HRA 05/05/1994 - 6344CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, MAY 5, 1994, 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: April 7, 1994
ACTION ITEMS:
CONSIDER PROCEDURES FOR
INSPECTIONS FOR REHAB PROGRAMS . . . . . . . . . . . . . .
CONSIDER AMENDED TIF REQUEST, SCOTT LUND . . . . . . . . 2.1-2.7/
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . . 3.1-3.3 �° /
INFORMATION ITEMS:
SOUTHWEST QUADRANT UPDATE . . . . . . . . . . . . . . . . 4.1 -4.8
LAKE POINTE MARKETING UPDATE . . . . . . . . . . . . . . 5.1 -5.2
OTHER BUSINESS•
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 7, 1994
CALL TO ORDER:
Vice - Chairperson Schnabel called the April 7, 1994, Housing &
Redevelopment Authority minutes to order at 7:30 p.m.
ROLL CALL:
Members Present: Virginia Schnabel, John Meyer, Duane Prairie,
Jim McFarland
Members Absent: ..Larry Commers:
Others-Present*: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
Craig.Ellestad, Accountant
APPROVAL OF MARCH 17, 1994, HOUSING & REDEVELOPMENT AUTHORITY
MINUTES•
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the
March 17, 1994, Housing & Redevelopment Authority minutes as
written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
1. CONSIDER PROGRAM CHANGES TO SINGLE FAMILY REHAB PROGRAM:
Mr. Fernelius stated that as indicated in the memo to William Burns
dated March 30, 1994, on this subject, staff is proposing a number
of changes to the housing rehab programs. over the past month,
staff has analyzed the program in order to see.how the program can
be improved.
Mr. Fernelius stated staff experienced several problems with the
program:
1. The application process took too long. A generic
application form was used which requested basic
information. From that application, staff screened out
those people who did not qualify for the various
programs. The problem with this process was that from
the time the application window opened until it ended,
there was a least a month lag during which people had to
wait to find out if they were even eligible to be
considered for any of the programs. Then, the actual
application process, underwriting, and review period took
place.
HOUSING & REDEVELOPMENT AUTHORITY MTG., APRIL 7. 1994 - PAGE 2
2. The actual prescreening process was not very helpful when
it came to the loan and mortgage programs which are based
more on a person's credit history and ability to pay;
issues that the City really does not have the ability to
examine.
3. The deferred loans (a small subsidy to be provided by the
HRA in order to make the financing affordable) really
were not necessary, particularly for the MHFA Home
Improvement Loan Program. The reason for that is that
MHFA reduced the. interest rates for.-that program about
a percentage point, so. it was a significant enough
reduction- where financing was already- affordable.
Additional HRA..money really was-not necessary.' =
4. The housing rehab inspections took too long and were not
useful to the homeowners. The inspectors were not
finding very significant violations. Most of the
properties were in fairly good condition. Staff also had
difficulty in finding competent and qualified inspectors
to do the rehab inspections.
Mr. Fernelius stated staff would like the HRA to approve the
following changes:
1. Staff would like to take
first -serve basis for the
It is important to get t1
programs into the lender
underwriting and credit re
prescreening and check it
that it takes a bank to eN
applications on a first -come,
loan and mortgage programs.
ie applications for these two
as quickly as possible for
view. Staff can do some basic
icome eligibility, but beyond
Falcate the applications.
For the grant program, staff would still like to use the
prescreening process. Staff believes that financial need
is a very important criteria, and they need to make sure
the money is going to those people whose homes are in
poor condition and who do not have the resources to make
repairs.
2. Staff would like to change how the HRA funds are going
to be used. The original idea behind using the HRA
dollars was to provide "gap financing ". Staff went away
from that approach for a couple of reasons, but has since
decided that it is not such a bad idea given the fact
that the MHFA interest rates have been reduced, and they
would be using the dollars only in situations where they
are needed. The maximum amount of assistance would
increase slightly, from $2,200 to about $3,700. That
amount would vary depending upon how much money a person
wanted to borrow and could qualify for. Staff also wants
to stress that not everyone who comes in would receive
HRA help.
HOUSING & REDEVELOPMENT AUTHORITY MTG.,.APRIL 7, 1994 - PAGE 3
3. Staff would like to. eliminate the rehab inspections. As
he explained earlier, the inspections took a great deal
of time, and staff is concerned about the quality of
inspections. Neither Fannie Mae nor MHFA requires an
inspection for either of their loan programs. To create
that extra requirement is a time factor that really plays
into the whole application process and makes it much
longer than it needs to be. A lot of this work is going
to be covered under a building permit, so the building
inspector will look at the work to make sure the work is
done to. code. So, there is some-control over how the -
work is. done.
Ms-. Schnabel.' stated she -.believed it. is * wonderful. how _staff . has
stepped back and taken a look at the things that have worked and
have not worked as*well' and staff's.'willingness to adjust.
Mr. Meyer stated he is puzzled- about a number of things. There
seems to be a disparate series of problems, and he is trying to
figure out how staff's suggested solutions fit into the problems.
Regarding the first problem about the application process taking
too long and requiring a significant wait for most people, how does
the length of the process enter into this?
Mr. Fernelius stated that in some cases, the wait was much longer
than a month. Once the people got through the prescreening
process, they were notified that they were going to be selected for
the program. Then an inspection had to take place. There was some
time in order to get the inspection done. Then, the inspection
report had to be filled out and sent back. Then, the homeowner had
to get bids, and the bids had to include whatever items were cited
on the inspection report. That whole process took several months.
Part of the problem was, again, the inspection requirement, and
part of the problem was that people had to fill out a separate
credit application required by MHFA. Had that information been
provided at the beginning, staff could have processed them more
quickly. The whole prescreening process seemed to slow things down
on the front end. A first -come, first -serve process would make the
process move quicker.
Mr. Meyer stated that when this program was first set up, it was
his wish that they would give everyone an equal chance by
publicizing the program and having the applications open for a
certain period of time. He believed this was a fairer way to
compete for public monies. Then, the inspection process examined
the property to determine the worthiness of the application.
Mr. Meyer stated that it sounds like staff is recommending that
they delete what he believes are two rather important safeguards
for the public dollars....by giving people an equal chance to apply
and to let people know at the very onset whether their particular
property is worthy of public monies. He was not so concerned about
the efficiency of time as he was about some other things.
HOUSING & REDEVELOPMENT AUTHORITY MTG., APRIL 7, 1994.- PAGE 4
Mr. Meyer stated staff had stated that the City does not have the
resources to do credit checks, and that did make sense.
Mr. Prairie asked how the program was publicized.
Mr. Fernelius stated they publicized the program through the Focus
News, the City newsletter, and the cable access channel. The
article in the City newsletter generated over 50% of the response
rate.
Mr. Fernelius stated that they will still be using the prescreening
process for the block grant program: The other programs are stand-
alone.and operate.throughout the state.
Ms. Dacy stated that with the MHFA-and Fannie Mae programs,.*the
people applying for monies are required to do code-improvements;
which is the City's objective as well. What they are seeing with
loan programs is that the public sector is losing as compared to
the private sector. The City's objective is to get people to
improve their housing. With the MHFA and Fannie Mae's programs,
the real crux of whether or not these people are going to get a
loan is their willingness to pay and their credit history. This
is a different kind of applicant than the grant applicant. Instead
of having them wait 30 days to get a determination from Mr.
Fernelius, staff wants to speed up that turn - around time. As long
as the checks are there for code.improvements, staff believes they
can accomplish the same thing.
Mr. Meyer asked if staff is proposing to eliminate the initial
rehab inspections. For example, if a person applies for money from
a bank for code improvements and public monies are involved, how
does the HRA or the City know what these code improvements are or
if the improvements are necessary?
Ms. Dacy stated the loan documents are conditioned upon those
improvements being completed, and the applicant has to specify
those improvements. The MHFA loan program has specific conditions
as does the City's agreement with Fannie Mae. The City's way of
making sure the code improvements are being completed properly is
through the building permit process.
Mr. Meyer stated the building permit inspections are after the
fact, after the money has already been spent. Who decides whether
the code improvements are necessary?
