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HRA 05/20/1993 - 29562CITY OF FRIDLEY HOIIBIN(� & REDEVELOPMENT AIITHORITY MEETIN(3� MAY 20, 1993 ���������.,..,.����������..��������������..��..��..����..����..������������� CALL TO ORDER• MOTION by Mr. Prairie, seconded by Mr. McFarland, to nominate John Meyer as the Acting Chairperson for the meeting. IIPON A VOICE VOTE, ALL VOTIN(3 AYE, ACTINC3 CBAIRPER80N MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. Acting Chairperson Meyer called the May 20, 1993, Housing & Redevelopment Authority minutes to order at 7:30 p.m. ROLL CALL: Members Present: John Meyer, Duane Prairie, Jim McFarland Members Absent: Larry Commers, Virginia Schnabel Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator Rick Pribyl, Finance Director Craig Ellestad, Accountant Jim Casserly, Consultant Jerome Meyers, Sheet Metal Connectors APPROVAL OF APRIL 8 1993 HOUSING & REDEVELOPMENT AUTHORITY MINLTTES : MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the April 8, 1993, Housing & Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPER80N MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 1. CONSIDER SUBORDIATATION AGREEMENT FOR SHEET METAL CONNECTORS: Ms. Dacy stated that Sheet Metal Connectors is about to complete the SBA loan process for permanent financing of its new building on Main Street. She stated that presented for HRA action are two agreements. One agreement is between the HRA and Northeast State Bank which will have the primary mortgage. The second agreement is between the Coon Rapids Development Company which processes the SBA 504 loan and the HRA. The SBA loan will have a second position. C HOIIBING & REDEVELOPMENT AIITHORITY MEETING. MAY 20. 1993 - PA(�E 2 � Ms. Dacy stated that Jim Casserly has reviewed the documents and advised that they are in proper form and in compliance with the development agreement. MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the Subordination Agreements and authorize execution by the HRA Chair- person and Executive Director. IIPON A VOICE VOTE, ALL VOTINC� AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 2. CONSIDER RESOLUTION TO AUTHORIZE PARTICIPATION IN PRHFA MINNESOTA CITY PARTICIPATION PROGRAM: Mr. Fernelius stated that the First Time Homebuyer Mortgage application was prepared the week of April 12, 1993, in order to meet the April 15, 1993, deadline. The application requested $2,249,999 in mortgage revenue bond allocation for the City of Fridley. At the May il, 1993, meeting, Fridley was allocated $1,161,000. He recommended that the HRA approve the resolution authorizing participation in the NII�iFA Minnesota City Participation Program and approve the application. Mr. Prairie asked if one-half of the request is the typical amount �..� that is awarded to a community. Mr. Fernelius stated that NIIiFA has an allocation formula based on a variety of minimum floor scenarios. He stated that $73 million were requested, and the pool available was only $47 million. Mr. Meyer stated that in the future, he would like to know more specifics about the allocation process and how final amounts are determined. MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the application to the MHFA Minnesota City Participation Program and to approve Resolution No. HRA 1- 1993, Resolution Authorizing Participation in the NIIiFA Minnesota City Participation Program. IIPON A VOICE VOTE, ALL VOTING AYE, ACTING CBAIRPER80N MTsYER DECLARED THE MOTION CARRIED QNANIMOIISLY. 3. CONSIDERATION OF ADDITIOIVAL IMPROVEMENTS IAT COOPERATION WITH MISSISSIPPI STREET IMPROVEMENT PROJECT: Ms. Dacy stated that there were three parts to this item. The first part deals with the traffic flow on the Rice Plaza property. Ms. Dacy showed a video depicting how the parking would function after the additional right-of-way has been removed from the front � of Rice Plaza. She stated that a driveway needs to be constructed _ to the rear of Rice Plaza and the parking lot striped in accordance � 80IISING & REDEVELOPMENT AIITHORITY MI�:ETINa. MAY 20. 