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10/17/1973 - 00016177THE MINUTES OF THE SPECIAL MEETING 0_F THE FRIDLEY CITY COUNCIL OF OCTOBER 17, 1973 The Special Meeting of the Fridley City Council was called to order at 6:15 p.m. on October 17, 1973 by Mayor Liebl. ROLL CALL: � MEMBERS PRESENT MEMBERS ABSENT Councilman Utter, Councilman Nee, Councilman Breider, Councilman Starwalt, and Mayor Liebl. None. OTHERS PRESENT: Mr. Nasim Qureshi, Acting City Manager/City Engineer, Mr. Doug Peterson, Attorney for P1r. Reidel, Mr. Rudolph �ante, Mr. Norm Reidel, and Mr. Fred Wall, and Mr. Virgil Herrick, City Attorney. CONSIDERATION DF PROPOSAL BY WALL CORPORATION FOR DEVELOPMENT OF REIDEL PROPERTY: Mayor Liebl addressed the Council and wanted to clarify the situation as it now stands. First of all, the property owner is tn a posit�on to cancel the option to Wall Corporation effective October 27, 1973. Secondly, the financial problems that the developer is having at this time are due to the fact that housing costs have become unreasonable, and thirdly, the question is, what can be done to satisfy the needs of the community and the same time, satisfy the needs of the property owner and the developer. Mayor Liebl continued that the developer has already made an investment in the property in the effect of setting up plans and proposing this project. Mr. Reidel needs to settle the property at this time. The Wall Corporation has the reputation of being a reputable Company, and if they cannot produce, the Mayor is not sure anyone else can � Mr. Reidel then gave a brief outline of the property and stated that the Internal Revenue Service wants to foreclose on the property to get some back taxes and interest which are due on the Reidel estates. Mr. Reidel's Attorney, Mr. �oug Peterson, responded further in giving a cost right now which �s be�ng incurred by the estates. First of all, $35,000 �s standing agatnst the estate due to federal taxes and interest and the state debt; $20,000 for real estate taxes and assessments, and a lien was put on the property by two other attorneys that had work with Mr. Reidel of around $12,000. The $12,000 mortgage was satisfied by an additional mnrtgage which was put on the house to satisfy the attorney's fees. So, in total, there is approximately $67,000 in continuing costs presently against the property and within a half year the IRS may foreclose. � Mayor Liebl then said that what had precipitated this meeting Wednesday was a letter that was received by the Council at their October 15, 1973, Public Hearing Meeting, and the alternatives at that time, were first: Wall Corporation give up the option, or, two; the Wall Corporation would be allowed to make an investment �n the community, The Mayor then asked Mr. Reidel if anyone else was available to buy the property, and Mr. Reidel said no, not to his knowledge. Mr. Reidel's Atiorney, Mr. Peterson, then elaborated also, to the fact that since December 1972, Mrs. Lola Shillquist, the real estate broker who has been handling the property, has not really contacted anyone else because of the option that is presently on the property, but also that she has not been contacted by anyone else. At this time, the schedule is such that the Wall Corporation is about the only one who could get going on the thing before the pending IRS foreclosure. The Mayor then opened the discussion to the Council. Councilman Breider then made the following comments. The decision must be made and his feeling was, Mr. Wall has prpposed, lowering the quality of the development. The first thing he has done is el�minate the proposed recreation 6uilding, number two, he has decreased the two car to a one car garage, and number three, he wants units or the units built as rental units in effect changing the quality of the construction. (Note: Mr. Wall entered the meeting at this time.) ��>1� SPECIAL COUNCIL MEETING OF OCTOBER 17, 1973 PAGE 2 Councilman Breider continued that he was real7y not satisfied with the Wall pro�ect in Eagan, and the housing itself was poorly constructed with wavy floors and thin walls. �iscussion followed between Mr. Wall and Councilman Breider commenting on the construction business and Mr. Wall summarized by saying the rents for project of this type are around $295 a month. The cost of the construction of the unit, ,7ust the unit itself, without any land costs is $22,000 and with land costs, the total cost was $28,000. The $28,000 is the total cost wh�ch has to be considered. (Note: Mr. Herrick now entered the meeting,) Mr, Wall's feel�ng was that the only changes were the plumbing hook ups and the changes in the recreation building and the garages d�d not effect the quality of construction, The pract�cal costs consideration limits on the market for apartments and mob�le homes and th�s was an alternative family housing and as is shown by the Rice Creek Townhouses put up by Roger Larson, there is a demand. Mr. Wall summarized further the fact that although these units are not necessarily a sellable item this year, then in 1976 with today's market, these build�ngs will be fairly sellable. Councilman Starwalt then made some comments concerning the construction. He said comments were made by the people that l�ved in the Eagan pro�ect>were that the walls were very thin and he felt that the average s�ze of the families in the pro,7ect were three to five children and he noticed many extra cars parked around. Councilman Starwalt thought the people in the area were ,7ust living there 7ooktng for a house and it was his feeling there was no long range planning for the future of the community that was being constructed in this area. Fte felt that the attitude of the occupant is important to the community. Mr. Wall then commented that the