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HRA 10/01/1998 - 29831� CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING OCTOBER 1. 1998 CALL TO ORDER: Chairperson Commers called the October 1, 1998, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, John Meyer, Pat Gabel, Jim McFarland Members Absent: Virginia Schnabel Others Present: Barb Dacy, Community Development Director Grant Femelius, Housing Coordinator Jim Casserly, Financial Consultant Rick Pribyl, Finance Director Craig Ellestad, Accountant � Ben Martig, Housing/Special Projects Intem Bill Schatzlein, Affordable Suburban Housing, Inc. APPROVAL OF SEPTEMBER 3. 1998. HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION: by Mr. Meyer, seconded by Mr. McFarland, to approve the September 3, 1998, Housing and Redevelopment Authority minutes as presented. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. CONSIDER PARTICIPATION IN NORTH METRO HOME AND GARDEN SHOW 2. CLAIMS AND EXPENSES: A list of additional expenses was distributed to the Commissioners for review and consideration. �, HOUSING & REDEVELOPMENT AUTHORITY, OCTOBER 1, 1998 PAGE 2 /'� Mr. Commers stated he would like staff to provide a breakdown of Administrative Personnel Services and City Insurance Allocations at the November meeting, if possible. OM TION by Mr. Meyer, seconded by Mr. McFarland, to approve the Consent Agenda as presented. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. I._T!�.1C�7►����J�F�I 3. RECONSIDER ACQUISITION OF 5859 3RD STREET N.E.: Mr. Femelius explained that this item was tabled at the September meeting to allow staff to obtain a review appraisal of the property. He noted that a review appraisal was completed which came in approximately $7,000 to $8,000 less than the bank's appraisal. The review appraisal was presented to the bank. They have indicated that they are not interested in renegotiating the purchase price of the property and that they would like to see what they can get for it on the open market. Mr. Femelius has requested that they contact us in the event that they wish to reconsider. This item can � be officially removed from the agenda for further consideration. MOTION by Mr. McFarland, seconded by Mr. Meyer, to strike Item 3. from the Agenda. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRMAN COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDER PROPOSAL BY AFFORDABLE SUBURBAN HOUSING TO DEVELOP HRA VACANT LOT AT 5800 2ND STREET IV.E.: Mr. Femelius explained that Mr. Schatzlein, on behalf of Affordable Suburban Housing, Inc., has submitted a proposal to develop the vacant lot at 5800 2"d Street N.E. Under the proposal, a new home would be constructed on the site which would be affordable to families whose incomes are within 80% of inedian income limits. The buyer would need to be a first-time home buyer. Mr. Femelius noted that Affordable Suburban Housing would be required to follow all of the HRA design and construction guidelines that have been established for the Scattered Site Program. Additionally, a house would have to be constructed with a minimum value of $95,000 including the value of both the land and building. They would be required to execute the Participation Agreement which would reserve the site for a specified period of time while a buyer was sought and plans were prepared. �'� After such was accomplished, the entire package would be presented to the HRA. The buyer would need to qualify for a mortgage loan. i� HOUSING & REDEVELOPMENT AUTHORITY, OCTOBER 1, 1998 PAGE 3 Mr. Femelius stated that in order to make this project affordable, the petitioner has asked that the HRA sell the land for $1.00 and issue a second mortgage in favor of the end buyer which would defer the land sale price of approximately $22,000 until the home is resold in the future, or is no longer occupied by the buyer. This would reduce the first mortgage amount. Mr. Commers asked if this would meet the City's replacement affordable housing obligations with respect to the Federal govemment. Mr. Femelius stated he would need to research this. However, if the property is sold to a family whose income falls within the guidelines, the City would be working toward that goal. Mr. Commers asked that staff research the federal requirements to determine whether this would meet the City's affordable housing replacement obligations. Ms. Gabel asked how the lender views the land value. Mr. Schatzlein stated the house will be appraised out at the value of both the land and the building. Since the HRA will have the second mortgage, the lender will view this as equity. � Mr. Femelius noted that at this time staff is seeking conceptual approval. If approved, the developer would need to find a buyer and prepare the necessary plans for HRA approval. MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the concept for the proposal by Affordable Suburban Housing, Inc., to develop vacant land at 5800 Second Street N.E., subject to approval of a final plan by the HRA. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDER RESOLUTION FOR AUTHORIZING EXECUTION AND DELIVERY OF A LETTER OF INTENT WITH MEDTROIVIC. INC.: Ms. Dacy outlined the changes which were made to the Letter of Intent dated' September 24, 1998, and executed by Medtronic. Mr. Commers asked if Mayor Jorgenson and the Council members have approved of the execution of the Letter of Intent. Ms. Dacy explained that the Letter of Intent is befinreen the HRA and Medtronic. The City will later be asked to approve the master plan process and any transportation ��` planning issues/changes. HOUSING & REDEVELOPMENT AUTHORITY, OCTOBER 1, 1998 PAGE 4 � Mr. Casserly stated that this document expresses the basic outlines of agreements yet to come. By executing the document, the HRA is basically consenting to the terms. The Council members have been extensively briefed on the document, and they have indicated their consent to the items in the Letter of Intent. Mr. Commers stated he merely wants to assure that there are no interFerences in the event that one of the issues arises in the future. Mr. Casserly stated this remains a concem to all and is an issue which will need to be resolved. One option may be to have some type of agreement which would include the City Council. MOTION by Ms. Gabel, seconded by Mr. Meyer, to approve Resolution No. HRA 17- 1998, Authorizing Execution and Delivery of a Letter of Intent by and between the Housing and Redevelopment Authority in and for the City of Fridley� Minnesota, and Medtronic, Inc. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: 6. UPDATE ON HOUSING AND SPECIAL PROJECTS INTERN: Mr. Ben Martig, the Housing and Special Projects Intem, was introduced to the HRA members. He provided a brief summary of his background as well as some of the responsibilities he will have during his intemship at Fridley. OTHER BUSINESS: Mr. Femelius provided the HRA members with an update on the Housing program. He noted that four reports were included in a packet. Mr. Commers stated that in regard to the Delinquency Report, he still is waiting for staff to put together some type of policy to address this ongoing problem. Ms. Dacy stated that staff prepared a memo and the HRA did agree on some of the administrative procedures that would be implemented. A copy will be sent to the HRA members. Mr. Meyer stated that he continues to remain concemed about the few loans that have been made to residents in the Hyde Park area. He feels the program is just not reaching that area, and perhaps the policy is too liberal for the rest of the areas in the �''�, City. The program is failing to do the job that the HRA originally planned to accomplish. HOUSING & REDEVELOPMENT AUTHORITY, OCTOBER 1, 1998 PAGE 5 r--� Ms. Gabel agreed with Mr. Meyer that perhaps the income guidelines are not appropriate. Ms. Dacy stated that she intends to conduct some type of survey or demographic studies to see where the mismatch is between income guidelines and housing needs. If possible, she would like to have this information available at the December meeting. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Mr. McFarland, to adjoum the meeting. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING WAS OFFICIALLY ADJOURNED AT 8:33 P.M. Respectfully submitted, <----- ( Q�'YY1C�-'l,Gt- C� Tamara D. Saeflce � Recording Secretary � ��