants' rights and property maintenance.
Eligible applicants include counties, cities, and nonprofits.
In 1992, about $500,000 of HOME funds will be available in Anoka
County. It is unlikely that any Anoka County cities will receive
funds out of the HOME program in 1992. This year's funds are
likely to go to a few nonprofits that are responding to urgent
housing needs. According to Anoka County staff, 1993 is likely to
be the year for the cities. Should the Council wish to have the
City apply, the HRA must apply on behalf of the City. A 25% match
from the City will be required. Tax increment financing, donated
land, supporting infrastructure, tax writedowns, and administration
costs, up to 7%, are considered forms of matching funds.
The HOME program has a two year funding cycle.
This program seems feasible for use in the City of Fridley.
2-B
Preliminary Survey of Existing Housing Programs
April 1, 1992
Page 2
HOPE
The Homeownership for People Everywhere (HOPE) program authorizes
planning, implementation, and technical assistance grants to help
residents of public and publicly assisted housing to purchase their
units. Applicants can include resident management groups, public
housing authorities, public agencies, nonprofit organizations, and
resident councils. Ownership can be in the form of fee simple or
cooperative ownership. Various resale restrictions apply for up
to 20 years.
This program seems to be targeted at cities with a larger number
of publicly owned or assisted housing units than the City of
Fridley.
Rental Rehabilitation Grant Program
The Rental Rehabilitation Grant Program is replaced with HOME and
HOPE.
Minnesota Housing Finance Agency (MHFA)
Home Improvement Loans
Under this program, eligible homeowners can borrow up to $15, 000
for up to 15 years for basic home improvements. Interest rates
vary from 3-9.75% depending on the borrower's income. Eligible
applicants must own and live in the property to be improved, have
a gross annual income of $38, 000 or less, good credit history,
ability to repay the loan, and sufficient equity to cover the loan
of security. Owner-occupied properties of one to four units are
eligible properties.
Under this program, the City of Fridley HRA would act as lender,
including marketing, application review, credit underwriting, loan
processing, etc. The HRA would sell the completed loan packages
to the MHFA and would receive the $200. 00 origination fee. The HRA
would also charge an application fee for credit review and
recording. This program is supported through State Bond Sales.
Cities reserve funds as loans are approved. The funding cycle is
18 months.
Home Energy Loans
Under this program, eligible homeowners can borrow up to $5, 000 for
a maximum of five years for energy-related repairs or improvements.
This would include doors, windows, insulation, and furnace repairs.
2-C
Preliminary Survey of Existing Housing Programs
April 1, 1992
Page 3
The interest rate is fixed at 8.875% Eligible applicants would
have a good credit history and an ability to repay the loan. There
are no income limits. Single family owner-occupied homes are the
only eligible properties.
Under this program, the City of Fridley HRA would have the same
responsibilities as under the Home Improvement Loan. The HRA would
receive a $175 origination fee but cannot collect any fees from the
borrower. This program is supported through State Bond Sales. The
City would reserve funds as loans are approved.
Deferred Loan Program (very low income)
Under this program, eligible homeowners can receive up to $9, 000,
zero interest, deferred payment loan for basic repairs/improvements
(health and safety, code violations) . The loan would have to be
repaired if the property owner sells, move, or otherwise conveys
his/her property any time during the ten year term. To qualify,
an applicant must have a gross annual income of $8, 500 or less and
assets of $25,000 or less. Owner-occupied, single family, or
duplex are the eligible properties.
Under this program, the City of Fridley HRA would be responsible
for marketing, application review, property inspection, preparation
of bid specifications, construction monitoring, etc. The HRA would
receive an 18 month allocation of funds, $30, 000, and could use up
to 14% for administration.
Rental Rehabilitation Loans
This program provides 7.45% loans for up to 15 years. Owners may
borrow up to the lesser of $15, 000 for a single unit property or
$8, 000 per unit for multi-family unit property (maximum of $40, 000
per building) . The funds can only be used for energy-related
repairs on buildings that are less than 15 years old. For older
buildings, moderate rehabilitation is also allowed. Any rental
property is eligible for this program.
