HRA 02/04/1999 - 6306HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, FEBRUARY 4, 1999
7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
A
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, FEBRUARY 4, 1999, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES
January 7, 1999
CONSENT AGENDA
Consider Application for 1999
Minnesota Cities Participation Program .............................. 1
Claims and Expenses ............. ............................... 2
ACTION ITEMS:
Consider Application to MHFA for Super RFP ......................... 3
Consider Proposal for Soil Borings on TH 65 .......................... 4
PRESENTATION:
Final Report on Housing Program Study .............................. 5
INFORMATION ITEMS:
Medtronic Update ................ ............................... 6
Update on Work with Robert Gerloff & Associates ...................... 7
Remodeling Planbook Kick -Off Event . ............................... 8
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
JANUARY 7, 1999
CALL TO ORDER:
Chairperson Commers called the January 7, 1999, Housing and Redevelopment
Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Present: Lary Commers, Virginia Schnabel, Pat Gabel, John Meyer,
Jim McFarland
Others Present: Barb Dacy, Community Development Director
Grant Femelius, Housing Coordinator
William Bums, City Manager
Jim Casserly, Financial Consultant
Al Folie, Assistant Finance Director
APPROVAL OF DECEMBER 3. 1998. HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES:
MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the December 3, 1998,
Housing and Redevelopment Authority minutes as writen.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. .CONSIDER CHANGE TO LOAN SUBORDINATION POLICY.
2. AMEND PROFESSIONAL SERAVICE AGREEMENT FOR REGIONAL
REMODELING HANDBOOK. GERLOFF RESIDENTIAL ARCHITECTS, INC.
3. CLAIMS AND EXPENSES,
Ms. Schnabel noted that a list of additional expenses had been distributed for
consideration.
MOTION by Ms. Schnabel, seconded by Mr. Mc Farland, to approve the Consent
Agenda as presented, including the additional expenses noted.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 2
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
4. CONSIDER TIE ASSISTANCE FOR MURPHY WAREHOUSE & ONAN.
Ms. Barb Dacy, Community Development Director, explained that Murphy Warehouse
Company and Cummins Onan are requesting Tax Increment Funding assistance for
extraordinary site and public improvements costs in the amount of approximately $1.2
million. In addition, there is another request for $956,000 for pollution - related clean -up
costs that the petitioner has requested from the State and Metropolitan Council.
Without approval of these funds from the State and Metro Council, the petitioner would
be asking for Tax Increment Assistance in the amount of approximately $2.1 million.
Ms. Dacy stated that Murphy Warehouse and Cummins Onan are proposing to
construct a 400,000 square foot state -of -the -art supplier warehouse and distribution
facility on a 26 -acre site, south of the existing Onan facility. Onan will lease 2/3 of the
building for their part suppliers. The total project cost of building and related site
improvements is approximately $13.5 million.
Ms. Dacy went through the site issues associated with the proposed project, including
clean -up of debris from the previous operation, extension of the water main, installation
of a sewer line, creation of a public street, removal of an existing French drain located
in the proposed building area, and storm ponding and wetland issues (water table is
very high on the site).
Ms. Dacy noted that Mr. Casserly and she have been working with the petitioner and
have come up with two packages for assistance. The first package would include
funding from DTED (State) and Metro Council with assistance from the HRA in the
amount of approximately $1.2 million. The petitioner did apply for the State and Metro
Council funds in November; however, due to the number of applications submitted,
there were not ample funds and they did not receive the funds. However, staff at both
the DTED and Metro Council were very encouraging for the City to sponsor this
application once again.
Ms. Dacy stated that timing issues are. very much a concern in order to achieve
November 1 occupancy for Onan and Murphy Warehouse. Therefore site improvement
costs must be initiated and the steel ordered for the building in March. After State and
Metro Funds have been applied for, the HRA would advance $871,000 (spread over
several months) in order to start the necessary work. Staff feels that chances are very
good of the petitioner receiving the funding in this cycle and, if so, the funds would be
received in June 1999 and the HRA would use those funds to reimburse themselves.
Under this option, the HRA would provide, in essence, a grant of approximately
$435,000 to reduce the Tax Increment note to approximately $764,000, thereby
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 3
reducing the term of the note to 9.5 years. The total assistance under this option
would be about 10% of the total project costs.
Ms. Dacy stated that in the event that the DTED funds and Metro Council funds were
not provided, the second package would include Tax Increment Funding assistance in
the amount of approximately $2.1 million. The HRA would advance $871,000 for
pollution clean -up this spring with Murphy Warehouse providing the local match of
$84,000 in addition to its other project costs. The HRA would issue a note of $1.2
million at the certificate of completion. The length of the note would be likely 13 years
(four years short of the term initially proposed) at an interest rate of 8 %. The tax
increment generated from the project would reimburse the HRA. The amount of
assistance under this option would be equal to approximately 20% of the total project
cost.
Ms. Dacy noted that staff believed this is a very worthwhile proposal for the HRA to
consider, with or without the State and Metro Council funding. The benefits of the
project are great; $5.6 million in tax increment would be created through the life of the
district (year 2015), $4,453,000 of that amount would be available increment for the
salvage yard redevelopment or other issues in the area if the State and regional
reimbursement were used. She stated $3.4 million would be made available without
the funding. This project would return the parcel back onto the tax rolls which is
currently not generating any taxes and Murphy Warehouse would start by paying
almost $500,000 per year. In addition, tax dollars would also be created for the county,
the school district, etc. The project would also create 100 jobs. She stated that this
project makes maximum and highest and best use of the property, and staff
recommends that the HRA authorize staff to prepare a development contract based on
the concepts presented.
Ms. Gabel asked if grant funding from the two sources is tied together.
Ms. Dacy stated, yes, and that the two agencies work together.
Ms. Schnabel noted that staff is recommending that the HRA be authorized to proceed
with the preparation of a development contract. She asked if staff is recommending
which option to pursue.
Ms. Dacy noted that staff intends to pursue Option A first; however, in order to proceed,
the actual agreement will need to spell out the "worst case scenario ", with the HRA
funding the entire clean up process.
Mr. Casserly noted that if the grant funds were obtained, the HRA would use half of it to
prepay the note, shortening the term. In order to make the project work, the funds
must be provided up- front.
Ms. Schnabel asked what would happen if the costs exceeded the projected costs.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 4
Ms. Dacy noted that this issue would need to be addressed prior to the execution of the
development agreement.
Mr. Casserly stated that most of the estimated amounts have contingencies built in of
approximately 15 %. Generally, if costs are difficult to estimate, a higher contingency
is applied.
Mr. Richard Murphy, President of Murphy Oil Company, stated that a series of
environmental work was done this fall including soil borings, trenching, etc., based on
the plan of the proposed building. This gave them somewhat of a history of the site so
that they know what they can expect.
Mr. Murphy explained the importance of timing of the project, noting that they wish to
occupy a portion of the building themselves. Existing lease options will be terminated
and they will need to achieve a specific occupancy date.
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to instruct staff to prepare a
development agreement based on the concepts presented.
Ms. Dacy stated that the Planning Commission reviewed the preliminary plat at their
last meeting and recommended City Council approval. The City Council will be
reviewing this at its January 25, 1999, meeting.
UPON A VOICE VOTE, FOUR MEMBERS VOTING AYE (1 ABSENTION —
COMMERS), CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED.
5. UPDATE ON HOUSING PROGRAM EVALUATION REPORT:
Mr. Grant Femelius, Housing Coordinator, explained that staff has completed the
survey of 255 families who have participated in the HRA's housing programs since
1993. The response was favorable (41 % returned). In addition, staff also surveyed
residents of Hyde Park (22% surveys were returned). The survey asked approximately
eight housing related questions. Mr. Ben Martig, Housing Intern, is currently in the
process of tabulating the results of the surveys and will include the findings in the report
to the HRA in February.
Mr. Femelius stated that Mr. Martig has also set up eight or nine personal interviews
with homeowners. The interview will be videotaped and will be available for review at
the HRA's February or March meeting.
Mr. Fernelius noted that his memo included in the Agenda packet included some
information also on the "This Old House Program" which was briefly discussed at the
December meeting. This is a property tax program available to homeowners who wish
to make improvements to their property where a portion of the improvement value can
be deferred over time. Approximately 133 residents have taken advantage of that
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 5
program since 1995 when it was approved by the legislature. In Fridley,
approximately 4,500 homes would qualify for the program in terms of age. A pamphlet
of the program was distributed to the HRA members for their review.
Ms. Schnabel suggested that highlights of the program be included in the City
newsletter, as she believes there are likely many residents who are not even aware of
the program.
Mr. Meyer asked if there were any income guidelines for the program.
Mr. Femelius stated that the only qualifying guidelines are the age of the property and
the type of improvements.
6. MEDTRONIC UPDATE:
Ms. Dacy explained that a meeting has been scheduled with Medtronic and their
attorneys to discuss the development contract on Thursday, January 14. Staff has
been actively reviewing the changes Medtronic has proposed and has come up with a
number of ideas they wish to discuss with them.
Ms. Dacy noted that the Alternative Urban Area Wide Review (AUAR) was finalized on
Thursday, January 7, and will be available for public comment beginning on Monday,
January 11 through February 10, at which time staff will have responses from the
reviewing agencies. She noted that she also just received a copy of the Indirect
Source Permit application, which will also be reviewed by MPCA.
Regarding the development applications, Ms. Dacy noted that Medtronic is currently
working through a number of issues. They are still trying to determine the size of the
first phase of the development (the first building). Originally they indicated an interest
in an additional 150,000 square feet. Now they have indicated that they would like to
construct a building of potentially up to 400,000 square feet. For purposes of the
Environmental Review, the document will assume a "worst case scenario ", with a
proposed 1.6 million square feet of development within 10 years, ending in 2009 and in
400,000 square foot increments.
Ms. Dacy stated that her memo in the agenda packet regarding this item included a list
of issues, noting that she feels the major issue will be traffic and the impact it will have
on Highway 65. One possible solution would be to construct an additional northbound
lane.
Mr. Commers asked what projected dates have been set for construction.
Ms. Dacy stated that their goal is to break ground in the spring with grading to take
place in late May. A building permit could be issued perhaps by July 1.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 6
7. UPDATE ON DESIGN AND DEVELOPMENT ISSUES FOR SCATTERED SITE
PROGRAM.
Mr. Fernelius explained that staffs primary concern about this program is that the
design and style of homes being built continue to be the same, therefore, stereotyping
the types of homes constructed on the scattered site lots. There are currently a couple
of vacant lots available which staff has been trying to market with limited success.
Mr. Fernelius stated staff recently met with Robert Gerloff, an architect who worked on
the City's Remodeling Planbook. He has considerable experience working in the inner
ring suburbs and understanding some of the issues that staff is experiencing. Mr.
Hickok, Mr. Fernelius and Mr. Gerloff took a tour of some of the neighborhoods where
homes were built under the program as well as where vacant lots are for sale. It will
now be necessary for staff to determine what they would like Mr. Gedoff specifically to
do. Staff will be preparing an outline on a scope of service which Mr. Gerloff will then
prepare cost estimates for. Staff intends to come back to the HRA at the February or
March meeting with a scope of service to seek authorization to move forward with a
contract for services.
Mr. Commers asked how many homes have been constructed under the Scattered Site
Program.
Mr. Femelius stated that 15 homes have been built.
Ms. Gabel asked what staff wants Mr. Gerloff to accomplish.
Mr. Femelius stated that this is what he will need to identify. Ideally he would like to
have some type of idea book to give to builders /developers with sample plans, perhaps
indicating what the HRA would like to see. The HRA has flexibility as to what they can
require; however, staff would like to see more focus on the aesthetics of the property.
Mr. Meyer stated he thought the core of the program was to remove blighted homes
and replace them with new homes. Now it appears that one is beginning to think about
artistically raising the standards of the City and disregarding the comments and
attitudes of the builders. He wondered if the HRA is going beyond what the original
mission is for the Scattered Site Program.
