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HRA 12/12/1993 - 6339CITY OF FRIDLEY A G E N D A HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, DECEMBER 16, 1993, 7:30 P.M. Location: Council Chambers Fridley Municipal Center CALL TO ORDER ROLL CALL APPROVAL OF MINUTES :. November 18, 1993 ACTION ITEMS: CONSIDER REQUEST TO ACQUIRE SUH PROPERTY, ROBERT C. WELLE . . . . . . . . . . . . . 1.1 -1.4 CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . 2.1 -2.3 NORWOOD SQUARE UPDATE . . . . . . . . . . . . . . . . . 3.1 INFORMATION ITEMS: HEDMAN ACQUISITION UPDATE . . . . . . . . . . . . . . . 4.1 STATUS OF SCATTERED SITE ACQUISITION PROJECTS . . . . . . . . . . . . . . . 5.1 RICEPLAZA UPDATE . . . . . . . . . . . . . . . . . . . 6.1 -6.2 FRIDLEY TOWN SQUARE UPDATE. . . . . . .`. . . . . . . . 7.1 -7.2 1994 HRA BUDGET . . . . . . . . . . . . . . . . . . . . 8.1 -8 -3 + budget information OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 18, 1993 ----------------------------------------------------------------- CALL TO ORDER: Vice - Chairperson Schnabel called the November 18, 1993, Housing & Redevelopment Authority minutes to order at 7:35 p.m. ROLL CALL: Members Present: Virginia Schnabel, John Meyer, Jim McFarland Members Absent: Larry Commers, Duane Prairie Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator Craig Ellestad, Accountant Jim Casserly, Consultant Dr. Dennis Rens, School District #14 Rebecca Keenan, School District #14 APPROVAL OF OCTOBER 14 1993 HOUSING & REDEVELOPMENT AUTHORITY MINUTES• MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the October 14, 1993, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. PRESENTATION BY DR. DENNIS RENS AND MS. REBECCA KEENAN, FRIDLEY SCHOOL DISTRICT #14: Ms. Keenan stated that she and Dr. Rens were at the meeting to acknowledge the HRA's financial support over the last few years. It has really helped everyone involved in the school district to know that the community does care. She stated that children are always told to say "thank you ", but as busy adults of a busy organization, they do not always take the time to stop and thank the other organizations who do things for them. The HRA is one of those organizations. Ms. Keenan stated the School Board members decided.they would like to thank the HRA for its foresightedness and for the dollars it has directed to the Fridley schools. The HRA has recognized a long term investment and that is not always an easy or fun thing to do. She stated the HRA's support has allowed the education of School District #14 to survive during these difficult financial times. HOUSING & REDEVELOPMENT AUTHORITY MTG.. NOV. 18. 1993 - PAGE 2 She would add that being creative with their limited resources has been the School District's strong point these past few years. Dr. Rens stated he also wanted to thank the HRA. Over the past number of years, the HRA has allowed tax increment financing revenues generated through a past levy referendum to flow through to the school districts. This has amounted to about $240,000 to. School District #14 in the last couple of years. In School District #14, that $240,000 buys about eight teachers. Dr. Rens stated that over the last four years, the State Legislature has not changed the pupil formula in school districts. In most districts, that has had a negative impact on class sizes. School District #14 has been able to maintain reasonable class sizes because of the dollars the HRA has turned over to the school district. If, for example, they were to eliminate the eight teaching positions this money has been able to fund, it would have a negative impact across each level of the school district. Dr. Rens stated he believed that if the students were aware of where these resources are coming from, they would also be at this meeting to thank the HRA. Dr. Rens stated the School District has a Youth Advisory Committee that interacts with the School Board its perception of what is happening in the schools. Recently, the School Board met with those students, and those students spent a lot of time talking about class size. Each student made it very clear that they learn more and get more individual help from teachers in classes that are smaller. They made a plea to the School Board to keep class sizes small, so he is before the HRA to thank the HRA for helping the School Board do that.. This is one specific example of how those dollars have helped them. Dr. Rens stated another example is that the School Board has been able to be proactive in terms of developing a Five Year Strategic Plan in moving forward and meeting the demands of the new world. One thing listed in the Mission Statement is that they want to create a nurturing environment for kids. One way they have helped create a nurturing environment is stated in Strategy 6 under "Strategies and Objectives ": "We will develop and implement programs that help students care for themselves and others and improve school climate." Dr. Rens stated they see and hear a lot about violence and about how people solve problems and resolve conflict. In the schools, they are now beginning to teach students to mediate conflict and resolve conflict through peaceful means through discussion and through negotiations. They are training students to be peer mediators to mediate conflicts between other students. In order to get that program started, they have invested one full staff member, part -time, in training students and staff in peer mediation A HOUSING & REDEVELOPMENT AUTHORITY MTG., NOV. 18, 1993 - PAGE 3 techniques., These dollars from the City are helping them to do this and to achieve their mission in a proactive manner. Ms. Keenan stated her reason for coming was not only as a School Board member, but also as a parent, to say that there are thousands of students who have benefitted from this financial support. It also gives the School Board the ability to keep their programming current and to be an innovative and creative school district. She thanked the HRA for their time. Ms. Schnabel thanked Ms. Keenan and Dr. Rens for coming. She stated their remarks were very much appreciated, and she was very sorry that the other two HRA members could not be here to hear these nice statements. 2. CONSIDER RESOLUTION TO AUTHORIZE EXECUTION OF DEVELOPMENT CONTRACT, ECO FINISHING: Ms. Dacy stated that at the October meeting, the HRA authorized staff to prepare a development contract to provide a $125,000 loan to ECO Finishing to assist them in the construction of a 29,000 square foot plating facility at the northwest corner of 51st Way and Industrial Boulevard. Staff recommends that the HRA approve the resolution and authorize the chairperson and executive director to execute the development contract. The HRA should note that Victor Rosenblum is defined as the redeveloper so he alone is responsible for repayment of the loan. MOTION by Mr. McFarland, seconded by Mr. Meyer, to adopt Resolution No. HRA 10 -1993 "A Resolution Authorizing Execution and Delivery of a Contract for Private Redevelopment By and Between the Housing and Redevelopment Authority in and for the City of Fridley and Victor Rosenblum ". UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. DISCUSS SCATTERED SITE ACQUISITION: Mr. Fernelius stated that at the HRA's October meeting, staff presented the recommendation to divide the pool of funds budgeted for the scattered site acquisition program in half; 50% to be allocated to properties for general acquisition activities, and 50% to be allocated for properties identified through the housing rehab program. Those would be properties that were not feasible to rehabilitate. Mr. Fernelius stated staff identified several properties they thought would be good candidates to acquire. The HRA members had some questions about what to do with the properties once they are acquired. Both properties (560 Hugo Street and 513 Fairmont) are considered non - buildable sites, because they do not meet the HOUSING & REDEVELOPMENT AUTHORITY MTG.. NOV. 18. 1993 - PAGE 4 minimum lot area requirements so it would be very difficult for someone to purchase those properties and build on the lot without a variance. Essentially, the HRA would be acquiring sites that would be difficult to reuse, and there would be some costs involved in holding on to those properties. Mr. Fernelius stated staff would like the HRA to take another look at the goals of the scattered site acquisition program. One potential goal of the program is to acquire properties that are buildable lots so there is the potential for some type of return as far as land sale incomes. On the other hand, there is the ability to acquire properties which are definitely blighting influences on the neighborhood and are difficult for the owners to sell based on their current conditions. Mr. Fernelius stated staff believes that for the dollars that are allocated, the scattered site acquisition program would really be serving the greatest public good by acquiring those sites. The only other option would be to do nothing and let the problems continue. By acquiring the sites, they are eliminating the blighting influence. There is the possibility to divide the lots and sell to the adjacent property owners. Staff continues to believe that properties in the second category should be the primary objective of the program; however, they wanted to get the HRA's input and concurrence. Ms. Dacy stated the HRA had a lot of questions at their October meeting, and staff wanted to confirm whether or not the HRA believed the goals of the program are to remove deteriorated homes or if they would prefer to acquire properties that may have deteriorated homes but were also buildable lots. Ms. Schnabel stated there seems to be a lot of variables in this program. There might be a property with a house that can be rehabilitated, and there might be a property with a house that cannot be rehabilitated. Ms. Schnabel stated that if the HRA buys an unbuildable site, they also incur the cost of demolition. What happens if they go through all those expenses and then find out that the neighbors on either side of the property are not interested in purchasing half of the property? Mr. Fernelius stated staff wanted to identify the site first to determine the HRA's interest; however, before they would actually move forward to acquire a site, they would make sure that the adjacent property owners were interested in purchasing half of the property and had the ability to do