HRA 01/12/1995 - 6284i,
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JANUARY 12, 1995
7:30 P.M.
PUBLIC COPY
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CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JANUARY 12, 1995 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES:
ACTION ITEMS:
November 10, 1994
CONSIDER ITEMS REGARDING SOUTHWEST QUADRANT:
CONSIDER CONDEMNATION RESOLUTION ON SUH . . . . . . 1(A) - 1(A)3
PROPERTY
CONSIDER RESOLUTION TO AUTHORIZE . . . . . . . . . . 1(B) - 1(B)4
EXECUTION OF THE CONTRACT FOR EXCLUSIVE
NEGOTIATIONS
CONSIDER CONTRACT FOR RELOCATION . . . . . . . . . . 1(C) - 1(C)3
CONSULTANT
CONSIDER CONTRACT WITH MACROMEDIA FOR. . . . . . . . 1(D) - 1(D)2
COMPUTER IMAGING
CONSIDER ACQUISITION OF FRANK'S USED CARS . . . . . . . 2
CONSIDER CONTRACT WITH MICHAEL O'NEAL TO. . . . . . . . . 3 - 3J
CONDUCT FOCUS GROUPS
ESTABLISH PUBLIC HEARING ON FEBRUARY 9, . . . . . . . . . 4 - 4B
1995 REGARDING DISPOSITION OF SCATTERED -
SITE PROPERTIES
CONSIDER RESOLUTION AUTHORIZING 3% COST OF. . . . . . . . 5 - 5C
LIVING INCREASE FOR THE HOUSING COORDINATOR
CONSIDER AUTHORIZATION TO BID ON 1375 . . . . . . . . . . 6 - 6A
SKYWOOD LANE N.E.
REVENUE AND EXPENSES . . . . . . . . . . . . . . . . . . . 7 - 7F
INFORMATION ITEMS:
REVIEW SCHEDULE OF REDEVELOPMENT OF SOUTH -. . . . . . . . 8 - 8C
WEST QUADRANT
REVIEW PROPOSAL FOR LOAN AGREEMENT BETWEEN. . . . . . . . 9 - 9B
THE CITY AND HRA
OTHER BUSINESS:
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT. AUTHORITY MEETING, NOVEMBER 10, 1994
CALL TO ORDER:
Chairperson Commers called the November 10, 1994, Housing and
Redevelopment Authority meeting to order at*7:35 p.m.
ROLL CALL:
Members Present: Larry Commers, Jim McFarland, Duane Prairie,
John Meyer
Members Absent: Virginia Schnabel
.Others Present: William Burns, Executive Director
Barbara Dacy, Community Development Director
Jim Casserly, Financial Consultant
Grant Fernelius, Housing Coordinator
Craig Ellestad, Accountant
James Hoeft, HRA Attorney.
APPROVAL OF OCTOBER 24, 1994, JOINT HRA /CITY COUNCIL MEETING:
MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the
October 24, 1994, Joint HRA /City Council minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
APPROVAL OF OCTOBER 24 1994 HOUSING AND REDEVELOPMENT AUTHORITY
MINUTES•
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
October 24, 1994, Housing and Redevelopment Authority minutes as
written.
UPON A VOICE VOTEI ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
1. APPROVE REOCCUPANCY OF FORMER 10,000 AUTO PARTS BUILDING. BY
JIM YUNGNER: 6525 UNIVERSITY AVENUE N.E.
Ms. Dacy stated the reason this item was being presented for
discussion is first because the zoning is S -2, Redevelopment
District. The language for the S -2 district enables the Planning
Commission, City Council, and Housing and Redevelopment Authority
(HRA) to review uses to see if it is consistent with the
redevelopment plan. Second, the owners of this business have
expressed an interest in being part of the redevelopment project
that-Mr. Lowell Wagner is attempting to pursue.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 2
Ms. Dacy stated staff has on a temporary basis been working with
the owner on -the occupancy of the building. When Ms. Dacy became
aware of this use, the owner said The Gym would occupy the
building and sign a lease for three years. She thought three
years was a.significant time frame of which the HRA should be
aware. The Planning Commission and the City Council have
reviewed the zoning issues and site issues, and have approved
occupancy of the building under the current zoning. Of issue.for
the HRA is whether.or not this occupancy would affect the
redevelopment in any way. Staff feels it will not hamper
redevelopment. The improvements the petitioner is.making to the
building are more cosmetic and will not add significantly to the
value of the building. Mr. Wagner is aware of the three -year.
lease and, if he needs to break the lease, he will have to
compensate.
Ms. Dacy stated, regarding the longer term impact of whether that
use should be in that building and in the redevelopment in the
future, staff recommended, and the Planning Commission and City
Council agreed, that it is to early to approve. There are issues
regarding parking which staff wants to'evaluate if the project is
to proceed. Staff are hoping whatever we do in the Southwest
Quadrant will spark an additional demand for retail uses on that
corner, and we are not prepared to say it is okay for this
business to occupy a significant part of that building.
Stipulation #6 that the Council included preserves our rights to
the approval of the use in redevelopment.
Ms. Dacy stated, if the HRA has an objection of the type use, now
is the timeto let the petitioner know that you do not want them
in the building. Mr. Yungner went to the Planning Commission and
City Council meetings in September. The Gym is now at 261
Commerce Circle and focuses on weight training and body building.
They have begun work on the inside of the building and have
painted the outside improving the temporary appearance. Staff
recommends the HRA approve the re- occupancy of the building with
the six stipulations as follows:
1. The petitioner shall apply for the appropriate building,
plumbing, and mechanical permits to complete remodeling as
proposed.
2. The petitioner shall stripe the parking lot; parking stalls
are 10 feet wide and 20 feet long, or 18 feet.long if the
stall abuts a curb stop or landscaped area.
3. The dumpster shall be screened on all sides..
4. The parking lot shall be kept free of weeds.and grass.
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HOUSING & REDEVELOPMENT AUTHORITY XT-G.. NOVEMBER 10, 1994 PAGE 3
5. Landscaped area to the north shall be kept trimmed in an
attractive manner to provide screening from the residence to
the north.
6. Inclusion of the proposed use in the Fridley Town Square
redevelopment project shall be reviewed by the City Council,
Planning Commission, and Housing and Redevelopment Authority
prior to execution /approval of the development contract for
the project.
Mr. Prairie asked how many locations does The Gym have.
Ms. Dacy stated she thought they had facilities in Plymouth,
Fridley, Champlin, and Bloomington.
Mr. Meyer asked if the police had any negative comments.
Ms. Dacy stated the police had no complaints. They were happy
the building would be occupied..
Mr. Commers asked if Mr. Wagner intended to include The Gym if -he
develops the property.
Ms. Dacy stated Mr. Wagner is willing to evaluate including them
if the City is comfortable with it. Also, Mr. Wagner does not
want to lease a significant part of the building to them because
of parking concerns and to allow for additional tenants.
Mr. Commers asked where the HRA is with Mr. Wagner.
Ms. Dacy stated, although Walgreen's have not said in writing
they are not interested in the site, Mr. Wagner is looking for a
similar -type anchor tenant. He no longer has any written
agreements on the three properties. He had a verbal agreement
with Mrs. Swanson. Apparently, the option agreement on the
single family homes has expired.
Mr. Commers asked if we had any commitment to Mr. Wagner as far
as what the HRA would do in terms of assistance.
Mr. Dacy stated there is no development contract executed. The
HRA did approve a concept assistance up to $300,000. If he comes
in with the exact same proposal, it would be on the table. If
the proposal is different, we can negotiate.
Mr. Commers asked how long that agreement is kept open.
Ms. Dacy stated it will be kept open as long as the HRA wishes to
do so.
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HOUSING I REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 4
Mr. Casserly stated the HRA has no legal relationship to make
that offer at this point. It is just that we have not dealt with
anyone else. The last discussion about a proposal was
approximately 18 months ago.
Mr. Commers stated The Gym may be fine but'his concern is that
this may not be the kind of project to put that kind of funds
into. He would imagine there could be scenarios where they might
want us to continue on that level and he wants to be sure the HRA
is protected.
Mr. Burns stated, as he recalled, the sum of $300,000 is tied to
the Fitch buyout which is no longer relevant to the project.
Therefore, the $300,000 proposal would not necessarily be
relevant.
Mr. Casserly stated this was also based upon the option
agreements which are no longer available. This kind of use
generally tends to have a lower square foot lease payment. He
was not sure how the financing would work.
Ms. Dacy stated part of.Mr. Wagner's question to the HRA is what
your concerns are about the lease. He is aware this use is not
what was contemplated three or four years ago. If the HRA does
not want to see this use, that is okay. The petitioner wants to
know this up front. This will also give them time to locate the
business elsewhere. We have told.them we will not carte blanche
approve-the use in the redevelopment of the building. There are
issues with parking. Mr. Wagner is concerned that, because of
the nature of use and the fact that most customers work,
customers come after 5:00 p.m. and occupy many parking spaces.
We are concerned about other-possible uses in the building and
that there may be corresponding peak use.
Mr. Commers asked, if someone decided it was appropriate, is
there anything anyone could do.
Ms. Dacy stated the S -2 zoning gives the HRA, Planning Commission
and City Council the discretion to determine whether or not the
use is consistent with the redevelopment objectives.
Mr. Commers asked, if the HRA says this is not consistent with
our long term objectives, where does that leave use
Ms. Dacy stated she did not think anyone objects to The Gym
occupying the building on a temporary basis. What she is hearing
is that the HRA may not want them as part of the redevelopment
plan. If so, we need to let them know.
Mr. Meyer stated he cannot see setting ourselves up for problems.
Down the line, someone could demand us to keep the low rent., but
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HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE S.
we can handle that. It sounds as if it would be okay.
Mr. Commers stated this would tie up the building for three
years.- He did not think they would get the development done in
three years unless there is a buy out of the lease.
Mr. Meyer asked, if something significant is to happen on that
corner, this business would have to go. In the interim, there is
someone occupying and keeping up the building and striping the
parking lot.
Mr. Prairie asked if there was discussion on the length of the
lease. Two years would be .easier for the City.
Ms. Dacy stated there was not a detailed discussion on the length
of the lease. That was between The Gym and the owner.
Mr. Commers asked if staff.were asking for HRA approval.
Mr. Burns stated it was an option not to take action but also not
veto the request.
Mr. Meyer thought that.through no action they would be giving
consent.
Ms. Dacy stated, if the HRA does not want to formally approve,
the zoning district states the Planning Commission and City
Council can review and approve and, as long as there is a written
Housing and Redevelopment Authority report on the project plan
and considerations. If the HRA wants to say, given the Planning
Commission and City Council approval is good enough, that is
fine.
Mr. Hoeft stated, as he read the statute and to follow up on what
Ms. Dacy said, right now the property is sitting there and the
HRA is the appropriate body as far as deciding whether a
temporary use or a use outside the plan fits into the
redevelopment proposal. Therefore, the City Council would have
authority over the zoning code as far as whether the use complies
or does not. The proposal is here for the HRA's review and
opinion He thought staff would be looking for approval or
disapproval on a formal level. This would come before the HRA if
it was part of a redevelopment plan. Because this is not a part
of an actual redevelopment, he does not think there needs to be a
formal action by the HRA. The zoning question is for the City
Council to resolve: This is here because there is a desire by
staff for informal discussion as to the HRA's concerns.
Mr. Commers stated staff is asking the HRA whether we have any
input as to whether or not, if that corner is redeveloped, that
this would be a part of the redevelopment.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10. 1994 PAGE 6
Ms. Dacy stated, if the-HRA feels strongly that they do not want
to see this use as part of the redevelopment plan, staff and the
petitioner want to know now.
Mr. Prairie asked what is wrong with waiting and seeing.
Mr. Meyer asked if the HRA would be committing themselves to The
Gym being part of the redevelopment plan.
Ms. Dacy stated the first question is whether or not the HRA has
a problem with The Gym occupying the.building for three years.
Mr. Commers stated this was the City Council's decision and they
are okay with that.
Ms. Dacy stated the next question is whether the HRA is
comfortable with The Gym in the new building after redevelopment..
Mr. Commers stated he would prefer not to have that kind of
facility there.
Mr. McFarland asked, if they turn down the request, will The Gym
move in temporarily.
Ms. Dacy stated they would be there as long as they can. They
are .fully aware that they may have to move in one year or perhaps
two years.