Under this program, the City of Fridley HRA would act as lender,
including marketing, application review, credit underwriting, loan
processing, etc. The HRA would sell the complete loan packages to
the MHFA and would receive the origination fee plus an admini-
stration fee which depends on the value of the loan. This program
is supported through State Bond Sales. The City would reserve
funds as loans are approved.
2-D
Preliminary Survey of Existing Housing Programs
April 1, 1992
Page 4
Single Family Capital Reserve Program
•
The purpose of this program is to meet locally identified
neighborhood revitalization goals regarding the preservation and
rehabilitation of the existing single family housing stock and to
provide single family homeownership opportunities.
Under this program, the appropriated fund could be leveraged with
market rate capital through first mortgage participation or an
interest-free second mortgage (see diagram below) . Appropriated
funds may not exceed 20% of the financing. Eligible applicants are
lenders (banks, nonprofits, etc. ) . The lender and the local unit
of government must jointly apply. Neither may proceed alone.
Benefitting participants must be low to moderate income persons who
are first time homebuyers, households with children, minority, or
disabled. Appropriated funds are likely to be allocated by June
of 1992 .
Blighted Residential Property Acquisition and Rehabilitation
Program
The purpose of this program is to improve blighted properties with
designated geographical neighborhoods. The properties must be
single family dwellings of one to four units. Eligible activities
are limited to: financing acquisition and/or demolition of
blighted property, providing gap financing for rehabilitation, or
gap financing for construction of new housing on blighted property.
Gap financing activities require that the property be sold to a low
to moderate income person or family upon completion.
The Minnesota Housing 'Finance Agency is a good and flexible
organization to work with. The program requirement under all of
the programs listed above would be easily implemented in the City
of Fridley. The Minnesota Housing Finance Agency has many more
programs that were not discussed in this report. For instance,
they have a Multi-Family Rental Program for new construction of
multi-family rental housing. Staff chose to include current
programs that were directed at rehabilitation rather than new
construction. Appropriated funds are likely to be allocated by
June of 1992 .
Community Development Block Grant Program (Anoka County)
Home Improvement Grant Program
This program provides zero interest, deferred loans for basic
repairs and improvements. Up to $9, 000 is available to qualified
residents. Income limits are based on family size. Loans are
1 f
2-E
Preliminary Survey of Existing Housing Programs
April 1, 1992
Page 5
repaid only if the recipient sells or moves from his/her home
during the 10 years term of the loan. Owner-occupied single family
or duplex properties are eligible for this property.
Other CDBG Eligible Activities
The Maxfield study made 11 overall recommendations to improve the
City with respect to housing and community development. We
discussed the recommendations and the role which CDBG funds could
play in addressing these issues. CDBG funds might be used to help
implement several of the recommendations as follows:
1. Encourage maintenance and upgrading of older single
family and multiple family housing stock.
• CDBG funds may be used for maintenance and
upgrading, provided recipients are low to moderate
income.
• The CDBG funds may be used for the remodeling design
handbook, provided that it is furnished free to low
and moderate income persons, while others are
required to pay the regular cost of the publication.
3 . Provide information on and access to housing .rehabili-
tation and development programs.
• CDBG funds can be used in such a project. Staff
time should be used to put this information
together. It is important once again in
disseminating the information that it be targeted
in such a way to benefit low to moderate income
person.
4-6. Encourage development of new housing of various types.
• CDBG funds may be used to acquire land and perform
infrastructure improvements on the properties in
question.
7. Consider redevelopment of areas where housing or
commercial businesses are vacant, substandard, and beyond
economic benefit of repair.
• CDBG funds may be used to acquire, clear, and
dispose of land for these purposes. However, it
should be remembered that these lands cannot be
given to businesses unless the resulting jobs go to
low and moderate income persons.
2-F
Preliminary Survey of Existing Housing Programs
April 1, 1992
Page 6
•
While Community Development Block Grants may be used for housing
purposes, it is important that the HRA be aware of and comply with
the significant requirements imposed with the use of these funds.
The requirements include, but are not limited to: the benefit
resulting from the proposal must be delivered to low/moderate
income households; new construction is not eligible; only code
violations are an eligible expense in rehabilitation. Failure to
comply with these and many regulations could result in City
liability for the expended funds. We question whether the amount
of CDBG funds we receive each year justify the staff time to
administer the program.
