HRAM 01/03/2019
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY MEETING
January 3, 2019
______________________________________________________________________________
Chairperson Eggert
called the Housing and Redevelopment Authority Meeting to order at
7:01 p.m.
MEMBERS PRESENT:
Elizabeth Showalter
Gordon Backlund
Stephen Eggert
Kyle Mulrooney
William Holm
OTHERS PRESENT:
Paul Bolin, HRA Assistant Executive Director
Jim Casserly, HRA Attorney
Steve Dunbar, Fridley Investments, LLC
Action Items
1. Approval of Expenditures.
MOTION
by Commissioner Holm approving the expenditures. Seconded by Commissioner
Backlund.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
2. Approval of December 7, 2018, Meeting Minutes.
MOTION
by Commissioner Holm to receive the minutes. Seconded by Commissioner
Mulrooney.
Commissioner Backlund
stated on page 2, about three inches down, there is a unique character.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY AND THE MINUTES WERE APPROVED
WITH THE CORRECTION.
3. Approval of Resolution Designating Official Depositories.
MOTION
by Commissioner Backlund adopting the resolution. Seconded by Commissioner
Holm.
Housing and Redevelopment Authority Meeting of January 3, 2019 2
Commissioner Mulrooney
noted in the third and fourth paragraphs in the resolution it notes the
individuals being able to sign on behalf of the HRA. It states signed by the following two
individuals and then it has lines for three individuals.
Chairperson Eggert
asked if they just needed two signatures.
Paul Bolin
, HRA Assistant Executive Director, replied, correct. Just two signatures.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
4. Approval of Resolution Designating Official Newspaper.
Commissioner Backlund
stated they need to check the paper to see if is named Fridley Sun
Focus Newspaper because it has changed several times.
MOTION
by Commissioner Holm approving the Resolution naming the Minneapolis Star
Tribune and also the Fridley Sun Focus News “or as it is known” as the official newspapers.
Seconded by Commissioner Showalter.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
5. Approval of Redevelopment Contract – 6431 University Avenue.
Mr. Bolin
stated they started discussing the potential of Steve Dunbar and his group developing
a senior project of Ebenezer Homes on the City’s former City Hall site about a year ago. In
August, the HRA approved an exclusive negotiations agreement with Mr. Dunbar and his group
for Fridley Investments, LLC, to construct and own a 135-unit senior with services building.
They would build and own the property, but it would be managed by Ebenezer Homes.
Ebenezer Homes is the non-profit housing arm of Fairview Health Services, and they are the
largest provider of senior housing in the State of Minnesota.
Mr. Bolin
stated Ebenezer’s model for the last few years is to work with a development group to
construct a building on their behalf and maintain ownership of the building and Fairview to
operate the building. Over the past few months he and attorney Casserly have worked with Mr.
Dunbar, Mr. Winkels, and their attorney to put together the contract they have before them.
Mr. Bolin
stated the contract for development has all of the elements they saw back in August in
the exclusive negotiations agreement. It is also very similar to the other development
agreements they have agreed to in the recent past.
Commissioner Showalter
asked if a requirement that a portion of the units be capped at a
certain income threshold or any certain affordability requirement was considered with this
development.
Housing and Redevelopment Authority Meeting of January 3, 2019 3
Mr. Bolin
replied, no. This is a model that Ebenezer uses for doing these types of
developments. The Authority has not usually been involved in placing caps or requirements on
affordability. They tend to let the market set the rents and apply assistance when needed.
Commissioner Showalter
stated she knows at this point it is late in the game to make those
requirements, but they talked at the budget workshop about potentially exploring when there is
an HRA project involving either conveyance land or TIF bonds of having some sort of
requirement related to that. That is something to think about in relation to future projects.
Chairperson Eggert
stated looking at the contract, he assumed that Schedules B and C, the copy
or the form of the Quit Claim Deed and Certificate of Completion will be attached with the
execution. He said he did not see Schedule D which is the allowed reimbursable expenditures.
Mr. Bolin
stated it should be there.
Jim Casserly,
HRA Attorney,stated it is actually a pretty lengthy schedule and the reason for
that is the City Public Works group laid out with great specificity how this was to work. That is
why you have five pages of direction on what is reimbursable, how they were to define it, and
how it is tracked. They cannot be any more specific than this.
