HRA 01/11/1996 - 29783`'"'�
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CZTY OF FRIDLEY
HOQBINa & RBDEVELOPMENT AIITHORITY MBLTINd
JANQARY il, 1996
CALL TO ORDER:
Chairperson Commers cal].ed the January 11, 1996, Housing and
Redevelopment Authority meeting to ordes at 7:35 p.m.
ROLL CALL:
Members Present:
Members Absent:
Larry Commers, Virginia Schnabel, Jim
McFarland, John Meyer
Duane Prairie
Others Present: Councilmember Dennis Schneider
William Burns, Executive Director
Barbara Dacy, Community Development Director
Jim Casserly, Financial Consultant
Grant Fernelius, Housing Coordinator. �
Craig Ellestad, Accountan�
Dave Ring, Center for Energy and the
Environment (CEE)
Robert Van ATeleon, 3144 Oakland Avenue
Oliver Tam, 1160 Fireside Drive N.E.
Dave Jellison, MEPC .
Leslie Jowett, MEPC
,APPROVAL OF NOVEMBER 9. 1995. HOUSING AND REDEVELOPMENT AUTHORITY
�lEETING :
OTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the
November 9, 1995, Housing and Redevelopment Authority minutes as
written.
IIPON A VOIC$ VO'1'E, ALL VOTINt3 AYE, CBAIRPERBON COMMERB DBCLARFD
THE MOTION CARRIED UbTANIMOIIBLY.
CONBENT AGBNDA:
1.
2.
3e
4.
5.
HYDE PARK HOUSING PROGRAM UPDATE
HOUSING PROGRAM UPDATE
SOUTHWEST OUADRANT BUDGET UPDATE
PROPOSED 1996 MEETING DATES
REVENUE AND EXPENSES
� 80II8INa & R?�DEVELOPMENT ADTHORITY MTa.. JANOARY 11, 1996 PA�3E 2
Mr. Ellestad distributed cdpies of his memo of January 11 with
additional expenses to be considered.
6. RESOLUTION AUTHORIZING PAY INCREASE FOR HRA EMPLOYEES
7.
8. 1�iPPROVAY� OF PLANS AND I DEVELOPMENT AGREEMENTS WITH DIANNE
SCHONIlKER, OLIVER TAM. �AND WHITNEY HOMES
9. RESOLUTION AUTHORIZIIdG EXECUTION OF DEVELOPMENT CONTRACT•
INDUSTRIAL INVESTORS L.L.P., JOHN ALLEN
10. APPROVAL OF CONTRACT WITH CASSERLY LAW FIRM
0
11. CONSIDER APPLICATION FOR 1996 MINNESOTA CITIES PARTICIPATION
PROGRAM
Mr. Fernelius stated therejis a slight change in Consent Agenda
items 7 and 8 and distribu�ed copies of revised information.
Under #7, one lot has beenladded at 623 Lafayette Street to the
� list of properties that wil�l considered at the public hearing.
_ This is directly tied to a;change in agenda item #8 and the
property to be developed b� Mr. Tam. Mr. Tam has re-evaluated
his decision on developing this property and does not feel he can
put a house on the property at a price that is profitable. He
wants to withdraw his offer. Based on that information, staff
contacted the next highest�bidder who is interested in developing
the property. Staff recommends the HRA approve the sale and
development agreements witY� Dianne Schommer and Whitney Homes as
presented in the regular HR� agenda pacicet and the resolutions
attached to staff's memo o January il, 1996, which would
authorize the execution of�those contracts. Staff recommends the
HRA approve the house plan design by Dianne Schommer which is in
the agenda packet. Whitne�► Homea will submit their house plans
for the next meeting. Staff recommends the HI2A approve the sale
and development with Mr. Tam be approved for two lots which he
will develop on Second and Third Street, but reject his offer for
623 Lafayette and to modify the development contracts. Staff
recommends the i�tA approveiMr. Tam's house plans for the two lots
he plans to develop.
Mr. Commers asked how thisichange came about.
Mr. Tam stated he was sorry about the confusion. After he got
the lot, he took it to his real estate agent who told him she did
� not think this property would support the kind of house he
, planned to put up. That is the main reason. After that first
discussion, the real estate agent then thought it would work. By
� SOIIBINa 6 RBDEVELOPMENT AIITHORITY MTG�.. JANOARY li. 1996 PAGE 3
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that time, staff had already contacted Whitney Homes.
Mr. Fernelius stated four bids were submitted for this property.
Mr. Tam had the highest bid, Whitney Homes had the second
highest. Based on the fact that someone who was interested if
the first bidder could not perform and the fact that Mr. Tam had
indicated he no longer wanted the property, Mr. Fernelius
contacted Whitney Homes to see if they were still interested in
buying the property. After that conversation, Mr. Tam contacted
Mr. Fernelius stating he wanted to develop the lot. Mr.
