HRA 07/02/1998 - 29828�"�
CITY OF FRIDLEY
HOUSING � REDEVELOPMENT AUTHORITY MEETING
JULY 2, 1998
CALL TO ORDER:
Chairperson Commers called the July 2, 1998, Housing and Redevelopment
Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Present: Larry Commers, Pat Gabel, John Meyer, Jim McFarland
Members Absent: Virginia Schnabel
Others Present: Grant Fernelius, Housing Coordinator
Jim Casserly, Financial Consultant
Craig Ellestad, Accountant
Mike and Jackie Egan
Jim Glidden, D/B/A Homes "R� Us
�'� Mr. Tucker, Alliance Home Values, Inc.
Bill and Joan Clark
APPROVAL OF MAY 7 1998, HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES�
OM TION: by Mr. Meyer, seconded by Mr. McFarland, to approve the June 4,
1998, Housing and Redevelopment Authority minutes as presented.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
� • • • .,� • > • • • , - • ,- •
It was staffs recommendation that the HRA establish Larry Commers as
Chairperson and Virginia Schnabel as Vice-Chairperson for the 1998-1999 term.
: ,�• s►� .-
n An list of additional expenses for HRA approval was distributed by Mr. Ellestad.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 2
MOTION by Mr. McFarland, seconded by Ms. Gabel, to approve the Consent
Agenda as presented.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
3. PUBLIC HEARING TO CONSIDER SALE OF HRA VACANT LOTS:
MOTION by Mr. Meyer, seconded by Mr. McFarland, to open the Public Hearing
at 7:32 p. m.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE
PUBLIC HEARING WAS OFFICIALLY OPENED AT 7:32 P.M.
Mr. Femelius, Housing Coordinator, explained that this is the first step in the
process of redeveloping the HRA vacant lots. The purpose of the Public
Hearing is to identify the sites which will be sold and the selling price of each lot.
Mr. Femelius stated there were a total of five sites for sale. The sites were sold
�'� on a first-come/first-serve basis. Offers were received on all five sites; however,
only four projects will be reviewed by the HRA at this time.
Mr. Femelius presented the addresses, listing price, and sale price for each of
the five lots. In some instances, the sale price of the Iot is lower than the listed
price. The reason for this is that City staff made some concessions in order to
achieve some design issues. The cost savings to the buyer will actually be put
back into the property. He stated staff recommends that the HRA approve the
resolution which authorizes the sale of the residential lots by the HRA.
MOTION by Ms. Gabel, seconded by Mr. Meyer, to close the Public Hearing at
7:43 p.m.
Mr. Commers stated that information regarding the property located at 530 Hugo
Street is not included in the memorandum dated June 28. It is, however,
included in the Resolution.
Mr. Femelius stated the information was inadvertently deleted, and should be
included as a part of the sites to be sold.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
n COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE
PUBLIC HEARING WAS OFFICIALLY CLOSED AT 7:43 P.M.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 3
� MOTION by Mr. McFarland, seconded by Mr. Meyer, to Adopt Resolution No. 9-
1998, A Resolution Authorizing the Sale of Residential Building Lots by the
Housing and Redevelopment Authority in and for the City of Fridley, Minnesota.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMI�IERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
4. CONSIDER APPROVAL OF REDEVELOPMENT CONTRACTS FOR
SCATTERED SITE PROGRAM:
Mr. Femelius explained that this is the second step in the process of selling the
HRA's vacant lots whereby the HRA considers the actual house plans and
development contracts for the individual builders.
Mr. Fernelius stated each builder has entered into a Participation Agreement
which reserves the site for 60 days. Within that time, the builder must find a
buyer for the property, prepare the plans and specifications and arrange for
construction financing. Each of the builders will be entering into a separate
development contract with the HRA which specifies all of the details of the
transaction including the lot price, the closing date, the date of construction start
and completion, etc. Once the agreements are approved by the HRA, the
builders will have a 45 day period in which to actually enter into the contracts and
� close on the properties. At the closing, the builder will pay cash for the property
(the HRA will not carry any financing on the land). The HRA will require a
minimum home value. Construction on the homes will need to be started no
later than October 15, 1998 with a completion date by February 15. 1999. All
site work must be completed by May 15, 1999. Staff has reviewed all of plans
and negotiated with the builders for certain design features and improvements to
the properties. He reviewed the minimum design standards Established by the
H RA.
