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HRA 07/08/1982 CITY OF FRIDLEY AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, JULY 8, 1982 7:30 P.M. LOCATION: COMMUNITY ROOM I (UPPER LEVEL CALL TO ORDER: ROLL CALL: APPROVE HOUSING & REDEVELOPMENT AUTHORITY MINUTES: JUNE 17, 1982 1 . PRESENTATION BY ARCHITECTS ON CENTER CITY COMPETITION Approximately 20 minute presentation with 10 minutes for questions and answers. A. Herb Baldwin, Landscape Architect 7:30 p.m. B. Bill Short, Barton, Aschman Assoc. Inc. 8:00 p.m. C. Roger Martin, InterDesign, Inc. 8:30 p.m. D. William Sanders, Sander' s & Assoc. 9:00 p.m. 2. SET DATE FOR SELECTION 3. CHECK REGISTER 4. OTHER BUSINESS: ADJOURNMENT: J CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JUNE 17, 1982 CALL TO ORDER: Chairperson Commers called the June 17, 1982, Housing & Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Duane Prairie, Carolyn Svendsen, Elmars Prieditis Members Absent: Walter Rassmuson Others Present: Jerrold Boardman, City Planner Virgil Herrick, City Attorney Sid Inman, Director of Central Services Patty Hardel , 332 - 64th Ave. N.E. Steven Hardel , 336 - 64th Ave. N.E. Cheryl Nybo, 1612 Berne Circle E. David Wagner, 1074 Lombard Judy Lee, 4948 Emerson Ave. So. Len Schollen, 6381 Univeristy Ave. N.E. W. G. Doty, 6379 University Ave. N.E. Howard Helgen, 7502 Tempo Terrace Sharon Gustafson, 437 Rice Creek Blvd. • APPROVAL OF MAY 13, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE MAY 13, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. I. WELCOME NEW MEMBER - WALTER RASSMUSON ( REPLACING RUSSEL HOUCK ): Mr. Commers stated Mr. Rassmuson's son is ill , so Mr. Rassmuson will not be at the meeting. II. CERTIFICATE OF APPRECIATION FOR RUSSEL HOUCK: Mr. Commers stated he had before him a certificate of appreciation from the HRA which read: "Certificate of Appreciation, City of Fridley, Mn., Awarded to Russel Houck, June 17, 1982, Housing & Redevelopment Authority". HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 2 Mr. Coroners stated Mr. Houck served at least two terms on the HRA and had. participated on a regular basis. He was very dependable in his appearance at the meetings, did a good job, and the HRA would like to express their appreciation to him for his good service over the years. III. -SELECTION OF VICE-CHAIRPERSON: Mr. Coroners stated that Mr. Houck was the vice-chairperson, and .the by-laws provide that the HRA must have that position filled. He declared the nominations open for vice-chairperson. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO NOMINATE ELMARS PRIEDITIS FOR VICE-CHAIRPERSON. • MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO CLOSE THE NOMINATIONS AND CAST A UNANIMOUS BALLOT FOR ELMARS PRIEDITIS FOR VICE-CHAIRPERSON OF THE HRA. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. IV. CENTER CITY PROJECT: A. Update: Columbia Park Properties 1 . Memo #82-47 from Executive Director Mr. Boardman stated Columbia Park Properties had their bond closing on June 16. Minnesota Title has insured over any of the problems with guarantees as per the contract documents. The HRA members have a copy of a signed option, in which Mr. Doty agrees to give the City an option on the property for $1 . He stated that satisfied Columbia Park Properties on their closing. Mr. Boardman stated everything else is moving along. He stated groundbreaking ceremonies will be on Friday, July 16, at around 2:30-3:00 p.m. He stated he would like as many HRA members as possible at the groundbreaking ceremonies. 2. Resolution HRA-2-1982 (Concurring with City Council Action on Columbia Park Properties IDR Bonds) Mr. Boardman stated this action has already been taken by the City Council. As per Section 7.2 of the Contract for Private Redevelop- ment between Columbia Park Properties and the Fridley Housing & Redevelopment Authority, it also requires the HRA to approve bonds. He would recommend the HRA approve HRA-2-1982. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 3 MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE RESOLUTION NO. HRA 2-1982, "RESOLUTION CONCURRING WITH THE CITY- COUNCIL ACTION APPROVING THE SALE OF $4,000,000 IN INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR MORTGAGE TO F & M MARQUETTE NATIONAL BANK, AS TRUSTEE". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. :. 3. Resolution HRA-3-1982 (Approving Construction Plans) Mr. Boardman stated he would recommend the HRA continue this resolution. One of the reasons for continuing it was they have not yet received the final plan documents. There were some modifi- cations in the initial document, and those have not been received so the HRA was not in a position to approve this resolution at this time. Mr. Commers stated that since the resolution involves the approval of the construction plans, the HRA would like to have the Building Inspector at their next meeting with regard to those plans. He also believed it required the HRA to have a copy of the construction contract in terms of the bid, because it requires the HRA to approve that the construction is not going to exceed the funds available. Mr. Boardman stated the bids should be back by the next meeting and an actual contractor selected based on those bids. He would have the Building Inspector at the next meeting to answer questions. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO CONTINUE RESOLUTION NO. HRA 3-. 1982 UNTIL THE NEXT MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Resolution HRA-4-1982 (Request City Council to Authorize Bond Sale) Mr. Commers asked Mr. Sid Inman to explain his June 3, 1982, memo on the Bond Sale. Mr. Inman stated the City has accrued $1 .7 million in special assess- ment temporary bonds for their construction project (normal sewer, water, and street improvements). They anticipate selling these bonds as early in June or July as they can because of the projected window in the interest rates. They have prepared the resolutions for the Monday agenda for the City's sale, and if the HRA concurs and agrees to request a sale by the City Council, they have prepared those also for the Monday agenda. That would give them a bond sale of approx. June 12. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 4 • Mr. Inman stated the advantages to a bond sale are: (1) The HRA's issue going with the City's tends to drive the interest rate down; and (2) The HRA gets a 25% break on the administrative costs by going with the City on a combined sale. Mr. Inman reviewed the computer run by Ehlers & Associates dated June 7, 1982. Mr. Inman stated that if the HRA was concerned about their cash flow, there might be some wisdom in waiting. He stated the resolution requesting the City to issue bonds does not require them to issue at the same time. Mr. Coroners stated there was some concern about the cash flow available on the funds if any other projects_would develop.- Mr. Inman stated that later in the agenda, he has a financial report, and a lot of the HRA's increment flows through the state in the Homestead Credit. The HRA's, like the cities, are experiencing some problems in the payments of the Homestead Credit. He stated the HRA will note on the financial report that a $74,000 payment received in January 1-982 should have been received in 1981 . At this point, he did not know what the City's reduction in Homestead Credit is. Mr. Commers stated they should continue Resolution 4-1982 until the end of the agenda when they discuss the financial report. B. Bids on 64th Avenue Project (Memo #82-43 from Executive Director) Mr. Coroners asked if it was necessary to relocate 64th Avenue even though they may not be doing the office building. Mr. Boardman stated he thought they were looking at the necessity of relocating the street because it was pretty well set when the clinic was designed. The clinic was located toward the back of the property primarily because of the office location. In order to get adequate room to develop an office farther to the north, they had to look at going across the street. As per the conditions of the contract documents with Columbia Park Properties, Columbia Park Properties wanted to ensure they had adequate access and said they needed an access easement. That access easement is actually an easement that was set up over the property. That leaves the HRA 50 ft. of property between that access easement and 64th. In recent discussions with Columbia Park Properties, they were very concerned that the HRA was even considering not putting in the revised 64th Ave. Their main concern was that once their building is up and open, 64th Ave. would be closed for the purpose of construction. Columbia Park Properties is requesting the HRA to take an action to put the roadway in per the original plan. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 5 Mr. Coroners asked the cost of the project. Mr. Boardman stated the total street project is $51.601 , and the sewer and water project is $13,125. He stated the sewer and water has to go in to service the clinic. He stated they are approximately 26% below . the original engineering estimates. If they are going to put the road in, it may be in their best interest to put it in at this stage because of the cost. - Mr. Prairie stated that if they go ahead and relocate 64th Ave., and then an office building is never put in, they would have spent money that was not necessary. Mr. Boardman stated it was a matter of planning. Once they package a facility to build an office building, they have a piece of property that can be packaged easier than if they had to go into vacations and the street was not in. He thought it was also a matter of commitment on the project. The HRA