Mr. Prairie asked how long has that building been without a
permanent tenant.
Ms. Dacy thought it had been at least six years.
Mr. Prairie stated he would say maybe to this use.
Mr. McFarland stated he had no opinion either way.
Mr. Meyer stated Mr. Wagner will not guarantee they will be in
the redevelopment. If it makes sense for the redevelopment, then
it may make the whole thing work. We cannot make any guarantees.
Mr. Commers stated he does not want to see it if there is a lot
of traffic. Perhaps we could get a retail use there. He is just
not enthused with having this use as.an anchor for that project.
Mr. Prairie stated a fast food business has a lot of traffic.but
short term parking. This may have different parking needs.
Mr. Commers stated the consensus of the HRA is to take a look at
it when the time comes.
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ROUSING & REDEVELOPMENT AUTHORITY NTG., NOVEMBER 10, 1994 PAGE 7
2. DISPOSITION GUIDELINES FOR SCATTERED -SITE ACQUISITION
PROGRAM
Mr: Fernelius stated his memo included in the agenda explains the
process staff recommends using in selling the properties. Staff
considered several methods of disposing of the property including
to list the properties with a real estate agent, which was not
considered as desirable; to post a sign and take offers on a.
first -come, first served basis; or, the one we are recommending,
to take sealed bids on the properties for the following reasons:
1. By law, the HRA must sell its property for an amount which
takes into consideration the fair market value. By
.utilizing a sealed bid approach, the market will in effect
establish the price. This does not mean that the HRA is
obligated to accept the offer /s.
2. State law also requires the HRA to conduct a public hearing
before it can convey the property. By selling all of the
lots at the same time, we can conduct one hearing..
3. The HRA has the opportunity to take offers from the general
public and potentially receive more offers.
Mr. Fernelius stated by using a sealed bid process., we think that
a market will be created and, therefore, we will meet that
requirement. The HRA needs to conduct.a public hearing before it
can actually approve the sale of the property. It makes sense as
a practical. matter if we can.have one public hearing for all the
properties. It also offers the opportunity to get more offers
and to appear from a public perspective to be more open.
Mr. Fernelius stated, after bids are accepted, the HRA would
conduct a public hearing to review the bids and formally award
the sale of each lot to the highest, most responsible bidder.
There is some flexibility if there is some discomfort with one of
the bidders. We would also enter into a development agreement
for each individual property which would spell out such things as
the time when the project is going to be completed, the type of
home to be constructed, a performance bond, a provision allowing
the HRA to prevent a builder from selling the property until he
has completed the improvements, etc.
Mr. Fernelius stated staff has prepared guidelines which were
included with the agenda. He thought it was A process which
would meet the statutory requirements. This process only applies
to what are considered buildable lots. Of the eight properties
acquired, two are considered non - buildable and are not covered
under these guidelines. Staff are still considering options for
those two properties and will return a recommendation at a later
date.
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HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 8
Mr. Fernelius stated staff recommends approval of the guidelines
as presented and to authorize staff to put the properties up for
sale.
Mr. Commers stated he presumed that when the properties were
acquired we got all the titles, abstracts, etc. What is the
estimated expense for the sale of these lots ?.
Mr. Fernelius stated they had budgeted $50,000 per property which
included acquisition. Staff has stayed within that budget, but
there are some costs over and above for demolition.
Mr. Commers asked if their were going to be costs incurred?
There will not be any realtor: commissions. Are there taxes to be
paid?
Mr. Fernelius stated there may be some costs involved in drafting
a development agreement. Because we did not meet the July 1
deadline, the property is considered taxable for next year. We
will need to pay taxes.for 1995 at least through the date of
closing.
Mr. Hoeft stated most of the taxes on these properties are
insignificant. The costs would be the cost of drafting the
development agreement. He was not sure of restrictive covenants
or if that is included in the development agreement. That issue
is not resolved.. There may be other miscellaneous closing fees.
Those costs will be relatively insignificant. The costs up front
will be to draft the development agreement and covenant.
Mr. Commers asked how these will be policed to make sure the
developer complies.
Mr. Hoeft stated, in Columbia Heights, through a development
agreement they are controlling what the house is going to look
like through detailed plans which must be pre- approved by the
City before a building permit is issued. Once the building
permit is issued, they tied up the certificate of occupancy with
the final inspection and sign off by the City.
Mr. Meyer stated they are asking for sealed bids for the lot. We
are concerned about the future use on the lot. In the sealed bid
operation, we have no control over what is going to be on that
lot. We will pick the high bidder, then decide what is proper,
and then award the contract. We don't know during the bidding
process what kind of operation will be built on that lot. It
seems that we should have some restrictive covenant in.the
original bid or outline of what is to.be built there. This
should be in the bid process and not wait until negotiating after
a bid.
HOUSING & REDEVELOPMENT AUTHORITY NTGf., NOVEMBER 10, 1994 PAGE 9
Mr. Commers stated we are not just selling a lot but, perhaps we
should do as in other developments, say this is the lot and we
want to see what will be placed on that lot.
Mr. Fernelius stated we would certainly make potential bidders
aware of our guidelines and all of this information would be
available to them so they know what our expectations are. He did
not think there would be any surprises. Before we convey the
property, the development agreement could address those concerns.
It is true we would be negotiating after accepting their offer,
but we would have the ability to say we don't like what they are
proposing. We could choose not to sell them the lot.
M.r.'Commers stated not selling puts us in a different position.
Mr. Hoeft agreed. But the way we would address this is, in the
.bid process, there is a page called Design Guidelines. The way
he suggested they try to address that is that the bids be awarded
upon the sale of the properties contingent upon a development
contract. We could call it a sale agreement and-redevelopment
contract. The property is not transferred until the City has
received specific plans and have reviewed and approved those.
plans. If the plans are not approved, the sale does not take-
place. He thought this could be incorporated into the bid
process.
Mr. Meyer stated his experience with government bids is that it
takes a lot to eliminate a low bidder.
Jim Casserly stated the point is well made, but what you do is
incorporate in the bid process the fact that the property is
going to be sold subject to these conditions.
Mr. Meyer stated, as an example, a developer wants to purchase
four properties and he has the high bid. But, we decide to give
the contract to the second high bidder, and the first bidder does
not like it and takes us to court.
Mr. Hoeft stated a responsible bidder has to match their bid
proposal with the specifications. An independent review will
show whether the bidder meets the criteria set forth. If they
meet all the criteria, you will have a hard time calling them an
unresponsible bidder.
Mr. Commers asked if potential bidders would expect assistance
from the HRA.
Mr. Fernelius stated no.
Ms. Dacy referred to the Design Guidelines.and asked if.there
were issues about which the members had concerns.
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HOUSING & REDEVELOPMENT AUTHORITY MTG.,, NOVEMBER 10, 1994 PAGE 10
Mr. Meyer stated he is concerned that this is after the fact. We
go from a very objective method of selling the lot and then go
into a qualifications thing which is subjective. Then we go into
the real subjective situation to decide whether or not the bidder
is going to put the kind of house on the lot that we want.
Beyond the initial objective part, we have steps of subjectivity
.to judicate and he is concerned we could find ourselves in a
legal turmoil.
Mr. Hoeft stated he heard Mr. Meyer saying we are selling the
property in step one and this is step two. We are saying there
is only one step which is to sell the property subject to this
agreement and, if you do not comply with that agreement, you do
not get title to the property.
Mr. McFarland asked, if a private party buys the lot, are they
subject to the standards of the City's zoning code.-
Mr. Fernelius stated there are zoning requirements to be met.
These requirements would exceed the standards the zoning
requires.
Ms. Dacy stated that is to insure we get a good home on the
property of a size and value that is an asset to the
neighborhood. We could be subject to a lot.of criticism if we,
did not do this. The objective of this.program is to remove the
blight.
Mr. McFarland asked if the HRA's requirements would drive down
the price of the land.
Ms. Dacy stated staff has tried to present this with the image
that the HRA is out there owning and selling the lots and that we
want to recommend some type of controls so we get a fairly high
value on the house and spur the neighborhood. If we did not have
controls, we could be subject to other issues.
Mr. Prairie - stated, if the value would be somewhat higher, it
would be okay. If it is way out of comparison for the next lot,
then he was not sure it was a good idea.
Mr. McFarland stated he did not think the requirements were that
strict. The only thing is the.lot is to be fully sodded. He did
not think this was generally done. It is generally the front
yard only that is sodded. He also thought they would want a two -
car garage and one and a half bath.
Mr. Hoeft stated the builder will take into consideration the
restrictions on the property. The builder knows they do not have
control over the lot next door. If someone next door puts up
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 11
what you might consider a substandard house, he will have a hard
time selling his..
Ms. Dacy stated the other issue is by law the HRA must have a
public hearing before selling the lots. We must notify the
neighbors of the hearing. She felt sure the neighbors would be
at the public hearing asking questions about what will happen on
that lot.
Mr. Meyer stated he thought he had heard the whole deal is not
consummated until such time the person's house has been approved
by the HRA. That is not what he understood this to say. "Once
award has been made by the HRA, each buyer will enter into a
development agreement with the HRA to establish the following .
. ." He questions the opening words "Once the award has been
made . . ."
Mr. Hoeft stated the award is not to sell.-the property outright.
The award is made based upon the specifications of the bid.
Mr. Meyer stated he sees an offer to buy a vacant lot. There is
nothing in this statement to tie that to the design guidelines.
Mr. Casserly stated they do not have to go through a competitive
bidding process for this program. There is another way to do
that which is similar to commercial -type redevelopments. You
could have an appraisal on the property and sell at that price.
We can say what we want on that lot before they get title, we
enter into an agreement, and a building permit is issued if the
plan is approved. This is really no different. Instead of
putting a price on the lots, we are suggesting they bid on the
lots with these criteria.
Mr. Meyer stated he thought the bidding process makes sense. He
is trying to tie one thing to what he thinks to be the important
part which is the design guidelines. He did not understand where
legally, if someone fills out the form as presented, that he /she
is tied to comply with any guidelines.
Mr. Casserly stated the specifications are in the packet. They
don't need to spell out that the home needs to match certain
drawings. It is not necessary to get that specific. The award
is not to sell the property outright. The award is for the sale
of property subject to the development agreement they are told
they must.enter into and which must be approved by the City. If
they do not, they do not get the property.
Ms. Dacy stated it is a matter of informing the potential bidder
of the guidelines. The bid package includes all the information
including the design guidelines.
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HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 12
Mr. Hoeft stated he was still comfortable with the title, "Offer
to Buy a Vacant Lot ". In the third paragraph, there is language
they could add to make it clearer that this is subject to the
development contract.
Mr. Commers asked how a buyer gets financing without title to the
property.
Mr. Hoeft stated, once the.sale and development agreement are
entered into, the bidder takes that agreement contract to get the
financing. .
Mr. Commers asked how they can secure a mortgage.
Mr. Hoeft stated they take a-guarantee from the title company who
has title to the lot.
Mr. Commers stated he does not want a lot tied up if a contractor
defaults.
Mr. Hoeft stated they could have a problem at any point in the
process. That is why we need to review who is submitting the
bids.
Mr. Prairie agreed with Mr. Meyer. If someone puts in a bid and
we agree, we must take the high bidder.
Mr. Hoeft stated the bidders are required under statute to have a
performance bond.
Mr. Prairie stated, even if we think they are marginal, we will
have to accept the bid.
Mr. Hoeft stated, if they require a specific level of performance
bond and the bidder meets it, we have security from the bond
company. The HRA may want negotiate, but this would be a good
way to start the process.
Mr. Meyer stated he thought it a good idea to take bids. When
making plans and specifications, everything must be there. What
staff has presented is vague. He wants to see on the forms that
the bidder is to sign that they should agree to build a residence
on this lot in accordance with the design guidelines and this
shall be part of the negotiation process. Not to negotiate after
the contract has been awarded.
Mr. McFarland referred to page 2F, conduct public hearing. At
the hearing, the HRA is to review the offers and give to the
highest, most responsible bidder.
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HOUSING & REDEVELOPMENT AUTHORITY NTd., NOVEMBER 10, 1994 PAGE 13
Mr. Fernelius stated we are considering their offer but before we
convey title the bidder must enter into a development agreement
which spells out exactly what is to be put on the lot. If it is
acceptable, we execute the agreement and go through the steps to
close and convey-title. We are not obligated to go with a
particular bidder if we are not comfortable with them. If there
is a problem, we do not convey the title.