Fernelius stated he was in an uncomfortable position because he
had already offered the property to someone else. In
conversation with Mr. Tam, he was comfortable with that and
realizes he will lose his earneat money deposited on that
property.
Mr. Commers asked how firm the offer was with the second biddera
Mr. Fernelius stated the offer was very firm.
Mr. Commers stated he had questions regarding the Revenue and
Expenses and would like to remove this item from the Consent
� Agenda.
OTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the
consent agenda with the exception of the Revenue and Expenses.
DPON A VOICE YOTE, ALL VOTIN(� AYE, CHAIRPER80N COI�II+3ERB DTsCLARBD
THL MOTION CARRIED ONANIMOIIBLY.
ACTION ITLMB:
12. CONSIDER APPOINTMENT OF HRA REMODELING COUNSELOR
Ms. Dacy distributed copies of additional information regarding
housinq programs. Councilmember Schneider was invited to listen
to this discussion and discussion of the next agenda item. The
City Council is a strong advocate of the programs.
Ms. Dacy reviewed the handout showing blight and decline and ways
to attack the problem. Staff is trying to put together a
comprehensive attack on blight and decline. The two elements
they will be talking about are remodeling or rehabilitation
counselors and housing rehabilitation. Mr. Fernelius ia doing
outreach with the focus groups and meeting with realtors. He is
also coordinating the rental inspection program, assisting in
planning efforts, organizing the first home buyer program, and
� workinq on the scattered site acquisition program which then
brings us to housing replacement.
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HOQBING4 � RBD�BLOPMENT AIITHORITY MT(�.. JANIIARY 11, 1996 PAQE 4
Ms. Dacy stated staff is trying to approach the programs in a
customer-service type of model. A rehab project can be something
simple taking two to three months or it can be as complex as 10
to 18 months. The key is in the initial phases. The rehab
counselor is key in the pre-planning phase. In order to qet
people to get a rehab loan, it is important to work with the
homeowner to make the decision on exactly what they want to do.
The rehab counselor needs to educate people. In the CEE example,
they have a program for one-stop financing.
Mr. Fernelius stated an obvious question is why the necessity for
a rehab counselor. Staff's experience has shown in the past few
years that many of the people we deal with do not always have
knowledge and understanding of home improvement projects and what
is involved in these projects. Typically when a homeowner comes
in, they have not explored everything that is necessary to plan
and organize a rehab project. As a result, things sometimes drag
out. The rehab counselor is the focus to help people through the
process. In addition, this service will also tie together the
other programs and services within the Community Development
Department. Besides information on home improvement projects,
the rehab counselor will also be providing information on housing
programs; make referrals to the building inspection department
and code questions, permits, etc.; and work on planning and
zoning issues that may come up. In addition, this also provides
an opportunity to have face-to-face contact with our customers at
a convenient time in their homes. It fills a gap in the existing
services through the housing program and improves the overall
quality of service and, hopefully, customer satisfaction.
Mr. Fernelius stated thie was a position identified in the 1995
goals and objectives. Because of other priorities, staff were
not able to implement it so they are beginning to implement this
in 1996.
Mr. Fernelius stated a wide array of services will be offered
including in-home property evaluation and input on the
improvements to make, value-added improvements, and code required
improvements. The rehab counselor would help homeowners asses�
whether they could do the projects themselves or bring in a
contractor. Other issues include the design and aesthetic
considerations, evaluatinq the cost effectiveness, and following
that up to see if there is any other assistance or services
needed. Other activities including working on a remodeling fair
to be held this spring. While this is a lot of work, it is also
an exciting opportunity to display the programs in Fridley and to
help residents to improve their properties.
Mr. Fernelius stated other concepts discussed at the staff level
could include the actual rehab of a Fridley rambler, having an
$OIIBING � REDEVELOPMENT AIIT80RITY MTa.. JANIIARY ll. 1996 PAaE 5
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energy efficient concept home, promotion of the purchase rehab
program, and a cable TV rehab program. There could also be a
tool lending library and home remodeling resource center. Other
ideas include a computer kiosk where residents could come into
City Hall and access a computer to find about programs and
provide information on home improvement issues. There is the
potential to develop some type of an on-line service and/or a
drop-in center for help with remodeling questions. Staff have
also discussed developing a voucher program for reduced rate
rentals for tolls and equipment for those who do their own work.
Mr. Fernelius stated the position is part-time. This an
e�ctremely important position as well as a technical position.
The hourly rate is $15.00 with a cap of 20 hours per week. For
1996, $15,600 is budgeted to provide this service. The service
would be free to the public.
