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HRA 08/08/1996 - 29789� �"� �, CITY OF FRIDLEY HOIISING & REDEVELOPMENT AIITHORITY MEETING AIIGIIST 8, 1996 CALL TO ORDER: Vice-Chairperson Schnabel called the August 8, 1996, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL• Members Present: Members Absent: Virginia Schnabel, Jim McFarland, John Meyer, Duane Prairie Larry Commers Others Present: Barbara Dacy, Community Development Director Jim Casserly, Financial Consultant Grant Fernelius, Housing Coordinator Craig Ellestad, Accountant Robert Van Nelson, Remodeling Counselor David Wiger, 901 Rice Creek Terrace Jeffrey Surma, 1852 Fillmore Street N.E. Kiley Jo Surma, 1934 Hayes Street N.E., Minneapolis, Minnesota Skip Sorenson, Architect, 10249 Yellow Circle Drive, Minnetonka, Minnesota Edward Johnson, 9793 - 64th Avenue North, Maple Grove, Minnesota APPROVAL OF JULY 11, 1996, HOUSING AND REDEVELOPMENT AUTHORITY MEETING: MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the July 11, 1996, Housing and Redevelopment Authority minutes as written. ' IIPON A VOICE VOTE, ALL VOTINt3 AYE, VICE-CHAIAPER80N 8CffiJAHEL DECLARED THE MOTION CARRIED ONANIMOUSLY. CONBENT AGfENDA: 1. REVENUE AND EXPENSES Mr. Ellestad distributed copies of additional expenses needing approval as outlined in his memo of August 8, 1996. Ms. Schnabel asked what was disbursed on check #26082. Mr. Ellestad stated check #26082 includes a$140,000 grant and $140,000 loan for Mr. John Allen for the industrial project on HOIIBINa & REDEVELOPMENT AIIT80RITY MEETINa, AIIGIIBT 8, 1996 PAaE 2 73rd Avenue. 2. RESOLUTION AUTHORIZING EXECUTION OF DEVELOPMENT CONTRACT WITH WALLBOARD, INC. 3. HOUSE PLAN DESIGNS FOR 5981 - 3RD STREET MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the Consent Agenda as presented along with the additional expenditures as outlined in Mr. Ellestad's memo of August 8, 1996. IIPON A 90ICE VOTL, ALL VOTINt3 AYE� VICE-CHAIRPERSON BCHNABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. ACTION ITEMB• 4. PROPOSALS TO REHABILITATE 6431 JACKSON STREET N.E. Mr. Fernelius stated the HRA discussed this item at the last meeting. At that time, the direction was to accept proposals for the rehabilitation of this property with a number of assumptions including that the purchase price would be fixed at $40,500. The bidders were instructed to meet minimum specifications and staff � prepared bids accordingly. Bidders were also encouraged to identify any additional improvements beyond the minimum improvements in their proposals. Mr. Fernelius stated staff contacted 27 individuals and builders. Bidders were asked to prepare written proposals as well as a description of their experience and references. As is required with all scattered site acquisitions, the successful bidder would be required to enter into a development contract with the HRA and provide a letter of credit equal to the amount of the improvements. The bidder would need to arrange their own rehabilitation and permanent financing. Mr. Van Nelson reviewed the proposals. Mr. Van Nelson stated staff received three proposals. Bids were received from Mr. Ed Johnson who proposes to make the improvements and sell the property to his brother; Jeff Surma who proposes to own and occupy the home; and David Wiger who proposes to improve the property and place it on the market for sale. Mr. Van Nelson stated all three of the bids were thorough and complete. All address the minimum standards. All indicated an ability to meet the financing requirements and had experience working on similar projects. All provided references and all the references had good things to say about the bidders. There was some variation in the additional improvements. All three �^ exceeded the minimum requirements. � � �"� 80II8ING � REDEVELOPMENT AIITHORITY MEETINa. AIIGIIST 8. 1996 PAG$ 3 Mr. Van Nelson stated Mr. Johnson proposed the minimum standards and additional items would be worth $41,000 in value. That in addition to the purchase price totals of $81,500. Mr. Surma proposed $34,000 to meet the minimum requirements, $6,000 for additional improvements with a 10� contingency for a total of $44,000. That and the purchase price totals $84,500. Mr. Wiger proposed $24,500 to meet the minimum standards, $19,800 for additional items with a contingency of 10� for a total rehab of $48,840. That and the purchase price totals $89,340. Mr. Van Nelson stated all three proposals showed considerable merit. After evaluating the proposals, Mr. Wiger's proposal highlights include a 12 foot x 12 foot addition incorporating the previous addition to make it tie more into the existing structure; closing