Compared to MHFA programs, CDBG program activities would be
possible, but would be more burdensome to implement. For this
reason, staff would recommend choosing CDBG funds only when other
funding sources are not available for a proposed activity.
Further, CDBG seems to work best in acquisition projects.
Tax Increment Financing (TIF) and Other Incentive and Subsidies
Tax Increment Financing may also be used for housing projects.
Please see attachment A, a memo from Jim Casserly, regarding
additional incentives and subsidy programs.
LC:ls
M-92-100
2-G
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Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403
Office (612) 342-2277 • Fax(612)332-4765
MEMORANDUM
TO: City of Fridley
Wiliam Burns, City Manager
rbara Dacy, Development Director
•
FROM: James R. Casserly 3.�•�'
Mary E. Molzahn
DATE: January 31 , 1992
RE: Housing Assistance
With the HRA's ongoing interest in housing we thought each of you
might enjoy the following:
1 . An overview of frequently used incentives/subsidies to
assist multi-family housing projects.
2. A roundtable discussion by a number of major actors in
the multi-housing industry which appeared in the
November 11 , 1991 edition of the Minnesota Real Estate
Journal.
Needless to say, we will be having a number of discussions on
these topics.
JRC,MEM/db
encls
2-i
AN OVERVIEW OF FREQUENTLY USED
INCENTIVES/SUBSIDIES TO ASSIST MULTI-FAMILY HOUSING PROJECTS
I. INTEREST REDUCTION PROGRAM (429.012, Subd. 7, 8 and 9)
Provides Tax Increment Assistance on an Annual Basis;
Low and Moderate Income Requirements:
A. Twenty percent of units held for families at 80% of
median family income.
B. Additional 55% held for families whose income is not
more than 66 x 120% of the monthly Fair Market Rent
established by HUD.
II. REDUCED REAL ESTATE TAXES [Class 4C (Title II) Property,
273.13, Subd 25(c) (1 ) ]
Reduces Class Rate from 3.4% to 2.2% of Market Values.
Requirements:
A. Direct Federal loan or Federally insured loan made
pursuant to Title II of National Housing Act.
B. Low and Moderate Income as defined in Title II (same as
above) ; however, some are interpreting that I.B above
should be that an additional 55% of units should be
leased for rents that are affordable to Moderate Income
Households. Affordable is defined as rents not
exceeding 30% of the maximum allowable income for a
Moderate Income Household.
C. Owner must be a non-profit of limited dividend entity.
Return is limited to 10% of capital contribution
(462A.03, Subd. 13) .
D. Partial compliance is permitted (75% is frequently the
target) .
III. TAX CREDITS [462A.222, Subd 3(a) ]
Raises Equity through Sales of Tax Credits.
A. Federal Requirements
1 . Set Aside Requirements - Units are rent restricted
and
a. 20% of units to families at 50% of median
family income; or
b. 40% of units to families at 60% of median
family income.
Casserly Molzahn and Associates 12/4/91
R •
2-J
B. State Requirements
1 . Size Limits: At least 50% of units must be two
'bedroom and at least 25% three bedroom or more.
2. Income Limits: 75% of units to families at 60% of
median family income.
3. Rent Limits: 30% of 50% of median family income
assuming one person/bedroom.
IV. TAX EXEMPT BONDS (474A.047, Subd. 1 )
Lowers Interest Rate on Mortgage:
A. Federal Requirements (less restrictive than State but
the State requirements are controlling) .
B. State Requirements - Same as Tax Credits.
V. ESSENTIAL FUNCTION BONDS (469.002, Subd. 13, 15, 17 and 18)
Lowers Interest Rate on Mortgages, Reduces Real Estate
Taxes:
A. Bonds issued by Authority as essential function or
activity of Authority.
B. Ownership of project in Authority or 501 (c) (3) entity
(non-profit) .
C. Debt (Bonds) can be G.O. or revenue bonds.
D. Property taxes reduced (469.040, Subd. 3) to 5% of
aggregate shelter rentals (vs. approximately 15% to 18%
of effective gross income) .
E. Building materials exempt from sales tax.
F. Authority can retain developer to develop project and
manager to manage project.
VI. HUD GUARANTEE [FHA 221 (d) (4) )
Lowers Interest Rates on Mortgages and Provides 40 Year
Financing.