Mr. Fernelius stated, in terms of the search process, the
position was advertised in the fall of 1995 and 26 applications
were received. Three were interviewed and Mr. Robert Van Nelson
has been selected. He has a Bachelor's Degree in Architecture
and Environmental Design. He is currently working for the
� Westside Neighborhood Services in St. Paul as a rehab advisor.
Prior to that, he worked as a remodeling contractor so he knows
the remodeling business and has worked as a carpenter. He has
experience with computers and software programs. Mr. Van Nelson
is at the meeting and available to answer questions. Staff
recommends his appointment to the position of remodeling
counselor. He can begin work on February 12.
Mr. Meyer stated this is a part-time position. What does the
candidate do for the other 20 hours?
Mr. Van Nelson stated he is currently remodeling his Victorian
home on his own. In order to speed the process, his wife
suggested he scale back his work hours in order to work on the
house. This position will work out well for what he is looking
for at this time.
Mr. Meyer asked if this position would have regularly scheduled
hours.
Mr. Fernelius stated staff has identified up to 20 hours per
week. At a minimum, Mr. Van Nelson would be here for the
extended service hours from 5:00 p.m. to 7:00 p.m. The thinking
behind the position is the rest of time will be spent either in
the office or in the field making appointments with homeowners.
Initially, there would be more work in the office but over the
� next several months he will be doing more and more in the field.
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HOIIBINa � REDEVSLOPMSNT AIITHORITY MTa.. JANQARY 11. 1996 PAa$ 6
Mr. Meyer stated the position is described with having two
facets. One is to work with homeowners making decisions, guide
the wise use of their money to accomplish the goal and make
decisions about the direction they want to go. The other part
seems to be more of working with fairs, computers, etc. If we
had more than 20 hours per week, it would be interesting to do
lot of other things. There could be the temptation to put the
majority oi the hours into the other things and less time
actually spent with the homeowner.
Mr. Van Nelson stated he is primarily working in direct contact
with the homeowner. He spends most of the time outside of the
office either managing construction projects or working with
clients in developing the scope of the work. The smallest
portion was when the office became automated. Most of the time
is spent working with clients.
Ms. Dacy stated she
people job. In the
about people skills.
interested about ouY
to introduce Mr. Var.
helping people.
is
a
could assure this is not a desk job. It is a
interview process, staff was very concerned
Initially, though, we need to get people
programs. A remodeling fair is a good way
Nelson to the job as well. The priority is
Mr. Meyer stated he thought this was an excellent idea and an
excellent program. He is, however, concerned there may be a
tendency to spend a lot of time on fairs, computers, etc., and
not spend time with homeowners. This is a limited number of
hours. If there is a problem in getting people aware of the
programs, that is something else that must be dealt with.
Mr. Fernelius stated this is not strictly self-interest about
promoting the programs. It is about investing in the community
and encouraging home improvement. Some of the folks we deal with
may not take advantage of any of the programs but staff and the
programs will be there in any event. If someone has other means
for paying for projects, they can do so. It is more than just
promoting our own programs. It is encouraging the whole idea of
home improvement. This person is to coach people through the
process. There will be follow up at appropriate times.
Mr. McFarland asked if the HRA had any liability if anything goes
8W� s
Mr. Fernelius stated no. Staff are not project managers.
Mr. McFarland asked, if the demands of the position are such that
Mr. Van Nelson cannot do the work, will other staff fill in.
Mr. Fernelius stated other sta,�� will share in the workload if
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needed.
OTION by Mr. Meyer, seconded by Mr. McFarland, to approve the
appointment of Mr. Robert Van Nelson as the Fridley Remodeling
Counselor.
IIPON A VOICL VOTS, ALL VOTINa AYB, CHAIRPLR80N CO1�ER8 DLCLARED
THE MOTION CARRIED IINANIMOIIBLY.
13e CONSIDER CONTRACT WITH CENTER FOR ENERGY AND THE ENVIRONMENT
FOR ADMINISTRATION OF CITY-WIDE HOUSING PROGRAMS AND
APPLICATION FOR FUNDING WITH MHFA
Ms. Dacy distributed copies of materials outlining some of the
advantages of working with the Center for Energy and the
Environment (CEE). Staff are excited about this approach. Staff
thinks this approach with CEE will work because of a competitive
interest rate of 5� and affordable monthly payments, one-stop
financing with a fast turn around, an emphasis on customer "cycle
of service" approach, a focused administration, 76�5 of the
households would be eligible, and new MHFA funds are available.
^, Ms. Dacy stated staff had not done this earlier because they had
assumed there would be a stronger role from banks and financial
institutions which did not happen. The advantage with CEE is
that their priority is housing. Staff was cautious in putting
the programs. Focus groups revealed a need to assist people
through the process. Programs were structured on what already
existed in the marketplace. The proposed approach is not being
done in other first ring suburbs, as far as she knows.
