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HRA 04/01/1999 - 00002669CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING APRIL 1, 1999 CALL TO ORDER: Chairperson Commers called the April 1, 1999, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, Pat Gabel and John Meyer Members Absent: Jim McFarland Others Present: Barb Dacy, Community Development Director Grant Fernelius, Housing Coordinator Bill Burns, City Manager Jim Casserly, Financial Consultant Rick Pribyl, Finance Director Julie Vogel, Accountant APPROVAL OF THE MARCH 4, 1999 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the March 4, 1999, Housing and Redevelopment Authority minutes as presented in writing. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. CONSIDER SUBORDINATION AGREEMENT FOR SHOREWOOD: 2. CLAIMS AND EXPENSES: Ms. Vogel, Accountant, distributed a list of additional expenses for consideration. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the Consent Agenda as presented. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 2 ACTION ITEMS: 3. RECONSIDER MAXIMUM LOAN AMOUNT FOR REVOLVING LOAN PROGRAM: Mr. Fernelius, Housing Coordinator, explained that at the March 4, 1999, meeting, staff made a recommendation to increase the maximum revolving loan amount from $25,000 to $35,000. At that time, the item was tabled and the HRA requested additional information regarding the repayment history of borrowers receiving larger loans and the types of improvements which were made with these funds. Mr. Fernelius explained that the HRA currently has 201 outstanding loans. Forty-three of these loans have a balance greater than $20,000. Staff reviewed the payment history of loans with balances over $20,000 and with balances under $20,000. Of the 43 loans with balances over $20,000, only three delinquencies have occurred. Of the 158 loans with balances under $20,000, there are approximately 25 delinquencies. Mr. Fernelius noted that many of the loans are less than 30 days delinquent. Based upon this information, the larger loans do not seem to have a high delinquency rate in comparison to the smaller loans. Mr. Fernelius provided the HRA with a breakdown of types of improvements completed with HRA loans. Fifty-six percent of the improvements were made to the exterior including windows, doors, roofing, siding, etc. The remaining improvements have basically been used to upgrade the health, safety, and livability of the housing. Mr. Meyer asked if the type of improvements were based on the actual percentage of dollars spent or by the percentage of loans made. Mr. Fernelius responded that the numbers were based on the loans made. Mr. Meyer stated this would not provide him with the information he desired. He stated he still believes that exterior improvements, room expansions, and interior improvements are not as important as improving the housing stock of the community, which is the main goal of the program. Mr. Fernelius stated that these improvements do improve the housing stock in the community. Furthermore, allowing homeowners to make changes such as additions often allows them to remain in the community rather than moving to larger homes in outlying suburbs. Mr. Meyer stated he does not feel this is an important element of the program. Raising the loan limit would not add money into the targeted areas of the community such as Hyde Park. Ms. Gabel stated she disagreed with Mr. Meyer. Part of the goal of the program is to maintain the housing stock and this provides the means for residents to do so. She stated she feels the entire community benefits by these improvements. Anoka County HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 3 has adjusted the income guidelines for the CDBG Home Improvement Grant Program and she feels this increase in loan limits falls in line with those increases. She would be in favor of the increase in loan amounts. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve Resolution No. 2-1999, A Resolution Modifying the Fridley Revolving Loan Program. Mr. Meyer asked what the income limits were for the loan program. Mr. Fernelius responded that the maximum income per household is $58,650 per year. Mr. Meyer stated he did not feel that a household with an income of $58,000 was in need of this type of a loan and that it was not going to those who were financially in need of the assistance. UPON A VOICE VOTE, COMMERS, SCHNABEL, AND GABEL VOTING AYE, MEYER VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 4. PROJECT PLAN APPROVAL FOR MEDTRONIC PROJECT: Ms. Dacy, Community Development Director, presented the master plan and project plan approval for the Medtronic world international headquarters to be located at the Lake Pointe site at I-694 and Highway 65. She stated she believes the proposed site plan for the corporate office facility captures the original intent and vision that the City and HRA has had since the site was identified in the mid-1980's for a redevelopment site. The HRA's action on this item will