HRA 06/01/2000 - 6322k
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HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JUNE 1, 2000
MEETING 7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
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CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
JUNE 1, 2000, MEETING, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
May 4, 2000
CONSENT AGENDA:
Consider Contract with CEE for 1998 HOME Rehab Program .......... ............................... 1
Consider Participation in Minnesota Solutions for 2001 Legislative Session ....................... 2
Approve Amended Escrow Agreement for Purchase of Old Central Avenue Sites ............... 3
Claimsand Expenses .............................................................. ............................... 4
ACTION ITEMS:
Consider Contract with Community Reinvestment Fund (CRF) for Fridley Loan Programs.... 5
Consider Authorizing Design for TH 65 Project ............................. ............................... 6
INFORMATION ITEMS:
Update on Gateway East RFP ................................................... ............................... 7
Information on Housing Rehab Program Issues ............................. ............................... 8
Update on Salvage Yard redevelopment ...................................... ............................... 9
Update on Joint Community Task Force ....................................... ............................... 10
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
MAY 4, 2000
CALL TO ORDER:
Vice - Chairperson Schnabel called the May 4, 2000, Housing and Redevelopment
Authority meeting to order at 9:58 p.m.
ROLL CALL:
Members Present: Virginia Schnabel, John Meyer, Pat Gabel, Jim McFarland
Members Absent: Larry Commers
Others Present: William Burns, City Manager
Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
Jim Casserly, Development Consultant
Julie Vogel, Accountant
APPROVAL OF THE APRIL 6, 2000, HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES:
MOTION by Mr. Meyer, seconded by Ms. Gabel, to approve the April 6, 2000, Housing
and Redevelopment Authority meeting minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. CONSIDER RESOLUTION DESIGNATING BLIGHTED PROPERTY IN
GATEWAY EAST PROJECT:
Mr. Fernelius stated that this is a resolution identifying the duplex at 349 -353 57th Place
as a blighted property. A similar resolution was adopted by the HRA in April of 1999 for
the Cash -n -Pawn and JR's Automotive sites. Blight determination is required to include
the parcel in a tax increment financing district (TIF). Action on the TIF district is
tentatively scheduled for sometime this summer after a developer has been selected. In
the meantime, the structure can be demolished to prepare the site for redevelopment.
Staff recommends approval of the resolution designating certain properties in the
Gateway East Project Area as blighted.
HOUSING & REDEVELOPMENT AUTHORITY MEETING. MAY 4. 2000 PAGE 2
2. CLAIMS & EXPENSES:
MOTION by Ms. Gabel, seconded by Mr. McFarland, to approve the claims and
expenses as presented.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the consent agenda.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
2. RECONSIDER ACQUISITION OF CENTRAL AVENUE PARCELS:
Mr. Femelius stated that staff recommends that the first action is to approve the Petty -
Erickson acquisitions for $57,000 and $86,100 respectively. The second action is to
exercise the right to terminate the agreement with Richard Carlson.
Mr. Casserly suggested that the HRA use the funding in escrow for the clean -up cost.
The purchase prices are being adjusted to reflect the cost and the clean -up. Those
other funds will be used to do just that. The purchase price should be adjusted as
shown in the resolution and use the balance of the funds. The funds cannot be moved
between the parcels.
Ms. Schnabel stated that an outside party was interested in the Petty property. Are they
going to purchase this ahead of this private party?
Ms. Dacy stated she explained to the private party that the escrow agreement and
purchase agreement was extended to June 30. The negotiation is still first between the
HRA and the property owner. The private party wants to develop it immediately for a
dental office.
Ms. Schnabel stated that on the Carlson site, staff made it clear that the debris on the
site was so expensive and of a different nature than the other two sites.
Mr. Meyer stated that he does not know how valuable the Carlson site would be to
impose clean -up. There are other ways to put piling down and save money.
Mr. Fernelius stated that the Carlson site probably is not going to develop on its own. At
some point down the road, they might get involved in this again and assist in the clean-
up costs.
Ms. Dacy stated that the piling suggestion is fine; but if some more hazardous materials
were detected, it would still have to be corrected for the land use.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 4, 2000 PAGE 3
Mr. McFarland asked for more information regarding the contamination.
Mr. Fernelius stated they just do not know.
Mr. McFarland stated that the property might be worth less than the cost of clean -up.
Possibly a new offer could be reconsidered.
Mr. Fernelius stated that the concern is that the cost of the clean -up could be very
expensive far in excess of what the HRA would have even committed to pay for the site.
Mr. Casserly stated that with the Petty - Erickson sites, they will be coming back into the
amendment to the escrow agreements. The amendments were not prepared in
advance for the meeting. With the extension of time, these parcels will not be closed
until after the next HRA meeting. He suggests that they authorize an amendment to
those agreements, but they will be prepared in time for the next meeting.
MOTION by Ms. Gabel, seconded by Mr. McFarland, to approve the modified purchase
price amounts for the Petty property from $90,800 to $57,000; and for the Erickson
property from $166,000 to $86,000; with the understanding the balance of funds held in
escrow will be applied to any environmental clean -up costs.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to terminate the Option Agreement
with Richard Carlson with the understanding that the funds held in escrow will be
returned to the HRA for repayment of the City's loan.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
INFORMATION ITEMS:
4. GATEWAY EAST RFP /RFQ:
Mr. Fernelius stated that the RFP packet identifies the goals of the project and provides
three site plan /street configuration options. The developers will be asked to provide
sample building and site plans, a summary of their experience, city references and
basic financial information that will be kept confidential with the HRA attorney. Once the
proposals are received, the HRA will review them at the July meeting.
5. COMPREHENSIVE PLAN UPDATE:
Ms. Dacy stated that the current draft of the plan has some additional information
regarding how the Central Avenue vacant parcel acquisition would relate to what is
stated in the plan. This is to clarify intent and the meaning of the language to address
concerns heard at public hearings and to respond to concerns of the City Attorney and
the City Manager.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 4, 2000 PAGE 4
OTHER BUSINESS
None
ADJOURNMENT
MOTION by Ms. Gabel, seconded by Mr. McFarland, to adjourn the meeting.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED AND THE MAY 4, 2000, MEETING OF THE
HOUSING AND REDEVELOPMENT AUTHORITY ADJOURNED AT 10:11 P.M.
Respectfully submitted,
.� �.c. o(. cep.+• -J
Signdf L. JohrzWon oYJ
Recording Secretary
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HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
DATE: May 26, 2000
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Contract with Center for Energy and Environment for 1998
HOME Rehab Program
In December of 1998 the HRA received $65,000 in federal HOME funds through
the Anoka County HRA. The monies are earmarked for housing rehab grants to
lower income homeowners. The program is to be administered by Center for
Energy and Environment (CEE; now known as Community Revitalization
Resources) and the HRA must provide a match equal $16,250. Sufficient funds
have also been included in the 2000 HRA budget.
Although, the HRA executed a grant agreement with Anoka County (and the
funds are secure) staff recently discovered that an agreement had not been
executed with CEE to administer the rehab program. In order to draw down on
the HOME funds an agreement needs to be in place. Normally, this would have
been done at the same time the HRA entered into a separate agreement with the
County.
Under the agreement CEE will administer all phases of the program, from
marketing and application in -take, through inspection and work write -up and
then final project completion. CEE will be paid $875 for each grant that it
processes. A copy of the agreement is attached. The contract date runs from
December 1, 1998 through December 31, 2000.
Recommendation
Staff recommends that the Authority approve the proposed contract with CEE to
administer the 1998 HOME rehab program.
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AGREEMENT FOR ADMINISTRATIVE SERVICES
between
CENTER FOR ENERGY AND ENVIRONMENT, INC.
and
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY
(1998 HOME Program)
THIS AGREEMENT, made this 1st day of December, 1998, the date of the signatures of the
parties herein notwithstanding, by and between the Housing and Redevelopment Authority in
and for the City of Fridley, a body corporate and politic existing under the laws of the State of
Minnesota (the "Authority "), and the Center for Energy and Environment, Incorporated, a
501(c)(3) non - profit corporation, with its offices at Butler Square Building, 100 North 6th Street,
Suite 412 A, Minneapolis, Minnesota 55403 -1520 ( "CEE ").
WITNESSETH THAT:
WHEREAS, The HOME Investments Partnership Act (the "HOME Program ") provides
assistance to state and local governments to strengthen public - private partnerships to provide
more affordable housing; and
WHEREAS, the Authority has submitted an application to Anoka County for HOME Program
funds; and
WHEREAS, said application has received approval by Anoka County and the United States
Department of Housing and Urban Development for the expenditure of funds, in part, to deliver
the Fridley Home Improvement Grant Program (the "Program "); and
WHEREAS, CEE has agreed to administer said Program for the Authority, which proposal has
been accepted by the Authority.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties
agree as follows:
1. TERM
The project to be accomplished by CEE hereunder shall run from December 1, 1998 to
December 31, 2000 unless earlier terminated as provided herein, or until all obligations set forth
in this Agreement have been satisfactorily fulfilled, whichever occurs first.
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2. SERVICES TO BE PROVIDED
A. CEE shall provide the following services to administer the Program:
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(1) Coordinate marketing efforts with the Authority and answer questions from
interested parties concerning the Program. In addition, CEE shall maintain
up -to -date application materials including, but not limited to, application
forms, program brochures and related literature.
(2) Receive applications from interested parties and determine eligibility status
with regard to household income, amount of assets, ownership status, type
of property and other criteria as specified by the Authority.
(3) Notify applicants in writing within 10 business days of receipt of application
as to their eligibility status. If an application is incomplete, CEE shall notify
the applicant within the 10 day period to request additional information.
(Applicants which qualify for the Program are defined as "Program
Recipients ".)
(4) Verify property title records to determine whether applicant has good title to
the property; confirm in writing that the applicant is current on property
taxes and mortgage payments and that there are no unsatisfied judgments
or liens. In addition, CEE shall prepare the necessary Repayment
Agreement to be signed and recorded prior to the start of the rehabilitation
work.
(5) Within 30 business days of receipt of application, CEE shall
schedule and conduct an inspection of the applicant's property. Said
inspection shall be conducted by qualified personnel of CEE who
are trained and experienced in housing rehabilitation. Said inspection shall
be used as the basis of preparing a scope of work and related project
specifications. CEE and Authority will meet to review minimum
rehabilitation standards, eligible improvements, minimum product quality,
work write -up format, and bidding procedures. Said scope of work shall be
completed and returned to the Program Recipient within 60 days of receipt
of application.
(6) CEE shall provide guidance to the Program Recipients on obtaining and
evaluating estimates. Program Recipients shall have 30 days to obtain
estimates.
D. It shall be the responsibility of CEE to meet all standards and satisfy all
requirements expressed in Title I of the Housing and Community Development Act
of 1974 as amended and the HUD Implementary Regulations at 24 CFR, Part
570, and any other applicable federal statutes, rules, or regulations established
now or hereafter, and any applicable statutes, rules, regulations, or guidelines
established now or hereafter by the State of Minnesota or any of its agencies.
Should it appear to CEE at any time during the course of implementing said
project, that the work to be done has not been explained or described in sufficient
detail, or with sufficient clarity, or should it appear that any plan, proposal, or other
material conflict with any standards or requirements imposed by statute,
regulation, or HUD, CEE shall promptly contact the Authority's Housing
Coordinator or other designated representative. In no event shall CEE proceed
with administration of said project in uncertainty. CEE shall comply with the
following requirements and standards of OMB Circular No. A -122, "Cost Principles
for Non Profit Organizations" or OMB Circular No. A -21, "Cost Principles for
Educational Institutions ", as applicable, and with the following Attachments to
OMB Circular No. A -110:
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(1) Attachment A, "Cash Depositories ", except for paragraph 4 concerning
deposit insurance;
(2) Attachment B, "Bonding and Insurance ";
(3) Attachment C, "Retention and Custodial Requirements for
Records ", except that in lieu of the provisions of paragraph 4, the
retention period for records pertaining to individual HOME
activities starts from the date of submission of the annual
performance and evaluation report, as prescribed in 570.507, in
which the specific activity is reported on for the final time;
(4) Attachment F, "Standards for Financial Management Systems ";
(5) Attachment H, "Monitoring and Reporting Program Performance ",
paragraph 2;
(6) Attachment N, "Property Management Standards ", except for paragraph 3
concerning the standards for real property, and except that paragraphs 6
and 7 are so modified so that
(1) In all cases in which personal property is sold, the proceeds shall be
program income, and
(ii) Personal property not needed by the subrecipient for HOME
activities shall be transferred to the recipient for the HOME program
or shall be retained after compensating the recipient; and
(7) Attachment O, "Procurement Standards ".
3. PROJECT METHODOLOGY AND PROCEDURE
CEE, in providing the services described in Section 2 of this Agreement, shall employ methods
and procedures that are deemed to be appropriate, reliable, and professional by individuals,
firms, and associations regularly engaged in work of a similar nature. The methods and
procedures employed shall include those required by the sources of authority specified in
Section 2, herein, but shall not necessarily be limited to such methods and procedures.
4. PROJECT EVALUATION AND ACCEPTANCE
In order that the Authority may be kept informed of CEE's progress and properly evaluate the
success of CEE in achieving the Agreement goals, the Authority may make suggestions,
criticisms, and recommendations to CEE and CEE shall on a monthly basis and at other times
upon request by the Authority, send a written progress report to the Authority's Housing
Coordinator. Said report shall a) summarize the activities and progress of CEE to date, b) detail
special problems or difficulties that have arisen during the course of the project which need to
be brought to the attention of the Authority and c) summarize any other information, problems,
or proposals which the Authority needs to know in order to properly evaluate the actions of CEE
in working towards the Agreement goal. CEE shall thoroughly and conscientiously implement
the proposals, recommendations, and criticisms of the Authority or its designated
representative, in writing, before proceeding further with the implementation of the program so
that the goals of this Agreement may be met to the satisfaction of the Authority.
