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HRA 02/17/1982 City of Fridley AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING WEDNESDAY, FEBRUARY 17, 1982 7:30 P.M. Location: Community Room II (lower level ) PAGES CALL TO ORDER: ROLL CALL: APPROVE HOUSING & REDEVELOPMENT AUTHORITY MINUTES: JANUARY 14, 1982 1 - 8 APPROVE SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES: JANUARY 21 , 1 - 4 1982 APPROVE SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES: FEBRUARY 1 , 1 - 4 1982 1 . CENTER CITY PROJECT 1 - 11 A. Shopping Center - Phase III 1 . Memo No. 82-06, Executive Director (information) B. Christiansen Building - Demolition (SEPARATE) 1 . Memo No. 82-07, Executive Director (information) C. Appraisal Report - Northwestern Bell Telephone Building (SEPARATE) 1 . Memo No. 82-10, Executive Director 2. MOORE LAKE PROJECT 12 - 19 A. Phase I 1 . Memo No. 82-11 - Update on Nybo Project B. Phase III 1 . Memo No. 82-08, Executive Director (information) C. Phase V-VII 1 . Memo No. 82-12, Executive Director 3. NORTH AREA PROJECT 20 - 43 A. Phase I A. Memo No. 82-10, Executive Direction (Action on Housing Bond Pro- gram for 360-Unit Complex). B. Memo No. 82-12, Executive Director. 'Proposal for anlndustrial Site (Jim Benson) Housing & Redevelopment Authority Meeting February 17, 1982 Page 2 PAGES 4. LARGE FAMILY PROJECT 44 - 47 A. Memo No. 82-05, Mary Cayan (Action on extension of 90 days) B. Letter from Thomas Feeney, Area Manager, HUD 5. FINANCE 48 A. Check Register 6. OTHER BUSINESS: 50 - 64 A. Report from MN National Association of Housing and Redevelopment Officials - (Proposed Legislation). ADJOURNMENT: CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JANUARY 14, 1982 CALL TO ORDER: Chairperson Commers called the January 14, 1982, Housing & Redevelopment Authority meeting to order at 7:36 p.m. ROLL CALL: Members Present: Larry Commers, Russell Houck, Carolyn Svendsen, Duane Prairie, Elmars Prieditis (arr. 7:38 p.m.) Members Absent: None Others Present: Jerrold Boardman, City Planner Ed Hamernik, Councilman Virginia Steinmetz, League of Women Voters Cheryl Nybo, 1612 Berne Circle J. M. Suh, 12 Island Rd. , St. Paul 55110 APPROVAL OF DECEMBER 10, 1981 , HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. HOUCK, SECONDED BY MS. SVENDSEN, TO APPROVE THE DECEMBER 10, 1981, HOUSING & REDEVELOPMENT AUTHORITY MINUTES. Mr. Commers stated that on page 3, paragraph 4, the first sentence should be amended as follows: "Mr. Remmen stated the reason they did not proceed on that basis was because this thing actually would not be in a position of "break-even" based on the rents and would probably not be in the position of "break-even until the eleventh year." (Mr. Prieditis arrived at 7:38 p.m.) UPON A VOICE VOTE, COMMERS, HOUCK, SVENDSEN, AND PRAIRIE VOTING AYE, PRIEDITIS ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED. 1 . CENTER CITY PROJECT A. Phase III - Shopping Center (Memo #82-01 from Executive Director) Mr. Commers stated that, as he understood it, there have been some changes concerning this project. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 2 Mr. Boardman stated he did meet with Mr. Remmen on Monday. At that time they had gone over some figures Mr. Remmen had put together and things were looking fairly good with those figures. However, on Tuesday, Mr. Remmen's people met with Prudential , and Prudential said they would not go with the buy-out. At that point in time, Mr. Remmen was out looking for other insurance companies to finance the project. Mr. Boardman stated that today Mr. Remmen had called him to tell him that Mr. Hauser has pulled his lease out of the project, and that was the one key element in the project as far as financing. Mr. Boardman stated that in light of this new situation, he felt they have extended the project long enough with Center Plaza Development Corporation and they should take away their sole right of development on that property and again open it up to other developers, with the understanding that Mr. Remmen can compete for the project. He thought they should start looking for another development. He stated he has discussed this with Mr. Qureshi and Mr. Herrick. The HRA is in the position where they can grant another extension to Mr. Remmen, but at this point, they have given Mr. Remmen a total of 440 days to try to put the package together. Mr. Remmen started the package on Oct. 27, 1980. Mr. Boardman stated he had hoped that Mr. Remmen could make it to the meeting this evening, but Mr. Remmen is sick and will probably be unable to come. Mr. Commers stated he is sure that Mr. Remmen had substantial costs in the front end of the project, and he did not like to have to do anything when Mr. Remmen was unable to be present and discuss it with the HRA. But, of course, there are two sides to the story, and the HRA has granted Mr. Remmen many extensions and has worked with him for 12 years. Mr. Boardman stated they are concerned about Mr. Remmen, but they are also concerned with the limited partnership. The limited partnership is the one group that will tend to lose out on this project, and he thought if they can tie the limited partnership into another project or if they could work with the limited partnership in an attempt to put a package together to assist that partnership, it is a possibility. Dr. Suh stated he wished Mr. Jim Vasser could have been at the meeting, but he is out of town. Mr. Vasser is the other general partner. He stated he personally felt that somehow Mr. Remmen would put the package together. Because of a lot of personal legal problems from previous projects, Mr. Remmen was not able to function as well as he would have liked to. Dr. Suh stated he understood those legal problems are still going on, and he now doubted if Mr. Remmen would have ever been able to put the package together. Mr. Prieditis stated he had similar doubts as Dr. Suh had expressed. He could not see where if Mr. Remmen has not been able to pull the package together to date, that they would have any better hope of him doing so HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 3 in the next 3-4 months. Maybe in 6-8 months another developer could put a package together and be more successful . Ms. Svendsen stated she also agreed with Mr. Prieditis. Mr. Remmen would still have the opportunity to resubmit a proposal if he wished to. But, she really felt there came a time when the HRA has to make a decision. Mr. Prairie stated the whole Center City project is really frustrating, and there doesn't seem to be any solution. It would have been nice if Mr. Remmen could have been at the meeting, but this would be the seventh extension, and it was not like blowing the whistle the first or second time. If they withdraw Mr. Remmen's right of development and Mr. Remmen came up with a proposal in the next month, he would not have lost anything; he just would not have exclusive rights. MOTION BY MR. PRAIRIE, SECONDED BY MR. HOUCK, THAT BECAUSE THE CENTER PLAZA DEVELOPMENT CORPORATION HAS NOT CONSUMMATED THE NECESSARY DOCUMENTS ON A GIVEN DATE AND THEREFORE BY THAT FAILURE TO ACT HAS FORFEITED THEIR EXCLUSIVE RIGHTS FOR DEVELOPMENT, THE HRA IS WITHDRAWING THEIR EXCLU- SIVE RIGHTS TO DEVELOP THE SHOPPING CENTER FPHASE,'iIII)• a$ ,GRANTED HERETOFORE. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman stated he would like to know what action City Staff should do as far as notification to the tenants in that area. He felt it was essential that a letter be sent to the tenants telling them the right of development has been removed from Mr. Remmen. Mr. Commers stated that letters should be sent immediately to the tenants explaining the current status on the matter, and he thought they should discuss the steps that should be taken to make sure developers are aware that this project is reopened. Mr. Boardman stated that, initially, they sent out RFP's (Request for Proposals) and that had a certain number of days for the developers to respond to the City. Since that time, he has been in contact with a number of developers who had expressed an interest. Mr. Commers stated he felt they should follow that procedure again. MOTION BY MR. HOUCK, SECONDED BY MR. PRIEDITIS, TO AUTHORIZE STAFF TO SEND OUT REQUEST FOR PROPOSALS AS DONE IN THE PAST AND, IN ADDITION, IF THERE ARE ANY DEVELOPERS SHOWING ANY INTEREST OR INTENT WITHIN THE NEXT 30 DAYS, TO REQUEST THAT THOSE PEOPLE APPEAR BEFORE THE HRA AT THEIR FEB. 12, 1982, MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 4 Dr. Suh stated he would like something stated in the minutes that would reflect some favor towards the existing partnership in order to protect some of the interest within the area. He went into the partnership because the City picked Mr. Remmen as the developer. He had not known anything about Mr. Remmen, and even though he thought it might be risky, he was willing to go into the partnership because the City was backing the developer. He was sure the other partners did the same thing. Mr. Commers stated he did not think the HRA could assure that whatever investment or arrangement Dr. Suh and the other partners had made with Mr. Remmen could be protected. Mr. Prairie stated they could mention to those developers who are interested in this project that there are some members of the limited partnership who are interested in participating in the project. Mr. Boardman stated a couple of the developers he has talked to are interested in looking at a joint project with the limited partnership. He did not think there was anything the HRA could do to guarantee that. He thought that Jim Vasser and the limited partnership should definitely attempt to put a package together for that investment interest they do have. The HRA will look at it, and he was sure the HRA will take into consideration what the limited partnership has been through in the invest- ment they have been willing to make in the City of Fridley, but he did not think there was any guarantee. The HRA has to look out for what is in the best interest of the City and pick a package they feel is going to proceed. Mr. Commers stated he would like the minutes to reflect that, if anyone shows an interest in the project, the Staff is instructed to advise them about the limited partnership and those people's investment and to try to encourage any interested parties to contact the limited partnership to see if they can make some kind of mutually satisfying and acceptable arrangement. B. Phase II - Columbia Park Clinic (Memo #82-02 from Executive Director) Mr. Boardman stated that since Mr. Signorelli had not yet arrived, they could start discussing the project. He stated he, Mr. Signorelli , his attorneys, and the city attorneys had a meeting and went over the contract documents. He stated they were essentially in agreement with all the contract documents. Mr. Boardman stated the Columbia Park Clinic people are presently surveying the property to get the contours for their building design. The first phase is for a 28,000 sq. ft. two-story building with 14,000 sq. ft. on each floor. The proposal they have worked on and are submitting to the HRA is that they would sell the first phase of the property to the Columbia Park Clinic for $1 . The Columbia Park Clinic HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 5 is also looking for an option for an expansion up to another 28,000 sq. ft. building by 1986. The Columbia Park Clinic people want the visibility to University Ave. , so prior to their opening in 1983, the buildings along University Ave. have to be removed. Mr. Prairie asked if those property owners have been notified. Mr. Boardman stated they have not. Mr. Commers stated this was the first time that the removal of all the structures has been discussed. If they approve this contract document, are they legally obligated to remove those buildings? Mr. Boardman stated that the contract document does not specifically make that statement, however, it is one of the concessions Columbia Park Clinic would like from the HRA. They would have preferred to locate the struction on the west part of the property, however they deferred to the east portion so that construction can begin as soon as possible. Mr. Boardman stated that with the option in Phase II, the City would provide the Columbia Park Clinic with land for 12 times the building footprint, plus adequate parking for the development of up to one stall for every 200 sq. ft. of building. Mr. Boardman stated the Columbia Park Clinic has until Jan. 1 , 1986, to exercise the option. If they exercise the option, the option price will be based on a dollar that has not been determined at this time. Before they sign any documents, the HRA has to approve a purchase price on that property. The Clinic would buy the property plus a consumer price index of between 8-12%. It is in the HRA's best interest to have the Clinic build on that property as soon as possible. If they occupy the building before Jan. 1 , 1986 (that gives them two years from the acceptance of the option to be in the building) , the City would give them a benefit of 6.7% on the purchase price of the land. Mr. Commers stated he felt there needed to be a lot more analysis on this project. The more he heard, the more uncomfortable he became with the project. He felt it is going to take several hours of study to determine what the' HRA should do. Mr. Boardman stated the HRA has to also consider that medical office buildings are valuated at a much higher rate per square foot than regular office buildings. In this sense, they are looking at a tax on that building of around $2.72/sq. ft. compared to a regular office building at around $2.00/sq. ft. and retail/commercial at around $1 .00- $1 .20/sq. ft. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 6 After receiving a phone call from Mr. Signorelli , who had been delayed because of another meeting, the HRA set a special meeting for Jan. 21 at 5:00 p.m. at City Hall in order to discuss the Columbia Park Clinic proposal with Mr. Signorelli . Mr. Commers stated that the HRA members are in agreement that some type of procedure has to be put together to notify the tenants and owners of the property along University Ave. and give them the opportunity to be heard. Mr. Prairie suggested that Mr. Boardman talk to these people in order to get some feedback and then give that information to the HRA at their Jan. 21st meeting. Mr. Commers stated Mr. Boardman should first send a letter to the tenants and owners and then also talk to them. After receiving that input, the HRA can decide at their Jan. 21st meeting what the next step should be. Mr. Commers stated some of the things the HRA would like to discuss further with Mr. Signorelli is: (1 ) alternative sites (2) some type of better commitment on Phase II (3) questions answered on price (4) clarification of purchase price languange Mr. Commers stated the HRA members should review the contract document before the Jan. 21 meeting. II. MOORE LAKE PROJECT A. Phase I - Office Building - Cheryl Nybo Mr. Boardman stated he would like Ms. Nybo to give a report on the office building. Ms. Nybo stated they are in the process of putting the final pieces together. There are lenders in the market who are interested. The lenders are requiring 50% intent to lease on the project. She stated they have about 25% at this time and are working on the additional 25%. She stated she was asking the HRA for some assurance of time-- perhaps a 60-day extension--in order to come up with additional tenants. Mr. Boardman stated he had no problem with granting Ms. Nybo a 60-day extension. The project has been moving along favorably. MOTION BY MR. HOUCK, SECONDED BY MS. SVENDSEN, TO GRANT TO CHERYL NYBO A 60-DAY EXTENSION OF TIME IN WHICH TO COMPLETE THE PROJECT. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 7 III. FINANCE A. Check Register MOTION BY MR. PRAIRIE, SECONDED BY MR. HOUCK, TO APPROVE THE CHECK REGISTER DATED 12/31/81 IN THE AMOUNT OF $15,000 AND THE CHECK REGISTER DATED 1/13/82 IN THE AMOUNT OF $377,072.03. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. IV. BY-LAWS APPROVAL Mr. Hamernik referred to the "Manner of Voting", Article V, Section second sentence, in the new proposed By-Laws which states: "All motions and resolutions shall require an affirmative vote of a majority of the commissioners." He stated that in the original By-Laws, Article XII , it states: "All motions and resolutions shall require an affirmative vote of a majority of the Members of the Authority." He stated the wording in the proposed By-Laws could be interpreted that the majority of a quorum (2 out of 3 members) could pass resolutions. In the old By-Laws, it would have to be 3 out of the 5 members in order to pass resolutions. He stated he would prefer the wording in the old By-Laws. Mr. Commers stated that the HRA can still conduct business with three members, but if all three members do not agree, they cannot pass a resolution. Mr. Boardman stated he had no problem with going with the wording in the old By-Laws. The rest of the HRA members felt that the original wording was more appropriate. Mr. Commers stated that amendments to the By-Laws can be made at any time by a majority of the HRA members, so the amendment process is not real complicated. He stated that on other commissions he has served on, when there was going to be an amendment, the commission usually provided that the amendment had to be sent to all the members in writing some- time before the meeting so everyone was aware of the amendment that was proposed. That way the amendment cannot be proposed and brought up on the agenda at the meeting. He felt they should add a statement to Article VII, Section I, on "Amendments" that "any amendment to the By-Laws must be submitted to the commissioners in writing seven days before the meeting" . Mr. Boardman stated he had no problem with adding that statement. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 14, 1982 PAGE 8 Ms. Svendsen stated that Mr. Dave Newman, City Attorney, had stated that Minnesota State Statute 462.441 allows members to be compensated, and he suggested that the HRA add Section 7 to the By-Laws. Mr. Commers stated they should probably add Section 7 and then just simply state that the HRA is not accepting any remuneration. The HRA members agreed with Mr. Commers. MOTION BY MR. HOUCK, SECONDED BY MR. PRAIRIE, TO APPROVE THE BY-LAWS WITH THE FOLLOWING AMENDMENTS: - ARTICLE V, SECTION 5, "MANNER OF VOTING" - CHANGE SECOND SENTENCE TO READ: "ALL MOTIONS AND RESOLUTIONS SHALL REQUIRE AN AFFIRMATIVE VOTE OF A MAJORITY OF THE MEMBERS OF THE HRA." - ARTICLE VII, SECTION 1, "AMENDMENTS" - A STATEMENT BE ADDED THAT "ANY AMENDMENT TO THE BY-LAWS MUST BE SUBMITTED TO THE HRA MEMBERS IN WRITING SEVEN DAYS BEFORE THE MEETING". - SECTION 7 ON COMPENSATION OF COMMISSIONERS BE ADDED TO THE BY-LAWS (AS RECOMMENDED BY MR. NEWMAN) . UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. V. RECEIVE LETTER FROM STATE AUDITOR'S OFFICE A. Designate Auditor for 1981 Audit Mr. Commers stated the George M. Hansen Co. , P.A. , is requesting that the HRA approve them as its auditors for 1981 and instruct them to conduct the 1981 audit of the HRA. MOTION BY MR. PRAIRIE, SECONDED BY MR. HOUCK, TO APPROVE THE GEORGE M. HANSEN CO., P.A. , AS THE AUDITORS FOR THE HRA OF FRIDLEY TO CONDUCT THE 2981 AUDIT. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION BY MR. PRIEDITIS, SECONDED BY MR. HOUCK, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE JANUARY 14, 1982, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:09 P.M. RESPECTFULLY SUBMITTED, /4 '7 E SABA — RECORDING SECRETARY CITY OF FRIDLEY SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING JANUARY 21 , 1982 CALL TO ORDER: Vice-Chairperson Houck called the January 21 , 1982, Special Housing & Redevelop- ment Authority meeting to order at 5:02 p.m. ROLL CALL: Members Present: Russell Houck, Elmars Prieditis, Carolyn Svendsen, Duane Prairie Members Absent: Larry Commers Others Present: Jerrold Boardman, City Planner Tim Signorelli , Administrator - Columbia Park Clinic CENTER CITY PROJECT - PHASE II - COLUMBIA PARK CLINIC: Mr. Boardman stated Mr. Signorelli was representing Columbia Park Clinic. He stated some issues were raised at the last meeting that the HRA wanted to discuss with Mr. Signorelli . He stated one of the key issues raised was con- cerning the option property. What was the dollar amount on the sale of the option property, and what were the conditions for removal of the front buildings along University Ave.? Mr. Boardman stated he, Mr. Qureshi , the City Attorney, Mr. Signorelli , and his attorney have come up with some tentative agreements. Those agreements have been brought to the HRA. Those agreements are that the City would sell the first phase of the property for $1 in order to get the clinic located here, and they would allow an option of the property on the second phase and that second phase value would be a set value at the time of the signature to the option. That set value has been discussed as 75% of a value, which has not been determined at this time. The City was looking at 75% of the $2 value, per sq. ft. The Columbia Park Clinic was looking at 75% of $1 .75. Since then, the Columbia Park Clinic has indicated they would come up to $1 .90. Seventy-five percent of $1 .90 is $1 .42. Mr. Boardman stated he thought they should compromise on this issue. - Mr. Boardman stated a concern that came out was that if the Columbia Park Clinic only built 5,000 sq. ft. on the option property, would that leave enough land for the HRA to develop the remaining parcel? Mr. Signorelli stated that comes in with their master planning. In the agree- ment, it calls for some approval process. It is clear that whatever they do on that site, they will want it to be both aesthetically,as well as literally, compatible with the overall Center City plan. SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 21 , 1982 Page 2 Mr. Boardman stated they will have to work with the Columbia Park Clinic's architect on the layout as far as the master planning. He stated he has looked at the site right now and if the Columbia Park Clinic did build the maximum on the property, the City would have enough open space so they could build approximately another 20,000 sq. ft. in addition to a 30,000 sq. ft. office. With that laid out in the master plan, the City would have that option. If the Clinic does build the maximum, then the City would leave that asopen space within the development. Mr. Signorelli stated he felt the whole key is integrated planning. They are trying to plan something that has some flexibility. It is their understanding that the City needs 90,000 sq. ft. in that area. He stated he is not in opposition to what the City is trying to accomplish as far as the 90,000 sq. ft. He is confident they can work out something that is aesthetically pleasing and will give the Clinic the visibility they need and still accomplish the City's needs. Mr. Prairie stated one of the issues the HRA wanted to discuss a little further was alternative sites. Mr. Boardman stated that when the Columbia Park Clinic people came in, the City showed them all the sites that are available. The Clinic selected the site south of City Hall . As far as the north site. It would probably have worked for the Clinic, but was too large for the development of what they wanted and would have created some difficulty for the HRA in marketing the property south of City Hall . The 2.4 acre, site, where the 10,000 Auto Parks building is, would not have been an acceptable location for 56,000 sq. ft. of clinic and adequate parking. Mr. Boardman stated he had sent out letters to all the tenants and owners. He then held a meeting on Tuesday, January 19, 1982, with the owners and tenants. He stated the meeting lasted about an hour and went very well . He told them the City anticipated the removal of the structures within 1-1 1/2 years on the front side and that acquistion of the structures on the back side would take place as soon as possible--hopefully in February so construction can begin in April. He explained to the tenants relocation, what their rights would be under relocation, and explained the rights of the owners as far as acquisition. He said there was no voiced opposition to the acquisition. The tenants just asked that the HRA please consider relocating them into the area. He had told them the HRA would definitely consider that, but there were no guarantees. Mr. Boardman stated the main thing Staff is trying to do is allow the develop- ment to go, because they feel it is an important step in the Center City process and still allow them the maximum flexibility to develop based on a master plan. They have to tie down some property for Phase I to allow the Columbia Park Clinic to develop and leave that option flexible, so they have outlined a legal description on the property, taking into consideration a certain segment that could be set aside for the 30,000 sw. ft. of office. As part of the agreement documents, it allow the HRA to buy the improvements that are put in by the Clinic, sell those improvements to the office building, in return for improvements in SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 21 , 1982 PAGE 3 another area within 200 ft. of the perimeter of the building. That allow them the flexibility to provide parking for the office, provide addition parking for the Clinic, so both properties are satisfied. With a total 90,000 sq. ft. of expansion of that property, they are looking at a spill-over of parking onto the bank property. He has talked to Bill Berry of the Fridley State Bank, and Mr. Berry is very interested in the project and has discussed possiblities of joint facilties. After commitments are drawn up with the Columbia Park Clinc, they will start working with Mr. Berry on reciprocal parking arrangements. Mr. Boardman stated he does not foresee any problems at this time. He would recommend that the HRA establish the money value. It is a benefit to the redevelopment district and to the Columbia Park Clinic to have some kind of removal arrangement on the front property. Mr. Signorelli stated they have always been under the assumption that those buildings would be removed, and it was their thinking all along that it was consistent with the City's desires, as well as needs, to have all the property improved. They would be concerned if those buildings could not be removed and their visibility was in back of the shopping center. Mr. Boardman stated it has never been the intent of the HRA to leave any of the structures up. His question was, could they give the Columbia Park Clinic the visibility it needs by removing all but the corner building until the second phase? Mr. Signorelli stated that was something he would have to look at. Mr. Prairie stated that if they are going to take the biggest part, they might as well take all the structures. Mr. Boardman stated he needed a concensus from the HRA that they are going in the right direction, that the agreements they have discussed with the Columbia Park Clinic are acceptable, and that they can proceed toward final commitment on contract documents. Prior to the sign of those contract documents, Staff will bring those documents back to the HRA for approval . He stated he also needs an acceptable value on the option property so that value can be put into the document. Mr. Signorelli stated he thought the Columia Park Clinic could have the commitment on financing as well as the other legal issues worked out within the next week. MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPPROVE A PURCHASE PRICE ON THE OPTION PROPERTY OF $1.45 PER SQ. FT., BASED ON APPROXIMATELY 75% of $1.93. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. 4 SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 21 , 1982 PAGE 4 MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, APPROVING THE INTENT OF THE CONTRACT DOCUMENTS FOR THE COLUMBIA PARK CLINIC ON THE PROPOSED EAST LOCATION WITH THE REMOVAL OF ALL BUILDINGS ON THE PHASE II PROPERTY BEFORE THE OPENING OF THE COLUMBIA PARK CLINIC. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. The HRA set a special meeting for Monday, Feb. 1 , at 6:00 p.m. for final commitment of the contract documents. ADJOURNMENT: MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE JANUARY 21, 1982, SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 5:56 P.M. RESPECTFULLY SUB ITTED, L ' IAL L Nt SABA RECORDING SECRETARY CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY SPECIAL MEETING FEBRUARY 1 , 1982 CALL TO ORDER: Vice-Chairperson Houck called the Special Housing & Redevelopment Authority meeting to order at 6:15 p.m. ROLL CALL: Members Present: Russell Houck, Carolyn Svendsen, Elmars Prieditis, Duane Prairie, Larry Conmers (arr. 6:30 p.m.) Members Absent: None Others Present: Jerrold Boardman, City Planner Virgil Herrick, City Attorney Tim Signorelli , Administrator - Columbia Park Clinic CENTER CITY PROJECT - PHASE II - COLUMBIA PARK CLINIC: Mr. Boardman stated that at the last meeting, they discussed what the City was trying to do with the Columbia Park Clinic and the development on that property. At that meeting, the HRA set the value on the option property at $1 .45 per sq. ft. They also made a motion approving the intent of the contract documents and agreed that if the Clinic goes on the property, they will take down the structures that face University Ave. This would be done within a time period based on the actual start of construction and completion of the Clinic. Mr. Boardman stated that since that meeting, he and Mr. Herrick met with Mr. Signorelli , and several members of the Columbia Park Clinic team, Dr. Wright, their architect, Bob Morasco, their attorney, Eric Anderson, and the architect from BWBR, Will Johnson, in order to get everything in order regarding the contract. After that meeting, Eric Anderson, the attorney for Columbia Park Clinic, did summarize the changes that should be made in the contract. Mr. Boardman stated he and Mr. Herrick have gone over these changes and the HRA members were given the new contract at this meeting. Mr. Boardman stated that, if possible, he is looking for an approval of the contract documents by the HRA and the authorization to enter into those contract documents as soon as all of the figures and all the partners of the Clinic get together. Mr. Signorelli showed the HRA the building site plan and a picture of the artist's concept of the building. SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEBRUARY 1 , 1982 PAGE 2 Mr. Boardman stated there is enough parking on the site for the Clinic, plus square footage for amenities, etc. If they are able to get a developer for the office building, at that time the HRA will have to look at it very carefully, because they will have to look at some additional parking in this area. He stated they got the indication from Dr. Wright of the Columbia Park Clinic that there is the 100% possibility they would proceed with some portion of the second phase and 75% possibility they would proceed with all of the second phase. So, the HRA has to go with the idea that the Columbia Park Clinic is going to expand to the maximum and that it will most likely expand by 1986. If they are going to put in an office building, they are really going to have to consider how they would handle the parking. (Mr. Commers arrived at 6:30 p.m.) Mr. Signorelli stated the next step is the working documents. If the HRA feels everything is appropriate and the Clinic is allowed to go ahead, sometime within the next week they would commission the start of the working drawings which would allow them to start construction in late April . Mr. Boardman asked Mr. Signorelli to explain the financing, because that is going to be the key to the City's start of acquisition. Mr. Signorelli stated their investment brokers are Juran and Moody. He stated they have indicated they would be willing to give a formal commitment letter, and that letter could be forthcoming within the next couple of weeks, or possibly sooner. Mr. Boardman stated it is his understanding that a commitment letter from Juran and Moody would be adequate for the HRA to look at as the 100% financing commitment. Mr. Boardman stated they have completed the contract document as much as they can. They have shown the $1 .45 on the sale price of the option property. They have laid out where the building would be located in the option and they tied together the necessary parking for that option,rated at one stall per every 200 sq. ft. of office space rated at 350 sq. ft. Regarding the question of easements on the option, they have added language that it would be conditioned on the City code requirements. Mr. Boardman stated that at the meeting they had with the Columbia Park Clinic partners, they did discuss how they would handle the office building if it was built. So, in this document, they have an agreement that if the City takes any of the Columbia Park Clinic property, they would have to provide improvements and parking back to the Columbia Park Clinic in an equal amount of space. One other condition the Columbia Park Clinic people wanted was a condition of where the City could locate an office building. Mr. Signorelli stated that at the last HRA meeting, the question was raised about what happens if the Columbia Park Clinic does not expand to the full 28,000 sq. ft., given the fact that the City has an objective to develop around 90,000 sq. ft. of rentable space. They were trying to come up with the best way to protect the SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEBRUARY 1 , 1982 PAGE 3 City and still not put the Clinic in the position of having a building right next to them that might block their visibility. The concept they decided upon was they would target an area on which another building could be built, and that if the Clinic does not expand up to the full 28,000 sq. ft., the City would automatically have the right to develop a building within another area on the same site. Mr. Boardman stated that is called the "Negative Easement Parcel" under Schedule A in the document. Also, in the document is an "access easement". The Clinic is requesting an "access easement" of 30 ft. for garbage pick-up and for servicing the building, He did not think they would have too much problem gaining this access. Mr. Herrick stated there are four factors the HRA should consider: 1) There is a requirement that all of the buildings have to be acquired and removed within one year after the property is sold. The cost of that in terms of what it is going to cost to acquire the property and take the buildings off the property, the grading, and the loss of taxes would be a factor. 2) The easement along the south side of the property is on property that is not presently controlled. That property is owned by Fridley State Bank and would have to be negotiated. 3) A conveyance of the vacated 4th St. In order for the first phase of the Columbia Park Clinic building to fit on the property, they will need all of the vacated 4th St. 4) There would be a provision that the building on the westerly phase would have to be located within a certain area. (Ms. Svendsen left the meeting at 7:07 p.m.) Mr. Prieditis stated he thought the development of the Columbia Park Clinic would be a great benefit to the Center City area and a great benefit to the citizens of Fridley. MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO ENTER INTO CONTRACT AGREEMENTS WITH COLUMBIA PARK CLINIC. Mr. Commers stated he also felt this was a fantastic thing for the City of Fridley. However, he was still concerned about the cash flow and the require- ment to take down the front structures in phase 2 at the time of the start of construction of Phase 1 without some kind of commitment on the part of Columbia Park Clinic. He thought they were giving the Clinic a very fair and reasonable SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEBRUARY 1 , 1982 PAGE 4 deal as far as price and, therefore, he thought they should get some kind of commitment from Columbia Park Clinic. Until that takes place, he could not in good faith vote in favor of the structure as it now stands. UPON A VOICE VOTE, HOUCK, PRIEDITIS, AND PRAIRIE VOTING AYE, COMMERS VOTING NAY, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED BY A VOTE OF 3-1. ADJOURNMENT: MOTION BY MR. COMMERS, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING AT MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 7:23 P.M. Re,ectfully submitted, y e Sa.a Recording Secretary 1 CENTER CITY PROJECT 2 THE CITY OF _ —� HOUSING �_�DO Ft : ; Os and ,, .. (\if.VA jrsEt4.— REDEVELOPMENT y MEMORANDUM .. ,.. AUTHORITY ' c E FRIDLEY -_r 'r iii..... : :FROM EXECUTIVE DIRECTOR MEMO NO. 82-06 DATE February 11, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Progress on Center City Project - Phase III Please find attached a list of developers that I have contacted or have contacted me for further information. I have personally met with six of them since mid-January and have received two letters of interest with intent to appear before the Authority. I anticipate letters from at least two other developers shortly. It is my intent to have the March 11 , 1982 meeting a discussion meeting with developers. We will schedule specific times at which they can present themselves to the HRA. With the initial selection of a developer, we have suggested that they have one month in which to submit specific site plans to the HRA and six months in which to commit to contract documents. All of the developers that we have talked to feel that this is adequate timing and are willing to work with these conditions. JLB/de T DEVELOPMENT NOTIFICATION LIST 3 Construction Bulletin • l, ; Bruce Dejong Milo Pinkerton, Project Director d° Bentz, Thompson, Ritow Arch. Orville E. Madsen & Son Inc. �' 1234 Dain Tower 901 Industrial Road Mpls. Mn. 55402 Hudson, Wisconsin 54016 Dean Doyscher jt(pe.t4 Iry M A Professional Planning & Developmer KeAus AWDERSon-/ REAL-rY C0 602 South 2nd Street Mankato, Mn 56001 523 S. 8. 1. 5} . • M044 r& . 55 q•I o y Betty Kaelke Bor-Son Building Corp. ���^ d;,, JK JIZ5. 17��elopv�e�t Zhu• P:O. Box 1611 t'` ! ORR114 A. Eti .5oNa ij.ELAsset 5vetven Minneapolis, MN 55440 �14 Z,$ Terry Evenson 46,00 cro.••c c Due S • 1-rry . 6S435 Evenson Properties S 20-47/9 3550 Lexington Avenue North Suite 104 St. Paul, Mn 55112 Lynn C. /7crrchce- &)4rscly etwrEes, _rye . * Jim Peterson �- c/o Undestad Investments 25< 60''�� PAz° �`"���' y 1045 Southgate Office Plaza ifT/,/c . �F 5001 West 80th J J`I/Lo Bloomington, MN 55437 A }.kokre-%er, eo SIE Jim Vassar 'Duarte 4Aso" Vassar and Associates ??o% leek Q . S . Hazeltine Gates Office Park 01/40s Mr.• 55435 Chaska, Mn. 55318 7707 $35- Michelle Foster Raunhorst Corporation M 1- F.16P4N^0, ecrip Suite 2200 Northwestern Financial Center wA'to e- er1c - 319.0800 7900 Xerxes Avenue South GSa K„a is Ao:nwe Mpls Mn. 5544 10 George Barr Did Redevelopment Project in B.P. o',4;e3900 85th Ave. N. j. Brooklyn Park, Mn. 55443 HOLMEN 4 DEVELOPMENT CO. C. A. HOLMEN 7701 YORK AVENUE SOUTH • EDINA, MINNESOTA 55435 • PHONE (612) 835-7707 February 3, 1982 Mr. Jerrold Boardman City Planner CITY OF FRIDLEY 6431 University Avenue, N.E. Fridley, MN 55432 RE: Development Site University & Mississippi Dear Mr. Boardman: Mr. Duane Nelson of our Company has had some conversations with you regarding the subject proposed development site. We are midwestern shopping center developers and owners. We recently opened a 270 ,000 square foot center in Beaver Dam, WI , a • nice city of 16 ,000 population located 45 miles northwest of Madison, WI. We are currently involved in the midwest and west. Some of these projects are typical suburban malls. Two of them are downtown redevelopment projects. Two of them are in partnership with The Center Companies (formerly Dayton Hudson Properties) . My personal experience in shopping center development extends from 1964 until the present. We have had our own company, Holmen Develop- ment Company, since 1975. We submit the foregoing brief, sketchy, background synopsis of way of giving you some historical orientation about us and our company. . We are interested in your proposed project for an enclosed mini-mall in Fridley at the subject site. While our time of exposure to the opportunity has been very short, we have made some inquiries regarding the site. I have personally, along with Mr. Nelson and Mr. Hallisey of our company, inspected the site, the older Holly Center, the neighborhood, the city offices, the office-entertainment site. SHOPPING CENTER DEVELOPMENT, LEASING, CONSULTING, MANAGEMENT 5 Mr. Jerrold Boardman February 3 , 1982 Page 2 Mr. Nelson indicates that the time for choosing a developer may be extended until sometime in March. If that is the case, our intention would be to call in our architects, prepare an interesting site plan for your review, propose pro-forma cost estimates, and income and expense projections and contact major tenants in earnest. Based upon our very preliminary (and rapid) survey of the possible tenants, we do find that there is interest. We must, of course, be candid and state that, in this short time, we certainly do not have any commitments. We have, however, piqued enough interest from several key potential tenants that we believe it is very well worth pursuing. If we are not too late, we would appreciate your serious con- sideration of Holmen Development as developer of the project. We look forward to hearing from you and then to some in-depth discussions as to the City' s desires and plans to see if we could mutually proceed toward consummation of a good and attractive facility at your location. Yours very truly, C. A. Holmen President CAH/bd cc: D.C. Nelson 6600 France Avenue South 6 Suite 218 American Edina, Minnesota 55435 �eA�evelyerS (612-920-4719) Inc. dk3EJ O1d4XUMW(Kir/WAX 790X XX MOM XXODOCXXXXX XXXXXX psxagsxxmax February 4, 1982 Mr. Jerrold Boardman H. R. A. Director 6431 University Avenue N.E. Fridley, Minnesota 55432 Dear Jerry: We thank you for taking the time to brief us on your plans to redevelop some of the property on the corner of University Avenue N.E. and Mississippi Street in Fridley. We are very interested in undertaking the development of this property. We are convinced that within nine months we would start construction on a minimum of 100,000 square feet on the 8.8 acres on the southwest corner and a minimum of 40,000 square feet on the 4.8 acres on the southeast corner. We have developed 16 shopping centers over the past 12 years (list attached. The most similar development to Fridley would be our redevelopment of downtown Mankato which was completed in 1978. We would be pleased to have you contact the Mankato City Manager, William A. Bassett (507-625-3161 ), or the Manager of the Citizens Telephone Co. , Paul Stevens (507-387-1151 ). Paul was very active in the downtown redevelopment organization. We have enclosed a preliminary development agreement for your review prior to the council meeting on February 1G, 1982. We would be most appreciative if the council would take it under consideration at that time. We will give a slide presentation of several of our projects at the February 18 meeting and be prepared to answer any questions. Sincerely, Orrin A. Ericson President OAE:dml Enclosure Downtown and$u6ur6an ,Slyyinj Centers • i& ice Iui&d njs • ,JoteA • ;74A0 Roust 7 at.n < XX roWn aero W 'C n x < to 'Tl < ' � � a, 1-• N •.rvno r go 8 � ~ R '` i � � i ger 2 r-• .. ..r•tu 0 .?. " a • 1 ►< ;f Al r- C L2 - cn 0 - rei N Wu ►< N N '< ►d . • CD U) ZJ fp Oum << W cu �r• rH `r cm �N a+ . to ~ a+ rt Cl) r•O N a a0 •� ft n o • PO'C1 0 '13x b7 off° CL p CD 'ti x t 4 n o b• Cr) x ° 2 DC rt p-1 P ° D �• u •� CDrorF- onF- O °acCDah, •G -h U 1-3 Cr)(Do •n (D (. t r ° 0Lrt •n rt< Hsrn G Lc: .pc rtrrrn £ a+ � Hrtro •n rt 1-1 1--,,•< 54 ,!.,: Q a? g N Hi) D 0 'b o f bi , 'TJ ° Q. 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N EN rt t& Nxr irt'< C -zC"G Hrrrr `l ' fil n r"C � 4 •a• Frt' J F•• N `m, N N N • N C7 � O H • N '° I- H n 0 H O H tv a Q+ tn rt s 11 RI a' '> - bo '- al:: W N N H O -�r H (D H rt D- . H �• ~ ai 9 � n tri NE Loe. p H to t6 tt+ ( In rt NN ~ tl YFN•• 4 rt rrt m g y U c a 5 • Z ; 5. c F � � � x om � � ro � N (CD N• ' rn O• 2 Ip • . rr W O N ', N r m m rt cD K rt rr fD a N E rt E ri rt cD go 4. dui H � �' h . aH ,n z o r- b �' CI) 0-, n u P N Dj , H :[', N H ��p (� .� rt 7' C) H rot Q7 c 7 N N C+ 8.O N (D ]C Fe m O W rt W l6 �r OpO++ i�. m(1. T7 rt rt rt (D • • r t K rt 'Li O m rt to a. to x CO to o tri W to rD 1-3 rt O o to x o 0 (D < ct U (DM• c• Cl) m CD o r° (D (D (D m o m m m 4 r7Nn- �yy rX^• rXn•999 r7-�� y^ 9 4yy IU V (U V V IV ° Fi? •�1 rQ1r O Nf S ° 'SJ {- lU O l i{ (D CO° � NR [U (CD RH. N Q. (CD R. H a. (ap �S H a rr Mo H a (gyp FrI H p' rt H.. . a H ft H H H O HH 0 O HH 0 0 H 0 O HH 0 O 1-" Ha0 HH O 00 -Si1-1 0 JJJ , JH � J J J JJ. N H H 1000 JH H JJH 1D00H U) H � � � H Ln Ln H � � lD J �J rt rt J rt J rt J rt J rt J rt J rt ....1 rr 10 Ln U1 U1 W W NJ H H n ►o w Di �ri c°n , � a N n c c N n rr m m • rt 7 v �' ti, ':7 rt H N Z o ° n ma 4 G� K Y �( N N N w N N H b g (�D H °H. CDD A P F N H On H. t IL ( 0 til III ,�l Fn ,.a l' 5• U (D (�� N 01 b lD In H W H Cr) N H Q1 W H N 10 CO UP '. UI In N 00 CO U1 NJ H N (A U) .P 00 kip 0 0 00 If).1-11 0 0 U)so En a, N-(3\01 tno mo rrtto rto rt c• (r) 0 rte rt a, rt 0 rOr o o O o O o O o rt o O In 0 4''. D o0 11 o � np o n o � 0 O 0 11 tp N tir7 m � N � N M NLi)� N K7 N 'T7 N � N -Ti BOR-SON 9 ._ _,_ La- -____-__tt CONSTRUCTION COMPANIES 2001. Killebrew Drive Post Office Box 1611 Minneapolis, MN 55440 [612)854-8444 February 4, 1982 Mr. Jerrold L. Boardman Executive Director Fridley Housing & Redevelopment Authority 6431 University Avenue NE Fridley, Minnesota 55432 Dear Mr. Boardman: We have received the information concerning your "Notice for Development Proposals." We are unable to make a cciamitment to present a proposal at this time, but thank you for your interest in The Bor-Son Companies. Sincerely yours, Betty lke Development Manager BK:km T 10 THE CITY OF -17)...., �:� C C HOUSING I and 7, :: (17 REDEVELOPMENT .. MEMORANDUM S.. AUTHORITY .