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HRA 08/05/2010 - 29812CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION August 5, 2010 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Pat Gabel Larry Commers Stephen Eggert John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Jim Casserly, Development Consultant Becky Kiernan, Accountant ACTION ITEMS: 1. Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by Commissioner Eggert. Chairperson Commers asked about the ground maintenance charge of $2,700 and asked staff to check with the Public Works Department to see if they have staff available for that job which may be a savings. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of June 3, 2010 Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Gabel. Chairperson Commers asked on the last page to add that Sandy's is not on the historic designation list. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MINUTES APPROVED AS AMENDED 3. Approval of Motion Authorizing Sales Listing for 831 Mississippi Street Paul Bolin, HRA Assistant Executive Director, said that this project has moved along very well. The builder has delivered everything that was promised in the correct timeframe and budget. Three "finished" open houses were held and nearly 2,000 residents walked through the home. Additional open houses have been added, every Wednesday night for the month of August. Mr. Bolin said that of all the people that came through the home he heard only three negative comments which were of personal choice and cosmetic nature. 27 dozen cookies and 125 loan application packets were distributed to those interested. This project should bring interest in the remodel advisor visits, loan programs and an increase in building permits. Mr. Bolin said that staff is looking for another home to do a similar project but this time the focus could be on changes allowing elderly people to remain in their homes. Staff would look to purchase another rambler, bring the washer/dryer on the main floor and make the home more accessible. Another option for a remodel is a green home but that may be difficult and may involve things that may not be very practical. Staff will come back to HRA in September with recommendations. Mr. Bolin said that staff is looking for a motion to place the home for sale with a list price of $197,900. This price would recover the bulk of the HRA investment and places the home competitive in today's market. If the home sold at the asking price the investment of just under $192,000 would be covered. By the time you take the realtor fees out there would be about a $6,000 investment from HRA. It should not take long for the city to make that up with the increase in building permits and loan programs. The amount of education that was received by Fridley residents for $6,000 was well worth it. Chairperson Commers asked about the real estate taxes. Mr. Bolin did not have the new tax figures with him but the previous value was about $154,000 and taxes were $2,200. He will get the figures to the Authority. Chairperson Commers asked when the second half of the taxes would be due. Becky Kiernan, Accountant, said that the second half would be due in November so it would depend on when the home sells. Jim Casserly, Development Consultant, said that the taxes would not be exempt. The improvements won't show up until the 2012 taxes. The taxes should be about 1% of the market value. Commissioner Holm noted that the home has not been appraised yet and he assumed the taxes would be based on the appraised value. Mr. Bolin said that is correct. Based on the analysis done by the realtor the appraised value should come in close to the asking price. Commissioner Holm noted that the realtors suggested a lower sale price. Mr. Bolin said that is correct, the realtor's price range is where he thinks the home will most likely sell at; $185,000-$195,000. Commissioner Holm said that he drove around Fridley to look at comparative homes and found that some were higher but most were lower. He doesn't understand how the sale price is calculated but he is thinking the home will sell for around $190,000. Chairperson Commers said that the issue is what the fair market value is in today's market. Commissioner Eggert noted that the timing isn't the greatest. Commissioner Gabel said that a lot of the things are new and some of the existing homes on the market may not be new like this home so that would have some benefit. Mr. Bolin said that this is a very unique property because basically it is a brand new home with the addition on the back All those foreclosed comparables tend to bring the value down. People were asked as they came through what they thought the home was worth and values anywhere from $170,000 to $270,000 were heard. Commissioner Gabel said that it would be best to list the home at this price and the price can always be negotiated down, but not up. Mr. Casserly said that this was a perfect candidate to be included in the Housing Replacement Program but when this was issued the law wasn't passed. Additional projects going forward would be eligible for the Housing Replacement Program. If another home is done like this one, with similar revenues and expenses, any shortfall amount would be covered by the Housing Replacement Program. Mr. Bolin said that this project was started last fall and the legislation wasn't received until the end of this session. MOTION by Commissioner Gabel to approve the motion authorizing sale listing for 831 Mississippi Street at $197,000. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Tree Replacement on HRA Property Paul Bolin, HRA Executive Assistant Director, said that two Autumn Blaze Maple and an American Linden have been selected as the replacement trees. The trees are just under $500/tree installed and guaranteed. If approved as an expenditure by the HRA, the trees would be installed within 2 weeks. Staff recommends approval of this request. MOTION by Commissioner Eggert to approve the purchase of three trees to plant on HRA Property. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS: 1. Fridley Assisted Living, LLC (Faulkner project) Paul Bolin, HRA Assistant Executive Director, said that HRA closed on the property on July 6tn Building plans and permit application were submitted on July 12th. Earthwork / soil corrections started mid July and the actual construction is likely to begin within 2 weeks. The estimated completion date is January 1, 2011. Soil corrections will be made on the entire site but the first phase includes only the 40 unit building on the northern most piece of property. 2. Scattered Site Acquisition Program Update Paul Bolin, HRA Assistant Executive Director, said that staff continues to identify and look at homes for demolition and placement into the program. MLS and TCCLB's "First Look" continue to provide leads. Many are too "nice" for demolition or have multiple short sale offers pending. Some success has come as staff offers tend to magically draw out higher offers within hours of making them creating activity for Fridley properties. Mr. Bolin said that when homes sell they must be single family owner occupied homes. Commissioner Eggert asked if when the home sells it can be traced to see if the person applied for building permits etc. to rehab the home from the poor state of condition. He asked if staff was internally able to track that information. He said that it wasn't a bad deal if HRA was losing bids to developers because the efforts are creating positive activity in the market. Mr. Bolin said that activity is easy to track with the land bank and staff can see if the homes are being rehabbed correctly. The other ones, staff can keep watching them but when sales are recorded there is about a six month lag before the records are accessible. 3. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, said that Fridley HRA Loan Program closed one other loan in July making a total of nine year to date. The total Remodeling Advisor Visits were three in July making a total of six year to date. NONAGENDA ITEMS: Paul Bolin, HRA Assistant Executive Director, announced Rick Pribyl's retirement. Everyone is welcome and encouraged to attend on August 13th at the Fridley Community Center. Mr. Bolin said that the purchase of the Sikh Society is having difficulty closing because of title work problems. When the Sikh Society purchased the property from McDonalds the northern most part of the property's deed was not filed. The easiest way to correct this is for McDonalds to present the Sikh Society with the deed. The Sikh Society is working with McDonalds to get the documentation needed. The Sikh Society wants to get this done as they are trying to purchase property for their new worship space in Bloomington. Commissioner Meyers asked if the county had the deed records. Mr. Bolin answered no; all records have been gone through in Torrens and Abstract and the information cannot be found. This was probably overlooked at the original closing. Chairperson Commers said that the building permit should have some information. Mr. Bolin said that staff has even pulled out the original blue prints and have found nothing. McDonalds was built in 1967 so records go way back. Jim Casserly, Development Consultant, said that the property is Abstract and Torrens so at the original closing there were probably a few deeds, the abstract was recorded and the other deed is somewhere. McDonalds probably did that and who knows where it is. The problem is that there is no way to correct this. It will be difficult but they will have to find the deed. Commissioner Eggert asked how big the piece of land is that the deed is missing for. Mr. Bolin said the piece of land is about 80x140; a good portion of the parking lot. Mr. Bolin said that the Trident Waters of Fridley, the 72 unit senior assisted living, is going to be built on the former Sandy's site. All approvals have been met and now the developer is lining up financing and the closing. This project should get built and they are not on the same time frame as Mr. Faulkner. This development should start construction in October or November. Mr. Bolin said that the City of East Bethel has finally received a ruling in their legal battle with the Anoka County HRA and its ability to levy in the City's that have or create their own Authorities. Chairperson Commers said that it looks like Fridley's HRA is not subject to their taxes. The issue is if East Bethel was established before Anoka County and if they are exempt or not. Mr. Bolin said that the ne�t meeting is scheduled for September 2, 2010. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:00 P.M. Respectfully Submitted, Krista Monsrud, Recording Secretary