HRA 04/01/2004 - 6232CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
Thursday, APRIL 1, 2004, 7:30 P.M.
AGENDA
LOCATION: Council Chambers (upper level)
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
March 4, 2004
CONSENT AGENDA:
✓ Consider Pledge Agreement Regarding Sale of Tax Increment Refunding Bonds .............. 1
Consider Medtronic Appraisal Invoice ........................................ ............................... 2
✓ Consider Claims and Expenses (Distribute at Meeting) 3
f ACTION:
✓ Consider Acceptance of City Owned Property and Authorize Marketing of Site .................. 4
INFORMATION ITEMS:
Gateway West Update ...... �'p�'aF- $Z"C'iC�� .................... ............................... 5
Follow Up Regarding Oreel Condemnation (Tabled at March 4t' Meeting) ........................ 6 Sht
Follow Up regarding Housing Loan Program Discussion (Tabled at March 4t' Meeting) ....... 7
City Council and Commission Conference Session ........................ ............................... 8 ecFle
MonthlyHousing Report ........................................................... ............................... 9 (?4f—
ADJOURNMENT: —0-yr)
CITY OF FRIDLEY
HOUSING and REDEVELOPMENT AUTHORITY
MARCH 4.2004
CALL TO ORDER:
Chairperson Schnabel called the March 4, 2004 Housing and Redevelopment Authority meeting
to order at 7:30 p.m.
ROLL CALL:
Members Present: John Meyer, Virginia Schnabel, Pat Gabel and Bill Holm.
Members Absent: Larry Commers
Others Present: Grant Fernelius, Assistant HRA Director
Scott Hickok, Community Development Director
Paul Eisenmenger, HRA Accountant
Rebecca Brazys, Recording Secretary
Mr. Hickok introduced the new recording secretary, Rebecca Brazys.
MOTION: Mr. Holm moved and Ms. Gabel seconded to approve the minutes of the February 5,
2004 meeting.
The following corrections to the minutes were requested:
• Page 3, Paragraph 8 — the word "dog" should be changed to "jog."
• In several locations, Ms Gabel's last name was misspelled.
• Page 3, the paragraph following the interest rate motion, should read "Ms. Schnabel
voiced concern".
• At the bottom of Page 3, in the voice vote paragraph, "all voting aye" should be removed
as the actual vote is recorded at the end of that paragraph.
• Page 4, the second paragraph under Item 4, Mr. Femelius's name is misspelled and the
sentence should state healing and cooling "costs ".
• Page 3, Paragraph 4 — the first sentence should read "Ms. Schnabel indicated that she
felt "it" is appropriate... ".
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED THE
MOTION CARRIED UNANIMOUSLY TO APPROVE THE FEBRUARY 5, 2004 MINUTES AS
AMENDED.
CONSENT ITEMS:
There were no consent items scheduled for this meeting.
ACTION ITEMS:
1. Consider Claims and Expenses
Mr. Meyer asked for clarification on two items.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 2
Mr. Eisenmenger explained the $10,000 item is the February 2004 loan principal interest
payment by Industrial Equities for a loan they have with the HRA for the John Allen
project on 73rd and University Avenue. The CRF payment represents principal and
interest payments received by the HRA from CRF for the various mortgage loans we
have. There will be more details provided at the next meeting.
Ms. Schnabel questioned why the city expenses are not reflected on the documents
provided.
Mr. Eisenmenger explained the city expenses are reflected on a quarterly basis.
MOTION by Ms. Gabel, seconded by Mr. Meyer, to accept the documents for claims and
expenses as presented.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED
THE MOTION CARRIED UNANIMOUSLY.
2. Consider Assignment of Redevelopment Contract and Limited Revenue Tax
Increment Note from McGlynn's Bakeries, LLC, to Sparky Acquisition Company.
Mr. Fernelius stated that McGlynn's has notified the HRA that it intends to sell its frozen
foods business, which is called Concept 2 Bakers, to Sparky Acquisition Corporation, a
subsidiary of Ralcorp Holdings. The sale involves the McGlynn's facility in Fridley.
McGlynn's is asking the HRA consent to an assignment of the development agreement
and revenue note to the new buyer. McGlynn's entered into a development agreement
with the City and the HRA in the early 1990's. They have fulfilled all of their obligations
under that agreement and currently receiving revenue note payments of approximately
$37,000 per year. These payments continue through August 2009. Ralcorp Holdings is
a large corporation that owns a number of food companies with total sales last year of
$1.27 billion. They will operate the Concept 2 Bakery under their Bremner Foods
division. Staff talked to John Pritchard in early January and he felt confident that the
change in ownership would not impact the Fridley operation or employment; as such he
felt this is a good thing. Part of the rationale for the decision to sell the business is that
the McGlynn's family is no longer in a position to continue to invest and grow the
company. Staff recommends that the Authority approve the consent agreement.
Mr. Meyer asked Mr. Femelius to clarify the financial aspects of this agreement.
Mr. Femelius explained as part of the redevelopment contract, McGlynn's receives TIF
payments to help recover some of the redevelopment costs for the property. In this
case, the payments total around $37,000 per year. In 1992, the Authority issued a
revenue note for $700,000 and we're paying against that using the available tax
increment that the project generates. The TIF district ends in 2009. It's quite likely
there will still be a principal balance owing at the end of 2009, but our obligation will
cease at that point. In terms of what McGlynn's is paying back to us, they agreed to
make up the difference in the local government aid penalty that the city incurred as a
result of this project and those payments are around $9,000 per year.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 3
Mr. Meyer stated there is no question about either the HRA or the petitioner being put in
jeopardy because of our potential agreement to this consignment; we're protected and
the successor to McGlynns is protected.
Mr. Femelius stated that is correct. As long as they continue to pay taxes, we will
continue to pay increment back to the new buyer.
Ms. Schnabel asked if we have a similar arrangement with any other development.
Mr. Fernelius stated we have a number of development agreements in place. It is not
uncommon for developers to reassign their interest in development agreements,
however staff is not aware of other projects in Fridley where there has been an
assignment to a new buyer.
Mr. Holm stated, as he understands the arrangement, Sparky Acquisition Corp assumes
responsibility for payment of the real estate taxes and in exchange receives $37,000 per
year. McGlynn's is completely removed from this transaction in the future.
Mr. Fernelius stated that is correct.
Ms. Schnabel asked about the fresh bakery division currently operated by McGlynn's
and the fact that Ralcorp did not purchase the fresh bakery division. Will the fresh
bakery continue to operate?
Mr. Fernelius explained that his understanding is that as of last October or November,
McGlynn's shut down their fresh bakery operation and were operating the frozen food
business only.
Ms. Schnabel stated she understood there is also a cake decorating division.
Mr. Fernelius stated that is correct but it is not a part of this agreement and he believes
that business will continue to be operated by McGlynn's.
Ms. Schnabel also stated that Ralcorp has indicated they intend to operate at this facility
and that no jobs will be lost as a result of this sale.
MOTION by Mr. Holm, seconded by Ms. Gabel, to approve the assignment of the
redevelopment contract from McGlynns Bakeries, LLC to Sparky Acquisition Company.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED
THE MOTION CARRIED UNANIMOUSLY.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING, MARCH 4.2004 PAGE 4
INFORMATION ITEMS:
3. Spring Valley Estate Development
Mr. Hickok explained the location of this development is in the southeast
quadrant of the intersection of Mississippi and Old Central. Mississippi Street is
on the north and Old Central is on the west. This is a private development being
proposed by John DeMello who was born and raised in Fridley. This is not a
development in which tax increment dollars have been invested or in which the
HRA is involved. The Planning Commission reviewed this proposal and
recommended on a 6 —1 vote to approve this project to the City Council, which
will take formal action on the request on March 8th. Each one of the elevations
for the residential building has been done in such a way to allow for a four -sided
complex and that is one of the things we look for developers to do so that all
sides of the building are equal. The architect carried the theme through the
residential and commercial area. The developer is hoping to complete the
residential area in one phase, but if they have to proceed in two phases, the first
phase will have a completed appearance. The commercial building is designed
to be four -sided so that there is no back of the building facing the condominiums.
Mr. Meyer asked what material will be used for the exterior of the buildings.
Mr. Hickok explained they will use a combination of brick, stone, concrete -board
siding and stucco with a standard asphalt shingled roof.
Ms. Schnabel asked Mr. Hickok to delineate the line between Phase 1 and
Phase 2 of the residential building.
Mr. Hickok explained Phase 1 will consist of 35 units and Phase 2 will have 36
units and will be the curved portion on the south end. There is a garage entry in
Phase 1 and the traffic will be two -way in the garage area. In Phase 1, residents
will enter and exit from the same location. In Phase 2, there will be a second
garage entrance enabling the residents to loop through if they so choose.
