HRA 08/05/1999 - 6314HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, AUGUST 5, 1999
MEETING 7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
AUGUST 5,1999, MEETING, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER
ROLL CALL:
APPROVAL OF MINUTES: _
July 1, 1999
CONSENT AGENDA:
Rylund Properties Revenue Note.. ............................... 1
Claims and Expenses ............. ............................... 2
PUBLIC HEARING:
Public Hearing regarding the Sale of
Excess Property at 8184 East River Road ............................. 3
ACTION ITEMS:
Consider Resolution for HRA
Tax Levy for Taxes Payable in 2000 .. ............................... 4
INFORMATION ITEMS: ,
Scattered Site Architectural Design Concepts
(Robert Gerloff, Gerloff Residential Architects ) ......................... 5
TH65 Update ................... ............................... 6
Northstar Corridor Property Acquisition ............................... 7
1999 — 2000 Budget Update ........ ............................... 8
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
JULY 1, 1999
CALL TO ORDER:
Chairperson Commers called the July 1, 1999, Housing and Redevelopment
Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Jim Mcfarland,
John Meyer, Pat Gabel
Members Absent: None.
Others Present: William Bums, Executive Director
Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
Rick Pribyl, Finance Director
Julie Vogel, Accountant
Jim Casserly, Development Consultant
Dave King, Center for Energy & Environment
Todd Raveling, 5861 Main Street
Stacey Burtyk, 5861 Main Street
Mavis Pries, 5905 Main Street
APPROVAL OF THE JUNE 3. 1999. HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES: ,
MOTION by Ms. Schnabel, seconded by Mr. Meyers, to approve the June 3,
1999 Housing and Redevelopment Authority minutes as presented.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. CLAIMS AND EXPENSES:
MOTION by Ms Gabel, seconded by Mr. McFarland, to approve the consent
agenda and additional expenses.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 2
ACTION ITEMS:
2. APPOINTMENT OF HRA REMODELING ADVISOR:
Mr. Ferelius stated that Virginia Harrington Sweeney has accepted the position
as the new Remodeling Advisor. Ms: Sweeney has over 20 years of experience
in the- residential construction industry including 1-3. years as a Journey -level
carpenter, 7 years as a General Contractor, and two years working for the
- _Habitat for Humanity -as a Construction. Site Manager. She has a lot of good
experience -and skills -.and wilt be-a,-very valuable employee for the HRA.
Unfortunately,,-she could not attend the HRA meeting; but, hopefully, she will be
present at the August meeting. Staff recommends that the HRA approve the
appointment of Ms. Sweeney to the position of Remodeling Advisor.
Mr. Commers asked if any HRA members. had any comments or concerns
regarding Ms. Sweeney.
Mr. Meyer stated it sounded like Ms. Sweeney has very good credentials.
MOTION by Ms. Gabel, seconded by Mr. Meyer, to approve the appointment of
Virginia Sweeney as HRA Remodeling Advisor.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
PUBLIC HEARING:
3. PUBLIC HEARING REGARDING THE SALE OF 5857 MAIN STREET TO
THE CENTER FOR ENERGY AND ENVIRONMENT.
MOTION by Ms. Gabel, seconded by Ms. Schnabel, to open the public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPEN AT
7:53 P.M.
Mr: Femelius stated the HRA is required to conduct a public hearing before it
sells any property. The property in question at 5857 Main Street is located in
Hyde Park neighborhood. It was acquired by the HRA in 1996 through the
Scattered Site Program. A substandard house on the site was demolished in
1997. There were a couple of offers that never materialized until last spring
when the HRA made a decision to work with the Center for Energy and
Environment (CEE) to develop the site. CEE is a non - profit agency that
administers the HRA's Housing Rehabilitation Program. They are branching out
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 3
into additional programs and services beyond housing rehab. This is a
demonstration project for them.
Mr. Femelius stated CEE is proposing is to construct a new single family home
with high performance standards. This would include super installation, building
envelope, mechanical ventilation, sealed ductwork, and also advanced wall
framing. Typically these features are included in higher value housing but are
not incorporated into start-up housing. CEE is targeting this type of property to
first -time homebuyers whose incomes are up to 80% of the median income. In
this case it would be up to $48,650.00 for a family of four. CEE is proposing a
two -story design, approximately 1,400 square feet in size, with two bedrooms,
1 Y2 bath, and a two -car attached garage. The projected value of the site would
be $130,000.00. That includes both land and completed building.
Mr. Dave King, CEE representative, spoke regarding the plans for the project.
Mr. Commers asked Mr. King if there is anything else he would like_to add
regarding this project and also asked if it is the first of its kind for CEE.
Mr. King stated that basically it is the first of its kind for CEE. He stated the
agency has a lot of experience with rehabilitation projects but have many people
on staff who have participated in new construction. Those people will be heading
this project. CEE has transferred an employee with new construction experience
to their Minneapolis office to facilitate this project. He stated they are basically
trying to an affordable home in the Hyde Park area. He stated the reason the
high performance aspect came in is that they received funding through the
Minnesota Housing Financing Agency through their proposal process. They
submitted two proposals --this one and another one in Fridley, and received
financing for the project. Part of the funds they received is going towards the
incremental cost of providing this study or demonstration to measure the cost of
completing a high performance project on an affordable property.
Mr. Meyer asked Mr. King a question about the financing relating to USBank.
Mr. King explained that they secured financing through MHFA. The end
purchaser will have to be a first -time buyer and attend a first -time homebuyer
training course so they partnered with USBank on this endeavor. The buyer will
participate in their services and ultimately receive USBank's product.
Mr. Commers asked if there was any assistance with that mortgage.
