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HRA 08/10/1995 - 29585� �� CITY OF FRIDLEY 80II8ING & REDEVELOPMENT AIITHORITY MLETING AII�3IIST 10, 1995 CALL TO ORDER: Chairperson Commers called the August 10, 1995, Housing and Redevelopment Authority meeting to order at 7:42 p.m. ROLL CALL: Members Present: Members Absent: Larry Commers, Virginia Schnabel, Jim McFarland, Duane Prairie John Meyer Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Jim Casserly, Financial Consultant Grant Fernelius, Housinq Coordinator Craig Ellestad, Accountant Sheldon Strom, Center for Energy and the Environment Dave King, Center for Enerqy & the Environment Roberta Moore, 6755 East River Road NE Larry Shafer, Agro-K Corporation Concie Rajamannan, Agro-R Corporation R. Eugene Logan, Agro-K Corporation APPROVAL OF JULY 17. 1995, JOINT CITY COUNCIL WORR SESSION AND HOUSING AND REDEVELOPMENT AUTHORITY MEETING: MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the July 17, 1995, Joint City Council Work Session and Housing and Rede�elopment Authority minutes as written. IIPOI+T A VOICE VOTE, ALL VOTING AYE� CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED IINANIMOIIBLY. CONSENT A(�ENDA: l. 2. ,�--� 3. CHANGE ORDER TO PROJECT NO. 281 TO PERMIT DEMOLITION OF 533 JANESVILLE STREET. 540 HUGO STREET. 600Q - 2ND STREET, AND 5924 - 2ND STREET MONTHLY HOUSING REPORT REVENUE AND EXPENSES � HOIISING & REDEVELOPMENT AIITHORITY MTQ.. AIIGIIBT 10. 1995 PAGE 2 ,� � Mr. Ellestad distributed copies of additional expenses submitted for approval. 4. �OUTHWEST 4UADRANT BUDGET UPDATE Ms. Schnabel stated, on the Southwest Quadrant expenses for July, check #25627 was drafted for the demolition of the Suh property but this is not reflected in the budget expenses. Mr. Ellestad stated check #25627 for $116,520 had some of that amount budgeted in June. He will check into those figures. Mr. Commers questioned the expenditure for the Suh appraisal and testimony. Mr. Ellestad sta�ed this was for additional work for the condemnation hearing. Ms. Dacy stated the hearing was held the previous week. The expense is associated with that in cooperation with the City Attorney prior to the hearing plus their e�enses to testify. Mr. Commers asked about the issue about #�he demolition payment not matching the figures in the budget. Ms. Dacy sta�ed she worked with Mr. Ellestad on the numbers and would like to go back and check. She remembers receiving a bill for the total amount with no differentiation between the Suh property and the apartments. As she remembers, staff made an allocation for the Suh property out of that amount. Ms. Schnabel stated what is listed is more than what was allocated for the demolition. Ms. Dacy stated $116,000 is below the contract price. The price for the Suh property, the apartments and the commercial property was approximately $189,000. Staff will go back and check. Mr. Ellestad stated he also brought July and August information. He thought that in June under Demolition the $77,000 for the Suh Property and $45,000 for the apartments would be the $116,000. OM TION by Mr. Prairie, seconded by Mr. McFarland, to approve the Change Order to Project No. 281 to Permit Demolition of 533 Janesville Street, 540 Hugo St�eet, 6000 - 2nd Street, and 5924 - 2nd Street; to approve the Monthly Housing Report; to approve check register #25623 through #25670 plus the additional expenses as contained in the August 10, 1995, memo from Mr. Ellestad for a total of $30,248.61; and the Southwest Quadrant Budget update; with the exception of the demolition expenses to be verified at the next meeting. � � '"1 � 80II8INa & REDEVELOPMENT AIITHORITY MTa.. AIIaIIBT 10. 1995 PAGE 3 IIPON A VOICE VOTE, ALL VOTINa AYEi CHAIRPERBO� CO�Il�ERB DECLARED THE MOTION CARRIED IINANIMOIIBLY. ACTION ZT8M8: 5. PUBLIC HEARING: CONSIDER TEMPORAR.Y ACOUISITION QF 6765 EAST RIyER ROAD N . E . OM TION by Ms. Schnabel, seconded by Mr. Prairie, to open the public hearing. IIPON A VOICE VOTE, ALL VOTINC3 AYE, CHAIRPERBON DECLARED THE MOTION CARRIED AND T8E PIIBLIC HEARING OPEN AT 8s40 P.M. Mr. Fernelius stated this item is to consider temporary acquisitior� of the vacant parcel at 6765 East �tiver Road, legally described as Lot 4, Block 1, Scherer Addition. The parcel was acquired several years ago by Anoka County as part of the road improvement project along East River Road. The house was taken down and the lot has remained vacant since that time. Due to an overhead power easement by NSP which cannot be relocated, the lot is considered nonbuildable. The owner of the property to the south, Ms. Roberta Moore, inquired earlier this year with Anoka County about acquiring the property. Ms. Moore was told by the County that they could not convey the property to her directly. The County contacted tMe City to see if we would become involved as an intermediary. Essentially, the HRA would acquire the property from the County for $6,800 and then reconvey the property to Ms. Moore for the same price. Ms. Moore would cover all the costs involved in acquisition including legal expenses and closing costs. Ms. Moore has agreed to do this. Mr. Fernelius stated Ms. Moore plans to expand onto that property as well as to enlarge her yard. The County would retain rights of access. This would prevent access from that property onto East River Road at any time in the future. Staff is asking for pub�ic comment and HRA approval for t�mporary purchase. Mr. Commers stated there property in terms of the Ms. Moore, he assumed it deed with no warranty. would be a restriction on the use of the access. When they give the property to would be conveyed through a quit claim Mr. �'ernelius stated this was correct. Mr. Commers asked for comments from the public. Ms. Moore stated she was agreeable to the terms. use the lot to expand her yard. The empty lot is care of. It would be nice to add it tQ her yard. She plans to not now taken � ,� � 0 HOIISINa & REDEVELOPMENT AIITHORITY MTa., AIIGIIBT 10, 1995 PAdE 4 Mr. Commers asked if the restrict�on about not getting onto East River Road would interfere. Ms. Moore stated no. Ms. Schnabel asked if it was possible that this lot could be split. Mr. Fernelius stated the lot could be split. Staff, as part of the public hearing requirement, notified everyone within 350 feet. Staff has received no response. It is possible but there is no interest on the part of the other property owner. OTION by Ms. Schnabel, seconded by Mr. Pra�.rie, to close the public hearing. UPON A VOICE VOTE, ALL VOTING AYE� CHAIRPERSON CONIlKERB DECLARED THE NlOTION CARRIED AND THE PIIBLIC HEARING CL08ED AT 8s53 P.M. MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve a Resolution to Approve the Temporary Acquisition and Sale of Real Property. IIPON A VOICE VOTE, ALL VOTING AYE, CBAIRPERBODT CONII�iERB DECLAR�D THE MOTION CARRIED UNANIMOIISLY. 6. CONSIDER APPROVAL OF RESOLUTION AUTHORIZING A COMPREHENSI�iE �tEHABILITATION PROGRAM IAT HYDE PARK Ms. Dacy stated the agenda packet included the focus group study and the analysis of that study. Ms. Dacy will present the list of activities she will be presenting to the City Council at their next meeting in terms of what staff is recommending to do in the Hyde Park area. Ms. Dacy stated, when this process with the focus group was started, gtaff wanted to identify the hausing needs in Hyde Park and other neighborhood concerns and issues. Staff also wanted to create a community team within the neighborhood. Ms. Dacy stated the immediate activities are those staff would like to initiate in the next few months. The first is to market and provide single family and multiple family loan program� with a contract with the Center for Energy and Environment (CEE). CEE would be responsible for marketing, doing a building analysis for the homeowners, matching the homeowner with the best financial loan package, conducting the rehab inspections, taking the applications, and administrating a number of MHFA programs and some of their own programs. Mr. Fernelius will talk about some of the City's programs that staff would like the HRA to evaluate and authori�e staff to initiate. � �,i0II8ING � REDEVELOPMENT AIITHORITY MTG.. AIIt3II8T 10. 