Ms. Schnabel questioned the entrance to the property.
Mr. Hickok explained that access to county roads is limited. The county and city
worked together on this proposal to determine where the access sites would be
best located. We have two county roadways on this site. The residential access
point is on Old Central. There is no connection roadway -wise between the
commercial and the residential areas. The commercial area has an entrance and
exit point on Mississippi and Old Central. These have been specifically designed
to line up with the two points across Old Central for the development proposed
and approved for that property as well as the new drive for Sandee's Restaurant.
This is a much safer and more efficient way of laying out the access points.
Mr. Meyer asked who the architect is for the Spring Valley development.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 5
Mr. Hickok stated the architect is Peter Billard of Architectural Works Billard Inc.
Mr. Meyer asked what control from this point on would we, the Planning
Commission and the City Council have with regards to the exterior appearance
and the interior.
Mr. Hickok explained the controls we have are in the stipulations placed on the
plat and on the rezoning. The master plan and the plat are a part of the rezoning
and include stipulations tying down the architectural elevations to dated plans
and we tied down the materials to plans and dates that are very specific. We
also tied down the other elements. Any modification of the approved plan would
have to come back through a process to have modifications approved. So we're
comfortable with the stipulations that have been placed on this project and that is
the typical process we use to make sure that the project presented is the project
built.
Mr. Hickok presented details of this proposal explaining that the petitioner is
requesting two separate land use actions from the City of Fridley, not from the
HRA, this is just to give you a sense of what has already been acted upon by the
Planning Commission. There's two separate actions from the City of Fridley in
order to construct the 71 unit senior owner - occupied condominium units and the
retail complex on the southeast comer of Central Avenue and Mississippi Street.
The plat is being requested to create two new parcels from 1314 Mississippi
Street, 1340 Mississippi Street, 6401 Central Avenue, 6421 Central Avenue,
6441 Central Avenue, 6461 Central Avenue and 134160 and 1357 64th
Avenue. That's the addresses of the properties you would see today if you went
out and drove this site today.
• The first building to the north is a 13,420 square foot retail building.
• The southern parcel will be used for the construction of 71 owner - occupied
senior condominiums.
• The petitioner is also requesting a rezoning for the east side of Old Central
between Mississippi Street and 64th Avenue. Currently there is a mixture of
commercial and residential zonings and the petitioner is seeking to rezone
the entire block to S 72 Redevelopment District.
• The petitioner has stated that he envisions the commercial building will house
neighborhood retail businesses such as a pharmacy, a coffee shop, an ice
cream / sandwich shop and a hair salon.
• The retail complex will include at least 54, 10 food wide parking stalls for
customers which meets code requirements.
• The residential development will be a 4 -story 71 -unit independent senior
condominium complex composed of 71 owner - occupied units comprised of 1,
2, and 3 bedroom units.
• The development will include 73 underground parking stalls and 30 surface
parking stalls which meets the requirement for a senior complex.
• The petitioner plans to model the exterior of both projects after an Italian villa.
HOUSING AND REDEVELOPMENT_ AUTHORITY MEETING, MARCH 4.2004 PAGE 6
• The site will include several ponds, a gazebo, and a trail system with
landscaping that surrounds the property. Site ponds are required to slow
down storm run -off and allow it to be cleansed before it enters the storm
sewer system.
• Rezoning a property to S -2 Redevelopment District, requires that the
accompanying site plan become the master plan for the site.
• If the rezoning and master plan were approved by the City Council, any
modification of the site plan would need to go back to the City Council for
review and approval.
• Review of the master plan would also need to be completed by the Housing
and Redevelopment Authority as the property is in a Redevelopment District.
CITIZEN CONCERNS
• The walking path should be around both structures so residents could make a
loop around the entire complex. This has been shown on the site plan.
• Is parking adequate? Visitor parking? The parking does meet the code
requirements.
• Pedestrian traffic /traffic on Old Central and Mississippi was a topic of
discussion. All indications are that with this development and the new
development across the street, the traffic impact will be minimal. No
additional traffic controls will be necessary.
• Pond Safety. Our standard is not to fence ponds but to have them created in
a way that they are amenities on the site and not treated as utilities,
landscaped and meant to be a feature. The pond slopes will not be severe,
but will be gradual and shallow.
• Setback from Property Line. The developer has used the standards of an R3
Multi- family Development. There have been no requests to forgive setback
requirements for this project. The only modification is the parking area is a 3
foot area to allow parking which is acceptable in a master plan for such a
development.
• Removal of Existing Homes. That is an impact of this development but
should be used as a positive exchange as this project will provide very nice
additional housing of a different type.
• Comprehensive Plan not a law, ordinance or statute. That is not true. The
comprehensive plan is identified in the statutes and case law as the
governing factor in making determinations on zoning. In our recent
comprehensive plan we did highlight this property and the property across the
street as redevelopment districts. So this rezoning and the subsequent
master plan is in line with the comprehensive plan.
• Ownership of property. There were some folks that were concerned about
the ownership of the property. This proposal is no different from many other
such projects where negotiations are done and deals are made contingent
upon approvals at the local level. After reviewing the facts, staff is
comfortable with this proposal.
• Tall building in the back yard. This particular concern was expressed by the
homeowner two lots away. There is going to be a 4 story building, so it does
HOUSING AND REDEVELOPMENT AUTHORITY MEETING, MARCH 4.2004 PAGE 7
change the scale a bit, but that is one of the outcomes of development. We
don't believe this is detrimental to the neighborhood and the residential
building has been designed to curve away from the existing house as best it
can.
• Cost of staff time. There was some concern about the amount of staff time
involved in the review of this type of development. Mr. Hickok explained that
we are looking at significant fee increases for development applications.
• Fit in the neighborhood. To give a sense of relationship as to the height of
this structure, Mr. Hickok pointed out that the Medtronic parking ramp is 35
feet to the railing of the upper deck with an additional 10 feet for the canopies
at the comers. The residential building in this proposal has a mid section
height of 47 feet.
• Breaks up core of the city. Mr. Hickok stated that is a matter of perspective.
But this proposal could be viewed as a very nice opportunity for an additional
and needed type of housing for the city.
• Area is getting run down. One citizen welcomes the opportunity for a new
development to provide a much - needed change in that neighborhood.
• Need something like this for seniors. One individual spoke of the need for
this type of housing in the city.
• Scale of the building. The staff has evaluated a number of different site plans
and they believe this is the most appropriate layout for this site.
HOUSING STUDY
Mr. Hickok explained that the petitioner hired Maxfield Research, Inc. to complete
a Market Feasibility Study for Senior Housing in Fridley. Maxfield determined the
area would support 189 housing units and that a senior housing development
would be the most marketable project for this site. Their research also showed
that the subject site could best support an age - restricted owner - occupied
development such as a condominium or cooperative of around 70 units.
TRAFFIC ANALYSIS
Mr. Hickok stated the staff utilized a number of sources to determine the possible
impacts that 71 senior owner - occupied condominium units and the commercial
complex may have on the local traffic patterns. Staff consulted the
Transportation chapter of the City's Comprehensive Plan, and reviewed the
traffic study supplied by TDI, Traffic Data Incorporated.
• The City's Comprehensive Plan indicates that in 2001, the portion of Old
Central adjacent to the proposed senior condominiums carried 8,000
vehicles per day and, at this traffic level, was only carrying 57% of the
traffic for which the roadway was designed and constructed to function at
a Level of Service D.
• The Comprehensive Plan anticipates Old Central carrying over 10,000
vehicles per day by the year 2020, based upon increases in population for
Fridley and surrounding communities, as well as redevelopment and
reinvestment within Fridley.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING, MARCH 4. 2004 PAGE 8
• At 10,000 vehicles per day, Old Central will be carving 71 % of the
maximum amount of traffic for which the roadway was designed.
• The petitioner hired Traffic Data Incorporated, a data collection, traffic
engineering and transportation planning firm to perform a traffic analysis.
• The consultants performed a trip generation analysis based on the
methods and rates published in the ITE Trip Generation Manual, 7"'
Edition, which was published in December 2003.
• The consultants used the Senior Adult Housing Attached category in the
ITE manual to determine that the proposed senior complex would
generate a total of 247 trips per day.
• The consultants used the Specialty Retail Center category from the ITE
manual and determined that the proposed retail complex would generate
a total of 598 trips per day.
• TDI developed traffic forecasts for the following 2005 scenarios:
• No build (with traffic forecasted from the Town Center Elderly
Housing project approved across from the site on Central
Avenue).
• Build Spring Valley Estates (with traffic forecasted from the Town
Center Elderly Housing project).
