HRA 07/11/1996 - 6266HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JULY 11, 1996
7:30 P. M.
PUBLIC COPY
(Please return to Community Development Dept.)
* * * INFORMAL DISCUSSION BEGINS AT 6:00 P.M.
1. Housing Action Plan
2. HRA Levy
3. Revolving Loan Program
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JULY 11, 1996 7:30 P.M.
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LOCATION: Council Chambers, Fridley Municipal Center
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: June 13, 1996
CONSENT AGENDA:
Revenue and Expenses . . . . . . . . . . . . . .
. . 1
- 1B
Resolution Modifying the Redevelopment Plan . .
. . 2
- 2C
for Redevelopment Project No. 1 and the Tax
Increment Financing Plans for TIF Districts
#1 - #3, #6, #7, and #9 - #14
Approval of Development Contract and . . . . . .
. . 3
- 3Q
Indemnification Agreement with ACCAP; 380 -
57th Place N.E.
Approval of Exterior Architectural Plans . . . .
. . 4
- 4C
for Fridley Plaza Office Building
Acquisition of 5833 - 2 1/2 Street N.E. . . . .
. . 5 -
5C
ACTION ITEMS:
Consider Options for 6431 Jackson St. N.E. . . .
. . 6 -
6B
Approval of Housing Action Plan . . . . . . . .
. . 7 -
7A
HRA Agenda
July 11, 1996
Page 2
ACTION ITEMS (Continued)
Resolution Authorizing an HRA Levy . . . . . . . . . 8 - 8P
Resolution Authorizing Funding for the . . . . . . . 9
Revolving Loan Program
Resolution Authorizing Additional . . . . . . . . 10 - 10C
Expenditures for the Mississippi Street /3rd
Street Intersection Project
INFORMATION ITEMS:
Status of TIF Assistance for Wallboard, Inc. . . 11 - 11F
OTHER BUSINESS•
ADJOURNMENT
HRA RESOLUTION NO. 12 — 1996
A RESOLUTION ADOPTING 1996 TAX LEVIES
COLLECTIBLE IN 1997
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota (the "Authority "), as
follows:
Section 1. Recitals.
1.01. The Authority is authorized by Minnesota Statutes
Section 469.033 to adopt a levy on all taxable property
within its area of operation, which is the City of
Fridley, Minnesota (the "City ").
1.02. The Authority is authorized to use the amounts
collected by the levy for the purposes of Minnesota
Statutes Sections 469.001 to 469.047 (the "General
Levy ").
1.03. The Authority is further authorized to use the proceeds
of an additional levy to defray the costs of providing
informational service and relocation assistance as set
forth in Minnesota Statutes 469.012, Subdivision 1 (the
"Relocation Levy ").
Section 2. Findings.
2.01. The Authority hereby finds that it is necessary and in
the best interests of the City and the Authority to
adopt the General Levy and the Relocation Levy to
provide funds necessary to accomplish the goals of the
Authority and in furtherance of its Modified
Redevelopment Plan.
Section 3. Adoption of General LevV.
3.01. The following sums of money are hereby levied for the
current year, collectible in 1997, upon the taxable
property of the City for the purposes of the General
Levy described in Section 1.02 above:
Total General Levy: .0131% of Taxable Market Value
Amount: Maximum Allowed by Law
HRA Resolution No. 12 - 1996 - Page 2
Section 4. Adoption of Relocation Levy.
4.01. The following sums of money are hereby levied for the
current year, collectible in 1997, upon the taxable
property of the City for the purposes of the Relocation
Levy described in Section 1.03 above:
Total Relocation Levy: .0013% of Taxable Market Value
Amount: Maximum Allowed by Law
Section 5. Report to Citv and Filing of Levies.
5.01. The executive director of the Authority is hereby
instructed to transmit a certified copy of this
Resolution to the City Council for its consent to the
levies.
5.02. After the City Council has consented by resolution to
the levies, the executive director of the Authority is
hereby instructed to transmit a certified copy of this
Resolution to the county auditor of Anoka County,
Minnesota.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS 11TH DAY OF JULY, 1996.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
HRA RESOLUTION NO. 13 - 1996
A RESOLUTION AUTHORIZING THE FUNDING OF THE
FRIDLEY REVOLVING LOAN PROGRAM; PROVIDING FOR
THE DELEGATION OF CERTAIN POWERS AND DUTIES;
AUTHORIZING THE EXECUTION OF DOCUMENTS
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota (the "Authority "), as
follows:
Section 1. Recitals.
1.01. The Authority has previously established a
Comprehensive Housing Rehabilitation Program for the
City of Fridley (the "Program ") for the residents of
all of the City of Fridley's neighborhoods. One of the
types of loans available under the Program is a loan to
assist with home improvements (the "Revolving Loan
Program ") as more fully described in HRA Resolution No.
12 - 1996.
1.02. The Authority has entered into the necessary agreements
to implement the Program.
1.03. It has been proposed that the Authority now enter into
the necessary agreements to finance and provide the
funds required for the Revolving Loan Program.
1.04. It has been proposed that the Authority borrow the sum
of $1,500,000 from the City to fund the Revolving Loan
Program.
Section 2. Findings
2.01. The Authority hereby finds that its area of operation
in which it has implemented the Revolving Loan Program
is the area within the territorial boundaries of the
City as provided for in Minnesota Statutes, Section
469.002, Subd. 8 and that the Revolving Loan Program is
available to all eligible City residents.
2.02. The Authority hereby finds that the adoption of the
Revolving Loan Program has and continues to promote the
purposes of the Authority as those purposes are defined
in Minnesota Statutes, 469.001, et seg. (the "Act ").
HRA Resolution No. 13 - 1996 - Page 2
2.03. The Authority hereby finds that the Revolving Loan
Program is assisting in the alleviation of shortages of
decent, safe and sanitary residential housing available
within the City at prices affordable to persons and
families of low or moderate income as described
therein.
2.04. The Authority hereby finds that preservation of the
quality of life in the City is dependent upon the
maintenance, provision, and preservation of an adequate
housing stock; that accomplishing this is a public
purpose in that there are many residences in the City
which require rehabilitation; that a need exists to
provide in a timely fashion affordable housing to
persons of low and moderate income as described in the
Act and herein residing and expected to reside in the
City; that many owners, would -be purchasers or
providers of residences are unable to obtain mortgage
credit for rehabilitation of residences under current
market conditions; and that in establishing its
Revolving Loan Program the Authority is acting in all
respects to benefit the citizens of the City and to
serve a public purpose in improving and otherwise
promoting their health, welfare and prosperity.
2.05. The Authority hereby finds that a long term source of
funds is necessary to maintain the Revolving Loan
Program.
Section 3. Authorization for Funding.
3.01. The Authority hereby approves and adopts funding for
the Revolving Loan Program as described in the
Financial Analysis for the Revolving Loan Program
attached as Schedule A to this Resolution.
Section 4. Delegation of Power and Duties.
4.01. In accordance with the Act, specifically Minnesota
Statutes, Section 429.012, Subd. 1(3), and in
accordance with Schedule A, the officers, agents and
employees of the Authority are hereby authorized to
take such actions as may be necessary to provide the
funds necessary to operate the Revolving Loan Program.
Section 5. Authorization for Execution of Documents.
5.01. The Executive Director and the Chairman are hereby
authorized to execute all documents necessary to
implement the Program, including any loan documents
with the City which will provide $1,500,000 in funds
for the Revolving Loan Program.
HRA Resolution No. 13 - 1996 - Page 3
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF
THE CITY OF FRIDLEY THIS 11TH DAY OF JULY, 1996.
LAWRENCE R. COMMERS - CHAIRPERSON
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
HRA RESOLUTION NO. 14 - 1996
RESOLUTION AUTHORIZING AN ADDITIONAL
REIMBURSEMENT TO THE CITY OF FRIDLEY FOR THE
MISSISSIPPI STREET /3RD STREET INTERSECTION
CONSTRUCTION PROJECT
WHEREAS, Anoka County has required certain public improvements to
be completed to the Mississippi Street and 3rd Street
intersection as a result of the Southwest Quadrant redevelopment
project; and
WHEREAS, the City of Fridley opened bids on the project on June
20, 1996; and
WHEREAS, the lowest bid was $212,616.20 resulting in an overage
of $50,378.51; and
WHEREAS, the HRA passed HRA Resolution No. 7 - 1996 authorizing
reimbursement of up to one -half of the original project cost of
$162,237.69.
NOW, THEREFORE, BE IT RESOLVED that the Authority agrees to
reimburse the City of Fridley the remainder of the costs for the
completion of the public improvements at the intersection of
Mississippi Street and 3rd Street.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS 11TH DAY OF JULY, 1996.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
HRA RESOLUTION NO. 15 - 1996
RESOLUTION MODIFYING THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX
INCREMENT FINANCING PLANS FOR TAX INCREMENT
FINANCING DISTRICTS NOS. 1 - 3, 6, 7, 9 - 14
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and 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 modify,
approve, and adopt a Modified Redevelopment Plan
relating to Redevelopment Project No. 1 (the "Project
Area ") to reflect increased geographic area and
increased project costs within the Project Area,
pursuant to and in accordance with Minnesota Statutes,
Sections 469.001 to 469.047, inclusive, as amended and
supplemented from time to time.
1.02. It has been further proposed that the Authority modify,
approve, and adopt Modified Tax Increment Financing
Plans for Tax Increment Financing Districts Nos. 1 - 3,
6, 7, 9 - 14 to reflect increased project costs within
the Project Area, pursuant to Minnesota Statutes,
Section 469.174 through 469.179, inclusive, as amended
and supplemented from time to time.
1.03. The Authority has investigated the facts and has caused
to be prepared with respect thereto, a Modified
Redevelopment Plan and Modified Tax Increment Financing
Plans (collectively the "Plans ") to reflect increased
geographic area and increased project costs within the
Project Area, defining more precisely the property to
be included the public costs to be incurred, and other
matters relating thereto.
1.04. The Authority has performed all actions required by law
to be performed prior to the modification, approval,
and adoption of the Plans.
1.05. The Authority hereby determines that it is necessary
and in the best interests of the City and the Authority
at this time to modify, approve, and adopt the Plans to
reflect increased geographic area and increased project
costs within the Project Area.
HRA Resolution No. 15 - 1996 - Page 2
Section 2. Findings.
2.01. The Authority hereby finds that the assistance to be
provided through the adoption and implementation of the
Plans is necessary to assure the development and
redevelopment of the Project Area.
2.02. The Authority hereby finds that the Plans conform to
the general plan for the development and redevelopment
of the City as a whole in that they are consistent with
the City's comprehensive plan.
2.03. The Authority finds that the Plans afford maximum
opportunity consistent with the sound needs of the City
as a whole for the development and redevelopment of the
Project Area by private enterprise and it is
contemplated that the development and redevelopment
thereof will be carried out pursuant to redevelopment
contracts with private developers.
Section 3. Modification, Approval, and Adoption of a Modified
Redevelopment Plan.
3.01. The modifications to the Redevelopment Plan for
reflecting increased geographic area and increased
project costs within the Project Area are hereby
approved and adopted by the Commissioners of the
Authority and are forwarded to the Fridley City Council
for public hearing, review, and approval.
Section 4. Modification, Approval, and Adoption of Modified
Tax Increment Financing Plans.
4.01. The modifications to the Tax Increment Financing Plans
for Tax Increment Financing Districts Nos. 1 - 3, 6, 7,
9 - 14 reflecting increased project costs within the
Project Area are hereby approved and adopted by the
Commissioners of the Authority and are forwarded to the
Fridley City Council for public hearing, review, and
approval.
Section 5. Filing of Plans.
5.01. Upon approval and adoption of the Plans, the Authority
shall cause said Plans to be filed with the
Commissioner of Revenue.
HRA Resolution No. 15 - 1996 - Page 3
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS 11TH DAY OF JULY, 1996.
LAWRENCE R. COMMERS CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
HRA RESOLUTION NO. 16 - 1996
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A DEVELOPMENT CONTRACT AND INDEMNIFICATION
AGREEMENT BY AND BETWEEN THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF FRIDLEY AND ANOKA COUNTY COMMUNITY ACTION
PROGRAM
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and 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 Development Contract (the "Agreement ") with
Anoka County Community Action Program (the
"Company ").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved
and adopted a development program known as the
Modified Redevelopment Plan for its Redevelopment
Project No. 1 (the "Redevelopment Program ")
pursuant to Minnesota Statutes, Section 469.001 et
sec .
2.02. The Authority hereby finds that the Agreement
promotes the objectives as outlined in its
Redevelopment Program.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the
Authority are hereby
deliver the Agreement
is met:
Executive Director of the
authorized to execute and
when the following condition
Substantial conformance of an Agreement to the
Agreement presented to the Authority as of this
date.