Mr. McFarland felt there were enough safeguards. On page 2F,
nothing is final until after the hearing.
Mr. Meyer asked the definition of the phrase, " after the
aware is finalized. . ."
Mr. Casserly the award is not to sell the property. The award is
to sell the property subject to the items as outlined.
Mr. Meyer suggested the addition to the Offer to Buy a Vacant Lot
of the wording which specifies the buyer shall construct a house
on this property that shall meet the design guidelines.
Mr. Fernelius stated the language could be changed to address
these concerns. The guidelines were developed to bring before
the HRA for comment.
Mr. Hoeft stated they will modify so there is no question and
make sure every document states what we are after.
Mr. Meyer stated asked why hardboard siding materials were not
acceptable.
Mr. Fernelius stated the guidelines are based on those of the
City of Crystal who operates a similar program. We are striving
for maintenance free siding so that is why hardboard and masonite
sidings were excluded. That is something that requires paint and
maintenance. We are asking the bidder to construct a quality,
maintenance free home.
Mr. Meyer stated hardboard siding has gotten some bad names. It
has improved over the years. A major contractor uses that on
homes. He would like staff to check on this to see if hardboard
siding is the standard for the industry.
Mr. Commers asked the Commission if they preferred to move the
packet subject..to being redrafted or have staff bring it back.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
disposition guidelines.for the scattered-site acquisition program
with the understanding that staff will incorporate the
suggestions as discussed.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 14
Mr. Meyer asked if the $500 earnest money was per lot.
Mr. Fernelius stated it is spelled out in the bidding procedures
that each offer must include $500 earnest money per property.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
Mr. Casserly referred to the memo from the City of Crystal. He
is working to put together a program in Crystal which is like
what Fridley is doing. This program suggests that a city go out
and buy old properties, generally blighted parcels. The city is
then clearing those parcels and selling them to new users. What
has happened in this program is that there are very few
resources. One can get CDBG funds, get a levy, get some money
out of the state, but there is nothing for this kind of
acquisition. One of the few resources the HRA has is to try to
create a tax increment district. This takes us back to the
purest use.of tax increments - buying blighted, under used
properties; clearing them; and putting something of more value on
them. There are a couple problems in law at this time in doing
the original tax increment concept.
Mr. Casserly stated one is the Local Government Aid Fund. They
took the values of the sites that Crystal is acquiring and put in
what they thought the value of the future homes on those sites
would be. They assumed the City would do this for five years, so
there would be 25 homes involved in.this program. We then create
a single tax increment district and, at the end of each year,
keep including additional homes. Over a period of the life of
this district, one could raise about 2/3 of a million dollars.
We are assuming the values of future homes to be $80,000 to
$120,000. If you get higher value homes, you can generate
additional increments. What we would like to accomplish with
this program is to have an orderly program where we take sites
acquired, put those parcels to a very special kind of tax
increment district, capture the increased value from putting new
homes on those parcels, and pledge that money for reuse in the
program. What is going to happen is that we will need these
funds to keep - recycling. We are probably going to have to do as
we have already done - use surplus revenues toward housing
program, probably have to do a levy and find funds to place in
the program. This is one more funding source. We are trying to
get approval that the concept of the program makes sense. He
will be working with several folks to introduce legislation. He
thought Fridley could profit from this type of program. We get
rid of the local government aid penalty. Some of the sites that
were acquired would not qualify in a redevelopment district
because they have been cleared. The reasons to create a tax
increment district no longer exists because the site is clear.
When creating a housing district 4nd you could put these into .a
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 15
housing tax increment district, you then run into all the lot
income guidelines so the only kind of housing that can go into
the district would be for people whose income meet the
guidelines. That may work for some, but the HRA is working to
get diversity of housing. The HRA is trying to take out
dilapidated housing and get higher value housing.
Mr. Casserly stated we therefore need a separate kind of tax
increment district in a housing replacement tax increment
district so we have some versatility in dealing with suburban
housing renewal replacement objectives. If the state acts on
this, it could be misused by wealthy communities. It would be
nice to have it limited to cities such as Crystal, Richfield,
Fridley, etc. because those are the communities engaged in these
programs. This goes back to why tax increment was originally put
into the statutes and for what its original use was intended.
You will be involved in a housing replacement cycle and need to
make sure that needs do not outstrip resources. Any resource you
can get is worth pursuing.
Mr. Casserly stated, if we cannot include the parcels we are
talking about now, he thought they should do this program for the
next group. Everything acquired would technically meet the
development criteria. There are problems with being able to move
funds around and there is a five -year limitation to spend funds.
He would like to draft a bill that strips out the restrictions
but.yet makes the use limited. These are funds that would be
used solely in the program.
Mr. Commers asked what the cost would be to the HRA for that.
Mr. Casserly stated he would like to share that with the
communities that would like to participate and allocate his time
between them. Any housing program administration costs will ,be
far in excess of what is allowed in the statutes. This is a
program that will generate some revenues. He will draft
legislation, come back and ask for a resolution to authorize the
legislation.
Commission felt this sounded like a good program and one they
felt they should support.
MOTION by Mr. Prairie, seconded by Mr. Meyer, to authorize Mr.
Casserly to go forward to develop legislation for a housing
replacement tax increment district.
UPON A VOICE VOTE# ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
3. APPROVE CONVEYANCE OF RIGHT -OF -WAY ALONG 8280 EAST RIVER
ROAD N.E.
JN
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 16
Mr. Commers stated he did not know it had been the practice to
convey a right -of -way without cost.
Ms. Dacy stated this is what the Department of Public Works has
advised. The HRA did do this in the Mississippi Street area at
the Southwest Quadrant.
Mr. Commers stated 3,000 square feet is worth a few thousand
dollars. What does that do the remaining area and what are the
building requirements?
Ms. Dacy stated the minimum lot area is 9,000 square feet. The
remaining lot will exceed that.
Mr. Commers stated, otherwise, we would have had two lots. By
conveying this property, we will be down to only one lot.
Ms. Dacy stated Mr. Fernelius talked to Anoka County about that.
When we bought the property, because of the location on a busy
street, we talked about splitting the parcel into two lots. We
agreed not to do that because we felt we could get a better price
and a nicer home if we kept it as a larger lot.
Mr. Fernelius stated he talked to the County, who said our
failure not to make plans was a damage for which we could not be
compensated. They did make a offer to pay for this piece of
property, but it is my understanding the City.conveys the right -
of -way at no cost.
Ms. Dacy stated the offer based on their appraisal was $4,400.
She had a conversation with Mr. Flora. His recommendation was
that we continue that policy. That does not mean in the future
you need to adhere to that. The County portion on that segment
has been controversial. His point is to cooperate with the
County.
Mr. Commers asked the difference between selling one lot versus
being able to sell two lots.
Mr. Fernelius stated the difference is speculation.
Mr. Commers asked the selling price for a 9,000 square foot lot.
Mr. Fernelius stated a lot of this size might sell for $10,000 to
$15,000.
Ms. Dacy stated this is also along a busy highway. Staff thought
it better to package it as one lot and have a nicer looking home.
She cannot answer what the difference in selling price would be.
She thought the approach was good because, if 3,000 square feet
HOUSING & REDEVELOPMENT AUTHORITY MTGo,, NOVEMBER 10, 1994 PAGE 17
is going to be taken, in order to sell that lot, we:would want to
preserve as much as possible.
Mr. Commers asked if the HRA could get a resolution from the City
Council telling us that this is what they do and that is what
they recommend we do. If that is a policy, he would like to see
that policy. Someone is telling us we should give this for
nothing because that is the City policy. If that is true, he
would like to get something from whoever makes that policy saying
so. He has no problem conveying the property at no cost if that
is the policy, but he sees nothing that says this. He would like
something in our record to show what the issue is and who has
made that policy.
Mr. McFarland asked if this was typical practice of all cities in
Minnesota.
Ms. Dacy stated no. Mr. Flora advised Ms. Dacy that, in his
experience in the City on improvement projects, the City has
provided the right -of -way at no cost.
Mr. Prairie Stated he was sure that cities, counties, and the
state do this °all the time. If the City receives property and
the County receives property, it is then a wash. There are other
things they swap.
Mr. Burns stated this is an administrative policy that has been
required by the County.
Mr. Commers stated that then should be uniform throughout the
County.
Mr. Fernelius stated, in conversation with Mr. Mike Kelly, Mr.
Kelly mentioned the owner to the north of the property owned by
the HRA made the same claim to split the property. That owner
had no plans on the drawing table and the County told him they
would not pay additional compensation for his inability to divide
the property.
Mr. Commers stated, if that owner does not want to cooperate and
wants to hold out, he can tell the County to condemn the property
and he will then get the full value. We do not want to get into
that. He is asking to find out what the policy is, to make sure
we are being treated the same as everyone else, and if that is
our policy have the Council decide that is the policy they want
to follow.
Mr. Burns stated there are so many agenda items and issues, and
this adds to the jam and the process. He did not think it was
really necessary. The City provided land to the County when the
HOUSING I REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 18
fire station was built on East River Road. Before we do it, we
should find out by what authority we have done so in the past.
Mr. Meyer stated another way of looking at it is that all of know
it will make a better City to have turn lanes there. If there is
a way we can aid by giving several thousand square feet, it is a
good trade to get a portion of East River Road cleaned up. He
thought it an inexpensive way to improve East River Road.
Mr. Burns stated he thought it is fair and legitimate to asked
that we convey this property from the City to the County and that
it is either implicit or explicit is some agreement. It may be a
part of the joint powers agreement. Staff will look at that
before asking the City Council to proceed with a policy on this
item.
Mr. Commers stated he agreed the bottom line is.that we will give
the property to the County. Irrespective of the cost, the HRA
will do what is necessary to improve that street. He is not
opposed to conveying the property to the County, but he wants to
get it straightened out as to how and why this is going on.
Mr. Burns stated he thought what exists is that the County has a
list of guidelines that are used for any construction project.
He thought the right -of -way was referenced in the joint powers
agreement entered into before starting into the project. The
difference here is that we are not involved in the construction
of the street. That is why the HRA is not being asked to sign a
joint powers agreement.
Mr. Commers asked staff to check on this and report back to the
HRA at the next meeting.
Mr. McFarland stated it seems strange that we buy this scattered
site in May and, in this case, make a 3,000 square foot
contribution to the County.
Ms. Dacy stated staff did not know this at the time.the property
was acquired. Initially, we thought we would get something back
also.
MOTION by Mr. McFarland, seconded by Mr. Meyer, to accept the
recommendation of staff to approve the of 2,970 square feet for
the right -of -way at 8280 East River Road at no cost.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 19
4. REVENUE AND EXPENSES
Mr. Ellestad presented the expenses, additional expenses needing
approval, and HRA portfolio inventory as requested at the last
meeting.
MOTION by Mr. McFarland, seconded by Mr.- Prairie to approve check
register #25332 to #25339 and the additional expenses as
submitted.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COM ORO DECLARED
THE MOTION CARRIED UN)WIMOUSLY.
5. FOLLOW -UP INFORMATION-REGARDING THE HOME PROGRAM
Mr. Commers asked how many applicants from last year were
completed.
Mr. Fernelius stated the 13 from last year were completed. This
year, of the 23 approved, perhaps 6 actually are completed. Keep
in mind that we did not start the program until July. There are
inspections and application processing that need to be done. The
majority are under way.
Mr. Meyer asked if staff had gotten any feedback on the
contractors doing the work and if there were any negative
comments.
Mr. Fernelius stated staff had not gotten negative comments in
terms of this program. Everyone has been, he thought, satisfied
and pleased with ACCAP. ACCAP made a special effort to make our
people a priority. They started in with the inspections and made
sure everything was done in a timely fashion. They have done a
very satisfactory job with the program.
Mr. Fernelius stated, in the other programs, they have not seen
the applications we would have liked. They will look at those
programs and see if they can determine a way to improve them.
Mr. McFarland asked if the Average Household Income was the
average income or total household income.
Mr. Fernelius stated this was the total household income and
includes income from all sources. This program is the deferred
payment grant program so part of the loan is forgiven and the
remainder is not repaid until the house is sold.
Mr. Commers asked what that income level meant. Does this mean
that 10% of the population in the City is at this level?
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994,--PAGE 20
Mr. Fernelius stated he did not know the statistics. HUD would
look at someone earning this level as very low income.