• The finding of these forecasts show that the level of service at both the
Central Avenue / 64t' Avenue intersections and the Mississippi Street /
Central Avenue intersections would remain the same in the no -build or
build scenarios.
• The only change seen is during the AM peak hour at the Central Avenue /
64th Avenue eastbound intersection where the level of service would
change from LOS B to LOS C.
• To complete the traffic study, the consultants also referred to the
Minnesota Manual on Uniform Traffic Control Devices, which governs the
use of traffic control devices per Minnesota State Statute.
• The Minnesota Manual on Uniform Traffic Control Devices has eight
criteria (called warrants) to consider when determining if a traffic signal
should be installed at an intersection or not.
• These warrants are primarily based on the traffic volumes flowing through
the intersection.
• A warrant analysis was conducted for the Mississippi Street / Central
Avenue intersection.
• To complete this analysis, TDA staff performed a turning movement count
from 6:00 a.m. to 7:00 p.m. at the Mississippi Street / Central Avenue
intersection.
• None of the eight warrants are met under the existing conditions, nor will
they be met if the elderly housing and retail buildings are constructed on
the proposed site.
• According to this anaylsis, a traffic signal should not be installed at the
intersection of Mississippi Street and Central Avenue until at least one of
the warrants is being met.
• The conclusions of TDI's analysis state that the stop controlled
approaches at the Central Avenue / W Avenue intersection operate at
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 9
LOS C or better under all scenarios with the existing lane configurations
and traffic control.
The intersection of Mississippi Street and Central Avenue operate at LOS
D or better under all scenarios with the existing lane configurations and
traffic controls.
A traffic signal is not currently warranted at the intersection and a traffic
signal will not be warranted at the intersection after the proposed
development is completed.
WETLAND
Mr. Hickok reviewed the wetland review for this site.
The petitioner has been working with the Rice Creek Watershed to
determine if the project area has a wetland.
The petitioner has hired Tom Bremen, with Acorn Consulting, to delineate
the site for any possible wetlands.
Currently, both the petitioner and the Rice Creek Watershed are waiting
for the delineators report.
PHASING PLAN
Mr. Hickok reviewed the phasing plan for this proposal as follows:
• The petitioner has indicated to staff that their intentions are to build the
entire 71 unit senior owner - occupied condominium project all in one
construction phase.
• If the bank required unit pre -sales are slower than predicated by the
market report, then they plan to phase the project.
• Phasing the project would involve constructing the senior complex in two
phases (two buildings).
• The first phase would be 35 units and the second phase would be the
remaining 36 units.
• Phase one would commence upon selling the bank required percentage
of units in the first half of the building, removal of the existing homes, and
soil corrections.
• Phase one would tentatively commence in August 2004.
• Phase two would commence when the pre -sales are met for the first part
of the second half of the building.
• In the meantime, sod, landscaping, and parking would be installed.
• Phase 3 involves the retail space.
• Simultaneously with the residential property the retail building would be
pre - leased.
• When the building is completely leased, the building will be constructed.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 10
STAFF RECOMMENDATION
Mr. Hickok stated the City Staff recommends approval of the Redevelopment
Master Plan as presented. Proposed rezoning is consistent with the
Comprehensive Plan.
• Provides housing opportunities for seniors.
• Provides additional retail opportunities in Fridley.
• Provides additional job opportunities in Fridley.
Ms. Gabel commented that she likes the four -sided retail space, but wondered how they
plan to handle the refuse.
Mr. Hickok explained they plan to have a dumpster enclosure. They're looking at the
southeast comer of the property in an area that is fully screened and finished off so it
doesn't have any impact on the residential building. Or possibly an area attached to the
building that would be fully enclosed so there will be no viewing from adjacent
properties.
Mr. Meyer asked what the projected cost of the residential sector will be.
Mr. Hickok estimated the cost to be in the area of $15 to $17 million.
Mr. Meyer asked how many units are included in the Town Center project across the
street.
Mr. Hickok stated there are 53 units in that proposal.
Mr. Meyer asked if the traffic study included those 53 units.
Mr. Hickok stated that area was included.
Mr. Meyer expressed concern about the height of the project and asked if the
underground parking could be lowered to lessen the overall height of the building.
Mr. Hickok explained that they would certainly lower it if they could, but ground water is
an issue and will control where that footing elevation is. They have done an incredible
amount of analysis and provided that information to us regarding this matter.
Mr. Meyer stated he hopes the variation in ground water at different times of the year
has been taken into consideration. He also stated it seems that it would be better to
allow access from the residential area to the retail area.
Mr. Hickok responded that all options have been explored and the determination was
made that separating the traffic would be a better solution for all involved.
Ms. Schnabel asked if there is a walking path included.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 11
Mr. Hickok stated there is an area on the site plan that has been designed to create a
walking loop to give the residents an opportunity to walk up to the retail area or to simply
utilize the path for taking a walk.
Ms. Schnabel asked if the retail area will be fairly small businesses.
Mr. Hickok explained they will be small retail users, broken up into say five small spaces.
If an office use wanted to come in and lease half of the building, they would be perfectly
fine with that as well. The petitioner does need to live by the standards of the
commercial zoning district for that complex.
Mr. Meyer asked if the store entrances will all face north.
Mr. Hickok replied the building is designed to be an interactive opportunity with glass
entrances on the south and north sides of the building which provides access for the
senior residents.
Mr. Meyer was concerned that the south side of the commercial building not become a
utilitarian area which the residents of the senior housing will be forced to view.
Mr. Hickok again explained that they have designed the retail area to not have a "back
door look ". Once the plan has been approved, the developer must follow the approved
plan or request approval of any modifications.
Ms. Schnabel asked how closely detailed are such items as the exterior finish of the
buildings so that there are no changes during actual construction.
Mr. Hickok stated to this point the petitioner has not objected to the stipulations that
outline the materials to be used on the exterior of the buildings. Again, he explained that
any modifications to the plan would require review and approval by the Planning
Commission.
Ms. Schnabel asked how many acres are included in the total area.
Mr. Hickok responded that there are 4.1 acres included in the plat and the rezoning
Ms. Schnabel asked how many acres how many units and how many acres involved in
the Gateway West project.
Mr. Hickok replied there are 90 condominium units on approximately 3.5 acres. There's
a total of 8 acres, but that included townhouses and additional parking. Gateway East
included a little over two acres with 28 units.
Ms. Schnabel stated the purpose of this discussion is informational only.
Mr. Hickok explained that is correct, but if the HRA members would like to pass a
recommendation on to the Council they are welcome to do so, or they may simply pass it
on without comment.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 12
Ms. Gabel stated she believes this is a good thing for the city as she has had many
friends who have left Fridley because they were unable to find such housing after they
sold their homes.
Mr. Fernelius clarified for the members and the audience that this is not a public hearing.
The public hearing was held by the Planning Commission and will go before the City
Council March 8 for additional public input.
Mr. Meyer repeated his concern that the traffic should be allowed to flow from the
residential to the commercial area and he was concerned about the location of the
access to the roadways.
Mr. Hickok explained this proposal has been carefully reviewed by the petitioner's
engineers and the city engineers as well as the county. This is the alternative that works
best. He added that the county is very restrictive as far as access allowed to county
roads.
Ms. Gabel commented that if she lived in the condominium units on this site, she would
rather not have the traffic from the retail site coming into the residential area.
Mr. Meyer also expressed concern about the mixture of materials for the exterior of the
buildings.
Mr. Hickok stated he trusts the architect's integrity on this and also the staff's ability to
review plans and to only approve plans that they recognize as being of quality
construction.
Mr. Meyer stated it is money that drives such decisions.
Ms. Schnabel commented that this proposal has been reviewed and approved by the
Planning Commission and then will be presented to the Council.
Mr. Meyer felt it is also the HRA's job to pass comments onto the Council. He remained
concerned about the traffic and the different materials to be used on the exterior of the
buildings.
Ms. Gabel stated she does not believe it is the HRH's role to get into the details of this
project, but that the HRA should simply be concerned with the overall concept of the
plan.
Mr. Hickok replied that is correct.
Mr. Meyer stated it seems that the HRA's responsibility goes beyond just the general
concept.
Ms. Schnabel asked Mr. Meyer what he wants to see done differently as far as the
traffic.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 13
Mr. Meyer stated it seems that the one main entrance and exit point is halfway up the
street. If that was dropped down further south and the other entrance near the retail was
broadened to serve the retail and the residential area it would "Free it up" and not create
a bottleneck.
Mr. Hickok reiterated that we are very much governed where access can be taken on
county roads. Not only do we need to consider what happens on this site but also lining
up driveways across the way so we don't end up with a 57th Avenue situation again. It's
very important to segregate the commercial traffic from the residential traffic.