Mr. Femelius stated he does not believe so, but rather that staff is trying to expand the
possibilities of what can be done under the program. He would like to also talk with
some builders /developers to get their input/feedback. The goals are still the same, but
staff also wants to see that the best homes are constructed that can be. He feels that
new designs can be identified which do not stereotype the home.
Ms. Schnabel stated that if it can serve as an inspiration to the builder or buyer, she is
in support of the process.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JAN. 7, 1999 PAGE 7
OTHER BUSINESS:
Mr. Bums noted that Commission members will be receiving an invitation to the
Commissioner's Banquet. This banquet will be held at the Shorewood on February 7.
ADJOURNMENT:
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to adjourn the meeting.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING WAS
OFFICIALLY ADJOURNED AT 8:50 P.M.
Respectfully submitted,
Tamara D. Saefke
Recording Secretary
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
AUTHORITY
DATE: January 29, 1999
TO: William W. Bums, Executive Director of HRA►
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Application for 1999 Minnesota Cities Participation
Program
The Minnesota Housing Finance Agency is again offering a special program for making
mortgage loans to first -time home buyers. Under the Minnesota Cities Participation
Program, the MHFA sells bonds on behalf of the participating cities and uses the
proceeds to make low- interest rate home mortgage loans.
The program has several advantages because MHFA covers all of the bond issuance
costs and private lenders originate the loans. Once a mortgage loan is made it is sold
directly to MHFA. The only cost to the HRA is a small application fee ($100 per
$100,000 in funds allocated), plus any marketing expenses.
This year MHFA expects to sell between $37 to $45 million in mortgage revenue bonds.
How much each city receives is based on the number of cities applying and the
population of each community. The Fridley HRA has participated in the program since
1993. During that time span more than $3,248,800 in mortgage loans have been made.
To qualify for a loan, applicants must 1) be a first -time buyer, 2) have total household
income of $48,640, or less, 3) purchase a home priced at $95,000 or less, and 4) be
able to meet normal underwriting standards. Interested buyers can contact anyone of
the 120 lenders approved for the program.
Recommendation
Staff recommends that the HRA authorize staff to prepare an application for the 1999
Minnesota Cities Participation Program for an allocation of funds up to $500,000.
Attachment
M -99 -26
1
1999 Minnesota Cities Participation Program
Request for Proposal
Fridley Housing and Redevelopment Authority
Municipal Center
6431 University Avenue N.E.
Fridley, MN 55432
February 1999
1 -A
1999 MCPP Application
I. ELIGIBLE ORGANIZATION
(A) Fridley HRA
Municipal Center
6431 University Avenue N.E.
Fridley, MN 55432
(B) Contact Person: Grant Femelius
Housing Coordinator
(office) #612- 572 -3591
(fax) #612- 571 -1287
(email) FemeliusG @ci.fddley.mn.us
(C) Housing and Redevelopment Authority as authorized under Minnesota
Statutes.
II. ORIGINATING LENDER
The Fridley HRA selects Option A. Any authorized MCPP lender may originate
mortgage loans in Fridley.
III. HOUSING PLAN
(A) Principal Housing Needs
Among the principal housing needs in Fridley are the preservation of
existing housing and the redevelopment of blighted housing which is no
longer viable to maintain. As a first ring suburb, Fridley experienced much
of its residential growth in the 1950's and 1960's. Between 1950 and
1970, approximately 6,520 (57 %) of the City's housing units were built. Of
these, more than 3,900 were owner - occupied units.
Much of this housing is characterized by one -story ramblers that are quite
common for the post World War 11 era. Many of these homes are smaller,
entry level housing that are extremely attractive to first -time buyers. Due
to the age of these units there is an increasing need for substantial
rehabilitation. Moreover, many of these homes lack the features and
amenities of newer housing available in the outer -ring suburbs.
1 -B
1999 MCPP Application
In addition to aging housing, the population in Fridley is also getting older.
In 1990, roughly 37% of all owner - occupied households were headed by
persons over age 55. These two facts demonstrate that the City is faced
with the need for community revitalization and redevelopment.
(B) Data Sources
1996 City of Fridley Housing Action Plan (Short- Elliot- Hendrickson)
• 1991 Housing Study (Maxfield Research Group)
• 1990 U.S. Census
(C) Specific Action Plan
According to the City's 1996 Housing Action Plan there are several areas
in which the City should focus its attention:
• Maintain a reasonable level of affordable units within the City and
increase the non - affordable owned and rented units to within the
Metropolitan Council benchmarks.
• Maintain (the) current level of low and very low income housing units in
the City.
• Provide a variety of market rate life cycle housing owned and rented
units available for a range of income groups that are attractive to
seniors, empty nesters and young professionals.
• Continue to provide incentives for rehabilitation and renovation of
single family homes.
• Obtain additional financial assistance for housing that benefits low and
moderate income persons.
To accomplish these objectives, the City of Fridley and HRA will continue
to devote federal, state, and local resources. Annually, the City and HRA
receive federal CDBG and HOME funds which are used to address single
family housing rehabilitation.
In addition, the HRA tax levy generates over $165,000 to help support
housing programs. The HRA has spent close to $2.0 million in reserve
1 -C
1999 MCPP Application
funds for housing rehab. In 1996, the City loaned the HRA $1.5 million to
help initiate a revolving loan pool for home improvement loans.
There are other programs and services offered by the HRA, including a
scattered site acquisition program to remove older, blighted housing stock
and replace it with new housing. The HRA also offers free technical
assistance on remodeling and home improvement topics via the
remodeling advisor service. The program is free to any Fridley home-
owner who wants help with their remodeling projects.
(D) Target Areas
None.
(E) Administrative Capacity
The HRA Housing Coordinator has primary responsibility for the housing
programs, however the HRA will work cooperatively with MHFA and
participating lenders to ensure that the program is a success.
IV. PROGRAM SPECIFICS
(A) Comprehensive Housing Plan
The Minnesota Cities Participation Program (MCPP) will compliment the
City's current housing programming. Most of the City's attention and
resources have been focused on rehabilitation and redevelopment. The
MCPP will provide needed dollars to make it both affordable and attractive
for prospective buyers to consider Fridley.
(B) Income Limits
Maximum allowed under program.
(C) Purchase Price Limits
Maximum allowed under program.
M
1999 MCPP Application
(D) Target Populations
None.
(E) Targeting of Housing Stock
None.
(F) Program Enhancements
None.
(G) Schedule of Funding
Immediate, upon availability from MHFA.
(H) Amount of Funding
Maximum $500,000
(1) Minimum Allocation
$250,000
(J) Unused MRB
None.
(K) Marketing
MHFA marketing support. However, the HRA will also place ads in local
papers and the City newsletter which is published quarterly.
(L) Self- Issuing Cities
None.
5
1 -E
t
1999 MCPP Application
V. ECONOMIC VIABILITY
Historically there has been strong demand for housing in Fridley. Much of the
demand is based on the fact that a majority of the housing stock is affordable.
According to the Anoka County Assessor's office over 75% of the City's owner -
occupied housing is valued at less than $99,000. Using the Livable Comm-
unities Law guidelines, 32% of the City's housing is valued at less than $72,000
and another 59% falls into the $72,000 to $115,000 bracket.
The City is also home to several major employers, including Medtronic (2,500),
United Defense (1,800), Cummins Power Generation (1,700), Unity Medical
Center (1,400), Target Warehouse (600), Minco Products (500), LaMaur (400)
and Kurt Manufacturing (350). In fact, in 1990 there were over 23,000 jobs for
city with a population of 28,335. Over the next 20 years the number of jobs is
expected to grow slightly to around 29,000 jobs by the year 2020. In other -
words, Fridley will continue to be an employment center in the future thereby
creating demand for the City's housing.
Medtronic has now committed to locating its new corporate headquarters to
Lake Pointe Executive Center, a 33 acre site along 1 -694 and Highway 65.
Close to 1.5 million square feet of office, research and development, light
manufacturing and retail will be developed over the next 10 years. Up to 4,000
employees will work on the new campus.
VI. NEW CONSTRUCTION REQUIREMENTS
New construction will be allowed under Category A, B or D. Fridley is a fully
developed, inner ring suburb and therefore has little room for new development.
Coupled with this fact is that some of the housing stock has deteriorated to the
point where it is no longer practical to rehabilitate. To address this situation the
City and HRA have created an "in -fill" development program with the intent of
providing new housing opportunities.
In 1995, the City received special approval to establish a Housing Replacement
Program which functions in the same way as a tax increment project, but is far
less cumbersome to administer. The HRA can recapture a portion of the
increased real estate taxes from the new home for a period of 15 years. The
primary intent is to remove substandard housing, but an additional benefit is the
ability to re -coup some of the costs involved in acquisition and demolition.
1 -F
1999 MCPP Application
Some of the new housing may be built on lots containing previously substandard
housing or on vacant and tax forfeited land. The MCPP will be means of
providing affordable financing to some of these new buyers.
VII. SIGNATURES
FRIDLEY HRA
William W. Bums
Executive Director
Date
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2 -A
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: January 29, 1999
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Application for MHFA Single Family Super RFP
Introduction
The Single Family Super RFP is a new initiative by the MHFA and Met Council to
consolidate nine different funding programs into one application process. The focus of
the Super RFP is to make it easier to apply for funding to construct or preserve single
family housing that is affordable to low and moderate income persons. A total of
$12,675,000 is available under the current round of funding.
For purposes of this program, "affordable housing" is considered to be housing that can
be purchased by families with incomes from $30,400 to $48,640 and units that cost no
more than $112,500. All homes must be owner - occupied upon completion.
Fridley / CEE Proposal
Staff has had several discussions with the Center for Energy and Environment (CEE),
the non - profit organization which administers the HRA's loan programs. CEE is very
active in a number areas of housing, most notably in the area of energy conservation
research and the sound insulation program for the Metropolitan Airports Commission.
CEE approached staff about two project concepts which will be described in the
following memo. The objective would be to partner with CEE on the projects and use
MHFA as the primary funding source.
Project 1: Construction of New Home to Meet Healthy House Standards
CEE would act as a developer to construct a new home on the HRA's vacant lot at 5857
Main St. The goal would be to construct an affordable, owner - occupied
MHFA Super RFP Memo
January 29, 1999
Page 2
home and sell it to a moderate income buyer. The new home would be constructed to
the American Lung Association's Healthy House Standards which address indoor air
quality. The standards focus on building materials including, windows, doors,
mechanical equipment and insulation. Many of these issues have become well
publicized in recent years, particularly with newly constructed homes.
CEE would apply to MHFA for the construction funding and contract with Sussel Corp.
to actually build the house. In addition, CEE would market the property to potential first -
time buyers who would need to meet the income guidelines to qualify (maximum
$48,640). The HRA would sell the lot to CEE for $1.00 and take a deferred mortgage
($22,000) on the land. The mortgage would then be assigned to the eventual home
buyer. Repayment of the mortgage would be deferred until the home is re -sold or is no
longer the buyer's principal residence.
By deferring the land cost, the end -buyer would only have to qualify for the construction
cost of the home. This would substantially reduce their borrowing costs and make it
affordable to a moderate income buyer. This approach was recently used by the HRA
on the lot sold to Affordable Suburban Housing at 5800 2 "d St.
The home to be constructed would be a 1 -1/2 story design, 1,400 to 1,600 square feet in
size, 3 bedrooms and 2 baths. It would also include a two car, attached garage.
Preliminary estimates are that the home would cost between $107,000 to $110,000 to
build, not including the Healthy House standards. This might add between $3,000 to
$5,000 of cost to the project. The end value of the home, including land, would be
$130,000 to $135,000. It is important to keep in mind that the end -buyer would only
need to qualify for construction cost of the home. The deferred land cost is not factored
into the lender's calculations.
This project would achieve a number of objectives including construction of a new home
in the Hyde Park neighborhood, creating more affordable housing, serving as a model
for other in -fill development projects and finally demonstrating a public/private
partnership. There is very little risk to the HRA since CEE would be acting as the
developer and MHFA would be funding the project.
roiect 2: Rehabilitation of a Fridlev Ramble
CEE would acquire an existing rambler in Fridley and rehab the property using one of
the plans furnished in the Remodeling Handbook or Rambler Planbook.