one unnecessary staircase and building in entertainment centers; new ceramic tile in the upper bathroom and an additional shower; a more modern approach to the kitchen; a new patio out the back; adding additional bedroom windows beyond replacing the windows that are there; and a substantial reworking of the front porch to make it structurally sound. Some additional items in his bid included the quality of materials, ceramic tile in the kitchen and bath, a new countertop in the kitchen, replacing exterior doors, and providing a substantial carpet allowance. Other strengths were the 20 years experience as a contractor licensed in the state and the City of Fridley and the financial capability to do the project. Mr. Van Nelson did a site visit on a project by Mr. Wiger in Fridley which was finished very well. Mr. Fernelius stated staff's recommendation would be to accept the proposal from Mr. Wiger. Between now and the September HItA meeting, staff would work with the HRA attorney to prepare the development contract and finalize the details of what the improvements will be. This would then be available for HRA consideration in September. If approved, Mr. Wiger would start work on October 1 and have 180 days in which to complete the project. M�. Meyer asked if the HRA had decided whether the property was to be sold and remodeled or demolished. Ms. Schnabel stated the HRA had decided to see what was proposed to rehab the property. Based on the bids, the HRA would decide whether to repair or demolish. Mr. Meyer stated the question is whether to demolish or to repair. What is the cost to demolish the structure? Mr. Fernelius stated demolition costs $4,000 to $5,000. Mr. Prairie stated he drove by the property. He asked if there had been feedback from the neighbors. HOIIBINa � REDEVSLOPMENT AIITHORITY MEETINa, AIIGIIBT 8, 1996 PAGS 4_ � Mr. Fernelius stated the mood at the last meeting seemed to be that the neighbors would prefer to see the house torn down. Ms. Schnabel stated she did not think the neighbors had confidence that anyone could work with it and bring it up to the standards of the neighborhood or do the work in a timely fashion. Mr. Meyer asked if it was correct that, if they �ent with the proposal, the HRA has nothing at risk. Mr. Fernelius stated this was correct. We still have the option to foreclose the mortgage and get the property back, or take the letter of credit and do the work, and/or demolish. Mr. Meyer stated the cost to the HRA is that they tie up certain monies for the loan. Ms. Dacy stated the HRA will issue a mortgage at 5� and the HRA does not collect payment until all improvements are complete. Mr. Fernelius stated the motivation is that the HRA has a loan on the property. The HRA has invested money in the property and there is no additional expenditure at this point. There is no transfer of funds. The only amount being financed is the cost of � the land which is being carried by the HRA. The bidder must secure their own financing for the improvements and then permanent financing. Ms. Schnabel stated the alternative is to demolish the structure in which case the HRA would have $40,500 invested for the purchase plus the additional expense of the demolition. The sale of the lot would recoup part of that. Mr. Fernelius stated this was correct. Because this is part of the acattered site program, the HRA might be able to collect some tax increment financing. This would recoup some of the costs. Mr. Prairie stated the contractor would start work on October 1. The date to complete construction is in 180 days. Mr. Fernelius stated yes. Six months is adequate time to do the work. They could start the exterior work this fall and do interior work during the winter. Mr. Meyer asked why Mr. Wiger included a sun porch, etc. Mr. Wiger stated the porch that is there serves no purpose and does not follow the roof line. He felt this addition would make the house more saleable. �� Mr. Meyer stated he was struck by the fact that the base bid is $24,000 and the extras $20,000. /""� HOIIBING � REDEVELOPMENT AIITHORITY MEETING, AIIaIIST 8. 