Ms. Dacy stated that if someone is applying for a roof versus a
furnace, the City is not in the business of deciding which comes
first. Improvements related to the structural quality or major
systems such as electrical, plumbing, and heating are permitted
code improvements. Adding a jacuzzi, for example, is prohibited.
As long as the applicant is proposing code improvements, that is
consistent with the HRA's objective.
HOUSING & REDEVELOPMENT AUTHORITY MTG.. APRIL 7. 1994 - PAGE 5
Mr. Fernelius stated that on the loan application, the applicants
must list what improvements they are going to make, provide copies
of estimates from contractors and provide signed warranties. If
the loan application meets the criteria of the program which would
be code -type improvements, the applicant would be approved for the
loan. The loan would be disbursed to the borrower. The applicant
would come in for a building permit, and the work would begin.
Mr. Meyer stated he is concerned about the person who wants to get
cheaper money to put in a new electrical system or a fancier
plumbing system, - none of which are -good, enough reasons to 'use
public•monies. :
Ms. Schnabel stated. the. money :that *the HIM* is giving .is just. the
gap financing which is only used -when necessary. The rest of the
home improvement loans will go -through MHFA or Fannie Mae, and she
would think it is up to these agencies to regulate their programs.
Ms. Dacy stated she did not think this money is a "gravy train"
for someone who is trying to take advantage of the system. With
the Fannie Mae program, the homeowner must have $15,000 worth of
improvements. The larger issue is that they are trying to
encourage people to upgrade and update their homes, because the
city is competing with other suburbs that have aggressive programs.
Mr. Meyer stated that history has proven that people spend a lot
of time trying to beat the system, and it isn't just confined to
housing. He believed it would behoove the HRA to have'some kind
of initial control as to whether the improvements are really
necessary. Otherwise, they should just turn it all over to the
private lenders.
Ms. Dacy stated that, on the flip side, the HRA's extra 5% on the
Fannie Mae program can help pay closing costs. It might be that
extra little help that helps a person who really needs it.
Mr. Meyer agreed, but stated they need to make sure that they are
helping someone who really needs the help. He would like to see
them stay with the pre- inspection where a knowledgeable inspector
says the proposed improvements are legitimate or not legitimate.
Ms. Dacy asked if Mr. Meyer would like an inspection after the
person has applied for a loan as opposed to an inspector making a
general inspection and identifying code deficiencies. Instead,
the inspector would go through the building and make sure the
improvements listed on the application are legitimate improvements.
Mr. Meyer stated Ms. Dacy raised a good point, that the inspector
look only at the improvements the homeowner has listed on the loan
application. That way, they could still keep the initial
inspection aspect.
Mr. Meyer stated that regarding first -come, first -serve versus
taking applications for a certain time period as was done this
HOUSING & REDEVELOPMENT AUTHORITY MTG:, APRIL 7. 1994 - PAGE 6
year, he preferred the latter. This was the first year for the
program, and a first time program always attracts a lot of people.
It is possible that with the second year, they could have lesser
applicants and the total time involvement could be considerably
less. He suggested that they stay with the original method for one
more year.
Mr. McFarland asked Mr. Fernelius how many people fell through the
cracks during the waiting period.
Mr. Fernelius stated he had 61 total applications for the.housing
rehab programs. Fourteen applications-were denied. Eleven people
withdrew from the -program... for" a variety of reasons: Eighteen
applications. are in ' .process, ' and` • •18 , loans or -grants have, been
approved.- For the home - improvement-. loan program, 26 ' people
applied, three were denied, five withdrew; 14 are still in process,
and four loans or grants have been approved.
Mr. Prairie stated he had no strong feelings either way as far as
changing the process or the inspections.
Mr. McFarland stated the HRA has.committed $400,000 for the housing
rehab programs, and only $162,000 has been spent, so they are
obviously not getting to the people they would like to get to,
whether through the application process or whatever. Since they
have a screening process that is going to limit the grants to those
people who are on the lower end of the spectrum, they will get.to
them sooner or later if the program goes long enough. He believed
they have to have something in the program to make sure that the
program is working.
Ms. Dacy stated that at the next meeting, she. and Mr. Fernelius
could discuss and make a recommendation on the issue of inspections
on the loans and confirming the types of improvements that are
listed on the applications. She feels strongly that on the loan
program, they should try to get people in and out as soon as
possible to get the momentum going in the neighborhoods and get
people to take advantage of the low interest rates.
Ms. Dacy stated the other issue with the Fannie Mae program is if
a person is trying to buy a house, the prescreening process can
really slow down the process. She stated the City wants to be more
like the MHFA where they have programs running throughout the year.
Ms. Dacy stated that if the HRA concurs with recommendations #1 and
#2, with the exception of recommendation #3, staff will make a
report on inspections at the May meeting. Staff would like to
proceed with the other items.
Mr. Meyer stated that if the prescreening process does not seem
practical and it can be dropped successfully,. he could see no
problem with dropping the prescreening process.
HOUSING & REDEVELOPMENT AUTHORITY MTG., APRIL 7. 1994 - PAGE 7
Mr. Meyer stated he believed staff could try the first -come, first -
serve basis if it. seems a burden. But, they should be aware of any
dissent from the residents.
Ms. Schnabel stated that they can try it for one year; and if it
is not successful, they can-always change back.
MOTION by Mr. McFarland, seconded by Mr. Meyer, to approve staff's
recommendations #1 and #2:
1. Take applications on a first -come, first -serve basis and
eliminate prescreening.: This action would reduce the
application process significantly and wake. the programs
more accessible to.: homeowners-. Prescreening would;.
however, be* used-for selecting candidates for home
improvement grants.
2. Provide deferred loans to applicants who cannot qualify
for all of the necessary home improvement loan financing.
Applicants who need "gap financing" could receive a
deferred loan from the HRA for up to $3,750. The
deferred loans would accrue interest at the same rate as
the MHFA loan but would not have to be repaid until the
house is sold.
Staff is to report back on staff recommendation #3 regarding rehab
inspections for loan and mortgage programs.
UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
2. CONSIDER RESOLUTION NO. HRA 3 - 1994 AUTHORIZING MHFA FIRST -
TIME HOMEBUYER APPLICATION:
Mr. Fernelius stated that the Minnesota Housing Finance Agency
(MHFA) will again be selling bonds for a first -time homebuyer
program (Minnesota Cities Participation Program). Cities
throughout the state can apply for up to $4 million. Last year,
the City of Fridley applied for $2,249,000 and received $1,161,000.
With that program, one loan was made and five loans are in process.
Mr. Fernelius stated the City would like to again apply and request
$1,500,000. Staff is recommending that the HRA approve a
resolution authorizing staff to prepare an application for the 1994
Minnesota Cities Participation Program.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve
Resolution No. HRA 3 - 1994, "A Resolution Authorizing the
Submission of an Application for the Minnesota Housing Finance
Agency's 1994 Minnesota Cities Participation Program."
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
HOUSING & REDEVELOPMENT AUTHORITY MTG., APRIL 7-, 1994 - PAGE 8
3. CONSIDER RESOLUTION NO. HRA 4 - 1994 AUTHORIZING 1994 HOME.
APPLICATION•
Mr. Fernelius stated this is a good opportunity for the City of
Fridley to apply for HOME funds provided by HUD and allocated to
Anoka County. Last year, the City received $70,000 in HOME funds
which were used for the home improvement grant program. Staff
recommends they do the same this year. A match of $17,500 is
required of the HRA, so the total funds that would be available
would be $87,500.
Mr. Fernelius stated these funds have to be targeted to low income
homeowners .within a specific neighborhood. Staff has identified
two target lzeighborhoods based on census -data for funding. At -a
minimum, they could make at least eight grants within one of these
two. areas. This supplements-. the block grant funds the City also
receives from the County.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve Resolution
No. HRA 4 - 1994, "A Resolution Authorizing the Submission of an
Application to Anoka County for 1994 HOME Funds" and designate Area
#2 as the neighborhood for these funds.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
4. CLAIMS & EXPENSES:
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the
check register (checks 25070 - 27084) except checks 25083 and 25084
which were voided.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
5. CONTINUE DISCUSSION OF SOUTHWEST QUADRANT:
Ms. Dacy stated the Council has directed staff to interview
developers who have a lot of experience with the mixed use
approach. She stated that at the May meeting, staff will give the
HRA an update on the meetings with these developers.
