HRAM 06/28/2018
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION
JUNE 28, 2018
Chairperson Gabel
called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m.
MEMBERS PRESENT:
Pat Gabel
William Holm
Stephen Eggert
Kyle Mulrooney
Gordon Backlund
OTHERS PRESENT:
Paul Bolin, HRA Assistant Executive Director
Wally Wysopal, City Manager
Jim Casserly, Development Consultant
Action Items:
1.Approval of June 7, 2018 Meeting Minutes
MOTION
by Commissioner Eggert to approve the minutes as presented. Seconded by Commissioner
Backlund.
Commissioner Eggert
noted to correct the spelling on page 10 “Motion by Commissioner Eckert
Eggert…”
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE
MOTION CARRIED AND THE MINUTES APPROVED AS AMENDED
2.Approval of Resolution Adding Parcels to Housing Replacement Program
Paul Bolin
, HRA Assistant Executive Director, stated that the Authority and Council approved an
amended and restated plan for the HRP in late 2010. The related plan gave the Authority the ability to
add Phases (parcels) to the program by resolution. Once a parcel is included in the district, the HRA
collects tax increment for a period of 15 years. The increment is used to help cover some of the costs
of the program. Unlike a traditional tax increment district, the HRP is less cumbersome to the
administer. Since the program originally began in 1995, the City has approved twelve phases for a
total of 38 properties. Under special legislation approved in April 2010, the City can designate up to
100 total parcels, inclusive of the 38 properties currently in the program.
Mr. Bolin
said that Anoka County recently made two tax-forfeit properties available to the City. Both
properties are vacant, dilapidated and meet the requirements for the HRP. The properties are locaed at
509 Cheri Lane and 8295 Broad Avenue. Staff is working with Mile Willey at Liesch/Terracon to
coordinate the hazardous materials assessment, abate ad demolition of the two properties. We expect
the demolition to occur by mid-August. There is already some interest from builders in purchasing the
lots. Staff recommends that the Authority approve the attached resolution amending the HRP to
Housing and Redevelopment Authority Meeting of June 28, 2018 2
include Phase XIII, adding the properties at 509 Cheri Lane NE and 8295 Broad Avenue NE into the
HRP.
Commissioner Gabel
asked for clarification on the market value of the homes.
Mr. Bolin
replied that the estimated value in the packet comes from the property tax records and
represents the taxable value.
Commissioner Holm
asked what the demolition costs would be.
Mr. Bolin
replied it would be around $12,000 for each home. That expense would be recovered
through the tax increment received over the next 15 years plus a portion recovered by the sale of the
lots.
Commissioner Eggert
noted that there are not a lot of opportunities to buy properties. This is an
opportunity to show residents the before and after of these homes and what the Authority is doing to
invest in our communities on the residential side.
MOTION
by Commissioner Holm to approve the Resolution Adding Parcels to Housing Replacement
Program. Seconded by Commissioner Eggert.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DELCARED THE
MOTION CARRIED UNANIMOUSLY
3. Approval of Changes to Housing Rehabilitation Loan Program
Paul Bolin
, HRA Executive Assistant Director, stated that earlier this month staff provided an
overview of proposed changes and additions to the current loan program. Commissioner comments
and suggestions were incorporated into the proposed loan program. The intent of this program is to
provide an incentive for Fridley seniors to make improvements to their homes that will allow them to
remain in their homes and/or update the homes for a future sale. The loan will be due upon the sale of
the home, transfer of ownership or if it is no longer the primary residence. At least one of the
homeowners must be at least 62 years old to qualify for this program. Commissioners suggested
collecting fees to cover the costs of processing loan, that information has been added.
Mr. Bolin
said that the terms for the Senior Deferred revolving loans are as follows:
Interest Rate: 0%
Loan Limits - $5,000 minimum / $25,000 maximum
Loan Terms – Due upon sale/transfer/no longer primary residence
Eligible Properties – Residential properties
Ownership/Occupancy – Owner occupied, one owner at least 62 years old
Loan to Value Ratio – 110%
Income Limits – None
Eligible Improvements – Most interior and exterior improvements
“Sweat Equity” – Not Allowed
Pre-inspection Required – Yes
Post Install Inspection Required – Yes
Work Completion – 120 days
Housing and Redevelopment Authority Meeting of June 28, 2018 3
Underwriting – Current on mortgage payments; Current on real estate taxes; no liens or unpaid
judgements; no pending bankruptcy or foreclosure.
