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HRA 03/23/2010 - 6249March 23, 2010 HRA Meeting Regular Meeting Agenda 7.00 p.m. City Hall, Council Chambers Call to order Roll call Action Items 1. Approval of expenditures 2. Approval of February 4, 2010, Meeting Minutes 3. Approval of Resolution Designating Official Depositories 4. Approval of 2010 Mowing Contract 5. Approval of Realtor and Contractor for Home Improvement Demonstration Project 6. Approval to set Public Hearing for Potential Land sale Informational Items 1. Housing Loan Program Update Adjournment H:\My Documents\HRA\2010 AGENDASNarch 23 -2010 Agenda Outline (2).docH:\My DocumentAHRM2010 AGENDASNarch 23 -2010 Agenda Outline (2).doc AGENDA ITEM CITY COUNCIL MEETING OF CRY OF March 23, 2010 FRIDLEY To: William W. Burns, Executive Director Paul Bolin, Asst. Executive Director From: Richard D. Pribyl, Finance Director fR Becky Kiernan, Accounting Specialist/Admin. Ass't. Date: March 10, 2010 Re: Resolution Designating Official Depositories Attached is a resolution appointing Wells Fargo Bank Minnesota N.A. as the City's official depository for 2010. This has been a traditional housekeeping task in the past. We like to designate our banks on an annual basis. For some reason, this traditional had been dropped a number of years ago, but at this time we would like to reinstate this process. The service we receive has been good; Wells Fargo Bank Minnesota N.A. has been responsive to our requests for information and does provide extensive internet services of which the City of Fridley and the Fridley Housing and Redevelopment Authority uses extensively. In using Wells Fargo Bank Minnesota N.A., we are able to invest idle cash on a daily basis with minimum costs to the City. We are able to determine daily needs and invest the balance in a money market account with Wells Fargo and other institutions. If we were to change the provider for the banking services, we would need to change the method in which we invest idle funds and the ease in which we make deposits. Staff recommends a motion adopting a resolution designating official depositories for the Fridley Housing and Redevelopment Authority. HRA Resolution No. 2010 - 01 RESOLUTION NO. HRA 2010 - 01 RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES FOR THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY I, Richard D. Pribyl, do hereby certify that I am Finance Director - Treasurer of the Housing and Redevelopment Authority in and for the City of Fridley, a corporation organized under the laws of the State of Minnesota. I further certify that at a meeting of said corporation duly and properly called and held on the 23rd of March, 2010, the following resolution was passed, that a quorum was present at said meeting, and that said resolution is set forth in the minutes of the meeting and has not been rescinded or modified. IT IS HEREBY RESOLVED, that Wells Fargo Bank Minnesota N.A. is hereby designated as a depository for the funds of this corporation. IT IS FURTHER RESOLVED, that checks, drafts, or other withdrawal orders issued against the funds of this corporation on deposit with said bank shall be signed by two of the following: Richard D. Pribyl, Finance Director - Treasurer Alan D. Folie, Assistant Finance Director William W. Burns, Executive Director And that said bank is hereby fully authorized to pay and charge to the account of this corporation any checks, drafts, or other withdrawal orders. BE IT FURTHER RESOLVED, that Wells Fargo Bank Minnesota N.A as a designated depository of the corporation is hereby requested, authorized, and directed to honor checks, drafts, or other orders for the payment of money drawn in this corporation's name, including those drawn to the individual order of any person or persons whose name or names appear thereon as signer or signers thereof, when bearing or purporting to bear the facsimile signatures of two of the following: Richard D. Pribyl, Finance Director - Treasurer Alan D. Folie, Assistant Finance Director William W. Burns, Executive Director And Wells Fargo Banks shall be entitled to honor and to charge this corporation for all such checks, drafts, or other orders, regardless of by whom or by what means the facsimile signature or signatures thereon may have been affixed thereto, if such facsimile signature or signatures resemble the facsimile specimens duly certified to or filed with Norwest Banks by the City Clerk or other officer of his corporation. BE IT FURTHER RESOLVED, that any and all resolutions heretofore adopted by the Housing and Redevelopment Authority of the corporation and certified to as governing the operation of this corporation's account(s) with it, be and are hereby continued in full force and effect, except as the same may be supplemented or modified by the foregoing part of this resolution. HRA Resolution No. 2010 - 01 BE IT FURTHER RESOLVED, that all transactions, if any relating to deposits, withdrawals, re- discounts, and borrowings by or on behalf of this corporation with said bank prior to the adoption of this resolution be, and the same hereby