A. No income restrictions.
B. For profit entity. May be non-profit entity under
221 (d) (3) .
C. Prevailing wage for construction.
Casserly Molzahn and Associates 12/4/91
\-
2-K
D. No limitation on return.
E. Mortgage debt service limited to 90% of net operating
income.
F. mortgage not to exceed 90% of cost as determined by
HUD.
G. Debt is 40 years, non-recourse, assumable, fixed rate
and level pay.
VII. TAX INCREMENT ASSISTANCE (469.174 through 469.179)
A. In a Tax Increment District that is not a Housing
District, the Authority may:
1 . Pay for any eligible expenses including public
improvements, site acquisition and preparation.
2. Write site cost down to 0.
3. Provide assistance up-front or annually (see I for
a variation of the annual assistance) .
B. In a Housing Tax Increment District (469.174, Subd. 11
and 469.176, Subd. 4(d) ] :
1 . An Authority may invest in any aspect of the
housing project that is authorized by its enabling
or underlying statute.
2. An Authority must assist only projects intended
for low and moderate income families (see I and II
for income requirements) .
Casserly Molzahn and Associates 12/4/91
14
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3 -A
TO: FRIDLEY H.R.A.
FROM: CITY OF FRIDLEY
RE: BILLING FOR OPERATING EXPENSES FOR MARCH, 1992
AND MARCH 1992 ADMINISTRATIVE EXPENSES
ADMINISTRATIVE BILLING:
MARCH ADMINISTRATIVE PERSONAL SERVICES 13,631.00
MARCH ADMINISTRATIVE OVERHEAD 252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
MARCH OPERATING EXPENSES:
GRETA WEDELL - FILMWORK, CORPORATE REPORT
878.00
GRETA WEDELL - FILMWORK, CORPORATE REPORT
928.00
MINNEGASCO - RICE PLAZA
8.01
AMERICAN ECONOMIC BOOK
30.00
CORPORATE REPORT MINNESOTA SUBSCRIPTION
21.97
POSTAGE - NEWSLETTER
327.11
POSTAGE
49.79
AT & T - LONG DISTANCE
1.28
GRETA WEDELL - ADVERTISING
3,935.50
NYSTROM PUBLISHING - SPRING NEWSLETTER
740.00
UTILITY BILLING - RICE PLAZA
172.17
DELIVERY SERVICE
48.54
FEBRUARY MANAGEMENT FEE - RICE PLAZA
184.51
MINNEGASGO - RICE PLAZA
15.52
NSP - RICE PLAZA
65.29
SNOW PLOWING - RICE PLAZA
115.00
SNOW PLOWING - RICE PLAZA
115.00
NSP - LAKE POINTE
1.08
TOTAL OPERATING EXPENSES FOR MARCH 7,636.77
TOTAL EXPENDITURES 21,520.02
L
Community Development Department
D HOUSING AND REDEWLopmENT AUTHORITY
City of Fridley
DATE: April 2, 1992
TO: William Burns, Executive Director of HRA.
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consideration of Future Advertising Costs
The Corporate Report contacted us early this year to place an ad
in the February issue which had a feature article on the north
metro area. In order to achieve a lower ad rate, four full page
ads were ordered, subject to concurrence by the HRA for the last
two ads of the year. We have placed ads in the February, March,
and May issues. Costs for the final and fourth ad will exceed the
advertising budget. This is to request direction from the HRA
regarding future advertising costs.
Background
We retained an advertising consultant for the February and March
ads. The consultant had previously worked with member cities of
the North Metro Mayors' Association. Reaction to that ad concept
was mixed - so we undertook a search for another advertising
consultant. We chose Client First Communications who suggested an
advertising campaign based on half -page ads focusing on positive
aspects of Fridley: access to major transportation routes, good
labor force, and existing businesses. The half -page ads can also
be used as a marketing tool in the future to advertise redevelop-
ment sites like Lake Pointe or the southwest quadrant. Further,
the half -page ad could be used to focus on an existing company.
The ad's name would be "Home to..." and would feature an existing
company such as Medtronic, Onan, or FMC.