1995 PAGL S Ms. Dacy stated this has been an on-going concern of the City Council. They want staff to be able to meet with homeowne�s and landlords after hours. CEE has agreed to work after hours, between 5:00 p.m. and 8:00 p.m., where they will go to the owner's home or space would be provided at tk�e municipal building. Ms. Dacy stated the City Counci]. vacated the slip off ramp from Un�.versity Avenue and 60th. They acquired the Custom Mechanical building which was later demolished. The slip off wil�. be closed in the near f�ture and staff wants to warn others that this will be happening. The neighborhood felt this would help wi�h traffic through the area. Ms. Dacy stated staff wants to continue the rental inspections and sefer the landlord, if necessary, to housing programs. The inspecto�s are about 2/3 of the way through the neighborhood. Those inspections must be completed. Ms. Dacy stated the City wants build on a victory at the Custom Mechanical site. Closing the slip off will create an additional lot. Staff recommends the City Council convey ownership of those two lot� to the HRA to include in the scattered site lot sale '� program. Staff is also thinking of working with the neighborhood and a builder to develop compatible home designs with conservation and energy saving devices. Ms. Dacy stated staff also wants to identify a community team building project. Ms. Dacy stated staff wants to ini�iate a meeting with area realtors about Hyde Park and the plans for the area including information about the Rottlund project and possibly a first home buyer program. Mr. Burns is still negotiating with the owners of the Frank's Used Cars site. Staff would like to start planning some type of townhome for that site for future evaluation by the HRA. PZs. Dacy stated long term activities include a response to comments about crime and safety in the area. She thought looking at a street lighting assessment might be a good way to add light to dark alleys and parking lots. The City may want to consider sprucing up the entries into the neighborhood including 57th and Main Street. Staff and the HRA need to evaluate TIF d�.stricts when appropriate for specific redevelopment sites. We need to identify a way for the HRA to recover their costs. Ms. Dacy stated there is a block that is bordered by 58th Avenue, � 2 1/2 Street, and 59th Avenue. There are 12 very small home� on the 2 1/2 Street side of the block. The size of 500 to 800 " square feet is well below the code recjuirement. If some of those HOIISIN(i & REDEVELOPMENT AIITHORITY MTG�.. AIIt3IIST 10. 1995 PAGE 6 � owners are elderly, we may want to consider obtaining options of first refusal. The homes are old and continued reuse to rehab when the homes are non-conforming may not be good use. Neighbors are concerried about the long term viability of the housing in this area. Mr. Fernelius stated staff are proposing a number of different programs for the Hyde Park neighborhood. Staff are proposing three programs for the HRA to fund. Mr. Fernelius stated the first is a matching, deferred loan program for single family homeowners in Hyde Park. This would provide a deferred loan of up to $4,000 at 1� interest. It would have to be matched dollar for dollar by the borrower and be paid back when the home is sold. This loan would be available to any homeowner in the Hyde Park neighborhood with an income of up to $55,000. They could use as matching sources either their own funds, an NgiFA loan ar a bank loan. We want to provide flexible financing. Mr. Fernelius stated another program is a last resort program. We have come across a number of households that carinot qualify for existing programs. Either there are credit problems or not !� enough equity in their home, yet their income is too high for the grant proqram. This program is designed to address those households and is just for Hyde Park. Under this program, a homeowner could receive a deferred loan of up to $10,000 at 2� interest. Homeowners would need to meet very specific guidelines in order to qualify for this program. The loan is due on sale with any interest accrued and accessible for anyone with a household income of up to $55,000. � � Mr. Fernelius stated staff wanted to offer similar terms and conditions for multi-family homes. Through the focus group study, we heard numerous comments that landlords perceive themselves as being treated differently than single family. In the interest of fairness, staff wanted to develop a program that was consistent. Staff is proposing a deferred loan be offered up to $4,000 per unit with a maximum of $44,000 per build�ng. That would incl.ude the larger il-unit buildings that are in Hyde Park. The terms and conditions are the same. Mr. Fernelius stated CEE wi.�l do a number of things which staff is currently doing but do not have the staff time to do on this type of scale. CEE will bring the MHFA fix-up fund which is a loan program where they can lend up to $15,000 at 2� to 8� interest to households with incomes up to $41,000 and can include up to one to four unit owner-occupied properties. In addition, CEE would be administering the MHFA home energy loan program which strictly energy �elated. This programs provides a$5,000 loan at about 8.75�a interest �ith a five-year teXm. There are no � 80IISINa & REDEVELOPMENT AIITHORITY idiTa.. AIIaUBT 10, 1995 PA�E_7 income restrictions so it can serve any single fam�ly household. CEE will also be administering the rental rehab loan program. Staff have administered that proqram in the past but not successfully. We hope that with CEE's involvement we can aggressively market thi� program. This program provides an $8,000 loan per unit up to $40,000 per building at 9.5� interest for a term of 15 years. The problem is that there is a restriction in this program that limits eligibility to only natural persons. Corporations or partnerships are not eligible. CEE will be bringing in another program called the rental energy loan fund which provides a$10,000 loan at 4� interest with a maximum term of 5 years. He did not think there were any restrictions in this program. Mr. Fernelius stated staff is proposing to enter into an aqreement with CEE for the Hyde Park neighborhood only. Staff would continue to market the other housing programs througho�t the City as currently structured. CEE would do all the marketing and applicat�on processing. They would offer a one-stop approach to financing. The property owner would meet with CEE, go over theis situation, and try to put together a package to meet the individual's needs. CEE will also provide a building analysis . which is optional for both homeo�ners and landlords. A building i"'`, analysis would include CEE looking at the property and helping the owner identify and prioritize improvements. CEE would also do inspections to verify that the improvements as proposed were in fact installed properly as well as providing administrative and s�affing personnei. Th�s is a fee for service contract. CEE will be paid only for the loans that they are actually originating. CEE will