HRA 11/12/1992 - 6376HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, NOVEMBER 12, 1992
7:30 P.M.
WILLIAM BURNS
EXECUTIVE DIRECTOR OF HRA
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, NOVEMBER 12, 1992, 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
6431 University Avenue N.E.
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: October 8, 1992
ACTION ITEMS:
CONSIDER SCHOOL DISTRICT x#13 TIF TURNBACK. ! . . . . . 1.1 -1.9
CONSIDER APPROVAL OF PLEDGE AGREEMENT
FOR THE ISSUANCE OF A GENERAL OBLIGATION
TEMPORARY TAX INCREMENT BOND . . . . . . . . . . . . 2
CONSIDER EASEMENT FOR ELECTRICAL CONTROL BOXES VOR,NSP . 3.1 -3.3
CLAIMS AND EXPENSES . . . . . . .. . . . . 4.1 -4.4
INFORMATION ITEMS:
HOUSING PROGRAM UPDATE . . . . . . .. . . . . . . . . 5
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . . 6
PROPOSED ADVERTISEMENT FOR JANUARY CORPORATE REPORT. . . 7
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 8, 1992
------ ~~ ---------------------------------------------------------
CALL TO ORDER:
Chairperson Commers called the October 81 1992, Housing &
Redevelopment Authority minutes to order at 7 :35 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, John Meyer,
Duane Prairie, Jim McFarland
Members Absent: None
Others Present: William Burns, Executive Director of HRA
Barbara Dacy, Community Development Director
Rick Pribyl, Finance Director
Paul Hansen, Accountant
Jim Casserly, Consultant
Don Fitch, Fridley Dairy Queen
APPROVAL OF SEPTEMBER 10, 1992, HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the
September 10, 1992, Housing & Redevelopment Authority minutes as
written.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
1. CONSIDER REQUEST BY DON FITCH FOR NOVEMBER, DECEMBER, AND
JANUARY RENT:
Mr. Commers stated Mr. Fitch, owner of the Dairy Queen, is
requesting a rent reduction for the months of November, December,
and January from $500 per month to $100 per month.
Mr. Don Fitch stated that earlier this year he had hoped that by
fall he would be relocated in the northeast quadrant. With that
anticipation, he hired two full -time employees because he hoped
that in the new location, he would have a year around facility.
He stated that he usually closes the Dairy Queen around the end of
October, and that is why the lease states that he will pay rent
during the eight months he is open and he will not pay rent during
the four months he is closed.
HOUSING & REDEVELOPMENT AUTHORITY MTG.. OCT. 8. 1992 PAGE 2
Mr. Fitch stated he is still optimistic that the Dairy Queen will
still be a part of the redevelopment of the 10,000 Auto Parts site
and that he will not have this problem .a year from now. Because
of that, he is hoping to stay open through the winter and keep the
employees he hired full -time. If he closes the Dairy Queen, he
will be paying no rent. He is proposing that he keep the Dairy
Queen open, minimize his rent, so that he can minimize his losses
and keep his full -time staff as well as his part -time staff on
through the winter.
Mr. Fitch stated that most of his employees are residents of
Fridley, and he is hoping he can get a rent reduction in order to
give them a job through the holiday times which is not a good time
to be laid off.
Mr. Commers stated that the Dairy Queen lease expires on November
30, 1992.
Mr. Fitch stated that he believed that unless formal written notice
is given, the lease will continue on a month -to -month basis after
November 30, 1992.
Mr. Commers stated that if that is the case, the rent Mr. Fitch is
paying now may not remain the same.
Mr. Fitch stated he realized that the HRA would have every right
to raise his rent after November 30.
Mr. Commers asked the status of the condemnation.
Mr. Fitch stated that at the present time, since he does not yet
know if he will be able to relocate in the 10,000 Auto Parts re-
development, he has made the necessary steps to file a suit to take
the City to court on the condemnation, from the position that if
the 10,000 Auto Part site falls apart, he will have no place to go.
Mr. Commers stated the City's appraisal was around $120,000. What
was the final Commissioner's award?
Mr. Fitch stated the final Commissioner's award was $165,000. His
appraisal was $325,000.
Ms. Schnabel stated that Mr. Fitch's request seems reasonable since
the alternative would be to close down the Dairy Queen, at which
point the HRA would be receiving no income from the property.
Mr. Commers stated the biggest problem he has with this request is
the fact that it is going to cost the HRA a lot of money to handle
the lawsuit against Mr. Fitch. By Mr. Fitch appealing the
Commissioners' Award of $165,000, it is going to cost the City
several thousands of dollars to defend that case. Of course, Mr.
Fitch has every right to pursue that and should if he doesn't feel
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 8, 1992 PAGE 3
the award is fair, but it is also hard to justify the reduction in
rent on the part of the HRA.
Mr. Fitch stated he would be willing to consider dropping all
charges or any continuation of any legal condemnations for the
condemnation if he knows he is going to be relocated to the 10,000
Auto Parts site and potentially what the assistance from the HRA
would be. He does not want to cause any ill will between himself
and the City of Fridley and if he can stay out of court, he will
do so. Financially, he has to do what he has to do.
Mr. Commers asked what has been done on the relocation issue.
Ms. Dacy stated nothing has been done at this point.
Mr. Commers stated he believes the HRA would be willing to consider
some assistance for the redevelopment of the 10,000 Auto Parts
site, but when Mr. Fitch says he will drop the proceedings once he
knows what he would get in the way of assistance, that appears to
put a little bit of leverage on this whole thing.
Mr. Fitch stated it is difficult to try to separate what he sees
as two separate issues, but at this time, he is requesting a rent
reduction for the months of November, December, and January to
allow him to remain open during the winter months so that he can
keep his employees year- round.
Mr. Commers asked staff's opinion on Mr. Fitch 's request for a rent
reduction.
Ms. Dacy stated that because Mr. Fitch has chosen to file the
appeal, staff is also concerned about that appearance. Maybe the
compromise is for the HRA to consider having Mr. Fitch pay the
deferred amount until a later point in time or subtract those costs
from any type of relocation costs, if there are any.
Mr. Commers asked Mr. Fitch what he thought of staff's suggested
compromise.
Mr. Fitch stated he would probably not view that as a compromise.
It is not so much an issue of whether he has the money in the bank
to pay it; it is a matter of whether or not he takes the $400 and
uses it to offset wages and stay open, or take $500 and use it to
offset wages and close.
Mr. Meyer stated he sees Mr. Fitch's request as separate from the
condemnation issue. He sees this request as a straightforward
small time business deal. No matter what happens with the legal
action, $1,200 doesn't represent enough for the City to leverage
anything against Mr. Fitch or for Mr. Fitch to leverage anything
against the HRA. He would be in favor of granting this request.
HO_U_S_ING & REDEVELOPMENT AUTHORITY MTG., OCT. 8, 1992 PAGE 4
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the
request by Don Fitch of the Dairy Queen for a rent reduction from
$500 per month to $100 per month for the months of November,
December, and January.
UPON A VOICE VOTE, MCFARLAND, PRAIRIE, SCHNABEL, MEYER VOTING AYE,
COMMERS VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED
BY A VOTE OF 4 -1.
Mr. Fitch stated he and his employees thank the HRA very much for
approving this request.
2. CONSIDER APPROVAL OF AGREEMENTS TO RETURN TAX INCREMENT TO
SCHOOL DISTRICTS:
Mr. Hansen stated that what the HRA has before them is the one year
agreement for 1993. That is pay 1993 which is January 1, 1993, to
December 31, 1993. That applies to the school district year of
July 1, 1993, to June 30, 1994.
Mr. Burns stated they are looking at paying out a total of
$338,913.17 in pay 1993. That is a decrease of 10% from what they
are estimating to pay out in 1992, and it does not include any
consideration of potential delinquencies.. It could actually be
less if the delinquencies are taken into consideration.
Mr. Burns stated he asked the Finance Department to prepare a cash
flow projection for the HRA's information. One of the assumptions
that is included in the cash flow projection is that they will be
making full payment of these discretionary TIF turn -backs to the
four school districts. Based on estimated guesses, it does look
like they can accommodate the Lake Pointe debt service and the TIF
turnback and also the $500,000 housing program they are projecting.
The housing program is only projected for five years.
Mr. Burns stated some conservatism is also built into the cash flow
projection in that they really had not projected any new
development anywhere. They did plug in Wal -Mart and did adjust
downward for the changes in the tax rate for the Spring Brook
Apartment property. Overall, these projections are reasonable and
conservative and fairly accurate.
Mr. Burns stated staff is recommending the HRA once again return
the TIF discretionary money to the school districts.
Mr. Burns stated School District #14 is heading for a referendum
this fall. What the HRA doesn't pay the School District in TIF
returns represents additional cuts for the School District.
Mr. Pribyl stated that the Lake Pointe site lies within School
District #13. Depending upon the result of the negotiations on
the Lake Pointe site, there might be a windfall to School District
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 8, 1992 PAGE 5
#13 in regard to penalties and interest. With tax increment
properties, the penalties and interest are split 50/50 between
county and school district, so School District #13 might have a
windfall. It might be prudent for the HRA to wait and reduce the
amount of TIF returns to School District #13 by the amount of
enrichment based on the settlement of the penalties and interest.
Mr. Burns stated that the penalties and interest could total
approximately $150,000.
Mr. Commers stated that if the owner of the Lake Pointe property
had paid the taxes in 1990 and 1991 like he was supposed to, School
District #13's return would have been increased.
Mr. Casserly stated that is correct. Had the taxes been paid
timely, School District #13 would have received those funds; and
if School District #13 was counting on that money, they would have
experienced a shortfall during that period of time. The real cost
to the School District is making up that shortfall from some other
funds or taking it out of reserves. The problems with the
penalties and interest, if it was just the interest portion, would
not be so bad. But the penalties are put in to encourage property
taxpayers to pay taxes on time. That is the part that becomes the
windfall. Those are not allocated among the taxing jurisdictions
proportionately. The law provides that the county and school
district each get half of penalties and interest. What staff is
suggesting is that there is a portion of this which is genuinely
a windfall to the jurisdictions. Staff needs a little more time
to find out what is really going to happen.
Mr. Burns stated that the HRA could approve the TIF returns to
School Districts #11, #14, and #16, but hold up on #13 at this
time.
Mr. Commers stated he was not sure philosophically whether he quite
follows the windfall thing and that they should keep this money
from School District #13. Maybe it should be computed how much
School District #13 would have collected in the three years without
penalties.
Mr. Casserly stated School District #13 will be reimbursed for
everything they should have received in the second half of 1990,
all of 1991 and 1992. Staff is only talking about the excess
amounts, not the original amounts.
Mr. Commers stated he would appreciate staff putting together some
numbers for the HRA for School District #13, and then the HRA can
go ahead and approve the TIF returns to the other school districts
now.
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the
agreements returning tax increment to School District #11 in the
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 8, 1992 PAGE 6
amount of $17,685.71, School District #14 in the amount of
$242,046.07, and School District #16 in the amount of $52,616.68.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
3. CONSIDER RESOLUTION NO. HRA 6 -1992 AUTHORIZING EXECUTION OF
AGREEMENT TO ACQUIRE EXCLUSIVE DEVELOPMENT RIGHTS ON LAKE
POINTE PROPERTY:
Mr. Burns stated the City has reached an agreement with Woodbridge
Corporation to purchase the Lake Pointe property, and they are now
in the process of having the agreement approved. Since both the
HRA and the Council are involved at different points iris the
execution of the agreement, staff believed it was important to have
both the HRA and Council approve the agreement. The Council
reviewed and approved the agreement on October 5, 1992.
Mr. Burns described the content of the Resolution. He would also
review the highlights of the Lake Pointe agreement.
Mr. Burns stated the HRA is paying the Redeveloper $4,230,000 to
terminate his interest in the site and to terminate the $5,603,735
revenue note given to him in 1985. In addition, the HRA is
assuming responsibility for taxes, penalties, and interest due on
unpaid taxes. The.total delinquent taxes as of December 15, 1992,
will amount to $1,036,951.46. The TIF portion of those taxes due
is $464,429.00, so the next cost to the HRA if they wait until
December 15 to pay the back taxes is $572,522.40. If the HRA
decides not to get the property tax exempt until the site develops,
they will owe more taxes in subsequent years. The 1993 tax bill
would be $157,488.00. That is another issue staff will be bringing
to the HRA at another time.
Mr. Burns stated the City is currently seeking abatement of
penalties and interest with the County.
Mr. Burns stated the Agreement provides for a settlement escrow
agreement. Under this settlement escrow agreement, a number of
documents are going to be deposited with an escrow agent. The
Redeveloper is going to assign a quick claim deed assigning the
property to the City. The Redeveloper is also going to assign his
interest in the two purchase agreements for the two adjoining
parcels which will be used for rebuilding the roadway system in
and out of the site to the HRA. The Redeveloper is going to put
the original revenue note into that escrow account. The only thing
the HRA is required to put in the escrow account is a signed copy
of the Termination Agreement. On or before approximately, December
15, 1992, the HRA is to deliver the money and deliver a directive
in writing to the escrow agent to release the $1 million escrow
amount, plus accumulated interest, that the redeveloper provided
at the onset of the agreement.
