HRA 02/03/2005 - 6198T
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
Thursday, February 3, 2005, 7:30 P.M.
AGENDA
LOCATION: Council Chambers (upper level)
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
January 6, 2005
CONSENT AGENDA:
Consider Claims & Expenses ............................................................ ..............................1
ACTION:
Contract for Services — Agreement between HRA & City ......................... ..............................2
INFORMATION ITEMS:
HRAInsurance ............................................................................... ..............................3
Updateon Gateway West ................................................................................... ............................... 4
Updateon CDBG ............................................................................ ..............................5
MonthlyHousing Report .................................................................... ..............................6
ADJOURNMENT:
COMMUNITY DEVELOPMENT
t DEPARTMENT
DEVELOPMENT DIRECTOR
Memorandum
DATE: January 28, 2005
TO: William W. Burns, Executive Director of the Housing
and Redevelopment Authority
FROM: Scott Hickok, Community Development Director
SUBJECT: Contract for Staff Services
Introduction
At the HRA's meeting in early January, they reviewed the contract written and signed between
the City and the HRA in 1979. After looking closely at the language and suggested
modifications by staff, the HRA determined that additional modifications would be necessary.
Questions raised could be categorized in 4 broad categories. These were:
■ 5% additional fee above cost of services provided;
■ Insurance coverage under the liability for injury or Damage clause;
■ Gender construction of language; and
■ Language regarding replacement of the Executive Director
All necessary changes have been made to address the concerns in these 4 areas.
Both a marked -up copy and a revised clean copy have been included in your packet for your
convenience. You may note that beyond the final marked up copy, staff further refined some of
the language to help improve contract readability. If the Authority is comfortable with the revised
language, the clean copy can be used as a contract approval exhibit and the original will be
available for signatures.
Staff Recommendation
Staff recommends that the HRA review the contract for Staff services with the suggested
modifications and approve as submitted.
M -05 -08
l
CONTRACT FOR STAFF - SERVICES
FOR THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
THIS AGREEMENT, entered into this day of , 2005, by and
between the City of Fridley, a municipal corporation, hereinafter referred to as City, and
the Fridley Housing and Redevelopment Authority, a public corporation organized under
the laws of the State of Minnesota, hereinafter referred to as Authority.
WHEREAS, the Authority desires to engage the City to provide staffing for the
activities and projects.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein set forth, the Authority and the City hereby agree as follows:
1. Scope of Services to be Supplied by the City: The City shall furnish to the
Authority all necessary services required by the Authority and as called for by the
Authority, including but not limited to, furnishing the services of an Executive Director,
Assistant Executive Director, Finance Director, Engineering Staff, Planning Staff,
Attorney, Secretary, and related supplies and contractual services referred to below as
supplies and contractual services.
a. The Executive Director shall be the City Manager or a person designated
by the City Manager. He /she shall have responsibility for the general supervision of the
projects of the Authority and supervision of the personnel of the City who are to furnish
services to the Authority pursuant to this agreement. He /she shall perform, or have
performed, such activities as the Authority shall from time to time reasonably request.
He /she shall be responsible for the care and custody of all funds of the Authority and for
the deposit thereof in the name of the Authority in such bank or banks as the Authority
from time to time shall designate; for the keeping of regular books of accounts showing
receipts and expenditures; for budget and budgeting activities; for rendering to the
Authority, as requested by the Authority, an account of the income and expenses of the
Authority; and for rendering such additional financial and other reports as the Authority
from time to time shall request.
b. The Assistant Executive Director shall be that person designated by the
Executive Director and approved by the Authority. He /she shall perform all duties
required by the Executive Director, including, but not limited to, the following:
coordinating and supervising all aspects of the planning and redevelopment of projects
of the Authority, including work of and between consultants, contractors, and other
employees of the City who are to provide services to the Authority pursuant to this
agreement; supervising and coordinating with, answering, and acting on requests of,
and meeting with representatives of other units of government; meeting with and
counseling local community groups and residents; keeping of the records of the
Authority; keeping the seal of the Authority; and all other duties properly and reasonably
requested by the Executive Director.
C. The Finance Director shall be the City Finance Director, and shall perform
all duties required by the Executive Director, including, but not limited to, the following:
preparation and maintenance of all financial books and records, and supervision of the
disbursements of funds; preparation of periodic reports reflecting income and
expenditures; internal audits, and other checks and revisions of the financial status of
projects; maintenance of all payroll, related accounts, including documentation of
amounts to be billed under the terms of this contract and all other duties necessary to
the financial administration of the Authority and its projects.
d. The Engineering Staff shall consist of the City Engineer and his /her staff,
and shall perform all duties required by the Executive Director, including, but not limited
to, the following: all engineering work necessary to the timely and successful
completion of all work needed in connection with Authority projects and not contracted
for by the Authority with other engineering consultants or contractors; coordination of all
engineering work; public works recommendations; review of plans and specifications for
project improvements prepared or submitted by consultants or contractors; preparation
of plans and specifications for all public improvement projects; and review and
recommendation on all plans as they may relate to streets, highways, sidewalks, alleys,
utility services, and construction techniques.
e. The Planning Staff shall consist of the Community Development Director
and his /her staff, it shall perform all duties required by him /her, including but not limited
to, the following: all planning work necessary to the timely and successful completion of
all Authority projects; coordination of all planning work; and review and recommendation
on all plans as they relate to land use, land controls, and other general planning
activities.
f. The Attorney shall be hired by the Executive Director and shall perform all
duties required of him /her, including but not limited to, the following: all legal work
necessary to the timely and successful completion of the projects of the Authority;
drafting and reviewing contracts; rendering legal advice and opinions on matters relating
to the projects when required by the Authority; attending meetings of the Authority; and
assuring that their activities in relation to the projects are in conformance with local,
State and Federal Law.
g. The Secretary shall be any one of the secretaries made available from
time to time by the Executive Director for use by the Authority from the personnel of
Fridley and shall perform all duties required of the position, including but not limited to,
the following: administrative tasks for any of the Authority's administrative staff; taking
minutes and keeping records of meetings of the Authority, public hearings, and staff
meetings as required by the Executive Director; and any other secretarial work
necessary to the timely and successful completion of the Authority's projects, as
required by the Executive Director.
h. Supplies and Contractual Services shall include office space, postage and
office supplies, telephones, reproduction equipment, car expense, travel expenses, and
such other items as from time to time may reasonably and properly be needed by the
Authority and as the City may then agree to provide.
2. Payment. The Authority shall pay the City for services provided to it by City
employees. This payment shall be based on a pro rata share of the actual cost of
wages and benefits for these employees. The Authority shall also reimburse the City for
supplies; other services and charges; capital outlay; and debt service expenditures
made on behalf of the Authority.
3. General Provisions.
A. Any of the work product, drawings, designs, applications, and other
materials prepared by the professional and clerical staff for the Authority shall remain
the property of the Authority.
B. The City shall make available to members of the Authority staff as
appointed by the City Manager pursuant to this agreement reasonable space for the
performance of their work. Such reasonable space shall include the use of computers
and equipment of the City and filing cabinets.
C. Liability for Injury or Damage. It shall be the responsibility of the City to
ensure that any insurance policies and worker's compensation policies provide
coverage for the professional and clerical staff and commissioners when doing work for
the Authority.
D. Amendments. This agreement may be amended or modified at any time
by written agreement between the parties hereto. Such amendment or modification
may be made by either party by giving two weeks (14 days) written notice to the other
party of the intended modification. When accepted by the other party, the amendment
or modification shall become binding as if a part of this agreement.
E. Minnesota Law to Govern. This agreement shall be governed by the laws
of the State of Minnesota.
F. Term of Agreement. The term of this agreement shall be perpetual.
G. Entire Agreement. This agreement, when executed, shall be the entire
agreement between the parties for the sharing of services and equipment.
H. Replacement of the Executive Director.
In the event the Authority is not satisfied with a person appointed by the City Manager
as Executive Director as provided for in Section 1 a. of this agreement, it may request
that the City Manager replace the Executive Director. The City Manager shall provide a
thirty (30) day written notice of termination, to the Executive Director, at such time as
the Authority deems a replacement of said personnel is necessary.
I. Replacement of the Assistant Executive Director. In the event the
Authority is not satisfied with service of the Assistant Executive Director, it may request
that the Executive Director replace the Assistant Executive Director serving the
Authority. The Executive Director shall provide a thirty (30) day written notice of
termination to the Assistant Executive Director, at such time as the Authority deems a
replacement of said personnel is necessary.
The Authority or City may cancel this agreement, by giving written notice to the
City Manager at least (90) days before such action is to be taken.
IN WITNESS WHEREOF, the City and the Authority have executed this agreement this
day of , 2005.
Fridley Housing and
Redevelopment Authority
Its Chairperson
AND
Its Executive Director
CITY OF FRIDLEY
By:
Its Mayor
AND
Its Manager
CORRECTION KEY
X Original Document
X Original Modifications Based on Staff /Attorney Review
X Enhanced Modification based on HRA Input
X Gay Greiter's most recent revisions
CONTRACT FOR STAFF - SERVICES
FOR THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
THIS AGREEMENT, entered into this day of , 2005, by and
between the City of Fridley, a municipal corporation, hereinafter referred to as City, and
the Fridley Housing and Redevelopment Authority, a public corporation organized under
the laws of the State of Minnesota, hereinafter referred to as Authority.
WHEREAS, the Authority desires to engage the City to render certain technical
advice and assistance in connection with the activities and projects of the Authority.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
herein set forth, the Authority and the City hereby agree as follows:
1. Scope of Services to be Supplied by the City: The City shall furnish to the
Authority all necessary services required by the Authority and as called for by the
Authority, including but not limited to, furnishing the services of an Executive Director,
Assistant Executive Director, Finance Director, Engineering Staff, Planning Staff,
Attorney, and Secretary (all hereinafter called "Services "), and related equipment as
below described and referred to (all hereinafter called "Equipment ").
a. The Executive Director shall be the City Manager or a person designated
by the City Manager. He /she shall have responsibility for the general supervision of the
projects of the Authority and supervision of the personnel of the City who are to furnish
services to the Authority pursuant to this agreement. He /she shall perform, or have
performed, such activities as the Authority shall from time to time reasonably request.
He /she shall be responsible for the care and custody of all funds of the Authority and for
the deposit thereof in the name of the Authority in such bank or banks as the Authority
from time to time shall designate; for the keeping of regular books of accounts showing
receipts and expenditures; for budget and budgeting activities; for rendering to the
Authority, as requested by the Authority, of an account of the income and expenses of
the Authority; and for rendering such additional financial and other reports as the
Authority from time to time shall request.
b. The Assistant Executive Director shall be that person designated by the
Executive Director and approved by the Authority. He /she shall perform all duties
required by the Executive Director, including, but not limited to, the following:
coordinating and supervising all aspects of the planning and redevelopment of projects
of the Authority, including work of and between consultants, contractors, and other
employees of the City who are to provide services to the Authority pursuant to this
agreement; supervising and coordinating with, answering, and acting on requests of,
and meeting with representatives of other units of government; meeting with and
counseling local community groups and residents; keeping of the records of the
Authority; keeping the seal of the Authority; and all other duties properly and reasonably
requested by the Executive Director.
C. The Finance Director shall be the City Finance Director, of Fr,a;ey, and
shall perform all duties required by the Executive Director, including, but not limited to,
the following: Preparation and maintenance of all financial books and records, and
supervision of the disbursements of funds; preparation of periodic reports reflecting
income and expenditures; internal audits, and other checks and revisions of the
financial status of projects; maintenance of all payroll, related accounts, including
documentation of amounts to be billed under the terms of this contract, and all other
duties necessary to the financial administration of the Authority and its projects.
d. The Engineering Staff shall consist of the City Engineer of Fridley and
their his staff, and shall perform all duties required by the Executive Director, including,
but not limited to, the following: All engineering work necessary to the timely and
successful completion of all work needed in connection with Authority projects and not
contracted for by the Authority with other engineering consultants or contractors;
coordination of all engineering work; public works recommendations; review of plans
and specifications for project improvements prepared or submitted by consultants or
contractors; preparation of plans and specifications for all public improvement projects;
and review and recommendation on all plans as they may relate to streets, highways,
sidewalks, alleys, utility services, and construction techniques.
e. The Planning Staff shall consist of the City Planning Staff Of FFidle , and it
shall perform all duties required by the Executive Director, including but not limited to,
the following: All planning work necessary to the timely and successful completion of all
Authority projects; coordination of all planning work; and review and recommendation
on all plans as they relate to land use, land controls, and other general planning
activities.
f. The Attorney shall be the Attorney of the €fidley Authority, and he /she
their #is assistants, and shall perform all duties required by the Executive Director,
DiFestoF including but not limited to, the following: All legal work necessary to the timely
and successful completion of the projects of the Authority; drafting and reviewing
contracts; rendering legal advice and opinions on matters relating to the projects, —when
required by the Authority; attending meetings of the Authority; and assuring that their
activities in relation to the projects ast+vlties are in conformance with local, State and
Federal Law.
g. The Secretary shall be any one of the secretaries made available from
time to time by the Executive Director for use of by the Authority from the personnel of
Fridley and shall perform all duties required of the position, including but not limited to,
the following: administrative tasks for any of
the Authority's administrative staff; taking minutes and keeping records of meetings of
the Authority, public hearings, and staff meetings as required by the D*FesteFef
Executive Director; and any other secretarial work necessary to the timely and
successful completion of the Authority's projects, as required by the hector of
Executive Director.
h. Equipment shall include office space, supplying of normal daily business
postage and office supplies, use of telephone and telegmph and reproduction
equipment, car expense, travel expense, and such other items as from time to time may
reasonably and properly be needed by the Authority and as €Fidley the City may then
agree to provide.