Ms. Dacy stated staff's goal is to do 100 loans in one year. The
entire I�IIiFA activity in Anoka County for the last five years
totals 122 loans. Staff want to do 100 loans just in Fridley.
Mr. Commers asked, if there was no arrangement with CEE, how do
they do it. Can a person work directly with CEE?
Ms. Dacy stated CEE has operated in Minneapolis. CEE has not
contracted with a suburban community. Because of CEE's
experience in Minneapolis, staff is trying to bring them out to
Fridley.
Mr. Fernelius stated CEE is not working in other communities. If
someone wanted to apply for a home improvement loan, they would
have to contact a local lender to see if they carry the prograffi
and then work through a bank. It would take quite a bit of
^ legwork on the part of a homeowner to find out about programs.
CEE will do promotion to make sure something gets done. In the
past, we have relied on lenders for this program which did not
� $OIIBINa 6 REDEVELOPMENT AIITHORITY MTa., JANOARY 11. 1996 PA�E 8
work. Staff thinks this is a more proactive approach.
Mr. Fernelius stated CEE is a nonprofit organization based in
Minneapolis. CEE has been in business for 15 years providing
energy, environmental and housinq rehabilitation services to
large utility companies, government agencies such as Fridley and
some neighborhood revitalization programs within the City of
Minneapolis, and private companies. In this time, they have
processed 8,000 loans totalling $25 million. They have a
knowledgeable and experienced staff to handle home improvement
financing. We began working with CEE in September, 1995, in the
Hyde Park area.
Mr. Fernelius stated the experience of working with CEE has been
positive. The idea of bringing CEE on board was the one stop
shopping to make it convenient for the borrower to come in. They
did not have to try to find out about different programs and try
to figure out what they might be eligible for. CEE would handle
that. The homeowner would fill out one application and CEE would
figure out what program would meet their needs. We have received
positive feedback from the residents in the Hyde Park area.
Since September, CEE did a targeted mailing, one workshop, 35
� building analyses, closed four loans totaling $45,000 and have 31
applications in process. This is a time intensive process.
Home-owners are out trying to get bids, evaluating what they want
to do, and making those decisions. Once they do, they contact
CEE to close on the financing. CEE has had staff hours on
Tuesday and Thursday from 5:00 p.m.. to 7:00 p.m. for walk-in
traffic, and has also been able to do some loan closings at the
homeowner's residence.
Mr. Fernelius statecl the HRA's role in the Hyde Parlc program has
been to provide deferred payment matching loans. This has been a
significant level of investment. In terms of existing programs,
staff has found banks somewhat reluctant to work with special
1�iFA programs. The banks are not always close for many of the
homeowners so it is not always easy to come in and fill out
applications. We have no control over the interest rates on the
NN�iiFA programs. We are competing to some extent with the banks on
the higher rates. There is also a need to get a grant or loan
for those who do not qualify due to their particular situation.
Existing proqrams have not been flexible enough in the
underwriting guidelines. CDBG and home programs have worked
quite well. Only one program is for rental property owners.
Mr. Fernelius stated a need exists for affordable home financing
in Fridley. Due to the potential investment needed to carry out
a citywide rehab program, there are some concepts we should be
'� following - use non-HRA dollars whenever possible; leverage HRA
dollars to maximize the total value or total improvements made in
� HOIIBINa � REDEVELOPMENT AIITHORITY MTa.. JANQARY 11. 1996 PAaL 9
the community; no longer provide the 30+ year deferred loans;
increase the loan volume; expand the market to include the middle
income market; offer attractive financing (5�) with flexible
terms to homeowners and landlords of up to $20,000 for up to 20
years; establish a revolving loan pool for owners with marqinal
credit; and maintain the last resort program.
Mr. Fernelius stated CEE's role is to originate loans for
homeowners and landlords. CEE will be providing a free building
analysis to rental property owners. CEE is connected with
Minnegasco and some of their rebate programs so they do energy
audits. More is involved in doing an analysis of rental property
so CEE will focus on rental property and Mr. Van Nelson will be
focusing on single family properties. The HI2A under this
proposal will only pay for loans that are actually made. CEE
will be assisting staff in negotiating with the Community
Reinvestment Fund (CRF), which is one part of the housing rehab
proposal. CRF will be buying some of the revolving loans so we
can recapitalize our loan pool. CEE will also assist staff is
utilizing 1�iFA programs that are available.
Mr. Fernelius distributed copies of the 1996 Single Family
^, Housing Rehab Programs and 1996 Multi-Family Housing Rehab
Programs which lists the target market, the programs available
for that market, and the HRA's role. Mr. Fernelius reviewed the
information for both single family and multi-family housing. CEE
would originate the multi-family funding.