carry insurance and indemnify the HRA. The contract can be terminated at any point if we determine they are not performing to our satisfaction. Mr. Fernelius stated CEE is a non-profit agency which focuses on energy and housing related services. They have a large staff. Their people have a lot of technical experience including energy auditing and sound insulation. They have a proven track record with NII3FA as well as a number of other programs they have administered throughout the state. According to the proposal CEE submitted, they have processed over 8,000 loans totalling more tha� $25 mi�lion. They have worked with a number of different groups including the large uti�ities. Mr. Fernelius did check references and stated everyone was complimentary of the organization. They have the capacity to administer this program as we are presenting it during the time frame that we want to get this accomplished. Mr. Fernelius stated, in terms of the resolution, staff is asking ,� to establish the Hyde Park program; to focus only on the Hyde Park neighborhood; to designate the administrative duties and ` authorize the Executive Director and Housing Coordinator to HQIIBINa & REDEVELOPMENT AIIT80RITY MTG.. AIIdIIBT 10, 1995 PAaB 8 �'"'� approve HRA l.oans; authorize the Chair of the HRA and Executive Director to approve payment to CEE for loans that they do administer on a bi-weekly basis; and authorize the actual agreement with CEE. He introduced Mr. Sheldon Strom, Executive Director, and Mr. Dave Ring, Business Manager. Mr. Strom distributed information about the program. CEE is a non-profit corporation. They have done �nergy and housing related work for 15 years. They began in 1980 as a department of the City of Minneapolis. In 1989, they created a non-profit corporation that took the services as provided in Minneapol3s and in Hennepin County and created a private corporation. They have over the years served over 40,000 households with different programs, mostly energy programs or other rehabilitation programs. Mr. Strom stated CEE has a staff of 40 people. The annual budget is about $3.5 million which comes from a variety of different projects. The largest project they currently run is for the Metropolitan Airport Commission where they coordinate the sound insulation program. That program was built on the energy work CEE was doing to reduce noise transmission. That project currently operates at the rate of about 800 houses per year. CEE � has recently completed a project in Madison, Wisconsin, for the utilities which was an energy and environmental program to deliver energy and environmental services to four neighborhoods. Mr. Strom stated CEE has about 12 technical staf€ who do work in the energy field, especially multiple family and comme�cial buildings. CEE started doing financing in the early 1980's to complement the energy programs. Many of the energy financing programs were not economical for banks to run. CEE started implementing those programs because they complemented other CEE energy programs. Over the years, CEE has developed an efficient way of delivering these energy and rehabilitation loan programs. Mr. Strom stated CEE can offer a very high level of customer service. On this pro�ect, CEE can very readily come in and of�er all the services the City wants and do it quickly. This is a very important project for CEE because they think there is a niche for �hese types of services. Even though it 3s a relatively modest size contract, it is important because CEE wants to prove they can do this and be successful. CEE presented the proposal such that they would only get paid for the work that is actually completed. They are fine with doing a project in this manner and think they can make the project successful. They have done numerous community-based programs in the past. ,� Mr. Strom stated CEE is proposing that they can do this in a way that is highly visible, instill pride in the neighborhood and " give the City credit for imp�ementing the program. � ,� � � 80II$INa & REDEVELOPMENT AIITHORITY MTa.. AIIGIIST �0. 1995 PA�S 9 Ms. Schnabel asked how CEE proposed to get the word ou� to the residents so they know what is available. Mr. Strom sta�ed they would send out a personal direct mail piece under the signature of the elected official along with a brochure to explain the program and a return device such as a return card or phone number. They would encourage people to attend one evening meeting to hear about the program. They have found these a good way to get information across in a clear and conc�se manner at a relat3vely low cost. An added advantage is that, when people see their neighbors at these meetings, it tends to instill interest and it is an easy way to sign people up for visits with a loan official or an on-site analysis of their house. Following that evening meeting, CEE would send a follow up mailing to those who did not respond to the first mailing. CEE would also make a final phone call to make sure they are aware of the program and have chosen not to participate. CEE has been successful with this system in previous projects. If the City has other vehicles to communicate to the neighborhood, they would use those as well. Mr. Prairie asked if the interest rates were fixed rates. Mr. Fernelius stated all the interest rates would be fixed rates. Mr. Commers asked why there was attached to the memo information on other programs and projects. Ms. Dacy stated this was provided to show the HRA that staff is proposing to allocate $1.3 million to this program and to show that this amount of money is accounted for in the budget for this year. Mr. Cammers stated he wanted to clarify that the i�2A is be3ng asked to approve the Hyde Park rehabilitation program that is going to involve $1.3 million and which will require some additional monies over and above the budget. Ms. Dacy stated this was correct, and the additional funds have been included in the programming for 1996. Since we are months away from 1996, staff have anticipated the costa. Mr. Commers asked if the costs for the University corridor would have a bearing. Ms. Dacy stated they do not. The University corr�dor was included in case we wanted to do any significant redevelopment north of 57th Avenue. Mr. Commers stated the manner in which the information is presented makes it ��ok as tho�qh these �ave been approved and ,� ,� .--\ HOIIBINa & REDEVELOPMENT AIITHORITY MTG., AIIGIIST iQ. 1995 PAaE 1Q are on the board. The same is true of the financial statement. These may be some things we are looking at but should be characterized in a different way. Ms. Dacy stated this came up earlier during the budget approval. Because an item i� included in the budget does not mean the HRA will authorize the expense. It is included to show that thia has been planned. She thought that, if this was not shown, the question might be where the money is coming from. Staff is proposing an amount of $1.3 million fos the HRA's approval. If the HRA wishes, that figure can be changed. Mr. Commers asked to clarify where the funds were allocated in the budget. Ms. Dacy stated the 1995 budget had $800,000 anticipated. Staff is proposing an additional $500,000 for the single family deferred matching program. That amount can be accommodated because staff have anticipated for 1996 that expenditure for the Hyde Park programs. Mr. Fernelius stated this agreement goes through the end of next year. They expect some of these funds wi11 be spent in 1996. There will be some carry over. Mr. Commers stated they need to know how the amounts are related to what the HRA might expect. How did staff arrive at these numbers for the program? Mr. Fernelius stated staff took into consideration the number of single family homes in the neighborhood, which is approximately 130. There are an additional 50 buildings which add up to 350+ un�.ts. Staff did some projections based on the spending in current programs on a per-unit basis. $1.3 million assumes we would be assisting a majority of the households in the neighborhood. As a practical matter, that probably will not happen. Ms. Dacy stated with a11 the programs they could get a total of about 225 to 250 loans. There are 180 properties. They want to keep the single family and multi-family funds equal based on what staff heard from the focus groups. In the last resort fund, based on an average of $10,000 per loan, that is about 30 households. That seemed to be balance of all the interests. Mr. Fe�n�lius stated they are leveraging other dollars. There will be matching funds. Mr. Commers stated, as he understands, CEE would get a fee as set forth in the schedule in Paragraph 2.1 of the Consulting Agreement. � HOIISIN(� & REDEVELOPMENT AIITHORITY MTO., AII�3II8T 10. 