Any deviations from the goals, standards, and requirements of the project as determined by
said designated representatives of the Authority shall be corrected by CEE before proceeding
further with the implementation of said project.
5. PROJECT ADMINISTRATION, PERSONNEL, AND RECORDS
A. CEE shall engage in the implementation of the Program, such individuals as are
necessary for its proper completion. CEE warrants and represents that all of its
employees shall be properly trained, competent and qualified to perform the tasks
assigned to them. CEE shall provide the Authority with such information regarding
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the qualifications of said individuals as required by the Authority to verify that
present and subsequent services are being rendered by competent and trained
people. All individuals engaged by CEE to perform services under this Agreement
must receive express approval of the Authority before commencing any services
under the Agreement. Any or all of said individuals may be regular employees of
CEE or may be specifically employed by CEE as independent contractors to work
on the implementation of said project. However, CEE shall not subcontract with
any other firms, associations, consulting agencies, or other organizations for the
implementation of the Program, without the expressed written approval of the
Authority.
B. CEE shall maintain records on all individuals employed by it in the implementation
of the Program. Said records shall show the name and qualifications of each such
individual, the hourly rate of pay for each such individual, and the number of hours
worked by each such individual, and the days on which such hours were worked.
CEE shall also maintain, and complete in correct form, all other records required
by the rules, regulations, or guidelines of HUD or by Title I of the Housing and
Community Development Act of 1974 as amended and the HUD Implementary
Regulations at 24 CFR, Part 570. CEE further agrees to maintain all such
required records for three years after receipt of final payment or until all other
pending matters are closed.
6. DATA PRIVACY
All data collected, created, received, maintained, or disseminated, or used for any purposes in
the course of CEE's performance of this Agreement is governed by the Minnesota Government
Data Practices Act, Minnesota Statutes 1984, Section 13.01 et. seq. or any other applicable
State statutes and any State rules adopted to implement the Act, as well as State statutes and
Federal regulations on data privacy. CEE agrees to abide by these statutes, rules, and
regulations and as they may be amended.
7. NONDISCRIMINATION
A. General
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CEE shall comply with all federal, state, and local laws prohibiting discrimination
on the basis of age, sex, marital status, race, creed, color, national origin, sexual
orientation, or the presence of any sensory, mental, or physical handicap or any
other basis now or hereafter prohibited by Law. These requirements are specified
in Section 109 of the Housing and Community Development Act of 1974; Civil
Rights Act of 1964, Title VI; Civil Rights Act of 1968, Title VIII; Executive Order
11063; Executive Order 11246; Section 3 of the Housing and Urban Development
Act of 1968; and Minnesota Statutes Chapter 363. Specifically, CEE is prohibited
from taking any discriminatory actions defined in the HUD Regulations at 24 CFR
570.602(b) (1 -3) and shall take such affirmative and corrective actions as are
required by the Regulations at CFR 570.602(b)(4).
B. Program Benefit
CEE shall not discriminate against any resident or Program recipient by denying
benefit from or participation in any block grant funded activity on the basis of race,
color, sex, or national origin. (Civil Rights Act of 1964, Title VI; Civil Rights Act of
1968, Title VII; Section 109, Housing and Community Development Act of 1974).
C. Fair Housing
CEE shall take necessary and appropriate actions to prevent discrimination on the
basis of Minnesota State law or federal law in federally assisted housing and
lending practices related to loans insured or guaranteed by the federal
government. (Civil Rights Act of 1968, Title VII; Executive Order 11063; Minnesota
Statutes Chapter 363).
D. Employment
1. In all solicitations under this Agreement, CEE shall state that all qualified
applicants will be considered for employment. The words "equal
opportunity employer" in advertisements shall constitute compliance with
this section.
2. CEE shall not discriminate against an employee or applicant for
employment in connection with this Agreement because of age, marital
status, race, creed, color, national origin, sexual orientation, or the
presence of any sensory, mental, or physical handicap, except when there
is a bona fide occupational limitation. Such action shall include, but not be
limited to the following: Employment, upgrading, demotion or transfer,
recruitment or recruitment advertising, layoff or termination, rates of pay or
other forms of compensation, and selection for training. (Executive Order
11246 as amended and Minnesota Statutes Chapter 363.)
3. To the greatest extent feasible, CEE shall provide training and employment
opportunities for lower income residents within the area served by block
grant assisted projects (Section 3, Housing and Community Development
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Act of 1968, as amended).
E. Contractors and Suppliers
1. No contractors, subcontractors, union, or vendor engaged in any activity
under this Agreement shall discriminate in the sale of materials, equipment,
or labor on the basis of age, sex, marital status, race, creed, color, national
origin, sexual orientation, or the presence of any sensory, mental, or
physical handicap. Such practices include upgrading, demotion, recruiting,
transfer, layoff, termination, pay rate, and advertisement for employment.
(Executive Order 11246 as amended and Minnesota Statutes Chapter
363).
2. All firms and organizations described above shall be required to submit to
the Agency certificates of compliance demonstrating that they have, in fact,
complied with the foregoing provisions; provided, that certificates of
compliance shall not be required from firms and organizations on contracts
and /or yearly sales of less than $10,000.
3. To the greatest extent feasible, CEE shall purchase supplies and services
for activities under this Agreement from vendors and contractors whose
businesses are located in the area served by block grant funded activities
or owned in substantial part by project area residents. (Section 3, Housing
and Community Development Act of 1968, as amended.)
F. Notice
1. CEE shall include the provisions of the appropriate subsections A, B, C, D,
and E of this section in every contract or purchase order for goods and
services under this Agreement and shall send to each labor union or
representative of workers with which it has a collective bargaining
Agreement or other contract or understanding a notice advising the said
labor union or worker's representative of the commitments made in these
subsections.
2. In advertising for employees, goods, or services for activities under this
Agreement, CEE shall utilize minority publications in addition to publications of
general circulation.
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8. EARLY TERMINATION
This Agreement may be terminated by the Authority at any time, with or without cause, upon 30
days written notice, delivered by mail or in person, to CEE. This Agreement may be terminated
by the Authority immediately upon the receipt by the Authority of notice of the loss of federal
funding for the HOME Program . For purposes of giving notices hereunder, the address of CEE
is The Butler Square Building, 100 North 6th Street, Suite 412 -A, Minneapolis, Minnesota
55403 -1520. Upon termination, CEE shall be entitled to receive as compensation, payment for
work actually performed to the date of termination as determined by the schedule of payment
referred to in Section 10 (Compensation).
9. DEFAULT AND REMEDY
A. Any of the following constitutes a default on the part of CEE:
(1) Failure to proceed with the implementation of the Program at a pace
reasonably calculated to implement such program within the time limits
stated herein;
(2) Failure to conscientiously abide by the directions of the Authority.
(3) Failure to abide by any other term or condition of this Agreement.
B. In the event of default, the Authority shall have the option of terminating this
Agreement upon written notice of termination sent to CEE at its address written
above. Termination shall be effective immediately upon receipt of notice of
termination by CEE, or at such later date as the written notice shall state. Upon
termination, the Authority may recover from CEE any and all damages directly or
consequently arising out of the breach of this Agreement or failure to perform the
same by CEE.
10. COMPENSATION
A. Administrative Services
As compensation for the services to be performed hereunder, CEE shall be paid a
fixed fee of $875.00 per grant processed. CEE shall invoice the City for services
rendered after the rehab project is complete
The City shall provide CEE with the appropriate forms and documents to submit for
reimbursement.
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B. Rehabilitation Assistance
CEE shall submit a separate invoice for each grant made, but only after the
rehabilitation project is complete. The invoice shall state, at a minimum, the name of
the Program Recipient, their address, and the full amount of grant. Within 15 days of
receipt of the invoice, the City shall remit to the CEE a check for the amount of the
grant. CEE shall issue payment to the remodeling contractors after the work is
completed. Before issuing payment to a remodeling contractor, CEE must do the
following:
(1) Inspect the work to ensure that it has been completed satisfactorily.
(2) Obtain a signed lien waiver from remodeling contractors, sub - contractors
and /or material suppliers for the amount of the work.
(3) Obtain the signatures of the homeowner and the remodeling contractors.
(4) Verify with the City that a permit has been obtained for the work performed and
that the remodeling CEE is properly licensed.
11. INDEPENDENT CCONTRACTOR
The relationship of CEE to the Authority is that of an independent contractor. Nothing in this
Agreement shall be construed so as to deem any employee or agent of CEE an employee of
the Authority for any purpose.
12. GOODS AND SERVICES NOT PROVIDED FOR
No claim for goods or services furnished by CEE not provided for by the terms of this
Agreement, or by duly authorized alterations or modifications of this Agreement, will be honored
by the Authority.
13. CHANGES IN THIS AGREEMENT
The Authority shall notify CEE in writing at least five days before any change in this Agreement
is to take effect.
14. ASSIGNMENTS AND SUBCONTRACTING
A. CEE shall not assign any portion of this Agreement without the written consent of
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the Authority, and it is further agreed that said consent must be sought by CEE
not less than thirty (30) days prior to the date of any proposed assignment.
B. Any work or services assigned or subcontracted hereunder shall be subject to
each provision of this Agreement and proper bidding procedures contained
therein. CEE agrees that it is as fully responsible to the Authority for the acts and
omissions of its subCEEs and of their employees and agents, as it is for the acts
and omissions of its own employees and agents.
15. INDEMNIFICATION
CEE agrees to indemnify, defend, and hold harmless the Authority (including its board
members, officers, and employees) from all claims, losses, or damages which they, or any of
them shall be legally obligated to pay as a consequence of any negligent act or omission, any
intentional tort, or any violation of the terms of this Agreement, by CEE (including its officers,
employees, and agents) in the performance of its services that are the subject of this
Agreement.
16. REVERSION OF ASSETS
Upon the expiration or termination of this Agreement, CEE shall transfer to the Authority any
HOME funds on hand or in the accounts receivable attributable to the use of HOME funds. In
addition, at the expiration or termination of this Agreement, any real property under CEE's
control that was acquired or improved in whole or in part with HOME funds in excess of
$25,000.00 shall be disposed of in a manner which results in the agency being reimbursed in
the amount of the current fair market value of the property less any portion thereof attributable
to the expenditures of non -HOME funds for acquisition of, or improvement to, the real property.
Such reimbursement shall not be required if the conditions of 24 CFR State Statute
570.503(b)(8)(i) are met and satisfied.
17. DISPOSITION OF PROGRAM INCOME
Upon the expiration or termination of this Agreement, program income shall be returned by CEE
to the Authority.
18. INSURANCE
CEE shall comply with the following insurance requirements:
A. Public Liability Insurance
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CEE shall obtain and maintain continuously during the term of this Agreement
general liability insurance of an amount not less than One Million and no /100
($1,000,000.00) Dollars which covers bodily injury and property damage and an
umbrella excess liability policy of Three Million and no /100 ($3,000,000.00) Dollars
and provide proof of Worker's Compensation Insurance pursuant to the Statutes
of the State of Minnesota. The general liability insurance policy and umbrella
excess liability policy shall name the Authority as an additional insured.
B. Proof of Insurance
CEE shall provide certificates of insurance required under this section, or, upon
request of the Authority, duplicates of the policies as evidence of the insurance
protection afforded. Such insurance policies shall not be reduced or canceled
without sixty (60) days prior written notice to the Authority.
19. ENTIRE AGREEMENT /REQUIREMENT OF A WRITING
It is understood and agreed that the entire Agreement of the parties is contained herein and that
this Agreement supersedes all oral agreements and negotiations between the parties relating to
the subject matter hereof as well as any previous Contract presently in effect between the
Authority and CEE relating to the subject matter hereof. Any alterations, variations,
modifications, or waivers of the provisions of this Agreement shall be valid only when they have
been reduced to writing and duly signed by the parties.
20. EXHIBITS
The following attachments listed below are hereby incorporated in this Agreement and made a
part hereof:
Exhibit A - Program Budget
Exhibit B - Certification
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IN WITNESS WHEREOF, the parties hereunder set their hands as of the date written below:
HOUSING AND REDEVELOPMENT CENTER FOR ENERGY AND
AUTHORITY IN AND FOR THE ENVIRONMENT, INC.
CITY OF FRIDLEY
By
By
Its
Its
Date
Date
By
By
Its
Its
Date
Date
98CEEContract
13 of 16
V
Source
1998 HOME Allocation
HRA Match
Uses
Home Improvement Grants
Program Administration
98CEEContract
14 of 16
EXHIBIT A
Amount
$65,000
$16,250
$81,250
$76,150
$5,1000
$81,250
EXHIBIT B
The Undersigned, on behalf of the Agency, certifies, to the best of his or her knowledge and
belief, that:
1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the
undersigned, to any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with the awarding of Federal
contract, the making of any Federal grant, the making of any Federal loan, the entering
into of any cooperative agreement, and the extension, continuation, renewal, amendment,
or modification of any Federal contract, grant, loan or cooperative agreement.
2) If any funds, other than Federal appropriated funds, have been paid or will be paid to any
person for influencing or attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee of a Member of
Congress in connection with this Federal contract, grant, loan or cooperative agreement,
the undersigned shall complete and submit Standard Form LLL "Disclosure From to Report
Lobbying" in accordance with its instructions.
3) The undersigned shall require that the language of this certification be included in the
award documents for all sub - awards at all tiers (including sub - contract, sub - grants, and
contracts under grants, loans and cooperative agreements) and that all sub - recipients shall
certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this
transaction was made or entered into. Submission of this certification is a prerequisite for
making or entering into this transaction imposed by Section 1332, title 31, US Code. Any
person who fails to file the required certification shall be subject to a civil penalty of not less
than $10,000 and not more than $100,000 for each such failure.
