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HRAM 10/01/2015 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION October 1, 2015 Call to Order: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. Roll Call: MEMBERS PRESENT: Lawrence Commers Pat Gabel Stephen Eggert Gordon Backlund William Holm OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Jim Casserly, Development Consultant ACTION ITEMS: 1.APPROVAL OF EXPENDITURES Commissioner Backlund asked if the $130,000 was for the Columbia Arena. Paul Bolin, HRA Assistant Executive Director, replied yes. Chairperson Commers asked if the demolition was almost complete. Mr. Bolin replied yes. MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2.APPROVAL OF SEPTEMBER 3, 2015 MEETING MINUTES MOTION by Commissioner Eggert to approve the minutes as presented. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 3.APPROVAL OF ADMINISTRATIVE CONTRACT – HOME AND GARDEN SHOW Housing and Redevelopment Authority Meeting of October 1, 2015 2 Paul Bolin, HRA Assistant Executive Director, stated that Fridley has been the fiscal agent for the Home & Garden Show for 18 years. (Blaine, Mounds View and Columbia Heights) Revenues from the booth rentals cover expenses for show. Since 2005, the Home and Garden Show has contracted with Marsha Wagner from Castle Visions to perform the administrative tasks. Staff recommends approval of the contract authorizing Castle Visions to perform the administrative work for 2016. Chairperson Commers asked if the 2016 contract is similar to what we have been doing in the past. Mr. Bolin replied yes. Commissioner Gabel asked if the rate was the same as last year. Mr. Bolin replied that Ms. Wagner did raise her rates by $3 per hour which is the first rate increase since 2005. The Show is February 6th from 9 a.m. - 3 p.m. at the Schwan’s National Sport Center in the Sport Expo Building. MOTION by Commissioner Backlund to approve the administrative contract for the Home and Garden Show. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4.APPROVAL OF RESOLUTION SUPPORTING GRANT APPLICATION – DEED REDEVELOPMENT Paul Bolin, HRA Assistant Director, reported that over the past 2 years positive changes have taken place at the Northern Stacks site. Phase 3 needs $7.6M in grants from outside sources. The DEED Contamination Cleanup Grant Program Assists with contamination investigations and development of Response Action Plans or; with contamination cleanup prescribed in a Minnesota Pollution Control Agency (MPCA)-approved RAP on a site that will be redeveloped. The Met Council Tax Base Revitalization Account (TBRA) provides $5 million annually to investigate and clean up brownfields - contaminated land, groundwater, or buildings - for redevelopment. Mr. Bolin stated that staff recommends the Authority adopt a resolution, approving application to enter into a funding agreement with DEED and act as project sponsor for Contamination Cleanup Grant funds necessary to redevelop the property located at 4800 East River Road. Also that the Authority adopt a resolution, approving application to Metropolitan Council’s Tax Base Revitalization Account for grant funds necessary to redevelop the property located at 4800 East River Road. Chairperson Commers asked if the second tax base revitalization account was used like the DEED funds. Housing and Redevelopment Authority Meeting of October 1, 2015 3 Mr. Bolin replied that there will be some overlap between the programs; some types of work are eligible for both, some are not. Paul Hyde , Developer, stated that these are the same grant programs that were applied for in the two previous rounds and those rounds were very successful. 75% of the DEED funds can be used to clean up the site. These funds need a match piece, which is where the Met Council comes in. Both funds are used for cleanup for example; DEED funds the investigation of asbestos and Met Council funds asbestos cleanup. Mr. Hyde added that the first phase of redevelopment is underway and the first building is done and is already half occupied. There is an active market interested in this site. This site is competing very well because of the location. This fall the second building construction will nd begin and it is expected to be complete by the 2 quarter of 2016. Mr. Hyde stated that phase two, the BAE building, construction is now putting wall panels up and will be done in 6-7 weeks. BAE is happy with how it is turning out and they have retained over 550 engineering jobs in Minnesota because of this building. They are excited for the ribbon cutting ceremony when the project is done. The focus on tonight is on phase 3 and this phase is going faster than planned. The old BAE building is down and Phase 3 cleanup will start next spring with a successful grant round. The outlined cleanup plan has been sent to pollution control and they are happy with the approach. Mr. Hyde said they are planning to retain the historic stacks including the walls around it. They are studying ways to reuse that area looking at ideas like a tap house, an artist loft or fitness center. They are also looking at a way to up light the stacks at night. Chairperson Commers asked where we were in terms of having the property occupied with tenants; and how that was reflected as to where we are with public improvements and road structure. He asked when that needed to be done to accommodate this project. Mr. Hyde replied that they are trying to segment the public infrastructure according to phase. Sometimes