Loading...
HRA 09/07/2000 - 29555CITY OF FRIDLEY � HOUSING & REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 7, 2000 CALL TO ORDER: Chairperson Commers called the September 7, 2000, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Jim McFarland Pat Gabel Members Absent: None Others Present: Barbara Dacy, Community Development Director Grant Fernelius, Housing Coordinator Clarissa Klug, Attorney Julie Vogel, Accountant APPROVAL OF THE AUGUST 17. 2000. HOUSING AND REDEVELOPMENT ^ AUTHORITY MEETING MINUTES: MOTION by Ms. Schnabel, seconded by Ms. Gabel, to approve the August 17, 2000, Housing and Redevelopment Authority meeting minutes. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: CONTRACT WITH CEE FOR REVOLVING LOAN PROGRAM: 2. RESOLUTION NO. HRA 9-2000. ADOPTING A 2000 TAX LEVY COLLECTIBLE I N 2001: 3. CLAIMS AND EXPENSES: MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the consent agenda as presented. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. n HOUSING 8� REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 2 ACTION ITEMS: 4. CONTRACT WITH HOISINGTON/KOEGLER/BON7JREA/EHLERS AND � ASSOCIATES: Ms. Dacy stated that the Joint Community Task Force was established this summer. It is an 11 member task force consisting of representatives from Fridley and Columbia Heights. The mission of the Task Force is to act as an advisory commission to look at existing and future demographic and market trends. The goal is to identify ways how the Cities can work together to take advantage of the opportunities presented by the Medtronic campus or other identified issues. Ms. Dacy stated that in July, the HRA authorized a contract and provided the funding for the Fridley portion to hire Demographic Technologies, Inc. (DTI), to provide GIS data of Fridley's population and household characteristics. The request tonight is for the HRA to evaluate its share and hire a combination contract befinreen a land use consultant, marketing consultant, and a fiscal impact consultant. Hoisington/Koegler Group is a Minneapolis-based landscape architecture and planning firm. Bonz/REA is out of Boston, Mass. They specialize in real estate economics. They have extensive experience with a number of large companies in the Boston area and elsewhere in the country. Ehlers and Associates have done work for the HRA in the tax increment area. Ms. Dacy stated that the consideration is to fund the consultant work program for the land use and the marketing piece for the task force. They responded to the task force's request for a proposal and seemed to be on the money in terms of what the task force '� was asking for. The demographic information provided by the GIS consultant will be used, and they will conduct research in the general market area around Fridley and the Metropolitan area. They will interview Medtronic and do other research with "DTED" and the Department of Economic Security. They will conduct a public workshop to get input from the people in Columbia Heights and Fridley as a second step. Third, they will analyze this information and make forecasts. In the end, they will talk about a recommended list of ways that the Cities could cooperate. They will present a recommended list of potential projects and try to space those out over 10-20 years in five year segments. They will be meeting with the task force potentially on a monthly basis and hopefully culminate with a final report to the Columbia Heights and Fridley City Councils in February or March, 2001. Ms. Dacy stated the task force met on August 10, The HRA's representative, John Meyer, was at the meeting. The task force suggested that the communities go ahead and participate and accept a proposal from HKGI. They were impressed with the experience of the consultants and their proposals seem to put together the right amount of research. Ms. Dacy stated that all of the partners talked about in the past have agreed to provide their share of funding. Columbia Heights has agreed to provide their share of funding for the demographic information. Anoka County has agreed to provide up to $20,000, and the school districts each have contributed $2,500. DTI plus the land use and the ^ market cost would be approximately $49,798 and Columbia Heights at $24,132. Hilltop HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 3 is considering contributing $500-$550. The suggestion is for the HRA to recommend � approval for entering into the contract with a consultant subject to a maximum of $49,800 minus the Hilltop contribution. The other jurisdictions have agreed to make their shares, so it is a matter now of receiving their money. They will be invoicing them and receiving the checks this month. Mr. Commers asked if Demographic Technologies, Inc., was a separate contract. Ms. Dacy stated, yes. The Fridley share is $25,875 and the Columbia Heights share is $18,055. Mr. Commers asked what the $10,000 was that they just paid. Ms. Dacy stated that was the initial invoice from the GIS consultant. That was toward the total