CCM 11/23/2020
CITY COUNCIL MEETING
CITY OF FRIDLEY
NOVEMBER 23, 2020
The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:00 p.m.
ROLL CALL:
MEMBERS PRESENT: Mayor Lund
Councilmember Ostwald
Councilmember Tillberry
Councilmember Eggert
Councilmember Bolkcom
OTHERS PRESENT: Wally Wysopal, City Manager
Daniel Tienter, Finance Director/City Treasurer/City Clerk
Scott Hickok, Community Development Director
APPROVAL OF PROPOSED CONSENT AGENDA:
APPROVAL OF CITY COUNCIL MINUTES:
1. City Council Meeting of November 9, 2020.
APPROVED.
2. Board of Canvass Meeting of November 12, 2020.
APPROVED.
OLD BUSINESS:
3. Second Reading of Ordinance No. 1385 Renewing the Grant of a Franchise to
Comcast of Arkansas/Louisiana/Minnesota/Mississippi/Tennessee, LLC, to Operate
and Maintain a Cable System in the City of Fridley, Minnesota; Setting Forth
Conditions Accompanying the Grant of Franchise; Providing for City Regulation
and Administration of the Cable System; and Terminating Prior Franchise;
and
Adopt Official Title and Summary Ordinance No. 1385.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 2
ADOPTED ORDINANCE NO. 1385 AND OFFICIAL TITLE AND SUMMARY
ORDINANCE.
NEW BUSINESS:
4. Adopt Resolution No. 2020 – 71, Designating Precincts and Polling Locations for the
2021 Election Year.
ADOPTED RESOLUTION NO. 2020 – 71.
5. Adopt Resolution No. 2020 – 73, Approving Water, Sanitary Sewer, Storm Water
and Solid Waste Abatement Charges, Fees and Rates for 2021.
ADOPTED RESOLUTION NO. 2020 - 73.
6. Adopt Resolution No. 2020 – 74, Approving Gifts, Donations and Sponsorships for
the City of Fridley Received Between October 27, 2020, and November 23, 2020.
ADOPTED RESOLUTION NO. 220 – 74.
7. Approve Final Plat, P.S. #20-03, by Roers Companies, to Replat the Property
Located at 6530 University Avenue N.E.
and,
Adopt Resolution No. 2020 – 75, Approving Final Plat, P.S. #20-03 by Roers
Companies, on Behalf of the Property Owner of 6530 University Avenue N.E.,
Roscoli Properties LLC (Ward 3).
APPROVED FINAL PLAT, P.S. #20-03, BY ROERS COMPANIES AND ADOPTED
RESOLUTION NO. 2020 – 75.
8. Approve Change Order No. 2 (FINAL) for the 2019 Street Rehabilitation Project
No. 19-01.
APPROVED.
9. Approve Employment Agreement between the City of Fridley and Walter Wysopal.
APPROVED.
10. Claims: 190926 - 191058.
APPROVED.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 3
ADOPTION OF PROPOSED CONSENT AGENDA:
MOTION by Councilmember Bolkcom adopting the proposed consent agenda. Seconded by
Councilmember Tillberry.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
OPEN FORUM, VISITORS:
No one spoke.
ADOPTION OF AGENDA:
MOTION by Councilmember Bolkcom to adopt the agenda. Seconded by Councilmember
Ostwald.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
PUBLIC HEARING:
11. Public Hearing to Consider Approving a Housing Program to Finance a
Multifamily Housing Project and the Issuance and Sale of Multifamily Housing
Revenue Note (Series 2020) for the Fridley Station Village Project;
and
Adopt Resolution No. 2020 – 72, Approving a Housing Program to Finance a
Multifamily Housing Project and Approving Issuance and Sale of Multifamily
Housing Revenue Note (Fridley Station Village-URSA Project), Series 2020,
Pursuant to Minnesota Statutes, Chapter 462C (Ward 3).