Mr. King stated there is a variety of different assistance available.
Mrs. Schnabel asked what the estimates of the benefits to the homeowner would
be in terms of savings with this high performance system.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 4
Mr. King stated that Mr. Bob Rosenthal, the construction manager on the project,
was not able to be present and he apologized for that. Mr. King said he didn't
know what the hard numbers for savings are. This construction -provides a very
durable property that has the highest energy efficiency and safest construction
techniques currently known. It should allow someone a little more affordability
with energy costs.
Mr. Meyer asked who would be building the house.
Mr. King said they would hire a builder.: CEE would own and .develop the lot, -
then market it, and sell it to a qualified- buyer..
Mr. Meyer asked if the builder would get the job on the basis of a bid. -
Mr. King stated it would be the competitive bid process, essentially Category 1.
Ms. Gabel asked if they would find a buyer first.
Mr. King said it was their focus to find a buyer through one of the homebuyer
training courses and let them put the finishing touches on the property like colors,
cabinets, sinks and fixtures, etc.
Mr. Commers thanked Mr. King for presenting the information for CEE.
Mr. Commers asked if there were any other members in the audience who
wanted to address any concerns with the public hearing.
Mr. Todd Raveling, 5861 Main Street, asked what happens if his fianc6's (Stacey
Burtyk) house at 5861 Main Street goes down (meaning damage to more than
50% of the value of the house) and the lot is only 40 feet wide. The HRA has a
60 -foot limit on lot width so how wouldthat affect Stacey Burtyk's property?
Mr. Commers said he wasn't sure what he meant. Mr. Commers asked if he
meant if it would reduce Ms. Burtyk's lot size when the house was built.
Mr. Raveling stated that if her house goes down due to a fire or something, is it
grandfathered to be rebuilt, or is she limited to 60 feet? A couple years back the
HRA offered to buy her property, but she declined at that time. The lot next to -
hers is 80 feet; and if HRA had purchased her property, the HRA could have built
two houses.
Mr. Bums stated that it sounds like Ms. Burtyk's property is a non - conforming
property; and if there was damage to more than 50% of the value, she would not
be able to rebuild.
Mr. Raveling stated he wondered why the purchase of the lot didn't go forward.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 5
Mr. Femelius stated he did have a discussion with Ms. Burtyk, but they were not
able to reach an agreement with the price and the deal fell through.
Mr. Commers said he wasn't sure if anything could be done at this time.
Mr. Raveling stated Ms. Burtyk was offered less than what she paid for the
property.
Mr. Commers said she could possibly turn around and sell it at a.higher price
because this might add to the value. Mr. Commers stated he appreciated-Mr..
Raveling coming to the meeting.
MOTION by Ms. Schnabel, seconded by Ms. Gabel, to close the public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE PUBLIC HEARING CLOSED AT 8:02 P.M.
Mr. Commers asked if there was any further discussion on the sale of 585' Main
Street to CEE.
Mr. Raveling asked if there was a chance that they could purchase a portion of
the lot to make Ms. Burtyk's lot a 60 -foot lot.
Mr. Femelius stated it is a conforming 80 -foot lot; and if any portion were sold, it
would become another non - conforming lot.
Ms. Dacy explained that in the Hyde Park area, S -1 district, the width of the lot
shall not be less than 60 feet at the required setback. At this point in time, the
HRA cannot make any commitment if that's an option or not.
Mr. Commers stated it would be up to CEE to diminish the value of the property,
and it is not a matter the HRA can consider at this time.
Ms. Schnabel asked when construction would be anticipated on the property.
Mr. King stated they would try to solicit bids starting July 15, select a contractor,
and, hopefully, break ground in September.
Mr. Meyer asked why the home was only 32 feet wide on an 80 -foot lot.
Mr. Femelius said he guessed the primary reason is to keep the cost down.
Mr. Meyer asked what they could do in this pending motion to leave the door
open for negotiation for Ms. Burtyk's property and the property located at 5857
Main Street.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 6
Mr.- King.stated they could see if something could be worked out.
Mr. Commers stated he hoped CEE could examine the situation for possible
negotiations.
Mr. Commers asked about the setbacks in Hyde Park.
Ms. Dacy replied that side setbacks are 10 feet on one side, and 13 feet on the
other side, except when there is an attached garage reducing the setback to 5
feet..
Mr. Commers stated that Mr. Raveling and Ms. Burtyk should try to meet with Mr.
Femelius and CEE to see what can be done.
Ms. Schnabel commented that the designs presented are newer designs of
houses. She said it would be nice to see some different designs incorporated in
the future.
MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve Resolution
No. HRA 8 -1999, Authorizing Execution and Delivery of a Contract for Private
Redevelopment By and Between the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota, and Center for Energy and Environment
for Property Located at 5857 Main Street.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
4. CONSIDER DEVELOPMENT CONTRACT WITH CENTER FOR
ENERGY AND ENVIRONMENT:
Mr. Casserly, Development Consultant, recommended approval of the
development contract.
Mr. Bums asked if there is a possibility of reopening the negotiations for the other
property of Ms. Burtyk's.
Mr. Commers stated they should recognize there is a little difficulty with that
property and they should talk to the other party about this issue.
Mr. Femelius stated he could talk to them about that and pursue all angles.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the development
contract.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 7
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY
INFORMATION ITEMS:
5. UPDATE ON ARCHITECTURAL DESIGNS FOR SCATTERED SITE
PROGRAM:
Ms. Schnabel commented that the same designs have been constructed for a
number of years with the garage in the front with very little of the house showing.
She liked the recent-presentations with the garage styles.
