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HRAM 09/07/2017 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 7, 2017 ______________________________________________________________________________ Chairperson Gabel called the Housing and Redevelopment Authority meeting to order at 7:01 p.m. MEMBERS PRESENT: William Holm Pat Gabel Gordon Backlund Stephen Eggert MEMBER ABSENT: Kyle Mulrooney OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Shelly Peterson, Finance Director Action Items: 1. Approval of Expenditures. MOTION by Commissioner Holm approving the expenditures. Seconded by Commissioner Eggert. Commissioner Holm pointed out the amount they paid to CEE was quite large this past month. He assumed that was due to some loans that were finalized. Paul Bolin , HRA Assistant Executive Director, replied, correct. Chairperson Gabel asked what ICMA stood for. Shelly Peterson , Finance Director, replied that is similar to what a 401K would be for the private sector. It is where they invest the retirement funds. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Approval of the August 3, 2017, Meeting Minutes. Chairperson Gabel stated on page 4, halfway down the page, third paragraph, it says Molly Plaza and should be Holly Plaza. Also, regarding the next paragraph, she suggested deleting the word “Jazz .” MOTION by Commissioner Holm approving the minutes as corrected. Seconded by Commissioner Eggert. Housing and Redevelopment Authority Meeting of September 7, 2017 2 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Resolution for Approval of 2017 Tax Levy for Taxes Payable in 2018 Ms. Peterson stated what they have in front of them is the resolution to adopt the 2018 levy. It is levied in 2017 for collection in 2018, and it is consistent with what they have done in all other years. Minnesota Statute authorizes the HRA to levy properties within the community to support housing and redevelopment efforts. The levy is equal to .0185 percent of the estimated market value. State Statute allows them to levy up to that percentage. Ms. Peterson stated the 2018 levy will allow the HRA to collect $477,023 and the estimated impact on a $150,000 home is about $28 for the year. The median-valued home in Fridley is about $186,000, which is $34 a year. On a $1 million commercial property, it is $185 a year. Ms. Peterson said because this levy is a percent of the estimated market value, it has fluctuated. At a high in 2009, it was close to $500,000. The HRA is still not back to that level. It is still collecting less revenue than 10 years ago, but the estimated market values are increasing in the community which is a great sign. Ms. Peterson stated staff recommends approval of the resolution consenting to the HRA levy. It provides the HRA the ability to fund ongoing and future redevelopment efforts. If approved, it will go to Council next Monday night for approval. The levy will then be certified and delivered th to the County by the 15 of this month which is the deadline. Commissioner Backlund asked if there is any difference between what was handed out tonight and what was in their packet. Ms. Peterson replied, yes. In order to provide more transparency to the resolution, they added two things. At the very top of the resolution, there is more detail explained as to what the law allows them to levy, and in the lower section they added the actual dollar amount, rather than just saying a percent of what the levy is. The resolution makes it more clear, and Council will see that when they approve it. MOTION by Commissioner Eggert approving the Resolution for Approval of 2017 Tax Levy for Taxes Payable in 2018. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. th 4. Change in Use – City View Apartments – 380 - 57 Place NE Mr. Bolin stated in 1996 the HRA acted as a conduit for the Anoka County Community Action Program (ACCAP) to access some state funds from the Minnesota Housing Finance Agency. Those funds were a 20-year, $200,000 forgivable loan. The HRA used those funds to purchase th the four-unit apartment building at 380 – 57 Place NE on ACCAP’s behalf. They had some Housing and Redevelopment Authority Meeting of September 7, 2017 3 parameters attached to those funds. One was the funding was intended to provide transitional housing. Mr. Bolin stated “transitional housing” was a type of housing that looked to provide transitional housing or “short-term” housing, for homeless people. In particular, those homeless folks who were employed but just did not make enough to afford long-term affordable housing. Mr. Bolin stated the idea back in the 1980s and 1990s is you would then help these people transition into longer-term, affordable rentals. Provide services to help them get there. Over the years, that model has not worked quite as well as some had hoped, and a number of the funding sources that were available for these types of uses have dried up. Mr. Bolin stated ACCAP has had trouble keeping people in this building because there are fewer people going into that program, and the rents they are able to receive are not enough to cover the services. Therefore, for this property and another property ACCAP owns in another community, they asked the State for permission to change the use designation in that agreement from “transitional housing” to what they call “permanent housing” or “long-term” affordable rental. Mr. Bolin stated the MHFA has provided permission for ACCAP to move forward with that change but, as the HRA is the actual fee owner of the property, they need the HRA to consent to that change. Staff recommends the HRA adopt a simple motion approving the change in use, allowing ACCAP to operate the City View Apartments as permanent housing. This really has been a painless venture for the HRA and the City. The HRA does hold title but ACCAP provides all the insurance for the property and they have done all the maintenance on the property. The HRA really does not spend any time on the property. Chairperson Gabel stated she did not know anything about this. She asked whether there is any reason then for the HRA to hold the fee title. Mr. Bolin replied, yes, the loan amount is for a 20-year loan; but the conditions that came with that make it a 30-year term. The property needs to stay in compliance with those terms. They have about another 14 years to hang