Ms. Dacy stated staff can bring to the next meeting a chart of
how the City breaks out on income.
6. UPDATE ON DEMOLITION BIDS FOR 550 HUGO STREET 677 HUGO
STREET, AND 683 GLENCOE STREET
Mr. Fernelius stated this is an information item. The
information includes a summary of the bids. On this particular
bid project, they ran into a problem in that the properties
contain asbestos in some form. The Federal regulations have
changed and the regulations are much stricter in disposal of
those materials. In the future, staff will have a consultant
look at these properties and determine if there is asbestos or
other hazardous materials to have it removed if necessary so
there is no delay. On this project, we now have a delay of about
20 days so demolition will not get started until the end of
November. Some of the final grading may not be completed this
fall.
Mr. Commers stated, if you do this before acquiring the property,
it may have ,a bearing on the value of the house.
7. MONTHLY HOUSING REPORT
Mr. Fernelius stated the summary is for the HRA's information.
There are some applications in the process for the Home Mortgage
Assistance Program. The lender is having some problems in
getting in touch with people and getting them to follow through
on what they need to do. This is one of the programs to be
evaluated to see what changes need to be made in order for it to
be successful.
8. UPDATE ON ANOKA COUNTY HRA.
Ms. Dacy distributed copies of a memo from Mr. Casserly regarding
the Anoka County.HRA.
Mr. Casserly stated he attended a meeting with County officials.
Some questions were raised and he essentially repeated in the
memo the questions that were asked to him. Can the County
establish a tax increment district in the City without HRA or
City Council approval? Can the County HRA do an economic
development project, a redevelopment project, and /or housing
redevelopment projects? As a practical matter, they cannot do
anything without City Council or HRA approval. The enabling
legislation that authorized their authority has a local approval
provision in it, and that local approval is very specific. The
question is whether they should establish a County HRA.
HOUSING A REDEVELOPMENT AUTHORITY NTG., NOVEMBER 10, 1994 PAGE 21
Mr. Commers stated, even though we may levy taxes, the County HRA
can tax us for whatever projects they do even if they do not do
anything in the City of Fridley.
Mr. Casserly stated this was correct. It is the same theory that
we do an HRA project in one ward of the City, we can tax the
entire City. They are subject to the same restrictions and
cannot levy at a greater rate than what the HRA can levy.
Mr. Casserly stated, if they want to proceed, it is worth the
City and the HRA looking at what it is they are trying to do and
find out if there are ways to cooperate. He thinks they would be
looking at housing projects.
Mr. Prairie asked if this was being considered because there are
areas in the County that are not covered by an HRA.
Mr. Casserly stated he was not sure.
Mr. Burns asked if they planned to take over the Section VIII
programs.
Mr. Casserly stated this may be. There will be interaction with
the metro, county and local HRA's and he suspects there will be
legislative discussion to find more resources for housing
programs to be promoted by HRA's. It may make more sense to put
the HRA at the County level.
Mr. Burns stated the basic conflict is that our motivation is to
improve values. He thought the potential County motivation is
for social service goals rather than property values.
Mr. Commers asked if the City Council had adopted a position in
support of or in opposition to a County HRA.
Mr. Burns stated the Council has not adopted a position. There
has been informal discussion.
Ms. Dacy stated the County has formed a committee. The City
Council may wait until there have been some meetings.
9. REVIEW OF EXPENDITURES FOR REDEVELOPMENT OF THE SOUTHWEST
QUADRANT AND LAKE POINTE
Ms. Dacy stated, at the last meeting, the HRA asked staff to put
together some proposed expenses.. Staff put together expenses for
professional services needed for the Southwest Quadrant and
potential costs if we cannot negotiate an acquisition price with*
the Suhs.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 22
Ms. Dacy stated the Phase I audit came back late last week.
Because of the tanks on the automotive building were removed in
the early 1980's prior to current regulations, Mr. Leisch
recommends we do soil sampling to assure there is no
contamination. Based on previous experience, the costs can range
from $2,000 to $10,000. There were three tanks removed. It may
be possible that we will not have condemnation costs or attorney
fees for the Suhs.
Ms. Dacy stated staff are recommending hiring Clark Engineering
to update the survey on the ten acres. The City has a 1985
survey, but much has changed.
Mr. Commers asked if this survey would be final.
Ms. Dacy stated this is a boundary survey. This survey would be
used for the plat.
Ms. Dacy stated the meetings on the Lake Pointe property are
going very well. They are getting good feedback. At most of the
meetings, the typical question is, "Do you have a Phase I audit
on Lake Pointe ?" She got a quote from Mr. Leisch for a Phase I
audit for $2,473. Between 1949 and 1957, the site was used for a
bus garage. There may not be a need for an audit.
Ms. Dacy stated a survey is requested for Lake Pointe. They will
need to reset the boundary corners in order to replat the survey.
The work may go faster based on the field notes Sunde Land
Surveying has to date. The City does not have an as built survey
for what is on the property. The boundary survey may not cost as
much as quoted. Staff is requesting authorization to get this
wrapped up with an amount up to $7,700.
MOTION by Mr. Prairie, seconded by Mr. Meyer, to authorize staff
to hire Clark Engineering to do the survey for the Southwest
Quadrant, to approve a Phase I audit for Lake Pointe, to approve
a Phase II audit for the Southwest Quadrant, and to authorize the
survey for the Lake Pointe property.
UPON A VOICE VOTE] ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
10. UPDATE ON LAKE POINTE MARKETING
Mr. Burns stated they had a visit from a potential user last week
by Mr. Nath, head of the Torchwood Group. This group owns 27
Burger King restaurants and is the company who has the Burger
King at 85th. They employ 1800 people and have office space
located west of Sheraton Park Place at I -394 and Highway 100.
Their lease runs out at the end of 1996, and Mr. Nath is very
interested in approximately 50,000 square feet of office space on
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 19914 PAGE 23
the Lake Pointe site. He would like it to be.a contemporary
design and promises this would be Class A office space. Based on
comments made by others, he has the financial wherewithal to do
this. The question is whether or not we want a project that is
as small as 50,000 square feet as a first project on this site.
Part of Mr. Nath's motivation is that he lives in North Oaks and
this location is convenient.
Mr. Prairie stated this is smaller than what they had envisioned.
Mr. Burns agreed. He discussed this with the City Council, and
they felt that it might be all right if we put them on the east
side where we had planned to put the hotel, bank and restaurant.
He thought the site originally thought to be a bank site might be
a good location. There are about eight acres on the east side
that is separated from the main body of land by the access road.
Mr. Prairie asked what the developers think about the importance
of the first building going up.
Mr. Burns stated he thought it has to set the tone for the rest
of the development. He thought it would make a difference if
they put this building on the smaller property.
Mr. Prairie asked if there had been any conversation with
Medtronic.
Mr. Burns stated he had not talked to them in the last month.
The last time he spoke with them, they were evaluating their
five -year building plan. There was no formal commitment.
Mr. Prairie stated Medtronic had a list of things they were going
to do and he thought they had accomplished all of those things.
They are building around the world.
Mr. Burns stated staff did industrial retention visit to them
this summer and at that time they were in a holding pattern with
their local headquarters and employment base in the City. They
are doing some reorganization to get a higher productivity with
fewer employees. He did not get the impression they were looking
for a new corporate headquarter site.
Mr. Meyer suggested staff talk about this with the market
consultants. The question regarding the first building on a site
is an important question.
Mr. Burns stated he thought this was a question they should raise
with the marketing consultant. He did not think moving this to
the east side would hurt their chances.
Mr. Commers stated this is a very visible site.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 24
Mr. Prairie asked if this would be a place for a hotel.
Mr. Burns stated there would still be room for a hotel. Mr. Nath
is proposing a three- story, 50,000 square foot building.
Mr. Meyer stated he thought it would be good to have a neutral
type of business at the entrance. If built there, it sets the
tone for whatever comes into the site.
Mr. Burns stated he is assuming we can work with Mr. Nath on the
architecture and get a consensus on the style. Would we want to
deny this project based on the size?
Mr. Prairie stated it depends on what the experts tell us.
Mr. Commers stated they should question the experts to see what
they think.
Mr. Burns stated he will bring in the market consultants.
Mr. Prairie thought there was much vacant office space.
Mr. Burns stated the vacancy rates is less than 10t right now.
If someone wants 10,000 square feet, they have a hard time
getting it. He is also hearing that some of the easy deals for
Class A office space.are no longer available. There is a market.
for Class A space and there may also be a market for Class B
office space.
Mr. Prairie asked if they would be optimistic to see if someone
would come in.
Mr. Burns stated the best strategy may be to wait and see the
results of the advertising campaign. On the other hand, this is
a substantial project.
Mr. Meyer stated the memo covers some things talked about. The
design criteria should be prepared for the buildings in order to
insure the quality of the architecture will be consistent
throughout the development. This implies that we should get
design criteria established by which to judge a proposal.
Mr. Burns agreed. He also thought they need to be discussing
some financial options for making land available to prospective
tenants.
Mr. Casserly stated our analysis was done on the basis of having
one developer. We can have more than one developer but we then
need to do some of that ourselves. If this is a high quality
building, it could set the tone. The problem is going to be
.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 25
figuring out the parking. That is where we will need help from
the professionals.
Mr. Meyer stated he thought it would be interesting to ask the
consultant if it would be profitable to have an architect do a
campus plan, do prospective builders want that, and how will
parking be handled on the site.
Mr. Burns stated they may want to consider a parking ramp.
Mr. Meyer stated, when we get to that point, we need an overall
plan. There is also the problem with the series of pads already
there. It will be a miracle if a prospective builder uses those
pads.
Mr. Commers asked staff to continue getting information.
11. UPDATE ON ACCAPIS APPLICATION TO MHFA
Ms. Dacy stated the memo was for their information. The
application is underway.
OTHER BUSINESS
12. HRA PROPERTY TAXES
Mr. Commers stated, on the two properties that the HRA leases
out, the HRA must pay taxes. He did not think this,true.
Ms. Dacy stated, on the Dairy Queen, we were reimbursed for
taxes. On the fast food property, we have been paying the
property taxes.
Mr. Ellestad stated, since we are leasing and this is a business
corporation, we are collecting the taxes from them.
Mr. Commers stated this is an ad valorem real estate tax on this
property and this should be assessed as a tax directly against
the tenant.
Mr. Casserly stated he would look into that.
13. JOINT MEETING
Ms. Dacy stated she included a letter sent to the developers on
the joint meeting. The next meeting will be December 5th with
the City Council and the regular HRA meeting will be on December
8th. If there is a lack of regular items, the regular meeting
can be cancelled.
HOUSING & REDEVELOPMENT AUTHORITY MTG., NOVEMBER 10, 1994 PAGE 26
14. COMMENT RECEIVED REGARDING THE SOUTHWEST OUADRANT
Mr. Commers stated a citizen has talked to staff and is
suggesting that we talk to the developers to consider building a
skyway across the intersection of Mississippi and University and
that the senior housing have some retail space on the ground
level for the seniors.
ADJOURNMENT
MOTION by Mr. McFarland, seconded by Mr. Meyer, to adjourn the
meeting.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED AND THE NOVEMBER 10, 1994, HOUSING AND
REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:30 P.M.
Respectfully submitted,
'& uowl CLUl 'z7 Ida)
Lavonn Cooper
Recording Secretary
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Condemnation Resolution on Suh Property;
6420 - 6460 University Avenue N.E.
Negotiations were initiated with Dr. and Mrs. Suh for the
remaining.three acres of the Southwest Quadrant in the Fall of
1994. Although we still hope to negotiate the acquisition of the_
property, it is necessary for the HRA to pass a resolution
initiating the condemnation.prcceedings.
After adoption of the resolution, staff will instruct the
attorney not to file the condemnation action until it is clear
that we cannot successfully negotiate the acquisition of the
property. Postponing adoption of the resolution to February
would slow the process significantly (see Item #8 regarding the
redevelopment schedule).
Staff recommends that the HRA approve the attached resolution
authorizing condemnation of the Suh property.