2. Payment. The Authority shall pay to the City for services provided hereunder its
pro rata share of the actual cost of wages and benefits thereon of employees furnished
by the City and such other costs as office supplies, sundry materials, photocopy and
printing charges, and vehicle charges, all to be paid for by the Authority at the City's
cost plus space and occupancy charges at the currently prevailing rate and also further
plus use charges for office furniture and equipment based on a reasonable depreciation
schedule.
0
3. General Provisions.
A. Any of the work product, drawings, designs, applications, and other
materials prepared by the professional and clerical staff OR for the Authority shall remain
the property of the Authority.
B. The City shall make available to members of the Authority staff as
appointed by the City Manager pursuant to this agreement reasonable space for the
performance of their work. Such reasonable space shall include the use of computers
typewriters and equipment of the City and filing cabinets.
C. Liability for Injury or Damage
- -
- - - --- -- - -. - -...__._, .- .. . -zl- .rry - -vr
the AutheFity appointed pursuant to this agreement who in the peFfermanGe of work
in ther, , It shall be the responsibility of the City, togetheF with the Auftdty, to
ensure that any insurance policies and workmen's compensation policies provide
coverage for the professional and clerical staff and commissioners when doing work for
the Authority.
D. Amendments. This agreement may be amended or modified at any time
by written agreement between the parties hereto. Such amendment or modification
may be made by either party by giving two weeks (14 days) written notice to the other
party of the intended modification. When accepted by the other party, the amendment
or modification shall become binding as if a part of this agreement.
E. Minnesota Law to Govern. This agreement shall be governed by the laws
of the State of Minnesota.
F. Term of Agreement. The term of this agreement shall be perpetual.
G. Entire Agreement. This agreement, when executed, shall be the entire
agreement between the parties for the sharing of services and equipment.
H. Saflselia#+er} Replacement of the Executive Director. OF Assestant
In the event the Authority is not satisfied with service of the
Executive Director AL the Assistant cwo , We D t , it may
request that the City Manager, replace the
Executive Director or Ac.smstant Exec +' serving the Authority. The City
Manager shall provide a thirty (30) day written notice of termination, to the Executive
Director, at such time as the Authority deems a replacement of said personnel is
necessary.
Replacement of the Assistant Executive Director. In the event the
Authority is not satisfied with service of the Assistant Executive Director, it may request
that the Executive Director City Managef replace the Assistant Executive Director
serving the Authority. The Executive Director Gity Managef shall provide a thirty (30)
day written notice of termination to the Assistant Executive Director, at such time as the
Authority deems a replacement of said personnel is necessary.
The Authority or City may cancel this agreement, by giving written notice to the
City Manager at least (90) days before such action is to be taken.
IN WITNESS WHEREOF, the City and the Authority have executed this agreement this
day of , 2005.
Fridley Housing and
Redevelopment Authority
By:
Its Chairperson
AND
Its Executive Director
CITY OF FRIDLEY
By:
Its Mayor
AND
Its Manager
COMMUNITY DEVELOPMENT
SUBJECT: HRA Insurance M -05 -7
At the January 6th Commission meeting, and in a follow -up letter from Chairman
Commers, two questions were asked pertaining to insurance coverage for the
HRA and its Commissioners. The specific questions regarded 1) the language in
the contract for services (Is the HRA covered by the City's policy or not ?) and 2)
the personal liability of HRA Commissioners (What type of claims could individual
HRA Commissioners have exposure to that are not covered by the $300,000
municipal tort limits ?).
The attached documents, a memorandum from Rick Pribyl and an e-mail from
Tom Grundhoefer (representative for the City's insurance at the League of
Minnesota Cities), address the questions and concerns that were raised both at
the meeting and in the letter from Chairman Commers. The following
summarizes the answers to these questions.
1) Is the HRA covered by the City's insurance?
The Authority is covered by an endorsement to the City's policy. The
confusing and wordy language that was in previous drafts of the
contract for services section on liability has been simplified to state, "It
shall be the responsibility of the City to ensure that any insurance
policies and Workers Compensation policies provide coverage for the
professional and clerical staff and commissioners when doing work for
the Authority'.
2) What types of claims could individual HRA Commissioners have exposure
to that are not covered by the $300,000 municipal tort limits?
Claims that would not be covered by the tort limits, that could expose
an individual member, include civil rights suits and inverse
condemnation claims arising out of regulatory takings. Rick Pribyl, City
H:\—Paul's Documents\HRA\HRA Agenda Items\2005\February 3, 2005\February2005HRA Memo (InsuranceUPdate).doc
Finance Director, has indicated that the City and HRA have the
resources to cover a loss that is in excess of the municipal tort limits,
provided the Commissioner(s) were not acting outside of the scope of
their duties, with malfeasance, willful neglect of duty or bad faith.
H:\—Paul's Documents\HRA\HRA Agenda Items\2005\February 3, 2005\February2005HRA Memo (InsuranceUPdate).doc
TO: WILLIAM W. BURNS, HRA EXECUTIVE DIRECTOR
PAUL BOLIN, ASST. EXECUTIVE DIRECTOR
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
PAUL EISENMENGER, HRA ACCOUNTANT
RE: HRA INSURANCE COVERAGE
DATE: January 14, 2005
RICHARD A PRIBYL
FIIVANCEDIRECTOR
Recently the Commission Members of the Housing Redevelopment Authority raised some
insurance questions contained in the working agreement between the two agencies. One concern
is regarding the liability coverage that is carried for the Authority. Another question was regarding
some other terminology contained under "Liability for injury or Damage" portion of the working
agreement.
The Commission Members are each covered for actions that they make as a member of the Fridley
Housing Redevelopment Authority under an endorsement to the City's insurance policy. The
Housing Redevelopment Authority is specifically covered by the endorsement under the Municipal
Liability coverage. I have attached to this memo a copy of the policy from this last policy period,
01/01104 to 01/01/05. We have yet to receive the 2005 policy but the same coverage is currently in
effect for the Authority.
In reviewing some past meetings, to which I was not in attendance, it seems as if there was a
question on the following section of the contract that related to the employees covered under the
contract.
"The City does not assume any responsibility or liability for the acts or omissions
of the officers, employees, or agents of the Authority appointed pursuant to this
agreement who in the perfonnance of work for the Authority have done something
which gives cause or rise to any claim for damage. In this regard, it shall be the
responsibility of the City, together with the Authority, to ensure that any insurance
policies and workmen's compensation policies provide coverage for the professional
and clerical staff and commissioners when doing work for the Authority."
The intent of this paragraph is to show that each City employee that is working for the HRA under
the umbrella of this contract, is specifically covered under the endorsement of the HRA as an HRA
employee. When working with the HRA under the terms of this contract, the employee's work
would then be covered under the HRA endorsement and not under the policy of the City of Fridley.
It also states that both the City and the HRA shall make sure that any work done under this
contract will be covered under the insurance policy.
City /HRA staff has spent a great deal of time making sure that the activities of the HRA
Commission Members, HRA Staff, and HRA/City staff are covered for the activities in which they
are involved in.
RDP /me
Attachment
CM C .24450 y v Coverage is Provided by:
THE LEAGUE OF MINNESOTA CITIES
INSURANCE TRUST
(Herein called LMCIT) L
I-,.
CITY: FRIDLEY, CITY OF Ca
Item 2. COVERAGE PERIOD: One Year
From: 01/01/04 To: 01/01/05 12:01 A.M. Standard Time at Mailing Address
on Common Coverage Declarations
Item 3. THE COVERED PARTY IS: CITY
Item 4. COVERAGE PARTS:
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS
OF THIS COVENANT, LMCIT AGREES WITH THE COVERED PARTY TO PROVIDE
THE COVERAGE AS STATED IN THIS COVENANT, SUBJECT TO THE FOLLOWING LIMITS:
EACH': OCCURRENCE LIMIT
$ 1,000,00
PRODUCTS & COMPLETED OPERATIONS
LIMIT $ 1,000,000 Annual Aggregate
FAILURE TO SUPPLY CLAIM LIMIT
EMF CLAIM LIMIT
MOLD CLAIM LIMIT
FIRE DAMAGE LIMIT
$ 1,000,000
Annual Aggregate
$ 1,500,000
Annual Aggregate
$ 1,500,000
Annual Aggregate
$ 50,000
Any One Fire
MEDICAL AND RELATED EXPENSE LIMIT $ 1,000/$10,000 Any one Person /occurrence
LIMITED POLLUTION LIABILITY CLAIM *$ 1,000,000 Per Sudden Occurrence/
LIMIT $1,000,000 Annual Aggregate
LEAD OR ASBESTOS CLAIM LIMIT *$ 200,000 Per Claim /$200,000 Annual Aggregate
LAND USE, DEVELOPMENT OR FRANCHISE
LITIGATION LIMIT * *$ 1,000,000 Annual Aggregate
*LIMIT includes damages, loss adjustment expense, defense costs and supplementary payments.
* *LIMIT includes litigation costs.
Item 5. MUNICIPAL LIABILITY DEDUCTIBLE: (Subject to General Annual Aggregate Deductible,
if any, shown on Common Coverage Declarations)
$ 50, 000 Per Occurrence
Item 6. RETROACTIVE DATES:
MUNICIPAL LIABILITY RETROACTIVE DATE: 01/01 /87
LIMITED POLLUTION LIABILITY CLAIM RETROACTIVE DATE: 01/01/89
LEAD OR ASBESTOS CLAIM RETROACTIVE DATE: 01/01/94
Item 7. ENDORSEMENTS ATTACHED TO THIS COVERAGE PART:
C M C(1 1 -03) M EO 14(1 l -01) NGE066(11 =0
LMCIT DEC - 013(11 /86)(Rev.11/03)
1(01 -95
COMPREHENSIVE MUNICIPAL LIABILITY COVERAGE
® Coverage A Municipal Liability
❑ Coverage A Municipal Liability, but only for Bodily Injury,
Property Damage or Personal Injury
❑ Coverage A Municipal Liability, except for Bodily Injury, Property
Damage or Personal Injury
® Coverage B Medical and Related Expense
® Coverage C Automobile Liability — Bodily Injury and Property Damage
® Coverage D Land Use, Development or Franchise Litigation
In consideration of the premium charged, it is understood and agreed that the
Declarations and Section II - Who Is Covered are amended to include.,,
HOUSING-AND REDEVELOPMENT AUTHORITY 3
for all coverage where o is X'd above.
All other terms and conditions remain unchanged.
LMCIT
ME066(11/96) (Rev. 11/02)
Page 1 of 1
Law Offices
1400 AT &T Tower
901 Marquette Avenue
Minneapolis, MN 55402 -2859
Telephone: (612) 305 -1400
Facsimile: (612) 305 -1414
Paul Bolin
Assistant HRA Director
City of Fridley
6431 University Avenue Northeast
Fridley, Minnesota 55432
AT'1O1t341
RAW s
January 17, 2005
Re: Insurance Coverage for HRA Members
Dear Paul:
Lawrence R. Commers
Attorney at Law
(612) 305 -1410
Irc@mcmlaw.com
Enclosed are copies of various correspondence I located regarding the insurance coverage
issue raised at our January 6, 2005 meeting. I was unable to find a response to my last letter
dated June 2, 1999.
Very truly yours,
M KALL, CR E & MOORE, PLC
bi
i
Lawren . Commers
Enclosures
cc: William Burns, HRA Executive Director
1.RC /js #730994v 1
Certified as a Civil Trial Specialist by the Minnesota State Bar Association and the National Board of Trial Advocacy
An American Bar Association Accredited Organization
Law Offices
1400 AT &T Tower
901 Marquette Avenue
Minneapolis, MN 55402 -2859
Telephone: (612) 305 -1400
Facsimile: (612) 305 -1414
Barb Dacy
Community Development Director
City of Fridley
6431 University Avenue NE
Fridley, MN 55432
kl
June 2, 1999
Re: Liability Insurance Coverage
Dear Barb:
Lawrence R Commers
Attorney at Law
612- 305 -1410
lrc @mcmlaw.com
Thank you for the memo from Thomas Grundhoefer on the liability of HRA members. I
have always understood the liability to be as he states with the limitations.
