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HRA 09/01/2005 - 29595n CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION SEPTEMBER 1, 2005 CALL TO ORDER Chairperson Commers called the Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL Members Present: Larry Commers John Meyer Virginia Schnabel William Holm Others Present: Paul Bolin, Assistant HRA Director Scott Hickok, Community Development Director Gay Cemey, HRA Counsel APPROVE PLANNING COMMISSION MEETING MINUTES — August 4�', 2005 MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to approve the ^ minutes as presented. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECARED THE MOTION CARRIED. CONSENT AGENDA: • Consider Claims and Expenses MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to approve the consent agenda. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. ACTION: • Approve HRA Levy for 2006 Mr. Bolin reported that since 1996 the HRA levy has supported housing rehabilitation programs in Fridley. This lery is used to make payments on $1,500,000 given by the City to fund the RLF. The current balance of the loan is $480,123. The levy is equal to .0144% taxable market value. The 2006 tax levy will allow HRA to collect $343,135. The impact on the taxpayer for a$200,000 home would be $28.80 a year and a ^ $1,000,000 commercial property would be $144 per year. (these figures are the same as last year) �"� HRA Meeting Setpember 1 2005 Staff recommends approval of the levy resolution. This resolution was reviewed by Krass, Monroe and must be certified to the County by 9/15/05. The City Council is scheduled to take action on this item on 9/12/05. 2 of 7 Chairperson Commers asked Mr. Bolin to verify that all funds will be designated to the payment of the City loan. Mr. Bolin will research the payment process and reply back to the HRA committee at the October meeting. MOTION by Commissioner Schnabel, seconded by Commissioner Holm, to approve the HRA Levy for 2006. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. • Award demolition contract for Gateway West Mr. Bolin stated that any demolition of properties over $50,000 is required to go through a formal bidding process. Staff opened up the bidding process for the Gateway West properties at 10:00 a.m. on August 31St, 2005 through the Star and Tribune. They received the following bids: Veit $89,628 ^ Frattalone $103,916 Both of the companies are very reputable and capable of performing the task at hand. Staff recommends awarding the contract to Veit. Veit would be able to begin demolition within ten days of signing the contract as that is approximately the time required to receive a pollution control permit. Chairperson Commers questioned if all salvageable materials have been recovered and if anything else is available to offset the current bid. Mr. Botin explained tha# back in July deconstruction services salvaged everything possible. There may be a chance that someone may want to purchase a garage and the fire department is interested in buming a few homes as a fire drill. This could accumulate some cost savings to offset the current bid. The fire department will have to inspect the homes to decide which homes will be the most economical to bum. Some homes may require hazardous materials to be removed; therefore it may not be economical to bum those homes. Commissioner Meyer asked for an amendment to the current action plan to include "less any set offs or deductions of burnable homes°. MOTION by Commissioner Schnabel, seconded by Commissioner Meyer, to award Veit the demolition bid of $89,000 gross, less any set offs or deductions of bumable homes. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE ^ MOTION CARRIED. HRA Meeting Setpember 1 2005 3 of 7 �`^� • Approve selection of Developer for Gateway West Mr. Bolin stated that at the August meeting, staff was given the approval to seek out developers that can build houses HRA had envisioned for the Gateway West area. Staff recommends that a motion be approved selecting Blue Print Homes as developer for Gateway West. By approving Blue Print Homes, staff can formalize terms and drafts needed for a development agreement which could be presented at the October meeting. Blue Print Homes has the ability to construct a wide variety of home designs that will add value to the Hyde Park neighborhood. Staff has toured three homes and the design, quality of materials and craftsmanship is all first rate. Jeff Magdik (owner of Blue Print Homes) is excited to build homes on 60' wide lots and would like the opportunity to showcase his work to those driving by on University Avenue. Staff has corresponded with buyers in the Blaine and Hugo areas who have used Blue Print Homes and they have reaffirmed the same impression staff received. Mr. Magdik 'rs great to work with and builds a quality home. Mr. Hickok presented a short slide show prepared with photos taken at some of the homes built by Blue