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HRA 07/11/1996 - 29788� CITY OB FRIDI�EY HOIIBINa & REDEVELOPMBNT AIITHORITY MEE7,'INa JOLY 11, 1996 CALL TO ORDER: Chairperson Commers called the July 11, 1996, Housing and Redevelopment Authority meeting to order at 7:38 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, Jim McFarland, John Meyer, Duane Prairie Members Absent: None Others Present: William Burns, Executive Director � Barbara Dacy, Community Development Director Jim Casserly, Financial Consultant Grant Fernelius, Housing Coordinator Craig Ellestad, Accountant Robert Van Nelson, Rehab Coordinator Francis & Pat Amman, 6435 Jackson Street Curt Curry, 6535 Oakley Drive ^ Edward J. Johnson, 9793 - 64th Avenue North, Maple Grove, Minnesota Daniel P. Johnson, 6381 Louisiana Ave. North, Brooklyn Park, Minnesota Debbie & Guy Rogers, 785 Bennett Drive �� Peter Eisenzimmer, 6535 Oakley Drive APPROVAL OF JUNE 13. 1996, HOUSING AND REDEVELOPMENT AUTHORITY MEETING: MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the June 13, 1996, Housing and Redevelopment Authority minutes as written. IIPON A VOICE VOTE� ALL VOTINa AYE, CBAIRPER80N COIYII�SERB DECLARED THE MOTION CARRIED DNAI�TIMOIIBLY. CONBENT AGLNDA• 1. REVENUE AND EXPENSES Mr. Ellestad distributed copies of additional expenses needing approval as outlined in his memo dated July 11, 1996. 2. RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR � REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING ' PLANS FOR TIF DISTRICTS #1 - #3, #6, #7. AND #9 - #14 �"`� � � HOIIBIN� � REDEOELOPMENT ADTHORITY MTd., JIILY 11, 1996 PAaE 2 3. 4. 5. APPROVAL OF DEVELOPMENT CONTRACT AND INDEMNIFICATION AGREEMENT WITH ACCAP: 380 - 57TH PLACE N.E. APPROVAL OF EXTERIOR ARCHITECTURAL PLANS FOR FRIDLEY PLAZA OFFICE BUILDING ACQUISITION OF 5833 - 2 1/2 STREET N.E. Ms. Dacy requested item #2 be removed from the Consent Agenda and become item #12. Mr. Meyer requested item #5 be removed from the Consent Agenda. He has questions regarding that item. Mr. Meyer stated he also has questions regarding #4 and asked if those plans had been submitted to the Planning Commission. Ms. Dacy stated no. The plans associated with the permits are proposed to be submitted to staff. These are not required to be submitted to the Planning Commission. If the HRA wishes to have the Planning Commission review, staff can do so. Mr. Meyer requested #4 be removed from the Consent Agenda. MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve Consent Agenda items #1 with the additional expenditures as presented and #3. IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERB DECLARED T8E MOTION CARRIED IINANIMOIIBLY. ACTION ITEMB: 6. CONSIDER OPTIONS FOR 6431 JACKSON STREET N.E. Mr. Fernelius stated Mr. Van Nelson would provide information about the condition of the property, talk about the issues and review the recommendations. The property was a yacant HUD home. The previous owner abandoned the property after having started significant remodeling work. The home was foreclosed, went back to HUD and was placed for sale in March. When staff became aware of the property, they became interested for the scattered site acquisition program. Staff did not anticipate the interest from the private market. Staff's concern was that a buyer might run out of money and not be able to do the work or that an investor would put in minimal improvements and end up having the same situation. At the April HRA meeting, the HRA approved the acquisition. Mr. Van Nelson evaluated the property and has worked with several contractors. /�'� �� �'`� HOIIBINa & REDEVELOPMENT AQT80RITY MTa.. JIILY 11. 1996 PAaB 3 Mr. Van Nelson showed slides of the e�cterior and interior of the property. The home has three levels with 1600 square feet and 500 square feet of finished basement. A partially completed porch is located in the front. There is also vegetation on the property. Along the back, there are two additions which were put on at different times. About one-half of the windows have been replaced. The attached two-car garage also has a single garage door opening toward the back. Inside, the plumbing and heating systems need to be replaced. These have been damaged by freezing. The electrical system is incomplete. The roof needs to be completed as does the siding, soffits and fascia along with interior remodelling. Mr. Van Nelson looked at a minimal rehab for the home which would update the mechanical systems and complete the existing remodeling projects. A more extensive rehab would be trying to come up with something similar to replacement housing. This would include rebuilding the front porch, removing the addition on the back and