FRIDLEY
HRA
By
Its
Date
By
Its
Date
98CEEContract
15 of 16
CENTER FOR ENERGY AND
ENVIRONMENT
By_
Its_
Date
By
Its
Date
EXHIBIT C
(24 CFR 85)
Administrative Requirements for Grants and Cooperative Agreements to State, Local and
Federally Recognized Indian Tribal Governments
(e) Contracting with small and minority business firms, women's business enterprise and
labor surplus area firms.
[1] The grantee and sub - grantee will take all necessary affirmative steps to assure
that minority firms, women's business enterprises and labor surplus area firms are
used when possible.
[2] Affirmative steps shall include:
(1) Placing qualified small and minority businesses and women's business
enterprises on solicitation lists;
(ii) Assuring that small and minority businesses and women's business
enterprises are solicited whenever they are potential sources;
(iii) Dividing total requirements, when economically feasible, into smaller tasks
or quantities to permit maximum participation by small and minority
businesses and women's business enterprises;
(iv) Establishing delivery schedules where the requirement permits, which
encourage participation by small and minority businesses and women's
business enterprises;
(v) Using the services and assistance of the Small Business Administration
and the Minority Business Development Agency of the Department of
Commerce; and
(vi) Requiring the prime contractor, if subcontracts are to be let, to take the
affirmative steps listed in paragraphs (e)[2](1) through (v) of this section.
98CEEContract
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HOUSING AND REDEVELOPMENT
ee AUTHORITY
Memorandum
DATE: May 26, 2000
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Participation in Minnesota Solutions Group for 2001
Legislative Session.
The Minnesota Solutions group was formed two years ago by a number of cities
(both metro and outstate) for the purpose of promoting redevelopment issues at
the State Capitol. During the 2000 legislative session the group was actively
involved in lobbying for additional funding for the Redevelopment Grant Program
which is administered by DTED. As an aside, we did apply for funding to help
with the Gateway East project but were unsuccessful, however it may be a good
source of funding to help with the redevelopment of the salvage yards.
In addition to the Redevelopment Grant Program, Minnesota Solutions was also
involved in business subsidy legislation, tax increment financing, historic
preservation and housing issues. Attached is a Legislative Update from Bonnie
Balach who is the Executive Director of the organization. The contribution for
2001 is $1,000 and can be accommodated in the HRA's General Fund budget.
Recommendation
Staff recommends that the HRA authorize payment of $1,000 to Minnesota
Solutions for 2001 legislative efforts.
M -00 -95
Minnesota Solutions Group
2001
Minneapolis Community Development Agency
City of Duluth
North Metro Mayors' Association
National Association of Housing and Redevelopment Authorities
City of Richfield
City of St. Louis Park
City of Roseville
St. Cloud HRA
St. Cloud Development Partnership
Minnesota Power
Minnegasco
Northern States Power
City of West St. Paul
Metropolitan Council
PEER Environmental
Krass & Monroe
City of Hopkins
Minnesota Solutions, Inc.
70 Grove Street
Mahtomedi, Minnesota 55115
(651) 6534926 (phone)
(651) 407 -6991 (fax)
My e-mail address: bbalach(amswest.net
May 17, 2000
TO: Minnesota Solutions' Participants
FR: Bonnie Balach
RE: Legislative Update and Meeting Notice
Meeting Noticelill
Friday, June 9, 2000
10:00 a.m.
Duluth City Hall
RSVP to: bbalach @uswest.net
Agenda:
I. Overview of legislative session.
II. Overview of Redevelopment Account by DTED staff.
III. Discussion of strategy to get funding for Redevelopment Account included in the
base.
IV. Other redevelopment concerns that can be addressed during the next legislative
session.
Other news:
I contracted the "Love Bug" virus and was ultimately forced to purge my hard drive and re- install
all my software. In the process, I lost my e-mail address book and everything else.
Please e-mail me confirming that you received this communigud and thus enabling me to
recapture your e-mail address.
Thanks for your patience. I hope I didn't pass on the virus to any of you.
Legislative Update:
Following is a brief summary of legislative activity (and inactivity) of issues importance to the
Minnesota Solutions' Participants:
Redevelopment Account. Clearly our greatest achievement of the legislative session, we came
away with $6 million in cash for this program. Many thanks to Representatives McElroy and
Osthoff, Senator Novak and Ingrid Bjorklund, his committee administrator, and DTED staff for
making this happen!
Business Subsidy Act: We were highly successful in this area, mostly because the issues we
pressed were modest and we acted as a champion for small businesses. We worked in concert
with the Association of Metropolitan Municipalities (AMM), the League of Minnesota Cities (LMC),
and the Economic Development Association of Minnesota (EDAM). This was very efficient and
allowed each organization to focus on issues of primary importance to their constituencies. The
issues focused on my Minnesota Solutions and the outcomes are as follows:
• Historic Preservation. An exemption for assistance provided for designated historic
preservation districts was obtained, provided the assistance is equal to or less than 50
percent of the total cost.
• Remediation subsidies: An exemption was obtained for tax increment financing districts
created for the purpose of remediation of hazardous substances.
• Small Business Assistance: We were able to get an exemption for small business loans
of $75,000 and under.
Historic preservation: Attempts to get a state tax credit put into place for historic preservation
met with obstacles we weren't ultimately able to overcome. Neither tax committee chair endorses
the idea of tax credits, which makes it a difficult proposition from the start. I have already had
discussions with David Kelliher, Minnesota Historical Society, about developing a new program to
assist with preserving historic property as a part of a redevelopment project.
Tax Increment Financing:
• Class rate changes: There were no class rate changes that will affect increment to be
generated in tax increment financing districts.
• Pooling for affordable housing: Spending on housing outside of project area: Allows
increments to be spent on qualifying low income housing that is located outside of the
project area. To qualify the housing must meet the requirements for the federal low
income housing tax credit which is generally limited to rental housing for families with
incomes below 60 percent of the area median income.
For instance, present law limits the amount of increment that can be pooled outside a
redevelopment district, but within the project area to 25 %. Now, an additional 10% can
be pooled outside the project area for affordable housing in the city having jurisdiction
over the TIF district.
County road costs: This is an issue that received particular attention from Minnesota
Solutions — I believe we were the only organization to challenge the House provision that
would have increased the amount of time a county could demand tax increment for
county road costs from 30 to 60 days. Ultimately, the time period was increased from 30
to 45 days. In addition, the conference committee report clarified that the county board
may require the tax increment financing authority to pay the cost of county road
improvements if the improvements are not scheduled for construction within five years
under the county capital improvement plan or within five years under any other formally
adopted county plan.
2
• Tourism facilities: Makes a confirming change in the definition of the tourism facility to be
consistent with the 1999 prohibition on using increments for social and recreational
facilities. The conference committee report also designates counties within development
regions 2,3,4 and 5 as qualifying to use economic development districts for tourism type
projects.
• Mined underground space TIF districts: This type of tax increment financing district was
repealed. We suggested that the conference committee might want to leave these
provisions alone given the recent interest in underground development and for it's
potential as an "anti-urban sprawl" tool. However, since this type of district has never
been used, we didn't have very good grounds to argue against the repeal.
• Definition of redevelopment districts: Expansion of qualifying factors for redevelopment
districts. Properties containing unused or underused tank facilities now qualify as
redevelopment districts.
• Reporting requirements, etc.: Notification of counties and school districts is now to be
sent to the county auditor and clerk of the school district, rather than the boards. In
addition, the city is required to provide a draft of the TIF plan (our suggestion that only a
draft be required, rather than the final plan).
• Waiver: Allows waiver of the 30 day, notice requirement to individual county
commissioners of housing and redevelopment districts. Notice need only be given to
individual county commissioners in whose districts the TIF district is located.
• But -for test: Eliminates a provision that would allow a municipality to approve a TIF plan
(without a but -for finding) by simply failing to act for 60 days after the TIF authority
submitted the plan.
• Publication requirement: Changes the information that must annually be published by a
TIF authority as follows:
Original tax capacity (existing law);
Total tax capacity (new);
Captured tax capacity (existing law);
Month and year of the first increment (new);
Required decertification date for the district (new);
Principal and interest to be paid on bonds for the year (new); and
Effect of fiscal disparity option (a) on property taxes (existing law).
Eliminates the necessary to publish the following:
Outstanding bonded indebtedness (annual principal and interest payments would
be reported instead);
Increments paid to other governmental bodies;
Administrative costs; and
3
Increments paid for activities located outside of the TIF district.
• Financial reporting: Expands the information that must be reported annually by TIF
authorities to the State Auditor. These reports would no longer need to be provided to
the school district. The following items are added to the statute:
Captured net tax capacity that is shared with affected taxing districts;
Date of approval of the TIF plan;
Date of the authority request the county to certify the district;
Month and year of the receipt of the district's first increment;
Break -downs of the separate components of the tax increment: (1) taxes paid, (2)
interest or other investment earnings, (3) proceeds from the sales of the property
acquired with increments, and (4) repayments of loans and other advances made with
increments;
Revenues of the district, other than tax increments; 91) proceeds of sales of property not
acquired with increments, (2) special assessments, (3) grants, (4) transfers from funds
not exclusively associated with the district:
Transfers to funds not exclusively associated with the district;
Payments with increments for activities outside of the district; and -
Additional details on the components of bond payments, by type of bond, and for pay -as-
you-go contracts.
• Economic development districts duration: Repeals the 11 year duration limit for
economic development districts. This duration limit is calculated from the date of
approval of the TIF plan. The nine year limit, measured from the date of receipt of the
first increment, is reduced to eight years. However, these districts will still be entitled to
receive nine years of increment, since eight years is measured from the receipt of the first
increment and the full increment in the last year is allowed to be received. Waiver of
increments does not affect the duration limit. Present law allows housing,
redevelopment, and hazardous substance districts or subdistricts to waive increment, but
only in return for a five yea reduction in their duration limits.
Also, the conference committee report eliminates the adjustment to original net tax
capacity for economic development districts.
• Enforcement provision: The House language would have allowed taxpayers to bring
private lawsuits for damages for TIF violations involving collection of increment and would
have made it retroactive to 1990 based on the assertion that this has not been allowed
merely because of a cross - referencing error made at that time. Minnesota Solutions
recognized the exposure that that language would have caused member cities and was
part of an effort that succeeded in making this provision prospective only.
• Increments after duration limit: Authorizes the authority or municipality to enter into an
agreement with the county to repay increments mistakenly paid by the county after
maximum duration limit of TIF district has been reached. If the overpaid increments are
voluntarily repaid, the municipality will receive its share of the increments.
4
.A_
Abatement: Makes several changes in this area. First of all, allows abatement to be
used for property in a TIF district, if the period of the abatement will not occur until after
the TIF district is decertified. Secondly, extensions the duration of an abatement term
from 10 to 15 years, if only one or two of the political subdivisions containing the parcel
grant an abatement. Also allows abatement to be used to phase -in property tax
increases that are caused by large increases in market value.
5
=J HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
DATE: May 26, 2000
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Amended Escrow Agreements for Purchase of Old Central
Avenue Sites
At their May 4t' meeting, the HRA authorized staff to proceed with the closings
on the two of the three sites along Old Central Avenue. The third site was not
approved due to concerns over potential environmental issues.
The funds for these transactions have been held in escrow since last December,
however the actual amount to be paid to the sellers will be considerably less due
to the environmental clean -up costs. As you recall, the sellers agreed to lower
the purchase price to more accurately reflect the value of the site given the
estimated clean -up costs.
The revised agreements preserve the balance of the funds (not paid to the
seller) for future redevelopment clean -up costs. Below is a summary of what will
be paid from the escrow account.
Revised
Escrow
Total
Property Price
for Clean -Up
Package
Erickson $80,100
$85,900
$166,000
Petty $57,000
$33,800
$90,800
Recommendation
Staff recommends that the HRA approve the attached resolutions Approving the
Amendment to the Purchase and Sale Agreements and Escrow Agreements for
the Doug Petty and Dan Erickson properties. Copies of the agreements are
attached.
M -00 -96
3
RESOLUTION NO. ,T
RESOLUTION DETERMINING THE NECESSITY FOR
AMENDMENT TO THE PURCHASE AND SALE
AGREEMENT AND ESCROW AGREEMENT RELATING TO
LOTS 2 AND 3, BLOCK 1, HERWAL'S RICE CREEK
ADDITION, FRIDLEY, MINNESOTA AND AUTHORIZING
EXECUTION AND DELIVERY OF A SECOND AMENDMENT
TO SAID AGREEMENTS
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as
follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority acquire Lots 2 and 3, Block 1, Herwal's Rice
Creek Addition, City of Fridley, Minnesota (the "Property ") for redevelopment
purposes.
1.02. The Authority has entered into a Purchase and Sale Agreement (the "Purchase
Agreement ") with the owners of the Property, Daniel H. Erickson, John Chisholm,
Rodric L. Guindon, Harm A. Weber, J. Richard Burton and Donald O. Ericksen
(collectively, the "Seller"), in order to facilitate the acquisition of the Property. The
Authority has also entered into an Escrow Agreement (the "Escrow Agreement ")
with the Seller and Old Republic Title Insurance Company (the "Escrow Agent ") in
order to facilitate the acquisition of the Property.
1.03. The Purchase Agreement provides that purchase of the Property by the Authority
is contingent upon a number of factors, including the Authority's determination, in
its sole discretion, that results of the Authority's investigations of the Property show
that the conditions of the Property are acceptable to the Authority. The Escrow
Agreement provides that the agreed -upon purchase price for the Property shall be
held in escrow and released if and when this transaction closes.
Section 2. Findings.
2.01. The Authority hereby finds that the results of its investigations of the Property show
that the conditions of the Property are unacceptable. More specifically, the
Authority finds that the investigations show that the soil conditions of the Property
are not acceptable for future redevelopment.