530 Hugo Street:
Mr. Fernelius noted that Jackie and Mike Egan will be both the builder and buyer
of the property (they are working with a general contractor who will do most of
the construction) and will be acting as the developer and signing the
development agreement. The lot price is $25,000. The minimum home value on
this site is $110,000. They are proposing a split-entry home, with finro bedrooms,
1 3/4 baths with a three-car attached garage. A site plan was provided to
indicate the location of the property as well as plans depicting the design of the
proposed structure.
Mr. Meyer asked what kind of electrical capacity is required for the homes.
� Mr. Femelius stated it would be in compliance with the City Building Code.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 4
� Mr. Meyer stated he believed some standards should be incorporated into the
agreements to assure a first class heating and electrical system. He also
believed that the HRA should consider requiring air conditioning.
Mr. Fernelius stated the HRA has not experienced problems in the past and he
did not feel they would be operating in good faith with the buyers if they started
adding costs at this time. He believes that the City Building Code addresses
many of the concems that Mr. Meyer has about these projects. If there are
requirements that would be more desirable than what the minimum requirements
are, the HRA could look at that for the future, but he could not recommend doing
so at this time.
Mr. Meyer stated that the HRA has made some requirements which would
upgrade the aesthetics of the properties. He feels the electrical and mechanical
systems are just as important as the aesthetics. Furthermore, he does not
believe the Building Code addresses the electrical amperage and the BTU's for
the fumace.
Mr. Femelius stated he believed adding a lengthy specification list would deter
builders from participating.
Ms. Egan stated when they talked with the heating contractors, there were
� standard guidelines that they were required to meet. She provided Mr. Femelius
with a copy o� the energy calculations for the property.
Mr. Casserly stated he does not feel there are any issues which are not covered
or addressed in the city building code. He would, however, be happy to obtain
further information and report back to the Board.
Mr. Commers suggested that Mr. Femelius and Mr. Casserly review some of
these issues and see if perhaps upgrades in the electrical and mechanical
systems should be considered.
MOTION by Mr. McFarland, seconded by Ms. Gabel, to approve Resolution No.
HRA 10-1998, A Resolution Authorizing Execution and Delivery of a Contract for
Private Redevelopment by and between the Housing & Redevelopment Authority
in and for the City of Fridley, Minnesota, and Michael J. Egan and Jackie S.
Egan.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
5857 Main Street N.E.: �
� Mr. Femelius explained that on this particular project, the buitder has not
identified a buyer, but it would be required prior to executing a development
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 5
� contract. The lot price for this parcel is $20,000 with a minimum home value of
$95,000 (land and structure). Mr. Glidden, D/B/A as Homes "R" Us, is proposing
to build a split-entry design with two bedrooms and 1 3/4 bath, with 1,092 square
feet and a two car garage. Diagrams were provided to show the design of the
proposed home.
Mr. Glidden noted that the standard electrical requirements are 100 amp service.
With anything higher, they charge an additional $300 to $400/50 amps of
service. Typically for a house of this size, 82,000 BTU's would suffice. Most
builders put in an 82% efficiency fumace. This is adequate to keep a home
warm. He stated he feels it would be very difficult to legislate higher
mechanical and electrical levels and keep homes in the affordable range.
MOTION by Mr. McFarland, seconded by Mr. Meyer, to approve Resolution No.
HRA 11-1998, A Resolution Authorizing Execution and Delivery of a Contract for
Private Redevelopment by and between the Housing & Redevelopment Authority
in and for the City of Fridley, Minnesota, and James A. Glidden D/B/A Homes "R"
Us.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
^ 5925 Main Street N.E.
Mr. Femelius stated the builder of this property is proposing a two-story home.
The lot price is $18,670, with a minimum home value of $95,000 (land and
structure). The home will consist of three bedrooms, two baths,.two car garage
and be approximately 1,624 square feet. A diagram was provided to show the
design of the proposed home.
Mr. Tucker, Alliance Home Values, Inc., noted that a buyer has recently been
identified for the home. He noted that as a builder, when he has an electrician
come in, he asks them to determine the amps which would be necessary
assuming the entire home is finished. The heating calculations are completed in
this manner as well to determine what is needed in terms of a heating unit.
MOTION by Ms. Gabel, seconded by Mr. McFarland, to approve Resolution No.