putting in French doors, removing and rebuilding damaged eaves, updating the kitchen, combining two smaller bedrooms to create a master bedroom and adding a bedroom on the lower level, adding a half-bath off the living space, and eliminating one set of steps. Mr. Van Nelson contacted nine contractors to get estimates for both approaches. Only two responded with estimates for both a minimal rehab and more extensive rehab as follows: Timber Craft $45,500 $63,500 New Leaf Builders $56,000 $83,000 Mr. Fernelius stated the question is whether it is feasible to rehab the property or demolish the property. The neighborhood is concerned about the property and there are buyers interested in fixing the property. If pursuing rehab, does the HRA want to do the work or have it done by the private sector? How will the property be sold? How will a buyer be selected? How much rehab is necessary to make the property desirable? What requirements should be placed on the buyer? Mr. Fernelius stated staff's recommendation, based on the cost estimates along with the interest from prospective buyers, is that rehab is feasible. He recommended establishing the scope of work along with a list of improvements. Bidders would have 30 days to submit a proposal. The price of the property would be fixed. The HRA could recoup their costs. The bidder would have to have the financial capability, experience in similar projects and references. Staff recommends going with the highest, most responsible bidder and then entering into a development agreement, obtaining a letter of credit, the HRA would approve all final plans and specifications before work would begin. � HOUBINa 6 REDEVELOPMENT AIITHORITY MTa.. JQLY 11, 1996 PAaE 4 Mr. Fernelius stated this is a long recommendation but he thought it covers all of the issues and provides assurances to the neighborhood that something will be done. He thought it was a good approach to take. /'`, � Mr. Commera stated we have in the past allowed individuals to purchase a site as long as they can find a contractor to bring in satisfactory plans. Mr. Meyer asked if this meant a private person would not do the work themselves. Mr. Fernelius stated they are looking for a buyer/builder team. He would recommend going ahead with the rehab. At the August meeting, the HRA could set a minimwn standard and look at bids in September. Ms. Amman stated she lived directly to the north of this property and has lived there since 1977. This is not a new issue to this home. She has seen people purchase the home with dreams and leave with those dreams shattered. Each person has their own idea of what they want to do with the house. The house is a monstrosity. The pictures give it justice. The house actually looks worse than the photos. The heating would have to be redone. Regarding the figures, the City purchased the property for $40,000. If in fact one of these two participating companies were given the opportunity to do the work, is that in addition to the $40,000? Mr. Fernelius stated yes. Ms. Amman stated this is.a wonderful neighborhood. However, if someone has $100,000 to $120,000, would they want to purchase a house that meets minimum standards when they can buy new for the same price? A house of that size takes a considerable amount of money to maintain. Will the buyer be able to continue to maintain that home? Most of the people in that neighborhood are long time residents and there are certain standards we would like to keep in the neighborhood. Several permits were issued where the work was not completed. It is important that there are requirements in place that, if the contractor does not meet the requirements, there is a way to combat that. Ms. Amman presented a letter from Pat and Jane Wisniewski who live adjacent to the back of the property and expresses their preference that the structure be demolished and another house be constructed more suitable to the neighborhood. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to receive the letter from Pat and Jane Wisniewski dated July 10, 1996, into the public record. �.,, 80Q8INa & RSDEVELOPMENT AIITHORITY MTa.. JIILY il, 1996 PAaE 5 � IIPON A VOICTs VOTE, ALL VOTINQ AYE, CHAIRPERBON CO1rIIKERB DECLARED T8E MOTION CARRILD IINANIMOIIBLY. Ms. Amman stated, as a neighbor to the north, that would be her hope as well. This home has holes in the roof and paper flies into her yard. The outside yard looks terrible. Mowing is a minimum. The trees need to be trimmed. She did weed killing in that yard to help keep her yard in the condition that she likes. She would like to have the HRA consider demolition of the property and build a home that better fits into the neighborhood. Most of the