BD /dw
M -95 -19
1lL11
HRA RESOLUTION NO. N - 1995
A RESOLUTION OF THE BOARD OF THE HOUSING &
REDEVELOPMENT AUTHORITY OF FRIDLEY#
MINNESOTA, AUTHORIZING THE ACQUISITION OF
CERTAIN PROPERTY BY AN EMINENT DOMAIN
WHEREAS, the Board of the Housing & Redevelopment Authority of
Fridley, Minnesota has determined that there is a need to acquire
property, described in Exhibit A, which is attached hereto and
made a part of this Resolution, for the purpose of redeveloping a
residential area within the City of Fridley, Minnesota; and
WHEREAS, the Board believes that the acquisition of the property
described in Exhibit A is reasonably necessary and convenient to
the furtherance of these objectives and will promote the health,
safety, and welfare of the residents of the City of Fridley,
Minnesota, and is in accordance with the public purpose and
provisions of applicable state and local laws; and
WHEREAS, the Board has been unable to successfully negotiate the
acquisition of the property described in Exhibit A, located in
the City of Fridley, County of Anoka, State of Minnesota.
NOW, THEREFORE, BE IT RESOLVED, that the Board of the.Housing &
Redevelopment Authority of Fridley, Minnesota hereby authorizes
the acquisition of the subject property by an eminent domain
proceeding pursuant to Minnesota Statutes, Chapter 117.
BE IT FURTHER RESOLVED, that said Board determines that it is in
the best interest of the Housing & Redevelopment Authority of
Fridley, Minnesota to acquire the possession of said property as
soon as permitted by Statute, therefore, the Board hereby
authorizes the implementation of Minnesota Statute 117.042,
providing early possession of said property.
BE IT FURTHER RESOLVED, that the Housing & Redevelopment
Authority of Fridley, Minnesota's attorney is requested and
authorized to file the necessary petition therefore and to
prosecute such action to a successful conclusion or until it is
abandoned, dismissed, or terminated by the Board of the Housing &
Redevelopment Authority of Fridley, Minnesota or by the District
Court.
1(A)1
a
Page 2 - HRA Resolution No.
PASSED AND ADOPTED BY THE BOARD OF THE HOUSING & REDEVELOPMENT
AUTHORITY OF FRIDLEY, MINNESOTA, THIS DAY OF
, 1995.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
1(A)2
1
1 `
1 axe � a..�t 'JY !►
The property is legally described as follows:
A11 that part of ict 1, Block 1, Sylvan Hills, Plat 5, and that part of the
vacated 64 1/2 L ` - „` _N=ortheast that lies South and West of the following
described line: Ca-a-anc.ing at a point on the East line of Lot 1, Block 1,
Sylvan Hills, Plat 5, t -nt is located 29 feet South of the North line of
said lot, thence ;es- sallel to the North line and its Easterlv extension
a distance of fi."e =cez, thence North parallel to the East line of said Lot
1 a distance of 0.5 feet, then on a tangential curve to the left whose
delta angle is 83 decrees 24 minutes 30 seconds and a radius of 40 feet a
distance of 61.72 feet; thence Westerly tangent to the last described curve
a distance of 71.30 feet; thence on a tangential curve to the right ainose
delta angle is 83 degrees 25 minutes 30 seconds and a radius of 70 feet to
its intersection with the centerline of vacated 64 1/2 Avenue Northeast,.
including any part of portion of any other street or alley adjacent to said
premises now vacated or to be vacated together i•.Tith all rights, privileges,
easements, and appurtenances thereunto attached or belonging, and including
any and all fixtu es r_ai affixed to the premises; Anoka County, Minnesota.
1(A)3
r _
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA 44
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Resolution Approving Contract for
Exclusive Negotiations with Rottlund Company, Inc.
At the joint City Council and HRA meeting on December 5, 1994,
Rottlund Company, Inc. was selected as the preferred developer on
the Southwest Quadrant. Since that meeting, staff has met with
the developer and has proposed a "Contract for Exclusive
Negotiation" to Rottlund.
In essence, the redeveloper will be committing to submitting the
required planning applications, participating in neighborhood
meetings, completing a traffic study, and participating in the
contract with Macromedia (computer imaging company) by March 3,
1995. Further, the redeveloper will be committed to completing
the planning and zoning approvals, other governmental approvals,
and completing their financial analysis and marketing on the
project by July 30, 1995.
The HRA will be required to provide Phase I and II environmental
audits, site survey, and soil tests, and establish a tax
increment district by March 3, 1995. All of these processes are
currently underway. Further, by July 30, 1995, the HRA will be
required to complete the acquisition of the property not already
owned by the HRA (Suh and apartment property).
Further, the contract also states an intent by the redeveloper
and the HRA to execute a development contract which would
establish the sales price per unit, the land sale amount per
unit, and the establishment of dates to accomplish the
redevelopment project.
The agreement will require that the redeveloper submit $15,000 to
compensate the HRA for its soft costs in processing the
redevelopment project. If Rottlund terminates the agreement, the
amount of unexpended funds would be returned to the redeveloper.
If a redevelopment contract is executed, the $15,000 will be
applied toward the purchase price of the project area.
1(
Contract for Exclusive
Negotiations with Rottlund
January 6, 1995
Page 2
Jim Casserly has prepared the contract and at the writing of this
report, Rottlund was still reviewing its terms. Casserly has
prepared a resolution for HRA action. We hope to distribute the
agreed -upon negotiated contract with this agenda distribution.
If not, it will be forwarded to the HRA as soon as possible.
Staff recommends that the HRA approve the resolution authorizing
execution of the Contract for Exclusive Negotiations. In order
to maintain the redevelopment schedule, if the HRA has concerns
regarding the contract, the HRA may want to consider approving
the resolution and the contract subject to staff following -
through on the points that the HRA would like to clarify.
BD /dw
M -95 -20
1(B)1
4
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: Fridley Housing and Redevelopment Authority
FROM: James R. Casserly
Mary E. Molzahn
RE: Contract for Exclusive Negotiations
between the Fridley HRA and Rottlund
DATE: January 5, 1995
Attached you will find a Resolution Authorizing the Execution and
Delivery of a Contract for Exclusive Negotiations (the
"Contract ") between the Housing and Redevelopment Authority in
and for the City of Fridley (the "Authority ") and The Rottlund
Company, Inc. (the "Redeveloper ").
The Authority has been attempting to redevelop the Southwest
Quadrant and has reviewed a proposal by the Redeveloper to
construct a mixed -use housing project. However, both the
Authority and the Redeveloper need a period of time in which to
prepare plans, meet with the affected neighborhoods, prepare a
plat, acquire properties not already owned by the Authority,
conduct soil tests and environmental assessments and so forth.
The Contract protects both the Authority and the Redeveloper
while the above activities are being undertaken. It is premature.
to prepare a contract for private redevelopment (the
"Redevelopment Contract ") because of the numerous planning issues
that need resolution.. However, the Contract does provide very
specific target dates which must be met. The Contract further
assumes that the parties will be negotiating the provisions of
the Redevelopment Contract and suggests several important
elements that should be included in the Redevelopment Contract.
Both the Authority and the Redeveloper are executing this
Contract with the hope and the intent that the Redevelopment
Contract will be executed and that a closing will take place.by
August 1, 1995. However, this Contract does not commit either
1(B)2
party to sign the Redevelopment Contract. The Authority should
understand the limitations of this Contract as it proceeds with
its planned acquisition. As a practical matter the Redeveloper
should be spending well in excess of fifty thousand of dollars so
it would be unlikely for the Redeveloper not to proceed.
However, there are always issues which need resolution including
those not currently contemplated but which will become obvious
during the planning and zoning process.
We recommend the execution of this Contract.
JRC/MEM/kh
Encl: Resolution
1(B)3
T_
HRA RESOLUTION NO. 7L, - 1995
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A CONTRACT FOR EXCLUSIVE NEGOTIATIONS BY
AND BETWEEN THE HOUSING & REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FRIDLEY,
MINNESOTA, AND THE ROTTLUND COMPANIES, INC.
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing & Redevelopment Authority in and
for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a
Contract for Exclusive Negotiations (the "Contract ")
with The Rottlund Companies, Inc. (the "Redeveloper ").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved and
adopted a development plan known as the Modified
Redevelopment Plan for its Redevelopment Project No. 1
(the "Redevelopment Plan ") pursuant to Minnesota
Statutes, Section 469.001 et sea.
2.02. The Authority hereby finds that the Contract promotes
the objectives as outlined in its Redevelopment Plan.
Section 3. Authorization for Execution and Delivery.
3.01 The Chairman and the Executive Director (the
"Officers ") of the Authority are hereby authorized to
execute and deliver the Contract when the following
condition is met:
Substantial.conformance of a Contract to the Contract
presented to the Authority as of this date with such
additions and modifications as the Officers may deem
desirable or necessary as evidenced by the execution
hereof.
PASSED AND ADOPTED BY THE BOARD OF THE HOUSING & REDEVELOPMENT
AUTHORITY OF FRIDLEY, MINNESOTA, THIS DAY OF
, 1995.
ATTEST:
LAWRENCE R. COMMERS - CHAIRMAN
WILLIAM W. BURNS - CITY MANAGER
1(B)4
r �
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995 r
TO: William Burns, Executive Director of HRA 4�
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Contract for Relocation Consultant for
Southwest Quadrant Redevelopment
Because the relocation consultant professional services will
exceed $25,000, we have contacted three relocation companies to
provide us-- quotes for relocation services for the commercial
entities on the Suh property and the tenants on the apartment
properties.
To -date, we have been using Kirk Schnitker from Professional
Redevelopment Resources, Inc. (a copy of his fee proposal is in
the HRA packet). We have also contacted Comworth Inc. and Wilson
Development Resources. Both companies have worked.for a number
of municipalities in the metropolitan area.
We have asked the consultants to provide us with a quote by next
Tuesday, January 10, 1995. We will then present the results of
the three quotes to the HRA at the meeting.
In order to initiate the proper procedures to relocate the
commercial tenants and the apartment tenants, it is necessary to
hire the relocation consultant as soon as possible. We will
attempt to contact references and will be prepared with a
recommended consultant at Thursday's meeting.
BD /dw
M -95 -21
1
Request for Proposal
Relocation services
summary
The City of Fridley and Housing and Redevelopment Authority (HRA) are
requesting proposals for tenant and business relocation services. The City
is in the process of redeveloping a 14 acre site which is currently
occupied by several apartment buildings, a small retail strip center, a car
wash and a fast food restaurant.
Project Information
Address
1. 155 -175 Satellite Lane
2.
3.
4.
5.
rim
195 Satellite Lane
201 Satellite Lane
221 Satellite Lane
Total =
Retail Strip Center
Units No. of Bedrooms
33 units 32 Two.bedrooms
1 Efficiency
20 units 18 Two bedrooms_
2 One bedrooms
12 units 11 Two bedrooms
1 Efficiency
11 units 11 Two bedrooms
76 units
- (2) Restaurants
- Video Store
- Temporary employment service
- (2) Small groceries
Car Wash (four stalls)
7. Fast Food Restaurant
Funding Source /s: - Tax Increment
- Local HRA /City Funds
Time Frame: The City plans to start the acquisition process in
February of 1995. Acquisition and relocation activities
should be completed by the end of April or early May of 1995.
Selection of a relocation consultant would occur in
January.
1(C)1
RFP for Relocation Services
Southwest Quad - Page 2
Services Requested
At a minimum the relocation services must cover the following:
I. Tenant Relocation Services
1. Prepare and send notices of relocation eligibility and
information brochures.
2. Conduct comparable search and document findings.
3. Complete required comparable inspections.
4. Issue available comparables.
5. Issue 90 day notices.
6. Consult with tenants regarding income, relocation eligibility
temporary moves, moving claims, rental assistance claims, move
out dates, and other issues as needed.
7. Inspect replacement units.
8. Prepare moving claim forms.
9. Prepare rental assistance claim forms.
10. Present executed claim forms to City.
11. Document files as required by URA.
12. Comply with URA requirements.
13. Correspond with City as necessary.
14. Close out and maintain files in audit -ready manner.
II. Business Relocation Services
1. Prepare and send notices of relocation eligibility and
information brochures.
2. Conduct site survey.
3. Video tape site.
4. Interview tenants.
5. Advise tenants of relocation benefit options.
6. Provide referral services as necessary.
7. Issue 90 day notices.
8. Assist owner(s) in moving the business.
9. Prepare the appropriate claim forms.
10. Present executed claim forms to City.
11. Document files as required by URA.
12. Comply with URA requirements.
13. Correspond with City as necessary.
14. Close out and maintain files in audit -ready manner.
1(C)2
RFP for Relocation Services
Southwest Quad - Page 3
Proposal Outline
Your proposal should follow the outline described below. Additional
information about your firm or services would be appreciated.