2.02. The Authority hereby finds that the soil issues which render the Property
unacceptable for future redevelopment are correctable, and that estimates have
been presented to the Authority stating that such correction may cost $85,900.00.
"I
Page 2 — Resolution No.
2.03. The Authority hereby finds that redevelopment of the Property would best be
facilitated if the sum of $85,900.00 were retained by the Escrow Agent and
disbursed in accordance with instructions of the Seller and the Authority in the future
as such work is performed.
Section 3. Authorizations.
3.01. The Chairman and the Executive Director of the Authority (the "Officers ") are hereby
authorized to execute and deliver a Second Amendment to the Purchase
Agreement and Escrow Agreement. The Second Amendment will substantially
conform with the Second Amendment presented to the Authority as of this date,
with such additions and modifications as those Officers may deem desirable or
necessary as evidenced by the execution thereof-,
3.02. Upon execution and delivery of the Second Amendment, the Officers and
employees of the Authority are hereby authorized and directed to take or cause to
be taken such actions as may be necessary on behalf of the Authority to implement
the Purchase Agreement and the Escrow Agreement, as amended, and to further
proceed towards the closing of the transaction contemplated by the Purchase
Agreement.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA THIS DAY OF JUNE, 2000.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
G:\WPDATA*VRIDLEY\49\DOCIHRA RESOLUTION - ESCROW AMENDMENT.DOC
HRA RESOLUTION NO.
RESOLUTION DETERMINING THE NECESSITY FOR
AMENDMENT TO THE PURCHASE AND SALE
AGREEMENT AND ESCROW AGREEMENT RELATING TO
LOT 5, BLOCK 1, HERWAL'S RICE CREEK ADDITION,
FRIDLEY, MINNESOTA AND AUTHORIZING EXECUTION
AND DELIVERY OF A SECOND AMENDMENT TO SAID
AGREEMENTS
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as
follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority acquire Lot 5, Block 1, Herwal's Rice Creek
Addition, City of Fridley, Minnesota (the "Property ") for redevelopment purposes.
1.02. The Authority has entered into a Purchase and Sale Agreement (the "Purchase
Agreement ") with the owner of the Property, Douglas Petty (the "Seller'), in order
to facilitate the acquisition of the Property. The Authority has also entered into an
Escrow Agreement (the "Escrow Agreement ") with the Seller and Old Republic Title
Insurance Company (the "Escrow Agent") in order to facilitate the acquisition of the
Property.
1.03. The Purchase Agreement provides that purchase of the Property by the Authority
is contingent upon a number of factors, including the Authority's determination, in
its sole discretion, that results of the Authority's investigations of the Property show
that the conditions of the Property are acceptable to the Authority. The Escrow
Agreement provides that the agreed -upon purchase price for the Property shall be
held in escrow and released if and when this transaction closes.
Section 2. Findings.
2.01. The Authority hereby finds that the results of its investigations of the Property show
that the conditions of the Property are unacceptable. More specifically, the
Authority finds that the investigations show that the soil conditions of the Property
are not acceptable for future redevelopment.
2.02. The Authority hereby finds that the soil issues which render the Property
unacceptable for future redevelopment are correctable, and that estimates have
been presented to the Authority stating that such correction may cost $33,800.00.
Page 2 — Resolution No.
2.03. The Authority hereby finds that redevelopment of the Property would best be
facilitated if the sum of $33,800.00 were retained by the Escrow Agent and
disbursed in accordance with instructions of the Seller and the Authority in the future
as such work is performed.
Section 3. Authorizations.
3.01. The Chairman and the Executive Director of the Authority (the "Officers ") are hereby
authorized to execute and deliver a Second Amendment to the Purchase
Agreement and Escrow Agreement. The Second Amendment will substantially
conform with the Second Amendment presented to the Authority as of this date,
with such additions and modifications as those Officers may deem desirable or
necessary as evidenced by the execution thereof-,
3.02. Upon execution and delivery of the Second Amendment, the Officers and
employees of the Authority are hereby authorized and directed to take or cause to
be taken such actions as may be necessary on behalf of the Authority to implement
the Purchase Agreement and the Escrow Agreement, as amended, and to further
proceed towards the closing of the transaction contemplated by the Purchase
Agreement.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA THIS DAY OF JUNE, 2000.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
GAWPDATA*'\FRIDLEY\48\DOCUIRA RESOLUTION - ESCROW AMENDMENTMOC
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
AND ESCROW AGREEMENT
This SECOND AMENDMENT amends the following:
1. The Purchase and Sale Agreement dated December 17, 1999, by and
between Daniel H. Erickson, John Chisholm, Rodric L. Guindon, Harm
A. Weber, J. Richard Burton and Donald O. Ericksen, as sellers
(collectively "Seller") and Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota, as buyer ( "Buyer");
2. The Escrow Agreement ( "Escrow Agreement ") dated December 17,
1999, by and between Seller, Buyer, and Old Republic Title Insurance
Company, as escrow agent ( "Escrow Agent "); and
3. The Amendment to Purchase and Sale Agreement and Escrow
Agreement entered into by Buyer and Seller on April 17, 2000.
The above - described documents shall collectively be referred to hereafter as "the
Contract."
WHEREAS, the Contract provides for sale of real property legally described as
Lots 2 and 3, Block 1, Herwal's Rice Creek Addition ( "Property ") on the condition that
specific contingencies are satisfied, as determined in Buyer's sole discretion; and
WHEREAS, Buyer deposited into escrow a sum equal to the full purchase price
due for the Property if Buyer elects to close the transaction contemplated by the
Contract ( "Deposit "); and
WHEREAS, Buyer has examined the Property and has determined that certain
aspects of the Property render it unacceptable; and
WHEREAS, Buyer has communicated to Seller that Buyer finds the Property
unacceptable and is not willing to purchase it unless certain work is performed to make
the Property acceptable; and
WHEREAS, Buyer and Seller are willing to close the transaction contemplated by
the Contract if a portion of the Deposit remains in escrow to be disbursed by the Escrow
Agent in accordance with Buyer's and Seller's directions.
THEREFORE, in consideration of the mutual obligations of the parties to this
Second Amendment, the parties agree that the Contract is amended as follows:
1. At the closing, when title to the Property is transferred to Buyer
( "Closing "), the sum of Eighty Five Thousand Nine Hundred and 00/100 Dollars
($85,900.00) shall remain in the account administered by the Escrow Agent pursuant to
the terms of the Escrow Agreement, as amended. The Escrow Agent shall disburse this
sum according to the instructions contained in Exhibit 1, attached hereto and made a
part hereof and which shall, upon execution of this Second Amendment, become a part
of the Contract as Exhibit B to the parties' Escrow Agreement.
2. The Escrow Agreement shall be amended to include the following new
exhibits: Exhibit B, reflecting Seller's post - closing instructions, and Exhibit C,
reflecting Seller's statement of purchase price satisfaction. These exhibits are attached
as Exhibits 1 and 2 to this Second Amendment, and are incorporated herein.
3. The Escrow Agreement, Section 3, shall be deleted and replaced with the
following:
De osit. On the date hereof, Buyer shall deposit with
Escrow Agent One Hundred Sixty Six Thousand and no /100
Dollars ($166,000.00). This sum represents the amount of
the Purchase Price to be paid to the Seller named in the
Purchase and Sale Agreement and the amount of the
Purchase Price to be held and disbursed for post - closing
expenses as outlined in Exhibit B, attached hereto and made
a part hereof.
4. The Escrow Agreement, Section 5, shall be deleted and replaced with the
following:
At such time that Escrow Agent (1) receives notice
from Buyer requesting closing of the transaction
contemplated by the Purchase and Sale Agreement (which
notice must be issued on or before June 23, 2000), and (2)
has prepared or, at Escrow Agent's election, received from
Buyer or Seller all documents necessary for closing, Escrow
Agent shall:
A. Record the Warranty Deed;
B. Pay and obtain releases of any mortgages,
contracts for deed or liens that encumber
the Property;
C. Release one original Closing Statement to
each of Seller and Buyer;
D. Retain in escrow the sum of Eighty Five
Thousand Nine Hundred and 00/100
Dollars ($85,900.00), which shall be
released according to Seller's instructions in
Exhibit B hereto;
E. Obtain from Seller a statement of purchase
price satisfaction in the form attached as
Exhibit C hereto and made a part hereof;
F. Pay the "net" sale proceeds to Seller;
G. Retain all interest accrued on the Escrow
Deposit for future disbursement in
accordance with the instructions appearing
in Exhibit B hereto; and
H. Issue a marked -up commitment for a title
policy issued in favor of Buyer in the full
amount of the Purchase Price, subject only
to the Permitted Encumbrances, effective
as of recording date of the Warranty Deed.
5. The Escrow Agreement, Section 8, shall be deleted and replaced with the
following:
Closing of Escrow Account, Termination of Escrow. The Escrow
Account shall be closed upon the occurrence of any one of the following:
A. At such time as Escrow Agent has duly
received signed instructions from Buyer and
Seller in the form appearing in Exhibit B
hereto and Escrow Agent has released the
amount retained in the Escrow Account
through disbursements required by Section
5 of this Agreement and by the instructions
appearing in Exhibit B.
B. At such time no funds remain in the Escrow
Account.
C. At such time as directed by the Arbitrator, if
Section 6 of this Agreement is invoked.
D. If Escrow Agent has not duly received
signed instructions from Buyer and Seller in
the form appearing in Exhibit B hereto on or
before July 15, 2000, the Escrow Agent
3
shall release to the Buyer the Deposit and
accrued interest in the Escrow Account.
Upon the closing of the Escrow Account in accordance with the
provisions of this Section 8, this Agreement shall automatically terminate.
Escrow Agent shall then notify Buyer and Seller of the closing of the
Escrow Account, the termination of this Agreement and the disbursements
pursuant to this Agreement.
6. The Escrow Agreement, Section 9, shall be deleted and replaced with the
following:
A. Seller and Buyer shall equally pay upon
demand all charges of Escrow Agent, and
such attorney's fees, expenses, and other
costs, as may reasonably be incurred in
connection with the administration of this
Agreement by Escrow Agent from the
effective date of this Agreement through the
closing of the transaction contemplated by
the Purchase and Sale Agreement attached
as Exhibit A hereto. Escrow Agent agrees
that its fees in connection to such activities
shall be fifty and 00/100 Dollars ($50.00).
B. Buyer agrees to pay all charges of Escrow
Agent, and such attorney's fees, expenses,
and other costs, as may reasonably be
incurred in connection with the
administration of this Agreement by Escrow
Agent from the day following closing of the
transaction contemplated by the Purchase
and Sale Agreement attached as Exhibit A
hereto through the termination of this
Escrow Agreement. Escrow Agent agrees
that its fees in connection to such activities
shall be and
00/100 Dollars ($ .00).
7. The provisions of the Escrow Agreement, including all of its exhibits, shall
survive the execution and delivery of the deed at closing of the transaction
contemplated by the Purchase and Sale Agreement.
8. Except as expressly provided above, the Contract shall remain in full force
and effect in accordance with its original terms, covenants and provisions, all as
4
amended by the Amendment to Purchase and Sale Agreement and Escrow Agreement
entered into by Buyer and Seller on April 17, 2000.
9. By its signature below the Escrow Agent agrees to the terms of this
Second Amendment, and to the terms of the Amendment to Purchase and Sale
Agreement and Escrow Agreement entered into by Buyer and Seller on April 17, 2000.
10. This Second Amendment may be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
EXECUTED ON:
This day of , 2000.
EXECUTED ON:
This day of , 2000.
EXECUTED ON:
SELLER: DANIEL H. ERICKSON, JOHN
CHISHOLM, RODRIC L. GUINDON, HARM A.
WEBER, J. RICHARD BURTON, DONALD O.
ERICKSEN
Daniel H. Erickson
BUYER: HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
FRIDLEY, MINNESOTA
By: _
Its:
By: _
Its:
ESCROW AGENT: OLD REPUBLIC TITLE
INSURANCE COMPANY
This day of , 2000. By: _
Its:
5
EXHIBIT 1
Exhibit B to Escrow Agreement
All funds remaining in the Escrow Account after closing of the transaction contemplated
by the Purchase and Sale Agreement attached as Exhibit A shall be disbursed by
Escrow Agent according to the following instructions:
1. Upon notice from Buyer that there has been costs incurred for any activity
related to debris removal, organic soil removal, soil replacement, piling installation and
related site improvements ( "Site Improvements "), Escrow Agent shall disburse funds
in response to a requisition if the following criteria are satisfied:
a. Receipt of a payment demand in the form of an invoice or other
reasonably detailed itemized statement ( "Invoice ") from a party providing labor
or materials for the Site Improvements,
b. Receipt of a statement from Buyer certifying that the Site
Improvements described in the Invoice have been suitably completed and
authorizing release of funds from the Escrow Account ( "Withdrawal Order"),
and
C. Receipt of a sworn list of those supplying labor and materials for
the Site Improvements, together with a lien waiver signed by each party providing
such labor or materials, all in a form reasonably acceptable to Buyer.
2. When the criteria outlined in Section 1 hereto are all satisfied, the Escrow
Agent shall, within ten (10) business days after receipt of the last document necessary
to satisfy the Section 1 requirements, draw a check on the Escrow Account. The check
shall be payable to the party or parties who provided labor or materials for the Site
Improvements and written for the amount specified in the Withdrawal Order. The
Escrow Agent shall mail such check to the party specified in the Withdrawal Order, or
provide payment as otherwise directed by that party.
3. When a payment is made under Section 2 hereto, the Escrow Agent shall
provide Buyer with a copy of the transmittal letter or other appropriate evidence of
payment.