Mr. Fernelius stated these programs have the market fairly well
covered and can serve more people in Fridley. In terms of the
budget implication, Hyde Park had a recommended investment of
$500,000 for the deferred loans. This could leverage up to 125
loans and an additional $250,000 in outside funds. These monies
will be paid back but at an uncertain date in the future. For
the citywide program, the recommended investment is $644,000,
which is broken down by the various programs. The revolvinq loan
fund and the interest rate write down fund will not necessarily
be repaid. These funds will leverage additional outside dollars.
That allocation of $300,000 could fund up to 372 loans or almost
$2 million in total improvements. If the goal is to do a lot of
loans and to make a lot of improvements in the community, staff
thinks this is a good way of doing it.
Mr. Fernelius stated staff recommends the HRA accept the proposal
by CEE to administer the citywide program and to execute a
contract for those services; and to authorize staff and CEE to
prepare an application for the community fix up fund and
^ community rehab program which are 1+giFA programs with application
' � deadlines in mid-February.
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HOIIBINa & REDEVELOPMENT AIITSORITY MTa.. JArTQARY 11. 1996 PAa� 10
Mr. Ring stated CEE is very excited about this initiative in
Fridley. He hopes the 100 loan goal is easily met. The intent
of CEE is to produce an aggressive marketing approach. CEE is
willing to be a sponsor in the housing fair and reduce the
administrative costs. The timing is better than it was for the
Hyde Park program. In September, there was not much initiative.
In the last few weeks, CEE has seen more interest in the program.
This is a nice time of year to start. He is confident CEE can
deliver a quality program for the HRA. CEE has been in this
business for a long time. Staff is e�erienced in working with
NIIiFA. In conversation with the 1�iFA, the proposal should be
funded. In the proposal, CEE will write the proposal to NII�FA and
get the approval. One of the programs is a grant programe
Mr. Ring stated, prior to December 1994, CEE ran a program for
Minnegasco called the Operation Insulation Program. CEE did
energy analysia and did financing. The program ended in Deceml�er
1994. Since that time, CEE has changed their focus on marketings
They are doing several building fairs this year which is a good
marketing tool to get the word out. The biggest problem they
have is getting the word out. These programs are not available
to contractors. He thought 5�S was a very marketable interest
rate.
Mr. McFarland asked if CEE went to the community or does the
customer come to them.
Mr. Ring stated they can go to the customer. The customer can
also fax information to them. When a person calls, CEE will tell
them what information to bring in and they can do everything
right there.
Mr. Fernelius stated, in our situation, we are requesting CEE
provide Tuesday evening hours and come out to take applications,
do loan closings, etc., so residents would not have to go to
downtown Minneapolis to get their financinge
Mr. McFarland asked how the activities of CEE would be
controlled.
Mr. Fernelfus stated CEE would be responsible for administering
the program. Mr. Fernelius would have contact with them on a
daily basis, if necessary. He would review any loan that has the
interest written down. Staff work closely with CEE to make sure
there is no misappropriation of funds and that everything is
being done successfully. Mr. Fernelius is responsible for
oversight of the program.
Ms. Dacy stated CEE is currently under contract for Hyde Park
only. A new contract must be set up for this proposal. This is
� HOIIBIN� & RED$VELOPMENT AIIT80AITY MTa., JANQARY il. 1996 PAdE 11
a community-wide proposal. Once Hyde Park is done, staff will
come back to the HRA for the next area on which to focus. We
also need to include multi-family buildings.
Mr. Ring stated there is no cost to the HI2A to originate a loan
for multi-family property. The interest rates are 4� and 6� and
CEE can blend those to get the 5�. To address the concern about
controls, CEE will be fronting all loan funds. CEE will be
sellinq those loans to NII�iFA or CRF. Basically, that is the
control. If they do not buy the loan, CEE then must absorb it.
The iiRA will be paying only for approved and purchased loans.
Ms. Schnabel asked, when the decision is made to loan money, to
whom is the payment made.
Mr. Ring stated the payment is made to the homeowner. CEE is not
allowed to deal with a contractor. To insure the funde are used
properly, there is a post-installation inspection. NIIiFA will do
a random inspection. If the work is not done, the loan is
considered in default immediately.
Mr. Fernelius stated most of the loans will be secured with the
i"� mortgage so we would have a lien against the property. All loans
are secured financing. There are safeguards built in.
Ms. Schnabel asked, out of the four loans that have been
approved, what kind of work is being done.
Mr. Fernelius stated work includes repair and/or replacement of
roofs, windows, heating, driveways, sidewalks, etc.
Mr. McFarland stated, on page 8 of the proposal, it states the
cost to the HRA for an average loan of $5,000 is $507.17.