successfully, sometimes not. Scott Hickok , Community Development Director, added that some of the improvements are in the county right of way and staff have asked the county to administer that grant. $300,000 is needed toward the set of new signal lights. This would be a 2016 project, spring to early summer for installation. There will be full access where the new signal would be going in; to the south an intersection to allow better circulation in and out for the trucking and access is still needed to BAE to the north that exists today. There will be two signalized intersctions and two non-signal servicing the site. Commissioner Backlund asked if the water came from Minneapolis waterworks. Housing and Redevelopment Authority Meeting of October 1, 2015 4 Mr. Hyde replied that a water line was found that was private that connected to Minneapolis waterworks. This has been turned off and capped. The water supply from the new waterline is with the City of Fridley water supply. Commissioner Backlund asked if the sewage was sent to Fridley. Mr. Hyde replied yes; the historic sanitary sewer line was in disrepair and replaced in phase 1. Commissioner Gabel asked how much money was expected from each grant. Mr. Hyde replied that they are still finalizing the cleanup planning budget. He is expecting DEED to be around $1.0M; for the BAE phase it was $900,000. These are very competitive grants. The grants are scored on a tax base, clean up and the number of jobs created. This project has scored well in the previous grant applications. Commissioner Gabel asked about the BAE floor; the paint room. Mr. Hyde replied that the BAE paint area is in the south east corner of phase 3. BAE is investigating and plans to remediate this fall depending on the weather. That is a great piece of news. A lot of time will be spent investigating the Navy and their plating shop. The Navy is planning on pilot studies of the deeper ground there which would not have happened without the building coming down. Everyone involved has had other people doing additional remediation because it is more cost effective and the building isn’t in the way. Commissioner Backlund asked how deep they would go to take soil out in both instances Mr. Hyde replied that is up to BAE and the Navy. The construction we are doing will go 8’ because that is what is needed for the site. Commissioner Backlund asked about some areas being capped and others not and if responsibility needed to be advocated to deal with it. Mr. Hyde replied that they don’t get to advocate their responsibility but there is an economic incentive to do treatment while building is not in the way. They have been very responsive to address both areas in a schedule that fits within the redevelopment activities Commissioner Eggert asked if there were any other surprises. Mr. Hyde was surprised how fast the water tower came down. The waterline conditions were known and we knew there were leaks. The sanitary line was also no surprise. They are expecting phase 3 with pulling up the floor and lots of lots of pipes that something may come up. Commissioner Eggert recalled that there was a concern with this project moving quicker than we planned and how it would impact us financially. Housing and Redevelopment Authority Meeting of October 1, 2015 5 Jim Casserly , Development Consultant, replied that is correct; other sources of funding have helped facilitate all the remediation and the draw on the Authority funds has been very orderly. Commissioner Holm noted that the concrete floor is very thick in some parts. Mr. Hyde replied that they have gone through a bunch of it already so they know what they are in for. Plans have been reviewed from BAE to help inform them what they may run into. MOTION by Commissioner Gabel to approve the Resolution supporting grant application – DEED Redevelopment. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5.APPROVAL OF RESOLUTION SUPPORTING GRANT APPLICATION – MET COUNCIL TBRA MOTION by Commissioner Eggert to approve the Resolution supporting grant application – Met Council TBRA. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 6.APPROVAL OF MODIFICATION OF HRA LOAN PROGRAMS Paul Bolin, HRA Assistant Executive Director, stated that rather than create a number of new programs, staff suggests adding flexibility to the existing program. Flexibility includes removing the income limits, increase the maximum loan amounts from $35,000 to $50,000, lowering the interest rate to 4.5% and the 115% loan to value ratio will be promoted (allows new buyers to immediately fix up/update older homes). The “Last Resort” Emergency Deferred Loan Program clarified that the program is to be used only for emergency/life safety/health/code deficiencies. The % interest rate would be eliminated to truly help those with an emergency and no other options. Other cities have eliminated the interest from these emergency loans to avoid criticism. A $10,000 loan at 2% annual interest x 20 years = $4,000 in deferred interest. Mr. Bolin reviewed other additions to the Current Loan Program. One is to have a Mobile Home Improvement Loan Program. There are approximately 400 Mobile Homes in Fridley. Due to ownership structure, they are not eligible for existing single family revolving loan program. The lien is filed through DPS to securitize the loan. A minimum Loan - $500; Maximum Loan - $10,000; interest rate - 4.5%; Term – Up to 10 years; Loan-to-value ratio – 115%; Debt to income ratio – 50%. Mr. Bolin reviewed additions to the current Multi-Family Exterior Improvement Loan Program. 