are, in all things ratified, approved, and confirmed. BE IT FURTHER RESOLVED, that any bank or savings and loan may be used as depositories for investment purposes as long as the investments comply with authorized investments as set forth in Minnesota Statutes. BE IT FURTHER RESOLVED, that the signatures of two of the following named City /HRA employees are required for withdrawal of City investment funds from savings and loan associations: Richard D. Pribyl, Finance Director - Treasurer Alan D. Folie, Assistant Finance Director William W. Burns, Executive Director BE IT FURTHER RESOLVED, that any brokerage firm may be used as a vendor for investment purposes as long as the investments comply with the authorized investments as set forth in Minnesota Statutes. I further certify that the Board of this corporation has, and at the time of adoption of said resolution had, full power and lawful authority to adopt the foregoing resolutions and to confer the powers therein granted to the persons named who have full power and lawful authority to exercise the same. PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 23rd DAY OF MARCH, 2010. LAWRENCE R. COMMERS, CHAIRPERSON ATTEST: WILLIAM W. BURNS, EXECUTIVE DIRECTOR Fridley Housing and Redevelopment Authority F!! MEMORANDUM DATE: March 17, 2010 TO: William W. Burns, Executive Director of HRA FROM: Paul Bolin, Assistant HRA Director SUBJECT: Approval of Mowing Contract Introduction The HRA has had a good working relationship with Complete Grounds Maintenance for the past 6 summer seasons. The rates have been relatively low and the service very reliable. Last year the HRA participated with the City in soliciting bids for mowing services and Complete Grounds Maintenance had the lowest pricing. Complete Grounds Maintenance has agreed to provide mowing services for the same rate as last year. Recommendation Staff recommends that the Authority contract with Complete Grounds Maintenance for the 2010 summer season. Not only will we continue to receive very reliable service from Complete Grounds Maintenance, it will be provided at the same cost as last year. AW ri ACTION ITEM HRA MEETING OF MARCH 23, 2010 MY of FRIDLEY Date: March 17, 2010 To: William Burns, City Manager From: Paul Bolin, Asst. Executive HRA Director Subject: Home Improvement Demonstration Proiect — Realtor/ Contractor After closing on the great (for our purposes) property located at 831 Mississippi Street. Staff began working on selecting a remodeling contractor and realtor to partner with us in making this demonstration program a success. Staff sent a request for qualifications to 79 home builders /remodeling contractors, currently licensed in Fridley and/or participating in our Home and Garden Show. A total of 16 contractors responded back stating their interest in the project, their experience with remodeling 1950's ramblers, and provided examples of their work along with references. Staff worked with members of the Community Development staff to evaluate and choose the top 3 respondents for follow up interviews at the home itself. Staff spent over an hour with each of the 3 finalists discussing potential upgrades to the home and judging the contractors understanding of what the HRA hopes to get out of this project. Each contractor was then given 5 days to submit a sketch and/or written description of what it is they would propose doing to the home and some cost estimates for the work. All three finalists are fine craftsmen; however, Lennox Builders was the resounding choice of staff members involved. Lennox Builders, located in Mounds View, seemed to have more resources available for the project (larger staff, including a marketing director) and had a full understanding of what we are trying to accomplish. Lennox Builders were the group that did the Coon Rapids "Home for Generations" program, did exceptional work, and came highly recommended. Their proposal is included in the packet. Staff ran a very similar process, using the North Metro Realtors Association to get our materials out to all of their members, in selecting a realtor/broker. A total of 15 realtors sent letters of interest and a listing of their qualifications. Staff members selected the top 3 and held interviews in the home. While all three realtors are experienced with the Fridley market and could do an excellent job selling the finished product, Tim Van Auken of Counselor Realty seemed to have the most interest in being an active participant throughout the entire process. Mr. Van Auken has a number of innovative ideas for marketing, not just the home, but our entire program. He will be an active participant in fine- tuning the exact extent of the remodel, able to help balance value with the desire of today's homeowners. Recommendation: Staff recommends the Authority select Lennox Builders to be the contractor for the Home Improvement Demonstration Program and Tim Van Auken/Counselor Realty to be the realtor /listing agent for the program. Staff further recommends the Board Chair and Executive Director be authorized to sign the necessary agreements on behalf of the Authority. AW-1 ACTION ITEM ri HRA MEETING OF MARCH 23, 2010 CITY OF FRIDLEY r% l . 