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 8, 1992 PAGE 7
Mr. Burns stated the Redeveloper and the HRA will split the cost
of the escrow agent. The HRA is responsible for the title
insurance expense, and the Redeveloper will sign all these
agreements and put them into the escrow before the HRA pays any
taxes at all.
Mr. Burns stated Jim Casserly and Barbara Dacy have put a lot of
hard work into these negotiations. He stated staff is recommend-
ing the HRA approve Resolution No. HRA 6- 1992.
Mr. Commers stated he has followed these negotiations, and Mr.
Casserly has done a very good job. The important factor here is
that the HRA is back in control of the Lake Pointe property. Also,
because of the favorable interest rates, purchasing the property
is not going to hurt any of the HRA's other projects as much as
might have been anticipated.
MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve
Resolution No. HRA 6 -1992, "A Resolution Authorizing Execution and
Delivery of an Agreement By and Between the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota;
the City of Fridley, Minnesota, and Lake Pointe Investment Company,
a Limited Partnership ".
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
Mr. Burns stated another big advantage in approving the resolution
tonight is they are helping to preserve some of the tax increment
pot that is quickly running out.
4. CLAIMS AND EXPENSES:
a. Check Register (2248 -2255)
MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the
check register dated October 1, 1992.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
5. STATUS REPORT ON MISSISSIPPI STREET IMPROVEMENT PROJECT:
Ms. Dacy stated this is a status report regarding the road
improvement costs, underground and utility lines, sewer and water
utility costs, and the corridor improvements. Total improvement
costs are well within the budget originally anticipated by the HRA.
6. RICE PLAZA UPDATE:
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT 8, 1992 PAGE 8
Mr. Commers stated that as the end of the year approaches, he would
like staff to put together a pro forma showing what the HRA's
projected expenses would be for next year.
7. OTHER BUSINESS:
a. Housing Programs
Mr. Burns stated staff is making progress on the housing
programs. Staff has been putting in quite a bit of time in
defining four different housing rehab programs. They have
not yet defined a way to do rental rehab, but they will
continue to work on that.
Mr. Burns stated that it was his initial hope that perhaps
they could contract out the whole housing program; however,
it is looking more and more like they will need to hire a
housing coordinator and probably one clerical person to assist
the housing coordinator. He anticipates a request in the near
future from staff asking the HRA to hire one or two employees.
These salaries would be part of the $500,000 set aside for
housing programs.
b. Annual Financial Report, December 31, 1991
Mr. Hansen handed out copies of the HRA's Annual Financial
Report.
Mr. Commers stated he would like to add discussion of the
Annual Financial Report to the November HRA agenda.
ADJOURNMENT:
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to adjourn the
meeting. Upon a voice vote, all voting aye, Chairperson Commers
declared the motion carried and the October 8, 1992, Housing and
Redevelopment Authority meeting adjourned at 9:10 p.m.
Respectfully su itted,
4Ly e Saba
Recording Secretary
1 1
TO: WILLIAM W. BURNS, CITY MANAGER 41P
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
SUBJECT: RETURN OF REFERENDUM LEVIES TO SCHOOL
DISTRICT 13
DATE: November 6, 1992
At the last HRA meeting I commented on the penalties and interest that Columbia
Heights School District might receive with the payment of taxes on Lake Pointe. As
you recall, based on this comment the HRA wanted to further investigate the penalty
and interest on the settlement of taxes. Since the tax issue is still undecided it is the
Staff's recommendation at this point to return the increment to District 13 along with
the three other school Districts. When this item was presented to the City Council for
their approval they tabled the item until Staff could present to them all four districts.
Since the HRA has previously approved the other three school districts agreements I
have attached the copy of the 1993 agreement for School District #13.
The table below breaks down the increase and decreases from 1992 to 1993 for each
school districts:
School
Estimated
Estimated
Percentage
District
1992
1993
Increase /(Decrease)
11
$ 18,335.71
$ 17,685.71
(4 %)
13
$ 27,308.37
$ 26,564.71
(3 %)
14
$272,604.13
$242,046.07
(11%)
16
60 155.92
$52,616.68
(13%)
TOTAL
$378,404.12
$338,913.17
(10 %)
RDP /me
AGREEMENT
This Agreement is dated as of January 2, 1993, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 13, and provides as follows:
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Redevelopment Project
No. 1 established and operated by the HRA
pursuant to Minnesota Statutes, Sections
469.001 through 469.047.
111985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
"Limited Revenue Note" means the HRA's
$5,603,755.80 Limited Revenue Capital
Appreciation Tax Increment. Note, dated
December 20, 1985.
"1985 G.O. Bonds" means the City's
$11,550,000 Variable Rate Demand General
Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985.
"1986 G.O. Bonds" means the City's
$10,045,000 General Obligation Tax Increment
Refunding Bonds, Series 1986, dated as of
August 1, 1986.
111990 G.O. Bonds" means the City's
$9,485,000 General Obligation Tax Increment
Refunding Bonds of 1990, dated March 1, 1990.
"Tax Increment Obligations" means the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, the 1986 G.O. Bonds, the
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1.3
1990 G.O. Bonds, and any other contractual
obligations of the HRA or the City which were
entered into prior to the date of this
Agreement and which commit the use of any tax
increments from the TIF Districts for
specified purposes, projects, or parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos._ 1 through 12 within
the Project. The attached Exhibit A contains
certification dates and other information on
the TIF Districts.
"School District" means Independent
School District No. 13, the Columbia Heights
School District.
"Subdivision" means Minnesota Statutes
Second 1989 Supplement, Section 469.177,
Subdivision 101 as amended by Laws of
Minnesota 1990, Chapter 604, Article 7,
Section 24 (a copy of which is attached hereto
as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) TIF District No. 6 is located
entirely within the boundaries of the School
District, and a portion of TIF District Nos. 2
and 4 are located within the boundaries of the
School District.
(c) None of the property within TIF
District Nos. 1, 3, 5, 7, 8, 9, 10, 11 and 12
is located within the boundaries of the School
District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
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JA
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is February
1, 1999.
(c) The Limited Revenue Note is not a
general obligation of the City or the HRA and
is payable solely from tax increments pledged
for such purposes from TIF District No. 6.
(d) The 1985 G.O. Bonds were payable
from tax increments derived from TIF District
Nos. 1 through 6, and the final scheduled
principal maturity of those Bonds was February
i, 2000. However, on February 1, 1990, the
City discharged the 1985 G.O. Bonds by paying
all then outstanding principal thereof and
interest thereon.
(e) The 1986 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1 through 6, and the final scheduled principal
maturity of those Bonds is February 1, 2000.
However, the City has advance refunded the
1986 G.O. Bonds via the issuance of the 1990
G.O. Bonds, and the City expects pursuant to
said refunding that all of the principal of
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1.5
and interest on the 1986 G.O. Bonds will have
been paid on or before February 1, 1994.
(f) The 1990 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1, 2, 3, and 6, and the final scheduled
principal maturity of those Bonds is August 1,
2009.
(g) Portions of the principal of the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, and the 1986 G.O. Bonds,
and the 1990 G.O. Bonds were outstanding on
May 1, 1988, and /or are outstanding on the
date of this Agreement.
4. Representations of the School District.
(a) On October 5, 1981, the electorate
of the School District approved a 5.0 mill
continuous levy first effective for the 1981
payable 1982 property taxes. This levy is
hereinafter referred to as the 111981 Levy ".
(b) On September 231, 1986, the
electorate of the School District approved a
7.0 mill continuous levy first effective for
the 1986 payable 1987 property taxes. This
levy is hereinafter referred to as the 111986
Levy".
(c) According to the Minnesota
Department of Education, for purposes of the
above - mentioned referendum levies the tax
capacity rate equivalents of 5 mills and 7
mills are .06162496 and .078759104,
respectively.
(d) On November 6, 1990, the electorate of
the School District approved a .08 tax capacity
rate levy authorized for 7 years and first
effective for the 1990 payable 1991 property taxes.
This levy is hereinafter referred to as the 111990
Levy".
5. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
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as and to the extent received by the HRA, with respect to the
tax increments relating to the 1992 payable 1993 property
taxes, as follows:
(a) TIF District No. 6. Since the 1981
Levy was approved before the date of
certification of TIF District No. 6, the
Subdivision does not apply to that Levy with
respect to this District, and no tax
increments attributable to said Levy from this
District are payable to the School District.
Pursuant to clause b(2) of the Subdivision,
the tax increment from TIF District No. 6
which is attributable to the 1986 Levy and the
1990 Levy shall be paid to the School
District.
(b) TIF District No. 4. Since the 1981
Levy was approved prior to the date of
certification of TIF District No. 4, the
Subdivision does not apply to that Levy with
respect to this District. Pursuant to clause
b(2) of the Subdivision, the tax increment
from TIF District No. 4 which is attributable
to the 1986 Levy and the 1990 Levy shall be
paid to the School District.
(c) TIF District No. 2. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 2 which is
attributable to the 1981 Levy, the 1986 Levy,
and the 1990 Levy shall be paid to the School
District.
6. Further Agreements. Nothing'in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
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1.7
In addition, the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment to the School District shall be limited to and shall
apply only to such tax increment attributable to the 1992
payable 1993 real estate property taxes, and at the conclusion
of said period, the City and the School District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to.the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Mayor
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 13
School Board Chair
Superintendent
224188
6
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
TIF District
Name
1
Center City
2
Moore Lake
3
North Area
4
Johnson Printing/
9/7/89
Skywood Mall
5
Paschke
6
Lake Pointe
7
Winfield
8
Shorewood
9
Onan /Old Central
10
Northco Phase III
11
Osborne Crossings
12
McGlynn Bakeries
224188
7
Independent
Certification School
Date District No.
5/11/79 14
7/31/81 13/14
5/19/82 11/16
1/20/84
13/14
3/15/84
16
12/24/85
13
10/22/86
16
10/24/86
14
9/7/89
16
4/10/90
16
1/31/92
16
5/5/92
14/16
1.8
1.9
EXHIBIT B
Sec. 24 . .'�_,nnesca Statutes Seccnd I5C-9
to read:
sEct cn 4f?.-177, s-_;b-d1'v_4s_:cn 10, -:s a:-.e :.ded
p
:C-s c f s E,
u -d E::=Iy to tax 7,cre.-.e.-,t
C_:str_:cts and _`c: -.:*--,ch ce:tificaticl vEs :ec-:ested
�efc:e vav 1, 1-CS8, that are iccatEd ;-.i a schoc! diStlict,
-.zhich .he '.-CtErS have approved 'lax capacity rates Cr En
i:-.Crease !.1 tax capacity rates -After the tax 1'cre:7.ent financi:-.g.
district vas certified.
(1) If t)-.e:e are no c--ts"znding bc.-ds 0.71 '-IaY 1, 13EB,
to whlc.i frc-m the d-st:-5cu is -.)Iedced, cr e
is 2_ zrcved after 1,* 1SES, and there are no Dc-ds
c,_,tStard_;.-.c at the t_ -.e the -;s approved, that -.:e:e
i s s -: E d '- e fc e :fay 1, 13 8 8 , c c - r c - n- : t: !.- - * n c : c n _ Z. n 5
c- t n x - c n =1 c 1- r it c - w a 5 - m v c - t t c -Z - t c c en c
C;,
-=.S-n=cccc_T
a.:t!lcrity m%:st annually icy to
the school district an amcuntl cf ec,�a! to the
j-cre-.ent IL'I-at is attributable to 'the increase i.-I the tax
capacity rate vnder the refcre-c-.:.m.
(2) If claL :se f3j-zn=!_cn (1) does nct apply, vPcn EPOr"al
by a majority vote of the ccve:-n_;n(g body of the municipality and
the sc!.00l board, the :-.-.;st say to the school district
an a-..cu:-t of ec-.-,al tc the ;I-
c:e:7•ent that is
att r 4 '-.;table to the increase -;:- the tax Capacity rate i::der t'-.e
refere-&jm.
Lj The amcunt-s of these :_.7crements may be expended and
must be treated by the sc',ccl --:-st,,-;ct in the _a:,-,e manner as
prc-.,-,*ded fcr t`.e revenues from the referendum levy
aT_Prc,..C-d
by ,,.e voters.
'!`ie
_--visicns of this subdivision
apply to
protects fcr -_-hic.h
c=__--_;f-cat_;cn
was recuested before
c.1, a,-.6 after
1,
19
Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 6, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Approval of Pledge Agreement for the
Sale of General Obligation Temporary Tax
Increment Bonds
On October 19,.1992, the City Council authorized the issuance of
$4,875,000 in temporary general obligation tax increment bonds. The
purpose of the bonds is to purchase the development rights for the
100 Twin Drive -in site. Bond counsel has advised us that the F[RA
needs to approve a Pledge Agreement for the sale of the bonds.
The Finance Department will be distributing the Pledge Agreement
at Thursday's meeting. The HRA will need to pass a motion to
authorize execution of the Pledge Agreement.
BD:ls
M -92 -685
TO: WILLIAM W. BURNS, CITY MANAGER
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
SUBJECT: RESOLUTION APPROVING AND AUTHORIZING
EXECUTION OF A NEW PLEDGE AGREEMENT FOR
THE $4,030,000 GENERAL OBLIGATION TEMPORARY
TAX INCREMENT BONDS, SERIES 1992C
DATE: November 12, 1992
Attached is the new pledge agreement that we have received from Jim O'Meara. This
pledge agreement acknowledges the desire of the HRA to acquire the title to the
development property known as Lake Pointe. The agreement also acknowledges the
cancellation of all prior agreements associated with the original development contracts
and notes with the developer. The agreement goes on to review the sizing of the new
temporary bond issue required for the acquisition of the development property and the
required pledge of increment necessary for the repayment of the debt.