Ms. Schnabel asked if there is any access from the residential area behind Holly Center
into Holly Center.
Mr. Hickok stated there is not. The concept here is to have a cohesive yet independent
development with distinct and different uses so that the people can shop in the retail
area yet keep that traffic from the residential area.
Ms. Gabel suggested it may have been helpful for the HRA members to have seen the
minutes of the Planning Commission meeting where these issues were probably
discussed in detail.
Mr. Holm stated he likes that the rear of the retail area will not have a "back door"
appearance and asked if there will also be parking spaces on both sides.
Mr. Hickok replied that there is.
Ms. Schnabel asked if we want to make specific recommendations to the Council or will
the minutes suffice? She added that she believes there is a need for this type of
housing in Fridley.
Mr. Meyer agreed that this is a needed development. He asked if there is an income
cap on the condominium units.
Mr. Hickok explained they are not asking for any sort of assistance, it is all private
dollars. Since the city is not involved in any part of the financing of this project, the
pricing is up to the developers.
MOTION by Mr. Holm moved, Ms. Gabel seconded that the HRA affirms there is a need
for this type of housing and that we generally concur with the concept of the
development as approved by the Planning Commission and the general design.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED
THE MOTION CARRIED UNANIMOUSLY.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 4 2004 PAGE 14
4. 2004 North Metro Home and Garden Fair
Mr. Femelius explained that this event would be held this Saturday between 9:00 and
2:00 p.m. at the Mounds View Community Center at 5394 Edgewood Drive off Highway
10.
This event is free and open to the public. There will be a total of 72 booths with a large
variety of contractors and landscaping companies as well as other information. There
will also be a series of workshops. We'd like to invite the HRA members and the
audience.
MOTION by Ms. Gabel, seconded by Mr. Holm to table the next two agenda items ( Oreel
Condemnation Case and Follow -up on Housing Program Discussion) to the next regular
meeting.
5. Follow -up on Housing Program Discussion
6. Follow -up on Oreel Condemnation
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED THE
MOTION CARRIED UNANIMOUSLY.
7. Monthly Housing Report
Mr. Femelius stated there is nothing out of the ordinary on these reports.
ADJOURNMENT:
MOTION by Ms. Gabel, seconded by Mr. Holm, to adjourn.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON SCHNABEL DECLARED THE
MOTION CARRIED AND THE MARCH 4, 2004 HOUSING & REDEVELOPMENT AUTHORITY
MEETING ADJOURNED AT 9:30 P.M.
Respectfully submitted,
Rebecca Brazys
Recording Secretary
e :1 .e1 0i
FINANCE DEPARTMENT
CITY OF FRIDLEY
RICHARD D. PRIBYL
FINANCEDIRECTOR
TO: WILLI" W. BURNS, EXECUTIVE DIRECTOR HRA fIR;CTOR GRANT FERNELIUS, ASSISTANT HRA EXECUTIVE
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
PAUL EISENMINGER, HRA ACCOUNTANT
SUBJECT. Resolution approving a pledge agreement for the $3,920,000 Taxable
General Obligation Tax Increment Refunding Bonds, Series 2004A
Date: March 22, 2004
Attached you will. find a tax increment pledge agreement that is required as part of the
new $3,920,000 tax increment bond issue. This pledge will replace the one that was in
place for the original bond issue of $4,185,000 that was issued in 1988.
As you recall, this refunding issue was done replacing the debt that originally was used to
purchase the property on which Medtronic has placed their corporate headquarters.
We opened bids for these bonds on the 23rd of February and due to the favorable bond
market we are in, from an issuers perspective, we will save $310,542.00 over the life of
the bond.
Staff is recommending that the attached resolution pledging increment for the repayment
of these new bonds be approved by the Housing Redevelopment Authority
RESOLUTION NO. HRA 2004 -_
RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF TAX
INCREMENT PLEDGE AGREEMENT RESPECTING $3,920,000 TAXABLE
GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2004B
This Tax Increment Pledge Agreement (the "Agreement ") is dated as of March 23, 2004;
is by and between the City of Fridley, Minnesota (the "City "), and the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "HRA "); and provides
as follows:
WHEREAS, at the request of the HRA, the City Council has adopted or is expected to
adopt a resolution (the "Bond Resolution ") awarding the sale of the City's $3,920,000 Taxable
General Obligation Tax Increment Refunding Bonds, Series 2004B (the "Bonds ") to refund the
2005 through 2012 maturities of the issuer's $4,185,000 Taxable General Obligation Tax
Increment Bonds, Series 1998B, dated October 1, 1998 (the "Prior Bonds "), which were issued
to refinance certain expenditures for certain redevelopment costs incurred by the HRA within its
Redevelopment Project No. 1, which costs were originally financed through the issuance of the
City's $4,090,000 General Obligation Temporary Tax Increment Bonds, Series 1995A, dated
November 1, 1995; and
WHEREAS, the proceeds of the Bonds will be used to pay the Prior Bonds on February
1, 2005, maturity; and
WHEREAS, to provide funds sufficient for the timely payment of the debt service on the
Bonds, it is necessary for the HRA and the City to enter into this Agreement:
NOW, THEREFORE, in consideration of the covenants and agreements hereof between
the City and the HRA, and pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, the
City and the HRA hereby agree as follows:
1. In order to pay the principal of and interest on the Bonds, when due, the HRA
hereby pledges to the City, for deposit in the Debt Service Account established by the Bond
Resolution for the payment of the Bonds, and the HRA shall pay to the City, Available Tax
Increments (hereinafter defined) in amounts sufficient to pay such principal and interest, when
due, and, to the extent that the Available Tax Increments are ever insufficient for such purposes,
and the City, pursuant to the Bond Resolution, advances City funds to provide prompt and full
payment of the Bonds, the HRA agrees to reimburse the City for such advances from such tax
increments, when collected by the HRA.
As used in this Agreement, "Available Tax Increments" means tax increments derived by the
HRA from the Tax Increment Financing Districts currently existing within the HRA's
Redevelopment Project No. 1 (to the extent the same may be applied toward payment of the
Bonds pursuant to applicable law) within the HRA's Redevelopment Project No. 1, subject to all
undischarged pledges or other commitments heretofore made for such tax increments. In
1619237v1
payment of its obligations under this Agreement, the HRA expressly reserves the right to pledge
or otherwise dedicate such tax increments to purposes other than the payment of the obligations
described above upon a finding by the HRA that the estimated Available Tax Increments then
remaining will be sufficient from year to year for such purposes. In addition, to the extent that
Available Tax Increments may not be sufficient for the above purposes, the HRA agrees to pay
the shortfall from such other of its resources as may be available, including land sale proceeds
and other assets and receipts.
2. An executed copy of this Agreement shall be filed with the office of Anoka
County Property Records & Taxation, as required by Minnesota Statutes, Section 469.178,
Subdivision 2.
3. This Agreement shall become effective upon the actual issuance and delivery of
the Bonds.
IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly
approved and executed as of the day and year first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF FRIDLEY, MINNESOTA
By:
Its Chair
By:
Its Executive Director
CITY OF FRIDLEY,
MINNESOTA
By:
Its Mayor
By:
Its City Manager
(SEAL)
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF 2004.
Lawrence R. Commers, Chairperson
ATTEST:
William W. Burns, Executive Director
1619237v1
MEMORANDUM
FINANCE DEPARTMENT
CITY OF FRIDLEY
RICHARD D. PRIBYL
FINANCE DIRECTOR
TO: WILLM4M W. BURNS, EXECUTIVE DIRECTOR HRA 'I A
GRANT FERNELIUS, ASSISTANT HRA EXECUTIVE RECTOR
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
PAUL EISENMINGER, HRA ACCOUNTANT
SUBJECT.• Invoice from The Valuation Group, Inc.
Date. March 25, 2004
You probably have already noted a bill in the check register that you are approving this
meeting in the amount of $11,237.00 to The Valuation Group. This invoice and vendor
relate to the work that is being done in regard to the petition to reduce the market value
on Medtronic.
It is not unusual in cases such as this, to hire outside appraisal services that have
extensive background in valuing and defending values associated with difficult and
specialized real estate. Since this case involves Medtronic and all of the value at risk is
tax increment, it would be a cost that could be part of the 10% administrative cost that the
HRA has available within the Lake Pointe (Medtronic) District for administrative
overhead. Any value that is lost or saved will all be tax increment that is subject to return
to Medtronic. We felt that since the cost of defense pertains to increment that is
generated by Medtronic and they are raising the issue and causing the expense, it would
only be reasonable that the increment should pay for the cost of defense of value.
If the Commission Members would like to discuss this information, it should be off the
record due to the legal process that this is now subject to.
