Loading...
HRA 06/03/2010 - 29811CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION JUNE 3, 2010 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:17 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Pat Gabel Larry Commers Stephen Eggert John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director Jim Casserly, Development Consultant Richard Pribyl, Finance Director ACTION ITEMS: 1. Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of May 6, 2010 Meeting Minutes MOTION by Commissioner Eggert to approve the minutes as presented. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 3. Election of Officers Paul Bolin, HRA Assistant Executive Director, said that the HRA by-laws require the Commissioners to elect a Chair and Vice-Chair to one-year terms. Staff recommends that the Authority elect a Chair and Vice-Chair. MOTION by Commissioner Holm to nominate Larry Commers as Chair and Pat Gabel as Vice- Chair. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Approval of Housing Replacement Program Paul Bolin, HRA Assistant Executive Director, said that the April 6th Legislation was approved reauthorizing our scattered site program. The program allows HRA to purchase up to 100 properties to demolish/rehab and place into a multi-phased scattered site TI District. HRA can construct and/or improve properties up to 150% of the average home value. The legislation requires a 25% non-TI match. Mr. Bolin said that the current housing market requires new approaches to acquisitions. Staff is recommending partnering with non-profit Twin Cities Community Land Bank (TCCLB). Mikeya Griffin and Shawn Huckleby from TCCLB will provide more detailed information on this program. Staff recommends a motion to continue the Housing Replacement Program, a motion to participate in the Twin Cities Community Land Bank's "First Look" Program and a motion authorizing staff, with approval of Board or Vice-chair & Executive Director, to purchase up to three homes for inclusion in the HRP. Shawn Huckelby, VP of TCCLB, said that TCCLB is a subsidiary of family housing in the Twin Cities. They are a nonprofit organization whose mission is to support local government, neighborhood based organizations, community development corporations and nonprofit and for profit developers to further economic development and affordable housing. TCCLB was formed last year to help find a way to access properties before they are listed on the foreclosure market. Minneapolis, St. Paul, Hennepin County and Brooklyn Park are currently participating in this program and it is expanding to the seven county metro areas. Mikeya Griffin, Program Manager, said that once TCCLB receives information that there are properties to purchase, the information is entered on a global spreadsheet on Google docs and every day information is updated and partners have ability to look at properties available for sale. Parties have 24 hours to say if they are interested. Once interest is received they have five days to inspect the property and request pricing. Pricing is not available upfront, once the interest and pricing is requested the information will be released to the interested party. If the pricing is not accepted the property goes back for sale on line. If the pricing is accepted, the party has 30 day to close. The purchase agreement and documents are prepared for closing. TCCLB will make sure any judgments, leans, assessments, etc. are taken care of and a clear title is given. Mr. Huckelby said that there is no cost to participate in this program, only when the property is purchased there is a$1,500 charge for nonprofit, $2,000 for government and $3,000 fee for for- profit developers. With the number of foreclosures increasing this is just another tool to use at the local level to help address properties. The City of Minneapolis is taking properties at a certain value and below, demolishing the properties and using the land for future development. Ms. Griffin added that this is just one way to help municipalities acquire properties. Developers have to adhere to rules and program requirements. Developers must agree to adhere to all standards and the goal is for community stability and not for rental homes etc. Commissioner Gabel asked about the financial cap. Mr. Huckelby said that the cap for purchasers is 115% of inedian income. Commissioner Gabel asked how the 25% can be part of TIF and how it worked. Mr. Bolin said that the rules and regulations would apply to properties HRA would pass on if the property was in too good of shape. 