so. Mr. Burns stated there is an economic incentive for the adjacent property owners to purchase the lot because it would make their properties conforming and easier to sell. HOUSING & REDEVELOPMENT AUTHORITY MTG., NOV. 18, 1993 - PAGE 5 Mr. Meyer stated that if they are trying to rid a neighborhood of blighted housing, that should be the HRA's primary objective. He believed they should not turn away from purchasing a property and getting rid of a blighted property because of a few thousand dollars up or down. It should not matter if no one purchases the property, because they have then accomplished the major goal which is getting rid of the blight. Getting rid of a dilapidated house on a nonconforming lot should be a priority over getting rid of a dilapidated house on a conforming lot. He believed they should purchase the properties at 560 Hugo Street and 513 Fairmont Street and demolish the houses regardless of whether or not they have buyers on the adjacent lots. Ms. Schnabel stated that if they purchase a property and the neighbors are not willing to purchase half the property, who is responsible for maintenance of the property and the taxes? Mr. Burns stated the HRA would be responsible for maintenance; however, they could probably get the property tax exempt. Mr. McFarland asked if there is a prohibition against transferring nonconforming properties. Ms. Dacy stated there is no prohibition against transferring nonconforming properties. Mr. McFarland asked how the City has evaluated the properties. Ms. Dacy stated they have been using the assessed value from the Assessor's office. At the last meeting, the HRA asked staff to check on the current mortgages recorded against the properties and staff will do that. Staff's original concern was what type of procedure the HRA wanted staff to take on these type of a programs. Whether buildable or nonbuildable, the HRA will not be making money. Staff wanted to hear the HRA's priorities and discuss the consequences of what they would do with the properties until they could potentially be split between the two adjacent property owners. Another option would be to wait to purchase these properties until they have solid buyers. Mr. McFarland asked the approximate purchase price for a lot. Ms. Dacy stated most of the lots range between $25,000 and $40,000, based on estimated market value for tax purposes. Mr. McFarland stated he did not want to see the HRA get bogged down with the dollars. He believed they should be interested in making the property conforming; and even if they had to split the property and give it to the adjacent property owners, it would be better to get the properties off their hands. A HOUSING & REDEVELOPMENT AUTHORITY MTG. , NOV. 18, 1993 - PAGE 6 Mr. McFarland asked if it would make sense to condemn some of these properties first and then purchase them. Mr. Burns stated the City Council's general direction to staff has been to not condemn residential properties; however, the Council might have a different attitude toward. condemnation of blighted properties and there may be some benefit in discussing this with the City Council. Mr. Meyer stated he agreed with Mr. McFarland that if they purchase a property and cannot sell it, it is better to give each adjacent property owner half of the property than to hang onto it and have to maintain it. He also cannot see allowing the value of the property to become a deal breaker. If they really believe they should spend public monies to get rid of blight, then they should go ahead and acquire the properties and not worry about the cost of a lot. They have to keep their eye on their goal, and that is getting rid of blighted properties. Mr. Fernelius stated he believed staff is pretty clear on the direction the HRA would like to go. He believed the recommenda- tions staff developed fall in line with the HRA's objectives. Staff will proceed to research the two properties in question, but will not do anything before coming back to the HRA. Ms. Schnabel asked if the HRA members wanted to pursue the issue of condemnation with the City Council at this time. Mr. Meyer stated he believed the HRA should wait until they have more information. Ms. Schnabel stated that her concerns are two -fold: 1. How are the taxpayers going to view the use of public monies to purchase blighted properties? Is the HRA going to receive criticism for taking City funds to buy blighted housing or substandard lots, and then turning them over to adjacent property owners? 2. If people hear about the HRA doing this, will there be a tendency by some property owners to not maintain their property because they know the City is going to come in and purchase it? Mr. Burns stated there are limited funds, and they will have to go at it very slowly. This gets back to the question: How much leveraging does the HRA want staff to do? If the HRA wants staff to leverage, then maybe they should acquire developable properties and work on those first to build a fund. Mr. Meyer stated that regarding Ms. Schnabel's concern about the taxpayers, he agreed it is a risk. However, he believed the HRA HOUSING.A REDEVELOPMENT AUTHORITY MTG.. NOV. 18. 1993 - PAGE 7 has made a strong point in trying to get rid of blighted properties in the City, and they will have to explain it to the public. Ms. Schnabel stated she agreed it is worth it to try it with these two properties and see how the program works. Mr. Burns stated he has not heard any public criticism of the City's rehab programs. He is more afraid that if they do not keep the momentum going and get things accomplished, the criticism will be more in the direction of why isn't the City doing more? 4. CONSIDER APPLICATION FOR MHFA COMMUNITY REHABILITATION FUND PROGRAM: Mr. Fernelius stated that in the last month, staff received notice from the Minnesota Housing Finance Agency (MHFA) of a new program called the "Community Rehabilitation Fund Program ". This is a $2 million initiative by MHFA to help cities with various neighborhood preservation and improvement activities. It is a tremendous program, because it allows the City to identify its own needs, design its own programs, and then bring in the dollars to accomplish the objectives. Mr. Fernelius stated the funds are issued from the state to the cities in the form of a grant. The cities can, in turn, use those dollars for such activities as acquisition, demolition, rehabilitation, permanent financing, gap financing, and a number of different options. Cities would essentially do that by-either making loans or grants in turn to eligible mortgagors. Mr. Fernelius stated the City has the opportunity to apply for up to $350,000 in funds. Staff is, requesting authorization to prepare an application to submit to the state in the amount of $350,000. The idea staff would like to present is to use the dollars to, expand the City's existing rental rehabilitation loan program. Under the current MHFA regulations for the rental rehab loan program, only natural persons are allowed to apply and receive loans. Corporations, partnerships, and non - profits are not eligible. Based on this requirement, there are owners in Fridley who would not be able to apply. So, staff is proposing to use these dollars to make loans to those individuals and use the same terms and conditions used under the existing program. Mr. Fernelius stated the funds need to be targeted in specific neighborhoods. At some future date, the Council will need to adopt by resolution the actual neighborhoods that would be targeted. The Housing Committee has identified several neighborhoods in the City that would ultimately benefit most by these program funds. On Monday, November 22, 1993, staff will present this program to the Council and recommend that the Council identify these neighborhoods. s HOUSING & REDEVELOPMENT AUTHORITY MTG., NOV. 18, 1993 - PAGE 8 Mr. Fernelius stated staff recommends that the HRA authorize staff to prepare an application to MHFA in the amount of $350, 000 for use with the existing rental rehabilitation loan program. The application is due on December 6, 1993. MOTION by Mr. McFarland, seconded by Mr. Meyer, to authorize staff to prepare an application for the MHFA Community Rehabilitation Fund Program in the amount of $350,000. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON 8CHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CLAIMS AND EXPENSES: MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the check register, checks #2446 -2471. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. RICE PLAZA UPDATE: Ms. Dacy stated the remaining tenant, Hong Kong Kitchen, will be moving to Holly Center in December. In January, staff will be asking for authorization to receive demolition bids. In February, the HRA will receive and award the demolition bid to a contractor. In the meantime, the Fire Department has requested use of the building for fire training exercises. Ms. Dacy stated she has been working with the Engineering Department to prepare the specifications for the bids. She has also worked with the MPCA on requirements for the disposal of any hazardous materials. Mr. Meyer asked if any direction will be given in the specifi- cations for how the property is to be finished. Ms. Dacy stated that because the demolition will probably be done in February, the contractor will fill the hole and regrade it. She is then hoping to work with the Public Works Department to spread seed on the property in the spring. 7. FRIDLEY TOWN SOUARE UPDATE: Ms. Dacy stated she has not received any more information from Lowell Wagner. Apparently, Walgreen's is reconsidering its interest in the site. Although she has not seen a revised site plan, a revised plan puts Walgreen's on the west side and the Dairy Queen on the east side. She also has not heard from Don Fitch; however, Mr. Fitch is pursuing acquisition of the Amoco property at the intersection of Osborne Road and University Avenue. At this HOUSING & REDEVELOPMENT AUTHORITY MTG.. NOV. 18. 1993 - PAGE 9 point, staff will just wait until they hear from either Mr. Fitch or Mr. Wagner. 8. WESTMINSTER UPDATE: Ms. Dacy stated staff is still working on the development agreement with Westminster Corporation. Mr. Casserly stated he hoped the development agreement will be ready for the December HRA meeting. 