Ms. Dacy reviewed the three scenarios (townhomes -low density; mixed
use - commercial & higher density; and high intensity development,
possibly owner - occupied condominiums) which she had presented at
the March meeting. She stated staff is not looking for any formal
action from the HRA at this meeting.
Mr. Prairie stated he would be interested in a tour of some of the
developers' projects.
Mr. Prairie stated that the southwest quadrant is kind of a
downtown area. Has anyone developed residential on a similar
location?
HOUSING _& REDEVELOPMENT AUTHORITY MTG., APRIL 7. 1994 - PAGE 9
Ms. Dacy stated the closest similar site is in New Brighton at 10th
and 5th. She believed it is a viable site for residential. There
are single family homes on Mississippi Street all the way from
Highway 65 to the River; and even though this is a downtown area,
a residential development is appropriate because it mixes in well
with the adjacent land uses.
Mr. Prairie and Mr. Meyer agreed that the George Sherman &
Associates' brick apartment building with high density would fit
well on this corner.
Ms:..Dacy stated. the* Council would like to pursue a Sherman type*
building with condos or rental on top with , some retail shops •on the
first floor: They like-the-idea of-gearing the.housing toward the
empty nester /senior market.
Mr. Prairie stated he would not be in favor of a general occupancy
apartment building because of the problems associated with
apartment buildings.
Mr. Meyer stated he agreed. There seems to be more problems with
apartment buildings. He would be more in favor of a owner- occupied
development if it gives them the development they want and helps
control the neighborhood.
Mr. Prairie stated that whatever the development, it should be done
well with a lot of landscaping.
Mr. Meyer suggested a Sherman -type building with partial retail on
the corner with townhomes behind it that would fit in better with
the existing residential neighborhood.
Ms. Schnabel stated she did not think she would like the look of
commercial that is visible from University and Mississippi.
Mr. Prairie agreed. The access is difficult, and he would
recommend very little retail.
Mr. McFarland stated the retail would have to rely strictly on the
building's residents.
Ms. Schnabel stated that regarding the schematic submitted by the
Bel Aire /LaNel Financial Group, she liked the way the mixed use
buildings were angled on the property.
Ms. Schnabel stated if staff finds an example of a mixed use
building with retail on the first floor and condominiums above, it
might be helpful for the HRA to visit the site.
Ms. Schnabel stated that a residential development, whether
townhomes or condominiums, on the southwest quadrant might spur
some development on the northeast corner.
HOUSING & REDEVELOPMENT'AUTHORITY MTG., APRIL 7, 1994 - PAGE 10
6. UPDATE ON LAKE POINTE MARKETING:
Ms. Dacy stated she had met with their consultant, Merrill Busch,
on Wednesday, April 6. The brochure and the inserts are almost
done. The inserts include demographic and employment data, school
district information, a site map of the Lake Pointe property, and
a list of testimonial statements from Medtronic, Onan, FMC, and
other key people in industry.
Ms. Dacy stated that they will be displaying the brochure at the
Commercial Real Estate Exhibition on Wednesday, *April 13, 1994,
from 3:30 =7:30 p.m. If any.of the HRA members could.attend•, she
�would.arrange for tickets.
Mr. Meyer stated he would like to attend.
ADJOURNMENT:
MOTION by Mr. McFarland, seconded by Mr. Prairie, to adjourn the
meeting. Upon a voice vote, all voting aye, Vice - Chairperson
Schnabel declared the motion carried and the April 7, 1994, Housing
& Redevelopment Authority meeting adjourned at 9:05 p.m.
Res ectfully s�,.ibmitted,
Ly a Saba
Re ording Secretary
�o
1.1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 28, 1994 1
TO: William Burns, Executive Director of HRA
M
FROM: Barbara Dacy,.Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Pre - Rehabilitation Inspections for the Housing
Program
After our meeting with HRA member, John Meyer, on April 28, 1994,
we have developed several changes with regard to the pre -
rehabilitation inspections. We plan to implement these changes for
the next phase of the housing rehab program, assess the impact,
and report back to the HRA in three to four months.
Recommendation
Staff recommends the HRA authorize staff to make the following
changes to the Housing Rehabilitation Program:
1. Pre - inspections will only be required for applicants to
the Home Improvement Loan Program who require HRA gap
financing. The inspections will be used to verify
proposed improvements and not minimum repairs.
2. Pre - inspections will not be required for applicants to
the Home Mortgage Assistance Program. United Mortgage
will utilize the phone inspectors to verify the proposed
work.
3. No changes will be made to the Home Improvement Grant
Program with.regard to inspections.
GF:ls
M -94 -238
a° 0
2.1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 29, 1994
TO: William Burns, Executive Director of HRA 44A.,
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Amended TIF Request, Scott Lund
Scott Lund of Rite -Way Mobile Home Repair, Inc., is proposing to
construct a 13,000 square foot office warehouse building on the
north side of 73 1/2 Avenue just east of Highway 65. Lund
originally requested TIF assistance of 5% of the total project
cost, or approximately $17,000. This was based on a project cost
of $230,000.
Since the HRA consideration in March, Lund received actual bid
estimates of the project which equal approximately $364,840.
Adding land costs and soft costs to the construction bids equals
a total project cost of $494,800. Lund has subsequently requested
a 10% assistance amount in order to complete the project.
Lund has applied for SBA 504 financing. Jim Casserly has prepared
a revised spread sheet for the project. If 10% was approved on a
pay -as- you -go basis ($49,800), the amount of assistance would be
recovered in the year 2003. The Onan district expires in the year
2014. Of the total tax increment generated ($209,507), the HRA
would retain $20,951 in administrative fees and $115,669 for its
redevelopment activities.
The HRA's current TIF policy for pay -as- you -go assistance is 5% of
the project costs. For loan requests, the amount of assistance can
increase to 15 %. Casserly is in the process of reviewing the
developer's proforma, and we are also working with the petitioner
to determine if assistance through a loan would be feasible.
Recommendation
Staff will present a recommendation at the May 5, 1994, meeting.
BD:ls
M -94 -240
iPP -15 —'94 94 FRI 1� =t: 1 Ire: Fri' =; INC. TEL hdi =i: ";= ;r, —?� ^ � t�53 F' t
2.2
RITE-WAY MOBILE HOMES REPAIR, INC.
USES QF FUNDS
Land $ 83,000
Building Construction 364,840
Soft Costs /Contingencies 40.160
SUBTOTAL $4881,000
Plus: SBA Debenture Pricing 6,800
TOTAL USES OF FUNDS S49
Bank $2441000
SBA (includes Debenture Pricing) 2021000
Equity
TOTAL SOURCES OF FUNDS 49a
2.3
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
Attention: W' iam Burns
arbara Dacy
FROM:
Mary E. Molzahn
James R. Casserly
RE:
Proposed Scott Lund Project
DATE:
April 21, 1994
Enclosed please find two revised cash flow analyses. Both
analyses reflect the following:
1. increased construction costs from $230,000 to $364,840
2. increased TIF Assistance from $17,000 (5.0% of total costs
of $340,000) to $$49,480 (10.0% of total costs of $494,800).
As shown on Schedule A, the result of these modifications is the
generation of $209,507 in tax increment.through 2014. After
retention of 10% or $20,951 for administrative expenses,
approximately $188,556 in tax increment is available for project
costs. The present value of this available tax increment is
$90,235.
Schedule B reflects the payment of $49,480 in requested TIF
Assistance over 14.5.years, terminating in June, 2003. Of the
total tax increment generated ($209,507), the HRA would retain
$20,951 in administrative fees, $115,669 would be available for
its redevelopment activities, and $72,887 would be available for
the revenue note to the Developer. Assuming a 7.5% interest
rate, the $72,887 represents the principal amount of $49,480 and
interest of $23,407.