Mr. Femelius clarified the plans shown before were given to Mr. Gerloff. Mr.
Gerloff had the challenge of building something sensitive to the other properties
around it in terms of existing homes but included amenities in demand by today's
homebuyers. Mr. Gerloff didn't want to part radically from the designs that were
dominating the City of Fridley. He stated it was a blending of new and old. Mr.
Femelius stated they are trying to get consensus on whether the designs are
attractive. They met with a builder and a realtor and also want to know how the
HRA authority feels as they are still in the process of revising.
Ms. Gabel stated there are some garages in Fridley that resemble barns.
Ms. Dacy said there are no codes requiring whether the garages look like a bam.
The zoning code can only go so far regarding architectural issues as long as the
garage meets all the guidelines for setbacks.
Mr. Commers asked Ms. Gabel to bring a picture of this property to show for
future reference in decisions.
Mr. Meyer stated there is a certain charm to having diversity in houses in a
neighborhood.
Ms. Dacy stated diversity is also a part of the planning to prevent a cookie cutter
design for the neighborhood.
Ms. Schnabel stated she thinks there are more interesting concepts that could be
built than what she has seen in the presentation. She believed it was very sterile
and bland, and she found the interior uninteresting. The kitchen is part of where
the living space is, so if you're cooking you have your pots and pans in view.
She had a question of how the plans would be presented to builders.
Mr. Femelius stated they hadn't decided that yet. There are pros and cons,
requiring a builder or using a concept and having them modify it as they see fit.
The HRA would still be reviewing any plans prior to construction however.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 8
6. DRAFT BUDGET1999 -2000:
Ms. Dacy stated that staff is not suggesting-any formal action tonight and would
represent the budget at the August meeting. There is nothing to be added over
and above what was discussed in the budget work session.
Mr. Primly stated he is placing the budget as a priority to be completed.
ADJOURNMENT:
MR. COMMERS DECLARED THE JULY ..1 .1999, MEETING OF THE HOUSING
AND REDEVELOPMENT AUTHORITY ADJOURNED AT 8:38 P.M.
Respectfully submitted,
ig a Joh n
Recording Secretary
HOUSING & REDEVELOPMENT
AUTHORITY UK
Memorandum CMY(N
FRIEM
DATE: July 30, 1999
TO: William Bums, Executive Director -of HRA �
FROM: Barbara Dacy, Community Development Director:
SUBJECT: Rylund Properties Limited Revenue Note
On October 10, 1996, the HRA passed a motion authorizing staff to pay up to $21,000
on the limited revenue note for the Rylund Properties' development on 73%2 Avenue in
TIF #9. The motion was conditioned upon Authority review of the status of the district in
three years to determine if payment on the remainder of the note could come from
either TIF #9 or other funds of the Authority. The payment request in the August
agenda is the 7t' payment of 16 identified in the revenue note, which equates to
$21,623.
While TIF #9 did not generate increment in 1999, and staff does not have information
yet from the County for the year 2000, the mini - warehouse development built in 1999
should be creating increment for the year 2000. Further, the Onan/Murphy project will
create increment in 2001. Of course, the Rylund development itself creates increment,
but there have been many fluctuations in the tax capacity and the valuations in the
district, so the district as a whole has not created increment. The Onan /Murphy project
especially will reverse the past trend.
Finally, there are adequate funds in the General Fund to provide the payments for the
note until TIF #9 creates increment. The last payment is February 1, 2004. The total
amount of the note, principal and interest, is $49,424.
Recommendation
Staff recommends the Authority continue payments on the Limited Revenue Note for
Rylund Properties, with the source of the funds to come from the General Fund or TIF
#9.
M -99 -177
I
I
HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 10, 1996 PAGE 2
Mr. Commers stated the Financial Statement for 12/31/95 was
included in the agenda. He asked if there was a way to get this
statement prepared sooner.
Mr. Ellestad stated the review process is long. The statement was
returned from the auditor on June 5.
ACTION ITEMS:
4. CONSIDER PROPOSAL FOR PAYMENT OF TAX INCREMENT NOTE; RYLUND
PROPERTIES 6*
Ms. Dacy stated the valuation of the tax increment district had_
gone down. When the district was created, it was producing
increment." -Based on Mr. Casserly's research with Anoka County, the
HRA accumulated approximately $21,000 in 1991 and 1992.
Subsequently, there was a downward trend in the value of property
in the district; consequently, the increment fell below the
original tax capacity. Because the pay -as- you -go financing is. a
small amount and because the developer has completed the
improvements, staff recommends the HRA go ahead and start paying on
the note using the revenue accumulated in 1991 and 1992. In the
year 2000, staff hopes the district will be producing increment.
Because of the small amount involved, it will be easy for the HRA
to use revenues from other districts that are in place.
Ms. Dacy stated staff's recommendation is for the HRA to authorize
staff to initiate payment on the note as agreed in the pre -
development contract up to $21,000. In the year 2000, staff will
revisit the status of the district and report back to the HRA.
Then, the HRA can draw on other funds if you so wish.
Mr. Commers stated the payments would be $6,000 per year so the HRA
could pay for three years based on the $21,000 collected in 1991
and 1992.
Ms. Dacy stated this was correct.
Ms. Schnabel asked what happens when said payment is to begin
August 1, 1996.
Ms. Dacy stated staff did not pay. The way the district is written
the HRA does not legally have to pay unless the district produces
income. If approved, the payment would be in place of the August
payment.
Mr. Casserly stated the payment should be made as soon as possible.
Technically, there is no tax increment. The HRA needs to authorize
the payments. This resolution would authorize the HRA to make
payments on the note from other sources and from already existing
HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 10, 1996 PAGE 3
income already generated. The issue is not the ability to make
payments. The issue is whether the HRA wishes to make the payment.