1996 PAGE 5 Mr. Wiger stated he and his partner pretty much do the work so they bid as if the work was subcontracted. Mr. Meyer asked if staff would accept this bid if we had the $24,000 minimum bid and forgot the extras. Mr. Prairie stated he did not understand this reasoning. They need to consider the bottom line or the total bid. Ms. Schnabel stated she also did not understand. Mr. Fernelius stated staff is proposing to sell the property to Mr. Wiger who is taking the risk. If he wants to invest $50,000 in that property, that is his choice. Clearly, the neighborhood would benefit from that. Ms. Dacy stated the bidder is meeting everything that is being required. Mr. Meyer asked why we did not tell the bidder to give us the $24,000 job. We established minimum standards and this bid was the lowest bidder on the minimum standards. Are the bids being considered on an equal basis? �, Ms. Dacy stated staff would not recommend going with just the minimum standards. Staff's direction from the HRA was to establish minimum standards and to encourage as much additional improvement as pnssible to enhance the value of the home. We are looking for as many things as possible to make the property marketable and compatible with the neighborhood. We need to look at the bottom line. We want a first class job on this remodeling project and staff believes this proposal meets those standards. Mr. Prairie stated, if they demolish the structure, this will cost us more and we will get only a portion back. Under remodeling, the HRA will receive the full amount back. Mr. Schnabel asked if there were further comments from the public. Mr. Surma stated he planned to do the work himself. The figure of $34,000 is for minimum improvements but there would be additional improvements. He would replace windows and re-roof the house. He works with friends. He has done other projects. He has a lot of other ideas. He thought they should look at what they were going to do with the property. The property would be owner occupied and he would plan to be there for a long time. Mr. Meyer asked if he was bonded and licensed in the City of Fridley. n HOIIBIN(� & REDLPELOPMENT AIITHORITY MEETING, ATJGIIST 8, 1996 PAGE 6 Mr. Surma stated no. He now lives in northeast Minneapolis. He has rental property but he wants to move out of that area. He can do most of the work. His friends who have licenses in various areas would help. Mr. Johnson stated he attended the last meeting. He felt the house would have been demolished if he had not been there. The loan interest is 5�. Is this for contractors to get ahead or is this to help citizens? He plans to fix the house and his brother would live there. He did not think one can look at the numbers. You have to look at experience. If you put in $20,000, you are not qetting that out of it if you are selling. Mr. Prairie asked the time frame on this. Ms. Dacy stated staff prefer the HRA take action this evening. The goal is to remodel in the next six months or demolish to include in the housing replacement program. The neighborhood wants resolution on the lot. The HRA has the option to table but that would mean approving everything at once in order to have time to do the work. Staff would prefer a decision tonight. Mr. Johnson asked why the time allowance was 180 days. The work could be done in 90 days. � Mr. Fernelius stated that is the typical maximum requirement for new construction. Mr. Meyer stated the problem he sees is that these standard specifications are so.loose that no one knows what we would be getting. They are very vague. Ms. Dacy stated the agenda packet information 4K through 4T spells out every standard for each room which is the outline or the framework for the development agreement. The root of your concern is that you want to make sure that what they are doing is correct and should address the issues. We want to set up a development contract and make sure it is met. Mr. Prairie stated the sample provided is similar with the bid summary sheet. Ms. Schnabel thought it was quite complete in terms of minimum standards so there should be no misunderstanding. Ms. Dacy stated that does negate remodeling versus demolition. If the HRA feels a new home is more appropriate, that then is an issue that must be decided. If you choose to remodel, staff wants to be ask specific as possible. � Mr. Meyer stated he felt the extra work was also very vague. � HOIIBINa & REDEVELOPMENT AIITHORITY MLETING, AIIGIIBT 8, 1996 PAGE 7 Ms. Schnabel stated the extra items is what each have spelled out on their bids. Mr. Prairie stated, if they demolish, there is then an open lot that may sit there for a time. Ms. Dacy stated, if the home were demolished, the site would be included in the inventory and they would try to sell it next spring. Mr. Meyer stated, from the neighbors' descriptions, it sounds hopeless inside to make anything of it. We may be putting money into something that may be unfixable. Mr. McFarland stated, with the property and $40,000 in value for improvements, the HRA will have plenty to back up the investment. OM TION by Mr. McFarland, seconded by Mr. Prairie, to accept the proposal from Mr. Wiger Ms. Schnabel asked the value