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HRA 02/13/1997 - 6273HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, FEBRUARY 13, 1997 7:30 P.M. WILLIAM BURNS EXECUTIVE DIRECTOR OF HRA CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, FEBRUARY 13, 1997 7:30 P.M. AGENDA LOCATION: Council Chambers (upper level), Fridley Municipal Center CALL TO ORDER ROLL CALL APPROVAL OF MINUTES: January 9, 1997 CONSENT AGENDA: Consider Application to MHFA for Minnesota Cities .............. 1 - 1 D Participation Program Consider Extension to Administrative Services Agreement ......... 2-2D with ACCAP Revenue and Expenses ... .......... . 3 - 36 . ...................... ACTION ITEMS: Consider Loan Origination Agreement with CEE for .............. 4 4CC Housing Rehabilitation Program Consider Request for Tax Increment Financing by ................ 5-513 Minnesota Commercial Railway Company Consider Request for TIF Assistance for Tamarisk ........... 6 - 6E Consider Supplemental Payments and Change Order for ........... 7-7R 3`d Street/Mississippi Street Intersection Project Housing & Redevelopment Authority Agenda for February 13, 1997 Page 2 INFORMATION ITEMS: Fridley Executive Center Update ............................. 8 - 8C Hyde Park Neighborhood Survey ............................. 9 - 9B Noah's Ark Update ......... ............................... 10 Lindstrom Metric TIF Request ............................... 11 - 1113 Proposed Strategy to Obtain Long -Term Funding for ..............12 - 12G Housing Rehabilitation Programs OTHER BUSINESS: ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JANUARY 9, 1997 CALL TO ORDER: Chairperson Commers called the January 9, 1997 Housing and Redevelopment Authority meeting to order at 7:35 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Jim McFarland Members Absent: Duane Prairie Others Present: William Burns, Executive Director Barbara Dacy, Community Development Director Craig Ellestad, HRA Accountant Jim Casserly, Financial Consultant APPROVAL OF DECEMBER 12, 1996, HOUSING AND REDEVELOPMENT AUTHORITY MEETING: MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the December 12, 1996, Housing and Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES FOR THE FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY 2. REVENUE AND EXPENSES Mr. Ellestad distributed copies of the check register #26196 through 26207, and copies of a memo dated January 9, 1997, listing additional expenses for approval. Mr. Meyer asked for what the checks to First Trust and National City Bank were written. Mr. Ellestad stated these represent the semi - annual payment from the bonds. The 1985 bond expires in a few years, and the other is a payment on the 1990 bond. Mr. Meyer asked for what the bonds were issued. HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 2 Ms. Dacy stated the 1990 bond is a refinancing bond. The 1985 bond is a refunding of an earlier bond for project area one. MOTION by Mr. McFarland, seconded by Mr. Meyer, to approve the Consent Agenda as presented with the check register #26196 through #26207 and additional expenses as presented in the January 9, 1997, memo. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONKERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ACTION ITEMS: 3. CONSIDER A RESOLUTION DETERMINING THAT A CERTAIN PARCEL IS OCCUPIED BY A SUBSTANDARD BUILDING AND IS TO BE INCLUDED IN A TAX INCREMENT FINANCING DISTRICT; 218 - 57TH PLACE Ms. Dacy stated the purpose of the resolution for this property is to preserve the HRA's option for creating a tax increment financing (TIF) district in the future. It does not commit the HRA to create a district but stated the HRA acknowledges that this structure is hazardous and substandard. Because of those conditions, the building has to be taken down. By removing the building now, we solve many of the safety issues. The resolution preserves the option for the HRA to declare the site as a TIF district. There is no commitment to create a district, but to preserve the option for the future. As you know, the TIF laws require the City Council to create the district, and the City Council has to pass a similar proposal. Staff is asking them to evaluate such a resolution in January. Ms. Dacy stated staff is recommending approval of the resolution. There is no commitment to.the HRA for money or funds, nor does it tie the HRA to create a TIF district. Mr. Meyer stated this is a rather unique process that a property is condemned as a hazardous building and the tenants forced to move out. Ms. Dacy stated this is unique. This action was undertaken by the City Council upon complaints around this property. The property was inspected, and it was determined that the building had structural defects, hazardous waste and /or paint was stored in the basement, and a number of other conditions existed pertaining to debris. Sanitary conditions in the building were such that it required going through this process. We did remove another structure under this statute on Fairmont Street several years ago. Mr. Meyer stated he thought this an interesting tool that could be HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 3 applied to other properties that we have heretofore purchased which were substandard in many areas. Evidently, we have had to gain access to this particular building. Ms. Dacy stated there is a difference between this structure and the scattered site structures. For this structure, we had to go to court and show evidence that this did apply to the hazardous conditions statute. This is not a tool we can use for the scattered site acquisitions, and this tool should be used carefully because the quality and-integrity of the structure must meet strict criteria as set in the statute. Mr. Commers stated he thought the real distinction is that this is used where the property is abandoned rather than where the property is still occupied as in the scattered site program. Mr. Meyer stated this property apparently had been occupied and the tenants evicted. Ms. Dacy stated one unit was vacant. The landlord did not respond to requests to improve, and the remaining tenants left. Mr. Meyer stated he appreciated the distinction between this site and the scattered sites. However, it does illustrate that this is a tool that can be used. He was thinking of one property in the scattered site program where the bedroom was in the basement, and the City got permission to inspect the inside to ascertain the condition. Did they get a court order before they knew the conditions inside or how did that work? Ms. Dacy stated she believed the landlord had permitted the inspector access to the site and staff proceeded to take appropriate action. Mr. Fernelius worked more closely with this and can verify the steps taken. If the landlord had not permitted access, the City would have had to prove to the judge that there was a significant defect. Mr. Meyer stated he realized there was a difference but there may be a gray area in between that would show it a useful tool to use condemnation in lieu of some of the other methods used in the scattered site acquisitions. Mr. Commers stated, since the resolution has no economics attached to it, it seems appropriate to proceed. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve a Resolution Determining that a Certain Parcel is Occupied by a Structurally Substandard Building and is to be Included in a Tax Increment Financing District. HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 4 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. LINDSTROM METRIC REQUEST FOR TIF ASSISTANCE Ms. Dacy stated Lindstrom Metric is now located west of the railroad tracks and east of Ashton Avenue. They are looking at a vacant five -acre site west of Main Street, north of 81st, and south of 83rd. Lindstrom Metric wants to build a 60,000 square foot building on this site. She believed their existing site is about half the size. There are poor soils on the proposed site. Lindstrom Metric contacted her regarding TIF assistance for soil correction. Unless the HRA feels otherwise, she and Mr. Casserly will work with the company to prepare a development contract that would propose a 5% grant and a 5% loan, similar to other soil correction requests that were approved in the last year. Mr. Lindstrom has not filed a TIF application as yet. The purpose of this memo is to inform the HRA that we had this discussion and that this is a proposal we would like to bring to you in February or March. A unique aspect of this development is that Mr. Lindstrom does not want to construct a new building until he sells the existing site. He would like the ability to use the TIF assistance for up to two years. She did not have a problem with that. The procedure is set up such that the developer has the burden to construct the building and get a certificate of completion. At that point, we issue the checks for the loan and the grant. The HRA does not need to take action at this time. Mr. Commers suggested, to the extent that there is going to be an expansion to the business, he would like to see a commitment as to where the business will create new jobs and what he expects that will do over a reasonable period of time after the new building is constructed. Mr. Casserly stated that information is now a statute requirement for projects assisted with tax increment. The HRA is required to enter into an agreement in which there is a certain amount of net job increase. Those are to be negotiated and must be complied with or the tax increment assistance has to be returned. Mr. Commers asked if this will be the first one negotiated. Mr. Casserly stated no. This has been done on several. This has been a part of the development agreements. Mr. Commers stated he did not remember that issue coming up in the past. He asked staff to go back and let the HRA know what the agreement has been for the last few requests they have had. Mr. Casserly stated he would make copies of that specific HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 5 condition. Mr. Commers asked if we have a method of verifying. What do we do to see if the agreed upon increase of jobs has been met? Mr. Casserly stated a form has been prepared by the Minnesota Department of Economic Development which must be filled out and submitted to us and to the state. Mr. Commers asked that, if any of these thus far, please provide the HRA with a Mr. Casserly stated this has not yet be, into effect. The recording requirement the date of issuance of the certificate within that timeframe yet. forms have been submitted copy. E�n done. The law just went is within two years after of completion. No one is Ms. Dacy stated they did require that with the McGlynn proposal. As a condition of that grant, they are required on an annual basis for two years to verify they have created jobs. We can do that with these proposals as well. 5. PROPOSAL BY STEVE LINN TO REHABILITATE DICK'S WHEEL AND TIRE, AND REDEVELOP A PORTION OF 57TH AVENUE Ms. Dacy showed on an aerial map the location of 57th Avenue west of University, Dick's Wheel and Tire, the substandard building discussed as part of item #3, a private home and a vacant piece of land next to Main Street. Holiday Plus is to the south. Ms. Dacy stated Mr. Steve Linn of Linn Companies is negotiating with Holiday Plus, who owns the Dick's Wheel and Tire building, to operate a Goodyear franchise on this property. Mr. Linn is also interested in acquiring the duplex site at 218 - 57th Avenue, the single family home, and the vacant area. He has a purchase agreement with the owner of 218 - 57th Avenue, and has contacted the owner of the single family home. He plans to acquire, remove and demolish, and build a strip mall on this site. He was originally thinking of putting in a video store and a fast food restaurant, but is now thinking of having only a video store. Ms. Dacy stated Holiday Plus has advised Mr. Linn that they need to put the negotiations on the back burner for a while because Holiday Plus is working on a deal with Mr. Applebaum and working on acquiring a sporting goods chain out of Detroit. Mr. Linn is still interested in pursuing a redevelopment project in this area. He is thinking of applying for TIF assistance, and he would have to make an application to do this. A TIF /redevelopment district would have to be created in order to accomplish what he is proposing. Staff does not know what level of assistance Mr. Linn is requesting nor HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 6 does staff know the gap. Mr. Linn will act as the developer. Ms. Dacy stated staff is bringing this to their attention to let the HRA know this will be on a future agenda. Staff must find out what the gap is. There is also a land use issue which the City Council will have to evaluate as well as the neighborhood. The area is zoned C -2, General Business. It is a permitted use and would not require a rezoning. To create a TIF district, public hearings must be held prior to the final decision. Mr. Meyer asked how much more traffic can 57th Avenue take. Ms. Dacy stated Home Depot contracted with BRW for a traffic analysis as a result of the construction of Home Depot. BRW did a very good analysis which outlined four or five options to improve 57th. The key is to reduce the access points along 57th. The second suggestion was to create either a turning lane down the middle of 57th for left turns. There were several options for signalization of intersections in the center and create a median along the alignment to allow breaks for 3rd Avenue traffic. They have not gone to the next step on the study because the land uses on the north and south sides will affect the traffic on the street. There will also be more traffic over time. She believed the City Council and the HRA would have to evaluate a series of land use alternatives. Mr. Burns stated, because this property has frontage on two streets, it would appear that any building would have to be long and narrow. Do the codes allow the type of center being proposed by Mr. Linn? Ms. Dacy stated staff has not see a site plan so she cannot give a good answer. For Dick's Wheel and Tire, all they need to do is occupy the building. Mr. Meyer stated is appears that 57th Avenue is shaping up as more of a problem. Plans are to improve access to 57th Avenue from I- 694 because there is a problem with access to 57th now. This is one more thing added. If, for example, we would not allow a TIF district because of the fact that we are using that as a device to reduce traffic, could someone else put a strip mall on that site without a TIF district? Ms. Dacy stated yes. A private entity could do this. Mr. Meyer stated the HRA would not gain anything by trying to prohibit a strip mall. Ms. Dacy stated that is the issue that would have to be evaluated. In creating a TIF district, you have to meet several tests and HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 7 without that redevelopment would not occur. Mr. Commers requested staff to proceed with caution because the use of TIF funds for assistance on a strip mall is not a priority in terms of planning. Make sure that Mr. Linn understands that. Ms. Dacy stated another issue with a redevelopment district is the removal of blight and inappropriate land uses, and increasing the value. While the HRA has not assisted, there is a condition of substandard properties and a redevelopment district is a tool to accomplish that. Secondary to that is what is the end use? That is also a key question. Ms. Schnabel asked the nature of the house. Is it a viable structure? Ms. Dacy stated she did not have adequate information. The house is a typical single family home for the area and is occupied. Ms. Schnabel asked if staff knew if Mr. Linn has an option for that property. Ms. Dacy stated Mr. Linn has contacted the owner, who has expressed a willingness to sell. 6. FRIDLEY EXECUTIVE CENTER UPDATE Ms. Dacy stated Mr. Commers had forwarded information to staff about the office, commercial and industrial markets in the metro area. She is now reviewing that information. She has scheduled a meeting with MEPC for an update for this month. Ms Dacy stated she talked with Merrill Busch who has the copy finalized for the brochure. The only missing piece is some pictures. They hope to complete this quickly. Mr. Meyer asked if there had been any interest in the site. Ms. Dacy stated yes. One proposal was for a 50,000 square foot and that was sent out in the beginning of January. There are three interested proposals for the site at this time. 7. MISSISSIPPI STREET AND 3RD STREET CONSTRUCTION UPDATE Ms. Dacy stated the cost overrun that was not anticipated was $34,106 that was identified within the past two or three weeks. The issues surrounding the RAO Manufacturing easement area were identified to us early in the project and do not amount to a significant cost. However, the most recent information was significant. Mr. Flora is meeting with the consultant tomorrow and HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 8 contacting the County. Before going to the City Council, he is trying to reduce the cost to the HRA and reduce the amount of the change order. All of the other items were anticipated to a certain extent. Mr. Commers asked Mr. Meyer for his opinion of the items on the list. Mr. Meyer stated he read the list and he can see that these were unexpected expenses. Some projects have more than their share. He was surprised that BRW is going to or has contributed something to this. Is that because some of the work had been done that had been done unnecessarily on their direction and this is now a compensation for that? Usually, the rule of thumb is that, if work needs to be done additionally which was not foreseen in the bidding process, it is certainly legitimate to ask the owner to pay for it. If these items were things that were not foreseen, that does not usually constitute a claim against the consultant. Usually, it is a claim against the consultant if work was done on the direction of the consultant. It is rather broad. There is no definite situation. If there is work that needs to be done, the owner would have to pay for it anyway in order to do the job right. But, if the consultant made an error and work had to be redone because of misdirection, that is another story. Ms. Dacy stated BRW is admitting liability in terms of some items. Their payment to RAO was a combination of that factor and the issue of constructing the wall, irrigation, easement acquisition at $2 per square foot, etc. There were a combination of factors that lead them to pay a certain amount. It was their inspectors that made the call to complete the additional milling, binder, wear course, and base course work which was a significant part of the overrun. Part of the issue is that the inspector made the call on the street and did not talk to a City employee. In retrospect, the decision to do that work was probably a good one from an engineering standpoint, but it was a unanticipated cost for which the City did not have the ability to make a decision. That is the reason Mr. Flora is pursuing BRW on this issue. Secondly, the County is getting a better road. Because of that, Mr. Flora is evaluating if the County is amenable to sharing those costs as well. Mr. Meyer stated the items did not constitute work that needed to be redone. They were improvements that were necessary. He is surprised that BRW is being asked to contribute under that circumstance. We have a vested interest in being fair and following the usual accepted understood procedures. OTHER BUSINESS: HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 9 8. 1997 BUDGET Mr. Commers asked the status of the budget. Ms. Dacy asked if the HRA wanted to schedule a work session one hour before the February meeting to review the budget. Mr. Commers asked if the object would be to go over the figures for approval at the March meeting. Ms. Dacy stated yes. The HRA may be able to approve the budget the same evening or perhaps in March. Mr. Commers stated the members would need time to review the proposed budget. Ms. Dacy stated that last year a draft budget was handed out about one month before, the discussion took place before the meeting, and the budget was approved that night. Mr. Commers stated he thought the HRA should have a work session. Mr. Meyer stated the way they proceeded last year seemed to work. Mr. McFarland asked that the budget be mailed to members in advance of the meeting in order to them to review. Mr. Commers asked staff to mail the budget to members a few weeks ahead of time and schedule a 6:30 p.m. start time before the next meeting. 9. CONSIDER PROPOSAL TO SHARE REMODELING ADVISOR SERVICES WITH CITY OF BLAINE Mr. Commers asked why they would want to make this position a full - time position and incur the additional expenses. Ms. Dacy stated staff advertised to continue the position as part - time. The pool of applicants applying was not satisfactory and did not come close to the experience and expertise we had established. Mr. Van Nelson was unique in that he had a personal situation that allowed him to work part -time. Staff was not seeing a similar quality candidate in the pool. They looked for ways to make the position more attractive. Blaine asked if we would like to share the position. She thought this should be considered because, if this were a full -time position, they would attract a higher quality candidate with experience. However, to answer the question, staff does not want the HRA responsible for a full -time position. The idea is to hire on contract which would be conditioned upon having a service agreement in place with Blaine where Blaine would pay 400 HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 10 of the 40 -hour work week. Staff came up with the 60/40 split because they were planning to come to the HRA as part of the budget to increase the Remodeling Counselor hours to 24 hours per week to handle the load created through the loan program. If for some reason we get halfway through the contract and Blaine decides to pull out, then the HRA is under no obligation to continue the employee at 40 hours per week. Staff felt this would be a way to get better applicants and still preserve the options. Mr. Commers asked, if this person is going to be an independent contractor, why assume health and dental insurance. Ms. Dacy stated this person would not be an independent contractor. She believed the personnel director calls this an unauthorized contract employee. This person would be considered an HRA employee. If they are a Fridley HRA employee and work 40 hours per week, we are required to provide benefits. Trying to find an independent contractor will be problematic because we will have to require the insurance certificate and we may pay a higher hourly rate. We would be paying for a consultant rather than a contract employee. As an example, the Section 8 coordinator for the City is a contract employee working 32 hours per week and receives benefits. We receive reimbursement from the Metropolitan Council on this position. This would be a similar method but having Blaine take on 400 of the cost. Mr. Commers stated this is a tremendous increase. Ms. Dacy stated the increase was going to go up $4,000 per year from the increase in hours from 20 hours to 24 hours. Because it does become a full -time position, it does have benefits. That represents an additional $5,000. That totals $9,000. That is after Blaine's share is subtracted. They want to get a remodeling counselor on board before the remodeling fair in April. Mr. Commers asked if staff could continue to look. Ms. Dacy stated they could. She is not hopeful that they would be able to find someone on a part -time basis that is of the quality of the person they had before. Mr. Burns stated the labor market has become more of a buyer's market and employees have more of an advantage. They are seeing fewer applicants for part -time jobs, and they are having to pay more. Staff have already gone through the recruiting process once. In order to have quality people, he thought they had to address the marketplace. He thought this is what Ms. Dacy was doing. He is not in favor of recklessly putting on full -time employees. In this case, he thought this arrangement would give them flexibility and that the person must understand that when we are done the job is HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 11 over with. Mr. Meyer asked if any of the applicants were retirees. This could be a good opportunity for a retiree. Ms. Dacy stated she could not answer that question. Mr. Fernelius has spent more time on applications. Mr. Meyer asked what kind of quality they were looking for in a new person. Ms. Dacy stated the minimum qualifications include a degree either in housing or architecture or a degree program with an emphasis on design. Staff would evaluate practical experience in the building trades as well. Mr. Van Nelson has a degree in architecture. The remodeling counselor is not designing projects or telling people exactly how to do thing. They are commenting, identifying options and helping find alternatives. Applicants in the first pool did not come close to the first set of applications that they had. There are rehab specialists out there. However, this most recent attempt to find them did not produce a candidate that was qualified. Mr. Commers stated there are also inspectors who see if the codes are met. He did not know how much of a full -time job that was. That may be a source. Mr. Meyer stated he was listening to the comments regarding quality. A person may not meet your criteria as far as experience. For example, you are not going to find anyone with a degree and /or with experience looking for a part -time position. It depends on what we are expecting this person to do. Ms. Dacy stated the person must also be knowledgeable about housing and building products. Mr. Meyer stated it does not necessarily follow that these types of duties would require a degree but rather a good amount of practical experience. He is wondering whether they are looking for someone who just does not exist. He is sure that the labor market is another influence. Do we need that type of person to extent of precluding applicants? They should also be looking for a person who has been around with experience in home construction. Ms. Dacy stated that is not the only qualification. If an applicant has building trade experience, that is part of it. Mr. Fernelius' recommendation to her was that the candidates were not acceptable even to interview. Mr. Meyer asked who was in Blaine. HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 12 Ms. Dacy stated under the proposal the Fridley HRA would be responsible for hiring, determination, etc. The person would work 24 hours in Fridley and 16 hours in Blaine. Mr. Burns stated they would be service contracting with Blaine. Ms. Dacy stated they have a termination clause of one month. It is more prudent for us to be in charge of the hiring and firing, and Blaine agreed. Mr. Burns asked if they could sell services to a third community if there was not enough business. Ms. Dacy stated this was possible that they could do that. These programs are getting a lot of attention. She would not be surprised if other communities would be interested in the service. Mr. McFarland asked, if you were to find a person to work as an independent contractor for both cities, would he /she work for $30,000 to avoid the employer /employee relationship. In lieu of the benefits, would they require more money? Ms. Dacy stated, in their experience, the rate would go up to between $20 and $30 per hour so that person can cover the cost of the benefits. It is cheaper to hire than to pay a consultant's cost. Mr. Commers stated he thought Blaine should pay a higher rate because Fridley would be taking responsibility and taking on the potential liability. He thought 40% of the regular hourly rate is not quite fair. An enhancement to the rate would be in order to cover such items as administrative expenses. Ms. Schnabel asked if this person would be working for the City of Blaine or the Blaine HRA. Ms. Dacy stated she did not know. She will check. If the HRA is comfortable for staff to proceed to do the advertisements, they would have to come back for approval of the position and the candidate. If something happens in between, the HRA will be informed. Mr. Commers asked if the members had any objections to advertising the position. The consensus of the HRA was to proceed. Mr. Commers asked staff to keep open the possibility that they might find someone part time. Mr. Meyer stated, if the applicants are not acceptable, it might be necessary next month to reassess the criteria to see if the HOUSING & REDEVELOPMENT AUTHORITY MTG., JANUARY 9, 1997 PAGE 13 criteria are excessive and we are therefore excluding persons who might qualify. 