The goal would be to demonstrate how a 1950's style home can be upgraded or
expanded to include modem amenities. The project would serve as a model to help
residents see the potential of their homes. Since this housing type dominates the first -
ring, suburban landscape, it could also act a marketing tool to promote the re -use of
older housing.
3 -A
MHFA Super RFP Memo
January 29, 1999
Page 3
CEE would act as the developer and acquire the house. MHFA would provide the bulk
of the financing for acquisition and rehab. Our initial proposal to MHFA would be to use
the Fridley Rambler Planbook as the local contribution to the project. However, there
may be additional funds required to make the project work. We have not identified
specific numbers, but would ask the HRA to contribute up to $15,000 to the project. The
funds would only be used if there was a financing gap and we would expect MHFA to
match the gap on a 1 for 1 basis. The home would also be marketed to moderate
income buyers and have price limits imposed by MHFA.
Application Deadline
Super RFP applications are due by February 18, 1999 and CEE would be responsible
for preparing all of the documentation.
Recommendation
Staff recommends the following action by the HRA:
1. Approve participation in Project #1 by contributing the lot at 5857 Main St. on
deferred sale basis. In addition, staff would be authorized to prepare a letter of
support for the project and sign any application materials.
2. Approve participation in Project #2 by contributing up to $15,000 to acquisition and
rehabilitation of an existing rambler. In addition, staff would be authorized to prepare
a letter of support for the project and sign any application materials.
Attachments
M -99 -28
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CENTER FOR ENERG'
AND ENVIRONMENT
January 29, 1999
Mr. Grant Fernelius
Housing Coordinator
City of Fridley
6431 University Ave NE
Fridley, MN 55432
Dear Grant:
First of all, I would like to thank you for the opportunity to partner with the HRA for the
MHFA Single Family Super RFP. The Center for Energy and Environment (CEE) is
very excited about the Super ,RFP program and the potential it offers to the City of
Fridley and the goal's of the HRA.
This letter shall serve as CEE's letter of interest to partner with the HRA on the housing
initiatives.we have discussed in recent meetings. In addition, I have outlined CEE's role
in the Super RFP process as well as program delivery.
The Center for Energy and Environment propose to provide the following services in
relation to the MHFA Single Family Super RFP process;
• Prepare all necessary application materials for submission to MHFA.
• Acquire construction financing to facilitate proposed projects.
• Coordinate incremental Healthy House measures and ensure compliance with
American Lung Association standards.
• Coordinate remodeling of acquired rambler and market the property.
• Find a qualified buyer for each project funded.
• Ensure qualified buyer attends required Home Buyer Training.
• Oversee all phases of project to ensure completion on schedule.
Grant, CEE is genuinely committed to facilitating these projects to successful
completion. CEE has thoroughly enjoyed our working relationship and would very much
appreciate the opportunity to enhance that relationship with additional housing initiatives.
Sincerely,
David King
Financing Program Manager
Equal Opportunity Employer
100 North 6th Street, Suite 412A A Minneapolis, Minnesota 55403 -1520 A Phone: (612) 335 -5858 A Fax: (612) 335 -5888
HOUSING
AND
REDEVELOPMENT
AUTHORITY
DATE: January 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Proposals for Soil Borings on TH 65
The recently published draft AUAR for the Medtronic project identified a potential
project to help mitigate some of the congestion on TH 65 if the site is developed beyond
800,000 square feet. An additional northbound through lane and an additional
southbound through lane on TH 65 from 1 -694 to 100 feet north of 631 Avenue will be
necessary to improve the level of service at the Lake Pointe Drive/TH 65 /Central
Avenue intersection.
SRF Consulting Group, Medtronic's consultant, has suggested the City evaluate a
sheet pile wall construction along the causeway which would be located 12 feet east of
the existing edges of the roadway. This construction would-not necessitate filling of the
lake. In order to find out the feasibility of this construction, however, SRF suggested
that soil borings be completed to determine the soil suitability for the sheet pile wall
construction.
City staff and Medtronic have also been working cooperatively to put together a request
to the Legislature to assist in funding this particular project. Because the soil suitability
would have a direct effect on the cost of the project, it is prudent to conduct the soil
tests as soon as possible in the month of February in order to come to a good
conclusion for an estimate of costs.
Three consultants were solicited. Braun Intertec, STS Consultants, and American
Engineering Testing, Inc., submitted responses. The proposals were reviewed by the
City's Engineering staff as well as SRF Consulting Group. Braun's proposal was the
lowest cost at $4,950, American Engineering was second highest at $5,100, and STS
Consider Proposals for Soil Borings on TH 65
January 29, 1999
Page 2
was the highest at $8,435. Staff is recommending that Braun Intertec be recommended
at a cost not to exceed $4,950. 1 have also contacted Medtronic to request that they
fully reimburse the HRA for the costs of this contract.
Braun Intertec was selected because of their familiarity with soils in the area. (They
have completed work for Northwest Athletic Club, Target, United Stores, and Medtronic)
and because their proposal was the lowest cost.
Recommendation
Staff recommends that the HRA authorize the Executive Director to execute a contract
with Braun Intertec at a cost not to exceed $4,950 to complete soil borings on TH 65,
with the stipulation that the analysis be completed by March 5, 1999.
BD:Is
M -99 -24
BRAUN'
I NTE RTEC
January 26, 1999
Ms. Barbara Dacy
City of Fridley
Fridley Municipal Center
6431 University Ave. N.E.
Fridley, MN 55432
Dear Ms. Dacy:
Braun Imertec Corporation
1017 109th Avenue Northeast
Blaine, Minnesota 554343729
612. 487.3245 Fax: 7542750
Engineers and Scientists Serving
the Built and Natural Environments®
Proposal BPDX- 99- MKTG.026
Re: Proposal for Soil Borings and Preliminary Geotechnical Evaluation, Proposed TH65
Roadway Improvements, Fridley, Minnesota.
We are pleased to furnish this proposal for soil borings and to provide preliminary geotechnical
engineering services for the above referenced project. We have discussed the project with your
design consultant, Mr. Jim Dvorak of SRF to formulate an appropriate work scope. Because the
purpose of this study is to evaluate the possibility for using a sheet pile wall design alternative,
we have limited the field exploration to six borings. We understand that additional borings may
be needed at a later time depending these findings.
We will furnish the services described in the attached Proposed Scope of Services for a Lump
Sum cost of $4,950. Please review our proposal and proposed work scope and find that we are
well suited to assist the City and their design consultant with this important project.
If this proposal is acceptable after your review, please sign the Signature Page of the copy and
return or fax the entire document to us. If you have questions about our costs or scope of
services, please call Keith Rosvold at (651) 487 -7012.
Sincerely,
Keith S. Rosvold, PE, PG
Senior Project Engineer - Geologist
Attachments:
Map of Proposed Boring Locations
Scope of Services
General Conditions
ksr: kahlp rop\99- mktg.026
City of Fridley
Proposal BPDX- 99- MKTG.026
January 26; 1999
Page 2
Introduction
Description and Understanding of Project .
From your letter dated January 22, 1999, we understand the City of Fridley desires to widen and
add a north and southbound lane to TH65 from I -694 to about 100 feet north of 63rd Avenue.
Currently, most of the road crosses Moore Lake. To accomplish this and minimize the impact
to the lake, a sheet pile wall construction alternative has ben suggested.
We have discussed the alternative with your design consultant, Mr. Jim Dvorak of SRF. To
evaluate the possibility of using this construction approach, six borings (3 borings on each side of
the alignment) are planned along the roadway. The approximate proposed boring locations are
shown in the attached map.
Braun Intertec Site Experience
Braun Intertec has performed numerous borings for several projects in the Moore Lake area and
we are currently under contract with Medtronic to provide geotechnical services for the Lake
Pointe Center. We also provided geotechnical services for the design and construction of the
Moore Lake Fitness Center located just north of Moore Lake. The soil conditions in the Moore
Lake area are somewhat unique in that the types of soil deposits include, but are not limited to;
swamp deposits, lacustrine soils (lake deposited), and several types of glacial soils. Given our
site experience and understanding of the soil conditions, we believe that we are thoroughly
qualified to assist the City and SRF with this project.
Proposed Scope of Services
In discussing the project with Mr. Dvorak, we have identified several work tasks which will need
to be performed to complete the preliminary geotechnical evaluation for this project. The tasks
are summarized in the paragraphs below.
Task 1: Staking Borings and Clearing Utilities. Prior to drilling, Braun Intertec will stake the
borings and contact Gopher State One Call and request they notify the appropriate utility vendors
to clear the underground utilities. We request you or your authorized representative notify Braun
Intertec immediately of the presence and location of any objects or private utilities which are not
the responsibility of public agencies. The boring locations may be adjusted slightly to avoid
utilities or for drill rig access.
Task 2: Site Safety and Traffic Control. Because of access restrictions, the borings will be
performed along the roadway shoulder. For safety of our drill crews and the public, we will
provide warning signs and cones to notify local traffic and route them around our drilling
equipment. The cost for warning signs and cones is included in this estimate.
Task 3: Mobilization\Demobilization, Access and Drilling. From our site reconnaissance, the
borings will need to be performed along the shoulder of the roadway because the slope adjacent
4 -C
City of Fridley
Proposal BPDX- 99- MKTG.026
January 26, 1999
Page 3
to the lake is too steep to allow access with our drilling equipment in most areas. The borings
would thus be performed with a truck- mounted drill rig and borings located as close to the guard
rail as possible. The cost for this task includes support truck and drill rig rental, mileage, and
travel time for the crew.
Six (6) penetration test borings will be performed for this project. To evaluate the possibility of
using a sheet pile design, we estimate that the borings will need to be drilled to a minimum depth
of about 30 feet. Penetration tests will be performed at 2 112 -foot vertical intervals to the 15 -foot
depth and then at 5 -foot intervals to the termination depth of the borings. Penetration tests
performed in the borings provide relative soil strength values. If water is encountered in the
borings, the depth where water was encountered will be recorded on the boring logs.
If existing fill or organic materials are found in the borings at depth, it may be necessary to
extend the borings through these materials. In such cases, the borings would be extended about 5
feet into native mineral soil deposits. This extra drilling is necessary for us to evaluate lateral
resistance. If deeper borings are needed, we will contact you for additional authorization.
Task 4: Borehole Abandonment and Pavement Patching. Minnesota Well Code requires that
all borings (including borings drilled for geotechnical purposes) meeting the criteria of an
environmental bore hole (EBH), generally those greater than 25 feet, be properly sealed so as not
to pose a future hazard to the groundwater. Upon completing each boring, borings that meet the
definition of an EBH will be properly sealed. Thus, about 180 feet of boring will need to be
sealed. The cost for sealing the borings is $2.50 per foot. After abandoning the bore hole,
borings performed in pavement areas will be patched with bituminous.
Task 5: Soil Laboratory Tests. Samples will be returned to our laboratory where they will be
visually classified and logged by a geotechnical engineer. Some routine laboratory tests may be
conducted to assist in classifying the soils and evaluating their strength and compressibility.
Potential tests include moisture content, 200 wash, and Atterberg limits. We have budgeted $250
for laboratory testing.
Task 6: Geotechnical Analysis and Preliminary Engineering Report. Data obtained from the
borings will be used to provide a discussion of the anticipated soil conditions, evaluate the
possibility of using a sheet pile wall design and to develop preliminary recommendations design
of the wall. The design parameters provided will include lateral earth pressure coefficients and
estimated driving depths.
The report will be considered preliminary such that if the proposed sheet pile design is found to
be feasible, we anticipate that additional borings will likely be needed to evaluate soil conditions
along the roadway at a later time.
Two copies of our report will be submitted to you. A copy will also be sent to your design
consultant.