homes.are three bedroom ramblers. Mr. Eisenzimmer stated the house was not in that bad of shape. He has been through the house. The heating system could be replaced. There are a lot of modifications that could be changed to make it a comfortable and nice home. There is a lot of work that needs to be done. His home also was in bad shape but he has done much of the work and it is now nice. He would like to do the work and bring the home up to standard. He thought the home should be remodelled and sold to someone in the City. This is something that needs to be looked at. What does the City expect to be done with the home? As far as rehabbing the home, there would be help. HUD had the price at $45,000. We are now saying ��� the figure is much higher. He did not know how the City got involved. He thought the basic structure was sound and did not think the house should be torn down. The garage is new with good lumber. It should be fixed up. He understands the neighbors have a problem with it, but they have never had the right person in it. There are people who would like to have a good home. Mr. Commers asked if Mr. Eisenzimmer had an idea of what the remodelling would cost. Mr. Eisenzimmer stated he and his family would do the work themselves but it would be according to the code. There is a plumber, electrician, etc., in the family. Ms. Rogers stated she lives across the street. The pictures are not justified. The house is horrible. There are no pictures of the upstairs bath. The main floor bath is terrible. She pays taxes and to look at stuff like that is sickening. The house is not kept up. The last owner put the garage up in one day and laughed about what he did. Safety is also a concern. She would prefer to see the house town.down. Mr. Amman stated the house has not been completed. There was new carpet and wallpaper in the home when the new owner came. The last owner took it out and it is now gone. The house is in a state of disrepair because the last person did not care. The �� house has a new garage, but there is no siding to protect the undersiding. There has not been siding or a roof for two years. � �, '�'`� HODBINd 6 REDEVELOPMENT AIITHORITY MTa., JIILY 11. 1996 PAaB 6 There was dry rot in the inside walls and the last owner put dry wall. One must go deeper into the house than just these pictures. The house has had rain and snow for the last year coming in with damage to the wood. He did not think it was feasible to rehab the house. He would vote to demolish it. did not think it was a sound building. � He Mr. Johnson stated he has gone through the house twice and is interested in buying it. Someone had said there was no interest. There were 18 signatures of people looking at the home. He has the backing, financing and could close on the house in 30 days. He has a history of doing such projects. He built his own home in Maple Grove. He is a laborer, so he does not have a large income. He can understand the neighbors concerns. He has purchased two HUD homes and those neighbors felt the same. When looking into this house, he looked into the roofing, siding, fascia, heating, plumbing, adding another bath, and upgrading the electrical. In order to that, you need to go down to the bare walls. At that point, the City needs to inspect the home to see what is rotted and what needs to be replaced. The doors need replacing as do the floor coverings. The property needs landscaping. One of the two houses he did in Crystal was scheduled for demolition. He purchased the property in 27 days, remodelled the home and sold it after completion for $65,000. This house has too much square footage to demolish. The house now looks terrible. He does not think it would cost $80,000 to do the work. He wants to buy the home, do the work, quit claim deed to property to his brother who is engaged to get married. He has numbers on what it would cost, and these numbers are different from those presented here. Ms. Amman stated this will be discussed again at the August meeting. How long before something will be done? They want it completed so the neighborhood does not have to go another summer like this. Mr. Fernelius stated he would hope they would see work being done this fall. If we get to September when the proposals come back and nothing is satisfactory to the neighborhood or the HRA, we could then say demolition is an option. If the private sector cannot meet the standards, then he thought they could take the house down. Fall is the time schedule for completion. Mr. Johnson asked if the i�2A would be looking at recommendations in August. Mr. Fernelius stated staff will bring recommendations back in August to set the guidelines for the contractors and