9. MEETING DATES FOR DECEMBER 1993 THROUGH MAY 1994: Ms. Dacy stated that because of a conflict Mr. Burns has with the HRA meetings on the second Thursday of the month for the months of December through May, staff is proposing that the HRA meet on the third Thursday of December and then the first Thursday of the month for January through May 1994. MOTION by Mr. McFarland, seconded by Mr. Meyer, to approve the following meeting dates for December 1993 and all of 1994: December 16, 1993 (third Thursday) January 6, 1994 (first Thursday) February 3, 1994 (first Thursday) March 3, 1994 (first Thursday) April 7, 1994 (first Thursday) May 5, 1994 (first Thursday) June 9, 1994 (second Thursday) July 14, 1994 (second Thursday) August 11, 1994 (second Thursday) September 8, 1994 (second Thursday) October 13, 1994 (second Thursday) November 10, 1994 (second Thursday) December 8, 1994 (second Thursday) UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. HEDMAN ACQUISITION UPDATE: Ms. Dacy stated that after the October meeting, she contacted David Hedman and he agreed upon an acquisition price of $68,000. The closing will be on Wednesday, December 1, 1993. Ms. Dacy stated that ACCAP is interested in leasing the home on a temporary basis until next spring. She also contacted three movers. Apparently, movers maintain lists of people who are interested in houses and match buyers with houses. One mover gave her a verbal quote that they would move the house, remove the foundation, dispose of the block, refill the hole and grade the property, and give the HRA $1,500. K HOUSING & REDEVELOPMENT AUTHORITY MTG., NOV. 18, 1993 - PAGE 10 Ms. Dacy stated she needs direction from the HRA on whether to lease the house to ACCAP on a temporary basis until next spring and then move the house off the property or remove the house as soon as possible. She stated it is staff's recommendation that the house be removed as soon as possible. MOTION by Mr. Meyer, seconded by Mr. McFarland, to authorize the Community Development Director to execute the necessary documents to dispose of the Hedman house as soon as possible. UPON A VOICE VOTE,, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Dacy stated that Sadie Gunderson has agreed to extend the option agreement for an additional year. 11. DISCUSS REQUEST BY PARSON'S ELECTRIC• Ms. Dacy stated the City has received correspondence from Parson's Electric that is now occupying the former Simer Pump building on Main Street, just north of Sheet Metal Connectors. This request is definitely unique because Parson's purchased the building and started the remodeling and rehabilitation work. Parson's is identifying a cost to rehabilitate the building at approximately $1 million. In her memo dated November 10, 1993, she outlined the information as it was given to her regarding the original purchase price and the contract for deed. Ms. Dacy stated Parson's Electric would like the HRA to provide them with a $500,000 loan over a 5 -6 year term at a 5% interest rate. Ms. Dacy stated she has discussed this request with Mr. Casserly and Mr. Burns. The parcel is not in a tax increment district or redevelopment project area, and the HRA would not be able to create a TIF district because Parson's has already started work on the improvements. The HRA could establish a project area with the same approach done for Sheet Metal Connectors. However, staff's concern is two -fold: 1. Staff believes the HRA would be subject to criticism from the standpoint that the project is already under way and that undermines the intent of TIF statute under the "But For" test. 2. The amount of $500,000 is beyond the HRA's guidelines. Parson's seems to be a solid company and could guarantee the loan and the HRA would be making interest on the $500,000 loan, but this would be very difficult to justify in terms of past requests. HOUSING & REDEVELOPMENT AUTHORITY MTG., NOV. 18. 1993 - PAGE 11 Ms. Dacy stated that in terms of a redevelopment project area, staff is recommending that the HRA deny this request. However, if the HRA wants to pursue some type of revolving loan fund program for industrial rehabilitation projects, that is always an option. Ms. Schnabel stated that since the HRA does not have the mechanisms in place to provide loans for commercial or industrial rehabili- tation, she would be in favor of not providing any assistance to Parson's Electric. Mr. McFarland and Mr. Meyer agreed that the HRA not pursue any further negotiations with Parson's Electric. ADJOURNMENT: MOTION by Mr. McFarland, seconded by Mr. Meyer, to adjourn the meeting. Upon a voice vote, all voting aye, Vice - chairperson Schnabel declared the motion carried and the November 18, 1993, Housing and Redevelopment Authority meeting adjourned at 8:55 p.m. Rej ectfu1 y s witted, Ly a Saba Red6rding Secretary a0 .j Community Development Department HOUSING AND REDEVELOPMENT AvTHoRrry City of Fridley TO: Housing and Redevelopment Authority Member FROM: William W. Burns, Executive Director of HRA DATE: December 10, 1993 SUBJECT: Suh Property Request Please note the attached letter dated December 6, 1993, from Robert C. Welle. Mr. Welle's letter indicates his intent to contact each of you individually. Additionally the letter restates Mr. Welle's case for the HRA's purchase of the Mr. and Mrs. Suh's property. We have spoken a number of times regarding this property. It has been established through written legal opinion of the City attorney that the City, has only limited potential legal liability should Mr. and Mrs. Suh choose to take the City to Court. From past experience, we have knowledge that the HRA has not done well while owning and operating shopping center property. We feel that the HRA has three options: 1. Decline Mr. Welle's request to purchase the property as the developer for the site. The advantage to this approach is that there is no cash outlay for the acquisition of the site or for- maintenance on the site. Moreover, the site remains on the tax rolls. The disadvantage of this option is that we risk legal action. 2. Acquire the site, demolish the buildings, and declare the land tax exempt as soon as possible. If this option is chosen we could expect to spend anywhere from $800,000 to $1,000,000 to buy the property and $50,000 to demolish the buildings on the property. We could also expect to pay approximately $40,000 in pay 1994 taxes. The advantage to this approach is that we would be acquiring the property at a time when the market is depressed and when there is no demand from a current developer. Obviously, as soon a developer rises on the horizon, the pressure to buy high will be greater. Under the current set of circumstances, we have the luxury of waiting_ as long as we want to negotiate an acceptable price. This option also has the additional advantage of avoiding the costs associated with leasing and maintaining the shopping center. 1.2 Suh Property Request December 10, 1993 Page Two 3. Acquire the property and maintain the property as a retail outlet. Under this option, we will pay taxes and incur all of the operating expenses associated with running a shopping center (insurance, leasing and management fees, electricity, gas, lawn care, and snow plowing). Staff recommends that we pursue Option No. 1 and at the same time we propose to activate our planning for the Southwest Quadrant development and move as quickly as possible to identify an acceptable development plan and developer for the site. If the HRA feels that Option 1 is not desireable, we would then propose Option 2 with the condition that the property be acquired at what we consider to be a more reasonable price. We can probably expect Mr. Welle to be in the audience at Thursday night's HRA meeting to request time to make a presentation. Thank you for your consideration of this matter. WWB:rsc ..e '- , DEC 07 1993 1.3 ///,rReliance Real Estate Services, Inc. December 6, 1993 Mr. William W. Bums City Manager City of Fridley 6431 University Avenue N.E. Fridley, MN 55432 Dear Mr. Bums: As you may know, I am trying to persuade the Fridley HRA to purchase the property at 6410 -6450 University Avenue NE which is owned by my clients, Jai M. Suh and Shin Jae Suh. I will contact each of the HRA members individually to seek their support. Of course, it would be helpful if we could also obtain positive support from the City of Fridley staff in favor of this action. The discussion and comments at the HRA's September meeting made it clear that purchasing the subject property is not a priority for the HRA. However, I request that you consider this matter in the context of a "hardship acquisition ". As far as I am able to determine the Suhs have been effectively singled out as property owners and are suffering financially due to the loss of reasonable access following the reconstruction of Mississippi Street and from condemnation blight from the widespread knowledge that the HRA has condemned adjoining properties. Although you may not have any viable redevelopment proposals before you at this time I see it as an injustice that the Suhs must suffer financially from diminished use and value while waiting for redevelopment to occur. On a more positive note, I believe it makes sense for the HRA to purchase the subject property to compliment the adjoining properties it already owns. Although the subject property has no direct access from University Avenue its frontage along the service drive provides visibility to the HRA property behind it. If the HRA purchased the subject property and prepared the overall site for redevelopment perhaps the new appearance would help to inspire redevelopment ideas. Rand Tower - 527 Marquette Avenue South - Minneapolis, MN 55402 612 - 338 -1000 - FAX 612 -338 -8971 1.4 Mr. William W. Bums December 6, 1993 Page 2 We will continue in our efforts to find a willing buyer for the property. However, we have reason to doubt whether the subject property has any practical use as is or for redevelopment without being combined with the adjoining HRA property. For commercial uses the critical factor is getting traffic to the property from University Avenue. The new median on Mississippi Street has relocated access a considerable distance west to Third Street. Third Street runs behind the subject property and there is no direct access to the subject property from Third Street. In summary, we are seeking your support and a recommendation to purchase the subject property in 1994. Your cooperation and support shall be appreciated. Sincerely, RELIANCE REAL ESTATE SERVICES, INC. t 42- Robert C. Welle RCW:sg Z ! vCac 000€�C'OOA -.V- .