25% would only apply to properties purchased that are demolished and find a private buyer to build a home. The 25% would come from the general fund or housing replacement program. Chairperson Commers asked if this would be in the scattered site program. Mr. Bolin said that properties HRA would purchase would go into the program, but privately purchased properties would not. Any properties HRA chooses to pass on, another group of developers would get the ne�t chance to purchase. Mr. Huckelby said that each city has a different priority criteria. Commissioner Eggert said that currently developers do not have access to these properties. Ms. Griffin said they do but under this program the City has first choice of purchasing the property; or the first right of refusal. Commissioner Eggert asked Ms. Griffin to share experiences other communities have had on this program. Ms. Griffin said that as of today 109 homes were sold. Commissioner Meyer asked what happens to the equity the homeowner would have in the house. Mr. Huckelby said that would be an issue between the lender and the homeowner. TCCLB would acquire the home after the redemption period is over, the property is vacated and the bank has the title. Commissioner Meyer asked what should be done to the home if the home is in disrepair. Ms. Griffin said that the developer would make those calls as they would best be able to know what would sell and be good in the marketplace. Mr. Huckelby said that each developer has to get the permits necessary to do work in your community. City staff inspections will be made to make sure the developer is meeting building requirements. TCCLB makes sure the developer adheres to the standards that are set. Commissioner Meyer asked what precautions are made to make sure the developer doesn't spend too much money so the house cannot be sold. Mr. Huckelby said that people who acquire the property cannot exceed 115% of inedian income. Developers have an idea of what needs to be done and how to price the home to meet those requirements. Commissioner Meyer asked what happens if the home doesn't sell. Mr. Huckelby said that has not been a problem. Developers that are not selling may bring the issue to the city and ask for help. Commissioner Meyer asked if the developer has more into the home than what it will sell for who is on the hook for the money. Mr. Huckelby answered the developer. Commissioner Meyer said that the developer pays for the repairs they have done. Mr. Huckelby answered that is correct. Ms. Griffin said that this is no cost to the city, it would be the developers problem. Mr. Huckelby said the developer can borrow up to 95% of the after rehab value. This is a personal guarantee to make sure the loan will have the ability to be repaid. Chairperson Commers said it is HRA's intention to acquire these properties in scattered properties. Commissioner Holm asked if lenders had an exclusive arrangement with TCCLB. This is an advantage for mortgage holders as they can dispose of properties with minimal effort. Mr. Huckelby said what hurts a lender is the cost and if this process is in place, in 45 days the home could be sold which saves them money. Commissioner Eggert asked what the assessment is based on. Ms. Griffin said that the assessment is based on loan dollars but doesn't necessarily rely on loan dollars alone and TCCLB will work with the bank to be realistic. Chairperson Commers asked what the role of the trust was. Ms. Griffin said that interested parties must to go through the trust and they will do the negotiations. Commissioner Gabel asked what the metro median income is. Ms. Griffin answered $96,500. Chairperson Commers asked how much the property could be sold for based on that income. Ms. Griffin said that it will depend on credit and a lot of other things. Mr. Huckelby said that it isn't advised to buy a home more than 2.5 times your income. Commissioner Meyer asked what constitutes the average income of a family group. Ms. Griffin answered several things; yearly income, dividends, stocks, etc. Anyone working in the household income is counted. MOTION by Commissioner Gabel to approve the Housing Replacement Program. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY MOTION by Commissioner Gabel to participate in the Twin Cities Community Land Bank's "First Look" Program. Seconded by Commissioner Holm. Commissioner Meyer asked if this was needed and why HRA couldn't continue to acquire properties like it is doing now. Chairperson Commers said that HRA will continue to operate as it is but this will be a new avenue. Many times the HRA finds out about foreclosed properties too late and this will make HRA aware of that sooner. Commissioner Holm added that by acquiring properties it assures the homes will be owner occupied homes rather than rental. Commissioner Eggert said that the homes would be priced at a predetermined price, the negotiation is done by TCCLB and the home can be acquired in a timely manner. Commissioner Holm said that the competition and having others interested is good. This program will allow foreclosed homes to be identified and should be a good deal. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY MOTION by Commissioner Holm to authorize staff, with approval of Board or Vice-chair & Executive Director, to purchase up to three homes for inclusion in the HRP. Seconded by Commissioner Eggert. Paul Bolin said that sometimes the timing is not within the time frame of the monthly HRA meeting. Staff is asking for approval to purchase up to three homes. Chairperson Commers asked if any homes have been identified to purchase. Mr. Bolin answered yes. Commissioner Eggert said this is a good time to try this program. Commissioner Gabel asked if three homes are enough. Mr. Bolin said staff wants the Authority to be comfortable with the homes being purchased, and thought a 3 home trial is a good way to start. Commissioner Holm suggested starting with three and if it needs to be raised to a higher number that could be discussed. Three in one month may be sufficient. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5. Approval of Sikh Society Property Purchase Paul Bolin, HRA Assistant Executive Director, said that staff has had ongoing negotiations with the Sikh Society. Staff and the Sikh Society have reached a tentative agreement, including a temporary leaseback, pending Authority approval. $424,000 for land and building $ 20,000 for relocation $444,000 total Mr. Bolin said that the price is 6% less than the HRA offered in 2007 and is comparable to declines in values of similar properties. The parcel is nearly one acre in size and provides additional redevelopment options for the area. Staff recommends the HRA approve the agreement and authorize Board Chair and Staff to execute agreement. Mr. Bolin said that the Sikh Society was supposed to drop off a signed agreement by Spm today but they did not drop it off. Chairperson Commers asked what it meant if rental happens after June in terms of property taxes. Mr. Bolin said the Sikh Society is a nonprofit so that is not an issue. Chairperson Commers asked if any of the old restaurant equipment is worth selling. Mr. Bolin said that staff gave the Sikh Society the right to salvage anything and they will do that by moving the equipment to their new worship space. Commissioner Eggert asked if a cap should be put on the rental to 30 days after the other property is acquired. Mr. Bolin said that the Sikh Society doesn't want to have the liability as they would have to carry insurance and pay utilities. The provision in the lease states that if they go beyond six months the rent increases to $100 per day. MOTION by Commissioner Holm to approve the Sikh Society Property Purchase. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS: 1. Home Remodeling Demonstration Program Paul Bolin, HRA Assistant Executive Director, said that there are two open houses to be held on Saturday and Sunday; July 17/18 and Wednesday July 21 from 4:30PM unti16:30PM This project has received many positive comments and has been a really fun project. Chairperson Commers asked if a board was up in the home about the HRA loan program. Mr. Bolin answered yes and he has been handing out applications and calls are starting to come in about the loan program. Commissioner Eggert said he was anxious to get the home on the market and sell it to have the opportunity to purchase and start another one. Mr. Bolin said that there has been discussion with Mr. Hickok and the builder about doing a second home. The scattered site home could be used but staff doesn't know if enough variation in housing style is available to do something other than another rambler. It is best to wait and see where we come out on this house first and maybe then consider doing another home more appealing to elderly residents. Another option is to put a green spin on things. Commissioner Eggert said that the goal is to break even and inspire people. 2. Fridley Assisted Living, LLC (Faulkner project) Paul Bolin, HRA Executive Assistant Director, said that Mr. Faulkner has the land use approvals and the development agreement from the city. He also received a preliminary approval from Rice Creek Watershed District regarding the wetland. The title is underway and the bank Board meets tomorrow. Mr. Faulkner is seeking financing for both phases now. Within the ne�t 2-3 weeks all information should be received from the bank and ready to close. Chairperson Commers asked if Mr. Faulkner is aware of the Waters Senior Living development that is going up in the area. Scott Hickok said yes and Mr. Faulkner sees it as a healthy neighbor for his development. Chairperson Commers asked about the historic designation of Sandy's. Mr. Hickok said that the building is in such poor use it cannot be used. The developer wanted a restaurant to stay there and it was part of the master plan to include a restaurant but not anymore. Where Sandy's was they will need to do master plan amendment. The development is all on one lot so there is no intention of dividing out any parcel. Mr. Hickok said the plan will go in front of the Planning Commission in June 16 and City Council June 28. This is a development group with experience behind them. Staff will be going out ne�t week to tour a similar facility in St. Michael. The developer is not asking Fridley for any money and will be privately funded. The development will start construction this year. 3. Housing Loan Program Update Paul Bolin, HRA Executive Assistant Director, said that in May one RLF and one DEF loan were closed which makes a total of 7loans closed year to date. The loans were for kitchen, heating systems (2), roof and windows (3). There were two Remodeling Advisor Visits in May which makes a total of two year to date. NON —AGENDA UPDATE: ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MEETING ADJOURNED AT 9:05 P.M.