Mr. Fernelius stated that is the write down costs of a loan from
8� to 5�. There are fees built in also. The $832.17 is the
subsidy we would provide in order to make a$5,000 loan.
Homeowners would be making monthly payments based on the 5� rate.
If we set up a$250,000 loan pool and assuming the average loan
was $5,000 with an $832 subsidy per loan, we could create an
improvement pool of $1.5 million.
Mr. Commers asked what the total cost would be.
Mr. Fernelius stated the total coat in this case is the $250,000
which is the initial investment. That amount produces 300 loans
for $1.5 million. The total of $600,000 being spent is creating
� a significant amount of value.
Mr. Commers asked if any of those �t�ds would come back.
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80IIBING & REDEVELOPMENT AIITHORITY MTa.. JANQARY 11, 1996 PAGZE 12
Mr. Fernelius stated $300,000 would not. The revolving loan fund
and the interest rate write down money will not come back. The
last resort programs would come back at some point. About half
would be recouped.
OTION by Mr. Meyer, seconded by Mr. McFarland, to approve the
contract with the Center for Energy and Environment (CEE) to
administer a city-wide housing rehab loan program.
Ms. Schnabel referred to page 9 where it states a loan purchased
through the HRA may want offset the fee by charging an
origination fee to the borrower.
Mr. Fernelius stated this was a suggestion on the part of CEE as
a way to reduce our costs. We would not do that.
IIPON A VOICB VOTS, ALL VOTINQ AYE,
THE MOTION CARRIED ONANIMOUBLY.
INFORMATION ITEMBo
14. LAKE POINTE UPDATE
COMMERB DECLARED
Ms. Dacy introduced Mr. Dave Jellison and Ms. Leslie Jowett who
will provide an update on the Lake Pointe site.
Mr. Jellison thanked the HRA for selecting MEPC to work on Lake
Pointea He will update the I�t�i on what they have been doing and
their plans for the future. He has reviewed the agreement and a
part of that is a schedule of activities for marketing. Mse
Jowett will provide a review of their marketing activities.
Ms. Jowett stated the first thing to be completed in January was
signage which is in process. She provided a mock up of the sign
with the Lake Pointe logo. This sign indicates Phase I which
they are excited about.
Ms. Jowett stated a flyer is being printed now and will be sent
to 300 brokers in the cities and also to 200 prospective tenants.
That will be done within the week. She distributed copies of the
flyer.
Ms. Jowett distributed copies of a press release which had been
prepared. Focus groups will be starting to feel out prospective
tenants to see if there is an interest in an office park.
Ms. Jowett stated they have had a meeting with an architect and
� have started the process for a master plan. The leasing people
' are very anxious to have something to take to the clients to
sell.
� HOIIBINa � REDBVELOPMENT AIIT80RITY MTa.. JANIIARY 11. 1996 PAQ� 13
Mr. Jellison stated they have selected Ed Farr and Associates as
the architects. Mr. Farr was a managing partner for the Wilson
Jenkins office that was moved here from Chicago. He designed
many of the Trammel Crowe buildings. He desigried the building
now under construction for Cyber Optics in Golden Valley. He is
puttinq together a master plan. When MEPC started the project,
we had to decide to start somewhere. They will start at the
westerly portion of the site with a prototype building for the
master plan. They are looking at a 5-6 story building with ramp
parking with 18,000 to 20,000 square foot floor plates. They
will design that building along with the master plan for the
entire park, but they need something to start with. MEPC will
take this out to prospective tenants featuring this as the first
building for the park. If we end up with a major user, MEPC will
regroup and work with them. As Mr. Farr goes further with the
master plan, MEPC will tie the whole master plan together and
bring it back to the HRA to review and approve. They wanted to
start at the west side because the east side is closer to the
intersection and will be easier to develop.
Mr. Jellison stated, with the 8 acre commercial site, MEPC feels
they need to put together some of the amenities for the market.
^ In talking with a prospective user, one of the first questions
was what amenities are in the area. They have tried to think
through the typas of services needed for the park and the things
we use at Minneapolis West that have been good for them. They
called on Hampton Inn Corporation, which has business hotels.
MEPC has three prototypes from them. Their corporation has
looked at the site. This is one of three sites they are
considering. MEPC thinks this will be a great service for this
park. From there, MEPC will look at other amenities they think
are important for the park. They will try to get them under
construction this summer and they would also like to get the
first. office building under construction this summer.
Mr. Jellison stated the other thing is the focus groups. They
are in the process of putting this together and will meet in
February to get an idea from the users in the marketplace to find
out their needs.
Mr. Meyer stated he has concerns that the commercial area would
be filled first and not have the office. This is an important
tract and he wants to do it right. Why is it necessary to get
the commercial amenities in place before the office space? If
the office space is contracted out, is there not enough time to
then put in the various amenities?