LUND2 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
SCHEDULE
B
2.4
CITY OF
FRIDLEY, MINNESOTA
PROPOSED SCOTT LUND PROJECT
7.502
PV RATE
ORIGINAL
ESTIMATED
CAPTURED
ESTIMATED
LESS:
AVAILABLE
AVAILABLE
PRESENT VALUE ANALYSIS
TAX
TAX
TAX
TAX
ADMIN
FOR
FOR
SEMI ANNUAL CUMULATIVE
DATE
CAPACITY
CAPACITY
CAPACITY
INCREMENT
FEES
HRA
DEVELOPER
BALANCE
BALANCE
6/
1994
7,068
7,068
0
0
0
0
0
0
0
12
/ 1994
7,068
7,068
0
0
0
0
0
0
0
6/
1995
7,068
16,546
0
0
0
0
0
0
0
12
/ 1995
7,068
16,546
0
0
0
0
0
0
0
6
/ 1996
7,068
16,546
9,478
5,513
551
(0)
4,962
4,283
4,283
12
/ 1996
7,068
16,546
9,478
5,513
551
(0)
4,962
4,128
8,410
6
/ 1997
7,068
16,546
9,478
5,513
551
(0)
4,962
3,979
12,389
12
/ 1997
7,068
16,546
9,478
5,513
551
(0)
4,962
3,835
16,224
6
/ 1998
7,068
16,546
9,478
5,513
551
(0)
4,962
3,696
19,920
12
/ 1998
7,068
16,546
9,478
5,513
551
(0)
4,962
3,563
23,483
6
/ 1999
7,068
16,546
9,478
5,513
551
(0)
4,962
3,434
26,916
12
/ 1999
7,068
16,546
9,478
5,513
551
(0)
4,962
3,310
30,226
6
/ 2000
7,068
16,546
9,478
5,513
551
(0)
4,962
3,190
33,416
12
/ 2000
7,068
16,546
9,478
5,513
551
(0)
4,962
3,075
36,491
6
/ 2001
7,068
16,546
9,478
5,513
551
(0)
4,962
2,964
39,454
12
/ 2001
7,068
16,546
9,478
5,513
551
(0)
4,962
2,857
42,311
6
/ 2002
7,068
16,546
9,478
5,513
551
(0)
4,962
2,753
45,064
12
/ 2002
7,068
16,546
9,478
5,513
551
(0)
4,962
2,654
47,718
6
/ 2003
7,068
16,546
9,478
5,513
551
1,543
3,419
1,762
49,480
12
/ 2003
7,068
16,546
9,478
5,513
551
4,962
6
/ 2004
7,068
16,546
9,478
5,513
551
4,962
12
/ 2004
7,068
16,546
9,478
5,513
551
4,962
6
/ 2005
7,068
16,546
9,478
5,513
551
4,962
12
/ 2005
7,068
16,546
9,478
5,513
551
4,962
6
/ 2006
7,068
16,546
9,478
5,513
551
4,962
12
/ 2006
7,068
16,546
9,478
5,513
551
4,962
6
/ 2007
7,068
16,546
9,478
5,513
551
4,962
12
/ 2007
7,068
16,546
9,478
5,513
551
4,962
6
/ 2008
7,068
16,546
9,478
5,513
551
4,962
12
/ 2008
7,068
16,546
9,478
5,513
551
4,962
6
/ 2009
7,068
16,546
9,478
5,513
551
4,962
12
/ 2009
7,068
16,546
9,478
5,513
551
4,962
6
/ 2010
7,068
16,546_
9,478
5,513
551
4,962
12
/ 2010
7,068
16,546
9,478
5,513
551
4,962
6
/ 2011
7,068
16,546
9,478
5,513
551
4,962
12
/ 2011
7,068
16,546
9,478
5,513
551
4,962
6
/ 2012
7,068
16,546
9,478
5,513
551
4,962
12
/ 2012
7,068
16,546
9,478
5,513
551
4,962
6
/ 2013
7,068
16,546
9,478
5,513
551
4,962
12
/ 2013
7,068
16,546
9,478
5,513
551
4,962
6
/ 2014
7,068
16,546
9,478
5,513
551
4,962
12
/ 2014
7,068
16,546
9,478
5,513
551
4,962
209,507
20,951
115,669
72,887
49,480
49,480
LUND2 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
ORIGINAL MARKET VALUE
12- 30 -24 -24 -0011
12- 30 -24 -24 -0012
12- 30 -24 -24 -0013
12- 30- 24- 24-0044
ORIGINAL TAX CAPACITY
12- 30 -24 -24 -0011
12- 30 -24 -24 -0012
12- 30 -24 -24 -0013
12 -30 -24-24 -0044
ESTIMATED CONSTRUCTION CASTS
ESTIMATED MARKET VALUE - BLDG
ESTIMATED MARKET VALUE - LAND
12 -30 -24-24 -0011
12- 30 - ?4 -24 -0012
12- 30 -24 -24 -0013
12 -30 -24-24 -0044
ESTIMATED MARKET VALUE - PROJECT
ESTIMATED TAX CAPACITY
CONSTRUCTION
VALUATION
TAXES PAYABLE
ESTIMATED 1994 TAX RATE
ESTIMATED TAXES
ESTIMATED TAXES /SQUARE FOOT
ADMIN FEES
INFLATION
PV RATE
CITY OF FRIDLEY, MINNESOTA
3.00%
REQUESTED TIF ASSISTANCE - 10.0% OF 494,800 (TOTAL CASTS)
12,300
6,200
9,100
112,100
622
314
460
5,672
80.00%
12.300
6,200
9.100
75.000
4.60%
1994
1995
1996
1.163434
13,000 SF
10.00%
0.00%
7.50%
139,700
7,068
364,840
291,872
102,600
394,472
16,546
19.250
1.48
49,480
2.5
LUND2 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
SCHEDULE A
2.6
CITY OF FRIDLEY, MINNESOTA
PROPOSED SCOTT LUND PROJECT 7.50% PV RATE
LUND1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
ORIGINAL
ESTIMATED
CAPTURED
ESTIMATED
LESS:
AVAILABLE
PRESENT VALUE ANALYSIS
TAX
TAX
TAX
TAX
ADMIN
TAX
SEMI ANNUAL CUMULATIVE
DATE
CAPACITY
CAPACITY
CAPACITY
INCREMENT
FEES
INCREMENT
BALANCE
BALANCE
6/
1994
7.068
7,068
0
0
0
0
0
0
12
/ 1994
7,068
7.068
0
0
0
0
0
0
6/
1995
7,068
16.546
0
0
0
0
0
0
12
/ 1995
7,068
16,546
0
0
0
0
0
0
6
/ 1996
7,068
16,546
9,478
5,513
551
4,962
4,283
4.283
12
/ 1996
7,068
16,546
9,478
5.513
551
4,962
4.128
8,410
6
/ 1997
7.068
16,546
9.478
5,513
551
4.962
3,979
12,389
12
/ 1997
7,068
16,546
9.478
5.513
551
4,962
3.835
16.224
6
/ 1998
7,068
16,546
9.478
5.513
551
4,962
3.696
19,920
12
/ 1998
7.068
16,546
9.478
5,513
551
4,962
3.563
23,483
6
/ 1999
7.068
16.546
9,478
5.513
551
4,962
3.434
26,916
12
/ 1999
7,068
16.546
9.478
5,513
551
4,962
3,310
30,226
6
/ 2000
7.068
16.546
9.478
5,513
551
4,962
3.190
33,416
12
/ 2000
7.068
16,546
9,478
5.513
551
4.962
3,075
36,491
6
/ 2001
7,068
16,546
9,478
5,513
551
4,962
2,964
39,454
12
/ 2001
7,068
16,546
9.478
5.513
551
4.962
2.857
42,311
6
/ 2002
7,068
16.546
9,478
5.513
551
4,962
2,753
45,064
12
/ 2002
7,068
16,546
9,478
5.513
551
4,962
2.654
47,718
6
/ 2003
7.068
16,546
9,478
5,513
551
4,962
2.558
50,276
12
/ 2003
7.068
16.546
9.478
5.513
551
4,962
2.465
52.741
6
/ 2004
7.068
16,546
9.478
5.513
551
.4.962
2.376
55.117
12
/ 2004
7.068
16.546
9,478
5,513
551
4.962
2.290
57.408
6
/ 2005
7,068
16,546
9.478
5,513
551
4.962
2.208
59,615
12
/ 2005