1993 - PAGE 3 with the site plan shown on page 3.5. She stated the estimated cost of the additional driveway work and striping would be about $5,000. She stated there is an adequate surplus in the Mississippi Street improvement project budget to accommodate this expenditure. Ms. Dacy stated that the tenants are concerned about the drive- through traffic for the Dairy Queen passing in front of the Rice Plaza building. She stated that in order to provide for safe traffic movements, the improvements are necessary. MOTION by Mr. McFarland, seconded by Mr. Prairie, to authorize staff to execute the necessary documents to complete the improvement as shown on the plan in the agenda packet. IIPON A VOICE VOTE� ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. Ms. Dacy stated that the second part of this item is the landscaping replacement at the Target and Holly Center sites. She stated the vegetation at the Holly Center site would not have to be replaced. She stated that because of that, the requested amount of money to replace vegetation in the project has been reduced to about $6,000. ^ Ms. Dacy showed a video identifying six evergreen trees, a variety of shrubs, and five Crabapple trees that need to be removed. She - stated that the row of Winged Euonymous along the trash enclosure on Mississippi Street will be transplanted to the front part of the Target site instead of being replaced. MOTION by Mr. Prairie, seconded by Mr. McFarland, to authorize staff to execute contracts to transplant or replace vegetation as necessary at a cost not to exceed $6,000. IIPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSOIJ MEYER DECLARED T8E MOTION CARRIED IINANIMOIISLY. Ms. Dacy stated that the third part of this item was the corridor landscaping improvements at the intersection. She stated that as part of the University Avenue corridor improvement plans completed in the mid-1980's, landscaping was proposed at every intersection along University Avenue. During the Mississippi Street project review in 1991, Anoka County indicated that the HRA should be responsible for the installation. She stated that it is cheaper for the HRA to bid and to install the landscaping since the County contractor typically charges a percentage overhead in addition to the subcontractor costs. Mr. Meyer asked who would be responsible for the maintenance. He stated that he recalled that the City and HRA had a number of ,� questions about maintenance issues. HOIISING & REDBVELOPMENT AQTHORITY MEBTING, MAY 20. 1993 - PA�E 4 T� Ms. Dacy recommended that the IiRA authorize her to take quotes on what it would cost for the landscaping at the intersection and determine whether or not it would be appropriate to have it installed this fall or wait until the next budget year. Ms. Dacy stated that she will determine who will be responsible for the maintenance of the landscaping and advise the HRA of that when it is discussed. MOTION by Mr. Prairie, seconded by Mr. McFarland, to authorize staff to solicit quotes for the intersection landscaping and schedule final action for the HRA in August or September 1993 and to include information about maintenance responsibilities. IIPON A VOICE VOTE, ALL VOTING AYE, ACTINt� CBAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 4. CONSIDER AMENDED LEASEHOLD AGREEMENT FOR FRIDLEY PLAZA OFFICE BUILDING PARKING LOT: Ms. Dacy stated that she wants the HRA to table action on this item. She stated that she was having trouble contacting the property manager regarding the snow plowing language and the time- frame for the sealcoating. MOTION by Mr. Prairie, seconded by Mr. McFarland, to table the item until the June 10, 1993, HRA meeting. IIPON A VOICE VOTE� ALL VOTING AYE� ACTING CBAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 5. CONSIDER RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES: Mr. Pribyl stated that this resolution defines the Fridley State Bank as the official depository for the HRA. The resolution also provides that the City Manager, Finance Director, and Assistant Finance Director are the official signers for the HRA checks. MOTIOPT by Mr. Prairie, seconded by Mr. McFarland, to approve Resolution No. HRA 2- 1993, Resolution Designating Official Depositories for the Fridley Housing and Redevelopment Authority. IIPON A VOICL VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLAR�D T8E MOTION CARRIED IINANIMOIISLY. 6. CLAIMS AND EXPENSES: Mr. Ellestad reviewed the expenses for the period from April 8- 13, 1993. Mr. Ellestad also added check numbers 2343 through 2350. n MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the claims and expenses and to issuance of checks, numbers 2304 - 2350. HOIISINC, & REDEVELOPMENT AIIT80RITY MEETING, MAY 20. 1993 - PAGE 5 IIPON A VOICE VOTE� ALL VOTING AYE� ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED DNANIMOIISLY. 