221 small mf properties (2-4 units); most constructed between 1955 and 1970; they are excluded Housing and Redevelopment Authority Meeting of October 1, 2015 6 from SF RLP unless the owner lives in 1 unit; focused on “properties that need the most help” and limited to exterior improvements and correction of code violations. The Loan Details are as follows: Minimum Loan - $1,000 / Maximum Loan - $50,000; IR-4.5%; Term – Up to 20 years; Loan-to-value ratio – 115%; Debt to income ratio – 50% Staff recommends approval of the resolution making changes and additions to the Authority’s existing loan programs. These changes will improve the City’s housing stock through expanding the properties eligible for the programs. Commissioner Gabel asked under eligible borrowers why non-permanent and non-permanent resident aliens were included. Chairperson Commers replied that some people are eligible to work with a green card and they could be a home owner. Jim Casserly , Development Consultant, noted that they would need a driver’s license, social security number and be employed to qualify. A better term can be used to give a more clear definition. Mr. Bolin added that is the existing language for the existing loan program and is standard language in all CEE loan programs in other cities as well. He will get more information and report back to the Authority. Chairperson Commers asked what the funding source was for these programs. Mr. Casserly replied that there is currently $2.0M cash balance in the revolving loan fund. Each month some loans are given out but others are being repaid at the same time. The purpose for 2016 is to designate $1.0M of that cash balance and put towards the loans. Next month we will talk about the commercial loan program for small businesses. Chairperson Commers asked if there would be any other commitments used for revolving loans for in the future. Mr. Casserly replied that commitments would be built into the analysis. Chairperson Commers thought funds were transferred from the revolving loan program, not just general funds. Mr. Casserly replied that last year funds were moved into the general fund but staff is suggesting not to do that this year and leave the revolving loan fund on its own. Commissioner Eggert added that it’s important to look at how dollars are being allocated between housing and commercial development. Housing and Redevelopment Authority Meeting of October 1, 2015 7 Commissioner Holm thought maybe the multifamily exterior improvement program should be opened up to interior as well as there may be a problem with an old bathroom or kitchen to make the units better as part of the housing stock. Commissioner Backlund asked if when adding external doors or windows if smoke detectors and c.o. detectors were included as that would be a code violation if they weren’t included. Mr. Bolin replied yes, they would. Chairperson Commers thought this would help to bring housing up to standard. Mr. Bolin reported that over 4,000 roofing permits came in and staff is trying to process them logically. They are grouping them into blocks and will do a block at a time. Two more contract inspectors will be brought in to help out and get this done as soon as possible. Scott Hickok , Community Development Director, thanked people for their patience as they understand there are a lot of permits out now for roofs. It is not a typical building season when hail hits everyone and there isn’t an opportunity to space things out. We appreciate that people have been patient and understanding. MOTION by Commissioner Holm to approve the modification of the HRA Loan Programs. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Informational Items 1.CEE Housing Program Update Paul Bolin, HRA Assistant Executive Director, reported that 3 loans were issued in September making 5 year to date. There were no remodel visits so the total remains at 3 year to date. Home Energy Squad had 20 visits in September for a total of 76 year to date. 2.Columbia Arena Update Scott Hickok , Community Development Director, stated that everyone is excited that the Columbia Arena has come down in the last few days. Council approved Monday night the first step in a journey to study a concept of using this site as a mixed use Civic Campus as well as a private development. Staff will start a process studying how police, fire, city hall, public works, community center and residential development would fit on this site. Council wants staff to investigate and fine tune the costs it would take to build a Civic Campus. Staff presented the following estimates to Council: Scenario #1 (Col. Arena) $30,750,000.00* *Plus cost to enhance plaza Scenario #2A (East Train ) $40,025,000.00 Housing and Redevelopment Authority Meeting of October 1, 2015 8 Scenario #2B (Civic Only) $33,198,750.00 Scenario #3 (Existing) $37,326,703.00* *Plus land to relocate Public Works At the citizen participation meetings the majority wanted to see some type of civic campus on the site. Chairperson Commers asked what the next step was. Mr. Hickok reviewed the following time table: Masterplan, Council Sessions, Dept. Head sessions, build design - 4 months Design Process - 8 months Bidding Process - 2 months Contract negotiations - 2 months Construction – 12 to 18 months TOTAL 28 - 34 months. Adjournment MOTION by Commissioner Backlund to adjourn. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:24 P.M. Respectfully Submitted, Krista Peterson, Recording Secretary