10. FIRST -TIME HOMEBUYER PROGRAM Mr. Commers stated this item, for informational purposes, relates to the report from Ms. Dacy relating to the Anoka County HRA and the first -time homebuyers program that the County is instituting through the MHFA. The bottom line is that it is staff's recommendation that we do not participate because there is not enough information and no track record for performance. Ms. Dacy stated staff is recommending to continue with the MHFA program and, in the meantime, look at what the Anoka County HRA is doing. 11. AUTHORIZATION TO APPLY FOR 1997 HOME FUNDS Mr. Commers stated we have participated in this program for the last few years. The recommendation is to authorize staff to make application for fund. This would require matching funds and we have always provided that. He has thought this program to be successful and fair. If we do get a grant, there would be a required match. Ms. Dacy stated she did not get the notice until Monday of this week and the deadline is early. Staff does need a motion from the HRA to authorize staff to apply. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to continue this program and to authorize an application to the County for $75,000 in 1997 HOME funds. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: CHAIRPERSON COMMERS DECLARED THE JANUARY 9, 1997, HOUSING AND REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 8:50 P.M. Respectfully submitted, Lavonn Cooper Recording Secretary DATE: February 7, 1997 MEMORANDUM HOUSING AND -REDEVELOPMENT AUTHORITY TO: William Burns, Executive Director of HRA dTJ i6_ FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Consider Application to MHFA for Minnesota Cities Participation Program The Minnesota Housing Finance Agency is requesting proposals from communities throughout the state for the 1997 Minnesota Cities Participation Program. Under this program, the MHFA sells bonds on behalf of participating communities to be used for mortgages to first -time homebuyers. Each city that joins the program, receives an allocation of funds for exclusive use within their community for a period of six months. This is the fifth year the program. In the previous four years the HRA has applied for and received $2,964,403 in funds. All of the money was used to make below market rate loans to eligible first -time homebuyers. The program is extremely attractive for local communities because of the low cost to apply (less than $200) and also because MHFA works directly with the financial institutions to process the mortgages. The HRH's role is to prepare the application and market the program. Staff anticipates that the fund allocation should be in the range of $550,000 to $650,000 which is the average over the last two years. Attached is summary of the program guidelines. Applications are due by February 18, 1997. Recommendation Staff recommends that the HRA authorize staff to prepare an application to the MHFA for the 1997 Minnesota Cities Participation Program. G F/ M -97-66 E The Minnesota City Participation Program (MCPP) PROGRAM GUIDELINES A population based formula is used to determine the maximum allocation for which each city qualifies. The maximum allocation a city may receive is its percentage of the housing pool as compared to the total population of all applications received. • Cities may apply for a specific dollar amount (minimum of $100,000) or may request the "maximum allowable" permitted by the population formula. If the individual allocation as determined by the per capita formula falls below a level that the city cites as "minimum," MHFA will contact the city to verify whether the city would like to cancel its application. • A city must use at least 50% of its 1997 allocation by the date of program expiration in order to be eligible to apply the following two years. • The usage test also applies to self- issuers. With submission of this application, these cities are required to submit loan origination data to MHFA to confirm compliance with this statutory requirement. The 1997 MCPP program term will run for eight months. Cities will have the exclusive use of their individual allotments for a six month period. Following the expiration of the six month period, all remaining individual allotments will be collapsed into a single, statewide pool available to all participating cities for the remaining program term. MCPP mortgages must meet the requirements of standard mortgage insuring and guaranteeing entities, mortgage industry accepted underwriting standards, and state and federal law governing mortgages provided through the issuance of mortgage revenue bonds. • Adjusted borrower income limits may not exceed 80% of area median income as determined by the Department of Housing and Urban Development (HUD). Adjusted income is calculated by taking a household's gross annual income and subtracting $1,000 per household resident. Cities may place their local program limit at or below these figures. W Currently, these limits are as follows: County 800/. of HUD Area Median Income 11 County Twin Cities Metropolitan Area (Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, $43,650 Scott, Sherburne, Washington, and Wright) Olmsted $43,840 All other counties S37,200 • Cities have the option of establishing n exceed the statutory defined limits listed bellow. The tcurrentestta statutory they do not maximums are as follows: ry purchase price If the mortgaged property is located in: Existing Home New Construction 11 County Twin Cities Metropolitan Area (Anoka, Carver Chisago, Dakota, Hennepin, $95000 $95,000 Isanti, Ramsey, Scott, Sherburne, Washington, and Wright) St. Louis County Clay County $95,000 $95,000 Benton and Stearns Counties $91,168 $95,000 $78,545 $95,000 Houston County Balance of State - $73,100 $95,000 $77,540 $95,000 • MCPP funds may only be used to finance properties located within the jurisdictional limits of the participating city or county. One of the following conditions must be met if new construction is to be provided i the seven county Twin Cities metropolitan area under the MCPP: n 1. The new housing must be located in a redevelopment area where at least 25% of the buildings are substandard. 2- The new housing must be replacing a substandard structure. 3. The new housing must be part of a housing affordability initiative, meetin one or more of the criteria listed in Attachment 1- g 4- The new housing is located on a parcel purchased by the ci the city under Section 282 -01, Subdivision 1 (tax- forfei ed lands) o conveyed to r 5. The city must have negotiated affordable and life cycle housing goals with the Metropolitan Council (For self issuers, please note: If your city is located in the seven county Twin Cities metropolitan area, the above new construction restrictions do not apply to loans closed ten months after your program start date). • In the balance of the state, new homes may be financed immediately only if the city includes in its proposal: Steps the city will take to encourage loans for existing housing. 2. An explanation as to why new housing is needed Statewide, cities may not provide set -aside or commitments for the exclusive use of builders or developers except for housing affordability initiatives as specified in Attachment 1. MHFA offers participating MCPP cities access to MHFA's Homeownership Assistance Fund (HAF), an interest -free, graduated payment second mortgage loan. HAF provides lower income first -time homebuyers with downpayment and /or monthly payment assistance. • Home mortgage loans are to be originated by participating lenders and bought by MHFA in accordance with the MHFA Mortgage Program Procedural Manual. • If a city will use additional resources or subsidies in conjunction with the MCPP, a layer of guidelines may be added as required by the source of the subsidy. INDIVIDUAL CITIES ARE RESPONSIBLE FOR THE DEFINITION AND ENFORCEMENT OF THESE ADDED GUIDELINES. • The Minnesota Department of Finance will charge a processing fee of $20 for each $100,000 allotment provided. For cities participating in the MCPP, this is due with the executed MCPP contract returned by each city before the bonds are sold. DO NOT SEND A CHECK BACK WITH YOUR COMPLETED RFP; WE WILL NOTIFY YOU WHEN TO FORWARD YOUR FEE. • Once cities have selected and identified participating lenders in the MCPP application, no additional lenders may be added for the balance of the program term. • MHFA will provide marketing support in the form of brochures, press releases and a shared marketing cost program_ • If preferred, cities can withdraw completely from MHFA's marketing support in order to develop their own marketing program. Cities choosing this option would be responsible for developing, producing, and distributing their own marketing materials and press releases. These cities may still access funds through MHFA's shared marketing program. 1C • Following the application deadline, MHFA will review all submitted applications. MHFA will apply the per capita allocation formula, as specified in statute, to determine the allocation plan. MHFA will complete a mailing to notify cities of allotment amounts, and will provide a formal request for fees at a later date. (DO NOT SEND A CHECK BACK WITH YOUR COMPLETED RFP). For those cities participating in the MCPP, the mailing will also include two contracts which must be signed and returned. Cities participating in the MCPP must execute and return the contract along with the processing fee (see part VII. Program Administration) and a 1% application deposit. The 1 % application deposit will be fully refunded, approximately one month after the closing of the bond sale. Please note that upon notification of allotment, self - issuing cities must send all fees directly to the Department of Finance at the following address: Lee B. Mehrkens Minnesota Department of Finance Cash and Debt Management Division 400 Centennial Building 658 Cedar Street St. Paul, MN 55155 V9 DATE: February 7, 1 997 MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Consider Extension to Administrative Agreement with ACCAP In October of 1995, the HRA executed a service contract with Anoka County Community Action Program (ACCAP) to administer the home improvement grant program. The program provides deferred - payment grants to very-low income homeowners. The HRA received $75,000 in federal HOME funds to pay for the program. The agreement expired on December 31, 1996 and ACCAP is requesting a one year extension to complete the project. So far, only 1 application has been processed. Only two neighborhoods were originally eligible for the program, thereby reducing the number of potential households. The number of target neighborhoods was expanded last fall (see attached map). An article in the spring newsletter will describe the availability of the program in hopes of increasing the number of applications. A one -year extension is needed, because it allows sufficient time to market the program, receive applications and process the files. ACCAP would continue to do the inspections, work write -ups, and monitor the rehabilitation projects on their program only. We will also be working simultaneously with CEE to process applications for the 1996 CDBG and HOME programs. 4 Administration Agreement w/ ACCAP February 7, 1997 Page 2 Recommendation Staff recommends that the HRA approve the attached addendum to the Service Contract with Anoka County Community Action Program for housing rehab - ilitation services under the 1995 HOME program. GF/ M -97-67 IWA =Mmu 1995 HOME Funds ADDENDUM TO SERVICE CONTRACT between ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC. and FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY THIS ADDENDUM made this day of , 1997, the date of the signatures of the parties herein notwithstanding, by and between the Housing and Redevelopment Authority in and for the City of Fridley, a public body corporate and politic under the laws of the State of Minnesota (the "Authority "), and the Anoka County Community Action Program, Incorporated, a 501(c)(3) non - profit corporation, with its offices at 1201 - 89th Avenue N.E., Blaine, Minnesota 55434 (the "Contractor"). WITNESSETH THAT: WHEREAS, the parties executed an original Service Contract (the "Agreement ") on October 1, 1995 for administration of the Home Improvement Grant Program; and WHEREAS, the term of said Agreement expired on December 31, 1996; and WHEREAS, the Authority desires to have the Contractor continue to administer the Home Improvement Grant Program until the 1995 HOME funds are exhausted. NOW, THEREFORE in consideration of the mutual covenants contained herein, the parties agree to all of the following terms and conditions: 1. The term of this Addendum shall run from January 1, 1997 to December 31, 1997. 2. The parties agree to adhere to all other terms and conditions as outlined in the original Agreement executed on October 1, 1995. IN WITNESS WHEREOF the parties here hereunder set their hands as of the date written below: HOUSING AND REDEVELOPMENT AUTHORITY ANOKA COUNTY COMMUNITY IN AND FOR THE CITY OF FRIDLEY ACTION PROGRAM, INC. By By Date: By Date: 11 of 11 Date: Date: CITY OF FRIDLEY ZONING MAP yeti_ x 11 f ij.li It 111 f.T I IFp COLUMBIA li-EIGHT� DISTRICT LEGEND I4 1 GI 111T�T I W ALL OCTOBER 1995 ,':IT)' OF 2C s- dfey ;al-get Neighborhoods 1995 & 1996 HOWE Funcis Area Neighborhood Platted 1 Carlson's Summit Manor North Carlson s Summit Manor South 1960 195 Plymouth Addition ion HydeD . vOCi 3 Riverview Heights 1922 Spring Broo;,<. Park �9 ?? 4 4 Dennis Ad�,ition Spring Vall-II y, Addition 1954 4 1922 5 Bonny Addition Bennet - Palmer Addition 1 955 195' Christie Addition Florence Park Addition 1957 A^' 1887 d plan +.�5v 5 N <� Parkview P,ranor L y n d a I e Builders 9J`' 0 r,, -? -1 TO: FRIDLEY H.R.A Ft�OM: CITY OF FRIDLEY RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES JANUARY 1997 Account #'s for HRA's Use ADMINISTRATIVE BILLING: ADMINISTRATIVE PERSONAL SERVICES ADMINISTRATIVE OVERHEAD COMPUTER OVERHEAD (For Micro & Mini computers) TOTAL ADMINISTRATIVE BILLING 460 - 0000 - 430 -4107 OPERATING EXPENSES: USPS- POSTAGE USPS - POSTAGE 262 -0000- 430 -4332 US WEST - PHONE SERVICE 460- 0000 - 430 -4332 460 -0000- 430 -4332 BENEFITS EXPENSES: CITY OF FRIDLEY - HEALTH INS CITY OF FRIDLEY - DENTAL INS CITY OF FRIDLEY - LIFE INS TOTAL EXPENDITURES File: 1EXDATA1HRA1TIF1978ILL.xls Details TOTAL OPERATING EXPENSES: 262 - 0000 - 219 -1001 262 -0000 - 219 -1100 262- 0000 - 219 -1200 TOTAL BENEFITS EXPENSES: - JANUARY 1997 KA 20,394.75 284.13 206.26 20 21.10 28.72 22.85 ZZAR 171.05 21.56 3.50 96.11 $21163.92 Account #'s for CR Ci 's Use Code 101- 0000 - 341 -1200 101 -0000- 336 -3000 101 -0000- 336 -3000 236 - 0000 - 336 -3000 236 - 0000 - 336 -3000 236 - 0000 - 219 -1001 236 - 0000 - 219 -1100 236 - 0000 - 219 -1200 H1 HA HA HA HA 11 12 13 w cy c3 w Q m a S z K 0 a W i ce F- O P N 2 O LA M M E 1 c v Q Ln W Ln F- �t Lr U W W � 1 F- U W O d F- z a+ w C E rn d 0 c_ E O U W > -+ > O a� W J L 4/ p G N W W (n U K < r v U Q O p � z CL O 0 0 O O Q � J U �•. 1 V C7 F- d U U U in p W (n W U �[ U In w LL O w w K K C S K p U U 4 w S W N K O O O J Q O O O � U m W N E O O O LL Q Z O O O m r o 0 U Z N W K O O O O U O O O L U O O O N Q O O O ca U N N O 10 10 10 N N N P Y C z O Q W � O D D . an d � LIN C) N N d to O .- W W W N O \ J J �T O U c0 J J J O C3 O W W W W c0 0� c0 0 P Lr% J LU W ti ti fA ti f� W t p Q d Q P a !' 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C1- w1 --�(nF w Yuj P p h Z O i Q \ Q N � O UW hWPNM�t V1 `O I�CDPO�NM�T V1 W m' MA M2 N N N N N N N N N N N N N N N N N N N N U U= i N N N N N N N N N N N N N N N N N N N N 00 In fl- i Y O U \ . W N S U fL ¢ LL Y U) Z C ~ W y Z r Q > O O U W U Z N f- W W 2 O U W Z J y W p LL O O W Z W¢} y (.2(n f Olin wl-LLLL E K LLI ex �LL 1-0 <00w dw Z .Z. .W. ce J W W d YC7 Sy} fA2 =C LL 1-]G W 1- Z U� W F-1-1- W z � m --wo m va ��ame z` 6UG LLy w ¢1-o yQaa> > ¢EiUwoza �O JO O w 0' y y U LL' W W y oc i W W QQ""E JJi yJd �'U-'f > Z w Z W 2ZY�� 1-Op t/1 C7 OJ O > c.i n'ZO n. W Utn.-....UQ t V p i ; ymmOJ2. -, "' n' U y O¢ Y W Z W Z i Q Q Q W i LL. -. , Yf Z OdK C(n0 N K � 2 � ¢ P O O •-. p Y W fppm,. t�tpp�.. UU P P P U P A P U U P w \ \ \ \ \ \ \ \ \ \ \ \ \ \ W O U O \ \ \ \ \ \ f� t� f� f�l�l� f� /� t�(�. f� (�t�%(�I�7� t� ti� O O O O O O O O O O w 2e O O O O O O O O O O N N N N N d a- LL N N N N N N N N N N N N N N N jo MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1 997 TO: William Burns, Executive Director of HRA $4 FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Consider Loan Origination Agreement with Center for Energy and Environment In March of 1996, the HRA executed a service contract with the Center for Energy and Environment (CEE) to administer the HRA's housing rehabilitation programs. Under - the agreement, CEE is responsible for providing such services as application intake and review, credit underwriting, document preparation and loan closings. As compensation for these services, CEE is paid $225 for each loan closed. In addition, CEE inspects the work upon completion to verify that the improvements have been made (post - install fee is $60). On December 31, 1996 our agreement with CEE expired. In the past few weeks, staff has been working with CEE to prepare a new service agreement. Jim Casserly is currently drafting a final version which will be delivered to the Commissioners on Monday, February 10tH For 1997, there are three changes to the proposed agreement: 1. Borrowers will be required to place their loan proceeds in an escrow account. The old procedure allowed borrowers to receive the loan money at closing. Under the new procedure CEE will only release funds upon completion of the improvements. This approach will greatly reduce the possibility of borrower fraud (although there have been no cases of fraud to date). As part of this new procedure, the HRA and CEE will open a joint account which be used to escrow the loan funds. CEE will then invoice the HRA as loans are closed and the HRA, in turn, will deposit funds into the joint account. CEE uses this same procedure with the Neighborhood Revitalization Programs in Minneapolis. al CEE Memo February 7, 1997 Page 2 2. CEE is requesting an increase in the loan origination fee from $225 to $350. When the HRA expanded its programs last year, CEE was unsure of the loan volume and amount of time required to process individual loan requests. CEE does have a part -time employee assigned to work the Fridley program, which includes Tuesday evening service hours. In addition, CEE maintains a separate telephone hotline in their offices for Fridley residents only. Dave King has prepared a memo explaining the rationale for the increased loan origination fees. 3. The term of the agreement will run for 12 months or until February 28, _1W. The term of the 1996 agreement was nine months. We are extremely pleased with the quality of service provided by CEE. We believe that CEE played a key role in the success of the housing programs last year. The administrative arrangement with CEE is very favorable because the HRA only pay for loans that are originated. In terms of the budget, CEE's fees are expected to equal about 5% of the total loan budget or a maximum of $79,800 (160 loans on a budget of $1,600,000). Also, remember that about $500,000 of the $1,600,000 will be financed by a portion of the City's and repayments from the existing loan portfolio. Recommendation Staff recommends that the HRA approve the Loan Origination Agreement with the Center for Energy and Environment. GF/ M -97-65 no FEB— 7 -97 FRI 13:27 Center for Energy /CEE FAX NC, 6123355888 p 02 CENTLR FOR ENERGY AND ENVIRONMENT February 7, 1997 Mr. Grant Fernelius Housing Coordinator Fridley Municipal Center 6431 University Avenue NE Fridley, MN 55432 Dear Grant: Per our conversation, I am writing you regarding CEE's request to the HRA regarding the need to increase fees for the 1997 contract. As an independent non -profit organization, CEE's rim services in the public interest while recovering our cos god is simply to provide valuable In January of 1997, CEE completed an internal financial analysis of the I4PA project. CEE analyzed the period of April I through December 31, 1996- Since the program essentially started in April, (processing applications, loan closings, housing fair, etc..) CEE felt this time frame would provide us with the most accurate data in order to assess our costs on a per loan basis. Unfortunately, in delivering the 1996 program, CEE was unable to recover the costs associate with the delivery of the HRA's IIome Improvement d (including overhead) amounted to $341 /each, while receiving Program. perEloan origination fe ost amount of $225 /each. For that reason aloe e in the services for the 1997 program, CEE is left with no other option than �to added e uest an increase scope of origination fees from the HRA to go into effect for the 1997 contract- For ease in For the 1997 program, CEE will be adding escrow account management duties to the existing scope of services in the consulting agreement. These additional duties are being implemented so as to increase internal controls and to help reduce the risk to the IIRA associated with the Home Improvement Program. '00 North 6th Street, Suite 412A Equal Opportunity Employer .► Mlnneapolis, Minnosa 4B -1520 A Phone: ($12) 335 -5858 A Fax: (612) 335 -5888 FEB— 7 -97 FRI 13:28 Center for Energy /CEE FAX N0, 0123355889 Escrow Account Management, including: • Post - installation verification (either through CEE or Fridley Inspections). • Verification of Permit Abatement. • Collect completion certificate from customer. Disbursing payment directly to Contractor upon receipt of final invoice and lien waiver. P. 03 I can assure you, the FIRA Board and Staff that CEE values and very much respects the relationship that has been established with the HRA over the last 18 months and is in no way, shape or forin attempting to nor willing to jeopardize that relationship by unjustly increasing our origination fees. If you have any questions or comments regarding this request, please contact me at 335 -5889. Sincerely, David King Financial Program Manager 4C 02/07/97 FRI 09:08 FAX 612 885 5969 KR4SS )fONROE. PA r "`e t�Blacklined 'oaY LOAN ORIGINATION AGREEMENT This '2 � L�ORIGINATION AGREEMENT " as of the 1st day of March 1996, ( Agreement ) IN made REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OFnFRIDLEY,w with D Offices at 6431 University Avenue Northeast, Fridley, Minnesota 55432 ( "Authority "), and CENTER FOR ENERGY AND ENVIRONMENT (a Minnesota nonprofit corporation), with offices at 100 Sixth Street North, Suite 412A, Minneapolis, Minnesota 55403 ("CEE' RECITALS A. The Authority has a need for certain professional services and desires to retain CEE to provide said services, all subject to the terms and conditions contained in this Agreement. B. CEE is qualified to provide the desired professional services, all subject to the terms and conditions in this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual Promises contained in this Agreement, the parties agree as follows: 1. Services /Scope of Work 1.1 CEE shall in conjunction with the Authority develop and deliver a Comprehensive Housing Rehabilitation Program for the City of Fridley (hereinafter the "Program") and more fully described on Schedule A attached hereto. All activities delivered under the Program shall be coordinated with the Authority's designated program manager. 