RDP /me
Attachment
Extract of Minutes of Meeting
of the Board of Commissioners
of the Fridley Housing and
Redevelopment Authority
Pursuant to due call and notice thereof a regular or special
meeting of the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota,
was held at the Fridley Municipal Center on November 12, 1992,
commencing at P.M., C.T.
The following Commissioners were present:
and the following were absent:
The following Resolution was presented by Commissioner
, who moved its adoption:
RESOLUTION NO.
RESOLUTION APPROVING AND AUTHORIZING EXECUTION
OF TAX INCREMENT PLEDGE AGREEMENT
RESPECTING $4,030,000 GENERAL OBLIGATION
TEMPORARY TAX INCREMENT BONDS, SERIES 1992C
WHEREAS, at the request of the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota (the "HRA"), it
is anticipated that the City of Fridley, Minnesota (the "City "),
will award the sale of its General Obligation Temporary Tax
Increment Bonds, Series 1992C, dated as of December 1, 1992 (the
"Bonds "), in the approximate principal amount of $4,030,000,
pursuant to Minnesota Statutes, Section 469.178, Subdivisions 2 and
5, and Chapter 475, to finance certain expenditures for certain
public redevelopment costs (the "Costs ") undertaken and incurred by
the HRA within the HRA's Redevelopment Project No. 1.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the Board of
Commissioners (the "Board ") of the HRA as follows:
228730
1. It is necessary and desirable that the City issue, and the
HRA hereby requests that the City issue, the Bonds in order to
provide financing to the HRA for the Costs.
2. The Tax Increment Pledge Agreement attached hereto and
made a part hereof is hereby approved, and the representations,
covenants and provisions contained therein are hereby ratified and
confirmed by the Board, and the officers of the HRA are hereby
authorized and directed to take such steps as may be necessary to
execute said Agreement, in substantially the form as attached (with
such amendments thereto as the officers executing the same shall
approve, as evidenced by their execution and delivery thereof) ,
upon approval and execution thereof by the City, and to carry out
and fulfill the provisions and requirements thereof.
3. The officers of the HRA are authorized and directed to
execute; in connection with the issuance of the Bonds, such
certificates as may be required or requested by bond counsel with
respect to past and future .project activities, including without
limitation the Costs, and such certificates shall constitute
representations of the HRA.
Adopted by the Board of Commissioners of the Fridley HRA this
12th day of November, 1992.
Chairman
ATTEST:
Executive Director
The motion for the adoption of the foregoing Resolution was
duly seconded by Commissioner and upon vote
being taken thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said Resolution was declared duly passed and adopted.
228730
TAX INCREMENT PLEDGE AGREEMENT
This Tax Increment Pledge Agreement (the "Agreement ") is dated
as of December 1, 1992; is by and between the City of Fridley,
Minnesota (the "City "), and the Housing and Redevelopment Authority
in and for the City of Fridley, Minnesota (the "HRA"); and provides
as follows:
WHEREAS, the HRA entered into a certain Contract for Private
Redevelopment, dated December 20, 1985 (as amended and supplemented
by other agreements, collectively, the 111985 Redevelopment
Contract ") , with a certain party (the "Developer ") with respect to
certain land (the "Development Property ") within the City and a
certain project known as the Lake Pointe Project; and
WHEREAS, the City and the HRA have entered into (or will enter
into prior to the issuance and delivery of the Bonds hereinafter
defined) a certain Agreement with the Developer (together with the
other agreements to be executed pursuant thereto, all of which are
hereinafter collectively referred to as the 111992 Lake Pointe
Agreements ") , pursuant to which, among other things, the 1985
Redevelopment Contract (and all rights, interests and other
agreements contemplated thereby or executed pursuant thereto,
including without limitation the "Revenue Note" thereunder) will be
terminated, and the HRA will acquire the title to the Development
Property, and the Developer's ownership interests and development
rights therein will be terminated; and
WHEREAS, on December 16, 1985, the City Council adopted a
resolution awarding the sale of the City's $11,550,000 Variable
Rate Demand General Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985 (the "Series 1985 Bonds "), to provide
financing for certain other public improvements made or to be made
with respect to the HRA's Redevelopment Project No. 1; and
WHEREAS, in Resolution No. HRA 3 -1990, adopted by the HRA
Board on March 8, 1990, in connection with issuance by the City of
certain other bonds issued for the purpose of refunding an
intermediate refunding of the Series 1985 Bonds, the Board found
and determined that it was necessary for the HRA to retain the then
approximately $2,400,000 of unspent proceeds of the Series 1985
Bonds for ongoing development and redevelopment costs incurred and
to be incurred by the HRA within and for the benefit of its
Redevelopment Project No. 1; and
WHEREAS, in connection with the issuance of the Bonds, the
Board hereby certifies that of the above described $2,400,000 of
proceeds of the Series 1985 Bonds, as of December 7, 1992, there
will remain not more than approximately $935,000, which figure
includes all investment earnings on said proceeds of the Series
1985 Bonds in the interim, and the Board hereby determines that it
228730
is desirable and necessary to apply $735,000 of said remaining
proceeds to reduce the costs otherwise to be financed by the Bonds
(the balance, $200,000, of said proceeds of the Series 1985 Bonds
having heretofore been committed by contract to the Sheet Metal
Connectors project); and in summary, the net costs to be financed
by the Bonds are as follows:
Property Acquisition Costs
Costs of Issuance
Allowance for Discount
Subtotal
Less Available Proceeds
of Series 1985 Bonds
Less Estimated Investment
Net Bond Issue
(Lake Pointe) $4,699,000
35,915
30,300
4,765,215
(735,000)
Earning (215)
$4,030,000
WHEREAS, at the request of the HRA, the City Council has
adopted or is expected to adopt a resolution (the "Bond
Resolution ") awarding the sale of the City's $4,030,000 General
Obligation Temporary Tax Increment Bonds, Series 1992C, dated
December 1, 1992 (the "Bonds "), finance the above described net
costs; and
WHEREAS, to provide funds sufficient for the timely payment of
the debt service on the Bonds, it is necessary for the HRA and the
City to enter into this Agreement:
NOW, THEREFORE, in consideration of the covenants and
agreements hereof between the City and the HRA, and pursuant to
Minnesota Statutes, Section 469.178, Subdivision 2, the City and
the HRA hereby agree as follows:
1. In order to pay the principal of and interest on the
Bonds, when due, the HRA hereby pledges to the City, for deposit in
the Debt Service Account established by the Bond Resolution for the
payment of the Bonds, and the HRA shall pay to the City, Available
Tax Increments (hereinafter defined) in amounts sufficient to pay
such principal and interest, when due, and, to the extent that the
Available Tax Increments are ever insufficient for such purposes,
and the City, pursuant to the Bond Resolution, advances City funds
to provide prompt and full payment of the Bonds, the HRA agrees to
reimburse the City for such advances from such tax increments, when
collected by the HRA. As used in this Agreement, "Available Tax
Increments" means tax increments derived by the HRA from the Tax
Increment Financing Districts currently existing within the HRA's
Redevelopment Project No. 1 (to the extent the same may be applied
toward payment of the Bonds pursuant to applicable law) within the
HRA's Redevelopment Project No. 1, subject to all undischarged
pledges or other commitments heretofore made for such tax
increments. In payment of its obligations under this Agreement,
the HRA expressly reserves the right to pledge or otherwise
228730
2
dedicate such tax increments to purposes other than the payment of
the obligations described above upon a finding by the HRA that the
estimated Available Tax Increments then remaining will be
sufficient from year to year for such purposes. The HRA
acknowledges that the City is issuing the Bonds as "temporary
bonds" within the meaning and subject to the requirements of
Minnesota Statutes, Section 469.178, Subdivision 5, and that the
City will accordingly be required, to the extent that the sources
available for the timely payment of the Bonds are not sufficient
for such purposes, to issue additional temporary bonds or long -term
bonds (collectively, the "Definitive Bonds "), and the HRA hereby
covenants to enter into such amendments, supplements, and /or
replacements of this Agreement as may be required or necessary in
connection with issuance of and in order to provide payment of any
such Definitive Bonds. In addition, to the extent that the
proceeds of any such Definitive Bonds, as so secured by pledges of
revenue of the HRA, would be used to pay, refund, or refinance
portions of the Bonds, the foregoing pledge of Available Tax
Increments would be modified accordingly, to the effect and with
the intention, however, that all debt service on the Bonds and such
Definitive Bonds would be and remain the ultimate responsibility of
the HRA and the Available Tax Increments.
2. An executed copy of this Agreement shall be filed with the
County Auditor of Anoka County, as required by Minnesota Statutes,
Section 469.178, Subdivision 2.
3. This Agreement shall become effective upon the actual
issuance and delivery of the Bonds.
4. For the benefit of the City as the issuer of the Bonds,
and for the benefit of the registered owners from time to time of
the Bonds, the HRA hereby certifies, finds, represents, and /or
covenants as follows:
(a) None of the private development of the Development
Property envisioned by the 1985 Redevelopment
Contract has occurred.
(b) Pursuant to the 1992 Lake Pointe Agreements, all
prior agreements executed with or for the benefit
of the Developer in connection with the Lake Pointe
Project have been terminated or will be terminated
prior to the issuance of the Bonds.
(c) No Assessment Agreement (as defined in the 1985
Redevelopment Contract) has ever been executed or
filed.
228730
3
(d) The Revenue Note has been or will be canceled in
connection with the termination of the 1985
Redevelopment Contract, and no payments have ever
been made thereon.
(e) The HRA will own, maintain, carry and be
Uresponsible for the Development Property at least
as long as the Bonds are outstanding.
(f) The HRA is aware of no private interest at this
time in the Development Property or any portion
thereof, and has no prospective private users in
mind for such property. There are no preliminary
or other negotiations proceeding between the HRA
and any such private users with respect to the
Development Property or any portion thereof.
(g) The HRA does not have and will not enter into any
direct, indirect, or underlying agreements or
arrangements with any party that is not a
governmental unit with respect to the use of or
interest in the Development Property as long as the
Bonds are outstanding, and the HRA will not allow
any use of the Development Property which is not a
use by a governmental unit for its public purposes
as long as said Bonds are outstanding.
(h) The HRA covenants that it will not sell, otherwise
convey, or grant any interest in the Development
Property (or close on any sale or other disposition
thereof) with any such non - governmental entity as
long as any of the Bonds remains outstanding.
IN WITNESS WHEREOF, the City and the HRA have caused this
Agreement to be duly approved and executed as of the day and year
first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF FRIDLEY, MINNESOTA
By
Its Chairman
By
Its Executive Director
228730
4
CITY OF FRIDLEY, MINNESOTA
Its Mayor
By
Its City Manager
(SEAL)
Certificate
I, the undersigned, being the duly qualified and acting
Executive Director of the Fridley HRA, do hereby certify that I
have carefully compared the attached and foregoing extract of
minutes of a special or regular meeting of the Board of
Commissioners thereof, duly called and regularly held on November
12, 1992, with the original thereof on file in my office and I
further certify the same is a full, true, and correct copy thereof,
insofar as the same relates to the approval of a certain Tax
Increment Pledge Agreement respecting the $4,030,000 General
Obligation Temporary Tax Increment Bonds, Series 1992C, of the City
of Fridley, Minnesota.
WITNESS my hand as such Executive Director of the HRA this
day of , 1992.
Executive Director
Fridley HRA
228730
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE:
November.2,
1992
TO:
William
Burns, Executive Director
of HRA �•��
FROM:
Barbara
Dacy, Community Development Director
SUBJECT:
Consider
Approval of Easement for
Electrical
Control
Boxes for NSP
As part of the effort to remove the overhead power lines and
install them underground along Mississippi Street, NSP requested
an area for the placement of three control boxes. NSP originally
wanted to place them in the MnDOT right -of -way north of the bus
shelter, but their location would prohibit construction of the berm
anticipated as part of the Mississippi Street improvement project.
Therefore, we agreed to have them locate the boxes in the southeast
corner of the Fridley Fast Lube site (former Kiffe Automotive
site).
A 10 foot easement along the easterly portion of this property is
needed. The control boxes are currently under construction. Keith
DeGross from Fridley Fast Lube agreed with the proposed location.
Parking will be interrupted on the property temporarily, but cars
will be able to be parked in the parking area north of the control
boxes after construction is completed.
Recommendation
Staff recommends that the Housing and Redevelopment Authority
approve the attached easement and authorize the Executive Director
to execute the easement.
BD:ls
M -92 -668
3.1
3.2
.f
00 i
OPP =
elo
E �
�.,.•.�.,• S�GAL
- 8A-S
Lo R/W
N
RELOCATE
AUTO HYDRANT-
PAIR
5
IW, TCH CFNTE /2 3 X 7'
Lagv Lcx,,' 6 x Coy DC
�Ll 1 J�� 'Es-m1Z. ml
BUS SHELTER
PER DETAIL
US SHELTER TO
REPLACED BY
AL PROVISIONS.