The question is of our personal exposure related to those areas in which the statutory
limitations do not apply. When we had the Satelite Lane Apartment issue with the tenants, it was
my understanding that their civil rights suit was not limited by the $600,000 statutory limitation.
Therefore, if there had been some type of monetary damage in excess of $600,000, there would
be no coverage. At one point I understood the City was looking into excess liability coverage
and there should be a memo on it.
In any event, it was the Satelite tenants' federal claims that caused us to look at the issue.
Even though the City might have to indemnify HRA members, if, for example, there was a
judgment for $1,600,000 leaving $1,000,000 uninsured, the judgment creditor might not want to
wait for the City to figure out how to raise the funds to pay the excess. In that event, they could
try to satisfy the judgment from the individual HRA members and leave the members to be
eventually indemnified by the City. Obviously, that would not be a satisfactory solution.
Years ago I sued a Minnesota municipality and recovered an amount way in excess of
any insurance. The statutory limitations did not apply. The City eventually bonded for the
amount and somehow added an excise tax to every resident's water bill for a few years to pay off
the bond. I do think, however, that this had more to do with political perceptions than anything.
In any event, this took several months to resolve and in the meantime, those members of the City
Council who had been named individually had personal exposure.
Civil Trial Specialist, certified by the Minnesota State Bar Association and the National Board of Trial Advocacy
pi
Barb Dacy
June 2, 1999
Page 2
I don't think that Grundhoefer really addresses the issue of what type of claims do we
have an exposure to that are not covered by the $600,000 limitation.
Very truly yours,
MACKALL, CROUNSE & MOORE, PLC
By
Lawren . Commers
cc: James R. Casserly
LRC /kbh/524745.1
RE: Insurance Pagel of 2
Bolin, Paul
From: Pribyl, Rick
Sent: Wednesday, January 26, 2005 3:30 PM
To: Hickok, Scott; Bolin, Paul; Eisenmenger, Paul; Burns, Bill; Ellestad, Craig
Subject: FW: Insurance
Here is the answer from the League regarding Larry Commers question as to the personal exposure of a member
of the HRA Commission.
- - - -- Original Message---- -
From: Grundhoefer, Tom [mailto:tgrundho @lmnc.org]
Sent: Wednesday, January 26, 2005 2:24 PM
To: Pribyl, Rick
Subject: RE: Insurance
Rick: I've read the material that you sent and I'll try to address Mr. Commers' question
Yes, it is very possible that a claim could be brought that is not subject to the municipal tort limits (current limits, by the way,
are $300,000 per person and $1,000,000 per occurrence.) In fact, that is the very reason many cities choose to buy excess
liability coverage. Some of the more common types of claims that would not be subject to the limits include: civil right suits
and inverse condemnation claims arising out of regulatory takings.
I agree with Mr. Commers that for a loss that exceeds the policy limits there theoretically could be a gap between the point in
time that judgment is entered and the time that the city makes good on its indemnification responsibility. (As mentioned in
the materials, the city would have no obligation to indemnify if the officer is acting outside of the scope of their duties or is
an act or omission constituting malfeasance, willful neglect of duty or bad faith.) It seems a remote risk, but one that may be
of concern. I can't imagine a court being too demanding on a public sector employee or officer who is simply awaiting the
processes of government to get it completed.
Having said this, if this potential short term exposure is a major issue, then the city may want to consider purchasing excess
coverage.
I hope this helps. Let me know whether you need anything further.
- - - -- Original Message---- -
From: Pribyl, Rick [mailto:Pribyl&@ci.fridley.nm us]
Sent: Wednesday, January 26, 2005 12:55 PM
To: Grundhoefer, Tom
Subject: FW: Insurance
Here it is.
> - - - -- Original Message---- -
> From: Pribyl, Rick
> Sent: Tuesday, January 25, 2005 1:51 PM
> To: 'tgrundho @lmc.org'
> Cc: Ellestad, Craig; Eisenmenger, Paul
> Subject: Insurance
> Tom, I have included a pdf file on the insurance issue that I spoke of on the voice mail that I left you. Our Chair, Larry
Commers who is an attorney himself raises the question as to their personal liability for a situation that would be outside of
the $600,000 limitation and pursue the individuals prior to the City or HRA determining how they would raise the funds in
excess of the $600,000 limitation. He is concerned about the gap between a judgement and the City or HRA actually be in a
1/27/2005
RE: Insurance Page 2 of 2
position to provide the resources for the judgement.
> The main question as I see it is on the memo from Larry to Barb Dacy dated June 2, 1999.
> 3rd Paragraph
> In that event, they could try to satisfy the judgment from the individual HRA members and leave the members to be
eventually indemnified by the City. Obviously, that would not be a satisfactory solution."
> What coverage would provide a solution to this issue?> > <<HRA Ins
> Larry Commers.pdf>>
> Richard D. Pribyl
> Director of Finance
> City of Fridley
> Fridley, MN 55432
> Phone: 763 -572 -3520
> Fax: 763 -571 -1287
> E -mail: pribylr @ci.fridley.mn.us
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1/27/2005
DATE: January 28, 2005
TO: William W. Burns, Executive Director of H ,1fI
FROM: Scott J. Hickok, Community Development Director
Paul Bolin, Assistant Director of HRA
SUBJECT: Gateway West Update M -05 -6
The purpose of this memo is to provide a summary of Gateway West activity
since the Authority's meeting in early January.
5355 3rd Street (4 -Plex) — Staff, working with Wilson Development and Jim
Casserly's office, has made an offer to purchase the 4 -plex. The offer was made
on January 27th to purchase the property for $275,000, pending HRA approval. A
number of factors were considered when making the offer, including, the
County's Estimated Market Value, Paul Schwartz's appraisal, follow -up
memorandum, estimated cost of acquiring through condemnation, and long
history in trying to acquire the property.
Staff is optimistic that an agreement can be reached prior to Thursday nights
meeting and that the purchase agreement can be presented for Chairman
Commer's signature.
28157 th Place — Staff provided Dave Harvet with a listing of potential
comparable properties on January 6th. Staff followed up with Mr. Harvet on
January 14th and was told that he hadn't had a chance to look at all of the
properties yet, but would contact staff when he had chosen a comparable. At the
time of writing this memorandum, Mr. Harvet has not followed through in getting
back to staff. Staff has a call into Mr. Harvets voicemail and will present an
update at Thursday nights meeting. As Mr. Harvet seems to have very unrealistic
expectations of a price for his mothers home and continues to delay responding
to City requests, staff will be recommending that the Authority no longer pursue
the purchase of the Harvet home and, instead, build around it if an agreement
cannot be reached prior to the HRA's March 3rd meeting.
H:\—Paul's Documents\HRA\HRA Agenda Items\2005\February 3, 2005\February2005HRA Memo (Gateway West UPdate).doc
Yage 1 of L
Welcome to the Web sits of
Anoka County
Mcsots
Property Account Summary
urrent General Information
Abstract Documents Have Been Recorded Through
Property ID
i23-30-24-22-0136
Situs Address
; 5955 3RD ST NE , FRIDLEY, MN 55432 -0000
Property Description
!LOTS 25 & 26 BLK 12 HYDE PARK, SUB) TO EASE OF REC
Last Sale Price
121,500.00
Last Sale Date
!09/22/1995 ��
Last Sale Document Type
;
Linked Property Group Position
308,000
Status
'Active
Abstract/Torrens
!Abstract
Parties
Role IName
Owner IHOGENSON PROPERTIES LTD
Document Recording Process Dates
Abstract Documents Have Been Recorded Through
11/16/2004
Abstract Documents Have Been Mailed Through
11/05/2004
Torrens Documents Have Been Recorded Through
11/12/2004
Torrens Documents Have Been Mailed Through
11/02/2004
ctive Certificates Of Title
Type lCertificate Number lCertificate Date
No Certificates Found
Documents Recorded Within 30 Days Of "Recorded Through" Dates Above
Type Abstract/Torrens lRecorded Number ;Recorded Date
No Documents Found
Lot Size JW80 *130 I
* Lot Size: Approximate lot size in feet, clockwise beginning with the direction the lot faces
Tax District Information
City Name
School District Number and Name FRIDLEY SCHOOL DISTRICT #14
Pro perty
Classification
Tax Year
lClassification
2004
4A- Rental /Residential Non - Homestead 4 or More Unit
2003
4A- Rental /Residential Non - Homestead 4 or More Unit
ii�roperiy Values «�
Tax Year
Description
Amount
2005
Est Market Land (MKLND)
68,600
2005
Est Market Improvement (MKIMP)
243,700
2005
Est Market (MKTTL)
312,300
2004
Est Market (MKTTL) _
308,000
2004
Taxable Market (TMTV)
308,000
Ox Amounts for MIPR
https: / /prtinfo.co. anoka .mn.us /(xaijch55nialsgihslel4s5 5) /search.aspx 1/10/2005
Page 2 of 2
Tax Year _
Description _
2004
Total Tax Amounts - Before Payments
y
_Amount
4,305.42
2004
Special Assessments (Included in Total)
93.84
Payment History for Past Three Years
Date Paid
Tax Year
Principal
Interests, Penalties and Costs
Amount Paid
05/15/2004
2004
4,305.42
0.00
4,305.42
05/15/2003
2003
4,039.26
80.78
4,120.04
05/15/2002
2002
2,593.55
0.00
2,593.55
No Charges are currently due.
No Charge Amounts are due for this property. If you believe this is incorrect, please contact a Property Support
Specialist.
Developed by ASIX, Incorporated.
@2004 All rights reserved.
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https: / /prtinfo.co. anoka. mn. us/( xaijch55nialsgihslel4s55 ) /search.aspx 1/10/2005
01/27/2005 10:29 IFAX DFAX @RRASSMONROE.COM
JAN -27 -2005 11:21 FROM:
MEMO
TO: Jim Casserly
FROM: Paul Schwartz
DATE: January 26, 2005
RE: Apartment appraisal —
Jim,
4 DFax IM 001/003
6516531381 TO:9528855969 P.1
Pursuant to your request, I have considered the fair market value of the above- referenced
property as if it is habitable and therefore rentable. Please note that this is not an appraisal
and that the assumption you are asking me to make is hypothetical.
We have considered all three approaches to value for the subject, if habitable: the cost
approach, them market approach and the income approach.
All figures from the cost approach as contained in the original appraisal would remain the
same except for physical depreciation. Assuming a newly renovated building, it is
estimated that the effective age would be 5 years. The resulting physical depreciation
would be 9% (5 effective age /55 economic life span = 9% physical depreciation). The
value would then be estimated then as follows:
Replacement cost new: $213,398
Less physical depreciation:$ 19,206
Plus land value: 72,000
VALUE: $266,192, say $265,000
It is noted that perhaps the land value is conservative (low) due to lack of comparable data,
which may result in understating of value via this approach.
The market approach would utilize the same comparables, howeverthe subject's condition
is considered to be at least average -good. All adjustments in the original appraisal would
remain the same except for condition. The comparable's adjusted value assuming
average -good condition are as follows:
Comparable 1:
$71,500 per unit
Comparable 2:
$68,000 per unit
Comparable 3:
$68,750 per unit
Comparable 4:
$71,300 per unit
The comparables, as adjusted and with consideration of better condition, all support a per
unit value of $70,000 per unit. As the subject has 4 units, the resulting value indication
01/27/2005 10:29 IFAX DFAX @KRASSMONROE.COM
JAN -i=7 -2005 11:21 FROM: 6516531381
from this approach is $280,000.
-) DFax Z002/003
TO:9528855969 P.2
The original report did not process the income approach as the units were not rentable in
their current condition.
The subject has three 2- bedroom units and one 1- bedroom unit. Market data supports a
rental rate of $750 for a newly renovated two- bedroom unit and $650 for a newly renovated
one - bedroom unit. A reconstructed operating income and expense statement is as follows:
ESTIMATED STABILIZED OPERATING STATEMENT
POTENTIAL GROSS INCOME
Rental Income
$34,800
Total Potential Gross Income
$34,800
Less Vacancy and Collection Loss @ 5%
$ (4,170)
EFFECTIVE GROSS INCOME
$33,060
FIXED EXPENSES
Real Estate Taxes &
Assessments
$4,300
$5,100
Insurance
$800
Total Fixed Expenses 1
VARIABLE EXPENSES
Management (5% of EGO
$1,653
Utilities
$2,480
Repairs
$ 600
Garbage
$420
Misc. Expenses (grounds)
$300
$6,321
Total Variable Expenses
Total Operating Expenses
$(10,553)
NET OPERATING INCOME
$22,50711
A capitalization rate of 8% is used and is supported by various recent transfers in the
Fridley and surrounding area. Capitalizing $22,507 net operating income estimates a
value via the income approach of $281,337.50, which is rounded to $280,000.
The market approach and income approach would both be considered equally and as
they indicated the same value, $280,000, the subject's hypothetical market value, as
renovated is supported at $280,000.