has committed to the clinic project, and the clinic is committed to a location on that site because of the other things that were happening. Mr. Boardman stated the HRA was promoting the office development and worked out the plans with the office development and Columbia Park Properties that this would be the best way to situate the office building and clinic in conjunction with City Hall and an outdoor plaza. He stated they have to commit to something in order to develop the Center City area. Mr. Coroners stated he did not know how the HRA got into the position of being committed to this, because from the start the HRA was not too happy with the clinic building being in the location it is now. They would much rather have had the clinic located in another part of the Center City Project. Mr. Herrick stated that, as Mr. Boardman had stated, the clinic has made plans based on that layout. He felt it was too late for Columbia Park Properties to change the location of their building. He was always under the impression that the location of the clinic building was based on the relocation of 64th Ave. At this point, the question the HRA has to answer is whether they want to create another building site by moving the road to the south. If they do not move the road, then they will not have another building site and they will probably not have the best utilization of the property south of the existing 64th. If Columbia Park Properties had assumed that 64th would stay as it is, he thought their plans would have been different for utilization of that portion of the property. He thought that, if they create the office building site, sooner or later it will sell. The question is how long it will take. It didn't mean they couldn't move the road at a later date, but this was probably the best price they are going to get. He stated Columbia Park Properties has expressed a desire to have the road relocated now so when the clinic is in operation, there will not be a street under construction. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 6 Mr. Prieditis stated that if the HRA committed themselves to the additional building site, then they are almost committed to do the relocation of the street right now. Mr. Boardman stated that when they looked at the overall area, they wanted to develop so the spaces that were created were exciting spaces. - They talked about developing plazas and that was the basis on which they went out for competition of landscape architects, so the HRA'tras committed to some kind of design criteria for this area. Mr. Commers stated part of the problem was communication with Columbia Park Properties. Columbia Park Properties made the mistake of locating their building on the property without the other project being approved. The office building location has never been approved by the HRA. All the HRA did was look at some preliminary plans for an office building and say they were fine. Columbia Park Properties came in with plans, and the HRA approved those plans and entered into a contract agreement with commitments, but they never committed to the relocation of 64th Ave. Mr. Prairie agreed with Mr. Commers. Mr. Herrick stated the crucial question was how the HRA wanted the Center City Project to develop ultimately. Did they want an office building on the north side of 64th? If they do, the road has to be changed. Mr. Prieditis stated he felt the HRA pretty much accepted the concept Mr. Boardman had presented to them. Even though they never formally voted for it, he felt they had accepted it and, as such, they have this commitment and have to pay the consequences by moving the street. He stated it is possible the HRA did not express themselves clearly enough. Mr. Prairie stated it is going to be difficult to discuss possibilities if they are going to be cast in stone right away. The HRA is going to have to be very careful in the future. Mr. Commers stated it is a question of commitments that have been made, however those commitments have been made. He stated they are committed to the clinic project itself, and they want it to be a good project. He stated there is a lot to be said for the way this has come up and the way it has been done, and there is no excuse for it. It has not been done in a proper manner. There was no understanding on the part of the HRA that they were committing and had committed to a design development for the whole area. By approving the street relocation, he did not think they were committed to how the rest of the area is going to be developed; and because of the fact that they have asked for bids on the Center City plaza, he did not think that committed them to doing that project. He stated that is not the way the information is to be brought to the HRA, nor is it the way it should be communicated to people who want to parti- cipate in the developments. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 7 MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO APPROVE THE RELOCATION AND CHANGE OF 64TH AVENUE. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. C. Approval of NSP Project in Connection with 64th Ave. Relocation (Memo #82-34 from Executive Director) MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO APPROVE THE NSP PROJECT IN CONNECTION WITH THE 64TH AVENUE RELOCATION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Appraisal Reports (Memo #82-49 from Executive Director) Mr. Commers asked Mr. Herrick to summarize the status of the negotiations with Mr. Doty. Mr. Herrick stated that, as the HRA was aware, the HRA employed an appraiser to appraise the shopping center that Mr. Doty owns. The appraiser came highly recommended by the Minneapolis HRA. He stated the appraisal on the shopping center came in at $375,000. After receiving the appraisal , he and Mr. Boardman met with Mr. Doty. Mr. Doty took exception to two or three parts of the appraisal and thought the appraiser was low on some of the factors of the appraisal. The appraisal was for real estate and the buildings and pertinences that are associated with the purchase of real estate. Mr. Herrick stated there are some state and federal requirements for relocation assistance and personal property inventory. Mr. Boardman had advised Mr. Doty that he intended to employ a separate appraiser to appraise the personal property and relocation expenses. In conclusion, they did reach an agreement with Mr. Doty, subject to HRA approval , that Mr. Doty be paid $400,000 and that would include his entire claim which would be the real estate, relocation, and personal property. Mr. Herrick stated he felt comfortable in making the recommendation to approve that price for the following reasons: (1) The appraisal was $375,000. He had no doubt that Mr. Doty could secure a reputable appraiser who would give a higher appraisal. If it went to court, it would be a jury case, and they have a tendency to arrive at a figure between the two appraisals. (2) The cost of going through condemnation. The City would face additional appraisal costs to have the appraiser testify. They would have to pay for three commissioners and under the law, a certain amount would be paid to Mr. Doty for appraisal • HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 8 of the property, and there would be attorney fees. Under the circumstances, he would rather see the HRA pay $400,000 than go to court and argue the real estate value plus paying the cost of condemnation and personal property and relocation. Mr. Coroners asked if Staff was in agreement with that recommendation and the acquisition price of $400,000. Mr. Boardman stated he thought $400,000 was a reasonable figure. Mr. Herrick stated he secured from Mr. Doty a 30-day unilateral option in which Mr. Doty has offered the property to the HRA on the terms Mr. Herrick had described. That is a binding option, and the HRA has until July 15 to decide if they would choose to exercise the option. He stated he would recommend the HRA approve the option. MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE NEGOTIATED PURCHASE PRICE OF $400,000 AND TO APPROVE THE EXECUTION OF THE OPTION AGREEMENT THAT HAS BEEN NEGOTIATED WITH MR. DOTY BY THE CITY ATTORNEY. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman asked if the HRA wished to move on the offers for 332 and 336 - 64th Ave. Regarding the clinic, the delivery requirement for these properties is Dec. 15, 1982. He stated they have not initiated any contact with the owners of the properties, other than to let them know the HRA is in the process of acquiring property, and some appraisals have been done. At this time, the City has not made an offer or started any negotiations. It was the concensus of the HRA that the Executive Director go forward and enter into negotiations with the owners of 332 and 336 - 64th Ave. based on the appraisals that have been received. E. Letter from Barthel Construction - Update on Phase III Mr. Commers stated the HRA had received a letter dated June 8, 1982, from Laura Manske, Commercial Leasing and Development, of Barthel Construction. Mr. Commers declared the letter received into the record. He stated the letter was for the HRA's information regarding the negotia- tions that are proceeding with the supermarket that will be coming into that space and the desires on the part of the supermarket people to have a doubling of space as opposed to what was discussed in the initial project. Mr. Commers stated the project appears to be moving along. It appears that until -the supermarket commitment is made,it will be slow securing other tenants, but some are beginning to line up based on the securing of the anchor tenant. He stated that maybe in a couple of months, they could have Ms. Manske come to a meeting and give a verbal report on their progress. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 9 V. MOORE LAKE PROJECT A. Cheryl Nybo Project (Memo #82-50 from Executive Director) Mr. Boardman stated the HRA members had a copy of the contract document and a letter of commitment from Eberhardt. Mr. Commers asked Mr. Boardman to summarize memo #82-50. Mr. Boardman stated they have been contacted by Ms. Nybo who is still interested in doing the project. He stated the HRA did have a right of development with Ms. Nybo, but the HRA removed that right of develop- ment; however, the HRA left it open for the development of the office building if Ms. Nybo could put the package together. He stated he, Mr. Herrick, Ms. Nybo, and Ms. Nybo's attorney had a meeting and they came up with contract documents that are satisfactory. They feel they are ready to move on the contract documents. Mr. Herrick stated he did not think there were any areas of disagreement. The contract is similar to the development contract format they have used for other projects. The one major concern was the attorney for the project was concerned about the assessment requirement that would lock them into a stated assessed value. The attorney's concern was that if the building was not full , they would be giving up their right of appeal to the city, county, and state to have a reduction based on the income evaluation. What the attorney asked for was that rather than be tied to an assessed or market value, they be tied to a guarantee of taxes sufficient to repay the money that was advanced. Mr. Herrick stated that in this case, that would be relatively small, because it was his understanding that the cost of the land with the existing building was relatively small in comparison to the title value of the building. Mr. Herrick stated the City didn't think that was a reasonable approach, but they reached a compromise. What they did in approximate figures was to say that under today's method of evaluating the proposed building, the taxes would be approximately $52,000. They agreed they would permit them to appeal the assessed value of the building based on the lack of income if the building is not completely full , but under no circumstances could the taxes fall below $40,000 a year (which was approximately 75% of what they would be). Mr. Coroners asked what they were talking about regarding the land cost. Mr. Boardman stated he took the appraised land cost and plugged that figure in. At this time, they did not talk about any reduction in land value, and that is a matter of whether they are going to look at a reduc- tion in land value or not. The appraised value is around $45-48,000, and Ted Burandt, owner of the property, is looking at $65,000, although he will drop to $60,000 if he can have the building and move it off the site. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 10 Mr. Commers asked what Staff's recommendation was with regard to the land cost and what they do in terms of cost or write-down on this project. Mr. Boardman stated that unless Ms. Nybo can show the HRA she needs that write-down to make the project go, he would recommend they work on the same . basis, that is 100%. Mr. Coroners asked Ms. Nybo if she had any comments regarding'.:the real estate tax or the land cost. Ms. Nybo stated she was in agreement on the tax. She had not discussed the land cost formally with Mr. Boardman. Mr. Herrick stated that regarding the commitment letter from Eberhardt, the commitment is conditioned upon a pre-rental of 50% of the building, and the condition is that when the building is 50% rented, a major portion of the mortgage would be committed; and when it is 85% rented, the balance of the mortgage would be committed. He thought the HRA was going to have to give some thought to how they were going to handle this. The first question they have to determine is: Do they want to take any action in acquiring the property until such time as the building is 50% rented and the major contingency is removed from the commitment? If they do, they want to ask the individuals involved to guarantee the City and the HRA their expenses if the HRA does proceed and they are not able to satisfy the condition in order to get the mortgage. Mr. Commers stated they should probably do what has been done in the past-- expect and ask for a guarantee of the HRA's out-of-pocket expenses, other than the acquisition. Mr. Herrick stated he thought that would be the proper approach. Mr. Herrick stated, regarding the contract, one other change they agreed to make was that, rather than posting a performance bond, they agreed to accept a letter of credit from an acceptable bank. Ms. Nybo's attorney felt this would be less expensive and easier to obtain. Mr. Herrick stated he had no problem with that. The HRA members agreed