contract. Mr. Commers asked if that would come off the $25,875. Ms. Dacy stated that was correct. Mr. Commers asked if the contract being approved tonight was the Hoisington contract? Ms. Dacy stated that was correct. � Ms. Schnabel asked if the $49,798 included the $25,875 of which we have already paid $10,000. Ms. Dacy stated that was correct. Mr. Meyer asked if the $54,500 includes the Bonz/REA/Ehlers contract also. Ms. Dacy stated that was correct. Mr. Meyer asked how they would work this being a Boston outfit. Ms. Dacy stated that Dick Bonz and Dick Paik will be here. Mr. Paik is employed with another client in Minnesota so, hopefully, they can take advantage of his time in Minnesota. Mark Koegler of Hoisington/Koegler is the contact person along with Mike Schroeder. They will be coordinating all the work. Bonz/REA will be responsible for the market research, contacting DTED and interviewing Medtronic and all the market analysis as part of the proposal. Ms. Schnabel asked when they expect their final report to be put together. Ms. Dacy stated that February, 2001, is the deadline, and the key to accomplishing that will be the availability of the data from the GIS consultant. They are hoping that will be n finalized in November. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 4 Mr. Meyer stated their report is due in February and there must be time after that for thorough discussions before they start formulating recommendations. � Ms. Dacy stated the February deadline does include the formulation of recommendations. The consultant work should be done in February or March. The task force may choose to take more time with it and come up with other ideas or issues to research. The task #orce would then go to each City Council to make the presentation. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the Hoisington/Koegler Group, Inc. contract. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDER TERM SHEET WITH REAL ESTATE EQUITIES FOR GATEWAY EAST REDEVELOPMENT PROJECT: Mr. Fernelius stated that on August 24, staff met with representatives from Real Estate Equities which is the developer for the Gateway East project. The purpose was to talk about more of the significant issues that would form the backbone of the redevelopment contract. A term sheet or the basic provisions of that agreement will be included in the agenda for the October meeting. Twenty-eight "for sale" townhome units will be constructed. Staff continues to work with the developer on unit design and quality enhancements and details. They plan to have that finished before entering into the '� development contract included as part of the contract agreement. Mr. Fernelius stated the schedule calls for a construction start date by April 1, 2001. The completion date is December 31, 2002. The developer would pay a dollar for the site. The HRA would contribute $545,000 for infrastructure and site improvements. The funds would be placed in an escrow account and the developer would draw down on those funds to complete the public improvements as the work gets done. Those improvements would include the streets, sidewalks, storm sewers, sanitary sewer, the water mains and services, as well as lighting and signage. Other improvements are the decorative fence similar to the Christenson Crossing project, shrubs, sod, trees and irrigation. Any funds remaining in escrow would be retumed to the HRA at the completion of the site improvement work. One of the ideas is the concept of sharing in the upside if the project is successful and if the developer is able to sell the units for more than what they are projecting at $135,000 per unit. This revenue participation plan would allow the HRA to recoup a portion of its investment in the project, specifically the public improvements the HRA is going to pay for. The base amount would be $3,780,000. Any amount above that is what the HRA would participate in. Mr. Fernelius stated that the HRA would receive 70% of the first $140,000 over the base revenue plus 60% of the next $140,000 over the base revenue, and 50% of the amount thereafter. The theory behind the $140,000 is that it is equivalent to $5,000 per unit. If the unit sold for $5,000 more than projected, the HRA would receive 70% of the first ^ $140,000 which equates to $98,000. The developer indicated they have concerns � HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 5 about those percentages and are willing to discuss the idea of sharing the revenue. � Staff will continue to negotiate on the final designs and specifications of the units. Staff will try to reach agreement on the major issues included in that contract and bring that back for the October meeting review. Mr. Commers asked if there was any information on what Fridley's housing needs are for those that are living here and would like to remain here. Mr. Fernelius asked if Mr. Commers meant what kind of demand there would be in a market study. Mr. Commers stated that was correct and in terms of what kind of home they would