of some of the other homes in the neighborhood. Mr. Fernelius stated the values range from the mid-$80,000's to �, $100,000. With the improvements, this house would be in that range. IIPON A VOICE VOTE, WITH M8. SCBNABEL, MR. MCFARLAND� AND MR. PRAIRIE VOTINd AYE AND MR. MEYER VOTIN(� NAY, CBAIRPERSON DECLARED THE MOTION CARRIED BY MAJORITY VOTE. 5. TIF REOUEST FOR NOAH'S ARK SENIOR HOUSING, INC. Ms. Dacy stated the senior housing proposal is from Noah's Rrk Senior Housing, Inc. They are requesting pay-as-you-go tax increment financing from the HRA and are requesting the City Council to issue mortgage bonds. These are concurrent items that will be scheduled as they proceed. Noah's Ark is proposing to construct a 104-unit, four-story independent living apartment building at 83rd and University. The total project cost is $8.5 million. The bond issuance would require that 40� of the units be rented to households with incomes less than 600 of the median income or $26,220. 40� of the units would be taxed at 2.3� rate and the rest at 3.4%. The rental rates would be $575 per month up to $1,100 per month. Approximately half of the apartments would be one-bedroom and the rest two-bedroom units. Ms. Dacy stated the City Council discussed this issue at their workshop meeting and agreed that a senior housing proposal was preferable to a commercial development. This is a higher value ,�"'� project and would generate more taxes. Staff completed an analysis and this project would generate $150,000 in taxes per �� HOIIBINm & REDEVELOPMENT AIIT$ORITY MEETING, AIIaIIBT 8, 1996 PAGE 8 year as compared to commercial at $50,000. This also meets a community need for senior housing. Ms. Dacy stated, from a location standpoint, it is near the Nature Center and pedestrian trail, close to shopping, etc. The market is for independent seniors who may still drive. Transportation services will be provided for those who do not drive. Ms. Dacy stated the City Council made no objection from a land use or policy standpoint. There is enough time in the existing TIF district 103 to provide up to $680,000 in tax increment. The exact amount of the assistance needs to be further clarified but it will be in the range of $600,000 to $680,000. The purpose of the assistance is to assist with the land acquisition, soil correction and mitigation. The burden is on the developer to construct the project and the HRA delivers a note. The asaistance amount represents approximately 8� of the project costs. Mr. Commers wanted staff to come up with the 1989 development request which was included in the agenda packet. Mr. Stutz had no problem with the request and felt there would be no impact on the townhomes. There is enough room in the senior market for both products. Staff went through the senior housing guidelines and this project meets those guidelines. � Ms. Dacy stated staff recommend the HRA authorize staff to continue negotiations with Ark Development to provide pay-as-you- go tax increment financing and prepare a development contract for HRA approval. Mr. Prairie asked what constitutes a senior. Ms. Dacy stated she believed this was persons aged 55 and over. For the bond, the age may be established at 62 or 65. Mr. Sorensen stated the average age of seniors living in these buildings is approximately 78 years. The turnover rate is less than 8� per year. This is an independent living facility. Noah's Ark is a non-profit agency and will provide services such as light housekeeping, transportation service, ancillary services for one hot meal a day. Other than that, other features include an emergency response system and security system in the building, a camera system and underground parking which is monitored. These are features the tenants like to see. Tenants have the right to come and go anytime they want to. This project will have ancillary spaces in the building including a community room, solarium, dining room, library, beauty parlor, TV room, management offices, etc., to help create a sense of community. Ms. Schnabel asked where the emergency response came from. � 80IISIN� & REDEVELOPMENT AIITHORITY MEETINa. AIIGIIBT 8. 