The half -page approach could then be followed up with a postcard
matching the picture in the half -page ad. The postcard could be
used for redevelopment sites and information about the site could
be placed on the back of the postcard. The postcards could be
mailed to interested parties or as part of a direct mail campaign
to targeted companies or developers.
At Thursday's meeting, we will show you the previous two ads plus
a copy of the third ad that will be in the May Corporate Report
issue. The advertising budget in total was $11,000. It included
$8,000 for promotional ads, $2,000 for legal notices, and $1,000
for potential RFP's. Total costs for three ads to date is $12,457.
4 -A
Consideration of Future Advertising Costs
April 2, 1992
Page 2
Options
Three options exist: (1) We could advertise again in the July
issue of Corporate Report, which will be. focusing on chief
executive officers in the metro area. Additional cost to run a
half -page ad with production costs would be approximately $4,110.
(2) We could advertise in Minnesota Ventures, another business -
oriented magazine which is focusing on the north metro area in
their summer issue. Production and advertising costs would be
slightly less at $3,796. (3) Discontinue advertising.
As part of option #2, if we featured an existing business like
Medtronic, we could approach them for sharing the cost for the
advertisement.
With option #1 or #2, the advertising budget will be exceeded. In
the Professional Services portion of the 1992 budget, a
"Miscellaneous" line item of $25,000 was created to fund any
studies during 1992. We could use a portion of these monies to
offset the additional advertising costs.
We have had one comment on the first ad from Helen Brooks, the
realtor involved in the McGlynn Bakeries' sale. Other than that,
we have not had potential contacts from the original two ads. We
hope to. get more response from the third ad to be in the May issue.
Recommendation
Staff has no specific recommendation for this year's effort. We
do, however, strongly recommend that the "postcard" approach and
"half- page" approach appear to be more effective than the original
approach we undertook with the first two ads. If the HRA does not
want to pursue continued advertising in 1992, we would like to
continue the half -page advertising approach in 1993, with possible
follow -up with a postcard to a targeted audience. We would like
to focus on an existing business in Fridley, as well as possibly
market the Lake Pointe site or the southwest quadrant.
BD:ls
M -92 -223
e
CORPORATE REPORT
ADVERTISING COSTS
February $2,609 Ad cost
1,389 Production
$3,989 Total
March $2,953 Ad cost
1,400 Production
$4,353 Total
May $2,010 Ad cost
2,096 Production
$4,106 Total
Potential costs for
final ad in Corporate Report
Minnesota Ventures
$4,110
$3,796
4 -B
h
r �
Community Development Department
HovswG Arm RUDEwLOPm ENT AUTHORITY
City of Fridley
DATE: March 24, 1992
TO: William Burns, Executive Director of HRA
FROM: ✓ Barbara Dacy, Community Development Director
SUBJECT: Sam's Club Expansion
Attached is a detailed memo from, Michele regarding Wal- Mart's plan
to add a 30,000 square foot expansion to Sam's Club. This raises
a new issue that the HRA needs to. address. The,30,000 sq..ft.
expansion is estimated to be'valued at $1.5 million, approximately
one -half of the minimum $3 million which was dictated in the
original development agreement.
Beckmann stated that Walmart intends to sell the remaining portion
of the lot and is suggesting that the City and HRA stipulate that
the development on that- parcel make up the remaining $1.5 million.
We should discuss this in advance of the April 9, 1992, HRA
meeting. Thanks very much.
BD:ls
M -92 -193
a° 0
5 -A
Community Development Department
PLANNING DIVISION
City of Fridley
DATE: March 18, 1992
TO: ✓ Barbara Dacy, Community Development Director
FROM: Michele McPherson, Planning Assistant
SUBJECT: Sam's Club Expansion
I met with Dale Beckmann of BRW, Inc. regarding.a proposed-301000
square foot expansion to Sam's Club, located at. 8100 University
Avenue N.E. Wal -Mart will be withdrawing their. current
applications for platting, rezoning, and the special use permit.
They will be filing a new plat application for the Sam's Club and
the adjacent parcel to the north. I reviewed several issues with
Dale Beckmann regarding the proposed plat, including dedicating the
right -of -way for Main Street and the West University Avenue Service
Drive, which are now currently dedicated in easements. We also
discussed outdoor storage and the parking.of dropped trailers. He
will be providing us with information as to the nature-of the
dropped trailers, which are often parked in the parking lot at the
intersection of Main Street and 81st Avenue.