-4 d CO € ko '1v33 10 0 0 V ?1•rt0 V, ..1I cn t CO € , 1 x 1 L c U. 3- M Jr z \ z €- c 1 a e H L o''. tz. M } z., \ a m O v \ U P, a 0 }L LC C z c IJ U, w X U G H .J X: > �{ L=? *_ Le- U. €- v? H 0 Q O -1 w i; C L^ IL IS a �CHzzzis"�"� azL}Lt- i -Lit9L cULettss€zrJ}}- BawcM >>m< uJLZZHOOMW cm= W0HHZZZW= YL i NM�6�t0!` 0 0, 0 N ac,cavc,c r�tJ- z I NI z.. fJ O 1 O m 4 Cl -4-1 j- i > z w€ D. o € �. J (l•Jw € 00 >€ c,t441 € a�€i € U'Lfi UjX0 € ,CXH i OF 10toIw¢ o o 12 A iCLO I U Lnys } , Z } } N 0 z =1 z o H � N Q N L) LLI co ~ H w z z z Z wmm o }M WJzHwwz> -Zm f -HF-IL ►-H CL��PGH E LLJ }coi flJJil J u ~tors az- WW ` L}a.ICUO w L CioLaazz UaE IA UHH wHLHz .=) - LLl�L03H -- 0 z H S_ 'I.L ,, IL_ & I- X MMMMMMMMMM r�4.AAL, ION 0,C,(hPT �aaMDtO€�Ni`€�N X00000 .aaaa . ' aaaaaa, - -f r' 2.1 TO: FRIDLEY H.R.A FROM: CITY OF FRIDLEY RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES NOVEMBER 1993 ADMINISTRATIVE BILLING: ADMINISTRATIVE PERSONAL SERVICES ADMINISTRATIVE OVERHEAD TOTAL ADMINISTRATIVE BILLING OPERATING EXPENSES: POSTAGE BY PHONE TOTAL OPERATING EXPENSES: TOTAL EXPENDITURES — NOVEMBER 1993 Re: 11 23DATA\HRA%TlF*381LLwkl Account Ws for HRWs Use 2.2 Account Ws for City's Use 13,842.00 101 - 0000 -341 -1200 250.00 101 - 0000 - 336 -3000 460- 0000 -430 -4107 14.092.00 460- 0000 - 430 -4332 67.79 236- 0000 -336 -3000 67.79 Q� P • • r � i w8OC.• LU a oe °D W � • dz• t7 im i Z Oe � zW• ae • • a• • � W ad � O •. ae • d • • • • • • • • ►W- a .- N � Z C9 i u g� LU Owe i Ix < IW- t7 i aa • d oe i U • F d G • ]LYZ W u H m� W W OC J • J 1 C9 ' • Z W • • • UZ • • i co cc O P S • 1� W r Z W E r✓i d O� O • 1- \ J d rn> --•O O M w• W 2 \ P W U N M O • W P i7 K i OC &u Q •Z• i d C7N LU W.x a. 0. It dY h-� aIt OWe W� 44 CD W=U OWU Y02 W &22 i Zl-O� 0 JOOuCC.YCCSUY�u -Y •jO' C1 myy • • < O! W • O! ZO�OZ07.'��faZ� O O O O O O O O O N P —gin 9 0 0 0 0 0 0 0 0 0 0 � cm 0g0q0CD p0 p01� �WOUOl 10A 00.0 COO OY1 NNONNN eN, M P In N a �. P P CO ��pp��pppppp •O .OHO N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 F J 0 0 0 0 0 0 0 0 O O Z W< O O O O O O O O P O O < O NNONNN CI- . . . . . .N.ppN��}}.N.ppN.N.pp��}}��}}N�.�}} MMOMMMOOM O ��pp��pppppp •O .OHO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M OOOMMMOOMMO U U U i-F-F- �O g O g ,D,o O O ,0,o O m m m NNI�N NNI-I� NN1_ aaPPP0 PON Qa \ \� \p 0 0 0 0 0 0 0 0 0 0 0 \ \ \ \ \ \ \ \ \ \ \ N N N N N N N N N N N N N N N N N N N N N N P a, Cl of 0% OP P O� O. O• e1` W N N W O OC Q. CO) Z O_ 1- U N a2 OC F- OC U 2.3 r� 3.1 Community Development Department HOUSING AND REDEVELOPMENT .AUTHORITY City of Fridley DATE: December 10, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Norwood Square Update Jim Casserly has been working with Westminster Corporation regarding the development contract to provide $82,000 of assistance for the project. Jim has indicated that it may be more prudent for the HRA to provide a grant rather than use the pay -as- you -go approach. Jim is preparing a memo about his recommendation and that memo will be distributed at the HRA meeting, or we will mail it to the HRA members prior to the meeting. BD:ls M -93 -729 A � 4.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: December 9, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Hedman Acquisition Update After the October HRA meeting, I received another bid to purchase the Hedman house. Ernst Movers will pay the HRA $4,700 for the house, remove the foundation, and backfill the hole. Jim Casserly and I are currently working on the documents necessary to convey ownership of the home itself. Ernst has applied for a moving permit, and we are holding his check for $4,700. He would like until March 1, 1994, to sell the home and remove the home from the property. We believe this is an agreeable amount of time in order to remove the house. We have received a certificate of insurance from Ernst Movers. His insurance policy will cover any incidents that may happen on the house between now and March 1, 1994. We have added the land to the HRA's liability policy. I will update the HRA at.the December meeting with any other details regarding transfer of the house. Jim and I attended the closing on the property on December 1, 1993. The HRA expended $68,469.80. The negotiated purchase price was $68,000, and the closing costs attributed to the HRA are $469.80. BD:ls M -93 -725 r � 5.1 Community Development Department Housim AND REDEVELOPMENT AUTHORITY City of Fridley DATE: December 9, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Update on Scattered Site Acquisition Program The following is an update on our efforts under the Scattered Site Acquisition Program: 560 Hugo Street N.E. We have sent a letter to the owner indicating the HRA's interest to acquire the property. We emphasized that the acquisition would be on a voluntary basis only and that the HRA would have the property appraised prior to any offer. The owner has until December 30, 1993, to respond to our letter. If he is interested, we will secure an appraisal of the home. Hopefully, we would have the appraisal ready for review by* the HRA at the February 1994 meeting. 513 Fairmont Street N.E. We are in the process of drafting a letter to HUD requesting that they demolish the structure. We started to take this step prior to making an offer. We are also researching the possibility of condemning the property due to the building's hazardous condition. The owner of the adjacent property to the east, 505 Fairmont Street N.E., has expressed interest in buying the lot and expanding his business. Part of his plan includes selling a portion of 513 Fairmont to the owner of 521 Fairmont. Staff has made him aware of various zoning issues that need to be addressed should he buy the property. Our primary concern, however, is removal of the building. We will provide additional information, if available, at the December HRA meeting. , GF:ls M -93 -722 r � g.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: December 10, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Rice Plaza Update Jim Kordiak has sold some of the existing furnaces and air conditioning equipment in Rice Plaza, recouping $600. He has also sold one of the tenant signs for $100. Hong Kong Kitchen is completing its remodeling of a tenant space at Holly Center. They will be open the beginning of January. On the January 1994 agenda, we will schedule an item to authorize demolition bids. I am currently reviewing specifications prepared by the Public Works Department. BD:ls M -93 -728 m co 0 co O H z w cc r a w U cc r E C 12 c m L ID C Y tm c 0 c 0 0 z 0 Y Z J Q Q x LL 6.2 Ir, r Community Development Department L� HOUSING AND REDEVELOPMENT AuTHORITy City of Fridley DATE: December 9, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUWECT: Fridley Town Square Update I met with Lowell Wagner on December 9, 1993, regarding the Fridley Town Square project. Wagner is still working with Walgreens management regarding the site; however, he does believe there is a good chance that Walgreens may decide to pull out of the project. Wagner still wants to pursue some type of development on the property and is currently evaluating whether or not he would actually buy the Swanson and the Marsolek property to the east. I have also been receiving telephone calls from,a party which may be interested in reusing the existing building on the Swanson property. Although I have not had a chance to confirm the exact nature of the use, it may be a potential hardware store. If Wagner does formally withdraw his intent to redevelop the property, the HRA needs to address interim uses on the site. The property is zoned S -2, Redevelopment District, which gives the City a lot of authority regarding consistency of uses with the "overall redevelopment plan as approved by the City ". Wagner indicated, for example, that if he were to buy the property, he may want to make some type of minimum improvements to the building including new windows, a new roof, or other interior improvements to make the building attractive for a viable tenant. I am currently research- ing with the Attorney's office our ability to approve or deny permits. under the S -2 zoning regulations. I hope to have more information for the HRA at the December meeting. BD:ls M -93 -726 I 7.2 205.23.05: 205.23 S -2 REDEVELOPMENT.DISTRICT REGULATIONS 1. PURPOSE The purpose of this special zoning district is to: A. Allow for a mixed use development within special redevelopment district s set up under Chapter 462 of Minnesota State Statutes for the health, safety and general welfare of the City. B. Allow for the maximum flexibility in the promotion of difficult redevelopment projects. C. Allow for development by a plan which is acceptable to, and in the best interest of, the City and the overall district and development plan. S -2 RE- DEVELOPMENT DISTRICT REGULATIONS V00 "i 10111 � 2. USES PERMITTED USES PERMITTED Permitted uses in S -2 Districts are: Those uses which are acceptable to the overall redevelopment plan and specific development plans as approved by the City. Upon approval of the specific development plans, the City shall determine the specific uses that are permitted within the development. 3. USES ALLOWED AFTER PLAN DEVELOPMENT Uses allowed in each individual building after construction will be the same as or similar to those uses approved in Section 205.22.2. above. 4. USES EXCLUDED USES • EXCLUDED Those uses unacceptable to the overall redevelopment plan and specific development plans, as determined by the City, are excluded uses in S -2 Districts. 5. PROCESS FOR APPROVAL A. Plans for each individual project or combination of projects must be submitted to the Planning Commission for review and recommendation to the City Council. The City Council shall have final authority to approve all project plans. B. Project plans submitted to the Planning Commission and City Council shall include the following minimum criteria: (1) Site plans showing the location of buildings, off - street r parking, street and utility locations, auto and pedestrian access to and from the project, any modification to existing services, grading plans, storm water plans, building exterior finish, lighting and signing and landscape plans. 9/92 205.52 -1 205.23.05. ■i y (2) Written City staff review on project compatibility to the ?3 overall redevelopment plan. (3) A written Housing and Redevelopment Authority (HRA) report on project plan approval and considerations. C. Any substantial modification to the plan must be submitted through the Planning Commission and approved by the City Council. 