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HRA 12/01/2005 - 29599,—� CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION DECEMBER 1S; 2005 CALL TO ORDER Chairperson Commers called the Housing and Redevelopment Authority Meeting to order at 7:30 p.m. ROLL CALL: Members Present: William Holm Pat Gabel Larry Commers Virginia Schnabel John Meyers Others Present: Paul Bolin, Assistant HRA Director Richard Pribyl, Finance Director/Treasurer Gay Cerney, HRA Attorney APPROVE HRA COMMISSION MEETING MINUTES - November 3�d, 2005. MOTION by Commissioner Holm, seconded by Commissioner Gabel, to approve the minutes as presented. ^ UPON UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. CONSENT AGENDA: • Consider Claims and Expenses MOTION by Commissioner Schnabel, seconded by Commissioner Meyer, to approve the Consent Agenda. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. ACTlON: • Review and Approval of Draft Budget for 2006 Mr. Pribyl asked for a motion to defer the budget for 2006 until January as staff is waiting for the tax increment values from Anoka County. The County has changed their software that runs the property tax data and have been unable to run a parcel inventory report for each of our tax increment districts. This report is used to create our TIF related revenues and payments. Currently county staff is programming this information and it should be available shortly. To date there are no changes from the information provided to you at the November 3�d, 2005 meeting. Staff recommends to postpone the approval of the 2006 budget until the ]anuary meeting. MOTION by Commissioner Gabel, seconded by Commissioner Schnabel, to postpone the Review and � Approval for the Draft Budget for 2006 until the ]anuary 5�', 2006 meeting. � UPON UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. • Review and Approve Draft Development Agreement with Blue Print Homes Mr. Bolin reviewed that back in September HRA approved Blue Print Homes as the developer of the Gateway West Project. HRA has had three meetings to discuss the Draft Development Agreement Contract and all issues have been addressed regarding the builder and lot sales. The Development Agreement clearly spells out the responsibilities of the Developer and HRA. This Development Agreement has been reviewed by the developer and they have no changes to the development agreement at this time. Mr. Bolin stated that this contract resolution may be signed by Commissioner Commers after it is approved by the HRA tonight. Once this Development Agreement Contract is signed, we can move ahead with the Gateway West Project. StafF requests that HRA review the development agreement and note any questions or concerns. If there are not any major changes or concerns, Staff would recommend that the Development Agreement be approved. Commissioner Gabel questioned why the project would be exempt from prevailing wages. Ms. Cerney replied that this exception is subject for review of the City ordinance and is standard language. Staff will research this issue and review a copy of the ordinance. Commissioner Commers recalled a similar situation with Rotlund and this issue should be addressed. There may be a need to change the Development Agreement in the event there is any barring as the ^ developer has agreed to the terms in this agreement. Mr. Bolin stated that there are community development block grant funds in the development plan and because of these funds; it may require prevailing wages to be paid. Commissioner Meyer recalled that the council changed the ordinance for Rotlund and the City Council amended the ordinance only for Rotlund. Our agreement states they must pay the prevailing wage. Ms. Cerney stated that this agreement was based on the Gateway East project and the prevailing wage clause was put in the development agreement for Gateway West place holder. She will follow up on this issue. Commissioner Holm questioned if the Gateway East project was exempt from prevailing wages. Ms. Cerney stated that this is an authority decision and the redevelopment would need adhere to prevailing wage requirements. She will research the issue and remove the statement if they are not exempt or see if the prevailing wages will contractually apply. Commissioner Commers asked for approval of the Development Agreement with the exception to clarify the prevailing wage clause. Commissioner Holm suggested to include the prevailing wage clause and for the developer to comply with the spirit of the statement. There may be a legal reason to have the prevailing wage language in the Development Agreement. Commissioner Commers asked Ms. Cerney to review the city ordinance and reply back to the council before the next meeting. ^ Commissioner Meyer questioned who is required to comply to the prevailing wages. All contractors, subcontractors etc. and who will enforce or inform those who need to comply. Ms. Cerney replied that she will research the language of the city ordinance and to what extent those involved with the construction site are required to comply. The contract does state that they must work with the contractors