1996 PAaE 9 � Mr. Sorensen stated they have an on-site resident manager. There will also be a service monitoring. Usually the service response system is tied into the telephone system of the building. The services provided in the basic rent include the rent and heat. In Spring Lake Park, the rent also includes cable TV and the tenants pay extra for underground parking. Mr. Prairie stated the rent starts at $575 and goes up to $1,100. Are there different categories? Mr. Sorensen stated yes. About 40� of the units will rent for $575 for a one-bedroom apartment. The remaining 60� will adjusted accordingly. Their survey says they would be looking at a density ratio of approximately 65� to 70� to be one-bedroom units and the other 30� to 35o to be two bedrooms. What they are finding to be popular in the marketplace is an entry level one- bedroom unit with about 750 square feet. This is larger than most standard units. Also popular is a one-bedroom unit with a den; a t�o-bedroom unit; and a two-bedroom unit with a den. The rents will go up accordingly based upon square footage. Mr. Sorensen stated unit features will include basically everything except the telephone. Included will be mini-blinds, carpeting, all appliances, oak cabinets, etc. The only thing the tenants will need to bring is their furniture and telephone. Mr. Prairie asked how many parking stalls would be in the garage. Mr. Sorensen stated they have found that 70� of the tenants require underground parking. The day the building opens is the largest demand for parking. As more services are provided, people start getting rid of their vehicles. After five years, this goes down to approximately 50�. Mr. Meyer asked the minimum age of tenants. Mr. Sorensen stated he thought it would be 55. Ms. Schnabel asked if they would allow pets. Mr. Sorensen stated he thought there was a pet policy with a security deposit required. Mr. Prairie asked how many units were at Village Green. Ms. Dacy stated Village Green has 100 units with five-stories. Mr. Meyer asked what the floor ccnstruction materials would be. Mr. Sorensen stated the floor between the garage and first floor � wauld be two-hour fire rate precast columns and beams. The upper four floors will be fire rated to two hours with wood HOIISINa & REDEVELOPMENT AIITHORITY MEETING. AIIGIIBT 8, 1996 PAGE 10 � construction and sprinklers. The exterior will be a combination of brick and maintenance-free siding. Mr. Meyer asked if Mr. Sorensen was aware of the need for soil correction. Mr. Sorensen stated yes. Mr. Meyer asked how Noah's Ark had come to choose this location. Mr. Sorensen stated staff identified six sites. They have found in building these projects that seniors look at accessibility and transportation. These seem to be big selling features. Ms. Schnabel asked if this project would be similar to the one in Spring Lake Park. Mr. Sorensen stated both are independent housing projects but there will also be differences. According to the survey, there is a need for 12,000 affordable housing units that should be built in six northern communities. The market shows it is very strong. Over 80� of the residents moving into a building come from within a six-mile radius. � Mr. Casserly stated the assistance on the pay-as-you-go basis can reduce rental rates by approximately $100 per unit per month. This makes the units more available in the marketplace. The assistance really translates into reduced rates. Mr. McFarland asked if this was spread out among all the units. Mr. Casserly stated as a practical matter they will have to reduce the rents on the smaller apartments to make them eligible. At this time, they use a factor of 82 cents per square foot and multiply by the different size units. This benefits the entire complex. Mr. Prairie asked what the square footage was on the larger units. Mr. Sorensen stated the larger units are 1,150 square feet. Ms. Schnabel asked if the money being requested would be a grant or a loan. Mr. Casserly stated it is a form of a grant. We will issue them a revenue note that is paid from the tax increment that is generated from their specific development. It will be done as a revenue note approach. Mr. Meyer asked what the costs for soil correction would be. �� HOIIBINa & REDEVELOPMENT AIITHORITY MEETING. AIIGIIBT 8, 1996 PAGB 11 Mr. Casserly stated it does not matter what those costs are. These are costs that will come out of the total and will help support the total project. MOTION by Mr. Meyer, seconded by Mr. Prairie, to authorize staff to proceed with formal negotiations with Ark Development to provide pay-as-you-go tax increment financing and to prepare a development contract for HRA approval. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. INFORMATION ITEMS: 6. REVIEW PERFORMANCE OF MEPC UNDER CONTRACT FOR EXCLUSIVE NEGOTIATIONS Ms. Dacy stated MEPC held an event on July 18 which was attended by several HRA members. This was a good event with a good turnout. Ms. Dacy passed around a copy of information that was distributed at the July 18 event. Ms. Dacy stated staff feels MEPC is meeting what the contracts has called for. 7. STATUS OF HOUSING PROGRAM Mr. Fernelius stated staff is pleased with what has happened so far. We have achieved the goal of 100 loans in four months. The flip side is that we could exceed the budget set aside for the loan program. 