Qmsv17L sle�.cno(q
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Date:
To:
From:
Subject:
VENDOR
THE VALUATION GROUP, INC.
SHORT ELLIOTT HENDERSON
CRF, INC.
THE MERMAID
WILSON DEVELOPMENT SERVICES
MOUNDS VIEW COMMUNITY THEATRE
INSTY- PRINTS
SUN NEWSPAPERS
FRIDLEY HRA LOAN PROGRAM
CEE
KRASS MONROE
ANOKA COUNTY
April 1, 2004
HRA Commission Members
Paul Eisenmenger - HRA Accountant
HRA Expenses For Approval
DESCRIPTION AMOUNT
MEDTRONIC LIMITED -SCOPE APPRAISAL
11,237.00
TIF BLIGHT ANALYSIS FOR GATEWAY WEST
1,107.25
REFUND OVERPAYMENT
22,749.38
PASTRIES FOR HOME & GARDEN SHOW
224.17
ACQUISITION & RELOCATION SERVICES
37.50
FISH POND FOR HOME & GARDEN SHOW
300.00
BROCHURES FOR HOME & GARDEN SHOW
585.35
ADVERTISING FOR HOME & GARDEN SHOW
727.12
REPLENISH CHECKING ACCOUNT FOR CEE LOANS
25,000.00
LOAN ORIGINATION FEES, REMODELING ADVISOR VISITS,MARKETING
2,753.45
FEB'04 PROFESSIONAL SERVICES RENDERED
840.75
2004 PROPERTY TAXES ON GATEWAY WEST PROPERTY
699.82
Total: $ 66,261.79
COMMUNITY DEVELOPMENT
DEPARTMENT
F1 HOUSING DIVISION
Memorandum
DATE: March 26, 2004
TO: William W. Burns, Executive Director Fridley HRA 60V
FROM: Scott Hickok, Community Development Director
Grant Fernelius, Assistant Executive Director Fridley HRA
SUBJECT: Conveyance of Property to the HRA For Sale Through Its Housing
Replacement Program
On November 24, 2003, the City Council approved a lot split and land swap with a
private party near the intersection of Ashton Avenue and Ely Street in northwest Fridley.
The Council action was of mutual benefit to the individuals and the City in that it created
two buildable lots, where only one had existed. Now that that action has occurred, the
City would like to sell its residential lot that was created. Staff has evaluated the
alternatives for this sale and believes the best solution is to ask the HRA sell the lot for
the City. The proceeds of the sale would be transferred back to the City's general fund.
However, the HRA would benefit from the land being added to their housing replacement
land inventory. Monetary benefit would come from the tax increment generated from the
addition of a new home through the Housing Replacement Program.
MECHANICS OF THE TRANSACTION
The city would convey the property through a deed to the HRA (with a caveat that the
proceeds be transferred back to the City upon sale of the property). The HRA would add
the property to its inventory of properties in its housing replacement program. The HRA
staff would prepare a document of conditions to assure that the future buyer of the land
will build a home that is consistent type and quality to meet City requirements.
Staff would then advertise the sale of the property through a solicitation of bids. Once
bid responses were reviewed, staff would advertise for a public hearing, which would
allow the HRA to receive public comment and to award the property to a successful
bidder at that time if appropriate. The HRA would then transfer the proceeds of the sale
back into the City's general fund, but would gain benefit from the tax increment
generated from a new home within the HRA's housing replacement program.
4
RECOMMENDATION
Staff recommends approval of the attached resolution that allows the conveyance of
property to the HRA for purposes of sale and authorizes staff to begin marketing the
property.
M -04 -52
RESOLUTION HRA NO. -2004
A RESOLUTION ACCEPTING THE TRANSFER OF REAL PROPERTY FROM THE
CITY OF FRIDLEY AND ESTABLISHING CONDITIONS FOR THE SUBSEQEUNT
SALE AND DISPOSITION OF SAID PROPERTY
BE IT RESOLVED, by the Board of Commissioners (the "Commissioners ") of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority"), as follows:
Section 1. Recitals.
1.01. The City of Fridley, Minnesota (the "City") is now the fee owner of real property, legally
described as `Tract B' The South 107 feet of Lots 21 - 24, Block 14 Spring Brook Park, Anoka
County, Minnesota (the "Property").
1.02. The City has determined that the highest and best use of the Property is for the
construction of a new single - family home.
1.03. The City has also determined that the most appropriate means of redeveloping the
Property for the highest and best use is to convey said Property to the Authority for inclusion in
the Housing Replacement Program (the "HRP Program ").
1.04. The City, at their regular meeting on March 29, 2004 approved the sale and transfer of
the Property to the Authority.
Section 2. Findings.
2.01. The Authority, for payment of good and valuable consideration of $1.00, hereby accepts
fee title to the Property from the City.
2.02. The Authority hereby declares that the Property will be added to Phase 4 of the Housing
Replacement Program.
2.03. The Authority hereby authorizes staff to prepare the necessary marketing materials in
order to sell the site to the general public.
2.04. The Authority hereby authorizes staff to accept bids from interested parties following the
procedures and guidelines of the Housing Replacement Program.
2.05. The Authority hereby reserves the right to accept or reject any or all bids for the Property.
2.06. The Authority hereby declares that the sale of the Property to the successful bidder shall
occur after a public hearing has been held and the Authority has reviewed and approved the
construction plans for the new home.
HRA Resolution No. -2004
2.07. The Authority hereby stipulates that the net proceeds from the sale of the Property shall
be transferred to the City within 30 days of the closing.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA THIS 1St DAY APRIL, 2004.
ATTEST:
William W. Burns, Executive Director
2
Lawrence R. Commers, Chairperson
COMMUNITY DEVELOPMENT
DEPARTMENT
.. HOUSING DIVISION
Memorandum
DATE: March 26, 2004
TO: William W. Burns, HRA Executive Director t�
FROM: Scott J. Hickok, Community Development Director
Grant E. Fernelius, Assistant HRA Director
SUBJECT: Gateway West Update
The purpose of this memo is to update the Authority on the Gateway West project and outline
the next steps in the process.
Properly Acquisitions
The owners of 5923 and 5925 - 3rd Street (Olson and Alaspa) have moved out of their homes. As
part of the negotiations, the sellers have limited salvage rights (e.g. appliances, cabinets, outdoor
plants), which must be exercised by June 30th. The owner of 5917 - Yd Street (Olson) has
purchased a replacement home near Cambridge, but has remained in their Fridley residence
pending completion of some remodeling on their new home. The Olson's also have limited
salvage rights to the Fridley home. Depending on when the families complete their salvage
activities, it may be possible to start some of the pre- demolition work (e.g. disconnecting
utilities) prior to June 30th.
Staff has had no contacts with the owners of 5933 3rd Street (Pawluk) or the 4 -unit apartment
building at 5955 3rd Street. During the next few weeks, staff will make additional attempts to
contact the rental owner and evaluate their willingness to sell. If no progress can be made on
either property by May 1 st, staff will seek direction from the Authority on whether to proceed
with a non - voluntary acquisition (e.g. condemnation).
As part of this decision - making process, the costs and benefits of pursuing the remaining sites
should be carefully weighed. For example, acquiring the home and apartment will add enough
land for two lots, while removing a total of five housing units. Acquisition by condemnation
could be both expensive and possibly become a sensitive issue for the neighborhood. A second
option would be to proceed in developing the sites already HRA control (12 units vs. 14 units).
Both of these options will be evaluated and discussed further at the May meeting.
5
Gateway West Update
March 26, 2004
Page 2
CDBG Funds
Earlier this month, Anoka County released the CDBG funds to the HRA for reimbursement of
expenses related for land acquisition. The total reimbursement was $191,559 and covered the
acquisition and relocation the Alaspa family at 5925 3rd Street.
Next Steps
April Contact remaining owners and determine willingness to sell. Staff to develop
recommendations for May meeting.
May HRA decision on whether to proceed with remaining acquisitions. If project were
to proceed without additional sites, staff will begin work on land use issues,
including a survey, street vacation, and plat application requests. Realistically,
land use applications would be ready for submission by end of May (60 days to
complete process). Letter sent to neighborhood on project status.
June Pre - demolition work would commence such as disconnecting utilities, de-
construction (if appropriate) and environmental assessments. Staff would begin
drafting a Request for Proposals (RFP) and design guidelines for the new homes.
Demolition bids would be sought for project.
July Demolition work authorized by HRA. RFP reviewed and approved by HRA.
Staff to begin process of soliciting builders /developers. Process to take 45 days.
August Land use approval process completed. Demolition and related site work to begin
(removal of streets, installation of new utility stubs, etc.).