You had also asked about what dollar amount (approximately) it would take to make the
subject units habitable. It is estimated that the better - condition unit would require about
01/27/2005 10:29 IFAX DFAXCKRASSMONROE.COM
JAN -27 -2005 11:21 FROM:
DFax Q003/003
6516531381 TO:9528855969 P.3
$5,000 in repairs and the remaining units require $25,000 per unit. This amount totals
$80,000 which is the estimate to make the units habitable. Our original appraisal concluded
the value as -is at $180,000. Adding $80,000 (cost to repair) to this totals $260,000. This
is similar to the concluded value as repaired but is slightly lower reflecting additional
amount for entrepreneurial profit (or a general contractor fee) to coordinate a renovation
process of this size.
I hope that this information is helpful to your endeavor
further assistance.
Lo 'S �
Paul Schwartz
Certified General Appraiser
MN #20002323
Please let me know if I may be of
LAKE STATE REALTY SERVICES, INC.
Fie
APPRAISAL OF
A 4-unit apartment building
LOCATED AT:
5955 3rd Street NE
Fridley, MN 55432
FOR:
The City of Fridley
6431 University Ave.
Fridley, MN 55432
BORROWER:
Paul Bollin
AS OF:
LAKE STATE REALTY SERVICES, INC.
January 11, 2005
The City of Fridley
Mr. Paul Bolin
The City of Fridley
6431 University Ave.
Fridley, MN 55432
File Number: 25010
Dear Mr. Bolin:
File No. 25010
In accordance with your request, I have personally inspected and appraised the real property at:
5955 3rd Street NE
Fridley, MN 55432
The purpose of this appraisal is to estimate the market value of the subject property, as improved.
The property rights appraised are the fee simple interest in the site and improvements.
In my opinion, the estimated market value of the property as of December 13, 2004 is:
$180,000
One Hundred Eighty Thousand Dollars
The attached report contains the description, analysis and supportive data for the conclusions,
final estimate of value, descriptive photographs, limiting conditions and appropriate certifications.
Si ce
Paul G. Schwartz
Certified General Appraiser
MN #20002323
Direct: 651-659-0920 Fax: 651 - 653 -1381 E- Mail:lakestate @goldengate.net
Lake State Realty Services, Inc.
APPRAISAL REPORT - RESIDENTIAL INCOME PROPERTY
This Form may be used for appraisal of income producing properties provided the loan requested does not exceed $750,000. 25010
Borrower /Client Paul Bollin File No. 25010
Property Address 5955 3rd Street NE Map Reference 78 -134 (Kings)
City Fridley County Anoka State MN Zip Code 55432 Census Tract 512.01
Legal Description LOTS 25 & 26 BLK 12 HYDE PARK SUBJ TO EASE OF REC
w
Current Sale Price (if applicable) $ N/A Date of Sale N/A Loan Requested $ N/A
Terms of Sale N/A
Z
Lu
m
w
w
a.
Property Rights Appraised N Fee EJ Leasehold (attach completed Lease Analysis FHLMC Form 461)
Lender The City of Fridley Lenders Address 6431 University Ave. Fridley, MN 55432
Instructions to Appraiser.- The purpose of this Appraisal is to estimate the current Market Value of the Subject Property. The Definition of Market Value is
as set forth in Certification And Statement Of Limiting Conditions (FHLMC439)
Note: FHLMC /FNMA do not consider the racial composition of the neighborhood to be a relevant factor and it must not be considered in the appraisal.
Other Information: This is a complete appraisal in summary format. PID number is : 233024220136
p
L)
CO
Appraisal requested from The City of Fridley Date 12/13/04 By: Mr. Paul Bolin
Items 1, 2, 4, 5 & 6 are required. Attach additional items and check box if items are considered appropriate for this appraisal or are requested by Lender.
1. ❑X Descriptive photographs of subject property 7. X❑ Map(s) regional, location, sales & rental comps.
2. X❑ Descriptive photographs of street scene 8. X❑ Plot plan or survey
3. X❑ Photographs of subject, area, sales & rental comps. 9. X❑ Qualifications of Appraiser
4. X❑ Sketch or floor plan of typical units 10. ❑ Lease Analysis FHLMC Form 461 (required if leasehold interest appraised)
5. X❑ Owners Current certified rent roll if existing, or 11. ❑ Summary of reciprocal agreements with other owners for use of parking,
pro forma if proposed or incomplete driveways, recreational facilities, private streets, (required if applicable)
6. X❑ Owner's income and expense statement or 12. ❑
pro forma income and expense statement 13.
p
iDescribe
W
O
Location . . . . . . . . X Urban . . Suburban U Rural
Built -up . . . . . . . . X❑ Over 75% . . . ❑ 25% to 75%. ❑ Under 25%
Present land use: . . . . _% Condominiums 65% 1- Family 20°/6 Apartments
15% Commercial %
Change in present land use . XTNot likely. . . .Likely( *) Taking Place( *)
( *) From To
Property values . . . . . Q Increasing . . Stable . Declining
Housing demand /supply X❑ In balance . , . ❑ Shortage ❑ Oversupply
Predominant occupancy . . . ❑ Owner . . . X❑ Tenant . . .100 % Vacant
Condominium: Price range $ N/A to $ Predominant $
Age yrs. to _ yrs. Predominant yrs.
Single Family: Price range $ 165 to $ 275 Predominant $ 220
Age 15 yrs. to 40 yrs. Predominant 20 yrs.
Typical apartment: Type walk -up No. Stories 1.5
No. Units 3 -8 Age 40 +- yrs. Condition Average
Rent Levels: Increasing X❑ Stable Declining
Estimated neighborhood apartment vacancy rate 6 °h ❑Decreasing 0 Stable ❑ Increasing.
any incompatible land uses and overall property appeal and maintenance level See Attached
OVERALL RATING
Employment Stability . . . . . .
Adequacy of Utilities . . . . . .
Convenience of Schools . . . . .
Police and Fire Protection . . . . .
Recreational Facilities . . . . . .
Property Compatibility . . . . . .
Protection from Detrimental Conditions
General Appearance of Properties ,
Appeal to Market
Good
Avg
Fair
Poor
X
X
X
X
X
X
X
X
X
Distance
Access or Convenience
Public Transportation
Employment Centers
Shopping Facilities
Grammar Schools
I Freeway Access
2 blocks
X
2 blocks
X
3 blocks
X
5 blocks
X
4 blocks
X
Rent Controls X No Yes (comment on page 4 if yes)
Addendum
m
2
O
W
Z
Describe any oversupply of units in area by type and rental See Attached...
Describe any shortage of units in area by type and rental See Attached...
Describe potential far additional units in area considering land availability, zoning, utilities, etc. See Attached...
Is population of relevant market area of insufficient size, diversity and financial ability to support subject property and its amenities? If yes, specify.
Not applicable.
Describe any probable changes in the economic base of neighborhood which would favorably or adversely affect apartment rentals (e.g. employment centers, zoning)
See Attached Addendum.
General comments including either favorable or unfavorable elements not mentioned (e.g. public parks, view, noise, parking congestion) See Attached...
Dimensions 129.5' X 80' Area 10360 Sq.Ft. Sq.Ft. or Acres
Zoning (classification, uses and densities permitted) See Attached Addendum
I aka gfntp Rpalty Sprvirp5_ Inn
25010
X Existing Approx. Year Built 1962 Proposed Under Construction LJ Elevator W Walk -up No. of Stories 2 LJ Row or Townhouse
No. of Bldgs. 1 No. of Units 4 No. of Rooms 15 No. of Baths 4 Parking Spaces: No. 4 Type 4 asphalt surface /poor
Basic Structural System Wood frame Exterior Walls Stucco Roof Covering asphalt shingles
Interior Walls Lathe and plaster Floors Vinyl, Carpet, C.TI (baths & kit) Bath Floor and Walls Ceramic Tile
Insulation Not visible Adequacy assumed Adequacy of Soundproofing adequate
N
Heating X Central Individual Type Hot water boiler Fuel Nat. Gas Condition Original/fair
Z
Air Conditioning ❑Central XO Individual Describe wall units Adequacy and Condition Adequate/Average
W
Elevator(s): Number N/A Automatic Adequacy and Condition
W
_
Security Features Locked main door.
0
Kitchen cabinets, drawers and counter space X Adequate X Inadequate
OVERALL PROPERTY RATING
Good
Av .
Fair
Poor
X
g
❑ RangelOven ❑ FanlHood ❑ Dishwasher ❑ Disposal
General appearance of property . . . . . . .
X
❑ Refrigerator X❑ Washer X❑ Dryer ❑
Quality of construction (materials and finish) . . .
X
O
Z
Hot Water Heater(s) 1 -40 gallon std recovery
Condition of improvements . . . . . . . .
X
0
Plumbing Fixtures inadequate kitchens and baths per unit
Rooms size and layout . . . . . . . . .
X
a
Electrical Service 200 amp main' unknown breaker -fuse
Closets and storage . . . , . . . . . .
X
R
Recreational Facilities None
Plumbing - adequacy and condition . . . . . .
X
U)
Electrical - adequacy and condition . . . . . .
0
Amenities and parking facilities . . . . . . .
X
Effective Age 30 Yrs. Estimated Remaining Economic Life 25 Yrs.
X
Appeal to Market .
modernization, etc.) See Attached Addendum.
COMMENTS: (Special features, functional or physical inadequacies, repairs needed,
LAND SALES (complete ONLY if appropriate for this appraisal) Zoning Area Sales Price Date Price per S . Ft. or per Unit
1. 0$ $ per
2. 0$ $ per
3. V) $ $ per
Comments & Reconciliation See Attached Addendum.
Estimated Land Value $ 72,000
APARTMENT BUILDING(S }ESTIMATED REPRODUCTION COST NEW
=
U
35.00 x 46.00 = 1,610.00 sq. ft. x 2 (Stories) = 3,220.00 sq. ft. x $ 64.72 $ 208,398
0
x = sq. ft. x (Stories) = sq. ft. x $ $
W
CL
x = sq. ft. x (Stories) = sq. ft. x $ $
IL
OTHER IMPROVEMENTS Asphalt concrete . . . . . . . . . . . $ 5,000
t-
N
$
O
$
V
TOTAL ESTIMATED COST NEW OF IMPROVEMENTS . . . . . . . . . $ 213,398
LESS DEPRECIATION 55% physical depreciation . . . . . . . . . . . . 117,369
DEPRECIATED VALUE OF IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . $ 96,029
ADD - ESTIMATED LAND VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72,000
INDICATED VALUE BY THE COST APPROACH (IN FEE SIMPLE) . . . . . . . . . . . . . . . . $ 168,029
IF LEASEHOLD DEDUCT VALUE OF FEE INTEREST (ATTACH CALCULATIONS), , . . . . , . . . . . $
INDICATED VALUE BY THE COST APPROACH LEASEHOLD . . $ 168,029
. . . . . . . . . . . . . .
ITEM COMPARABLE No. 1
COMPARABLE No. 2
COMPARABLE No. 3
Address
7so
The subject units are not rentablellivable
rental comps have not been selected
Proximity to sub'. and the income approach is not processed
Rental survey date
Brief
No. Units No. Vacant Age Yrs
No. Units No. Vacant Age yrs
No. Units No. Vacant Age yrs
H
description
0
of property
im rovements
9
Rm. Count
Size
Monthly Rent
Rm. Count
Size
Monthly Ren
1 Rm. Count
Size
M nthly Rent
Zww
Individual
Sq. Ft.
S . Ft.
S . Ft.
Tot BR b
$
0
Rm
Tot BR b
$
fA
Rm
Tot BR b
$
Rm
W
unit
m
breakdown
Q
a
O
Utilities, furn-
iture and
amenities in-
cluded in rant
Comparison
to subject
including rental
concessions,
if anv
I aka Ctata RAalty RArvicas_ Inc
25010
ITEM
SUBJECT
COMPARABLE No. 1
COMPARABLE No. 2
COMPARABLE No. 3
Address
5955 3rd Street NE
Fridley
5980 2nd St. NE
Fridley
5900 2 1/2 St. NE
Fridley
157 Mississippi Place NE
Fridley
Proximity to subject
N/A -- is subject
2 blocks northwest
2 blocks southerly -
9 blocks northwest
Map code
78 -D4 Kin s
78 -D4 Kin s
78 -D4 Kin s
78 -C4 (Kings)
Lot size
10,360 S .Ft.
10,400 s.f.
13,000
9,960 s.f.
Brief Description of
building
improvements
No. Units: 4 No. Vac.: 0
Year Built: 1962
1.5st walk-up w/ arden level
No. Units: 4 No. Vac.: 0
Year Built: 1962
1.5sty. walk-up w/ arden level
No. Units: 7 No. Vac.: 1
Year Built: 1960
1.5 sty. walk-up w/ arden level
No. Units: 4 No. Vac.: 0
Year Built: 1963
1.5 sty. walk-up w/ arden level
Stucco
Stucco exterior
Stucco /brick exterior
Brick exterior
One 4 -unit building
One 4 -unit building
One 7 -unit building
One 4 -unit building
Quality
Average
Average
Average
Average
Condition
Poor
Avera e/ ood - $30,000 /unit
Average-fair - $10,000 /unit
Avera e/Aver a good - $25,000
Recreational facilities
None
None
None
None
Parkinq
No garage s
No garages
No garages
Surface /2 qarages +$1,000
Tenant appeal
Average
Average
Avera a
Average
GBA
3,220 s.f.
