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HRAM 12/05/2019 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION December 5, 2019 Chairperson Holm called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m. MEMBERS PRESENT: William Holm Elizabeth Showalter Dave Ostwald Gordon Backlund Kyle Mulrooney Rachel Schwankl OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Dan Tienter, Finance Director Jim Casserly, Development Consultant Greg Johnson, Development Consultant Action Items: Paul Bolin, HRA Assistant Executive Director, asked to add Review of Transit Orient th Development Master Plan located at 105 58 Avenue NE and to Adopt an Amendment to Northern Stacks Agreement with Paul Hyde and Fridley Land LLC to the agenda. 1. Approval of Expenditures MOTION by Commissioner Showalter to approve the expenses as submitted. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of October 3, 2019 Meeting Minutes MOTION by Commissioner Backlund to approve the minutes as presented. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MINUTES APPROVED. th 2B. Review and Approval of Transit Orient Development Master Plan located at 105 58 Avenue N.E. Housing and Redevelopment Authority Meeting of December 5, 2019 2 Stacy Stromberg, Planning Manager, stated that this is the first Project since the adoption that the HRA hasn’t been involved in. The TOD requires the HRA to give a recommendation to the th Council. The Project is located at 105 58 Avenue in the Hyde Park Neighborhood, NE corner of th 58 Ave and Main Street and there is an existing 7-unit apartment building and 7-stall garage. TOD Standards relate to lot coverage, setbacks, height, façade articulation, parking, landscaping, sidewalks and lighting. th Ms. Stromberg said that the Planning Commission reviewed the request at their November 20 meeting and recommended approval. City Staff recommends the HRA concur with the Planning Commission on approval of TOD #19-01. This meets the purpose of the TOD Overlay District and the goals highlighted in the 2030 Comprehensive Plan. City staff recommends approval with the following stipulations: 1. The property shall be developed in accordance with the site plan submitted for “Main Street Apartments II”, page A-102, by In Gauge Engineering and Technology, dated revision: 12/03/2019. 2. The exterior building elevations shall be developed in accordance with the architectural exterior elevations sheet submitted for “Main Street Apartments II, page A-109, by In Gauge Engineering and Technology, dated revision: 12/03/2019. 3. The petitioner shall meet all requirements set forth by: 1. The Building Code 2. The Fire Code 3. The City’s Engineering department – related to grading, drainage, storm pond maintenance agreement, utilities, and utility connection fees 4. The City’s Planning department – related to irrigation, landscaping, signage, and the TOD Overlay Zoning District stipulations 4. All parking for tenants and visitors shall occur on-site. The Property Management Company or Property Owner is responsible for controlling tenant parking spot designation and enforcing City code requirements related to parking. If street parking becomes an issue, staff may require additional parking be installed on the property. 5. The petitioner shall pay sidewalk construction costs at time of building permit submittal. Costs submitted will be put in a TOD sidewalk account created by the City to be used when applicable. 6. A building permit to remodel the exterior of the existing apartment building and garage shall be submitted at the same time as the building permit for the new building. Commissioner Showalter thought this would be a great improvement to the area with the improvements to the existing building. MOTION by Commissioner Mulrooney to approve the Transit Orient Development Master Plan th located at 105 58 Avenue NE. Seconded by Commissioner Showalter. UPON A VOICE VOTE ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. Housing and Redevelopment Authority Meeting of December 5, 2019 3 3. Approval of 2020 HRA Regular Meeting Dates MOTION by Commissioner Showalter to approve the 2020 HRA Regular Meeting Dates. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Approval of 2020 HRA Budget. Dan Tienter, Finance Director, said that as part of the annual budget development process, Housing and Development Authority (HRA) staff prepare a proposed budget for review by the HRA Board of Commissioners. The proposed 2020 Budget reflect past action of the HRA Board, including current agreements, outstanding revenue notes, existing programs and current or pending Tax Increment Financing (TIF) District plans. Normally, the HRA Board first reviews the proposed budget during their November meeting, which was cancelled due to a lack of agenda items. Mr. Tienter said that the budget for the HRA contains three major components; the General Fund, Housing Loan Program Fund and the TIF District Funds. Annually the HRA Board reviews a series of cash flow projections for each fund, which are significant source of information for the proposed budget. Significant revenue changes for the 2020 proposed budget include $54,996 increase in the property tax levy; $492,800 decrease in the sale of real estate and a $769,747 increase in miscellaneous revenues. These and other changes represent an increase in revenue of about $235,100. Significant expenditure changes for the proposed 2020 budget include $30,778 decrease in debt service payments; $20,631 increase in administrative charges from the City and $5,700 decrease in non-personnel insurance allocation. These and other changes represent a decrease in expenditures of about $12,200. Mr. Tienter noted that in addition to the General fund budget modifications, stall also assumed $20,000 “carry-over” for an outstanding senior housing loan and about $15,765,000 limited revenue tax increment note payment. Based on the process date, staff recommend the HRA Board adopt the Proposed 2020 Budget as included in the December 5, 2019 Agenda Packet. MOTION by Commissioner Backlund to approve the 2020 HRA Budget. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 4B. Adopt an Amendment to Northern Stacks Agreement with Paul Hyde and Fridley Land LLC Paul Bolin, HRA Assistant Executive Director, stated that this item is related to the bond issue for Northern Stacks. One thing needs to be changed in the development agreement with Mr. Hyde and Fridley Land LLC, the provision for the Authority to sue for delinquent taxes. By removing Housing and Redevelopment Authority Meeting of December 5, 2019 4 that wording from agreement bonds can be issued tax exempt which will save on taxes quite a bit. The excess revenue coming in is extensive coverage on the bond itself, so staff has no concerns to remove that provision from the development agreement. Chairperson Holm said that this is a technical adjustment to consider issuance of TIF bonds for this project. MOTION by Commissioner Showalter to Adopt an Amendment to Northern Stacks Agreement with Paul Hyde and Fridley Land LLC. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. Approval of HRA/Northern Stacks TIF Bond Issue Dan Tienter, Finance Director, stated that based on current interest rates, a bond issue would allow the HRA to refinance the current Note at a lower interest rate from 4.69% to 2.37%, which would save the HRA about $1,487,000. The bond issue would also allow the City and HRA to extend the life of the TIF District and thereby build a fund balance to support other potential redevelopment projects. The bond issue would also recapitalize the developer allowing them to consider other projects within Fridley. Mr. Tienter noted that in July, the HRA guided staff to further examine a potential bond issue. Through a series of meetings, staff identified the following bond issues as the best issuance strategy. The City Council reviewed the bond issues and its proposed structure at their Conference Meetings on September 23 and October 14, 2019. They also provided for the sale of the bond issues at their November 12, 2019 Meeting. To issue the bonds, the HRA must pledge tax increment from TIF District No. 20 to support the repayment of the bonds. Staff estimate the average annual debt service at approximately $1,250,000 compared to estimated annual tax increment of about $2,300,000. To support repayment, the HRA would receive tax increment semi-annually, and transfer the payment amount to the City. Mr. Tienter said that Assuming City Council supports the issuance of the Series 2019A and Series 2020A General Obligation Tax Increment Bonds, the next steps include December 9 Award sale of the bonds, December 26 and January 2 Closing Date of the Bonds and January 7, 2020 Refinance the TIF note. Based on the process to date, staff recommend the City Council adopt the resolution authorizing execution of a tax increment pledge agreement with the City of Fridley. Chairperson Holm asked if tax increment is pledged every six months or annually. Mr. Tienter replied that the payments would happen on an annual basis and the HRA TIF funds would be held until the city has to make the bond payment. Chairperson Holm asked if the TIF amount received is greater than the money owed if the Authority keeps the excess. Housing and Redevelopment Authority Meeting of December 5, 2019 5 Mr. Tienter replied that the only money that goes to the City is what is needed to pay the bond. MOTION by Commissioner Backlund to approve the HRA/Northern Stacks TIF Bond Issue. Seconded by Commissioner Showalter. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. Approval of Resolution Designating Expenses, Northstar TIF Funds 12 & 13 Paul Bolin, HRA Assistant Executive Director, stated that in 2008 special legislation was granted for the Northstar Station. We were the only City that had to fund their own station. Legislature worked with us and allowed us to pool tax increment for districts 11, 12, and 13. Districts are starting to expire, and fund balances must be used. The Authority approved allocating funds toward the trail along East River Road and that went in this fall. In 2019 district 12 will expire and district 13 expires in 2023. As the City continues to work on the bridge over the Burlington th Northern at 57 Avenue there are a number of things the HRA could assist with like engineering and design, preliminary street and utility work. Staff recommends approval of resolution authorizing funds from TIF Districts 12 and 13 be spent in the Northstar District which will be approximately $800,000. Commissioner Showalter asked if this new road would be a County road. Mr. Bolin replied that they had a meeting earlier this week and the County is working with Fridley on this bridge. It is too early to get commitments on funding or ownership of the bridge. Commissioner Backlund asked how people would get on the bridge, there is a short distance and high overpass. Several ideas have been presented. Mr. Bolin replied that some engineering work has been done already and he will email that information to the Authority. Chairperson Holm asked what the time frame was to expend this money. Mr. Bolin didn’t know if there is an expiration date, but he doesn’t anticipate any problems spending the funds in the next year. MOTION by Commissioner Backlund to approve the resolution designating expenses, Northstar TIF Funds 12 & 13. Seconded by Commissioner Showalter. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. Approval of Amendment to Sherman Fridley Station Village Agreement Housing and Redevelopment Authority Meeting of December 5, 2019 6 Paul Bolin, HRA Assistant Executive Director, stated that the HRA closed with the Sherman group on October 31. They met on-site this afternoon with Metro Transit and the lot will be open again for use next Monday. In the development agreement all the work related to the parking lot is to be completed in December. With the delays that happened, they scrambled but still some items that won’t be completed until later this spring, so they need to amend the agreement to memorialize those things. The first coat of asphalt is done, striped, sidewalks are poured, and temporary lighting will be brought in. Permanent lighting may be installed next week, and the final lift of asphalt will be installed this spring along with signage and restriping the parking lot. th Staff recommends approval of the 4 amendment of the development contract with Sherman associates. Commissioner Mulrooney asked if May 1st would be the new final deadline. Mr. Bolin replied correct. MOTION by Commissioner Showalter to approve the Amendment to Sherman Fridley Station Village Agreement. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 8. Approval of Amendment to Dunbar Fridley Senior Building Agreement Paul Bolin, HRA Assistant Executive Director, stated that staff continues to get closer to closing on the City Hall. There is a small amount of contamination on the Fairview property and parking lot. There used to be a dry cleaner shop on the site at one time and fluids were found. As long as this area is a parking lot there is no need to do anything with the contamination that was found. The property was sold as is and the issues are being worked out between the developer and Fairview. The deadline is today to close on the property but with the outstanding issues the date needs to be extended to March 1, 2020. This will also memorialize the eligible reimbursement expenses that will be given to Mr. Dunbar at closing as a credit. Staff recommends the Authority th approve the resolution, adopting the 5 amendment to the development contract. MOTION by Commissioner Showalter to approve the amendment to Dunbar Fridley Senior Building Agreement. Seconded by Commissioner Mulrooney. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. Informational Items: 1. CEE Housing Programs Update Paul Bolin, HRA Assistant Executive Director, reported that this past month and a half two loans were issued making 24 year to date. There are 17 remodel advisor visits year to date and there were 13 home energy squad visits in November for a total of 47 year to date. Housing and Redevelopment Authority Meeting of December 5, 2019 7 Adjournment: MOTION by Commissioner Backlund to adjourn. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:55 PM. Respectfully submitted, Krista Peterson Recording Secretary