1995 PAQE 11 � Mr. Fe�nelius stated CEE would receive at a minimum $225 per loan that is closed. The building analysis is not mandatory. There are instances where a building analysis is not appropriate. MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve a Resolution Establishing a Comprehensive Housing Rehabilitation Program for the City of Fridley's Hyde Park Neighborhood; Establishing the Area of Operation; Providing for the Delegation of certain powers and Duties; Authorizing the Execution of a Consulting Agreement by and Between the Housing and Redevelopment Authority in and for the City of Fridley and the Center for Energy and Environment. IIPON A DOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONB�iERB DECLARED T8E MOTION CARRIED IINANIMOIISLY. Ms. Schnabel was not present during the vote. 7. CONSIDER RESOLUTION AUTHORIZING ANORA COUNTY HRA SPECIAL BENEFIT LEVY FOR 1996 Ms. Dacy distributed a letter dated August 4, 1995, from Mr. Tim Yantos, Anoka County. Ms. Dacy's memo as included in the agenda '� packet talks about the intergovernmental meeting attended by Councilmember Billings on August 2. The outcome of that meeting is verified by Mr. Yantos that, if the comxnunities do not want to make a commitment to opt in or opt out of the levy, communities can pass a resolution to inform the County of their preliminary intent but the decision would have to be finalized by November 22, 1995. That would allow the County to do what they need to do to certify the levy prior to December 1. Mr. Commers asked if their intent could be that they have not yet made up our minds. Ms. Dacy stated yes. Between now and November 22, the technical advisory committee and intergovernmental committee will try to better define the use of where the levy funds would be provided in each community. If we elect to use the money for rehab funds, Councilmember Billings is recommending that communities specifically use them for multi-family rehabilitation. Staff would come up with guidelines and some type of program and bring that back to the City Council and HRA. Mr. Commers stated he read this to mean the County wants the City to go in or out rather than be neutral. If we can do that, that is fine. �� Ms. Dacy stated Mr. Yantos' letter states the cities are to inform them of our preliminary intent to participate in this special 1evy. The �ray th� letter i� wr�tten leans toward saying HOIISINa & REDEVELOPMENT AIITHORITY MTG.. AIIGIIST 10. 1995 PAQE 12 '�� yes, but there is nothing to prevent the HRA or City Council from opt3ng out. Mr. Commers stated, until we get your recommendation, it is hard to say �ahich way we want to go. Ms. Schnabel asked if this concept was in place in any other county in the state where the county has an HRA and the cities also have an HRA. Ms. Dacy stated yes. Dakota,County has a county levy which they use for senior housing. South St. Paul, a community within Dakota County, also has a levy. Washington County and Carver County also have county HRA's. There are a number of others in outstate Minnesota. Mr. Fernelius stated there are also some that have multi-county HRA's that cover ].arge geographic areas. It is a common practice. Mr. Prairie asked if Dakota County has had a county HRA longer than the cities within that county. �' Ms. Dacy stated yes. The county HRA was established ira 1972. Dakota County administers the Section 8 program. Mr. Pra3rie stated it would be different from our situation. Anoka County has not had an HRA. Ms. Schnabel asked if the County could create TIF districts. Ms. Dacy stated the County has adopted a policy that they will not conduct economic development activities although they may have the power for tax increment districts. The County has �et up a participation process where.the communities would shape the structure of the programs. The proposed purpose of the tax levy would be for senior housing and rehabilitation. They want the city councils and staff inembers o€ the cities that opt in to either of those areas to devise and implement the proqram. The County does not want to add staff. They are trying to do this on behalf of the communities to have as many housing programs as possible. Ms. Schnabel asked if this would create an additional burden �or City staff. Ms. Dacy stated yes. It may mean more meetings. But, there is also additional monies we could use for housing programs. n Ms. Schnabel asked if the County would reimburse the City for �` their time and serv3ces. �--� �OIISING & REDEVEI,OPMENT AIITHORITY MTG., AIIdIIST 10. 1995 PAGE 13 Ms. Dacy �tated no. If we choose to do that, we would have to subtract that from the levy for a specific program. Ms. Schnabel asked, in terms of the legislature, are they looking at th�s in a different light or thinking of any different laws with regarding to county iiRA's overlapping the city HRA's. Mr. Casserly stated the counties have been able to set up HRA's for years. It was only in the metropolitan area that they could not. Ar�oka County had approval for an county %II2A for years but they did set it up. Hennepin County has had a county HRA but did little with it. Washington County and Dakota County became active earlier and did thei.r activities through the County. There were not city HRA's. There are questions of economies of scale and what can be offered. Will the southern part of Anoka County get more of the rehab activities? There are things that have to be sorted out. It would be good to know how the funds would be matched over time. Mr. Prairie asJced if there was a reason the County formed an HRA. Was it to function in those communities that'did not have an HRA? ^ Ms. Dacy stated this came from the issue that there are federal funds that require a county HRA to be in place. There was a housing advisory committee where they saw the same housing issues come up in several cities. The County initiated this to see if they could provide additional services and fill a need that communities could not fill. Mr. Prairie asked if there would be an overlap. Ms. Dacy stated she thought the County and address similar problems in as many ways as is saying they want to use this vehicle to communities want. The committee was set up issues. cities are possible. do what the to address trying to The County the Mr. Burns stated it seems that if we could demonstrate that we are able to leverage money through this process that we would not be able to leverage with our own levy. If we cannot do that, it would seem that through this plan we are sharing the responsibility �or additional taxes and, at the same time, have less control over the use of the funds than we would through our own levy. If we are going to share the burden for levying the tax, then we would be better off adopting a way to allow us to have some control. He did not know that there was enough information to sort this out. He is concerned that, if we commit ourselves in a preliminary way, we are starting to share the � burden of levying the tax. He was not sure that is wise at this point. r"� HOIISING � REDEVELOPMENT AIITHORITY MTa.. AIIGIIST 10. 