afford. Mr. Fernelius stated that the developer believes there will be a demand from existing Fridley households. Young professionals and recent divorcees may consider these. These are affordable guidelines based on the $135,000 Metropolitan Council standard. Preliminary market analysis states that there would be demand from people living in the community. Mr. Commers asked if there was a study about whether the seniors who moved into Christianson Crossing were able to afford them. n Ms. Dacy stated that they have not completed the household by household census and the project as of the end of last year was sold out. The homeowners associations are now formed and established. Mr. Commers asked what level of family income is needed to qualify for a$140,000 house. Mr. Burns stated that he thought it was no more than 35% of your income should go to housing. Mr. McFarland said that it is up to 50% with utilities and taxes with the monthly income. Mr. Commers stated that on a$140,000 home with normal amortization, what would someone generally have to have as an income? Mr. Bums stated it depends on how much equity is put down. Mr. Commers stated that he is assuming that minimum would be put down. Ms. Vogel stated that 35% of $140,000 is $49,000. Mr. McFarland stated that it would be in the area of a minimum of $25,000 pre-tax. With taxes and everything else, it would be $25,000-$30,000 annual income with one or finro � wage eamers. HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPTEMBER 7. 2000 PAGE 6 Ms. Dacy stated that the two or three story project is not designed for an empty nester or senior. There is a demand for that type of housing in Fridley. They may be attracting employees that work in Fridley or plan to work in Fridley. It is a small project with only � 28 units. Mr. Commers stated that he heard a Planning Commission member state that there is a big need for senior housing in Fridley. Are they targeting the wrong market? Maybe it should be a more affordable type of property if there is that demand. They do not have a lot of space for other projects for people if they are not able to afford a$140,000 home. Mr. Bums stated that they have had the discussion at the staff level as well. To what extent are they trying to satisfy the needs of Fridley residents in building new housing versus to what extent are they trying to produce new value on Fridley property.? This project is a good compromise but clearly is not directed to one or the other. Mr. Commers stated it is directed away from the seniors. Ms. Dacy stated that the City has 100 households at Village Green and 118 at Banfill Crossing for the seniors. Mr. Commers stated there is still an expressed need. He can see these going fast with Medtronic employees. He just wants to make sure they are not sacrificing the needs of the people that are here to bring in young professionals or others. � Ms. Dacy stated it is an issue of balance and the City could build senior housing all day long and not fill it up, and they could build lower income housing all day long and not fill it up. The HRA and the Council has to weigh the balance issue for seniors, affordable house, and the market rate. The empty nester types of townhomes are one story and they take up a lot of land. To get the same amount of units and density for those types of homes, you need two to three times the land area to get a one story unit. They do not have the land available anymore without requiring a significant amount of units for businesses. Ms. Schnabel asked why you would need finro to three times the land for an empty nester development. Ms. Dacy stated that you try accomplish the same amount of square footage with one story instead of finro stories. Mr. Commers stated they have to consider what they want to do. It is important to find out what has occurred at Christianson Crossing, and they need information as soon as they can regarding what the needs are. Maybe the place to start is at the Community Center with some senior groups and maybe a questionnaire could be designed to see what the needs are. Mr. Burns stated that he has had recent conversation with the seniors at the Community ^ Center, and affordable housing is a huge issue for them. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 7 � Mr. Commers stated that he is concemed that staff should focus on where they know there is an immediate need rather than on another type of housing need. They do not want to force out people who have lived here for a long time. Ms. Dacy stated that the City has responded to that need in at least three projects in the last ten years. Mr. Commers stated they better look at priorities and where to put the money. Ms. Dacy stated that staff has heard another priority and the Gateway East is not set up for a senior development type. The shape is odd and it is only 2.5 acres. Those are two conflicting priorities, and they have responded to the image issue and overlay the housing need on top of that. It is a significant financial contribution, but the