1.2 CEE shall assist the Authority staff in marketing the Program on a time and materials basis. CEE shall insure that the Authority's sponsorship of the program is a prominent part of any marketing effort. 1.3 During the term of this Agreement CEE shall complete up to x-550 Comprehensive Building Analysis as described below upon request for any participant owning rental property. The Comprehensive Building Analysis shall identify and prioritize rehabilitation opportunities eligible for financing. If requested in writing by the Authority, CEE shall also complete a Comprehensive Building Analysis on a single family dwelling. 1.4 CEE shall originate- and close � 1 Z002 02/07/97 FRI 09:09 FAX 612 885 5969 BRASS NIOVROE. PA pr-ineipal fer —all Program loans. lieweverbefer-e --G dieba'rreee funds feE a lean eeeribed in 1-S(g) e (h), a. b. c. 1.5 CEE shall develop a personalized financial package for each eligible borrower that coordinates financing from the various programs described in Schedule A which includes the following: (da) CEE Rental Loan Fund (eb) MHFA Rental Rehabilitation Program (6cc) Fridley Revolving Loan Program (gd) Fridley Single Family Last Resort Deferred Loan Program (.he) Fridley Multiple Family Last Resort Deferred Loan Program The funding source in (c), (gd), and (hc) above is exclusively from the Authority and these three programs will be referred to as the Authority Funded Program. 2 4E 2003 02/07/97 FRI 09:09 FAX 612 885 5969 KRASS MONROE, PA 004 I r, 1.6 CEE shall complete an Installation Verification as described below to verify that all improvements are complete and were used for eligible purposes if (i) financed by the Authority Funded Program or (ii) if the interest rate write -down is in excess of $1,500. The Installation Verification will be performed by a CEE housing technician and shall not substitute for any required code or permit inspection performed by the Authority. Cornpens� ation 2.1 The Authority shall pay CEE for services provided under this agreement according to the following schedule: Comprehensive Building Analysis The Authority shall pay CEE a fee for each 130.00 Comprehensive Building Analysis completed. CEE shall provide a copy of the analysis report as documentation of completion. Installation Verification The Authority hall h $ -G50.00 Installation Verificati E Verification completed. The Installation Verification shall be performed by a CEE housing technician as provided in 1.6 above. CEE shall provide a copy of the Installation Verification report as documentation of the inspection. Loan Origination The Authority shall pay CEE an Origination FeeOfor each loan closed using Authority Funded Program. The Origination Fee shall compensate CEE for assisting borrowers with loan applications, preparation of loan documents, loan closing and other direct costs of processing loans. Mortgage filing costs shall be paid by the borrower. CEE shall provide a copy of all closing documents including the loan note and mortgage as documentation of the loan closing. $125.00 The Authority shall 1pay uan Administrative Fee to CEE for each MHFA Fix -up Fund Loan, Home Energy Loan Program Loan or Community Fix -up Fund Loan that is originated and closed by CEE and is sold to MHFA at a discount as part of the Discount Loan 3 4F 02/07/97 FRI 09:09 FAX 612 885 5969 KRASS MONROE, PA Program. CEE shall provide a copy of the MHFA origination certificate as the documentation of the sale of the loan to MHFA. The Authority shall compensate CEE only for services completed. Compensation under this agreement shall not exceed seventy -five thousand dollars ($75,000.00) for Loan Origination Fees, Administrative Fees, Comprehensive Building Analysis Fees, Installation verification Fees, Marketing and Program Development Fees. CEE will provide the marketing and program development materials for the following fees: CEE Program Manager $50:00 /hour Workshop and Marketing Coordinator $45.00 /hour Database Management $55.00 /hour Graphics /Clerical $35.00 /hour Hourly rates are inclusive of all overhead expenses and will be charged only for hours directly related to program development and marketing. CEE will be reimbursed by the Authority for any non - labor, out -of- pocket expenses, relating to these services on a dollar - for- dollar basis with no mark -up. Marketing and Program Development costs are not to exceed $10,000 except upon the express written authorization of the Authority. 2.2 CEE shall invoice the Authority not more than two times each month for (i) the principal of loans in the ""s P n-raicTAuthority Funded Program, (ii) the dnnt-eiaeet rate bra zit ;=eoaR „Y J Comprehensive Building Analyses, (iv) Ve =eatien -ef inst ,, , at •1 ; (v)(iiil Loan Origination and Installation and verification Fees, Adfainsetrative -Feee, and (vii-)- iv Marketing and Program Development services. The Authority shall pay CEE within 7 days of receipt of the invoice. The Authority's Obligations 3.1 If requested by CEE, the Authority shall make reasonable efforts to obtain information and or permission for access from the Authority's clients which may be necessary for CEE to provide the services under this Agreement. 3.2 The Authority shall assist CEE in obtaining names, 4 'ram 02/07/97 FRI 09:09 FAX 612 885 5969 hRASS '!f0.NR0E. PA addresses, phone numbers and building characteristics of potential Authority Funded Program participants and eligible Authority Funded Program structures_ Whenever Possible, the Authority shall provide this information to CEE on an IBM compatible computer diskette. 3.3 The Authority shall assist in marketing the Program by authorizing the use of City of Fridley or other city agency logos and letterheads to CEE for use on marketing literature. All Program marketing materials used by CEE to promote this Program shall be approved in advance by the Authority. 3.4 The Authority shall provide Authority Funded Program sufficient to finance eligible loans. The Authority shall determine the amount of funds allocated to the Program. 3.5 The Authority shall establish eligibility for the Authority Funded Program and shall provide these criteria in writing to CEE prior to commencement of any marketing efforts. 3.6 The Authority shall make reasonable efforts to respond promptly to requests from CEE for information and approvals regarding the services to be provided under this Agreement. 4. CEE's Obligations 4.1 CEE shall use its best efforts to provide services under this Agreement in a professional manner consistent with the care and skill used by reputable members of CEE's profession. 4.2 CEE, and all of its employees or agents shall comply with all statutes, ordinances, rules, regulations and other laws applicable laws applicable to the provision of services under this Agreement. 4.3 CEE shall secure all permits and licenses required for performance of the services under this Agreement. 4.4 CEE shall not engage in discriminatory employment practices against any employee or applicant fornt employment and shall in all respects comply with all federal, state and local laws, regulations and orders, including without limitation, Chapter 363 of the Minnesota Statutes, as amended from time to time. 2006 02/07/97 FRI 09:10 FAX 612 885 5969 IiRASS MONROE. PA Failure to comply with the provisions hereof shall be deemed a material default under this Agreement. 5. Term and Termination 5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall become effective on March 1, 1996, and continue through - 996February 28, 1996. 5.2 This Agreement may be terminated by either party, for any reason or no reason, immediately upon written notice to the other party. In the event this Agreement is terminated by CEE prior to the expiration of the term set forth in paragraph 5.1, the Authority shall compensate CEE for all services delivered up to the date of termination and CEE shall provide the Authority with such information as the Authority may request regarding the status of the Authority Funded Program. 5.3 Any termination of this Agreement shall not release either party from their respective obligations under sections 7 and 8 of this Agreement. 6, Insurance 6.1 During the term of this Agreement, CEE shall obtain and maintain the following insurance coverage: (a) Worker's Compensation Insurance at the statutory requirement for the State of Minnesota (b) Commercial General Liability Insurance with a $1,000,000 limit each occurrence and a general aggregate limit of $2,000,000 (c) Business Auto Insurance with a combine single limit of $1,000,000 each accident 6.2 During the term of this Agreement, CEE shall provide the Authority with a certificate or certificates of insurance relating to the insurance required pursuant to paragraph 6.1. 7. Liability and Indemnification I 7.1 CEE represents that the services to be provided under this Agreement are reasonable in scope and that CEE has the experience and ability to provide the services. 7.2 CEE acknowledges that the Authority cannot control the conditions at any site where the services may be R R 02/07/97 FRI 09:10 FAX 612 885 5969 KRASS MONROE, PA Z008 provided, and accordingly, the Authority is not liable for any claim, damage, loss, injury or expense of any type which CEE may suffer as a result of providing the services under this Agreement. 7.3 CEE warrants that any services provided hereunder shall be done in a professional and workmanlike manner. 7.4 CEE shall indemnify, defend and hold harmless the Authority and the City and their officers, directors, employees and agents from and against any and all claims, damages, losses, injuries and expenses (including attorney's fees and damages for death, personal injury and property damage) which the Authority or the City may incur as a result of any act or omission by CEE in providing services under this Agreement. 7.5 The Authority shall indemnify, defend and hold harmless CEE and its officers, directors, employees and agents from and against any and all claims, damages , losses, injuries and expenses (including attorney's fee and damages for death, personal injury and property damage) which CEE may incur as a result of any act or omission by the Authority in discharging its duties under this Agreement. 8. Confidentiality Unless otherwise agreed by the Authority in writing, CEE shall maintain in confidence and not disclose to any third party any information obtained regarding the Authority and /or any of the Authority's clients for which CEE is providing services; provided, however, that this obligation to maintain confidentiality shall not apply to: * Information in the public disclosure; * Information which becomes after disclosure through * Information which CEE can prior to the date of this 9. Relationship of Parties domain at the time of part of the public domain zo fault of CEE; or demonstrate was known by it Agreement. CEE will provide services as an independent contractor under this Agreement. Neither CEE, nor any of its employees or agents, shall be considered employees of the Authority for any purpose, and neither shall CEE be eligible for any compensation or benefits which the Authority may provide to its employees from time to time. CEE shall be solely responsible for employment and other taxes applicable to W 02/07/97 FRI 09:10 FAX 612 885 5969 BRASS IfONROE, PA providing services hereunder, and the Authority will not withhold any taxes applicable to providing services hereunder, and the Authority will not withhold any taxes or contributions from the compensation. payable to CEE under this Agreement. If any governmental authority (federal, state or other) claims that the Authority owes taxes or contributions which allegedly should have been withheld or made, then, to the extent permitted by law, CEE shall pay the Authority the amounts claimed to be due, plus reasonable attorney's fees and any other costs which the Authority may incur in defending such claim, whether or not a lawsuit is commenced. All notices, requests, demands and other communications required to be given in writing under this Agreement shall be given to the other party in person or by mail as provided in this section. If delivered personally, notice shall be deemed to have been duly given on the date of delivery. If delivered by mail, such notice shall be sent via first class U.S. mail, postage prepaid, to the address set forth at the beginning of this Agreement or such other address as a party may otherwise request written notice shall be deemed duly given three (3) business days after mailing. 11. Assignment This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns; provided however, that neither party shall assign or transfer in any manner, this Agreement or any portion hereof without the prior written consent of the other party, and any attempt to assign or transfer without prior written consent shall be void and of no effect. 12. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 13. Miscellaneous 13.1 Headings and captions used in this Agreement are for convenience only and shall not affect the meaning of this Agreement. 13.2 This Agreement contains the entire agreement of the parties and supersedes all prior agreements, discussions and representations, written or oral, concerning the subject matter hereof. 13.3 No waiver by the Authority of any term or condition of this Agreement or any document referred to herein 4K NAM. 02/07/97 FRI 09:11 FAX 612 885 5969 KRASS MONROE, PA shall, whether by conduct or otherwise, be construed as a waiver or release of any other term or condition in this Agreement. 13.4 This Agreement may only be amended in a written agreement signed by both parties. 13.5 Except as expressly set forth in Section 7, the rights and benefits under this Agreement shall inure solely to the benefit of the Authority and CEE, and this Agreement shall not be construed to give any rights, benefits or causes of action to any third party. 13.6 The invalidity or partial invalidity of any provision of this Agreement shall not invalidate the remaining provision, and the remainder shall be construed as of the invalidated portion shall have never been a part of this Agreement. 13.7 CEE shall comply with the provisions of Minnesota Statutes Chapter 13 (Government Data Practices) that are applicable to the Authority and shall not disseminate any information concerning loan requests or the borrowers without the prior written approval of the Authority. 13.8 This Agreement may be signed in any number of counterparts, each of which shall be deemed an original and one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY Date Date By: Lawrence R. Commers Its: Chair By: William W. Burns Its: Executive Director Em G] Z010 02/07/97 FRI 09:11 FAX 612 885 5969 I'RASS MO.NROE, PA 2011 CENTER FOR ENERGY AND EN`IIRONMENT By: Date Sheldon Strom Its: Executive Director Federal Tax Identification Number: 41- 1647799 M 4M 02/07/97 FRI 09:11 FAX 612 885 5969 KR4SS MONROE, PA Z012 Blacklined #1 - 2/6/97 SCHEDULE A DESCRIPTION AND GUIDELINES COMPREHENSIVE HOUSING REHABILITATION PROGRAM FOR THE CITY OF FRIDLEY I. SINGLE FAMILY LOAN PROGRAMS �. ,. ! Y. Y, r. If � t �. ,. ! Y, 1' �. ,. ! Y, • 91 • � t .c 91 02/07/97 FRI 09:11 FAX 612 885 5989 BRASS MONROE, PA 0 018 SCHEDULE A Page 2 QW&W, L'OFAWATAIJ aa. .. ... Nowwock OUR a 07a7a r / S t / S 02/07/97 FRI 09:12 FAX 612 885 5969 KRASS MONTROE, PA x]014 SCHEDULE A Page 3 Y. •�•.:c•. ..�•.:i .mss -:.e:a �� i�.C.i: • 111 • 02/07/97 FRI 09:12 FAX 612 885 5969 KRASS MONROE, PA Z015 SCHEDULE A Page 4 .. -07 aft; $A. REVOLVING LOAN PROGRAM 1. Loan Description 'Phis program is intended to address the home improvement financing needs of beffewercs whe eannet qualify for- an W;FA lean as described in Seetiea !(A )/1 \/n n\ b;1t �ni..� .. b , lid ible homeowners residing in the City of Fridley. 2. Funding Source The Revolving Loan Program will be funded solely by the Authority. 3. Prouam Administrator The Center for Energy and Environment will market, administer and close all loans under this program. 4. Qualifications Income Limits: $58,650. This means projected annual household income as defined by the MHFA Home Improve- ment Loan Program Procedural Guide. I 02/07/97 FRI 09:12 FAX 612 885 5969 IRRASS MONROE, PA Z016 SCHEDULE A Page 5 Underwriting: Borrowers shall meet the following underwriting e—viteiria -mod a. Debt -to- Income Ratios not to exceed 50 %. b. Loan -to- Value Ratios not to exceed 115%. C. May have marginal credit, but have the ability to make a monthly payment. CEE shall notifv the Authority of anv applicants with credit blemishes in advance of ciosina a loan. Property Type: Owner - occupied, 1 to 4 unit residential properties located in Fridley. 5 91 b Program Specifics The Revolving Loan will carry an annual interest rate of five (5) percent and must be repaid in monthly installments. The maximum Revolving Loan shall not exceed $25,000. The maximum term shall not exceed 20 years. All Revolving Loans will be secured with a separate mortgage. General Requirements This program is available to any homeowner in the City of Fridley who meets the income, credit, and other program requirements in Section I (RA)(1 -7) or as otherwise approved by the Authority. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide. r,B. LAST RESORT LOAN PROGRAM 1. Loan Description This program is designed for those homeowners who cannot qualify for 02/07/97 FRI 09:12 FAX 612 885 5969 KRASS MONROE, PA Z017 SCHEDULE A Page 6 any other Authority loan or grant programs. Funding will be provided in the form of a deferred payment loan up to $10,000 without interest. - T ter-es Last D ..t Lean w H be alnv�l t� f it rn• SIICCIL -7. ��:— ��G' J�1TG�-RIGUSiYCC�QJ•'I'�RffT�: ff �WRTIXWKW mm7; The Last Resort Loan is due and payable when the home is sold or after twenty (20) years from the date of the loan note, whichever comes first. The Last Resort Loan may be prepaid at any time. The Authority, may at its discretion, extend the maturity date of a Last Resort Loan. 2. Funding Source The Last Resort Loan Program will be funded solely by the Authority 3. Program Administrator The Center for Energy and Environment will market, administer and close all loans under this program. 4. Qualifications Income Limits: $58,650 Underwriting: This is a last resort program and as such applicants shall be selected for this program only if they are unable to qualify for financing through other Authority programs. The Authority and the Program Administrator shall work in co- operation to identify all possible resources before an applicant can be considered for this program. Equity: The Last Resort Loan shall be secured with a separate mortgage. Property Type: Owner - occupied, 1 to 4 unit residential properties located in the City of Fridley. 4S 02/07/97 FRI 09:13 FAX 612 885 5969 KRASS MONROE, PA SCHEDULE A Page 7 5. Program Specifics The Last Resort Loan is designed specifically for homeowners in the City of Fridley who can't qualify for a loan or a grant. Acceptable criteria include, but are not limited to: a. Borrowers who have existing financial obligations and /or insufficient income to qualify for a loan. b. Debt -to- income ratios in excess of 50%. C. Loan- to-value ratios in excess of 115 %, but not greater than 125%. d. Borrowers who have had credit problems, such as slow payment. C. Borrowers who can't qualify for any CDBG or HOME program funding because their incomes exceed the program guidelines. This program is not available to borrowers with pending bankruptcies or foreclosures, unpaid judgements or liens, or non - payment of real estate taxes /assessments. 6. General Requirements . This program is available to any homeowner in the City of Fridley with incomes up to $58,650 per year Who meet the criteria in Section I (ED(1 -7) . 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Home Improvement Loan Program Procedural Guide. All properties shall be inspected prior to the approval of any financing. The Authority will only disburse fwsds to the contractor /s directly after an inspection has been conducted and the homeowner signs a completion certificate. WU Z018 02/07/97 FRI 09:13 FAX 612 885 5969 IiRASS MONROE, PA SCHEDULE A Page 8 II. MULTIPLE FAMILY LOAN PROGRAMS A. RENTAL REHABII,Z'I'ATION LOAN PROGRAM 1. Loan Description The Rental Rehabilitation Loan Program is funded by the Minnesota Housing Finance Agency and is intended to help rental property owners complete improvements which increase the livability and energy efficiency of their properties. The program provides loans at 6% simple interest with repayment terms up to 15 years. The maximum amount that can be borrowed is based on the number of units in the property. I and 2 Unit Buildings Minimum: $ 1,000 Maximum: $25,000 3 or More Unirs Minimum: $1,000 Maximum: Lesser of $10,000 per unit, not to exceed $100,000 per structure. All loans over $5,000 must be secured with a separate mortgage against the property to be improved. 2. Funding Source The Rental Rehabilitation Loan Program will be solely funded by the MHFA. CEE will originate and sell loans directly to MHFA. The Authority will not provide any funding under this program. 3. Program Administrator The Center for Energy and Enviromnent will market, administer and close all loans under this program. 4. Qualifications Income Limits: None 4U Z019 02/07/97 FRI 09:13 FAX 612 885 5969 ItRASS MONROE, PA Z 020 SCHEDULE A Page 9 Underwriting: The property generally must show positive cash flow after the rehabilitation work is complete. For loans which are unsecured, the borrower must have the ability to repay the loan based on their own personal finances. Equity: Property Type: 5. Program Specifics For loans which are secured, the property must show positive cashflow after the rehab is completed. The borrower must have sufficient equity in the property, if the loan exceeds $5,000. Nom - owner - occupied, residential rental properties located in the City of Fridley. After the improvements are completed a certain portion of the units must be occupied by households with incomes less than 80% of the state median income. 6. General Requirements This program is available to any rental property owner in the City of Fridley who meets the guidelines of the programs as described in Section H(A)(1 -7). 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Rental Rehabilitation Loan Program Procedural Guide. , B. RENTAL ENERGY LOAN PROGRAM 1. Loan Description The Rental Energy Loan Program is funded by the Minnesota Department of Public Service and uses Exxon Oil Overcharge funds. The program provides loans at 4% simple interest with repayment terms up to 5 years. The minimum and maximum loan amounts are as M 02/07/97 FRI 09:13 FAX 612 885 5969 BRASS MONROE, PA Z 021 SCHEDULE A Page 10 follows: Minimum: $ 500 Maximum: $10,000 All loans over $3,500 must be secured with a separate mortgage against the property to be improved. 2. Funding Source The Rental Energy Loan Program will be solely funded by the Minnesota Department of Public Service. CEE will originate and sell loans directly to MnDPS. The Authority will not provide any funding under this program. 3. Program Administrator The Center for Energy and Environment will market, administer and close all loans under this program. 4. Qualifications Income Limits: None Underwriting: The property generally must show positive cash flow after the rehabilitation work is complete. For loans which are unsecured, the borrower must have the ability to repay the loan based on their own personal finances. For loans which are secured, the property must show positive cashflow after the rehab is completed. Equity: The borrower must have sufficient equity in the property, if the loan exceeds $5,000. Property Type: Non owner - occupied, residential rental properties located in the City of Fridley. 5. Pro ram Specifics None. W - 02/07/97 FRI 09:14 FAX 612 885 5969 KRASS MONROE, PA SCHEDULE A Page 11 6. General Requirements This program is available to any rental property owner in the City of Fridley who meets the guidelines of the programs described in Section II(B)(1-7). 7. Improvements_ Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the Minnesota Department of Public Service Rental Energy Loan Fund Procedural Guide. C. LAST RESORT RENTAL LOAN M(3RAm 1. Loan Description This program is designed for those rental property owners who cannot qualify for any other Authority loan or grant programs. Funding will be provided in the form of a deferred payment loan up to $10,000 per unit, not to exceed $50,000 per structure. * For the first ten years, 2% (simple interest) charged on the principal balance. * After ten years, no interest shall be charged. The Last Resort Loan is due and payable when the home is sold or after twenty (20) years from the date of the loan note, whichever comes first. The Last Resort Loan may be prepaid at any time. The Authority, may at its discretion, extend the maturity date of a Last Resort Loan. 2. Funding Source The Last Resort Rental Loan Program will be funded solely by the Authority. 3. Program Administrator The Center for Energy and Environment will market, administer and close all Last Resort Rental Loan Program Loans. Z 022 02/07/97 FRI 09:14 FAX 612 885 5969 KRASS MONROE, PA 2023 SCHEDULE A Page 12 4. Qualificatimis Income Limits: No income limit. Underwriting: This is a last resort program and as such applicants shall be selected for this program only if they are unable to qualify for financing through other Authority programs. The Authority and the Program Administrator shall work in co- operation to identify all possible resources before an applicant can be considered for this program. Equity: The Last Resort Loan shall be secured with a separate mortgage. Property Type: Non - owner - occupied, residential rental properties located in the City of Fridley. 