� Mr. Jellison stated that is something they must weigh when
putting in a development. Wlien MEPC goes to users to find out
what would attract them to the area, most have amenities to
HOIIBING�& REDEVBI�OPMENT AIITHORITY MTm.. JANIIARY 11. 1996 PAQE 14
attract people to the site. One must have a total package. He
did not know all the answers but he felt they must have services
in the area to meet the needs of the employees. MEPC is after
good corporations who will bring a lot of good people here and,
therefore, have good services right in the area. MEPC will give
i�tA members a tour of their existing park to show them a park
that works well and the type of package that has been successful
for them.
Mr. Meyer stated he is concerned that, if you get the commercial
amenities in and nothing then happens in the office sector, we
then have a commercial area which may not be the best. There is
no guarantee, but he is concerned this might happen.
Mr. Commers stated the HRA has approval over anything that goes
into that area. If MEPC proposes to construct, they have to get
approval. If it does not have a long term benefit to attract
tenants, hopefully the HRA would be able to say no.
Mr. Jellison stated everyone that MEPC would bring in as an
amenity to the park would also have to be convinced that this is
a good location. The Hampton Inn would not come in unless they
�1 felt it would be successful in their eyes. If, by the end of
1996, MEPC does not have an anchor tenant but has some services,
how can that hurt the on-going marketing of the park. These
services will the types of services that everyone needs. When
you start seeing something happen on the site, it gives the site
a life of its own. We are excited to get something happening.
We will be coming to you with more. We have also met with a
banker to see if they would like a branch in this location. We
are trying to make a community so businesses will come to the
area. MEPC will try to provide those services that are important
to those working at the site.
Mr. Jellison stated MEPC is getting the word out that there will
be a park. Once they get a design, it will develop interest.
Because of the location, he can see a market all the way down to
Minneapolis.
Mr. Commers stated the sooner that something can get goinq the
better. We recognize that activity on the site will encourage
things to happen.
Ms. Dacy distributed additional information regarding an indirect
source permit application and the ISTEA application. Staff had
to hire another specialty consultant to do air quality testing.
MPCA would not allow us to update the information from the 1986
,,� permit. The air quality equipment is very expensive. There is
only one company in town that does this work. That work will be
� underway this month. The costs ha�e been included in the budget.
� HOIIBING � RBDEVELOPMENT AIITHORITY MTa.. JANQARY 11. 1996 PAGE 15
Ms. Dacy stated they asked Benshoof to complete the Inner Surface
Transportation Efficiency Act (ISTEA) funding application in
order to construct the intersection. The total cost is $6,700
but Anoka County will pay $3,350. ISTEA is a source of Federal
fundinq for up to 80� of the road improvement costs. Staff will
know in March if they have been successful. The catch is that
the Federal monies require an environmental assessment which is
different from the environmental assessment that was updated for
the Lake Pointe development. Staff may have to come back for
additional funds.
Ms. Schnabel asked, potentially without a Federal budget, would
this money be available from the government. Some agencies are
now funded and some are not.
Ms. Dacy stated she would verify the funding source. The money
itself will not be available until two years from now. However,
depending on how fast MEPC goes, we could try to bump another
project ahead of this if everything is in place. Perhaps 1998 is
a more practical time to start construction. The funds are
included for 1997. If the application is not funded, there,is
money in the budget. The City must be the applicant for the
funds rather than the I�2A.
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to request the
City of Fridley to file the ISTEA application and, if funded, to
act on behalf of the HRA to complete the project with the
understanding that the costa associated with the project are to
be reimbursed by the i�2A.
IIPON A VOICE VOTE, AI�L VOTINa AYE, CHAIRPERSON COMMERB DECLARED
T8E MOTION CARRIED ONANIM008LY.
15. SOUTHWEST OUADRANT UPDATE
Ms. Dacy stated she, Mr. Casserly and Mr. Burns will meet with
Mr. Stutz on January 12. Staff has no update at this time. They
will get the numbers tomorrow.
Mr. Commers stated, if the prevailing rate increases the costs
significantly, perhaps we should not continue. If that is the
case, we should discuss.
Mr. Burns suggested waiting until after the meeting to see what
Mr. Stutz says. Since the issue of the prevailing wage is an
ordinance, he would work with the City Council to find a way out
of the impasse.
'� Mr. Commers stated the City Council has passed a prevailing wage
- requirement. He thought the crucial issue was if the City
� 80II8IN(� & REDEVELOPMENT AIIT80RITY MT�,. JANOARX 11. 1996 PAGE 16
Council could come back to the HIZA to pay the difference in cost
for the prevailing wage, and he was unsure this was something the
HRA should do. This issue has not arisen for some time. He
asked why this had not come up for other projects.