September HRA to review RFP's and select a developer for the project. Authorize staff to
begin drafting development agreement, along with terms and conditions.
October HRA to review and consider approval of development agreement.
Builder /developer to begin marketing the individual lots to the general public.
Recommendation
Unless otherwise directed, staff will proceed along the time line referenced above in anticipation
of a formal decision at the May HRA meeting.
M -04 -48
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COMMUNITY DEVELOPMENT
} DEPARTMENT
y HOUSING DIVISION
Memorandum
DATE: March 26, 2004
TO: William W. Burns, City Manager 4V
FROM: Scott J. Hickok, Community Development Director
Grant Femelius, Assistant HRA Director
SUBJECT: Update on Fred Oreel v. City of Fridley Settlement
Note, this item was tabled at the March 4, 2004, HRA meeting. As a follow to Chairman
Commers request for additional information and a written opinion from the City Attorney on
Fred Oreel Condemnation settlement, we have included this information. You will note that the
court's memorandum was filed Feb 18, 2004. We just received this information during the
preparation of your packet. City Attorney Knaak has forwarded this information and will likely
have a more formal written opinion by the time we meet on Thursday evening.
M -04 -49
6
I
FILED
Jane F morroml.
Court Admir, strWuon
DISTRICT COURT
STATE OF MINNESOTA $ 200
ANOKA TENTH JUDICIAL DISTRICT
COUNTY OF .,o . r:�y yj
CASE TYPE: CONDEMNATION
In the Matter of Condemnation by the
City of Fridley,
VS.
Fred Oreel,
Petitioner /Appellant,
Respondent/Appellee-
ORDER CONFIRMING
JURY VERDICT,
ORDER FOR JUDGMENT
Court File No.: C4 -98 -7564
The above - captioned matter came on for jury trial before the Honorable Daniel
M. Kammeyer, Judge of District Court, at the Anoka County Courthouse, Anoka,
Minnesota, on December 1 -5, 2003. Petitioner was represented by Frederic W.
Knaak, Esq., Knaak & Kantrud, P.A., 3500 Willow Lake Road, Suite 800, St. Paul,
Minnesota 55110. Respondent was represented by Barry A. Sullivan, Esq., 2140
Fourth Avenue North, Anoka, Minnesota 55303.
The verdict of the jury Was received and read in to the record on December 5,
2003, at a.m. /p.m. The jury awarded Respondent $40,600.00 damages for
the direct taking and $O for severance for a total award of $40,600.00.
Respondent is entitled to interest on the amount awarded payable from the
date of taking, November 23, 1998, and payable at the statutory judgment interest
rate pursuant to Minn. Stat. § 549.09 (2002).
-1-
Interest is payable until the. date of
U
v
I
not be subject to a "prevailing party" consideration. Pursuant to Rule 58.01, the
entry of judgment shall not be. delayed for the taxation of such costs and their
omission herein shall not aff ect the finality of the judgment.
2. The Court Administrator is directed to. enter judgment that Petitioner
Py 6, 83a• °3 • �.n,�l�.
shall recover from Respondent the amount of .
ENTRY OF JUDGMENT SHALL BE STAYED FOR A .PERIOD OF 30 DAYS
FROM THE DATE HEREOF.
Dated:
/lai-/P),
BY THE COURT:
Do. V% KA V0,
Daniel M. Kammeyer
Judge of District Court
-3-
2
The City says it sent a second check at the same time "for interest, calculated daily, from
September 5, 2002, through today [December 30, 20021" (Exhibit 1 to City Attorney Knaak's Affidavit).
According to the City, the "second check was for interest upon the [$54,540] because the City failed to
pay Mr. Oreel by September 5th, 2002" (City's Post -Trial Memorandum,'p.1).
But the City doesn't tell us the amount of that second check Nor does the City factor that second
check (whatever its amount) into its calculations. And respondent Oreel never mentions that alleged
second check in his post verdict submissions. Accordingly, we have simply ignored that alleged second
check in the Order for Judgment.
[c] Last. Day for Interest Calculations : The City says that interest on the $40,600 should be
calculated through 9/5/02*— but doesn't tell us why that 9/5/02 date should be the last day,for the
calculations. Respondent Oreel says the interest should be calculated through 12/31/02, the day he
received the $54,540 check from the City.
In the Order for Judgment, we used respondent Oreel's proposed last day for the calculations,
12/31 /02. Asa result, the number of interest bearing days shown in the Appendix for 2002 differ: 365
by Oreel and the Court, 248 by the City.
[d] The Mathematical Computation : Once the parties start the actual number - crunching, they
arrive at different interest totals ($7,103.81 by the City, $7,008.24 by respondent Oreel). That
discrepancy between the parties' respective interest totals is attributable, in part of course, to their using
two different days for the "day of taking„ and two different days for the "last day for interest
calculations ", as described above.
But that discrepancy is also attributable, in part, to the fact that they use two different
mathematical methods for calculating the interest. Here's the difference in a nutshell :
We know the method the City uses because, in its written submissions, the City spells out that
method, including a very precise derivation of the "Daily Amount of Interest." (We briefly explain the
City's method -- including how it derived the Daily Amount of Interest -- in the text immediately under
the Appendix Tables). But we do not know the method respondent Oreel used, because he doesn't tell us
in his written submissions. More specifically, he doesn't tell us if he used a "Daily Amount of Interest"
and, if so, what that amount might be. (Accordingly, in the Appendix, there are "blanks" in Oreel's Table
under the column for "Daily Rate of Interest").
Because we know exactly how the City calculated the interest and because that method has nitty-
gritty precision, we adopt it Using the City's method, we come up
with an amount of interest
($7,107.97) that is only a few scant dollars more than the City's figure ($7,103.81).
[e] Amount of the Refund Owing to the f& : Both parties agree, in their calculations before
taking into account any potential award of costs and disbursements to respondent Oreel, that it's the City
I
e '
e
4
Accordingly, the Court has not included that City - proposed interest provision in the Order for
Judgment. In connection with the post -trial motions (if any), the City can essentially renew its request for
interest on the $6,836.19 refund. If that renewed request is persuasive, the Final Judgment can easily be
amended to make allowance for an award of such interest to the City.
(2) Award of Costs, Disbursements, Appraisal
Fees, and Expert Witness Fees
Both sides agree that the CU is not entitled to an award of any of its costs, disbursements, and
expert witness fees. But, in his proposed Order for Judgment, respondent Oreel includes a provision that
he be awarded "his reasonable costs, disbursements, expert witness fees and appraisal fees" (hereinafter
referred to as "litigation expenses'). The City opposes any such provision.
This also appears to be an issue of first impression, 'namely : whether in a condemnation
proceeding an owner, who (as in this case) winds up having to "refund" money to the condemnor, is still
entitled to recover his litigation expenses. In their post - verdict submissions, the parties have vigorously
argued both sides of that issue, to their own respective advantage. Most of that argumentation by the
parties focuses on whether a Minnesota Supreme Court decision applies to our case and, if so, how that
decision should be implemented in our scenario where the owner has to refund money to the condemnor.
See : In the Matter of Condemnation by the Minneapolis Community Development Agency, 447 N.W.2d
891 (1990).
Here's how the Court has handled that issue of respondent Oreel's litigation expenses in the
Order for Judgment and how the Court envisions that issue being handled hereafter in the post- verdict
motion process :
In the first instance, we have included in the Order for Judgment Oreel's proposed provision
entitling him to an award of his litigation expenses -- at least on a threshold basis. That provision will
simply afford Oreel the opportunity to apply to the Court Administrator for "taxation" (allowance) of
those litigation expenses. The Court Administrator is hereby directed to treat that application for taxation
as she would in any kind of case, approving or disapproving the various line -items of litigation expenses
applied for by Oreel. In other words, the Court Administrator will make her approve /disapprove
determinations without regard to whether Oreel actually has threshold legal entitlement to an award of his
litigation expenses in the fast place. Either side can then "appeal" the Court Administrator's taxation of
those litigation expenses to the trial judge (myself), probably as part of the larger post- verdict motion
..
Once the issue of litigation expenses is before me on that "appeal ", I can then resolve that first-
impression issue of whether Oreel has threshold legal entitlement to an award of his litigation expenses in
RESPONDENT
OREEL
PETITIONER
CITY
THE
COURT
C.