3,128 s.f.
2,400 s.f.
3,456 s.f.
Unit Mix
75% 2br; 25% 1br
100% 2br
100% 1br
100% 2br
Location
Averacle
Avera a
Avera a
Avera e
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
Tot.
BR
b
Tot.
I BR
b
Tot.
I BR
b
Tot.
BR
b
3
4
2
1
4
4
2
1
7
3
1
1
4
4
2
1
u
Unit
1
3
1
1
p
D!
a
breakdown
a
Util. paid by owner
All but ind. unit elec.
All but ind. unit elec.
All but ind. unit elec.
All but ind. unit elec.
w
Data source
Inspection/Owner
Assessor /ADN
Assessor /ADN
Assessor /ADN
w
Price
$ N/A X Unf. F
$ 310,000 X Unf. F
$ 350,000 X Unf. F
$ 275,000 FXJ Unf. 17F
g
Sale-Listing-Offer
Brokered sale
Brokered sale
Brokered sale
Date of sale
N/A
08/03 -- closed
09/03 -- closed
11/03 -- closed
No sale in the past several
Conventional financing
Conventional financing
Conventional financing
Terms
years
all personal property
all personal property
all personal property
(Including conditions
no unusual conditions
no unusual conditions
no unusual conditions
of sale and
Unit Mix = -$1,000
Unit Mix $3,000
Unit Mix= -$1,000
financing terms )
AdL Unit Value = $46,500
Ad'. Unit Value = $43,000
1 Ad'. Unit Value = $43,750
Com lete as many of the followinq items as possible using data effective at time of sale
Gross Annual Income
$ is 0
$ :$
$ :$
$ is
Gross Ann. Inc. Mult.1
0.00
0.00: 0.00
0.00; 0.00
0.00 � 0.00
Net Annual Income
$ :$ 0
$ :$
$ :$
$ :$
Expense Percentage 2
%; 0.00%
%; %
%; %
%' %
Overall Cap. Rate 3
%: 0.00%
0.00 %: 0.00%
0.00 %: 0:00 %
0.00 %: 0.00%
Price per unit
$ 0.001s
77,500.00
$ 50,000.00
$ 68,750.00
Price per room
$ 0.00
$ 19 375.00
$ 16 666.67
$ 17 187.50
Price gross bldg. area
$ /s q. ft. bldg. area
I $ 43.66 Is q. ft. bldg. area
Is 50.05 /s q. ft. bldg. area
$ 56.85 /s q. ft. bldg. area
(1) Sale Price , Gross Annual Income (2) Total Annual Expenses : Total Gross Annual Income (3) Net Annual Income : Price
RECONCILIATION: See Attached...
INDICATED VALUE BY MARKE 180,000
tzi
OFurnishings
a
INCOME
Total Monthly Apartment Forecasted Rents . . . . . . . $ N/A
Other Monthly Income (Itemize) not livable or
rentable in current condition $ not livable
Total Gross Monthly Forecasted Income. . . . . . . . $ 0
Total Gross Annual Forecasted Income . . . . . . . , $ 0
Less Forecasted Vacancy and Collection Loss ( 0.00%) , $( 0)
Effective Gross Annual Income . . . . . . . . . . $ 0
Less Forecasted Expenses & Replacement Reserves . . . . $( 0)
Net Annual Income from Total Property . . . . . . . . $ 0
Less Return on and Recapture of Depreciated Value of
($ @ %) $( )
Net Annual Income from Real Property . . . . . . . . $ 0
EXPENSES ACTUAL FORECASTED
Real Estate Taxes* . . . . . , $ N/A $ N/A
Other taxes or licenses . . . .
Insurance . . . . . . .
Unsubordinated ground rent . .
Fuel . . . . . . . . . .
Gas . . . . . . . . . .
Electricity . . . . . , . .
Water and sewer . . . . . .
Trash removal . . . . . . .
Pest control . . . . . . .
Maintenance and repairs . . . .
Interior and exterior decorating . .
Lake State Realty Services, Inc. 25010
General Comments (including comments on any items rated poor or fair) A detailed description of the current state of the improvements is
included in the improvement description
CONDITIONS AND REQUIREMENTS OF APPRAISAL (include required repairs, replacements, painting, termite inspections, etc.): This report is a
"complete appraisal" utilizing a "summary report" format The subject has been appraised as -is in fee simple estate free and clear of
all liens and encumbrances All mechanical systems are assumed to be in proper working order unless otherwise noted. A detailed_
description of the condition of the subject improvements is indicated in the improvement description.
RECONCILIATION AND VALUE CONCLUSION
Indicated Value by the Cost Approach , , . , . $ 168,029
Indicated Value by the Market Approach , , , . $ 180,000
Indicated Value by the Income Approach . . . . $ N/A
FINAL RECONCILIATION: Both the cost and market approach indicate complimentary value indications. The income approach was
not processed due to the current poor condition of the subject improvements that render the individual units not livable and
therefore not rentable As there is abundant data to process the market approach, and as this approach is the most likely
approach utilized to determine value by the market for this type of real estate in its current condition, more emphasis is placed on
the value finding from this approach A concluded value of $180,000, rounded is supported by both the market and cost
approaches to value
I certify that to the best of my knowledge and belief, the statements made in this report are true and I have not knowingly withheld any significant information;
that I have personally inspected subject property, both inside and outside, and have made an exterior inspection of all comparable sales listed herein; that I have
no interest, present or contemplated, in subject property or the participants in the sale; that neither the employment nor compensation to make said appraisal is
contingent upon any value estimate; and, that all contingent and limiting conditions are stated herein. g) Certification and Statement of Limiting Conditions
(FHLMC Form 439) applies ( ❑ On file with client ❑ Attached ).
As a result of my investigation and analysis, my estimate of Market Value of the subject property as of December 13, 2004 is .......
Loan Recommended
Subject to:
Date 01/10/2005 Appraiser
Date
Paul G. Si
20002323
If applicable, complete the following
Appraiser
Date ❑ Supervising or ❑ Review Appraiser
Did 0 Did Not Physically Inspect Property
MN 8/05
FOR LENDER'S USE ONLY (completion optional)
$ @ %. Term yrs. Principal & Interest $ /mo. $ /annually
Borrower's Cost or Purchase Price $ Appraised Value $ Loan to Appraised Value %
1 n1, Q# +n D—If Ccry name InC
25010
ITEM COMPARABLE No. 4
COMPARABLE No. 5
COMPARABLE No. 6
Address
Proximity to sub'.
Rental survey date 7/04
Brief
No. Units No. Vacant Age yrs
No. Units No. Vacant Age yrs
No. Units No. Vacant A e yrs
description
p
of property
Q
Z
cc
im rovements
Individual
unit
Rm. Count Size Monthly Rent
Rm. Count Size Month) Rent
Rm. Count Size Month) Rent
Tot BR b S . Ft. $ Rm
Tot BR b
Sq. Ft.
$
Rm
Tot BR b
S . Ft.
$
dJ
Rm
_J
Q
breakdown
Q
a
v
Utilities, furn-
-.I
iture and
F
z
amenities in-
cludAd in rent
wComparison
uJ
to subject
a.
IL
including rental
D
w
concessions,
if any
ITEM
SUBJECT
COMPARABLE No. 4
COMPARABLE No. 5
COMPARABLE No. 6
Address
5955 3rd Street NE 15761
Fridley
2nd Street NE
Fridley
Proximity to subject
N/A -- is subject
1.5 blocks souther)
Map code
78 -D4 (Kings)
78 -D4 (Kings)
Lot size
10,360 Sq. t.
7,800 s.f.
Brief Description of
building
improvements
No. Units: 4 No. Vac.: 0
Year Built: 1962
1.5st walk-up w/ garden level
No. Units: 3 No. Vac.: 0
Year Built: 1962
1. 5stV walk-up w/ garden level
No. Units: No. Vac.: _
Year Built:
No. Units: No. Vac.: _
Year Built:
Stucco
Stucco /wood exterior
One 4 -unit building_
One 3 -unit building
Quality
Average
Average
Condition
Poor
Avera e/Avera a ood - $25,000
Recreational facilities
None
None
Parking
No garages
No garages
Tenant appeal
Average
Average
GBA
3,220 s.f.
1,821 s.f.
Unit Mix
75% 2br; 25% 1 br
33% 1 br; 33% 2br; 33% eff
c30i
Location
Average
Average
p
W
CL
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
No. of
Units
UNIT ROOM COUNT
Tot.
BR
b
Tot.
BR
I b
Tot.
BR
b
Tot.
BR
b
a
W
Unit
breakdown
3
4
2
1
1
2
0
1
1
3
1
1
1
3
1
1
1
4
2
1
Q
Q
Z
Util. paid by owner
Data source
All but ind. unit elec.
Ins ection /Owner
All but ind. unit elec.
Assessor /ADN
Lu
Price
$ N/A X Unf. F
$ 204,900 X Unf. F
$ Unf. F
$ Unf. F
LU
Sale- Listin -Offer
Closed sale
CL
Date of sale
N/A
05/03 -- open to market
ai
No sale in the past several
Conventional financing
Terms
years
all personal property
(Including conditions
No unusual conditions
of sale and
Unit Mix $3,000
financing terms )
Ad'. Unit Value = $46,300
Complete as many of the following items as possible using data effective at time of sale
Gross Annual Income I 1 : $ 0 Is : $ Is ; $ Is $
ENDUM
Borrower: Paul Bollin File No.: 25010
Property Address: 5955 3rd Street NE Case No.:
City Fridley State: MN Zip: 55432
Lender: The City of Fridley
Other Information
This is a complete appraisal in summary format. PID number is : 332922440078
Incompatible Land Uses, Property Appeal
The subject is located in an area of congruent land uses. The subject property has good appeal due to its location and
positive and complimentary surrounding land uses. Stevenson Elementary school is five blocks easterly. Ample
commercial, including restaurants, shops, and services is proximate.
Oversupply in Unit Type(s)
There appears to be no over - supply of rental units in the area, and vacancy rates are stable and under at about 6 percent,
similar to other portions of the Twin Cities Metropolitan Area. Due to low interest rates and ample entry-level housing in the
area, it is possible that some renters may become home owners, therefore increasing the vacancy rate likely modestly.
Currently the statistics do not indicate an oversupply of units of any size or type, with many area buildings at or near full
occupancy.
Undersupply in Unit Type(s)
There appears to be no shortage of any type or size of units in the area, although many buildings are at or near full
occupancy. As there are many other submarkets in the area, any shortage of units is typically absorbed by other submarkets.
Potential for Additional Units
The subject is located in a fully - developed first -ring suburban area where typically the addition of more rental units would only
be as a result of redevelopment. Redevelopment is costly and as such, typically only government units are involved in the
projects. There are no pending projects which are likely to take any of the subject's market share.
Probable Changes in Economic Base
The diverse economic base of the Twin Cities softens any negative impact on apartments or the residential real estate
market of the subject's area. Although the national economy is under - performing, and unemployment is high (although
decreasing), the state's economy and unemployment rate is about average due to the diverse economic base of the Twin
Cities Metropolitan area -- the largest economic contributor to the state's economy. No changes in the subject's zoning are
forthcoming.
General Neighborhood Comments
The subject is located in southwestern Fridley, about 1/2 mile west of the Mississippi River, four blocks north of 1 -694, and
one block west of University Ave. NE (Highway 47), a main north -south thoroughfare. The subject is located in a
neighborhood known as Hyde Park, which has seen some redevelopment undertaken by the City in recent years. A portion
of this neighborhood still is in the state of redevelopment or planned redevelopment. Along University Avenue NE and 57th
Ave. NE are various commercial establishments, including sit -down and fastfood restaurants, box store development, and
other similar uses. The east side of Highway 47 consists of newer townhomes which have been recently built as a result of
redeveloped land by the City of Fridley. The subject is located in a residential pocket of similar age, style, and price range of
single- and multi - family housing. The confines of the neighborhood generally are: 61st Ave. NE to the north; University Ave.
NE to the east; 1 -694 to the south; and the Mississippi River to the west. Stevenson elementary is 5 blocks to the west from
the subject.
Zoning classification and description
We obtained this zoning data from the City of Fridley. The subject has a legal conforming zoning of S -1, Hyde Park
Neighborhood District Regulations. This zoning classification is governed by the city of Fridley. The subject improvements
are deemed a legal and conforming use.