1. 4 -D
City of Fridley
Proposal BPDX- 99- MKTG.026
January 26, 1999
Page 4
Cost Summary
We will furnish the services described in this proposal for a Lump Sum cost. The approximate
cost for each task is shown in Table 1 below.
Table 1. Cost Summary
Task
Description of Service Task
Estimated Cost
1
Staking Borings and Clearing Utilities
$ 150
2
Site Safety and Traffic Control
250
3
Mobilization/Demobilization and Drilling (6 borings @ 30 feet)
2,900
4
Borehole Abandonment (assumed 180 feet @ 2.50 /foot)
450
5
Laboratory Testing (budgeted amount)
250
6
Analysis and Preliminary Engineering Report
950
Lump Sum Total
$4,950
After you have reviewed our proposal and costs for the various tasks, we will be happy to meet
with you and discuss our scope of services, provide clarification of the work tasks, or discuss
how the work scope may be adjusted to meet your budget requirements.
Costs presented in this proposal are based on the assumption that the proposal will be authorized
within 30 days and that the project will be completed within the proposed schedule. If the project
is not authorized within 30 days, we may need to modify the cost estimate. If the project cannot
be completed within the proposed schedule due to circumstances beyond our control, revising the
cost estimate may be required for completion of the remaining tasks.
Terms on payment for services are due upon receipt of invoice with interest added to unpaid
balances, in accordance with the General Conditions which are a part of this proposal.
Schedule
We will begin the work on this project within ten days of receipt of your written authorization.
We anticipate the field work will be completed in about 2 days. Approximately two weeks will
be required to review the soils encountered, complete the laboratory tests and prepare the
engineering report. If needed, verbal results and recommendations can be provided after
completing the drilling program and reviewing the soil conditions encountered.
4 -E
City of Fridley
Proposal BPDX- 99- MKTG.026
January 26, 1999
Page 5
Authorization to Proceed
Please proceed according to the above - stated contract terms and General Conditions.
Date
Client Name
Authorized Signature
Title
4 -F
4 -G
BRAUN °-
INTERTEC
Our agreement with you consists of these
General Conditions and the accompanying
written proposal or authorization.
Section 1: Our Responsibilities
1.1 We will provide the professional
services described in our written agree-
ment with you. We will provide you with
written reports containing professional
opinions and recommendations. In
performing our services, we will use that
degree of care and skill ordinarily
exercised under similar circumstances by
reputable members of our profession
practicing in the same locality.
1.2 Our work will be conducted using
appropriate procedures and protocols. If
you direct us to deviate from our recom-
mended procedures, you agree to hold us
harmless from all claims, damages, and
expenses arising out of your direction.
1.3 There is an inherent risk that samples
or observations may not be representative
of things not sampled or seen and, further,
that conditions may change over time. We
will reference our field observations and
sampling to available reference points. We
will not survey, set, or check the accuracy
of those points unless we accept that duty
in writing.
1.4 Our duties do not include supervising
your contractors or commenting on,
overseeing, or providing the means and
methods of their work, unless we accept
those duties in writing. We will not be
responsible for the failure of your
contractors to perform in accordance with
their undertakings, and the providing of
our services will not relieve others of their
responsibilities to you or to others.
15 We will provide a health and safety
program for our employees, but we will
not be responsible for contractor, job, or
site health or safety unless we accept that
duty in writing.
Section 2. Your Responsibilities
2.1 You will provide access to the site. We
will use reasonable care to minimize
damage to the site. In the course of our
work some site damage is normal even
when due care is exercised. We have not
included the cost of restoration of normal
damage in the estimated charges. At your
option and expense, we will correct
normal damage. We agree to be respon-
sible for damage that is caused by our
negligence.
2.2 You agree to provide us, in a timely
manner, with the information that you
have regarding buried objects located at
the site. Until we have completed our field
work, you agree to provide us with all
your plans, changes in plans, and new
information that refer to site conditions.
You agree to hold us harmless from all
claims, damages, losses, and related
expenses involving buried objects of
which you had knowledge but did not
timely call to our attention or correctly
show on the plans furnished to us.
2.3 You will be responsible for the
cooperation of your employees and your
contractors in observing all radiation
safety standards after we notify you that
radiographic or gamma ray equipment or
other nuclear testing or measuring devices
are to be employed by us.
2.4 You will notify us of any knowledge
or suspicion of the presence of hazardous
materials in samples provided to us. You
will provide us with information in your
possession or control relating to contami-
nation at the site. If we observe or suspect
the presence of contaminants not
anticipated in our agreement, we may
terminate our work without liability to you
or others, and we will be paid for the
services we have provided.
General Conditions
25 Neither this agreement nor the
providing of services will operate to make
us an owner, operator, generator, trans-
porter, treater, storer, or a disposal facility
within the meaning of the Resource
Conservation Recovery Act, as amended,
or within the meaning of any other law
governing the handling, treatment, storage,
or disposal of hazardous materials. You
agree to hold us harmless and indemnify
us from any such claim or loss.
2.6 Drilling, well installation, and
remediation services may involve risk of
cross- contamination of previously
uncontaminated air, soil, and water. If you
are requesting that we provide services
that include this risk, you agree to hold us
harmless and indemnify us from cross -
contamination claims and damages, unless
the loss is caused by our negligence.
2.7 You agree to make disclosures
required by law. In the event you do not
own the site, you acknowledge that it is
your duty to inform the owner of the
discovery or release of contaminants at the
site. You agree to hold us harmless and
indemnify us from all claims related to
disclosures made by us that are required
by law and from all claims related to the
informing or failure to inform the site
owner of the discovery of contaminants.
Section 3: Reports and Records
3.1 We will furnish reports to you in
duplicate. We will retain analytical data for
seven years and financial data for three
years relating to the services performed.
3.2 All samples remaining after tests are
conducted and field and laboratory
equipment that cannot be adequately
cleansed of contaminants are your
property. They will be discarded or
returned to you, at our discretion, unless
within 15 days of the report date you give
4 -H
written direction to store or transfer the
materials, at your expense.
3.3 Our reports, notes, calculations, and
other documents are instruments of our
service to you. Our reports are for your
use only for the purposes disclosed to us.
You may not transfer our reports to others
or use them for a purpose for which they
were not prepared without our written
approval, which will not be unreasonably
withheld. At your request, we will provide
endorsements of our reports or letters of
reliance, but only if the recipients agree to
be bound by the terms of our agreement
and only if we are paid the administrative
fee stated in our then current Schedule of
Charges.
3.4 If you do not pay for our services as
agreed, we may retain all reports and work
not yet delivered to you and all reports and
other work in your possession must be
returned to us. Reports and other work
may not be used by you for any purpose
whatsoever until they are paid for in full.
Section 4. Compensation►
4.1 You will pay for services as agreed
upon or according to our then current
Schedule of Charges if there is no other
written agreement as to price. An
estimated cost is not a firm figure unless
stated as such.
4.2 You will notify us of billing disputes
within 15 days. You will pay all undis-
puted portions of invoices on receipt. You
agree to pay interest on unpaid balances
beginning 30 days after invoice dates at
the rate of 1.5% per month, but not to
exceed the maximum rate allowed by law.
4.3 If you direct us to invoice another, we
will do so, but you agree to be responsible
for our compensation unless you provide
us with that person's written acceptance of
all terms of our agreement and we extend
credit.
4.4 You agree to compensate us for our
reasonable fees and expenses if we are
required to respond to legal process arising
out of a proceeding as to which we are not
a party.
4.5 If we are delayed by factors beyond
our control, or if project conditions or the
scope or amount of work change, or if the
standards or methods change, we will give
you timely notice and we will receive an
equitable adjustment of our compensation.
Section 5. Disputes.
Damage and Risk Allocation
5.1 Disputes will be submitted to
Alternative Dispute Resolution (ADR) as a
condition precedent to litigation. Each of
us will exercise good faith efforts to
resolve disputes through a mutually
acceptable ADR procedure. Collections
will not be submitted to ADR. All disputes
will be governed by the law of the state in
which our servicing office is located.
5.2 We will not be liable for special,
incidental. consequential, or punitive
damages, including but not limited to
those arising from delay, loss of use, loss
of profits or revenue, loss of financing
commitments or fees, or the cost of
capital.
53 We will not be liable for damages
unless suit is commenced within two years
of the date of injury or loss or within two
years of the date of the completion of our
services, whichever is earlier. We will not
be liable unless you have notified us of the
discovery of the claimed breach of
contract, negligent act, or omission within
30 days of the date of discovery and unless
you have given us an opportunity to
investigate and to recommend ways of
mitigating damages.
5.4 For you to obtain the benefit of a fee
which includes a reasonable allowance for
risks, you agree that our aggregate liability
will not exceed the fee paid for our
services or $50,000, whichever is greater,
and you agree to indemnify us from all
liability to others in excess of that amount.
If you are unwilling to accept this
allocation of risk, we will increase our
aggregate liability to $ 100,000 provided
that, within 10 days of the date of this
agreement, you provide payment in an
amount which will increase our fees by
10 %, but not less than $500, to compen-
sate us for the greater risk undertaken.
This increased fee is not the purchase of
insurance. Your check should be forwarded
to the Law Department at P.O. Box 39108,
Minneapolis, MN 55439 -0108, and refer
to our proposal or project number.
55 If you fail to pay us within 60 days
following invoice date, we may consider
the default a total breach of our agreement
and, at our option, terminate all of our
duties without liability to you or to others.
5.6 If we are involved in legal action to
collect our compensation, you agree to pay
our collection expenses, including
reasonable attorney fees. If you make a
claim against us that is resolved in our
favor, you will reimburse our costs of
defense, including but not limited to
reasonable attorney and expert witness
fees.
Section 6. General Indemnification
6.1 We will indemnify and hold you
harmless from and against demands,
damages, and expenses caused by our
negligent acts and omissions, and breach
of contract and those acts, omissions, and
breaches of persons for whom we are
legally responsible. You will indemnify
and hold us harmless from and against
demands, damages, and expenses caused
by your negligent acts and omissions, and
breach of contract and those acts,
omissions, and breaches of persons for
whom you are legally responsible.
6.2 To the extent that may be necessary to
indemnify either of us under Section 6. 1.
you and we expressly waive, in favor of
the other only, any immunity or exemption
from liability that exists under any worker
compensation law.
Section 7. Miscellaneous Provisions
7.1 We will provide a certificate of
insurance to you upon request.
7.2 This agreement is our entire agree-
ment, and it supersedes all prior agree-
ments. It may be modified only in writing
making specific reference to the provision
modified.
7.3 Neither of us will assign this
agreement without the written approval of
the other, but we may subcontract work as
we deem necessary.
7.4 This agreement may be terminated by
a writing. We will receive an equitable
adjustment of our compensation.
7.5 It is customary for the consultant that
provides design recommendations to be
retained to provide observation and related
services during construction or remedia-
tion work. If we are not retained to provide
continuing services, you agree to hold us
harmless from all claims, losses, and
expenses arising out of any interpretations,
clarifications, substitutions, or modifica-
tions of our work provided by you or
others.
Revised 2 -1 -96
4 -I
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: January 29, 1999
TO: William W. Bums, Executive Director of HRA/��
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
Ben Martig, Housing and Special Projects Intem
SUBJECT: Final Report on Housing Program Analysis
Introduction
We are pleased to present to the HRA, staffs analysis of the housing rehabilitation
program. This study was a five month process to examine the HRA's home rehabilitation
programs. It marks the first comprehensive review of the program and its impact on the
city.
The primary objective of this study was to analyze the impact of the HRA's housing rehab
programs and their effectiveness on improving the City's housing stock and
neighborhoods. Several techniques were used in the evaluation, including 1) written
surveys and personal interviews of past loan and grant recipients 2) surveys of Hyde Park
neighborhood residents 3) an analysis of building permit data, and 4) a survey of six other
first -ring metro cities, similar in size and age of housing.
The following memo provides a brief summary of the findings from the analysis and
recommendations for improving the HRA's housing programs. A more detailed report is
attached.