� ,; �f ISO FRIDLEY FROM EXECUTIVE DIRECTOR MEMO NO. 82-07 DATE February 11 , 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Demolition of the Christiansen Building Enclosed in your folder is the bid specifications for the removal of the Christiansen Building on Phase I of the Center City Project. We will be opening bids on February 16, 1982 and will be bring these before you on the March 11 , 1982 meeting for "Award- ing the Contract". The documents require complete removal and grading by the end of April 1982. JLB/de JLB/de 11 THE CITY OF --EJiiiiir HOUSING ::• c '"" and •. fr •' MEMORANDUM .. • ( . REDEVELOPMENT .4._ • .. ,.. AUTHORITY FRIDLEY : ::. FROM EXECUTIVE DIRECTOR Oii,,A4 MO N EMO. 82-10 DATE February 11 , 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Appraisal Report for Northwestern Bell Telephone Building Enclosed in your folder is the appraisal report and a review completed by Leon Madsen, City Assessor's Office, on the value of the Telephone Building. We are presently working with Mark Haggerty, who is representing Mr. Wyeth, owner of the property, to come up with a workable arrangement on purchase based on the appraised value. Indications now are that if they go with the appraised value, they will want to go with a contract for deed. I hope to have further information on this item by the February 17, 1982 meeting. JLB/de ,2 MOORE LAKE PROJECT r 13 THE CITY OF T ... ... [/7, HOUSING €1 t i ; .....0, le and E VEL pMEMORANDUM .. R DE O MENT :: ♦ ....... AUTHORITY ? : ; E ! ." ; * FRIDLEY ... FROM EXECUTIVE DIRECTOR qp----- MEMO NO.82-11 DATE February 11 , 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Progress Report on Phase I - Moore Lake I talked to Cheryl Nybo on February 11 , 1982 to get an update on her office project on Hillwind Road. She indicated that the project was moving along satisfactorily and that she had the necessary commitment for rental space and now is finalizing the financing for the project. She will send me a letter on her progress which you will receive at you February 17, 1982 meeting. JLB/de , 14 THE CITY OF --TIJAgis, HOUSING "3 ` and lli -� •� :: REDEVELOPMENT ' MEMORANDUM f : l' . AUTHORITY �,'' E i •• FRIDLEY FROM EXECUTIVE DIRECTOR q MEMO NO. 82-08 DATE February 11 , 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X City Council Approval for CDBG Funds for Land Acquisition in Phase III - (for potential elderly project) St. Phillips Church has indicated that they intend to proceed with the submission of an application for 202 funding for the development of elderly/handicap housing in accordance to the Concept Plans of the Housing Authority for the Phase III property north of Moore Lake. The City Council , in support of St. Phillips' action, has ear- marked approximately $120,000 of the 1982 Community Development Block Grant funds toward property acquisition for this project. However, there funds would only be used at this site with a commitment for elderly/handicap housing. It is their intent to hold these funds until November, 1982 to see how the St. Phillips' project appli- cation is progressing. If funding is approved, then the City Council will direct those funds to the HRA to assist in property acquisition. If the funding is not approved, the City Council will re-evaluate the use of those funds. At some in the near future, St. Phillips, in its application, will need HRA guarantee that they have the right to develop this property and that the HRA has the power to control the site. I will discuss this with you in more detail at the February 17, 1982 meeting. JLB/de Y • ..: . , ." ...,--.••••' '....' ":'S- - ' - 14,,4-'.1'4"'-'?"-r•,+;?.; f 15 . .. 0 ,. . . . . - , • , . ti . 1 a . dfit 42 0 . . • 3 1::::), ., _ 111111111' .4- • . .41,:::), . t ` v rr .- , / r, , ; ,,.4•11..-• ,1 t • V 3 •1• ..,_ ' . !. ....'''% . ' ..•• ° - 4 7 41:PA:21(.• J T. :10,- { �' 1/1-•�� Vit;:. • � /'• t. 'W 14 �1 1. /•"1-41;1*:17-7. / p1 i t 'fir •� '�� •t,l�� _ .!s'f.+ eirE0 ./ 3, \ ; tir j . ,, . . • i 40 0 , s.601„ � ' r I „ t <• _ f\ .i, W.lek lik + i ,',, -N. .. - - , , ,. ,.„:-.1 . . _ 101E.' a 4 N.N ;1'" ; , ,. 0. .... . ,..:1 , ,a,. ,4 . -.41: 1.- - - .. .., , ' -t 1-17. ,_12 qt..' -h..." 4 1 El i I 1."' ' ' V.:17 4 .tt ' -... `t� . r sCYy . ,,,,,,t..04.027.4.,.• ` ; '.i tlti. it s : 1 a P 'kr. `46 -1"---'-47------7.--,----- �_ _F— _^ .. f'3."..'•-' t'-' '' -'1'.1%! •••t! ' - i / 31 i '''.-.! . }: 4' v , ,;- !al ,I ?• N 4/• /, , tt / _- / �I La -,,-.".; (Iii Z • > i Fi r' •moi. t • / � : w . Q � ,.i �, a � �; � � � y � , s. ?.�,, - � - 1 . �, D1 16 THE CITY OF --c),..., HOUSING riii i . c _ ir-IMIk.amiw and .WO . REDEVELOPIVIENT MEMORANDUM .. Oak .. ;.. AUTHORITY : E 1 FRIDLEY ••••17 FROM EXECUTIVE DIRECTOR 90. MEMO NO. 82-12 DATE February 11 , 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Proposal Submitted by Dick Moschinski, Moschinski Contractors for Phase V-VI Moore Lake Project We have received a proposal from Mochinski Contractors for the development of a townhouse/quad project to be located in Phase V-VI of the Moore Lake District. They presently own a portion of property in this area and want to start development with a staged construction (see attached layout). We will be meeting prior to the February 17, 1982 meeting to review the proposal and determine the amount of assistance he will be requesting for the project. I am submitting this in the agenda at this time for your information. Indications that I have gotten from Knutson Mortgage Corporation, who is working with Moschinski , is that the financing would be available for this type of project. I hope to have more information by the February 17, 1982 meeting so that we can start analyzing the impact on the district. JLB/de � cco. I .2t/, Ii. 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It'._+/'T"•lc. _a.f`° 1.1,-;,.. .- ..- - t_ �� .�� ..f JS 'R�3.. l;.I 20 NORTH AREA PROJECT 21 THE CITY OF �.. �� HOUSING c� __. _ :: • • .. AriF4.- and •� f\VA REDEVELOPMENT y MEMORANDUM .. ,.. ----f.,� .:::� AUTHORITY I i FRIDLEY ...�.. FROM EXECUTIVE DIRECTOR MEMO NO. 82-09 DATE February 11, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Request from the City Council to Review Housing Bond Program and Make Recommendation on Use of Tax Increment Funds. The City Council has been considering the issuance of tax exempt housing mortgage bonds as allowed under Chapter 462C of the Minnesota State Laws for the development of a 360-unit apartment building to be located in the North Area Tax Increment District. At their meeting of February 1 , 1982, the Council has requested the HRA to review the program submitted by the developer to analyze the use of Tax Increment funds, for not only land improvements, but for use as rent subsidy. Both are allowable expenditures with Tax Increment Districts. The idea of housing mortgage bonds was discussed briefly with the HRA on December 10, 1981 after the City Council approved the Housing Mortgage Plan on December 7, 1981 . I am attaching information on the program being submitted by the developer so that we can further analyze the effect of this progrm on the TIF district and make the requested recommendation to the City Council . JLB/de METROPOLITAN COUNCIL 22 Suite 300 Metro Square Building, St. Paul, Minnesota 55101 MEMORANDUM October 30, 1981 TO: Human Resources Committee FROM: Guy D. Peterson SUBJECT:. TAX-EXEMPT MORTGAGE REVENUE BONDS - BACKGROUND SUMMARY AND CURRENT STATUS Because of changes and delays caused by passage of the Ullman Bill, the Council has not reviewed a local tax-exempt bond plan since December, 1980. This memo is being provided to give you background information and to bring you up to date on federal and state actions and the Council 's role in the issue of tax- exempt bonds for housing. THE GROWTH OF TAX-EXEMPT BONDS FOR HOUSING The selling of tax-exempt bonds to provide capital which can be lent to housing producers and consumers at below market interest rates is not a revolutionary concept. The nation's public housing authorities have long financed their public housing construction in this manner and for over a decade state housing finance agencies have built rental housing for low- and moderate-income families with funds raised on the tax-exempt market. Four basic methods are used to pass forward to housing the interest savings gained from tax-exempt financing. The four are: 1. Lending the bond proceeds at below market interest rates for housing construction. 2. Subsidization of permanent mortgages for purchasers of housing. 3. "Loans to lenders" programs which provide below market interest loans to savings institutions to be relent to housing purchasers. 4. Acquisition on the secondary market of below market loans originated by such institutions. Originally, state housing finance agencies were to provide housing through the use of tax-exempt financing to low-income households in conjunction with fedetal operating subsidies and to moderate-income households on the strength of the tax exemption alone. In practice, however, federal subsidies became necessary to reach even the moderate-income rental market while the use of tax- exempt bonds expanded beyond the production of lower-income housing. The end of the '70s and 1980 witnessed a rapid increase in the use of tax- exempt bonds by local governments. Mortgage revenue bonds began to subsidize the construction and purchase of single-family homes for people of middle as well as moderate incomes, and serve special development and redevelopment objectives such as neighborhood revitalization and retention of higher income households. 2 23 • Through the auspices of local government, qualified participants have realized interest rates which are two or three percent below the market rate and have enjoyed total interest cost savings of as much as 20 percent; At no cost or - risk to local taxpayers, local government has provided what would appear to be a housing cost savings to homebuyers unparelled by any government initiative yet devised. TAX-EXEMPT FINANCING OF HOUSING IN MINNESOTA Tax-exempt financing for housing in Minnesota and the metropolitan area has been around for a number of years. In 1971 the state legislature created the Minnesota Housing Finance Agency giving it the authority to issue tax-exempt revenue bonds to support the development of single-family and multifamily housing as well as housing rehabilitation programs. Special laws passed in 1974 and 1975 gave several cities in the state the authority to issue housing bonds including Minneapolis, St. Paul and South St. Paul. • In 1979 Coon Rapids, Vadnais Heights and Eagan prepared tax exempt bond programs to provide the financing for housing using authority provided to cities by the legislature in the Industrial Development District Act of 1978, Chapter 474. Eagan issued approximately $6 million in bonds to finance the construction of a 206 unit market rate rental apartment complex, but before the Coon Rapids and Vadnais Heights programs could be finalized the state legislature took up the issue in early 1979. The Municipal Housing Bond Program Act, Chapter 462C, became state law in 1979 because of the legislature's recognition that limitations insuring the public purpose of tax-exempt mortgage financing by local government were not present in Chapter 474. The Act established limitations on the amount of bonds that could be issued by cities, and prescribed purchase price and income qualifications for program participation. It also called for the review of all proposed bond plans in the metropolitan area by the Metropolitan Council. The Council was directed to review the plans to determine whether they further local and regional housing policies, are compatible with the City's own housing plan, and adequately meet the stated housing needs for the City. Following Council review the cities forward the bond plans to the Minnesota Housing Finance Agency for a more technical review of the mechanics of the tax-exempt issue itself. THE ULLMAN BILL In April of 1979, similtaneous to the State's efforts to rewrite legislation governing tax-exempt mortgage financing, Rep. Al Ullman of Oregon, then chairman of the powerful House Ways and Means Committee, introduced a bill to severely restrict the ability of states and local government to issue mortgage revenue bonds. Motivated by figures which showed single-family mortgage bonds accounting for $570 million in tax-exempt borrowing in 1978 and over $1 billion in just the first quarter of 1979, the Ullman Bill sought to stop what the Congressman and the Treasury Department viewed as an unacceptable loss of tax revenue. . . .The simple introduction of such legislation by such an influential member of 24 Congress and committee chairman seemed to almost give the bill the full force of law. The uncertainty it created regarding the future of the tax exempt status of bonds issued to finance mortgages, brought a screeching halt to the issuance of such bonds by local governments all across the nation. In of 1979, the bill moved out of committee and was passed overwhelmingly byvtheer full House of Representatives. While the Ullman Bill was making its way through the House, the Senate also began deliberations on tax-exempt mortgage financing with proposals geared more toward reform and control of its use within reasonable guidelines. It could not, however, reach accord on any one bill and thus when the Ullman Bill was attached to the House's Appropriations Bill, it was left up to a House-Senate Conference Committee to reconcile the differing positions. In June, 1980 this conference committee did come to an agreement which removed the restrictions of Ullman from the appropriations bill because by special resolution the Senate promised to prepare legislation dealing with tax-exempt mortgage financing in the next session of Congress. This "Long Resolution" as it was called, permitted bond programs prepared in 1979 and 1980 to go forward, because it guaranteed that no future restrictive legislation would be applied retroactively to any bonds issued before January 1, 1981. METROPOLITAN AREA BOND PROGRAMS The bond programs of Coon Rapids and Vadnais Heights were grandfathered in when 462C became law and both cities issued bonds for single-family home mortgages during 1979 and 1980. Late in 1979 and throughout 1980, the Council reviewed several local tax-exempt mortgage revenue bond plans prepared by cities in the Region pursuant to Chapter 462C. The only city in the area that had prepared a 462C bond plan which could not be affected by the Ullman Bill was that of Eagan because it was authorized by the city prior to the Ullman Bill 's April, 1979 cutoff date. Otherwise the plans submitted by St. Louis Park in late 1979 and by Minneapolis, St. Paul, Minnetonka, Blaine, Columbia Heights and Bloomington in 1980 were all done by the cities with the realization that pending federal legislation could prevent them from issuing the bonds. Following the Long Resolution, St. Louis Park issued bonds to finance a condominium development and provide single-family home mortgages city-wide; Minneapolis and St. Paul financed several individual multifamily housing developments; and Minnetonka and Columbia Heights issued bonds for construction financing for condominium projects. Blaine and Bloomington had pr epared wide single-family home mortgage programs but high interest ratespreventedty them from selling bonds before 1981. THE MORTGAGE SUBSIDY BOND TAX ACT OF 1980 The 1980 elections spelled defeat for many influential members of Congress including Rep. Ullman. Yet, even as a lameduck Congressman, he was able to see his bill become law when the Mortgage Subsidy Bond Tax Act of 1980 was made part of the Budget Reconciliation Act passed and signed into law in December of last year. This legislation along with escalating interest rates has effectively shut the door on the issuance of tax-exempt mortgage revenue bonds by local government in the Metropolitan Area. Only Minneapolis and St. Paul, whose McKnight Foundation program was specifically exempted from the federal restrictions, have sold bonds in 1981. 