This fits into one of the peccadilloes of tax increment. It has
nothing to.do with the project or with Mr. Lund. They built what
was agreed to and more. If the property were in its own tax
increment district, it would actually generate $12,000 to $16,000
per year. Our payments on the note are $6,000 per year.
Mr. Casserly stated what actually happened is very curious. After
certifying the district, Anoka County was concerned about the Onan
property and hazardous materials. In order to pre -empt the County,
they created parcels which they assessed at "0" market value to
prevent forfeit. If the property is forfeited, it goes to the
County and they have concerns about who is responsible. The County
took the initiative to create a "0" market value and reduced the
value of adjacent parcels. In doing this, the valuation of the
district decreased by $15 million. The district has less market
value now than when it was certified in 1988. Now the value is
coming back up.
Mr. Casserly stated this is 'a very unusual situation. There is no
conceivable way that you could explain it to a user or participant
with a revenue note. While you are legally correct to not pay it,
it is very clear that it is the function of very unusual
circumstances. That is why he and staff are recommending it be
paid. If the value continues to climb, the district will generate
increment in the future.
Mr. Commers stated he would imagine it is a necessary provision to
protect the development agency. In the event the HRA did not have
any other funds, the HRA would not be in a position to pay it.
Mr. Casserly stated the other agreements have the same language.
The reason the issue does not come up very often is because, if you
create very small districts, the user is in their own district. If
no increment is generated, it is because they are not paying taxes.
That is not the case here. The user put substantial value on the
parcel. It is the rest of the district that has weighted it down.
Given the fact that the district generated increment in the past
and will in the future, he would advise the HRA to make payments on
the note.
Ms. Dacy stated the major argument that led staff to recommend
approval is that the builder did do as agreed. If other parcels
had retained their value, it would be generating income.
Mr. Commers asked if the builder had asked for this.
Ms. Dacy stated yes. Staff recommends the HRA pay $3,089 now with
the next payment in February 1997.
HOUSING & REDEVELORMENT AUTHORITY MEETING OCTOBER 10 1996 PAGE 4
Mr. Commers stated this recommendation is not to say that, if the
district is not producing tax increment in the year 2000, we are
not committed to borrowing funds at that time.
Ms. Dacy stated the HRA can revisit the issue at that - .time. If the
HRA wants to dispose of the whole item, you could use funds from
other districts. If you want-to-revisit the issue in the year
2000, you can do so. It may be a non -issue by that time.
Mr. Commers stated the HRA should review the issue again before
borrowing from other districts.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to authorize staff
to initiate payment on the tax increment note as agreed to in the
1994 redevelopment contract up to $21,000 or three years; and then
the item is to be reviewed to see if the payments should be
continue and if the HRA decides if they wish to borrow from another
source.
UPON A VOICE VOTE, ALL VOTING AYE, 7ONAPPRAISAL N CONKERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
INFORMATION ITEMS:
5. DISCUSS SCATTERED SITE ACQUISI PROCESS_
Mr. Fernelius stated, at the las meeting, several issues were
raised about the appraisal proc ss. In reviewing the minutes, the
principle issues appeared to 1) the appraisal process, 2) what
is going on in the Fridley h sing market, and 3) whether code
enforcement could be used t address the problem.
Mr. Fernelius reviewed t objectives of the scattered site program
which include removing um and blight; revitalizing neighborhoods
and promoting safe, h lthy, and attractive housing; stimulating
private activity and nvestment; encouraging a balance of the
housing stock; and abilizing and improving the tax base.
Mr. Ferneli/oes d, in terms of code enforcement, the City has
used the habuilding act in some instances. It has been
applied prio vacant or abandoned properties. If the
hazardous bact is used, the owner still has the ability to
repair the . Using the hazardous building act and
condemnatioot get at the issues of functional obsoles cence,
or issues o and marketability, etc.
Mr. Ferne us stated he and Ms. Dacy met with the HRA's contract
appraiser and the City Assessor. They provided some information on
what has been happening in the Fridley market. The data they
provide is a comparison of the first 6 months of 1995 and 1996.
SCHEDULE D
$32,000
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
THE HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY
LIMITED REVENUE TAX INCREMENT NOTE
RYLUND PROPERTIES
The Housing and Redevelopment Authority in and for the City of
Fridley (the "Authority "), hereby acknowledges itself to be
indebted and, for value received, promises to pay to the order of
Rylund Properties, a Minnesota partnership (the "Registered
Owner"),-or its registered assigns, solely from the source, to the
extent and in the manner hereinafter provided, the principal amount
of this Note, being Thirty Two Thousand Dollars ($32,000) (the
"Principal Amount "), together with interest thereon from August 1,
1994 at a rate of eight percent (8.0 %) on the dates (the "Scheduled
Payment Dates ") as set forth on the Payment Schedule attached as
Exhibit A hereto and in the amounts stated thereon (the "Scheduled
Payments "). This Note shall be payable in semiannual installments
commencing on August 1, 1996, and on the 1st day of February and
August thereafter until and including February 1, 2004.
Upon 30 days' prior written notice from the Authority to the
Registered Owner, the Principal Amount is subject to prepayment at
the option of the Authority in whole or in part on any Scheduled
Payment Date.
Each payment on this Notes is payable in any coin or currency
of the United States of America which on the date of such payment
is legal tender for public and private debts and shall be made'by
check or draft made payable to the Registered Owner and mailed to
the Registered Owner at its postal address within'.the United States
which shall be designated from time to time by the Registered
Owner.