look at selecting a particular bidder. � HOIIBINa � REDEVELOPMENT AIITHORITY MTa.. JIILY 11, 1996 PAaE 7 Mr. Johnson stated this looks like it would be October or November before ownership. In that case, work would be done in the spring. Mr. Commers stated the HRA looks at purchasing the property in order to gain some control and provide some reasonable standards. There are some timing issues that are not as favorable as one would like to see but the concerns are being addressed. Ms. Rogers asked if the HRA had toured the house. The steps feel like they are going to fall. The bath is gutted upstairs. The mailman had stated water was coming out of the front door. She would like to have the HRA see it so they know what the neighbors have had to live with. Ms. Amman asked if anything could be done to speed up the process. Mr. Eisenzimmer stated the house can look bad but the repairs are minor and can be done, but it can be done for less that what has been quoted. Mr. Johnson asked if the house was tagged for occupancy now. The i'� HRA has control over the house now and could sell it for the bid price. Someone who spends $45,000 will want to do something to have a place to live. Mr. Commers stated the HRA does not want to have someone get into the home, not be able to complete the work, and leave. Staff is saying they want to set some criteria for the buyer and to have some control in order to get this done the way it should be done. We don't want to sacrifice quality for epeed and have the same problem in another year. Ms. Amman asked, if the permits are issued, how do the residents know the standards will be held. Mr. Commers stated enforcement of permits is not within their purview. . Mr. Burns asked if the staff felt the specifications for a significant rehab are definite enough so that we are prepared to go out for proposal in the next few weeks. The answer from staff is yes, they feel sure about the criteria. If the HRA chooses to go with the rehab option, the HRA may also want to direct staff to prepare an RFP built around those standards. That could save some time and potentially get the construction work done this year. � '"� n� HOIIBING & REDEVELOPMENT AIITHORITY MTa.. JIILY il, 1996 PAa� 8 Mr. Commers asked if it was realistic that someone is going to put in $70,000 or a similar amount into rehab in addition to the purchase price of the property. Mr. Meyer asked, if we did go out, solicit proposals and get them back, the HRA still retains the option to demolish the property. Mr. Burns stated yes. There should also be a buyer beware element. He did not think a buyer would respond to the specifications and commit to a letter of credit without feeling sure they could sell the property in that neighborhood. Mr. Meyer asked, when you give a request for proposal and list the items inside the house, is someone going to put together a list of what needs to be corrected. Mr. Burns stated that work is done. Mr. Meyer stated, in your proposal, which of the two methods are you talking about in terms of a minimal rehab or a significant remodelling. Mr. Burns stated staff would be prepared to recommend a substantial rehab. Ms. Schnabel stated it sounds like you would have to do that in order to bring the house up to code. They are talking about heating, plumbing, electrical, siding, roof, water damage, etc. This sounds like a significant rehab. She did not know if they could get by with anything less. Mr. Meyer stated he thought the initial rehab would take care of that. It is the addition of the half bath, changing the eaves, combining two bedrooms into one, etc. We have to decide whether it is our job to worry about those things. He would recommend doing what Mr. Burns is suggesting but to do the minimum rehab. Mr. Burns stated, in that event, staff would propose the minimum rehab but base the competition on the total dollar value and nature of the rehab in light of the proposals. It could be somewhere in between or it could be substantial. In evaluating the responses to the proposal, the party submitting the highest quality rehab plan would be the person staff would recommend. Ms. Dacy stated someone had asked what is different in this case if the buyer does not comply with the standards of the building permits. This is different because the HRA owns the lot. We are recommending a letter of credit be submitted equal to the value of the improvements being made. If the person defaults, we can �� collect on the letter of credit and have the work done ourselves. � � ,� 80II8INa & REDEVELOPMENT AIITHORITY MTa., JIILY il� 1996 PAdE 9 This is our control, and the goal is to maintain and improve the value of the neighborhood and to insure