Page 2 - HRA Resolution No. 16 - 1996
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS 11TH DAY OF JULY, 1996.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY MEETING
JUNE 13, 1996
CALL TO ORDER:
Vice - Chairperson Virginia Schnabel called the June 13, 1996
meeting to order at 7:45 p.m.
ROLL CALL:
Members Present: Virginia Schnabel, John Meyer, Duane Prairie,
Jim McFarland
Members Absent: Larry Commers
Others Present: Barbara Dacy, Community Development Director
William Burns, Executive Director
Grant Fernelius, Housing Coordinator
Jim Casserly, Financial Consultant
Craig Ellestad, HRA Accountant
Dave Jellison, MEPC American Properties, Inc.
Leslie Jowett, MEPC American Properties, Inc.
Mark Williamson, Ed Farr Architects
APPROVAL OF MAY 9, 1996 HOUSING AND REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the May
9, 1996 Housing and Redevelopment Authority minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. ADDENDUM TO SALE AND DEVELOPMENT AGREEMENT. WHITNEY HOMES
INC.; 5720 POLK STREET N.E.
2. APPROVAL OF HRA BY -LAWS AND ESTABLISHING CHAIRPERSON AND
VICE CHAIRPERSON
3. REVENUE AND EXPENSES
Mr. Ellestad submitted additional expenditures for authorization
in a memo date June 13, 1996 to be included in the consent
agenda.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
Consent Agenda as presented with the additional expenditures as
presented in the June 13, 1996 memo.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 2
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
4. APPROVAL OF LAKE POINTE MASTER PLAN
Ms. Dacy stated that the Master Plan is recommended for HRA
approval subject to the twelve stipulations recommended by the
Planning Commission. She stated that the proposed plan is
consistent with the City's redevelopment objectives. If approved
by the HRA, the item would be considered by the City Council on
June 24, 1996.
Ms. Schnabel asked if the time frame for development was 8 to 12
years or 8 to 10 years.
Ms. Dacy said that 12 years was the longest time frame
anticipated but 8 to 10 has been identified by the developer.
Mr. Jellison said MEPC wants the property to be developed as fast
as possible and certainly within 10 years.
Mr. Mark Williamson from Ed Farr Architects presented comments
verbatim from a letter from Ed Farr dated March 29, 1996
regarding the architecture, site layout, and landscaping (copy of
the letter on file in the Community Development Department).
Mr. Prairie asked if the buildings would be connected by a
skyway.
Mr. Williamson said yes they would at the second level.
Mr. Prairie asked about the phasing of buildings 1 through 4 on
the site plan.
Mr. Jellison said that building 1 on the west side of the site
will be developed first, however depending on the tenant needs,
they may need to develop other buildings like 3 and 4 first. The
market will dictate generally what gets built first. He said
that MEPC intends to start on the west but may need to adjust
based on tenant response.
Ms. Schnabel asked if a person could walk from one building to
another without going outside.
Mr. Williamson said yes.
Mr. Prairie asked about parking capacity.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 3
Mr. Jellison said the numbers of parking spaces is sized based on
the building size. Another level of ramps could be added.
Ms. Schnabel asked about vehicle access to the ramps.
Mr. Jellison said most of the access will be via Bridgewater
Drive. Mr. Jellison introduced Leslie Jowett to talk about the
upcoming marketing event.
Ms. Jowett said that a broker event is planned for July 18, 1996
on the site. After hearing about other developments in the metro
area being named as "Lake Pointe" and after hearing feedback from
brokers in the focus group, we decided to rename to property as
"Fridley Executive Center ". The name identifies the site in
Fridley and still portrays a corporate image. About 350
invitations will be sent to real estate brokers in an attempt to
have about 150. The theme for the event will be the "Fridley
Masters" after completing the Master Plan and coinciding with the
golf theme.
Ms. Schnabel asked if the name came out of the focus groups.
Ms. Jowett said the feedback from the focus group in general was
that the site was still associated with the previous developer.
The marketing people came up with the actual name.
Mr. Prairie said the name Lake Pointe wasn't particularly
attractive but questioned whether "Executive Center would be
appealing.
Ms. Schnabel reiterated that "Lake Pointe" had a greater up scale
ring to the development and that "executive center" is flat.
Mr. Jellison said that he agreed the new name may not be the
best, but from a marketing perspective it helps locate the site
in Fridley and is not confused with the industrial park in
Plymouth or the condominium development in Minneapolis. The name
will not affect the development of the site since tenant needs
are going to drive the decision.
Mr. Casserly asked if the Centennial Lake project will compete
with Lake Pointe.
Mr. Jellison said he didn't think that would be the case because
the competition is different in the 494 area than here in the
north.
Mr. Meyer asked about the role of the brokers at the party.
Ms. Jowett said the brokers are meeting with users every day.
They can get the project exposed. Many companies outsoure their
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 4
real estate services to brokers and it is important to get the
information to them.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the
Master Plan subject to the 12 stipulations recommended by the
Planning Commission and as represented in the staff report on
pages 4P through 4CC.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
Ms. Dacy stated that she wanted the HRA to review the proposal by
Merrill Busch for preparation of a 4 page color brochure
regarding the City and its amenities.
Mr. Prairie asked if 1,000 brochures are enough and what the life
of the brochure is.
Ms. Dacy said staff could obtain a quote for additional brochures
if requested.
Mr. Jellison said if the City could get 5 years from the brochure
that would be good.
Ms. Schnabel asked if the brochure is about development or is
this more community oriented.
Ms. Dacy said more community oriented.
Ms. Schnabel asked about the inserts.
Ms. Dacy said the inserts would be tailored to the audience but
would provide the hard facts about Fridley like favorable tax
rates, crime prevention programs etc.
Mr. Meyer asked why not just focus on the project.
Ms. Dacy said that a project brochure has been completed and the
purpose of this brochure is to help sell the community.
Mr. Jellison stated that not many people know what Fridley has to
offer. This would be an opportunity to sell the community.
Mr. Meyer stated that the brochure should not be diluted until
the point where it is useless. Keep in mind who the brochure is
intended for.
Ms. Jowett said the inserts could do that and speak directly to
the intended audience.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 5
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the
proposal from Merrill Busch for a four page color brochure at a
cost not to exceed $10,940.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
5. APPROVAL OF RESOLUTION AUTHORIZING ACQUISITION OF 380 57TH
PLACE NE AND RELATED DOCUMENTS
Ms. Dacy said this item is to approve the documents needed to
accomplish the acquisition of the 4 plex for transitional housing
services. The HRA had previously approved a lease agreement on
July 17, 1995 regarding this item. The documents include a
resolution authorizing the acquisition and a lease agreement with
ACCAP to operate the transitional housing service which has been
modified to meet MHFA requirements. She stated that a third
document will be needed to indemnify the HRA from all costs for
the financing on the project. She said she anticipates this
agreement will be on the August agenda.
Ms. Schnabel asked about the possibility of the County HRA levy.
Ms. Dacy stated that the County HRA has not proposed to pass a
levy in the City, but they have done so in those cities which do
not have an EDA or an HRA.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the
resolution as presented.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the
lease agreement with the Anoka County Community Action Program.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
6. TIF ASSISTANCE FOR WALLBOARD INC.
Ms. Dacy stated that Wallboard Inc. has purchased a lot in the
Great Northern Industrial Park and is proposing to construct a
30,000 square foot building. She stated that Wallboard supplies
building materials to contractors, drywall contractors, and to
the general public. She said that the company is relocating from
its current location in Minneapolis. She stated that the project
costs are approximately $1,100,000 of which $850,000 is for
building and land. $250,000 is for two boom trucks.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 6
Ms. Dacy stated that Ms. Patty Paraschek, the owner, wanted her
to convey to the HRA that they also intend to manufacture drivet
wall systems. Also, Ms. Paraschek feels that her business
creates a lot of jobs because it is labor intensive.
Ms. Dacy stated that in the past, the HRA has assisted primarily
manufacturing companies and not distribution or supply companies.
Although this seems to be a good project, Ms. Dacy stated that
the funding this request may set a precedent for other types of
distribution companies requesting assistance.
Mr. Meyer asked about the objection against an organization of
this type.
Ms. Dacy stated that in the past the HRA has prioritized
manufacturing projects as opposed to distribution firms.
Mr. McFarland state that this company does employ many people and
purchases supplies at wholesale and delivers to the job site. He
stated that the amount of labor should be a factor to
differentiate this proposal as opposed to a typical distribution
warehouse. He stated he did not feel this use was like a Murphy
Warehouse.
Ms. Schnabel asked about the use of the HRA funds to purchase the
boom trucks. Should the HRA be financing equipment?
Mr. Prairie asked if this was going to be a loan?
Ms. Dacy stated yes, a TIF district would not be proposed.
Mr. Meyer reiterated his question about why we should not promote
this type of business. Manufacturing business could be as much a
nuisance. Creating jobs should be a priority.
Ms. Schnabel stated that the HRA may want to support this project
but she was unclear as to how much.
Mr. Prairie suggested $50,000.
Ms. Dacy suggested that she is hearing support to assist the
project. In order to do that, a motion should be made
authorizing staff to initiate the process to add the parcel in
the redevelopment project area so that a loan can be negotiated.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to direct staff to
initiate the process to add the parcel proposed to be occupied by
Wallboard Inc. into the HRA's redevelopment project area, and to
direct staff to negotiate an appropriate loan amount.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 7
UPON A VOICE VOTE, MR. PRAIRIE, MR. MEYER, AND MS. SCHNABEL VOTED
AYE; MR. MCFARLAND ABSTAINED. VICE - CHAIRPERSON SCHNABEL DECLARED
THE MOTION CARRIED.
7. ESTABLISHMENT OF A HOUSING REVOLVING LOAN PROGRAM
Ms. Dacy handed out a summary outline of the request to initiate
a housing rehabilitation revolving loan program supported in part
by a HRA levy. The City would loan the HRA $1.5 million for
initiation of a revolving loan pool. The loan payments and the
levy would repay the loan; in the meantime, a significant amount
of money could be leveraged.
Mr. Prairie asked if this was the first levy in Fridley.
Ms. Dacy stated yes.
Mr. Burns stated that housing development is expensive. Need to
generate a supply of funds for future housing projects and
programs.
Mr. Prairie asked how many cities are charging a levy?
Ms. Dacy stated that there are a number of inner ring suburbs
such as Columbia Heights and South St. Paul. She could
investigate that further.
Mr. Burns stated that the recent citizen survey indicated support
for a levy; about 55% indicated they would pay additional taxes.
Mr. Meyer asked about who is actually levying the tax. He said
there is an increasing resentment toward levying taxes by those
who are not elected. He also asked about the purposed of the
program, is it to keep the HRA sound or is it to serve a public
purpose such as improving properties.
Mr. Casserly state that the proposal is really like what the
Minnesota Housing Finance Agency does. The purpose is to improve
the housing stock and to provide a means to encourage citizens to
do that. The HRA will eventually run out of money as the TIF
districts expire. Because redevelopment activities are
expensive, the HRA needs to find resources to fund housing
programs. By encouraging investment now, the cost of
redevelopment will be less in the future. The proposed levy is a
small part of the program. The revolving loan program is based
on the payment of the loans back to the HRA.
Ms. Dacy stated that the recent housing condition study
identified several hundred units which need at least 2 items of
repair.
HOUSING AND REDEVELOPMENT AUTHORITY MTG., JUNE 13, 1996 PAGE 8
Mr. Prairie asked at what point do we end the program.
Mr. Casserly stated that the levy can be decertified once the
loan to the City is paid in fifteen years.
Mr. McFarland stated that the TIF from the industrial
developments will eventually expire and a source of funds will be
needed. He stated he thought the program was aggressive and he
is in favor of it.
Ms. Schnabel stated that the HRA is running out of resources and
we need to be creative to generate money.
Mr. Burns stated that we have conquered the learning curve on the
housing programs and have created an awareness of our programs
which didn't previously exist.
Mr. Meyer stated what's the ultimate objective - public money for
everyone?
Ms. Schnabel stated that it's a loan which needs to be paid back
so that others can use it.
Ms. Dacy stated that the loans would be similar to current rehab
programs which encourage remodeling activities which maintain and
improve values like room additions or kitchen upgrades.
Mr. Meyer questioned whether the use of funds for kitchen
upgrades is worthwhile. The City should assist code
improvements. The new buyers of the homes could pay for the
other types of upgrades.
Mr. Fernelius stated that current loan recipients have an average
income of $43,260. Some home buyers may not be able to afford
the additional improvements. He stated that current loan
recipients may not have been able to receive financing from a
bank and are able to receive assistance from the HRA and
therefore improve their home.
Mr. Prairie stated that because it raises taxes we should be
careful.
Mr. Burns suggested that this item be discussed at the July
meeting when the Chairperson could also participate in the
discussion.
8. MODIFICATION TO FRIDLEY PLAZA OFFICE BUILDING
Ms. Dacy stated that this item will be on the July agenda for
action. She is hopeful that all of the issues can be resolved.