The Note is a special and limited obligation and not a general
obligation of the Authority, which has been issued by the Authority
pursuant to and in full conformity with the Constitution and laws
of the State of Minnesota, including Minnesota Statutes, Section
469.178, Subdivision 4, to aid in financing.a "project ", as therein
defined, of the Authority consisting generally of defraying certain
public redevelopment costs incurred and to be incurred by the
Authority within and for the benefit of its Redevelopment Project
No. 1 (the "Project Area ").
23
THE NOTE IS NOT A GENERAL
AUTHORITY OR THE STATE OF MINN'
CITY, THE AUTHORITY, THE STATE
THEREOF SHALL BE LIABLE ON THE
OUT OF ANY FUNDS OR PROPERTIES
AS DEFINED BELOW.
OBLIGATION OF THE CITY, THE
ESOTA (THE "STATE "), AND NEITHER THE
NOR ANY POLITICAL SUBDIVISION
NOTE, NOR SHALL THE NOTE BE PAYABLE
OTHER THAN AVAILABLE TAX INCREMENT,
The Scheduled Payment of this Note due on any Scheduled
Payment Date is payable solely from and only to the extent that the
Authority shall have received as of such Scheduled Payment Date,
"Available Tax Increment" which is defined in the Contract for
Private Redevelopment between the Authority and the Registered
Owner (the "Agreement ") as tax increment received as of a Scheduled
Payment Date with respect to certain real property described in the
attached Exhibit B (hereinafter referred to as the "Redevelopment
Property ") which real property is located within the City's Tax
Increment Financing District No. 9.
The Authority shall pay on each Scheduled Payment Date to the
Registered Owner the lesser of the Available Tax Increment and the
Scheduled Payment due hereon on that date. To the extent that on
any Scheduled Payment Date the Authority is unable to make the
total Scheduled Payment due on such date as a result of its having
received as of such date insufficient Available Tax Increment, such
failure shall, not constitute a default under this Note and any such
deficiency or unpaid portion shall be paid on any subsequent
Scheduled Payment Date from the Available Tax Increment. On
February 1, 2004, the maturity date of this Note, any unpaid
portion shall be deemed to have been paid in full.
This Note shall not be payable from or constitute a charge
upon any funds of the Authority, and the Authority shall not be
subject to any liability hereon or be deemed to have obligated
itself to pay hereon from any funds except the Available Tax
Increment, and then only to the extent and in the manner herein
specified.
The Authority makes no representations or covenant, express or
implied, that the revenues described herein will be sufficient to
pay, in whole or in part, the amounts which are or may otherwise
become due and payable hereunder.
The Authority's payment obligations hereunder shall be further
conditioned on the fact that there shall not at the time have
occurred and be continuing an Event of Default under the Agreement,
and, further, if pursuant to the occurrence of an Event of Default
under the Agreement the Authority elects to terminate the
Agreement, the Authority shall have no further debt or obligation
under this Note whatsoever. Reference is hereby made to the
provisions _of the Agreement for a fuller statement of the
obligations of the Redeveloper and of the rights of the Authority
thereunder, and said provisions are hereby incorporated by
24
reference into this Note to the same extent as though set out in
full herein. The execution and delivery of this Note by the
Authority, and the acceptance thereof by the Redeveloper, as the
initial Registered Owner hereof, shall conclusively establish this
Note as the "Note" (and shall conclusively constitute discharge of
the City's obligation to issue and deliver the same to the
Redeveloper) under this Agreement.
The Registered Owner shall never have or be deemed to have the
right to compel any exercise of any taxing power of the Authority
or of any other public body, and neither the Authority nor any
director, commissioner, council member, board member, officer,
employee or agent of the Authority, nor any person executing or
registering this Note shall be liable personally hereon by reason
of the issuance or registration hereof or otherwise.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions,
and things required by the Constitution and laws of the State of
Minnesota to'be done, to have happened, and to be performed
precedent to and in the issuance of this Note have been done, have
happened, and have been performed in regular and due form, time,
and manner as required by law.
This Note may be assigned but upon such assignment the
assignor shall promptly notify the Executive Director of the
Authority at the offices of the Authority by registered mail, and
the assignee shall surrender the same to the Authority either in
exchange for a new fully registered note or for transfer of this
Note on the registration records for the Note maintained by the
Authority. Each such assignee shall take this Note subject to the
foregoing condition and subject to all provisions state or
referenced herein.
The Authority has elected to issue this Note as a non -tax
exempt obligation and accordingly does not anticipate that the
interest on this Note is or will be generally exempt from federal
or state income taxes, and the Authority makes no representation or
covenant with respect to any such exemption.
IN WITNESS WHEREOF, the Authority has caused this Note to be
executed by the manual signatures of its Chairman and Executive
Director and has caused this Note to be dated ,
1994.
Chairman
This instrument was drafted by:
Casserly Law Office, P.A.
215 South 11th Street
Minneapolis, Minnesota 55403
25
Executive Director
DATE
August 1, 1996
February 1, 1997
August 1, 1997
February 1, 1998
August 1, 1998
February 1, 1999
August 1, 1999
February 1, 2000
August 1, 2000
February 1, 2001
August 1, 2001
February 1, 2002
August 1, 2002
February 1, 2003
August 1, 2003
February 1, 2004
EXHIBIT A
PAYMENT SCHEDULE
i
27
PAYMENT
$3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
3,089.00
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r�
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
CIWOF
FWE1.
DATE: July 30, 1999 /�
TO: William Burns, Executive Director of HRA l
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Public Hearing Regarding Sale of Excess Property at 8184 East
River Rd.