3.3
Easement
Corporation(s) to Corporation(s)
No delinquent taxes and transfer entered; Certificate of Real Estate Value
( ) filed ( ) not required
Certificate of Real Estate Value No.
, 19_
by
County Auditor
Deputy
STATE DEED TAX DUE HEREON:
Date . 19
FOR VALUABLE CONSIDERATION, The Fridley Housing and Redevelopment Authority, Grantor, a
Corporation under the laws of Minnesota, hereby conveys an easement to the City of Fridley, Grantee, a
Municipal corporation under the laws of Minnesota, on real property in Anoka County, Minnesota.
A 10 foot utility easement described as follows:
The West 10 feet of the East 40 feet of that part of the Northwest Quarter of the Southwest Quarter (NW
1/4 of SW 1/4) of Section Fourteen (14), Township Thirty (30) North, Range Twenty-four (24) West,
described as follows: Commencing at a point on the North line of said NW 1/4 of the SW 1/4 distant 1043.58
feet East from the Northwest corner thereof; thence Southerly parallel with the Westerly line of University
Avenue Northeast, also known as State Trunk Highway #56, as the same is laid out and constructed a
distance of 158 feet; thence East parallel with the North line of said NW 1/4 of the SW 1/4 a distance of
155 feet, more or less, to the said Westerly line of University Avenue Northeast, also known as State Trunk
Highway #56; thence North along the said Westerly line of University Avenue, also known as State Trunk
Highway #56, a distance of 158 feet, more or less to the North line of said NW 1/4 of the SW 1/4; thence
West along the North line of said NW 1/4 of the SW 1/4 a distance of 155 feet, more or less, to the point
of beginning.
Subject to easements, dedications, conditions and covenants of record.
The City of Fridley hereby accepts this easement for utility purposes.
Shirley A. Haapala - City Clerk
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
BY:
STATE OF MINNESOTA )
)ss
County of Anoka )
The foregoing instrument was acknowledge before me this day of '19
by , the Chairman of Fridley Housing and Redevelopment Authority, a
Public Body and Corporate Politic under the laws of Minnesota on behalf of the Public Body and Corporate
Politic.
Tax Statements for the real property
described in this instrument should
be sent to:
THIS INSTRUMENT WAS DRAFTED BY:
City of Fridley
6431 University Ave., N.E.
Fridley, MN 55432
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TO: FRIDLEY H.R.A.
FROM: CITY OF FRIDLEY
RE: BILLING FOR OPERATING EXPENSES FOR OCTOBER, 1992
AND OCTOBER 1992 ADMINISTRATIVE EXPENSES
ADMINISTRATIVE BILLING:
OCTOBER ADMINISTRATIVE PERSONAL SERVICES 13,631.00
OCTOBER ADMINISTRATIVE OVERHEAD 252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
OCTOBER OPERATING EXPENSES:
SIGN PERMIT SURCHARGE
0.50
SEPTEMBER MGMT FEE — KORDIAK
158.98
UTILITY BILLING — RICE CREEK
241.03
MINNEGASCO — RICE PLAZA
17.17
NSP — RICE PLAZA
154.84
MISC REPAIRS — RICE PLAZA
50.00
CLEAN HEATING UNIT — RICE PLAZA
49.95
PLUMBING REPAIRS — RICE PLAZA
100.75
LAWN MOWING — RICE PLAZA
63.60
NSP — LAKE POINTE
33.68
CARPET CLEANING — RICE PLAZA
190.00
SEPT — INSURANCE ALLOCATION
929.00
SEPT — INSURANCE ALLOCATION
40.00
SEPT — INSURANCE ALLOCATION
52.00
OCT — INSURANCE ALLOCATION
929.00
OCT — INSURANCE ALLOCATION
40.00
OCT — INSURANCE ALLOCATION
57 nn
TOTAL OPERATING EXPENSES FOR OCTOBER 3,102.50
TOTAL EXPENDITURES 16,985.75
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: City Council Comments on Proposed Housing Program,
October 26, 1992
We have prepared additional information regarding the four
recommended housing programs originally discussed by the HRA at its
September 10, 1992, meeting. The enclosed report was reviewed by
the City Council on October 26, 1992. We would like the Housing
& Redevelopment Authority to review the enclosed report and make
comments or recommendations on each of the program components. To
follow is a list of the City Council's concerns about the
recommended programs:
1. The Council expressed concern
funding for the various housing
very concerned about people with
not qualify for any of the prog
to emphasize the lower income
possible.
over the adequacy of
programs. He was also
lower incomes who might
rams. He would like us
households as much as
2. Councilmember Schneider also expressed an interest in
rehabilitating rental units or acquisition and demolition
of poor rental properties.
3. The Council seemed to agree that the rental inspection
program should be our first effort; however, Council -
member Billings would like us to impose an annual
certificate of occupancy requirement for not only rental
property but also for commercial and industrial property.
4. The Council suggested that we conduct a pretest of the
proposed single family rehabilitation program components.
Councilmember Jorgenson suggested that we contact ACCAP
to tell us about the types of qualifiers for MHFA
programs as an example.
5. The Council suggested that we look at trying to assist
those homeowners who were affected by the poor
foundations on Horizon Drive.
City Council Comments
November 4, 1992
Page 2
6. The Council suggested that housing and rehabilitation
information should be passed along to single family
homeowners when doing our code enforcement program.
7. The Council asked us to investigate alternative software
for packages for the rental inspection program. They
suggested a PC based software which would tend to cost
less than the HTE software.
8. Regarding the scattered site housing component, the
Council suggested that we try to ensure that we are not
buying property from individuals who are buying the
property just ahead of us in order to make additional
money.
9. The Council did not object to hiring a housing
coordinator once it has been confirmed that there are
banks willing to help administer the program. They also
agreed with the other elements of the program except as
noted above.
BD:ls
Iuay�:VYO7
i
C% Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: October 22, 1992 9-*'
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Proposed Housing Programs
On July 27, 1992, and September 10, 1992, the City Council and HRA
reviewed a list of recommended housing programs for implementation
in 1993. The purpose of this memorandum is to review the progress
of additional research on the proposed programs. Staff has
prepared a list of recommended steps for each program for the City
Council and HRA to discuss and to provide direction.
Original Recommended Programs
The primary strategies recommended to the City Council and HRA
were:
1. Initiation of a single family rehabilitation program
2. Increased rental inspections
3. Scattered site acquisition program
4. Increased state and federal grant application activity
(MHFA /HOME)
5. Initiation of a neighborhood land use planning process
to determine future land uses of vacant and redevelopment
parcels
The original proposed budget of the five programs totalled $505,000
as follows:
Rehabilitation program $160,000
Rental inspection program $1101000
Scattered site acquisition program $225,000
MHFA /Home applications $10,000
Neighborhood land use
planning process -0-
$505,000
Proposed Housing Programs
October 22, 1992
Page 2
We will not discuss the neighborhood land use .planning process
since all of our time and resources have been placed into
establishing the other four specific housing programs. After
implementation has started on the housing programs, time will then
be available to work more on the neighborhood land use planning
process.
Proposed Revised Budget
After further investigation into the proposed programs, we are
recommending the City Council and HRA consider a reallocation of
funds but maintain the same budget amount of $505,000. The
proposed distribution of funds for discussion is as follows:
1. Fridley housing rehab programs $200,000
2. Rental inspections $110,000
3. Scattered site acquisition $100,000
4. MHFA /HOME applications $ 10,000
5. Land use planning process -0-
6. Administration $ 85,000
$505,000
The budget was redesigned to maximize the rehabilitation effort and
to provide for the administrative resources needed to adequately
run the programs. About half of the "Administration" item in the
proposed budget is for a "Housing Coordinator" to be hired by the
HRA on a contractual basis. The Housing Coordinator would be
responsible for administering the four housing programs as well as
any other programs that can be initiated in the future. The
Housing Coordinator could be an individual applicant or we could
send RFPs to ACCAP, MCDA, Metro HRA, or another housing agency to
supply a person who can meet the demands of the Housing Coordinator
position. A tentative job description has been prepared.
I recently had a unique opportunity to test the "market" for
Housing Coordinator. ACCAP received a grant from the McKnight
Foundation to hire a "Housing Development Specialist ". ACCAP asked
me to participate in the interview team. Qualified persons are
available.
The $85,000 Administration item would also include costs to
administer the other programs. A potential breakdown is as
follows:
Proposed Housing Programs
October 22, 1992
Page 3
Housing Coordinator
Housing Rehabilitation
• Program Inspections
• Marketing
• Forms /applications
Rental Inspections
• HTE Software
• Forms /applications
Scattered Site Acquisition
• Appraisals
• Title opinion
• Attorney fees
$40,000
$14,000
Absorbed in existing
HRA budget
$ 1,000
$20,000
$ 1,000
$ 2,000
$ 2,000
$ 5,000
$85,000
The HTE Software would be a one -time expenditure. Other costs,
like the marketing expenses could be absorbed by the HRA budget
(1992 budget was $11,000).
HRA Cash Flow Analysis
The HRA, at its October 8, 1992, meeting, received a cash flow
analysis prepared by the Finance Department which incorporates a
$500,000 expenditure for housing programs for the next five years
beginning in 1993 (see attached chart). The analysis includes the
Lake Pointe purchase costs and assumes a worse case scenario of no
new development and reduced property taxes. School district TIF
turnbacks are also incorporated into the expenses.
A positive fund balance is maintained despite the additional
expenses; however, the HRA should review the budget on an annual
basis to determine the effectiveness of the program and the
financial ability to carry out the program.
Recommendation
We would like the City Council and HRA to review each program and
provide comments and direction on each. In each program, there are
specific issues which the City Council and HRA will need to
discuss. As we proceed through the meeting, we can review those
on an individual basis.
In general, staff recommends that the City Council and HRA direct
staff to continue implementation of the programs.
Proposed Housing Programs
October 22, 1992
Page 4
Additional Information
At the July 27, 1992, City Council conference meeting, Council
requested additional information about the truth -in -sale of housing
ordinances in the metropolitan area, as well as how other
communities deal with nuisance abatement procedures and housing
code violations. Steven Barg has written three memos regarding
these topics to provide additional information to the Council. You
may also want to discuss these in more detail.
Also enclosed is a copy of a letter to targeted multiple family
property owners regarding potential funding from MHFA for a rental
rehab project.
BD:ls
M -92 -654
Position Title:
Department /Division:
Position Objective:
Immediate Supervisor:
Examples of Duties
and Responsibilities:
JOB DESCRIPTION
Housing Coordinator
Community Development Department
To implement the housing programs of the
Fridley Housing & Redevelopment Authority
and the City Council.
Community Development Director
1. Administers the Fridley Housing Rehabilitation program:
A. Prepares procedural manual on loan and inspection
processes and requirements.
B. Prepares marketing information including press releases,
correspondence, articles, and other items.
C. Interviews, solicits, and negotiates contracts with
program inspectors.
D. Reviews rehabilitation application documents prior to
distributing to banks or the Anoka County Community
Action Program.
E. Coordinates financial issues with the Finance Department.
F. Prepares on -going reports for the Housing & Redevelopment
Authority.
2. Oversees and administers the rental inspection program.
A. Interviews, solicits, and negotiates contracts with
rental inspectors.
B. Interviews and hires clerical staff.
C. Oversees implementation of HTE.software system.
D. Reviews and revise as necessary Chapter 220 of the
Fridley City Code regarding rental inspections and make
recommendations of other code improvements.
E. Supervises contract inspectors and implements a quality
control program where necessary.
Housing Coordinator
Page 2
3. Administers scattered -site acquisition program.
A. Reviews proposed sites with the HRA and City Council.
B. Negotiates with property owners.
C. Arranges for demolition, reconstruction, or
rehabilitation of the structure.
D. Arranges for closing documents and real estate
transactions.
4. Prepares grant applications to state and federal agencies.
A. Keeps current with state and federal housing programs.
B. Prepares grant applications to state and federal
agencies.
C. Meets with state and federal staff when necessary.
D. Establishes and maintains working relationship with
housing providers, including Anoka County, non - profit
housing providers, and other governmental agencies.
5. Assists the Community Development Director and the Executive
Director of the HRA on redevelopment projects which involve
housing.
6. Administers housing program budget.
7. Advises HRA on other housing programs and policies which
furthers the goals as identified by the Fridley City Council
and HRA.
8. Establishes evaluation mechanisms of housing programs and
monitors housing program impact.
supervisory
Responsibilities: The Housing Coordinator will supervise all
contract inspectors and the rental inspection
clerical staff person.
Knowledge and
Skill Requirements:
1. Must be knowledgeable in local, state, and federal building
and housing codes.
2. Familiar with building materials.
Housing Coordinator
Page 3
3. Familiar with the components of residential structures.
4. Familiar with cost estimating and specification writing.
5. Familiar with local, state, and federal housing programs.
6. Familiar with property acquisition and real estate procedures.
7. Oral and written skills.
8. Negotiation and mediation skills.
9. Able to establish and maintain ongoing work files.
10. Familiar with tax increment financing.
11. Able to work independently.
12. Knowledge of contract and contract negotiations.
13. Familiar with grant application techniques and procedures.
14. Familiar with computer software and hardware.
Minimum Job
Requirements:
1. Bachelor of Arts in Planning, Urban and Regional Affairs,
Municipal Administration, or Housing or a related field.