5. Program Specifics The Last Resort Rental Loan Program is designed specifically for rental property owners who can't qualify for a loan or a grant. Because there are numerous variables which are used when underwriting a multiple family rental loan, it is difficult to list all of the scenarios which would qualify an applicant for the Last Resort Rental. Loan Program." In general, the following criteria will be used as primary factors: a. Borrowers who have a negative cashflow on their property. b. Borrowers who have no equity in their property and the Loan - to -Value Ratio (with the new debt) which exceeds 100%, but is not greater than 125%. C. Borrowers who have had credit problems, such as slow payment. This program is not available to borrowers with pending banlcruptcies or foreclosures, unpaid judgements or liens, or non- payment of real estate taxes /assessments. 6. General Requirements This program is available to rental property owners on a case -by -case 4Y 02/07/97 FRI 09:14 FAX 612 885 5969 BRASS MONROE, PA Z 024 SCHEDULE A Page 13 basis. The Authority Board of Commissioners shall specifically approve all .Last Resort Rental Loans in excess of $10, 000. 7. Improvements Borrowers shall use funds under this program to make permanent repairs and improvements to their properties. Improvements shall be limited to those defined in the most current version of the MHFA Rental Rehabilitation Loan Program Procedural Guide. �FRI D LEY\ HOU597\CEE\SCHED -A. RED 02/07/97 FRI 09:14 FAX 612 885 5969 BRASS MONROE, PA Z025 DRAFT #1 - 2/6/97 ESCROW AGREEMENT THIS AGREEMENT, made and entered into this day of 1997, by and between the Housing and Redevelopment Authority in and for the City of Fridley having its office at 6431 University Avenue NE, Fridley, Minnesota (the "Authority "), Center for Energy and Environment ( "Agent ") and of Minnesota (the "Borrower "). WTTNESSETH WHEREAS, the Authority has funded a loan for the purpose of improving Borrower's residential property located on the following described tract of real estate: which loan is in the original principal sum of $ is dated , 19 (the "Loan "): and and WHEREAS, said Loan was funded pursuant to the Program (the "Program ") , the proceeds of the Loan are to be expended for permanent repairs and improvements to Borrower's residential property, as described above. WHEREAS, the Agent and the Authority have contracted for the Agent to administer the funding of the Program. WHEREAS, the Borrower and the Authority desire that the proceeds of the Loan be placed into an escrow account for disbursement to a contractor, so as to be assured that the Loan funds will be devoted to the purposes provided in the Program. NOW, THEREFORE, in consideration of an Escrow administration fee of $ zero paid by Borrower to Agent and of the covenants herein contained and the mutual benefits to be derived therefrom, it is hereby agreed between the parties hereto as follows: 1. The Borrower shall and hereby does deposit the proceeds of the Loan in the amount of $ with the Agent, the receipt and sufficiency of which are hereby acknowledged by Agent, to be placed into Agent's trust account for disbursement in the manner hereinafter provided. 2. The Agent shall review the contract(s) entered into between Borrower and the contractor(s), to be assured that the contract(s) provide(s),as a minimum, the following: a. That the total contract sum for construction shall not exceed $ for all materials supplied and =I 02/07/97 FRI 09:15 FAX 612 885 5969 KRASS MONROE, PA 2026 services performed, of which total the amount funded by the Loan shall not exceed $ b. That the construction to be performed shall be authorized under the requirements of the Program and shall meet or exceed the plans and specifications for such work as agreed to between the Borrower and contractor(s). C. That construction be completed within days after commencement of construction, provided that all construction must be completed within nine months of the date of the note secured by the mortgage. d. That the contractor(s) provide evidence of workman's compensation insurance coverage. e. That the contractor(s) deliver lien waivers and sworn construction statements to Agent for each required draw of the construction contract amount. f. That the Borrower approve all construction draws. 3. That construction draws be in such numbers and amounts as to protect the Borrower's interest in the successful completion of construction. 4. That a reasonable retainage be withheld from the contractor (s) before completion of construction. 5. Agent shall inspect the site during construction and prior to final disbursement of funds to the contractor(s) to insure that the improvements are constructed in accordance with any plans and specifications agreed to between the Borrower and contractor(s), that good workmanship and materials are used, and that the construction has to be For improvements permitted by the terms and conditions of the Program. 6. Upon completion of the above requirements to the satisfaction of the Agent, in addition to the duties and responsibilities of the Agent, the Agent shall: a. Disburse the proceeds of the Loan in accordance with the terms hereof. b. Require the Borrower to execute the Program Completion Certificate, which is attached as Schedule 1. 7. The Agent shall receive compensation for its services hereunder only in the manner specifically provided in the Contract between the Agent and the Authority. -2- Hglaa� 02/07/97 FRI 09:15 FAX 612 885 5969 BRASS MONROE, PA 8. The parties hereto agree that upon the discharge of the duties undertaken herein by the Agent in accordance with the provisions as set forth, the Agent shall have no further liability to the Borrower arising from this Escrow Agreement. 9. This Escrow Agreement is not assignable without the prior written consent of the Authority. 10. This Escrow Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement the day and year first above written. AUTHORITY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA CON Its AGENT CENTER FOR ENERGY AND ENVIRONMENT By By BORROWER By By LIMA \ FRIDLEY \H0U"6 \LAST \ESCR0W.AGR -3- 4CC Z027 MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Request for Tax Increment Financing by Minnesota Commercial Railway Company REQUEST Minnesota Commercial Railway Company is proposing to build a $2,500,000 warehouse /distribution building on the four acre site in the Northco Business Park at the northeast corner of 71St Avenue and the University Avenue frontage road. According to Dennis Zylla of Northco, the site contains poor soils which require correction, and as a result, the building will need oversized footings and foundations. The railway company is requesting establishment of an economic development tax increment financing district in order to provide a 5% grant and a 5% loan similar to the assistance which was completed for the industrial building completed by John Allen just to the north of this site. THE COMPANY The project will house a subsidiary of the railway company, known as Commercial Transload of Minnesota (CTM). CTM provides "single bill of lading, just in time service" for steel processors. Rolled steel is to be received from a rail spur on the Minnesota Commercial Railway line which runs east/west through Fridley just north of 71St Avenue (Willamette has a spur from this rail line). The rail spur would be extended along the north side of 71St Avenue and would be extended directly into the CTM building. The steel is then transferred from the rail cars to semi- trucks who in turn delivers the steel to a variety of steel processors in the metro area. John Gohmann, President, points out that transporting the steel by rail reduces truck traffic not only in Fridley but on other metro area roadways. One rail car eliminates 11� Minnesota Commercial Railway Company February 7, 1996 Page 2 three or four trucks transporting the same material from the roadway system. Gohmann also provides documentation as to the economic savings of rail versus trucking costs. Six employees will be employed at the site; however, Gohmann points out that his service is a direct link to many manufacturers in Fridley and also for the construction trades. Some of the companies that they now service and would continue to serve include Onan, Pride Machine, Kurt Manufacturing, and Brooklyn Tool Company. Gohmann also points out that the railway company provides an economic development advantage to Fridley since they worked cooperatively with Willamette and Roland Marketing Inc., who have recently located their businesses in Fridley. TAX INCREMENT FINANCING ASSISTANCE Because the proposed use is a railroad operating company, it is subject to different taxation requirements by the state. The market value of railroad operating property is determined by the state rather than the city. According to Jim Casserly, the value is in part determined by the income received by the company. Taxes could be higher in good economic markets or lower in poor markets. The valuation for the use, however, is typically lower than a value determined by the city assessor. The proposed building is 57,980 square feet. If it were valued by the City, it would generate $100,000 - $118,000 in taxes. Gohmann indicates, however, that approximately $60,000 would be generated based on the state's valuation approach. How would $60,000 /year in taxes compare to the taxes generated if the site were developed as a typical manufacturing or warehouse facility? A 45,000 square foot warehouse or manufacturing building would generate $85,000 /year in taxes. It is uncertain if taxes from the site would be higher or lower than what could be generated if the use were not a railroad operating company. A minimum assessment agreement could be executed to require a minimum amount of taxes. The City should also assess whether it wants to assist this use in order to better serve Fridley businesses and construction trades. I contacted Woody Nelson at Onan to evaluate the impact on his company and he agreed to call me on Monday with a response. The company is also evaluating a site in St. Paul. The economics of both the Fridley and the St. Paul site appear to be equal according to Gohmann, except for the soil correction and additional costs to extend the rail spur. Gohmann was clear that he would not pursue the Fridley site without the TIF. 5A Minnesota Commercial Railway Company February 7, 1997 Page 3 The subject site has been the topic of potential commercial recreation uses in the past; however, the once- anticipated roller skating facility was not pursued. John Allen had indicated an interest in completing a similar building to his project on 73rd Avenue, but requested a 10% grant for the site costs. We advised Allen that a 10% grant had not been approved in the past and is inconsistent with previous HRA policies. PLANNING ISSUES Gohmann has stated that there will be no rail cars standing on the spur and that the cars will be held on their lines in New Brighton. The proposed building can hold up to seven cars inside. Gohmann states that most of the activity will occur between 11:00 a.m. and 4:00 p.m., and there will be no evening activity. The rolled steel coils will be transferred to trucks via an overhead crane which is contained within the building. He stated that there would be no outside noise emanating from the building from the operation of the crane ( Gohmann also said he is applying for state funds to purchase the crane). Approximately 10 - 20 trucks per day would use the facility. The only loading dock is proposed to be on the east side of the building. Additional plantings and landscaping will be required at the southwest corner of the site. The building will be at least 30 feet tall. Unlike other industrial uses, the building is served by a small parking area and one dock. A typical office /warehouse could have several docks and larger parking areas. RECOMMENDATION The subject property will need some type of tax increment assistance because of the soil correction required. Because of the nature of the use, a pay -as- you-go approach up to $200,000 is recommended. The City Council will need to create another TIF district. The City Manager has asked that I research if there will be any LGA loss to the City as a result of creating the district. I hope to have the information available prior to the City Council establishing a hearing on this request. Staff recommends that the HRA direct staff to continue to negotiate with the petitioner with the understanding that the assistance is not to exceed $200,000 and is provided as a pay -as- you-go note. n.91're M -97-64 02/06/97 THU 16:51 FAX 612 885 5969 KRASS HONROE 444 FRIDLEY Z002 James R. Casserly Direct Dial.• (612) 885 -1196 TO: City of Fridley Attn: Barbara Dacy William Burns FROM: James R. Casserly Bonnie Balach KRASS MONROE KRASS MONROE, P.A. 'ATTORNEYS AT LAW - MEMORANDUM RE: Minnesota Commercial Railway Co. Our File No. JRC 9571 -15 DATE: January 16, 1997 Attached please find a cash flow which roughly approximates the future market value and potential taxes that would be generated by the construction of an almost 60;0000 square foot facility by Minnesota Commercial Railway Company. Since this project would be considered operating property of a railway company, its valuation will be determined by the State of Minnesota Department of Revenue. In general, the taxes will probably be less than those taxes generated by another user of the PI' o perry. The market value, and resulting taxes, are affected by the profitability of the railway company. As a result, it is very difficult to predict the market value over a number of years. Due to the difficulty of determining market value, if the Housing and Redevelopment Authority wishes is to proceed with this project, we would suggest the use of a pay -as -you go revenue note. The attached cash flow illustrates the amounts available for such a revenue note. If, for example, a revenue note in the amount of $200,000 were approved by the Authority, the cash flow illustrates that such a note would be paid in June 1 of 2005. The note would require six and one -half years of tax increment. Please let us know if you need any additional information. JRCBLB/kh SU1TE 7200 SGUiHP01NY OYF,CE Chrv'fER • 16-90 WEST 82ND STR7F'.'I ' BLOOMINCTON. MINNES01'k 5543? -1447 TFLErHUNK 6]2/885.5899 FnCSIMILB G12/SQb.54�G9 02/06/97 THU 16:51 FAX 612 885 5969 IiRASS MONROE -44 FRIDLEY IZ 003 CITY OF FRIDLEY CITY OF FRIDLEY MN COMMERCIAL RAILWAY COMPANY ASSUMPTIONS Original Market Value 304,900 PIN 1992 Mkt 1996 Mkt PINS: Sg Ft. 11 -30- 2431 -0011 87,120 Value 174,200 Value_ 174,200 11- 30 -24 -31 -0012 87,120 130,700 130,700 174,240 304 900 304,900 Economic Inflator Original Tax Capacity Estimated Market Value Estimated Tax Capacity Estimated Taxes 1997 Tax Rate Administratie Fees Inflation P.V. Rate Construction 1997 Valuation 1998 Taxes Payable 1999 4.600% 57,980 Sq. Ft. 57,980 Sq. Ft. 1.267400 10.000% 0.000% 7.500% 20.00 per Sq. Ft. 1.17 per Sq. Ft. 1.00 14,025 1,159,600 53,342 67,605 RAIL PREPARED BY CASSERLY MOLZAHN & ACCOCIATES 02/06/97 02/06/97 THU 16:52 FAX 612 885 5969 KR4SS MONROE CITY OF FRIDLEY CITY OF FRIDLEY MN COMMERCIAL RAILWAY CO. CASH FLOW ANALYSIS Original Estimated Estimated Less Available Tax Tax Tax Admin. Tax Capaci Capacity Increment Fees Increment 06/01/97 12/01 /97 06/01/98 12/01/98 06/01/99 12/01/99 06/01/2000 12/01/2000 06/01/2001 12/01/2001 06/01/2002 12/01/2002 06/01/2003 12/01/2003 06/01/2004 12/01/2004 06/01/2005 12/01/2005 06/01/2006 12/01 /2006 06/01/2007 12/01/2007 ... FRIDLEY Z004 7.500°/, Cumulative P.V. P.V. Balance Balance 14,025 14,025 0 0 14;025 14,025 0 0 0 0 0 14,025 53,342 0 0 0 0 0 14,025 53,342 0 0 0 14,025 14,025 53,342 53,342 24,915 24,915 2,4911 22,423 0 19,353 0 19,353 14,025 53,342 24,915 2,491 2,491 22,423 22,423 18,653 38,006 14,025 14,025 53,342 53,342 24,915 2,491 22,423 17,979 17,329 55,985 73,315 14,025 53,342 24,915 24,915 2,491 2,491 22,423 16,703 90,018 14,025 53,342 24,915 2,491 22,423 22,423 16,099 106,117 14,025 14,025 53,342 53,342 24,915 24,915 2,491 22,423 15,517 14,956 121,634 136,591 14,025 53,342 24,915 2,491 2,491 22,423 22,423 14,416 151,006 14,025 14,025 53.342 53,342 24,915 2,491 22,423 13,895 13,393 164,901 178,294 14,025 53,342 24,915 24,915 2,491 2,491 22,423 12,909 191,202 14,025 14,025 53,342 24,915 2,491 22,423 22,423 12,442 1 1,992 203,644 14,025 53,342 53,342 24,915 24,915 2,491 22,423 11,559 215,637 227,195 14,025 53,342 24,915 2,491 2,491 22,423 22,423 11,141 238,336 14,025 53,342 24,915 2,491 22,423 10,738 10,350 249,075 259,425 448464 44 846 403,618 259,425 259,425 RAIL PREPARED BY CASSERLY MOLZAHN & ACCOCIATES 02/06/97 m i UN(v�t�Y PTV NE. .-T �1 s �� k I I 1 • 3.� ma c NOV- 1 -96 FRI 14:06 18/31/1996 19:53 NORTHCO CORP 17085490405 FAX N0. 6128201620 JON (a FtA.6M t_BTRYVL MINNESOTA COMMERCIAL RAILWAY COMPANY a+n w. cdv,,..M Clw a—, Prosww* "447 P 9MOG h ern.. S.rE. 201 November 1. 1996 u- -W-& u. eoaw Mr coma zyla, V�w Prudent, Nortco Partnerrs, Inc. 612 -820 -1620 P. 02 PF4GE 01 FAX tisrS444M Dc/& This is to provide a thorough explanation of the use of the building we woWd propose to build in Northco industrial Paris, Fridley, MN. The building wig be used by our Comdiencial Transload of "nnesota operating mb dl�, of our railroad. (CTM)- C K as a separate and distinct entity of our railroad, provides Specialized wog of steel and steel products. As in any "warehouse- kind of opeuatiotL the product generally arrives inbound in a radeu. the steel is offloaded from the railcar onto the storage floor, and, then is held anywhere from 6 hours to 60 days in warehouse storage for just in time delivery to steel related industries in the metro area, inlcuding some in Fridley, Plymouth, Minneapolis, St. Paul and the general metro area The local distribution fisnctioa'is handled by truck. We offer a computerized warehouse inventory control system, tied in with the systems of our major customers, to provide the just in time Service expectations. TWO to four railcars pet day is our projected traffic. Each radcar. on average, wiD Serwate 3 to 3.S tnxkload3 over. a period of time, depeading upon detention in the Warehouse Unloading of ""cars and loading of trucks is done INSIDE as part of the serviet M ofts is maintaining a climate controlled environment for the steel to Avoid coadeusatioa, frost, and nwisture damage (rust) on the steel or ah3minum we handle. Typical truck traffic would be from a minimum of six to a maximum of about 16 trucks per day - probably 10 would be a good daily average. hail service to the building would be once per day. at the same time we provide service to Wid mette Industries, and, the movements will be at slow sperds, not to exceed around 5mph, its the area. No railcars or trucks will be unloaded or loaded outside the building - as key to unloading railcars and loading trucks is a 23 to 30 ton overhead electric crane which will be contained within the building The "am is almost "whisper silent- - geotrating far less noise than even an idling truck. No milcars will be held on the track paralelliag the Wilamette building - any cart awaiting spotting at this Adlity will be held 0) At our major Yard terminal in St. Paul, (2) our holding yard in New Brighton, or, (3), on occasaion, the side track about 2000 feet east of this proposed site, where we presently hold cars for our other two customers in the area, Roland Marketing and Wilamette Industries (basically behind the Target Distribution Center to do immediate South). Mtnnmaws Railway of Commence, inaustry and Industrial Development It NOV- 1 -96 FRI 14:07 NORTHCO CORP - 10/31/1996 19:53 17085490485 FAX NO, 6128201620 JOHN lBTRYU- uyou aced Sutba iiufonuation, do not hesitate to contact are. We look forward to w0iW"8 with the City on this project, Sincere P. 03 PAGE 02 02/04/1997 17:45 17085490485 JOHN GOHMANN LBTRYVL PAGE 03 COMMERCIAL TRANSLOAD OF MINNESOTA ECONOMIC IMPACT OVERVIEW Commercial Transload (CTM) was formed in January, 1992 as a operating subsidiary of Minnesota Commercial ;Railway, and, began operations in a leased, 25,000 square foot facility in Roseville, MN, where its operations continue today. Minnesota Commercial Railway acquired the assets of the former Minnesota Transfer Railway (which had served the local region since 1883) in February, 1987. On February 1, 1997, Minnesota Commercial celebrated its loth anniversary. CTM is a "one of a kind" unique service business in the entire State, providing single bill of lading, just in time service for the transportation, warehousing and then local delivery of steel mill products from distant domestic (and foreign) steel mills to Twin Cities Steel Processors. CTM's unique value added is substantially reduced transportation costs for steel, which translates into lower costs for the steel for Twin Cities (and even an area some 75 miles surrounding the Twin Cities) for construction and manufacturing of steel products of all kinds. For example, the current trucking costs on steel is about $22.25 a ton from steel mills in the Indiana Harbor area to Twin Cities businesses, The rail - transload/warehouse - local truck cost is an average of about $18.45 per ton - a savings of over 20 %. As distances or steel sources get further from the Twin Cities, the savings is even more dramatic. For example, from mills in Texas, Arkansas, and, from Ports of entry into the US for coiled steel, as well as beams and plates, etc., average rail rates, including the transload/warehouse - local truck delivery cost is in the $34 to $45 per ton range, while trucking over the road is between. $95.00 and $120.00 per ton, depending upon origin, weight, etc. The savings in the case of more distant steel (oftentimes needed for speciality products, etc) in this case is over 50% by the use of rail For example, take the construction of the CTM new building in Fridley - which will require about 1000 tons of steel of construction beams, plates, etc, which typically come from distant specialty mills in Texas. Savings on rail versus truck is an average of $55.00 per ton - and, at 1000 tons, that's a savings of $55,000 in construction costs! Such kinds of savings will be in the future available to others constructing new steel framed buildings in the Fridley area. Overall, in the year 1996, CTM handled about 500 railcars of steel of all kinds (beams, plates, coils, and dimensional) or, 50,000 tons. At an average savings of an estimated $40 per ton, that's an impact of $2,000,000 in reduced transportation costs, imputed directly into the competitiveness of Fridley and Twin Cities area businesses. We project that with the new buidling we can at least increase our annual business levels to about 800 cars a 02/04/1997 17:45 17085490485 JOHN GOHMANN LBTRYVL PAGE 04 Year (an average of about 2.2 cars per day) , or 600%. At these levels, the annual increase in reduced transportation costs to local business rises to about $3.2 million anrivally, Fridley area businesses profit directly from such savings. In the construction trades, the services of CTM are available to all steel suppliers who sell to contractors erecting buildings in the Fridley area. In the case of steel coils, those go to steel processors who slit, cut and process such coiled steel for various kinds of steel fabrication. Major Twin Cities processors include Metalmatic, Quality Metals, Keelor Steel, Select Metals, and, many others, While naturally, such companies do not readily give out the names of their customers, we have identified through these steel processors that Onan, Pride Machine, Kurt Manufacturing, Carter Day, and Brooklyn Tool Company are amoung their Fridley customers who do in many cases business in the six figure a year brackets. Further, CTM has committed to Wilamette Industries in Fridley to provide some temporary storage of certain product stock to permit them to warehouse this nearby, rather than having to receive it by more costly truck deliveries when it's needed. CTM will produce in the vicinity of six jobs, in addition to the above very significant contribution to the community by virtue of reduced transportation costs. And, Minnesota Commercial has been active in the industrial development of Fridley. In 1990, we proactively assisted in assembling a package that brought Willamette Industries to Fridley, as opposed to another site in St. Paul. In 1996, we worked proactively with Roland Marketing, Inc., to assist their location in the former Penxoil Building on highway 65: CTM will be a significant contributor to the competitiveness and stability of the Fridley economy. We pursue this sight - as opposed to a sight in St. Paul, only because the availability of TIF makes the transaction equally competitive with the St. Paul sight and building plans we have put together with another developer in that area. We have committed to our customers to be in business in late August, 1997, putting this on a tight time schedule hereafter. We would be pleased to answer any questions, and, look forward to working with you. John W. Gohmann President, CTM, Minnesota Commercial Railway Co. February 4, 1997 FEB- 5 -97 WED 15:28 NORTHCO CORP FAX NO. 6128201620 P,02 NORTHCO REAL. ESTATE SERVICES February 5, 1997 Ms. Barbara Dacy Community Development Director City of Fridley 6431 University Avenue N.B. Fridley, MN 55432 Dear Barb: In follow up to the meeting we had with you and John Gohmann, our chent/prospect for 4 acres in the Northco Business Park, we are providing you with a formal request for tax increment assistance. Fridley Business Center Partnership is the owner of the land. Northco is a partner in that partnership. Northco Corporation is intending to serve as developer for the Minnesota Commercial Railroad with John Gohmann as principal. The project will be a build to suit to own with Mr. Gohmann providing all constriction and permanent financing through his lender. Mr. Gohmann has been actively recruited for a build to suit to lease in the Midway District of St. Paul and we are competing for his project with another developer. There are various cost trade offs between the Midway site and the Fridley site. W. Gohmann's primary concern is to provide quality service to his clients and assure building completion by August of 1997 at the lowest economic cost to his company. The schematic plans that we presented to you are the extent of our drawing to date. We have a preliminary cost estimate for the project of 2.5 million dollars. Landis included at $375,000. Our specific request is to ask the City of Fridley to provide a 5% cash contribution and a 5% loan to the project on terms similar to other proposers assisted by the city. Our building is architectural precast with extraordinary costs for site clearing, soil correction, ponding and oversized footings, foundations and concrete floor. Our clear height is thirty feet and we have a 90 foot span to accommodate a 25 ton crane. Our floor slab will be 8" minimum. It should be noted that our project cost excludes any expenses to extend the spur to the building and to provide a crane within the structure. These are costs that are outside of our proforma, but are real costs to the project, which we believe add to our justification for city financial assistance. 