Site Comments
The subject is a typical apartment site in terms of size, land -to- building ratio (site "density "), topography, location, appeal,
and landscaping. The site is serviced with all essential urban utilities. There are no areas of poor drainage noted and there
are no visible signs of encroachments. A visual inspection of the site did not indicate any signs of negative easements, and
none were indicated from the owner or client. Title information, however, was not available and therefore not viewed. The
highest and best use of the subject as improved, is as currently utilized, one 4 -unit apartment building. There are no other
alternative uses that would generate a higher return to the land than S -1 Hyde Park Neighborhood District Regulations, its
underlying zoning.
Description of Improvements Comments
The subject property consists of one 4 -unit apartment building. Three of the four apartments have the exact configuration
which are two bedrooms each. The other garden level apartment is a one bedroom unit as the second bedroom area is used
as a mechanic room /laundry room. The subject improvements consist of one stucco, 1 -1/2 story walk -up apartment building
which was built in 1962. The total gross building square footage is 3,220 s.f. According to the realtor (Jim Cormandy at
Keller Williams) representing the owners, the building has not been rented for several years and from time to time a friend of
the owners will stay in unit 2 without compensation. No rental history exists at the property.
ADDENDU
Borrower: Paul Bollin File No.: 25010
Property Address: 5955 3rd Street NE Case No.:
City Fridley State: MN Zip: 55432
Lender: The City of Fridley
deteriorating which will require replacement. There is one laundry room with 1 washer and 1 dryer (owned) which also serves
as a mechanic room that holds a 40- gallon standard hot -water heater and a furnace which is covered by exposed insulation
with a black substance on the exterior of the furnace. There are no storage lockers on site.
Each unit is separately metered for electric and all electrical services are fuses. There is one individual - controlled heat -zone.
The stucco exterior has some severe cracking both vertically and horizontally which either will require repair or replacement
as if left untreated may allow moisture infiltration into the building envelope. Newer vinyl windows do exist and age is
uncertain however the appraiser noticed many edges of the vinyl windows were separating and showing gaps, and may
possibly have been installed improperly or the building has recently settled. Additionally, two of the downspouts are missing.
Individual unit interiors including walls, ceilings, doors, floors, kitchens and bathrooms are predominately in poor condition
with the exception of unit 2 on the garden level. Unit 2 is in close to average condition which is the only unit that is habitable.
We need to note areas of severe peeling paint present in this unit's bath ceiling, and the living room ceiling shows signs of
past damage and incomplete repair as noted by the different ceiling textures. The smoke detector was removed from the wall
of this unit.
The other three units have much damage and show a lack of maintenance and incomplete destructive work as noted from
the following items:
Unit 1 is a one - bedroom unit at garden level. The bathroom has all of the wall board missing including all the plumbing
fixtures are missing or incomplete. Exposed insulation is present in the walls which shows signs of moisture damage. The
entire bathroom was full of debris which will require removal. The bedroom has missing trim and missing interior doors along
with 1/2 painted and 1/2 wallpapered walls which are severely peeling. The kitchen is missing all faces of the cabinetry and
has incomplete counter top including all appliances. The walls and floors are damaged along with all fixtures. Both electrical
and plumbing are non existent. Floor covering is missing from all of the living room and shows exposed concrete which old
carpet padding was glued however not fully removed. The light fixtures are incomplete and all smoke detectors are missing.
All walls require repair and re- coating.
Unit 3, upper level is a two - bedroom unit which also requires severe work. The bathroom has exposed insulation with
evidence of water damage in the interior of the wall. A black substance is present in the insulation. The tub, sink and toilet is
present however will require removal and replacement due to deteriorating ceramic tile wainscotting at the tub walls and
floors. The existing toilet, tub and sink are damaged. The bedrooms of unit 3 are missing trim, have incomplete baseboard
heaters and have black streaks present on the ceilings near the baseboards heaters. Doors are missing from the bedrooms
as well as the carpeting. The carpeting in the hallways are very soiled and are in need of replacement. The kitchen is in need
of all new cabinets as the current ones are incomplete missing doors and drawers. Additionally, plumbing fixtures are
missing. All appliances are also missing or incomplete. The flooring of the kitchen and dining room are also missing showing
exposed wood underlayment. The light fixtures are also incomplete or are missing. The living room is missing floor covering
and has exposed wood underlayment, peeling paint at the ceiling, incomplete trim and a damaged entry door and jamb. All
walls require repair, re- coating, and re- painting. The smoke detectors are missing from this unit.
Unit 4 a two- bedroom unit on the upper level has a bathroom with exposed electrical wires in the fan along with damaged
ceramic tile floor at the tub which may require replacement. The bedrooms have missing floor covering, exposed wood
underlayment (which appears to be damaged), missing and exposed electrical wires in place of the fixtures, and missing trim.
Baseboard heaters are incomplete and require repair due to their current condition. The hallway in unit 4 is partially carpeted
and has partially exposed underlayment. The kitchen is missing some facing on the cabinets and re -use of the the existing
cabinetry due to their current fair condition is questionable. No range exists and the gas pipe is not properly sealed. The
countertop is severely damaged and the floor covering is non existent as exposed underlayment is the flooring. The living
room is also missing any attached floor covering and missing complete baseboard heaters. The smoke detectors are missing
from this unit.
The building has a 200 ampere main and all electrical panels are fuses of unknown amperage. There are 5 services (one
per unit and one for the common area of the building). The electrical capacity appears to be adequate and the condition
appears average -fair due to incompleteness of the apartment fixtures and switches. The cooking appliances are gas.
Land Sales Comments and Reconciliation
The subject is located in a built -up area where typically development only occurs a s a result of redevelopment, which is
costly. No applicable arms - length land sales could be located. The land is assessed for $65,600, and typically the assessed
value for land in built -up areas of Anoka County is lower than market. The land value is estimated at $7.00, with 10,324 s.f.,
totals $72,268, say $72,000.
The replacement cost new was obtained from the Marshall Valuation Service, Section 12, page 14, Average Class D
(Masonry Veneer) dated 8/2004, which indicated the base cost per square foot at $52.62, with the gross multiplier at 1.23 to
equate to $64.72/s.f.
Physical depreciation is based on the age /life method, with the subject having an economic life span of 55 years, and a
current effective age of about 30 years due to significant deferred maintenance and needed repairs.
i
ADDENDUM
Borrower: Paul Bollin File No.: 25010
Property Address: 5955 3rd Street NE Case No.:
City: Fridley State: MN Zip: 55432
Lender: The City of Fridley
The subject has 1 one - bedroom unit and 3 two- bedroom units. The unit mix vary per each comparable, with two
comparables having all two- bedroom units and one having all one - bedroom units. Comparable 4 has a mix of 1
one - bedroom unit, 1 two- bedroom unit, and 1 efficiency unit. Unit mix adjustments of - $1,000 to +$3,000 are made. The
more bedrooms in a unit, the more rent that can be charged. This premium of rent, as capitalized, indicates the approximate
adjustments used.
After adjustments, the comparables range from $43,000 to $46,500 per unit. The average of the adjusted data is
$44,887.50, with a similar median of $45,025. The tight adjusted value range, and similar average and median support well
an estimated value for the subject of $45,000 (rounded) per unit. As the subject has 4 units, the estimated value utilizing the
"per unit' unit of comparison is $180,000.
ADDITIONAL EMINENT DOMAIN CERTIFICATION
I certify that, to the best of my knowledge and belief...
That on December, 13th, 2004, 1 have personally inspected the property. The property owners were
afforded an opportunity to accompany us on the appraisal inspection, and Mr. Jim Cormandy, the
owners realtor representative, did accompany me.
- The statements of fact contained in this report are true and correct, subject to the Assumptions and
Limiting Conditions.
That I understand that this appraisal us to be used in connection with the acquisition of the property for a
redevelopment project by the City of Fridley, and that this appraisal has been made in conformity with
the appropriate State laws, regulations, policies and procedures applicable to an appraisal of right of way
for such purposes, and that to the best of my knowledge no portion of the value assigned to such
property consists of items which are non compensable under established State law.
That in making this appraisal, I have disregarded any increase or decrease in the before value caused by
the project for which the property is being acquired.
My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
I have no present or prospective interest in the property that is the subject of this report, and I have no
personal interest or bias with respect to the parties involved.
The appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the
approval of a loan, nor upon the occurrence of a subsequent event.
My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the requirements of the Code of Professional Practice of the Appraisal Institute.
- I will not reveal any of the findings contained in this report to anyone, unless by due process of law, we
need to testify publicly to any findings contained herein.
ADDEN
Borrower: Paul Bollin File No.: 25010
Property Address: 5955 3rd Street NE Case No.:
City Fridley State: MN Zip: 55432
Lender: The City of Fridley
Paul Sc iwartz
Minnesota Certified General Appraiser #20002323
General Condition and Reconciliation Comments
AGENDA ITEM
ri HRA MEETING OF JANUARY 612005
QTY OF
FRIDLEY
Date: January 28, 20051-i
To: William Burns, HRA Executive Director 4A l
From: Scott Hickok, Community Development Director
Paul Bolin, Asst. Executive HRA Director
Subject: 2005 CDBG Application
M -05 -5
INTRODUCTION
As you may recall from past years, the Community Development Block Grant (CDBG)
program makes Federal money, through HUD, available to Counties for redistribution
among cities, townships, and service organizations.
Applications for 2005 funds were due to Anoka County on January 12th, 2005. Based
on information received from Anoka County, which identified their funding priorities,
staff submitted an application seeking an additional $167,600 to cover the purchase
price, relocation expenses, and demolition costs for the remaining single - family property
in the Gateway West project area.
Staff will attend a meeting with Anoka County's project selection group on February
15th. The purpose of the meeting is to allow the selection group to question applicants
before recommending projects to the Anoka County board. After this meeting staff will
have an indication as to the potential for funding the City's 2005 CDBG request.
Fridley HRA
Housing Program Summary
Cover Page
February 3, 2005 HRA Meeting
Report Description
Loan Application Summary Loan application activity (e.g. mailed
out, in process, closed loans) for
January 2005 and year -to -date.
Loan Origination Report
Loan Servicing Report
Remodeling Advisor &
Operation Insulation
Loan originations for January 2005 and
year -to -date.
Loan servicing by Community
Reinvestment Fund (CRF) for the month
of December 2004. Note, that the loan
servicing reports are usually available
10 days after month end.
Shows the number of field appointments
scheduled and completed the Operation
Insulation and Remodeling Advisor
Services administered by Center for
Energy and Environment.
HA-- Paul's Documents\HRA\Loan Program Reports\Loan Servicing Reports\2004\Housing Program Cover Page (February2005).doc
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Fridley HRA
Loan Origination Report
January 2005
Loan / Grant Originations
- 0%
Kitchen remodel
- 0%
General plumbing
- 0%
Heating system
- 0%
This
Previous
Basement finish
- 0%
Insulation
- 0%
Month
Months
Misc. interior projects
YTD
Loans Issued
1
-
Roofing
1
Grants Issued
1 100%
-
-
Driveway /sidewalk
- 0%
Landscaping
Total
1
-
1
Funding Sources
This
Previous
Month
Months
YTD
Fridley HRA
$
16,600
$ -
$
16,600
MHFA
$
-
$
$
-
Met Council
$
-
$
$
-
CDBG /HOME
$
-
$ -
$
-
CEE
$
-
$
$
-
Other
$
-
$
$
-
Total $
16,600
$ -
$
16,600
Types of Units Improved
This
Previous
Month
Months
YTD
Single Family
1
-
1
Duplex
-
Tri-Plex
-
4 to 9 Units
-
-
10 to 20 Units
-
-
-
20+ Units
-
-
Total
1
-
1
Types of Improvements
Interior # of Projects % of Total
Bathroom remodel
- 0%
Kitchen remodel
- 0%
General plumbing
- 0%
Heating system
- 0%
Electrical system
- 0%
Basement finish
- 0%
Insulation
- 0%
Room addition
- 0%
Misc. interior projects
- 0%
Exterior
Siding /Fascia /Soffit
- 0%
Roofing
- 0%
Windows /Doors
1 100%
Garage
- 0%
Driveway /sidewalk
- 0%
Landscaping
- 0%
Misc. exterior projects
- 0%
Monthly Servicing Report
Principal Paid
Interest Paid
Total Payments Rec'd
Ending Principal Balance
Loans in Portfolio
Monthly Servicing Fees
NET FUNDS RECEIVED
Delinquency Report
Time Frame
1 to 30 days Late
31 to 60 Days Late
Over 60 Days Late
Fridley HRA
Loan Servicing Report
December 2004 *
Pool
Pool
Pool
Deferred
Installment
Installment
Loans
Loans
Loans
-
1,647.72
4,145.85
-
724.81
2,373.90
-
2,372.53
6,519.75
31,500.66
184,712.60
615,933.49
7
17
51
Total
" December Information Received January 7, 2005
Pool 3
Deferred
Loans Total
5,793.57
3,098.71
- 8,892.28
13,355.92 845,502.67
3 78
$ 435.00
$ 8,457.28
Delinquent
Delinquent
Delinquent
Loans
Payments
Principal
4.00 $
2,549.24
$
17,113.34
4.00 $
2,549.24
$
17,113.34
% of
Delinquent
Principal
0.00%
0.00%
0.95%
0.95%
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FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY
February 3, 2005
1. Islamic Center property.
After much debate and hours of testimony from residents and Islamic Center officials, the City Council
voted 3 -2 at their January 3rd meeting to approve the Special Use Permit to allow the Al Amal School to
plan for and begin construction on their two- phased school expansion.