2. A minimum of three years experience in a housing and
redevelopment authority or a local unit of government working
directly with local, state, and federal housing programs.
Salary: Contract negotiation required.
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REHABILITATION PROGRAMS
1. Goals:
a. To improve the quality and the condition of single family
homes.
b. To maintain and improve neighborhood quality and property
values.
C. To bring into compliance those homes which have unsafe
or hazardous building conditions.
2. Program Components and HRA
a. Fridley Middle Income
b. MHFA Fix -Up Fund
C. CDBG
d. Assistance for Non -Qu;
3. Program Requirements:
Budget:
Rehabilitation $150,000
-0-
-0-
3lifiers 50,000
$200,000
See attached matrix of four program components. The Middle
Income Program would be administered through Fannie Mae
approved lenders via four types of loans:
(1) A straight rehabilitation loan
(2) A refinancing and rehabilitation loan
(3) A purchase and rehabilitation loan
(4) A straight purchase loan
The HRA would provide assistance in the amount of 5% of the loan
up to a $6,000 maximum. The assistance would be issued at closing
and is applied to closing costs, points, or other costs of the
loan.
4. Eligible improvements:
First priority will be given to those repairs that correct
obvious health and safety problems that will be identified by
a rehabilitation inspection conducted prior to completion of
the loan application. Loan funds must be used to pay for new
improvements to existing structures which improve the basic
livability, the utility, or energy efficiency of the property.
The improvements must be permanent, general improvements which
may include additions, alterations, or repairs to the
structure, kitchen and bathroom updates, exterior siding or
repainting, and construction or repair of personal use garages
and driveways. Loan funds may not be used for decks, patios,
fireplaces, spas, tennis courts, swimming pools, conversion
of non - residential property into residential property,
conversion of personal property, mobile homes, or vacation
homes into year- around residential properties, and
improvements of the type or quality which exceed customary
Rehabilitation Programs
Page 2
standards in the area for similar properties. Further, the
loan funds may not be used for any previously existing
mortgage or debt, improvements initiated before the date of
the credit application, or assessments for public
improvements. Finally, those improvements made /constructed
by those other than a licensed contractor, plumber, or
electrician are specifically excluded. In no case shall
proceeds from the loan be used to pay for time and labor of
the property owner or his /her immediate family.
5. Administration:
The rehabilitation program is divided into four components.
The program would be administered by a housing coordinator who
would solicit applications and direct each applicant to the
appropriate program.
For example, lower income households would be directed to the
Minnesota Housing Finance Agency Fix -up Program, and very low
income households would be directed to the Community Develop-
ment Block Grant Program. Other individuals with higher
incomes would be directed to the HRA- assisted middle income
rehabilitation program. In other words, the state and federal
money will be maximized first, then the HRA money. If
individuals cannot, for whatever reason, qualify for MHFA,
CDBG, or even the Fridley middle income program, a budget
reserve of up to $50,000 is provided (see item #9 for further
discussion).
6. Inspections:
The Housing Coordinator would arrange for an initial
inspection at the outset of the loan process. During that
inspection, the code and safety issues would be identified and
given to the property owner. The loan funds must be used
toward resolving those issues prior to using the funds for the
other improvements. The types of code and safety issues that
will be required are currently under investigation. We are
reviewing code requirements from Hopkins, Richfield, St. Louis
Park, Minneapolis, and St. Paul. The rehab program
inspections could be contracted out; two individuals of
existing staff would qualify (Pat Wolfe and Gary Ford). The
banks will conduct inspections of the improvements prior to
selling the loans to Fannie Mae. The HTE Software proposed
for acquisition for the rental inspection program can also be
used to track the rehab program.
7. Negotiations with Banks:
Faye Wegner from Miller Schroeder was a key player in
developing the City of Minneapolis program, the model for the
Middle Income Program. She has assisted us in developing the
Rehabilitation Programs
Page 3
program and will assist us in approaching area banks. Fannie
Mae approved lenders in the metropolitan area include Norwest
Banks, First Banks, and United Mortgage. The City Manager and
I recently met with Fridley State Bank. The Bank was very
interested in becoming a Fannie Mae approved lender and rehab
lender. Approval must be granted from the Fannie Mae office
in Chicago. If a local bank cannot be obtained to administer
the proposed program, then we will need to approach Norwest
and First Bank to determine if they would be willing to assist
Fridley in the middle income program. Wegner's initial
reaction is that they would be willing to do that.
TCF elected not to participate in the Minneapolis program
because of other programs already in place. The Metropolitan
Savings and Loan Institution is working exclusively with the
St. Paul program. The Marquette Bank system, because of the
acquisition by First Banks, may be an opportunity to have a
First Bank office in Fridley. The former Marquette Osborne
office could be converted to a First Bank facility. A final
decision on this would not be made public probably until after
the first of December.
Northeast State Bank, while not a Fannie Mae approved lender,
may still be interested in the middle income program.
Northeast State Bank, in its Columbia Heights office, does
process the MHFA Fix -up Fund loans. We would prefer to have
a. Fridley bank administer the Fix -up Fund Program; Fridley
State Bank stated they are willing to investigate this option
as well.
There is no bank involvement in the Community Block Grant
Program. We do need to reallocate remaining funds from the
Riverview Heights Project from this year and the previous
year. We can specifically designate our CDBG funds for the
housing rehabilitation program, and that program can be
administered by ACCAP. The Housing Coordinator would be the
liaison between the City and ACCAP to administer this program.
8. Straight Purchase Loan:
We are proposing to target 177 single family non - homesteaded
properties. At the current time, 67 of those properties are
located in Neighborhood Area #4 (which is approximately the
middle of the City) and 50 of those properties is in
Neighborhood Area #7 (in the northwest part of the City) .
This would achieve the objective of converting rental single
family housing to an owner - occupied status. This could also
satisfy the first -time homebuyer goal identified in the
Maxfield study. A stipulation on the loan, however, would be
that the house must remain owner - occupied through the life of
the loan; otherwise, the loan payments would be accelerated
and the amount of HRA assistance would have to be returned.
Rehabilitation Programs
Page 4
9. Assistance for Non - Qualifiers:
About $50,000 of the $200,000 recommended funding is proposed
for a reserve fund for those individuals who cannot qualify,
for whatever reason, for any of the other three programs.
This may be a married couple with a fairly large income but
they have a number of children in college and a bad credit
history. If there are code and safety issues which should be
resolved, it is proposed that a maximum deferred loan of
$10,000 be provided. Wegner from Miller Schroeder and other
area banks have advised that it may be best to negotiate the
specific terms of this particular program on a case -by -case
basis. The HRA could also require that the loan amount is
returned upon sale of the property.
10. Demolition Option:
For homes built prior to 1950, another option exists. The
HRA's assistance could be dedicated to demolition and the
property owner could finance a loan for new construction
through the Fannie Mae lender.
11. Purchase Lease Option:
Fannie Mae will also permit the HRA to purchase a home and
property and lease it back to the owner for 3 -5 years with the
stipulation that the tenant can buy the property back within
that timeframe. In fact, a portion of the lease amounts can
be escrowed on the tenant to be used for the acquisition of
the home at the end of the lease period.
12. Future Approvals Needed in the Rehabilitation Program:
Jim Casserly is researching the legal basis and procedures for
using TIF money on the housing programs. At minimum, the City
Council and the HRA will need to:
a. Approve a resolution on rehab program structure and
requirements; possibly referring to a procedural manual
outlining loan and inspection requirements.
b. Approve the appropriate agreements with the banks/
financial institutions to administer the Middle Income
Program (agreements are not necessary with the banks for
the MHFA program).
13. Immediate Recommended Actions:
In order to implement the rehab program, we recommend the City
Council and HRA direct us to:
Rehabilitation Programs
Page 5
a. Identify bank or mortgage company to administer Middle
Income Program.
b. Finalize the job description and initiate the hiring
process for a Housing Coordinator. This may include
requesting a proposal from ACCAP, MCDA, the Metropolitan
Council HRA, or other individuals.
C. Hire Housing Coordinator as soon as possible and locate
in former Planning Coordinator office, no later than
January 1, 1993. Authorize Housing Coordinator to
proceed with other programs as directed by the City
Council and HRA.
d. Identify and establish a Fridley bank to administer Fix -
Up Fund Program.
e. Initiate CDBG reallocation process to identify housing
rehab program.
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RENTAL INSPECTION PROGRAM
1. Goal:
a. To improve the quality of the rental housing stock
b. To avoid receiving displaced problem tenants
C. To interrupt the cycle of deferred maintenance
2. Program Components and HRA Budget:
a. Conduct inspections in 2,000 units per year.
b. Inspector and support staff contract costs- $110,000
C. HTE Code Enforcement Software - $ 20,000*
d. Supplies for forms, etc. - $ 1,000*
* These costs are in the Administration line item.
3. Program Requirements:
a. Housing Coordinator will identify appropriate revisions
to Chapter 220, Residential Rental Property and Condo
Common Area Maintenance Code, which include:
- Adopting HUD Section 8 minimum housing standards
- Other fire, building, electrical, or plumbing
standards
b. Housing Coordinator will hire and organize contract
inspectors and a clerical person to inspect 2,000 units/
year:
- The equivalent of two full -time inspectors will be
needed plus;
- One full -time clerical person to input inspection
results on computer, schedule inspections, complete
follow -up correspondence.
C. Minimum qualifications for inspectors:
(1) Minimum of 3 years experience as a housing inspector
for a city or other local unit of government
(2) Certificate in Building Inspection Technology or an
Associate of Arts degree
Rental Inspection Program
Page 2
(3) Ability to communicate clearly and concisely both
orally and in writing
(4) Knowledge of Building and Housing Codes and Code
Enforcement Procedures
(5) Demonstrated ability to work with owners, renters,
property managers, and general public
4. Administration:
a. A team of rental inspectors could be assigned to certain
neighborhoods of the City; however, all inspectors would
have to be consistent in interpretations and follow -up
procedures.
b. Inspection forms should be revised to be compatible for
computer input and ordinance revisions.
C. HTE Software System should be implemented in conjunction
with rental inspection program because:
(1) It is directly linked to Land Management System in
ASA 400 computer. This will enable inspectors /staff
to crosscheck other issues such as zoning code
issues, water bill delinquencies, or license fee
delinquencies.
(2) It will create systematic "tickler" system for
initial and follow -up inspections.
(3) The program can provide detailed reports on types
of violation, frequency, location in neighborhood
area or ward, or other items desired by the City.
(4) It will automate other functions of Code Enforce-
ment staff such as weed notices on problem
properties, systematic code enforcement program, and
sign code violations.
d. Rental license fees must be increased to offset the
additional costs associated with the program. Two
alternative fee schedules have been developed which could
generate an additional $34,000 to $90,000 per year. The
more expensive fee schedule would generate about
$108,000.
Rental Inspection Program
Page 3
5. Future Approvals Needed for Rental Program:
a. Housing Coordinator should meet with rental property
owners regarding the proposed program and rental fee
increase.
b. City Council will need to adopt an ordinance amendment
raising rental license fees.
C. City Council will need to approve ordinance amendment to
Chapter 220.
d. HRA will need to authorize the Housing Coordinator to
prepare RFP for rental contract inspectors and establish
program.
6. Immediate Recommended Action:
a. Acquire HTE Software by November 30, 1992, so Housing
Coordinator can train on the system and oversee its
implementation.
ALTERNATIVE FEE SCHEDULES FOR MULTIPLE DWELLINGS
EXISTING SCHEDULE: Single Family - $12.00
Double Units - $12.00 Each
Three to Seven Units - $36.000 Total
Eight to 12 Units - $49.00
Over 12 Units - $49.00 per Building
Plus $2.00 for Each Unit over 12
FEES COLLECTED NOW: 72 Single Units - $864.00
258 Double Units $3,960.00
3, 278 Three and Up Units - $12, 718. 00
430 Condo Units - $1,292.00
-----------------------------------
Total Presently Collected- $18,834.00
PROPOSED FEE SCHEDULE: $50.00 for First Unit; $8.00 for Each
Additional Unit
72 Single Units - $3,600.00
258 Double Units - $7,482.00
3,278 Three and Up Units - $36, 178.00
430 Condo Units - $6,170.00
Total Proposed Collected - $53,430.00
PROPOSED FEE SCHEDULE: $100.00 for First Unit; $10.00 for
Each Additional Unit
72 Single Units - $7,200.00
258 Double Units - $14,190.00
3,278 Three and Up Units - $74,480.00
430 Condo Units - $12,700.00
-----------------------------------
Total Proposed Collected- $108,570.00
1.
2.
M
4.
5.
SCATTERED SITE ACQUISITION
Goals:
a. To remove blighted and abandoned homes
b. To provide new housing construction
Program Components and HRA Budget:
a. Acquisition of vacant and developed properties
b. $100,000 for property acquisition; $9,000 in
Administration budget provides for appraisal, title, and
legal costs.
Program Requirements:
a. HRA and City Council approves list of potential
properties on an annual basis.
b. Housing Coordinator uses a rating system to identify
priority parcels for acquisition from:
- List of abandoned homes
- List of vacant parcels
- Potential redevelopment sites
C. See attached chart for rating system. The chart
identifies a weighted criteria system to analyze
properties.
Purposes of Acquisition Activity:
a. Remove blighted building and convey property to adjacent
property owners if it does not meet lot requirements.