4 The major provisions of the Act and those with the most significant impact on 25 • the ability of local government to issue tax-exempt mortgage bonds are as follows: Single-Family Mortgage Programs 1. Such programs can assist only first time homebuyers who are defined as having not owned a home for the previous three years. 2. There are no income limits. 3. Purchase price limits for new and existing units are to be based on average sales prices in the SMSA - $83,880 new and $61,920 existing for this Region. 4. There is an annual limit on the dollar amount of bonds sold in the state, $239 million for Minnesota. 5. Unless designated otherwise by state law or the governor, this total must be split 50-50 between state and local governments. 6. The arbitrage limit (the amount of money that can be earned from fees or investments from proceeds of bond sales) is reduced from 1.5 to 1.0 percent. 7. Authority to issue all mortgage revenue bonds expires in December, 1983. Apartment Development Programs 1. Apartment development bonds are exempt from most of the Act's provisions and do not count against the state's dollar volume limit. 2. All development must have at least 20 percent of the units affordable to Section 8 eligible tenants. TAX-EXEMPT MORTGAGE FINANCING IN 1982 AND 1983 With the encouragement of local housing officials, Senator David Durenberger is currently preparing a bill to be introduced later this year which will amend the Mortgage Subsidy Bond Tax Act of 1980 to eliminate some of the restrictions which have hampered local government in their attempts to issue bonds for housing in 1981. The Senator's bill will propose several areas of change which may help local governments put together bond programs within the overall limits of the 1980 Act while not amending its broader total dollar and unit cost limits. These proposed amendments would call for an internal audit within individual bond programs to insure compliance with the Act's first time buyer, purchase price and other requirements. They would eliminate the requirements that bonds be registered and that issuers must sell excess reserves at a loss. They would increase the arbitrage ceiling to 1.25 percent, reduce to 10 years the length of time that 20 percent of the units must be low- and moderate-income affordable, and would retain the definition of low- and moderate-income at 80 percent of the median income. It is also interesting to note that the Reagan administration's housing legislative package for this upcoming year is proposing the expansion of tax- exempt financing for housing in 1983. To facilitate multifamily production, HUD wants to extend tax-exempt financing to all FHA projects and is thus also proposing elimination of the requirement that 20 percent of the units in bond- financed rental projects be low-income affordable for 20 years. 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I b EeS —;')I��r NNS y >•f�/ w•-. �z�` jI I ;1 • ' 1114.4.1‘ S.q.„.. il ;As CA• 1 /!.✓111 �I fa .00114 ,I _ 1 • • 11CA1— IOr r 01► I - �i • •,I _ or 1 t gown.' II' -.....v.:-.;;;,•.,t• `` Ifo UNIT •AFaRTMENTi - j 3 _bY.nee.tan •• i - c:— ts �I; r r •• f . �'; Lam- _ -----1-7-1 _ -- _ / : $ 'I c, `o �, I oy i o /1�T.....; ,..11.2,__.:.4 r r•-• I . CIS GARAGES •Otag l;{I I ± 10.'6AR.6Es 1;4 a % • j.. =•� tri` r o' PCMID--#-Alligr .6t .-... 21 b uhAnt t r / �I 4,,rM,,..,.a. 1 0 1 . • • • ` ..`i.- • — I _ --'3R - ;. Vt.: ----•—t--.�•--NAL �_ ••• /� • S S- 011tat 28 tfo'� Nd ai 114 January 25, 1982 =+� e • yP /14'iN Jerrold Boardman, Planner City of Fridley 300 Metro Square Building 6431 University Avenue N.E. Saint Paul, Minnesota 55101 Fridley., MN 55432 Telephone 612/291-6359 RE: Housing Plan and Program Metropolitan Council Referral File No. 10249-1 Dear Mr. Boardman: At its meeting on January 21, 1982, the Metropolitan Council considered the City of Fridley's Tax Exempt Mortgage Revenue Bond Plan. This consideration was based on a report of the Human Sources Committee, Referral Report No. 82-08. A copy of this report, which was adopted as presented, is attached. The Council finds that the City's mortgage bond plan as currently submitted is consistent with areawide policies and goals. Sincerely, METROPOLITAN COUNCIL Charles R. Weaver Chairman C RW:bm Attachment cc: HUD Area Office An Agency Created to Coordinate the Planning and Development of the Twin Cities Metropolitan Area Comprising: Anoka County 0 Carver County 0 Dakota County 0 Hennepin County 0 Ramsey County 0 Scott County 0 Washington County An Equal Opportunity Employer 29 METROPOLITAN COUNCIL { Suite 300 Metro Square Building, St. Paul, Minnesota 55101 MEMORANDUM January 11, 1982 TO: Human Resources Committee FROM: Guy D. Peterson SUBJECT: REVIEW OF THE CITY OF FRIDLEY'S TAX-EXEMPT MORTGAGE REVENUE BOND PLAN REFERRAL FILE NO. 10249-1 COUNCIL DISTRICT NO. 13 I. AUTHORITY TO REVIEW The Council has received a Tax-Exempt Mortgage Revenue Bond Plan prepared by the City of Fridley pursuant to M.S.A. 462 C, the Minnesota Housing Bond Program Act. The Council is required by the Act to review and comment on such tax-exempt mortgage revenue bond plans for their consistency with local and regional housing policies and needs. The 45- day review period expires on February 5, 1982. II. BOND PROGRAM SUMMARY The City of Fridley proposes to make two bond issues of $16 and $5 million dollars to finance the construction of rental, apartment developments in the City's North Park and Moore Lake Tax Increment Finance Districts. Development of a large apartment complex with a variety of unit sizes has been proposed by a private party, while the City's HRA has initiated, the development of an elderly rental facility. North Park Terrace will be a 360 unit complex with one, two and three bedroom apartment units in several three story buildings. Currently it is projected that rents for these units upon completion in 1984 will be $483, $568 and $726 per month for each of the respective unit sizes. Moore Lake Gardens will be a 100 unit complex, perhaps a five story building, of one- ,and two-bedroom units for the elderly and handicapped. • Tax increment financing will be used to assist the development of both complexes and may occur in the form of any number of cost write downs. It may be used to write down the cost of land to acquire the Moore Lake Gardens site, or for soil correction and drainage adjustment costs at both sites. Tax increment will also very likely be an important element in structuring the rental rates of both developments to ensure that 20 percent of the units are affordable to households of low- and moderate- income as required by the Mortgage Subsidy Bond Tax Act of 1980. Presently it is undetermined as to how this 20 percent set aside of units will be structured. The U.S. Treasury Department which is to promulgate rules on how it will interpret the 20 percent low- and moderate-income affordable provision of the federal law and its relation to ensuring the continued tax-exempt status of the bonds has as yet not done so. 30 There appear, however, to be two ways in which the 20 percent set asides can occur. One option is for the developer/owner to establish maximum monthly rents for 20 percent of the units at an amount affordable to low- and moderate-income households by increasing proportionately the rents for the other 80 percent of the units in order to realize the necessary total monthly rental income from the development. The problem with this method is that it can push rents in the market rate units beyond an amount that is marketable and therefore make the project unfeasible. A second option is to use the tax increment gained from the development to actually subsidize the rents of 20 percent of the units each month for the 20 year period in which the units must remain low- and moderate-income affordable. With this method the City's HRA enters into an agreement with the developer/owner to pay a certain amount of rent toward 20 percent of the units while the owner certifies that each month for the 20 year period a low- and moderate-income household occupies the unit. How much and how the rents would be subsidized by the City will be undetermined until the Treasury Department clarifies its position. It is anticipated that bonds for the North Park Terrace development will be advertised and sold publicly in the early spring with construction beginning soon afterward. Underwriters involved in the bond program indicate that currently a bond interest rate of 13 percent would make the project financially feasible. Preparation of the Moore Lake Gardens proposal is not nearly as complete, and a timeframe regarding bond issue and development cannot be projected at this time. III. RELATIONSHIP TO CITY AND REGIONAL POLICIES This tax-exempt mortgage revenue bond plan is consistent with the goals and policies and the implementation methods set forth in the housing element of Fridley's comprehensive plan. The development of these two apartment complexes through the use of tax-exempt financing will provide new housing opportunities which will help the City achieve a portion of its numerical goals of 480 to 1,200 low- and moderate-income and 480 modest-cost housing opportunities through 1990. The bond programs will enable Fridley to continue to diversify its housing stock and make additional housing alternatives available for young households and empty-nesters alike. It is also consistent with the City's -dousing policy which calls for the use of local fiscal initiatives to "stimulate" the construction of multifamily housing units. This tax-exempt bond effort is also consistent with regional housing policy of the Metropolitan Council, particularly Policy 81, which calls for the use of tax-exempt financing by municipalities to meet their share of the areawide need for low- and moderate-income and modest-cost housing. Consistent with regional policy and bond plan review guidelines, the bond plan indicates that the housing opportunities afforded by the programs will be affirmatively marketed to all potential consumers and producers. These programs will also provide diversification of housing type, and the construction of market-rate rental housing units, both of which are identified as primary objectives of tax-exempt financing in the } Council 's review guidelines. 31 IV. SUMMARY OF FINDINGS 1. The Fridley housing bond plan includes all information required by law and necessary for Metropolitan Council review. 2. The bond plan identifies the specific size and location of the developments to be financed though the tax-exempt bond issues. 3. The bond plan is consistent with the housing policies of the City's comprehensive plan, and the policies and bond plan review guidelines of the Metropolitan Council with regard to the provision of low- and moderate-income and modest-cost housing opportunities. 4. The bond programs are tools which will help the City provide low- and moderate-income and modest-cost housing opportunities in attempting to achieve its ten-year fair share goals for such housing. 5. The bond programs do not duplicate a financing method for subsidized housing which is already available through MHFA or HUD. 6. The bond programs will promote diversification of the City's housing stock and the construction of much needed market-rate rental housing. V. RECOMMENDATION Fridley's tax-exempt mortgage bond plan as currently submitted is consistent with areawide policies and goals. LM295-H2 • I 32 THE CITY OF DIRECTORATE OF 1<'►1c oo�oo - MEMORANDUM PUBLIC WORKS • FRIDL Y DATE January 28, 1982 MEMO NO. 82-09 FROM D.P.wJerrold Boardman - Planning TO ACTION INFO. SUBJECT John Flora Y X Multifamily Mortgage Revenue C, Mfrf e.i.tf✓ Bond Program and Resolution Please see attached the "Multifamily Mortgage Revenue Bond Program" and "Resolution" as submitted by Diane Eliason, Dain Bosworth and Associates, for the North Park Terrace Apartments. This is the third step in a five step process. Step (1) and Step (2) have been completed. They are (1 ) the approval of the Housing Mortgage Bond Plan and Preliminary Bond Sale Resolution by the City Council on December 7, 1981 and (2) the review and approval of the Bond Plan by the Metropolitan Council completed on January 21 , 1982. The remaining steps are as follows: 1 . Approval of the Bond Program by the City Council and its -submission to the Minnesota Housing Finance Agency for approval . 2. Minnesota Housing Finance Agency approval . 