onto this property, and then it will transfer back to ACCAP at that time. Commissioner Holm asked at that point ACCAP becomes the owner of the property? Mr. Bolin replied, correct. Commissioner Holm asked whether there are any other transitional housing areas in the City. Mr. Bolin replied, this is the only one he is aware of. Commissioner Holm asked, if St. William’s had transitional housing located adjacent to their property. Housing and Redevelopment Authority Meeting of September 7, 2017 4 Mr. Bolin replied that is a similar model to this. That is really aimed more at families, but that would be considered transitional housing. Commissioner Holm asked if ACCAP owns or runs any other properties in Fridley. Mr. Bolin replied yes, they have another property in the Hyde Park neighborhood. They have been looking for a number of years for funding to add onto that property. It is on the corner of ndth 2 Street and 60 Avenue. The HRA does own a small lot next to that parcel. Around five or six years ago, they had a discussion about if and when they are able to obtain the funding to do their addition, the HRA would be willing to sell its parcel to them at that time. Commissioner Holm asked if that site is being used for any type of housing or if it is just an undeveloped property. Mr. Bolin replied ACCAP does have a building on that. Commissioner Holm stated there are people who live there and it provides housing for them. Mr. Bolin replied it does. Chairperson Gabel stated she thought ACCAP mows the lot for the HRA. Mr. Bolin replied, ACCAP has maintained it for a number of years. It is a fairly small strip. It is not buildable on its own. It provides a nice yard. th Commissioner Holm stated he presumes this building on 57 Place gets inspected like any other multi-family unit in the City. Mr. Bolin replied correct. Like any other rental property in Fridley, it does have a rental license and is subject to those regular inspections. Commissioner Backlund stated by making this change from temporary to permanent, does this change the residents? Mr. Bolin replied, right now there are tenants who were moving out at the end of July and then the building became vacant. Chairperson Gabel asked Mr. Bolin what is the criteria to rent these units? If somebody had a Section 8 voucher, could they live there. Mr. Bolin replied along with the change of permanent housing, there are different ways to get into this type of housing. MHFA and ACCAP are still having some discussions as to what those other options will be. The HRA may have seen in the letter a reference to putting the people into the building using the coordinated entry system or other means approved by MHFA. Housing and Redevelopment Authority Meeting of September 7, 2017 5 Mr. Bolin stated the way the coordinated entry system works is that typically by county, they have really centralized the way to get families into these types of properties. In Anoka County, for families and single adults who are 24 and older, they need to start their journey into this type of housing by contacting the Salvation Army in Coon Rapids. Mr. Bolin stated for folks who are 24 or younger, they need to get into contact with the YMCA. The Salvation Army and YMCA have a network they broadcast these things out to and, if ACCAP has a unit available, they would respond. It is really kind of the State’s attempt to centralize these things so there is some coordination, and there is only one list to get on. There is only one contact in Anoka County. MOTION by Commissioner Holm approving the Change in Use – City View Apartments – th 380 – 57 Place NE. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Informational Items 1. Housing Loan Update Mr. Bolin stated in the month of August, they did have 3 more of the HRA’s revolving loan fund loans closed. They now have 12 for the year, which is about $233,000 total so far this year they have loaned out. After the changes the HRA made at the end of 2015, they are starting to see those dollars come out. Mr. Bolin stated the Remodeling Advisor did no visits in August, but they have had 4 for the year to date. The Home Energy Squad had 3 visits in August, for a total of 34 for the year. That is the same number of visits they had at this time last year as well. They should see a little increase in activity now that it is getting colder. 2. Locke Park Pointe Update Mr. Bolin stated City Manager Wally Wysopal has really led an effort to provide as much design flexibility as possible as it relates to the HRA’s private development. He has been working with Anoka County and the Met Council to better define which areas of the City-owned Locke Park should be included as part of the County and Met Council’s regional park system. Mr. Bolin stated for those who may not realize it, the City actually owns Locke Park in its entirety from University Avenue all the way to Highway 65, but there was an agreement back in 1980 or 1981 that allows the County to maintain the property and then allows Met Council to include it as part of the regional system. As they started looking at making some changes (even though the City owns all of the land), both Anoka County and the Met Council want to make sure that anything they push over onto what they consider their park land, there is some new park land to them to balance that out. Mr. Wysopal has had some discussions with these groups. Housing and Redevelopment Authority Meeting of September 7, 2017 6 Mr. Bolin stated the red on the map shown is the area the County and Met Council originally wanted. It was about 1.9 acres in exchange for the land just above that. They kind of wanted a 1-for-1 swap for that. However, through negotiating, Mr. Wysopal has now talked them down to about 1.4 acres in that area. Rather than use their kind of arbitrary box, the City engineers have spent some time looking at where the developable slope ends and then also had discussions with the developer’s engineers as to where their basement floors might be and where things need to be for gravity to feed out to sewers. Mr. Bolin stated staff did include an invite in the HRA’s packet for a neighborhood meeting with the developer that will take place a week from tonight at 7 p.m. on this site where the playground is next to the water filter plant. Some residents in the neighborhood to the south have had