4. Interest on the Deposit shall at all times be part of the Escrow Account.
5. The instructions contained in this Exhibit B are agreed upon by both Buyer
and Seller; the parties further understand and agree that Seller authorizes no use of the
P
Deposit for any activities other than those required in Buyer's reasonable judgment to
bring the Property to a state amenable to redevelopment activities.
6. In the event that Buyer determines Site Improvements are required on the
Property after the disbursement of all funds in the Escrow Account, Buyer shall be
solely responsible for the expenses related to such Site Improvements.
Seller, Buyer, and Escrow Agent agree to these instructions by providing their
signatures below:
EXECUTED ON: SELLER: DANIEL H. ERICKSON, JOHN
CHISHOLM, RODRIC L. GUINDON, HARM A.
WEBER, J. RICHARD BURTON, DONALD O.
ERICKSEN
This day of , 2000.
Daniel H. Erickson
EXECUTED ON:
This day of , 2000
EXECUTED ON:
BUYER: HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
FRIDLEY, MINNESOTA
By: _
Its:
By:
Its:
ESCROW AGENT: OLD REPUBLIC TITLE
INSURANCE COMPANY
This day of , 2000. By: _
Its:
7
EXHIBIT 2
Exhibit C to Escrow Agreement
Statement of Full Satisfaction of Purchase Price
This statement is provided:
1. In consideration of Housing and Redevelopment Authority in and for the City
of Fridley's willingness to waive its right to refuse to close the transaction
contemplated by a Purchase and Sale Agreement dated December 17, 1999
(as subsequently amended) (the "Contract "), as allowed by Section 3 of that
Contract, and
2. In accordance with the Second Amendment to that Contract.
I, Daniel H. Erickson, as a seller of the real property subject to the Contract, state:
1. 1 have received $ and 00/100 at the closing of the transaction
contemplated by the Contract; and
2. 1 accept this sum as full satisfaction of the Purchase Price listed in the
Contract.
EXECUTED ON:
This day of , 2000
Daniel H. Erickson
\\ PDC \VOL2 \WPDATAWRIDLEY\49\DOC\AGREE MODIFYING PURCHASE AND SALE AND ESCROW AGREEMENT2.DOC
0
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
AND ESCROW AGREEMENT
This SECOND AMENDMENT amends the following:
1. The Purchase and Sale Agreement dated December 20, 1999, by and
between Douglas Petty, as seller ( "Seller") and Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, as
buyer ( "Buyer");
2. The Escrow Agreement ( "Escrow Agreement ") dated December 20,
1999, by and between Seller, Buyer, and Old Republic Title Insurance
Company, as escrow agent ( "Escrow Agent"); and
3. The Amendment to Purchase and Sale Agreement and Escrow
Agreement executed by Buyer and Seller on April 6, 2000, and April
11, 2000, respectively.
The above - described documents shall collectively be referred to hereafter as "the
Contract."
WHEREAS, the Contract provides for sale of real property legally described as
Lot 5, Block 1, Herwal's Rice Creek Addition ( "Property ") on the condition that specific
contingencies are satisfied, as determined in Buyer's sole discretion; and
WHEREAS, Buyer deposited into escrow a sum equal to the full purchase price
due for the Property if Buyer elects to close the transaction contemplated by the
Contract ( "Deposit "); and
WHEREAS, Buyer has examined the Property and has determined that certain
aspects of the Property render it unacceptable; and
WHEREAS, Buyer has communicated to Seller that Buyer finds the Property
unacceptable and is not willing to purchase it unless certain work is performed to make
the Property acceptable; and
WHEREAS, Buyer and Seller are willing to close the transaction contemplated by
the Contract if a portion of the Deposit remains in escrow to be disbursed by the Escrow
Agent in accordance with Buyer's and Seller's directions.
THEREFORE, in consideration of the mutual obligations of the parties to this
Second Amendment, the parties agree that the Contract is amended as follows:
1. At the closing, when title to the Property is transferred to Buyer
( "Closing "), the sum of Thirty Three Thousand Eight Hundred and 00/100 Dollars
($33,800.00) shall remain in the account administered by the Escrow Agent pursuant to
the terms of the Escrow Agreement, as amended. The Escrow Agent shall disburse this
sum according to the instructions contained in Exhibit 1, attached hereto and made a
part hereof and which shall, upon execution of this Second Amendment, become a part
of the Contract as Exhibit B to the parties' Escrow Agreement.
2. The Escrow Agreement shall be amended to include the following new
exhibits: Exhibit B, reflecting Seller's post - closing instructions, and Exhibit C,
reflecting Seller's statement of purchase price satisfaction. These exhibits are attached
as Exhibits 1 and 2 to this Second Amendment, and are incorporated herein.
3. The Escrow Agreement, Section 3, shall be deleted and replaced with the
following:
De osit. On the date hereof, Buyer shall deposit with
Escrow Agent Ninety Thousand Eight Hundred and no /100
Dollars ($90,800.00). This sum represents the amount of
the Purchase Price to be paid to the Seller named in the
Purchase and Sale Agreement and the amount of the
Purchase Price to be held and disbursed for post - closing
expenses as outlined in Exhibit B, attached hereto and made
a part hereof.
4. The Escrow Agreement, Section 5, shall be deleted and replaced with the
following:
At such time that Escrow Agent (1) receives notice
from Buyer requesting closing of the transaction
contemplated by the Purchase and Sale Agreement (which
notice must be issued on or before June 23, 2000), and (2)
has prepared or, at Escrow Agent's election, received from
Buyer or Seller all documents necessary for closing, Escrow
Agent shall:
A. Record the Warranty Deed;
B. Pay and obtain releases of any mortgages,
contracts for deed or liens that encumber
the Property;
C. Release one original Closing Statement to
each of Seller and Buyer;
D. Retain in escrow the sum of Thirty Three
Thousand Eight Hundred and 00/100
Dollars ($33,800.00), which shall be
2
released according to Seller's instructions in
Exhibit B hereto;
E. Obtain from Seller a
price satisfaction in
Exhibit C hereto and
statement of purchase
the form attached as
made a part hereof;
F. Pay the "net" sale proceeds to Seller;
G. Retain all interest accrued on the Escrow
Deposit for future disbursement in
accordance with the instructions appearing
in Exhibit B hereto; and
H. Issue a marked -up commitment for a title
policy issued in favor of Buyer in the full
amount of the Purchase Price, subject only
to the Permitted Encumbrances, effective
as of recording date of the Warranty Deed.
5. The Escrow Agreement, Section 8, shall be deleted and replaced with the
following:
Closing of Escrow Account: Termination of Escrow. The Escrow
Account shall be closed upon the occurrence of any one of the following:
A. At such time as Escrow Agent has duly
received signed instructions from Buyer and
Seller in the form appearing in Exhibit B
hereto and Escrow Agent has released the
amount retained in the Escrow Account
through disbursements required by Section
5 of this Agreement and by the instructions
appearing in Exhibit B.
B. At such time no funds remain in the Escrow
Account.
C. At such time as directed by the Arbitrator, if
Section 6 of this Agreement is invoked.
D. If Escrow Agent has not duly received
signed instructions from Buyer and Seller in
the form appearing in Exhibit B hereto on or
before July 15, 2000, the Escrow Agent
shall release to the Buyer the Deposit and
accrued interest in the Escrow Account.
Upon the closing of the Escrow Account in accordance with the
provisions of this Section 8, this Agreement shall automatically terminate.
Escrow Agent shall then notify Buyer and Seller of the closing of the
Escrow Account, the termination of this Agreement and the disbursements
pursuant to this Agreement.
6. The Escrow Agreement, Section 9, shall be deleted and replaced with the
following:
A. Seller and Buyer shall equally pay upon
demand all charges of Escrow Agent, and
such attorney's fees, expenses, and other
costs, as may reasonably be incurred in
connection with the administration of this
Agreement by Escrow Agent from the
effective date of this Agreement through the
closing of the transaction contemplated by
the Purchase and Sale Agreement attached
as Exhibit A hereto. Escrow Agent agrees
that its fees in connection to such activities
shall be fifty and 00/100 Dollars ($50.00).
B. Buyer agrees to pay all charges of Escrow
Agent, and such attorney's fees, expenses,
and other costs, as may reasonably be
incurred in connection with the
administration of this Agreement by Escrow
Agent from the day following closing of the
transaction contemplated by the Purchase
and Sale Agreement attached as Exhibit A
hereto through the termination of this
Escrow Agreement. Escrow Agent agrees
that its fees in connection to such activities
shall be and
00/100 Dollars ($ .00).
7. The provisions of the Escrow Agreement, including all of its exhibits, shall
survive the execution and delivery of the deed at closing of the transaction
contemplated by the Purchase and Sale Agreement.
8. Except as expressly provided above, the Contract shall remain in full force
and effect in accordance with its original terms, covenants and provisions, all as
4
amended by the Amendment to Purchase and Sale Agreement and Escrow Agreement
executed by Buyer and Seller on April 6, 2000, and April 11, 2000, respectively.
9. By its signature below the Escrow Agent agrees to the terms of this
Second Amendment, and to the terms of the Amendment to Purchase and Sale
Agreement and Escrow Agreement which Buyer and Seller executed on April 6, 2000
and April 11, 2000, respectively.
10. This Second Amendment may be executed in any number of counterparts,
each of which shall constitute one and the same instrument.
EXECUTED ON: SELLER: DOUGLAS PETTY
This day of , 2000.
Douglas Petty
EXECUTED ON: BUYER: HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
FRIDLEY, MINNESOTA
This day of , 2000. By:
Its:
EXECUTED ON:
This day of , 2000.
Its:
ESCROW AGENT: OLD REPUBLIC TITLE
INSURANCE COMPANY
M
5
Its:
EXHIBIT 1
Exhibit B to Escrow Agreement
All funds remaining in the Escrow Account after closing of the transaction contemplated
by the Purchase and Sale Agreement attached as Exhibit A shall be disbursed by
Escrow Agent according to the following instructions:
1. Upon notice from Buyer that there has been costs incurred for any activity
related to debris removal, organic soil removal, soil replacement, piling installation and
related site improvements ( "Site Improvements "), Escrow Agent shall disburse funds
in response to a requisition if the following criteria are satisfied:
a. Receipt of a payment demand in the form of an invoice or other
reasonably detailed itemized statement ('Invoice ") from a party providing labor
or materials for the Site Improvements,
b. Receipt of a statement from Buyer certifying that the Site
Improvements described in the Invoice have been suitably completed and
authorizing release of funds from the Escrow Account ( "Withdrawal Order "),
and
C. Receipt of a sworn list of those supplying labor and materials for
the Site Improvements, together with a lien waiver signed by each party providing
such labor or materials, all in a form reasonably acceptable to Buyer.
2. When the criteria outlined in Section 1 hereto are all satisfied, the Escrow
Agent shall, within ten (10) business days after receipt of the last document necessary
to satisfy the Section 1 requirements, draw a check on the Escrow Account. The check
shall be payable to the party or parties who provided labor or materials for the Site
Improvements and written for the amount specified in the Withdrawal Order. The
Escrow Agent shall mail such check to the party specified in the Withdrawal Order, or
provide payment as otherwise directed by that party.
3. When a payment is made under Section 2 hereto, the Escrow Agent shall
provide Buyer with a copy of the transmittal letter or other appropriate evidence of
payment.
4. Interest on the Deposit shall at all times be part of the Escrow Account.
5. The instructions contained in this Exhibit B are agreed upon by both Buyer
and Seller; the parties further understand and agree that Seller authorizes no use of the
G
Deposit for any activities other than those required in Buyer's reasonable judgment to
bring the Property to a state amenable to redevelopment activities.
6. In the event that Buyer determines Site Improvements are required on the
Property after the disbursement of all funds in the Escrow Account, Buyer shall be
solely responsible for the expenses related to such Site Improvements.
Seller, Buyer, and Escrow Agent agree to these instructions by providing their
signatures below:
EXECUTED ON:
This day of , 2000.
EXECUTED ON:
This day of , 2000.
EXECUTED ON:
SELLER: DOUGLAS PETTY
Douglas Petty
BUYER: HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
FRIDLEY, MINNESOTA
By: _
Its:
By: _
Its:
ESCROW AGENT: OLD REPUBLIC TITLE
INSURANCE COMPANY
This day of , 2000. By:
Its:
7
EXHIBIT 2
Exhibit C to Escrow Agreement
Statement of Full Satisfaction of Purchase Price
This statement is provided:
1. In consideration of Housing and Redevelopment Authority in and for the City
of Fridley's willingness to waive its right to refuse to close the transaction
contemplated by a Purchase and Sale Agreement dated December 20, 1999
(as subsequently amended) (the "Contract "), as allowed by Section 3 of that
Contract, and
2. In accordance with the Second Amendment to that Contract.
I, Douglas Petty, Seller of the real property subject to the Contract, state:
1. 1 have received $ and 00/100 at the closing of the transaction
contemplated by the Contract; and
2. 1 accept this sum as full satisfaction of the Purchase Price listed in the
Contract.
EXECUTED ON:
This day of , 2000
SELLER:
Douglas Petty
G: \WPDATA\F\FRIDLEY\48\D0C\AGREE MODIFYING PURCHASE AND SALE AND ESCROW AGREEMENT2.DOC
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d'
HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
DATE: May 26, 2000
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider New Contract with Community Reinvestment Fund (CRF)
for Fridley Loan Programs
Since 1996, the Community Reinvestment Fund (CRF) has serviced the HRA's
loan portfolio. CRF is a separate agency and is not affiliated with Community
Revitalization Resources (CRR) which administer the programs and make the
loans.
CRF currently charges $15.00 to set up a loan file in their system and $4.50 per
month to service the loan. CRF collects the loan payments from the borrowers
and maintains all of the account information on each file including current
principal balance, current principal and interest payment made and a payment
history. CRF is also responsible for preparing the annual 1099 interest
statements to borrowers for tax purposes. When a loan is paid off, CRF also
coordinates preparation of the documents and files all of the necessary
paperwork with Anoka County.