3. Entering into any legal contracts with the developer and approval of the final bond sale. The approval of the program does not require any commitment of subsidy for its submission to the Minnesota Housing Finance Agency. This would allow the developer to be eligible for tax exempt financing. After the Minnesota Housing Finance Agency approves the program and prior to the final bond sale resolution by the City, the City Council needs to determine the most appro- priate means to assist the project. This may be in terms of a subsidy of units, further write down of outside development costs, delay assessments, etc. These are all eligible tax increment fund expenditures and would have to be determined based on the financing information at that time. JLB/de . • City of Fridley 33 Multifamily Mortgage Revenue . Bond Program By enactment of Minnesota Statutes, Chapter 462C, the Legislature in 1979 authorized all cities in Minnesota and housing and redevelopment authorities, if authorized by the City, to establish and finance certain single family and multifamily housing programs as defined in the Act. Before issuing bonds under Chapter 462C, the issuer is required to prepare, and after conducting a public hearing, adopt a housing plan, submit the plan to the Metropolitan Council for review and comment, prepare and, after conducting a public hearing, adopt a housing program covering the specifics of the proposed financing and submit such program to Minnesota Housing Finance Agency for approval. The state agency has promulgated regulations regarding the scope of their review. Chapter 462C contains a series of limitations including issue size and requirements of units for low income persons. Furthermore, the proposed project site is in a redeve- lopment district established pursuant to Minnesota Statute 462 and therefore is considered a target area under Minnesota Statute 462C.05 At the regular City Council meeting of December 7, 1981, a resolution was passed which authorized the City of Fridley to develop and administer programs of making mortgage loans to finance single family and multifamily housing redevelopments and to sub- mit a housing plan and program to the Metropolitan Council for approval. Said resolution passed and adopted the housing plan. The housing plan is presently being reviewed by the Metro- politan Council. It is anticipated that approval will be received shortly. Such approval is necessary before implementation of this program. Through the implementation of this program, the City of Fridley intends to provide for the following statewide policies: • Availability of housing to all persons, and equal employ- ment opportunity by all contractors and subcontractors engaged in the construction of such housing to all per- sons, without discrimination as to race, color, creed, religion, national origin, sex, marital status, age, and status with regard to public assistance or disability; '' Assurance of decent, safe, and sanitary housing through compliance with the state building code; Provision of affordable housing options, and where possible relocation assistance, to displaced persons in the same developments and neighborhoods, in order to .minimize the effects of potential displacement due to housing programs; The participation and assistance of private industry in • providing decent, safe, and sanitary owner-occupied housing and rental housing at affordable prices and ren- tals to persons and families of low and moderate income, to the elderly, and the handicapped; -2- 34 The development of alternative energy systems and the greatest possible use of techniques for energy conser- vation in the construction or rehabilitation of residen- tial housing, even where such techniques may exceed the applicable federal, state, or local conservation standards; Innovative methods of financing residential housing for persons and families of low and moderate income; • Increased construction of rental housing for large fami- lies of low and moderate income; Economic integration in residential housing in all communities; and The participation and assistance of local government and other related• public bodies in the development of programs to provide decent, safe, and sanitary housing to persons and families of low and moderate income. In addition the City of Fridley intends to implement this program insuring that all construction will comply with the State Building codes and any other codes that are deemed appropriate . regarding this multifamily housing project. The City of Fridley is not under any restriction regarding the aggregate principal amount of the bonds as long as the City implements the construction of multifamily housing including affordable housing for low and moderate income families. It is anticipated that the City of Fridley will issue approximately $15, 000,000 in mortgage revenue bonds to fund the construction of 360 1, 2 and 3 bedroom rental units to be located at 83rd Avenue N.E. , Fridley, Minnesota. Under single family restriction the City of Fridley would not be able to issue more than $30, 228,000 in aggregate mortgage revenue bonds. The tax-exempt bonds will be collateralized by a pledge of revenue derived from rental • income including a pledge of revenue from tax increment as well as a first mortgage in the subject property. A. Summary of the Program A summary of the proposed multifamily mortgage revenue bond program would currently establish the following parameters: Rental Rates • The rental rates established for this project will be based on the latest Fair Market Rents for Minneapolis/St . Paul as published in the latest Federal Register and increase such rent figures by 10% each year thereafter to such time that occu- pancy occurs. Rental rates will be comparative to • other units available in the City of Fridley and • neighboring communities. • -3- 35 Qualification for the 20% Low and Moderate Income Units 20% of the 360 rental units will be maintained and available to persons or families of low and moderate income. Such persons or families will qualify if income is at 80% or less of median income level' for their family size as determined by the Department of Housing and Urban Develop- ment. Subsidy of 20% units A pledge of revenue by the City of Fridley or owner sufficient to cover the difference between the market rate rental income and the rental income received of the 20% of low and moderate income families will be required to implement this bond program. Revenue Bond Issue Size and Rate It is anticipated that approximately $15, 000, 000 in bond proceeds will be necessary to finance the construction of approximately 360 multifamily units at an average interest cost of an estimated 13%. B. Administration The City of Fridley will need to direct certain responsibility for implementation of this program. The city will assume this responsibility by directing the overseeing of rentals to low and moderate income persons or families to qualified Staff ( "Administrators" ) . Said Administrators will be the Fridley Housing and Redevelop- ment Authority or an experienced managing agent to be • determined and approved by the city. The administration will be responsible for the collection of information, and submitting necessary reports to the City Council and the State. Periodic review of low and moderate income persons • and families to verify their qualifications will be required. C. Costs of the City Any necessary expenses of the City and its staff during the structuring of the sale of bonds incurred and associated with bond issuance will be reimbursed out of bond proceeds. D. Distribution of Bond Proceeds Bond Proceeds will be restricted to provide construc- tion and permanent financing for 360 multifamily rental units located at 83rd Avenue, N.E. , Fridley, Minnesota. 36 " -4- • E. Summary and Conclusion The City of Fridley desires to provide affordable housing opportunities for all segments of its population. This project will add 72 low income units to the City' s housing inventory as well as provide 228 reasonably priced housing units in the City and will increase the economic integration of its neighborhood. The housing plan with the multifamily mortgage revenue bond program is designed to further the local and regional housing policies by constructing safe, decent, sanitary housing and making it available to various eco- nomic segments of the City of Fridley population. It is believed that the program will provide an incentive for people to relocate in the City limits as well as provide current rental residents with greater residential oppor- tunity. 37 Resolution No. • RESOLUTION APPROVING MULTIFAMILY MORTGAGE REVENUE BOND PROGRAM AND AUTHORIZING ITS • SUBMISSION TO MINNESOTA HOUSING FINANCE AGENCY • • • WHEREAS, Minnesota Statutes, Chapter 462C authorizes a city to plan, administer and make or purchase a loan to finance a multi-family housing • development after adoption of a housing plan and housing program thereon; and WHEREAS, Minnesota Statutes, Chapter 462C authorizes adoption of the housing plan and housing program after public hearing held thereon; and WHEREAS, the City Council of the City of Fridley (the "City") held a public hearing on the housing plan of the City (the "Housing Plan") on December 7, 1981, and adopted it on that date; and • WHEREAS,'the City Council of the City held a public hearing on the multi- family mortgage revenue bonds housing program (the "Program") on December 7, 1981, and February 1, 1982; NOW, THEREFORE, BE IT RESOLVED THAT: The City hereby approves the Program and authorizes the City Manager to submit the Program to the Minnesota Housing Finance Agency for review and approval. 38 THE CITY OF �]Aiiir HOUSING00 ` € .. c's� a e.....� :: and .. (crtsull- REDEVELOPMENT ' 000.11.41 AUTHORITY MOO + ... FRIDLEY aajm:::~':_ E FROM EXECUTIVE DIRECTOR MEMO NO.82_13 DATE February 11, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Proposal for Industrial Development by ELO Manufacturing - North Area TIF , I have been approached by Jim Benson, Benson & Malkerson, Inc. , who is representing ELO Manufacturing in the development of a new 70,000 sq. ft. manufacturing plant located at the corner of 81st and Main Street N.E. ELO Manufacturing is presently located in the City on Rancher's Road and needs to move to a new location in order to double its present size of plant, and would like to stay in Fridley. They looked at this site, but would need some assistance from the HRA for soil and drainage work. They are planning to appear before the HRA on February 17, 1982 to present their project. I hope to have some detailed figures to look at for this project by this meeting, and will start as soon as we get the plan. JLB/de 39 620 Mendelssohn Avenue, Minneapolis, Minnesota 55427 Phone: 612 542-9907 Bensons maLKeRson, ins. Industrial Rea'Estate February 12, 1982 Mr. Jerrold L. Boardman Executive Director Fridley Housing and Redevelopment Authority City of Fridley 6431 University Avenue N.E. Fridley, Minnesota 55432 Dear Jerry: I am writing you this letter as a representative of Elo Engineering, Inc. who wish to apply to the Fridley Housing and Redevelopment Authority for asssistance under the Tax Increment Plan to the North Area Redevelopment Area as adopted by the City of Fridley. Elo Engineering, Inc. is owned by Gene and Louise Owczarzak and have been a Fridley based company for several years, currently operating their business at 7770 Ranchers Road, Fridley, Minnesota. Gene and Louise have entered into a Purchase Agreement to purchase approximately 6.95 acres of industrial land located in the southeast intersection of Main Street and 81st Street. The seller of the property is Mr. Ronald Flanagan and Mr. Flanagan has owned the property for several years. The Owczarzak's have attempted to purchase several industrial lots in Fridley but have been forced to cancel the purchase agreements based on the cost to correct the extremely poor soil conditions. The Purchase Agreement between the Owczarzak's and Mr. Flanagan is contingent upon Assistance under the Tax Increment Plan based on the need for soil correction. It is the intentions of Elo Engineering to construct approximately a 70,000 sq. ft. industrial building on the proposed lot. This new building will replace their existing building on Ranchers Road which is now approximately 25,000 sq. ft. As I mentioned to you on the telephone, I will deliver to your office on Tuesday, February 16 additional information to include a site plan, building specifications to include the cost of the proposed building and cost estimates to correct the soil for the construction of the proposed industrial building. ,oma kas Individual Membership,Society of Industrial Realtors Member, National Association of Industrial and Office Parks 40 We would like very much to appear before the Fridley Housing and Re- development Authorities meeting on Wednesday evening, February 17, 1982. Thank you for your assistance and cooperation. Sincerely, BENSON & MALKERSON, INC. J'm Benson, S. I. R. JB/dbb i 41 UNIVERSITy A INDUSTEiI J 8sT _ J SIeAveroug — — iwti :. \ Fr– I I 1 1.16 M. 0.99AC 0.81Aci � k I \ K \ L -- j. Q� it, 1.12 AC �! 0.96 AG 0.88 AC''K\K\\\\:\' C.r�' I j m Qo \\ NI r: W W I -- -i _—I- = D 1 15 I m I.IIAC rep ' li 0.96 AC097 I D c ; c3 q a I 0 I i I C E E ti co___ __t___I I L _ 1._____3 _i_i `r r • ------------ r-- 1— , I ,,..->Drainage 8 Utility Easement ' I I OS 0. ( 1.0 -1 1.09 AC j 0.96 AC 0.97 AC j �t 5 4 I 1 I 4 9 c I 1 E. : L I ' 4 � o ;. Z i 1.84 Ac I 11 ' I I.08AC ti � 0.96AC D..181,At I 9 cat ! 5 I s 1. I , , _.-r___ _ - -CY, ZI I I //' ' 2 I 4I ?1'VC I i f.06 At I.03 Ac t f EXCE N I I % T/ O.81 AC – +- – -r•- _.) I I I 1q+H ANY.'Vtt -N.t. ' 9TAvg Nut —14011— r - NE \,.., i-- -- , p ,, OAST RANLN =Q 5-4-PTA 4 .,- c' `r �� At2p1T1Ori kt/ 11 4 3 TERMS OF SALE AND AVAILABILITY ARE SUBJECT 41A ZONED FOR INDUSTRIAL COMMERCIAL OR OFFICE BUILDINGS 13 Located in the suburb of Fridley, University In- dustrial Park is linked to the Metropolitan area via University Avenue N.E. (Hwy. 47), providing direct access to 1-694 and Hwy. 10. ® Lots available in any combination to fit your needs, 15 acres zoned industrial and 6 acres zoned commercial — 1,300 feet of highway frontage on University Avenue N.E. ® Land sales with terms . . . Build-to-suit . . . Lease back. C Municipal sanitary sewer, water, storm sewer and 9 ton roads installed, plus underground electrical service and firm natural gas provided to all sites. F Restaurants, banks, post office, shopping areas, bus services, residential neighborhoods and parks are all provided for in the immediate area. CHANGE OR WITHDRAWAL WITHOUT NOTICE. 41B a Anoka County Airport 0„ N W I R 35E I v INDUSTRI UNIVERSIAL 'TY D Weave. PARK OLE I Y allGysul vii Airport r- i r"P"zr 1 _ , a I m 1 try 1 LI ciw 1 1 _, J �_LJ l – I h\- � 1 100 ' St Paul Minneapolis Q 1 v 1 MPLS.— St.Paul ST.PAUL Downtown INT'L I / Airport 1 Airport I L. ..':.147N - W CO I;77 ad, Flying Cloud t>s® Airport ea / . University Industrial Park offers all the benefits of an urban industrial site plus the advantages of a suburban location. It is close to the metropolitan center of Minneapolis-Saint Paul—the major governmental, industrial,and financial center of the Upper Midwest. Of equal importance is the reservoir of educated and willing workers available in this area. Business can draw continuously from this labor force of exceptionally high quality and productivity. Among the nationally known companies already located throughout the Fridley area are Medtronics, D.W. Onan, Carter-Day, Dayton-Target, Midland Cooperatives, Northern Ordnance, Minnesota Linseed Oil, Downing Box, Kurt Manufacturing and Totino's. Investigate the advantages of a site in University Industrial Park. You're sure to find the location that meets all of your requirements. FOR DETAILS AND INFORMATION ON UNIVERSITY INDUSTRIAL PARK, CALL JIM BENSON 542-9907 Exclusive Agents: The descriptive information set forth in this brochure is from sources deemed reliable, but no Benson associates warranty is made as to the oc- curacy thereof. Any prospective purchaser or lessee or other Industrial Real Estate person interested in this offer- ing is required to moke his own investigation and is not to rely 620 MENDELSSOHN AVENUE • (612)542.9907 on information set forth herein, MINNEAPOLIS,MINNESOTA 55427 since the some may be subject to errors or omissions. The offer- ing is subject to change of price or other conditions or prior sale ��`.`� or leose. 