7. PROPOSED STYROTECH PROJECT AT 61ST AVENUE/MAIN STREET: Mr. Burns stated that he wanted to add this item to the HRA agenda. He stated he was contacted by Everest Development Group regarding an interest by Styrotech Company to locate a 100,000 square foot building at the vacant parcel on the west side of Main Street and 61st Avenue. He stated that 45� of the building would be manufacturing, 50% warehousing, and the remaining 5� would be office. He stated the company manufactures styrofoam products like the underlayment for roofing. He estimated market value of the project would be $3 million, and the estimated tax value would be $2,500,000. The Company is also looking at Brooklyn Park. Mr. Burns stated that Brooklyn Park's tax increment program offers a pay-as-you-go program in the amount of $426,000. He stated this was the present value amount. He stated that, given the City's current TIF guidelines, it would be difficult to compete with the Brooklyn Park offer. Mr. Casserly stated he had prepared a memorandum dated May 20, � 1993, describing a potential assistance package. He stated the package consists of a$100,000 pay-as-you-go revenue note and an $150,000 loan. He noted that was based on the project value of $3 million. He believed the project value could substantially increase to $5 million after all building and equipment costs are included. Mr. Casserly stated that the Brooklyn Park district is an older district such that they.do not have to compensate for the loss of local government aids. He stated Brooklyn Park is specifically being aggressive with manufacturing companies. This company's hourly wage is reasonably high; and, because of its unusual processing techniques, it requires a skilled labor force. Mr. Burns stated the company would employ approximately 60-70 employees. He stated the amount of truck traffic per day would be 20-30 trips. Mr. Prairie stated that FMC is reducing its labor force. He believe the loss in manufacturing jobs is very high. He questioned if the HRA should go beyond its guidelines in order to attract this type of company. Mr. McFarland asked if there were any pollution problems relating to the company. ,� � HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 20. 1993 - PAGE 6 Mr. Burns stated he was not aware of any problems with the Everest Group, but they did say that the company is not a hazardous waste generator. Mr. Casserly stated that they are not making the styrofoam product at this site but merely forming and cutting the product. Mr. Burns suggested that if the HRA wanted to pursue this company, he suggested that the HRA direct staff to finalize the project costs and re-figure a potential assisted package. Further, he suggested that the additional assistance would have to be compared to the HRA's cash flow because of the recent prioritization of HRA monies for housing programs. MOTION by Mr. Prairie, seconded by Mr. McFarland, to authorize Jim Casserly to revise the proposal to Styrotech based on a$5 million project cost and to direct staff to investigate the impact of the proposal on the HRA tax increment cash flow. IIPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERBON MEYER DECLARED THE MOTION CARRIED QNANIMOIISLY. 8. STATUS REPORT ON HRA HOUSING REHAB PROGRAMS: �.,.� Mr. Fernelius updated the HRA on the CDBG program, the HOME program, the NII3FA home improvement loan program (MHFA Fix-up Fund) , the Fannie Mae program, the HRA reserve fund, and the MHFA Rental Rehab Loan program. Mr. Fernelius stated that the pre-screening applications would be taken beginning Monday, June 14, 1993, and the application period would be extended to July 16, 1993. He stated that he and Barbara Dacy had made a video newsletter; and they are preparing a half- page ad for the Fridley Focus, and an extensive article in ti�e summer newsletter. Mr. Fernelius stated that regarding the CDBG program, a contract will be presented to the HRA board at its June meeting. He stated the County has raised the grant amount from $9,000 to $11,000. He stated it is proposed that Fridley's program would be consistent with the County's. Mr. Fernelius stated that regarding the federal HOME program, this money would probably not be available until this fall. He suggested that the HRA consider raising the income guidelines to 500 of the area media income as published by HUD. He stated this would provide more flexibility for program recipients. Mr. Fernelius described a new proposal for the NIIiFA HOME improvement loan program. He stated that when he came on board, � he understood this program to be a"gap" financing program. He stated that while trying to implement this program, he had a number HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 20. 