Chairperson Eggert
asked if an escrow agreement has been negotiated.
Attorney Casserly
replied, no, there really will be more of a disbursement agreement. The
money will be placed in escrow, but the title company does not want to make any decisions
about whether money should be released. The way it will work is the costs will be submitted to
the HRA staff who will then approve it, send it to the title company who will then release the
proceeds.
Chairperson Eggert
asked if they were doing partial payments or 100 percent at the end.
Attorney Casserly
replied, they will do partial payments. He does not know if they will have a
holdback or not. They have not really negotiated that agreement yet. If they were to have a
holdback, it would be a minor amount, and he did not know if it would require some bonding or
some arrangements with the City on some parts of it. The City wants to make sure the work is
done correctly.
Chairperson Eggert
stated his only concern is if for some reason the project stopped, and they
had all this money into it.
Attorney Casserly
stated the money is there to make these improvements, and if the project
stops he guessed the improvements will not be made. This is not going to close until the funding
is in place to build it. As a real practical matter there will be multiple closings. They will be
transferring title, there will be a mortgage going on, there will be money put into escrow for
disbursement. All of the financing will be in order. The reason they are doing that is they know
there are issues. They know there are problems that have to be dealt with on that site. They are
unsure as to what it is going to take to correct all those problems. They think they are placing
substantially more in escrow than they will need. Their hope is that they will have a fair amount
Housing and Redevelopment Authority Meeting of January 3, 2019 4
of money left over to cover Authority expenses and then ultimately convey the excess to the
City. That is their arrangement with the City. The City transferred title to its portion of the site.
The HRA is the development arm so they are organizing all of this and assisting with the
development. While the transaction itself is reasonably complex and there are different parties
and a lot of different pieces, it is actually fairly straightforward in terms of explaining it. They
have a building that has to be demolished, they have environmental issues they are not quite sure
of, and they have a site that needs to be filled and prepared. All of that is to make the site
actually buildable.
Attorney Casserly
stated a very nice facility will be constructed on the site. This is a typical
redevelopment project, and there is nothing unusual at all about what is going on. He said most
often they are creating a tax increment district when they are doing this kind of project. In this
instance they are not. In theory they could have, but they have no reason to. This is really a
win/win proposition for the Authority and the taxpayers.
Commissioner Holm
said there is a parking lot for the Fairview office building. He asked if
that is part of this site.
Mr. Bolin
said they are transferring all of the property that is owned by the City and Authority
around the existing City Hall. When that project was originally done in 1982, the Authority
retained ownership of the westerly (he thinks 150 feet) of one of Fairview’s parking lots closest
to University Avenue. They are turning that over as part of this development as well as the
parking lot around the northernmost Fairview building. The Authority also owns that, and that is
also being transferred as part of this. Fairview has paid the Authority $800 a month in rent since
1982 for use of those parking lots. They will just continue that relationship with Mr. Dunbar’s
group.
Commissioner Holm
stated so that is not an issue of any kind with the developer. He said he
also noticed that the access to underground parking is going to be used. He asked if it was the
same underground driveway that was used for the police department with access to lower level
parking.
Steve Dunbar
, Fridley Investments, LLC, replied, there is going to be a new enclosed garage as
part of the senior housing facility. Within that facility there will be 91 enclosed stalls, but that
access road where you currently go to access the underground portion of the structure ramp and
to get to the current storage units, gun range and former police station, that will be used as the
move-in/move-out facility and the gun range for lack of a better term will be utilized as storage
space. They saw that as a benefit to maintain because it really is a retaining wall to the north, the
surface parking lot to the building to the north, and basically if they did remove it, they would
just be replacing it with another retaining wall. It made sense to utilize that space and make it
functional. There will be a new enclosed garage space within the envelope of the building.
Commissioner Holm
stated when he read that he was imagining garbage trucks and large
vehicles going down there, and he assumed they are taking into account how they are going to
get in and out of that space.
Housing and Redevelopment Authority Meeting of January 3, 2019 5
Mr. Dunbar
said it does have an advantage. Instead of having it come to the main entrance area
in the southern portion, they have created a lower area in that little turn around area where trucks
can back up for trash removal and not disturb the day-to-day activity around the main entrance.