HOUSING AND REDEVELOPMENT AUTHORITY MTG. , JUNE 13 1996 PAGE 9
JULY_ AGENDA
Ms. Schnabel suggested that the July agenda start early since
there seemed to be a lot of issues to be discussed. It was
agreed that the meeting would start at 6:00 p.m., staff would
provide dinner, and the HRA would work through dinner prior to
the start of the meeting at 7:30.
ADJOURNMENT:
MOTION by Mr. McFarland, seconded by Mr. Prairie, to adjourn the
meeting.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 10:45
P.M.
fully Submitted,
Barbara Dacy
Acting Recording ecr ary
TO: FRIDLEY H.R.A
FROM: CITY OF FR!DLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
JUNE 1996
JUNE '1996
ADMINISTRATIVE BILLING:
ADMINISTRATIVE PERSONAL SERVICES
ADMINISTRATIVE OVERHEAD
COMPUTER OVERHEAD
(For Micro 8 Mini computers)
TOTAL ADMINISTRATIVE BILLING:
OPERATING EXPENSES:
US WEST — PHONE SERVICE
CITY OF FRIDLEY — JAN thru MAY COPIER ALLOC
BENEFITS EXPENSES:
CITY OF FRIDLEY — HEALTH INS
CITY OF FRIDLEY — DENTAL INS
CITY OF FRIDLEY — LIFE INS
Account #'s for
HRA's Use
460 -0000- 430 -4107
460 -0000- 430 -4332
460 - 0000 - 430 -4335
TOTAL OPERATING EXPENSES:
262-0000-219-1001
262-0000-219-1100
262 -0000 -219 -1200
TOTAL BENEFITS EXPENSES:
TOTAL EXPENDITURES — JUNE 1996
File: \123DATA \HRAMF\9681LL.wkl Details
1
Account #'s for
City's Use
19,800.75 101 -0000 -341 -1200
275.85 101 - 0000 - 336 -3000
200.25 101 -0000- 336 -3000
20.276.85
14.37 236- 0000 - 336 -3000
724.58 236 -0000- 336 -3000
738.95
182.40 236 -0000- 219 -1001
20.53 236 -0000- 219 -1100
3.50 236 -0000- 219 -1200
206.43
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Im
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: July 2, 1996
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Modifying Redevelopment Project Area #1 for
Wallboard, Inc.
At the June 13, 1996 meeting, the HRA passed a motion directing staff to initiate the
process to add the property owned by Wallboard, Inc. into the redevelopment project
area. The motion also directed staff to negotiate with Wallboard, Inc. for the provision
of a loan /second mortgage.
Concurrent with the HRA direction, the City Council will be establishing a public
hearing to add the parcel to the redevelopment project area at the July 22, 1996 City
Council meeting. Prior to the City Council's consideration, the HRA must approve a
resolution justifying the addition of the parcel into the redevelopment project area.
Wallboard, Inc. has purchased a 3.69 acre parcel in the Great Northern Industrial Park
to construct a 30,000 square foot building. Wallboard, Inc. supplies building materials
to general contractors, drywall contractors, and to the general public. Approximately
30 jobs are proposed to be created as a result of its relocation from Minneapolis to
Fridley. Wallboard, Inc. has also indicated that it will be manufacturing drivet wall
systems.
RECOMMENDATION
Staff recommends the HRA approve the attached resolution as presented. A memo
updating the HRA about the negotiations on the second mortgage is included in the
information section later in the agenda.
BD /dw
M -96 -315
21
RESOLUTION NO.
A RESOLUTION MODIFYING THE
FOR REDEVELOPMENT PROJECT
INCREMENT FINANCING PLANS
FINANCING DISTRICTS NOS. 1
REDEVELOPMENT PLAN
NO. 1 AND THE TAX
FOR TAX INCREMENT
- 3, 6, 7, 9 - 14
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ")
of the Housing and 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 modify, approve and
adopt a Modified Redevelopment Plan relating to Redevelopment
Project No. 1 (the "Project Area ") to reflect increased geographic
area and increased project costs within the Project Area, pursuant
to and in accordance with Minnesota Statutes, Sections 469.001 to
469.047, inclusive, as amended and supplemented from time to time.
1.02. It has been further proposed that the Authority modify,
approve and adopt Modified Tax Increment Financing Plans for Tax
Increment Financing Districts Nos. 1 - 3, 6, 7, 9 - 14 to reflect
increased project costs within the Project Area, pursuant to
Minnesota Statutes, Section 469.174 through 469:179, inclusive, as
amended and supplemented from time to time.
1.03. The Authority has investigated the facts and has caused to
be prepared with respect thereto, a Modified Redevelopment Plan and
Modified Tax Increment Financing Plans (collectively the "Plans ")
to reflect increased geographic area and increased project costs
within the Project Area, defining more precisely the property to be
included the public costs to be incurred, and other matters
relating thereto.
1.04. The Authority has performed all actions required by law to
be performed prior to the modification, approval and adoption of
the Plans.
1.05. The Authority hereby determines that it is necessary and in
the best interests of the City and the Authority at this time to
modify, approve and adopt the Plans to reflect increased geographic
area and increased project costs within the Project Area.
Section 2. Findings.
2.01. The Authority hereby finds that the assistance to be
provided through the adoption and implementation of the Plans is
necessary to assure the development and redevelopment of the
Project Area.
2A
Page 2 - Resolution No.
2.02. The Authority hereby finds that the Plans conform to the
general plan for the development and redevelopment of the City as
a whole in that they are consistent with the City's comprehensive
plan.
2.03. The Authority finds that the Plans afford maximum
opportunity consistent with the sound needs of the City as a whole
for the development and redevelopment of the Project Area by
private enterprise and it is contemplated that the development and
redevelopment thereof will be carried out pursuant to redevelopment
contracts with private developers.
Section 3. Modification, Approval and Adoption of a Modified
Redevelopment Plan.
3.01. The modifications to the Redevelopment Plan for reflecting
increased geographic area and increased project costs within the
Project Area are hereby approved and adopted by the Commissioners
of the Authority and are forwarded to the Fridley City Council for
public hearing, review and approval.
Section 4. Modification, Approval and Adoption of Modified Tax
Increment Financing Plans.
4.01. The modifications to the Tax Increment Financing Plans for
Tax Increment Financing Districts Nos. 1 - 3, 6, 7, 9 - 14
reflecting increased project costs within the Project Area are
hereby approved and adopted by the Commissioners of the Authority
and are forwarded to the Fridley City Council for public hearing,
review and approval.
Section S. Filing of Plans.
5.01. Upon approval and adoption of the Plans, the Authority shall
cause said Plans to be filed with the Commissioner of Revenue.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF ,
199
LAWRENCE R. COMMERS - CHAIRPERSON
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
101 :1
Page 3 - Resolution No.
CERTIFICATION
I, William W. Burns, Executive Director of the Housing and
Redevelopment Authority in and for the City of Fridley, County of
Anoka, Minnesota, hereby certify that the foregoing is a true and
correct copy of Resolution No. passed by the Authority
on the day of , 199
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
2C
MEMORANDUM[
HOUSING
REDEVELOPMENT
DATE: July 2, 1996
AUTHORITY
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Authorizing Signature of a Development
Contract and Indemnification Agreement for the Transitional
Housing Four -Plex at 380 - 57th Place N.E.
BACKGROUND
At the June 13, 1996 HRA meeting, the HRA approved several documents pertaining
to the HRA's ownership of the four -plex at 380 - 57th Place N.E. to operate a
transitional housing service. The HRA approved a resolution authorizing the
acquisition of the four -plex from the Minnesota Housing Finance Agency, and it
approved a management agreement between the HRA and the Anoka County
Community Action Program.
Because the project is being financed by both the deferred mortgage from the MHFA
and a mortgage from the Family Housing Fund, staff noted that an additional
document was necessary to indemnify the HRA for the entire project. As you will
recall, the MHFA deferred mortgage is for 20 years and is forgivable as long as a
transitional housing program is operating. The Family Housing Fund financing is a 30
year deferred mortgage which accumulates 1% interest and is deferred to the end of
the 30 years. At the expiration of the 30 years, an amount of $50,000 would be due
to the Family Housing Fund.
PROPOSED AGREEMENT
The purpose of the attached agreement would be to indemnify the HRA for the entire
30 years and hold ACCAP responsible for.any costs that would result if the program
ceases operation during the course of the next 30 years.
3
Development Contract/Indemnification Agreement
July 2, 1996
Page 2
At the conclusion of the thirty year timeframe, the HRA would close down the
transitional housing program, sell the building, and reimburse the housing fund the
amount of the deferred mortgage. ACCAP has also indicated a willingness to
purchase the property for the value of the second mortgage if requested by the HRA.
RECOMMENDATION
Staff recommends the HRA approve the resolution which authorizes the HRA Chair
and the Executive Director to execute the development agreement and
indemnification agreement.
BD /dw
M -96 -314
3A
JUL 02 '96 14:51 BARNA GUZY & STEFFENGER P.2
DEVELOPMENT CONTRACT AND INDEMNIF *ATION AGREEMENT
THIS AGREEMENT is dated as of 1996, by
and between the Housing and Redevelopment uthority in and for the
City of Fridley, Minnesota, a public boc* corporate and politic
created pursuant to the laws of the State of Minnesota (the "HRA") ,
having its principal offices at 6431 University Avenue N.E.,
Fridley, Minnesota 55432, and Anoka County Community Action
Program, Inc., a Minnesota non - profit corp1b,ration (the "Company"),
having its principal offices at 1201 - 89t1; Avenue N. E., Suite 345,
Blaine, Minnesota 55434; and provides as follows:
ARTICLE I
Definitions
"Act" means Minnesota Statutes Sectiop 462A.202, Subdivisions
2 and 7, and the rules and regulations. applicable thereto or
promulgated thereunder (including Minnesottt Rules, Parts 4900.3100
through 4900.3130).
"Agreement" means this Agreement, as the same may from time to
time be amended.
"Closin IN means the date upon vikiich the HRA shall have
purchased the Project from the Company pursuant to Article Ill.
"Company" means Anoka County Community Action Program, Inc.,
a Minnesota non- profit corporation.
"FHF" means Family Housing Fund, a;private Minnesota non-
profit corporation.
"FHF Loan" Means the loan by the FHF to the HRA in the amount
of $20,000.00 due in 30 years which accrued interest at the rate of
one WO percent per annum.
"FHF Loan Aacuments" means all documentation required by the
FHF in connection with the application for =or the making of the FHF
Loan.
"" means the Federal Home Loan Bi.nk, a private financial
institution.
"FHLB Loan" means the grant by the-;FHLB to the HRA in the
amount of $20,000.00.
"PHLB Loan Documents" means all docu*ntation required by the
FHLS in connection with the application for or the making of the
FHLB Loan.
JUL 02 '9G 14:52 BARNA GUZY & STEFFENGER
P.3
"HRA" means the Housing and Redevelopment Authority in and for
the City of Fridley, Minnesota, a public bddy corporate and politic
created pursuant to the laws of the State�of Minnesota.
"Maturity Date" means the date whTate h is the 20th annual
anniversary of the Closing Date, or the prior to such time
upon which the Lease or this Agreement is: terminated.
"MHFA" means the Minnesota Housing Oinance Agency, a public
body corporate and politic of the State of Minnesota.
"MHFA Loan" means the loan in the approximate amount of
$200,000 anticipated to be made by the MHFA to the HRA pursuant to
the Act and the MHFA Loan Documents to asiSist in the acquisition
and completion of the Project.
"MHFA Loan Documents" means all docu nation required by the
MHFA in connection with the application trt
o r the making of the
MHFA Loan, including without limitation, the related Loan
Commitment and the Deferred Loan Repayment�;Agreement and Mortgage.
"Transitional Housing" means housinyi provided for a limited
duration for persons and families whose irs'come (1) does not exceed
fifty percent (50k) of the greater of the statewide or area median
household income as estimated by the Unimed States Department of
Housing and. Urban Development, adjusted for families of five or
more, or (2) otherwise meets applicable ir*ome limitations imposed
upon the Project pursuant to-the MHFA Loan. Documents or the Act.
"Transitional Housing Proj ect'� or " ro ect" means the real
property described on the attached Exhi.it A, the building and
k
related facilities and improvements to e rehabilitated by the
Company thereon, Improvements, all intended to be used and operated
by the Company for Transitional Housing purposes.
ARTICLE II
Representations and Warnanties
Section 2.1. Representations and Watranties by the HRA. The
BRA represents and warrants that:
(a) The HRA is a public body c.grporate and politic duly
organized and existing under the ;laws of the State of
Minnesota. The HRA has the authority to enter into this
Agreement and carry out its obligations hereunder and has duly
authorized its execution, delivery 'end performance of this
Agreement.