6. PERFORMANCE STANDARDS PERFORMANCE STANDARDS All performance standards for uses in this district shall be comparable to other similar uses that are allowed in other districts. Parking space sizes may be reduced to nine (9) feet in width upon approval of a special use permit. (Ref. Ord. 952) 0 9/92 205.52 -2 8.1 Community Development Department D HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: December 10, 1993 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUWECT: Proposed 1994 Draft Budget We have prepared a draft 1994 .budget for the HRA's preliminary discussion. No action is requested at this meeting. After the HRA's consideration, we will present the budget for final approval on the-January 1.994 agenda (with colored paper and a bound copy). Big Picture We have prepared the "Cash Flow and Projection of Annual Cumulative Balances" to analyze revenues versus expenditures in our 'tax increment and redevelopment program. It is unreasonable to assume that these projections beyond the year 2000 are accurate. There are just too many assumptions that we are making to rely on these projections. The projections to the year 2000, however, are more realistic. With the exception of 1995, the HRA has a positive annual balance and a healthy cumulative balance. The negative annual balance in 1995 assumes that we pay off the temporary Lake Pointe tax increment bond. It is. likely that we would roll over that bond cost and issue another bond to postpone payment. Revenues The following summarizes key assumptions for each of the columns on the revenue side of the nroiection analvsis: 1. The tax increment projection, represents 1992 payable taxes. It does not include increment from any development on Lake Pointe, southwest quadrant, Norwood Square, or the improvements at Bob's Produce or Osborne Crossings (Cub Foods). 2. The mortgage revenue column reflects the recent loan agreements with Sheet Metal Connectors and ECO Finishing. 8.2 Proposed 1994 Draft Budget December 10, 1993 Page 2 3. The rental revenue column eliminates the Rice Plaza rent in 1994 and eliminates rental income from the liquor store in 1997. The remaining rental amounts represent the $800 per month payments from the Fridley Plaza Office Building for the parking lot. 4. The special assessment revenue is from the East Moore Lake Drive project. 5. We have calculated interest earnings on the balance through the year 2000. We have not projected the interest earnings beyond the year 2000 because it tends to inflate the cumulative balance at the far right -hand side of the analysis. This may be unrealistic because, in all likelihood, we will be receiving increment from development in our project areas and, consequently, will be accumulating interest. Expenses The following summarizes key features of the expense columns: 1. The column entitled, Expenses, represents total expenses for personal services, supplies, other services and charges, and capital outlay. 2. We have created a housing program column which is different from previous projection sheets. We have simply identified a $500,000 expenditure for the housing program beginning in 1998 and extending through 2014. The housing program expenses for 1993 through 1997 are .incorporated in the expense column. 3. The analysis assumes that the HRA will continue a policy of returning all of the school district refunds through the year 2010. 4. The total debt service column represents the debt service payments on the three bond issues pertaining to HRA projects. Please note that the temporary tax increment bond for the Lake Pointe project is due in 1995. The Finance Director has advised me that it is very likely that staff will recommend that another bond be sold in order to postpone pay -off of the total bond. For the purposes of this projection, however, we have assumed that the entire bond would be paid in 1995. If development does occur on the property, increment from the development could offset the debt service payments. 8.3 Proposed 1994 Draft Budget December 10, 1993 Page 3 HRA oDeratina Fund and Housina Coordinator Fund As you recall, the HRA created two funds to trace our expenses; the HRA Operating Fund and the Housing Coordinator Fund. We have provided detail sheets for each of these funds and provided expense information on a line item basis. We are proposing a 5% decrease in the 1994 budget for the HRA Operating Fund. A number of expenditures will no longer be necessary in the 1994 budget. For example, taxes on the Lake Pointe property are now exempt. More expenditures are shifting to the Housing Coordinator fund because of our housing program emphasis. The Housing Coordinator budget has increased because we have simply rolled over the unexpended balances of the. rehab programs and added them into the 1994 allocation. As you recall, we had allocated $100,000 for scattered site acquisition and approximately $320,000 for the single family and multiple family rehab programs. We have simply rolled over those funds into 1994. The personal service budget has increased because this will be Grant Fernelius' first full year as Housing Coordinator. We have also allocated $20,000 (which is the same amount we had reserved last year) for contract rehabilitation inspections. These are for the single family and multiple family rehabilitation inspections. We have identified this figure in the personal services portion of the budget, because we have to hire the rehab inspectors as temporary employees of the HRA. The $20,000 budget equates to approximately 238 inspections. We believe this will be adequate for -our programming needs in 1993. Summary We will review the attached detail sheets with the HRA at the December meeting. Please note that we have not received the bills for the Mississippi Street improvement project from Anoka County as of this date. We have consequently budgeted for these expenses as well. BD:ls M -93 -731 co U m g U z U. z O U W O Q IL U. a U � Q$ jj$$�� o Or_oN_aeopa C9_ CO O 14Q7 � l0 r� N N a A m a�..'� a� a "a 9��v�o nwnaaof -Nw nnp. nNOlin" P � 02i3C�o�r°. o &o��c9i Annnn r C�vo..oeL`s, N r C7 A r pp sod ONp N � NCpp m Nm app op o tp O � O O M O d. CD Cl l0 CD CV N N N N N N N N N N N N, gQ oo�O1 � Q 3 v m p alas C r o N N p asa uO 1pp pO oO a P pp _ p -clo r r g r r r r r r r r r r r r a $g n_n n 'It an_ 'It °n_ i Iq E oM � iS �vidsfd � � �A op o wn 't �tal7 �p ddddd nr a Cr D r w ar 7 r r 9 r 0 ciaio r p r 0 r 7 r N r O r a e7 r r r W N N N N N N N ° $ _ C �£ gg gg m v cuggii8ggq$oii23: Q gg gg gg QQ Q r r Q us z8 X0 it J O� O O �NCpp N �NCpp �NCpp NCp� �Np CrO 0 0 0 O O �NCpp �Np �Np �CNpp N �Np �Np Np kit �Np Np eNC�� NCpp O O 0 O 4 O O O O O O O O O A Cf C1� a s CS CS N! 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N C7 l9 C7 C9 _ p -clo w a $g n_n n 'It an_ 'It °n_ i Iq N CS lJ' r CY 0 0 p N M O O o wn 't 'N P.i r-. ft N al Z g g r C$ W N N N N N N N N N N N N r $ E � mI II I O r N CO 1* EIIIIIkII PM a2. r r � 4 of gr C No iEn 0 ft A v 9' E sa � 000 0o a9O c� M M r z 3 N m 4) ON R ed U m r-1 b N 0 rn 41 V r-1 dP aP aB aP aP aP U •d ON 9--1 ri E-1 In v N v U ri v v v go O e O Q ll O1 In ri ri N 01 M W ce) d' ON ON 01 ON zz m M �r W pq rnw 00 l- cd V-1 W M w l,- O E-4 3 In W ri H td ch A .0 U w> U 0% G4 0 000 00 r-1 b N 0 rn 41 V r-1 dP aP aB aP aP aP M In 9--1 0% N In v N v v ri v v v %D O kD O to ll O1 In ri ri N 01 M d' d' ON 01 O d' m M r� N N 00 l- cd r- M M l,- H E-4 In In N In $4 � A .0 U r-I N ON 0 000 00 01 d' l- O O1 O O1 r-1 0% 10 %0 l- d' O r-1 O w - - ODW + ON o r-I in %D N r� r-I N O1 1, M In (- CA � O ch 01 N d' sp cn l- w O N 00 H %D ON %D N %D to 00 ON 9-1 r4 N N N O H N N O d' In In %D I,- %D r� O ON 00 In N r-1 d' %D N ch In qo H O %D r r 10 O M ra r-1 m � a� cd U r-1 N -H V U - to O b 44) 4) m M r-1 a, a o U -rI $4 cd M � O -rl r-I $4 cd 4J E-4 1044 -P4 $4 � A .0 U H En 0 134 En O %a U LEGAL SERVICES FOR HRA, 1993 OPERATING FUND Amount Expended Amount Budgeted A. Casserly $18,316 $40,000 1. $2,500 was received to defray Casserly expenses. • Victor Rosenblum 2. This does not include November and December 1993 bills. Amount Expended Amount Budgeted B. Barna Guzy $11,951.50 $10,000 1. A majority of expenses was for Dairy Queen litigation. 2. This does not include November and December 1993'bills. HOUSING FUND Amount Expended Amount Budgeted A. Casserly $10,046.05 $ 6,000 1. $10,046.05 is the estimated amount for 1993. 2. These expenses were for legal work on establishing the housing rehab programs; the Fannie Mae program required a lot of time. BUDGET 1994- WORKSHEET City of Fridley State of Minnesota Expenditure Detail - Line Item Detail PERSONAL SERVICES: 4101 Full time employee - regular 4102 Full time employee - overtime 4104 Temporary employee - regular 4105 Temporary employee - overtime 4107 Administrative charges 4112 Employees leave 4120 Medicare contribution 4121 PERA contribution 4122 FICA contribution 41251CMA contribution 4131 Health insurance 4132 Dental Insurance 4133 Life Insurance 4134 Cash benefit 4140 Unemployment compensation 4150 Worker's compensation 4170 Work order transfer - labor TOTAL SUPPLIES: 4212 Fuels and lubes 4217 Clothing /laundry allowance 4220 Office supplies 4221 Operating supplies 4222 Repair & maintenance supplies 4225 Small tools and minor equipment 4229 Work order transfer - parts TOTAL OTHER SERVICES & CHARGES: 4330 Professional services 4331 Dues and subscriptions 4332 Communication 4333 Transporation 4334 Advertising 4335 Printing and binding 4336 Insurance. non - personnel 4337 Conferences and school 4338 Utility services 4340 Services contracted, Non -prof 4341 Rentals 4346 Miscellaneous 4350 Payments to other /contribution TOTAL CAPITAL OUTLAY: 4510 Land 4520 Building 4530 Improvements other than bldg 4540 Machinery 4560 Furniture and fixtures TOTAL TOTAL EXPENDITURES �0009=-� -NNKFZM- $163.572 $168,479 $0 $168.479 $0 $174.376 $260 $600 $1.306 $0 $1.906 $450 83,586 123,800 42,863 128,000 287 405 486 405 663 800 813 800 207 600 6 600 19,860 33,000 3,269 33,000 1,698 2,750 1,295 2,750 11,649 30,147 4,125 13,832 1,551 1,600 806 1,600 2,367 6,400 1,685 2,800 52,574 45,783 33,601 78,583 40 4,6431 1 200,7321 338.9131 163,1001 1 1 315,046 $375.174 $584.198 $256.732 $0 $0 $577.416 58,055 255,428 271,192 57,740 0 50,500 0 120,000 116,350 355,170 18,503 355,170 0 0 $174.405 $661,098 $289,695 $0 $0 $532.910 713 411 $1.414.375 047 733 168 47 1906 1b1.285.152 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4101 