Commissioner Holm
asked if they had to have specific numbers for memory care. He asked
Mr. Dunbar know how many units will be for memory care out of the 135 units.
Mr. Dunbar
replied there are 18 units specifically for memory care. They did work with Ms.
Stromberg on the planning side to make sure they were counting appropriately for the parking
regulations specified by the City Code. They are over and above the parking requirements.
They know with independent vs. assisted there is that fluctuation because people age from
independent and start adding services as they go, so they are comfortable with that flexibility.
They do a specific program for memory care.
Commissioner Backlund
stated when they start taking up concrete and digging it up, sometimes
you discover things you were not aware of. He talked to Mr. Bolin about this a little bit earlier
that there are provisions in the contract where they cannot define things so they can negotiate out
what the value is of fixing it and hopefully it will not involve an environmental impact statement.
The second thing is they are vacating a piece of road which runs parallel with University. He
knows they had to do something like that with Cielo, but do they have to deal with MnDOT
when they are vacating a road that is in basically their right-of-way? He does not who owns that
property, if they owned it and gave them the right to use it years ago; and then what about the
piece of it that goes with the Target which is now for lease.
Mr. Dunbar
replied, as to the environmental concerns, they have been working with City staff
and with Braun regarding the environmental reports and technical reports and doing soil borings
on the site, to make sure they are doing their due diligence up front. They have been working
with the City on the replatting and the surveying of the site as well to make sure that when they
do go in and start breaking up the ground there are limited surprises. They have been going
through the title process to know what they are dealing with. That has been an ongoing due
diligence period they will continue before they do break ground to make sure they do have the
most information possible to make sure they are putting their best foot forward. The City has
been wonderful to work with.
Mr. Dunbar
stated with respect to the right-of-way land, that is something they have been
working with the City and the HRA. There is a MnDOT component, but he believes survey and
title have been working on clarifying those concerns as well.
Mr. Bolin
stated the City owns 38 feet. That is the City’s share when it gets vacated. It takes it
roughly to about the westerly curb line of where the existing roadway is, and then the rest they
will leave as MnDOT right-of-way. It keeps everything much simpler. They have all the letters
of approval they need from MnDOT between the developer’s working with Carlson McCain as
well as the City’s engineering staff. There have been a number of people reviewing this vacation
to make sure they get all the pieces to fit. Anytime they vacate anything along that frontage
road, it usually ends up taking a lot of extra time because MnDOT took different pieces at
different times. Sometimes they took it in title and other times they just took it as an easement.
Housing and Redevelopment Authority Meeting of January 3, 2019 6
They do have the right people working on this and do know they can retain 38 feet of that once it
is vacated.
Mr. Dunbar
stated they have been working with the Planning Department, the HRA, and with
Carlson McCain to make sure their setback is appropriate. Closing down that frontage road
should not impact the actual building of their facility because there is a lot of green space in that
MnDOT right-of-way. In that right-of-way is where a continuation of the sidewalk will be as
well so kind of outside their property line, but they are set back appropriately to allow for more
green space with their landscape plan, and not really interfere with the actual building of the
building.
Commissioner Backlund
stated he assumes it will be like Cielo approximately from the setback
of the paved road up to the building.
Mr. Bolin
replied, he believed they will have a little bit more setback than Cielo did.
Mr. Dunbar
replied he believed so.
Chairperson Eggert
stated he had a couple of questions on the phasing. The initial phase is the
majority of the project, and he would expect for them to be operational, they will need to be 100
percent constructed and open for business.
Mr. Dunbar
replied correct.
Chairperson Eggert
stated with the site prepped, they can roll right into the second phase, and
he would imagine Ebenezer would then come to the petitioner at some point of time. He asked
Mr. Dunbar if they have done that before with them.
Mr. Dunbar
replied in regards to timing, they would not close on this unless all funding was in
place and the goal is obviously sequencing that streamlessly. If they are mobilizing to clean the
site, they do not want to remobilize to build a building. It is going to be one effort as they
mobilize to clear the site and then move from that to build the facility. They have been in
ongoing conversations with Ebenezer for a year now regarding planning and marketing plan. As
they start breaking ground that is a scheduled plan for building websites, getting it out in the
community, leasing model units, all that stuff is built into the programming of the construction.