(b) The activities of the HRA Hereunder are undertaken,
in part, for the purpose of assisti$ig a housing development
-2-
3C'
JUL 02 '96 14:52 BARNA GUZY & STEFFENGER
P.4
project and providing decent, safe, arj7 sanitary dwellings for
persons of low and moderate income and their families.
(c) To finance the costs of the activities to be
undertaken by the HRA hereunder, ancl as the sole source of
funding therefor, the HRA proposes to apply for and, if the
MHFA Loan shall have been committed to and actually funded by
MHFA, to use the proceeds of the MHFA Joan as provided in this
Agreement.
Section 2.2. Representation and Wa]*anties by the Company.
The Company represents and warrants.that:'
(a) The Company is a non- ptofit corporation duly
organized and in good standing under the laws of the State of
Minnesota, is not in violation of :any provisions of its
articles of incorporation, has fu:k corporate power and
authority to enter into and perform its obligations under this
Agreement and has duly authorized theexecution, delivery and
performance of this Agreement.
(b) The Company will construct aid complete the Project,
and will maintain and operate the Project for Transitional
Housing, all in accordance with the terms of this Agreement,
and all applicable local, state and federal laws and
regulations (including, but not limited to, environmental,
zoning, building code and public health laws and regulations) .
(c) At such time or times as may! be required bylaw, the
Company will have complied with all applicable local, state
and federal environmental laws and regulations and will have `
obtained any and all necessary environmental reviews, licenses
or clearances.
(d) The Company will obtain, in a timely manner, all
required permits, licenses and approvals, and will meet, in a
timely manner, all requirements of al 1. applicable local, state
and federal laws and regulations which must be obtained or met
before the Project may be undertaken :and completed.
(e) The Company will cooperate *ith the HRA with respect I
to any litigation commenced by any third party with respect to
this Agreement, the lease or the Project.
(f) Until the Maturity Date, the Company will use the
Project exclusively as Transitional 'Housing in conformance
with the Act and the rules and regulations promulgated
thereunder, including without limiti.tion, Minnesota Rules,
Parts 4900.3100 through 4900.3130.
(g) The Company shall permit t - 'e HRA, the MHFA and the
legislative auditor for the State. of Minnesota, at any
-3-
3D
JUL 02 '96 14:53 BARNA GUZY & STEFFENGER
Mi
reasonable time and upon prior writien notice, to inspect,
audit, copy or abstract, any and all., of its books, records,
papers or other documents relating too the MHFA Loan or the
Project. In addition, the Company sNill promptly provide the
HRA with any other information which the HRA may reasonably
require regarding the Company's operation of the Transitional
Housing in compliance with the requirements contained in this
Agreement, the Act or the rules promulgated thereunder.
(h) The Company represents khat it has received,
reviewed and is familiar with the co*tents of the MHFA Loan
Documents, the FHF Loan Documents and "the FHLB Loan Documents
and hereby agrees to abide by -all requirements and
restrictions contained or referenged in the MHFA Loan
Documents, the FHF Loan Documents and'the FHLB Loan Documents
which may be applicable to the Company pursuant thereto or
pursuant to this Agreement. The Company covenants to take
whatever actions may be reasonably necessary to enable the HRA
to remain in compliance with the MHFA'�Loan Documents, the FHF
Loan Documents and the FHLB Loan Documents. The Company shall
not take or cause to be taken any actions which would cause
the HRA to be in default under the MVFA Loan Documents, the
FHF Loan Documents and the FHLB Loan Documents or in violation
of the Act or the rules promulgated thereunder.
ARTICLE III
Acouisition of Prope4l�y
Section 3.1. Company to Complete PADiect. It shall be the
Company's responsibility to acquire, con 'act for, construct and
complete the Project.
Section 3.2. Condition of Project.
(a) The acquisition of the Project by the HRA hereunder
is understood to.be solely for the p rpose of obtaining the
MHFA Loan to assist the Transitional Housing Project.
Therefore, the Company agrees that it will, subject to the
terms of Section 6.1 hereof, indetpnify, defend and hold
harmless the HRA from any actions, proceedings or claims, of
whatsoever nature, arising out of the existence of any
hazardous wastes or pollutants on,; in or respecting the
Project, which actions, claims or1 proceedings have been
brought against the-HRA by virtue of'the HRA's having become
an owner of the Project under this Agreement.
-4-
3E
JUL 02 '96 14:53 BARNA GUZY & STEFFENGER P.6
ARTICLE IV
Additional Improvementai "iena
Section 4.1. Additional Improvemeants. The Company may
construct improvements in addition to the project, as initially
completed ( "Additional Improvements ") , prgvided that construction
plans for the Additional Improvements meet ;all applicable codes and
regulations and shall receive HRA approval in writing prior to
commencement of construction of the Additional Improvements, which
approval shall not be unreasonably withheld. Regardless of whether
the HRA's consent is required or obtaindd, all alterations and
improvements shall be made in accordance{ with applicable laws,
codes and insurance guidelines and shall be performed in a
workmanlike manner.
Section 4.2. Liens. The Company4;sha11: (a) duly and
punctually pay for all labor performed an materials furnished in
connection with the completion of the Project and any Additional
Improvements; (b) keep the Project and every improvement thereon
free and clear from all liens for labor IOperformed and materials
furnished; and (c) defend or satisfy, at its own cost and expense,
each and every lien asserted or filed against the Project or any
improvement thereon (except for Permitted Encumbrances) . The
Company shall indemnify and save the HRA, harmless from each and
every claim, demand, action or cause ,_of action (including
reasonable fees of attorneys) associated with or arising out of the
said items (a) through (c) of this Sectiozi 4.2.
Section 4.3., Limitation U on Encumb •nce of Property. Prior
to the Maturity Date, neither the Compazhr nor any successor in
interest to the Lease or any part thereof shall engage in any
financing or any other transaction creatiffig any mortgage or other
encumbrance or lien upon the Project (other than Permitted
Encumbrances as set forth on Exhibit B attached hereto) , whether by
express agreement or operation of law, or *ffer any encumbrance or
lien to be made on or attach to the ProjeO-t.
ARTICLE V
Insurance and Condemn* ion
Section 5.1. Insurance.
(a) The Company shall provide aid maintain, at its cost,
at all times during the process of Qonstructing the Project
and any Additional Improvements and, �rom time to time, at the
request of the HRA, shall furnish the' -HRA with certificates of
insurance for: '
(i) Builder's risk insurance, written, on the so-
called "Builder's Risk -- Completed value Basis," in an
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JUL 02 '96 14:54 BARNA GUZY & STEFFENGER
P.7
amount equal to one hundred ercent (100 %) of the
insurable value of the Project a the date of completion,
and with coverage available in onreporting form on the
so- called "all risk" form of pol cy, but any such policy
may have a deductible amount ofnot more than $5,000;
(ii) Comprehensive gene *l liability insurance
(including operations, liability, operations of
subcontractors, completed operations and contractual
liability insurance) togeth r with an Owner's
Contractor's Protective Policy w th limits against bodily
injury and property damage of rapt less than $1,000,000
for each occurrence, $2,000,000 in the aggregate (to
accomplish the above - required limits, an umbrella excess
liability policy may be used); and
(iii) Workers' compen* tion insurance, with
statutory coverage.
The policies of insurance required puxisuant to clauses (i) and
(ii) above shall be placed with %financially sound and
reputable insurers licensed to transaret business* in the State
of Minnesota.
(b) From and after the Closi Date and continuously
through the Maturity Date, the CO' m ny shall maintain, or
cause to be maintained, at its cost, d, from time to time at
the request of the HRA, shall f'rnish certificates of
insurance for: i
(i) Insurance against loso:of and /or damage to the i
Project (including all Additional Improvements) and
contents thereof under a policy * policies covering such
risks as are ordinarily insured.i.against for residential
housing, including without limitation, fire, extended
coverage, vandalism and malicious mischief, boiler
explosion, water damage, demolition cost, debris removal,
collapse and flood, in an amount not less than the full
insurable replacement value of #aid facilities, and any
such policy may have a deductibl' amount of not more than !
$2,500. No policy of insurance hall be so written that
the proceeds thereof will produle less than the minimum
coverage required by the precedigg sentence, by reason of
co- insurance provisions or othe wise, without the prior
consent thereto in writing by a HRA. The term "full
insurable replacement value" s`al1 mean the insurable
value of the actual replacement host of the improvements
and equipment, and may be determ ned from time to time at
the request of the HRA, but not re frequently than once
every three years, by an indepen nt insurance consultant
or insurer. All policies evidencing insurance required
by this subparagraph '(i) shall be carried in the name of
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JUL 02 '96 14:54 BARNA GUZY & STEFFENGER P.8
the Company, naming the HRA ''he MHFA as additional
insureds, and shall contain standard clauses which
provide for Net Proceeds of insurance resulting from
claims per casualty thereunder tb be made payable to the
HRA. The Company shall not agzlee to any settlement on
such insurance without the written consent of the HRA.
Comprehensive geri�pral public liability
insurance, including personal '.injury liability (with
employee exclusion deleted) , aria automobile insurance,
including owned, non -owned and hiired automobiles, against
liability for injuries to persona and /or property, in the
minimum amount of $1,000,000 for each occurrence and for
each year in the aggregate of not less than $2,000,000,
and shall be endorsed to show: the HRA as additional
insured.
(iii) Such other insurace, including worker's
compensation insurance respecti g all employees of the
Company engaged in work with respect to the construction
or operation of the Project and any Additional
Improvements and to management or custodial care thereof,
in such amount as is customarily carried by like
organizations engaged in, like activities of comparable
size and liability exposure; prrnvided that the Company
may be self- insured with respect to all or any part of
its liability for workers' compensation.
(c) The Company agrees to notifp the HRA immediately in
the case of damage exceeding $10, :000 in amount to, or
destruction of, the Project or any pdrtion thereof resulting
from fire or other casualty. If such damage does not exceed
$40,000, the Company shall forthwith repair, reconstruct and
restore the Project to substantially the same, or an improved
condition or value as existed prior t4 the event causing such,
damage and, to the extent necessary toy. accomplish such repair,
reconstruction and the Company shall 4pply any Net Proceeds of
Insurance relating to such dama* to the payment or
reimbursement of the costs thereof. *t Proceeds of Insurance
relating to such damage up to $40,000 shall be paid directly
to the Company.
(d) Net Proceeds of Insurance 4sulting from claims for
losses over $40,000 shall be paid an ,endorsed to and held by
the HRA in a separate insurance lost account. The Company
shall, at its sole option, within thirsty (30) days after such
damage or destruction, notify the HRA of its intent to:
W apply such Net Proceed" of Insurance to repair,
rebuild or replace the applicae loss of or damage to
the Project to the extent permitted by applicable zoning
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JUL 02 '96 14:55 BARNA GUZY & STEFFENGER
laws, taking into account the ? grant of any variance
thereto, or
(ii) utilize such Net Procgeds of Insurance to pay,
in the following order, the M�iFA Loan; any costs or
expenses incurred by the HRA in Qonnection with the sale,
transfer, or disposition of the Troject (net of any sale
proceeds received by the HRA upc�n, such disposition) ; and
the remainder to Company.
Section 5.2. Condemnation. In the event that title to and
possession of the Project, or any material part thereof, shall be
taken in condemnation or by the exercise ;of the power of eminent
domain by any governmental body or oth &r person prior to the
Maturity Date, all the proceeds receive4 from any condemnation
proceeding shall be applied to repay th FA Loan, if required
pursuant to the MHFA Loan Documents or is Agreement, with any
remaining proceeds payable to the Company4
ARTICLE VI.
Indemnification
Section 6.1. Release and Indemnification Covenants.
(a) . The Company releases the H4 from, and covenants and
agrees that the HRA and its governinj body members, officers,
agents, servants and employees, shaV1 not be liable for and
agrees to indemnify, defend (with counsel approved.by the HRA,
which approval will not be unreason$bly withheld), and hold
harmless the HRA and its governing =body members, officers,
agents, servants and employees, from:and against any claims,
demands, liabilities, suits, actions, penalties, fines, costs,
es, expenses" char a ,
g xp judgments or `other proceedings of
whatsoever nature by any person :or entity arising or
purportedly arising out of the actions of the Company, its j
officers, agents, servants, contra -tors, or employees in
connection with the acquisition, construction, installation,
lease or operation of the Transitional Housing Project,
provided, however, that Company shall,not release or indemnify
the HRA for W any act or omission arising out of the willful
neglect, gross negligence, fraud or intentional misconduct of
the HRA, or (ii) liability arising o t of any act or omission
relating to properties, responsib$lities, or obligations j
solely within the control of the HRA,k
(b) All covenants, stipulations, promises, agreements
and obligations of the Company and .the HRA contained herein j
shall be deemed to be the covenants,,stipulations, promises,
agreements and obligations of the HRA and the Company and not
of any governing body member, officer, agent, servant or
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JUL 02 '96 14:56 BRRNR GUZY & STEFFENGER P.10
employee of the HRA or the Company i.n his or her personal
capacity.