be the first step in the master plan review process. It will be presented to the Planning Commission on Wednesday, April 7. The City Council will take action on the plans at the April 26 Council meeting. The AUAR will be reviewed and action will be taken at the April 12 meeting. Ms. Dacy noted that the S-2 district requires that the HRA review the plans to determine if it is consistent with the redevelopment objectives. She presented an overhead of the master plan. She noted that the site is approximately 44 acres with the increase due to the realignment of the roadway along the north side of the site. The key concept of the plan is a creation of a parkway, which will extend from the 7th Street intersection to Highway 65 which will create a very stately and formal appearance. Ms. Dacy stated that Phase I will encompass approximately the east half of the site and will include five buildings and a parking structure. The centerpiece of Phase I will be the corporate office with a large atrium in the middle of the building. This building will be the tallest structure in Phase I with a total height proposed at 85 feet. It will have four stories of offices. The neuro office building will be 70 feet high and the research center and education center will be 55 feet in height. Ponds will flank an access drive with both the research center and education center on either side at the entrance. There will be an underground access to the parking ramp, which will consist of six parking levels, two of which, as proposed, will be installed below grade with a maximum above-grade elevation HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 4 of 40 feet. A central power plant facility will be located just west of the parking structure which will provide the heating and cooling systems for the entire development. Ms. Dacy stated a mall area will connect the office buildings. The mall area will provide a garden-type approach, providing the campus with a pedestrian walkway. A 20-foot high light standard is proposed for the center of the parkway, which is appropriate for the area and will create a parkway feel rather than a typical city street. She stated that the landscaping plan is rather extensive with 618 trees being proposed for Phase I. She noted that the grading and utility plans will need to be approved by the City engineers and the Rice Creek Watershed District to see that they are in compliance with all required standards. Ms. Dacy briefly discussed the purpose of each of the plan documents which had been distributed to the HRA. The plan documents include the site survey, the master site plan, the site plan for Phase I, the site demolition plan, the site layout plan, the preliminary grading plan, the preliminary utility plan, the drainage and erosion control plan, and the planting plan. Mr. Meyer stated that Red Oak trees in Fridley have been especially susceptible to oak wilt. He felt this should be noted. Ms. Schnabel asked if Bridgewater Drive will be privately maintained or if Medtronic will maintain it. Ms. Dacy stated that it is currently proposed as a city street; however, staff is suggesting that the vegetation and maintenance of the area around the trees on the median and boulevard areas be the responsibility of Medtronic, due to the City's limited access to necessary equipment. Ms. Schnabel stated her concern in that this drive may become a speedway providing direct access from 7th Street to Highway 65. Ms. Dacy stated this could occur; however, with the nature of the design, it is hoped that it will be a below-speed roadway. Ms. Schnabel asked if stop signs could be installed to alleviate the problem. Ms. Schnabel asked the proposed parking stall width. Ms. Dacy stated that the stalls in the parking ramp are proposed at 8.5 feet wide with 9 feet wide proposed for the surface parking. The 9-foot wide surface parking will require a special use permit, which Medtronic is seeking. Staff is supporting a zoning text amendment to create an 8.5-foot wide space only in parking ramp structures. Mr. Haggmann of Medtronic presented a rendering of the proposed Phase I development. He stated they are very excited about this development and that it will make a dramatic HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 5 statement for the North Metro area. He also presented a three-dimensional model of the development. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to recommend approval of the master project plan to the Planning Commission and the City Council, subject to the execution of the development agreement and approval by necessary entities. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: 5. HRA BUDGET: Mr. Pribyl, Finance Director, stated staff is in the process of developing the HRA budget. Ms. Dacy stated that staff is proposing a workshop meeting at 6:30 p.m. preceding the May HRA meeting to further discuss the budget. The HRA members were in agreement with this meeting time. 6. MEDTRONIC UPDATE: Ms. Dacy stated that staff has been working actively on two pieces of legislation. She explained that a bill has been introduced to both the Senate and House which would extend the TIF district to the year 2025, with the understanding that 200,000 square feet of Phase I development will become taxable in the year 2011. Additionally, staff has been working with members of the Senate and House for a bill that would identify funds to assist the city in constructing additional lanes on Highway 65. Mr. Burns, City Manager, stated two hearings have been held in regard to the TIF extension which he believes were well received. This will now be presented to the Tax Committees. The bill for the public improvements was introduced to the Senate, which would provide $500,000 through a MIF grant (appropriated in year 2000). A similar grant has been requested for the current fiscal year. Both of these bills are uncertain at this time. He stated staff is also exploring other alternatives for funding the highway improvements. Ms. Dacy has hired Mr. Jim Benshoof to conduct a traffic analysis and a consultant is also conducting soil borings. It appears, from preliminary information, that the cost of the project will likely increase from $5 million to $7.5 million. Ms. Dacy stated staff has been meeting with various entities, including the County Commissioner, the President of the School Board, and the Chamber of Commerce. A meeting has been scheduled with the entire School Board to discuss the development. Mr. Casserly stated that the School board and the County would need to approve the TIF extension and file it with the Secretary of State. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 6 Ms. Dacy stated she has received a very positive response at the various meetings and people have been extremely supportive of the development. 7. CONSIDER TIF REQUEST, WAYMORE TRUCKING: Ms. Dacy explained that she met with Waymore Trucking representatives on Monday, March 29, in regard to TIF assistance. They have indicated that they would like to pursue development on the vacant parcel immediately east of their present facility. She stated that the HRA could provide up to $112,000 in tax increment assistance, assuming they sign a minimum valuation agreement at certificate of completion. Staff has reviewed the soil reports and talked with Braun Intertec. The cost of soil correction is significant. Mr. Commers asked if the request would meet the HRA requirements. Ms. Dacy stated that it is higher than usual. The proposed assistance would be approximately 9% of the project costs of approximately $1.2 million. Mr. Commers asked what the justification would be for exceeding the HRA guidelines. Ms. Dacy stated that this is a similar approach to the Onan/Murphy project in that if the soil is not corrected, no development will occur on the property. Mr. Burns noted that it is estimated that the new development will create 25 additional jobs. MOTION by Ms. Schnabel, seconded by Ms. Gabel, to authorize staff to pursue negotiations with the owner of Waymore Trucking, with a tax increment package not to exceed $112,239. Mr. Commers stated he would not support this request, as the assistance would exceed the HRA guidelines. Furthermore, he is not convinced that 25 additional jobs would be available. Ms. Dacy stated that the job requirement would be made part of the development contract. Ms. Schnabel stated the guidelines are generally adequate for a typical project. However if this assistance is not available, no development will occur on that property. She feels the HRA needs to consider more assistance in this kind of circumstance. UPON A VOICE VOTE, SCHNABEL, GABEL, AND MEYER VOTING AYE, COMMERS VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 8. UPDATE ON HOME IMPROVEMENT GRANT PROGRAM: Mr. Fernelius explained that Anoka County notified staff that HUD has released new income limits for the CDBG and HOME programs. These funds are used to provide assistance under the HRA's Home Improvement Grant program. He stated that in recent HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 1, 1999 PAGE 7 years, the demand for the program has decreased, which is partly due to the income guidelines. It is felt that the increase in income limits will allow more residents to qualify. No action is required by the HRA on this item. OTHER BUSINESS: Staff noted that the Housing Program Summary Report was included in the packet for HRA's information. Mr. Fernelius explained that Mr. Dave Mayer, the City's Remodeling Advisor, has submitted his resignation notice. Staff will miss his expertise as he has done an excellent job for Fridley. The position will be advertised and staff will begin the process of finding a replacement immediately. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Ms. Schnabel, to adjourn the meeting at 9:25 p.m. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE APRIL 1, 1999, MEETING OF THE HRA ADJOURNED AT 9:25 P.M. Respectfully submitted, Tamara D. Saefke Recording Secretary