HRA 12-1998, A Resolution Authorizing Execution and Delivery of a Contract for
Private Redevelopment by and befinreen the Housing & Redevelopment Authority
in and for the City of Fridley, Minnesota, and Alliance Home Value. Inc.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
,r� � 1545 75th Avenue N.E.:
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 6
� Mr. Femelius explained that this builder is proposing a one story rambler design
with three bedrooms, two bathrooms and a finro car garage, with approximately
1,450 square feet. The lot price is $29,000 and the minimum home value is
$130,000 (land and structure). A diagram was provided to show the design of
the proposed home.
Mr. Clark, the buyer of this home, stated it is his feeling that if the HRA begins
legislating BTU limits, it may take away the rights of the homeowner to include
something that they would like to include.
MOTION by Mr. Meyer, seconded by Ms. Gabel, to approve Resolution No. HRA
13-1998, A Resolution Authorizing Execution and Delivery of a Contract for
Private Redevelopment by and befinreen the Housing & Redevelopment Authority
in and for the City of Fridley, Minnesota, and Sussel Corporation.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
5. CONSIDER ACQUISITION OF 5839 THIRD STREET N.E.:
Mr. Femelius explained that this properly is located in the Hyde Park
neighborhood at the comer of 58th Avenue and 3rd Street. The home was
� moved from Richfield in 1995 and is a split level home, approximately 1,100
square feet. The original plans were to fix up the house and occupy it; however,
the owner ran into financial di�culty and apparently walked away from the
property. The bank has initiated foreclosure on the property and anticipates that
they will have clear title by July 2nd. Staff has been through the property and
determined that a substantial amount of work would need to be done in order to
make the home habitable (estimated $45,000 worth of improvements). This
property has been the subject of many complaints over the past two years. The
bank is willing to sell the property for $43,000. Staff has some concems that a
contractor may acquire the property and do the minimum number of
improvements.
�
�
Mr. Casserly stated that the bank has agreed to pay the $7,000 in delinquent
water bills which were certified to the taxes. In essence, the HRA at closing
would pay $34,000 for the property ($43,000 less $9,000 [delinquent water bills -
$7,000, and unpaid taxes -$2,500]). The land is valued at $27,600.
MOTION by Ms. Gabel, seconded by Mr. Meyer, to authorize the purchase of
property located at 5859 Third Street N.E. in the amount of $34,000 with
MidAmerica Bank paying all delinquent taxes, water bills, and miscellaneous
costs.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 7
� Ms. Gabel stated she has personally viewed the property and believes it would
be in the best interest of the City to acquire it.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
After some discussion, it was the general consensus of the HRA that the City
should exercise some reasonable code enforcement activity before the HRA
steps in to purchase the property.
6. CONSIDER ACQUISITION OF 621 LAFAYETTE STREET:
Mr. Femelius noted that this property is in the Riverview Heights neighborhood
and is immediately adjacent to the 611 Lafayette property which the HRA
acquired earlier this year. The home is a one-story rambler with one bedroom
and a total of 400 square feet. It has a one-car detached garage. The lot is a
non-conforming.lot, and, if purchased, the home would be demolished and the
lot would need to be combined with the 611 Lafayette property in order to create
a buildable lot. The property has been appraised for $57,000 with a$22,000
land value. The owner has agreed to sell the property for $55,000.
Mr. Meyer stated the home is small, but it is excellently maintained. It is not a
� detriment to the neighborhood or to the Fridley housing stock. Therefore, he
does not agree with stafPs recommendation to purchase the properly and
demolish it.
�
Mr. Femelius stated it is staff s feeling that this property could be combined with
the 611 Lafayette property in order to create an opportunity for newer market
rate housing. The other option would be for the HRA to subdivide the 611
properly and try to sell it to the adjacent property owners.
Ms. Gabel asked what the HRA paid for the property at 611 Lafayette.
Mr. Femelius stated the HRA paid $10,000; however, the house had been
destroyed by a fire.
Ms. Gabel asked if the HRA is ever able to recoup the costs associated with the
Housing Replacement Program.
Mr. Femelius stated the City can recapture some of the increase in the new
taxes, but the program is an expensive program.
Ms. Gabel stated she would like to have an opportunity to drive by the property.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 8
� Mr. Commers suggested that Mr. Femelius contact the adjacent property owners
to see if they would be interested in purchasing a portion of the 611 Lafayette
property and furthermore, if purchasing a portion would indeed make their lots
"buildable" lots.