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SUBJECT Jerrold Boardman X Large Family Home Ownership Program: Financing Time Limit Extension On February 6, 1982 the 90-day financing time limit initiated by the HRA expired for Mr. & Mrs. Mosad Aly. This family has made every effort to secure financing and had all the necessary paper work submitted to the F.H.A. I recommend that the HRA grant a 90-day financing extension to this family since they have no control over the application processing time of the F.H.A. This extension should ensure adequate time to complete all necessary procedures for closing on the lot. MC/de s • • 46 1}-1 D pRre DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT l � `= MINNEAPOLIS-ST.PAUL AREA OFFICE \b1101111 111 1111 01 e 220 SECOND STREET SOUTH 44 ao MINNEAPOLIS,MINNESOTA 55401 REGION V JAN 2 0 1982 IN REPLY REFER TO: 5.6CM Honorable William J. Nee Mayor of Fridley 6431 University Avenue N. E. Fridley, Minnesota 55432 Dear Mayor Nee: Subject: Closeout Procedures CDBG Bonus Fund Grant in Support of Areawide Housing Opportunity Plans B-78--SA-27-0013 Fridley, Minnesota A review of our Letter of Credit records reveals that you have now drawn down nearly all funds allocated to the above captioned project. We assume that this means your project is near or ,at completion and that all funds have been disbursed for the purpose of this program. In order to close out this grant, an audit and Performance Assessment Report must now be completed. The timely completion of these closeout activities will be a consideration in any future applications for funding. The audit should begin within sixty days and should be completed within 150 days. If the completed CDBG Bonus fund project has already been included in a recent audit conducted of other CDBG programs, no additional audit is necessary. The audit requirement for CDBG programs can be met by obtaining an audit performed in compliance with either of the following audit guides: 1. CDBG Audit Guide and Standards 6505.2, including Changes 1 and 2. 2. United States General Accounting Office's Guidelines for Financial and Compliance Audits of Federally Assisted Programs dated February 1980, along with GAO's publication entitled Standards for Audit of Governmental Organizations, Programs, Activities, and Functions. A copy of the CDBG audit guide is enclosed. You can obtain a copy of the GAO audit guide by writing to the following office: Superintendent of Documents Public Documents Department U. S. Government Printing Office Washington, D. C. 20402 47 Page 2. If you have not already done so, we recommend that you assign responsi- bility for resolving audit findings to a member of your staff, since un- resolved findings may have a negative effect on consideration for future CDBG funding. The enclosed Performance Assessment Report (PAR) must be completed within thirty days, unless the CDBG Bonus fund grant has been reported as com- pleted in a previous Grantee Performance Report. All CDBG Bonus fund recipients must complete the following PAR forms. 4052.1 Cover Sheet 4052.2 - Grant Progress 4052.3 - Program Benefit (if applicable) 4052.4 - Direct Benefit Activities (if applicable) 4052.9 - Displacement (required only if displacement has occurred as a result of the CDBG Bonus fund project) In addition, those CDBG Bonus Funds recipients whose housing performance is not reported in an annual entitlement Grantee Performance Report or a Small Cities performance report which has or will be submitted within 12 months must complete the following forms: 4052.5 - Housing Assistance Performances Part I - Types and Sources of Housing AssistanceProvided 4052.7 - Rousing Opportunities - Part I Once your audit and performance assessment report have been reviewed and accepted by HUD, a Certificate of Completion will be executed. This will officially close out your CDBG Bonus Fund project. Please inform us immediately if you expect a delay in the closeout of this project. Otherwise, we will expect your final Performance Assessment Report on or about March 1, 1982, and a completed audit report on or about July 1, 1982. Contact your HUD Community Development Representative if you have any questions on these closeout requirements. Sincerely, Thomas T. Feeney Area Manager Enclosures cc: Jerry Boardman, City Planner 48 FINANCIAL REPORT t _ 49 Check Register at meeting 1 50 OTHER BUSINESS: • 51 �• r `� .ter s -. - t► virVe .EbJ "7ervinci finnesoto's Housinci on Community Development Heeds MEMORANDUM January 18, 1982 TO: Members, Minnesota NAHRO FROM: Nancy Reeves, Chair, and the members of the Minnesota NAHRO Legislative Committee SUBJECT: Report of the Work of the Committee and 1982 State Legislative Outlook The Minnesota NAHRO Legislative Committee held 5 meetings between September 30 and December 1, 1981, to complete its work in preparation for the 1982 Minnesota Legislative Session. At these meetings, a total of 11 different issues or specific proposals were discussed and considered by the Committee, with presentations from experts on each issue. At the last meeting, the Committee voted to recommend to the NAHRO Board that Minnesota NAHRO hire legal counsel to draft bills and represent NAHRO's positions in the legislature for 3 proposals. Three additional proposals were supported, but with other organizations taking the lead role. One proposal was opposed. Three proposals were supported in concept, subject to consideration of specific bills when available. And the last proposal was considered, but no action taken, pending answers to many questions. The recommendations of the Committee were approved by the NAHRO Board at its December 10 meeting, whereupon Stan Kehl, of the Holmes and Graven law firm, was hired to represent NAHRO. Since that time, bills have been drafted and sent to the Revisor's office, and sponsors have been found for the NAHRO proposals. During the next few weeks, Minnesota NAHRO members may be contacted by Mr. Kehl or by the Legislative Committee to provide information, testimony, or legislative contacts for the NAHRO bills. I urge all of you to extend your full cooperation to secure passage of these bills. And, I want to extend my thanks to the following people who have served on the Legislative Committee: Jerry Boardman, Fridley Mary Cayan, Fridley; Phil Cohen, Brooklyn Center; Dennis Daniels, Bloomington; Roberta Everling, Metro HRA; Barb Grossman, St. Paul; Ann Hurlburt, Cottage Grove; Phil Katzung, Metro HRA; Bill Kemp, St. Cloud; Kermit Mahan, Austin; Joanne McDonald, Dakota County HRA; Geoff Olson, Maplewood; Dean Otterson, St. Cloud; Guy Peterson, Metropolitan Council; Marge Rolland, Minneapolis; Carol Schultz, Dakota County HRA; Mary Schweiger, St. Paul; Mark Ulfers, Dakota County HRA. A listing of the legislative issues sponsored, supported, and considered by the Committee is attached for your information. 5Z 1982 SUMMARY OF MINNESOTA LEGISLATIVE PROPOSALS RELATED TO HOUSING AND COMMUNITY DEVELOPMENT NAHRO - Sponsored Proposals: 1) Proposal permitting PHA's to offer housing interest reduction programs. This proposal, an amendment of the HRA Act, Chapter 462, would permit housing authorities to write down interest rates on new or rehabilitated housing developments, as well as for commercial space within housing developments. The revenue used by the housing authority to pay these costs could be derived from any funding sources available. The write-down of interest rates may be necessary to produce affordable housing, particularly if it is combined with other available financing tools. A copy of the NAHRO bill is attached. 2) Proposals to increase the informal bid maximum from $5,000 to $10,000 for housing authorities, and to $20,000 for emergency repair needs. This proposal, also an amendment to Chapter 462, could substantially reduce administrative costs for housing authorities by reducing the number of times formal bids are necessary in the operation of public housing units. Municipalities already use the higher limits, and further research may determine that housing authorities are already able to do so also. If so, Minnesota NAHRO will provide information regarding the appropriate limits, and there will be no need for legislation. Meanwhile, the proposed bill is attached for your information. 3) Proposal to provide for Commercial Rehabilitation Loans. Introduced during th ie 981 Session as S.F. 1228, the proposal is currently being sponsored by Senator Pehler of St. Cloud and Representative Pogemiller of Minneapolis. It is designed to encourage the rehabilitation of small and medium sized commerical buildings through the use of local tax-exempt bonds. A copy of S.F. 1228 is attached. Proposals Supported by NAHRO: 4) Amendments to Chapter 462(c) to bring state tax-exempt bond law into conformance with Ullman provisions. The amendments include defining "single-family" as 1-4 unit buildings if owner-occupied; defining "multifamily" as any rental property of one or more units; permitting refinancing with rehabilitation of single-family units; and permitting rehabilitation without acquisition. Also in the proposal is a procedure for allocating unused state bonding authority by the Housing Finance Agency. (For further information: Mary Schweiger, St. Paul Department of Planning and Economic Development.) 5) Community Reinvestment Fund. This proposal, sponsored by the Metropolitan Council and the Minnesota League of Cities, would create a statewide bond fund for commercial and industrial development loans. It would be a revolving fund, with new loans generated as old loans are paid back, and would provide a needed reinvestment tool for the older cities of the state. (For further information: John Kari, Metropolitan Council staff.) 53 6) Other Amendments to the State HRA ACT, Chapter 462. (a) Permitting the size of the PHA Board to be increased from five to seven members, at the option of the governing body, and (b) increasing the amount of compensation HRA commissioners are eligible to receive per meeting and per year, up from $25 to $50 per meeting, and from $1,500 to $3,000 per year, maximums. These amendments will be sponsored by Senator Belanger of Bloomington. (For further information: Dennis Daniels, Bloomington HRA.) Proposal Opposed by NAHRO: 7) Possible proposal to count housing subsidies as income in figuring welfare benefits in Minnesota. New regulations of the Federal Department of Health and Human Services permit states to count monthly housing subsidy amounts as income in determining welfare payments. For a state to begin doing this, legislation is required. If such legislation is proposed in Minnesota, it should be strongly opposed. Housing subsidies are designed to help people move up and out of the poverty level. This new proposal would not only push people back down, it would also increase the cost of housing subsidy payments, which are based on income. (For further information: Roberta Everling, Metro HRA.) Additional Proposals Considered by NAHRO: 8) Pension fund legislation, to make it possible for more money from pension funds to be made available for home mortgages. NAHRO supports this concept. 9) Group home zoning, to permit group homes for the mentally ill in single- family zones. NAHRO supports this concept. 10) HRA audits. There is a need to clarify the current state position that HRA's are required to be audited by the state and to pay for the audit. Legislation may be needed to protect HRA's from double audit requirements and costs. Further clarification of this issue is currently being sought by NAHRO. 11) Urban Preserves. A proposal to permit areas within cities to be designated "urban preserves". In these areas, property taxes on multifamily housing units would be reduced in return for guarantees of lower rents for the • units. Units in these "preserves" could not be converted to condominiums. This proposal is worthy of further study, but there are many questionable aspects. 54 SEi{:12/29/81 NA120-003 A bill for an act relating to housing and redevelopment authorities; authorizing a housing interest reduction program; amending Minnesota Statutes 1980, Section 462.421,Subdivision 14,Section 462.445 by adding a subdivision, and Section 462.545,Subdivision 1. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1980, Section 462.421, Subdivision 14 is amended to read: Subd. 14. "Project" means a housing project, a housing development project or a redevelopment project, or any combination of such projects. The term "project" also may be applied to all real and personal property, assets, cash, or other funds, held or used in connection with the development or operation of the housing project, housing development project or redevelopment project,es the case may be. The term "project" also includes an interest reduction program authorized by section 462.445.subdivision 10. Sec. 2. Minnesota Statutues 1980, Section 462.445 is amended by adding a subdivision to read: Subd. 10. (INTEREST REDUCTION PROGRAM.) An authority may develop and administer an interest reduction. to assist the financing of the construction, rehaoilitation, and purchase of housing units which are primarily for occupancy by individuals of low or moderate income and related and subordinate facilities. An authority shall have the power to: (a) pay in periodic oavments or in a lump sum payment any or all of the interest on loans made pursuant to chapter 462C or section 462.445,subdivision 9; (b) pay any or all of the interest on bonds issued pursuant to chapter 462C, or pursuant to this chapter for the purpose of making loans authorized by section 462.445. subdivision 9; (c) pay in periodic payments or in a lump sum payment any or all of the interest on scans made by private lenders to purchasers of housing units; -e (d) pay any or all of the interest due on loans made by private lenders to a developer for the construction or rehabilitation of housing units; (e) oav in periodic payments or in a lump sum payment any or all of the interest on loans made by any person to a developer for the construction. rehabilitation and purchase of commercial facilities which are related and -1- 55 SEK:12/29/81 NA120-003 subordinate to the construction, rehabilitation or purchase of housing units which receive interest reduction assistance: and (f) oav any or all of the interest on bonds issued pursuant to chapter 474, when the bonds are issued for a project which is related and subordinate to the construction, rehabilitation or purchase of housing units which receive interest buy-down assistance; In develooing the interest reduction program the authority shall consider: (a) the availability and affordability of other governmental programs; (b) the availability and affordability of private market finarcirP; and (c) the need for additional affordable mortgage credit to encourage the construction and enable the purchase of housing units within the jurisdiction of the authority. The authority shall promulgate regulations for the interest assistance program. An interest reduction shall not be provided when the authority determines that financing for the purchase of a housing unit or for the construction or rehabilitation of housing units is otherwise available from private lenders upon terms and conditions which are affordable by the applicant, as provided 5y the authority in its regulations. Sec. 3. Minnesota Statutes 1980, Section 462.545, subdivision 1 is amended to read: Subdivision 1. [FINANCING PLANS AUTHORIZED.] The entire cost of a project as defined in section 462.421. subdivision 14, including administrative expense of the authority allocable to the project and debt charges and all other costs authorized to be incurred by the authority in sections 462.415 to 462.711, shall be known as the public redevelopment cost. The proceeds from the sale or lease of property in a project shall be known as the capital proceeds. Since it is the purpose of this act that authorities will sell or lease or retain the land in the redevelopment project area, in whole or in part, for a variety of purposes, depending upon the type of project, including private housing for upper or middle- income groups, or low income groups, public housing for low-income groups, commercial and other purposes, at its fair use value, except as provided in section 462.525, subdivisions 9 and 10, which may be less than the public redevelopment cost, the capital proceeds from land sold may pay beck only a portion of the public redevelopment cost. For the purpose of carrying out the provisions of sections 462.515 to 462.545, including the defrayment of the c €Ferenee between the public redevelopment cost and minus the capital proceeds if any, which includes the -2- 56 SEK:12/29/81 NA120-003 difference between any annual debt service end the annual administrative expenses of the authority allocable to the project and any annual capital proceeds, an authority may, in its discretion, finance such projects in any one, by any combination of, the following methods, which are also dealt with in sections 462.415 to 462.711. Sec.4. [EFFECTIVE DATE.] This act shall be effective the day following final enactment. -3- 57 SEK:12/15/81 NA120-003 A bill for an act relating to housing and redevelopment authorities; increasing the minimum expenditure limit for public bidding; amending Minnesota Statutes 1980,Section 462.461,subdivisions 1 and 2. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1980, Section 462.461, Subdivision 1 is amended to read: Subdivision 1. All construction work, and work of demolition or clearing, and every purchase of equipment, supplies, or materials, necessary in carrying out the purposes of sections 462.415 to 462.711, that shall involve the expenditure of $57698 510.000 or more shall be awarded by contract as hereinafter provided. Before receiving bids under the provisions of these sections the authority shall publish,once a week for two consecutive weeks in an official newspaper of general circulation in the community a notice that bids will be received for that construction work, or that purchase of equipment, supplies, or materials, stating the nature of the work and the terms and conditions upon which the contract is to • be let, naming therein a time and place where bids will be received, opened and read publicly, which time shall be not less than seven days after the date of the • last publication. After the bids have been duly received, opened and read publicly and recorded, the authority shall award the contract to the lowest responsible bidder, the authority reserving the right, however, to reject any or all bids, each such contract to be duly executed in writing, and the person to whom the contract is awarded shall give sufficient bond to the authority for its faithful performance. If no satisfactory bid is received, the authority may readvertise. The authority shall have the right to set up reasonable qualifications to determine the fitness and responsibility of bidders and to require bidders to meet such qualifications before bids are accepted. Sec. 2. Minnesota Statutes 1980, Section 462.461, Subdivision 2 is amended to read: Subd. 2. If the authority by an affirmative vote of four-fifths 'of its members shall declare that an emergency exists requiring the immediate purchase of any equipment or material or supplies at a cost in excess of 56-,-898 510.000,but not exceeding 5467988 $20.000 in amount, or making of emergency repairs, it shall not be necessary to advertise for bids,but the material, equipment, or supplies may be purchased in the open market at the lowest price ootainable, or the emergency -1- 58 SEK:12/15/81 N A120-003 repairs may be contracted for or performed without securing formal competitive bids. An emergency, as considered in sections 462.415 to 462.711, shall be understood to be unforeseen circumstances or conditions which result in the placing • in jeopardy of human life or property. Sec.3. [EFFECTIVE DATE.] This act shall be effective the day following enactment. • -2- 59 • • (REVISOR ] XX/JC 81-2430 X228 APR s 1281 Messrs. Pehier, Dicklich and Davis introduced-- S. F. No. 1228 Referred to the Co-c.1ttee on LL!Government and Urc_n Affairs 1 A bill for an act 2 relating to cities; authorizing city rehablitation 3 loan programs for small and medium sized commercial 4 buildings; and providing for the issuance of revenue 5 bonds to finance the programs; proposing new law coded • 6 in Minnesota Statutes, Chapter 459. 7 8 33 IT ENACTED 3Y THE LEGISLATURE OF THE STATE C3 MINNESOTA: • 9 Section 1. [459.31] [PROGRAMS FCR MUNICIPAL COMMERCIAL 10 REHABILITATION LOANS. ] 11 Subdivision 1. [FINDINGS AND PURPOSE. ] The legislature of 12 the state of Minnesota finds that in many cities within the 13 state there are small and medium sized commercial buildings 14 which are physically deteriorating and in need of 15 rehabilitation; that there is a need for city programs for the 16 rehabilitation of these commercial buildings; that some o hers • 17 of small and medium sized commercial buildings are unable to 18 afford rehabilitation loans in the private mortgage market and 19 that the health, safety and general welfare and the preservation 20 of the duality of life of the residents of Minnesota cities are 21 dependent upon the preservation and re_hai:_-= =on of these 22 commercial buildings. 23 Subd. 2. [AUTHORIZATION. ] To accomplish the purposes 24 spe,—" g' d in subdivision 1, the governing body of any city, 25 however organized, may, by ordinance, establish and provide for 25 the administration of a commercial building loan program to 1 . 60 • .. . (REVISOR ) SX/JC 81-2430 1 rehabilitate and preserve small and medium sized commercial . 2 buildings located within its boundaries, upon making the 3 following findings: 4 (1) that commercial buildings in the city are physically 5 deteriorating, underused, economically inefficient or 6 functionally obsolete, and in need of rehabilitation to meet 7 applicable building codes; _ 8 (2) that there is a need for a comprehensive program for 9 the rehabilitation of the buildings to prevent economic and 10 physical !� blightI and deterioration, to increase the municipal tax ' 11 base, and to assist in the implementation of the comprehensive 12 plan of the municipality; 13 (3) that some owners of small and medium sized co„_ ___ial 14 buildings in the city are unable to afford rehabilitation loans 15 on terms available in the private mortgage market or to obtain 16 rehabilitation loans on any terms because the private mortgage 17 market is severely restricted; and 18 (4) that the health, safety and general welfare and the 19 preservation of the quality of life of the residents the 20 are dependent upon the preservation and rehabilitation of the 21 commercial buildings. In no case shall any governing body 22 include the making of grants as a part of a program authorized I 23 by this section. The program may include provisions for loans 24 for rehabilitaticn and preservation purposes, secured by 25 mortgages on the property with respect to which the loans are 25 made, or by other security acceptable to the governing body of 27 the city. Except as hereinafter provided, the loans may be made 28 on terms and conditions as authorized in the program. In 29 approving applications for loans from a program, the following 30 factors shall be considered: 31 (a) The availability and affordability of private mortgage 32 credit; 33 (b) The availability and affordability of other 34 governmental programs; 35 (c) Whether the building is required, pursuant to anyCoL`r`_ 36 order, statute or ordinance, to be repaired, improved or 2 61 . • [REVISOR ] XS/JC 81-2430 1 rehabilitated; and 2 (d) Whether the proposed improvements will result in 3 conformance with building and zoning codes and improvement of 4 the aesthetic quality of existing commercial areas. 5 Subd. 3. [LIMITATIONS. ) A loan program shall be operated 6 within the following limitations: 7 (1) The terms and conditions of all loans made under the 8 program shall be fixed so that the sum of all repayments of 9 principal and interest on them, not then delicuent, and all fees 10 and charges collected, together with other sums to be 11 contributed by the city, shall, over the duration of the 12 program, be estimated to be equal to or greater than the sum of 13 all estimated costs of the program, as determined by the program 14 administrator and approved by the governing body of the city, 15 including administrative costs, mortgage foreclosure costs, and 16 principal and interest payments cn bonds issued to finance the 17 program to the extent not paid from bond proceeds; 18 (2) No loan shall be made for a period exceeding 20 years; 19 (3) No loan shall exceed 80 percent of the estimated market • 20 value of the property to be rehabilitated upon ccmpletion of the • 21 rehabilitation, less the principal balance of any prior mortgage 22 existing on the property at the time the loan is made; and 23 (4) No loan shall be made in excess of $100,000 for the 24 rehabilitation of any particular small or medium sized 25 commercial building. • 26 Subd. 4. [ADMINISTRATII0N. ] The municipal_ty may administer 27 the program directly or may contract with any .,:a' ='..d public 28 or private nonprofit agency or enterprise for some or all of the 29 services required. The ordinance establishing the program shall • 30 provide for the adoption of progra:. regulations which shall 31 include a definition of "small and medium sized commercial 32 buildings", loan eligibility and loan priority criteria, loan 33 amount limitations and other provisions as deemed necessary. 34 Sec. 2. 1459.321 [HOUSING :NG ?EJEVELC?.M:N:" AUTHOR:TY 35 ACTING ON BEHALF OF CI'_':."-a^ 36 A housing and redevelopment authority of.a city may 3 62 4 [REVISOR ] X{/:C 81-2430 1 exercise any or all of the powers conferred by this act on 2 behalf of a city, if the city by ordinance authorizes it. 3 Sec. 3. [459.331 [BONDS FOR ,MUNICIPAL COMMERCIAL 4 RZ^'-?BILITATICN LOAN ?ROGRAM. ] 5 Subdivision 1. [REVENUE BONDS. ) Notwithstanding any 6 contrary provision .of other law or charter, the governing body 7 of any city operating a program under section 1 nay, by 8 resolution, authorize, issue and sell revenue bonds or 9 obligations payable solely from all or a portion of the revenues 10 derived from or other contributions to the program. The bonds 11 or obligations shall mature as determined by resolution of the 12 governing body of the city in accordance with the limitations of 13 section 1, subdivision 3. 14 The bonds or obligations nay 75 (a) be issued in one or more series, 16 (b) bear a date or dates, 17 (c) bear interest at a rate or rates, 18 (d) be in the denomination or denominations, 19 (e) be either coupon or registered, 20 (f) carry conversion or registration privileges, 21 (g) have rank or priority, 22 (h) be executed in the manner, 23 (i) be payable at the place or places, and 24 (j) be subject ec t to the terms of redemption, with or without • 25 premium, 25resolution, its trust indenture or mortgage may provide.. as the 27 The bonds or obligations may be sold at public or private sale 28 at the price or prices the governing body of the city by 29 resolution shall determine, and notwithstanding any contrary 30 provision of any other law, shall be fully negotiable. In any 31 suit, action, or proceedings involving the validity or 32 enforceability of any bonds or obligations of the city or their itsubstance that it has been issued 33 security, any bond � nS in 34 by the city to aid in financing a commercial rehabilitation loan 35 program shall be conclusively deemed to have been issued for 36 that purpose, and the program shall be conclusively deemed to 4 • 63 (REVISOR J C/JC 81-2430 1 have been authorized, established and carried out in accordance 2 with the purposes and provisions of section 1. Neither the city 3 nor any council member, board member, director, commissioner, 4 officer, employee or agent of the governing body of the city nor 5 any person executing the bonds shall be liable personally on the 6 bonds by reason of -their issuance. The bonds or obligations may 7 be further secured by a pledge or mortgage on the property with 8 respect to which loans are made and in aid of which the bonds 9 are issued and by covenants as the governing body of the city 10 shall deem by resolution to be necessary and proper to secure 11 payment of the bonds. The bonds or obligations, and they shall 12 so state on their face, shall not be payable from nor charged 13 upon any funds other than the revenues and properties pledged or • 14 mortgaged to their payment, nor shall the issuing city be 15 subject to any liability on them or have the powers to obligate 16 itself to pay or pay the bonds from funds other than the 17 revenues and. properties pledged and mortgaged and no holder of 18 the bonds or obligations shall ever have' the right to compel any • 19 exercise of any taxing power of the issuing city or any other 20 public body to pay the principal of cr interest on the bonds or • 21 obligations, nor to enforce payment of them against any property 22 of the city or other public body other than that expressly 23 pledged or mortgaged for their payment. 24 Subd. 2. [USE OF BOND PROCEEDS. ] The proceeds of the 25 revenue bonds or obligations may be used 26 (a) to make loans in accordance with a program, • 27 (b) to establish a fund from which loans may be made in 28 accordance with a program, 29 (c) to establish reserves for the payment of the bonds and 30 interest on them, 31 (d) to pay all of the coming due cn the bonds 32 until the money derived from loan repayments is s ' ^ mnt for 33 the purpose, and 34 (e) to pay costs of issuance. 35 Subd. 3. (SECURITY FCR BONDS. ] The city may pledge any 36 mortgages securing loans made under the program and all 5 64 [REVISOR j }c/J` 31-2420 1 principal and interest payments to be received cinder them to tie 2 payment of revenue bonds cr obligations issued under this 3 section, may make other covenants with respect to them, future 4 mortgages or other matters as deemed necessary for the security 5 of the revenue bonds or obligations, and may assign all cf its 6 rights under the mortgages to a trustee for bond holders and 7 enter into an indenture of trust for this purpose, containing 8 other terms and provisions and conferring powers on the trustee 9 as considered necessary for the security of the bonds or 10 obligations. 11 Subd. 4. [ADDITICNAI, SECURITY FOR BONDS. ] The governing 12 body of the city shall not amend the regulations adopted by 13 ordinance and in effect at the time any bonds or obligations • 14 authorized by this act are issued, to the detriment of the 15 holder of the bonds or obligations. 16 Subd. 5. [OTHER LEGISLATION. ] The authority granted in 17 this act is in addition to all existing power and authority of 18 any city. 6