APPENDIX : Interest Calculations By
The City, The Respondent, and The Court —
Calculated Daily on the $40,600 Jury Award
YEAR ANNUAL% DAILY NUMBER YEARLY
RATE OF AMOUNT OF OF DAYS AMOUNT OF
INTEREST INTEREST INTEREST
1998
5%
$5.55814
38
$208.41
1999
4%
$4.44570
365
$1,600.00
2000
5%
$5.55814
365
$2,000.00
2001
6%
$6.67058
365
$2,400.00
2002
1 2%
$2.22082
365
$800.00
$7,008.24
1998
5%
$5.55814
84
$466.88
1999
4%
$4.44570
365
$1,622.68
2000
5%
$5.55814
365
$2,028.72
2001
6%
$6.67058
365
$2,434.76
2002
2%
$2.22082
1 248
$550.76
$7,103.81
1998
5%
$5.55814
38
$211.21
1999
4%
$4.44570
365
$1,622.68
2000
5%
$5.55814
365
$2,028.72
2001
6%
$6.67058
365
$2,434.76
2002
2%
1 $2.22082
365
$810.60
$7,107.97
TOTAL
TOTAL
TOTAL
The parties agree that the "Annual % Rate of Interest" is the rate for any given year under Minn.
Stat. § 549.09, subd. 1(c), that is : the statutory rate of interest on judgments set each year by the State
Court Administrator. For example, the Annual % Rate of Interest set by the State Court Administrator for
2001 was 6 %.
The Court adopts the method used by the City for calculating the `Daily Amount of Interest. "
The City's method consists of : (1) First determining the daily rate of interest, and (2) then applying that
daily rate against the $40,600 jury award. For example, in 200.1 : (1) the 6% annual rate for that year is
divided by 365 days to reach the daily rate of .0001643% for that year, and (2) then that daily rate of
.0001643% is applied against the $40,600 jury award to reach the $6.67058 daily amount of interest for
2001.
The Court also adopts the method used by the City for calculating the "Yearly Amount of
interest", namely: multiplying the daily amount of interest by the number of interest bearing days in that
year. For example, in 2001, the daily amount of interest ($6.67058) multiplied by the 365 interest-bearing
days in that year results in the Yearly Amount of Interest for 2001 of $2,434.76.
r
COMMUNITY DEVELOPMENT
W.
DEPARTMENT
n HOUSING DIVISION
Memorandum
DATE: March 26, 2004
TO: William W. Burns, HRA Executive Director
FROM: Scott J. Hickok, Community Development Director
Grant E. Fernelius, Assistant HRA Director
SUBJECT: Follow -up on Housing Program Discussion
Introduction
This item was scheduled for follow -up discussion at the March 4, 2004, meeting, but was tabled.
As you recall, at the February 5, 2004 meeting the HRA approved a number of changes to the
housing loan programs. These changes included a reduction in the interest rate and an increase
in the maximum income limit. During the discussion several questions were raised about the
median income figures for the metro area, Anoka County and Fridley.
Data
The income limits used for the Authority's loan programs are based on guidelines established by
the Minnesota Housing Finance Agency (MHFA). MHFA, in turn, relies on data provided by
the U.S. Department of Housing and Urban Development (HUD). In general, the income data
used by HUD is compiled from the most recent decennial census (2000 census) and the U.S.
Bureau of Labor Statistics. HUD updates annual family income data for each state and statistical
area (e.g. Twin Cities Metropolitan Area) in the country. However, income data for sub - regions,
including counties and cities, is not updated annually. For example, the data for Fridley and
Anoka County are based on the 2000 census, which reflects income estimates as of mid -1999;
now almost 5 years old. It is for this reason that MHFA uses metro and non -metro family
income thresholds, rather than city - specific data that is only updated once every ten years.
Income Information
Median income data for families are shown on the next page. As described earlier, median
income data are not available on an annual basis at the county or city level.
Housing Program Follow -Up
March 26, 2004
Page 2
Area
2003
1999
Twin Cities Metropolitan Area
75,300
65,665
64,261
Anoka County
n/a
n/a
55,381
Fridley
We hope that this information is helpful in understanding the rationale behind the housing loan
program changes.
No action is needed by the Authority at this time.
M -04 -50
COMMUNITY DEVELOPMENT
_G DEPARTMENT
HOUSING DIVISION
Memorandum
DATE: March 26, 2004
TO: William W. Burns, HRA Executive Director 1 f/
FROM: Scott J. Hickok, Community Development Director
Grant E. Fernelius, Assistant HRA Director
SUBJECT: City Council and Commission Conference Session
On Monday, May 17"', a joint conference session will be held with the City Council, HRA, Parks
and Recreation and Charter Commissions to review the results of the 2004, Council- Commission
Survey. Among the topics that will be covered are 1) future redevelopment strategies; 2)
revisions to the housing chapter of the Comprehensive Plan; and 3) the University Avenue fence.
Additional details will be provided at the May 6t', HRA meeting.
No action is needed by the Authority at this time.
M -04 -51
°� �ls�lCL �t CvSgtc,7✓1 .
E
Memo to: The HRA �
From: William W. Burns, HRA Director 40
Subject: Council - Commission Survey Report
Date: March 26, 2004
Here's my report on the 2004 Council - Commission Survey results. If you have questions, please
call me.
My plan is to devote Council's April 19 and May 17 conference meetings to discussions of the
survey results. The HRA is cordially invited to the meeting on May 17 in the lower level meeting
rooms. I have you scheduled with the Charter Commission and the Parks and Recreation
Commission. The meetings will start at 7:00 p.m.
I hope that all of you can be there to share your views on these very important issues. Thanks for
completing the survey.
Question I - Replacement of the Aerial
There were thirty-two responses to this question. Twenty -three agreed with the recommendation
to replace the Fire Department's aerial truck in 2006. Eleven disagreed with the
recommendation. Several of those opposed to the recommendation indicated that they felt that
the number of fires requiring the aerial together with increasing use of mutual aid made the
purchase unnecessary. One respondent opined that those who owned tall buildings should pay for
the equipment through a special assessment.
Question 2 -Additional Firefighter
Among the thirty -four respondents, seventeen indicated that we should not use federal grant
funding to hire an additional firefighter. Seventeen believed that we should. A few of those
opposed offered comments. One respondent felt that it was unwise to hire more firefighters at a
time when we were laying off other employees. Another felt we should rely on the paid -on -call
firefighters and also had no problems with our Fire Department managers taking emergency
calls.
Question 3 - Senior Companion Program
Twenty of the thirty -four respondents to this question would have the City relying on grant
money, fundraisers and other charitable contributions to fund the Senior Companion Program.
Only thirteen of the respondents would continue the Senior Companion Program at City expense.
One respondent pointed out that since Fridley is an aging community, the $5,000 for the Senior
Companion Program was a small price tag and presumably one that we should to pay.
Question 4 - Parks Capital Funding Level
Opinions were evenly divided among the respondents to this question on parks capital
improvement financing. Seventeen respondents indicated that we should scale back our annual
parks capital improvements as a result of lost Local Government Aid and generally declining
local government revenues. These same individuals believed that we should rely on the existing
park - related revenues such as those made available through park dedication fees and interest
revenues. Seventeen respondents believed that the Parks Capital Improvement Fund should be
allocated additional money for needed park improvements. Two of the respondents added notes
indicating that additional property taxes should be approved through a referendum
Question S - Off Leash Dog Park
This question pointed out that Anoka County was considering the establishment of an off -leash
dog park at one of Fridley's County Parks. While one of the respondents did not care, sixteen
thought the park was a good idea; seventeen indicated it was not a good idea. One respondent
added a note indicating that he /she had purchased a Minneapolis permit for his/her dog and
believed that it would be nice to have this amenity in Fridley.
Question 6 - 2:00 a.m. Bar Closing
Opinion on this issue was diverse and spread widely among the choices. Ten of the respondents
would hold off on allowing 2:00 a.m. bar closings until we have more accident and DUI data
from other cities. Eight respondents would extend the hours unconditionally to insure that
Fridley bars and restaurants remain competitive. Seven respondents indicated that they would not
extend the hours under any conditions. Six indicated that we should continue to study the
impacts of 2:00 a.m. bar closing while allowing it on special nights, such as New Year's Eve and
the night before Thanksgiving. Three chose their own option. Of these three, two would extend
the hours conditionally with the understanding that the issue would be revisited after a trial
period. One would allow the extended closing, but would sunset the ordinance.
Question 7 - Redevelopment Strategies
In this question, we pointed out that the HRA has reserves, but not a very plentiful revenue
stream for redevelopment. Respondents were asked how we should approach redevelopment in
view of this situation. Thirteen respondents would continue housing rehabilitation and scattered
site housing programs, but save the remainder of reserves until we accumulated enough money
to accomplish top redevelopment priorities. Five respondents would use all of the reserves to
leverage private sector development and redevelopment. Six would use reserves to leverage
grant money for projects that accomplish some public good. Four would use the reserves to
leverage redevelopment of aging apartment buildings. Six respondents crafted unique responses.