Print Homes. The photo's featured beautiful millwork, cabinets, built ins and many upgrades that are available to the buyer. Blue Print Homes makes use of every square foot of the home and never builds the same home twice. Commissioner Meyer questioned if the Hyde Park Area can sustain a price point of $250,000-$400,000 plus the cost of the lot. �''� Mr. Hickok reaffirmed that the builder is careful not to overprice homes in the marketplace and research confirms that the homes will hold their value. Blue Print Homes would build finro models and buyers will build their homes based on their needs for a specific style and design. Chairperson Commers questioned if any studies have been completed regarding the value of these homes. Mr. Hickok responded that the builder has evaluated the market and has leamed that buyers are looking for places to live within close proximity of work and shopping. This is a national trend in land redevelopment and Gateway West is the perfect area to meet the specific needs of this trend. Commissioner Meyer questioned if we sign the agreement with Blue Print Homes if there would be any restrictions to the outcome of the home. Mr. Hickok commented that staff would address those issues at the October meeting when they discuss the terms and conditions of the contract. To date, staff has no plan to assign a dollar value limitation (high or low) with the buyer. If this is something HRA would want to include in the terms and conditions, it can be up for discussion. Commissioner Meyer questioned if we were going to have square footage restrictions, layout requirements, mandatory upgrades, or minimum quality requirements. Mr. Bolin commented that staff does not want to prescribe each home. The models that Blue Print Homes builds will have many upgrades and it will be up to the buyer as to HRA Meeting Setpember 1 2005 4of7 n which upgrades they would like to include in their home. The builder will build to the buyer's specifications. Staff does not want to make all amenities mandatory for each home. Mr. Hickok commented that the builder is excited to build on this site and the area is prime location to show Blue Print Homes talent. Mr. Magdik will work out the details and can build in safe guards at the top or bottom end of the price point. Commissioner Schnabel commented that both homes in the slide show were well over $500,000. She recommended staff to tour some homes in the lower price range to ensure they hold their value. Mr. Bolin responded that he and Mr. Hickok would tour the lower price point homes before the next meeting. Commissioner Meyer commented that selling homes of this value could be a challenging task as they may be priced too high for the Hyde Park area. The City of Fridley could face unfortunate situations if the homes do not hold their value. Mr. Bolin stated that a home located on the northem end of the 5800 block on 3`� Street was recently appraised for $400,000, so some homes in the area currently hold similar value. Commissioner Holm questioned if HRA is under any time restrictions to sign this �--� agreement. Mr. Bolin responded that the sooner we complete this agreement, the sooner the City of Fridley will be able to collect on the tax increments. Chairperson Commers agreed that the time frame has already been extended too long and it would be best to move forward with this project. MOTION by Commissioner Schnabel, seconded by Commissioner Meyer, to select Blue Print Homes as the Developer for Gateway West subject to approval of the final agreement. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. • Approve Interfund loan between General Fund and TIF District #18 Mr. Bolin reported that the purpose of the interfund loan is to loan TIF District Number 18 (Gateway West) $ 1,000,000 to finance redevelopment efforts until such a time that the District creates enough tax increment to pay back the loan. The loan terms are in the amount of $1,000,000 at an interest rate of 5% with a loan length of 27 years or until 12/1/32. The loan may be paid off early if sufficient tax increment is available. Chairperson Commers asked for a budget on the different projects related to Gateway � West and to include running totals so the HRA is aware of the actual funds that are being spent on this project. HRA Meeting Setpember 1 2005 5of7 � Mr. Bolin commented that staff wiil provide an updated budget sheet each month. To date $1,700,000 has been spent on Gateway West. Commissioner Schnabel asked if staff could add a budget column to the report. This way HRA could compare budget and actual figures. Mr. Bolin stated that a budget column could be added, but noted that when the budget was created, categories were staff "best guess" at costs and revenues. MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to approve resolution HRA 2005-05 Interfund loan befinreen General Fund and TIF District #18. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECALRED THE MOTION CARRIED. • Islands of Peace Mr. Bolin reported that staff met with representatives from Bancore Group and an interim agreement of 60-90 days will be necessary to further explore the feasibility of moving forward with a project in the Islands of Peace neighborhood. Staff asks for a motion to be approved to authorize the Executive Director to sign all necessary interim agreements. ^ MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to authorize the Executive Director to sign all necessary interim agreements. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECALRED THE MOTION CARRIED • Approval to Purchase home at 6000 East River Road Mr. Bolin stated that in July staff was authorized to appraise the property on 6000 East River Road. Currently this home is not connected to city water or sewer and the existing septic system has failed. The property was appraised at $235,000. Staff is asking for a motion to be approved authorizing staff to work with relocation specialists to determine action benefits and make an offer to purchase the property. The City of Fridley would be required to find a home of similar size and value for the seller. The seller is willing and understands the buying process. Relocation expenses are estimated at $3,000. If the Island of Peace project moves forward, this would be a good starting point for the development. If we do not go forward with the project, the City of Fridley may be able to sell the property to a developer or create a park. The lot is about finro acres and has many large trees. Commissioner Meyer questioned if the current sewer and water conditions have been ^ taken into account under the current appraisal amount. HRA Meeting Setpember 1 2005 6of7 �. Mr. Bolin confirmed that the sewer and water conditions were taken into account. The home was built in 1942 and has had minimal upkeep and improvements. It is recommended to demolish the home, remove the septic tank and leave the lot in its natural state until a project arrives. MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to authorize staff to make a purchase offer at 6000 East River Road not to exceed $235,000 plus any relocation fees. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECALRED THE MOTION CARRIED INFORMATION ITEMS: • Monthly Housing Report Mr. Bolin reviewed August loan applications. The City of Fridley received four loan applications and closed on finro. There are a total of 17 loans year to date which exceeds last years total of 16 loans for the entire year. A direct mailing will be distributed to all Fridley residents in the next few weeks offering an interest rate of 4% on loans. The loans issued last month for HRA loans totaled $51,656 brining the year to date total to $320,636 out of City funds. Currently there are three delinquent loans in the amount of $3,000 for loans totaling just under $16,000 which is less than two percent of the total loans. �, Operation Insulation and Remodeling Advisor had one aisit in August and no calls. The mailer to be distributed to all City of Fridley residents should promote loans also should increase our loan totals. Chairperson Commers asked if the $51,656 is a continuation of the revolving loan fund. He did not think the funds should be categorized in the general fund and that we had a separate revolving loan fund for the continuation loans. Mr. Bolin responded that the number corresponds to finro new loan expenses that are up for approval. The totals match up with the loans issued in July. He will double check the numbers and �esubmit in October if necessary. Chairperson Meyer asked if the Target tax situation has been resolved. Mr. Bolin stated that Target understands and will comply. They closed on Wednesday after negotiating for two days. Chairperson Commers asked if the City of Fridley had any obligations with Target Superstore when they rebuild. Mr. Hickok presented a brief update on the conversion of Target to Target Superstore. The Petco currently located next to Target will be relocated as a free standing building closer to 53"� Street. Petco will be rebuilt and occupied this year. ^ After the holiday season Target will move out of the current building, demolish the building and begin construction of the new Target Superstore. Target Superstore will be HRA Meeting Setpember 1 2005 7of7 �"`� on the same area, facing the same direction but the elevation will be raised. This will bring a new look to the area with great architecture features. ADJOURNMENT: MOTION to adjoum. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MEETING ADJOURNED. Respectfully submitted by, , - GL— e���y�� � ��/L� Krista Monsrud Recording Secretary �� � � � � r� CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING ��.�+���b�� I , ���s ---------------------------------------------------------------- ---------------------------------------------------------------- Name and Address Agenda Item of Interest - —\ �