Fees for Services
1. Tenant relocation (per tenant) services for this project.
2. Business Claims for this project.
a) Payment in Lieu of Actual Expenses.
b) Actual Cost Claims.
3. Appeals
Specify the cost for appeals (i.e. set charge or billed
on an hourly basis).
Misc.
1. General Hourly Rate.
2. Miscellaneous expenses (specify if you have additional charges
for secretarial services, copying, mailings, mileage, and faxes.
Summary of Staff Experience
Please provide a summary of the staff who will work on this project
and their experience.
Previous Pro -iects and References
Please provide a list of previous projects your firm has worked
on and three (3) client references.
Deadline
Please submit your completed proposal to the City of Fridley, 6431
University Avenue NE, Fridley, MN 55432, Attn: Grant Fernelius by no later
than 4:00 p.m. on Tuesday. January 10,_1995.
Questions concerning this RFP can be directed to Grant Fernelius at 572-
3591.
1(C)3
r
Community Development. Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Contract with Macromedia Technologies
Inc. for Computer Imaging of the Southwest
Quadrant Redevelopment Plans
At the City Council and HRA joint meeting on December 5, 1994,
staff was directed to inquire about the.possibility of using
computer imaging for the development plans of the Southwest
Quadrant. As you recall, some of the City Council members viewed
a demonstration by Macromedia Technologies Inc. which displayed
various products of computer imaging..
Staff met with Frank Blundetto, President of Macromedia
Technologies Inc.., in.December. He has submitted a proposal
including three options which are photographic still renderings,.
animations, and an interactive computer program.
Although staff is still negotiating with Rottlund regarding their
amount of-participation,-it is recommended that Rottlund
participate up to 50% of the contract amount. I am recommending
that the HRA pursue purchasing Option. #1 which is creation of
three photographic still renderings (11" x 14 ") of three views
into the development. In addition, I recommend that a two minute
animation also be purchased. Purchasing Option #1 and the two
minute animation would equal a contract cost of $19,100. If
Rottlund agrees to the 50% participation, then the cost to each
party would be less than $10,000.
On a number of occasions, I have seen Macromedia's work and
technology. There is no question that use of this technology
will help to visualize the project at public meetings.
Because Rottlund participation is not known at this time, staff
recommends that the HRA authorize staff to execute a contract
with Macromedia Technologies Inc. at a cost not to exceed
$19,100.
BD /dw .
M -95 -22
iii`
MACROMEDIA
Technologies Incorporated
December 20, 1994
Barbara Dacy
City of F, idiey
6431 University Avenue NE
Fridley, MN 55432
Ph. (612) 572 -3590
Dear Barbara,
It was a pleasure to meet with you last week. As per our conversation I am quoting you
the following costs to visualize the proposed Rottlund development. 1 have menued
the visualization approach with options so you can choose the approach that best suits
your needs.
Option One:
Photographic Still Renderings
These are photo - realistic stills which show the proposed development site. These
renderings are created at a level of realism that is almost impossible to tell what has
been created by the computer and what actually exists. The costs listed below are to
create' one 11 x14 inch photographic print of each view selected, costs for additional
sizes or quantities are available upon request.
Total Costs:
Three Views:
(Minimum order)
Each Additional View:
$9,600.00
$1,000.00
4590 Scott Trail ■ Eagam 1 �SD ) l ■ (612) 683 -0579
Option Two
Animations:
Option two will be the creation of a video animation of the proposed development site.
The video animation will have a photo- realistic backdrop and will show all aspects of
the proposed development site. The costs listed below assume that Option One has
been created. I recommend that due to the size of the proposed project a minimum of
4 minutes be created for the animated presentation.
Total Costs:
Two Minute animation: $ 9,500.00
Four Minute animation: $18,500.00
Option Three
Interactive Computer Program
Option Three is an interactive Windows based computer program that shows various
views of the proposed development site. This program will allow the user to select
views in or around the proposed development (these views will need to correspond to
the views create in Option One) and view them on the computer screen at
photographic resolution. The costs listed below assume that Options One and Two
have been created.
Total Costs:
Three view selections: $2000.00
Each additional view: $ 500.00
Production Schedule and Terms
Our terms are 1/2 down with balance due upon delivery of the final product. I
anticipate a six (6) week production schedule from receipt of deposit and notice to
proceed to delivery of the finished product.
Barbara, as I mentioned at our first meeting this visualization approach has
tremendous value for municipal review as well as marketing potential for Rottlund
homes. If you have any questions regarding this proposal or our services I can be
reached at 683 -0579. 1 look forward to working with you on this important project and
talking with you again soon.
Sicerely,
J P hn Gregor
rector of Sales d Marketing
I,,
1(D)2
r l
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
TO: Fridley Housing and Redevelopment Authority Members
FROM: William W. Bums, Executive Director of the HRA ACe
DATE: January 6, 1995
SUBJECT: Acquisition of Frank's Used Cars
With the recent death of Mary Gabralcik, the question of the acquisition of the
Frank's Used Cars property has once again emerged. Staff has worked with Brad
Bjorklund, our appraiser, to identify a preliminary budgetary estimate for the
acquisition of the property. I spoke with the real estate agent representing the
owners of the property and with Frank Gabralcik, Jr., regarding the HRA's purchase
of this property.
Before proceeding, I would like to ask the HRA to consider the acquisition of the
Frank's Used Cars property and to provide further direction for the negotiation of the
purchase price.
Thank you for your consideration of this matter.
TT11:
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA 44
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Contract with Michael O'Neal for Focus
Groups
As a result of the completion of the redevelopment priority and
housing program focus area report, the Hyde Park area was
identified as a Priority A area for housing programs. Specific
activities recommended to be completed in 1995 consisted of three
focus groups in Hyde Park the first quarter of 1995; one for
single family owners, one for multiple family owners, and.one for
tenants. In addition, in order to improve the effectiveness of
the housing rehabilitation programs, it was recommended that two
additional focus groups be conducted; one with program recipients
and the other for those persons who were denied assistance or
withdrew their application.
The City Council on a number of occasions has requested staff to
pursue the focus group technique as a means to.show the City's
interest in improving neighborhood stability and conditions.
Secondly, the City Council has also asked us to measure the
"success" of the rehabilitation programs and possibly develop a
program for "people who fall through the cracks ".
The City Council directive, in addition to the staff work on the
priority analysis, leads us to recommend that the HRA incorporate
funding for a minimum of five focus groups in the 1995 budget. I
am pleased to report that via the neighborhood revitalization
program in Minneapolis, we were able to contact Michael O'Neal to
assist the HRA in completing the focus groups.
By profession, Mr. O'Neal is a professor of Sociology at Augsburg
College; however, he has also acted as a research consultant as
part of the neighborhood revitalization program in Minneapolis.
He has extensive experience in research methods, public policy
evaluation, survey design, and focus groups. Staff became aware
of Mr. O'Neal through a videotape we watched at the request of
Councilmember Nancy Jorgenson.
3
Focus Group Contract
January 6, 1995
Page 2
Staff has met with Mr. O'Neal on two occasions and has requested
that he submit a proposal to conduct six focus groups. Although
five is being contemplated at this time, depending on the success
of any one of the five, we may have to conduct another one. The
total contract amount proposed by Mr. O'Neal is $8,700. We
believe this is far less than a proposal that we would have
received from a marketing research consultant. In fact, Mr.
O'Neal states that he "has tried to keep the budget low since
this will be part of my community service that Augsburg College
wants to provide to those within the Twin Cities community ".
Staff recommends that the HRA authorize staff to execute a
contract for an amount not to exceed $8,700 to conduct six focus
groups.
BD /dw
M -95 -23
ELI
L
Housing Focus Groups
Objectives
To collect and analyze information from residents about the
following issues:
1. Neighborhood perceptions
2. Housing needs /problems
3. Existing programs
4. City's role in meeting those needs
5. Ideas for new programs
Method and Target Audience
Conduct one evening focus group sessions with the following
groups:
1. Residents of Hyde Park.
Rationale: This area has been identified by staff.as a
redevelopment priority area and neighborhood input is a
critical component. This-group could also serve as a
"pilot" for additional focus groups in other city neigh -
neighborhoods.
2. Landlords of Hyde Park.
Rationale: This group could lend perspective on issues
which face rental property owners and could also serve as
a "pilot" for additional rental focus groups.
3. Tenants of Hyde Park
Rationale: This group would provide the tenant's view of
their neighborhood, housing needs, problems /solutions.
4. Program Recipients
Rationale: This group could help determine what attracted
people to the program, what they liked /disliked about the
program, areas where service /program could be improved.
5. Program Non - Participants
Rationale: This group could help us learn why people either
withdrew from the program or were denied assistance. Also
might help us identify programs /services that could better
meet their needs.
UL,
Michael E. O'Neal
1906 Elliot Avenue South
Minneapolis, Minnesota 55404
(612) 870 -1013
Barbara Dacey
City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
� S
13 December 1994
Dear Mn Dacey,
Attached you will find my proposed budget for conducting and
analyzing the six (6) targeted focus groups. The information from
these focus groups will then be compared to the census data you
already have on the Fridley area. As you requested, I have
arranged for an experienced facilitator to conduct the groups and
I will serve as the transcriber. In addition to the written notes
of the meetings, the groups will also be audio taped. The best
size for this type of group is from 8 to 12 participants, but no
group should ever be larger than 14 people. Focus group
participants will also be asked to complete an anonymous survey at
the end of each meeting so we can match their demographic
characteristics to larger profile of the area's residents.
As we agreed, your staff will assume the responsibilities of:
scheduling the meetings, arranging the meeting room, providing
transportation for those Fridley residents that need rides to and
from the government center and scheduling child care. Since the
groups will last two hours, I Would suggest that you provide some
sort of light refreshment and beverages. I also recommend that the
meetings be scheduled for both early evenings and Saturday mornings
so more people have the option to participate. Depending on your
preference, a representative of the city or from your staff could
introduce the purpose of the meeting and thank residents for their
participation. However, the facilitator can, and will do this,
unless I am notified of your preference.
I will provide the summary analy� of each focus group as well as
a combined report of all the meetings. This will include analyzing
the focus groups and the exit surveys, in relationship to the
census data and geographic information systems (GIS) data your
staff has already complied. I may require some additional time
from your staff to conduct extra data runs and /or produce maps that
I might need to finalize the report. My final report will include
recommendations on how the City of Fridley can best provide housing
funds to this area of the city, if you determine recommendations
are desired.
As I have mentioned, I have tried to keep the budget low since this
will be part of my community service that Augsburg College wants to
3C
provide to those within the Twin Cities community. I have been
able to keep the budget low given our verbal understanding that I
would be able to use the data generated for this report for other
academically related research. In this other research on the Twin
Cities metropolitan area, neither the City of Fridley, or any of
the focus groups participants would be identified.
I hope the proposed budget meets with your approval. If you have
any questions please call me (870- 1013). I would be prepared to
start on the project in early January, 1995, if a contract can be
arranged. I will need to start by clarifying your specific housing
questions, establishing what existing data you already have on the
neighborhood and reviewing information you have of previous housing
grant applicants. The focus groups could be conducted as early as
mid- February, if it is feasible . for your staff to schedule them
that quickly. If this proposed schedule is feasible, I would
project having a report completed by at least the end of March,
1995.
sincerely,
Z��
Michael E. O'Neal
enclosures: Budget
Vita
3D
Proposed Budget for City of Fridley
Focus Groups, Analysis and Final Report
Submitted by Michael E. O'Neal
13 December 1994
This budget assumes that staff from the City of Fridley will
arrange meeting space, obtain participation from area residents and
provide transportation as needed for the participants. The City of
Fridley will also provide access to the census and geographic
information systems (GIS) data /maps required for the completion of
the report.
Six, two hour Targeted Focus Groups, 0100.00/hr 01,200.00
with 8 to 12 Participants. I
would recommend seven in case ($1,4C0.00)
participants attendance is low
or they fail to attend. I will
need to bill for one hour should
participants fail to attend.