7,068
16,546
9,478
5,513
551
4,962
2.128
61.743
6
/ 2006
7,068
16.546
9,478
5.513
551
4,962
2.051
63.794
12
/ 2006
7,068
16,546
9,478
5,513
551
4,962
1,977
65,771
6
/ 2007
7,068
16,546
9,478
5,513
551
4,962
1,905
67,676
12
/ 2007
7.068
16,546
9,478
5,513
551
4.962
1,836
69,513
6
/ 2008
7,068
16,546
9,478
5,513
551
4,962
1,770
71,283
12
/ 2008
7,068
16,546
9.478
5.513
551
4,962
1,706
72,989
6
/ 2009
7.068
16.546
9.478
5.513
551
4.962
1.644
74.633
12
/ 2009
7,068
16,546
9.478
5.513
551
4,962
1,585
76,218
6
/ 2010
7,068
16,546
9,478
5,513
551
4.962
1,528
77,746
12
/ 2010
7,068
16,546
9.478
5,513
551
4.962
1,472
79.218
6
/ 2011
7,068
16,546
9.478
5,513
551
4.962
1,419
80,638
12
/ 2011
7,068
16,546
9,478
5,513
551
4,962
1,368
82,006
6
/ 2012
7,068
16,546
9,478
5,513
551
4.962
1,319
83,324
12
/ 2012
7.068
16,546
9.478
5,513
551
4,962
1,271
84,595
6
/ 2013
7,068
16.546
9.478
5,513
551
4,962
1,225
85.820
12
/ 2013
7,068
16.546
9,478
5,513
551
4,962
1,181
87,001
6
/ 2014
7,068
16,546
9,478
5,513
551
4,962
1,138
88,139
12
/ 2014
7.068
16,546
9.478
5.513
551
4,962
1,097
89.235
209.507
20.951
188,556
89.235
89,235
LUND1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
CITY OF FRIDLEY, MINNESOTA
ORIGINAL MARKET VALUE
139,700
12- 30 -24 -24 -0011
12,300
12- 30 -24 -24 -0012
6,200
12- 30 -24 -24 -0013
9,100
12- 30 -24 -24 -0044
112,100
ORIGINAL TAX CAPACITY
7,068
12 -30 -24-24 -0011
622
12- 30 -24 -24 -0012
314
12 -30 -24-24 -0013
460
12 -30 -24-24 -0044
5,672
ESTIMATED CONSTRUCTION COSTS
80.00%
364,840
ESTIMATED MARKET VALUE - BLDG
291,872
ESTIMATED MARKET VALUE - LAND
102,600
12- 30 -24 -24 -0011
12,300
12 -30 -24-24 -0012
6,200
12 -30 -24-24 -0013
9,100
12 -30 -24-24 -0044
75,000
ESTIMATED MARKET VALUE - PROJECT
394,472
ESTIMATED TAX CAPACITY
3.00% 4.60%
16,546
CONSTRUCTION
1994
VALUATION
1995
TAXES PAYABLE
1996
ESTIMATED 1994 TAX RATE
1.163434
ESTIMATED TAXES
19,250
ESTIMATED TAXES /SQUARE FOOT
13,000 SF
1.48
ADMIN FEES
10.00%
INFLATION
0.00%
PV RATE
7.50%
REQUESTED TIF ASSISTANCE - 10.0% OF 494,800 (TOTAL COSTS) 49,480
2./
LUND1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 20 -Apr -94
3.1
P r . o�IAnOOMOr000.o�poMOMOO.oNO s
\ • Z . ll I C! O0U1��- �N10.00%t 00 M
U1 . � � Or•�pOa- .OE0000. �If1�0t•�NpppO,�If�f�NUMM� eMD
twa ; ; oN UINCNOCM��ullanc �� SN a0
�U1.0��
O. z • M N_ t�
W • • �-
r . .
2
W • .
m . •
N .
O .
t .
• r
• � N W J
• . == C7 U Q
OC Oy W.Z -.-.VQ WO O
' Iw-1 C7E ccp WO W
• OC Z V1 co Wr mf
• • > ^
r 2J Jw 8
xx rON _ .
• O . mJ01 W4Q N. w J QQJ F- 2WOQYQ ce
aC7Q W I'M" i rZ Q OC
• . J Q�r S Oap 1409 Qd'£► -W �-. O INJ W
• r . >-.-. xN NQ • �- W Wr >�-. 2UrQ a"
d. OC m 4l co J 1.- N J J -1 ca au .. N J
Qom rNQ �ddrocoe,ma Lu
U. W Zi- W Zr OC QUU 25 C31IU{� N U W W
N• J r aa 1-p -C -C J W OC of YG W W O U
W • W QoCW W d,.-= 0. QpOQWO JOCu
• p . In mIL (a CA US ul _5 WdK
d .
W • •
Y . •
O • .
•
O: . YOC • U1.01�00 p.O NM�t {BCD PO a--N 't U1.0
w . UW • O.PO.O UMMMOOOOe --- r.-
O- . W m . 00 — - e- 7P�a -a-P
. U O• N N N N N N N N N
m N N N N N N � Z • N N N
to �
Y + .
U � .
W �
S
a � '
• H N J J W
• De Q O Q
i
r r Z 2 IL N Z U
• r O Iwi U-
%,1.- W QOU .Z-.
• OC 2 Z Z •+. W U r 2
• • .w. W Z W W W W .-. J Q
O!O�rmww NONLLOr.� -. «O Z
r . • 13 w3.. W ►. O QOe1 =:O-W
z . • Ur r-1 w r u.. a!�"a a- ZM xZZN
Qw0 �.-. 3r oaarz
W • W . WW yQ..r ZZO-OCO
x E. W U OC> r of >-NUN
O_ • Q . J UJO rQ> > > >NQOay
_ o z m m a c� c� > o! r u ai
O W OC . p W W pC W w-1 QS r
>• O Z J$ V1 J S W Q J Q W J r> W a x N
In W . p W O r0 Zr cc W cn _ 09 022 Um
Ln In W . W . W OCU WOC U-Z+Z 60Ld dOC .- ..Z�.Z.�y W
P . > pti .-. CO IL ..£ O m IL m ULL.
z .
s d • i
P
pp\.. C7 �
N O-z-. i
\%n N
.t M 73
C7 x • i
W £> . . Q%01 Q O0•PPPP PP P PPPPPO�.P Off•
0' Q W . Y W • \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \
d w-i . Ur • m0007 mN N N N a;ao0 PPP% 000%O.
O_ p . WQ . OOOONNNNNNNNNN NN IV fL
O: OC . U
o a� .
TO: FRIDLEY H.R.A
FROM: CITY OF FRIDLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
APRIL 1994
ADMINISTRATIVE BILLING:
ADMINISTRATIVE PERSONAL SERVICES
ADMINISTRATIVE OVERHEAD
TOTAL ADMINISTRATIVE BILLING:
OPERATING EXPENSES:
POSTAGE BY PHONE
POSTAGE BY PHONE
U.S. WEST - TELEPHONE SERVICE
REGISTRATION - COMM R/E CONF
BENEFITS EXPENSES:
CITY OF FRIDLEY - HEALTH INS
CITY OF FRIDLEY - APR DENTAL INS
CITY OF FRIDLEY - APR LIFE INS
Account #'s for
HRA's Use
3.2
Account #'s for
City's Use
14,255.00 101 - 0000 -341 -1200
275.00 101 - 0000 -336 -3000
460 - 0000 -430 -4107 14.530.00
262- 0000 - 430 -4332
460- 0000 - 430 -4332
460- 0000 - 430 -4332
460- 0000 - 430 -4337
TOTAL OPERATING EXPENSES:
262 -0000- 219 -1002
262 -0000- 219 -1100
262 -0000 -219 -1200
TOTAL BENEFITS EXPENSES
TOTAL EXPENDITURES - APRIL 1994
File: \123DATA \HRAVnF\BIWNG.wk1 Details
33.46
236- 0000 -336 -3000
23.44
236 -0000- 336 -3000
12.45
236 -0000- 336 -3000
25.00
236 -0000- 336 -3000
94.35
0.00 236 -0000- 219 -1002
20.53 236 -0000- 219 -1100
4.25 236 -0000- 219 -1200
24.78
a
CD
a,
'SW;
Q
CO
n cc m
w�I
cc
o. z
C7 F
0
1--
W LU
2
OC �
U �
a :
W
O
ui
� aC
� fL
:
u
N W Z
C7 U
W W i
OC OC Q
H C7
a
� v
.a..