4900 VIKING DmvE EDINA. Mist 55435 -53A4 TEL: 612.820.1600 Fax: 612.820.1620 FEB- 5 -97 WED 15:29 NORTHCO CORP FAX NO. 6128201620 P.03 Ms. Barbara Dacy February 5, 1997 Page 2 Bruce Carlson, from Northco, and John Gohmann, both intend to be at the meeting of the HRA. John has previously dialogued with you about his use and operation of the building and site and provided certain follow up information. He will respond to any questions of the BRA, at the meeting. Unfortunately, I will be on vacation, but Bruce Carlson can ably address any development issues. T believe that it is important to point out that this is a very real project with a schedule that can be accommodated on the Fridley site assuming we move expeditiously to provide the financial support that this project needs in order to favorably compete in the marketplace. But for the BR.A.'s support, this project will not be pursued for the Fridley site. We believe the building efficiently utilizes the site by providing minimal surface parking and disturbance to natural vegetation. There will be minimal impact by the railroad to activities on the site with all railroad transfer occurring within the building. Over the last few years, we have recieved several inquiries from retail users for this site. The Gohmann project is one of the few M -2 users we have endorsed for the land. Please let me know if there is anything else that you require as we move forward with this fine project for your city. We appreciate the cooperation that you have shown as we have formulated our plan these past few months. Thank you. Sincerely, iDenni ylla Vice President DZ:hrh Enclosure J; W O L LY ,r 0IJ SPN C0 BSCT[L DZ MINNESOTA COMMERCIAL RAILWAY COMPANY 14047 Petronella Drive, Suite 201, Libertyville, IL 60048 John W. Gohmanm, Chairman, President 14047 Petronella Drive, Suite 201, Libertyville; IL 60048 847 - 549 -0.186, FAX 847 -549 -0485 Patrick ylcCardle, .Asst. l ice President Uarketing St. Paul, MN 320 - 743 -3717, FAX 320 -743 -3909 Minnesota Commercial Railway Company 508 Cleveland Avenue, North, St. Paul, MN 55114 612 -646 -2010, FAX 612 -646 -8549 OPERATIONS Wayne Hall, Jr., Director, Operations & Customer Services .Joe Anderson, Director, Administration &.Accounting Jack S. Lockhart, .Vfanager, Operations & Customer Services Daryl Johnson, Afanager. Administration & Customer Services Thomas Wells, Jr.. Afanager, Operations & Customer Services Dennis Ballweber, .Manager of Operations Scott Chambers, Asst. Director of Operations Services. I fanager ofTrain;t Ed Savelkoul, Supervisor offraining MECHANI AL Scott Wardrope, Chief Mechanical Officer - Locomotives Tim Schneider, Chieftfechanical Officer - Cars, Director oflla_mat Ray Duran, Chief lfaintenance of lVay Officer Phillip Jensen, .Lfanager Signals & Communications .James Lindamood, Afunuger, Car Department Thomas O'Brycki. Director, Transload Operations Bork Equipment .Joe Krawczeski, Alanager, Track & ;Velding :Van Birkholz, .tlanager, Track Inspector Afaintenance Eric Nelson, Director. Commerciul Transtoad ofJlinnesota 612 -631 -3739 .Jeff Brewster, Manager. Reload Structural co,�ivE�-rlo��s MINNESOTA - 4F I i. l L TIIE COrVNb_'CTIO,%:S Minnesota Commercial Railway is the Twin Cities' O.VL F Industrial Switching Carrier ottering neutral, competitive service and connections to all major railroads serving the Twin Cities area. Line haul service, from or to any industry served by the Minnesota Commercial, is available Isom the Burlington Northern, Chicago & North Western Transportation Company, the Soo Line Railroad, Wisconsin Central and Twin ~ `` Cities Western l.p..d: MINNESOTA COMPIERCIAL rndiey O,h.. R.dro.d. Twin Cities Mato, Hiphw.r. Arsenal RNoadRSuek Tr.n.I,, Track, t Int..modat S.,vic• Av.d.04 (19 a� Cw R.a.lr faipti.• LN10tl Arden Hills Hugo New Brighton lmm 500 we till Little Whits Bear Roseville Canada lake S,dlw a,er a AV St. Paul nCNw-aHl Bayport Minneapolis tat! Soo �a e9 za 9a Tin,sy bxeru,anfle osy wR11 tiN, CNN! Soo. WC, rCdW John W. Gohmanm, Chairman, President 14047 Petronella Drive, Suite 201, Libertyville; IL 60048 847 - 549 -0.186, FAX 847 -549 -0485 Patrick ylcCardle, .Asst. l ice President Uarketing St. Paul, MN 320 - 743 -3717, FAX 320 -743 -3909 Minnesota Commercial Railway Company 508 Cleveland Avenue, North, St. Paul, MN 55114 612 -646 -2010, FAX 612 -646 -8549 OPERATIONS Wayne Hall, Jr., Director, Operations & Customer Services .Joe Anderson, Director, Administration &.Accounting Jack S. Lockhart, .Vfanager, Operations & Customer Services Daryl Johnson, Afanager. Administration & Customer Services Thomas Wells, Jr.. Afanager, Operations & Customer Services Dennis Ballweber, .Manager of Operations Scott Chambers, Asst. Director of Operations Services. I fanager ofTrain;t Ed Savelkoul, Supervisor offraining MECHANI AL Scott Wardrope, Chief Mechanical Officer - Locomotives Tim Schneider, Chieftfechanical Officer - Cars, Director oflla_mat Ray Duran, Chief lfaintenance of lVay Officer Phillip Jensen, .Lfanager Signals & Communications .James Lindamood, Afunuger, Car Department Thomas O'Brycki. Director, Transload Operations Bork Equipment .Joe Krawczeski, Alanager, Track & ;Velding :Van Birkholz, .tlanager, Track Inspector Afaintenance Eric Nelson, Director. Commerciul Transtoad ofJlinnesota 612 -631 -3739 .Jeff Brewster, Manager. Reload Structural co,�ivE�-rlo��s MINNESOTA - 4F I i. l L TIIE COrVNb_'CTIO,%:S Minnesota Commercial Railway is the Twin Cities' O.VL F Industrial Switching Carrier ottering neutral, competitive service and connections to all major railroads serving the Twin Cities area. Line haul service, from or to any industry served by the Minnesota Commercial, is available Isom the Burlington Northern, Chicago & North Western Transportation Company, the Soo Line Railroad, Wisconsin Central and Twin ~ `` Cities Western 02/04/1997 17:45 17085490485 JOHN GOHMANN LBTRYVL PAGE 02 To-Barb Dacy, City of Fridley 612-572-3590 Dennis Zyla, Northco 612 -820 -1620 Hi: Here is an economic impact analysis for the new building in Fridley. Barb, someone from your staff'just called regarding anaiy,.ing this matter from a property tax standpoint. I gave her the name of Wayne Gerwing from MN DORevenue - who we work with - to report our taxes each year. Railroad Operating Property - which this would be (notwithstanding ownership, as use is what governs according to what our accountant found out talking to the DOR), is taxed at a different base. I guessed the taxes to be $60,000 a year, not the$75,000, based on Dennis's first whack at appraised value. Usually, however, the difference between the railroad value and the local value is eaten by the State's portion of the taxes, not the local municipality. However, if this is a problem, I certainly would have no problem making some kind of agreement with you with respect to minimum taxes we would pay. While the difference of $15,000 is not too much, it does help us stay more competitive - as it is the transportation functions, as you can see from the analysis, that provide such a value added to the community. Just let me know, Barb, and, I will do my best to work with you on this matter so it has a TIF justification, for otherwise, the St. Paul site would look better. We don't intend to short change Fridley on tax revenues, that's for sure, as we appreciate working with you and your desire to get this through. Tell me what it takes if this is a problem. Based on my knowledge of how this all works, 1 did not foresee a problem, but, if there is, we should beable to solve it! Thanks, and, if you have any comments on this, let me know. cc: Pam Rosenbusch, Banl - - -- _ -- your files. MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 / TO: William W. Bums, Executive Director of the HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Tax Increment Financing Request by Tamarisk REQUEST Tamarisk is proposing to acquire the Holi Haus property at 1282 Mississippi Street and convert the building into an education/leaming center for Tamarisk volunteers and clients. Tamarisk is a non - profit organization whose purpose is to provide volunteer services for the terminally ill and their families. Tamarisk is requesting assistance to offset their costs in acquiring the site, remodeling, and establishing the former retail site into the proposed learning center. TAMARISK Tamarisk was originally incorporated in 1993 by Gretchen Hanson, a Fridley resident. The program has trained 35 volunteers to assist the terminally ill and their families. Hanson's program is receiving worldwide attention. CDBG funding was provided to Tamarisk in 1995 -1996 to assist low and moderate income families. Tamarisk recently made a request for 1997 CDBG monies to acquire the Holi Haus property, but funding is not recommended since it competes directly with the allocation for the rehabilitation grant program for low and moderate income families. TIF REQUEST The subject property is located in a redevelopment project area and near, but not in, Tax Increment District #2. Because of its location in a project area, the Authority may assist in the acquisition and remodeling of the site with its tax increment funds. A low interest loan can be made by the Authority and secured via a second mortgage on the property. This is the same approach as was done for Sheet Metal Connectors, Eco Finishing, and Wallboard Inc. A Tamarisk TIF Request February 7, 1997 Page 2 Although no specific amount was identified by Tamarisk, the attached letter fully explains the project expenses. Consistent with past requests, a loan equal to 10% of the project costs (land and building cost equals $120,000) or $12,000 is recommended. A 5% interest rate is proposed with a term of 13 years. Principal and interest payments would not be required in the first three years of the loan term. Tamarisk has enough funds at this point to pay for the $20,000 down payment, and intends to complete a variety of fund raising activities to retire the first mortgage and ultimately the Authority's loan. The first mortgage is a contract for deed with the owner for 10 years at 7.75% interest. The Authority's assistance reduces the cost of the land which then enables Tamarisk to make exterior and interior improvements to the site and building. RECOMMENDATION Staff recommends the HRA authorize staff to prepare a loan agreement with Tamarisk for $12,000 at 5% interest for a 13 year term, with no principal and interest payments required in the first three years. :s M -97 -71 Me 1 1 'N� Tamarisk Providing compassionate care for persons facing life threatening illness and for their loved ones February 6, 1997 Barbara Dacy Community Development Director City of Fridley Dear Barb, Tamarisk has entered into a purchase agreement for the property at 1282 Mississippi St NE in Fridley. This property is commonly known as the Gottwaldt house and is currently being used as a gift shop known as Holi Hans. We plan to use it for our offices, volunteer training, education, counseling, library, and as a general resource center for issues surrounding terminal illness and death. Tamarisk is an all volunteer organization no one is paid) that provides personal care and comfort to those faced with terminal illness and for their families and caregivers. We provide all of our services without charge. We primarily serve people in the northeast suburbs. We have about 30 volunteers providing care and are typically caring for 25 -30 people at any given time. Tamarisk began in Fridley in early 1993 with initial funding given by the family of Tom Brickner. We have operated out of a home and rented office space in Fridley since our beginning. Our new property is intended to be our permanent home in Fridley. Our purchase of this property and any work we do on it is done with the sole goal being to improve our unique service to people in Fridley and neighboring communities. Our purchase price is $120,000. Closing and occupancy is scheduled for May 1, this year. We will pay $20,000 cash from our reserve funds and the current owners are carrying the balance of $100,000 on a 10 year 7 3/4% CD. We plan to retain the historic and residential characteristics of the house and property. We do not plan to make any external changes to the property except to install an underground sprinkler system and replace the current Holi Haus sign with a smaller sign identifying Tamarisk. The sign is to be done in keeping with the residential nature of the neighborhood. We expect the total cost of this work to be about $7000. We do not plan to do major interior remodeling. We do plan to do a small amount of interior work to reinstall appliances in the kitchen, replace hand and guard rails on the stairs, install a folding partition in the living room entrance, and general cleanup and painting. We expect the total cost of this work to be a maximum of $5000. kiimirisk Resource,. Inc 205 Mississippi St N[; Pi) Box 32602 Fri(Hcv MN 554 ;2 Phone: 612 572 -19_1 66 .. 612 572 -1956 We expect to furnish and decorate the interior with office furniture (much of which we presently own) in the office areas, home type furnishings in library and counseling areas, and multi use tables and chairs in the training and meeting areas. We expect the total cost of this to be about $10000. We expect to purchase lawn and exterior maintenance equipment such as lawnmower, snowblower, etc. We expect the total cost of this to be a maximum of $2000. We expect closing costs (including realtor's fee and first year's insurance premium) to be about $3000 In summary, we expect our costs (excluding debt service) to be: Property 120,000 Closing costs 3,000 Ext Improvements 7,000 Ext Maint Equip 2,000 Int Improvements 5,000 Furnish & Decorate 10,000 TOTAL $147,000 We intend to cover these costs from several sources: -our own reserve and operating funds (primarily to maintain debt service & principal payment continuity) -a general public fund raising effort - specific fund raising events for this purpose - memorial gifts given for this purpose -gifts from various local service organizations - grants and low cost financing from various agencies We have previously requested $25000 of CDBG funds to assist us in this project. We have also discussed the possibility of low cost financing from the HRA. I have attempted in this memo to sum up for you the total scope of our project. Please give it your consideration for assistance in partial funding for this project in whatever way and whatever amount that works. I'm available any time for questions, more info, or whatever. We sincerely appreciate the help and support that you and others in the city offices have given us to date on this project. T hank �Yion, Wally Emerson Business Manager cc; Gretchen Hanson 6C JRH ASSOC INC 612 571 3330 P-01 Date; Time: 49, OY To: From: l Tamarisk Resources Inc. �J 205 Mississippi Street NE Company P.O. Box 32602 ALP- Fridley, MN 55432 Fax number Phone: 612 -572 -1950 Fax: 612-572-1956 � /�—�� Number of pages (including cover letter): 02 M Comments: 2W A "Alimb W" ~41 Z &A -0 /ge 14 Gri' /"�y At rfl& '0 A&/ �,l r v Qb-) Confidentiality Notice: The documents) accompanying this fax may contain confidential information which is legally privileged. The information is only for the use of the intended recipient named above. If disclosure, copying, distribution, or the caking of any action in reliance on the contents of this telecopied information except its direct delivery to the intended recipient named above is strictly prohibited. If you have received this fax in error, please notify us immediately. Think you. Aclutowledgc: Yes No 6D JRH ASSOC INC V_q1L1iaS J 1111llvv 612 571 33SO P.02 1 SATURDAY, JANUARY lb - 199% Volunteers care for terminally ill By aren Gall Jostad Star'(Yibune Staff Writer Gretchen Hanson's parents were living in a small town in northern Minnesota with little medical help available when Gretchen's father was diagnosed with lung cancer in 1980- "My family needed more help than was available," said Hanson. "The heart piece was missing — somebody to walk along with us as a family, to care." I lanson also was deeply dis- turbed at her father's diminishing feelings of self - worth. "I le saw no value in his being around anymore," she said. "All of life we're valued for what we can do. People who are dying can't do that anymore. We need to affirm them and make them feel valued and loved." It was after her father's death that she founded Tamarisk Re- sources Inc. in Fridley, an all -vol- unteer care program for the ter- minally ill. Where she'must' be Although she "never set out on purpose" to found such an or- ganization, Hanson is certain that a higher power had everything to do with it. During hospice train- ing, when she watched a video about a man dying of lung cancer just as her father had, Hanson had the feeling that "someone's hands were on my shoulders say- ing, 'Sit down, this is where you need to be.' " Once the flame was Ill, Han- son says, she learned all she could about care of the dying. She enrolled in St. Mary's Univer- sity of Minnesota graduate school and special programs in Minne- apolis and designed her own master's program in human de- velopment with an emphasis on care of the terminally ill. She also was accepted into a world -re- nowned hospice seminar in Great Britain, where she met Prue Clench, a founder of hospice home care in Europe. "I was so struck by what I heard her say," said Hanson. "Es- pecially her delivery of it. She's a very committed Christian and she really spoke to my heart." In 1991, needing only live credits toward her degree, Han- son asked Clench if she could re- Photo provided by Gretchen Hanson Gretchen Hanson founded Tamarisk, a care program for the terminally ill. Ielping Out more about hospice there. Clench agreed, and for six weeks Hanson studied hospice pro- grams, gleaning information for what was later to become Tama- risk, a nonmedical care program based on her thesis, "Spirituality of Presence" — a "simple con- cept of'being there' for people." Name from Genesis Tamarisk was incorporated in 1993. In 1994, 11 volunteers grad- uated from its first patient -care training program. The name comes from a story in Genesis aboutAbraham offering comfort — including the shade of his tree, known as an "eshel" or tamarisk -- to strangers as they crossed the Sinai Desert. Today, Tamarisk has about 35 volunteers who provide nonmed- ical care to terminally Ill people and their families. Diane Refshaw is volunteer coordinator. "Its a hands -on sort of thing, meeting people where they're at, letting them be who they are," said Refshaw. "I think that makes a real difference in the quality of life people have." Hanson said_ "Our volunteers are trained to walk alongside peo- ple. They provide respite for care- givers and child care, do small housekeeping tasks and shop for groceries — anythinga friend might do." -teer bakes cookies for lilies. Another, who 6E 3S cared for by Tam- has styled clients' hair. "Everyone has something to offer," said Hanson, who thinks of Tamarisk as a "gift exchange. Volunteers screened volunteers are screened by Hanson and Refshaw and com- pplete 33 hours of training. Proni a hosppice nurse, they learn the kinds of physical things they can expect to see, and from a social worker they learn the issues that can arise when someone is dying Hanson believes that Tamarisk should create an environment in which families can continue on their spiritual journeys. "we're not just about volunteers sending people out to someone's house — it's about being good listeners, building trust and confidence. "People who are dying don't want to burden their loved ones. The volunteer provides ,1 wonder- ful ear for the patient.` Each year the volunteers hold a celebration of remembrance for families they've helped. "We like to think that on the final stage of life's journey home, we're offer- ing people comfort and support under the branches of our tree,' Hanson said. "Tamarisk operates from the foundation that He is the root, the source, the vine and We are the branches." To learn more about voltuireer- ingat 7'mnnrisk, cx+11572 -1950. If you know an outstaytctlug vol- unreer you'd like to see fearured in this column, please turite to Helping Out, Faith & Valrres, Star Tribune, 425 Porrland Av. MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO: William W. Bums, Executive Director to the HRA G0 FROM: Barbara Dacy, Community Development Director SUBJECT: Consider Approval of Supplemental Payments and Change Order #1 for the 3rd Street/Mississippi Intersection Improvement Project The Public Works Director has requested that the HRA take formal action to approve the supplemental payment requests and change order for the 3rd Street/Mississippi Street improvement project before final action by the City Council at its February 24, 1997 meeting. While the project was let as a "City" project, the HRA is ultimately responsible for the remaining costs of the project after payment by Anoka County, Holly Center, and Rottlund. At the last meeting in January, the HRA reviewed an information memo which stated that the supplemental payments were for additional expenses associated with the RAO retaining wall, driveway, and irrigation system. The net cost for the RAO work was approximately $9,080. Unanticipated was the change order for $34,106. John Flora reviewed the issue with BRW Inc. in detail (see attached letter dated January 24, 1997). While there were additional costs as a result of missed quantities by BRW (about $10,000 to $13,000), there were savings of $10,000 elsewhere in the project. These costs are exclusive of the $1,236.75 BRW voluntarily paid to RAO. John Flora has written a letter to the County requesting an additional contribution of $10,575.73. The County has already agreed to pay up to $60,059, or $19,500 over the original share. The "worst case" cost to the HRA is as follows: Original Amount $212,626.20 RAO Construction $ 9,080.00 RAO Easement $ 2,061.95 3`d Street/Mississippi Street February 7, 1997 Page 2 Change Order #1 $ 34,106.00 Final Design $ 37,073.08 Total Rottlund share Holly Center Anoka County Balance $294,947.23 $ 40, 559.00 $ 55,000.00 $ 60,059 $139,329.23 Originally, the HRA budgeted $42,720 for "site grading" and $115,000 for "public improvements ". The balance of $139,329 is within the $157,710 budget for this item. Please note that Flora's memo does not address the RAO easement acquisition costs or the final design costs. RECOMMENDATION Staff recommends the HRA recommend approval of the supplemental payments and change order #1 to the City Council for the improvements at 3rd Street and Mississippi Street. M M -97 -70 7A " Mv B R W INC. January 24, 1997 Mr. John Flora Director of Public Works City of Fridley 6431 University Avenue Northeast Fridley, MN 55432 Re: Mississippi Street Improvements - Quantity Analysis Dear Mr. Flora: As you requested, we have analyzed the quantities on the Mississippi Street project in Fridley.' We reviewed the bid items that exceeded the contract quantity Planning by at least 20 percent. The bid items were then broken down into 3 areas of Transportation responsibility as you requested: RAO, Holly Center, and County Roadway. I Engineering have also included an exhibit for each area showing where extra work was Urban Design performed. Each area is summarized below and on the attached exhibits.