Background
To gain an understanding of the program's effectiveness, it is necessary to look at a
number important questions, including:
1. Who is using the HRA's programs?
Housing Study Memo
January 29, 1999
Page 2
2. Why did people choose to participate?
3. Why have participation levels in the Hyde Park neighborhood fallen?
4. Do the HRA's programs complement or compete with the private sector?
5. How does Fridley compare to other first -ring suburban communities who are trying to
address the same housing issues?
6. Are changes needed to make the program more workable and should the HRA re-
focus its efforts on particular housing problems?
Executive Summary
The HRA's housing rehabilitation program encompasses a number of different sub-
programs to assist homeowners and landlords in improving their properties. The study
looked only at the single family programs. Under the single family category, there are six
programs:
5% Revolving Loan Fund (HRA)
Fix -up Fund (MHFA)
• Home Energy Fund (MHFA)
Home Improvement Grants (CDBG and HOME)
Last Resort Loan Fund (HRA)
• Hyde Park Deferred Loan Fund (HRA)
The statistics that were compiled in this study include all of the loans and grants made
since 1996. Appendix A of the study provides a breakdown of average income by
program. In general, however, the average income for all program beneficiaries (259
households) was $43,557. The average amount of assistance was $11,886. The average
home value was $91,886. 54% of the recipients were comprised of two income families.
In terms of how people felt about the program, 77% felt that the City rehabilitation
programs have improved their neighborhoods. 53% said that they would not have been
able to finance their home improvement without the HRA's assistance. 27% were not able
to finance all of their improvements due to the maximum loan limit of $25,000.
In Hyde Park, the results were quite similar. In this case all residents of the neighborhood
were mailed a questionnaire. 90% of the respondents stated that the HRA should
M
Housing Study Memo
January 29, 1999
Page 3
continue to offer the special housing rehabilitation program in Hyde Park. An interesting
statistic, however, was that 71 % of respondents have never used an HRA loan. Slightly
over a third of these individuals (35 %) said they didn't want to take on additional loan debt.
Others responded that they felt their homes didn't need any improvements.
With regard to the role of the HRA's programs in relation to the private sector, it seems
clear the HRA's program serve a complementary function rather than a competitive one.
In fact, from 1994 to 1998 total private investment, as measured by building permits, was
$44,616,462. The HRA programs funded $3,322,828 worth of improvement activity over
this same time period, roughly 7% of the total activity in the City.
The study also looked at Fridley in comparison to other first -ring suburban communities.
From 1997 to 1998, Fridley had a total of 146 loans and grants compared to 29 loans and
grants on average by the surveyed communities. Furthermore, Fridley had $1,277,922
total loans and grants from 1997 to 1998 while compared to $272,312 on average by the
surveyed communities.
Findinas
After completing the housing rehabilitation survey, staff believes that the rehabilitation
loans and grants are making a significant impact on improving the housing conditions in
Fridley. The home rehabilitation loans have encouraged homeowners to invest in their
properties. Our survey and personal interviews of loan and grant participants have shown
that the City programs have allowed people to make improvements which they may not
have been able to make or were likely to put off for several years.
The results of the analysis seem to suggest the following conclusions:
1. The home rehabilitation programs are improving the quality of homes and
neighborhoods.
2. The HRA should maintain a City -wide housing rehabilitation program as well as
continuing to offer a housing rehabilitation programs for targeted neighborhoods.
3. The housing rehabilitation programs have enabled those who wouldn't ordinarily make
home improvements with the ability to do so.
4. The Revolving Loan limit of $25,000 is restricting many recipients from making larger
scale improvements such as new additions or major re- modeling.
5. The City is successfully marketing the program to qualifying households.
Housing Study Memo
January 29, 1999
Page 4
Recommendations
Staff recommends the following actions to improve the existing programs. Staff will
prepare a resolution addressing item #1 below for consideration by the HRA at March
meeting.
1. Maximum Loan Limits.. Increase the maximum loan limit to $35,000. We have seen
several substantial rehab projects take place where the actual cost of the project
exceeded the loan limit of $25,000.
2. Mar i . Provide a brochure of City housing rehabilitation loan and grant programs
to new residents of Fridley.
3. Contractor Resources. Create a short "Contractor Survey Form" and give to the
homeowner with the building permit. The results of the survey should be compiled and
made available at City Hall.
4. County CDBG Suggestions. Several comments were received about the CDBG home
improvement grant program regarding the application process, the method of selecting
contractors and the length of time to complete a project. Many of the requirements of
the program are established by HUD. However, to the extent that changes can be
made locally to make the program more workable, we will inform the County of
comments and encourage improvements.
gf
M -99 -29
5 -C
Housing Rehabilitation Program
Analysis
An Examination of Fridley's Housing Rehabilitation Program
and its Impact on the City.
Fridley Housing and Redevelopment Authority
February 1999
5 -D
Introduction
The primary objective of this study is to analyze the impact of the HRA's housing rehab
programs on improving the City's housing stock and neighborhoods. Staff used several
techniques as part of the analysis including: 1) surveys of past loan and grant recipients,
along with face -to -face personal interviews, 2) surveys of Hyde Park neighborhood
residents, 3) analysis of building permit data, and 4) surveys of housing rehab activity in
other metro cities of similar size.
This report summarizes the analysis of the programs and includes recommendations on
changes to the program.
Who is Using the Program?
To gain a better understanding of the program's impact on the community, it is important to
know who is utilizing the program. Table 1 on page 2 provides a demographic profile for
each of the six different single - family programs administered in Fridley since 1996. (1996 is
significant due to the fact that the HRA initiated most of its programming efforts at this time).
The users vary by program based in large part on different eligibility requirements (i.e.
income limits, loan size, etc.). For example, the CDBG grants are being utilized by the
lowest income individuals. The HRA funded Revolving Loan Fund recipients have an
average income of $42,858. This falls in the middle of the range for all loan and grant
recipients. The MHFA funded Home Energy Loan recipients have an average income of
$70,899. This is the highest average income for home rehabilitation loans in the City
because there are no income limits. Only 8 loans were made under this program and all
were for energy related improvements. It is also interesting to note that the Hyde Park
Deferred Loan program served families with average incomes of $35,470, just $7,000 shy of
the Revolving Loan program average income.
The HRA Revolving Loan program is by far the most utilized program in the City. There
have been 219 total loans for a total of $2,823,505 from January of 1996 through December
of 1998. The success of this program is due in large part to the attractive interest rate (5 %)
and higher income limits than the CDBG or MHFA Fix -up Fund programs. The revolving
loan program is serving predominantly middle income homeowners (avg. income of
$43,557), who live in moderately priced housing (avg. value of $91,886). For example, 54%
of the borrowers were comprised of two- income families, 46% were single heads of
household, and 48% were families with children. These statistics mirror the trends in the
larger housing market of two income households, smaller families and a higher incidence of
single heads of household.
1
5 -E
Table 1: Loan and Grant Program and Recipient Profile
❖Revolving Loan 219
$2,823,505
$42,858
$84,136
Community Fix -Up 2
$25,898
$61,288
$108,400
Home Energy 8
$36,477
$70,899
$100,067
❖Hyde Park Matching 18
$80,866
$35,470
$84,200
Deferred Loan
-*.-Last Resort Loan 4
$39,164
$31,211
$92,175
CDBG Grant 8
$72,693
$19,617
$82,343
Total 259
$3,078,603
$43,557
$91,886
*Figures represent total closed loans and grants from 111196 through 12131198. (CEE Report)
* *The symbol "❖ "represents HRA funded programs.
** *Note: These figures do not include closed loan and grant figures for 1993 through 1996.
Why Do People Participate?
In addition to understanding. who is taking advantage of the programs, it is important to know
why people participate. Last November, staff distributed a mail survey to all residents who
received a City grant or loan since 1993. The purpose of the survey was to obtain feedback
from residents on their satisfaction with the housing rehabilitation program. Conclusions of
program recipient opinions may be drawn from the data, however, it is not accurate to make
conclusions about opinions for the general community.
A total of 141 surveys were returned out of 285 distributed which equates to a 49.5%
response rate. Due to the high response rates, the responses should reflect accurate
predictions of the overall opinion of loan recipients.
Program Incentives
The survey indicates 53% of respondents would not have been able to finance their
improvement projects. The survey did not indicate how long they would have postponed
their projects. A series of personal interviews of loan recipients indicated that the projects
would have been postponed anywhere from two to ten years before they would be able to
afford the improvements.
Ten percent (10 %) did state that they would have proceeded with their improvement project
in its entirety. However, there are also 14% who indicated that they would not have
proceeded at all. It is likely that many of these respondents may have been low- income
individuals receiving grants through CDBG funds.
2 S .-F
Financing Terms
A majority (63 %) of loan and grant recipients were able to finance all of the original
improvements they had planned within the $25,000 loan limit. Twenty -seven percent (27 %)
of those who were not able to finance project needed more funds. Some recipients
elaborated by stating that the $25,000 loan limit was not sufficient to make additions to their
homes. Fourteen percent (14 %) of those who were not able to finance their projects
indicated that their planned improvements were not eligible under the program, such as
adding a deck or patio.
Income Limits
The response was overwhelmingly in support of maintaining or increasing the maximum
income limit of $58,650 for the Revolving Loan program. Twenty -two percent (22 %) of
respondents felt that there should be no income limits at all and thirty-six percent (36 %) felt
that the income limit should be increased to allow more homeowners to receive assistance.
There was support to keep the income limits the same (34 %) but very few (6 %) felt that the
income limits should be reduced to assist low- income families only.
Loan Limits
A majority (55 %) of respondents felt that the City should continue to have a loan limit of
$25,000. A number of respondents (37 %) felt that the loan limits should be increased. As
stated earlier, some of the respondents made comments that the limit of $25,000 was not
sufficient to complete an addition to the home.
Marketina
A majority (66 %) of respondents discovered the program through the City newsletter or the
Fridley Focus newspaper. The high level of response for the newsletter and newspaper
indicate that they are effective mediums for marketing the programs. No respondents
indicated they discovered the program through the Fridley Municipal Center television
channel.
Satisfaction
The survey indicates a favorable opinion of the loan and grant programs. The direct
answers to the questions along with the general comments illustrated this support. An
overwhelming number of respondents (77 %) felt that the City loan programs have improved
their neighborhood.
The survey also indicates that the respondents feel the City should continue to make the
loans and grants available to all qualifying residents. Ninety -one percent (91%) responded
3 5 -G
that the programs should be made City -wide while only four percent (40/6) responded that
the City should focus its resources on specific neighborhoods.
The Hyde Park Experience
The Hyde Park neighborhood is a sixteen square block area bound by 57' Avenue on the
south, Main St. on the west, 61" Avenue on the north and University Avenue to the east.
The area is one of the oldest parts of Fridley, in fact the area was first platted in 1886. The
neighborhood contains a unique mixture of single family homes, duplexes, triplexes and
small scale multiple family rental property. In addition, there are a couple of small
commercial buildings.
Last November, staff distributed a mail survey to all property owners in Hyde Park. This
neighborhood has been targeted as needing significant housing improvements. The
purpose of the survey was to obtain feedback from residents on their satisfaction with the
housing rehabilitation programs and to determine if the program made an impact in their
neighborhood. Conclusions of Hyde Park resident opinions may be drawn from the data,
however, it is not accurate to make conclusions about opinions for the general community.
A total of 38 surveys were returned out of 138 distributed which equates to a 27.5%
response rate. The response rate is at a significant level and should reflect accurate
predictions of overall opinion of Hyde Park residents.
Program Participation
A majority of the respondents (71 %) have not taken advantage of the housing rehabilitation
programs. There were a variety of responses as to why the programs were not used.
Thirty-five percent (35 %) did not want to take on an additional loan payment or financial
obligation. Some of the other reasoning for not using a home rehabilitation loan or grant
through the City included the following: they earned too much to qualify for the program, the
type of improvements they wanted were not eligible and that they are satisfied with the
condition of their home.