Ms. Dacy stated, based on research, for commercial and industrial
the contractors are union and match the prevailing waqe. This is
not generally true of residential contractors. There are also
exemptions for sole proprietors.
Mr. Burns stated it is a top priority to get this issue resolved.
This issue will affect every residential project undertaken in
the future.
16. PROPOSED REVISION TO HOUSING MORTGAGE ASSISTANCE PROGRAM
Mr. Fernelius stated they have been struggling with this program
for the last two years. Staff have identified an opportunity to
provide the same type of program utilizing some other funds.
Staff will research that and come back with a recommendation in
the next few months.
'� 17 . DRAFT 1996 BU�ET
Mr. Commers stated it will take several hours to go over the
budget and understand what the entries mean. It appears straight
forward but it takes time to go through it.
Mr. Meyer stated he would prefer to meet earlier to allow extra
time to review the budget.
Mr. Burns stated staff would look at the next agenda. If they
can work it out, they will plan to meet at 6:30 p.m.
Mr. Commers stated the budget has increased by a large amount.
This is fine, but the HRA must be satisfied to justify that type
of an increase.
The consensus of the HRA was to consider the budget at the next
meeting.
Ms. Dacy stated staff has been conservative on the revenues and
aggressive on the e�cpenses.
Mr. Casserly stated the HRA has funded projects but has not seen
funds coming back in from those projects. Adjustments to the
budget would be to the revenue projections.
� Mr. Ellestad stated he could provide footnotes for interpretation
� of the entries and add a columt� �,,�tled Projects in Process.
� HOIIBINd 6e REDEVEIAPMENT AIITHOItITY MT�.. JANQARY 11. 1996 PAdS 17
Mr. Commers stated that is what he would like to see. He felt
that information would be helpful. He asked staff to add this
item to the agenda for the next meeting.
OTHER BII8INE88:
18. FRANR�S USED CAR SITE REDEVELOPMENT UPDATE
Ms. Dacy distributed a copy of her memo of January 5, 1996,
regarding Frank's Used Cars.
19. OPTION TO ELECT CONTRIBUTIOPT OR LGA/HA,CA REDUCTION ON TAX
INCREMENT FINANCING DISTRICTS
Ms. Dacy distributed copies of her memo of December 12, 1995,
regarding the tax increment financing district.
20. ,APPEALS OF RELOCATION BENEFITS BY JANG WONG RESTAURANT
Mr. Commers stated he did not understand the increase in the
relocation benefits.
-'"� Ms. Dacy stated she would have Mr. Schnitker write a memo to
document the reasons for the additional amount.
21. MASTELL BROTHERS TRAILER SERVICES INC. REOUEST FOR TAX
INCREMENT FINANCING ASSISTANCE
Ms. Dacy distributed copies of her memo of December 8, 1995,
regarding a request from Mastell Brothers Trailer Services, Inc.,
for tax increment financing assistance.
22. REVENUES AND EXPENSES
MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the
check register #25774 through #25827 and the additional expenses
as listed in Mr. Ellestad's memo of January 11, 1996.
Mr. Commers asked what had been paid with check #25786e
Mr. Ellestad stated this was the second half taxes for the four
apartment buildings. When we buy a property, all taxes should be
paid for the rest of the year.
Mr. Commers questioned, when doing a quick take, if they get to
deduct the taxes.
� Ms. Dacy stated that is a separate action with a condemnation.
She will check with Barna, Guzy & Steffan to see if this is
- correct. The properties should be tax exempt for July 1996. She
HOIIBING � REDEVELOPMENT AIITHORITY MTa.. JANIIARY 11. 1996 PA�E 18
�
thought they were responsible for the second half taxes, but she
will check further.
Ms. Schnabel asked what the expenditure was for to Springstead
Public Finance.
Mr. Ellestad stated the 1992 temporary I�ake Pointe bond came due.
Springstead is the company that provides the legal service for
getting the bonds.
IIPON A VOICE VOTE, ALL VOTINa AYB, CSAIRPER80N COl►IIriERB DECLARl�D
THE MOTION CARRIED �I�TANIMOIIBLY.
ADJOIIRNMENT:
MOTION by Mr. McFarland, seconded by Mr. Meyer, to adjourn the
meeting.
IIPON A VOICE VOTE, ALL VOTINa AYE, CHAIRPERSON COMMERB DECLARED
T8E MOTION CARRIED AND THE JANQARY 11� 1996, HOIIBI�Ta �iND
REDEVELOPMENT AIITHORITY MEETINa ADJOIIRNED AT 1Os20 P.M.
� Respectfully submitted,
u � `/�
Lavonn Cooper
Recording Secretary
�
S I G N- I N 8 H E E T
HOIISING AND REDEVELOPMENT AIITHORITY MEETING� . January 1 1, ] 996
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