- Thresher Square 700 Third Street So. Minneapolis, MN 55415 612/370 -0700 Fax 612/370 -1378 Denver Milwaukee Minneapolis Newark Orlando Phoenix Portland San Diego Seattle RAO PROPERTY The costs associated with the RAO property were attributable to the need to construct a retaining wall to allow for the street widening and the reconstruction of the sidewalk. This resulted in the removal and reconstruction of the RAO driveway to provide for a smooth transition from their parking lot to the street. The total extra work for this property results in an increase to the contract of $17,122.70. In addition, an easement was required to construct the retaining wall. BRW had initially informed Barb Dacy that the costs would be between $0.75 to $1.50 per square foot. The total easement area required was 1,649 SF. Negotiations to acquire the easement were slow and coincidental with construction. As negotiations dragged on and as problems occurred in the field (the contractor cut their electric service and Rottlund cut their telephone service) the price of the easement rose to $2.00 /SF. BRW felt that if the easement would have been obtained prior to the start of construction, the cost of the easement would have been less. We accepted some responsibility in this matter and therefore, we have agreed to pay $0.75/SF to RAO with the City (or HRA) paying $1.25 /SF. Although it is not noted on the attached analyses, we believe that if we would have had a bid item for the modular block retaining wall, the unit cost could have been lower. Typically, BRW would anticipate a cost of $14 to $15 /SF for this. The negotiated unit price was $17 /SF. Therefore, it could be considered that BRW is responsible for $9 7B, 300 in extra cost for this item. John Flora January 24, 1997 Page 2 HOLLY CENTER The costs associated with the Holly Center are attributable to the removal of additional bituminous material to match into the existing pavement. It was difficult to clearly define the limits of pavement removal without a detailed field survey. In addition, some minor additional sidewalk was installed to make a connection from the Holly Center parking lot to the adjacent travel agency. I believe this was an item that Barb Dacy negotiated with the travel agency. The total extra work associated with the Holly Center was $6,652.00. COUNTY ROADWAY The costs associated with extra work on the County roadway included the need to reinstall 2 loop detectors that were cut while removing curb and gutter. There was no way for the contractor to avoid the loop detector wires. In addition, BRW directed that additional milling be performed to provide for smooth transitions on the road. BRW felt that this was necessary to make for a good final project. Since milling exceeded the contract amount, there was a corresponding increase in wearing course in the milled areas. Other extra work items included the use of temporary lane tape to accommodate safe traffic operations during the multiple phases of construction. Some additional conduit was used to extend the conduits a sufficient distance behind the concrete sidewalk for future ease of access. The total extra work associated with the County roadway cost was $12,305.40. The spreadsheet for the County Roadway show areas of quantity over -runs for the County road. Some quantities actually under -ran and are depicted by negative numbers. Some of the items appear to reflect errors in quantity take -offs by BRW including the following: salvage'concrete pavers, 4" concrete walk, and install salvaged concrete pavers. It appears that BRW missed the center median when performing quantity take -offs. Again, these items were needed for construction. However, we believe that lower unit prices may have been obtained if the correct quantities were used. We believe that the project may have experienced up to a 25 percent reduction of unit prices bid if the correct quantities were used. On the three items referenced above, that would equate to a savings of $2,163.45. The total costs associated with quantity over -runs was $16,226,60. Applying a 25% unit price reduction to all quantities that overran would be $4,056.65 ($16,226.60 x .25). We believe BRW has some responsibility in this matter somewhere between these two figures. The total costs identified in the enclosed spreadsheets total $52,306.70. The original contract amount was $212,626.20. The actual final cost was $254,929.10, therefore there was approximately $10,000 in other items that actuually under -ran. 7C John Flora January 24, 1997 Page 3 BRW is prepared to discuss these items at your convenience. We apologize for the difficulties these quantity issues have caused you. Please call if you have any questions or need any additional information. Sincerely, BRW, -INC. P �' G 1 Danielson, P. E. Project Engineer Enclosure cc: Gary Ehret, BRW Tom Harrington, BRW File 2881A06 QUANiANL.WPD City of Fridley TO: Barbara Dacy, Community Development Director PW97 -032 FROM: John G. Flora, Works Director DATE: February 4, 1997 SUBJECT: Mississippi Street Improvements We have received information from BRW summarizing the costs associated with the Mississippi Street improvement project. The original bid was for $212,626.20. With the associated charges for the project, the cost was increased $43,186.00 to $255,812.20. Actual construction costs are $254,929.10 or $42,302.90 over the original bid. Based upon the cost sharing agreement on this project, the County is a 25% partner. Accordingly, $10,575.73 of the overrun would be appropriately covered by the County (a letter has been sent). As a result of the increase and County contribution, the final cost distribution is: County $70,634.73 Rottlund 40,559.00 Holly Center 55,000.00 HRA 88,735.37 Total $25;929 10 In finalizing the project, there is a requirement to approve three supplemental agreements of ($1,774-60),$9,496.00 and $1,358.60 and a change order of $34,106.00 to properly address accounting for the project. Supplemental Agreement No. 1 deleted a certain amount of pavement messages. Supplemental Agreement No. 2 adds the RAO retaining wall and tree removal, Supplemental Agreement No. 3 adds additional landscaping, and finally, Change Order No. 1 addresses pavement costs. Recommend the HRA approve the supplemental agreements, change order and final project cost. Once the HRA has approved these items, they will be submitted to the City Council for approval and final payment as agents of the HRA contract. JGF:cz Attachment 7E Ur I HAN6POH I A T ION SUPPLEMENTAL AGREEMENT No. U1 F—Add- B- MILLEn, Federal Project : Location: 6701 Norris Lake Rd Elk River, MN 55330 Pro. No. F.Y. Account I.D. DeptMv. Sequence No. Purchase Terms Asset No. C.CD•t C.CD.2 OOONET Supp. 10 Contract No. Sheet of -' State Project No.: t_i2- GG6 -09 Mississippi Street and Third Street in Fridley, in Anoka County Suffix I Object I Vendor 01 C.CD.3 TYPO Amount V C.CDA C.CD.5 TYPE OF A40 ( ) A41 ( ) Dated Number Entered by TRANSACTION: A44 ( ) A45 ( ) A46 ( ) Dated Number Entered by This contract Is amended as foNows: WHEREAS: this contract Provides for,: among other things, the installation of type C signs and striping, and WHEREAS: the County has requested revisions be made to the type C signing to reflect high intensity sheet and to revise to striping from epoxy to paint, and WHEREAS: due to a late award," the contract completion date of September 15, 1996, shall be extended by 45 days to October 30,1996, and WHEREAS: the Engineer is in agreement with the above revisions. NOW, THEREFORE, IT IS MUTUALLY AGREED AND UNDERSTOOD THAT: 1- The contractor agrees to furnish and install high intensity sheeting on all the type C signs in place of engineer grade sheeting. �.PPROVED: ,ommissioner of < +ministration d 2. The contractor agrees to install paint in place of epoxy paint for the striping, 3- Payment for the above work will be at the negotiated unit prices as shown in the Estimate of Costs. 4. Contract time will be extended by 45 days to October 30, 1996, and the provisions for liquidated damages, #14 in the General Provisions will be in effect. APPROVED: Commisisoner of Finance Dated___ - -_- ! to State Auditor -- Copy to Agency Original Contract Dated Approved as to form Dated T t344 Prote t i oe and execution - Contractor Dated District Engineer Assistant Attorney Genera. Dated - -- - - Agency Head 7F P - 0713.1 03 r "E OF MINNESOTA DEV""RTf.1i =NT OF TRANSFORTATION SUPPLEMENTAL AGREEMENT No. CAnira ClOC Address: MILLER. Inc_ Fedoral Projecl UPP- 10 irca'ract No. State Project No -: 02- 606 -09 67(_11 Norris Location: - Lake Rd Mississippi Street and Third Street Elk River-, MN 53330 in Fridley; in Anoka County Pro. No. F.Y. Account I.D. DePUDM Sequence No. Suffix Object Vendor Type Amount Purchase Terms Asset No, C CD t 01 V OOONET C.CD.2 C.co.3 C.CD.4 C.CD.5 TYPE OF A40 ( ) A41 ( ) Dated Number Entered by TRANSACTION: A44 ( ) A45 ( ) A46 ( ) Dated Number Entered by This contract is amended as follows: 5- The contractor will not make claim or of any kind or character whatsoever for any other costs or expenses which he may have occurred nor which he may hereinafter incurred in preforming the work or furnishing the material required by this agreement_ Total Decrease APPROVED: APPROVED: :ommissioner of Commisisoner of administration Finance fled `3y - -- - ,al 10 State Auditor Original Contract Approved as to form and execution Assistant Atlorr 7G- Price Arun 120.00 480.00 130.00 260.00 1.50 624.00 6.00 240.00 1.70 1054.00 6.50 585.00 6.00 240.00 1.50 420.00 $3,903.00 Dated ':? 12 4� _ff / Proleclt F n ©er q - - -- -- - Dated Dated - - -- Agency Head - -- ESTTMA F OF Co. Decrease Item Ttem # 0564.602 Ite Pavement Message F A �' °n'' v 4.00 0554.602 (Lt Arrow) epoxy Pavement Message EA 0564-6o.- (only) epoxy 2.00 4 ..solid White LF 416.00 0564-603 epoxy 4" Solid Yellow LF 40.00 0564.603 epoxy 4" Solid Double LF 620.00 0564_603 Yellow epoxy 24" Solid Yellow LF 90.00 0564.603 epoxy 24-- Stop Line White LF 40.00 0564.603 epoxy 4" Broken White LF 280.00 epoxy Total Decrease APPROVED: APPROVED: :ommissioner of Commisisoner of administration Finance fled `3y - -- - ,al 10 State Auditor Original Contract Approved as to form and execution Assistant Atlorr 7G- Price Arun 120.00 480.00 130.00 260.00 1.50 624.00 6.00 240.00 1.70 1054.00 6.50 585.00 6.00 240.00 1.50 420.00 $3,903.00 Dated ':? 12 4� _ff / Proleclt F n ©er q - - -- -- - Dated Dated - - -- Agency Head - -- -I 1'- UZ734 -03 (5 /88) E OF MINNESOTA DEPARTMENT Or TRANSPORTATION Sup, • to Contract No SUPPLEMENTAL AGREEMENT No. - -- — Contractor: Sheet - W B MILLER', , Ic_ Federal Project: State Project No -: (3 06 -C)0 Address: 6701 Norris Location: Lake Rd Elk River, Mississippi Street and Third Street MN 55330 in Fridley, in Anoka County Pro, No. F_y. Account I.D. DePUDiv, Sequence No. Suffix Object Vendor Type Amount Purchase Terms Asset No. C.cD t C.CD.2 OOONET 0t C,CD.3 V C.CD.d C.CD,S TYPE OF A40 ( ) A43 ( ) Dated Number Entered by TRANSACTION: A44 ( ) A45 ( ) A46 { ) bated Number Entered by This contract is amended as follows: Increase item--# Ite 0564.602 Pavement Message Dn FA 4.00 Amount r�Up (Lt Arrow) paint 180.00 0564.602 Pavement Message EA 2.00 45.00 90.00 0564.603 (Or1Y) paint 4" Solid White LF Paint 416.00 0_G5 270,40 0564.603 4" Solid Yellow LF 40.00 0.65 26.00 Paint 0564.603 4" Solid Double LF 620.00. 1.35 837.00 Yellow paint 0564.603 24" Solid Yellow LF 90,00 2 :..25 02.50 0564.603 Paint 24" Stop Line White LF 40.00 2.25 90.00 Paint 0564 -603 4" BI oken .White LF 280.00 0 _ e5 182.00 Paint UT) arade to High SF 83.50 =x.00 250.50 Intensity sheeting Total Increase X2,128.40 Net Decrease This Agreement X1,774.60 DISTRIBUTION: S A P 02- 606 -09 co— 'PROVED: =Dated APPROVED: Original Contrac)mmissioner of Commisisoner of Jministration Finance - - - - - -- Dated t� orate Auditor -- Cbpy to Agency Approved as to form - -- and execution I�S�ISti3nt F�}tni.. �... !` -"l kfa! 7H- Pr 'act eer g Dated q -13- °� ��/ Conlractor Dated District Engineer Dated Agency H ©ad TAT E GF 1.11A1NES0TA D�PAPT,YENT Of: TRANSPOR T A T ION SUPPLEMENTAL AGREEMENT No. ContraC(Of: � Federal Pr--,--c!: MIiL�eh Inc. Address: I 167,011 Location: N' 'rris Lake Rd Elk River; MN 55330 Pro. No. F.Y. Account i.D. De UDiv, S P equence No, Purchase Terms Asset No. _ 00 0NET C c i:' I C.00.2 r Cupp ;o Contrac;N(l_ Sheet State Project No.: Mississippi Street and Third Street in Fridley, in Anoka County Suffix O4iOO 1 Vendor Type Amo ht at v C,CDA TTC70.4 C.CD.5 r t PE OF A40 ( ) A41 ( ) Dated Number Entered by TRANSACTION: A4 ( ) A45 ( ) A46 ( ) Dated Number Entered by This contract is amended as follows: ,WHEREAS: this contract provides for, amono other things, the Widening of the existing roadway, and WHEREAS: the street widening, the installation of curbs ana sidewalks has resulted in the need for retaining walls, and WHERE S: two loop detectors that were inadvertently cut during the removal stage need to be replaced, and WHETS: to minimise the extent of grading, the Engineer has determined that two modular block retaining walls shall be built and an oak tree shall be removed, and WHEREAS; the Engineer has also determined that the two loop detectors shall be installed. �r0'1 THIEREFORE , IT IS MUTUALLY AGREED AND UNDERSTOOD THAT: 1. The contractor agrees to furnish and install two modular block retaining walls as directed by the Engineer. The contractor agrees to clear and grub one oak tree as directed by the Engineer. 3 The contractor agrees to furnish and install two 6' x 6' loop detectors as directed by the Engineer. APPROVED: COrnmissioner of Administration APPROVED: COrnmisisoner of Original Contract n (J� Finance Dated /6 --- /c B y Approved as to form Dated Dated- - -- and execution contractor Dated Dated _ DislnC Engineer Assisl: 7' iey Generai Dated :�Tr»,= ' C= -OS4: Or SUPPLEMENTAL AGREENEN No. staff �. �Cahor; 07 :i =�i�_ -- EL= �i:_r. ;�� »�•. {J r. �r = = - =,_ ` <y�-a f��y -- T=No. ! =y �uni1. i , CD=-&- 1 Civ, SeQuelCa Nc S,ioc :bjeC Veroot jpe arncu¢ =tease -� =QON= i —APE _' ( ) A4' fated vm E-rerec .y ANS1.CpN: ( ) A ( ) Aa: ( Dai: Nimbd Errered b� 1 �r►i -c s ame!:ded az ;oUcvs: �y� cwt for .he �bc-= = ;Try ai _= b= a- the -. c__=e-E i_ Dri:es _s o::- _- C_s-�. U__i = -ze c =ai- or of = y r_ ,_ c- _ iaracte_ w _ts —ve_ c:.ie= cc-=-Cs :_ lie nay ha.2 -or ah_.h =e ME-7 ere�-�a = =ar nc=re_ IM ?r._o� =ir__ tr_= wc_�= c_ :--1 34 = =e `te c, t_is =_r Tte= cat S. �e t_n s' 'o= =i Th_-s Aimee _-en = i _ _ ,O c 1-' _..; -50 )0 17.)0 _.C_ -00.)0 • ,.?_I --. DI I I =�V: �.A_?. C2 -C: o- tea-: UL Y'PR� /E APP OVA: - �mm;orer of m I rna �on� ! n7r7ilnCrarcn ,try ,✓ - -_ — -- - - -- - - - - -- d-C ex" __ - --- -- _....c STATE OF MINNESOTA DEPART,.!—EN! O`- TRANSPORTATION SUPPLEMENTAL AGREEMENT No. Sheol_1�_'c. state Proiect No.: '— Federal Proiect 6 _ 0 •factor: I?_ iiILLER, Inc Address: 6701 Norris Lake Rd Location; Mississippi Street and Third Street Elk River, HN 55330 1 in Fridley, in Anoka County Vendor Type Amount hoc o. F.Y. Account I.D. DeptMv. Sequence No. Suffix Object V 01 C.CD.5 ase Terms Asset No. C.CDA C.CD.2 C.00.3 C.CD.4 00NET TYPE OF A40 ( ) A41 ( ) Dated _---- Number � Entered by TRANSACTION: A44 ( ) A45 ( ) A46 ( ) Dated — __-- -- Number � Entered by This contract is amended as follows: WHEREAS: this contract provides for, among other things, the installation of retaining walls adjacent to the street widening, and - WHEREAS: the installation of the retaining walls has resulted in the need for additional landscaping, irrigation work and i restoration, and WHEREAS: the Engineer has concurred that the additional land- scaping, irrigation work and restoration shall be required. NOW, THEREFORE, IT IS MUTUALLY AGREED AND UNDERSTOOD THAT: 1. The contractor agrees to grade topsoil, furnish and install the necessary irrigation material and restore the area with sod as directed by the Engineer. 2. Payment for the above work will be at the negotiated lump sum price of $1,358.60, as shown in the Estimate of Costs. 3. Contract time will not be revised. APPROVED: Commissioner of Administration By APPROVED: Commisisoner of Finance By Original Contract Approved as t0 fo'n, and execution j Dated _ Dated — A�ist jy Genera! 7K Dated /� j� �� Project Engineer C -0nifIIC�O( D a'. e d - - - -- Cistrict Eng near - - - -- - — ; t e — _— -- — - - - - -- Agoncy OF ?tIIINNESOTA DFpARTM7,`JT OF TRANSPORTATION SUPPLEMENTAL AGREEMENT N©. ac,or. Federal Pro ; -! -- Sheet Stato Proioct No Address: 6701 Norris Lake Rd Location: Elk River Mississirpi Str t and Third ;�tree.t MN 55330 in Fridley, ire Anona County Pro. No. F.Y. Account I.D. DepiJDiv, Sequence No. Purchase Terms Asset No. OOONET C.CD.1 C.00.2 TYPE OF A40 ( ) A41 ( ) Dated _ TRANSACTION: A44 ( ) A45 ( ) A46 ( ) Dated his contract is amended as follows: P P ---9 Suffix Object Vendor 01 C_CD.3 C.CDA Number Number Entered by — Entered by q7�Afuf C.CD.S 4- The contractor will not make claim or of any kind or character whatsoever for any other costs or expenses which he may have occurred nor which he may hereinafter incurred in preforming the work or Lurnishing the material required by this agreement. Landscaping and restoration ESTIMATE OF COSTS Total Increase This Agreement ihii-t want i t Prir. e Amount LS$ 1 -00 1,358.60 1,358.60 DISTRIBUTION: S_A.P_ 02_606_09 SCHEDULE A = (10035) PROVED: APPROVED: �missioner ( Original Contract ninistr,ntion Appmvod as to forni - -- { and execution - - Da( As;i;tanI 7L neral $1,358.60 Cont,,., :!or - > r.-. ✓i �• r.. En, rdC� F.n.,�cy rar,�d Page 1 of 3 CITY OF FRIDLEY CONTRACT CHANGE ORDER PROJECT: CSAH 6 (Mississippi Street) Street Improvements PROJECT NUMBER: ST 96 -4 (2881A81) CONTRACTOR: W.B. Miller, Inc. CHANGE ORDER NO.: One (1) DATE: December 31, 1996 WHEREAS: The Engineer directed the Contractor, to construct a retaining wall adjacent to RAO Manufacturing in order to facilitate roadway widening, resulting in the removal of the existing bituminous drivewayto RAO, removal of additional curb and gutter, installation o additional bituminous material to replace the driveway, installation of additional concrete walk; and, WHEREAS: The Engineer directed the _Contractor to mill additional bituminous material to insure a smooth transition in driving ;surface along Mississippi Street, resulting in the installation of additional wearing course mixture; and, WHEREAS: The Engineer directed the Contractor to remove additional paving at the Holly Center to accommodate a reasonable straight edge to match existing pavement grades, resulting in the installation of additional bituminous material; and, WHEREAS: The Engineer directed the Contractor to install additional concrete walk to connect the Holly Center parking lot to the adjacent travel agency; and, WHEREAS: The Engineer directed the Contractor to install additional temporary lane tape to provide for safe traffic control operations during the multiple phases of construction of the improvements; and, WHEREAS: The Engineer directed the Contractor to extend rigid steel conduit beyond the end of the sidewalk to facilitate future -use of the conduits. THEREFORE: Contract unit prices were extended to cover the increase in quantities. The following increases are hereby made to the contract. 7M 131D SCHEDULE A - IiNCREASES Iteni No. Item Name 2104.501 Remove Curb & Gutter 2104.503, Remove Bituminous Pavement 2332.501 Mill Bituminous Surface (1.5 ") 2340.508 "?340.510 Type 41 Wearing Course Mixture LF b Type 31 Binder Course Mixture 2340.514 Type 31 Base Course Mixture 2503.541 12" RC Pipe Sewer Design 3006 0.40 Class V 2521.501 4" Concrete Walk 0564.603 0565.603 4" Solid Yellow Line - Polypre TON 4" Rigid Steel Conduit (RSC) BID SCHEDULE A INCREASE CONTRACT AMOUNT: Original Amount $212,626.20 Previous Contract Amendments $9,080.00 Current Change Order $34,106.00 ,revised Contract Amount $255,812.20 OMPLETION DATE: 2 of 3 $34,106.00 Total Change Order $34,106.00 , <o adjustment is required for the contract completion date. 7N Unit Unit Quanti Price Amount LF 413.00 $4.00 $1,652.00 SF 4,417.00 0.40 $1,766.80 SY 889.00 4.00 $3,556.00 TON 155.00 47.00 $7,285.00 TON 91.00 56.00 $5,096.00 TON 104.00 54.00 $5,616.00 LF 35.00 50.00 $1,750.00 SF 1,192.00 2.40 $2,860.80 LF 1,481.00 1.40 $2,073.40 LF 70.00 35.00 $2,450.00 $34,106.00 Total Change Order $34,106.00 , <o adjustment is required for the contract completion date. 7N APPROVALS: Recommended By: BRW, INC. f�' /J By- c�-� �,,�.� Date: Accepted By: W.B. Miller; Inc. C Approved By: City of Fridley 70 Date: Date: Page 3 of 3 CITYOF FRIDLEY FRIDLEY MUNICIPAL CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY. MN 55432 • (612) 571 -3450 • FAX (612) 571 -1287 February 7, 1997 Mr. Jon G. Olson, PE County Engineer Anoka County Highway Department 1440 Bunker Lake Blvd NW Andover, MN 55304 Subject: Mississippi Street Improvements (CSAH 6) Dear Mr. Olson: PW97 -015 In finalizing the cost for the Mississippi Street improvement project on CSAH 6 and University Avenue, BRW, the consultant for the project, has provided the following information regarding final costs. In conjunction with the Mississippi Street improvement, additional milling as a result of roadway alignment, the re- installation of two loop detectors and temporary lane taping to accommodate safe traffic operations during the multi -phase construction, they identified an additional cost of $12,305.40 and there were some line item overruns which amount to $16,226.60, or a total cost of $28,532.00. The original estimate for the project was $212,626.20. The final construction cost amounts to $254,929.10 or an increase of $42,302.90. As the County was a 25% participant in this project, it seems appropriate for the County to share in the project increase at the same percentage or $10,575.73.. This would amount to a total contribution of $70,634.73.. There were additional overruns as associated with the RAO Development and the Holly Shopping Center which the HRA will be addressing. Your response to the County's participation in this portion of the project is requested. If you require any additional information, please contact me at 572 -3550. Sincerely, John G. Flora Director of Public Works JGF:cz 7P g It8 t I �g I } 8 ' W 1 ll �P 'q IN. 1—' It } I -ry oo rrroT ri I , nw Israa o I I t8A ' oirr 1 I ivv ' ' T I__________ ___ - _ _ ______i__ 0 0 N O O I U N I V E R S I T Y A V E N U E U N I V E R S I T Y " V E N U E O — � (T T A T f. II V T. ] ) ( 2 T A T C w. I Y. A ] ] V I NCPEBT CEPIIFT THAT TN IS PUN, DESIQ' CICC: REV. DAX q CITY OF FR I DLEY �EC)ETUTIDN m PE[aPT .AS PPV.RED zealAOs R YE OR UAER ur DTRC SIVEFVISIQ M I SS I SS i PP I STREET (C.S.A.H. 6) THAT I Aw ., DuT PEms,um DR.A°N P a5 — ST. IMPROVEMENT PROJ. ST 96 -4 °RaESSTM°"AE ENCINErn te. ECS.. x�w E STATE D PROPOSED REMOVAL AND ttcre= — CONSTRUCTION Y1rwL+Squr4 >D9 T11,d S—I& PAl D881ET01 o Mlnw Pet4 SRt fNll [6su n]JSANDq [.a 7 7�if /.0 ] MAY y 15. 1996 _ A 4 r4 x� �p . .3 s F i I } 8 ' W 1 ll �P 'q IN. 1—' It } I -ry oo rrroT ri I , nw Israa o I I t8A ' oirr 1 I ivv ' ' T I__________ ___ - _ _ ______i__ 0 0 N O O I U N I V E R S I T Y A V E N U E U N I V E R S I T Y " V E N U E O — � (T T A T f. II V T. ] ) ( 2 T A T C w. I Y. A ] ] V I NCPEBT CEPIIFT THAT TN IS PUN, DESIQ' CICC: REV. DAX q CITY OF FR I DLEY �EC)ETUTIDN m PE[aPT .AS PPV.RED zealAOs R YE OR UAER ur DTRC SIVEFVISIQ M I SS I SS i PP I STREET (C.S.A.H. 6) THAT I Aw ., DuT PEms,um DR.A°N P a5 — ST. IMPROVEMENT PROJ. ST 96 -4 °RaESSTM°"AE ENCINErn te. ECS.. x�w E STATE D PROPOSED REMOVAL AND ttcre= — CONSTRUCTION Y1rwL+Squr4 >D9 T11,d S—I& PAl D881ET01 o Mlnw Pet4 SRt fNll [6su n]JSANDq [.a 7 7�if /.0 ] MAY y 15. 1996 _ A 4 r4 x� �p CO Z W 2 W NO w CL ;E I — 'W NW I.�i� rF- v ICL (n C/) �U) v) 2 U) U) z Z Q M a G> � c to co U U !oil) ! ZI ji CY I Imo) ZO I U W �-; 0 F- i Z! 1<1 F-- I 0, Ui !X`F; iW Q. i LU - U 'Z i� i I I W i I C) cD 0 0 0 0 CD O O CD CV O C) 0 0 C) O N (D N CD O O I- CO t O (j) t--- C- I i� r L7 c O CO (I)- L cf3 &9. 69 b9. 0 0 0 0 0 0 O CO C) V- O O O CO O cY) U N O N CO C� c In v- o o CV CV c� N N 00 161) u)9 EF} U)- Ei} N o,o0C) C) 00o'o'O:o0C) - o' .o olO o,o :Oto;o;o 0 0 fC) t� i �oIo CD (D;OlO�oiO•o'O�o CD (D I CD! ICV!C) C) O;OIO,OI(Joj0:0;CD CD' O .' N CO CD. CD ' CD (D. C) Oj CD CD O Cj i� �iCD'V ;f�•fA (�Irlp!N.CO- Efi:69 N O:dO.m:�i :O ` N !LO co C:) C:) C) 0'C) p•p p p p p.o.p 10'0;0;0 0 0 (::; 0'0 :0;0 10'(Y).C)'to q-! C:) r:Cfj O*CV °O O O �(D I I i0� i O,O!O O'O O OiO O O.O,O 0! O'O C:)!C) O 0i0;0�0 E) "4- -" Si CD (D. C) N C:) C); O!O M!C :). f) I r" c,:T (Y) , ! ! N NN ; ! j j 64,69 r, O O:O.O.o O O :O C) (D O O O N CD C) O CO CO O:OlO'O�O r'O "- (D co co r ; C) O O O O O O O O o �0 O O o;o.�t CD. CD O o ;O.o v- O �t o CD ! V- : CD" N tlj LO 64 64.64 6Li t7 Cn cO LO 6g 64 64 c ) o ; � 69 64 f9- 69-. i Q LL t1.. tL >- Z Z' Z LL tL LL L LL LU . ---I U) C0 U) 0 0 , 0 _J UJ (n ---t J °4 I I I f I i �CB w' i t l Q L I 1 W o1 D, w! C- t � 0.S : >: C . L (� >_ ! (II a ' 1 Q Q m CCf D, (n ?� + 0 _O 6 �. Q) U d O .C' (LS O GO Cll CO C], O O U) " -t C�) c`) U C 7C) .v n o 0 n) O>- n n N U , D O MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO: William W. Bums, Executive Director of the HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Fridley Executive Center Update To follow is an update on a variety of activities regarding Fridley Executive Center. 1. The Mayor, Chairperson Commers, Bill Bums and myself met with Dave Jellison and Leslie Jowett from MEPC on January 22, 1997. A number of issues were discussed but the following were the outcomes: A. Chairperson Commers requested an analysis to consider the tradeoffs in value if a one story, high tech building is located on a portion of the site versus 100% corporate office (Jim Casserly is now working on a variety of options). B. Chairperson Commers requested statistics about the office turnover in downtown Minneapolis and what kind of potential office users might be available as a result. C. Dave Jellison suggested we consider making a promotional videotape that would emphasize the economic advantages of being in Fridley, and the types Of things available in Fridley to keep employees. Mayor Jorgenson suggested we obtain the "Back to the Park" videotapes produced by Brooklyn Park (Barbara has obtained those and will be obtaining a copy of Apple Valley's and possibly White Bear Township). D. It was agreed that another joint Council /HRA meeting be scheduled after the above information is compiled. 