Adjacent property owners can use area for potential
improvements.
b. Remove blighted building and sell lot to builder for new
construction.
C. Remove questionable structure or nonconforming uses and
sell lots to builder for new construction. Relocation
costs may be necessary if building is occupied.
Future Approvals Necessary for Scattered Site Acquisition:
a. Properties must be in redevelopment project area; City
Council and HRA will need to adopt a resolution. Jim
Casserly is researching whether or not this would be
absolutely necessary.
Scattered Site Acquisition
Page 2
b. Authorize Housing Coordinator to initiate acquisition
process and when, necessary, to contract with appraisers,
builders, and others.
6. Immediate Recommended Actions:
a. Potential properties for 1993:
(1) 513 Fairmont Street
(2) 532 Janesville Street
(3) 576 Ironton Street
(4) 683 Glencoe Street
(5) 389 Hugo Street
b. Initiate property owner contacts and determine willing-
ness for sale. These parcels contain severely
debilitated structures, some worse than others. All of
these lots are below 7,500 square feet and are not
buildable without a variance. The lots could be divided
in half and conveyed to adjacent property owners. Each
of these properties range in value from $30,000 to
$50,000. The worst two or three will have to be chosen
to remain within the budget.
7. Land Sales:
There may be occasions when the acquisition costs could be
recouped through sale of the property.
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MHFA /HOME APPLICATIONS
1. Goals:
a. To obtain as much state and federal funds as possible to
supplement the City's housing programs such as scattered
site acquisition, rehabilitation, or redevelopment
projects
b. To preserve local financial resources as much as possible
2. Program Requirements and HRA Budget:
a. The Housing Coordinator will be responsible for keeping
abreast of state and federal programs and making
application at the right time for the right project.
b. $10,000 is proposed for application fees or other costs
which may be necessary to make applications.
3. Immediate Recommended Actions:
a. Identify and establish a bank in Fridley to work with
City or MHFA mortgage programs.
b. Prepare application for recent rental rehab competition.
C. Prepare and submit application for first -time homebuyer
program during required timeframe (first quarter 1993).
OTHER POSSIBLE PROGRAM ADDITIONS
1. Truth -in -Sale Ordinance
a. Evaluate three options.
b. Evaluate administration costs.
2. Nuisance Abatement Ordinance
3. Develop a local source of money for rental rehabilitation
projects.
4. Establish a Multi - Family Owner /Landlord Coalition.
5. Prepare a "how to" rehabilitation handbook.
6. Adopt ordinance on mobile home code requirements.
e Community Development Department
L� PLANNING DIVISION
City of Fridley
DATE: October 20, 1992
TO: Barbara Dacy, Community Development Director
FROM: Steven Barg, Planning Assistant
SUBJECT: Truth -in -Sale of Housing Programs
Introduction
On October 8, 1992, I attended a seminar on Truth -in -Sale of
Housing programs sponsored by the Minnesota Society of Housing
Inspectors. As you are aware, Truth -in -Sale of Housing programs
require a seller to obtain a written evaluation from a licensed
housing inspector describing the condition of a property before it
may be put on the market for sale.
I had the opportunity to speak with representatives from St. Paul,
Hopkins, and St. Louis Park at this seminar concerning their
housing programs. Subsequently, I have had telephone conversations
with individuals directly involved with similar programs in
Minneapolis and Maplewood. The following summarizes some of the
important information which I have learned through the seminar and
my follow -up telephone calls.
Alternative Approaches
After gathering information received from these five cities, it is
apparent that there are three main approaches. These are as
follows:
1. Information only - The Cities of St. Paul, Minneapolis,
and Maplewood use Truth -in -Sale of Housing only as an
informational tool designed to assist potential buyers
in analyzing properties for sale. While the cities hope
th' oc ess m g
a encourage sellers to make needed
is pr y
improvements, their ordinances do not require sellers to
take any actions beyond obtaining the written evaluation
and making it available to potential buyers.
Truth -in -Sale of Housing Programs
October 20, 1992
Page 2
2. Identify/correct life safety hazards - The City of
Hopkins also seeks primarily to provide relevant
information on housing conditions to those interested in
purchasing properties. However, the Hopkins' ordinance
requires that sellers correct any conditions which are
deemed to constitute serious safety hazards prior to sale
of these properties. Since the Hopkins' program began
in 1991, approximately 40% of inspections conducted have
failed due to the presence of these life safety hazards.
3. Achieve code compliance - The City of St. Louis Park uses
its program as a tool to bring properties into compliance
with all housing and code requirements. A certificate
of code compliance from the City of St. Louis Park is
required prior to the sale of any residential property
in the community. While this program requires signi-
ficant staff time and effort for tracking and follow -up
inspections, the city considers it an important step in
attempting to protect the integrity of its housing stock.
I have received information from each of these communities regard-
ing license /application fees and other charges relating to their
programs. This information is contained in the chart which is
attached to this memo.
Key Issues
In discussing the Truth -in -Sale of Housing programs with repre-
sentatives from these five communities, I have determined that
several important points should be considered prior to undertaking
such a program. These are as follows:
1. Clarify mission - Considerable latitude exists in
tailoring a program to the needs of a particular
community. Before starting, it is important to agree
upon the program's mission. Identifying the desired
outcome and the specific objectives to be pursued will
help determine which of the three approaches to follow.
2. Identify/commit necessary resources - A common theme
expressed by individuals involved in these housing
programs is that the City can only achieve in proportion
to what it is willing to invest. For example, it is
pointless to employ an approach requiring code
compliance unless appropriate staff time (inspectors,
clerical, etc.) and other tools such as computer tracking
Truth -in -Sale of Housing Programs
October 20, 1992
Page 3
are committed to the projects. On the other hand, a
program desired primarily as an informational resource
to potential buyers may be conducted with a greatly
reduced need for staff time and other assistance. A city
should strongly consider the resources which it intends
to assign in conjunction with the selected approach so
that the program has a reasonable chance of meeting its
expectations.
3. Advertisement /promotion - All efforts should be made to
inform the public and other key players affected in a
Truth -in -Sale of Housing program as early as possible
prior to its starting date. The focus should be on
soliciting support for the important goals of the program
and allowing the general public to become familiar with
the program before it gets underway. Specifically, it
is critical to obtain the support of realtors and real
estate agencies since these people are so directly
involved in property sales.
4. Monitor /review program - The representatives indicated
that it is important to periodically meet with its
licensed housing inspectors to ensure that they are
performing their work in a consistent manner. In
addition, the City should occasionally review the program
to ensure that it is meeting the goals for which it was
enacted. For example, certain items may be added or
deleted from the inspection checklist and the focus of
the program may shift slightly from time to time.
Summary
From my conversations with representatives from these five cities,
it appears that they are each making use of a Truth -in -Sale of
Housing program as part of their overall approach to housing
issues. While similar in some respects, each city has effectively
tailored its program to meet its own unique needs.
Please let me know if you have questions or would like me to
research this issue further.
SB:ls
M -92 -649
C] Community Development Department
L�
PLANNING DIVISION
City of Fridley
DATE: October 22, 1992
TO: Barbara Dacy, Community Development Director
FROM: Steven Barg, Planning Assistant
SUBJECT: Nuisance Abatements
In conjunction with the Strategic Planning Task Force on housing
issues, we have discussed strengthening code enforcement as one
tool designed to improve neighborhoods. As you are aware,
successfully processing code violations through Anoka County Court
often requires extensive time. The net effect is that neighborhood
improvement occurs very slowly and residents become frustrated with
the City's response to their concerns.
For this reason, the City of Coon Rapids adopted a strong ordinance
regarding abatement of public nuisances. The purpose of this
ordinance is to circumvent the court process when such action is
appropriate. I have attached to this memo a copy of the Coon
Rapids' ordinance for your review. The following is a summary of
its key points:
1. Definition - The intention of the Coon Rapids' ordinance
is to remove those items which are defined as being
public nuisances. Specifically, the code lists junk
vehicles, debris, and building materials as those items
which the City abates when necessary. Coon Rapids has
followed a liberal approach in interpreting this
definition and used it to include virtually any unlawful
outside storage of materials on residential properties.
2. Inspections Process - The Coon Rapids ordinance observes
the following process in addressing public nuisances.
First, the inspector sends the property owner a notice
of noncompliance stating that he has 20 days to correct
the violation or request a hearing on the matter. If the
property owner does not correct the violation or request
a hearing within that time period, the City may act to
abate the nuisance and charge the cost to the property
owner.
Nuisance Abatements
October 22, 1992
Page 2
3. Hearing Process - If the property owner requests a
hearing, it must be conducted no more than ten days after
the request is received. The hearing examiner receives
evidence and testimony from the property owner and the
City and returns a decision within ten days of the
hearing.
4. City Council - The property owner may appeal the hearing
examiner's decision to the City Council. If such a
request is made, the Council will review the decision at
its next meeting and take action to affirm, repeal, or
modify the hearing examiner's decision.
It is my understanding that the City of Coon Rapids has had a very
positive experience with this ordinance. Initially, the City
received several challenges which required hearings, but after
having the City's position upheld in these cases, the number of
hearing requests dropped significantly. Residents soon realized
that the City was committed to perform nuisance abatements when
necessary, and. that the independent hearing examiner would not
overturn the City's decisions unless the property owner could show
substantial evidence for such action.
Currently, the City's contract requires payment of $100 per hour
to the hearing examiner for his services. The City budgets $1,000
per year for hearing examiner fees, but has actually used little
of this in recent years because it has needed fewer hearings since
the program's first year. The City's other main financial concern
involves the need to spend money initially for the abatement when
the costs will not be recovered until a later date through
assessments against the properties.
There appear to be several benefits realized from a nuisance
abatement ordinance and related enforcement as conducted by the
City of Coon Rapids. First, the time required to bring properties
into compliance is greatly shortened as compared with following the
normal court process. Second, property owners are far more likely
to comply with the inspector's initial notice of noncompliance once
they are aware that the City will act to abate the nuisance and
charge the cost, if the property owners fail to do so. Finally,
residents develop the perception that the City is more responsive
to their concerns since they see compliance at an earlier date than
is often achieved through the court system.
Please let me know if you have questions or wish to further discuss
this matter.
SB:ls
CEM -92 -95
a° 0
Community Development Department
PLANNING DIVISION
City of Fridley
DATE: October 22, 1992
TO: Barbara Dacy, Community Development Director
FROM: Steven Barg, Planning Assistant
SUBJECT: Housing Court
During the past year, I have expressed to you considerable
frustration regarding the court systems' treatment of code
violations. While a couple of judges may take some interest in
such matters, the majority do not seem particularly concerned with
issues pertaining to housing, zoning, and other related code
sections. Therefore, property owners often receive little or no
penalty relating to their violations and the length of time during
which noncompliance existed.
Several years ago, the City of Minneapolis began a special Housing
Court to address issues relating to code violations and landlord/
tenant problems. Its purpose was to remove such matters from the
normal court process into a forum that could be more attentive and
provide faster response time.
This separate court was established under special provisions of
Minnesota State Statutes permitting such "pilot programs" for
Hennepin and Ramsey Counties. The total cost of approximately
$750,000 is divided between the State ($250,000) and Hennepin
County ($500,000). The required funds provide for a housing
referee and all administrative costs related to operation of an
entirely separate system. The costs reflect the extremely high
case load of the City of Minneapolis.
From my research, I would suggest that all parties involved seem
very satisfied with the Housing Court. Even building owners and
managers benefit from the housing referee's knowledge of the issues
despite the fact that this individual has a reputation for being
somewhat tough. Overall, the system appears to be quite a success,
and they hope it will continue for many years to come.
Because of the specific provisions in the Minnesota State Statute
which currently limit the program to Hennepin and Ramsey Counties,
the City of Fridley and Anoka County would be presently unable to
establish a separate housing court to cover this area. However,
I believe that there are two ways the City of Fridley can benefit
from the City of Minneapolis' experience:
Housing Court
October 22, 1992
Page 2
1. Perhaps the City could contact its state legislators in
an attempt to have the State Statute provisions extended
permitting creation of housing courts in the entire seven
county metropolitan area. Obviously, the greatly lower
case load which would be generated here would reduce the
program's costs considerably.
2. The City could work with communities in Anoka county to
lobby for creation of a special day /time (perhaps one day
a month) during the regular court calendar when cases
pertaining to housing, zoning, and related court issues
would be heard. In accordance with this, perhaps a judge
with a particular interest in such matters could be
assigned on a regular basis so that the court would have
consistency and concern on these issues.
Summary
As I have indicated, the City does not currently have an option to
participate or help create a separate court system to address
housing code enforcement. However, I believe it is important that
we work toward establishment of a better forum to address the
increased number of housing code violations which we may be
pursuing in our attempt to improve the City's neighborhoods.
SB:ls
CEM -92 -96
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I
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 6, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Corporate Report Ad
At the April 8, 1992, meeting, the HRA authorized a half -page ad
in Minnesota Ventures and a final ad in January 1993 for Corporate
Report (see copy of Minnesota Venture ad and article in the
packet). I recently met with Jane Abell from Client First
Communications about the content of the ad to be placed in the
January 1993 Corporate Report issue. We would like to feature the
100 Twin Drive -in site.
Client First Communications is currently preparing a concept for
featuring the drive -in site for the Corporate Report ad. The
objective is to dispel the memory of the site as the "Lake Pointe
Site" and to start an effort to have it known as the best
redevelopment opportunity in the Twin City metropolitan area!