and subcontractors so this would be implacable to all employees. Commissioner Commers asked that counsel review the contract, get it into compliance and clarify the language. Commissioner Meyers questioned the nine stipulations listed in the agreement and mentioned that only two of the stipulations apply to Gateway West. Is this standard stipulation and are we in jeopardy with State or Federal if the stipulations are not relative to Gateway West. Ms. Cerney stated that the objectives are laid out in the HRA Redevelopment plan and are set up for public purpose for the project. The stipulations can be adjusted to list only those that apply to the development if so desired. Commissioner Meyers questioned the letter of credit on page 11 and that it is for the entire 16 lots. It is unclear if after the first three lots are developed are more lots required to be purchased and what happens to the balance of the funds. Ms. Cerney stated that this only applies to the payment schedule Blue Print Homes has to agree to. Blue Print Homes only has an obligation to make quarterly payments. HRA will draw on the letter of credit as the closings occur. � Commissioner Meyers asked if the developer has the option to halt the program after the first five lots are developed and cease activity. Ms. Cerney clarified that after the first three lots are developed, the developer is required to take two lots each quarter. The developer is obligated to develop all 16 lots. Commissioner Meyers asked for clarification in the Development Agreement where it states on page 15 of the contract that HRA needs to approve the construction based on the city building codes, warranty etc. The contract it states that construction plans shall not be objected... etc. that could have been raised at the preliminary plan review. HRA has seen some preliminary plans and evidently approved the plans. By this wording in the Development Agreement, if we want to make any changes to the construction documents we need to do so now before it is too late. The typical floor plans have been submitted and have we seen enough to comply with requirements. If we want to object with anything we have already seen, we best do so now before we see final construction plans. Ms. Cerney stated that this is a reasonable concern but not intended if items are not in the preliminary plan. HRA can object to a construction plan if items are something they did not see in the preliminary plan. This is a good concern. Mr. Bolin clarified that the plans submitted are potential homes Blue Print Homes plans to build on site. If someone wanted to build a split level home, for example, it would not fit with the vision of the area and could be objected. Some details will be difFerent but driven by the buyer. HRA will get 16 nice homes kept in the spirit of the home plans already reviewed by the HRA. Commissioner Commers stated that the final construction documents with details will be submitted to � the HRA with specifications for each home. ,—�� Commissioner Holm questioned when the ending date of the Gateway West Project. The target date is listed as 12/31/2007 assuming that two houses will be constructed per quarter. He recommended re- looking at this date as with winter construction and unseen delays in construction this date could go into 2008. Commissioner Schnabel stated that the start date is listed as 4/15/2006. Is this the actual start date or the date the title is filed. Ms. Cerney stated that the timing may need to be amended in the Development Agreement. The developer will be required to take title prior to the start of construction. Mr. Bolin stated that the final plat drawing is on the city council's agenda for the second ]anuary meeting. Once this is signed, the developer could close on the first lots by the beginning of March. MOTION by Commissioner Schnabel, seconded by Commissioner Gabei to approve the Draft Development Agreement between Blue Print Homes and Gateway West with the exception of the clarification of preliminary wages and other items discussed. UPON UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. Commissioner Commers questioned why the City is part of the Gateway West development. Ms. Cerney clarified that HRA doesn't contract with the city. Authority is undertaken to make sure the public improvements are completed. ^ Commissioner Meyers questioned who is responsible for the public improvements such as roads etc. Mr. Bolin stated that the HRA is responsible for public improvements and it is currently in the budget of the project. Staff works closely with the public works director to make sure the public improvements are completed. • Islands of Peace Update Mr. Bolin reported that on November 14"', Bancor presented some of their ideas for possible site design and reuse of the Islands of Peace neighborhood to City Council, HRA and City Staff. Bancor's ideas included rehabbing the existing apartment buildings along Island Park Drive and construction additional units between existing buildings. The Council and HRA members present seemed to collectively not care for the ideas proposed by Bancor. To sum