The response was even more varied when asked what kind of incentive it would take to
become interested in a home rehabilitation loan. The response was evenly split between
increasing the deferred loan amount, changing the focus of resources to only low- income
residents, and allowing other improvements such as decks. and patios. There were also
several responses that they were just happy with the condition of their home and that they
wouldn't be interested in fixing or adding anything.
Satisfaction
An overwhelming majority of respondents (90 %) stated that the HRA should continue to
offer the special housing rehabilitation loan programs in Hyde Park. The responses and
4
5 -H
interviews of residents in Hyde Park reflected the desire to keep the housing programs.
Many also felt that the neighborhood has improved, however, they are concerned about low
market values of their property.
Future Plans
A majority of residents (65 %) in Hyde Park plan to continue to own their home or rental
property in the neighborhood. Eighteen percent (18 %) did indicate that they planned to sell
their property and move out of Fridley. There were a variety of reasons for their planned
departure including complaints of neighbors, lack of police help with citizens, a desire to live
further from the inner - cities, low rents and no appreciation in property values.
Public vs. Private Investment
Staff calculated the ratio of investment for the total public sector investment compared to the
private sector investment. The total public support for residential housing improvements
from 1994 to 1998 was estimated to be 7% of the total investment. This figure is based on
estimated valuations of home improvements drawn from residential building permit data and
the total amount of loans and grants distributed by the City. The public support was
calculated to be $3,322,828 while the total private investment was calculated to be
$44,616,462.
The severe storm damage to residential homes in the summer of 1998 led to higher levels of
home improvement investment. Thus, the total private investment of $44,616,462 is inflated
by approximately $2,900,000 due to abnormally severe weather during the spring. If the
inflated amount is deducted from the total private investment for 1994 to 1998, the total
public support for residential housing would be 8% rather than 7 %.
Although these statistics show there is significant private investment relative to public
investment, it is not possible to determine if the public sector support for home rehabilitation
leads to private reinvestment in neighborhoods. Theoretically, we would expect that
rehabilitation sends a signal to neighbors that the area is worth investing in and that
neighbors are making the necessary investments necessary to maintain housing stock. This
theory has been supported through previous studies. For example, a 1997 University of
Minnesota study found that the City of St. Paul's "Houses to Homes" home rehabilitation
efforts in neighborhoods led to an average annual increase of $713 per house in home
rehabilitation by neighbors.
Also, as illustrated earlier, many of the home loan and grant recipients would not have been
able to make their improvements without a City loan or grant. Fifty -three percent (53 %)
either would not have been able to make their improvements or would have to at least
postpone their improvements. Once again, this illustrates that the housing rehabilitation
programs are providing home improvement options to people who would not have them in
the private market.
5
5 -1
How Does Fridley Compare in the Metro?
In addition to understanding the existing programs in the City, it is also important to look at
how the programs and staff compare to other cities. Last October, staff surveyed six
metropolitan cities comparable to Fridley in population and activity in housing programs.
These cities included St. Louis Park, Roseville, South St. Paul, Crystal, Richfield, and
Brooklyn Park. The purpose of the survey was to compare other similar cities with Fridley in
terms of investment in housing rehabilitation and the effectiveness and efficiency in
administering housing programs. A summary of the cities programs and staff are provided
in Appendix C.
Loan and Grant Rehabilitation Activity
When compared to the surveyed communities, Fridley stands out as a proactive community
in regard to housing rehabilitation activity. From 1997 to 1998, Fridley had a total of 146
loans and grants compared to the other cities that averaged 29 loans and grants a year.
Fridley provided roughly five times as many loans and grants than other cities. Fridley also
provides a significant amount of funds for housing rehabilitation. Fridley had $1,277,922 in
loans and grants from 1997 to 1998. The surveyed communities only averaged $272,312
during the same period.
As noted earlier, many Fridley residents take advantage of the City Revolving Loans.
Surprisingly, only two other cities had city funded housing rehabilitation programs. Richfield
has a loan program specifically for large -scale remodeling projects. Roseville has a
Rambler design program that covers architectural costs for housing additions. However, this
program is very costly per household. Only three homes have been funded. Roseville is
reviewing a newly proposed City funded program which would provide loans for home
improvement costs exceeding $50,000. The other cities rely strictly on CDBG funding or
MHFA loans.
Administration of Programs
The administration of the various housing programs varied among the surveyed cities. The
number of staff working on housing related programs ranged from one to six staff members.
Section 8 housing staff and housing inspectors were not included in these totals.
It is not possible to draw accurate comparisons of efficiency or effectiveness among the
cities from the information gathered due to the differences in the programs administered by
each city, the varying role of contracting agencies, the varying responsibilities among staff
and the inability of surveyed cities to provide specific administrative budgets. However, a
more detailed analysis does indicate that the more programs the cities are involved with and
the less support they get from outside sources such as the county or contract agencies, the
more staff they have. South St. Paul had a higher number of staff because they operate two
public housing units.
6
15..J
Housing Replacement Programs
All of the surveyed communities had an active housing replacement program. Fridley
actively purchases and removes about five properties a year. Most of the cities had about
three properties purchased per year. South St. Paul stood out as a more active community
in home replacement averaging around ten properties a year. They are fortunate to receive
additional funding through MHFA in a program targeted for housing replacement.
Findings
The results of the analysis lead staff to the following conclusions:
• The home rehabilitation programs are improving the quality of homes and
neighborhoods.
• The HRA should maintain a City -wide housing rehabilitation program as well as
continuing to offer a housing rehabilitation programs for targeted neighborhoods.
• The housing rehabilitation programs have encouraged those who wouldn't ordinarily
make home improvements to do so.
• The Revolving Loan limit of $25,000 is restricting some recipients from making larger
scale improvements such as new additions or major re- modeling.
• The City is successfully marketing the program to qualifying households.
Recommendations
After completing the rehabilitation housing program evaluation, staff -has analyzed the
results and provided the following recommendations to improve the housing rehabilitation
programs:
Marketina
• Provide a brochure of City housing rehabilitation loan and grant programs to new
residents of Fridley. This information will be added to information currently being sent to
new residents. These new residents are determined through changes in water billing
and personal inquiries.
Contractor Resources
One criticism of the rehabilitation program was difficulty in finding contractors to bid on
projects. Some loan and grant recipients were also disappointed with the work done by the
contractors.
7
5 -K
• Create a short "Contractor Survey Form" and give it to the homeowner with the building
permit. At the time of final inspection, the form should be filled out and given to the
building inspector. Questions should focus on the consumers satisfaction with the
contractor.
• Categorize by type of improvement (i.e. kitchen remodel, room additions, re- shingling,
new, siding installment, etc.) List contractors under the type of improvements they have
been involved with in Fridley. Provide contractor name, address and phone number.
• Provide a copy of the Home Improvement Contractor List at City Hall (including survey
results). The City should not include any type of recommendation of contractors (to
avoid liability).
Maximum Loan Limits
Staff recommends that the maximum loan limit should be increased to $35,000. This figure
would be consistent with the maximum limit allowed by MHFA. We have seen several
substantial rehab projects take place where the actual cost of the project exceeded the loan
limit of $25,000. By increasing the maximum loan limit we can accommodate the projects
which need substantial rehab and would benefit from the HRA's lower interest rate. The
borrower would still have to qualify for the loan and the property would need to be able
support the higher debt load.
County CDBG Suggestions
Several comments were received about the CDBG home improvement grant program. The
comments seemed to center around the application process, the method of selecting
contractors and the length of time to complete a project. Many of the requirements of the
program are established by HUD. However, to the extent that changes can be made locally
to make the program more workable, we will try and push for improvements. A list of the
comments will be forwarded to the County.
8 5 -L
APPENDIX A
Fridley Housing Program Survey Responses
141 of 285 surveys returned (49.5 %)
1. How did you find out about the housing rehabilitation program?
76(44.2%)
City newsletter
U0.0%)
Fridley cable t.v. access program
3-Z-(21.5%)
Focus newspaper advertisement
22(12.8%)
Friend or neighbor
27 15.7°
Home Remodeling Fair
9(5.2%)
Other (please specify)
"I called the City."
"Window vendor."
"Fridley seasonal publication (the one that comes four times a year)."
"Family member."
"Letter from City."
"Flyer"
"Flyer in the mail."
1(0.0%) No Answer
2. Were you able to finance ALL of the improvements you had originally planned?
DD-M-3. 1 ° Yes
Q13-5-5-01) No
1.4° No Answer
If not, what were the reasons:
2 .4° Some of the home improvements were not eligible
4(2.7%)— /couldn't qualify for the entire loan amount
No Answer.
Other (specify)
"Not sufficient money for payments."
"Our improvements amounted to more than $25,000."
"Not enough funds for basement window or gutter overhangs."
"We needed more than the maximum loan."
"Ran out of loan money. Things cost more than estimated."
"Ran out of time and funds."
"Remodel bathroom, did not find the right contractor."
"Bath project was more than we planned for."
5 -M
"Cost of the improvements exceeded the loan limit."
"The maximum loan didn't cover everything we wanted to do."
"Not willing to borrow more money."
"I did not know about the program in time."
"We were very pleased to be able to borrow the $25,000. However, we also did
make needed repairs and improvements and still need more."
"My improvements cost more than $25,000."
"Some things cost more than anticipated so I used up more of the money. I didn't get
my driveway."
"Driveway and stucco garage were not eligible."
"The cost was greater than $25,000."
"Concrete patio."
"I am not sure."
"Limited by my monthly payment maximum (my cash flow)."
"Maximum loan amount did not cover the total cost of the project."
"Landscaping and deck."
"Not enough loan money."
"Improvement project planning process requirement is too complicated and time
consuming."
"My home required too many improvements to bring it up to code. I maxed out the
grant amount."
"Couldn't afford more."
"More than the maximum loan amounts."
"Limit of $25,000 loan."
3. Would you have proceeded with your home improvement project, if you had not
received the Fridley HRA loan?
14(9.9%) Yes, in its entirety.
32(22.5%) Yes, but I would have scaled back the project.
75(52.8%) No, but I probably would have proceeded at some point In the future.
20(14.1%) No, I would not have proceeded at all.
1(0.1%) No Answer
Additional Comment:
"Yes, because Minnegasco made a mandatory "red tag" that I fix the furnace."
2
5 -N
4. The Fridley HRA is evaluating changes to the maximum income limit (currently $58,650)
for its housing rehab program. Which response best describes your opinion (check only one):
31(22.0%) There should be no maximum income limit under the program; any credit
eligible Fridley homeowner should be assisted.
51(36.1%) The income limit should be increased to allow more homeowners to receive
assistance.
9(6.4%) The income limit should be reduced to assist lower- income families only.
48(34.0%) No change; keep the existing income limit.
2(1.4%) No Answer
Comment:
"I would need more information about how much money was available to loan and how
many homeowners are now using the programs."
5. The Fridley HRA is evaluating changes to the maximum loan amount (currently
$25,000) for its housing rehab program. Which response best describes your opinion (check
only one):
6(4.3%) Reduce the maximum loan amount so that more people can be assisted.
52(36.9%) Increase the maximum loan amount so that homeowners can
borrow more to fix -up their homes.
78(55.3%) No change; keep the existing loan limits.
5(3.5%) No Answer
Comments:
"Should be $35,000 to $40,000 to complete an addition to the home."
6. Do you feel the loan program has helped improve your neighborhood?
109 (77.3 %) Yes
3(2.1%) No
29(20.6%) Don't know
7. Should the HRA focus its programs on specific neighborhoods rather than make them
available city -wide?
5(3.5%-) Yes, should focus its resources on specific neighborhoods.
128(90.8%) No, should make the programs available city wide.
7(5.0%) Don't know
1(0.7% Other:
"They should provide some unique programs to specific neighborhoods but also offer
other loans to all residents with certain income or asset limits."
8. Other comments (please add anything additional in the space below):
"I want to thank you for the opportunity to use this program. This was very helpful with the
needs I had. I think this is a great program for the community to use to keep this community
looking as best as it can."