ARTICLE VII.
Termination
Section 7.1. Termination. This Agreement is subject to
termination as follows:
(a) This Agreement shall termite upon termination of
the Lease, except that all rights and.remedies of the parties
set forth herein shall survive such termination, including
specifically, but without limitation of the generality of the
foregoing, any indemnifications, remedies or provisions for
redress set forth herein.
(b) If not sooner terminated this Agreement shall
terminate in its entirety as of the Maurity Date or as of the
actual purchase of the Project pur uant to Article VIII,
whichever shall occur later.
ARTICLE VIII.
Purchase Option
i
Section 8.1. Purchase option. At arty time on or after, but
within one hundred twenty (120) days folle#wing the Maturity Date," f
Company shall have the right, by giving wr tten notice to the HRA,
to purchase the Project from the HRA (the "rchase Option ") . Upon
receipt of said written notice, Company 4nd the HRA shall enter
into an agreement for the transfer of tithe to the Project to the
Company containing such terms and conditions as are reasonably
acceptable to Company and the HRA. The total sum to be paid by the
Company to the HRA upon the exercise of t Purchase Option shall
be One Dollar ($1.00), plus an amount suficient to pay, satisfy,
and discharge in full any outstanding i *debtedness against the
Project. Upon such exercise, the HRA shallprovide, at.the expense
of the Company, a current abstract of tithe for the Project_
I
Section 8.2. Conditions to Exercise. :;The Purchase Option may
be exercised by the Company in accordancerawith the provisions of
this Article VIII only in the event that, each of the following
conditions is met:
(a) The Company has not terminated the Lease or the I
Agreement;
(b) The HRA has not terminated the Lease; and
(c) Upon exercise of the Purchase Option, the MHFA Loan
shall be or have been paid or satisfidd in full by the Company
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JUL 02 '96 14:56 BARNA GUZY & STEFFENGER
P.11
or forgiven by the MHFA, in accordand� with the terms of the
MHFA Loan Documents.
Section 8.3. Failure to Exercise Pur ' ase Option. If Company
(i) fails to exercise the Purchase Op ion within the period
prescribed in Section 8.1 hereof or (it) notifies the HRA in
writing prior to the termination of such period of its intention
not to exercise the Purchase Option, thy% Company shall have no
further right, title, interest or posse sion in, to or of the
Project, unless it continues to lease the,Project.
ARTICLE IX.
Repair, Maintenance and }Costs
Section 9.1. Project "As Is ". The Company shall lease the
Project as is, without warranty or indemnity from the HRA, and the
HRA shall have no obligation to the (company to perform any
improvements to or maintenance of the Project.
i i
Section 9.2. Maintenance of Premis The Company assumes
the full and sole responsibility for t4 condition, operation,
repair, maintenance and management of the Project until the
Maturity Date, and the HRA shall not under any circumstances be
responsible for the physical performance oil, any repairs, changes or
alterations whatsoever to the Project or fqr the cost thereof. The j
Company shall, at its sole cost, take goodAcare of the Project and
shall, without limitation, keep the sidewalks, roadways, landscaped
areas, buildings, building systems (plumbi #g, sewage, heating, air
conditioning and electrical), and mainte*nce facilities in good
working order and condition.
Section 9.3. Rent. The Company shall pay $1.00 per year as
the total rent payment to the HRA for thoProject ( "Rent "). The
Company shall pay Rent, together with pr. erty taxes pursuant to
Section 9.4 below, and all other amounts que under this Lease, to
the HRA (or to the appropriate payee, a the case may be, with
proof of such payment furnished to the HRA at the address set out
in the preamble of this Agreement.
Section 9.4. Real Estate Taxes. Thq Company shall, for the
entire Term of this Lease and without any set -off or deduction
therefrom, pay directly as they become du[e all real estate taxes
and installments of special assessments which shall accrue to, or
are or may become payable in respect of, 4ny part of the Project.
r
Section 9.5. Operating Costs. Thei- Company shall, for the
entire Term of this Lease and withoutl set -off or deduction
therefrom, pay all operating costs ( " Operating Costs,,) with respect
to the Project, including, but not limite# to, the costs of heat;
cooling; utilities; insurance (in accords¢ ice with Section 5.1 of
this Agreement) ; security; landscaping; janitorial and cleaning
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JUL 02 '96 14 :57 BARNA GUZY & STEFFENGER P.12
services; property management; all employment costs including
salaries, wages and fringe benefits; all nagement fees; fees for
professional services; charges under intenance and service
contracts; all supplies purchased for Use within or for the
Project; all maintenance and repair cof ts; the costs of all
personal property and fixtures purchased or rented for use on the
Project; costs, including attorney's fees, onsultant's fees, staff
costs and overhead costs, incurred by the OM in the administration
of this Agreement, the ownership of 'the Project, or the
administration of the MHFA Loan, the FHF_-Loan or the FHLB Loan;
costs of any removal or abatement of hazardous substances or
asbestos; costs resulting from the defective design or construction
of the Project; any and all other costa' of operation, whether
ordinary or extraordinary. The Company shall make payments of
Operating Costs directly to the appropriate providers, suppliers,
employees or other charging entities in a, :timely manner.
IN WITNESS WHEREOF, the HRA has cawed this Agreement to be
duly executed in its name and behalf, ancl' the Company has caused
this Agreement to be duly executed in its same and behalf on or as
of the date first above written.
THE HOUSING AND #EDEVELOPMENT AUTHORITY
IN AND FOR THE CfTY. "OF FRIDLEY,'
MINNESOTA
BY 3:
Its
By
Its
ANOKA COUNTY COMMUNITY
ACTION PROGRAM, INC.
By
Its
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JUL 02 '96 14:57 BARNA GUZY & STEFFENGER P.13
STATE OF MINNESOTA ) ;!
ss.
COUNTY OF )
The foregoing instrument was acknowle4ged before me this
day of 1996, by " the
and the
of the Housing any Redevelopment Authority
in and for the City of Fridley, Minnesota, '; a public body corporate
and politic .created pursuant to the laws oft the State of Minnesota,
on behalf of said public body.
Notary Public
,i
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowle i!ged before me this
day of 1996, by the
of Anoka County mmunity Action Program,
Inc., a Minnesota non - profit corporation, on behalf of ..said
corporation.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
BARNA, GUZY & STEFFEN, LTD. (CMS)
400 Northtown Financial Plaza
200 Coon Rapids Boulevard
Minneapolis, MN 55433
(612) 780 -8500
91\rea1est \crosr \accag.dcv
E
i
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JUL_ 02 '96 14:50 BARNA GUZY & STEFFENGER P.14
EXHIBIT A
Legal Description;
Lots 12 and 13, Block 6, City View, accorcj.ng to the duly recorded
plat thereof, Anoka County, Minnesota_
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3UL 02 '96 14:5e BARNA GUZY & STEFFENGER P.15
j
EXHIBIT B
Permitted Encumbrances
Mortgage in favor of the Minnesota Housi* Finance Agency in the
original amount of $200,000.00, dated 1996, and
filed 1996, as Anoka Coun y Recorder Document No.
Mortgage in favor of the Family Housing Fund in the original amount
of $20,000.00, dated 1996, Oand filed ,
1996, as Anoka County Recorder Document No.
Mortgage in favor. of the Federal Home Lo*n Bank in the original
amount of $20,000.00, dated , 1996, and filed
1996, as Anoka County Recorder Document No.
S
z
30.
HRA RESOLUTION NO. - 1996
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A DEVELOPMENT CONTRACT AND INDEMNIFICATION
AGREEMENT BY AND BETWEEN THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF FRIDLEY AND ANOKA COUNTY COMMUNITY ACTION
PROGRAM
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and 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 Development Contract (the "Agreement ") with
Anoka County Community Action Program (the
"Company ").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved
and adopted a development program known as the
Modified Redevelopment Plan for its Redevelopment
Project No. 1 (the "Redevelopment Program ")
pursuant to Minnesota Statutes, Section 469.001 et
se s.
2.02. The Authority hereby finds that the Agreement
promotes the objectives as outlined in its
Redevelopment Program.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the
Authority are hereby
deliver the Agreement
is met:
Executive Director of the
authorized to execute and
when the following condition
Substantial conformance of an Agreement to the
Agreement presented to the Authority as of this
date.
Page 2 - HRA Resolution No. - 1996
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF ,
1996.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
C�l`�
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
DATE: July 2, 1996
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Approval of Exterior Architectural Plans for Fridley Plaza
Office Building
The Columbia Park Medical Group, the current owner of the Fridley Plaza Office
Building, is proposing to move its OB /GYN clinic from the Fridley Plaza Clinic to the
Fridley Plaza Office Building to create additional space in the clinic building for
primary care. There will be three physicians and three nurse practitioners who will be
occupying the first floor of the Fridley Plaza Office Building. A building permit has
been issued for the remodeling. In addition, five physical improvements are also
proposed to the exterior of the west side of the building. The HRA has the authority
to review additional architectural modifications or expansions according to the
development contract executed in 1982.
PROPOSED MODIFICATIONS
The proposed modifications will all be financed by Columbia Park Medical Group.
There is no financial involvement for the HRA. The five improvements are:
Construction of a canopy similar in design to the canopy which is currently on
the south side of the municipal center. The new canopy will be located on the
west side of the building where the former entrance to the cafe was once
located.
2. A new landscaping plan will be developed for the west and south sides of the
building, removing some of the older, overgrown trees and replacing them with
low -lying shrubs.
3. Installation of two handicapped accessible power door closures.
2
Architectural Plans for Fridley Plaza Office Building
July 2, 1996
Page 2
4. Removing the multi - colored picnic tables, and the exhaust fan and vent on the
west side of the building.
5. Replacement of the existing directional signage just west of the building to
direct customers to the Fridley Plaza Office Building and Fridley Municipal
Center.
Staff met with the owner and its architect in the latter part of June. The proposed
canopy emulates some of the existing design features not only on the Municipal
Center but also on the Fridley Plaza Clinic building. The owner has incorporated one
of staff's suggestions which is to construct some type of a brick base for each of the
supports of the canopy to mirror the existing construction on the Municipal Center.
The owner has also agreed to some of the suggestions regarding the landscaping
plan and is preparing a revised plan for the west and south buildings to
accommodate our concerns.
The owner will also reinstall, at their expense, the directional sign. The existing sign
is in very poor repair, and its replacement is warranted.
The proposed canopy and landscaping plans are attached.
INK IN FA XMIM We
Staff recommends the HRA approve the modifications proposed to the Fridley Plaza
Office Building subject to the plans as presented.
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MEMORANDUM
HOUSING
L!
REDEVELOPMENT
DATE: July 3, 1996
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Acquisition of 5833 2 -1/2 St.
This home is a one story, bungalow -type structure with a partial basement and a one
car, detached garage. The house, which was built in 1946, has two bedrooms, a
bathroom, living room and a kitchen. The structure is showing signs of deterioration
and the owner was planning to invest $25,000 to replace the foundation. The,
property is valued at $45,400 for tax purposes and is owned by Bonnie Mikkola.
The lot is 40' x 130.44 or 5,217,60 square feet in size. Under City Code the lot is
considered legal non - conforming because it is less than 75 feet in width and has less
than 9,000 square feet. As a result, the lot would have to be combined with an
adjoining parcel to meet the code requirements for a new home. Our
recommendation would be to retain the property for future redevelopment.
Based on an independent appraisal done in May the property is valued at $43,900.
The owner has agreed to sell the property for $46,700 which is within the HRA
negotiation guidelines.
Recommendation
Staff recommends that the HRA authorize the purchase of 5833 2 -1/2 St. from Bonnie
Mikkola for the price of $46,700.
GF/
M -96 -323
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MEMORANDUM
HOUSING
_E
REDEVELOPMENT
DATE: July 3, 1996
AUTHORITY
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Options for 6431 Jackson St.
Background
This past March staff became aware of this property through the HUD foreclosure
program. Upon further inspection and research we discovered that the property had
been abandoned and left vacant for several months. According to neighbors and the
City's records, the previous owner had apparently been in the process of remodeling
the home and then abruptly stopped. In November of 1995, the owner left and never
returned. By the time the property had gone through the foreclosure process,
additional damage was caused by frozen water pipes, a burst water heater, and a
ruptured hot -water heating system. At their April 11, 1996, the HRA authorized the
purchase from HUD for $40,500. A detailed description of the property's condition is
attached. - -
Because of its poor condition, HUD determined that the property wasn't eligible for
FHA insurance. Normally, HUD notifies staff of foreclosed properties that don't qualify
for FHA insurance. The usual practice is to allow public agencies to acquire
substandard properties before a public sale. In this case, HUD did not notify staff in
advance and as a result numerous inquiries were received.