a quick turnaround time. No further comments from the public were received. OTION by Mr. McFarland, seconded by Ms. Schnabel, to recommend staff prepare an RF'P for rehab of the property based on criteria to be established by staff. Mr. Meyer stated his understanding is the RFP will be based on a minimum rehab. Mr. Commers stated the RF'P should contain an explanation that any additions to those minimum standards would enhance who may receive the bid. Mr. Burns stated it is staff's intent that, if we do not receive satisfactory responses, we have the option to revisit the issue and demolish the property. QPON A VOICE VOTE, ALL VOTINa AYE, CHAIRPER80N COMMERB DECLARED THE MOTION CARRIED ONANIM0�8LY. Ms. Dacy stated staff would start right away to hire a contractor to do some work on the property to improve the interim appearance. Mr. Fernelius stated the criteria will go out in the next few weeks. The goals is to look at it in August. Mr. Johnson stated he had one additional comment. Regardless of who is awarded the bid, there is no reason this house could not have a family in there and have this be a beautiful home by Christmas. 7. APPROVAL OF HOUSING ACTION PLAN Mr. Commers stated a copy of the Housing Action Plan was received in the agenda packet. The plan is a recommendation to establish criteria and guidelines which will have to be further refined before being incorporated into the Comprehensive Plan. Staff is asking for general approval of the information which will then be sent on to the City Council. Ms. Dacy stated the Comprehensive Planning process has not yet been established. Staff will advise the HRA at the appropriate time. MOTION by Me. Schnabel, seconded by Mr. McFarland, to recommend approval of the Housing Action Plan and to forward the Plan to the City Council. /„� HOIIBINa � REDEVELOPMENT AIITHORITY MTa.. JIILY 11, 1996 PAaE 10 IIPON A VOICF VOTE, ALL VOTING AYE, CBAIRPERSON COMMERB DECLARBD T8E MOTION CARRIBD DNANIMOIIBLY. 8. RESOLUTION AUTHORIZING AN HRA LEVY 9. RESOLUTION AUTHORIZING FUNDING FOR THE REVOLVING LOAN PROGRAM Mr. Commers suggested items #8 and #9 be discussed simultaneously. These two items go hand-in-hand. As he understands it, the money the City Council was to provide for the Southwest Quadrant as proposed would be used for the revolving housing action plan and that would then be repaid by the levy. If we do not have a levy, then what happens? Mr. Casserly distributed copies of a Resolution Adopting 1996 Tax Levies Collectible in 1997. The levy can be used for any HRA authorized activities. One of the programs adopted is the revolving loan program. The levy provides a revenue stream available to the HRA which will be used to repay part of the loan from the City. If the City were to loan the III2A $1.5 million at 5� and the HRA were to make 5� loans, all of the loan repayments would go to repay the City loan. The levy allows the HRA to � repay the City and fund the revolving loan program. Ms. Schnabel stated the loan from the City will cost the HRA about $75,000 per year in interest. When looking at the levy, it will not generate enough income to cover the interest on the loan and the loan payment. Mr. Casserly stated the loan will be amortized like a mortgage so the payment will remain the same. The levy may not cover the interest the first year but should in subsequent years. Ms. Schnabel asked how much would the $1.5 million loan cost the HRA ultimately. Mr. Ellestad stated theoretically it should cost the HRA nothing. Mr. Commers asked how they arrived at the interest rate. Mr. Burns stated this is close to the interest rate that the City is getting in grants and loans for other projects. It seems to be a fair rate of return for the City. � Mr. Casserly stated he thought this was correct. In discussions with Mr. Pribyl, he does get a bit better return on investments. 5�a represents a poorer return than what they would like to have r'"� but with less cost then if we had to issue bonds. � H008INa & REDEVELOPMENT AIITHORITY MTa.. JIILY il. 1996 PAaE 11 Mr. Casserly distributed copies of a Resolution Authorizing the Funding of the Fridley Revolving Loan Program; Providing for the Delegation of Certain Powers and Duties; Authorizing the Execution of Documents. Attached to this resolution is a schedule which provides an explanation of the cash flow. They figured an average loan of $12,000 for 12 years at 5�. He reviewed the information. Mr. Commers stated, assuming a$12,000 loan throughout the period, in 10 years they will not be worth as much. We will have to increase the loans or do less. He did not know if the number of loans projected in the last few years was realistic. If they did not