They definitely have been in those communications with Ebenezer to make sure they are hitting
all those marks. That plan will be streamlined once they start breaking ground.
Chairperson Eggert
asked whether they have been involved with Phase 2.
Mr. Dunbar
replied where the structured ramp is?
Chairperson Eggert
replied, yes.
Mr. Dunbar
replied, the plan there would be obviously additional housing, but they want to get
the 135-unit facility built and stabilized and make sure the market is strong enough. They want
to make sure they are putting their best foot forward to get them to a sustainable marketplace
Housing and Redevelopment Authority Meeting of January 3, 2019 7
where the 135-unit building is supportive and sustainable with all of the services there, and then
it will allow them to explore Phase 2 which has not been defined yet.
Chairperson Eggert
stated but it will be all set up for them. The site will be ready for them, and
they can get a permit and build.
Mr. Dunbar
replied, they hope so. They are very excited for the overall opportunity of the
senior health campus. Working with Fairview as well and having them be their neighbors, it just
lends to a really great opportunity for long-term care on that site.
MOTION
by Commissioner Backlund approving the Redevelopment Contract – 6431
University Avenue. Seconded by Commissioner Mulrooney.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
6. Approval of Amendment to Loan Origination Agreement CEE.
Mr. Bolin
stated the HRA has worked with CEE (Center for Energy and Environment) since
1996 to administer the program on the HRA’s behalf. Through their administration of the
HRA’s program, they have done marketing, processed all the loan applications, determined
eligibility, underwriting, and also customized loans to fit residents’ individual needs. They
provide technical assistance to residents as well on remodeling, energy conservation, and also
indoor air quality.
Mr. Bolin
stated The HRA’s partnership with them does provide residents with access to some
other loan dollars. As a non-profit, CEE is able to access different funding sources such as
Minnesota Housing Finance Agency (MHFA) and Met Council, and they have money available
for different programs. The partnership allows them to sometimes package these different
dollars together with the HRA’s loan programs. Occasionally, they will even partner with Xcel,
and Xcel may have some money available for residents who are putting in furnaces. If that is
part of the project, CEE will package some of that along with the HRA’s loan money to help
keep those costs down and keep the project more affordable.
Mr. Bolin
stated CEE is a non-profit, and since 1996, they have rarely raised any of the HRA’s
fees. They only do this when it is necessary to cover their costs. Every few years they go
through and look at what it is taking them to provide services. With this contract extension, they
have added an administrative fee of $500 annually they are going to charge each city now. This
covers some of that overhead they have when they come out to meet with them to talk about the
programs and changes. It would cover some of their time, some of the marketing they do would
be covered with that, as well as the different set-up costs they have, for instance, if the HRA
would add a program and they have to adjust their software to handle the new program.
Mr. Bolin
stated the other increase they have was in their installation verification. The way this
loan program works is your contractor signs an agreement with CEE. Your contractor does not
get paid until the work is completed and inspected, and that is what that installation verification
is--if CEE has to come out to verify the project was completed. It is a fee that they do not end up
Housing and Redevelopment Authority Meeting of January 3, 2019 8
paying all that often. If it is a project that required a building permit, CEE will allow the City’s
building officials to issue a certificate of completion or certificate of occupancy to count as an
installation verification. There are very few projects that get done with these loan dollars that do
not require a permit of some kind. They have found when they do have to come out, their costs
are closer to $100 than it is to $70. That is the reason for that increase.
Mr. Bolin
stated staff has been very pleased with the service they have received from CEE over
the years. The residents who have worked with them seem very happy with the loan process
and their different programs. He recommends approving the contract extension with those
changes through December 31, 2021. Before they take action, Commissioner Holm pointed out
a change they need to make on the schedule that was attached. Under the Mobile Home
Improvement Program, if they go down to ineligible properties, they need to remove “co-op,
mobile homes, and manufactured homes” from that list.
Commissioner Holm
stated this arrangement with CEE is wonderful. They have been able to
do a lot of wonderful things, and the rates are reasonable. He asked how they got their funding.