Based on our concerns about the negative impact of this property and complaints
from neighbors, we felt there was an opportunity to take action and acquire the
property. The initial plan was to demolish the structure and make the land available
for a new home site. Since then we have-received a great amount of interest from the
general public about the potential for remodeling the structure.
Q
6431 Jackson St.
July 3, 1996
Page 2
Current Status
The property remains vacant, however we have contracted to have the grass cut on a
regular basis and are working to have some outside debris removed. In the last
several weeks staff has also worked with several contractors to get cost estimates on
remodeling the structure.
With the assistance of Robert Van Nelson, a detailed work write -up was prepared and
12 contractors were contacted about providing estimates. The work write -up was
two- tiered to allow for 1) a "bear bones" code -only upgrade, and 2) a more substantial
project involving interior modifications. Based on the bids received, the costs to
repair the property range from $50,000 to $70,000. The low -end assumes minimal
repairs to make the structure habitable, while the high -end assumes more intensive
work.
According to the City Assessor's office property values in the neighborhood range
from in value from $80,000 to $100,000 and recent sales activity indicates that prices
for some homes are exceeding $110,000. Based on this information, it appears that
there it is financially feasible to rehab the structure and still remain in line with
surrounding property values.
This property is different than the typical site acquired under the Housing
Replacement Program (HRP). For example, this home has more than 1,500 s.f. + of
finished space, an open floor plan, two car detached garage, large basement, and a
good size yard. Most of the adjacent homes are one -story ramblers which are well
kept.
In contrast many of the HRP sites are small homes (less than 800 s.f.), usually with a
one car detached garage, one to two bedrooms, and without a basement. So far all
of the new homes built are split -entry designs (or variations) with unfinished
basements.
Options
Demolish the structure and redevelop the site through the Housing
Replacement Program. Although, this is an opportunity to build a new home,
the HRA it would be demolishing a structure which at this point appears
salvageable.
2. Rehab the home with the HRA acting as the project manager. Under this
scenario the HRA would determine the level of improvements, obtain
6431 Jackson St.
July 3, 1996
Page 3
bids and select a contractor. This scenario provides greatest amount of
control, but also carries the greatest amount of risk. If not planned
properly we could over build and take a loss if and when the property sold.
3. Rehab the home under a contractual arrangement with a private buyer. This
scenario reduces the risk to the HRA, but diminishes some amount of control.
There is also the issue of how to select a buyer. Among the options could be
a) sealed bid for home only (HRA establishes minimum amount of rehab
up front), b) a Request - for - Proposals whereby interested parties prepare
their own plans and specs and present these to the HRA along with a bid for
the home.
4. Sell home outright as is. This would be the quickest method of disposition,
however, the HRA would have no control over the project. It would also bring
into question the rationale for purchasing the property in the first place.
Recommendation
Assuming the objective is to eliminate a blighting condition and create investment in
the neighborhood, staff recommends Option No. 3. This option allows the HRA to
seek proposals from the private market on the feasibility of rehabilitating the property.
If the private market is unable to meet the requirements and standards of the HRA,
then demolition would be appropriate. RFP guidelines and qualifications will be
developed by staff and presented to the HRA for consideration at the August meeting.
After adoption by the HRA, bidders would then have 30 days to submit a proposal
which the HRA would then consider at their September 1996 meeting.
GF/
M -96 -322
DATE:
TO:
FROM:
SUBJECT:
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
AUTHORITY
July 3, 1996
William Burns, Executive Director of HRA
Barbara Dacy, Community Development Director
Approval of Housing Action Plan
The HRA approved funding the cost of a consultant to prepare the Housing Action
Plan as required by the Livable Communities Act. The Plan has been completed by
SEH and .is recommended for approval.
The Livable Communities Act is intended to encourage ample housing opportunities
for individuals regardless of income or special needs. The City of Fridley elected to
participate in the Livable Communities Act so that it could have access to funding
sources for redevelopment projects and housing programs. Completion of the
Housing Action Plan will meet one of the requirements for eligibility for the funding
programs.
In addition, the Housing Action Plan spells out how the City is doing in terms of
affordable housing. The Metropolitan Council has established three benchmarks:
1. Affordability
2. Density
3. Life cycle housing
The Plan shows how the City meets GII of these benchmarks. The Plan will also serve
as an excellent foundation for the Housing chapter update for the Comprehensive
Plan and the City's analysis for prioritizing future redevelopment expenditures.
A draft of the Plan was distributed in the June packet. An updated
as well as color copies of the maps which are identified as "Figures
text.
7,
copy is enclosed
" in the written
Approval of Housing Action Plan
July 3, 1996
Page 2
At Thursday's meeting, I will give a brief presentation about some of the salient points
of the Plan and its implications to the HRA. In summary, the Plan establishes the
need for continued work in our rehabilitation programs, continued and possibly
expanded work in the scattered -site acquisition program, and the need to advocate
for different types of housing styles (such as owner - occupied townhomes and senior
apartments), through redevelopment projects.
RECOMMENDATION
Staff recommends that the Housing & Redevelopment Authority review the plan and
recommend its approval to the City Council. After approval by the City Council, the
Plan is submitted to the Metropolitan Council. The Plan is not approved or denied by
the Metropolitan Council, but comments will be made. The Metropolitan Council has
suggested that the information be used for the update of the City's Housing chapter
of the Comprehensive Plan. A recent State law has required all communities in the
metro area to update their Comprehensive Plans by the end of 1998.
Two suggested questions as you review the Plan are:
I. Are there issues that need further emphasis?
2. Are there issues that are missing and should be addressed?
BD /dw
1►i 1001 R1 :'
7A
MEMORANDUM
HOUSING
1
REDEVELOPMENT
AUTHORITY
DATE: July 3, 1996
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Resolution Authorizing HRA Tax Levy
Introduction
This item was originally presented for discussion at the June 13, 1996 HRA meeting:
During the meeting several questions were raised about the need for an HRA tax levy
and whether the HRA should even be involved in making home improvement loans.
In response to these issues, staff has prepared a list of supporting reasons (copy
attached) for an HRA tax levy. Also attached is a description of the redevelopment
loan program, the proposed tax impact on a typical single family home, a memo from
Jim Casserly outlining the financial aspects of the redevelopment loan program. Jim
Casserly is currently preparing a resolution authorizing an HRA tax levy and will
distribute copies at the HRA meeting on July 11, 1996.
Summary of Issues
Although -the HRA tax levy places an additional commitment on taxpayers, it is small
in comparison to the overall objective of stabilizing and improving Fddley's housing
stock now and into the future. Below are several additional issues worth noting:
The HRA tax levy is the key component in supporting the redevelopment loan
program. The small amount that is charged to each property establishes
a program which directly benefits Fridley residents. Properties which
benefit from the program will have a positive impact not only on the
immediate neighborhood, but on. the larger community.
•
HRA Tax Levy
July 3, 1996
Page 2
2. The redevelopment loan program is an important component in providing
a long term source of funds for improving Fridley's housing stock. As
outlined in Jim Casserly's memo, over twenty years the HRA can make
more than 700 loans. These loans represent roughly 11 percent of
the total number of owner - occupied properties in Fridley.
3. The redevelopment loan program is a proactive approach to addressing
housing conditions and neighborhood stability. Under this approach the HRA
is providing resources for private owners to invest in their homes and remain
in the community. The HRA is in the position of heading off problems now,
rather than responding to a crisis in the future.
4. The tax levy generates the funds not only to repay the City's loan, but
also leverages more than $7 million dollars in total improvements. Without
the levy, the program will only provide a fraction of the loans and improvement
value.
5. Based on our recent experience the HRA's programs are helping those families
who would otherwise be unable to_ get financing elsewhere. By assisting these
owners the HRA is also encouraging others to improve their properties. The
few discretionary dollars would probably be spent in other areas.
6. Finally, it is important to offer a program which is flexible in terms
of eligible improvements. A roof, furnace, new wiring and plumbing are
all critical elements to a home, however collectively they do not add
value. By allowing owners to make small room additions, remodel a kitchen
finish a basement or build a garage the HRA is adding value to the housing
stock.
Recommendation
Staff recommends that the HRA approve the attached resolution authorizing an HRA
tax levy for taxes payable in 1997. The City Council will consider the HRA's request
for a tax levy on August 12, 1996.
Please note that the Redevelopment Loan Program will be considered as a separate
item on the HRA agenda.
GF/
M -96 -321
• A
PROPOSED REVOLVING LOAN
PROGRAM FOR HOUSING
REHABILITATION
Proposal:
Utilize $1.5 million loan from City to HRA
originally considered for southwest
quadrant to initiate revolving loan
program for housing rehab loans.
How it Works:
1. City provides loan to HRA:
a. 5% interest
b. 15 year term
c. $1,500,000
2. HRA uses proceeds from loan to initiate
revolving loan program for housing rehab
projects, single family and multiple family
units.
Revolving Loan Program - Page 2
3. Loan is ultimately repaid to the City via:
a. the loan repayments from the
recipients of the revolving loan
program; and,
b. a local HRA levy:
i. local HRA levy cannot exceed
.0131 % of taxable market value
ii. about $150,000 /year
iii. over 20 years, $3,000,000 would
be raised by levy of which
$2,150,000 is used to repay the
City.
Impact:
1. A pool of over $11,000,000 is created
over 20 years;
Revolving Loan Program - Page 3
2. 776 loans can be financed in 20 years
between 1996 and 2016;
3. City will be paid off in 2012;
4. After 2012, 60 loans /year at $12,000 /unit
can be financed.
SUPPORTING REASONS FOR
A LOCAL H RA LEVY
1. HRA fund balances will decrease as
neighborhood redevelopment projects
occur; need to find another source of
revenues for rehab programs.
* Frank's Used Cars
* Gateway East (behind Rapid Oil)
* Salvage Yards
* Others to be identified in
upcoming Redevelopment Priority
Analysis
2. Housing redevelopment projects do not
generate significant amounts of tax
increment; especially when redeveloping
blighted commercial sites into residential
projects.
3. Some of the existing "outside" programs
are more expensive to use than financing
our own.
a
Local HRA Levy - Page 2
4. The need and demand for rehabilitation
is well documented:
a. 1994 housing condition study
identified 901 units (single family
through four- plexes) needing at least
one item of exterior repair.
901 x $10,000 /unit = $9,100,000
b. Anoka County plan identified 2,211
units "needing rehab ".
2, 211 x $10, 000 /u n it = $22,110, 000
c. Using average loan data from
programs so far, if ALL single family
units built from 1940 - 1970 were
rehabbed: -
1940 -49 485 units $ $ 713782305
1950 -59 2300 units $ $24577Y800
1960 -69 2407 units $ $37,000,404
Total: 5192 units - $68y956,509
Local H RA Levy - Page 3
5. The need to rehabilitate apartment
buildings is substantial:
a. 1994 housing condition survey
identified 240 out of 365 buildings
had at least 1 item of
exterior /interior repair:
2,304 units x $10,000 /unit =
$23,042,500
b. 68% of all
multiple
family
buildings
were
built
between
1960
and
1979:
2,440 units x
$241400)000
$10,000 /unit =
c. 85% of renter occupied units- are 2
bedrooms or less:
i. demand for 3 bedrooms is up;
ii. maybe a
amenities;
demand for
0
Local HRA Levy - Page 4
conversion to senior units a
possibility;
iv. may need to consolidate units
to improve marketability of 1 or
2 bedrooms.
6. MHFA funding may not be available to
Fridley every year; federal programs are
also tenuous.
7. The earlier the program is initiated the
more revenue will be generated in the
long run:
a. The levy is needed to support and
build the revolving loan program and
to repay the loan from the City which
initiates the program.
b. The revolving loan program can be
self supporting with loan repayments
providing funds for more loans.
E�:l
Local HRA Levy - Page 5
8. A local levy demonstrates a local
commitment to raising funds for
programs which in large part help
"affordable" households, both single and
multiple family.
9. Although the County has adopted a
policy that it will not impose a levy for
the County HRA without local approval,
passing a local levy prior to County .
action puts the City in a better position to
obtain funds for a local program.
10. Current housing program and services
have generated positive feedback from
citizens. In the recent citizen survey,
55% of the respondents stated they
would support a levy.
11. If the Legislature imposes a "property tax
freeze ", a housing levy would be
grandfathered and the City would
preserve its rights to such a levy.
Local H RA Levy - Page 6
12. The levy can be terminated annually if
the need no longer exists or other funds
become available.
HRA Levy Is Based On Taxable Market Value
Tax on Industrial Property(1)
Value $ 9,5001000
0.0131 %
Levied 1Y
(1) Represents taxable value on Electronic Hair supply(old Dow Brands)
HRALEVALS 8K 11 5/20/96
Casserly Molzahn & Associates, Inc.