construction at Eagan was a better than average construction considering the type of construction that �s going on at this time. He d�d not feel this was a good project, but it is an adequate one. In relation to the Reidel property, he felt the Reidel property is not a residential site, the best pro�ect for the site was a 240 apartment huilding plan that they originally had proposed, He felt in standard construction, what they have for an apartment bu�lding has around $160 a month rent for an efficiency, $195 for a one bedroom u m t and $260 for a two bedroom unit. He said the cost of this type of unit in an apartment building is around $18,D00 per um t with 900 square feet in an apartment and is very su�table. The prob]em with the townhouses �s, they must be larger, and with a double car garage added, it does add additional costs. The difference is between $18,000 for an apartment unit to $28,000 for a townhouse: He said the difference in the cost of this project goes from about 3.6 million for the apartment deveiopm�nt to 4.5 to 5 miilion dollars for the townhouses, and this is the reason for the additional cost to the person who rents it. The need for rental family units is there, but, the costs still have to be there. Non-homestead taxes are one of the reasons for the additional cost to the person who rents and it would be very diffucult for the townhouses as originally proposed to stand the $40,000 cost which would make it very unsellable, Mr. Herrick then made some comments on the legal position of the City. He fe7t that if there is an acceptance of this pro,7ect, before the building permit could be issued, an ordinance change would have to be made to remove the rental requirement from the ordtnance otherwise there would be a conflict. Mr. Herrick then had to leave, so he made the following comments, He felt as far as the Council's option, either of the alternatives were open, because they had made an agreement and with the Reidel property and the Wall Corporation the economics have changed and the Council stiil has an option to reject, but if the ordinance can be amended, there would be no problem in acceptance. Councilman Utter then made a comment, stattng he felt rental units are basically for transients causing problems in many cases in the 5chools. Mr. Dante then commented that Rice Creek is a similar pro,7ect and the buildings have to be built to the specifications of the UBC and he is determined that the construction and the standards would be of high quality, and this is what Wall Corporation would be adhering to. Mr. Wall followed with comments to the fact that as far as the quality of construction and thin walls, when people are close together, this is a standard complaint. The walls and construction can be upgraded and the sound can be reduced. Nis second comment was that homeowners sometimes be7ieve that this �s the only way to live. Not everyone wants''to own their own home and peaple are constantly moving in all communities, so he did not think this to be a reasonable reason for denial. � � � � u _ _ �� SPECIAL MEETING OF THE COUNCIL OF OCTOBER 17, 1973 PAGE 3 Councilman Nee made his comments known, he does not agree with the housing as he felt it ts only a short term housing solution. He felt in the townhouse the space itself was not functtonal. The proposal is not sat�sfactory to h�s feeling. He felt it is not a liveable unit and an alternative might be an apartment complex described by Mr. Dante. Further discussion followed and a recess was called at 7:45 p.m. The meeting was called to order again at 8:22 p.m. by Mayor Liebl. Councilman Breider then made the following comments. A formal poll of the Council was made and at that time Councilman Nee, Councilman Breider, Counc�lman Starwalt and Councilman Utter all agreed that the proposal of Mr. Wall as presented at their Monday m ght Council meeting (Octo6er 15) would be turned down Councilman Breider then proposed to outline a separate proposal. The proposal follows. 1. The property would be platted on the outside for s�ngle family dwel7ings. This area would be on Mississippi Street, 7th Street, and 63rd Avenue, and this would include approximately 22 single family lots 2. The City would allow the R-3 zoning area to have 125 apartment units 6uilt on it and they would allow them to �nclude some of the R-1 area between the platted lots and the R-3 zon�n9 to make up for some of the additional units. 3. The extra land would be provided for a pond and for allowing the additional multiple units. Mr. Reidel followed stating the assessments for the �mprovements on the residentia7 lots are in and paid for except for minor improvements on 7th Street. The sewer, water and street improvements are in and paid for. Councilman Starwalt then commented that although this is a proposal by the City, this pro,7ect would still be suhject to normal hearing processes. After a lengthy discussion, the Acting City Manager summarized the Council's feelinqs about the new proposal so that he would he would have a clear frame work layout by the Council in which he is instructed to work with the Wall Corporation and he �ndicated the project would still include: 1. 22 residential lots or at least an approximation of 22, 2. The Council suggested 130 apartment um ts be constructed i the rental price range of one bedroom at $195, two bedroom at �260, and at the 1973 rates. 3. The drainage cost will be taken care of 6y the development and they will maintain the drainage pond as per previous agreement. The Council as a whole then agreed for purposes of hearina to these conditions and the meeting adjourned at 8:55 p.m. � ctfully submitted, Peter J. erlofsky, r. � Acting ecretary to the City Council Date Approved �'I'�.6�t.� � +�Oi� Frank G. Liebl, ayor