Administrative Charge 5,897 Total Budget Requested 174,376 Justification: Wage and benefit cost computed by the Finance Dept. 174,376 Total 1.74,376 e City of Fridley State of Minnesota BUDGET 1994- WORKSHEET Expenditure Detail - Line Item Detail PERSONAL SERVICES: 4101 Full time employee - regular 4102 Full time employee - overtime 4104 Temporary employee - regular 4105 Temporary employee - overtime 4107 Administrative charges 4112 Employees leave 4120 Medicare contribution 4121 PERA contribution 4122 FICA contribution 4125 ICMA contribution 4131 Health insurance 4132 Dental insurance 4133 Life insurance 4134 Cash benefit 4140 Unemployment compensation 4150 Worker's compensation 4170 Work order transfer - labor TOTAL SUPPLIES: 4212 Fuels and lubes 4217 Clothing /laundry allowance 4220 Office supplies 4221 Operating supplies 4222 Repair & maintenance supplies 4225 Small tools and minor equipment 4229 Work order transfer - parts TOTAL OTHER SERVICES & CHARGES: 4330 Professional services 4331 Dues and subscriptions 4332 Communication 4333 Transporation 4334 Advertising 4335 Printing and binding 4336 Insurance, non - personnel 4337 Conferences and school 4338 Utility services 4340 Services contracted, Non -prof 4341 Rentals 4346 Miscellaneous 4350 Payments to other /contribution TOTAL CAPITAL OUTLAY: 4510 Land 4520 Building 4530 Improvements other than bldg 4540 Machinery 4560 Furniture and fixtures TOTAL TOTAL EXPENDITURES $163.572 $168,479 $0 $168.479 $0 $174.376 $260 $600 $1.306 $0 $1.906 $450 83,586 123,800 42,863 128,000 287 405 486 405 663 800 813 800 207 600 6 600 19,860 33,000 3,269 33,000 1,698 2,750 1,295 2,750 11,649 30,147 4,125 13,832 1,551 11600 806 1,600 2,367 6,400 1,685 2,800 52,574 45,783 33,601 78,583 40 4,643 200,732 338,9131 163,100 315,046 $375.174 $584,198 $256.732 $0 $0 $577.416 58,055 255,428 271,192 57,740 0 50,500 0 120,000 116,350 355,170 18,503 355,170 0 0 $174.405 $661.098 $289.695 $0 $0 $532.910 713 411 51.414.375 547 33 168 479 1906 51.285.152 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4101 Administrative Charge 5,897 Total Budget Requested 174,376 Justification: Wage and benefit cost computed by the Finance Dept. 174,376 Total 174,376 s ADMINISTRATIVE CHARGE PERCENTAGE OF SALARIES AND FRINGE BENEFITS OF CITY EMPLOYEES PERFORMING HRA- RELATED TASKS % of Salary Employee and Fringe Benefit City Manager 45% Secretary to City Manager 5% Finance Director 15% Asst. Finance Director 2% City Clerk 6% Accountant 50% General Accountant 2-0. Account Data Input Clerk 3% Account Data Processing Clerk 2% 0 Records Retention Specialist 8% 0 Secretary 25% Information Specialist 1% Public Works Director 4% Asst. Public Works Director 4% Engineering Tech Inspector 5% 0 Secretary 1% a Community Development Director.. 50% Planning Secretary 2% HRA Secretary 100% I I 1 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision 4221 1 Operating Supplies Justification: Inc./Dec. Over Last Year Total Budget Requested 200 Reference manual (Corporate Report Fact Book) Film, computer supplies Total 100 100 200 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4331 Dues and Subscriptions 0 Justification: Total Budget Requested 405 Minnesota Real Estate Journal American Economic Development Council Corporate Repd3arna —Guzy Total 100 280 25 405 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by.--Barbara Dacy, Community Dev. Mr. Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision 4333 1 Transportation Justification: Inc./Dec. Over Last Year Total Budget Requested EDC or other NAHRO conference Total 600 C*%i47 600 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by,.-Barbara Dacy, Community Dev. Mr. Budget Year 1994 t CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4335 Printing and Binding 0 Justification: Total Budget Requested 2,750 Request for Proposal Copier allocation Annual Report in City Newsletter Total 500 750 1,500 2,750 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 b CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND rg Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4337 Conferences and 0 Schools Justification: Total Budget Requested 1,600 Lunch meeting reimbursement Conference lunches Community Development Director Miscellaneous (local) Total 500 100 500 500 1,600 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Account No. 4338 1 Utility Services Justification: Dollar Amount Requested Inc./Dec. Over Last Year 5,600 Total Budget Requested 2,800 Lake Pointe electricity for irrigation Lake Pointe water charges Total Division City Manager's Council's Recommendation Decision 300 2,500 2,800 i' z CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department HRA REIMBURSEMENT FUND Account No. 4340 Justification: Services Contracted, Non — Professional Dollar Amount Requested Inc./Dec. Over Last Year 32,800 Total Budget Requested 78,583 Courier service to chair, clients, consultants Lake Pointe maintenance service Lake Pointe tree/fertilizer maintenance Microcomputer charge Minicomputer Sprinkler maintenance Rice Plaza demolition Total Division City Manager's I Council's Recommendation Decision 250 26,000 5,000 703 1,630 10,000 35,000 78,583 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 CITY OF FRIDLEY Attachment D Capital Outlay Request Form Priority #: Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision 4510 Land and.Special 57,740 Assessments Description of Purchase: Estimated Cost Unit Cost Quantity Total Fridley Plaza parking lot Relocated 64th Avenue (Fourmies Ave.) Taxes for Rice Plaza 16,483 4,546 30,477 16,483 4,546 30,477 Taxes for Hedman property Taxes for DeGross Automotive 2,000 4,484 2,000 4,484 Option on Gunderson property 5o0 Soo 57,740 Additional Costs/Trade —in (Conversion costs, Estimated Cost/Trade —In Unit Cost Quantity Total accessories, set —up costs, trade —in description, etc.): Justification: 1. Last year for special assessment payments on Fridley Plaza parking lot and Fourmies Avenue. 2. Taxes for Rice Plaza will be tax— exempt for 1995. 3. Taxes for Hedman property will be tax— exempt for 1995. 4. Option payment for Gunderson property included in HRA does not acquire. CITY OF FRIDLEY Attachment D Capital Outlay Request Form Priority #: Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Building: Dairy Queen 4520 Acquisition, Gunderson 120,000 Home Description of Purchase: Estimated Cost Unit Complete acquisition process via commissioner Cost Quantify Total hearings ($125,000 already paid) 4p000 40.000 Gunderson home 80,000 80,000 Additional Costs/Trade —in (Conversion costs, 120,000 accessories, set —up costs, trade —in description, Estimated Unit Cost/Trade —In etc.): Cost Quantity Total Justification: CITY OF FRIDLEY Attachment D Capital Outlay Request Form Priority #: Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year. 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Improvements: 4530 Mississippi Street/ 340,000 University Avenue Description of Purchase: Estimated Cost Unit Cost Quantity Total Mississippi Street University Avenue 300,000 40,000 300,000 40,000 340,000 Additional Costs/Trade —in (Conversion costs, Estimated Cost/Trade —in Unit Cost Quantity Total accessories, set —up costs, trade —in description, etc.): Justification: 1. Roadway, utility, and University Avenue Corridor improvements in conjunction with Mississippi Street Anoka County project. 2. Signaliization improvements at 57th And 61 st Avenues and University Avenue (authorization in 1991). CITY OF FRIDLEY Attachment D Capital Outlay Request Form Priority #: Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year. 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Improvements: 4530 Plaza tree and grate 10,670 replacement Description of Purchase: Estimated Cost Unit Cost Quantity Total Replace dying Locust trees, install grates, remove see below 10,670 stumps, and replace pavers. Additional Costs/Trade —in (Conversion costs, Estimated Cost/Trade —In. 10,670 accessories, set —up costs, trade —in description, Unit etc.): Cost Quantity Total Justification: Hardier tree species with grates at the base will ensure healthier, longer —lived trees in the Plaza area. Some e)dsting trees have died and others are stressed. Eight deciduous trees 4,760 Replace pavers and remove stumps 2,875 25% contingency 3,035 10,670 CITY OF FRIDLEY Attachment D Capital Outlay Request Form Priority #: Submitted by: Barbara Dacy, Community Dev. Dir. Budget Year 1994 Department Division HRA REIMBURSEMENT FUND Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Improvements: 4530 Two spare decorative 4,500 lights Description of Purchase: Estimated Cost Unit Cost Quantity Total 2.250 2 4.500 Two spare decorative lights. 4,500 Additional Costs/Trade —In (Conversion costs. Estimated Cost/Trade —In Unit accessories, set —up costs, trade —in description. etc.): Cost Quantity Total Justification: These lights will replace any damaged lights. Costs will then be charged to abutting property owners. BUDGET 1994- WORKSHEET City of Fridley State of Minnesota Enmenditura nedmai - i i- i*-- n-&-a PERSONAL SERVICES: 4101 Full time employee - Reg 4102 Full time employee - OT 4104 Temporary employee - Reg (i 4105 Temporary employee - OT 4107 Administrative charges 4112 Employees leave 4120 Medicare contribution 4121 PERA contribution 4122 FICA contribution 4125 IMCA contribution 4131 Health insurance 4132 Dental insurance 4133 Life insurance 4134 Cash benefit 4140 Unemployment compensation 4150 Worker's compensation 4170 Work order transfer - labor TOTAL SUPPLIES: 4212 Fuels and lubes 4217 Clothing/laundry allowance 4220 Office supplies 4221 Operating supplies 4222 Repair & main't supplies 4225 Small tools and minor equip 4229 Work order transfer - parts TOTAL OTHER SERVICES & CHARGES: 4330 Professional services 4331 Dues and subscriptions 4332 Communication 4333 Transporation 4334 Advertising 4335 Printing and binding 4336 Insurance, non - personnel 4337 Conferences and school 4338 Utility services 4340 Services contracted, Non -prol 4341 Rentals 4346 Miscellaneous 4350 Payments to other /contribution TOTAL CAPITAL OUTLAY: 4510 Land 4520 Building 4530 Improvements other than bldg 4540 Machinery 4560 Furniture and fixtures TOTAL $0 $33638 $28,690 $34,513 $0 $67,240 $0 $1,211 $488 $550 $0 $1,200 26,678 21,801 24,676 34,604 200 20 20 200 1,115 1,125 2,375 20,000 300 300 2,600 756 756 3,000 1 ,750 1,418 1,718 4,344 387 352 403 565 800 494 494 800 2,041 1,507 1,725 2,415 1,185 1,024 