53 applications are still pending. The potential impact could be another $500,000. There is some money remaining in the budget. Mr. Fernelius stated these are monies that would be used for loans that would be paid back on a monthly basis. The average loan is about $12,000 with repayment over 12 years. This is income that will be coming back in and can be relied upon. Staff's request is for the HRA's concurrence to authorize up to $500,000 for the housing revolving loan program. Staff will continue to provide updates. Mr. Prairie asked what the budget was going to be for next year. Mr. Fernelius stated this has not been established at this point. Mr. Prairie asked if staff wanted to attain this in 1.5 years. Mr. Fernelius stated the direction from the City Council is to keep plugging away and try to meet the demand. If the HRA wants � to set a limit, they can certainly do so. Staff want to promote the programs and the improvements that are being made. 80II8INa � RBDEVELOPMENT AIITHORITY MEETINa� AIIaIIBT 8. 1996 PAaE 12 Ms. Dacy stated, when staff does a cash flow on an annual basis, they figure very conservatively on the revenue side and very high on the expense side. The HRA has an adequate cash position. The City Council has directed staff to be aggressive with the rehab program. Because the revolving loan fund has been successful so far and although the budget may look like it is over, we will receive these payments back. We do not want to be in a position to halt the program. These funds will come back in. The program has been so successful it has exceeded the expectations. Mr. Meyer asked if staff had given the HRA a summary of the types of housing rehab that has been done to date. Mr. Fernelius stated staff has not done a formal analysis. A range of improvements have been made including roof replacement, furnace replacement, some room additions, multiple repairs including roof, siding, windows, etc. Some of these improvements have been deferred. He felt the program is making a positive impact. Mr. Prairie asked if how many driveways were being done. Mr. Fernelius stated he did not have actual numbers. He felt there were very few. Staff are encouraging that type of work. '� Mr. Meyer stated he would like to see as a condition of the loan that a person must undergo an inspection of plumbing, electrical, heat, fire and then address any deficiencies. Mr. Fernelius stated they could do that. When they started the program, there were a number of restrictions which made the programs less popular. Staff have modelled the program after some that are out there. The borrower drives what is done. We are determining who is eligible but they do not prioritize which comes first. Ms. Dacy stated the Remodeling Counselor helps the applicant look at those things so they are being considered. The City Council direction is to get people moving to take an interest in their homes and to do the improvements that are needed. Ms. Dacy stated staff would go to CEE to produce a report and analyze what repairs are being made. MOTION by Mr. McFarland, seconded by Mr. Meyer, to authorize up to an additional $500,000 for the housing program budget for 1996. Mr. Meyer stated this is with the understanding that staff will draw up a list of what the funds are being used for. � � HOIIBINa & REDEVELOPMENT AIITHORITY MEETINa. AIIaIIBT 8. 1996 PAGB 13 IIPON A VOICE VOTE, ALL VOTINa AYE, VICE-CBAIRPERSON BCBNABEL DECLARED THE MOTION CARRIED IINANIMOIISLY. 8. REVIEW PROPOSED STRATEGY TO ACCOMPLISH MULTIPLE FAMILY HOUSIAIG GOALS Ms. Dacy stated each year the City Council develops goals and objectives for the year. One of the objectives for 1997 is to closely evaluate the most severely deteriorated apartment complexes in the community and figure out ways to assist the owner in completing significant rehabilitation or completing ourselves. After identifying the complexes, the choices can include doing nothing, private rehab, non-profit ownership, public-private partnership, public ownership, or demolish the buildings. The City Council wants staff to explore the options in the middle. Mr. Fernelius stated the rental inspection program has been in place for 1.5 years. Buildings are inspected every four years. The focus is on basic health and safety related issues. It does not get at issues such as marketability and attractiveness. The City through the police department is involved in a rental landlord coalition that deals with tenant screening, building maintenance, etc. CEE did a short presentation on programs we �..