have a levy, would it be relevant to see how that affects our current financial status. Mr. Casserly stated, without the levy, it is difficult to do this type of program unless you take revenues out of your existing cash flow. Mr. Commers stated he is wondering what that would do in terms of what we are doing and are able to do. Mr. Casserly stated the HRA now has an opportunity to provide $3 /� million to the revenue stream. If you do not do this, it would be absorbed out of the current budget at $150,000 per year. He thought the HRA would see increasing demands on the fund balances. Mr. McFarland asked why not take $1.5 million from their existing revenues to finance the program. Mr. Ellestad stated the HRA has a$6 million cumulative balance. Another way to look at it is to invest by giving out loans to be paid back at 5�. Then figure the costs including a 2� origination fee, a 4� handling and maintenance fee plus a 2� reserve for bad debts. This is approximately 8.5� times $150,000 which would be the true operating expense for that program. That would become another column they could add which would give the operating cost the program. Mr. Commers asked if the HRA would be better off doing that. Therefore, 8.5� plus the 5% we are paying to the City would be the true cost of operating the program. Why borrow the money from the City? Mr. Casserly stated one reason is to establish a fund in order to do the program. He thought the investment return would be better than 5�. ^ Mr. Ellestad stated the HRA investments are now making approximately 6�. If the HRA is going to borrow from the City at HOIIBINa � REDEVELOPMENT ATTTHORITY MTG.� JOLY il. 1996 PAQE 12 5� and then lending the money at 5�, it is basically a wash. The HRA will not be using all that money at once. It may be possible to invest some of it and gain some revenue. Mr. McFarland stated the HRA will be generating income from the loans and money from the tax levy which is building up the fund. If you do not make a commitment up front to capitalize the HRA monies, the fund will not grow. Mr. Commers stated he thought, if they did not have the revenue, the HRA would have to capitalize it themselves. His concern is that the fund would grow less than projected, there may be a shortfal� in 7-8 years, and the HRA is going to be limited in some of things they might want to do. Mr. Casserly stated part of the purpose in approaching the matter in this way was that so often the projects that come to the HRA are going to be redevelopment projects. The HRA will do only some because staff and the resources can only handle so many. In the near future, the HRA will be doing projects that are net losers. They will provide some new revenue but are pure redevelopment. This type of program tried to become self- financing in the future. If you tzeat each revolving loan fund n and provide that as a separate source of funds, you can continue with loans. That is what you will try to do in the future. The HRA will do a few grants. But loans are going to be the major housing programs. This tries to aadress that and tries to treat them as separate programs. Mr. Commers stated he was trying to figure out how badly they need the levy. What does it add to this? Mr. Casserly stated this essentially gives the HRA $1.5 million up front and capitalizes the source for the program. Mr. Fernelius asked if the tax levy really builds up a balance at the end. Mr. Casserly stated that is where the effect is seen. The i�tA has then paid off the loan to the City and now has a levy which can be invested into programs without having to repay. It is very advantageous to have the levy particularly if you do not have to make repayments. It is to your advantage to borrow money to fund a program up front. In the event the program is not sound or you do not need the levy, you do not renew. This can be discontinued at any time. Mr. McFarland stated, if we are going to invest in our housing stock, that should stabilize the tax base which will offset that � percentage over time. It should be returning to the tax payer by stabilizing the tax base. HOQBINa � REDEVELOPMENT AIITHORITY MTa.. JIILY 11, 1996 PAaE 13 Mr. Fernelius stated there is also the issue of encouraging other improvements to be made outside of our program. There are other positive effects for other owners. For every $1 we are investing, there may be $2 or $3 from the private sector being invested by owners who see people going through our program and willing to invest in their property. There are other positive effects it creates for other owners. Ms. Schnabel stated, if the improvements being made are bringing things up to code, we will not see a big increase