Suite 1100 Southpoint Office Center • 1650 West 82nd Street • Minneapolis, Minnesota 55431
Office (612) 885 -1298 • Fax (612) 885 -1299
M E M O R A N D U M
TO: City of Fridley
FROM: James R. Casserly
Mary E. Molzahn
RE: Establishment of a Housing Revolving Loan Program
DATE: May 17, 1996
For the last several years we have become increasingly concerned
about the City and the HRA's ability to fund housing programs.
Only recently has the City and the HRA established a program in
which the rehabilitation loans are repaid.
Several factors make it advantageous for the City /HRA to initiate
a long -range aggressive self supporting rehabilitation housing
program. These factors include the following:
1. In order to assist the HRA with its cost for the Southwest
Quad Development, the City has offered to loan 1.5 million
dollars to the HRA to defer its expenses. This loan would
provide the initial funds for the program.
2. Many cities have levied for their HRA housing activities.
The levy would be very small, approximately fourteen one -
thousand of one percent of the City's taxable market value
and would raise slightly over $150,000 per year. This levy
would repay the City loan and provide the capital for the
program.
3. Tax increment receipts which have been the source of your
housing program funds will rapidly diminish. Alternative
resources and programs must be developed while the tax
increment revenues are still available.
This revolving loan program should continue to grow over the
years and will provide the City, HRA and future councils with
resources to continue aggressive rehabilitation programs.
A financial analysis of this program is more fully described on
the attached Memorandum.
JRC /jms
Attachment
A•
Casserly Molzahn & Associates, Inc.
Suite 1100 Southpoint Office Center • 1650 West 82nd Street • Minneapolis, Minnesota 55431
Office (612) 885 -1298 • Fax (612) 885 -1299
V M����
TO: City of Fridley
FROM: Mary E. Molzahn
James R. Casserly
RE: Financial Analysis for Housing Rehabilitation Loan
Program
DATE: May 17, 1996
Attached please find a cash flow analysis for the proposed
revolving loan program designed to facilitate the rehabilitation
of the City's aging housing stock. Included below please find a
brief description of the analysis.
1. GENERAL ASSUMPTIONS
(a) Home improvement loans may be issued for either single
family or multiple family units.
(b) Average loan amount of $12,000 per unit.
(c) Average loan term of 12 years.
(d) Average loan rate of 5.000 %.
(e) Loans are issued in the first quarter of 1997 and every
quarter thereafter for 20 years, terminating in the
last quarter of 2016. In the first 20 years of the
program a total of 776 loans at $12,000 per loan or
$9.312 million will be issued based on the following
assumptions:
8 loans per quarter or 32 per year in 1997 - 2002
7 loans per quarter or 28 per year in 2003 2008
11 loans per quarter or 48 per year in 2009 - 2012
15 loans per quarter or 56 per year in 2013 - 2016
Me-
2. QUARTERLY REVENUES (see cash flow)
The proposed revenues, which approximate $11.595 million,
consist of the following potential sources:
(a) City loan of $1.5 million to the HRA during the first
quarter of 1997 payable at 5.000. over 15 years.
(b) HRA levy providing approximately $75,000 semi annually
and totalling $3.0 million from 1997 through 2016.
(c) HRA grant(s) to be provided by the HRA if and when
required; no grants are included in this scenario.
(d) Home improvement loan repayments from the issuance of
776 loans over 20 years and which approximate $7.588
million. From this amount a loan reserve of 2.5- and
servicing expenses of 4.0% are deducted leaving a net
of $7.095 million.
3. QUARTERLY EXPENSES (see cash flow)
The proposed expenses, which approximate $11.648 million,
include the following potential categories:
(a) Home improvement loans issued as described in Section 1
above and which total $9.312 million.
(b) HRA payments to the City in the semi annual amount of
$71,666.46 and which approximate $2.150 million at the
rate and term described in Section 2 (a) above.
(c) Origination Expenses of $186,240, based on 2.000. of
the total principal amount of home improvement loans.
4. QUARTERLY INTEREST (see cash flow)
This additional source of revenue assumes interest is earned
quarterly at 5.000- per annum on the difference between
revenues and expenses; it approximates $297,533 through
2016.
5. ENDING BALANCE (see cash flow)
This column simply reflects revenues of $11.595 million less
$11.648 in expenses plus $297,533 in interest earnings for
an ending balance in December 2016 of $244,862.
The three columns on the right side of the analysis represent the
number of loans issued per quarter, per year and cumulatively.
•
CITY OF FRIDLEY, MINNESOTA
CASH FLOW
Period
Ending
Beginning
Balance
Quarterly
Revenues
Quarterly
Expenses
Quarterly
Interest
Ending
Balance
Loans/
Quarter
Loans/ Cum
Year Loans
03/01/97
0.00
1,502,490.54
97,920.00
17,557.13
1,422,127.68
8
06/01/97
1,422,127.68
79,981.09
169,586.46
16,656.53
1,349,178.83
8
09/01/97
1,349,178.83
7,471.63
97,920.00
15,734.13
1,274,464.60
8
12/01/97
1,274,464.60
84,962.18
169,586.46
14,873.00
1,204,713.32
8
32 32
03/01/98
1,204,713.32
12,452.72
97,920.00
13,990.58
1,133,236.62
8
06/01/98
1,133,236.62
89,943.27
169,586.46
13,169.92
1,066,763.35
8
09/01/98
1,066,763.35
17,433.81
97,920.00
12,328.46
998,605.63
8
12/01/98
998,605.63
94,924.36
169,586.46
11,549.29
935,492.82
8
32 64
03/01 /99
935,492.82
22,414.90
97,920.00
10,749.85
870,737.57
8
06/01/99
870,737.57
99,905.45
169,586.46
10,013.21
811,069.77
8
09/01/99
811,069.77
27,395.99
97,920.00
9,256.82
749,802.58
8
12/01/99
749,802.58
104,886.54
169,586.46
8,563.78
693,666.44
8
32 96
03/01/2000
693,666.44
32,377.08
97,920.00
7,851.54
635,975.07
8
06/01/2000
635,975.07
109,867.63
169,586.46
7,203.20
583,459.44
8
09/01/2000
583,459.44
37,358.17
97,920.00
6,536.22
529,433.83
8
12/01/2000
529,433.83
114,848.72
169,586.46
5,933.70
480,629.79
8
32 128
03/01/2001
480,629.79
42,339.26
97,920.00
5,313.11
430,362.17
8
06/01/2001
430,362.17
119,829.81
169,586.46
4,757.57
385,363.09
8
09/01/2001
385,363.09
47,320.35
97,920.00
4,184.54
338,947.98
8
12/01 /2001
338,947.98
124,810.90
169,586.46
3,677.16
297,849.57
8
32 160
03/01/2002
297,849.57
52,301.44
97,920.00
3,152.89
255,383.90
8
06/01/2002
255,383.90
129,791.99
169,586.46
2,694.87
218,284.30
8
09/01/2002
218,284.30
57,282.53
97,920.00
2,220.59
179,867.42
8
12/01/2002
179,867.42
134,773.08
169,586.46 '
1,813.18
146,867.21
8
32 192
03/01/2003
146,867.21
61,952.30
85,680.00
1,539.24
124,678.76
7
06/01/2003
124,678.76
139,131.53
157,346.46
1,330.80
107,794.63
7
09/01/2003
107,794.63
66,310.76
85,680.00
1,105.32
89,530.70
7
12/01/2003
89,530.70
143,489.98
157,346.46
945.93
76,620.15
7
28 220
03/01/2004
76,620.15
70,669.21
85,680.00
770.12
62,379.48
7
06/01/2004
62,379.48
147,848.44
157,346.46
661.02
53,542.48
7
09/01/2004
53,542.48
75,027.67
85,680.00
536.13
43,426.27
7
12/01/2004
43,426.27
152,206.89
157,346.46
478.58
38,765.28
7
28 248
03/01/2005
38,765.28
79,386.12
85,680.00
405.89
32,877.30
7
06/01 /2005
32,877.30
156,565.35
157,346.46
401.20
32,497.38
7
09/01/2005
32,497.38
83,744.57
85,680.00
382.02
30,943.98
7
12/01/2005
30,943.98
160,923.80
157,346.46
431.52
34,952.83
- 7
28 276
03/01/2006
34,952.83
88,103.03
85,680.00
467.20
37,843.06
7
06/01/2006
37,843.06
165,282.25
157,346.46
572.24
46,351.09
7
09/01/2006
46,351.09
92,461.48
85,680.00
664.16
53,796.72
7
12/01 /2006
53,796.72
169,640.71
157,346.46
826.14
66,917.11
7
28 304
03/01/2007
66,917.11
96,819.93
85,680.00
975.71
79,032.75
7
06/01 /2007
79,032.75
173,999.16
157,346.46
1,196.07
96,881.52
7
09/01/2007
96,881.52
101,178.39
85,680.00
1,404.75
113,784.65
7
12/01/2007
113,784.65
178,357.61
157,346.46
1,684.95
136,480.75
7
28 332
03/01/2008
136,480.75
105,536.84
85,680.00
1,954.22
158,291.81
7
06/01/2008
158,291.81
182,716.07
157,346.46
2,295.77
185,957.19
7
09/01/2008
185,957.19
109,895.29
85,680.00
2,627.16
212,799.64
7
12/01/2008
212,799.64
187,074.52
157,346.46
3,031.60
245,559.29
7
28 360
03/01 /2009
245,559.29
113,008.48.
134,640.00
2,799.10
226,726.87
11
RLP1 PREPARED BY CASSERL 80 lHN & ASSOCIATES, INC. 17— May -96
CITY OF FRIDLEY, MINNESOTA
CASH FLOW
Period
Beginning
Quarterly
Quarterly
Quarterly
Ending
Loans/
Loans/ Cum
Ending
Balance
Revenues
Expenses
Interest
Balance
Quarter
Year Loans
06/01/2009
226,726.87
188,942.43
206,306.46
2,617.04
211,979.87
11
09/01/2009
211,979.87
114,876.38
134,640.00
2,402.70
194,618.96
11
12/01/2009
194,618.96
190,810.34
206,306.46
2,239.04
181,361.87
11
44 404
03/01/2010
181,361.87
116,744.29
134,640.00
2,043.33
165,509.49
11
06/01/2010
165,509.49
192,678.25
206,306.46
1,898.52
153,779.79
11
09/01/2010
153,779.79
118,612.20
134,640.00
1,721.90
139,473.89
11
12/01/2010
139,473.89
194,546.16
206,306.46
1,596.42
129,310.01
11
44 448
03/01/2011
129,310.01
120,480.11
134,640.00
1,439.38
116,589.49
11
06/01/2011
116,589.49
196,414.06
206,306.46
1,333.71
108,030.81
11
09/01/2011
108,030.81
122,348.02
134,640.00
1,196.74
96,935.56
11
12/01/2011
96,935.56
198,281.97
206,306.46
1,111.39
90,022.46
11
44 492
03/01/2012
90,022.46
124,215.93
134,640.00
994.98
80,593.37
11
06/01/2012
80,593.37
200,149.88
134,640.00
1,826.29
147,929.54
11
09/01/2012
147,929.54
126,083.84
134,640.00
1,742.17
141,115.55
11
12/01/2012
141,115.55
202,017.79
134,640.00
2,606.17
211,099.50
11
44 536
03/01/2013
211,099.50
129,197.02
183,600.00
1,958.71
158,655.23
15
06/01/2013
158,655.23
206,376.24
183,600.00
2,267.89
183,699.36
15
09/01/2013
183,699.36
133,555.47
183,600.00
1,670.69
135,325.52
15
12/01/2013
135,325.52
210,734.70
183,600.00
2,030.75
164,490.97
15
60 596
03/01/2014
164,490.97
137,913.92
183,600.00
1,485.06
120,289.95
15
06/01/2014
120,289.95
215,093.15
183,600.00
1,897.29
153,680.39
15
09/01/2014
153,680.39
142,272.38
183,600.00
1,404.41
113,757.18
15
12/01/2014
113,757.18
219,451.60
183,600.00
1,870.11
151,478.90
15
60 656
03/01/2015
151,478.90
146,942.15
183,600.00
1,435.26
116,256.31
15
06/01/2015
116,256.31
224,432.69
183,600.00
1,963.61
159,052.61
15
09/01/2015 '
159,052.61
151,923.24
183,600.00
1,592.20
128,968.05
15
12/01/2015
128,968.05
229,413.78
183,600.00
2,184.77
176,966.61
15
60 716
03/01/2016
176,966.61
156,904.33
183,600.00
1,878.39
152,149.33
15
06/01/2016
152,149.33
234,394.87
183,600.00
2,536.80
205,481.00
15
09/01/2016
205,481.00
161,885.42
183,600.00
2,297.08
186,063.50
15
12/01/2016
186,063.50
239,375.96
183,600.00
3,022.99
244,862.46
15
60 776
11,595,562.44 11,648,233.83 297,533.85 244,862.46 776 776 776
Interest Rate 5.000%
RLP1 PREPARED BY CASSERL 8P 'AHN & ASSOCIATES, INC. 17— May -96
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
AUTHORITY
DATE: July 3, 1996
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Resolution Authorizing Funding for the Redevelopment
Loan Program
A resolution which authorizes funding for a redevelopment loan program is being
prepared by Jim Casserly and will be distributed at the HRA meeting on July 11,
1996. A description of the program was outlined in the attachments to the tax levy
memo. Additional information on the program will be provided at the HRA meeting.
