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HRA 02/03/2005 - 29589.- � CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY FEBRUARY 3, 2005 � �"� CALL TO ORDER: Chairperson Commers called the February 3, 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: Scott, Hickok, Community Development Director William Burns, HRA Executive Director Paul Bolin, Assistant HRA Director Paul Eisenmenger, Accountant Rebecca Brazys, Recording Secretary APPROVAL OF MINUTES: Januarv 6, 2005 Commissioner Schnabel asked for the following corrections: Page 2- 4t" Paragraph remove the word "the." Page 2- 3�d Paragraph from bottom of page, second to the last sentence, change "what" to "why". MOTION by Commissioner Gabel, seconded by Commissioner Holm, to approve the minutes as amended. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA • Consider claims and expense MOTION by Commissioner Schnabel, seconded by Commissioner Holm, to approve the consent agenda as presented. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — February 4, 2005 Page 2 of 6 �. ACTION: • Contract for services — agreement between HRA and City Mr. Bolin stated the changes requested by the HRA at their previous meeting have been made. Staff recommends approval of the contract. Mr. Bolin also explained that the concerns regarding insurance have been addressed. The HRA members are covered by an endorsement on the City's policy. The language regarding insurance coverage has been clarified in the contract and now reads "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." Another concern regarded what types of claims the HRA could have exposure to that are not covered by the $300,000 municipal tort limit. Information gathered by Mr. Pribyl show that claims that aren't covered by that tort limit include civil rights suits and inverse condemnation suits that arise out of the regulatory taking. The City and HRA do have resources in place that would cover in excess of those tort limits provided the commissioners were not acting outside the scope of their duties, with malfeasance, willful neglect or bad faith. Another option is to purchase additional insurance coverage at an annual cost of $37,000 for excess liability coverage. �--� Chairperson Commers stated that as he understands it, the City has $1,000,000 coverage for certain types of actions. If there's a claim over that figure, the City will indemnify the HRA members as long as they were acting within the scope of their responsibilities. He suggested the provision in Paragraph 3C of the contract have a sentence added to that affect. There's no provision in the contract for the City to indemnify the members. Commissioner Meyer questioned the provision in Paragraph 3C for the replacement of the Executive Director and Assistant Executive Director. He didn't think the directions were clear as to how this will be handled. The other Commissioners had no concerns with this section. Commissioner Schnabel questioned if there is a cap on an award that could be given against the City. Chairperson Commers stated one possible situation where there would be no cap would be an inverse condemnation. Mr. Pribyl stated he believes the City has an indemnification responsibility just by the mere fact that the HRA members are agents of the City. After some discussion, it was decided that the contract should include language to �—.� indemnify the HRA members. . HOUSING AND REDEVELOPMENT AUTHORITY MEETING — February 4, 2005 Page 3 of 6 ,�—� Dr. Burns suggested the following be added to the contract, Paragraph 3C, "The City will indemnify the Commissioners for losses in excess of the insurance coverage if they are incurred within the scope and course of their work. This indemnification shall not be extended to acts of malfeasance, willful neglect or bad faith." Commissioner Meyer in Paragraph 3C suggested the language be changed to remove the words "to ensure" and simply stated that "It shall be the responsibility of the City to provide insurance policies and workman's compensation policies..." Commissioner Schnabel commented that she is bothered by the use of all the "him's and her's" but is not asking that it be rewritten. MOTION by Commissioner Gabel, seconded by Commissioner Meyer, to amend the contract as follows: Amend Paragraph 3C to read "Liability for injury or damage shall be the responsibility of the City to provide insurance policies and workman's comp policies that cover the professional and clerical staff and Commissioners when doing work for the Authority." And add to Paragraph 3C "The City will indemnify the Commissioners for losses in excess of the insurance coverage if they are incurred within the scope and course of their work. This indemnification shall not be extended to acts of malfeasance, willful neglect or bad faith." UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED �—, THE MOTION CARRIED UNANIMOUSLY. MOTION by Commissioner Holm, seconded by Commissioner Gable, to approve the contract as amended. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: • Update on Gateway West Mr. Bolin explained that staff has made an offer to purchase the 4-plex at 5955 3`d Street for $275,000. They are still waiting for a response from the owner. Staff has prepared a resolution for the HRA's approval that would approve the execution of the purchase agreement as it's presented. This would allow the sale to proceed prior to the March 3�d HRA meeting. For the property at 271 57th Place, Mr. Bolin stated staff has been in contact with the property owner regarding the list of comparable properties. The owner's son contacted staff just prior to this meeting with a counter-offer seeking $100,000 more than the initial offer. Staff recommends the HRA make one final offer based on the most recent � comparables. If an agreement is not reached in time for the March meeting, staff recommends that at that time the HRA considers moving forward with the Gateway �� HOUSING AND REDEVELOPMENT AUTHORITY MEETING — February 4, 2005 Page 4 of 6 � West project either by designing around this property or possibly considering condemnation. They're hoping to come to some agreement with the property owner within the next two weeks and avoid either of those alternatives. He further explained that