up all of the comments made, it was quite obvious that all new construction was preferred to rehabbing of rental units. It also appeared that the consensus of the group was to construct high-end, high-valued, multi-story condominiums. There did not appear to be any real interest in purchasing the Tri-star Insulation and Longview Fiber properties to expand the project to the East. Mr. Bolin stated that after a follow-up meeting with Bancor, staff is concerned that Bancor is not taking the Council and HRA comments seriously. Their response to all of the comments was to move the entrance into the development, to the North, so that one would not drive through the rehabbed apartments to get to their market rate condominium. Despite representing to us that they could deliver any desired type of housing product but if the Council and HRA want a high rise, they were not the right developer. �'� Mr. Bolin reported that Staff and HRA legal counsel met with Bancor on November 23�d to further discuss and clarify the next steps. After this meeting HRA is back to the drawing board and Bancor � submitted a letter asking for HRA to extend the current agreement contract to March 31, 2006. Currently HRA is under no monitory obligation with Bancor and this letter would outline the task each group would perform. A vote would be taken at a later date to decide whether to continue business with Bancor. Staff recommends extending the current contract with Bancor to March 31, 2006. Mr. Bolin stated that to determine feasibility and demand for multi level condominiums more than four stories a different developer may need to be hired. Staff recommends the authorization to spend $15,000 to research the housing market for the Island of Peace Project. This study will identify the potential demand for sales of properties and what type of housing product will sell on this site. The study would also compare results to similar projects in the Metro Area. Mr. Bolin stated that this study will help determine if a multi story housing project is suitable for this site. If multi story condominiums are not suitable, other options will need to be explored. If multi story condominiums will be in demand, HRA will need to work with a different developer than Bancor. Bancor admits that they would not be the preferred contractor if the project required higher than four story buildings. Commissioner Commers questioned what led the group to the conclusion that multi story condominiums would be feasible on this site. Mr. Bolin stated that last May, councilmember Billings mentioned that a number of multi level buildings with underground parking would be great in this area. Bancor submitted drawings at the last joint meeting but most people who attended the meeting wanted more upscale, higher price point buildings. Commissioner Schnabel responded that that she was present at the joint meeting and as she was ^ reading into the project, Bancor was using existing buildings to create lower income rental units, followed by single family housing with a vacant piece of land closest to the river. Banco asked for reaction of those present and what they would like to see on this property. Many replied that a hi rise condominium would be great. There was a lot of discussion regarding Bancors presentation and most people were not thrilled with what they saw. The reaction of many at the meeting was that Bancor did not present the vision in the beginning of the project. Commissioner Meyers concurred with Commissioner Schnabel. Bancor was taking existing buildings and rehabbing them uniquely to rent out at lower rates. He commented that if Bancor is not the right developer, why we would want to extend their contract. Commissioner Commers stated that Bancor has presented a research study if a hi-rise is not feasible on this site we may want Bancor as a back up plan. We will continue to do the research to find out what is the best development plan to put on this property. Commissioner Meyers commented Bancor presented an interesting plan. Bancor did not say that a hi- rise is not feasible, but it was beyond their ability. Commissioner Schnabel stated that some present at the meeting thought the drawing was dull and not interesting. Bancor's presentation was so different from the May meeting. Bancor did not pick up on what we had planned for the area. If Bancor would like to submit another plan, it will not cost HRA to extend their contract and try to review the property again. In the meantime, have another company do an analysis to find other ideas for the properly. Mr. Bolin thought that Bancor did their homework and presented a reasonable design and product mix. This was the idea to partner with them in the first place, but at the joint meeting HRA and Bancor was '� not on the same page. Extending the contract will not cost any additional funds and an independent analysis would be worth the effort. Currently Bancor and HRA do not have the same vision on the � concept of the area so a third party analysis is recommended by StafF. Commissioner Commers agreed that a third party analysis is the right choice and to continue