Background
The subject property is located at 8184 East River Road and was acquired last
year by Anoka County as part of the East River Road expansion project. The
property was purchased because the house was too close to the proposed
roadway. The lot measures 50'x 110'(5,500 s.f.) and is too small under the
zoning code for construction of a new home. In addition, the County has
eliminated access to East River Road.
N
In March of this year the adjoining property owner (Al Kellner) to the south at
8182 East River Road contacted the County about buying the lot. The County
then approached HRA staff for assistance in the transaction. Apparently, the
County is prohibited from selling the property directly to a private parry.
However, the County can sell the property to a third parry, such as the HRA.
The HRA previously assisted the County on a similar project along East River
Road near the Locke Lake dam.
Current Status
This item had been scheduled for consideration at the July 1st HRA meeting.
However, two weeks prior to the meeting staff was contacted by the property
owner to the north of the site. The owner, Gene Harstad at 500 Ironton Street,
was upset that he wasn't given an opportunity to bid on the site.
K
East River Rd. Lot
July 30, 1999
Page 2
Staff contacted Anoka County and learned that negotiations were initiated with
Mr. Kellner because he was the first party to express interest-.in-.the site. In the
interim, the County processed a deed to the HRA and Mr. Kellner deposited
money with the HRA for the purchase price. The final step in-the process
involves the public hearing-on August 5t' and then a closing convey title to
Kellner.
Legal Position
According to our legal counsel, the HRA is merely acting as a pass- through in this
transaction. The County and Mr.Kellner were the only parties involved in the
negotiations. As the intermediary, the HRA is only required to conduct a public
hearing before it conveys title to Mr. Kellner. The HRA is not required to go
through a public bidding process. This information has been shared with all of
the parties involved. Based on advice from our legal counsel, the HRA should
proceed with this transaction as originally proposed. A public hearing notice was
published in the Focus News as required by law. A separate letter was also
mailed out notifying neighbors of the hearing on August 5t'.
Recommendation
Staff recommends that the HRA conduct a public hearing and approve the sale of
Lots 5 and 6, Block 6, River View Heights to Al Kellner for $4,000.
M -99 -178
�P
Hv�NE
of
IRONTON ST NE
HUGO ST NE
FAIRMONT CIR NE
STN
FAJFVMWCIRNE
NE
HOUSING & REDEVELOPMENT
AUTHORITY F
Memorandum
CrN(N
FRIER"
DATE: July 30, 1999
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Resolution for HRA Tax Levy for Taxes Payable in 2000
This is the fourth year that the HRA has utilized a tax levy. The levy, which is
equal to .0144% of the City's taxable market value, produces between $185,000
and $200,000 in annual revenue for the Authority. The HRA has used the bulk of
this revenue to support repayment of the $1.5 million loan from the City.
Each year the HRA makes $143,332 in principal and interest payments on the
loan. The remaining funds are deposited into the HRA's General Fund.
As of August 1, 1999 the HRA has paid off $358,330 on the loan, leaving a
principal balance of $1,320,409. The term of the loan runs through February 1,
2012.
The City Council will consider a separate resolution consenting to the HRA levy
on August 23, 1999. The deadline for certification to the County Auditor's office
is September 15, 1999
Recommendation
Staff recommends that the HRA approve the attached resolution adopting a 1999
tax levy collectible in 2000.
M -99 -179
E
1 11
E RA RESOLUTION NO. 1999
A RESOLUTION ADOPTING A 1999 TAX LEVY
COLLECTIBLE IN 2000
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the Housing
and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority "), as
follows:
Section 1. Recitals.
1.01. The Authority is authorized by Minnesota Statutes Section 469.033 to adopt a levy on
all taxable property within its area of operation, which is the City of Fridley, Minnesota
(the "City ").
1.02. The :authority is authorized to use the amounts collected by the levy for the purposes of
Minnesota Statutes Sections 469.001 to 469.047 (the "General Levy ").
Section 2. Findings.
2.01. The Authority hereby finds that it is necessary and in the best interests of the City and
the Authority to adopt the General Levy to provide funds necessary to accomplish the
goals of the Authority and in furtherance of its Modified Redevelopment Plan.
A/
Section 3. Adoption of General Lew.
3.01. The following sums of money are hereby levied for the current year, collectible in 2000,
upon the taxable property of the City for the purposes of the General Levy described in
Section 1.02 above:
Total General Levy: .0144% of Taxable Market Value
Amount: Maximum Allowed by Law
Page 2 — Resolution No.
Section 4. Report to City and Filing, of Levies.
4.01. The Executive Director of the Authority is hereby instructed to transmit a certified copy
of this Resolution to the City Council for its consent to the General Levy.
4.02. After the City Council has consented by resolution to the General Levy, the Executive
Director of the Authority is hereby instructed to transmit a certified copy of this
Resolution to the County Auditor of Anoka County, TMinnesota.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF .1999.
LAWRENCE R. CON IERS - CHAIRPERSON
ATTEST:
WILLIAM W. BURN IS - EXECUTIVE DIRECTOR
r
GAV/PDATAWTREDLEWSUMA RES - 2000.DOC
HOUSING & REDEVELOPMENT W
AUTHORITY t
Memorandum
CMOF
MEM
DATE: July 30, 1999
T0: William Burns, Executive Director of HRA Al'o',
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Scattered Site Architectural Design Concepts
At the July 1, 1999 HRA meeting, staff presented an update on the initial draft of
the pattern book and house plans that were prepared by Robert Gerloff, a
residential architect.
On August 5t' Gerloff will update the HRA on the work he has done since the last
meeting. The goal is to wrap up the design work and complete final editing of
the book sometime in August. In September, staff will have a recommendation
on selecting a house plan for the Mississippi St. lot. In addition, we will prepare
a recommendation for selecting a developer.