concerns about the potential of either removing or relocating the playground equipment that is there. At that meeting they can maybe discuss some alternatives, what is feasible, etc. Chairperson Gabel stated from what she understands watching those meetings, what the HRA will be agreeing is with that tot lot there, no matter who ends up owning that land, the tot lot will be open to the public, correct? Mr. Bolin replied there will be playground equipment. It may stay where it is, may be relocated on the site, but it would remain on public property. The City does not want the developer to have that on their private property. The equipment that is out there is due for replacement. If it were to be moved, now would be a good time to do it. Chairperson Gabel asked if the equipment is owned by the City. Mr. Bolin replied, yes. Commissioner Eggert asked who owns the tract of land that they are swapping out for the road. Mr. Bolin replied, that would stay owned by the City Commissioner Eggert asked and operated by the County. Mr. Bolin replied correct. Commissioner Eggert asked if it will remain green space. Mr. Bolin replied that would be the most likely use for it. The slopes that are there are steep enough where in theory you could put some retaining wall in and ponding but most likely, it would just stay natural. Commissioner Backlund stated there are a lot of trees along that area which would have to be taken out if there was a retaining wall put in. Mr. Bolin stated if it were to go below that elevation, yes. Housing and Redevelopment Authority Meeting of September 7, 2017 7 Commissioner Backlund stated and it is not very far from there to Rice Creek. Mr. Bolin stated in April they transferred land to the City that they needed in order to start construction of the new City Hall. The plan was they would then transfer this property to the Authority so it can continue to negotiate with the developer. It would make platting of the property simpler if the HRA was the only body that held title to this land. However, as it came to the City Council, people got worried the Authority was going to own the water filter plant that is on that property. That is not the case. In short-term, the Authority would hold title to it, but as they flush these plans out and things get replatted, part of that first platting would be to figure out the area the City still needs and wants for the water filter plant, and that would be transferred back to the City. Chairperson Gabel stated when they discussed the water filter plant, it was going to stay right where it is. Mr. Bolin replied, yes, there are no plans to move that. In fact the City has plans to add onto it on the south side of the building. Commissioner Backlund stated water rights, such as mineral rights, are separate from the ownership of the property and usually it is included when it is put in the abstract. Are there times when it is not? Mr. Bolin replied, that is a good question and not one he has an easy answer to. That has never come up with any of the transactions he has done in Fridley. It is more common in rural or agriculture areas. It is certainly something they can look into. For the parcels here, the City of St. Paul actually has a blanket easement over a large swath of Fridley for water and it encompasses the subject property as well. The City engineers have been in contact with St. Paul and it has taken about six months to get the signatures needed to have them vacate that easement. He asked Commissioner Backlund if he was concerned about reserving water rights and if there was something he wants them to do. Commissioner Backlund stated when he was on the school board they had to go through and readjust all the properties for the soccer fields with the ownership of the well. He does not know if that was ever addressed during that period of time. Mr. Bolin replied that was part of the Tiger Land plat. They worked on that a number of years before he came to Fridley. There were no discussions about water rights that he recalls from that. He can certainly look into it. Commissioner Backlund stated not to spend a lot of time on it. Mr. Bolin stated the next meeting is set for October 5, and they are doing everything they can to bring a term sheet back to them on the business points of the redevelopment and some agreement with the developer on this. Housing and Redevelopment Authority Meeting of September 7, 2017 8 Commissioner Holm stated he noticed that the City Hall is above ground so they are on schedule. Mr. Bolin replied they are on schedule and on budget. Commissioner Holm asked whether the City Hall is going to be done first and then the Public Works building. Mr. Bolin replied the City Hall has a basement and a lot of other things that take more time. They are seeing the foundations going in. They have been doing some work on the Public Works building. In mid-October they should start seeing some of the concrete panels go up for the Public Works building. Once they start with that it will go up much quicker. Commissioner Holm stated he saw they are starting to work on the final phase of the Northern Stacks development. He asked if they tenants planned for that stage. Mr. Bolin stated that is on the north end where the final two buildings are set to go in. this summer they have been getting the remaining contamination out of that area, and they have been pulling the bad soils out and bringing the good soils in. They are getting everything ready and expect to pull the permits for those last two buildings potentially even before the end of this year or shortly into next year. He knows they have been talking to one group who would actually take both buildings. Commissioner Holm stated he sees there is nothing happening on the John Allen development site. Mr. Bolin replied Mr. Allen had entered into a lease arrangement with some of the construction companies who have been doing the gas line work and some of the larger sewer work. Staff does continue to hear from him on a fairly regular basis. He is out marketing his site. He is probably hopeful the Northern Stacks development gets built out soon which would create more demand for his site as well. ADJOURN: MOTION by Commissioner Eggert to adjourn. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:44 P.M. Respectfully submitted, Denise M. Johnson Recording Secretary