2. The proofs for the brochure were delivered on February 6, 1997 and will be available at meeting for review. The pictures, quotes, and layout are very attractive. The next she p is to develop the inserts on taxes, labor force, recreation amenities, and other topics. �l • Fridley Executive Center Update February 7, 1997 Page 2 3. Federal funding for the Highway 65/Lake Pointe Drive/Central Avenue intersection has unexpectedly become available for 1997 construction! The Council has authorized John Flora to proceed with an informational hearing with the neighborhood on February 19, 1997 to alert the immediate neighborhood that the intersection improvement may begin as early as this fall. The intersection design, as preliminarily approved by MnDOT, is nearly the same as was contemplated in 1986, except for modifications to the 1-694 ramps. A drawing will be available on Thursday evening to review the intersection design. There are no increased costs to the HRA beyond the amounts previously discussed (approximately $380,000). .0 M -97 -72 EngfneWM9 (A) sewer rwater QO Parks Q:3, Sereetp, "': ?: U Matnlenanci WJ Cr m ; City of Fridley TO: William W. Burns, City Manager PW97 -029 '4; FROM: John G. Floral Public Works Director DATE: January 28, 1997 SUBJECT: TH 65 Lake Pointe Intersection Improvement On Tuesday, January 28, 1997, I attended a meeting at the State Aid Office with representatives from MnDOT and SEH regarding the preliminary plans for the improvement of TH 65, I -694, Lake Pointe and Central Avenue intersections. Based upon the preliminary estimates, it appears that the entire project proposed can be completed within the original estimate of $1.9 million ($1.5 million Federal, $400,000 HRA). In reviewing the geometrics, an HOV lane has been incorporated on the Hwy 65 west bound I- 694 ramp as well as two left turn lanes from Hwy 65 into Lake Pointe. At the Central Avenue intersection, four options were identified for the Hathaway /Hackman/Polk neighborhoods. The first option is to leave it as it, which is not supported. The second and third options deal with moving the intersection to the 1986 location. Based upon the MnDOT and County review, these options either reduce the amount of stacking on Central Avenue, causing a delay to the residential neighborhood or close off the entrance to left turns from the residential neighborhood. The fourth option relocates the residential outlet to a Polk Street extension. This option provides for adequate stacking and provides for safe turning movements. SEH is preparing concept drawings which I will provide to the Council at the February 3 conference meeting. These drawings should reflect the various traffic movements and will also identify the incremental cost associated with each option. MnDOT has indicated that there is an extraordinary amount of funds available for a 1997 project. If the City is to make use of these funds, we need to complete the final plans and a decision on the location of the residential outlet onto Central Avenue. If right -of -way is required, this must be accomplished by the City prior to initiation of the Federal project or as an option, it could be completed at a later date as a separate project by the City. Explanation of the project, the various concepts and options will be provided at the meeting. JGF:cz TH 65 /1-ake Pointe Drive Fridley, Minnesota Cost Estimate 2 SW NE NW Lake Central TH 65 Ramp Ramp HOV Pointe Avenue Total Ramp Drive Grading, base $347,000 $222,500 $220,000 $122,000 $264,500 $201,500 $1,377,500 paving, etc. Signals $125,000 $125,000 $15,000 $125,000 $390,000 Interconnect $20,500 $20,500 Totals $367,500 $347,500 $345,000 $137,000 $389,500 $201,500 1 $1,788,0 Federal (ISTEA) $294,000 $278,000 $276,000 $109,600 $311,600 $161,200 $1,430,400 80% Local Match $73,500 $69,500 $69,000 $27,400 $77,900 $40,300 $357,600 (20 %) KPA-- City Share State Share $25,000 $25,000 $3,000 $12,500 $65,500 County Share $6,250 $6,250 2 MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO: William Burns, Executive Director of HRA 414 FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Results of Hyde Park Neighborhood Survey Last December, staff distributed a mail survey to residents living in the Hyde Park neighborhood. The purpose of the survey was to obtain feedback from residents on whether the HRA's housing programs have had an impact on the neighborhood. A total of 40 surveys were returned out of approximately 180 that were distributed which equates to a 22% response rate. Unfortunately, we did not get a very good response from either landlords or renters. Of the 40 surveys returned, only 1 indicated that they were a renter. It was also difficult to interpret some of the responses. For example, 98% of the responders "owned" the property where they lived, however only 57% live in single family homes. It is unclear if the remaining respondents both own and live in multiple family buildings, or if they did not understand the question. Below is a summary of the results. #1 Owners 98% Renters 2% #2 Type of Property Occupied: #3 Length of residency in Hyde Park E Single Family Home 57% Duplex g% 3 or 4 Units 15% 5 or more Units 19% More than 5 Years 69% 2 to 5 Years 13% 1 to 2 Years 13% Less than 1 Year 5% Hyde Park Survey Memo February 7, 1997 Page 2 #4 What are your future plans? Plan to remain in current residence 88% Plan to move, but stay in the neighborhood 0% Plan to move, but stay in Fridley 3% Plan to move outside of Fridley 10% #5 Did you take advantage of the HRA's housing programs? Yes 17% No 83% #6 If not, what were the reasons? Did know about the program 14% Financing terms were not attractive 7% Believed I was ineligible (too much income) 14% Not planning to make any improvements 66% #7 If You did apply, what made the program attractive? Low - interest rate 38% Deferred financing 44% Evening service hours made it convenient 6% 1 was planning the improvements anyway 13% #8 Have the HRA's programs encouraged you to remain in Hyde Park? Yes 50% No 20% Uncertain 30% #9 Since the HRA's programs began, what has happened to the Hyde Park neighborhood? Improved for the better 66% Remained the same 34% Declined 0% WW Hyde Park Survey Memo February 7, 1997 Page 3 #10 Should the HRA continue its housing rehabilitation programs in the neighborhood? Yes 95% No 5% On the positive side., the majority of respondents believe the programs have made a difference and many would like to see the programs continued. The challenge remain to encourage those residents who have not taken advantage of the programs to take a second look and pursue an application. We believe it is important to continue to have a presence in the neighborhood and will recommend additional funding as part of the 1997 budget. No action is required at this time. GF/ M -97-68 • MEMORANDUM HOUSING L 1C REDEVELOPMENT AUTHORITY DATE: February 7, 1997 C TO: William W. Bums, Executive Director of the HRA �`� FROM: Barbara Dacy, Community Development Director SUBJECT: Update on Noah's Ark Development Jim Casserly would like to update the Authority on the progress of the senior housing development request by Noah's Ark. The required financial information has been submitted to Casserly and he would like to discuss in general the issues which would be addressed in the development contract. It is anticipated that the contract would be on the Authority's agenda in March. co M -97 -73 LL•J DATE: TO: FROM: MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY February 7, 1 997 William W. Bums, City Manager Barbara Dacy, Community Development Director SUBJECT: Lindstrom Metric TIF Request BACKGROUND At the January meeting, the HRA reviewed a request by Lindstrom Metric for TIF assistance to correct poor soils on a 5 acre site west of and adjacent to Main Street, just north of ANR Trucking. It seemed to be a routine request since it was located in an existing TIF district and the soil correction costs equaled the requested amount of assistance of $230,000. The project cost was estimated at $2,300,000. On January 31, 1997, the Mayor, City Manager, and I met with Virgil Lindstrom and two of his real estate advisors and was informed that the soil tests reported an extensive amount poor soils beyond the amount which was originally anticipated. Some areas showed depths of poor soil up to 20 feet. Estimates from contractors are now ranging up to $600,000 of soil correction costs and pilings. After reviewing the soils report, it is possible to locate a substantial portion of the 60,000 square foot building on the portion of the site which has better soils. The building may have to be in a "L" shape. Staff will be requesting copies of the contractors' estimates to analyze the range of costs as compared to the soils report. TIF REQUEST It is likely that the site will not be buildable without TIF assistance, and the site may end up as tax forfeit property. However, because the amount of required assistance has yet to be verified, staff recommends the Authority consider a pay as you go approach (as opposed to the 5% grant and 5% loan) to equal the cost of correction up to the amount of increment available from the project until the end of the district in 2007. This amount is approximately $450,000 (present value). 11 Lindstrom Metric TIF February 7, 1997 Page 2 THE COMPANY Lindstrom Metric is a growing company and needs to relocate from its 35,000 square foot facility on Ashton Avenue. A 60,000 square foot facility is proposed with possible expansion to a 90,000 square foot building. Thirty -five employees are employed currently. The owner, Virgil Lindstrom, is a Fridley resident and started this business 25 years ago. The company imports and distributes metric bolts and fasteners. Lindstrom Metric has three other facilities, one in Texas and two in South Carolina. Because of the recent industrial activity in the community, there are few five acre site remaining which could accommodate the proposed use. Some of the sites are too large, others are too small. A site west of the subject site was identified (north of Park Construction), but the land price may be prohibitive. RECOMMENDATION While the details on the amount of assistance need to be finalized, staff recommend the Authority direct staff to continue working with Lindstrom Metric offering a pay as you go approach, and advising the owner that final approval must be obtained by the HRA before preparation of a development contract. BD/ M -97 -74 11A I Vacant Commercial and Industrial Property Inventory Property information Owner: William Penk 22 Hawthorne Hopkins, MN 55343 646 -1717 PIN- 3- 30 -24 -14 -0005 ^ -ea: 237,375 Sq. Ft./5.45 Ac_ -viarket Value: $215,000 (1995) honing: M -3, Outdoor Intensive ll 4.1al 11B- Wetlands on Site Located in TIF #3 12 DATE: TO: MEMORANDUM .HOUSING AND REDEVELOPMENT AUTHORITY February 7, 1997 William W. Bums, Executive Director to the HRA�zlP FROM: Barbara Dacy, Community Development Director Grant Femelius, Housing Coordinator SUBJECT: Proposed Strategy to Obtain Long Term Funding for Housing Rehabilitation Program In an effort to find additional, long term sources of funding for the Authority's revolving loan program, a strategy has been developed to approach the City's legislative delegation and policy - making staff at MHFA. In brief, the City would request the State, via the MHFA, to provide the capital for the revolving loan program on an.annual basis. MHFA would ultimately receive its money back, and the HRNs costs are significantly reduced. Fridley's program could be used as a demonstration program for ultimate adoption to other first ring suburbs. If inner ring suburbs take action now, the region and state may save a tremendous amount of future money by preventing the impacts of declining property values and housing deterioration. Current state programs are aimed at situations where deterioration and blight are at extreme conditions. Encouraging residents to invest in their homes as opposed to moving out of their homes will ultimately prevent housing value decline. More important to Fridley is the fact that the HRA must address other redevelopment needs. The recent loan from the City will save the HRA $340,000 in 1997 alone; however, new sources of funding for the housing program must be sought in order to preserve revenues for other projects. Unless otherwise directed, staff will be arranging meetings with MHFAolicmakers anti the legislative delegation to determine the- fo(Co�ving see memo from Jim Casserly and Bonnie Ballach): 1. The likelihood that MHFA would incorporate the City's program into MHFA current Community Fix Up Fund. 2. The likelihood that MHFA will develop a new program to address the housing needs of inner ring suburbs. 3. Whether a coalition ought to be built to pursue a general fund appropriation or whether a "pilot program" for Fridley ought to be developed. BD/ M -97 -75 W MEMORANDUM DEVELOPMENT DIRECTOR DATE: January 23, 1997 TO: William W. Burns, City Manager FROM: Barbara Dacy, Community Development Director v Grant Femelius, Housing Coordinator SUBJECT: Proposed Strategy for Long Term Funding of Housing Rehabilitation Loan Program In anticipation of Senator Betzold and Representative Johnson attending the City Council meeting on January 27, 1997, we have prepared the background and key concepts of a strategy to find a long term source of funds for the City's rehabilitation program. The details are still being developed, but the City's legislative delegation may be contacted in the near future about the strategy. A SUCCESS STORYI The Housing and Redevelopment Authority's 5% loan program was successful in 1996 for three reasons: The 5% interest rate provided a lower monthly payment and thus more "borrowing power" for the homeowner. 2. Applying for the program was easy and the turn - around time to process an application was completed within a week. 3. The HRA and the City Council provided a significant amount of capital to create a loan pool without a "cap" on the number of loans, or a deadline to make application. The program's success is an investment for the City's future. The dividends the City will receive are as follows. Homeowners are reinvesting in one of the City's strongest assets, its housing stock. Remodeling activity in a neighborhood is contagious and helps to create confidence in the viability of the community. 12A Housing Rehab Loan Program January 23, 1997 Page 2 2. Reinvestment in housing will prevent deferred maintenance and declining o values- n9 Pr Pedy 3. The program encourages owners to complete exterior improvements like new windows or siding, or room additions which improves the appearance of a neighborhood and its market appeal_ 4- Remodeling is the City's major tool to diversify the values of its housing stock, since opportunities for new construction are limited_ About 90% of the housing stock is below $115,000 in value_ Although affordable, there is little opportunity for residents to "move up" into housing which offers more room or amenities, thus leaving an owner with no choice other than to "move out ". 5. Because a majority of the owner occupied housing stock is affordable, the program also maintains the livability of affordable housing by providing a lower cost means for low to moderate income owners to make code or other improvements to their home. THE PROBLEM The City and HRA cannot afford to provide $2 million annually to meet a demand of 100 to 150 loans per year. While the funds are paid back overtime, there are other redevelopment priorities which need to be addressed including development of the Fridley Executive Center (former Lake Pointe site), redevelopment of salvage yards, and neighborhood infill and redevelopment projects - The tax increment districts will expire over the next ten to fifteen years. The increments from these districts are needed to complete the projects identified in these areas_ Cutting back on the program or limiting its use will be counter productive. A window of opportunity now exists given the favorable real estate and financial market_ Other suburbs similar to Fridley are following Fridley's lead in preserving neighborhoods and housing stock. If inner ring suburbs take action now, the region and state may save a tremendous amount of future money by preventing the impacts of declining property values and housing deterioration. Fridley's program is easily adaptable to other inner ring suburbs_ The benefits, or the "dividends ", are likewise multiplied across the metro area_ The problem lies in finding a lour cost source of capital to fund the program and a means to administer it. THE STRATEGY The details need to be better defined, but the thrust of the strategy is to solicit participation from the Minnesota Housing Finance Agency and the Metropolitan Council to provide the capital for the loan program and to assume the cost of the interest . rate write- dove � Housing Rehab Loan Program January 23, 1997 Page 3 Fridley's program would be the model for a pilot program for a specified time frame with other appropriate first ring suburbs as a "demonstration" project. Partnering with Blaine may be appropriate given their recent interest in sharing the costs of a remodeling advisor (their EDA has passed a bond issue for housing programs). Problematic to this approach are the following points: There are limited amount of funds in the Livable Community Act program. The Livable Communities Local Housing Incentives Account is a potential source, but funds are limited. Only $500,000 is available in 1997. The Legislature would have to allocate more funds_ 2. The major purpose of the Livable Communities Act is to create affordable housing where it does not exist. Fridley exceeds its benchmarks, and funding may be prioritized elsewhere. 3. The Legislature may need to pass special legislation to authorize additional funds for MHFA to provide the capital for the.program, not only for Fridley, but for other first ring suburbs. NEXT STEPS We will be meeting with Jim Casserly in the near future to carve out the details. In addition, the HRA needs to review this proposal_ Time is of the essence, however, if there is to be a lobbying effort in this legislative session. Unless otherwise directed, we will continue to work on the details of the proposal and will follow -up with a recommendation for approval by the Council and HRA as soon as possible. :s M -97-46 NOTE: Attached is a synopsis of the demographics of the loan program for 1996. 12C MEMORANDUM TO: Grant Femelius, FROM: Dave King, CEE SUBJ: Fridley Home Improvement Program DATE: December 12, 1996 -•�- 111 111 —cey �punsurcu loan programs, cEE orginated 19 additional loans to Fridley property owners valued at S156,155. IMPROVEMENTS: Exterior- Interior: Additions 13 Bathrooms: ? 1 Driveways, Sidewalks, etc__ 25 Insulation, Weatherstnpping 10 Garage Repair, Replacement 13 Heating Systems 3? Landscaping 16 Kitchens 19 Roof Replacement 37 Plumbing and/or Electrical ?� Siding ��i ndo�t s 27 Other Interior lrnnrovc,ncnt� �S (S Tota l 12D +6129B5129B CASSERLY MOLZAHN OB6 P02 FEB 06'97 17:42 KRASS MONROE KRASS MONROE, P.A. - ATTORNEYS AT LAW - February 6, 1997 TO: Barb Dacy Grant Fernelius FR: Bonnie Balach Jim Casserly FE: MHFA " Community Fix Up Fund" We. have analyzed the above program and make some recommendations as follows: Sim many of Program: The Community Fix Up Fund is a fairly new program. MHFA has set aside $10 million for the program, $4.5 million has been earmarked for the 11 county metro area. About $500,000 has been used for 37 loans thus far. The funding is from the sale of Mortgage Revenue Bonds which puts some income constraints on the use of the funds -- 115% of HUD area median. An income figure of $65,895 for the 11 county metro area will go into effect in March, 1997. The Community Fix -up Fund is a program designed to address "targeted community rehabilitation efforts," rather than serve a general need for home improvements funds. The program allows for a maximum of $25,000 for a loan term of 20 years. Only improvements to residential property are eligible. According to Kathy Aanerud, the program is not competitive. There is a pool of money and funding is dependant upon meeting certain guidelines. This seems somewhat in contrast with the program actual program guidelines, that set forth seven criteria with which to rank proposals. Proposals strong in the following applicant/selection requirements will be funded: * A description of the designated community and the specific home improvement needs/objectives being addressed. * An explanation of how the loan funds meet the identified needs /objectives of the designated community. * The impact these funds will have on meeting the specific needs /objectives of the designated community. SUITE, 1100 SOUTH POINT OFricE CENTer� . 1650 "' _ ^ - STREET • BLOOMINGTON, MINNEi0'r.4 55431.1447 TGLEPPONi 612/88,1 12E imuE 612/8E5.5969 +6128851298 CASSERLY MOLZAHN 086 P03 FEB 06'9'717:43 * A detailed marketing plan for reaching potential borrowers in the designated community. The name and address of local partner assisting in evaluating the credit needs of the designated community. A "Community Fix-Up Fund Contact Persons" form. Evaluation of the program will begin this summer. It is expected to be reauthorized for the biennium beginning on October 1, 1997. A proposal in Carver County for septic system upgrades may be funded, which seems to fail in meeting the requirement for "targeted community rehabilitation efforts." The City of St. Paul writes down the interest rate to 4% and other communities have expressed interest in doing so. The current interest rates are purportedly a function of what revenues must be generated to pay off the bonds. Issues The program fails to meet the needs of the Fridley community for two reasons: The interest rate offered by MHFA is not low enough to be attractive in a community like the City of Fridley. As a result the City of Fridley must write down the interest rate to 5 %. The City has opted to use its own resources for rehabilitation loans. This is an expensive endeavor that has rapidly surprassed the City's ability to meet the demand for rehabilitation loans. The program is designed to address "targeted community rehabilitation efforts," rather than assist a community with an aging housing stock implement a "scattered site" approach to community decline. Recommendations The state has an interest in intercepting the flight of moderate income families from cities like Fridley, where an aging housing stock and relatively low property values ensure affordable housing opportunities but offer no incentive for maintaining the housing stock. Thus, families are forced out as personal income grows leaving the public sector to deal with the issues related to increasing concentrations of low income residents and lowered property values. The state's resources are currently targeted to situations that have, for the most part, become hopeless. A more efficient approach would be to target some funds to communities already making a considerable local investment in the problem but requiring additional public resources to stem, the tide of deterioration in their communities. Many inner ring suburbs would meet this criteria. The City of Fridley should meet with their legislative delegation and request that a meeting be arranged with policy- making staff at MHFA (not program managers). An in -depth discussion 12F +6128851298 CASSERLY MOLZAHN 086 PO4 FED 06'97 17.43 of how current programs fail to meet the needs of a community like Fridley should ensue. Following the meeting, we should determine the following: 1. The likelihood that NMFA would incorporate our issues into their program guidelines during the summer evaluation of the Community Fix -Up Fund. 2. The likelihood that MHFA will develop a new program to address the housing needs of the inner ring suburbs. 3. Whether a coalition ought to be built to pursue a general fund appropriation or whether a "pilot program" for Fridley ought to be developed. 12G DATE: TO: FROM: MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY February 7, 1997 William W. Bums, Executive Director to the HRA�(� Barbara Dacy, Community Development Director SUBJECT: Job Creation Reporting Forms Chairperson Commers requested documentation as to the Authority's method of tracking job creation goals in the development contracts. Since the state law was adopted, four development contracts contain language documenting the number of jobs to be created within two years as a result of the project. Excerpts from each of the contracts is attached as well as the reporting form provided by the State. Please remember that this representation is for a two year period and the company may in fact create more jobs. The Industrial Equities project will create at least 15 jobs; Wallboard Inc. will create 2 jobs; American Excelsior will create one job; and the Scott Lund project did not specify an amount since the State law had recently taken effect on August 1, 1995. BD/ M -97 -77 `•.cE1rade � �. . s o aMinnesota Business Assistance Form's P b: Minnesota Department of Trade and Economic Development Pa b AA Please type or print in dark ink. 1. Funding government agency name 11. Date business received assistance 2. Agency street address 13. Hourly wage level goals for business receiving assistance 3. City 4. Zip Code 5. Phone number (area code) 6. Fax number (area code) 7. Contact name 8. Type of government agency City _County _Regional _State Other (Please indicate) 9. Name of TIF district (if applicable) 10. Name of business receiving assistance 11. Date business received assistance 12. Job creation goals for business receiving assistance 13. Hourly wage level goals for business receiving assistance 14. Actual jobs created since business received assistance 15. Acnral average hourly wage paid to employees hired since business received assistance. 