MOTION by Councilmember Bolkcom to waive the reading of the public hearing notice and
open the public hearing. Seconded by Councilmember Tillberry.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING WAS OPENED
AT 7:04 P.M.
Daniel Tienter, Finance Director/City Treasurer/City Clerk, stated they can think of this as the
third phase of the project--the affordable building. He said he was going to briefly go through
the background of the history of the Station Village-URSA Project and talk about the specific
section of the project that is subject to the conduit debt.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 4
Mr. Tienter stated in 2017, Sherman Associates began the redevelopment process for the site
that existed at the Northstar Line Transit Station. Following a review by multiple agencies,
including Anoka County, the Metropolitan Council, the Fridley Housing and Redevelopment
Authority, and City staff, the Housing and Redevelopment Authority authorized the sale of land
to Sherman Associates to begin the development of a three-phase project.
Mr. Tienter stated in 2019, the City of Fridley formally received a request from Sherman
Associates to issue up to $19.7 million of conduit bonds. This is reflected in the language that is
included in the resolution in the Council’s packet for the acquisition of a 73-unit low to moderate
income housing facility.
Mr. Tienter stated on July 22, 2019, the City Council provided its preliminary approval; and
there is a bit of a lapse of time because Sherman Associates went through four attempts to get a
tax-exempt bonding allocation from the State of Minnesota. Essentially there is a pool that exists
at the State level to award tax exempt bonding allocations which give the City the opportunity to
issue the bonds and the note. It is a very competitive process, which is why Sherman had to go
through multiple reiterations and eventually was rewarded priority status in the process and got
the allocation on its fourth attempt.
Mr. Tienter stated that action on July 22, 2019, authorized the City Manager at such a time if
Sherman Associates was to receive its tax-exempt allocation to call a public hearing. On
November 6, the City Manager called for the public hearing and a 15-day notice was published
in the City’s official newspaper to consider the issuance and sale of a multi-family housing
revenue note of up to $11 million. The difference has to do with an evolution of the project but
also the amount of the tax-exempt allocation the City received for the bonding.
Mr. Tienter said the project is very similar in the style of the two phases that are currently under
construction on site, and it mirrors what Council reviewed in July of last year. There is a slightly
more efficient layout, so it has increased from 72 units to 73 units.
Mr. Tienter stated as to conduit debt, Minnesota Chapter 462C and certain sections of the
Internal Revenue Code allow the City to issue revenue obligations to finance qualifying
improvements. In this case, it is for a multi-family housing development that is geared toward an
affordable program for low- and moderate-income households. For this arrangement, the City
will issue and sell what is called a Multi-Family Housing Revenue Note Series 2020 (“Note”).
This Note can be used by a for-profit entity to construct multi-family housing for parties who
meet a predetermined age or income qualifications. In this case, it is the latter, and there is a
housing program attached to the resolution that outlines the various rents that would be charged
as an affordable rate to certain size households.
Mr. Tienter stated revenues are then derived from the qualifying organization (in this case a
multi-family housing facility) so the rents and other charges essentially are used to pay the debt
that has been issued by the City and the lender. The Note does not constitute a debt of the City,
and the City has no financial obligation whatsoever and will not be involved in the servicing of
the debt.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 5
Mr. Tienter said the City would issue the note and enter into a loan agreement and a mortgage
with Sherman as the borrower. The City then assigns that loan and the mortgage to the lender (in
this case Cedar Rapids Bank & Trust). The borrower and lender enter into a purchase
agreement, and all the payments between the loan go between the borrower and lender. This
does not represent all of the agreements made among the parties. In fact, if they looked at the
index for this particular deal, there are more than 100 separate agreements and documents that
underpin the financing related to this development. It is a complicated financial package. There
are several documents including the Note, note security, bridge loans, taxable loans, TIF loans,
closing documents, legal opinions, and other miscellaneous documents.