CRF receives about $900 per month to service the HRA's portfolio of 200+ loans.
This number fluctuates between 190 and 215, depending on the number of new
loans made and older loans that are paid off. Their fees equate to about 2% of
the principal and interest payments that are received on a monthly basis.
CRF is in the process of revising its fees to account for the increased cost to
service the loan pool. In addition, they are proposing new fees for services that
were not contemplated in the original loan servicing agreement. Below is a
summary of the proposed fee structure.
r;,
Memo Regarding CRF Contract
May 26, 2000
Page 2
Fee Structure
Set -up Fee
Monthly Servicing
Fee
Payoff Fee
Deferred Loan
Servicing
New Agreement
$25.00
$6.00
$25.00
$1.00
Old Agreement
$15.00
$4.50
None
None
CRF has indicated that the costs to service the HRA's program have gone up,
while the fee structure has remained unchanged for nearly five years. The
current agreement had no expiration date, but could be terminated by either
party with 30 days notice. As a practical matter there are few vendors who
provide this kind of service. Community Revitalization Resources has conducted
their own analysis and believes that the rates are competitive and will continue
their own contract with CRF. The new contract proposed by CRF would run from
July 1, 2000 through June 30, 2002.
The attached draft was received late last week and Jim Casserly is in the process
of reviewing it. We will update the HRA on any proposed changes at the
meeting on June 1st.
Recommendation
Staff recommends that the Authority approve the proposed contract with
Community Reinvestment Fund for servicing the Authority's loan program.
M -00 -93
LOAN SERVICING AGREEMENT
BETWEEN
COMMUNITY REINVESTNIENT FUND, INC.
AND
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY
LOAN SERVICING AGREEMENT
THIS AGREEMENT entered into as of July 1, 2000 between
Community Reinvestment Fund, Inc., a Minnesota nonprofit corporation ( "Servicer ")
and
Housing and Redevelopment Authority in and for the City of Fridley ( "the Authority")
WITNESSETH
that in consideration of their mutual undertakings and payments provided herein, the parties recite, covenant and agree as follows:
WHEREAS, the Servicer is a nonprofit corporation engaged in the purchasing, origination and/or servicing of development
loans and represents that it is qualified and authorized to perform the services described herein; and
WHEREAS, the Servicer is authorized to function as a servicing agent under the terms of this agreement; and
WHEREAS, the Authority now desires to have Servicer perform the duties set forth herein for loans funded solely by the
Authority (the "Loans ") which are covered by this Loan Servicing Agreement (the "Agreement ")
NOW THEREFORE, Servicer and the Authority agree as follows:
Section 1. Duties of Servicer
Servicer shall, at all times and with respect to all Authority Loans which it has been engaged by the Authority to service, perform in a
manner consistent with normal and prudent servicing and collection practices as follows:
(a) Maintaining Loan Files. Servicer shall maintain complete and current information, notices, documents, correspondence and
loan service comments relating to each Loan.
(b) Billing. Servicer will deliver to each borrower a billing for the monthly amount due on each Loan. The billing may take the
form of a coupon book, and shall set forth the amount of monthly payments due and the due date, and shall otherwise
conform to all applicable state and federal laws.
(c) Collecting Loan Payments. The Servicer shall collect monthly payments from the borrowers as further specified in Exhibit
A. In the event that the amount paid is not sufficient to pay in full the monthly payment when due from the borrower, then
the Servicer shall diligently collect or use its best efforts to collect each such monthly payment when due, or as soon
thereafter as possible. If payments are received by the Servicer in excess of all amounts due from the borrower, then such
excess amounts shall be applied by the Servicer as provided in the documents evidencing the Authority Funded Program
Loans.
(d) Payment Records. Servicer shall maintain or cause to be maintained accurate records of such payments showing principal,
interest, outstanding balance and other charges.
(e) Remitting Loan Payments to the Authority. In accordance with procedures set forth herein or amended in writing by the
Authority from time to time, Servicer shall remit or cause to be remitted to the Authority no later than the tenth business day
of each month the amount of payments received for principal and interest less any set -up and monthly loan servicing fees due
to Servicer on all Authority Funded Program Loans being serviced on behalf of the Authority for which a loan file was set up
or for which payments were received during the preceding month.
(f) Loan Payoffs and Mortgage Satisfactions. Servicer will take responsibility to produce satisfactions as Loans are paid off in
the normal course of business. Satisfactions are the sole responsibility of the borrower to record within the county the
mortgage was filed.
(g) Reporting. Servicer shall submit a monthly report to the Authority which includes the following information:
• Loan principal and interest payments received;
• a trial balance with reconciliation showing beginning principal balance of the Loans less principal payments received
equals ending principal balance on trial balance
• summary Loan delinquency statistics
• a summary of amounts being remitted to the Authority by (1) Loan interest payments, and (2) Loan principal payments.
(h) Defaulted Authority Funded Program Loans. With respect to defaulted Loans, the Servicer shall take actions as are
consistent with normal and prudent servicing practices. Subject to Section 1(c) above and Exhibit A attached
(i) Insurance. Servicer, during the tern of this contract, shall have in force the following insurance: at least $25,000 in
employee dishonesty coverage or a fidelity bond in at least that amount.
(j) Interest Paid. On or before January 31st of each year, Servicer shall provide to each borrower a statement showing the
interest paid during the preceeding year and the principal balance at the end of that year.
Section 2. Effective Transfer Dates. Servicer shall commence activities under this Agreement effective on the I' day of July ,
2000. This contract will be in effect until June 30, 2002.
(a) Transfer of New Authority Loans. From time to time, the Authority may transfer the Authority Program Loans that it
originates or has caused to originate and which are closed subsequent to the date of this Agreement. When the Authority
closes a Loan, it shall give to the borrower at closing a servicing letter stating that Servicer will service the Loan, showing
the address to which payments are to be sent and providing the first payment coupon to borrower. The Authority shall then
transfer the Loan file, including a copy of the promissory note, and a copy of the servicing letter described herein to Servicer
within ten (10) working days of the closing and disbursement of the Loan. The Authority will cooperate with Servicer, and
provide or cause its prior servicer, if any, to provide to Servicer such information as may be necessary to reconcile any Loan
balance information provided to Servicer, and Servicer may rely in good faith on information provided to it by the Authority.
2
Section 3. Servicing Compensation.
schedule presented below
delinquent loan.
Type of Loan
Amortizing Loans
Deferred
The Authority shall compensate Servicer in the manner in accordance with the fee
Servicer will retain any late fees paid by the to borrowers to cover cost of handling the
Initial Set -Up Fee Pavoff Fee
$15.00 $25.00
$25.00 $25.00
Monthly Servicing Fee
56.00
$1.00
Monthly, Servicer shall deduct from amounts to be remitted to the Authority Initial Set -Up Fees from Loans transferred to
Servicer during the preceding month and the Monthly Servicing Fee for each outstanding Loan which has not been declared
inactive by the Authority. If, in the event that the amounts collected during the month are insufficient to pay amounts due
Servicer in their entirety, Servicer shall invoice the Authority for the difference owed to it. "Inactive" Loans are all Loans
with respect to which the Authority has authorized in writing a write off or a forbearance or deferral of collection activities
pursuant to procedures described in Exhibit A, and any other Loans removed from active status as described in Exhibit A.
Servicer shall deduct amounts owed to it for servicing compensation from remittances to the Authority and shall provide a
detailed monthly report to the Authority including a calculation of the amount of the fee to be deducted and showing
activities regarding all past due Loans as required by Exhibit A, and indicating which Loans are to be deemed inactive, and
the Authority and Servicer shall mutually agree on the classification of Loans as inactive. The Authority has the right to
withhold or recover payment of servicing compensation if, in its judgment, based on reasonable methods of verification, it
finds that Servicer is not complying with the collection procedures in Exhibit A.
Section 4. ServicingEE,xRenses: Nature of Agreement. Servicer shall perform all of its services and duties hereunder at its own
expense and without cost or charge to the Authority except as expressly provided in Section 3 herein. Servicer
acknowledges that this Agreement does not constitute a joint venture; that the Authority is not responsible for
Servicer's acts, and that Servicer is acting as an independent contractor and not as agent for the Authority except as
may be specifically provided for herein.
Section 5. Promissory Notes. Servicer shall retain custody of original promissory notes, and Servicer shall take reasonable
precautions to safeguard the original Loan promissory notes in its possession to minimize the risk of loss from fire
or natural disaster.
Section 6. Disaster Recovery.
(a) Servicer shall take all reasonable precautions to safeguard information regarding the Authority Funded Program Loans to
minimize the risk of loss from fire, natural disaster or electronic data system failures;
(b) Servicer shall keep duplicate records of all electronic information in its possession pertaining to the Authority Funded
Program Loans and shall store such records in a site remote from its main offices; and
(c) In the event of a natural disaster or catastrophic failure of Servicer's electronic data system, Servicer shall have a period not
to exceed 45 days from the date of such catastrophe to recover or reconstruct such lost data necessary to comply with Section
1 hereof.
Section 7. Civil Rights: Equal Employment Opportunity. The Servicer shall comply with all applicable provisions of
Minnesota Statutes, Section 181.59.
Section 8. Tenn of Agreement This agreement will be in effect from July 1, 2000 through June 30, 2002. Either the
Authority or Servicer may terminate servicing by Servicer with respect to any Loan or all Loans upon ninety(90)
days written notice delivered to the other party by Certified Mail. Upon such termination, Servicer shall promptly
supply appropriate reports, documents, promissory notes and other information as requested by the Authority or any
person or entity designated by the Authority and shall use its best efforts to effect the orderly and efficient transfer
of servicing to the Authority or a new Servicer designated by the Authority.
Section 9. Assignment of Rights. Servicer acknowledges that all right, title and interest in and to this Loan Servicing
Agreement may be assigned by the Authority to its successor or any trustee designated by the Authority, if any, and
that the successor and trustee shall have the rights to enforce the same. The Servicer may not assign its rights under
this Loan Servicing Agreement without the prior written consent of the Authority.
Accepted and Agreed to:
Housing and Redevelopment Authority in and for the City of Community Reinvestment Fund, Inc..
Fridley (Servicer)
(Authority)
By: BY:
Dennis Sonnek
Its: Its: Vice President
And By: DATED: 5- 9 ' C 6
Its:
DATED:
2000
4
EXHIBIT A
Servicer Standard Collection Procedures
1. If a payment is not receied on the due date, the Servicer shall send borrower a collection letter ( "Letter 1 ") requesting the
payment on or about 15 days after the due date but no later than 30 days after the due date.
2. If the past due payment is not received within one week after letter 1 has been postmarked, the Servicer shall send a second
collection Letter ( "Letter 2 ") to the borrower not later than the last day of the month subsequent to the month in which the
payment was due.
3. If the payment is not received within one week after Letter 2 has been postmarked, the Servicer will attempt to contact the
borrower by telephone and request payment
4. If the borrower is contacted by telephone and the matter cannot be resolved, Servicer may advise the borrower by letter what
options are available to resolve the matter.
5. If Servicer and borrower agree to a written collection schedule, the collection schedule shall generally provide that the loan
payments will commence no later than one month from the date of the collections schedule.
6. If a borrower who has been repeatedly delinquent in the past, unless the delinquencies usually have been cured before a second
collection letter is necessary, Servicer will attempt to contact the borrower by telephone to request payment.
7. Servicer will send borrower a letter within a week after the telephone call notifyinng the borrower that, in the future, the note or
notes will be accelerated if payments are late.
S. If the borrower cannot be contact by telephone as described in paragraph 3, or an interview cannot be completed as described in
paragraph 4, or an agreement is not reached as described in paragraph 5, then Servicer shall send a final notice and attempt to
contact the borrower by telephone within three days of sending the final notice of delinquent account.
9. If the Servicer does not receive payment within ten days of the third and final notice, Servicer shall send borrower a notice of
acceleration which details the charges involved in foreclosure proceedings and gives the borrower 30 days in which to cure the
default.
10. If the Servicer does not receive payment by the deadline named in the acceleration notice, Servicer shall meet with the Authority
to discuss the default and the action that must be taken. At that time, Servicer will present to the Authority a detailed report of
collection efforts so the Authority may determine how it will handle further action. The loan will be removed from the trial
balance, declared Inactive and send the file back to the Authority.
11. Upon the completion of any bankruptcy or estate proceedings (or if servicing should be suspended or other action taken during
the pending of such proceedings), Servicer shall advise the Authority within two weeks of any uncollected balance on the note
which should be written off, removed from the trial balance, declared Inactive and send the file back to the Authority.
12. If, in Servicer's judgment, it is more likely to collect payment of any loan if it deviates from the collection standards described
herein, Servicer will notify the Authority of its intention to deviate from the collection standards and provide an alternative
collection plan.
W
HOUSING AND REDEVELOPMENT
t7 AUTHORITY
Memorandum
Date: May 26, 2000
To: William W. Bums, Executive Director
From: Barbara Dacy, Community Development Director
Subject: Request to Initiate Design of TH 65 Improvement Project
BACKGROUND
As you recall, the Legislature allocated $500,000 to the City of Fridley in the 1999 legislative
session for design and engineering fees for the TH 65 project. The allocation was made by the
legislature as a result of a joint lobbying effort by the City and Medtronic, Inc. The TH 65
project includes adding another northbound and southbound lane on TH 65 from I -694 to the
vicinity of the East and West Moore Lake Drive intersection. The funds were allocated in the
Department of Trade and Economic Development budget, and the City submitted the required
documentation to DTED after conducting a public hearing on July 26, 1999. A stipulation on
these funds was imposed by DTED that the $500,000 would only be released pending the
receipt of State or Federal funds to complete the project. Unfortunately, the City fell 10 points
short of receiving federal funding in the most recent round of Federal '"T -21" funds. The City
Manager requested that DTED remove the stipulation so that the City could move forward with
using the funds for design activities, and DTED agreed on March 1, 2000.