"I was pleasantly surprised that the City of Fridley offered a housing program. I was able to
qualify for the entire $25,000 to use toward the improvements on our home. The house I
purchased was in need of a lot of updates and I know I could have used more funds for the
3
5 -O
advantage of it, will help all of the residents in the long run. It will allow some residents, who
currently would not have access to the funds needed, to be able to afford to improve their home,
and in doing so, will help the neighborhoods by maintaining a standard that the residents of Fridley
deserve. I want to thank you for making available this type of program."
"Pleased with the smooth process of obtaining the loan and having the work done."
"I think this is a wonderful program for specifically first time home owners, who purchase an older
home with plans to rehabilitate the residence. It was a great opportunity for us."
"We are very grateful for the help and advise we received and would like more; but not at the
expense of some other homeowner who needs it more. I'm ambivalent on question 5 above since
I'm not really familiar with the need. I'm hoping to come to your meeting so I can learn more about
this."
"Very helpful. The rates are not that much different than conventional loans. I particularly liked the
on site assistance provided by the person who explained the programs. She told us of the
weatherization program which had no money limits which we took part in. Thank you."
"I originally had applied for a grant, under which my income more than qualified me. I have a young
adult son at home and he had been employed full -time for a year when I applied. Even though I
included the amount of rent he paid me monthly in my income, his income was combined with mine
so I didn't qualify. That was not fair - I had no access to his earnings other than his monthly rent. I
had to apply for the loan program and scale my repairs way back because of my low income. My
son's wasn't counted for this other than his rent."
"We, as new Fridley City residents, knew nothing about the HRA until the company we chose to get
windows from told us about it. It would be very helpful to send this out to new residents with other
information about the City of Fridley."
"It helped us stay warm. Without replacing our windows and siding our furnace ran constantly the
year before. It helped a lot. Also, when your house looks good, you take care of it more."
"1 think the loans should be based more on the house than the homeowner -i.e. how will the loan be
used most effectively to improve the overall condition /value of the house. Some houses need to be
improved some do not. Luxury vs necessity. How will the improvements effect the neighborhood's
real estate values? Those houses that need improvements should receive money first and more if
the need is great."
"Great program! Keep it up."
"I would volunteer for your focus group."
"Our home improvement project was a kitchen remodel which increased the resale value we feel."
"How about small business loans for businesses that want to "set up shop" in Fridley?
"I very much appreciate being accepted into the program as I had no way of fixing anything. I did,
however, get bids on some. Had I been able to do my own contracting, I could have saved a lot but
that wasn't an option. I regret that. I've always wished I could know the final amount of cost before
the 10% per year deduction. I called three times and wrote a letter once with no response. What
4
5 -p
do I have to do to find out? Your response would be appreciated. Lastly, I appreciate that the City
of Fridley cares about the people."
"I wish I could finance previous improvements such as windows - because I did not know of the
program then."
"I feel that the real estate agents feel my neighborhood is an easy buck and is undervaluing the
housing. Many people have lived here since the 1950's and 1960's, they don't realize that they can
get more for their homes than the agents suggest. Of course market evaluation, show homes
selling for that amount yet I believe that when a house sells within a week, it was undervalued not
correctly priced. I feel it won't matter what improvements are made if the agents don't increase the
purchase price of the homes. My neighbors home was sold in one day for $102,000 the agent
wanted to sell it for $98,000. There is more square footage in these homes than in Coon Rapids
where they sell for $158,000. Yes I am concerned!"
"Thanks for possibilities of doing a home improvement."
"The appeal of this program was its easy access. Maybe higher income people shouldn't be helped,
but I think the program gives people incentive to improve their homes. This helps Fridley keep good
residents. I've noticed how much better the City looks. This program also helps young people.
Since this City is turning its housing to the young people, we want the best young people to move
here. This is the best use of taxpayer money I've ever seen."
"We will probably participate in the program again. If that is possible."
"Very satisfied."
"I felt that I should not have been required to pay the interest rate of 8% when the range was 5 -8 %.
1 do not understand why I was not given a lower interest rate. My credit record is excellent and I do
not feel my income would put me in a higher bracket. I was not informed on why the interest rate
was the highest rate, even though I asked a number of times. The answers given skirted the
question."
"Just to say thank you. The improvements help reduce my energy bills and add security to my
house."
"Can I find out if I qualify for a loan before I make plans for a home improvement ?"
"We were very satisfied with this program we were able to pay our loan off early. I think it really
helps the
community look more aesthetically pleasing."
"I'm very grateful for the loan. I am wondering if I can apply again for additional improvements ?"
"I was very impressed and satisfied with how and the quick availability of getting the loan. Very
good program. But I find a lot of people don't know about this."
"Very beneficial. I'm 58 and this helps prepare me for having this all done and paid for before I
retire."
"This program was wonderful. I could have never did repairs to my home that were in need without
this program."
5
5 -Q
"I think its wonderful to have a low interest loan program like this."
"The repayment should be reduced or cancelled if the homeowner stays in the property 5 years or
more. Minneapolis has a similar program."
"Excellent program. Keep up the good work."
"The loan application process requires too much trouble. It is pure bureaucratic function. For low
income family, money saving project is highly demanded, therefore, "do- it- yourself" projects is a
favor for the family, even we have a loan. But the application process is entirely in favor of
contractors and make the project designing process is only done by these professionals. Why is the
design required to be done by supply shops when we want to conduct the project by our own
hands? This requirement has nothing to do with loan use or the payback process. You should
eliminate this requirement and allow the homeowner to do the planning."
"Everything went smoothly and on time. Your people involved were very helpful and professional."
"A very good program. I may be seeking another loan next year."
"As a single, low- income parent, there was no way I could have fixed up my house without help. I
think that helping out low- income residents helps the whole neighborhood look better and have
more pride."
"We have been very pleased with the program. Our home has been repaired etc. and we
were able to repay the loan at an interest rate we could afford. Thanks again."
"Improvements could be made on the re- payment process. Getting 20 years worth of
pre - printed payment coupons is very awkward."
"The general contractors who participate in City /County improvements should be more
closely evaluated. The contractor obviously knew the amounts to bid in order to get the job. Some
items were broken that he wouldn't be responsible for."
"If it wasn't for the loan being available to us, our home improvements would have been put off for at
least ten years."
"In response to question #4, 1 feel that any improvement increase the value of the home. This
increases the tax base for Fridley. I would hope low income families have first access to any
available money. I thank you for the loan. I am paying mine back as fast as possible. My problem
was not if I could make the payment but of having that kind of money on hand to start out with.
When one is first starting out many things are needed. This program will give homeowners money
to improve. With improvements comes pride in ownership. With pride in ownership comes more
improvements. What a wonderful spiral upwards."
"The program was just very helpful. Thanks!"
"I think low income people who otherwise would be unable to get needed work done should be
helpful first."
"My experience with CEE was not entirely satisfactory. First, because the final permit costs were
$95 higher than anticipated, CEE refused to pay more than the estimate. But failed to notify me
5 -R
until Anderson Windows sent a nasty notice. Second, CEE paid a contractor for work not completed
to my satisfaction; paid without official releasel CEE is inconsistent in their policies and procedures.
They were difficult (at times) to work with. And finally, the entire program began to feel too
restrictive. Had the 5% money not been so enticing, I would have told CEE and HRA to take a hike.
Four months (120 days) was difficult to work with, lets try for 180 days, its a bit more realistic."
"We were, overall, very satisfied! Two years into our 4 -year loan we needed to borrow more
money to remodel an existing bathroom and the only way we could do this with you was to take out
another separate loan. We would like to have just added on a little to the loan we already had. But
that was not possible. And we could not afford two payments. Maybe you would change this. Be a
little more flexible. Thank you!"
"I hope this program will continue so Fridley will never have to deal with run down houses."
"A great program with ease of application. Everyone was most helpful."
"So many of the contractors were unwilling to do the work as they all wanted larger jobs and some
didn't want to put in a bid, so it took a long time to get there bids."
"The program has improved the appearance and quality of many Fridley homes."
"In our neighborhood, we have 3 to 4 other homeowners that used the loan services. It's a great
deal! I think a lot of people would rather improve their homes than move."
"This is a wonderful program. I would not have been able to do the improvements needed without
this program. I did think it should include decks. I feel this is part of the home and mine is rotted.
Thanks."
"I think the City should advertise more to let residents know about the loans."
"I'm not happy with the work that was done. The Contractor you sent me never really kept the work
on a timely schedule. Several times we would have our home ready for them to come in and do the
windows and they never showed up. Then, when it was extremely cold, they came to only start the
work. This was one of the reasons I was not happy with the work. My home is cold all the time,
especially by the windows. They have condensation, moisture and ice and frost on the windows. I
also feel they did a real poor job on my roof. Shingles appear to be buckling and I'm not sure if it
will stand the winter snowcover. I don't think it will last five years. My railing they replaced broke
and is loose. They also removed some oil tanks but never leveled the ground in my basement and
the window well leaks. The bottom line is I'm not happy with the work completed or the contractors."
"The program is important to help residents make home improvements at affordable rates. We
need our neighborhoods looking good. There is a big chunk of 3 bedroom rambler style houses
with basements. These are nice "starter" homes but, with two kids they soon feel really cramped.
To stay in the City some people choose to add on. The money for this can vary. I have mixed
feelings on a loan amount (i.e. is $25,000 enough to make the improvements? This program is a
nice low -cost alternative to refinancing a mortgage and rolling in those home improvement costs."
"I had squirrels and birds nesting in both rusted screen areas of the overhang of the garage and
house areas. The screens had to be replaced on all outside windows rusted and some dig holes, so
was replaced by a plastic windowed frame and non - painted product I would not have to handle as I
would with a wood replacement. Got a City water put in to handle the problem of my own well that I
have used for 40 years. My power was upgraded, my attic was insulated and now my air
7
5 -S
conditioner doesn't seem half as much. I had a lot of kitchen and dining room floor replaced.
Thanks so much for your help."
"I feel more people would use this if there was no maximum income limit. What is the difference as
long as they pay the loan off ?"
"There are already plenty of programs for low income people. There isn't a lot of help for the middle
class -which most of them seem to struggle with these things also. Also, since Fridley has so many
older homes, which are usually bought and owned by the middle class, and are generally in need of
a lot of repair and /or improvements, I feel you need to keep this available for these people."
"While I think that the programs should be available City wide (since there are individual buildings
that are in need of improvement), the bulk of the programs should be targeted at specific
"problematic" neighborhoods. Thanks for the help. I wouldn't have been able to make much
needed improvements without it!"
"The only thing I didn't care for is that the contractors didn't contact the housing inspector as they
should have. I don't think the check to the company should have been approved until the inspector
made sure the wrap had been actually put on before the siding went up. I'm still waiting for the
company and the contractor to meet to see if the siding company actually did this. Also, my roof
isn't to code because our roofing contractor never called as required to get it inspected. No ice
guard was ever put on. Doesn't the inspectors have some duties to homeowners to make sure the
contractors are complying ?"
"I feel if a homeowner can do the work for less then a contractor so be it."
"This program gave my family an opportunity to improve our home faster than if I had to do the
improvements by myself. Hopefully others will be able to benefit from the program also."
"When I tried to refinance my home the loan (from Fridley) has been a pain in my side. You have
made it very difficult for me to accomplish this task. When I took out the loan there was no policy.
There is nothing in my papers about your procedure that only one year ago came into existence. If I
would have known what the policy was I may have never taken out this loan (I was never informed
of your change either). I'm sure if all of the people taking out this money for their homes knew I feel
many would think twice. This loan is not all you are lead to believe it is."
"Increase the income limit if reasonable circumstances warrant it - as in my case, where we had to
repair because of foundation problem. In other words, be a little flexible if the situation warrants it.
How much money is used each year of the total available ?"
$ 5 -T
APPENDIX B
Hyde Park Neighborhood Housing Survey Responses
38 of 138 surveys returned (27.5 %)
1. Have you ever applied for a Hyde Park housing rehab grant or loan
through the Fridley HRA?