Mr. Tienter stated seven of these documents which are relevant to the final resolution offered
tonight were submitted last week for Council’s review. The principal will be about $10.7
million. It has an anticipated term of about 40 years. There are two interest rates attached to this
loan, and they are both variable rates. The first is a 3.5 interest rate which is the prime rate plus
2.5 percent; and that will be for interim draws or advances on the Note. Eventually, the Note
will be converted, and the servicer will then begin paying on the Note itself.
Mr. Tienter stated it is a negotiated sale. It is tax exempt; and it has not been qualified. The
lender in this particular deal is Cedar Rapids Bank & Trust Company, which is the preferred
lender of the borrower.
Mr. Tienter stated the multi-family housing revenue Note makes up the balance of the financing
for the project followed by syndication proceeds which they can think of as low-income housing
tax credits. The developer is waiting to take some of their fee in order to finance the project; and
then the HRA is involved with a TIF note, a deferred loan, and a deferred loan on the land. The
TIF note will be issued as a limited revenue tax increment note, typical to deals the HRA has
offered in other TIF districts. There is a promissory note that will be paid over 17 years based on
the net cash flow of the project at 2 percent. The deferred land loan is a purchase price loan that
will be paid over 30 years at no interest to the borrower. Ultimately the funds are just under
$21.7 million. For the uses, construction makes up the balance of the use, followed by
development services, financing services, and professional services.
Mr. Tienter stated assuming approval of the sale and issuance of the Note this evening, early
next month they will obtain the signatures for the various documents and then later in that same
month they will close on the Note, transfer funds, and begin construction. The targeted closing
date for the Note is December 18, 2020; and as a direct placement to a qualified lender, the Note
does not receive any type of credit rating.
Mr. Tienter stated staff recommends Council adopt Resolution No. 2020-72 which
accomplishes the issuance and sale of the Note in an amount not to exceed $10,680,175. It also
authorizes the City Manager and staff to execute many of the various documents related to the
project. There is a revised Resolution No. 2020-72, which contains only one modification to the
resolution itself which is in Section (E). The earlier resolution included in the packet discusses
favorable comment from the Metropolitan Council when in fact before the meeting tonight they
have received “no comment” from the Metropolitan Council, so the resolution has been revised
to reflect that remark.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 6
Mayor Lund asked what the percentage was for the financing.
Mr. Tienter replied there are two interest rates associated with the Note at this time. The first is
essentially characterized as an interim rate on the draws against the Note to accomplish
construction, and then later the Note outlines a conversion where eventually they begin to service
the debt and the rate changes based on the formula outlined in the Note itself.
MOTION by Councilmember Bolkcom to move the revised Resolution No. 2020 - 72 into the
record. Seconded by Councilmember Tillberry.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Mr. Tienter stated a representative of the developer could not be present this evening because of
the Coronavirus, and they did provide a written statement which they would like him to read into
the record as follows:
Thank you, Mayor Lund and councilmembers, for your time today. We
appreciate the partnership between Sherman & Associates and the City of Fridley
to make Station Village a reality. We are just one month away from the opening
of a 95-unit market rate apartment building and moving in residents.
Additionally, the 107-unit senior apartment building is on schedule to be
completed in April. We are excited to begin construction on a 73-unit of mixed
income units for the third and final building. In July, we were awarded a bonding
allocation by the Minnesota Housing Finance Agency and approval of those
bonds is before you today. The bond financing enables this third building to
provide affordable housing options as part of the overall project at Station
Village. The financing tools allows us to cap the rents so they are affordable to
families at 60 percent at area median income. Our history in constructing and
managing both market rate and affordable housing stretches back 40 years. The
proposed building has a two and three-bedroom options for families and other
buildings at Station Village. It features a club room, fitness room, onsite laundry,
and outdoor play structures to serve the residents. We will provide a high level of
quality by using the same architecture and construction team that is currently
underway on the market rate and senior buildings. Again, we are very excited to
work on the third and final building to complete the vision for Station Village and
bring so many diverse and high-quality housing options to the City of Fridley at
this important site. Thank you for your consideration. Sincerely, Dillon O’Brien,
Building Associate.