Mr. Bolin
replied, they do. In the next few months they will have Jim Hasnik from CEE come
out because they have some new programs they are going to roll out. They are going to start
servicing loans. Right now CEE processes all of the HRA’s loans and then they get turned over
to the community reinvestment fund to do the actual collections. CEE is starting to do some of
that work. They will have them come in and Mr. Hasnik can give them some more detail. Back
in the 1970’s the City of Minneapolis had an energy conservation department. They started
doing some loans and pretty soon other cities were calling them and saying, hey, how are you
doing that program? They saw this opportunity to spin it off as its own non-profit entity. From
there they have taken it and run. They do much more than the loan programs. They do a number
of energy-related programs, not just for residents but also for businesses; they get different grant
funding for projects. They may recall when the Metropolitan Airport Council was putting in all
the new windows for all the homes that were in the flight path, that was a CEE project. They
have a number of different funding sources for the services they provide.
Commissioner Showalter
asked on the multi-family exterior program that excludes co-ops, was
that intentional.
Mr. Bolin
replied, it was. That has to do with the ownership and how these different homes get
mortgaged against properties.
MOTION
by Commissioner Holm approving the Amendment to Loan Origination Agreement
CEE. Seconded by Commissioner Showalter.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
7. Approval of Agreement Regarding Issuance of TIF Note – Northern Stacks.
Mr. Bolin
stated the Authority has partnered with Hyde Development since 2011. In that time
Mr. Hyde, has taken the former BAE site. When he took the property, there were 2 million
Housing and Redevelopment Authority Meeting of January 3, 2019 9
square feet and one very large dilapidated building and a whole lot of contamination and less
than 400 jobs on the site. Since then, it has been transformed into nine new or improved
buildings totaling 1.8 million square feet with a number of different users rather than just a single
user. Once LKQ (an automotive parts distributor) moves in next week, there is going to be 1,600
jobs now on that site. It has been a great success. The project did build out much quicker than
they had anticipated. The values on the property are higher than they anticipated. All very good
problems, but in their original development agreement, they had anticipated these things taking
time and these phases being stretched out.
Mr. Bolin
stated the HRA had it set up that originally they would issue a tax increment note for
each individual building. They did that for each of the first two buildings, but then a year or so
ago when Mr. Hyde was ready for notes for Phases 3, 4, and 5, they thought it might make sense
to take a look at taking those first two notes back and just issuing one note at the end of the
project. To simplify things, not only for the Authority, but for Mr. Hyde as well.
Attorney Casserly
stated the Agreement is actually pretty straightforward. It is about 2 ¼ pages
and the first page is mainly “Whereas’s” setting it up. The reason for this Agreement is that this
transaction is genuinely complex. There have been a whole series of notes that could have been
issued. They did not end up issuing two. They were assigned to the First National Bank of
Omaha. They have pledged to the Bank of Omaha payments on notes to be issued. Nothing
unusual about that. As they construct each phase, they want the HRA to commit to passing the
increment through to pay the note that was provided for all those expenses. There are millions
and millions of eligible expenses--probably somewhere between $18.8 and $20.6 million
depending on how you calculate in capitalized interest. It is a very, very substantial amount. In
addition, the Authority created a hazardous substance sub district which is very unusual kind of
district. They made grants out of that for up to $2.5 million. He did not know if all of those
have been disbursed yet or if there is still some.
Mr. Bolin
replied there is about $200,000 and some yet to distribute.
Attorney Casserly
stated almost $3 million of the $4.5 have been disbursed. They wrote
provisions into the Agreement that said they have a right to review all of their accounts, all of
their statements, to figure out what it is, and if there was any reason for the HRA to be issuing a
smaller note. It is like a clawback arrangement. It has to be very complicated because you need
to figure out the internal rate of return. You go through a series of assumptions.
Attorney Casserly
stated they had city appraisers they have used for many of their projects,
review this. They had Greg Johnson, who is a CPA and a tax consultant, spend a lot of time
going through all of their statements and all of their analysis. At the end, they concluded they
could issue the full amount of principal of the note; and the maximum amount they can issue is
$15,775,000. That is what they intend to do. Attached to the agreement is an exhibit which is a
draft of a note. This is exactly the same format and the same form of note that was attached to
the redevelopment contract. There is nothing unusual about this note. This is the standard note
they have used on essentially every project they have done in the last 25 years. The note is very
standard. The principal amount they have identified. Mr. Bolin and the Finance Department
have reviewed their eligible expenses.