No action is needed on this issue; however, we wanted the HRA to
be aware of our current thinking.
BD:ls
M -92 -684
or years, business slang hasv decreed that abusiness "goin
g
south has =gone -foot in the financial- boneyard `Economic
boosters in the 'sp ' e of cities to the north of 1Vlinneapolis
.a ,
and St. Paul would like to turn that saying on its `head: From now
_.._
on,- those. individuals say, tongue lightly in cheek, the surest sign
of success-is a business_"going north."
Boosters of the economic climate in the north -metro area point
b proudly to their; setting's pluses: a skilled work force, reasonably
y.
J o h n a t h a n priced land,- centrally "located: highway systems, affordable hous-
Katstrom
ing and abundant: financial programs, such as supplemental loans
SEPTEMBER / OCTOBER 1992 MINNESOTA VENTURES 47
for product development or building expan-
sion.
As evidence of the allure of the north
metro, supporters say they are seeing a sig-
nificant influx of commercial businesses to
the area.
"Generally, I see more small -scale busi-
ness start-ups here than I've seen over the
last five years —that 12- to -20- employee
kind of business," says Joseph Strauss, ex-
ecutive director of the North Metro May-
; ors Association, an organization founded '•
in 1985 to promote economic development
has heard proposals in just the last two
months from large and small companies
that would bring about 1,000 jobs to the
city were they all to actually make the
move.
Increased interest in the north -metro
area is a sentiment echoed by many al-
ready located there. "It may be the busiest
year we've had," says John Cox, an eco-
nomic- development specialist for Blaine,
located in the southern portion of Anoka
County and almost on the northern border
of Ramsey County.
Cox attributes the influx of businesses
into Blaine (and the subsequent barrage of
development deals) partly to reasonable
land costs, the city's close association with
the Small Business Administration and the
Blaine Area Development Co., a nonprofit
development corporation that assists com-
panies locating or expanding in Blaine.
"We're seeing a lot of people now not
only building their building and locating
their business here, but moving into the
community," Cox says. Such businesses
are partly attracted to the north -metro
cities, perhaps because of the price of land.
As Cox notes, "The land is cheaper, and
you can build a [less expensive] building
here than, let's say, in Eden Prairie, and
consequently your taxes are going to be
less."
As for programs created by local areas,
the Blaine Area Development Co. is -one
example of the innovative offerings north-
em -metro cities have put together to coax
business onto their turf. Since 1983,
BADC has provided loans to industrial -
based companies for the acquisition, ex-
pansion and construction of buildings.
The program has been highly successful,
creating one job for every $1,000 loaned,
says Cox, BADC's administrator. "It has
never had a loan go bad, which in itself is
extremely remarkable," he says. BADC's
fund is capitalized each year by the Blaine
City Council, whose annual allocation
varies depending upon need.
"The program is set up to somewhat di-
minish the equity requirements [for] a
company getting in a building," Cox says.
BADC typically provides a small amount
C f d' f o;ect such as 10 percent
and improve transportation in the area.
"And it's been in the last 12 to 14 months
that we've seen those companies come in-
to existence."
For instance, Brooklyn Park, located in
the northern section of Hennepin County,
48 M[NNESOTA VENTURES SEPTEMBER / OCrOBER 1992
o un mg or a pr
of its cost.
The influx of companies into the north-
em suburbs might also be partly attributed
to the ongoing activities of the North
Metro Mayors Association. NMMA orga-
nized to provide one voice for the north-
metro area on issues of job creation and
business building. It lobbied for legislative
Some of the noTth-S Stars
RAMSEY
COUNTY: ANOKA
DISTANCE FROM THE MPLS/
ST. PAUL AREA: 25 MILES
POPULATION: 12,408
LARGEST EMPLOYERS: MATE
PUNCH AND DIE,
INDUSTRIAL TOOLING; 205;
ALTRON, ELECTRONIC
ASSEMBLY;165
CONTACT: JIM GROINBERG
PROJECT MANAGER
15153 NOWTHEN BLVD.
NW.
RAMSEY, MN 55303
(612 )472 -1410
CHAMPLIN
COUNTY: HENNE %N
DISTANCE FROM THE MPLSI
ST. PAUL AREA: 17 MILES
N/NW
POPULATION: 16,649
LARGEST EMPLOYERS:
JOHANSEN Bus Co., Bus
BERVICEJCHARTER; 95; CITY
OF CHAMPLIN, MUNICIPAL
GOVERNMENT;91
CONTACT: MARY EBANKs,
-. AIDE; COMMUNITY.
.:.DEVELOPMENT
:. 11955 CHAMPLIN DR.
MPLIN
;:. CNA, MN 55316 -
(612)421 -8100 _
MAPLE GRak
COUNTY: HENNEPIN
DISTANCE FROM THE MPLS/ ..
ST. PAUL AREA: 20 MILES
Nw
POPULATION: 38,736
LARGEST EMPLOYERS: SCI
MED, MEDICAL SUPPLIES;
1,300; NORTAN'x:
COMMUNICATIONS,
TELECOMMUNICATIONS; 450.
CONTACT: ALAN A. MADSEN,
DIRECTOR ECONOMIC
DEVELOPMENT
9401 FERNBRooK LANE
MAPLE GROVE, MN 55369
" (612 )420 -1925
1 �
BROOI(LYN PART(
COUNTY: HENNEPIN
DISTANCE FROM THE MPLs/
ST. PAUL AREA: 2 MILES N
POPULATION: 56,381
LARGEST EMPLOYERS: DAMARK
INTERNATIONAL, MAIL ORDER
SALES; 775; CATEPILLAR
PAVING PRODUCTS, NERVY
EARTH MOVERS; 351
CONTACT: JOE McKAsY,
DIRECTOR COMMUNITY
DEVELOPMENT
5200 85TH AV. N. -
BROOKLYN .PARK, MN 55413
(612 )424 -8000 -
NEW 90PE
COUNTY: HENNEPIN
DISTANCE FROM THE MPLS/
-ST. PAUL AREA: 7 TILES NW
POPULATION: 21,853
LARGEST EMPLOYERS: NORTH
RIDGE CARE CENTER,
NURSING CARE; 900;
LAKESIDE INDUSTRIES,;
ADVERTISING SIGNS; 350
CONTACT: KIRK MCDONALO,
DIRECTOR COMIMINTTY
DEVELOPMENT
4401 XYLoN AV. N.
NEw HOPE, MN 55428
(612)531 -5100
COUNTY: ANOKA
DISTANCE FROM THE MPLs/
ST. PAUL AREA: 20 MILES NW
POPULATION: 17,192
LARGEST EMPLOYERS:
HOFFMAN ENGINEERING CO.,
ELECTRICAL ENCLOSURE;
1,600; ANOKA COUNTY,
COUNTY GOVERNMENT; 1,388
CONTACT: ROBERT KIRCHNER
DIRECTOR COMMUNITY
DEVELOPMENT DEPARTMENT
2015 FRsT AV. N.
ANOKA, MN 55303
(612 )421 -6630
Whether a company is looking for room to expand or
just the resources that can help fuel growth, representa-
tives of the north -metro area say they are determined
to create an infrastructure that will support those plans.
And, supporters remind with a wink and a nudge, going
north could be just the ticket to a business's success.
COON RAPIDS
COUNTY: ANOKA
DISTANCE FROM THE MPLS/
ST. PAUL AREA: 8 MILES
N/N W
POPULATION: 52,978
LARGEST EMPLOYERS: MERCY
MEDICAL CENTER, HOSPITAL;
1,453; ANOKA HENNEPIN
SCHOOL DISTRICT,
.FDucATm;1,260
CONTACT: LEE STARR,
DIRECTOR DEVELOPMENT
SERVICES
1313 COON RAPIDS BLVD.
COON RAPIDS, MN 55433
BROOI(m CENTER-
COUNTY: HENNEPIN
DISTANCE FROM THE MPLS/ ! .
ST. PAUL AREA: 8 MILES N
POPULATION: 28,887
LARGEST EMPLOYERS:
BROOKDALE CENTER,
SLOPPING CENTER; 1,709;
PROME -ON, DIVISION OF
MEDTRONIC. MEDICAL
COMPONENTS; 459
CONTACT: BRAD HOFFMAN,
DIRECTOR COMMUNITY
"DEVELOPMENT
6301 SHINGLE CREEK PKWY.
BROOKLYN C9RER, MN 55430
(612)569 -3300
7i°j
BLAINE
COUNTY: ANOKA
DISTANCE FROM THE, MPLS/
ST. PAUL AREA: 15 MILES
N/NE
POPULATION: 38,975
LARGEST EMPLOYERS:
CONSOLIDATED -
FREIGHTWAYS, TRUCKING;
418; AVEDA, BEAUTY
PROOucn ;275
CONTACT: JOHN COX,.....
ADMINISTRATOR; BLAINE
AREA DEVELOPMENT CO.
9150 CENTRAL AV NE.
BLAINE, MN 55434 -
(612)784.6700
COUNTY: ANOKA
DISTANCE FROM THE MPLS/
ST. PAUL AREA: 9 MILES N
POPULATION: 28,335
LARGEST EMPLOYERS: FMC
CORP. NAVAL SYSTEMS
DIVISION, PUMPSINAVAL
ORDNANCE; 2,400;
MEDTRONIC CORP., ELECTRO-
'MEDICAL DEVK:Es; 2,350
CONTACT: BARBARA DACY,
DIRECTOR COMMUNITY
DEVELOPMENT
6431 UNIVERSITY AV. NE
FRDLEY. MN 55432
(612)572 - 3590
MINNEAPOLIS
NEW BRIGATON
DISTANCE FROM THE MPLS/
ST. PAUL AREA: 6 MILES N
POPULATION: 2$207
LARGEST EMPLOYERS' ZEDS
INTERNATIONAL. COMPUTER
MANUFACTURNIO/SALES; 823;
DELTA ENVIRONMENTAL,
ENVIRONMENTAL
CONTACT: KEVIN LOCKE,
603 FIFTH AV.. NW.
NEw BRIGHTON. MN 55112
(612)631-8340':
COUNTY: ANOKA
DISTANCE FROM THE MPLS/
ST. PAUL AREA: 7 MILES N
POPULATION: 18,910 `
LARGEST EMPLOYERS:
MEDTRONIC INCA ELECTRO-
:
MEDICAL DEVICES; 275;
"K MART, MERCHANDISE
SALES; 200 „, - " - '
CONTACT: DoT SCHINEDER
HOUSING AND
REDEVELOPMENT AUTHORITY
590 40TH AV. NE
COLUMBIA HeGHM MN 55421
.(612)782 -2855 _
ST. PAUL
SEPTEMBER / 0CMBER 1992 MINNESOTA VENTURES 49
changes on such issues as fiscal dispari-
ties, tax - increment financing and better
transportation (including attaining $44
million in federal and state funds for the
new Highway 610). NMMA also
launched an ongoing public - relations and
marketing campaign several years ago to
promote the area as a viable place to con-
duct business. It published Northern
Lights magazine for about two years,
which featured profiles of the northern
suburbs, and it continues to publish "Fo-
cus," a center insert in the newspaper
Business Media.
In addition to its other activities, the
North Metro Mayors Development Asso-
ciation, a branch of NMMA that was
founded in 1988, is increasing the odds of
retaining and attracting companies to the
area by developing relationships with
banks to provide financing assistance to
companies. The association has conducted
demographic studies and can provide in-
formation to companies on everything
Historic, state -of- the -art
and affordable are not
contradictory terms
when you meet in
Minneapolis North Metro,
w
Consider!
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lovingly restored to create a state-of-the-art meeting, conference and exhibit center, and an
exquisite 11 -room Bed & Breakfast Inn. In all, more than 20,000 square feet of totally flexible
meeting & dining space, for groups up to 1,000. Complete catering services; AV, sound and
lighting equipment; and free parking!
America's First All Suite Conference Center featuring 231 two -room executive suites. This
two - level, 22,000 square foot conference center is uniquely comprehensive and flexible,
featuring 800 seat and 400 seat ballrooms, a 138 seat amphitheater and 27 conference rooms.
Truly a world -class living and learning facility.
Four Additional Meeting and Convention Hotels with facilities to accommodate up to 500
persons. All nationally affiliated, yet offering some of the Twin Cities' most competitive rates
for first -class meeting service.
Over Twelve Hundred Sleeping Rooms.
Seven Championship Golf Courses nearby, featuring one of America's finest municipal
courses designed by Robert Trent Jones II, complete with clubhouse facilities
accommodating up to 400 persons.
All Facilities Within Minutes of downtown Minneapolis by interstate highway.
Fine Shopping Centers, Mississippi River cruises and thousands of acres of parks.
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. . RO
Minneapolis North Metro Convention Bureau
6155 Earle Brown Drive • Suite 120
Brooklyn Center • MN 55430
50 MINNESOTA VENTURES SEPTEMBER /OCTOBER 1992
from the school systems to the work
force in the north -metro area. NMMA al-
so can call upon the bonding power of
the Minneapolis Community Develop-
ment Agency to help businesses find fi-
nancing. "Through their bonding power,
[MCDA] will provide dollars to be bond-
ed for projects in the north -metro area,"
says Bill Haas Jr., president of the North
Metro Mayors Development Association.