that was acceptable. Mr. Herrick stated it was his understanding the principals are proposing to proceed with a newly formed corporation, and he thought any guarantees they get should include personal guarantees as well as corporate guarantees-- aguarantee of the HRA's expenses if the project doesn't go forward and any other commtments that might be involved in the development contract. Mr. Boardman stated he felt the HRA was now in a position to approve the contract documents and set a time limit on actual commitment of the financing. He stated it was his opinion that this was a good project and would be a good benefit to that area. The actual cost of the project to the HRA was very little in the sense of the amount of compensation the HRA will get out of it as far as tax increment. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 11 MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE EXECUTION OF THE CONTRACT DOCUMENTS WITH CHERYL NYBO. UPON RECEIPT OF NOTICE .THAT THERE IS 50% OCCUPANCY APPROVED BY THE FINANCE COMPANY, STAFF HAS THE AUTHORITY TO MOVE FORWARD ON ACQUISITION. IN THE MEANTIME, STAFF IS TO CONTINUE NEGOTIATIONS WITH MR. BURANDT AND HAS THE AUTHORITY TO NEGOTIATE A PRICE WITH RESPECT TO THE LAND ACQUISITION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. B. St. Philip's Project (Memo #82-51 from Executive Director) Mr. Boardman stated the City has been working with the people from St. Philip's Church. St. Philip's proposal is for a 60-unit elderly facility. They are looking at the southwest corner of Central Ave. and Rice Creek Road for the location of this facility. St. Philip's is a sponsor for making application for 202 funds. He stated 202 funds are federal HUD monies for mortgages. There are funds available for fiscal year 1982. The application is being made by St. Philip's as a non-profit organization, and the Ebenezer Society is assisting St. Philip's as consultants in putting the project together. The application will be submitted to HUD on June 30. Mr. Boardman stated that as part of that application process, St. Philip's has to show they do have some ability to control ownership. That is where the HRA comes in for HRA support of the project. The HRA will have to give a right of development to St. Philip's in order for them to do the project. That right of development is similar to other right of developments, only they have to be a little more specific for HUD. Mr. Boardman stated that in the draft "right of development" letter to St. Philip's, it says the HRA does give the right of development to St. Philip's Church, and that "St. Philip's Church proceed to work on the submission of a 202 application to the Department of Housing & Urban Development". It also lays out the time period and states that if financing is approved, the HRA will take the necessary action to acquire the property. He stated they set up a basis for that acquisition and the acquisition costs are laid out in paragraph 4 of the letter. They also had computer runs done by Ehlers & Associates on the project based on estimated costs on the project--that they have a 60-unit building, the value of that building is $2,000,000, paying an estimated $69,000 in taxes. Based on those conditions, they could commit $325,000. That $325,000 is based on the bond run of $500,000, including the capitalized interest costs of $165,000. In addition to that, the City Council approved $110,000 in CDBG funds for fiscal 1983 to be committed to the St. Philip's project. That commitment is based on HUD approval in Oct. HUD sets priorities and gives preliminary approval in Oct. Once pre- liminary approval is granted, the funds are released for construction next Oct. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 12 Mr. Commers asked for Staff's recommendation. Mr. Boardman stated he would recommend the HRA proceed with the right of development to St. Philip's Church. He stated St. Philip's has done an excellent job on this and is trying to meet some of the needs that are in the City. St. Philip's is getting letters of support from the Community Development Commission and the Human Resources Commission, approval at the Chamber of Commerce Board meeting and a letter of support from the Chamber of Commerce, and the City Council has taken a step also in providing CDBG funds. Mr. Commers stated there should be some kind of termination date at the time when St. Philip's is notified as to whether or not funding was approved. Ms. Judy Lee stated she was with Ebenezer Society representing St. Philip's as their consultant. She stated the contract needs to be between the HRA and a corporation called "St. Philip's Human Services, Inc.", which is a new corporation recently formed by the church to be the owner and the borrower corporation on this project. Ms. Lee stated she wanted the HRA to know as-much as possible