1995 PAGfE 1� Mr. Commers stated it seems that the issue is what kind of interest do we give. We can indicate that we are preliminarily interested or we are not 3nterested. Or, at this point, we are open and have not made a determination one way or the other. He thought it was misleading to give an indication �f �e do not have some preliminary intent to follow up. He is inclined to think the HRA should take a neutral position. Ms. Schnabel stated she did not see where, at this point, Fridley needs this kind of program. Although the letter says we have the opportunity to opt in or opt out, there is no guarantee that this wi11 remain the same or that the rules wi�l change. We may be committing to a program we may not benefit from or tha� we are doing on our own. Ms. Dacy agreed. She agreed with Mr. Burns in that the County needs to nail down what the opportunities are from N�iFA to see.if the information we are getting is accurate. This must be done so we can de�ermine if this is what we want. Also, if going to the taxpayers for additional funds, we have tc point ta something and have a specific program. She thought that is what the County is trying to do. She thought a lot of communities are concerned because the plan just came out and the County is now saying tax levy. The timing is conflicting with the budget process, and some of the other communities are struggling as well. Mr. Burns stated staff have not had time to focus on this and sort it out. We have had other projects and budget problems taking our time. Ms. Schnabel asked if the $72,000 home was a median priced home for the County. Mr. Casserly stated $72,000 is an easy figure to calculate because that is the lowest value on homestead. Mr. Commers stated the HRA does not have enough information to make a decision one way or the other. OM TION by Ms. Schnabel, seconded by Mr. Prairie, to indicate to the Anoka County Housing and Redevelopment Authority that, at this time, the Fridley HRA does not have.sufficient information to be able to give them a preliminary intent of whether the Fridley HRA would desire to opt in or opt out. IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERB DECLARED T8E MOTION CARRIED IINANIMOIISLY. � 8. CONSIDER TAX INCREMENT FINANCING ASSISTANCE FOR AGRO-K Mr. Burns stated several weeks aga representatives from Agro-K n- HOIIBING & REDEVELOPMENT AIIT80RITY MTa.. AIIGIIST 10. 1995 PAaE 1S visited and indicated an interest in the City of Fridley. They have a variety of products aimed at the agricultural �ndustry. They make environmentally friendly fertilizers and feeds. There is another company Agro-R is contemplating joining in the near future called Aqua Peat, �hich makes a device to eradicate weeds using steam rather than herbicides. The company is currently located in Columbia Heights near the Camden bridge. Mr. Burns stated staff assisted them is identifying some Fridley sites. He believes they have chosen a site located at the southwest corner of 81st and Main Street. This site is in a tax increment financing district. He has asked Mr. Casserly to work with Agro-R to develop a proposal. Mr. Casserly stated his memo dated July 21, 1995, outlines the proposal. Representative of the company were at the meeting to talk about the project. Agro-K has a facility in Columbia Heights which they are leasing. They are in need of space for expansion and are looking for a suitable site in the immediate area. One of the sites is in Fridley. This site has severe soil problems which were known and documented. Agro-K is working with the Small Business Administration (SBA) and TCF Bank to put together a financing package to expand, develop and build. They �, approached the City of Fridley to see if there was assistance for _ site preparation needs and to assist them with the SBA financinq package. We talked about what was available in the City. The problem is that the request they have and the amounts they have are over what our guidelines will al�ow. Based o� that, we tried to put together a package that �ou1d �espond to their needs and not vio�ate the guidelines. Mr. Casserly stated the package tried to accomplish $150,000 worth of assistance. Of that, $75,000 would be in the form of a grant which is needed up front in order to meet the SBA requirements and to be part of our equity contribution. The other $75,000 would be a loan at 5% interest with two years deferred but accruing interest. The amortization on a second or third mortgage cannot be for a period shorter than the SBA so he is suggesting to amortize the loan over 18 years but, on the tenth year, adjust the interest rate to 5 basis points above prime to encourage pay off of the loan. Ten years is what has been done on the last few loans. Mr. Casserly stated the financial schedule shows a 20-year term, but there is actually no payment for the first two years. The company has responded to concerng raised previously. Mr. Commers asked if there was any personal obligation to the � loan. 0 HOIISING & REDEVELOPMENT AIITHORITY MTG.. AIIaIIST 10. 1995 PAQE 16 Mr. Casserly stated there would be a personal guarantee by the two principals of the company. Mr. Prairie asked the number of acres included in the site. Ms. Rajamar�nan stated the site is 6.5 acres. M�. Casserly stated this is in a redevelopment district. There are some soil problems to deal with. The project value is approaching $1.5 million. We are suggesting that approximately 5� of the project value be a loan and 5o be a grant. Nir. Casserly distributed copies of a Contract for Private Redevelopment By and Between the Housing and Redevelopment Authority In and For the City of Fridley, Minnesota, and Agro-R Corporation. He estimated $34,000 per year of tax increment being generated on the site and they pulled out the administrative fees of 100. In about three years, the HRA could recover the $75,000 grant and would then get the loan repayment over ten years because of the substantial increase in interest that would be put on the note. Mr. Casserly stated, in looking at this in terms of the funds to '� be generated, this is a strong project for the HRA. They are assuming the taxes they will pay will be modest, and he thought the project will be valued at more than suggested in the analysis. He thought the analysis is probably overly conservative in terms of revenues generated for the HRA. The assessment agreement suggested to be part of the package is valued at $900,000. In addition, part of the reason for the company looking at this site is the opportunity for expansion in the hope that in the next two to five years they will be able tc add 20,000 square feet. Ms. Rajamannan stated the site is 6.5 acres. They are planning a 30,000 square foot building and hope to bring a sister company here as well. Her husband, Dr. Rajamannan, has developed a machine to kill weeds using hot water. In 1999, they are going to ban some chemicals. That company will be coming along with Agro-K. They hope, in three to four years, to add another 20,000 square feet. They looked for a site in Fridley because of the acreage. Columbia Heights has only about 2.5 acre sites. This is why they approached Mr. Burns. Mr. Larry Shafer can answer questions about the company. Mr. Schafer stated Agro-K manufactures feed additives that are drug free and hormone free for beef, dairy, and swine. They have markets worldwide including German, Australia and Japan. Their �"�� products are marketed through distributors, dealers and some directly. The soil products are soil enhancers that are approved ` for organic use. We are moving tcward f�wer chemicals and more ��, � � HOIISINa & REDEVELOPMENT AIITIiORITY MTa.. AIIaIIBT 10. 