Y W
O �
W I.- : 5c 8
W W m U
OC J 1
J
x W
cn
U C-
I- w
2 W
ucza
_
.a
:
I
:
1-
:
2
W
a
O
CO J
C3 w .
O W W
W Q
P OC O
O
2 �
s a.
a � I-
;�-- 02
\ r N : U =
JS�ui
OC
v x :
O
w cx > i
c W
0.0
Iu0�
OL Ix De
a a. i
x O °c
H U= U O X
Y N W C
LU <
OC22 f-
cyv- CccLL
QOe�7<Q
m
OC OC F tY I-
0 0 0 0 0 0
0 0 0 0 Cl 0
�\0.
0 0 0 0 0 0
2 W
OOOOOOP
L� a o
0000
um"
ONO
\M
O 00 in ON
P P P P
�t
P
P
N
N
xxx
0 0 0 0 0 0
0 0 0 0 Cl 0
aP O0.PaP
co r.-
O N N N N
\ \ \ \ \ \
It v It Ir s �
01O NN
1r Ln LnLn
P P O. U Ol Ol
O
W
H
IA
W
U
O
OC
a
a
O
H
v
a
aN
K
F
oc
U
-O
3.3
0 0 0 0 0 0
2 W
OOOIA00
L� a o
NONPNN
um"
cm cm cm CY cm
MMM
10 %%0%0;99 10
M P M M, M
I � I
0 0 0 0 0 0
CO,
o_0000
xxx
P N P P
MOMMM MI
U U U
I-I-H
aaa
oP0000
mmm
Nf-NNNN
aP O0.PaP
co r.-
O N N N N
\ \ \ \ \ \
It v It Ir s �
01O NN
1r Ln LnLn
P P O. U Ol Ol
O
W
H
IA
W
U
O
OC
a
a
O
H
v
a
aN
K
F
oc
U
-O
3.3
a° 0
4.1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 29, 1994
TO: William Burns, Executive Director of HRA AW
FROM: Barbara Dacy, Community Development Director
SUBJECT: Southwest Quadrant Update
We continue to meet with a variety of developers regarding a
project for the southwest quadrant. Since the HRA meeting in
April, we have met with Frank Dunbar of Dunbar Development
Corporation, Frederick Furland of Ted Glasrud Associates, Inc.,
and Harry Yaffee., and Ken Belgarde of Belgarde Enterprises, Inc.
We reviewed the outcome of these meetings with the City Council in
its workshop session on April 25, 1994. The Council asked us to
meet again with Jim Winkels and LaNel. Financial to explore the
mixed use option in more detail.
Dunbar Development Corporation specializes in multiple family
projects which. are financed via an Essential Function Bond.
Glasrud Associates, Inc., sent a letter indicating that they would
not be interested in pursuing the site because of other projects.
Yaffee and Belgarde indicated that they would be prepared to
construct market rate rental apartments and townhomes. They were
going to contact us with more specific plans at a later point in
time.
The Council asked us to report back to them about the outcome of
another meeting with Winkels and LaNel Financial. They asked us
to inquire as to what types of commercial uses they would propose
in a mixed use development; what would it take to do the project
in one phase instead of a two phase approach; and what would it
take for a development to occur such that commercial is on the
first floor and residential units are the remaining stories of a
multiple story building.
We will provide an additional update to the HRA at the May 5th
meeting.
BD:ls
M -94 -241
4.2
NOTES FROM MEETING WITH FRANK DUNBAR
APRIL 13, 1994
1. Frank Dunbar is Presidentlof Dunbar Development Corporation.
Dunbar Development Corporation has constructed a number of
housing projects in Minnesota, Iowa, Wisconsin, and the
Dakotas. A notable project in Minneapolis is the Laurel
Village development in downtown Minneapolis next to Loring
Park.
2. There are only eight employees in the corporation, but they
have contracts with management companies, architects, and
construction companies.
3. They are currently working on projects in Des Moines, Iowa;
Madison, Wisconsin; and Omaha, Nebraska.
4. They own approximately 3,j500 rental units. About one -third
of the units are. market rate apartments, another one -third
are "downtown" units, and the remaining one -third are senior
apartments.
5. For the downtown units, Dunbar works with Human, Resource
departments in major employers in downtown areas. He stated
about one -third of the renters may be employees of major
companies moving into the city from somewhere else.
6. In the Laurel Village development, the -parking is located
underground, and they contract with a manager on the property.
The city owns the land and the garage, but Dunbar manages it.
7. The downtown .units are marketed as a step -up to the
"hospitality approach ". There are a number of amenities in,
the units such as large walk-in closets, in -unit washers and
dryers, and security. These types of amenities are not
typically found in individual apartment units, but condominium
or townhome units.
8. Most of the apartment units are one and two bedroom units.
9. They have developed one -story townhomes which are fully
sprinkled with a two car attached garage in Mankato,
Minnesota, and Park RapidGs, Minnesota.
10. They buy their constructkruct n products wholesale at a cheaper
cost and are able tc con the units fairly rapidly.
11. A substantial portion of the projects completed in Minnesota
are HRA owned projects via the use of essential function
bonds.
4.3
Notes from Meeting with Frank Dunbar, April 13, 1994
Page 2
12. Dunbar said that a mixed use development has to avoid some of
the design issues associated with the 66 Avenue and Lyndale
development in Richfield where the front door of the
commercial and the housing is the same. He was cautious about
whether a mixed use development could happen because of the
economics involved with the project. He stated the "customer
can't foot the bill" or the operating costs, taxes, and
management of the building.
13. Dunbar stated that they would continue to participate in the
project and manage the project as opposed to a developer which
would sell the project and not have any involvement in the
future. He said that the essential function bond approach
provides the city with the control of the project and provides
the city with the ability to require payment .in lieu of taxes.
14. Dunbar sees city involvement as participation versus a
subsidy. In the case of Faribault, Minnesota, 50 units were
constructed via essential function bonds and were occupied by
70 people. One -third of these people freed up existing single
family homes for first -time homebuyers.
15. Dunbar cautioned that any project should not be labeled as
"senior ". .He said older people necessarily do not define
themselves as seniors if they are 60 years old. He would
prefer to market a project as a general market project but
control for the age to be rented. He also suggested that
services be provided if that is market to be targeted.
16. In terms of his view on the retail market, Dunbar said he
would consult three sources that he works with on commercial
projects.
17. Dunbar advocated use of the essential function bonds, because
they provide a better rate for investors, a better return for
investors, and the city would be able to control and., at the
same time, receive payment instead of property taxes.
Dunbar Development Corporation 4.4
April 13, 1994
Ms. Barbara Dacy
Community Development Director
Municipal Center
6431 University Ave. N.E.
Fridley, MN 55432
Dear Ms. Dacy:
Thank you for the opportunity to meet with you this morning. Enclosed is a list of the
development program our organizations have worked on.with communities.
I would be delighted to have an opportunity to discuss this development program with the Mayor
and the Chairperson of the Housing and Redevelopment Authority.
Sincerely,
IFrank C. Dunbar
Dunbar Development Corporation
FCD:aw
Enclosure
15 North 12th Sint Minneapolis, Minn to 55403 612 341-0005 FAX 612 341 -0327
4.5
DUNBAR DEVELOPMENT CORPORATION
PROJECT LIST
JANUARY 1994
I. HOUSING AUTHORITIES
DDC has been retained as development coordinator by a number of city and county housing authorities throughout Minnesota to
develop the following projects:
PROJECT
RESIDENTIAL
COMMERCIAL
PHASE
CONSTRUCTION
NAME
UNITS
SQ.FT.