One asked that we revisit the priority list before making a decision on funding. Another
respondent said that he /she would keep some reserves to take advantage of opportunities that
become available. One other person liked A, but suggested that spending reserves depended on
"what other issues arise."
Question 8 - Comprehensive Plan Revision
The prologue to this question points out that the City's Comprehensive Plan has come under
increasing fire as we have considered various development proposals during the last two years.
In view of this demand for revision of the Comprehensive Plan, you were asked to agree or
disagree with several statements about how this planning process should occur.
The first statement asserted that we should schedule a process for amending only the housing
section of the Comprehensive Plan. Twenty -two responded. Eleven agreed; eleven disagreed.
The next statement said that the process should be accompanied by careful analysis of Fridley's
housing composition and how this existing mix met the current and future needs of the
community. Twenty -five respondents agreed with this statement. One disagreed.
The third statement asserted that the Comprehensive Plan amendment process should be
conducted in a manner that maintains Fridley's compliance with the Metropolitan Livable
Communities Act, the Fair Housing Act and other relevant laws and statutes. Twenty -one agreed
with this statement. Two disagreed.
PA
The fourth statement provided that while the comprehensive planning process should welcome
neighborhood input, it should be based on community -wide needs as reflected in the comments
of a broad cross section of the City's population. Twenty -three respondents agreed with this
statement. Four disagreed.
Finally, we stated that although the process for amending the Comprehensive Plan should be
moved along expeditiously, it should be done carefully and carried out within a time frame that
allows sufficient research, public education and public discussion. Twenty -six respondents
agreed; no one disagreed.
The bottom line is that there is near agreement on all of the statements except the first one. As
we discuss this on April 19 and May 17, it will be interesting to ask whether the opposition was
to amending the housing section of the plan separate from the entire plan or whether it reflected a
desire not to get into the comprehensive planning process at all until we are required to do it
several years down the road.
Question 9 - University Avenue Fence
Twenty -three of the respondents liked the idea of the alternate bid for the East University
Avenue Service Drive fencing (between 61 sr Avenue and Mississippi Street) in 2004. Six
respondents disagreed.
Twenty -one respondents also agreed that we should erect a 4' high decorative fence along the
East University Avenue Service Drive south of 61' Avenue as part of the 2005 street
improvement project. Seven respondents disagreed.
Twenty -one respondents supported the idea of constructing a combination of decorative fencing
and hedges on the west side of University Avenue between Burger King and 61 ' Avenue as part
of the Gateway West project. Nine respondents disagreed with this concept.
Fifteen respondents supported constructing a combination of decorative fencing and hedges
along the west side of University Avenue between 61 st Avenue and the Rottlund project in 2006.
Fourteen respondents disagreed.
There were numerous written comments attached to this question. One respondent, for example,
supported each of the four projects with the condition that there should be partial State funding
for each segment. While one other respondent hates fences, she/he would be more inclined to
support decorative fencing if it did not include arborvitae and the maintenance cost associated
with it. Another respondent seems supportive of the decorative fences, but objects to assessing
the commercial/religious entities on the east side while not assessing any of the residential
property owners on the east side. He /she would not assess anyone.
3
Question 10 - Strategies for Budget Cutting
This question recognizes another $649,000 loss in LGA for 2005 and points out that there will be
pressures to restore both personnel and equipment that were cut in prior years as we prepare the
2005 budget. In view of these losses and pressures, the question asks that the respondent select
an expenditure - cutting strategy.
Fifteen respondents would make all cuts based on prioritization of City programs and services.
Fourteen others would start with an across- the -board reduction in each department, with the
remainder of the cuts based on prioritization of programs and services. Two respondents would
ask each department to take the same percentage cut in their budgets. Two respondents crafted
their own solutions. One of these would ask employees to take a 10% salary cut, pay for more of
their benefits and take unpaid time off. Firefighters and Police Patrol would be exempt. The
other respondent would ask for an across- the -board reduction in each department except for
essential services, and would require, for example, two weeks of unpaid vacation for all
departments.
Question 11- Charter Restrictions on Utility Rates
The question points out that the Charter indexes utility rates to the rate of inflation and asks
whether or not a Charter change is desirable.
Twenty -four respondents believe that these restrictions should be lifted from the City Charter.
Six respondents believe that the Charter restrictions on utility rate increases should be
maintained. Two respondents would leave the restrictions alone and use reserves to pay for
utility deficits before asking the voters for rate changes. Two others crafted their own responses.
One would lift the Charter restrictions, but limit increases to actual cost increases. The other
would seek voter approval of the Charter amendment.
n
Fridley Housing and Redevelopment Authority
Monthly Housing
Report
April 1, 2004 Meeting
Report
Loan Origination Report
Loan Servicing Report
Remodeling Advisor Report
Operation Insulation Report
Notes:
Summary of Reports
Description
Summary of all loan activity through March 26, 2004.
Report not yet available for March 2004 *.
Summary of all Remodeling Advisor visits through
March 26, 2004.
Summary of all Operation Insulation appointments
through March 26, 2004.
The Loan Servicing Report is prepared by Community Reinvestment Fund (CRF)
and is usually mailed out 7 to 10 business days after the month end.
Loan Origination Report
March 2004
Loan I Grant Originations
This Previous
Month Months YTD
Loans Issued 2 3 5
Grants Issued
Funding .
Total
2
3
# of Projects
5
Bathroom remodel
_
This
Previous
1
13%
General plumbing
_
Month
Months
1
YTD
Fridley HRA
$
37,255
$ 17,306
$
54,561
MHFA
$
18,595
$ 30,655
$
49,250
Met Council
$
-
$ _
$
_
CDBG/HOME
$
-
$ _
$
_
CEE
$
_
$ _
$
_
Other
$
_
$
$
Improved Types of Units
Total $
55,850
$ 47,961
$
103,811
This
Previous
Month
Months
YTD
Single Family 2 3 5
Duplex
Tri -Plex
4 to 9 Units
10 to 20 Units
20+ Units
Total
Types ..
2 3
5
Interior
# of Projects
%. of Total
Bathroom remodel
_
poi,
Kitchen remodel
1
13%
General plumbing
_
poi,
Heating system
1
13%
Electrical system
-
0%
Basement finish
_
poi,
Insulation
_
0%
Room addition
2
25 %,
Misc. interior projects
_
polo
Exterior
Siding/Fascia/Soffit
_ 0%
Roofing
- 0%
Windows/Doors
1 13%
Garage
_ poi,
Driveway /sidewalk
1 13%
Landscaping
1 13 %,
Misc. exterior projects
1 13%
Monthly Housing Report (April 2004 HRA Mtg).xls
Loan Origination
3/29/2004
Pi
Loan Servicing Report
March 2004
Servicing Monthly Report
Pool
Pool
Pool
Pool
Deferred
Installment
Installment
Deferred
Loans
Loans
Loans
Loans
Total
Principal Paid
Interest Paid
-
-
Total Payments Rec'd
-
-
Ending Principal Balance
-
-
Loans in Portfolio
-
-
Monthly Servicing Fees
$ _
NET FUNDS RECEIVED
$ _
Delinquency Report
% of
Delinquent
Delinquent
Delinquent
Delinquent
Time Frame
Loans
Payments
Principal
Principal
1 to 30 days Late
-
$
-
$
-
0.00%
31 to 60 Days Late
-
$
-
$
-
0.00%
Over 60 Days Late
-
$
-
$
-
0.00%
Total
-
$
-
$
-
0.00%
Monthly Housing Report (April 2004 HRA Mtg).xls
Loan Servicing
3/23/2004
Remodeling Advisor and Operation Insulation
March 2004
Remodeling Advisor
Program Description
A free service available to all Fridley homeowners. Program is administered by the
Center for Energy and Environment (CEE) on behalf of the Fridley HRA. Services
include a in -home consulation, free remodeling advice, referrals to financing programs
and building code information. Remodeling advisor appointments can be made by
calling 612- 335 -5874.
Appointments in March 2004 3
Appointments Previous Months 5
Appointments Y -T -D 8
Operation Insulation
Pro-gram Description
A fee - for - service program available to all Fridley homeowners. Program is administered
by the Center for Energy and Environment (CEE) on behalf of the Fridley HRA.
Service includes in -home energy audit, recommendations on ways to improve weather-
stripping, insulation, ventilation and related indoor air quality. As an added incentive
homeowners can receive the audit at not cost if they make the recommended improve-
ments. Appointments can be made by calling 612- 335 -5877.
Appointments in March 2004
Appointments Previous Months
Appointments Y -T -D
Energy Improvement Projects
Notes:
* Report not available for March 2004.
** Projects completed in connection with a previous energy audit.
Monthly Housing Report (April 2004 HRA Mtg).xls
R.A. - O.I.
3/29/2004
2
2 **