Exit survey construction
Content analysis of focus groups
Analysis of surveys
Matching survey and focus groups
to existing data
Completion of final report, with
or without recommendation based
on preference of City of Fridley $7,500.00
Total $8,700.00
3E
Michael E. O'Neal
1906 Elliot Avenue South (612) 870 -1013
Minneapolis, MN 55404 (612) 330 -1095
Prof it e :
Strong research and teaching interests in urban community issues
and social policy concerns. Experienced in both applied and
academic research settings. Capable of working with both community
groups and policy developers. Interested in translating data into
usable public information. Primary areas of concentration are:
* research methods * statistic
* public policy evaluation * survey design
* geographic information systems
Academic Experience:
* Augsburg College, Department of Sociology, 1989 to Present.
* University of Minnesota, Department of Sociology, Graduate
Instructor, 1985 to 1989.
Professional Service:
* Research Consultant; Neighborhood Revitalization Program
(NRP); Minneapolis, MN.
* Community /Economic Development Consultant; People of
Phillips Neighborhood Group; Minneapolis, MN.
* Research Consultant; MN Governor's Task Force on Poverty.
Education:
* Ph.D. in Sociology; University of Minnesota, 1991. Emphasis
in urban social policy and politics; qualitative and
quantitative research; historical and comparative
methods, statistics and organizational analysis.
* M.A. in Sociology; University of Minnesota.
* B.A. In Sociology and Philosophy; University of Missouri,
St. Louis.
3F
,)using Program Focus Areas
Page 8
Recommendations - Housing focus Areas
�i✓i�y�TS
In addition to the rehab programming currently in place, it is recommended that the City and
HRA focus on two areas each year in the City, one concentrating on single family structures
and the other concentrating on multiple family structures.
The City's housing program can be considered in three tiers:
Priority
Areas: Specific areas which need immediate attention in the City to focus
housing programs and redevelopment projects (see recommended
priorities below).
Preventive
Maintenance: Identify properties which are in fair to good condition and provide reh? -b
loan or grant programs to property owners to prevent these properties
from sliding into the fair to poor category.
Education/
Information: Identify strategies to provide property owners with information on
home /structural maintenance and remodeling upc-rades, including
information on energy and water conservation.
The recommended priorities identified below represent the areas whic were identified as
having the most occurrence of poor structural conditions. These areas need more intensive
analysis to develop specific programs or redevelopment projects to ad;_ress the problems
occurring in the areas.
The priority areas have been divided into A, B, and C priorities. "A- priorities are those
which should be addressed in the immediate future (1990. "B " -2. s could b- address
in 1996. "C" priorities should be addressed in 1997. More wo- cou:: occur in other areas -s
the City becomes more skilled at completing specific projects /p=ograj-..:.
Dwelling Type
Priority "A"
Priority "B" Priority "C"
Single Family
Hyde Park
i
Plymouth Add-::.on Riverview Heights
Multi - Family
Satellite Lane
IsIan-' Park i Cannel Road
Driv-,. Charles Street
3G
is
V
.ousing Program Focus Areas
Page 9
It should be noted that Hyde Park has a mix of both single and multiple family structures, as
well as commercial buildings which were also identified as needing immediate attention.
Also, three out of the four apartment buildings on Satellite Lane ranked high in terms-of their
condition.
1995 Activities - PRIORITY AREAS:
SINGLE FAMILY
a. Conduct three focus groups in Hyde Park in the first quarter of 1995; one for
single family owners, one multiple family owners, and one for tenants.
b. Identify neighborhood problems and find out why owners have not taken
advantage of available housing programs.
C. _Conduct two more focus groups for rehab program recipients and those that did_
not qualify (the households which "fall through the program cracks".). These
should be conducted during the same timeframe.
d. Identify rehab program changes, develop new programs, and conduct additional
redevelopment analysis during the second quarter of 1995 in order to:
1. address the neighborhood concerns.
2. improve the rehab and housing programs for all property owners.
e. Implement and offer programs in the last six months of the year. This may
include a variety of programs including rehab, scattered site acquisitions, new
housing projects, or other ideas which may result from the focus groups or
during additional planning work in the second quarter of the year.
MULTIPLE FAMILY
Three out of the four Satellite Lane apartment buildings were identified as having fair
to poor structural condition. The current redevelopment effort on the Southwest
Quadrant should address these issues. The options currently being evaluated can be
applied to all multiple family buildings:
1. Do nothing;
2. Property owner completes rehab and HRA assists;
3. HRA purchases ownership position as a limited partner;
Housing Program Focus Areas
3H
age 10
4. FIRA purchases ownership position as a general partner and operates
apartment building;
5. Buildings are purchased, tenants relocated, and buildings demolished.
The City's work in 1995 will shape future approaches for multiple family properties.
1995 Activities - PREVENTIVE MAINTENANCE:
a. Respond to focus group findings by changing the rehab programs or develop
new programs that will encourage owners of properties in fair to good condition
to maintain their properties.
b. Conduct mailings to specific areas to generate interest in the rehab programs.
Develop and publish a home maintenance and remodeling guide.
1995 Activities - EDUCATION /INFORMATION:
The 1995 Goals and Objectives for the Community Development Department
proposed a rehab fair, production of videos, and working with a marketing
consultant to expand the programs' visibility.
b. Work with the Fridley Focus to write news articles regarding the activities in
priority areas, both single family and multiple family, to build awareness of the
City's emphasis on housing and neighborhood stability.
Future Activities
The City Council and the HRA should determine the priority areas for all land use categories.
Staff will complete priority area plans and submit additional findings to the City Council and
-HRA for approval. The following additional research has already been identified and is
currently underway to supplement current activities:
Continue additional analysis of data_
a. Calculate the percentage of exterior conditions requiring repair.
b. By census tract, calculate the number of single family homes with exterior
conditions requiring repair.
c. By census tract, compare housing conditions with 1990 socio- economic da:a.
d. By census tract, compare 1976 data with 1994 data to determine percent cInanQ-1 in
condition.
e. Map residential investment using the building permit information.
31
P i ,
,ousing Program Focus Areas
Page 11
?. Plan additional biennial observer teams to measure results of housing programs.
3. Improve networking with other cities and HPAs regarding housing programs. .
3J
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 5, 1995 P
TO: William Burns, Executive Director of HRA 4
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Public Hearing on Sale of Lots
Minnesota Statute 469.029 (Subd 2.) requires that the HRA conduct
a public hearing before it sells or leases.any real property. As
you know, last year we acquired eight (8) blighted or substandard
homes under our scattered site acquisition program. Except for
two sites (539 and 547 Glencoe St.), all of the homes have been
torn down and the lots are ready for new home construction.
In order to allow neighbors and the general public an opportunity
to review our plans, we are recommending that the HRA conduct the
public hearing before we start taking bids. Once.the hearing is
closed we can incorporate any comments or suggestions into the
bid process, if necessary, and then begin taking bids in February
and March of this year.
The advantage to this method is that the public is notified of
the opportunity to bid on the lots early in the process as
opposed to after the fact (i.e. after a builder has already
submitted a submitted a bid). The actual sale will still be made
to the highest most responsible bidder, contingent upon said
bidder executing a development contract with the HRA.
Contingent award would be made at the April meeting.
Recommendation
Staff recommends that the HRA call for a public hearing to be
held on February 9, 1995 to take comments on its plans to sell
the following vacant lots:
Public Hearing on Sale of Lots
January 5, 1995
Page 2
Address
187 Longfellow St.
6409 East River Rd.
8280 East River Rd.
677 Hugo St.
539 Glencoe St.
547 Glencoe St.
GF/
M -95 -15
PID
03- 30 -24 -42 -0039
15- 30 -24 -41 -0068
03- 30 -24 -23 -0001
03- 30 -24 -23 -0156
03- 30 -24 -23 -0071
03- 30 -24 -23 -0072
;N
0
Sale of Vacant Lots
Schedule
Task
Send letter out to neighbors
notifying them of public
hearing.
Publish hearing notice in Focus.
Conduct public hearing
Advertise lots for sale
Review offers and make award
to highest bidder contigent
upon execution of a development
agreement. Approve by motion
and allow 45 days for agreement
to be negotiated and approved.
Negotiate with builder on
closing date and misc. issues.
Consider development agreement
with builder and approve by
resolution.
Execute development agreement
with builder and conduct closing;
HRA to convey title (by quit
claim deed) and builder
to provide mortgage (due with
interest on or before 8/31/95).
Builder to present plans to
HRA before issuance of any
permits.
Builder to start construction
Builder completes home and closes
with buyer; HRA mortgage is paid
off.
Date
January 19, 1995
January 24, 1995
(Notice due at Focus 1/18/95)
February 9, 1995
February 13 - March 8, 1995
March 9, 1995
March 10 - April.6, 1995
April 13, 1995
April 24, 1995
May, 1995
June, 1995
August 31, 1995
M,
r �
i
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Authorizing Pay Increase for Housing
Coordinator
In order for Grant Fernelius to receive the authorized cost of .
living increase of 3 %, it is necessary for the HRA to pass the
attached resolution. The resolution was drafted by Bill-Hunt,
Assistant to the City Manager. The cost of the salary increase
is incorporated into the draft of the 1995 HRA budget. Staff
recommends that the HRA approve the attached resolution as
presented.
BD /dw
M -95 -16
d
MEMORANDUM
® Municipal Center
® 6431 University Avenue Northeast William C. Hunt
Fridley, Minnesota 55432 Assistant to the City Manager
UTYOF (612) 572 -3507
FMDLEY FAX: (612) 571 -1287
Memo to: Barbara Dacy, Director of Community Development
From: William C. Hunt, Assistant to the City Manager ; r
Subject: Resolution Authorizing Pay Increase for HRA Employees
Date: December 15, 1994
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, 1995 it will be necessary for the
HRA to take action on this matter at its meeting of January 12, 1995. 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
5A
7
RESOLUTION NO. HRA �� - 1995
A RESOLUTION AUTHORIZING AN INCREASE IN COMPENSATION FOR
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY EMPLOYEES FOR
THE 1995 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, 1995:
1. A general-increase of 3.0 percent in employee salaries.
2. For employees eligible for the health benefit who choose
dependent coverage, a maximum contribution of $345.00 per
month toward premium costs of health insurance. Up to
$15.00 of the above amount of $345.00 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 $210.00 per
month toward premium costs of health insurance. Up to
$15.00 of the above amount of $210.00 can be used for
premium costs of dental insurance. (Flexible Benefit
Plan, Option A)
4. An increase of 3.0 percent in automobile allowances,
where applicable.
5. A. contribution of _$165.00 per month to each employee who
chooses Option B of the Flexible Benefit Plan for City
of Fridley Employees.
6. Mileage reimbursement at the rate of $0.29 per mile.
a
7. A cap of $2,250.00 per employee per year on the
Educational Benefit with an extension of coverage from
tuition only to include required books, educational
materials and course related fees.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS
DAY OF , 1994.
WILLIAM A. CHAMPA - CITY CLERK
5C
WILLIAM J. NEE - MAYOR
g�
0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 5, 1995
TO: William Burns, Executive Director of HRA 11
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Authorization to Bid on 1375 Skywood Lane N.E.
This property is a duplex located along Skywood Lane and abuts
Interstate 694 (see attached map). The neighborhood primarily
consists of well maintained, single - family homes valued at
approximately $84,000. This property has had a long history of
problems, including most recently a foreclosure. For the past
several years it has suffered from deferred maintenance and
numerous complaints have been received by staff. In fact, this
property was identified as one of the worst (in terms of
condition) during our recent housing condition study.
In an effort to address this problem, we feel it is important to
intervene and acquire the property under our scattered site
acquisition program. Although, this property is in marginal
condition, it is suitable for rehabilitation. We are currently
in the process of talking with the Tamarisk group as a potential
site for their hospice program. We hope to have some indication
of their interest by the February 9th meeting. If Tamarisk is
not interested, we would proceed with moderate rehabilitation
work (est. $20,000) and sell the home to a first -time homebuyer
via lottery.
It. should be noted that the property will be offered by HUD for
bidding to the general public on January 17, 1995. Should we
proceed, we would be competing with other interested buyers. The
property has an assessed value of $96,120 (pay 1995) and had a
mortgage balance of $115,581. However, HUD has re- appraised the
property and is now asking $59,000.
Recommendation
Recommend that the HRA authorize staff to submit.'an offer to HUD
for 1375 Skywood Lane in an amount not to exceed $591000 and
further that the Executive Director be authorized to execute any
documents necessary to complete the purchase of said property.