Adds Strauss: "If there is a particular
project that either is a business expansion
or business transfer, and it requires
unique or creative or large financing, and
the local community is not about to do it
through its own mechanisms, that com-
mon bond fund is available," to qualify-
ing companies.
Besides these larger, concerted efforts
The AoTth metro f la y ors
Deuelopment Association
is developing
relationships with banks
to prouide financing
assistance to companies.
to attract and keep companies in the
northern suburbs, several cities have also
created their own tools for helping busi-
nesses grow. Consider Champlin, a town
of about 17,000 people located in the far
northern section of Hennepin County
(about 17 miles from downtown Min-
neapolis).
For companies considering building
within Champlin but that find themselves
short of cash, they might consider con-
tacting the Champlin Growth Fund. The
fund is a new supplemental loan program
for commercial development in that city.
"If [a company is] still short of money to
put their project together and make it fea-
sible, that's where [the fund] would come
in," Haas says. Champlin has just started
assembling the fund, which will be fund-
ed by a percentage of the sale of city -
owned property that will be developed
into commercial lots. The plot is called
the Park Ridge Property, 20 acres of land
donated to the city about five years ago.
That means the fund is neither raised
through nor dependent on tax dollars.
"Today, government has to be creative in
how it raises funds, and this is one of the
ways," Haas says.
Another newly formed organization,
the Community Resource Partnership, is
working with three northern -metro sub-
urbs— Blaine, Brooklyn Center and
Brooklyn Park —on a multicity business -
retention, job - creation and market -expan-
sion project. In September, CRP will sur-
vey the business community in the north -
metro area to create a detailed database.
The purpose is partly to assemble infor-
mation to identify links between north -
metro companies that could use each oth-
er's services and products, and thereby
strengthen the local economy. The three -
year pilot project is to be conducted in
conjunction with the cities, the area's
community and technical colleges, and
the Minnesota Department of Trade and
Economic Development.
�� 24NN Ful ��
1,
Mie
52 MINNESOTA VENTURES SEPTEMBER / OcroBER 1992
The partnership, for example, found
one local company whose products were
packaged for international shipping in
Missouri, although just a block and a half
away, a new carton company had
opened. The two companies were un-
aware of each other. "It makes a lot of
sense to put those dollars in the local
market," explains Strauss, "because it
creates jobs and expands the market."
Alarger north -metro city, such as
Brooklyn Park (population 57,000), sells
bonds through its Economic Develop-
ment Authority to help companies raise
cash for expansion. "So we have that arm
that other cities do not have," says Joe
McKasy, the city's director of economic
development. In addition, Brooklyn Park
is currently implementing a business -re-
tention and credit - enhancement program,
expected to be launched by mid- Septem-
ber. Under the program, the city would
guarantee to lenders a small part of a
qualifying company's business loan, such
as 10 percent. "We're simply making it
economically more viable for businesses
0-Donnett-s company
will receive a $200.000
incentiue loan at 0-
percent interest through
Brooklyn Parks Economic
Deuelopment Ruthority.
in Brooklyn Park to do business," McK-
asy says.
Innovative Communication Systems, a
computer- software manufacturer that
moved from Fargo, N.Dak., to Brooklyn
Park on June 1, is one company that has
benefited from the programs Brooklyn
Park has set up. ICS will receive a
$200,000 incentive loan at 8- percent in-
terest through the city's Economic De-
velopment Authority; in return, Brooklyn
Park will benefit through additional job
creation in the area:
ICS was founded in 1984 as a technol-
ogy- transfer project created through the
University of North Dakota. The company
currently has 10 full -time and four part-
time workers, but company founder
Michael O'Donnell expects to add between
200 and 300 customer - support technical
representatives within the next two years
as ICS rolls out its new product, Ask -Me.
Ask -Me is an interactive multimedia
software package that enables a company to
merge such media as video, animation,
sound, graphics, text and still -frame pic-
tures through a computer to create a dynam-
ic presentation. It is an interactive program
in the sense that the operator can pull infor-
mation from the presentation at any time to
illustrate a point. Multimedia software is
considered one of the hottest new comput-
er- software specialties, and it's growing at a
43- percent annual rate, O'Donnell says.
The industry is predicted to grow from $4
billion in sales in 1992 to $30 billion in
1995. O'Donnell sees a bright future for
ICS's product because by using Ask -Me,
potential customers could prepare their own
presentations rather than hire an advertising
agency to create presentations for them. As
a `do -it- yourself process, the savings for
users could be enormous.
ICS launched its first software product
in 1990. Recent proceeds from a $1 mil-
lion private placement will be dedicated to
product development and marketing and
sales, as well as hiring additional employ-
ees. In 1991, the company had revenues of
about $500,000, but its goal for the 1992 -
1993 fiscal year (which ends for the com-
pany on June 30) is $2 million. .
According to O'Donnell, the company
relocated for several reasons. It needed to
be in a bigger city to capture more of its
desired market. In addition, its investment
bankers in Minneapolis wanted ICS to be
closer, and Brooklyn Park provided an
added incentive to relocate with its loan.
One reason the company likes the northern
suburbs, O'Donnell says, is the affordable
housing. ICS relocated six families to the
metro area, and they were all concerned
about housing and insurance costs. "[They]
all ended up on the north end because it's
just a little more affordable," O'Donnell
says. Mobility is another reason the com-
pany is pleased with the north -metro area.
"Anytime I have an appointment and I
have to go down to Bloomington, Eagan or
Eden Prairie, I'm stuck in traffic for an
hour," he says. "And I can get around the
north end. So there's a good infrastructure
here in terms of transportation."
Transportation in the north -metro area
will be even better when the 610 cross-
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SEPTEMBER / OCTOBER 1992 MINNESOTA VENTURES 55
town highway is completed, a major goal
of the North Metro Mayors Association.
The highway is to serve as a convenient
east -to -west route, much like Crosstown
62 in south Minneapolis. The new high-
way will nun through five communities:
Blaine, Brooklyn Park, Coon Rapids,
Maple Grove and Mounds View. There
are three phases to the project: Phase one,
the 610 Bridge (in the middle of the pro-
ject) is now under construction. Phase
two, slated for construction in 1995, ex-
tends the 610 Bridge to trunk Highway
169. Phase three, extending from High-
way 169 to I -94, is expected to be com-
plete by the late 1990s. The freeway will
relieve congestion on other parts of the
transportation infrastructure, primarily I-
694, Strauss says.
Strauss says if the North Metro Mayors
Association hadn't pushed for the project,
it would probably not have been built for
about 25 years because it was not a prior-
ity for MnDOT. A 'group comprising the
five corridor communities, Hennepin and
56 MmEsam Vonums SonvABER / OcroHm 1992
t
Rick Meier tik- 44ytersop wcrlc%r�e sllliv'g!n nortbem ' °°
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town highway is completed, a major goal
of the North Metro Mayors Association.
The highway is to serve as a convenient
east -to -west route, much like Crosstown
62 in south Minneapolis. The new high-
way will nun through five communities:
Blaine, Brooklyn Park, Coon Rapids,
Maple Grove and Mounds View. There
are three phases to the project: Phase one,
the 610 Bridge (in the middle of the pro-
ject) is now under construction. Phase
two, slated for construction in 1995, ex-
tends the 610 Bridge to trunk Highway
169. Phase three, extending from High-
way 169 to I -94, is expected to be com-
plete by the late 1990s. The freeway will
relieve congestion on other parts of the
transportation infrastructure, primarily I-
694, Strauss says.
Strauss says if the North Metro Mayors
Association hadn't pushed for the project,
it would probably not have been built for
about 25 years because it was not a prior-
ity for MnDOT. A 'group comprising the
five corridor communities, Hennepin and
56 MmEsam Vonums SonvABER / OcroHm 1992
Anoka counties, the business community,
various chambers of commerce, legislators
in the area and about 100 volunteers
worked on and lobbied for the project ex-
tensively. The project is to be funded with
$36 million from the federal government
and about $8 to $9 million from the state.
While the transportation system will un-
doubtedly be better once the 610 project is
finished, at least one company says that the
current system is just fine already, thank
you. Anderson Development Corp., a con-
struction company that relocated in June to
the north -metro area, cites the fire- flowing
transportation in the north metro as a big
plus for its business.
Anderson Development Corp, which
moved to Fridley from two south suburban
locations, Burnsville and Savage, is now
near Highway 65. "[Our location] is real
nice —in the morning we can get equip-
ment out and downtown fast," says owner
Brent Anderson, whose company is also
near I -694. "We're much closer to the
downtown area than we were in Savage for
all of our supplies."
Anderson says the main reason the busi-
ness relocated was to combine its two of-
fices under one roof, making it easier to
coordinate the work force. He was looking
at buildings primarily in the northern sub-
urbs, such as New Brighton, Roseville and
Fridley, although he did look at a Bloo-
mington site as well. He eventually found
an old lumberyard in Fridley that was a
good fit for his business. The corporation
is in the process of rejuvenating the lum-
beryard it bought, adapting it to its needs.
Anderson Development Corp is a hold-
ing company for four businesses: Brent
Anderson Association, an architectural de-
sign firm (founded in 1978); Division 7
Corp., a commercial roofing and water-
proofing company (1982); Division 3
Restoration, a concrete - restoration compa-
ny (1991); and Division 5 Specialties, a
company specializing in interior and exte-
rior expansion joints (1992).
"One thing that was very instrumental in
[relocating] is that the Coon Rapids Rede-
velopment Authority helped [us with] funds
to put togethez [a Small Business Adminis-
tration] package," Anderson says. The Re-
development Authority, a nonprofit organi-
zation that works for Anoka County, paid
the $5,000 required to put the loan together.
The company, which typically employs
70 workers in the summer and 35 in the
winter, went from $50,000 in sales in 1978
to $6 million in the 1991 fiscal year and
jumped to $7 million in its 1992 fiscal
olk'
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MMUSTRIALPARIC
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You can take advantage of this. competitively priced light
industrial space in a north metro location by calling
Doug Watson at (612)920-4077
■ WATSON INVESTMENTS ■
Brokers Welcome
Is
"Herit age Qnter
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What makes the Heritage Center so uaique among
Twin Cities meeting places? Ask the Minne�ta .
Society of CPAs Conference CoordmatoA Kathryn
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parking a mental break by walking about the
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(800) 524-0239
(672) 569 -6300
6155 Earle Brown Drive
'II
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1v�OTA
SOCIiIY OF CPAs
Brooklyn CentmMN 55430
SErrHMBER /OCTOBER 1992 MwrnsoTa Vermmis 57
\N
• Just 20 minutes from downtown Reserve ur t on the lin Annual
Minneapolis J°D �°P
Ci
(upgraded Highway 169 corridor). Citywide Bur on October 1, 1992,
3:0 p.m o 4:30 p.m. RVP by Frday
• Prime commercial properties available.
September 25 to Mary Ebanks at
• City financing. 612 -421 3055.
• Just opened: the largest state -of -- the -art All interested parries are invited
high school in the state.
City
Mary Ebanks or Kurt Ulrich
City of Champlin
Cham lin
P
Community Development
U955 Champlin Drive
Champlin, MN 55316
_
612 -421 -3055
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Contact:
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58 MwNEsora VwnuPFS SEPTEMBER / OcroaER 1992
year. Despite the nation's economic down -
tum, the company is well ahead in sales
this year over last year, Anderson says. A
key to Anderson Development's success is
that, unlike most subcontractors, it em-
ploys engineers and architects to provide
technical expertise, he says. "Rather than
do just whatever the architect has designed
or the contractor wants you to do, we real-
ly try and get involved in the design and
the construction to make things better than
you would normally do," Anderson says.
"Lots of times subcontractors don't get
that involved. A lot of architects now call
us to help them on the design."
Another company profiting in. the north-
metro area is Meier Tool and Engineering,
a contract manufacturer specializing in
precision metal stampings (i.e., parts)
made from coils of very thin -gauge metals.
It manufactures small precision parts for
various industries, including electronics
and medical, as well as for the military.
According to owner Richard Meier,
business has doubled for the Champlin -
based company in the past three years. In
addition, the company is operating in the
midst of an expansion that will more than
double its plant size, from 4,000,to 8,600
square feet -
Meier attributes the success of Meier
Tool and Engineering to several factors,
including its "very aggressive and hard-
working and well-trained" employees. The
company has grown from two employees
in 1984 to 11 today, all of whom live in
the northern suburbs of Anoka, Blaine,
Champlin and Crystal. Meier also cites the
company's reputation for quality work and
customer service: "If you keep the cus-
tomers happy, good things will happen."
Another success factor, he says is that
"Champlin is a good location. It's easy.to
get to; we're located only a1alf -block off
Highway 169." Champlin is also conve-
niently situated near companies that offer
special services that Meier Tool uses, such
as those that "heat treat" metals into a soft
state needed for stamping. Because Meier
Tooland Engineering is near these compa-
nies, it can reduce the turnaround time 'to
its customers, which Meier says is becom-
ing increasingly iMportant.
Another plus of the north -metro area is
found in its housing situation, Meier says.
"Tire housing up in this area is pretty rev
sonable," he says. "You can get a nice new
home up here for about the same price [as)
a 10- year -old home in other areas." 17