11 A_ -_1_ A I A/1I I1 vaLc. IvIQI u I 1/, Gu I V To: William Burns, City Manager From: Paul Bolin, Asst. Executive HRA Director Subject: Authorization to Set Public Hearing For Potential Land Sale The HRA has been approached by Mr. James Faulkner, a builder /architect/developer, regarding the possibility of purchasing two lots currently owned by the HRA. The two sites Mr. Faulkner wishes to purchase are located at 6352 Old Central Avenue and at 1271 E. Moore Lake Drive. Mr. Faulkner plans to develop a 40 unit assisted living / memory care building for seniors on the Old Central property and a 9,900 square foot commercial building on the E. Moore Lake Drive site. The HRA purchased these two sites in the spring of 2000 for a total of $143,000. As indicated in a report prepared for the HRA prior to the purchase, the properties are not buildable in their current condition due to the excessive depth of organic soils. It is because of these soil conditions that Mr. Faulkner is offering a price of $100,000 for the land. (An attached analysis from Attorney Casserly discusses this in greater detail). Mr. Faulkner is also making application to the City for a "master plan" approval for the site, as it is zoned S -2 Redevelopment District. The HRA will need to sign on to the application as the current property owner in order to move his application forward. (There is no cost or resulting obligations resulting from the HRA's signing on to this land use application). Staff and legal counsel will provide more detailed information at your meeting on Tuesday night, including pictures of various Faulkner developments. Recommendation: Staff recommends the Authority set a public hearing on the potential land sale, to the Faulkner Group, for May 6th, 2010. Staff further recommends that the HRA authorize the Board Chair to sign on to the "Master Plan" land use application. James R. Casserly jcasseriy @krassmonroe.com Direct 952.885.1296 Greg D. Johnson gjohnson@krassmonrt)e.com Direct 952.886.6994 MEMORANDUM To: City of Fridley Housing and Redevelopment Authority Attn: Paul Bolin, HRA Assistant Executive Director From: James R. Casserly, Esq. Greg D. Johnson, CPA, Senior Public Finance Analyst Date: March 17, 2010 Re: Sale of Old Central Lots to Faulkner Our File No. 9571 -75 INTRODUCTION MMONROE Jim Faulkner has been negotiating with the City and HRA for some weeks regarding the purchase of two lots owned by the HRA which we have referred to as "Old Central Lots." The Developer is proposing that he purchase the lots for $100,000 for the construction of a senior facility (40 assisted living /memory care units) and a 9,900 square foot commercial building (retail /office). The site has remained undeveloped because of the substantial amount of soil corrections that are required to make the site usable. PURCHASE PRICE A 40 -unit senior project should be able to pay $8,000 a unit for a buildable site or approximately $320,000. A commercial building should be able to pay approximately $15.00 per square foot of building for a buildable commercial site or approximately $148,500.00. If the site were buildable the value for these uses should be approximately $468,500. However, the Developer has provided HRA staff with four soil correction bids which range from $612,000 to $620,771. Averaging the four bids 8000 Norman Center Drive, Suite 1000 Minneapolis, Minnesota 55437-1178 TEL952.885.5999 Fax 952.885.5969 www.krassmonroe.com together, the soil correction costs would be approximately $616,000. The opportunity to save money on those bids will result from a lower cost per cubic yard of exporting unsuitable soil and importing appropriate fill. The cost of importing and exporting soil appears to be well in excess of $500,000. The Developer is offering the HRA $100,000 for the total square footage which is less than 100,000 square feet. REAL PROPERTY TAXES Attached is a cash flow our office prepared reflecting the amount of City taxes that would be generated from the construction of the senior and commercial facilities. The annual City portion of the taxes would be $21,300. As the cash flow suggests, there will be approximately $300,000 of taxes available over the next 15 years for the City as a result of the development of this site. CONCLUSION Because of the excessive costs of soil correction and the opportunity of currently tax exempt property generating over $21,000 in annual City taxes, it is our recommendation that the HRA sell the lots for $100,000. Some issues do need to be worked out with the Developer. For example, if all or a portion of the site is not developed, the HRA will want it back for future development. In addition, it is important that the soil correction for both the commercial and the senior project be completed at the same time. It is not as important that the commercial building be done immediately and the agreement should provide several years to allow the commercial building to be developed. These are issues that will be fully developed in a Purchase or Development