M -99 -180
N
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum rM
MDCMIOF
DATE: July 30, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: TH 65 Update
SHEET PILE WALL DESIGN
At the June 1999 HRA meeting, the Authority authorized staff to enter into a contract with a
consultant to evaluate the feasibility of a sheet pile wall design for the lane expansion across
Moore Lake on TH 65. Subsequent to the meeting, staff entered into a contract with Short Elliot
Hendrickson for $58,000 (about half of this cost was for addition soil borings). On July 29,
1999, staff met with the consultant regarding their preliminary findings. The consulting
engineer's conclusion is that a sheet pile wall design is feasible, and will not adversely affect
Moore Lake.
The next step is to meet with MnDOT staff to gain their approval and support. A meeting has
been scheduled for Friday, August 6, 1999. Once approved by MnDOT, staff has asked them to
write a letter to support the City's application for federal funds which is due by September 20,
1999.
Also, the consulting engineer will need to meet with the Rice Creek Watershed District to
determine the impact of their requirements as well. This information will also be included into
the cost estimate for the project. ,
A final report will be available for the September HRA agenda.
DTED FUNDS
As you recall, the Legislature allocated $500,000 to the City of Fridley for design and
engineering fees for the TH 65 project. The funds were allocated in the Department of Trade
and Economic Development budget. Consequently, DTED staff advised the City that the typical
procedure for requesting DTED funds had to be requested. Therefore, staff completed an
application mid -July, and the City Council conducted a public hearing on July 26, 1999 to
authorize staff to make application to DTED. The City had to move quickly since a new law
passed which would have required job creation goals as part of the application. The effective
date of the new law is August 1, 1999. DTED staff has arranged for the "award letter" to be
issued on July 30, 1999. These funds will be used to reimburse the Authority's expenses for the
preliminary analysis on the sheet pile wall, the federal funding application, and the first round of
soil borings last March (total amount is approximately $76,000).
No action is required by the HRA on this item.
M- 99-182
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
DATE: July 30, 1999 (/
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Northstar Corridor Development Authority Issues
Background
I
"4
The Northstar Corridor Development Authority is evaluating two potential park and ride
facilities on the west side of the Burlington Northern Railroad tracks at 61St Avenue and
on the east side adjacent to Main Street. The property on the west side is owned by
Maynard Nielsen, and the property on the east is owned by Commercial Property
Investments.
There have been several developers interested in purchasing the Nielsen property for
either single family or multiple family development. The property on the east side was
recently rezoned to M-4, Manufacturing Only, and there does not appear to be
significant interest in this site as of yet.
The City will be actively supporting creation of a transit site at these locations in order to
provide additional transit service to Fridley businesses and residents. In addition,
supporting the Commuter Rail project will in the long run help to reduce the volume of
through traffic on University Avenue and TH 65. Staff is most concerned, however,
about the Nielsen property because the existing platted lots in the area could be
combined into several single family lots and development could occur without Council
review or approval. If developed, the loss of vacant land would hamper creation of
adequate park and ride or other redevelopment opportunities.
Staff recommends that the Housing and Redevelopment Authority purchase the Nielsen
property using the available Tax Increment from TIF #3, prior to the end of this year.
Originally, staff had intended to request the City Council to enter into a 12 -month option
agreement while the environmental review process concludes. The Fridley HRA,
however, may be better suited to complete the acquisition. Northstar Commuter Project
staff has indicated that it is their "intent" to reimburse the Authority for the acquisition
expenses. In order to maintain the purity of the environmental review process, Federal
regulations prevent the Northstar Authority from acquiring land during the environmental
review process. The funds from the NCDA would be "unrestricted funds" for the Fridley
HRA in the future and could be used for any of the Authority's programs. Further, the
HRA can purchase the property with the understanding that some of the land may
7
Northstar Corridor Development Authority Issues
July 30, 1999
Page 2
be used for additional redevelopment consistent with the City's goals and objectives for
development around transit station. The site, however, must be placed into the City's
redevelopment project area, which requires a public hearing process. This could be
accomplished this fall.
The NCDA staff is working with the .Metropolitan Transit staff to apply for Federal Funds
for the sites-under the "Congestion Management-and Air Quality" Funding program.
These funds may not be available for a year, and because it is a competitive application
process, the request may not befunded: These funds, however, could be another
potential source to reimburse the Fridley HRA faster other than the budget of the
Commuter Rail project.
Staff Recommendation
Unless otherwise directed, staff will prepare an option agreement with Maynard Nielsen
to acquire the property in 60 -90 days. The Authority will need to complete an appraisal
of the property and to complete a Phase I assessment of the property as well. The
option agreement would be presented for the Authority's approval at the September
agenda.
M -99 -183
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Ir
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum _
FRI
DATE: July 30, 1999
TO: William Bums, Executive Director of HRA
o(I
FROM: Barbara Dacy, Community Development Director
SUBJECT: 2000 Budget
Because or the work that was necessary to complete the fund projections discussed at
the joint meeting, staff did not have time to finalize the annual budget document. The
document will be presented for HRA review for the September agenda.
M -99 -184
0 •
Fridley HRA
Monthly Housing Program Summary
August 5, 1999
1. Loan Origination Report
Covers the loans and grants issued through 7- 30 -99. This report shows
activity both city -wide and in the Hyde Park neighborhood.
2. Loan Servicing Report
Covers HRA funded loans only. Report summarizes all of the loans being
serviced (including priortyears) by the Community Reinvestment Fund
(CRF) for the most recent reporting period, 6- 30 -99.