Dale asked about the proposed valuation of the expansion. The
expansion is estimated to be valued at $1.5 million, approximately
50% of the $3 million which was stipulated in the original
development agreement. However, through the plat process, Wal -Mart
will be creating an outlot of excess property which is intended to
be sold in the future. Platting it as an outlot will allow the
City to have greater control over the property than if it were a
dedicated lot. Dale feels that this will allow the City to obtain
the addition $1.5 million in valuation through another development
on the excess property. This item should be reviewed by the HRA,
as well as the expansion of Sam's Club. I told Dale that we would
schedule this item to be reviewed by the HRA at their May meeting.
If you feel that it is not necessary for the HRA to review this new
proposal, please let me know, or please confirm that this will be
a May agenda item.
One additional item of concern is the location of the loading docks
which are visible from the public right -of -way. As you are aware,
the code does not allow loading docks in the front yard; however,
my interpretation of the code is that the location of the loading
docks is in the rear yard, and need only be screened from the
5 -B
Sam's Club Expansion
March 18, 1992
Page 2
public right -of -way. If you agree with this interpretation, I will
tell Dale that he does not need to process a variance request, but
that the landscaping in the area of the loading docks should be
intensified to provide additional screening. The loading docks for
the Sam's Club expansion will be adjacent to the existing loading
docks, which face Main Street.
Dale will be submitting materials for application for the March 20,
1992 deadline, which will then allow this item to be scheduled for
the April 22, 1992 Planning Commission meeting.
If you have any further issues we should discuss regarding this
item, please let me know.
MM /dn
M -92 -182
'= s
CrnroF
FRIDLEY
FRIDLEY MUNICIPAL CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432 • (612) 571 -3450 • FAX (612) 571 -1287
March 18, 1992
Mr. J.R. McFarland
1440 North Innsbruck Drive
Fridley, MN 55432
Dear Mr. McFarland:
I am pleased to inform you that at the City Council meeting on March 16, 1992, the City
Council reappointed you to the Housing and Redevelopment Authority.
Your term of office will begin immediately and will expire on June 9, 1997.
The City Council and I wish to express our appreciation to you for your willingness to serve
as a Commission member.
Sincerely,
William W. Burns
City Manager
WWB:rsc
7
Community Development Department
HousiNG AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: March 25, 1992
TO: William Burns, Executive Director of HRA
FROM: of arbara Dacy, Community Development Director
SUBJECT: Redevelopment of Schroer Property
Michele and I met with Bob and Mike Schroer regarding a revised
plan for the redevelopment of their site. Instead of constructing
a brand new produce building, they will maintain the existing
building and add a 9,300 sq. ft. addition to the rear of it. They
will demolish the existing Malmborg Garden Center and replace it
with a brand new building for Lyndale Garden Center.
They indicated they were still interested in tax increment
financing assistance. I asked them to submit any revised
information on the construction costs, evaluation, and a proforma.
I indicated that since you were primarily involved with the project
originally that they should send this information to you.
They also intend to complete permit approvals by June 1, 1992.
Therefore, I suggested consideration by the HRA at the May 14,
1992, HRA meeting to determine whether or. not the HRA wanted to
assist this project. If approved, the development agreement could
then be approved at a following meeting. This leaves us the month
of April to resolve any issues with the Council and HRA.
Should you have any questions, please feel free to contact me. I
will also find out if they need to forward more money to continue
our financial review.
BD:ls
cc: Jim Casserly, Consultant
Rick Pribyl, Finance Director
M -92 -201
0
03-Apr-92
RICE PLAZA 1992 RENT
CHILDREN CHARM
250.00
100-00
350.00
HONG KONG KITCHEN
877.02
791.83
789.84
2,458.69
MY SISTER'S CLOSET
672.30
672.30
0.00
1,344.60
CINNAMON SKIN TAN
5,600.00
900.00
900.00
7,400.00
RAPIT PRINTING
1,076.00
1,076.00
1,076.00
3,228.00
TOTAL
8,225.32
3,690.13
2,865.84
14,781.29
YEAR TO DATE
18,225.32
111,915.45
114,781.29
14,781.29