Loading...
HRAM 12/06/2018 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION December 6, 2018 Chairperson Pro Tem Eggert called the Housing and Redevelopment Authority Meeting to order at 7:03 p.m. MEMBERS PRESENT: William Holm Stephen Eggert Kyle Mulrooney Elizabeth Showalter MEMBERS ABSENT: Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Dan Tietner, Finance Director Jim Casserly, Development Consultant Vickie Johnson, Development Consultant Action Items: 1.Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of November 1, 2018 Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DECLARED THE MINUTES APPROVED 3.Approval of Resolution Rescinding Resolution 2014-19, Col. Arena/City Loan Paul Bolin, HRA Assistant Executive Director,said that when the Authority and the City were looking to purchase and demolish the Columbia Arena, the City loaned $1.5M to the Authority to put towards the purchase of the property. The transaction was memorialized in Resolution 2014-19. The loan to the City was to be paid back from TIF funds, after the Authority had reimbursed itself. At the time of the purchase, there was no discussion of the arena site being Housing and Redevelopment Authority Meeting of December 6, 2018 2 anything more than a future private development that would pay for the land and generate tax increment. Mr. Bolin noted that four years later, those original assumptions are no longer correct. The scope of the project has greatly expanded, and the private sector portion includes former City and park land now being made available to the HRA. Authority and City staff have spent a great deal of time determining how the City loan should be repaid. The combination of land sales and tax increment collected should be enough to make the Authority whole and allow the Authority to repay the City from the Authority’s General Fund. The City will be immediately repaid $1M from the Authority’s General Fund which the City intends to use for pending related costs. The remaining $500,000 will come from an annual payment made from the Authority’s General fund. Mr. Bolin said that this resolution rescinds the original agreement found in HRA resolution 2014-19 and memorializes the approach described above. The City Council will act on a similar resolution. The project projections for land sales and increment generate support this approach to make the Authority whole in the project and allow it to repay the City Loan. Staff recommend approval of this resolution. Chairperson Pro Tem Eggert noticed the impact on the budget. Mr. Bolin replied yes, we did include these changes into the budget. There is $200,000 that the City will pay back the HRA for a water main being installed as part of the new parkway to be finished up this spring. The City has funds in the water fund that can pay for things like a new water main. Commissioner Holm asked how long does the TIF district would run and when the closing date would be for the district. Mr. Bolin replied that the Authority would be paying the City back out of the general fund, then collecting increment and using that to reimburse the Authority and not the City. Commissioner Holm asked if there was a conflict of language. Jim Casserly , Development Consultant replied that the effort behind the resolution is to move away from the tax increment refund and create what amounted to an interfund role from each body to the project and be repaid from tax increment. This creates reporting issues and raised a number of questions. Right now, $1m is being repaid is coming from the general fund. The City is absorbing all costs related to this district. The City anticipates it will be repaid over the 25 years. The tax increment allows the Authority to defer the increment for a couple of years. We have been through the financial aspects and there should be sufficient tax increment being generated to repay the general fund with interest. The general fund is committed to repay the City a fixed amount for 25 years, but that is not from the tax increment. This is similar to other projects that have been done like the Ciello project. Commissioner Holm said that if revenues are sufficient to pay any of this back early, he encouraged to pay off the balance before the 25 years. Housing and Redevelopment Authority Meeting of December 6, 2018 3 Mr. Casserly replied that the Authority has the ability to do that any time they wish. Commissioner Holm didn’t see that all the dates for the recitals were included. He wanted to make sure the numbers are correct. Mr. Bolin replied that the numbers are correct. Some are HRA and others are City resolutions. MOTION by Commissioner Holm to approve the Resolution Rescinding Resolution 2014-19, Col. Arena/City Loan. Seconded by Commissioner Showalter. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DELCARED THE MOTION CARRIED UNANIMOUSLY 4.Approval of Final 2019 HRA Budget Dan Tietner, Finance Director, presented the updated 2019 budget for Authority approval. Included in the budget were three changes from the preliminary budget presented on November st 1. The changes to the budget are related to repayment of the $1.5M loan the City made to the Authority for the purchase of the former Columbia Arena. $1M of the loan will be repaid by the end of this year and the remaining $500,000 will be repaid in annual installments over the next 25 years. The third change relates to a reimbursement from the City, of up to $200,000, for the water main installed with Locke Parkway. Mr. Tietner stated that the budget contains three major components. General Fund, Housing Loan Program Fund and TIF District Funds. The cash flow projections as reviewed at the October 18, 2018 work session are a significant information source for the formation for the proposed and final budget. Significant modifications include, but are not limited to, $9,600 decrease in rents and royalties for the Fairview parking lot rental, $26,146 increase in property tax levy, and $500,000 increase in sale of real estate to Sherman Associates, Inc. For the expenditures there is a standard 2.5% increase for materials and supplies, $4,000 increase in anticipated legal expenditures and $29,069 increase in administrative charges. In addition to the general fund budget modification staff also assumed $250,000 increase in housing programs for senior housing, $720,000 real estate for Lennar and $1.4m for capital outlay. Staff recommends approval of the budget for 2019. MOTION by Commissioner Mulrooney to approval the final 2019 HRA Budget. Seconded by Commissioner Showalter. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DECLARED THE MOTION CARRIED UNANIMOUSLY 5.Approval of Redevelopment Contract – LPP Phase 2, Lennar Paul Bolin, HRA Assistant Executive Director,stated that City staff met with over a dozen developers and in September chose Lennar to work in developing the remaining vacant land Housing and Redevelopment Authority Meeting of December 6, 2018 4 around the campus. They plan to build 72 townhome units in the lots south of the pond and the former Public Works site. Lennar does a nice job using different products, materials and architecture to bring variety to their designs. Color patterns give uniform appearance to the development. Over the past few months, Vickie and Jim worked with Lennar and the legal team to put together redevelopment contract. This is similar to other contracts from the past with a mechanism built in to protect the Authority and guarantees. Staff recommends the Authority approve a resolution authorizing the execution and delivery of the contract for private development with U.S. home corporation. Commissioner Pro Tem Eggert noted that it states Lennar has an option of doing two phases. stnd 1 the southern part and 2 smaller eastern part. Vickie Johnson , Development Consultant, stated that if sales are going well both closings can happen in 2019. Chairperson Pro Tem Eggert asked when they anticipate closing on the document with Lennar. Mr. Bolin replied that it is contingent on getting the land use approvals. This close until City Council approves the plat and master site plan. Early April closing is a possibly. Commissioner Holm asked how payments were scheduled for the sale of this property. Ms. Johnson replied that the purchase price is calculated based on number of units. 10,000 x the number of units received at the closing. MOTION by Commissioner Holm to approve the Redevelopment Contract – LPP Phase 2, Lennar. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DECLARED THE MOTION CARRIED UNANIMOUSLY 6.Approval of Resolution Memorializing Land Transfer from City to HRA Paul Bolin, HRA Assistant Executive Director,replied that earlier this year, the Fridley HRA developed an Exclusive Negotiations Agreement with Steve Dunbar of Ivy Properties to redevelop the existing Municipal Center. Dunbar is working with Ebenezer Homes, part of Fairview Health Services, to develop a 134-unit senior “with services” building. The building would include assisted living as well as memory care units. Ivy Properties plans to build and own the property, as Ebenezer prefers to work with development/investment groups than to build and own the building. Currently, the Authority owns portions of the property, and the City owns th others. When the City transfers property it is done by ordinance. On November 26, the City Council held the first reading of an ordinance to transfer their property to the Authority. The th second reading of the ordinance is on their December 10 Agenda. The property is to be sold to the Dunbar group, for the appraised fair market value amount of 2.2m. The Authority will return all proceeds above its’ actual costs, and the eligible extraordinary development costs incurred by Dunbar, to the City. This deal structure is typical for HRA redevelopment projects. Staff Housing and Redevelopment Authority Meeting of December 6, 2018 5 recommends the Authority adopt the resolution, memorializing how it will pass sales proceeds on to the City. Commissioner Showalter asked if the $2.2M was for the building or just the land. Mr. Bolin replied just the land. Commissioner Mulrooney asked what the timeline was for demolition and construction. Mr. Bolin replied that a rough draft of the development agreement is put together, but the details need to be worked out with Dunbar. The agreement will be brought back to the January meeting for approval. Some submittals have already been made, the city of plat and master plan approval. Construction will start this summer. Jim Casserly , Development Consultant, added that they are in agreement for a March 1 closing. st The redeveloper has to go through provisions. Demolition should be done by June 1 and the st project done by December 31 of the following year. Estimated three months for demolition and 18 months for construction. Closing won’t take place until the financing is in place. Chairperson Pro Tem Eggert thoughtthis will be a great development that is needed in the heart of the City. There is a demand for this type of development. Commissioner Holm added that with the elimination of the roadway there will be excellent traffic flow and will be great improvement. He hopes there is room for a sidewalk. Mr. Bolin said that engineering staff is meeting with MNdot to discuss the MNdot right of way, what would MNdot be willing to pay for and not pay for as far as removing the existing street/sidewalk. MOTION by Commissioner Holm to approve the Resolution Memorializing Land Transfer from City to HRA. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 7.Approval of Resolution Designating Expenses, Northstar TIF Funds 11 & 12 Paul Bolin, HRA Assistant Executive Director,stated that the 2008 legislative sessions gave the City of Fridley the ability to create a Transit TIF Distcict and to pool tax increment from three existing districts, 11, 12, and 13, to pay for public improvements in and around the Northstar Station Area. Starting this year, the three existing districts begin expiring. In order to spend the remaining funds, nearly $408,000 in TIF District 11 alone, the Authority must designate a use for the funds. Mr. Bolin said that the Authority had anticipated spending the funds this fall on a sidewalk extension and replacing a stoplight on East River Road in a joint project with Anoka County. Housing and Redevelopment Authority Meeting of December 6, 2018 6 Due to timing issues with design, the work will not be able to be completed until late in the spring/summer of 2019. The work is estimated to cost the Authority approximately $500,000. This resolution authorizes the expenditures and allows the Authority to spend the funds form the expiring District #11 with the remaining funds coming from district #12. Staff recommends approval of the resolution authorizing funds form TIF Districts 11 and 12 to be spent on various utility improvements in the Northstar TIF District. Type information from letter. Chairperson Pro Tem Eggert noted that these funds will be put in good use in the City rather than being moved out. MOTION by Commissioner Holm to approve the resolution designating expenses for Northstar TIF funds 11 and 12. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR PRO TEM EGGERT DECLARED THE MOTION CARRIED UNANIMOUSLY. Informational Items: 8. CEE Housing Programs Update Paul Bolin , HRA Executive Assistant Director, reported that in November one RLF loan closed and four senior loans making a total of 20 year to date which put almost $500,000 back into the residential community. Home Energy Squad had five visits in November making 47 year-to- date. There were no remodel advisor visits this month making 18 year-to-date. All numbers are up over last year. Adjournment: MOTION by Commissioner Holm to adjourn. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON PRO TEM EGGERT DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:58 P.M. Respectfully submitted, Krista Peterson Recording Secretary