1995 PAaS 17 environmentally safe products. There has been interest by small users in the food industry, but some of the major producers are now moving in that direction. We have a soils program for agriculture products. These products are marketed throughout United States. They have specialty products that can be used reduce chemical inputs and drift of pesticides and herbicides order to use lesser amounts and still have �ffective control. They have markets for their products in South Africa, New Zealand, Australia, South America, and Europe. There is also interest in our technologies. Dr. Rajamannan spends a lot of time overseas developing these markets which supplements the manufacturing to a year-round basis. Mr. Prairie asked what would be going on in this facility. the to in new Mr. Schafer stated this would be a form of manufacturing. Raw materials would be brought in, formulated, bagged as final products, and shipped out in various size containers. Ms. Rajamannan stated they have a warehouse in downtown Minneapolis and in Georgia. They hope to combine the Minneapolis warehouse with this facility. They also have a manufacturing facility in South St. Paul. Ms. Schnabel asked if this would be both research and development and manufacturing at this facility as well as a warehouse. Ms. Rajamannan stated yes. They do have warehouses all over the United States. Mr. Prairie asked if this was a liquid product. Mr. Schafer stated yes. The feed product is dry. Many of the soil and foliar products are liquid. Mr. Casserly stated, because of the activities over the last eight or nine weeks, they were going to have information for the HRA in July but there was not time. Agro-K has received approval from the development corporation associated with the SBA. They cannot submit the final package until they put together a11 the financing components of which one component is that being presented. Mr. Casserly stated he talked with their financial institutions who say there are no roadblocks to having approval. They are hoping to start construction in September. That is why they are here tonight and that is why they are asking for concept approval. Mr. Casserly stated this is designed this so it is a$150,000 loan. Once the building is constructed, we then forgive $75,000. �OIIBINa & REDBVELOPMENT AIITHORITY MTG.. AIIQIIBT 1Q. 1995 PA�E 18 This is included in the note in the fi=st paragraph. The last sentence of the note talks about the principal balance which ahaly be reduced upon issue of a Certificate of Occupancy. The contract also includes a guarantee of performance of the agreement and an assessment agreement �hich guarantees a minimum value. He believes the HRA is as secure as they can be for a third mortgage. Ms. Schnabel asked, if we approve and have a loan as the third place and if the business should be sold, what happens to the HRA. Mr. Casse�ly stated, unless we relieve them of responsibility� they are always responsible Qn the note. Mr. Prairie asked if the buyer would have to agree to the terms. Mr. Casserly stated yes, but that does not relieve the original party of their obligations. The buyer could assume if the buyer agrees. Ms. Schnabel asked, in the case it should be sold, does the HRA have the right to review the buyer to protect our interests. Mr. Casserly stated the sale does not relieve the original borrower from their obligation. Ms. Schnabel asked how well the HRA was covered. Mr. Commers stated page 13, paragraph 8, is a due on sale provision �hich covers the question. It requires the note to be paid if the property is sold or transferred. Mr. Burns stated Agro-R needs to be out of their existing facility by November 30 so that also is in play. Mr. Commers asked what the cost for the land was per aquare foot. Mr. Casserly stated the land cost is approximately 75 cents per square foot. Mr. McFarland asked for a break down of the financing. Ms. Rajamannan stated SBA �ill provide approximately $570,000, the bank -$500,000, Agro-K -$125,000 plus moving expenses. OM TION by Mr. Prairie, seconded by Ms. Schnabel, to approve a Resolution Authorizing Execution and Delivery of a Contract for ^, Private Redevelopment By and Between the Housing and Redevelopment Authority In and For the City of Fridley and Agro-IC " Corporation. HOIISING & REDEVELOPMENT AIITHORITY MTG., AIIGIIBT 10. 1995 PA�B 19 ,� Mr. Prairie asked if this has been approved by the Planning Commission. Mr. Burns stated the Planning Commission has not seen the proposal. Iie did not think there were planning issues involved. Mr. Burns has discussed the proposal with the City Council and their response has been positive. He did not think there was a need for any type of variances. Mr. P�airie asked if this was the entire portion of the lot that is there. Mr. Burns stated the site is 6.5 acres which goes from Beech to Main Street. It is a pre-1989 tax increment district and one of the last sites in the City where we have the flexibility to use the entire project. IIPON A VOICL VOTE, ALL VOTING AYE, CHAIRPERBON CONII3ER8 DECLARED THE MOTION CARRIED IINANIMOIISLY. INFORMATION ITEMB: 9. LAKE POINTE UPDATE � Mr. Burns stated he and Mr. Casserly met with the representatives of MEPC several weeks ago. They identified a number of items related to what the City expects and rahat the developer expects. We also looked at some of the issues. She asked how MEPC would respond to build-to-suit situations and how flexible they would be in their development process. They identified the issues and identified the areas of expectation, and MEPC was going to come back with a preliminary agreement. This was not ready for this meeting, but it will be ready soon. Mr. Prairie asked if the primary issue was time. Mr. Burns stated that was one issue they raised. During the discussion, MEPC were characterized as being conservative. They said they were conservative but not immobilized. They are aggressive in their decision making. Ms. Schnabel stated the HRA wanted to be able to set the contract within a certain time frame. Mr. Burns stated they had discussed that at length. MEPC seemed to be receptive to doing that, but we do not have any specifics to present tonight. Staff will bring that to the HRA when they have it. �� � HOII�INa & REDEVELOPMENT AIITHORITY MTG.. AIIQIIBT 10. 