Housing and Redevelopment Authority Meeting of January 3, 2019 10
Attorney Casserly
stated this Agreement deals with whether there has to be any assistance
repaid, and it says, no, we have done the analysis and there will be no recapture of any
assistance. It says the maximum amount of the principal of the note is $15,775,000. It identifies
the payments that have been made and how they should be allocated up to this point. The
payments that have been paid are being allocated to interest because they have substantially more
interest than what they are reimbursing for. They had to borrow early on as they always do in
these projects because what they were borrowing for was to do the environmental remediation,
do the site preparation; and those are the costs that are incurred first. They borrowed those funds
from, again, First National Bank of Omaha.
Attorney Casserly
stated they have identified the interest payments. They have also identified
they have issued two notes. As Mr. Bolin was alluding to, those notes are more complicated
because the notes have now been sold back to Fridley Land Company. The reason is Fridley
Land Company is getting takeout financing, long-term financing for various phases in this
project. First National Bank of Omaha was really the construction lender, and then had separate
notes for what would represent tax increment eligible expenses. All of those are being resolved
now. They have identified the principal, the interest, also the interest rate.
Attorney Casserly
stated they have an interest rate now that is going to be based on ten-year
treasury yields plus 2 percent. They have agreed upon a reconciliation date, December 31 of
2018. Treasury yield on that date was 2.69. So the interest rate now will be 4.69. All of those
things are items that they have been sorting out since August. While maybe they did not have to
have this Agreement because the redevelopment contract authorizes the issuance of these notes
and provides the authority for them to be given and to pledge the notes, all of that is really
contained in the redevelopment contract.
Attorney Casserly
stated they thought because of the complexity of this transaction and the
number of issues that were raised, it would be best to identify the issues that were in the contract
and lay them out. There are still a couple of little things they need to sort out. They have not
listed all of the documents. They need to identify where the agreements are right now.
Attorney Casserly
stated before they actually make the next payment and issue the note, they
are want to see all of the documentation and get back the original notes the HRA has already
issued because they have almost $8.5 million worth of notes right now. They have to have those
back, they have to get back all of the other pledges they have made, make sure everything is in
the name of Fridley Land Company, because this note is going to go specifically to Fridley Land
Company.
Attorney Casserly
stated the real reason they are having this discussion is because it really got
built out five years sooner than they thought. The original reconciliation date was December 31,
2023; and the value going on they thought would be about $75 million but turning out to be
probably in excess of $100 million. When all is said and done they have at least a third more
value in half the time. It cannot go any better than that. It is going to work out extremely well
for the Authority and the City, and there are some other options they can talk about.
Housing and Redevelopment Authority Meeting of January 3, 2019 11
Commissioner Holm
stated he has a question about the $15 million. The Agreement states they
are going to make payments from now until 2042. Is there any reason why they would want to
pay that back?
Attorney Casserly
replied once this note is issued, there is going to be a request to take the note
out, potentially with a tax exempt bond, and that would reduce the interest rates probably 150
basis points or 1.5 percent; and that will give them the opportunity. Right now they are paying
5.75 and it is now dropping down to 4.75 or 4.68 and it will probably drop down to 3.25 or 3.0.
All that means is they would be able to pay this debt off much more quickly and it will give them
some other opportunities.
Attorney Casserly
stated they are trying to explore how quickly they can pay off the hazardous
substance subdistrict. This is one of the few things that actually takes tax base. It is the only
time they have done it in the City. As a matter of fact it may have been the first one in Anoka
County, but this project was just that unusual. They would like nothing better than to try and get
that tax base back on. About $14 or $15 million is tied up in that subdistrict. They are going
from $15 million to over $100 million of tax base. That is why this is such a solvent project.