there has not been an offer made since last summer and the owner did not counter offer until tonight. Before a decision is made to design around it or consider condemnation, a final offer should be made based on the most recent comparables. He explained that he has told the owner that the next offer from the HRA will be the final offer. Commissioner Gabel suggested the HRA state in a motion that one final offer will be made and then they will move forward. The HRA has been after this property for a long time and is now anxious to see the Gateway West project proceed. Also, it was previously determined that this project can move forward without the property at 271 57�" Place. Commissioner Schnabel agreed with Commissioner Gabel's suggestion. Commissioner Meyer asked the amount of the initial offer. Mr. Bolin stated it was $149,000 and the appraisal was $119,000. Wilson Development found a comparable property at $149,000. He explained the process is the offer is based on the appraisal plus the relocation benefits of the difference befinreen the �--, appraisal and the comparable property. The counter offer from the property owner is $249,000. �. MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to authorize the staff to make one final offer based on a current comparable and set a deadline for that offer to be accepted or rejected by the property owner with ample time prior to the March HRA meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. For the four-plex at 5955 3�d Street, Mr. Bolin explained the property owner does have a purchase agreement from the City in their hands. What this resolution does is approves the offer the staff has made and the purchase agreement prepared and would allow Dr. Burns and Chairperson Commers to sign off on any documents necessary to proceed with the sale prior to the March meeting. Commissioner Meyer asked if the staff will be negotiating further with the property owner. Mr. Bolin explained it is his belief that an offer has been made that the property owner will most likely accept. � HOUSING AND REDEVELOPMENT AUTHORITY MEETING — February 4, 2005 Page 5 of 6 � HRA Attorney Gay Greiter explained that what this resolution is doing is attempting to speed things up. As long as the final purchase agreement is in substantial conformity to what is included in the members' packet, this resolution is authorizing staff is authorized to go ahead. They're not anticipating a higher price and are not inclined to pay a higher price. If there is a substantial change, staff will come back before the HRA, but if there's an insignificant change this resolution would authorize staff to proceed. She further explained that this property owner has been extremely hard to get in touch with for a period of many months. Finally after being notified that the HRA had authorized condemnation, the property owner's broker contacted staff and said he is interested in selling. This resolution would simply save time by authorizing the staff to proceed. Chairperson Commers stated as long as there is no major difference, this should be fine. Commissioner Meyer questioned the definition of a major difference. Mr. Bolin commented that since condemnation has already been authorized on this property, the offer for $275,000 is a follow-up offer and he believes the seller is anxious to work out an agreement with the City. Dr. Burns stated another option would be to call a special meeting if the HRA does not feel comfortable with approving the resolution. �� Commissioner Holm asked if it is better to simply approve the resolution based upon what has been presented, an offer of $275,000, to lock in the dollar amount. If there are other details that would be within the scope of staff and the chairman to work out. Mr. Hickok stated that is a valid option. Commissioner Holm stated he would feel more comfortable approving the resolution based on the terms presented and if there are other changes, staff could call the HRA back for a special meeting. MOTION by Commissioner Holm, seconded by Commissioner Meyer to approve the resolution to authorize the staff to go forward with a purchase agreement and execution at $275,000 (for 5955 3�d Street) with collateral terms that could be negotiated, but not on the price. And if that isn't satisfactory, staff would have to come back before the H RA. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. �� HOUSING AND REDEVELOPMENT AUTHORITY MEETING — February 4, 2005 Page 6 of 6 �'^� • Update on CDBG � Mr. Bolin reported that the Community Development Block Grant application was submitted to Anoka County before the deadline with a request for $167,000 for the Gateway West project. He spoke with Anoka County earlier this week and they indicated they're going to recommend to approve at least a portion of the City's request. Staff should have a final answer by the middle of April. • Monthly Housing Report Mr. Bolin briefly reviewed the summary with little activity since it's the first month of the year. There was one loan for $16,600 for a single family property to purchase new windows and doors. As of the end of December there were four delinquent loans out of a total of 78 loans and the delinquency amounts to $2,500. The Operation Insulation advisor completed two weatherization projects started in December and there was one call in January for the Remodeling Advisor. To get more information out to the public, he explained they have worked with Dr. Burns for an ad in the City newspaper and on the cable channel as well. Mr. Bolin reported that the Home & Garden Fair will be held from 9:00 a.m. to 2:00 p.m. on March 5 at the Schwan Center at the National Sports Center in Blaine. • Non-Agenda Update Mr. Bolin reviewed the non-agenda items. He explained that the owner of the Tiro Industries building did contact City staff and indicated they do have plans for the building being vacated by Tiro. ADJOURNMENT: MOTION by Commissioner Schnabel, seconded by Commissioner Gabel, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:35 PM. Respectfully submitted by, .�-�a, .� �< � ���� L� ' C!l�'� � Rebecca Brazys � Recording Secretary � � . � CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING �� � � � � �� Name and Address Agenda Item of Interest � I /"`'