MOTION by Councilmember Bolkcom to close the public hearing. Seconded by
Councilmember Tillberry.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE HEARING WAS CLOSED AT 7:18
P.M.
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 7
MOTION by Councilmember Bolkcom to adopt the revised Resolution No. 2020 – 72.
Seconded by Councilmember Ostwald.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Councilmember Eggert stated people are very interested in establishing new low-income
housing. Here before them they saw the example of the amount of effort it takes to put one of
these projects together. Not only by the development team in trying four times with the State but
also to bring together the financing and to make all the numbers work. The mixed-use project
had a nice piece here for a low-income project. He asked Scott Hickok to update them on the
status of the project.
Scott Hickok, Community Development Director, replied the construction on this has gone very
well. He goes to the project on Thursday mornings and takes photos as the development has
evolved. They are very fortunate because the developers have selected really good architects. In
terms of occupancy they are about a month away from occupying the first building. In the first
quarter of 2021 the second building will be occupied. They are very excited for the timing of
that third building because they certainly have done a nice job with this project.
NEW BUSINESS:
12. Approve 2021 Agreement for Residential Recycling Program Between the City of
Fridley and the County of Anoka.
Mr. Hickok, Community Development Director, this is a very successful program. The are
many environmental benefits, one being that it takes 95 percent less energy to make an
aluminum can from recycled material than new material. He said annual recycling in Minnesota
reduces greenhouse gases comparable to 1.3 million cars off the road, there are over 60,000 jobs
are created through the recycling efforts, and $15.7 billion is added to the Minnesota economy.
Mr. Hickok stated there is a statute requirement for recycling. Minnesota Statutes Chapter
115A requires that through your programs and through SCORE funds that are distributed to the
counties, that there be programs to recycle and to reduce the amount of materials that go into the
waste stream. In Fridley, there is a base funding that is made up of a formula of $10,000 up front
plus $5 per household. That total and the base funding is $70,665. There is drop-off funding the
City gets because of the drop-offs it does, and that is $15,000. General enhancements the City
does in its program, a dollar per household, is $12,133. That is a subtotal of $109,931. The City
gets an additional $20,000 enhancement for its organics program. That brings the City to
$129,931 overall in its funding. Curbside recycling in Fridley, 80 percent household
participation in 2020. That is very good by comparison to the other metro cities. It is at least as
good or if not better than most. It is over 160 tons or 325,000 pounds of recycling per month.
All recyclables collected are being recycled.
Mr. Hickok said organics recycling is a new and growing program. In September there were
240 participants, and they kept more than 6 tons of organic waste out of the landfill per month or
FRIDLEY CITY COUNCIL MEETING OF NOVEMBER 23, 2020 PAGE 8
600 pounds per person per year. They are in the midst of a November promotion that would
allow 3 months of free organics recycling. It was a volunteer program. There was a cost to the
individuals but to get in it now, there is a 3-months free program currently being offered.
Mr. Hickok stated moving the drop-offs to Green Lights Recycling has been a very successful
venture. Green Lights has been very careful to keep the proper PPE on and to keep the recycling
program for these larger bulkier items happening in spite of COVID.
Mr. Hickok stated education outreach materials have made the City’s program very successful,
and there is also staff time that gets recovered and costs recovered partially through the grants as
they are given.
Mr. Hickok stated it is staffs’ recommendation for the Council to approve the 2021 Recycling
Grant Agreement with Anoka County.
MOTION by Councilmember Eggert to approve the 2021 Agreement for Residential Recycling
Program Between the City of Fridley and the County of Anoka. Seconded by Councilmember
Ostwald.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
13. Informal Status Reports: There were no reports.
ADJOURN:
MOTION by Councilmember Ostwald, seconded by Councilmember Eggert, to adjourn.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:37
P.M.
Respectfully submitted by,
Denise M. Johnson Scott J. Lund
Recording Secretary Mayor