1995 PAGS 20 � 10. SOUTHWEST OUADRANT UPDATE Ms. Dacy stated staff followed up on the direction of the City Council and HRA about the condominiums. Staff's direction was to talk to Rottlund to see how many condominium units they can build and see if they can minimize the construotion costs. She talked to Mr. Todd Stutz of Rottlund Homes. They want to build 48 units as originally proposed. When they looked at consolidating the two buildings into one building with 32 units, they determined that the cost savings would not be as great as we had thought. Their original proposal was for four-story construction. We asked them about a three-story building which would not require masonry construction. The building code provides that, if you have a multi-story building with sprinklers for all the stories, then you may have wood frame construction. Eliminating one story does not produce significant cost savings. The other cost savings they could identify by going to a smaller building was the elimination of some amenities which were not significant savings. Ms. Dacy stated someone had suggested smaller units. Rottlund responded that the only items affected are sheetrock and carpeting which are high volume materials and would not generate � significant cost savings. The design of the condominiums had a second den/ bedroom. If the size is reduced by 100 to 200 square feet, that would eliminate that extra room. The size of the unit and existing amenities match what there is in a typical rambler in Fridley that a senior would own. They felt these seniors would not buy a smaller unit at a higher price. Rottlund feels the $80,000-$100,000 range fits the Fridley market perfectly and they would like to keep the size of the unit as is because they think this is best design for prospective buyers. Ms. Dacy stated Rottlund would be willing to pay $200,000 for the land, 50� of the park fees or $54,750, and are willing to participate in an equity participation agreement for the entire project. Mr. Stutz, in his letter, states that anything above the 25� standard profit margin would be paid to the City as a deferred land payment. These negotiations took place yesterday and staff reviewed the numbers with Mr. Casserly. Staff is asking the HI2A for direction on whether staff is going in the right direction. There are still detail issues to work out on how some of these things might work. This is the most recent update. She thought this does answer the questions asked at the meeting. We could have a smaller unit but it comes at a high price and brings into question whether the unit is marketable. In her opinion, the design with two 24-unit buildings was a good design choice. �� Mr. Commers questioned what Mr. Stutz was speaking to when he � mentioned the 25� profit margin. � �OIIBINa & REDEVELQPMENT AIITHORITY �T6.. AIIaIIST 10. 1995 PAQE 21 ; � Mr. Casserly stated Mr. Stutz talked verbally about their gross prof�.t margin being 25�a. Their profit is 25�5, and also includes part of the other company expenses. Mr. Prairie stated he thought this was a big number. Ms. Dacy stated Mr. Stutz stated this is not a negotiable number. Mr. Commers asked what that would require the HRA to subsidize. Ms. Dacy stated the 48 condominiums would be approximately $800,000 of additional costs. This proposal is essentially reducing the cost from $800,000 to approximately $550,000. Rottlund is proposing to pay $200,000 for the land and part of the park fees. We cannot give an estimate on the equity participation. Mr. Prairie stated this ends up being $11,500 per unit more. A person would be paying approximately $90,000 per unit so the HRA is aiding in the sale of these units. Mr. Casserly stated he talked with Mr. Stutz about doing this the other way around or having them escrow the total land payment. '� When they sell the units, we would then provide the subsidy the other way. Rottlund is building the units for $110,000 which they will be selling for $90,000. If the benefit is really to the purchaser so that they, in theory, have an $80,000-$90,000 unit that really costs $110,000 and those units appreciate over the next 75 years, is there a way we can recover some of that appreciation. Mr. Stutz stated the problem with that is that people buy condominiums and homes with the hope that there will be appreciation. To eliminate that opportunity would be a barrier to marketing the units. His fear is that, if these do well and people in five years can sell the units for $12p,000 and bought them for $90,000, it is our subsidy that made this possible. Mr. Stutz feels this is a difficult hurdle to overcome. We are $250,000 more in the pot than we were three weeks ago. ARr. Commers stated the HRA is over what we authorized Mr. Burns to do. Even with the reduction, they are over what we had discussed. Mr. Prairie asked, when Rottlund made their proposal, did they put the numbers on the condominium buildings. As he understands, Rottlund put their numbers on this part of the project and now they are saying they need another $0.5 million. ,�, Ms. Dacy stated staff made that point to Mr. Stutz. Rottlund did not have cost projections at the time of the RFQ. � HOIIBING & REDEVELOPMENT AIITHORITY MTd., AUGQST 10, 1995 PAG$__�2 Mr. Prairie stated the costs should be fairly close to what was proposed. Mr. Casserly stated it has bothered him that this started as a sequest for qualifications. Everyone came in with a quasi-RFP response. He did not think anyone who made a presentation really sorted out all of the costs and the issues. Mr. Commers stated the HRA relied on the information provided in the presentations. What has happened raises some credibility issues. Mr. Casserly stated we have no requirement that we have to continue to deal with the developer. In the origina�. program development, we had amounts included for condominiums to arrive at the land price on a per unit basis. After Rottlund priced out the condominium units, we have had discussions. He did not believe that Rottlund intended to deceive. This is a product they have not yet done. Mr. Commers stated Rottlund should have taken that into consideration when they made their proposal. '� Ms. Dacy stated an option is to say no to Rottlund but the�e is no guarantee that another developer will not do the same. Owner occupied units seems to be driving the development. Mr. Prairie stated he would like a break down on the 250. It seems to be at least double what it should be. Ms. Dacy stated staff would meet with Rottlund. Mr. McFarland stated the way Rottlund put together the proposal they probably have a 25� margin. He thought that a smaller firm has to settle for 15�. The way they operate they can get 25�. On the other hand, they have a lot of corporate overhead that will be there. They are a publicly owned company and we can get their financial statements. Mr. Commers stated we are still far apart on the subsidy number. Mr. Casserly stated they started^to give a breakdown of the components of the 25�. Out of that comes the marketing, overhead, and administrative costs. Rottlund has also agreed to cover the costs of the public improvements on Third Street and any associated costs. Ms. Dacy stated, in summary, the HRA wants staff to identify the �"� 25�. The HRA feels the subsidy is too large. She asked if the HRA was satisfied that you have the information requested " regarding the two buildings versus one building. ^ $OIISINa & REDEVELOPMENT AIITHORITY MTa., AIIGIIST 10. 