COMPLETION
WOODLAND PARK APARTMENTS*
180
N/A
Operations
Dec -89
Cottage Grove, MN
BRIAR POND
196
N/A
Operations
Nov -91
Oakdale, MN
ANN BODLOVICK APARTMENTS* &
50
N/A
Operations
Sep -91
SENIOR CENTER
6,(A2
COBBLE HILL APARTMENTS*
45
N/A
Operations
Jun -92
Woodbury, MN
NORTH VIEW MANOR*
60
N/A
Operations
Oct -92
Bemidji, MN
TRAILS EDGE APARTMENTS
50
N/A
Operations
Nov -92
Faribault, MN
LAURENTIAN MANOR*
80
N/A
Operations
Mar -93
Virginia, MN
SOUTHCENTRAL, MN:
Construction
Janesville
24
Jan-94
St. Clair
8
Dec -93
Madelia
16
Feb-94
Madelia
24
Mar -94
Madelia*
20
Jun -94
St. James
28
Apr -94
Sherburn
14
May -94
Trimont*
10
May -94
LaFayette
12
Jan-94
Courtland
20
Dec -93
Gibbon*
12
Feb-94
Winthrop
16
Feb-94
Gaylord
26
Mar -94
Henderson
14
Apr -94
Ar!ingto:
26
May-94
Arlington*
30
Jun -94
TOTAL
300
N/A
LAKE GRACE APARTMENTS
19
N/A
Operations
Oct -93
Acquisition Units
72
Chaska, MN
GARDEN TERRACE
51
N/A
Construction
May -94
New Ulm, MN
LAKESHORE PLACE*
60
N/A
Construction
Jul -94
Grand Rapids, MN
FOREST PARK WEST 36 N/A Construction Sep -94
Grand Rapids, MN
*Elderly houisng
Dunbar Development Corporation March 3, 1994
4.6
DDC Project List
January 1994
Page 2
PROJECT
RESIDEN IAL
COMMERCIAL
PHASE CONSTRUCTION
NAME
UNITS
SQ.Fr.
COMPLETION
NW MN MULIT COUNTY H.R.A.
Development
Ada*
31
12,500
Crookston
40
Crookston*
30
Fertile*
14
Fisher
14
Shelly
8
Newfolden
8
Greenbush
12
Fosston
12
Fosston*
12
Erskine
10
Argyle
8
Warren
16
Waxen*
20
Mahnomen
12 .I
Mahnomen*
18
Clearbrook
6
Clearbrook*
10
Park Rapids
36
Park Rapids*
60
Red Lake Falls*
16
TOTAL
393
HUTCHINSON H.RA
74
N/A
Development
Hutchinson, H.R.A.
ST. CLOUD; H.R.A.
52
18,945
Development
St. Cloud, MN
RED WING H.RA
45
N/A
Development
Red Wing,
T
H.R.A. HISAGO COUNTY H.R. 100 N/A Development
Center City, MN
A
ITASCA COUNTY H.R., lOf N/A Development
Calumet, MN
11. TRIBAL DEVELOPMENTS
Oneida Nation 243 N/A Development
Oneida, Wl
Mandan, Hidatsa & Arikara Nation 75 N/A Development
New Town, ND
*Elderly houisng
Dunbar Dcvelopment Corporation i
I March 7, 1994
DDC Project List 4.7
January 1994
Page 3
III. CITY DEVELOPMENTS:
Minneapolis
Laurel Village
This project is a redevelopment of approximately three city blocks between l Ith and 15th Streets on the west side of Hennepin
Avenue in downtown Minneapolis. The development includes 795 rental housing units and associated neighborhood.
commercial and retail space. Below is a list of projects within the LAUREL VILLAGE development.
PROJECT
NAME
Alden Apartments
Hennepin Ciossing
Loring Station Post Office
DeForest Apartments
Swinford Apartments
Swinford Townhomes
The McNair
Wilson Park Tower
Laurel Curve
Des Moines, IA
Stage I - City View - Rehab
Stage 2 - Hillside
Stage 3 - Hillside
Stage 4 - Hillside
Stage 5 - Hillside
McCormick Apartments
Madison, WI
One Thaucand Harney
Omaha, NE
LaCrosse, WI
• Elderly Housing
RESIDENTIAL
UNITS
COMMERCIAL
SQ.Fr.
PHASE
CONSTRUCTION
COMPLETION
68
6,000
Operations
Jun -86
210
29,580
Operations
Jun-89
N/A
16,000
Operations
Jun -89
72
15,793
Operations
Apr -90
55
N/A
Operations
Jun -91
15
N/A
Operations
Jun -91
80
10,000
Operations
Feb-91
200
N/A
Operations
Jul -91
89
N/A
Operations
Development
144
194 8,000
106
150 12.000
120
150 Development
200 10,000 Development
70 N/A Development
Dunhar Ikvelopment Corporation March i. 1994
April 20, 1994
Mr. William Burns
City Manager
City of Fridley
6431 University Avenue, NE
Fridley, MN 55432
Dear Bill:
We enjoyed the opportunity to meet you and Jim Casserly the other day.
Your ambitions for the project we discussed are impressive.
Subsequent to our meeting, we were presented an unexpected
opportunity that we are going to pursue. Unfortunately, the timing and
nature of this opportunity necessitates our withdrawal from consideration
on your project.
Sincerely,
TED GLASRUD ASSOCIATES, INC.
Frederick M. Furland
Chief Executive Officer
c:\wplfredlfddleyAtr
c. Ted Glasrud, Sr.
431 SOUTH SEVENTH STREET, SUITE #2470- MINNEAPOLIS. MINNESOTA 55415 - (61 2) 341-2651
a° 0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: April 29, 1994
TO: William Burns, Executive Director of HRA ,A JT'
FROM: Barbara Dacy, Community Development Director
SUBJECT: Lake Pointe Marketing Update
The new Lake Pointe brochures have been printed and were
distributed at the April 13, 1994, Commercial Real Estate
Exhibition. About 30 brochures were distributed at the exhibition.
Four inserts were prepared as an initial introduction to the site.
They included a site map and basic description of the property,
information about demographics, and employment, testimonials from
other existing businesses, and information about the school
systems.
Merrill Busch, Mayor Nee, the Executive Director, and myself met
on April 21, 1994, to discuss the next steps in the marketing
program. The following marketing approaches were discussed:
1. The inserts for the brochure would be reprinted on
heavier card stock and the color scheme of the card stock
would match that of the brochure. Typos and other minor
corrections would also be made. An additional insert.
about recreational amenities would be developed, as well
as an insert about property tax information and how
Fridley compares with other 694 communities.
2. Busch recommended that the HRA Chairperson and Mayor
prepare a cover letter which would be mailed along with
the revised brochure to brokers and developers. .
3. Busch recommended placement of at least one, and
hopefully two, signs on the property indicating that it
is available for development. I am currently researching
the Sign Code to determine what would be permitted.
4. Busch recommended that we issue a news release about the
property and advertise in the Minnesota Real Estate
Journal, Minnesota Ventures, Twin City Business Monthly,
City Business, and Corporate Report. The Real Estate
5.2
Lake Pointe Marketing Update
April 29, 1994
Page 2
Journal will be featuring communities in the north metro
area, and Busch has suggested to the editorial staff that
they focus on Fridley for one of the issues.
5. Busch would develop a list of potential corporate users,
and we would then prepare a direct mailing of the
brochure and a cover letter to the companies on the list.
The booth at the Commercial Real Estate Exhibition was successful
in that a number of major brokers and developers were at the
exhibition and received a brochure. Now that the brochure is
circulating in the development community, we need to keep the
momentum going by following up on the above marketing ideas. No
action is needed by the HRA at this time.
BD:ls
M -94 -242
LAW OFFICES
BRIGGS AND MOPGAN- AQR 0� 19g
PROFESSIONAL ASSOCIATION
2200 FIRST NATIONAL BANK BUILDING
SAINT PALL. MINNESOTA 55101
TELEPHONE (612) 223 - 6900
FACSIMILE 16121 223-9450
WRITERS DIRECT DIAL NUMBER
MEMORANDUM
i
FROM: Jim O'Meara
DATE: April 6, 1994
RE: Proposed Tax Increment Amendments
MINNEAPOLIS OFFICE
2400 I D S CENTER
MINNEAPOLIS. MINNESOTA 55402
TELEPHONE 10121 334 -9400
FACSIMILE (6121334-8650
On April 4, 1994, Representative Rest introduced House File No. 3195, a bill to
amend the Minnesota Tax Increment Act. The bill proposes several significant changes,
including the following.