� are offering. The emphasis has been on moderate rehabilitation but they do not focus on those properties that require a substantial investment. Mr. Fernelius stated building issues are a concern. Many buildings were constructed in the late 50's and early 60's and were designed as inexpensive housing. Most contain one and two bedroom units. The apartments are generally small with older appliances and fixtures and lack some of the modern amenities such as covered parking, balconies, play areas, green spaces, three-bedroom units, etc. Problems are compounded when owners do not invest in their properties. Another area is tenant services. More tenants need services linked to the housing projects such as child care, education, employment, etc. Mr. Fernelius stated staff have identified four areas which have buildings that are generally in poor condition, have some code compliance problems, are unattractive in appearance, etc. Staff did some site visits and came up with some suggestions for improvement. The smallest project was four buildings with 28 units and the largest was nine buildings with 108 units. Mr. Van Nelson stated the first site in on Island Park Drive and is the largest site with nine buildings. It is adjacent to East River Road which could provide the link to transportation but now is off of the main street. It is close to an elementary school ,� and to the river. The buildings are poorly designed. There is no sense of structure to the spaces and parking is up to the � �'�1 HOQBINa � REDEVELOPMENT AOTHORITY ME$TING, AIIGIIBT 8, 1996 PAaB 14 building. With no definition of front or back yard, people can be anywhere around the building at any time without raising suspicion. The buildings are not well articulated. The units are primarily one-bedroom and some are two bedroom. There is little storage which contributes to the clutter. There is no evidence of people living there other than cars. The windows are small. Mr. Van Nelson stated some improvements include making a prominent entrance, adding landscaping to create space to get outside, lowering the grade so the lower level units could get more light, adding a roof pitch to give the scale of a residential building. Mr. Fernelius stated these ideas talked with the owners and staff would be. We don't know if that There may be a variety of things to give an individual character. are conceptual. Staff have not do not know what the expenses is the plan for every building. one could do with each building Mr. Van Nelson stated the second site is at 7th Street and Polk. This is an isolated multi-family area close to residential. It is bounded by major transportation routes. There are site constraints so the developments are smaller but have a negative impact. The buildings themselves are repetitive units, lack articulation with the windows, have very little landscaping, and lacks structured space such as a play area. Mr. Van Nelson stated staff talked about incorporating some service programs including a community room in the lower level apartments, providing a way to access the building would enhance the area as well as the possible addition of balconies, landscaping and lighting. Mr. Van Nelson stated the third site has 28 units in four buildings. Al1 are two-story stucco in a residential area and bounded by University. The buildings are not much larger than a house. The windows are small. There is no landscaping. The spaces between the buildings are paved for parking. Mr. Van Nelson stated possible changes could include bumping out a small enclosure to bring the scale of the facade into line. The bedrooms are on the street so there is little privacy. The windows are in poor condition and need to be replaced. Their plan considered larger openings. Adding a low pitch hip roof would bring it into scale with the neighborhood. Landscaping and decorative lighting would add to the appearance and safety. Mr. Fernelius stated, in terms of an action plan, within the next two or three months staff will talk with some of the owners to ,� see if they are interested in participating in a program like this. Staff will not make any commitments. This is research to i''� � HOIIBINQ � REDEVELOPMENT AIIT80RITY MEETING. AIIaIIBT 8, 1996 PAQE 15 see if there is any interest. Ms. Dacy talked about a continuum but we need to talk about the financial aspects, ownership issues, how these buildings are managed, etc., as well as what role the HRA would have in any project. In order to take these elements one step further, staff would like to hire Gar