GF\
M -95 -14
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SEC. 404* T. 3
ary OF FRIDLEY
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TO: FRIDLEY H.RA
FROM: CITY OF FRIDLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
NOV 1994
NOV 1994.' xx
Account #'s for
Account #'s for
236- 0000 - 336 -3000
HRA's Use
City's Use
ADMINISTRATIVE BILLING:
236- 0000 - 336 -3000
US WEST — TELEPHONE SERVICE
ADMINISTRATIVE PERSONAL SERVICES
14,657.00
101 - 0000 -341 =1200
ADMINISTRATIVE OVERHEAD
103.00
101 - 0000 -336 -3000
COMPUTER OVERHEAD
194.00
101 - 0000 -336 -3000
(For Wam & Mira eomputefs)
236- 0000 - 336 -3000
INSURANCE — NON PERSONNEL ALLOC OCT 94
TOTAL ADMINISTRATIVE BILLING:
460- 0000 -430 -4107 14.984.00
236- 0000 -336 -3000
OPERATING EXPENSES:
POSTAGE BY PHONE — POSTAGE
262- 0000 - 430 -4332
35.28
236- 0000 - 336 -3000
POSTAGE BY PHONE — POSTAGE
460 -0000- 430 - 4332
23.12
236- 0000 - 336 -3000
US WEST — TELEPHONE SERVICE
460 - 0000 - 430 -4332
13.25
236- 0000 -336 -3000
INSURANCE — NON PERSONNEL ALLOC OCT 94
460- 0000 - 430 -4336
487.00
236- 0000 - 336 -3000
INSURANCE — NON PERSONNEL ALLOC OCT 94
450 -0000- 430 -4336
18.00
236- 0000 - 336 -3000
INSURANCE — NON PERSONNEL ALLOC OCT 94
455 - 0000 - 430 -4336
33.00
236- 0000 -336 -3000
TOTAL OPERATING EXPENSES: 609.65
BENEFITS EXPENSES:
CITY OF FRIDLEY — HEALTH INS, Sept —Dec 262 -0000- 219 -1001 768.00 236 -0000- 219 -1001
CITY OF FRIDLEY — DENTAL INS, Nov & Dec 262 -0000- 219 -1100 41.06 236 -0000- 219 -1100
CITY OF FRIDLEY — LIFE INS, Nov 262 -0000- 219 -1200 4.25 236 -0000- 219 -1200
TOTAL BENEFITS EXPENSES: 813.31
TOTAL EXPENDITURES — NOV 1994
File: \123DATA HRA \TIF\BIWNG.wkl DeiEdIs
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TO: FRIDLEY H.R.A
FROM: CITY OF FRIDLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
DEC 1994
>'' AEC[894 Account #'s for
...............................
HRA's Use
ADMINISTRATIVE BILLING:
ADMINISTRATIVE PERSONAL SERVICES
ADMINISTRATIVE OVERHEAD
COMPUTER OVERHEAD
(For Micro & Mini computers)
TOTAL ADMINISTRATIVE BILLING : 460- 0000 -430 -4107
OPERATING EXPENSES:
US WEST — TELEPHONE SERVICE
460 -0000- 430 -4332
AMERICAN EXPRESS — LUNCH
460 -0000- 430 -4337
INSURANCE — NON PERSONNEL ALLOC NOV & DEC 94
460- 0000 -430 -4336
INSURANCE — NON PERSONNEL ALLOC NOV & DEC 94
450- 0000 - 430 -4336
INSURANCE — NON PERSONNEL ALLOC NOV & DEC 94
455 -0000 -430 -4336
BENEFITS EXPENSES:
CITY OF FRIDLEY — HEALTH INS
CITY OF FRIDLEY — DENTAL INS
CITY OF FRIDLEY — LIFE INS
TOTAL OPERATING EXPENSES:
262 -0000- 219 -1001
262 -0000- 219 -1100
262 -0000- 219 -1200
TOTAL BENEFITS EXPENSES:
TOTAL EXPENDITURES — DEC 1994
File: \123DATA\HRA \TIF\B1WNG.wk1 Details
mm
Account #'s for
City's Use
14,687.00 101 - 0000 - 341 -1200
103.00 101 - 0000 - 336 -3000
194.00 101 - 0000 -336 -3000
14.984.00
13.30
236- 0000 - 336 -3000
48.92
236- 0000 -336 -3000
974.00
236 =0000 -336 -3000
36.00
236- 0000 -336 -30DO
66.00
236 - 0000 -336 -3000
1.138.22
192.00 236 -0000- 219 -1001
20.53 236 -0000- 219 -1100
0.00 236 -0000- 219 -1200
212.53
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of HRA A�
FROM: Barbara Dacy, Community Development Director
SUBJECT: Review Schedule of Redevelopment of Southwest
Quadrant
There are six areas of work that will occur simultaneously to
redevelop the Southwest Quadrant:
1. Expansion of the TIF District and Redevelopment Project Area.
2. Acquisition and Condemnation of Suh Property and Apartments
3. Relocation Process for Both Commercial and Apartment Tenants
4. Negotiation with Rottlund Homes, Inc.
5. Neighborhood Comment and Participation
6. Design Issues and Planning Approvals
Todd Stutz from Rottlund Company Inc. has advised us that they
are able to initiate construction this Fall. They would
construct a unit of each type (attached townhome, detached
townhome, and a condominium building) initially in order to
initiate marketing of the project. In order to transfer the
property to Rottlund on'August 1, 1995, we have developed a
schedule and have identified dates to accomplish certain key
tasks.
In general, the TIF district creation for the property occupied
by the apartments must be created first. That process has been
initiated and the City Council will conduct the public hearing on
February 13,1995. Concurrently, however, the HRA can proceed
with the acquisition of the Suh property and the relocation,
since it is within the existing ten acre project area..
During the month of December, the Executive Director has made
contact with all of the apartment owners and is beginning to
negotiate with each of them. The Executive Director will be
Schedule for Redevelopment
of Southwest Quadrant
January 6, 1995
Page 2
prepared to give the HRA an update at Thursday's meeting. If
necessary, a condemnation resolution to condemn the apartments
will be on the February HRA agenda subject to approval of the TIF
district.
As evidenced by other items on this agenda, negotiation with the
developer must occur immediately and the Contract for Exclusive
Negotiation must be initiated immediately in order to accomplish
the timeframes contained within the contract.
In order to accomplish the August 1, 1995 property transfer, the
development applications need to be submitted by March 3, 1995
for.Planning Commission and City Council consideration during
April and May. Final approval by the City Council will occur in
June. Then, the.redevelopment contract will be prepared and
considered by the HRA in either June or July.
Concurrent to all of this is the possibility of the-Quick-Take
Condemnation proceedings. Using the 110 day rule of thumb, the
Suh condemnation should result in the tenants being removed and
the property demolished in May. As for the apartments, the
tenants should be out of the buildings by June 1, 1995 and the
buildings demolished after that.
Attached is a summary of the important dates and listing of the
activities that will be completed by staff to accomplish the
aforementioned schedule.
BD /dw
M -95 -24
al
C CT R e '�V7►.�
e , 1 V OUTHWES 1 QUAD=S �+ , +�
1. Six Areas of Work Occurring Simultaneously:
A. Expansion of the TIF District and
Redevelopment Project Area
B. Acquisition and Condemnation of Suh
Property and Apartments
C. Relocation Process for both commercial and
apartment tenants
D. Negotiation with Rottlund Homes, Inc.
E. Neighborhood Comment and. Participation
F. Design Issues and Planning Approvals
2. Key Dates for the City Council:
A. Neighborhood Informational Meeting;
February 2, 1995.
B. Public Hearing on Expanding TIF District;
February 13, 1995.
C. If Both Meetings are Non - Controversial, we
Would Like to Have Resolution Expanding
the TIF District Approved on February 13,
1995; Save Two to Three Weeks on
Condemnation Process.
D. Public Hearings on Development
Applications; May 8 or 22, 1995.
8B
Southwest- Quadrant
Page 2
3. Key Dates for the HRA:
A. Suh Condemnation; January 12, 1995.
B. Preliminary Development Agreement; January
12, 1995.
C. Resolution Expanding TIF District; February
% 1995 Subject to Council Approval.
D. Apartment Condemnation Resolution;
February 9, 1995 Subject to Council Approval.
E. Development Contract Approval; June 9,
1995.
2z
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: January 6, 1995
TO: William Burns, Executive Director of the HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Proposed Loan Agreement Between the City of
Fridley -and the Fridley Housing & Redevelopment
Authority for the Southwest Quadrant
At the joint City Council and HRA meeting on December 5, 1994,
the City Council and the HRA directed staff to prepare a
potential loan arrangement between the City of Fridley and the
HRA to pay for some of the redevelopment expenses of the
Southwest Quadrant.. Staff recommends the following loan terms:
Redevelopment Expenses - $4,200,000
Redevelopment Revenue -
Land sale - $1,000,000
City loan at - $1,600,000
5% for 15 years
HRA cash - $1,600,00
$4,200,000
Although Casserly's memo recommends a 3% - 4% interest rate,
Casserly is assuming 0% property appreciation over the course of
15 years. It is more than likely that the $150,000 difference
between 3% and 5% will be generated by increase in values of the
units.
Unless otherwise directed, staff will prepare the loan agreement
between the City and the HRA with the above terms for City
Council approval at its January 23, 1995, meeting, and for HRA
approval at its February 9, 1995 meeting.
BD /dw
M -95 -12
G
r ti.
Casserly Molzahn & Associates, Inc.
215 South 11th Street, Suite 300 • Minneapais • Minnesota 55403
Office (612) 342 -2277 • Fax (612) 334 -3382
M E M O R A N D U M
TO: City of Fridley
Attn: Barbara Dac:
William Burns
Rick Pribyl
FROM: James R. Casserly
Mary E. Molzahn
RE: .Funding Project Costs for SW Quad
DATE: January 5, 1995
The expenses associated with zhe redevelopment of the Southwest..
Quad are approximately $4.2 pillion. We anticipate selling the
site for at least $1 million. The tax increment that will be
generated as a result of the 172 unit Rottlund proposal.amounts
to approximately $1.2 million if we assume a present value or
interest rate of 7.5 percent. The deficit to the HRA is $2
million. Our goal is to try _-o reduce this deficit.
One method to reduce the def =cit is to have a lower interest rate
on any debt supported by the _ax increment. If the amount of
available tax increment is constant, a lower interest rate will
support a larger debt or principal which, in turn, reduces the
deficit. For example, if the HRA were able to pay 3% on any
funds it borrowed, it would t_zen have approximately $1.7 million
available for the project instead of $1.2 million which assumes
the 7.5 percent interest rate.
The City has fund balances which it invests. The fund balances
are a cushion in the event o: any dramatic change in City
revenues and the investment earnings are additional revenues for
City activities. If the City is swilling to take a lower interest
rate on a portion of its investments and assuming that needed
cash reserves are not threatened, then the City can invest in a
note or obligation issued by she HRA to help finance the.
Southwest Quad project costs.
The City should not loan nor should the HRA borrow more than can
OA
P,
be reasonably repaid from the tax increment generated by the
proposed redevelopment. If the City were to loan, for example,
$1.6 million at an interest rate of 3 to 4 percent for 14.5
years, then our analysis shows that the City could be completely
reimbursed and would have the money available to it for future
reinvestment. The lower interest rate will provide at least
$400,000 of assistance to the HRA.
From an HRA perspective, it should not borrow money that cannot
be repaid from the proposed redevelopment. Any shortfall should
be taken from the fund balances of the HRA. If the HRA finds
itself in a position of not having adequate fund balances to
subsidize a project, then it should obviously not do the project.
If the true interest cost on the HRA's debt is less than the
interest earnings on its invested fund balances, then it might
make sense to issue debt. For the Southwest Quad project this is
clearly not the case.
Financing the $4.2 million of Southwest Quad expenses could be
accomplished as follows:
$1.0 million: land sales on approximately August 1, 1995
$1.6 million: City loan at 3 to 4 percent for 14.5 years
1.6 million: HRA cash
$4.2 million
We.believe this approach to be financially sound and the loan of
monies between the City and the HRA can be structured for a
nominal cost. Loans between related units.of government are
common and in this instance would help reduce the HRA's deficits
by over $400,000. Please keep in mind that all the numbers are
estimates. Substantial work needs to be done on both the expense
and the revenue side before any numbers can be finalized. If
there are any further questions, please give us a call.
JRC /MEM /kh