Agreement that the HRA will consider at its next meeting. At that meeting we will also hold a public hearing on the sale of the lots. Please give us a call if there are any questions. JRC /al Enclosures KM: 4813- 7566 -8485, v. 1 2 Old Central - Senior & Commercial -City Tax Analysis.xls Prepared by Kress Monroe, P.A. 3/17/2010 W 1 y Ut- FRIDLEY - ior / Commercial Project Projbased on Pay 2010 tax rates) COMMERCIAL B 4d� Assessed V $ 110.00 per sq. ft. = $1,089,000 Tax Capacity 150,000 x 1.50% = 2,250 939,000 ; x - 2.00% 18,780 i - -- -� - -- 21,030 1,089,000 City of Fridley Local Taxes - Annual 21,030 x 0.32258 = $ 6,784 _ Build 2011 Value 2012 Taxes 2013 _SENIOR BUILDING Assessed Value 40 units @ $ 90,000 - �--- F= per unit = $ 3,600,OQ0 Tax Capacity 3,600,000 x 1.25% = 45,000 $ 14,516 Ciiy of Fridley Locai Taxes -Annual 45,0001 x 0.32258 = I Build 2010 Value 2011 Taxes 2012 - Total Assessed Value $ 4,689,000 CITY OF FRIDLEY PROPERTY TAXES Inflation 0.00% Commercial Senior Year ' Building Building TOTAL 1 2 - -- 2012 i -+- 2013 ! i - - 6,784 14,5161 _ 14,516 , 14,516_ 14,516 _14,516 21,300 21,300 21,300 3 2014 6,784 6,784 4 2015 5 2016 6,784 14,516 - 21,300 6 2017 6,784 14,516 21,300 7 2018 6,784 14,516 21,300 8 2019 6,784 14,516 21,300 -9 2020 6,784 14,516 21,300 10 _ L- 2021 6,784 14,5161 -� 21,300_ 11 12 .f _ 13 14 15 -- --+- 2022 6,784 2023 _ - - 6,784 r 2024 6,784 2025 _ 6,784 2026 6,784 141516 _14,516 14,516 ; _ 14,516 ` 14,516 - - 21,300 21,300 21,300 21,300 94,974 203,225 298,199 0 Old Central - Senior & Commercial -City Tax Analysis.xls Prepared by Kress Monroe, P.A. 3/17/2010 Fridley HRA Housing Program Summary Cover Page March 23, 2010 HRA Meeting Report Loan Application Summary Loan Origination Report Remodeling Advisor Description Loan application activity (e.g. mailed out, in process, closed loans) for January and year -to -date. Loan originations for February and year to -date. Shows the number of field appointments scheduled and completed for the Remodeling Advisor Services administered by Center for Energy and Environment. provide- LA P ck a." PI u, w\, 6e v 5 H:\—Paul's Documents \HRA\HRA Agenda Items\2010\February 4, 2010\Housing Program CoverFebruary.doc FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY March 2332010 1. Legislative Update It has been a busy week with two trips down to the capitol to testify before both the House and Senate Tax Committees on the scattered site housing replacement TIF District language we have been trying to reestablish the past few Legislative Sessions. Our bill was passed through both committees without a lot of discussion. Hopefully the "third time is the charm" as they say. You may recall that 2 sessions ago our bill made it through the House and Senate before being attached to a larger tax bill the Governor vetoed. Last year our bill was moving along extremely well until the bills Senate author became ill and missed an important hearing, therefore not making it out of the Senate. We are optimistic that our Bill will get through this year, allowing us the ability to re- establish the scattered site housing replacement plan and purchase the worst of the vacant foreclosed properties in Fridley. 2. Gateway Northeast Update TKD Il Kim, owner of the Tae Kwon Do studio has NOT returned the purchase agreement for his property. Mr. Kim has lost out on not only the Blaine Dairy site he was hoping to relocate to, but also 2 other buildings over the past 3 weeks. Staff is still optimistic that a deal will be struck soon, as Il Kim is working hard to find a site and has enlisted the help of his friend/student Larry Mountain (an attorney with Land Title) to help him. Both Il Kim and Mr. Mountain are comfortable with the purchase agreement terms, it is simply a matter of Il Kim finding a site to move into before he is comfortable returning the Purchase Agreement to us. Demolition/Environmental As I had reported in February some the soil samples taken from the former Sinclair station during tank and hoist removal found some minor contamination under the area where the hoists were located. There is likely very little contamination and possible that no additional work may be required. However, the MPCA is still working on making a determination on whether or not they want further investigative work done on the site. We recently submitted the required MPCA "Leaksite Ownership" Form and are waiting to hear back from the MPCA, what, if any, the next steps are that need to be taken. Fortner Citgo Station Staff has been keeping an eye on the vacant Citgo station since we originally took a look at purchasing the property in 2006. You may recall that the price wanted was somewhere around $530,000. If there is interest on the part of the HRA to purchase this property, the owners may now be willing to consider a more realistic price. The owners have not paid property taxes on the parcel since 2006, and now currently owe approximately $50,000 in back taxes, penalties, and special assessments. I will continue to look further into the property and try to determine what an appropriate purchase price would be.