2. Tiro Industries
The City received notice on January 17d', that Tiro Industries, located at 5601 East River Road will be
closing and permanently laying off 295 regular employees and 160 temporary workers. Tiro Industries
(www.tiroinc.coin) is a developer and manufacturer of health and beauty products as well as personal
care, specialty cleaning and other novelty products. Tiro provides product development, compounding,
filling and packaging of hair and skin care, cosmetics and selected cleaning products to several major
consumer products companies. The company differentiates itself from competitors by employing over 30
chemists, engineers, microbiologists and technicians who engage in analytical testing to support product
development and creation of products to meet customer specifications. Tiro works behind the scenes as a
contract manufacturer, helping other firms develop, manufacture, package, warehouse and ship a full
range of hair- and skin -care products, such as shampoo, mousse and styling gel.
Tiro filed for Chapter 11 Bankruptcy protection in October 2004, and named Jay AuWerter (a corporate
turnaround specialist) the interim CEO. Tiro was recently sold to Outsourcing Services Group, LLC, a
company that was a competitor to Tiro. Outsourcing Services Group does not intend to continue
operations at the 475,000 square foot manufacturing facility, located on 25 acres near I694 and East River
Road. With annual sales greater than $300 million, OSG is a full service custom manufacturer, located in
New Jersey, with plants similar to Tiro's Fridley plant, located across the US, Canada, & Mexico.
Staff has talked informally about a role for the HRA in retaining and /or attracting high paying
manufacturing jobs to the City. Staff is working on developing the questions for this years Council
Commission survey and plan to include a question regarding the City /HRA role in preserving our
industrial job base.
3. Hardee's Condemnation
The re -trial of the condemnation case, originally scheduled for January 24th, has been rescheduled for
March 14th. The reason for the rescheduling is due to the fact that Oreel's attorney, Barry Sullivan, has
requested additional time to review the City's modified appraisal.
It was brought to Attorney Knaak's attention that Mr. Oreel had contacted the Nath Companies (owner
of Burger King & employer of the City's witness, Rick Bentz) and suggested to Mr. Nath that Mr. Bentz,
"call in sick". A copy of attorney Knaak's letter addressing this issue is attached.
As per Chairman Commers request, a copy of the "Order Denying JNOV and Granting New Trial" has
been attached.
4. John Demello Senior Condominium Project
In exchange for dismissing a potential lawsuit, the Council has agreed to entertain a new (scaled down)
plan from John Demello to construct a building containing 71 senior condominiums and 9,000 sq. ft. of
retail on the SE quadrant of Mississippi and Old Central.
If there are any items you would like covered in upcoming issues of the Non - Agenda Update please send
me an e-mail. bolinp @ci.fridley.mn.us
IT
January 17, 2005
VIA FACSIMILE (763) 571 -1287
AND CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mayor Scott Lund
City of Fridley
Fridley Municipal Center
6431 University Avenue NE
Fridley, Minnesota 55432
JAN 2 () RECD I
Re: Tiro Industries LLC Fridley, Minnesota and Minneapolis, Minnesota Plant Closures
Dear Mayor Lund:
As set forth in the enclosed notices to affected employees, Tiro Industries LLC and its
affiliated debtor companies (collectively, "Tiro ") entered into an agreement last Friday for the
sale of its assets to Outsourcing Service Group, LLC (the "Buyer "). The Buyer has informed
Tiro that it does not intend to conduct further operations in Minnesota. Tiro has a plant located
at 5601 East River Road, Fridley, Minnesota and a warehouse at 2621 28th Avenue South in
Minneapolis, Minnesota. As a result, Tiro will have to permanently close its East River Road and
28th Avenue facilities and will permanently lay off all employees at those facilities.
Accordingly, this notice is provided pursuant to the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. § 2102(a). Tiro Industries LLC is providing as much notice as is
reasonably practicable.
Since filing it bankruptcy cases, Tiro has been trying to identify potential purchasers for
Tiro's assets. The sale process generated little interest, but Tiro was able to identify one
potential purchaser - the Buyer. Although Tiro attempted to sell its business as a going concern,
the Buyer-advised Tiro that it is not interested in operating Tiro's business.
As required by the bankruptcy process, Tiro will submit the proposed sale to the
Bankruptcy Court for approval. The approval process allows other potential bidders to make a
higher and better offer for Tiro's assets. Although Tiro is unaware of any potential new bidders,
if one were to appear that also wanted to operate Tiro's business as a going concern, then the
closure of the plant and the permanent layoffs could be avoided. If no such alternative bidder
Page 1 of 2
The permanent plant layoffs for most employees will likely begin in early March 2005.
Tiro will need at least some employees to work beyond early March to support the transition of
production and movement of equipment and inventory, among other tasks. The company will
know more in the next few weeks how many and which individual employees will be needed and
will discuss the specific termination date with those individual employees once specific needs
are determined. When all layoffs are complete, those layoffs will be a permanent closure of the
affected classifications. The closing is expected to result in the permanent layoff of
approximately 295 employees at the Fridley facility and 5 employees at the Minneapolis facility.
Additionally, for the purposes of the Dislocated Worker Program, approximately 160 temporary
workers (not employees of Tiro) at the Fridley facility will no longer be on assignment at this
facility at some point in the future.
The attached list reflects the job classifications affected and the number of employees
affected in each job classification.
Should you have questions or require further information, please contact Donna
Hazelton, Director of Human Resources, at 763 -572 -2786.
Very truly yours,
Tiro Industries LLC
Jay P. AuWerter, Jr.
Interim CEO
Enclosure: List of affected employees' job titles and the number of employees in each classification.
;r
Page 2 of 2
TIRO INDUSTRIES, LLC
WARN NOTICE CLASSIFCATIONS
Class #
Class Description
1
Executives
2
Facilities Related
3
Financial Analysis /Accounting
4
Forklift - Related
5
General Assembly /Laborers
6
Human Resources
7
IT Related
8
Machine Operators
9
Managers /Directors
10
Mechanics
11
Office Clerical
12
Production Line Leaders
13
Production /Logistics Related
14
Purchasing
15
Quality Related
16
Sales
17
Technical Related
18
Truck Driver
Totals
# of Ees
3
9
6
47
33
4
2
28
11
27
21
28
32
7
17
4
23
1
303
1/18/2005 CONFIDENTIAL Page 1
KNAAK & KANTRUD, P.A.
'Attorneys at Law -
Frederic W. Knaak* 3500 Willow Lake Blvd., Suite 800 Of Counsel
H. Alan Kantrud* * Vadnais Heights, MN 55110 Donald W. Kohler
Telephone: (651) 490 -9078 Joseph B. Marshall
*Also Licensed in Facsimile: (651) 490 -1580 Kathy Krider Hart
Wisconsin & Colorado. -
* *Rule 114 "Qualified ADR Civil Neutral Thomas M. Dailey, P.A.
January 25, 2005
Mr Barry A, Sullivan
Attorney at Law
21;40 Fourth Avenue North
Anoka MN 55.303
RE: Fridley v.. Oreel -
Dear, Mr. Sullivan:
Thank you for providing me a copy of the purchase agreement in which your client retained his
right to the proceeds in the condemnation action in "which we are currently engaged._
Of course, for.the time being I choose to assume that providing "all reasonable assistance" would
not include perjury.
Mr. Oreel's apparent suggestion that Mr:. Bentz. "call in sick ",would be more likely interpreted
to be a violation of the witness tampering statute than a request under the terms of the purchase
agreement to "provide assistance Who 'knows? Perhaps it's both:
You are certainly welcome to" question Mr. Bentz regarding his knowledge of the purchase
agreement; since he was directly involved in representing Nath Companies in the purchase.
Similarly, you can expect that I will be asking your client about the nature of his contacts with
Mr. Nath immediately before the time that Mr. Bentz could have been expected to testify.
You are more than welcome to take Mr. Bentz'. deposition. He is not a party, however, and I
would note that in securing his appearance for trial, the City has already advanced a substantial
sum of money for his: statutory witness fee and travel expense. I do not believe you would find
that he would be a hostile, witness if you were to make arrangements to depose him in Florida or
here: He has been subpoenaed to appear of the trial. on March 15th in Anoka.
I will be in the office on Friday and I will try to contact you at that time to discuss these issues.
Si rel .
- f
Frederic W. Knaak
Cc: ,Bill Burns,,
Scott Hickok.. �/`
JAN -2U -2005 THU 04:02 Pill KNAAK AND KANTRUD PA FAX N0. 6514909078
Knank and Kantrud, P.A.
Attorneys at Law
3500 Willow Lake Blvd., Suite 800
St. Paul, MN 55110
Tclophone (651) 490 -9078
Fax (651) 490 -1550
FACSIMILE. COVER S11L'CT
C onl7dentiality Notice: The documents accompanying this fax contain
confidential information which is Iegally privileged. The information is
intended only for th.c use of the below - described recipient.. If you are not
tlial person, tllen you are hereby notified that any disclosure, copying,
distribution, or the taking of any action in reliance on the contents of 1.11is
telecopied information except in its direct delivery to the intended recipient
nanied below is strictly prohibited. If you havo received this fax in error,
please notify us immediately by telephone or arrange for return of the
original document(s) to us. Thank you.
TO: City of 1 ridley
ATTN: Scott Ilickok
],'ROM: 1 "ritz Kit<<aldGreg
I)ATP.,: January 20, 2005
RY": Orcel
N1JMBF'12 01" PAGES INCI.UI)ING TIJIS PAGI3: 5
l''AX NlJMt313R: 763- 571 -1287 PHONE NUMBER:
MESSAGI,: "Phis is what I received from the Court. The only copy of a
subhocna is from Bernices file. The one from Pat's file is shown as being
filed, however, Court Admin. told we that it isn't in the file, meaning it was
MiSP111ced -Ind lost amongrst the stacks. They sent nic a copy of tilt; log
-Bowing it was receive<J. 1.Iopcf illy this works. Let me know if I can be of
nily otlicr help. Greg
P. 01
JAN -20 -2005 THU 04:03 PM KNAAK AND KANTRUD PA FAX N0. 6514909078 P. 02
''r• , rAi
STATE OF MINNESOTA
COl1N'fY OF ANOKA
U6➢UTY
In the Matter of Condemnation by the
City of Fridloy,
vs.
Fred Orcel,
Petitioner /Appellant,
Res ponriont /Appollee,
DISTRICT COURT
TENTH JUDICIAL DISTRICT
Q j u N 01.2004
ORDER DENYING JNOV
AND GRANTING
NEW TRIAL
Court File No.: C4 -98 -7564
The above:- coptionod matter came on for jury trial before the Honorable Daniel
M. Karnmoyer, Judge of District Court, at the Anoka County Courthouser Anoka,
Minnesota, on December 1 to December 5, 2003. The jury returned a verdict
awarding Respondent damages in the arnount of $40,600.00 for the direct taking
and $0 damages for soveranco. On Fohruary 18, 2004, the Court issued an Order
Confirming Jury Verdict, Order for Judgment. Thereafter, Respondent Oreel moved
-the Court' for judgmant_ notwithstanding the verdict (JNOV) and /or new trial.
Based upon all the files, records, minutes, and proceedings herein, and upon
the laws of the State of Minnesota, the Court hereby orders as follows:
1. Respondent's motion for judgment notwithstanding the verdict (JNOV)
is DENIED.
2. Respondent`:; motion for a new trial pursuant to Rule 59 of tlio
Minnesota Rules or Civil Procodure on the issue of damages is GRANTED. The Court
It
-1-
JAN -20 -2005 THU 04 :03 PM KNAAK AND KANTRUD PA FAX N0. 6514909078 P. 03
Administrator shall schedule the matter for jury trial at the next available date in tho
Lisual catirse of scheduling and notify the parties accordingly.
The ground for the Court's order denying the JNOV and granting the motion
for a now trial area set forth in the attached Memorandum of Law which is
incorporated herewith.
Uatecl:
-7-
BY THE COURT:
ID C� V�, lc—lkvv�. Daniel M. Kam r meye M.— - �- -•.�
Judge of District Court
JAN -20 -2005 THU 04:03 PM KNAAK AND KANTRUD PA FAX N0. 6514909078 P. 04
MENIMANDUM
Respondent -owner Qreel's post - verdict motions are stated in the alternative -- judgineit
uotwlthsl.rinding the verdict sad/or new trial -- nrnd eonstituto (what is sotrictinies called) a "blended
motion" under the Rules:
A motion for jilclgraunt notwithstanding the verdict may include in the alternrttive
a emotion for a now trial.