1,153 1,745 2,700 1,212 1,564 2,111 105 135 180 20 10 14 51 616 134 750 1,225 $0 $33638 $28,690 $34,513 $0 $67,240 $0 $1,211 $488 $550 $0 $1,200 $0 $40,930 $13,469 $15,465 $0 $46,815 6,065 9,246 10,445 13,065 200 20 20 200 1,115 700 300 300 2,600 756 756 3,000 1 ,750 300 1,750 800 494 494 800 28,000 2,953 3,450 26,900 $0 $40,930 $13,469 $15,465 $0 $46,815 $0 $421,800 $13,311 $15,298 $0 $840,000 TOTAL EXPENDITURES $0 497 579 155-9-5a 65 826 f_0 $955.255 100,000 200.000 320,000 11,614 13,600 640,000 11800 1,698 1,698 $0 $421,800 $13,311 $15,298 $0 $840,000 TOTAL EXPENDITURES $0 497 579 155-9-5a 65 826 f_0 $955.255 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4220 Office Supplies 0 Justification: Total Budget Requested S00 Miscellaneous office supplies Total Fil:1] S00 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Fernelius, Housing Coordinator Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Account No. 4330 1 Professional Services Justification: Dollar Amount Requested Inc./Dec. Over Last Year 7,000 Total Budget Requested 13,065 Rehabilitation program (legal fees) Scattered —site acquisition (legal fees) Wellness program Total Division City Manager's Recommendation Council's Decision 10,000 3,000 65 13,065 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Fernelius, Housing Coordinator Budget Year 1994 _5 ., CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Fernelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Account No. 4332 1 Communication Justification: Postage Total Dollar Amount Requested Inc./Dec. Over Last Year (415; Total Budget Requested 700 Division City Manager's Council's Recommendation Decision_ 700 FZZ#7 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4334 Advertising 400 Total Budget Requested 3,000 Justification: Housing brochures Advertisements in Fridley Focus News Total 1,000 2,000 3,000 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Femelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Division Dollar Account Amount City Manager's Council's No. Description Requested Recommendation Decision Inc./Dec. Over Last Year 4337 Conferences and 0 Schools Justification: Total Budget Requested 900 NAHRO or Minnesota Housing Partnership Miscellaneous rehabilitation training programs Total 700 200 900 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Fernelius, Housing Coordinator Budget Year 1994 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Fernelius, Housing Coordinator Budget Year 1994 Department HOUSING COORDINATOR FUND Account No. 4510 1 Land Justification: Scattered —site acquisition: 1993 1994 Total No monies spent in 1993. Dollar Amount Requested Inc./Dec. Over Last Year 100,000 Total Budget Requested 200,000 Division City Manager's Council's Recommendation I Decision 100,000 100,000 200,000 CITY OF FRIDLEY Attachment B Budget Detail Form Submitted by: Grant Ferneiius, Housing Coordinator Budget Year 1994 DRAFT BUDGET 1994 City of Fridley State of Minnesota DEBT SERVICE: 4605 Principal Payment 4610 Interest Expense 4620 Fiscal Agent Fees 265.000 285,000 285 000 305,0001 224,565 203 0 584 203,584, 180,340 1,450 2 W0 2,141 2,000 TOTAL DEBT SERVICE $491,015 $490,584 725 $487.340 He: WRAMRF- 380BUD DRAFT BUDGET 1994 City of Fridley State of Minnesota DEBT SERVICE: 4605 Principal Payment 4610 Interest Expense 4620 Fiscal Agent Fees TOTAL DEBT SERVICE 51 102 2909,230 AM&L2 J650,1jQ File: XHRAITIRF- 384BUD 0 0 0 6649,1 2 30 649130 649130 1001 7121 1000 TOTAL DEBT SERVICE 51 102 2909,230 AM&L2 J650,1jQ File: XHRAITIRF- 384BUD DRAFT BUDGET 1994 City of Fridley State of Minnesota DEBT SERVICE: 4605 Principal Payment 4610 Interest Expense 4620 Fiscal Agent Fees 0 0 0 0 0 155155 155155 155155 7,581 250 305 300 TOTAL DEBT SERVICE 7 581 155 405 $155,460 155 455 Per conversation with Jay Paulson on 3- 15 -93. two Is a $= Annual Admin Fee and a SW Annual Prin Pay Fee. He also mentioned that two Is a $2 charge per transfer after the first 50. He said there probably won't be many transfers with 1ht Issue. File: \HRA \TIF\Fund354 A MEMORANDUM Municipal Center William C. Hunt _ 6431 University Avenue Northeast Fridley, Minnesota 55432 Assistant to the City Manager COF { (612) 572 -3507 FRIDLEY! FAX (612) 571 -1287 Memo to: Barbara Dacy, Director of community Development From: William C. Hunt, Assistant to the city Manager Subject: Resolution Authorizing Pay Increase for HRA Employees Date: December 16, 1993 Since the HRA is a distinct entity it will be necessary for its board to authorize salary increases for employees. I have adapted the resolution we used for the Fridley City Council to apply to the needs of the HRA. In order to provide salary increases effective January 1, 1994 it will be necessary for the HRA to take action on this matter at its of meeting of December 16, 1993. I recommend that you present this matter for action at the above mentioned meeting. If I can be of any further assistance let me know. WCH /jb NO. HRA - 1993 A RESOLUTION AUTHORIZING AN INCREASE IN COMPENSATION FOR FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY EMPLOYEES FOR THE 1994 CALENDAR YEAR WHEREAS, it is the intention of the Fridley Housing and Redevelopment Authority (HRA) to provide fair and equitable compensation to Employees within budgetary constraints; and WHEREAS, the Fridley HRA intends to comply with the Minnesota Local Government Pay Equity Act; and WHEREAS, Staff of the City of Fridley have reviewed economic indicators and compensation adjustments by comparable employers; and WHEREAS, an adjustment of employee salaries and benefits is warranted; NOW, THEREFORE, BE IT RESOLVED by the Fridley Housing and Redevelopment Authority that the following adjustments be authorized for employees of the Fridley HRA, with the exception of employees who are members of a bargaining unit, effective January 1, 1994; 1. A general increase of 3.0% in employee salaries. 2. For employees eligible for the health benefit who choose dependent coverage, a maximum contribution of $315.00 per month toward premium costs of health insurance and $25,000 worth of group term life insurance. Up to $15.00 of the above amount of $315.00 can be used for premium. costs of dental insurance. (Flexible Benefit Plan, Option A) 3. For employees eligible for the health benefit who choose single coverage, a maximum contribution of $205.00 per month toward premium costs of health insurance and $25,000.00 worth of group term life insurance. Up to $15.00 of the above amount of $205.00 can be used for premium costs of dental insurance. (Flexible Benefit Plan, Option A) PASSED AND ADOPTED BY THE FRIDLEY HRA THIS 1993. DAY OF - LARRY R. COMMERS - CHAIRMAN WILLIAM W. BURNS - EXECUTIVE DIRECTOR A , v2 �- Casserly Molzahn & Associates, Inc. 215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403 Office (612) 342 -2277 • Fax (612) 334 -3382 M E M O R A N D U M TO: City of Fridley HRA Attention: Bill Burns, City Manager Barb Dacy, City Planning Director FROM: James R. Casserly Mary E. Molzahn DATE: December 10, 1993 RE: Funding Mechanism for Norwood Square Apartment Project The HRA has previously approved $79,000 in Tax Increment assistance for the above project. While the assistance is being used for quality enhancements to a low income senior housing project, the Development Agreement provides the assistance for the legal and customary tax increment eligible expenditures. As with most Development Agreements which use a Tax Increment Revenue Note to provide the assistance, the Authority delivers the Revenue Note after it has issued its Certificate of Completion and determined that the agreed upon improvements are completed. However, the use of a Revenue Note in this project creates legal ambiguities and would cost the Authority an estimated additional $8,479. The project is being financed with HUD funds. As a condition of its funding, HUD requires that all project expenses be funded up front. The project owner will be Norwood Square, Inc., a non - profit corporation. The Project Sponsor is Westminster Corporation. Doug Mayo, the Director of Housing Development at Westminster has been attempting to negotiate financing that could be repaid with the Revenue Note. The Greater Minneapolis Housing Foundation may be willing to loan $31,000 of the $79,000 for part of the quality enhancements. However, the Norwood Square project would be competing with a number of other projects for potential loans offered by the Foundation. Proceeds from the Revenue Note would first reimburse the Foundation and the balance of the proceeds would then go to make,-improvements after those proceeds had been disbursed to the Developer. We have a circular problem. In theory the Revenue Note is not delivered until the improvements are completed; in this case the improvements will not be started until the Revenue Note payments are actually received (with the exception of $31,000 worth of improvements which are structural and cannot be done later). A second source of funds would be a bank loan to Westminster for the $79,000 which Westminster would then provide to the project. HUD will not allow any second mortgages on the project, so an assignment of the Revenue Note is the only security that the Developer can provide. One commercial lender that Doug Mayo contacted indicated that a fixed interest rate would be 2.5 to 3 percent over prime, which is currently at 6 %. Part of the reason for the higher rate is that there will be no payments available until August 1, 1996 with the final payment being made on August 1, 1999 (see Schedule A attached). The total payment required to pay a $79,000 loan with an 8.5% per annum interest rate is $103,695. If the Authority were to provide the funding up front, it could recover its investment from the Tax Increment that is generated by the improvements. This is the same Tax Increment that would pay the Revenue Note if that option is used. Schedule B assumes the City is receiving a 6% rate of return on its invested funds (the current Treasury Bond yield for Bonds maturing in 1999 is approximately 5.250). Schedule B assumes a 6% investment rate or cost of money. This Schedule simply shows that the HRA could reimburse itself the $79,000 advanced with interest at 6% per annum for a total Tax Increment cost of $95,216. This results in a savings of $8,479 as opposed to a commercial loan. We think the HRA should have reservations about committing to fund improvements in 1997 and 1998. If the improvements are not made, the only recourse