Fees – Loan recipient pays a 1% origination fee, preparation fee, mortgage filing fee, title
work, credit report, flood zone check and any other applicable closing costs associated with the
loan.
Mr. Bolin
said that staff also proposes expanding the rental property revolving loan program to
include buildings with 1-12 units and change the name of the product to Rental Property Revolving
Loans. There are a large number of rental properties, more than 50 years old, which have 8-12 units,
and a number of single family homes that have become rentals over the past 10 years. This change
will provide additional opportunities to improve the code deficiencies and outward appearances of the
City’s older rental stock.
Mr. Bolin
said that Commissioners inquired about the sliding maximum loan, based on the number of
units in the building. As the improvements are limited to code deficiencies and exteriors, it was
determined that an extra $3,000/unit would assist in replacing windows in the larger buildings.
Mr. Bolin
said that the terms for the Rental Property revolving loans are as follows:
Interest Rate: 4.5%
Loan Limits - $5,000 minimum / $50,000 maximum for up to 4 units; an additional $3,000 may
be borrowed for each additional unit.
Loan Terms – 1 year minimum/20 year maximum
Eligible Properties – 1-12 unit residential properties
Ownership/Occupancy – Owner occupied not required
Loan to Value Ratio – 115%
Income Limits – None
Debt to Income Ratio – Maximum 50% (sole proprietors). LLC’s must show positive cash
flow.
Eligible Improvements – Interior code violation corrections/most exterior
“Sweat Equity” – Not Allowed
Pre-inspection Required – No
Post Install Inspection Required – Yes
Work Completion – 120 days
Underwriting – No payments more than 60 days late in the past 12 months; no bankruptcy in
the past 18 months; current on mortgage payments; current on real estate taxes; liens and
judgements factored in the loan to value calculation.
Mr. Bolin
said that staff recommends adopting the attached resolution. In the event that the “Senior
Deferred Loan” program becomes “too successful”, staff will recommend placing a cap on the total
amount of funds that can be loaned out. Additionally, staff will monitor the “Multi-family Exterior
Improvement Loan: and suggest changes to the maximum loan amount if needed.
Commissioner Holm
thought that the administrative fees associated with the program may restrict the
effectiveness of the program for loans less than $5,000.
Mr. Bolin
replied that the $550 fee is paid by the Authority for each loan that is approved. There are
staff costs associated with these loans including following up to make sure the work is done to the
home. These programs should be ready early August when CEE has them entered into their system.
Housing and Redevelopment Authority Meeting of June 28, 2018 4
MOTION
by Commissioner Eggert to Approve the Changes to Housing Rehabilitation Loan Program.
Seconded by Commissioner Backland.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE
MOTION CARRIED UNANIMOUSLY
4.Approve Resolution Supporting Grant Application to the Metropolitan Council – Sherman /
NS Station
MOTION
by Commissioner Holm to add item no. 4 to the agenda. Seconded by Commissioner
Eggert.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE
MOTION CARRIED AND THE ITEM ADDED TO THE AGENDA
Mr. Bolin
stated that this is a development agreement with Sherman and Associates to develop the
housing at the NorthStar Commuter Rail Station. Staff is also working with metro transit to rearrange
some of the parking and had success by reducing the parking to 80 stalls. There will be expenses
relocating the pond and replacing and building 80 new parking stalls and the new bus lane. Sherman
would like Fridley to work with them on a grant application through the Communities Transit Orient
Development Grant Application.
Commissioner Backlund
asked if the housing would all be at market rate or subsidized housing.
Mr. Bolin
replied that Sherman is looking at building three separate buildings—two at market rate,
and one subsidized.
MOTION
by Commissioner Holm to approve the Resolution Supporting Grant Application to the
Metropolitan Council – Sherman / NS Station. Seconded by Commissioner Eggert.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE
MOTION CARRIED UNANIMOUSLY
Adjournment:
MOTION
by Commissioner Backlund to adjourn. Seconded by Commissioner Eggert.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON GABEL DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:35 P.M.
Respectfully submitted,
Krista Peterson
Recording Secretary