3. Delinquent Loan Report (see attached memo)
Report shows the number of loans that are considered delinquent. There
are four categories (1 month, 1 -2 months, 2 -3 months, over 3 months).
The report also shows the total amount of delinquent payments along with
the total loan principal outstanding. Report covers activity through
6- 30 -99.
4. Other Information
None
Monthly Housing Report Cover (5 -1 -99 HRA)
1999 (Jun -July) LOAN ACTIVITY REPORT
7139199
LOAN ORIGINATION REPORT
Month Ending
July -99
CUM Wide Loans
and Grants
J
HRA
MHFA
HRA
Fed.
MHFA
Fed.
Type of
Date
Type of
Loans
I Name
Address
Loans
Urd
Loans Unt
Grants Unt
Total
Unt
Closed
Property
Program
Hicks
6700 Monroe SL
$ 61000.00
1
$
$
$ 61000.00
1 1112199
Single Family
HRA 5% Loan
Jacob
6251 Rainbow Dr.
S 7,401.58
1
$
S
S 7,401.58
1 223199
Single Family
HRA 5% Loan
Wenzel
130 - Logan Pkwy. "
$ 10,660.00
1
$
$
$ 10,660.00
1 3/2/99
Single Family
HRA 5% Loan
Schreiner
7372 Symphony St.
$ 25,000.00
1
$
S
$ 25,000.00
1 323199
Single Family
HRA 5% Loan
Steinberg
6533 Lucia Lane
S 24,750.00
1
$
$
$ 24,750.00
1 417/99
Single Family
HRA 5% Loan
Werner
4543 Main SL NE
S 2,947.00
1
S -
$
$ 2.947.00
1 420/99
Single Family
HRA 5% Loan
Bernier
1544 Osborne Rd.
S
$ 10,000.00 1
$
$ 10,000.00
1 420199
Single Family
MHFA Loan
Kuusisto
595 - Kimbell SL NE
$
S -
$ 15,635.00 1
S 15,635.00
1 429199
Single Family
CDBG Grant
Semke
518 - KinfaO SL NE
S
S
S 15,825.00 1
$ 15,825.00
1 429/99
Single Family
CDBG Grant
Murano
7345 - Hayes SL NE
$ 4,386.00
1
$
$ -
$ 4,386.00
1 6099
Single Family
HRA 51% Loan
Tyge
7509 Fast River Rd.
S 1,890.00
1
$
$ -
$ 1,890.00
1 6115189
Single Family
HRA 5% Loan
Hughes
7547 Lakeside Rd.
S 10,147.00
1
$
$
$ 10,147.00
1 7/13199
Single Family
HRA 5% Loan
Maher
7965 - Riverview Terr.
$ 10,000.00
1
$
$
$ 10,000.00
1 720199
Single Fanuly
HRA Last Resort
Sub -Total $ 103,181.58 10 S 10,000.00 1 $ 31,460.00 2 S 144,641.58 13 Units
Hyde Park Loans and Grants
J
HRA
MHFA
Fed.
Date
Type of
Name
Address
Loans
Unt
Loans Unt
Grants Unt
TWaI
Unt Closed
Property
Program
Butterfield 5924 - 2 -12 St. $ 9,390.66
7
$ 9,390.66 $
$ 18.781.32
7 3110/99
Multiple Family
Hyde Park Deferred
Woods 5830 - 2nd St. $ 25.000.00
4
$ $
$ 25.000.00
4 3111/99
Multiple Fandty
Hyde Park Deferred
Sub -Total $ 34,390.66
11
$ 9,390.66 $
$ 43,781.32
11 Units
Total S 137,57224 21 S 19,390.69 1 S 31,490.00 2 $ 188,422.90 24 Units
e
LOAN SERVICING REPORT
Month Ending
June -99
Number of Loans-in Portfolio
Principal Payments
Interest Payments
Ending Principal Balance
Deferred Loans
Number of Loans in Portfolio
Principal Payments
Interest Payments
Ending Principal Balance
Totals
Total Loans in Portfolio
Principal Paid
Interest Paid
CRF Monthly Servicing Fee
NET FUNDS RECEIVED
TOTAL OUTSTANDING LOAN PRINCIPAL
Pool Pool Total
76 103 179
$ 29,414.03 $ 8,228.93 $ 37,642.96
$ 4,357.67 $ 5,053.72 $ 9,411.39
$ 903,265.76 $1,167,671.61 $ 2,070,937.37
20
105
2
22
$ 37.04
$
- $
37.04
$ 1.16
$
- $
1.16
$ 108,005.63
$
17,390.66 $
125,396.29
96
105
201
$ 29,451.07
$ 8,228.93
$
37,680.00
$ 4,358.83
$ 5,053.72
$
9,412.55
$
47,092.55
$
820.50
$
46,272.05
$1,011,271.39
$1,185,062.27
$ 2,196,333.66
Notes: Pool 1 loans were Issued prior to February 1, 1997.
Pool 2 loans were issued after February 1, 1997; loans made from the City's $1.5
million loan.
1999 (June -July) LOAN ACTIVITY REPORT
L.S.R. - JUNE 1999
7/30/99
s
Fridley Loan Program
Loan Delinquencies
6/30/99
Number of Loaft (1.99)
14
1 to 2
2 to 3
Over 3
Loan Data
1 Month
' Months
- - Months
Months
Number of Loaft (1.99)
14
3 2
2
Total Monthly.Payments
$ 2,298.17 $
813.13 $ 450.02
$ 1,874.30
% of Portfolio
5.8%
1.8% 1.6%
0:2%
7/30/99
a