of the Authority is to discontinue payments on the Note and to initiate litigation. All this seems rather cumbersome particularly since the Tax Increment assistance is really to fund Tax Increment eligible expenses which the Authority should be agreeing exist at the time it delivers the Revenue Note. On the other hand, we can avoid legal and administrative problems by requiring the HUD Sponsor to obtain a loan, but this adds the additional expense described above. If the Authority funds the improvements up front, it will use a mechanism that is on sounder legal grounds, much easier to administer and less expensive. We are hoping the HRA would review the up front or grant option and provide us with some additional direction. If there are any questions please contact us. JRC /ecs A SCHEDULE A CITY OF FRIDLEY, MINNESOTA 0 PROPOSED WESTMINISTER SENIOR HOUSING --------------- ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: AVAILABLE TAX TAX TAX TAX ADMIN TAX AVAILABLE AVAILABLE DATE CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES INCREMENT TO PROJECT TO CITY 12 / 1993 3,519 3,519 0 0 0 0 0 0 6/ 1994 3,519 3,519 0 0 0 0 0 0 12 / 1994 3,519 3,519 0 0 0 0 0 0 6/ 1995 3,519 36,064 0 0 0 0 0 0 12 / 1995 3,519 36,064 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 12 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 6 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 12 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 6 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 12 / 1998 3,519 36,064 32.545 18,648 1,865 16,783 16,783 0 6 / 1999 3.519 36.064 32,545 18.648 1.865 16,783 2.995 13.788 130.537 13.054 117.483 103,695 13,788 aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa 8.50% PV RATE PV OF AVAILABLE TO PROJECT SEMI ANNUAL CUMULATIVE BALANCE BALANCE 0 0 0 0 0 0 0 0 0 0 14,209 14,209 13,630 27,839 13,074 40,914 12,541 53,455 12,030 65,485 11,540 77,025 1,975 79,000 79,000 aaaaaaaaaaaaaaaaaaaaaaaaaa 79.000 WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 13- Dec -93 SCHEDULE B CITY OF FRIDLEY, MINNESOTA PROPOSED WESTMINISTER SENIOR HOUSING 6.00% PV RATE ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: AVAILABLE PV OF AVAILABLE TO PROJECT DATE TAX CAPACITY TAX CAPACITY TAX CAPACITY TAX INCREMENT ADMIN TAX AVAILABLE AVAILABLE SEMI ANNUAL CUMULATIVE ------------------------------------- EXPENSES INCREMENT TO PROJECT TO CITY BALANCE BALANCE 12 / 1993 3,519 3,519 0 0 0 0 6 / 1994 3,519 3,519 p 0 0 0 0 0 0 12 / 1994 3,519 3,519 0 0 0 0 0 0 0 0 6 / 1995 3,519 36,064 0 0 0 0 0 0 0 0 12 / 1995 3,519 36,064 0 0 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 0 16,783 0 16,783 0 p O 0 12 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14, 14,912 6 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14,477 477 29,349 12 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 14,056 43,445 6 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 13,646 57,091 12 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 11,299 0 13,249 70,340 5,484 8.660 79,000 -_ -_ 111,889 11,189 100,700 95,216 5,484 79,000 79,000 -_ __ aaaaaaaaaaaaaaaaaac== aaa= a = = =a =aaaaaaaaaaaaaa= aaaaaaaaaaa aaaaaaa-- aaaaaaaa_- aaaaaaaaa WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 13- Dec -93 AAA-T Casserly Molzahn & Associates, Inc. 215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403 Office (612) 342 -2277 • Fax (612) 334 -3382 M E M O R A N D U M TO: City of Fridley HRA Attention: Bill Burns, City Manager Barb Dacy, City Planning Director FROM: James R. Casserly Mary E. Molzahn DATE: December 10, 1993 RE: Funding Mechanism for Norwood Square Apartment Project The HRA has previously. approved $79,000 in Tax Increment• assistance for the above project. While the assistance is being used for quality enhancements to a low income senior housing project, the Development Agreement provides the assistance for the legal and customary tax increment eligible expenditures. As with most Development Agreements which use a Tax Increment Revenue Note to provide the assistance, the Authority delivers the Revenue Note after it has issued its Certificate of Completion and determined that the agreed upon improvements are completed. However, the use of a Revenue.Note in this project creates legal ambiguities and would cost the Authority an estimated additional $8,479. The project is being financed with HUD funds. As a condition of its funding, HUD requires that all project expenses be funded up front. The project owner will be Norwood Square, Inc., a non - profit corporation. The Project Sponsor is Westminster Corporation. Doug Mayo, the Director of Housing Development at Westminster has been attempting to negotiate financing that could be repaid with the Revenue Note. The Greater Minneapolis Housing Foundation may be willing to loan $31,000 of the $79,000 for part of the quality enhancements. However, the Norwood Square project would be competing with a number of other projects for potential loans offered by the Foundation. Proceeds from the Revenue Note would first reimburse the Foundation and the balance of the proceeds would then go to make improvements after those proceeds had been disbursed to the Developer. We have a circular problem. In theory the Revenue Note is not delivered until the improvements are completed; in this case the improvements will not be started until the Revenue Note payments are actually received (with the exception of $31,000 worth of improvements which are structural and cannot be done later). A second source of funds would be a bank loan to Westminster for the $79,000 which Westminster would then provide to the project. HUD will not allow any second mortgages on the project, so an assignment of the Revenue Note is the only security that the Developer can provide. One commercial lender that Doug Mayo contacted indicated that a fixed interest rate would be 2.5 to 3 percent over prime, which is currently at 6 %. Part of the reason for the higher rate is that there will be no payments available until August 1, 1996 with the final payment being made on August 1, 1999 (see Schedule A attached). The total payment required to pay a $79,000 loan with an 8.5% per annum interest rate is $103,695. If the Authority were to provide the funding up front, it could recover its investment from the Tax Increment that is generated by the improvements. This is the same Tax Increment that would pay the Revenue Note if that option is used. Schedule B assumes the City is receiving a 6% rate of return on its invested funds (the current Treasury Bond yield for Bonds maturing in 1999 is approximately 5.25 %). Schedule B assumes a 6% investment rate or cost of money. This Schedule simply shows that the HRA could reimburse itself the $79,000 advanced with interest at 6% per annum for a total Tax Increment cost of $95,216. This results in a savings of $8,479 as opposed to a commercial loan. We think the HRA should have reservations about committing to fund improvements in 1997 and 1998. If the improvements are not made, the only recourse of the Authority is to discontinue payments on the Note and to initiate litigation. All this seems rather cumbersome particularly since the Tax Increment assistance is really to fund Tax Increment eligible expenses which the Authority should be agreeing exist at the time it delivers the Revenue Note. On the other hand, we can avoid legal and administrative problems by requiring the HUD Sponsor to obtain a loan, but this adds the additional expense described above. If the Authority funds the improvements up front, it will use a mechanism that is on sounder legal grounds, much easier to administer and less expensive. We are hoping the HRA would review the up front or grant option and provide us with some additional direction. If there are any questions please contact us. JRC /ecs SCHEDULE A CITY OF FRIDLEY, MINNESOTA PROPOSED WESTMINISTER SENIOR HOUSING 8.50% PV RATE ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: AVAILABLE PV OF AVAILABLE TO PROJECT TAX TAX TAX TAX ADMIN TAX AVAILABLE AVAILABLE SEMI ANNUAL CUMULATIVE DATE CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES INCREMENT TO PROJECT TO CITY BALANCE BALANCE 12 / 1993 3,519 3,519 0 0 0 0 0 0 0 0 6/ 1994 3,519 3,519 0 0 0 0 0 0 0 0 12 / 1994 3,519 3.519 0 0 0 0 0 0 0 0 6/ 1995 3,519 36,064 0 0 0 0 0 0 0 0 12 / 1995 3,519 36,064 0 0 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14,209 14,209 12 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 13,630 27,839 6 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 13,074 40,914 12 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 12,541 53,455 6 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 12,030 65,485 12 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 11,540 77,025 6 / 1999 3,519 36,064 32,545 18,648 1,865 16,783 2,995 13,788 1,975 79,000 130,537 13,054 117,483 103,695 13,788 aaaaaaaaaaaaaaaaaaaaaaaaaavaaaaaaaaaaaaaaoaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaavaaaaaaaaaaaaaaaaoa 79,000 aaaaaaaaaaaaaaaaaoaaaaoaaa 79,000 WEST1 PREPARED BY CASSERLY MOLTAHN & ASSOCIATES 13- Dec -93 SCHEDULE B CITY OF FRIDLEY. MINNESOTA PROPOSED WESTMINISTER SENIOR HOUSING 6.00% PV RATE ORIGINAL ESTIMATED CAPTURED ESTIMATED -------------- LESS: AVAILABLE - ------ - --- ------- ---------------- - - - - -- PV OF AVAILABLE TO PROJECT TAX TAX TAX TAX ADMIN TAX AVAILABLE AVAILABLE SEMI ANNUAL CUMULATIVE DATE CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES INCREMENT TO PROJECT TO CITY BALANCE BALANCE 12 / 1993 3,519 3,519 0 ----------------------------------- 0 0 0 0 - - - --- 0 - -- ------ 0 - - - - -- 0 6/ 1994 3,519 3,519 0 0 0 0 0 0 0 0 12 / 1994 3,519 3,519 0 0 0 0 0 0 0 0 6/ 1995 3,519 36,064 0 0 0 0 0 0 0 0 12 / 1995 3,519 36,064 0 0 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14,912 14,912 12 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14,477 29,389 6 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 16,783 0 14,056 43,445 12 / 1997 3,519 36.064 32,545 18,648 1,865 16,783 16,783 0 13,646 57,091 6 / 1998 3,519 36,064 32,545 18.648 1,865 16,783 16,783 0 13.249 70,340 12 / 1998 3.519 36,064 32.545 18,648 1.865 16.783 11.299 5.484 8.660 79,000 111,889 11.189 100.700 95.216 5,484 79.000 79,000 aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaacaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa-- aaaaeaaaaaaaaaaaa aaaaaa=- aaaaaaaaaaaaaaaaaa WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 13- Dec -93