16. Last date actual wage and job creation levels documented *Please complete one form for each business project your agency assisted with .525,000 or more in public funds. Please send completed form annually by March 1 to: Minnesota Business Assistance Form Minnesota Department of Trade and Economic Development 500 Metro Square 121 East 7th Place St. Paul. Minnesota 55 10 1 or fax report to: (612) 296 -1290 For information. call: (612) 297 -1291 or 1 -800- 657 -3S5S (d) The Redeveloper will use its best efforts to obtain, a timely manner, all required permits, licenses and approvals, in and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. organized under theelawsrofsthelStated liability partnership ofMiinn Minnesota. (f) The Redeveloper agrees that it will cooperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attorney reasonably acceptable to the Authority and Redeveloper, with respect to any litigation commenced by third parties in connection with Redeveloper's failure to perform according to the terms and conditions of this Agreement. (g) The financing arrangements which the Redeveloper has obtained or will obtain, to finance acquisition or construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (i) The Authority has provided to the Redeveloper, and the Redeveloper acknowledges receipt of, a copy of Laws of Minnesota for 1995, Chapter 224, Section 58, to be codified in Minnesota Statutes, Section 116J.991, and entitled "Public Assistance to Business; Wage and Job Requirements," requiring that within 2 years of receiving the assistance provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date the Certificate of Completion is issued in accordance with Section 4.3, the Redeveloper shall comply with certain jobs and other obligations stated in the above - mentioned statute. The Redeveloper hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be the creation of 15 jobs within the applicable 2 year period. The Redeveloper acknowledges and agrees that, as required by this statutory provision, failure to meet said goals will result in an Event of Default hereunder and in an obligation of the Redeveloper to repay all of the assistance provided pursuant to this Agreement. The Redeveloper further agrees that said jobs shall have an hourly wage of at least $7.00 per hour. This subparagraph shall not be construed as imposing on the Redeveloper any obligation beyond the scope i t f I s and purpose of the above - mentioned statute to maintain or provide minimum employment and wage levels. The Redeveloper further agrees to provide to the Authority in a timely manner, or to the State of Minnesota, as may be applicable, any information that is necessary to comply with the above - mentioned statute. (j) For the construction of the Minimum Improvements the Redeveloper will pay wages in accordance with the prevailing wage rate as that term is defined in Minnesota Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 1990. The City's Public Works Department shall be responsible for monitoring Redeveloper's compliance of this requirement. (k) The Redeveloper shall not allow any use or occupancy of the Redevelopment Property or Minimum Improvements by a "Sexually Orientated Business" as defined in Ordinance No. 965 of the City's Code. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper agrees that it will cooperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attorney of its choosing, with respect to any litigation commenced by third parties in connection with this Agreement. (f) The financing arrangements which the Redeveloper has obtained or will obtain, to finance acquisition or construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (g) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (h) The Authority has provided to the Redeveloper, and the Redeveloper acknowledges receipt of, a copy of Laws of Minnesota for 1995, Chapter 224, Section 58, to be codified in Minnesota Statutes, Section 116J.991, and entitled "Public Assistance. to Business; Wage and Job Requirements," requiring that within 2 years of receiving the assistance provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date the Certificate of Completion is issued in accordance with Section 4.3, the Redeveloper shall comply with certain jobs and other obligations stated in the above - mentioned statute. The Redeveloper hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be the creation of 2 jobs within the applicable 2 year period. The Redeveloper acknowledges and agrees that, as required by this statutory provision, failure to meet said goals will result in an Event of Default hereunder and in an obligation of the Redeveloper to repay all of the assistance provided pursuant to this Agreement. The Redeveloper further agrees that said jobs shall have an hourly wage of at least $14.00 per hour. This subparagraph shall not be construed as imposing on the Redeveloper any obligation beyond the scope and purpose of the above - mentioned statute to maintain or provide minimum employment and wage levels. The Redeveloper further agrees to provide to the Authority in a timely manner, or to the State of Minnesota, as may be applicable, any information that is necessary to comply with the above- mentioned statute_ (i) The Redeveloper shall not allow any use or occupancy of the Redevelopment Property or Minimum Improvements by a 'Sexually Oriented Business" as defined in Ordinance No. 965 of the City's Code. (d) The.Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper is a corporation organized under the laws of the State of Texas. (f) The Redeveloper agrees that it will cooperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attorney reasonably acceptable to the Authority and Redeveloper, with respect to any litigation commenced by third parties in connection with Redeveloper's failure to perform according to the terms and conditions of this Agreement. (g) The financing arrangements which the Redeveloper has obtained or will obtain, to finance acquisition or construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (i) The Authority has provided to the Redeveloper, and the Redeveloper acknowledges receipt of, a copy of Laws of Minnesota for 1995, Chapter 224, Section 58, to be codified in Minnesota Statutes, Section 11GJ.991, and entitled "Public Assistance to Business; Wage and Job Requirements," requiring that within 2 years of receiving the assistance provided pursuant to this Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date the Certificate of Completion is issued in accordance with Section 4.3, the Redeveloper shall comply with certain jobs and other obligations stated in the above - mentioned statute. The Redeveloper hereby covenants to comply with said obligations, and the Parties agree that said goal level shall be the creation of 1 job within the applicable 2 year period. The Redeveloper acknowledges and agrees that, as required by this statutory provision, failure to meet said goals Will result in an Event of Default hereunder and in an obligation of the Redeveloper to repay all of the assistance provided pursuant to this Agreement. The Redeveloper further agrees that said jobs shall have an hourly wage of at least $8.00 per hour. This subparagraph shall not be :construed as imposing on the Redeveloper any obligation bey= the scoot_ and purpose of the above - mentioned statute to maintain or provide minimum employment and wage levels. The Redeveloper further agrees to provide to the Authority in a timely manner, or to the State of Minnesota, as may be applicable, any information that is necessary to comply with the above - mentioned statute. (j) The Redeveloper shall not allow any use or occupancy of the Redevelopment Property or Minimum Improvements by a "Sexually Orientated Business" as defined in Ordinance No. 965 of the City's Code. aware of no facts, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Rights Act. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper is a corporation, organized and existing under the laws of the State of Minnesota. (f) The Redeveloper agrees that it will cooperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attorney reasonably acceptable to the Authority and Redeveloper, with respect to any litigation commenced by third parties in connection with Redeveloper's failure to perform according to the terms and conditions of this Agreement. (g) The financing arrangements which the Redeveloper has obtained or will obtain, to finance acquisition or construction of the Minimum Improvements, together with financing provided by the Authority pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (h) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (i) For the construction of the Minimum Improvements the Redeveloper will pay wages in accordance with the prevailing wage rate as that term is defined in Minnesota Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 1990. The City's Public Works Department shall be responsible for monitoring Redeveloper's compliance of this requirement. (j) The Redeveloper agrees to work with the Authority to determine the amount of actual assistance provided for economic development or job growth. Upon the Authority's request, the Redeveloper shall report on any wage levels and job creation goals established by the Authority in accordance with 1995 Minnesota Laws, Chapter 224, Section 58. City of Fridley Community Development Department MEMORANDUM DATE: January 30, 1997 TO: William Burns, Executive Director of HRA A FROM: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator SUBJECT: Follow -Up to HRA Concerns Regarding Remodeling Advisor Position At the January 9, 1997 HRA meeting, several questions were raised about the general qualifications for the Remodeling Advisor position, the criteria used to select candidates, and why no one was considered from the application pool. Qualifications Attached is a copy of the job description for the position. At a minimum, applicants must have either a bachelor's degree or technical degree in housing, residential design or a closely related field. In addition, applicants must have three years of experience in the remodeling field; knowledge of building codes, materials, and construction methods; and two years of experience in residential inspections. Candidates for this position might come from either the public or non - profit sector (i.e. rehabilitation specialist, building inspector, or housing inspector), or from the private sector (i.e. remodeling contractor, designer /cost estimator, or home inspections). The ideal candidate would have a combination of both public and private sector experience; in fact the previous advisor had experience as a carpenter, held a degree in architecture, and worked as rehabilitation specialist for a St. Paul non - profit. Because of the wide variety of requests for information from residents, it is important to find a candidate with a broad range of experience and training. For example, someone with only contracting experience may be prone to recommending specific contractors; a designer may have limited knowledge in Remodeling Advisor Memo January 30, 1997 Page 2 such areas as furnace replacement or plumbing questions; a building inspector may only focus on code issues, etc. We should point out that that the remodeling advisor will not draft plans, prepare specifications, recommend contractors, or be capable of answering all questions. Rather the successful candidate will be knowledgeable about remodeling, be a good listener, comfortable with people and offer helpful advice and referrals to other resources. Based on anonymous customer surveys, the overwhelming majority of homeowners who met with the advisor were extremely pleased with the content and quality of service. We believe this is an important component of our overall housing strategy. Selection Criteria All applicants for the position were asked to complete a city- approved application form and submit a resume and cover letter. By law, applicants must complete the application form so that all applicants are treated equally and the appropriate veteran's preference points are awarded. The City is subject to severe penalties and potential litigation if it does not use a standard application form. Out of the 30 people who originally applied, 10 were rejected for not completing an application form at all. The remaining 20 applications were then evaluated for educational background and work experience. Applicant Pool Of the 20 applicants actually considered, 6 had some experience in either housing inspection (2), remodeling (2) or building inspections (1). The balance of the candidates were either in real estate sales, finance, management or no experience at all (6). Further, it appeared that some of the candidates may have potential conflicts due to on -going business interests. In summary, the field of candidates was not as strong as the group considered last year when the position was established. Current Status The position is currently being advertised as a full -time contract position and applications are due by February 10, 1997. In response to the HRA's request to pay an additional amount for "risks ", Blaine has agreed to share up to 45% of the costs of the position and would like to have the person work out of their offices (when working in Blaine). This will eliminate some of the logistical problems and overhead expenses had the employee off iced in Fridley. Remodeling Advisor Memo January 30, 1997 Page 3 We will update the HRA at their February 13th meeting with regard to our progress. GF.- M -97 -55 FMDLLY OFFICE OF THE CITY MANAGER PERSONNEL DIVISION POSITION TITLE:,' HRA HOME REMODELINGIADVISOR REPORTS TO: HRA Housing Coordinator POSITION OBJECTIVE: To assist residential property owners with evaluating their home remodeling and housing rehabilitation needs at the City of Fridley and Blaine. ESSENTIAL JOB FUNCTIONS: 1. Conduct inspection of residential properties at owner's request. a. Meet with property owner /s on site. b. Conduct "whole house" building condition analysis. 2. Evaluate the physical condition of the property, including: a. Energy efficiency b. Structural, mechanical, electrical, and plumbing deficiencies. C. Interior space, function and floor plan issues. d. Kitchen and bathroom upgrades. e. Health and safety issues_ f_ Exterior and cosmetic areas. g. Decks, walkways and drives. h. Landscaping, grading and drainage_ 3. Provide owner with information on condition of the property. a_ Provide owner with verbal feedback on potential issues or concerns. b. Prepare written analysis report to owner, as necessary AFP1 1v1AT1VF A(- T10N /F011A1 C)D0r1nTt1w+1TV Caeca r- 4. Provide information and guidance to property owners on such topics as: a. Options for improving property, including energy savings, system upgrades, economic return of proposed improvements. b. Design issues and function of proposed improvements. C. Potential building, plumbing, electrical and mechanical code and other municipal requirements. d. Evaluating, selecting and recommending materials and products. e. Evaluating "do -it- yourself" vs. Hiring a contractor. f. Utilizing other professional resources, such as architects, engineers, and legal professionals. g. Referrals to City staff on planning, zoning, building and financing resources. 5. Prepare brochures, project manuals, and other literature on home improvement topics. 6. Prepare quarterly newsletter article on home remodeling advisor services and cable television access program on home remodeling topics. 7. Consult with Housing Coordinator, Building Official and other City staff on pertinent issues related to the counseling service_ . 8. Prepare customer service evaluation cards and distribute to customers. 9. Participate in the annual HRA Remodeling Fair. 10. Prepare monthly reports on activity levels. 11. Advise HRA and staff on ways of improving service, as necessary. 12. Review with HRA Coordinator the status of all projects regularly. OTHER JOB FUNCTIONS: 1. Establish and maintain on -going work files. assigned. COMPENSATION AND BENEFITS: This is a contracted, full -time position with the Fridley Housing and Redevelopment Authority. Starting salary is $14.89 to $16.39 per hour depending on qualifications. Benefits include insurance (Life, health, workers' compensation, and _'unemployment compensation) paid ,entirely;''or,. partially 'for _they employee ='by employer;,`eighteen (18) days of earned annual leave per eleven (11) holidays employer's - P .year and to Social Security, Med car e nd PublcEmploye s of Rettirement Association. APPLICATION PROCEDURES: Submit a letter of application (cover letter), a resume and a City of Fridley application form to be considered for this Position. For application materials contact the City of Fridley, 6431 University Avenue N.E., Fridley, MN 55432 (612) 572 -3504. Applications must be received or postmarked no later than Monday, February 10, 1997: January 1997 Women and minorities are encouraged to apply The Fridley Housing and Redevelopment Authority and the City of Fridley will not discriminate against or harass any employee or applicant for employment because of race, color, creed, religion, national origin, sex, disability, age, marital status, sexual orientation, or status with regard to public assistance. MINIMUM QUALIFICATIONS: 1- A bachelor's- - degree_ or technical degree in housing, residential design, architecture or closely related field- 2. Three years' experience in the residential remodeling field'. �. 3. Knowledge of local, st codes. ate-,and federal building and housing 4. Knowledge of building materials, construction methods, and components of residential structures. 5. A minimum of two years' experience in residential property inspections. 6. Able to meet with property owners on evenings and week- ends for appointments. 7. Valid driver's license.. 8. Effective oral and written communication skills. DESIRED QUALIFICATIONS: 1. Familiar with cost estimating and specification writing. 2. Able to work independently. 3. Previous work experience with an HRA or housing agency. 4- Structural design experience`. WORK ENVIRONMENT: The attached work environment characteristics are representative of those an employee encounters while performing the essential functions of HRA Home Remodeling Advisor. Reasonable accommoda- tions may be made to enable a person with disabilities to perform the essential job functions. WORK SCHEDULE: As part of the normal work hour the schedule will include evening and weekend hours. This is a contracted position that is subject to renewal. -� s - MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO: William W. Bums, Executive Director to the HRA •,�� FROM: Barbara Dacy, Community Development Director SUBJECT: Osborne Road Lighting Project Update I met with Bob Schroer on January 30, 1997. A synopsis of our meeting is attached. Another option was developed which I am now developing the assessment costs on a front foot basis. The option suggested by Schroer is to install lights from the railroad tracks on Osborne Road to east of University Avenue in front of Jiffy Lube and the strip mall. There would be no lights along the frontage road. The estimated cost is $152,000. I will be working with Bob to develop a brief survey of affected owners to determine if they are willing to be assessed for 100% of the light installation costs, and if not, to what amount they would be willing to share. Bob agreed to hand deliver the surveys when he returns from vacation. No action is needed at this time by the HRA. The results of the survey will be shared with the HRA at a future agenda. Schroer did say he may contact some of the HRA members. BD/ M -97 -76 MEETING WITH BOB SCHROER JANUARY 30, 1997 I advised Bob Schroer that the lighting consultant from Luma Sales confirmed that the maximum amount of distance for the double -ball lights is one standard with two globes for every 150 feet. The sales consultant also confirmed a per - standard cost of $4,000; about $2,300 -2,400 is the actual cost of the standard globe and arms. The remaining $15,000- 17,000 is the labor cost. 2. Two options were discussed as a starting point, and then our conversation drifted to a third option of which I am to develop a front -foot cost and a potential annual assessment cost. The first option discussed was a "small cross" running east/west on Osborne Road from Main Street to the end of the strip mall on the north side of Osborne on the east side of University Avenue crossed by a north /south string stretching from the common lot line of Perkins and Pet Food Warehouse north to the common lot line of ABRA and Kennedy Transmission. The original estimate of this option was approximately $144,000. 3. The second option discussed was the "large cross" which extends on Osborne Road from the SuperAmerica Station on East River Road all the way east to the strip mall and also includes a string of lights on the frontage road from 73`d Avenue to 791h Avenue. The potential cost of this option was $276,000. 4. Bob Schroer felt that the best option to pursue was a string along Osborne Road, potentially either from the SuperAmerica Station or the railroad tracks east of University Avenue just on the north side of Osborne Road to the end of the strip mall. We calculated approximately 35 -38 standards would be needed at a cost of $152,000 5. We debated whether the assessment should be on front -foot basis or by a per - owner basis. I agreed to evaluate some options and to come up with an annual assessment. 6. We agreed that the survey should find out from the affected owners if they would be willing to pay 100% of the cost and to indicate if they would not be, what amount they would be interested in paying. We also agreed that the survey should be hand delivered to each of the business owners to make sure we maximize the response rate. 7. After the survey is taken, there are a number of options to evaluate: a. The owners pay 100% of the installation costs plus all the electrical costs. b. The HRA pays 100% of the installation costs and the electrical costs. Meeting with Bob Schroer, January 30, 1997 C. The owners pay electrical only, and the HRA pays for the installation costs. d. The HRA pays the electrical only, and the owners pay 100% of the installation costs. e. The HRA and the owners split the installation costs 50/50, but the owners pay all the electrical costs. f• The owners and the HRA split the installation costs 50/50, but the City pay the electrical costs. 8- The installation and the electrical costs are split between the HRA and the owners 50/50. 8. Bob is going to be out of town for the next three weeks. In the meantime, I am develop the assessment costs and come up with two or three survey questions for his review upon his return. I may also send these over to Mike Schroer to get an early look at it. 9. 1 advised Bob that the lead time on ordering the lights would be 16 weeks, according to the sales associate. 10. Bob suggested that I contact Sterner Lighting out of Waconia, Minnesota, to see if they have a comparable standard that is manufactured in the state. MEMORANDUM HOUSING AND REDEVELOPMENT AUTHORITY DATE: February 7, 1997 TO. William W. Burns, Executive Director of the HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Preliminary 1997 HRA Budget Because of the length of the February agenda, a "pre- meeting" discussion on the 1997 budget is not proposed; however, a meeting should occur before the March regular meeting. A preliminary synopsis of the budget, however, is attached. The line item sheets will be forwarded to the HRA in the next week well ahead of the March discussion. The following issues were addressed in the preliminary estimate: CASH FLOW PROJECTION: A. The revenue portion of the cash flow has been updated to include the tax increment from the American Excelsior project and loan repayments on the Wallboard Inc. loan. B. The revenue portion also includes the HRA tax levy plus the loan repayments from the 1996 loan portfolio. The City's $1,500,000 loan is also included. The revenues do not include a projection on the housing loan repayments on loans made this year, estimates are now being prepared. Remember that the intent is to make the revolving loan program self - sustaining. With the tax levy and City loan in place, the HRA is well on its way to accomplish that objective. C. A 0% appreciation rate on the tax increment is also assumed, and represents a conservative estimate of increment. 1997 HRA Budget February 7, 1997 Page 2 D. The Housing Program expenses decline for the next four years assuming two factors: 1) outside sources of funding are found from MHFA (see item #12 in agenda); and 2) the revolving loan repayments reduce the need for the HRH's cash. Scattered Site Program expenses are increased to $550,000 for the next ten years. Remember that the HRA will recover about 1/3 of these expenses with the special housing replacement legislation (increment is not shown on the revenue side). $200,000 is allocated to Hyde Park in 1997 in addition to the loan program ($135,000 spent in 1996). 'Target Neighborhood" expenses of $200,000 is extended to the year 2000. E. Lake Pointe intersection expenses have dropped from $1,900,000 to $380,000. F. The cash flow does not reflect any project costs for redevelopment projects at this time. The Chairperson has requested an analysis of the Lake Pointe site to determine if additional expenses would be needed by the HRA. 2. BUDGET SUMMARY: The Housing Budget is increasing by 1 % from 1996. The HRH's Operating Budget is 27% lower than 1996 since no redevelopment project costs have been included. Please note however that this number does not include the $380,000 which may be expended in 1997 for the Lake Pointe Intersection (amount is in the cash flow), and does not include an additional payment for the Chenywood Apartment appeal ($651,000 is the worst case number). All other expenses for the southwest quadrant have been expended. 3. HOUSING BUDGET: The Housing Program budget proposes a similar amount of total funding as compared to 1996 ($1,600,000), but the HRA is saving about $500,000 as compared to 1996 since a portion of the City's loan will be used to provide loans ($370,000) and repayments from 1996 are rolling in ($124,000). The amount proposed for Hyde Park is $200,000 which exceeds the 1996 expenditures and could fund up to 50 deferred loans. Remember this program is the 50/50 program only for Hyde Park. The Last Resort program is proposed to be continued at $100,000 and available citywide. NEXT STEPS The line item detail budget will be prepared and forwarded to the HRA by February 21, 1997. A pre - meeting conference should be scheduled for the March 13, 1997 meeting at 6:00 p.m. BD/ M -97 -79 Housing Operating Expenses and Capital Outlay 10% Housing Rehab Programs (3 %) Total 1% HRA Operating Expenses (35 %) Capital Outlay (5 %) Total (27 %) BUDGET SUMMARY BUDGET 1996 BUDGET 1997 $ 815,244 $1,650,000 $ 894,478 $1,600,000 $2,465,244 - ___ -_- $2,494,478 $966,720 $ 360,170 $1,326,842 $ 628,106 $ 340,997* $ 969,103 *This figure does not include $380,000 for the HRA's share of the Lake Pointe intersection improvements or an additional payment needed for the Cherrywood Apartment appeal (worst case scenario is $651,000). z a c a ca 0 0 CL V> N W O O O (D v (p CD t- (D N N 0 o' 0 C) U) r- 0 v rn O ffl EA W O V p O O O p O p O O V� Ut W O O O 69 O O O V> V O V► V cp W O O Cn —8 O O O V) V) 69 �1 O O O O O O O O O O O O O O O V) !A !n _... 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