Hargens to provide some rehabilitation options including costs estimates, site plans, etc. Staff estimate the cost to be $2,500. There are some unused funds under the contract the HRA has with Close & Associates, so the net expenditure would be approximately $1,300. There is also the issue of tenant services which is where a non- profit agency would step in. Many of these projects would eventually involve a non-profit element to tie in tenant services and management issues. Staff will also talk to other cities who have had experience. Mr. Fernelius stated staff's goal is to do something by January l, perhaps have an application ready to go to the housing finance agency for an RFP. This would require a commitment to have site control. In the coming months, staff would continue to research the items discussed and keep the HRA up to date. Staff will be talking to the City Council about this on April 19. Mr. Meyer stated he was interested in the architectural change of the site, but what is the bottom line. What is the ultimate goal? Mr. Dacy stated staff want to find the results of a high, medium, and low rehab. The overall goal is to remodel inside and outside and turn the buildings around. We have to find the right mixture. Between the owner's cash flow and the MHFA program, we can come together and see if anything can be done. Mr. Meyer stated, if you take all the deficiencies, there is no way with any reasonable budget that we would ever cure more than a fraction of those deficiencies. Ms. Dacy stated all of the sites are R-3. Another option is that some of these buildings could be demolished and replaced with new multiple family housing. The multi-family part is probably going to be the most expensive issue the HRA will have to deal with. Mr. Meyer asked why bother. These are units built by private parties, occupied, rented, and making money for the owner. The owners are finding people to rent the units. What business is it of the HRA to disturb that process? Ms. Dacy stated the City Council is telling staff that they feel these are having a negative impact on the neighborhood. The City Council wants to prevent blight and decline from impacting the City. These are the areas that seem to be causing the most problems. HODBINa & REDEVELOPMENT AIITHORITY MEETINa, AIIaIIBT 8. 1996 PAaE 16 Mr. Fernelius stated what he did not show on the map is four � other properties that are similar to the latter. They are the same design but are better maintained. There is more multi- family to the north which is properly maintained and properly managed. Those shown have the perception of bringing the neighborhood down. This represents an opportunity to intervene and doing something. �� Mr. McFarland stated the owners must not care or they would do something. What can we do to motivate them? Ms. Dacy stated this is the issue. How do we get an owner to go beyond repaving a driveway, or re-roofing, etc.? Mr. Meyer asked what business is was of public funds to help out some landlords. There is not way to correct every ill in the City. Where do we stop? There are many issues of blight that have nothing to do with the building. Ms. Dacy stated it may be that we buy the building and improve it. Non-profit ownership is a way to turn the building around. Mr. Prairie asked if staff was requesting funds to do an analysis. Mr. Dacy stated yes. Staff will continue to do all of these things along with cost estimates. Mr. Meyer stated Gar Hargens is very good and he has no problem with getting estimates. He is against the program. He sees no merit in this type program. He does not see that these units have any more of a detrimental effect as before. OM TION by Mr. McFarland, seconded by Mr. Prairie, to authorize staff to hire Gar Hargens of Close & Associates to evaluate rehabilitation optiona, exterior design issues and related site improvements. IIPON A VOICE VOTE, ALL VOTINa AYE, VICE-CHAIRPERBON BCHNABEL DECLARED THE MOTION CARRIED DNANIMOIIBLY. ADJOIIRNMENT: MOTION by Mr. Prairie, seconded by Mr. McFarland, to adjourn the meeting. OPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPER80N �CBNABEL DSCLARED THE MOTION CARRIED AND THE AIIGIIST il, 1996, HOIISING AND REDEVELOPMENT AIITHORITY MEETING ADJOIIRNED AT 1Ot10 P.M. Respectfully submitted, � Lavonn Cooper Recording Secretary 8 I G N— I N 8 H E E T � $OIISING AND REDEVELOpMENT AIITHORITY MEETING, August 8, 1996 Name Address/Business Ill� 1� �� 9� i,�,� ����',� T�,����.� .� '"'r �, �'v �z � I,��a ,�� // m c:a �z � � � n �. K � l e �a �� �z � �. �-t fl � � � � � �� I � �� ��N -�r�� � j�2 �c�i� �f� G�z.. N1 � ^-� r ; � � v� �#- e�' w�C�C �� r,,, . ( �, ���, � �