Minn. R. Civ. I', 50.02 (b) (emphasis added).
Based on our review of the entire: record (the present Judge having presided over the jury tri.nl),
:arid bawd on t.hc written ,and oral arguments of the parties' attorneys, the Court deni,. ?s the judgment n.o.v,
pro t of the hlunde;d or altCrIlMive motion -- but gry )tq the other part, the motion for a new trial, We wjll
also address repolulion of the issue of costs and disbursements in light of our granting the new trial.
Th 0 iNcw
Trial Motion
Tho three grounds for our granting a new trial are succinctly stated in Rule 59, dc;aling with "Ncw
Trirl k" .
A new trial may be granted ... for aarry of the following causes [or grounds) :.. .
(b) Misconduct of the ... prevailing party; ...
(c) [lJnsiif ficient damages, apps firing to have been given under the
intluerico of pashion or prejudice; ...
(g) "flee verdict .. , is not justiflod by the evidence, or is contrary to
law... .
Milih.I%. Civ. P. 59.01.
The aT.'eurnents under•piruung those Rule - liaised grounds have beers fully stated by respondent
Orccl ilr his raclnorandi -mi supporting his post - verdict motions. Those arguments are pc,�rsuasivc and we
alol)t them, without reciting them all over again here. We will briefly Summarize those argrnnents,
iluyu�11.
The two most innporinnt of the Rule 59.01 grounds on which we base the granting of a new trial
ill finis cast; are stated in sub-provision (c) "insufficient dannacles" and sub - provision (g) the verdict's
bein�� "rot jusl.ifled by the evidence" and being "contrary to law." Those two grounds in this case have io
do with the well- ostablisbed legal measure of damages in a partial talccirig condennnatioll case. We
JAN -20 -2005 THU 04:03 PM KNAAK AND KANTRUD PA FAX N0. 6514909078 P. 05
2
explieil.ly stated that legal nuiisurc of damages in the final written jury instructions. Respondent Oreel's
evidence fully complied with that well- establislrecl measure of damages --but the City's evidence did not.
Given that dramatic 1$0° difference between owner Orecl's legally comp i,.nt evidence; and the
City's legally iincotapc °tcMnt evidence, the jury's verdict matched neither the evidence nor the law.
Accordingly, the; jury's verdict delivered "insuflicient damages" wider sub provision (e), "appearing
[allowing the inference] to havu been given under the influence of passion or prejudice." For the sank:
reaF,r +ns, tau jury's verdict under sub - provision (g) was "not justified by the evidence, or [was] contrary to
laW."
In granting the now trial, we do not rely as heavily on the remaining ground, stated in sub -
l)"ovisiun (b), " misconduct of the prevailing party." In this case, that misconduct was the impermissible
,sul,gcsiion by the City's attorney in his opening statement that the jiny should concidcr the benefits
Our cl's property received front the road improvement project itself. Admittedly, the Court altcmpted to
disabusc tLe jury of any such suggestion with a curative instruction, given to the jury orally during the
1,6;11 and in writing in the filial written instructions. Taut, in light of the jury's apparent disregard of the
Court's criticzrl insiniction about the legally- con•eet measure of damages, T have little confidence that the
jury IICCL.lcd that curative instrvetion either.
Costs and
Disbursements
This case presents some novel "first impression" issues regardn1g costs and disbursements. At
pp. 4 -5 of our Memorandum explaining the 2/18/04 Order for Judgment, we laid out the procedure by
which those navel issues would be resolved in this case. However, because of our granting a new trial,
r� °SlJ1Ul1()11 of those costs end d!SbLITSCmCntS issues must be defmcd, to be resolved ultimately after the
trial itsr if -- tar by the patties' global settlement of all the issues in this case.
j
1-2-
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
JANUARY 6, 2005
CALL TO ORDER:
Chairperson Commers called the January 6, 2005 Housing and Redevelopment
Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Pesent: Larry Commers
John Meyer
Virginia Schnabel
William Holm
Pat Gabel
Others Present: Paul Bolin, Assistant HRA Director
Paul Eisenmenger, Accountant
Rebecca Brazys, Recording Secretary
APPROVAL OF MINUTES: December 2, 2004
MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to approve
the minutes as presented.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
• Consider Claims & Expenses
Commissioner Schnabel questioned why only December 30 & 31St are listed on the
check register.
Mr. Eisenmenger explained those were the only bills they had for December.
MOTION by Commissioner Holm, seconded by Commissioner Meyer, to approve the
consent agenda.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING — JANUARY 6, 2005 Page 2 of 6
ACTION:
• Contract for services — agreement between HRA & City
Mr. Bolin explained he, Mr. Hickok and the HRH's legal counsel reviewed the
agreement. It was originally determined that it would be easier to update the original
1979 agreement rather than creating one from scratch, but that hasn't been the case.
At the November and December HRA meetings, drafts of this agreement were brought
before the board and changes were requested. If there are any additional changes or
corrections, he asked the board members to note those changes on their copy and staff
will incorporate those changes.
Commissioner Meyer stated the word Fridley is still in the document and should be
replaced with the word City. In General Provision 3, Item C, it states it shall be the
responsibility of the city together with the Authority to provide insurance policies and
workman's comp. He felt this should be changed to specify that the City is responsible
for that coverage.
Commissioner Gabel stated the first sentence of Item C should be deleted "The City
does not assume any responsibility or liability for the acts or omissions of the officers..."
Commissioner Schnabel asked if the Mr. Bolin has discussed the liability issue with the
city attorney.
Mr. Bolin responded he has not but he would be happy to do so. He added that the city
is self insured up to a certain dollar amount, and then the League of Minnesota Cities
insurance takes over after that. It is his understanding that the HRA is covered under
the umbrella of the City.
Commissioner Schnabel asked that Mr. Bolin clarify this issue prior to the next meeting.
Commissioner Schnabel stated she does not like the sexist language in the document
and asked that it all be removed; any reference to "he" should be removed and replaced
with the position title. She also found some grammatical errors that she circled. On the
last page of the document in the paragraph just above General Provisions which
requires the Authority to pay the City for overall administrative expenses not to exceed
5% of the salaries of personnel services attributable to the Authority. She questioned
what the additional 5% is necessary when the HRA is already paying salaries, rent and
services.
Mr. Eisenmenger stated he will look into this and report back at the next meeting.
Commissioner Schnabel stated under General Provisions, Item H, regarding the
procedure for replacement of the Executive Director. Since the Executive Director is the
City Manager, the wording of this provision does not appear correct.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING — JANUARY 6, 2005 Page 3 of 6
Mr. Bolin stated he will review this with the city attorney and report back at the next
meeting.
Commissioner Holm stated he has some minor items that he's marked on his copy of
the agreement and he will share that with Mr. Bolin.
INFORMATION ITEMS:
• 2005 CDBG Application
Mr. Bolin stated the 2005 Community Development Block Grant application is due to
Anoka County by January 14. Staff attended a meeting on December 8 reviewing the
application process with Anoka County. There is a lot more documentation required
with the CDBG applications than in the past and HUD has been monitoring the projects
more closely. All the objectives stated as a part of the application need to be followed
through. This year, acquisition and blight demolition were a high priority both for the
county and at the federal level. In 2003 the city received $200,000 for acquisition and
blight removal for the Gateway West project. For 2005, based on numbers put together
by Mr. Casserly, they are requesting $167,000 additional to help with further acquisition
and blight removal in the Gateway West area. The application does require a resolution
from City Council and the City Council passed that resolution on January 3, 2005. Of
the $167,000, about $5,000 is actually demolition and the remainder will cover
acquisition and relocation costs.
The maximum amount for a CDBG application is $300,000, Mr. Bolin explained, and
each dollar requested must be accounted for at the beginning of the process. Staff
determined that $167,000 would be the amount necessary to purchase a particular
property for Gateway West. Since the city is already in the process of purchasing the
four -plex in the Gateway West area, it is not eligible for CDBG funds.
Chairperson Commers asked if infrastructure repair or changes can be done with CDBG
funds.
Mr. Bolin responded that is an eligible activity but it has not ranked very high with the
county. For the entire county, there is only a little over $1 million to disburse and the
county typically receives a much higher number of applications for projects than they
are able to fund.
• Update on Gateway West
Mr. Bolin reported that after a number of unsuccessful attempts to purchase the four -
plex at 5355 3rd Street in the Gateway West area, on December 7th a realtor
representing the owner of the four -plex contacted the city to say the owner was
interested in selling. Staff then toured the property with the city's appraiser and the
blight analyst. They had full access to the property. Three of the units are taken apart
HOUSING AND REDEVELOPMENT AUTHORITY MEETING — JANUARY 6, 2005 Page 4 of 6 11
with incomplete remodeling projects. Staff worked with the HRA's legal counsel to draw
up a purchase agreement and they are now waiting for a final number from the
appraiser. The offer will then be presented to the owner.
Mr. Bolin explained that on January 3, 2005, the property owner's son for 281 57th Place
contacted staff and indicated that they will continue negotiating with the city. He is
optimistic that agreements can be made for both of these properties prior to the
February meeting at which time they will be brought to the HRA for approval.
• Monthly Housing Report
Mr. Bolin reviewed the Loan Application Summary stating two applications were sent
out in December. For the year, 27 loan applications were processed with 18 closed on.
Compared to four loan closings last year, it is clear that this program has become more
popular.
Mr. Bolin reviewed the Loan Origination Report explaining that $283,414 actual HRA
dollars were put out into the community this past year. Looking at the types of
improvements, there were a total of 28 loans made but included 46 separate projects.
Each loan sometimes generated multiple projects; windows and doors and heating
systems.
Mr. Bolin explained the Loan Servicing Report is actually based on November 2004
data. The principal balance for loans in the community was $848,000. During
November they took in $42,000 in repayment on those loans. Currently there are four
delinquent loans with a total past due of just over $2,500.
Mr. Bolin stated during the month of December the Remodeling Advisor and Operation
Insulation scheduled two appointments and completed weatherization. The Remodeling
Advisor had no visits or calls in December.
Mr. Bolin further stated that staff was asked by the HRA at their last meeting to look into
things that can be done to promote the city's home loan program. Included in the
agenda for this meeting was a memo from the Center for Energy and Environment
which compared Fridley's home improvement financing activity with other communities
for 2004. Fridley had a total of 28 loans compared to 10 for Anoka, 43 for Blaine, 11 for
Columbia Heights, and 23 for Coon Rapids. He pointed out that Coon Rapids is nearly
twice the size of Fridley yet Fridley processed more loans. As far as different marketing
strategies, the Center for Energy and Environment found that the more you can get the
program in the city newsletter the better the program does. So staff has been working
with the City Manager to get an increased presence in the City newsletter; in the
February issue there's a small mention about the various programs the City offers and
hope to have a full article on the programs in the April newsletter. This past year, the
Center for Energy and Environment did one mailing to Fridley residents and for the
upcoming year they have budgeted to do two mailings. Staff also plans to work with
utility billing to include program information with their mailings. Another opportunity is
HOUSING AND REDEVELOPMENT AUTHORITY MEETING — JANUARY 6, 2005 Page 5 of 6
cable television and during tonight's show there is a scrolling marquee across the
bottom of the screen listing some of the city programs. Also, an electronic billboard
page has been created for the cable station with a regular spot for city program
information. In addition, staff is working with the cable television director and the Center
for Energy and Environment to put together some shows to get the message out about
the loan program. Another marketing effort will be participation in the Home and
Garden Show that will be held March 5 at the new Schwann Center in Blaine.
Commissioner Meyer asked if any of the marketing includes information about energy
and costs savings as a result of home improvements through the city loan program.
Mr. Bolin stated that information has been a big part of the Operation Insulation
Program but agreed that it would be good to include that in the loan program
information.
• Hardee's Condemnation Witness Expense
Mr. Bolin explained that at about 4:00 p.m. today it was brought to staffs attention that
there is a hearing scheduled on the Hardee's matter for January 24th. Staff believes it is
very important to have Rick Bentz present as a witness for the city at this hearing. It
may be costly to bring Mr. Bentz to the area (a couple thousand dollars for a flight and
hotel) but will likely help to save the city thousands of dollars or more in the long run.
The City Attorney would like a response on this matter today. If the HRA deems the
expense appropriate, staff recommends that the City pay half the expense and the HRA
pay the remaining half of Mr. Bentz' expenses.
Chairperson Commers asked Mr. Bolin for a copy of the court order relating to this case
allowing a new trial.
Commissioner Meyer stated there is no reference to reimbursing Mr. Bentz for his time.
MOTION by Commissioner Schnabel, seconded by Commissioner Meyer, to pay half of
the Bentz travel expenses, accommodations and compensation.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
ADJOURNMENT:
MOTION by Commissioner Gabel, seconded by Commissioner Holm, to adjourn.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:24
PM.
HOUSING AND REDEVELOPMENT AUTHORITY MEETING — JANUARY 6, 2005 Page 6 of 6
Respectfully submitted by,
Rebecca Brazys
Recording Secretary