To date, the Authority has spent about $76,000 for preliminary analysis on the'TH 65 additional
lane project. The Authority funded soil boring analysis, consultant costs to prepare the federal
funding application, and a preliminary feasibility study of the sheet pile wall by Short Elliot and
Hendrickson.
PROPOSED REQUEST
The Public Works Director has prepared the attached memoranda indicating that MnDOT has
amended its Transportation System Plan to include the TH 65 project as a potential project for
implementation from July 1, 2000 through June 20, 2001. MnDOT's recognition of the project
came as a result of its own TH 65 Corridor Study and as a result of significant input from City
staff regarding the necessity of the project. While the City was unsuccessful with the most
recent round of federal funding, the legislative allocation can now be spent on the design of the
project. If the City /Authority undertakes completion of the final design now, the project will
receive higher consideration by MnDOT or Federal agencies for funding because the project will
have been fully designed. Completing the design will also place the City in a good position to
lobby State and Federal legislators to fund the construction of the project in the legislative
session in 2001.
C�
Request to Initiate Design of TH 65 Improvement Project
May 26, 2000
Page 2
RECOMMENDATION
Staff recommends the Authority authorize staff to initiate the process to hire an engineer to
complete the final design of the TH 65 project. The $500,000 would be used to reimburse the
Authority the costs it has already expended, and fund the cost of about two -thirds of the final
design. It is estimated that the cost of the final design may range from $600,000 to $750,000.
The Authority would therefore be responsible for the difference between State funding and the
cost of final design ($200,000 to $350,000). This type of expenditure was identified specifically
in the Special Legislation for authorizing the extension of the Tax Increment Financing District
for the Lake Pointe /Medtronic site, and would therefore be reimbursed by the tax increment
proceeds from TIF #6.
M -00 -99
City of Fridley
TO: William W. Burns, City Manager PW00 -056
FROM: John G. Flora, it Public Works Director
DATE: May 3, 2000
SUBJECT: TH 65 Improvement Project
We received a letter from MnDOT identifying the trunk highway funding projects supported for fiscal year
2001. These projects are within the municipal agreement and access management categories that are
supported by MnDOT and incorporated within the Transportation System Plan (TSP) for projects available
from July 1, 2000 through June 30, 2001.
In the listing as No. 17 is the TH 65 improvement project from I -694 north to 63' Avenue. This project is
identified with local funding at $5,475,000 and MnDOT contribution of $100,000. While the funding
requirement is placed on the City, it is unofficially understood that it is the City's responsibility to obtain
the funding support from either state or federal agencies. In this regard, the City needs to initiate legislative
action at the state level to obtain funding support through MnDOT funding, re- allocations, or legislative
action. At-the same time it would be appropriate to initiate political effort to obtain congressional funding
support for this bottleneck/corridor /regional need.
In the mean time, to initiate the project the City (as has always been defined) needs to initiate the design for
the project so that construction could start in 2001. The project has been defined as approximately $6
million project, therefore, design is estimated at approximately $600,000. Some state funds have been
allocated to the City for the design and any shortfall would be expected to be provided by the HRA as a
result of the Medtronic development. Therefore, to have a design ready for next year's construction season,
it is imperative that we initiate a design contract as soon as possible. Since SEH has been designing the TH
65 projects for the City in the past and was the firm selected for the preliminary study for the sheet pile
retaining wall on the causeway, it is appropriate to retain the firm to complete the design for this project.
Since time is of the essence, recommend the City Council/HRA authorize the City to initiate a design
contract with SEH for the TH 65 improvement project from I -694 north to 63' Avenue.
JGF:cz
Minnesota Department of Transportation
Pip
Metropolitan Division
COW Waters Edge
1500 West County Road B2
Roseville, MN 55113
April 26, 2000 651 -582 -1370
To: Fiscal Year 2001 Municipal Agreement and Access Management Project Candidates
RE: Selection Results for Fiscal Year 2001 (FY 2001) Municipal Agreement and Access
Management Programs (7/1/00 — 6/30/01)
Attached please find the results of the selection process for projects requesting Trunk Highway
Mo funding in the State Fiscal Year 2001 (FY 2001) Municipal Agreement and Access
Management Programs. The list is broken into two categories as follows:
- FY 2001 Successfid Projects
- FY 2001 Unsuccessful Projects
The project selection committee that evaluated and made funding recommendations for this
year's program consisted of four city engineers. Mn/DOT representatives were also available to
provide project specific information -
The committee placed each of the projects within a project category based on the Metro
Division's Transportation System Plan (TSP). The TSP outlines funding priorities as follows:
1. Preservation
2. Management (Safety, Capacity)
3. Improvement
4. Expansion
These categories were used in determining the individual project rankings. Other factors used
for project ranking included "trunk highway benefit vs. cost" as well as project readiness.
Although some projects were selected based on the Municipal Agreement Program criteria and
some based on Access Management, all of the selected projects will be administered through the
Metro Division State Aid Office. All of the projects will be classified as Cooperative Agreement
Projects. The funding for these projects will be available from July 1, 2000 through June 30,
2001.
Please refer to the attached list to determine which projects were selected to receive finding. For
these projects, comments have been provided that outline specific requirements associated with
the funding, Mn/DOT'S contribution limit, or other issues that must be addressed prior to
receiving the funding. Please contact the Municipal Agreement Section in the Metro Division
State Aid Office for further clarification on these issues.
An equal opportunity employer
FY 2001 Project Candidates
April 26, 2000
Page 2
A seminar will be held in late May to provide training to those individuals that will be
responsible to deliver the programmed projects. The seminar will cover plan design, agreement
processing and construction requirements as these items relate to Cooperative Agreement
Projects. Information regarding this seminar will be mailed out shortly. It is strongly
recommended that your designers and/or project managers attend this seminar and share
information with us about how the entire process can better serve the local agencies.
Please contact me if you have any questions or need additional information. The State Aid
Office looks forward to working with each of you.
Sincerely,
J 4� � - Kevin Hoglund, 6 / 5' k L /17
Metro Division, State Aid
Cooperative Agreement Engineer
Enclosure (1)
FY 2001 — Successful Projects
project
Project Location.
Category and
Rank
And Description
Conditions
Fundine
14
TH 13 in the city of Savage
Management / Improvement
Total — $2,295,000
- Raised median, close access, re-
- The. Signal is not warranted orjustified
Local — $1,795,000
align Quentin and 123rd,
Funding for the frontage road work as
Requested
shown on current layout. Mn/DOT will
Mn/DOT — $500,000
provide an additional $250, 000 for frontage
road construction if the city closes Toledo,
Approved
Princeton, and Ottawa at TH 13.Must obtain
Mn/DOT - $250,000
access control and dedicate to the State.
15
Pike Lake just north of TH 694 in
Management / Improvement
Total — $305,000
the city of New Brighton
- Funding provided for Mn/DOT
Local — $105,000
- Build Storm Water detention
contribution (65 %) to flow
Requested
basin.
Mn/DOT — $200,000
Approved
Mn/DOT - $200,000
16
TH 3 from north of 145 to near
Improvement / Management
Total — $430,000
143'd in the city of Rosemount
- Fundingfor repair of existing
Local — $327,000
- Re- construct park/ ride, mill &
infrastructure including Mill & Overlay.
Requested
overlay, sidewalk, curb & gutter,
Mn/DOT — $250,000
storm sewer
Approved
Mn/DOT - $100,000
17
TH 65 from just north of 694 to
Improvement / Management
Total — $5,975,000
63rd Ave in the city of Fridley
— Frurdingfbr TH 65 awess closurm near
Local — $5,475,0OQ 4
- Auxiliary lanes along Moore Lake
eaWwest Moore Lake Drive a*. st . _.:
Requested
bike trail, lighting, signalization
-obtain rrontrol and dee to die
Mn/DOT — $500,000
SIM
Approved
Mn/DOT - $100,000
18
TH 65 from 37th to 45th in the city
Management / Safety
Total — $1,600,000
of Columbia Heights
- City to extend construction to include Mill
Local — $850,000
- Median construction with strce t
& Overlay between 43"d and 4
Other
and utility rehabilitation
Mn/DOT - $500,000
Requested
Mn/DOT — $250,000
Approved
Mn/DOT - $250,000
19
TH 10 @ Main Street in the city of
- Possible funding for alternative solution.
Total — $60,000
Anoka
Requested
- Build pedestrian trail along ramp
Mn /DOT — $50,000
Local — $0
Funding to be
determined.
20
TH 7 in Excelsior
- Possible alternative funding.
Total — $130,000
- Sidewalk between Oak and Elm
Requested
Mn/DOT — $117,000
Local — $13,000
Funding to be
determined.
Total Annrnved
FY 2001 Funding = $2.470.000
A
City of Fridley
TO: William W. Burns, City Manager
FROM: John G. Flo Public Works Director
DATE: May 18, 2000
SUBJECT: TH 65 Improvement Project
PW00 -063
The Governor with the legislatures approval, has $175 million set aside for bottle neck congestion and
regional corridor improvement projects. These projects must be committed by June 2003.
As I mentioned earlier, MnDOT has amended their Transportation Study Plan to include the TH 65 corridor
improvement project from I -694 to 631.
As these monies are only available for a specific amount of time and for specific projects, MnDOT probably
will not be able to design and commit all of those funds. Accordingly, if we have a project that we can
submit to MnDOT for construction, they can satisfy their requirements and we can get the TH 65 corridor
completed.
Recommend that we initiate a design project for the TH 65 improvement if we want to be considered and
hopefully obtain the dedicated funds for this corridor improvement.
JGF:cz
cc: B. Dacy
HOUSING AND REDEVELOPMENT
ar®
AUTHORITY
Memorandum
DATE: May 26, 2000
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Update on Community Fix-Up Fund and Related Housing Programs
At their April meeting, the HRA approved participation in the Community Fix -Up
Fund program. During the meeting the HRA expressed the following concerns:
1. The income limit of $73,140 was too high and would benefit households who could
otherwise afford private financing.
2. Several HRA members suggested that a cap be placed on the value of homes to be
improved.
Although, the HRA agreed to participate in the program and commit $50,000 for interest
write downs, they directed staff to re- evaluate the guidelines
and come back with a recommendation prior to implementing the program.
To follow is a summary of the issues and a strategy to implement the program.
Communes Fix -Up Fund
As you recall, the Community Fix -Up Fund Program is funded by MHFA and
provides home improvement loans (maximum loan: $35,000) to families with
incomes up to $73,140. MHFA created this program several years ago to
address the needs of middle income homeowners. Community Revitalization
Resources (CRR) administers the program on behalf of the HRA and sells the
loans directly to MHFA.
CRR's initial proposal was to offer the Community Fix-Up Fund program in the 15
suburban communities who sponsored the Cape Cod and Rambler Remodeling
Guide. The goal was to encourage homeowners to make the improvements
described in the book by offering attractive financing. As an added incentive,
CRR suggested that the interest rate be reduced from 8% (the standard MHFA
rate) to 6 %. A key requirement, however, is that the homes must have been
built before 1970, therefore prioritizing the oldest housing stock.
e
Update Memo on Community Fix -Up Fund
May 26, 2000
Page 2
Each community who participates in the program will help write down the
interest rate, but only for loans made within their community. The remaining
portion of the write down would be shared by the Met Council and MHFA. The
first phase of the program is available in the cities of Blaine, Columbia Heights,
Coon Rapids, Fridley and St. Louis Park.
Impact on Existing Programs
The Community Fix-Up Fund program is an effort to compliment our existing
rehab programs. As you know, CRR administers our 5% loan program which is
funded entirely by the HRA. The purpose in offering the Community Fix -Up Fund
program is two -fold; first it addresses the needs of the middle- income market
(between $58,650 and $73,140), and second it allows the HRA to leverage its
resources with outside dollars.
It is important to emphasize that this initiative represents a $50,000 commitment
by the HRA for 18 months. Assuming an average loan amount of $5,000, the
HRA could make up to 440 loans with a projected value of $2.2 million.
Obviously, the higher the loan amount, the higher the write down and the fewer
loans that could be made.
In comparison, the HRA budgeted over $600,000 toward the on -going
operation of the Revolving Loan Fund. It will be necessary to continue this
capital infusion for the next 5 years in order to make the fund self - sufficient.
By leveraging outside dollars and participating in the Community Fix-Up Fund
Program, the HRA can offset some of the future demands on the Revolving
Loan Fund.
Response to HRA Concerns
In terms of the questions raised by the HRA at the April meeting, we believe it is
prudent to maintain the guidelines as initially proposed.
Income Guide %nes
The $73,140 limit was established by MHFA and is used by the four other
communities in the program. Although the $73,140 limit may seem like a lot, in
the context of today's marketplace it is not uncommon to find two- income
households or even multiple wage earners (including college students who live at
home) with combined incomes that easily exceed this amount. Lowering the cap
from $73,140 to $58,000, or some number in between, will likely diminish the
number of potential borrowers and loans that could be made.
Update Memo on Community Fix -Up Fund
May 26, 2000
Page 3
If the HRA feels that that the income limit is still objectionable, perhaps it would
be prudent to maintain the existing $58,650 limit. In effect we could use the
Community Fix -Up Fund program as a substitute for the Revolving Loan Fund
until the write -down funds are depleted.
Market value Cap
Imposing a market value cap of $100,000 may exclude a significant number of
potential borrowers from the program. Over the last several years home prices
have increased dramatically and many existing homes exceed this figure. In
fact, in 1999 the average sales price of existing homes in Fridley was $131,500
(the average estimated market value was $109,800).