Attorney Casserly
stated they will be back to the HRA with some other concepts because this is
turning out to be a far more financially-profitable project for the Authority and the City than was
ever contemplated under any set of circumstances. When they started this, they were still
working with the great recession, and that is why the timeframes were built in to go out so far
and the valuations were kept fairly modest. All of the properties in the City have increased in
value over the last five years. It has been fortuitous, people have had vision, and it has been just
the right project at the right time. This is going to work out extremely well.
Chairperson Eggert
stated Attorney Casserly has reminded them a number of times they have a
good conservative financial approach. They work out of cash as much as they can. They have
gone through these economic dips and highs, and it has worked well for them.
MOTION
by Commissioner Mulrooney approving the Agreement Regarding Issuance of TIF
Note – Northern Stacks. Seconded by Commissioner Backlund.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY.
Informational Items
1. Housing Program Update
Mr. Bolin
stated taking a look at the loans for the past month, there were 4 more of the senior
loans that went out which is a total of 6 now in the last two months. There was 1 other and that
was through one of those MHFA programs that CEE is able to obtain funding for Fridley
residents. Looking at the year-to-date loans, they had 22 in total, 6 of which again were the
senior loans, 11 were standard revolving loans, and then there were 4 others.
Housing and Redevelopment Authority Meeting of January 3, 2019 12
Mr. Bolin
stated they had 22 loans this year--2006 was the last time they had 22 loans in one
year. A large portion of that is the new senior deferred loan product they have.
Mr. Bolin
stated taking a look at Remodeling Advisor visits, there were none in December but
they have done 18 this year. As to Home Energy Squad they had 3 December visits and 50 for
the year. Looking at both of those historically, they have never done 18 Remodeling Advisor
visits in a year. They are 12 over last year and 7 over their highest year which was 2016, when
they did 11. People are taking advantage of these different programs. They did a lot of different
marketing things this year with different hand notes and City events, and they are starting to see
those efforts pay off.
Mr. Bolin
stated with respect to the Home Energy Squad, those numbers are dropping a little bit.
Once they come out and go through your house that is it. There were a lot of people interested in
it right away and those who were interested have done it. They are going to still promote the
program. Rachel Workin, the City Environmental Planner, is working on a number of different
things with the Home Energy Squad. Hopefully those numbers will approve.
Chairperson Eggert
asked on the Home Energy, he did that back in 2015 and that is when they
were using the CFL’s for the lights which were cooler and took a little while to warm up and get
to full brightness. They are now using the LED lights which last a lot longer. It might be a good
reason to have it done again.
Mr. Bolin
said as a summary of projects they have completed in the last year, 2018 was a busy
year for the Authority. It seems like it took them a long time to select private developers to
develop housing around the new City Hall, but they did approve an agreement with Pulte to do
36 patio homes and now 6 of those are under construction. They continue to sell lots and will
continue to build all winter. Just last month they approved an agreement with Lenard to do 72
townhomes. They are getting their submittals ready now for the Planning Commission and City
Council for their land use items, and they expect to start building here in May or June. That is
moving along well.
Mr. Bolin
stated the HRA approved an agreement with Sherman, and he and Attorney Casserly
continue to work with them and Metro Transit to further this project along. Sherman wants to
start building all three buildings early this summer. That will be 267 total units over the three
buildings. That are going to be 96 in the market rate building, 100 senior units, and then 71 in
the mixed income building.
Mr. Bolin
stated with respect to the Housing Replacement Program, when the City had all the
foreclosures, there was a lot of opportunity for the HRA to acquire properties. That has not been
the case the last couple of years. Last winter they did acquire two tax-forfeit properties from
Anoka County. They now have a five-bedroom house going up on Broad Avenue and a three-
bedroom house going up on Cherry Lane. They are working on acquiring two more tax-forfeit
properties from Anoka County and should have more to report on that at the next meeting.
Mr. Bolin
stated the Cielo project was another long-term project. It took a number of years to
acquire all of the properties but, once they had everything cleared off and they found the right
developer. Now things have been moving along fairly quickly on that as well.
Housing and Redevelopment Authority Meeting of January 3, 2019 13
Adjournment
MOTION
by Commissioner Holm to adjourn. Seconded by Commissioner Backlund.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON EGGERT DECLARED
THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT
8:12 P.M.
Respectfully submitted,
Denise M. Johnson
Recording Secretary