trade-off is that they may have to sacrifice other priorities in order to focus on housing needs. They will go whatever direction the Council and HRA wants them to. Mr. Commers stated that the HRA is not in the process of trying to change this project, but in light of what seems to be coming to the surface here, they may be missing the boat a little in addressing immediate needs. They better get on the ball and figure out what it is and that may not be the way they should be directing our future focus. Ms. Dacy stated that if they are missing an urgent need, the Gateway East site is more ^ of an affordable project. It may not be owner occupied, but a rental project. Mr. Burns stated that the big problem with senior housing is land. Where do you find land in Fridley to fulfill that option? Ms. Dacy stated that you could put an apartment building on the Gateway East site and go to a Noah's Ark developer and say they would like to replicate a senior project at that location. Ms. Gabel stated that she is someone who would be looking for a townhouse to stay in Fridley but not this type of townhouse because she is an empty nester. She could name 8-10 people about her age who would like to stay in Fridley and get rid of their houses. Mr. Burns stated that the land for the one story senior model is not in Fridley.. They may need to take a more regional approach to senior housing than just the Fridley approach. Even land for high-rise senior housing is limited in Fridley. Ms. Schnabel stated they could also do the condominium style as opposed to the townhome approach. Ms. Gabel stated that a Iot of people do not want that. r"� Mr. Burns stated they have no vacant land and have had to buy existing buildings to make these projects. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 8 Ms. Dacy stated that she does not think they are missing the boat with this particular product and market, and it addresses a different demographic in the City. It is a small '� size project in a small place; however, if the HRA decides that the resources should be focused on another type of demographic, they can start over. Mr. Commers stated that he was not suggesting staff redo this project. He is suggesting that information is coming to us to suggest that there is a big need in a certain area, and he would like to get information about that need to test it and see if it �s real. If it is real, staff could start focusing on that need for the future. For example, the salvage yards could be used for a project of that nature. Staff is creative and could come up with ideas, but they have to identify the need first. Mr. Burns stated this project is responsive to two trends in Fridley. They heard in the early 90's that Fridley has a high proportion of younger single head of the household families. The Medtronic project employees will need housing also. Ms. Gabel asked why you would wait so long into the sale of 24 out of 28 units before you talk about the accounting of the costs and profits. Ms. Klug stated that was because it may take time to see how the market reacts and you do not get a good picture if the cost will be under or over. It is a fair picture of what the overall revenue will be as compared to the costs, and the final adjustment would be made at the very end when the final unit is sold. � Ms. Gabel asked if a good picture could be made after 16-18 are sold. Ms. Klug stated that she thought it could be structured that way. Ms. Gabel stated that she would hate to see it get that far down the line before someone is taking a look at where it is really at. Mr. Commers stated that it is hard to anticipate that there will be anything coming of this. They are listed at what is the market value. Ms. Gabel asked if this revenue participation is something that is done with this type of development. Mr. Femelius stated this developer has done it on a couple of projects, and it is a way for the public sector to recoup part of its investment and he understands there has been some money available. Mr. McFarland stated that as long as the investor has the properties and they are not selling, it is costing them a little more money, so he will reduce the cost rather than raise the price. Mr. Meyer asked if this was an expected assistance of the $545,000 of additional ,� assistance. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 7, 2000 PAGE 9 ,—� Mr. Fernelius stated that it was not a surprise. They knew the day that Real Estate Equities submitted its proposal that there was a shortfall with their project and they knew they would have to address it. The developer is saying that is the shorlfall created by building that particular unit on that site. MOTION by Ms Gabel, seconded by Mr. Meyer, to approve the term sheet attached in the packet for Gateway East Project redevelopment contract. Mr. Meyer asked if the term "term sheet" is new. Does it signify that this is just a preliminary document? Ms. Dacy stated that was correct. Ms. Klug stated that it was the basic terms. Mr. Commers stated they should be careful in going about the kinds of appliances if it is not stated very specifically. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. CONSIDER REQUEST TO INSTALL COMMUNITY SIGNAGE AT SOUTHWEST � CORNER OF UNIVERSITY AVENUE AND MISSISSIPPI STREET: Ms. Dacy stated that the signs are under production right now. The exclamation point will not be on the sign, but the contractor is Redwood Signs out of Osseo. We had talked about it before, but because the estimate came in higher than what we had talked about she put it back in the agenda. She does not have an estimate of the electrical costs at this point in time. Mr. Commers asked how big the sign is. Ms. Dacy stated that they are three different sizes to match the locations. One sign will be 5 x 10 feet or 50 square feet. Mr. Commers asked how the lighting will be reflected on that. Ms. Dacy stated that there will be a light fixture that will be placed at the bottom and they are talking about fixtures in the back for back lighting. In the backdrop there are the Colorado Spruce trees that will form a background. Mr. Commers asked if they need landscaping around these to be maintained. Ms. Dacy stated that the sign will be placed in the back of the limestone wall so the wall will rise above the wall and the evergreens and lights will be in the back. The other ^ locations are on Highway 65, East River Road, and University Avenue. HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPTEMBER 7. 2000 PAGE 10 Ms. Schnabel asked if all the signs would have a wall in front of them. Ms. Dacy stated that they will not and each will be handled differently. They will be � landscaped. Ms. Schnabel asked who would maintain the landscaping. Ms. Dacy stated that the sign on East River Road will be located in the front yard of a single family owner. The homeowner has said they would love to put flowers at the base of the sign and take care of it. Mr. Hickok has been handling the issues of the signs with the other owners. A couple of the signs are within the MnDOT right-of-way. The City will pay for some maintenance and electrical cost for the sign on Highway 65. Ms. Schnabel asked if there was a City garden club that might take this over. Ms. Dacy stated she did not know. Ms. Schnabel asked if at the top of the sign was the Banfil Locke House. Ms. Dacy stated that was correct and it was painted. Ms. Schnabel asked who maintained the paint on the whole scene. Ms. Dacy stated the City will have to undertake that type of work. Some signs will have brick columns instead of wood posts. It will have more of stately appearance. � Ms. Gabel stated that she still did not like the idea of the signs. It is a maintenance nightmare; and if you do not live in Fridley, you will not understand the point of the white house in the back. Mr. Bums stated that the 50�' Anniversary Committee met for well over a year and had lengthy discussions. That was what they came up with. Ms. Gabel stated that the sign in Shoreview is made of a lot of brick and mortar but is very well done. Mr. Burns stated that there are a number of Fridley Historical Society members on the committee who felt strongly about the Banfill Locke House on that sign. Mr. Meyer asked from what direction this would be read. Ms. Dacy stated that it would be placed on the southwest comer and the primary view would be the southbound traffic. East and westbound would have a better view. Mr. Commers asked if it is the same design on all the signs. Ms. Dacy stated, yes, but some have the brick and some have the wood. � ,� HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPTEMBER 7. 2000 PAGE 11 Ms. Schnabel asked if they have to go through the request for approval with each sign. Ms. Dacy answered that they do. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the authorized construction of the Welcome to Fridley sign. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. CONDUCT PUBLIC HEARING REGARDING SALE OF 530 HUGO STREET AND CONSIDER DEVELOPMENT CONTRACT WITH SCOTT OLMSTEAD BUILDERS FOR 530 HUGO STREET: Mr. Fernelius stated that this item could be tabled for further discussion at a later date. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to table this item. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. OTHER BUSINESS ,,—� Ms. Dacy stated Julie Vogel will be taking a new position and is leaving Fridley. She stated the City certainly appreciates the hard work and effort Ms. Vogel has contributed to the City, and she will be missed. Mr. Commers stated the HRA members want to express their thanks and appreciation for Ms. Vogel's attendance at the HRA meetings for the past couple of years and for doing such an excellent job. It has been a pleasure working with her. ADJOURNMENT MOTION by Ms. Schnabel, seconded by Ms. Gabel, to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE SEPTEMBER 7, 2000, MEETING OF THE HOUSING AND REDEVELOPMENT AUTHORITY WAS ADJOURNED AT 8:43 P.M. RespectFully submitted, - �� �, A� .. � 2�� Sign L. John n � Recording Secretary �