In addition, there may be seniors or other households that live in higher valued
homes, but who have fixed incomes and cannot afford to make improvements on
their own. By Thursday's meeting we hope to have a GIS map showing the
number and location of homes built before and their valuation for tax purposes.
We should also point out that MHFA does not impose home value limitations on
its rehabilitation programs. From a practical standpoint it is desirable to keep
our guidelines consistent with MHFA for ease of administration and marketing.
Other Issues
On a related topic, at the July HRA meeting staff will present a proposal to
increase the interest rate on the Revolving Loan Fund from 5% to 6 %. The
purpose of this change is to help offset some of the increased loan servicing
costs from Community Reinvestment Fund and anticipated increases in the loan
origination costs from Community Revitalization Resources. From a historical
perspective the HRA adopted the 5% rate in 1995, but has never made any
changes. We will have more information on this subject in July.
Conclusion
Unless otherwise directed, we will implement that Community Fix-Up Fund as
originally
M -00 -98
(j77=7 HOUSING AND REDEVELOPMENT
® AUTHORITY
Memorandum
Date: May 26, 2000
To: William W. Burns, Executive Director
From: Barbara Dacy, Community Development Director
Subject: Update on Joint Community Task Force
The City Councils of Columbia Heights and Fridley have decided to initiate a Joint
Community Task Force. The purpose of the task force is to identify ways to take
advantage of the opportunities presented by the Medtronic Corporate Campus. As of
the writing of the memo, all of the members have been appointed except for a
representative from School District #13. The list of members is attached.
The first meeting is tentatively scheduled for June 8, 2000. Now that the mission of the
group has been fully discussed, the next task is to identify the funding arrangement for
the consultants. Joint funding scenarios between Anoka County, the cities, school
districts, and possible Medtronic are now being researched. It will be proposed that the
Authority provide some amount of funding for the Fridley share. The exact amount will
depend on a variety of issues and it is not required that the Authority take action on
Thursday night. An amount will probably be available for action at the July meeting.
More information will be presented Thursday night, but no action is required of the HRA
at this time.
M -00 -92
10
JOINT COMMUNITY TASK FORCE
DISTRIBUTION LIST
COLUMBIA HEIGHTS
Name
Address
Phone
E -Mail
Gent' Herringer
Herringer Company
763 - 571 -8177
NA
Planning Commission
5150 Central Avenue NE
Fax: 763- 571 -3823
Bob Barnette,
Columbia Heights, MN 55421
763 - 574 -9585
NA
Julienne Wyckoff,
City of Columbia Heights
(H) 763 - 788 -3463
Julienne.wvckoffO
Councilmember
590 40`x' Avenue NE
Fax: 763 - 706 -3601
-c.i.
Columbia - heights.mn.us
John Meyer,
Columbia Heights, MN 55421
(w) 612 - 338 -0713
J_ meyer@-mbieng.com
Marlaine Szurek,
City of Columbia Heights
(H) 763- 788 -4506
Marlaine.szurek(&c.i.
EDA Commissioner
590 40"' Avenue NE
Fax: 763- 706 -3601
Columbia - heights.mn.us
Columbia Heights, MN 55421
Tom Ramsdell,
4645 Fillmore Street NE
(W)--651-697-7834
NA
Planning & Zoning
Columbia Heights, MN 55421
Fax: 651 - 697 -7822
Commissioner
FRIDLEY
Name
Address
Phone
E -Mail
Diane Savage,
567 Rice Creek Terrace NE
(W) 763- 323 -5646
NA
Planning Commission
Fridley, MN 55432
Fax: 763 -422 -7524
Bob Barnette,
City of Fridley
763 - 574 -9585
NA
Councilmember
6431 University Avenue NE
Fax: 763 -571 -1287
Fridley. MN 55432
John Meyer,
7868 Alden Way
(w) 612 - 338 -0713
J_ meyer@-mbieng.com
Fridley HRA
Fridley, MN 55432
Fax: 612 - 337 -5325
Kenneth Schultz
Dasco Systems
763 - 572 -2275
Kschultz(a)4alabel.com
7787 Ranchers Road
Fridley, MN 55432
INDEPENDENT SCHOOL DISTRICT #14
Name
Address
Phone
E -Mail
Larry Johnson
7120 Riverview Terrace
Fridley, MN 55432
763 - 572 -0451
Larry@goldengate.net
INDEPENDENT SCHOOL DISTRICT #13
Name
Address
Phone
E -Mail
Dave Behlow,
Superintendent
1400 49th Avenue NE
Columbia Hei hts, MN 55421
(W)763- 586 -4505
Fax: 763- 586 -4508
NA
INDEPENDENT SCHOOL DISTRICT #16
Name
Address
Phone
E -Mail
Gary Brisbin
7560 Brigadoon Place
Fridley, MN 55432
763 - 784 -4469
NA
""'Always cc: William W. Burns, City of Fridley, Barbara Dacy, City of Fridley, Walt Fehst, City of
Columbia Heights, and Ken Anderson, City of Columbia Heights.
Fridley HRA
Monthly Housing Rehabilitation Report
Prepared for
June 1, 2000
HRA Meeting
2000 LOAN ORIGINATION REPORT
May-00
Loan CDBG Type of
IName # Street Type HRA MHFA HOME Total Property
Black
Calabrese
Cisewski
Diedrich
6301
840
1559
46
Van Buren St.
Rice Creek Terr.
75th Ave. NE
66th My
CDBG
5% Loan
CDBG
5% Loan
$
$
$
19,300 00
-
26,574.00
# $
$
$ -
$ -
# $
$
$
$
9,655.00
-
7,430.Q0
# $
$
$
$
9,655.00
19,300.00
7,430,00
26,574.00
1
1
1
1
SF
SF
SF
SF
Doege
658
Ironton St.
5% Loan
$
11,108.00
$
$
$
11,108.00
1
SF
Dutcher
7550
Lakeside Rd.
No Loan
$
4,565.00
$ -
$
-
$
4,565.00
1
SF
Fannon
5260
Lincoln St.
5% Loan
$
13,000.00
$ -
$
$
13,000.00
1
SF
Ferdelman
6007
3rd St.
8% Loan
$
-
$ 7,950,00
$
$
7,950.00
1
SF
Gallagher
379
79th W
5% Loan
$
2,420.00
$
$
-
$
2,420.00
1
SF
Gallegos
445
63rd Ave. NE
20% Grant
$
8,406.00
$
$
$
8,406.00
1
SF
Gerard
5973
6th St.
5% Loan
$
4,306.00
$
$
-
$
4,306.00
1
SF
Golan
4514
3rd SL
5% Loan
$
2,495.00
$ -
$
$
2,495.00
1
SF
Green
649
Hugo St.
5% Loan
$
1,447.00
$
$
$
1,447.00
1
SF
Hebelsen
901
W. Moore Lake Dr.
5% Loan
$
35,000.00
$
$
$
35,000.00
1
SF
Hinrichs
7355
Hayes St. NE
5% Loan
$
12,786.00
$
$
$
12,786.00
1
SF
Kadic
7510
4th St.
5% Loan
$
18,090.00
$
$
$
18,090.00
1
SF
Kostuch
8027
Fairmont Circle
5% Loan
$
9,099.00
$
$
$
9,099.00
1
SF
Lewis
621
Hugo St.
$
-
$
$
$
Laane
615
Hugo St.
5% Loan
$
11,257.00
$ -
$
$
-
11,257.00
-
1
SF
SF
Magnuson
4780
3rd St.
CDBG
$
-
$
$
11,870.00
$
11,870.00
1
SF
Mancuso
7561
Central Ave.
5% Loan
$
3,500.00
$ -
$
$
3,500.00
1
SF
Miller
7331
Memory Lane
8% Loan
$
$ 8,000.00
$
$
8,000.00
1
SF
Morin
5763
Central Ave.
5% Loan
$
11,873.00
$
$
$
11,873.00
1
SF
Moses
5180
Hughes Ave.
5% Loan
$
11,500.00
$
$
$
11,500.00
1
SF
Provost
6040
2nd SL
5% Loan
$
2,266.00
$
$
$
2,266.00
1
SF
Schwint
1535
Mississippi SL
5% Loan
$
9,655.00
$
$
$
9,655.00
1
SF
Towberman
4632
2 -1/2 St.
0% Grant
$
$ -
$
6,411.00
$
6,411.00
1
SF
Zelenak
7526
4th St.
0% Grant
$
9,941.00
$ -
$
$
9,941.00
1
SF
TOTALS 1 $ 228,588 1 21 1 $ 15,950 1 $ 25,711 1 41$ 270,249 26
FRIDLEY HRA
LOAN SERVICING REPORT
APRIL 2000
Number of Loans in Portfolio
Principal Payments
Interest Payments
Ending Principal Balance
Number of Loans in Portfolio
Principal Payments
Interest Payments
Ending Principal Balance
Loans in Portfolio
Principal Received This Month
Interest Received This Month
66 121 187
$ 18,664.94 $ 14,722.62 $ 33,387.56
$ 3,313.76 $ 5,293.60 $ 8,607.36
$ 844,306.12 $ 1,331,843.51 $ 2,176,149.63
20
$ 37.35
$
$ 0.85
$
$ 106,214.53
$
4 24
$ 37.35
$ 0.85
31,390.66 $ 137,605.19
86 125
$ 18,702.29 $ 14,722.62 $
$ 3,314.61 $ 5,293.60 $
$ 22,016.90 $ 20,016.22 $
2000 Loan Activity Report
Loan Servicing
5/26/00
211
33,424.91
8,608.21
42,033.12
HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
Date: May 26, 2000
To: William W. Burns, Executive Director
From: Barbara Dacy, Community Development Director
Subject: Salvage Yard Redevelopment Update
BACKGROUND
Paul Hyde from Real Estate Recycling Inc. has expressed interest in pursuing redevelopment of
the salvage yards along 73rd Avenue. Mr. Hyde is well qualified since his firm specializes in
redevelopment of contaminated properties (Murphy Warehouse and Cummins project is a
recent example). Simultaneous to Hyde's inquiry, the City has been wrapping up its
Comprehensive Plan update for the year 2020. One of the suggestions in the plan is to
redevelop the salvage yards for additional space for industrial development.
The public purpose achieved by redeveloping this area is correcting any environmental
contamination problems, improving the efficiency of land uses, eliminating a poor street pattern
for development (removing 73rd 1/2 Avenue), and creating the opportunity for increased tax
base and job opportunities.
PRELIMINARY FINDINGS
To follow is a bullet list of a number of issues about the proposed redevelopment project:
• The redevelopment area will consist of about 9.5 acres north of 73rd Avenue.
• Staff is currently exploring redevelopment of 11 acres south of 73rd Avenue.
• Once redeveloped, about 245,000 square feet of industrial space will be available for
occupancy.
• Once redeveloped, the new development will represent about $11 million in new market
value versus about $3.3 million in existing market value.
• A new redevelopment Tax Increment District will need to be established to recover a
majority of the expenses from the project.
• It is anticipated that expenses may be $9.6 million, which includes acquisition,
relocation, demolition, site improvements, environmental, clean up, and any public
improvement costs. It also includes a 10% contingency.
• It is anticipated that revenues may be $8.3 million and assumes at least $2.5 million of
state and regional funding.
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Salvage Yard Redevelopment Update
May 26, 2000
Page 2
• The deficit can be covered by use of tax increment funds from TIF #9 (Onan District),
and still leave a substantial amount of increment in TIF #9 for other purposes.
The estimates for the expenses and revenues have been refined over the last two weeks and
are conservative in the sense that they are anticipating larger outlays given the unknown
environmental and relocations issues.
CONTRACT FOR EXCLUSIVE NEGOTIATIONS
As the Authority has done in the past, staff is suggesting that the Authority enter into a
Contract for Exclusive Negotiations with the developer. The Contract would establish that the
Redeveloper, Real Estate Recycling Inc., would negotiate purchase prices (including relocation
expenses), conduct environmental testing, prepare grant applications, and prepare preliminary
development plans. The Authority would be responsible for assisting the redeveloper with
application for grants, reviewing zoning and land controls to determine their impact on
redevelopment of the site, and reviewing the Authority's ability to exercise eminent domain in
the event that parcels cannot be purchased. The Contract would not be assignable and would
terminate by the end of the year. Prior to termination of the agreement, the development
contract would also be negotiated and would address all of the issues involving the
development of the project. Jim Casserly is now preparing a draft of the contract.
PROPERTY OWNERS UPDATE
Paul Hyde and staff met with two of Determan's operations employees to discuss their future
development plans on their Fridley site. The City had previously been approached by Determan
staff regarding setback requirements and exterior building material requirements to expand the
truck - refurbishing portion of the business. Determan wants to construct a metal panel building
with 10 large industrial sized internal truck - refurbishing bays. The reason for metal panels is to
allow them to replace the panels when the sandblasting process damages them. Determan's
goal is to clean up their image and move materials inside. They explained that they have been
looking for additional space and may need to eventually move to keep up with their growth
demands.
Staff encouraged them to continue with cleanup efforts, but explained the City's masonry
requirements for building surfaces facing a public right -of -way. The sandblasting operation
could be built into a masonry building with protective panels inside. Determan also expressed
interest in the possibility of moving north into a new building once the salvage yards are
eliminated. The meeting ended with the Determan representatives stating that they need to
talk to their owners about growth options.
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Salvage Yard Redevelopment Update
May 26, 2000
Page 3
NEXT STEPS
This project was identified as a year 2000 —2001 priority for the City and the Authority. Unless
otherwise directed, staff will proceed with negotiating a Contract for Exclusive Negotiations with
Real Estate Recycling Inc. for possible consideration by the Authority at the July meeting. The
availability of state and regional funds, plus the ability to use increment from TIF #91 will make
the project financially feasible. No formal action is needed by the Authority Thursday evening.
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