1993 - PAGE 7 of concerns about this approach. He stated that it may not be fair to assist a very small group of people, many of whom may be a poor credit risk. Secondly, the subsidy level of HRA funds would be focused into a small number of households, reducing the HRA's ability to assist as many people as possible. Further, there may be a greater risk to the HRA in the event of the borrower default. Mr. Fernelius stated that in order to encourage people to make improvements to their homes, assist those who qualify for a loan, maximum the HRA dollars, and reduce the risk to HRA funds, he is proposing that the program be administered such that the HRA would provide a no interest deferred loan based on the following: Loan Percentage Maximum Maximum Number Amount Reduction Assistance of Loans @ This Level Less than $5,000 100 $500 $5,001 to $10,000 12.50 $1,250 $10,001 to $15,000 15� $2,250 120 48 26 Mr. Fernelius stated that staff has determined a new name to refer to the Fannie Mae financing program. The new program name is the HOME Mortgage Assistance Program. He stated that Fay Wegner will be submitted origination agreements to be approved by the HRA at � its June meeting. Mr. Fernelius stated that he is recommending that they not prepare specific guidelines for the reserve fund until the first round of applications has been reviewed and approved. After that time, we will know more about the types of applications which will fall through the funding cracks, and the HRA can determine on a case- by-case basis how to handle those situations. Mr. Fernelius stated that the Rental Rehab Loan Program would be administered in a similar fashion to the proposal outlined for the MHFA home improvement loan program. He stated he has been working more on the single family programs in order to get the pre- screening application process started, but this program would be available this summer as well. The HRA did not have specific questions of staff. 9. RICE PLAZA UPDATE: Ms. Dacy had nothing further to report about the monthly rent statement for Rice Plaza. 10. FOLLOW-UP ON LAKE POINTE BID INFORMATION: Ms. Dacy stated that Mr. Meyer had requested this information to ,� determine the alternate A and alternate B bid requests. HOIISING & REDSVELOPMENT AIITHORITY MEETINa, MAY 20. 1993 - PAaE 8 � 11. FOLLOW-UP ON TAXES FOR HRA PROPERTY: Ms. Dacy stated that Mr. Commers had requested this information. She stated she had provided copies of the tax statements for the HRA property at the southwest quadrant. The reason why the taxes increased was not because of an increase in the property valuation, but because of the school district referendum. 12. MEMO OF HRA ANNUAL REPORT FOR SUMMER NEWSLETTER: Ms. Dacy stated that the summer newsletter will contain the HRA annual report. Articles will include a feature on the housing programs with a picture of Grant Fernelius. Also, a picture and article will be published about the Sheet Metal Connectors property and Bob's Produce redevelopment project. Hopefully, a drawing of the Mississippi Street reconstruction will be included, as well as some pictures. Mr. Prairie asked whether or not information was going to be published about the Lake Pointe property. Ms. Dacy stated she has been working with Mr. Froehle on this, and it would be possibly a picture of the site and a short paragraph on the result of the joint HRA and City Council meeting on May 8, ,� 1993. She stated she had not yet had a chance to review this item with Mr. Burns. 13. UPDATE ON FRIDLEY TOWNE SQUARE REDEVELOPP�ENT PROJECT: Mr. Casserly reported that Mr. Wagner has said he needs to work on the final details on their partnership agreement with Don Fitch. Further, the construction financing with the bank had not been finalized, but Mr. Wagner reported that he does have control of the three properties. Mr. Casserly stated that Mr. Wagner had to resubmit the application to Walgreen since there was a change in management position in Walgreen's corporate structure. ADJOURNMENT: MOTION by Mr. Prairie, seconded by Mr. McFarland, to adjourn the meeting. Upon a voice vote, all voting aye, Acting Chairperson Meyer declared the motion carried and the May 20, 1993, Housinge& Redevelopment Authority meeting adjourned at 9:05 p.m. Respectfully submitted, / �. /"� Ly e Saba Recording Secretary