MOTION by Mr. Meyer, seconded by Ms. Gabel, to table further discussion on
the purchase of the property at 621 Lafayette Street until the next HRA meeting.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
7. CONSIDER ACQUISITION OF 5845 2-1/2 STREET N E•
Mr. Femelius explained that this property is located in the Hyde Park
neighborhood. It is a one story rambler with three bedrooms and a total of 816
square feet. The property has a basement and a 1-1/2 car detached garage.
The house has suffered from deferred maintenance and has severely
deteriorated roofing and siding. Additionally, a significant amount of mold and
mildew has accumulated throughout the house, with deterioration to the walls
and ceilings. There is also evidence of water problems in the basement which
are deteriorating the block foundation.
� Mr. Femelius stated the lot is 50' X 100' and is considered substandard for new
construction. The property was appraised at $54,000 ($20,000 land). The
owner has agreed to sell for $48,600. The HRA would likely demolish the home
and hold on to the property until an opportunity became available to purchase an
adjacent property.
MOTION by Ms. Gabel, seconded by Mr. McFarland, to authorize the acquisition
of property located at 5845 2-1/2 Street N.E. in the amount of $48,600.
Mr. Meyer agreed that the house should be acquired, but wondered if the HRA
should pay $48,600 for the properly.
Mr. Femelius responded that the price is well below the appraised price and he
was informed that there is a big market for homes under $60,000.
Mr. Commers asked if Fridley has looked into a Truth-in-Housing Ordinance.
Mr. Femelius responded that it is a matter that has been discussed, however it
has not been determined that it is worth pursuing.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
/'� COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 9
^ 8. RATIFICATION OF ACTIONS BY HRA AT ITS EMERGENCY MEETING OF
JUNE 26 1998 AND OTHER ACTIONS CONSISTENT THEREWITH:
Mr. Casserly distributed a copy of Resolution No. HRA 8-1998 ratifying the action
taken at the Emergency meeting of June 26, 1998. The resolution also
addresses the Contract for Exclusive Negotiations that was approved but not
acted on and will revoke the resolution adopted in January.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to adopt Resolution No.
HRA 8-1998, a Resolution Ratifying a Prior Resolution and Revoking all Previous
Authorizations for Execution and Delivery of Certain Contracts. .
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON
COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY.
Mr. Casserly explained that the HRA has attempted to make it clear to Duke
Realty that they do not have an agreement with Medtronic and that the HRA is
trying to determine what is being proposed and that their agreement has been
negotiated and discussed. In the event that the HRA is unable to resolve issues
with Medtronic, the HRA would want to continue discussions on this property
with them again.
�� INFORMATION ITENLS:_
9. TIF REQUEST FOR PENK/PETERSON PROPERTY ON MAIN STREET•
Mr. Casserly noted that this item is being brought forward for informational
purposes and to bring the HRA up to date on what has occurred. The site has
severe soil problems. The site has had development proposals in the past;
however, none have materialized due to the tremendous site improvement costs.
The owners of the property are contracting to have some of the poor soil
removed and replacement soil in. They have had a lot of discussion with
Zintas, a uniform business, who are looking to expand their facilities. The
company expects a substantial increase in employment over the next few years
and they would be interested in a 50,000 to 60,000 square foot building. A
building of this nature would likely increase the taxes 10 times from what is being
paid on the site now. The current owners have approximately $300,000 to
$400,000 worth of expenses in the site. The soil corrections have been
estimated between $250,000 and $400,000. The site is estimated to be worth
around $350,000 to $400,000.
Mr. Casserly stated five to six years of tax increment would be necessary in
order to make this project work. His suggestion to the owners would be to sell
� the site and that the HRA contract with the user of the site. The end result
� would be the same as previous projects have been done.
HOUSING & REDEVELOPMENT AUTHORITY MTG, JULY 2, 1998 PAGE 10
� OTHER BUSINESS
Mr. Commers stated that a copy of the Monthly Housing Program Summary was
included in the agenda packet.
Mr. Femelius noted that staff has not overlooked the loan servicing/delinquency
issue that has been discussed in the past. He noted that this will be included on
the agenda for the month of August or September.
ADJOURNMENT•
MOTION by Mr. Meyer, seconded by Ms. Gabel, to adjoum the July 2, 1998,
Housing & Redevelopment Authority meeting at 9:35 p.m.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
Respectfully submitted,
����� �, �
r D. Saeflce �
Tama a �
Recording Secretary
�
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CITY OF FRIDLEY
SIGN-IN SHEET
HOUSING & REDEVELOPMENT AUTHORITY MEETING
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