1995 PAaE 23 , Mr. Prairie stated Rottlund is probably right that 1200 square feet is better than 3,000 square feet. Ms. Dacy asked if the HRA had any comments for the City Council. Mr. Commers asked staff to convey to them the discussion. There is some point at which we will leverage. If we cannot stay within that point, perhaps we go to another developer. Mr. Prairie stated it seemed to him that differences ariae and we are qoing to provide the whole thing. What has Rottlund given as a way to negotiate? They are making their 25� on the rest of the units. Are they not going to budge at all? Ms. Dacy stated Mr. Stutz w�ll not budge from the 25�. That leaves the design costs such as berms, landscaping, the stone fence, aonstruction of the plaza, etc. Those are costs they are incurring and including in development costs. Mr. Commers stated that should be the cost of the overall construction that we are figuring back into the cost of the units. '� Mr. McFarland asked if we could go back to another alternative plan. ,� Mr. Burns stated they could put in townhomes in place of the condominiums. That �ould mean losing density and having less �ax increment. Staff has looked at this from as many angles as possible. He did not know that it would get any better. He is not happy with it but their does not seem to be a�hole lot of flexibility in terms of the product and still accomplish the goal. Mr. Prairie asked how much in sales would be generated by the total project. Mr. McFarland stated the project would be approximately $14.5 million in market value. Mr. Casserly felt the sales would be more than that. Mr. Prairie asked what the problem would be with delaying a decision. " Ms. Dacy stated it may be that construction would not start this year. Staff has been hopeful that the first units would go up this year. Mr. McFarland asked if we could make a counter offer. � �OIISINa & REDEVELOPMENT AIITHORITY MTa.. AIIaII�T 10. 1995 PAGE 2� ,--� f�, Mr. Prairie asked what the subsidy would be. Mr. Burns stated the subsidy would be approximately $650,000. Mr. Prair�e stated it seems that with $15-$16 million Rottlund would have a little give. Mr. Commers stated, if we are $900,000 and we take off $200,000 to $250,000 to get us down to $650,000, if we spread that we are still doing 2/3 and them 1/3. Actually, it would be an overall $900,000 subsidy. He requested an explanation of the 25� and suggested making a counter offer. Mr. Casserly stated they could also discuss equit� sharing at that time. Mr. Burns stated staff thought it would be wise for the HRA Chairperson, the Executive Director, Ms. Dacy, Mr. Casserly and Mr. Stutz have more communication on this issue and then bring it back fos further discussion. Mr. Commers stated he would have time conflicts and asked if another member would be available for these discussions. Mr. Prairie stated he would attend. 11. HOUSING REPLACEMENT PROGRAM UPDATE Ms. Dacy stated this was an information item. Staff has provided an outline of the steps staff need to carry out as a result of the new law. Staff will be coming back next month with a full plan for approval. In the plan will be an initial recommendation of including some sites that have been acquired. It establishes the tax increment planning for a housing replacement program. After the HRA discusses in September, the City Council will hold a public hearing and approve the program. 12. UPDATE ON NORTHCO DEVELOPMENT Mr. Casserly stated he looking for a reaction from the HI2A. Northco contacted the City. They have submitted a lis� of things and the cost in terms of soil correction on the site. There has been quite a bit of analysis. They maintain the site requires $550,000 in soil corrections. The kind of building they want is a 100,000 square foot facil.ity. Mr. Casserly asked them to get an analysis on wha� they would normally spend on site preparat�.on. They said it would be in the neighborhood of $1.15 to $1.50 per square foot of building. If we have a site in which normal site preparation costs would be in the range of $150,000 and their site will be $550,000, there is a gap in the costs. It was a question of wh�ther the HRA wants to look at a way to cover 80II8ING & REDEVELOPMENT AIITHORITY MTG.. AIIGIIST 10. 1995 PAGE 25 �� that gap. The HRA has done this in the past. It was easier in the past. Now we have to cr�ate an economic development district which had a short life, contribution requirements, and some negative aspects. With the recent legislative changes, most of the negative aspect� are now eliminated. It is possible to look at economic development districts again. Cities are now allowed to make l0� contributions to a project instead of having any local government aid penalty reduction. Since the City has traditionally used the 10� generated for administrative expenses, one can see how the City could invest 10� into doing the project. Mr. Casserly stated, with that in mind, is it worth look3ng at some proposals in which people would come in and ask for some assistance for something such as soil correction. For this one could use an economic development district which has a limited life and one can use loans or grants. For Northco, the total property costs are $3.5 million which will exceed the guidelines. The assistance is not an incentive to locate in Fridley but to make the site competitive and available so the site can be developed. Mr. Casserly stated, on this type of project with a$3.5 million cost and the HRA did half as a revenue note and half as a loan, �� we could provide $350,000 of assistance to help with the soil correction costs. This project generates a substantial amount of tax increment. It �ould only need a district in place for three to four years to recover the assista�ce provided as well as some additional amounts for some housing programs and administrat�ve expenses. It is not disadvantageous to have this kind of d3strict. There �ould be an opportunity to provide for new development and an opportunity to develop some surplus funds for the housing programs. Mr. Casserly stated these are some opportunities available that were not available three months ago. This project was brought to the HRA in 1990 and the project fe11 through. Nothing has happened on this site for the last five years. He did not know if we should encourage them to bring anything in. The present guideline does not work for them on this site. Do you want to . look at something more if it provides something for the City? Mr. Prairie asked where the site was located and the number of acres. Ms. Dacy stated the site is located south of 73rd and to �he north of the business center. The site is 6.67 acres. Mr. Casserly stated this is a policy question. Does the HRA want c-� to look at projects that fall under the guidelines of the new law? If there is a project that makes sense, we can bring it ° before the HRA? There are other improvements that are also ^ $OIISING & REDEVELOPMENT AIITHORITY MT4.. AIIGIIST 1Q, 1995 PAGB 26 called for which could be supported by a tax increment package. Mr. Commers asked how long is a district and how much would the HRA recover in the life of the district. Mr. Casserly stated taxes of $1.50 per square foot would be generated which would be about $150,000 for the Northco request. The amount of tax increment generated in the first year would be over $111,000. What is wrong with this district is there is an inflater built in because it is an economic development district. The total is about $682,000 and they want $350,000 to $400,000 �n assistance. Ae recommends staff put together a package for $300,000 making part of it a loan and part a revenue note. It generates a lot of tax increment at the beginning of the project and little at the end. He distributed a copy of a memo regard3nq Northco. Mr. Burns suggested the HRA consider this item at their next meeting. 13. SW 4UAD DEMOLITION Mr. E1lestad reviewed information about Ms. Schnabel's question '� about the demolition project. Ms. Schnabel stated that the information satisfied her question. ADJOII1tNMENT : OTIO by Ms. Schnabel, seconded by Mr. Prairie, to adjourn the meeting. IIPON A VOICE VOTE� ALL DOTING AYE� CBAIRPERSON CONII�RB DECLARED T8E MOTION CARRIED AND THE AIIGDST 10� 1995� SOIIBINC3 AND REDEVELOPMENT AIITHORITY MEETINa ADJOIIRNED AT 10:29 P.M. Respectfully submitted, _ , p l � ,�/ ; -� i � (.� � / < ,� ��" � (m(.J Lavonn Cooper Recording Secretary �� �� �''1 '-� � 8 I G N- I N 8 H E E T HOIIBING AND REDEVELOPMENT AIITHORITY MEETING� l O(���