11 8. ° Yes
27 Z1. 10
ZQJ No
2. If not, why:
7°
I wasn't aware of the program.
5 17.2%
1 earned too much income to qualify for the program.
2 .9°
The type of improvements I wanted to make weren't eligible.
0°
I didn't have the matching funds to qualify for the program.
10 34.5°
I didn't want to take on an additional loan payment or
financial obligation.
11 37.9°
Other (please specify):
"We were thinking about it recently."
"We don't need any improvements."
"It is not City business to be a bank."
"I was a renter until very recently."
"I have not needed a grant."
"I tried to get a loan but no one there followed through with my paperwork."
"I'm 85 years old and too old to do anything."
"Procrastination."
"Had other priorities this year with storm damage, etc."
"Cash flow is low as it is."
"Newer bungalow (69') - no rehab necessary."
3. If you haven't received assistance through the program, what kind of Incentive would it take
for you to become interested? Please check only one box which best reflects your opinion.
4 7.3° Raise the income limit so that higher income residents could qualify.
U14-6-MI Increase the maximum deferred loan amount above $4,000 per unit.
EAM&AIJ Focus the resources on lower- income Hyde Park homeowners,
rather than middle- income people.
604.6%) Allow more flexibility to do value -added improvements (i.e. decks,
patios, porches).
8 19. ° Other (please comment):
"We are satisfied with the current structure."
"I'm very happy with my house. I see no need for improvement."
"As of today, I have not needed one now."
"Have your people follow through with getting back to people."
5 -U
"Don't look at the income of tenants."
"I don't want to repair anything."
"Please ask current residents in Hyde Park to maintain these properties better to begin with
(yards and streets)."
"Get rid of the matching of $ for
11 26.8 %) No Answer
4. Should the HRA continue to offer the special housing rehab programs in Hyde Park?
34 (89.5 %) Yes
2(5.3%) No
1(2.6%) Undecided
1(2.6%) No Answer
Comments:
"The City should offer loans to people who need them."
"Only if the system is serious about helping the people of our City."
"I have seen improvements in the neighborhood."
"I think it has greatly improved the area and values of homes!"
5. What are you future plans?
25(65.8%) Continue to own home /rental property In the neighbor hood.
1(2.6%) Sell home /rental property and move out of the neighborhood, but
stay in Fridley.
7(18.4%) Sell home /rental property and move out of Fridley.
5(13.2 %) No Answer
If you do plan to sell your property, why are you leaving? Please explain:
"Foreigners and welfare people are treated better than working homeowners. They blare
music 24 hours and the police are little help. They (foreigners and welfare people) don't go
to work in the morning, but we have to. We can't even have our windows open in the Spring
because of blaring Mexican Polka music."
"The City is wasting tax money by giving grants to home owners. The City is also wasting
money on the University Ave. and 5r Ave. project."
"Go to a City with better police and better help for their citizens."
"I'm not leaving because I'm too old to move."
"I want to live in an area where residents take better care of their property, i.e. yards and
keep their streets policed up. There is too much debris in Hyde Park."
"If I do sell it will be to build further out of the cities."
"No appreciation. Low rents."
"Rental licensing rules are too strict."
2
5 -V
6. Please write In additional comments here:
"I am glad you are trying to encourage people to upgrade and maintain their homes."
"The lot on 571 Place and Main Street has been a mess for over a year, but the City has done
nothing about it. It must have something to do with who owns it."
"Some of the houses that should have been tom down have done some repair but it does not do
much for the area. Some other (homes) could be made into nice homes if they had a major
upgrade. Again, they are doing part of the job. It would be better if they were allowed to borrow a
larger amount, with an incentive to remove and then build new, or do a real rebuilding job."
"Though my prior answers would indicate no need for such programs. I did rent for many years at
5924 2 % Street, a building that has been in steady decline since the current owner bought it five
years ago. This is why I answered "yes" to question 4."
"Get rid of broken down crime infested rental property. Fridley really screwed up by mixing up rental
people with people that care."
"I'm glad to hear that the recipients of the loan /grants are able to do their own contracting and
hiring."
"Losing too much money. Hard to get responsible /good tenants in our rentals where Fridley rents
are the lowest in the Twin Cities. We need to be able to improve buildings and get higher rents."
"We were interested in selling our home and buying another one in Fridley, but the other homes we
saw didn't seem worth the large amounts they were asking, and our home is worth much more than
we were offered, after looking at what was out there. We would like to make improvements, but
really don't know where to start. We attended the Housing Forum at the High School, but we didn't
get there until 2:00 and half of the booths were empty. The information we did gather wasn't helpful
at all. I do think, however, that the HRA is an asset to our community. Keep up the good work!"
"There was no such program when I built this house in 1948. Lots were $100 each. Total cost of
the house and lot was less than $2500."
"I was denied a grant because of tenants in the basement (who rent all year but are only there about
two months a year). The City considered them part of my household income. I do have a $1,000
loan deferred that was taken out about two years ago. I do plan on applying for the $3,000 left.
Can they just transfer my application so I don't have to fill everything out again? And then I'll just
submit bids for work I'm looking at having done."
"I will live here until I die."
"My income is under $24,000 a year and I don't qualify for the 5% interest or deferred loan. I would
love to put siding on my house but I might as well take a home equity loan in a few years again. I
will be paying the same interest and be able to write it off on my taxes."
"Hyde Park is looking better and better - due in large part to the loan program and firm enforcement
of codes. Please continue both. The planning department was a lot of help to me. I didn't take out
an HRA loan, but did a lot of work on my property."
3
5 -W
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MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: January 28, 1999
TO: William W. Bums, Executive Director
FROM: Barbara Dacy, Community Development Director
SUBJECT: Medtronic Update
To follow is an update on a variety of issues pertaining to the Medtronic Project:
• Funding Request to Legislature for highway and other public improvements
• Neighborhood meeting scheduled for February 4, 1999 (to be held in Meeting
Rooms 1 and 2 in the lower level)
• Master plan concept
• AUAR/Mitigation Plan
• Development contract negotiations
Funding Request to Legislature
The AUAR identified several improvements to address the impacts from the
proposed development:
• Additional through lanes in each direction on TH 65 from 1-694 to 100 feet
north of 63rd Avenue
• Reconfiguring EastNVest Moore Lake Drive and Highway 65 intersection to
accommodate the lane widening, and installation of new signals
• Free right turn from 57th Avenue to northbound TH 47
• Striping right turn on 57th Avenue to southbound 7d' Street
• Striping left turn on 7� Street to 57th Avenue
• Replacing or installing a new sewer line prior on 57th Avenue prior to phase 2
or after 400,000 square feet of development
D]
2
The project that costs the most is the TH 65 project, estimated to be at least
$4,080,000. MnDOT has suggested the City apply for Federal funds which
would require "local participation" (which could include City, County, State, and
Medtronic participation) of 20% of the construction costs plus the engineering
and inspection fees. The federal funds would provide 80% of the construction
costs. The local share on the TH 65 project alone would be $1,360,000. The
total cost of the improvements listed above (including a 25% contingency) would
be approximately $2.3 million.
After reviewing these costs with Medtronic, it was decided that a joint request for
funding should be made to the legislature given the economic benefits to the
State as a result of this project. Initial contacts have been made to the City's
legislative delegation and Medtronic has hired a lobbyist to assist them in
preparing the request. A meeting with the legislative delegation will probably
occur in the immediate future.
Preparation for the Neighborhood Meeting
While the Authority is meeting on February 4, the neighborhood meeting will be
conducted in the meeting rooms in the lower level. I will lead off the
Neighborhood meeting with a very brief synopsis of the events that have
occurred since last year when the MEPC tech flex proposal was under
consideration. I will then speak about the importance of this project in relation to
the City's Redevelopment Program, and I will state that the Medtronic proposal
represents the original dream and vision that was originally contemplated for the
site since the 1980's. Finally, my remarks will conclude with a synopsis of the
planning review process and will highlight the key points at which time the
citizens may participate in the public hearings. I will also describe and define an
AUAR and its approval schedule.
Medtronic will then be responsible to describe the project and the rationale
behind the development concept. The Chief Financial Officer, Bob Ryan will
open this part of the presentation. Medtronic's consultants will then present the
Master Plan Concept. After the plan description, the floor will open to questions
and answers.
Medtronic's traffic consultant, SRF Consulting Group, will be in attendance to
respond to the traffic questions. Kenny Horns of HGA, Medtronic's engineering
consultant will be present to address any storm water related questions about
Moore Lake. I will be available to address any City related issues.
Master Plan Concept
Medtronic's consultants presented the Master Plan to staff on January 20, 1999.
The first phase will include up to five buildings totaling 400,000 square feet. The
first phase will occupy the easterly half of the site. An education building,
6 -A
A
research and development building, corporate headquarters, neurological offices
and support offices are contemplated for the first phase of development. The
plan shows two subsequent phases of development totaling 600,000 square feet.
While the Master Plan shows about 1,000,000 square feet of development,
Medtronic wants to retain the flexibility to go up to 1,600,000 square feet.
Buildings up to 10 stories in height would achieve the additional square footage.
Medtronic indicated that the first phase buildings would probably not exceed six
stories.
An important element of the proposed plan is reconstructing Bridgewater Drive
along the north boundary as a "parkway" and connecting it to 7t' Street at the
northwest comer. Lake Pointe Drive would be removed and the utilities
relocated. Realignment of Bridgewater Drive would require acquisition of seven
homes just north of the development on Jackson Street and Quincy St.
Medtronic has put together an attractive acquisition package and has instructed
Dave Ryan, a local realtor, to meet with the affected households to the north of
the site this week. Medtronic has asked the City to follow through with
condemnation on the homes if necessary.
AUAR/Miti4ation Plan
The comment period on the environmental review ends on February 10, 1999.
No agency comments have been received as of yet; however, the primary issues
will probably be the transportation impacts to TH 65, the storm water related
impacts from the development, and the lane widening on TH 65.
Development Contract
Jim Casserly, Rod Krass, and I met with the Medtronic team on January 14 about
the first draft of the development contract. A second draft has been prepared by
Casserly and will be forwarded to Medtronic next week. The focus of the
discussion was responsibility for the public improvements, the timing of the
approvals of the Master Plan and development applications, a variety of planning
and building construction issues, and whether the City should be a party to the
agreement. The second draft will respond to these issues.
BD\jt
M -99 -25
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: January 29, 1999
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Update on Work with Robert Gedoff and Associates
At the January HRA meeting staff reviewed a proposal to work with Robert
Gerloff, a residential architect, on addressing house plan designs and
architectural issues for the scattered site program.
Staff has scheduled a meeting with Gerloff for February 12, 1999 to outline a
scope of work. After this meeting Gerloff will prepare a proposal to identify costs
for his services.
No action is needed by the HRA at this time. More information will be presented
at the March HRA meeting.
M -99 -27
11
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
DATE: January 29,1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Kick -Off Event for Remodeling Planbook
Fifteen cities including the Fridley HRA have participated in the development of a new planbook
to remodel post -World War II houses. A draft of the Planbook was distributed at the January
1999 meeting. In order to promote the printing and distribution of the Planbook, a "kick -off"
event will be held at International Market Square on February 25, 1999. You are all invited!
The event will be held in Room 185 in the International Market Square building from 1:00 to
3:00 p.m. (food will be provided). Robert Gerloff, the architect who completed the drawings for
the Planbook, will provide a slide presentation of the three homes which were used as a basis
to suggest alternative designs. George Edwards, the Executive Director of the Preservation
Alliance, will also speak about a recent project in Atlanta, Georgia, where a neighborhood of
ramblers was recently certified as a historic neighborhood.
Officials from each of the participating cities will be invited, as well as the board members of
contributing organizations including the St. Paul and Minneapolis Realtor Associations, the
Builders' Association of the Twin Cities, the Remodelers' Association, CEE, Norwest Bank,
Hennepin County, and MHFA.
A postcard invitation will be mailed to each HRA member. No action is needed on this item.
BD:ls
M -99 -23
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