about this development, and that is that the amount of money HUD will lend them, if their application is approved, is limited by fair market rent formula that HUD dictates and interest rates that are not yet announced. In essence, there has not been a project of this type developed that had any land cost associated with it for the last 2-3 years. They want the HRA to be aware of this and to know that if they get the mortgage money, it will most likely not pay any land cost, that all the money will have to go into construction costs. They are hopeful there are ways to explore to cover that land cost, whatever it is. Ms. Lee stated she had one other concern about the wording in the "right of development" letter. In paragraph 4 when they talk about "The purchase price to St. Philip's Church shall be determined by a Court established or negotiated value on the original acquisition...", she wondered if they would be able to include some statement as to the HUD appraised value or a broader statement such as, "the price that is ultimately determined has to be approved by HUD",because that is a fact. Mr. Howard Helgen stated he is a member of the St. Philip's committee. He stated that because St. Philip's is a conduit on the project, they do not have any funds to commit to the project. He felt the pragraph should reflect the purchase price would not in any way involve any funds from St. Philip's Human Services, Inc. The money is going to have to come from some other source. Mr. Boardman stated he would work with Ms. Lee on the wording in the "right of development" document. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 13 MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO GO FORWARD WITH A RIGHT OF DEVELOPMENT WITH ST. PHILIP'S HUMAN SERVICES, INC. • UPON A VOICE VOTE, COMMERS, PRIEDITIS, AND PRAIRIE VOTING AYE, SVENDSEN ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. VI. FINANCIAL: A. Check Register MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE THE CHECK REGISTER DATED MAY 12, 1982, IN THE AMOUNT OF $294,666.16 AND THE CHECK REGISTER DATED JUNE 8, 1982, IN THE AMOUNT OF $182,307.38. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. B. CDBG Funds Audit Report, June 11 , 1979 - Dec. 31 , 1981 Mr. Inman stated he would like to explain that some of the comments in the report are based on the analysis with which the original HRA accounting system was set up. The original accounting system was set up for very limited activities. They were well into a change in personnel in the City and into a number of transactions before he changed the process. C. Billing for HRA (Memo from Mr. Inman dated June 17, 1982) MOTION BY MR. PRAIRIE, SECONDED BY MR• PRIEDITIS, TO APPROVE A PAYMENT, IN ACCORDINACE WITH THEIR CONTRACT,OF $15, 530.30 TO THE CITY FOR REIMBURSE- MENT OF APPROPRIATE EXPENSES INCURRED BY THE CITY IN THE ADMINISTRATION OF THE HRA. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Financial Report Mr. Inman reviewed and explained the HRA City Accounts/Funds, the HRA Funds, and Combining Funds, all dated June 8, 1982. Mr. Coroners stated that, rather than having all the funds comingled, he thought it would be useful for the HRA to know, on an informal basis, how they are doing and what is allocated for each project. Mr. Coroners stated he did not think the NRA had any concern about being able to make interest payments. They may have a problem with the money when it is first due, and there might have to be some shifting of funds, but the problem is a long range or short range planning problem about where they would take the funds and where they would put them. He thought HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 17, 1982 PAGE 14 they should have some kind of strategy or plan so that when money is needed, they are not caught not knowing what they have to work within terms of what they are going to need on their other projects. Mr. Inman stated he did not feel the HRA would have any problems. He stated if the HRA wanted to proceed with the sale of the $600,000 bond, they will have to pass Resolution 4-1982. MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE RESOLUTION NO. HRA-4-1982, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY TO REQUEST THE FRIDLEY CITY COUNCIL TO AUTHORIZE BOND SALES FOR THE CENTER CITY REDEVELOPMENT TAX INCREMENT DISTRICT PHASE II". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. VII. OTHER BUSINESS: Meeting Date Change Mr. Boardman stated he would be out of town on Sept. 9, the HRA's September meeting date. He suggested the HRA change their meeting date to Sept. 16. The HRA members were in agreement with this meeting date change. ADJOURNMENT: Chairperson Commers declared the June 17, 1982, Housing & Redevelopment Authority meeting adjourned at 11 :15 p.m. Respectfully submitted, A Lyn Sa a Recording Secretary