GF/
M -96 -324
0
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
DATE: July 3, 1996
AUTHORITY
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Authorizing Additional Expenditures for the
Mississippi Street/3rd Street Intersection Project
At the HRA meeting on April 11, 1996, the HRA approved a resolution authorizing
reimbursement to the City for the Mississippi Street/3rd Street intersection
construction project. The reimbursement authorized was for one -half of the
intersection costs. The one -half share represented the Rottlund share and the HRA's
share. The other one -half is to be provided by Anoka County and Holly Center.
On June 20, 1996, the City conducted the bid opening for the project. Eight
contractors requested the specifications, and four returned bids. The bid amounts
were as follows:
1. W.B. Miller, Inc. $212,616.20
2. Midwest Asphalt Corporation $214,977.40
3. Alber Asphalt Company $217,949.40
4. Land Dar, Inc. $255,302.10
The original estimate on the project's cost was $162,237.69. After further discussion
with Anoka County and City engineers, the additional cost overruns are a result of
additional requirements by Anoka County. Of the $50,378.51 overage, approximately
$34,000 is a result of the County requiring complete remilling and saw cutting of the
pavement at the intersection. A smaller. amount of saw cutting and milling was
proposed in the plan's specifications.
IF
Additional Expenditures
Miss. St. /3rd St. Intersection
July 3, 1996
Page 2
The County has been contacted to either participate in sharing the additional costs or
removing the requirements completely. If the County removes the saw cut and
milling requirement, it would only be an overage of $16,378.51. The engineers have
advised me that the contractors are extremely busy, and the bids may reflect their
costs.
The engineers discussed rebidding the project this Fall or next Spring, but that option
is not recommended. It was noted that three out of the four bids were within $3,000
of one another and rebidding could result in a higher cost and delayed
implementation.
Anoka County committed to participate up to $40,559.00, as did the other
participants. The County is currently evaluating our request and will contact us by
July 10, 1996 as to the response about sharing the cost or removing the requirement.
At worst, the HRA would be responsible for the difference of $50,378.51. At best, an
additional $16,378.51 would be required if the County removed the saw cutting and
milling requirement.
As a result of this overage, I have reviewed the Southwest Quadrant expense and
revenue budget. An unanticipated revenue component will be received since the
Minnesota Petro Board has agreed to fund $21,000 of the remediation activities that
have occurred on the Fridley Fast Lube site. Further, there was approximately
$115,000 budgeted for "Public Improvements" at the initiation of the budget in the Fall
of 1994. Approximately $65,559.00 of that amount has been committed. However,
like other budgets, there were overages in other line items and lower expenses in
others. The acquisition and relocation costs associated with the apartment buildings
is the reason for a majority of the difference in expenditures (Cherrywood issue is still
pending).
RECOMMENDATION
Everything possible is being done to reduce the cost to the HRA. Hopefully, a
solution will be presented Thursday evening. Although this is an unpopular
recommendation, staff recommends that the HRA pass the attached resolution
authorizing an additional expenditures to cover the remaining costs of the Mississippi
Street/3rd Street intersection project. In the meantime, the City will try to eliminate
and /or significantly reduce these costs.
M -96 -325
10A
4
HRA RESOLUTION NO. - 1996
RESOLUTION AUTHORIZING AN ADDITIONAL
REIMBURSEMENT TO THE CITY OF FRIDLEY FOR THE
MISSISSIPPI STREET /3RD STREET INTERSECTION
CONSTRUCTION PROJECT
WHEREAS, Anoka County has required certain public improvements to
be completed to the Mississippi Street and 3rd Street
intersection as a result of the Southwest Quadrant redevelopment
project; and
WHEREAS, the City of Fridley opened bids on the project on June
20, 1996; and
WHEREAS, the lowest bid was $212,616.20 resulting in an overage
of $50,378.51; and
WHEREAS, the HRA passed HRA Resolution No. 7 - 1996 authorizing
reimbursement of up to one -half of the original project cost of
$162,237.69.
NOW, THEREFORE, BE IT RESOLVED that the Authority agrees to
reimburse the City of Fridley the remainder of the costs for the
completion of the public improvements at the intersection of
Mississippi Street and 3rd Street.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF , 1996.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
f
ATTACHMENT />
Soul /rived Quadrant 1994 Proposed Bu el
Compared with March 1991
Estimated Expenditures
* The final figure for acquisition is contingent upon completion of condemnation
hearings and appeals.
Note also that these are costs incurred since 1994- Other acquisition costs were
incurred in the mid -1980s and in 1990, prior to the inception of the current project.
10C
1994 Budget
Land Sales of
144 Units
1996 Estimated
Expenditures and
Revenues based
On 118 Units
Available Tax Increment:
$1,051,352
$ 760,235
Land Sales:
720.000
951,000
Total Revenue:
$1,771,352
$1,711,235
Acquisition:
2,836,968
3,132,929*
Relocation:
486,600
561,466
Demolition:
247,174
233,243
Public Improvements:
_ 115,000
65,559
Site Improvements:
42,710
0
Issuance, Etc.:
73,595
0
Other:
380.205
318,846
Total Expenses:
$4,182,252
$4,312,043
SURPLUS /(DEFICIT)
($2,410,900)
($2,600,808)
* The final figure for acquisition is contingent upon completion of condemnation
hearings and appeals.
Note also that these are costs incurred since 1994- Other acquisition costs were
incurred in the mid -1980s and in 1990, prior to the inception of the current project.
10C
MEMORANDUM
HOUSING
VIL ►!
REDEVELOPMENT
DATE: July 3, 1996
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Status of Negotiations with Wallboard, Inc. for a Loan/
Second Mortgage
Wallboard, Inc. has filed the appropriate application for tax increment financing
assistance as a result of the direction of the HRA to include the property in the
redevelopment project area. After the June 13, 1996 HRA meeting, I met with Ms.
Parashek regarding the HRA discussion. I advised her that the HRA did not want to
include the cost for the trucks as part of the project cost. The HRA decided to
eliminate this cost from the project cost calculation because it was movable
equipment and the owner could probably obtain financing to make these
expenditures.
Ms. Parashek corrected me, however, on the land and building costs. I had originally
assumed that the $850,000 was both the land and building cost. She advised me
that the $850,000 is solely the construction costs, and she has already paid $200,000
for the land. Therefore, the total project cost of the 30,000 square foot building is
$1,050,000. In order to finance the construction, Ms. Parashek will obtain a first
mortgage for approximately $550,000, leaving a gap of $300,000. The owner will
obtain a personal loan, with the land as security for the remainder.
In a letter dated May 27, 1996, she identified five items which would not occur without
the tax increment financing assistance, totalling $100,000. All of the five items would
result in a higher quality project and a larger sized project. One of the purposes of
the redevelopment program is not only to create jobs but also to create a higher
quality /value project.
The actual construction costs of three of the five items (adding a mezzanine,
changing the size of the overhead doors, and adding the appropriate number of
11
Wallboard Loan /Second Mortgage
July 3, 1996
Page 2
windows in the front of the building) is approximately $88,500. Without these
improvements, the project would be smaller and of lesser value.
RECOMMENDATION
It is proposed that a second mortgage /loan be executed between the HRA and
Wallboard, Inc. for $85,000, or about 6.5% of the project cost. Unless otherwise
directed, a resolution and development contract will be on the consent agenda for the
August meeting for this amount. The interest rate would be 5 %. Ms. Parashek has
requested a ten year term. As in previous development contracts, the owner will have
to provide a guarantee for the amount of the loan.
No action is needed on this item.
M -96 -317
11A
WE DELIVER GYPSUM LIKE NO ONE DELIVERS GYPSUM
��. gill
w
WALLBOARD, INC.
4615 Humboldt Avenue North
P.O. Box 11309
Minneapolis, Minnesota 55411
Telephone: (612) 521 -2211
June 27, 1996
Subject: Tax Increment Financing Information
Purpose: We are requesting additional funds in order to build a larger facility and to add a
mezzanine and for site improvements.
Description of Project: The 30,000 square foot office warehouse will be constructed with
Fab -Con prefabricated concrete tip-up panels. The facility will contain approximately 5,000
square feet of office space and 25,000 square feet of warehouse space.
Project Costs: Land cost = $ 200,000
Building & site improvements = $ 850,000.
Trucks, forklifts and equipment = $ 250,000
Subsidy Request: $ 85,000
Construction Schedule: July 20, 1996 start date, with a completion of October 1996.
Legal Description: PIN - R22 30 24 43 008, Great Northern Industrial Center, Lot 1,
Block 7.
Deposit: $2500
• Pagel 11B
WE O ,-- GYPSUM LIKE NO ONE .--
.
w
May 27, 1996
Ms Barbara Dacv
Municipal Center
6431 University Avenue Northeast
Fridley, MN 55432
RE: Tax Increment Financing
Dear Ms Dacy:
WALLBOARD, INC.
4615 Humboldt Avenue North
Minneapolis, Minnesota 55411
Telephone: (612) 521-2211
We are negotiating with two General Contractors on our new facility in Fridley. As you know, we have
been planning our new facility for the past year. Our budget for the building is $650,00.00. The bids
are approximately $825,000.00 to $850,000.00. We would like to build the facility at it's current
design, however, because of our financial requirements, it may be necessary to scale back to meet our
budget restraints.
In order to meet our budget, value engineering would require the following changes:
Eliminate the mezzanine.
Change the size of the overhead doors
3. Eliminate the fence in back of the property.
4� Change the size of the front gates
Decrease the number of windows in front of the building
The above changes would amount to approximately $100,000.00.
Our second option would be to eliminate two new boom trucks, and hire four new drivers at a cost of
approximately $250,000.00. Obviously, our new facility will require us to hire new employees over
and above the new drivers. If we are fortunate enough to be able to participate in Fridley's TIF
program, we would be able to go ahead with the plans as they are now.
We are'looking forward to hearing from you as soon as possible, as it will affect our construction and
financial planning.
Thank you for your consideration.
S�innccerely,
Patti Paraschuk
President
/jm
it
11C
Business
Address:
APPLICATION FORM FOR TAX INCREMENT FINANCING
Type (Partnership,
Representative: AL-
Telephone: �/e
Name of Counsel:
Name and Telephone of Accountant:, /,
List of Financial References: Name /Address /Contac- t/TnlPnhnnc
+I' j
wiPP,
1:659-417V
Other Comments Pertinent to Your Application:
Have You Ever Filed for Bankruptcy? Yes No
If Yes, provide details on separate sheet
Have You Ever Defaulted on any Loan Commitment? Yes No
If Yes, provide details on separate sheet
INFORMATION CONCERNING APPLICANT'S PROPOSED PROJECT
Location of Proposed Development: (Attach a Drawing) /
Nature of Proposed Business:
11D
a
ilk
a
9 �
Principal Business or Product of the Company?
Is the Proposed Project a New
Expansion of Existing Facility?
y' f'
r
s �£
4g' t 2
Facility or Rehabilitation and /or iti;i�
Industrial /Commercial /Residential: bq 14�
What is the Present Employment of Your Firm:
What is Your Estima a of Employment One Year After Completion of
p
f:
Project: ..MCP —&
What is You Estimate of Employment Five Years After Completion of
Project: ,r�C
Total Estimated Project Cost:
Total Estimated Construction Costs: , 0QQ
Potential Other Use(s) of Proposed Development:
Will this Development p Attract Other Related Industries:
Yes No
How?
What Types?
What is the Current Zoning Status of the Project Site?
In Rezoning, will Zoning Variances or Conditional Use Permits be
Required in Connection with the Project?
r
P
-2-
11E
r,
f
Is the Property Properly Subdivided for the Proposed Use?
Has Site Approval been Obtained for this Project?�
If So, When ?ZL%��
By Planning Commission? AJ11A
By City Council? All
Have You Applied for Conventional Financing for the Project?
Yes Y No
If Yes, Provide Details on Separate Sheet, "H. Information to
Attach"
.55p� aoa for /OVeA-. -IU7546 -6,Z-11C&,1'7
If No, Why Not?
INFORMATION TO ATTACH
Please include:
J1,
f
--�
State Public Purpose
-�
Description of Project
Schematic Drawing of Project
Breakdown of Project Costs
---��
Amount of Subsidy Request,
Construction Schedule
Legal Description - (Include PIN's)
Other Pertinent Information
Deposit
t:
� F
-3-
11F