(1) County Veto of New TIF. For tax. increment districts or areas requested
for certification after June 30, 1994, the County Board would be able to exclude
county taxes from the tax increment; alternatively, the County Board could approve
the tax increment plan, but specify a shorter duration than that approved by the
municipality or specify that only a portion of the county tax rate will be used in
computing the tax increment, or both. This may not sound like it, but it's virtual veto
power.
(2) County Veto of Old TIF. The bill also contains the power of the
County Board to veto any significant amendment of a post - 7/31/79 tax increment
district that is at least 5 years from its request for certification. For any such district,
the bill would require county consent to any modification which increases the tax
increment expenditures, goals, or activities; designates additional property to be
acquired; adds new bonded indebtedness, or expands the area where the tax
increments may be spent. This too is BIG.
(3) Tax Increment Volume Limits. Another provision of the bill would
limit the municipality's ability to create new tax increment areas after April 30, 1995,
if that would cause its new tax increment limit (of captured tax capacity) to be
BRIGGS AND MORGAN
exceeded. That limit would generally be 5% of the total net tax capacity of the
municipality, maybe higher for some localities under a formula alternative.
(4) Expanded "But For" Finding. For new tax increment areas, a new
finding would be required, namely, that another development or redevelopment of
the site of equal or greater value (after deducting the estimated cost of the tax
increment assistance) would not occur within the reasonably foreseeable future
without using tax increment financing. This would be in addition to the current
requirement that the municipality find that the project would not reasonably be
expected to occur solely through private investment within the reasonably foreseeable
future. O, Crystal Ball!
(5) Housing/Redevelopment TIF Duration. The duration of new housing
TIF districts and new redevelopment TIF districts would be limited to 20 years, down
from the current 25.
The bill contains other proposed changes.
//,Zo�'Reliance Real Estate Services, Inc.
April 22, 1994
Mr. Arnie Prieve
Gateway Foods
P.O. Box 1389
Minneapolis, MN 55418
RE: SW Quad, University Ave. N.E. & Mississippi Street
Fridley, MN
Dear Mr. Prieve:
As we recently discussed, I am forwarding the enclosed information regarding a
site which we are offering for sale for redevelopment in the City of Fridley. We
are offering 2.44 acres which is part of a larger site of approximately ten (10)
acres. The adjacent land of approximately 7.5 acres is owned by the Fridley
Housing and Redevelopment Authority and is part of TIF District #1. The contact
person at the City of Fridley is Barbara Dacy, Community Development Director.
Enclosed for your review are a location map, an aerial photograph, and two (2)
demographic reports. The first report is for radii of 1, 2, and 3 miles. As you can
see, much of the area to the West of one mile lies on the opposite side of the
Mississippi River. Therefore, we ordered a second report based on select
census tracts East of the river within reasonable drive times, The census tract
map outlines the area included in the report.
Please consider this site as a potential site for a Jubilee franchise. I will call you
again in the near future with hopes that we can discuss your potential interest
more thoroughly. If you have any questions or desire any additional information
before then, please contact me.
Sincerely,
RELIANCE REAL ESTATE SERVICES, INC.
Bob Welle
Enclosures
cc: Ms. Barbara Dacy, City of Fridley
Rand Tower • 527 Marquette Avenue South • Minneapolis, MN 55402
612 - 338-1000 • FAX 612 - 33848971
maff���
G. W. PASCHKE
7979 RANCHVIEW LANE NORTH. MAPLE GROVFE
TELEPHONE (612) 420.8862 PAX (612) 420.8962
April 18, 1994
Barb Dacy
City of Fridley
Economic Development
6431 University Avenue NE
Fridley, EN 55432
Dear Barb Dacy:
�,��
p
As per our conversation this is a follow up letter to the H.R.A.
for the meeting of May 5, 1994.
We had discussed the need for assistance in the development of a
22 acre piece of land owned by Park Construction on 78th and Main.
We are proposing a 30,000 square foot
This.will not be a spec building. We
for this building. We are looking at
Coon Rapids. Our tenant prefers the
discussion we would need a write down
$50,000.00 and $100,000.00.
plus building for this land.
have a.large national company
this site and also one in
Kain Street site. As per our
of the property of between
We have requested.and have received soil samples from Park Construc-
tion. I will provide a copy of them for your review at a later date.
As time is of the essence I must have this building under construction
in.approximately 30 -45 days or I will miss my move in date and would
have to look for another site.
I anticipate that this building will cost in the $700,000.00 to
$800,000.00 range. We are General Contractors and we do excavating,
grading and building; therefore, we can move fairly quickly.
I will be at the May 5th meeting.
a
Sincq�r y,
f
erald W. Paschke
�PASCHKE PROPERTIES
GWP /ro
° lN
IX
VI
XII
8251 ASHTON AVENUE NORTHEAST
FRIDLEY, MINNESOTA 55432
PHONE 612- 784 -5776
Barb Dacy
Community Development Director
City of Fridley
6431 University Ave NE
Fridley, MN 55432
April 25, 1994
Dear Ms. Dacy,
Thank you. very much,for taking the :time this morning to discuss JIT Powder
Coating' situation regarding our operation at 8251 Ashton 'Ave NE in Fridley: Let me
take this opportunity to summarize our discussion and our request for financial
support.
JIT Powder Coating Company (JIT) is a new business that has been operating in
the building at 8251 Ashton Ave NE since September, 1993. Currently, JIT employees
26 people at this location, projects sales revenue of $2.1 million dollars for FY 94, and
is continuing to grow at a rapid pace.
As you are well aware, the 8251 Ashton Ave NE property has a long history of
problems, both with the business practices of the previous owners and the physical
structure itself. As part of establishing our powder coating business, a business, I
might add, that does not generate any hazardous waste and does not
cause any solvent emissions, JIT has made over $150,000 of building
improvements. These improvements include new lunch room and locker rooms, new
and renovated office space, equipment upgrades, electrical upgrades including the
rewiring of all process equipment, and numerous other upgrades. Even with these
expenditures, JIT has only refurbished approximately 65 % of the building and is able
to operate only 1 of the 2 production bays in the building. JIT is faced with more than
$100,000 in additional expenses to improve the building so that the other production
bay is operational. Among these expenses is the installation of a new 400 amp 480 V
electrical service and an improved sewer line inside the building to allow for a second
spray washer.
JIT has reached a point where it is difficult to proceed with this type of expenditure
in a facility that we do not own. Our landlord, Bob Norris, RKI Inc., is not interested in
making these investments. In order to protect our investment in this building and grow
our business, we have entered into negotiations to purchase this building. Though a
purchase agreement has not been reached, I believe that an agreement will be soon
reached for the sale of the land, building and equipment for an approximate price of
$750,000.
JIT has developed a relationship with NE State Bank (Jim McFarland) to help
finance the purchase. Mr. McFarland is recommending that we use the SBA 504
program as the financing mechanism for purchasing the building. He recommended
that I contact the City of Fridley to see if the City would consider helping JIT finance our
10% requirement of the SBA 504. With a projected purchase price of $750,000, our
portion would be $75,000. Coupled with the necessary improvements mentioned
earlier, JIT would need $175,000 in company funding to make this project happen. JIT
would like the City of Fridley to consider any funding options that they have available
that would reduce JIT's funding requirement by 50% (Le.,, $87,500).
1 recognize that this facility is not in a tax increment finance district, and that recent
legislation penalizes communities who create new tax increment districts. This limits
your options. However, I am hopeful that you have other mechanisms at your disposal
that could help us.
In my opinion, it has become essential that JIT own its production facility. As part of
the 8251 Ashton Ave NE purchase process, I have investigated the option of building a
new facility should our efforts in purchasing and for financing be unsuccessful. I have
found several communities, such as the City of Farmington,. that have programs
available to assist us. However, it is our strong desire to stay in this building and in the
City of Fridley. I hope that you can assist us in realizing this desire.
I have attached a first quarter 94 financial statements and a 1994 pro forma income
statement and balance sheet to help you assess our request. I look forward to hearing
from you.
Sincerely,
�,liYvLo
A Wwa,_
Timothy . Milner
President
CC Jim McFarland NE State Bank