with Bancor. Commissioner Holm agreed that Bancor did not offer what we wanted and clearly we need the independent study. He asked when we could expect the independent study to be complete. Mr. Bolin answered that the independent study could be done before February 1, 2006. He also stated that he had the reauthorization papers here to sign tonight so a third party could get started right away. Commissioner Holm questioned at what point to we take the suggestion from the third party and ask Bancor to drop out. Commissioner Schnabel stated that Bancor has connections to refer people to HRA who can build a hi rise. Mr. Bolin is in favor of the hi rise and believes it would be beneficial to do the study. The study would not only tell us if a hi rise would sell, but what the price point should be etc. Commissioner Gabel was concerned that many consultants give you the results you want to hear. How do you tell a consultant to give us the real study and not what you want to hear. She agreed to extend Bancor's contract as it will not cost the HRA any additional funds. She also agreed that Bancor did not listen to the HRA wishes very well. � MOTION by Commissioner Holm, seconded by Commissioner Schnabel, to approve $15,000 for staff to hire a third party to research the Island of Peace Project. Commissioner Meyer suggested to advise the new third party developer to assume all the apartments are gone and also that they stay and be reconstructed so we get a few different plans. Obviously Bancor did not get the message. Mr. Bolin stated that we will look at a plan as keeping the apartments and put in up to 160 condominiums and multi story buildings. The third party needs to look at the area as a blank slate for the hi rise condominiums. Studies done in this past year are very detailed and analyze the site and other projects in the area. MOTION by Commissioner Holm, seconded by Commissioner Holm, to extend Bancor contract to 3/31/06. Commissioner Meyers stated that he assumed Bancor would be informed of this motion and why we are performing a third analysis. Bancor should be aware of the direction we are going. Commissioner Commers said that Bancor will proceed with their analysis and the third party will also work on a development plan. Mr. Bolin confirmed that Bancor is aware of the funding request and encourages new ideas. INFORMATION ITEMS: • Monthly Housing Report /"� Mr. Bolin stated that he just received the report this morning. This has been a good year for loans. A . , � total of 33 loans were given to residents and 23 from the HRA revolving and deferred loan fund. Last year total loans were 16; we have exceeded last year totals and have the month of December to go yet. Mr. Bolin reported that the funding sources last month were $72,000 and the new total is over $400,000 for the year. Mr. Bolin reviewed the monthly service report. $22,000 was received in principal, $3,500 in interest with an ending principal balance of $950,000. Currently there are 78 loans in the portFolio and the community reinvestment fund is $453. As a result, $27,558 was deposited back into the account. Currently, 5 loans are in delinquency, 3 are 1-30 days late, 1 is 30-60 days late and 1 is 60+ days late. The related principal loans total $54,000 total with delinquent payments at $2,800. Mr. Bolin reported that the operation insulation and remodel program is going okay. Our goal was 25 appointments and we are at 21 for the year. Currently we have no November or December appointments. Operation insulation is not going as well. We had a goal of 50 appointments and have had 7 appointments through October. This program is not as popular as we had thought and are not sure why the accounts are low service. OTHER ITEMS: Mr. Bolin reported that )im Casserly is updating our cash balance and position and will report back to HRA as to what we can invest in other redevelopment projects. Commissioner Commers questioned these cash balances. ^ Mr. Bolin stated that this is the cash on hand from projected funds that may be complete or expiring. The sources will be identified so HRA will know what funds will be available in the future. Ms. Cerney confirmed that the HRA levy for the city is almost paid off, the pre 1990 districts are getting paid off and they may use these funds for other projects rather than close the districts. Commissioner Schnabel questioned if the storm results would increase any of the loan requests or were most damages covered by insurance. Mr. Bolin stated that the loan requests did increase and so did the number of calls they received. CE did a mailing last month and they worked with CE, Coon Rapids and the City of Blaine for a home energy fair. 21 people from Fridley attended the energy fair. AD]OURNMENT: MOTION by Commissioner Gabel, seconded by Commissioner Schnabel to adjourn the meeting. UPON A UNANIMOUS VOICE VOTE, CHAIRPERSON COMMERS DECLARED THE MEETING AD]OURNED AT 8:50 P.M. Respectfully Submitted by, ��� � Krista Monsrud Recording Secretary /'1 y , � CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING �Ceml��' , a D o5 Name and Address Agenda Item of Interest