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HRAM 11/05/2020 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION November 5, 2020 Chairperson Holm called the Housing and Redevelopment Authority Meeting to order at 7:00 p.m. MEMBERS PRESENT: William Holm Elizabeth Showalter Rachel Schwankl MEMBERS ABSENT: Gordon Backlund Kyle Mulrooney OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Jim Casserly, Development Consultant ACTION ITEMS 1. Approval of Expenditures MOTION by Commissioner Showalter to approve the expenses as submitted. Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Approval of September 3, 2020 Meeting Minutes MOTION by Commissioner Showalter to approve the September 3, 2020 minutes as submitted. Seconded by Commissioner Schwankl. Commissioner Schwankl noted a correction on item 3 should read $46.08 on a $200,000 home. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MINUTES APPROVED AS AMENDED. 3. Approve Meeting Dates for 2021 MOTION by Commissioner Showalter to approve the 2021 Meeting Dates. Seconded by Commissioner Schwankl. HousingandRedevelopmentAuthorityMeetingofNovember5,20202 UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Paul Bolin, HRA Assistant Executive Director, stated that Ebenezer Senior Apartments has been delayed due to pollution control agency requests, actuary requirements from the Rice Creek Watershed District and the neighboring property exchanged hands. All of this has added quite a bit of time and costs to the project. Mr. Dunbar has put together a team to get this project started. th Staff is requesting the Authority adopt this 8 amendment to change the closing date to after the January HRA meeting. Steve Dunbar, Developer, said that there have been challenges and this year has added additional challenges. He is happy to report that the team is ready to commit to move forward with this project. They are committed to this site and community and happy to see this through. Commissioner Schwankl asked if there were any new changes to what was originally planned for this area. Mr. Dunbar replied that there are no changes to the plans, and they are ready to pull the permit. Chair Holm asked when they would break ground. Mr. Dunbar replied that they are projecting to break ground mid-December. MOTION by Commissioner Showalter to approve the Amendment to the Development Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. Paul Bolin, HRA Assistant Executive Director, said that the lender is requiring that Roers agrees that the property will not have an assessed value less than $34,750,000 upon completion. The closing is anticipated for early December. Staff recommends approval of the amendment to the development contract. Shane LaFave, Roers Construction, said that they are close in pulling the team together and anticipate closing the week of Thanksgiving. The contractor and lenders are lined up and have received information that the permits are ready. The largest tenant in Holly Center will vacate on November 15. Having a necessary in this case. The lending community likes it because there is a guaranteed TIFF payment. This provides additional security that there will be a payment coming. This will help HousingandRedevelopmentAuthorityMeetingofNovember5,20203 get this closed and they do anticipate a value much higher than this, but this will set the minimum bar to satisfy the lender for the term of the loan. Commissioner Schwankl asked if the minimum value would impact the rent. Mr. LaFave replied no. Chair Holm asked when they planned to break ground. Mr. LaFave replied right after closing. Commissioner Schwankl asked if there was any movement with the potential childcare operator. Mr. LaFave replied no; but there are two more potential interested parties, but no one signed at this point. Commissioner Schwankl noted a correction on Schedule K, Item 1, be $24M and $24, not $24M and 25. MOTION by Commissioner Showalter to approve the Amendment to the Development Seconded by Commissioner Schwankl. UPON A VOICE VOTE, ALL VOTING AYE, CHAIR HOLM DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATIONAL ITEMS 1. Housing Loan Program Updates Paul Bolin, HRA Assistant Executive Director, reported this past month four loans were closed making a total of 21 year to date. He had a good conversation with CEE last week and our loan volume has been good this year, usually we do 18-22 loans per year. This year the senior deferred loan is popular. We could drop our interest rate to 2% to generate more interest but to do that a motion is needed. Commissioner Showalter asked what the benefit would be to lower the interest rate. Mr. Bolin replied that it is up to the Authority but there are funds sitting there that could be used income limits like other programs. Commissioner Showalter noted that the MHFA income limits were raised last year so they are pretty high, she wonders if makes sense to reduce the interest rate when there are better products out there. HousingandRedevelopmentAuthorityMeetingofNovember5,20204 Commissioner Schwankl said that the senior deferred loans are spent out every year. Mr. Bolin said that is capped at $250,000 per year Chair Holm asked if it made make sense to lower the rate now and talk about other ways to spend money at a future meeting. Commissioner Showalter thought the interest rate should be left where it is until they have an idea of what to do. We are not trying to target households making over $150,000 per year. People can go to a bank and get a loan. Chair Holm thought this program was helping those with limited income. Commissioner Schwankl asked for the amount that was available in this loan program and if it was a 10-year term loan. Mr. Bolin replied that the term is up to 20 years but based on the amount that is borrowed and there is about $3.0M in the revolving loan fund. Commissioner Schwankl agrees to table this and present after the first of the year. Chair Holm said that interest rates are low, and lenders are willing to refinance at 3%. Commissioner Schwankl asked staff to put this on the agenda for next month. Mr. Bolin said that this is one more tool to address problems and single-family housing stock has always been important. This is an opportunity for residents to borrow money at a competitive rate. He will put this on the agenda to discuss next month. ADJOURNMENT MOTION by Commissioner Showalter 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 7:30 P.M. Respectfully submitted, Krista Peterson Recording Secretary