in taxes. Mr. McFarland stated, if your housing stock is going to stay with the times, they will have to update kitchens and baths or you will have some deterioration. Enhancing the roof does not enhance the house. Mr. Commers asked if the members wanted to authorize the levy. Mr. Casserly stated he would recommend providing the maximum levy allowed by statute. In 1994, there could be two levies. In 1994, the HRA could have generated $156,000. In 1996, it could be slightly more than $150,000. Because these levies are such small percentages, or .0144�, for the first year he would �"`� recommend the maximum allowed by statute. MOTION by Mr. McFarland, seconded by Ms. Schnabel, to approve a Resolution Adopting 1996 Tax Levies Collectible in 1997. • Mr. Meyer stated he would vote no because he feels this is an inappropriate tax increase for the City's taxpayers. D�N A VOICE VOTE, WITS MR. CO1�iER8, M8. 8CffidABEL AND MR. MCFARLAND VOTINa AYE, AND MR. MEYER AND MR. PRAIRIL 90TINa NAY, CHAIRPERBON COMMERB DECLARED THE MOTION CARRIED BY A MAJORITY VOTE. MOTIOId by Ms. Schnabel, seconded by Mr. McFarland, to approve a Resolution Authorizing the Funding of the Fridley Revolving Loan Program; Providing for the Delegation of Certain Powers,and Duties; Authorizing the Execution of Documents. IIPON A VOICE VOTE, WITH MR. COMMERB, MB. BCffi�TABEL AND MR. MCFARLAND VOTIN(� AYE, AND MR. MEYER AND MR. PRAIRIE VOTINt3 NAY, CHAIRPER80N COMMERB DECLARED THE MOTION CARRIED BY A MAJORITY VOTE. 10. RESOLUTION AUTHORIZING ADDITIONAL EXPENDITURES FOR THE MISSISSIPPI STREETl3RD STREET INTERSECTION PROJECT ^ Ms. Dacy stated the City opened bids for the intersection project and the low bid was $212,616.20. This is a difference of 80II8INa � REDEVELOPMENT AIITHORITY MT�.. JIILY 11. 1996 PAaE 14 approximately $50,000 from our estimates. That overage does not include inspection costs which will be an additional $14,883. The total overage is approximately $65,000. Ms. Dacy talked to County staff who will make a recommendation that the County Board pick up an additional $20,000 out of that $65,000. Our position to the County was that the amount should be $34,000. The County held firm that their additional requirements which were a part of the overage were worth $20,000 and that is what they would recommend to the County Board. Ms. Dacy stated she called the.Holly Center owner. They left a message that they were willing to be assessed for an additional $15,000. They are not happy about it but they want to get the project done. Ms. Dacy stated she had not heard from Mr. Stutz at Rottlund. The best case scenario is that, out of the total overage, this leaves $15,000 for the HI2A. The worst case scenario is if the County Board says no. The Holly Center owner will only agree to the additional assessments if the County puts in and, if Rottlund says no, the cost to the HRA would be $65,000. i"'1 Ms. Dacy stated.staff talked about rebidding and feel that is a risk. Staff talked about waiting until next spring or next fall. Without the County overage, waiting until spring to do the project would probably result in a higher bid. In the meantime, we have postponed the project and improvements to establish an entrance into the project. The best way to approach this was to try to get the partners to cost share. The last resort is to have the HRA agree to pay for the costs. Mr. Prairie stated the bids were close. When the bidding is that close, they are usually good bids. Ms. Dacy stated staff recommends approval of the resolution subject to staff working with the Holly Center, the County and Rottlund to minimize the costs. MOTION by Mr. Meyer, seconded by Mr. Prairie, to recommend approval of a Resolution Authorizing an Additional Reimbursement to the City of Fridley for the Mississippi Street/3rd Street Intersection construction Project, subject to staff working with the Holly Center, the County and Rottlund to minimize the costs. IIPON A VOICE VOTE, ALL 90TINa AYE, THE MOTION CARRIED IINANIMOIIBLY. INFORMATION ITEMB: CONII�lERB DBCLARED 11. STATUS OF TIF ASSISTANCE FOR WALLBOARD. INC. ^ HOIIBINd � REDEVELOPMENT AIIT80RITY MTG.. JIILY il. 1996 PAaB 15 ` --- Ms. Dacy stated staff's recommendation on the loan is that we proceed to bring back a development contract for $85,000 at the August meeting. Staff wants to make sure that the HRA is approving the project area as well. M TION by Ms. Schnabel, seconded by Mr. Prairie, to recommend approval of the concept that a second mortgage/loan be executed between the HRA and Wallboard, Inc., for $85,000 for land and building costs at 5� interest for 10 years. II�N A VOICE eOTE, WITH MR. COMMERB, M8. 8C8NABEL, MR. MCFARLAND AND MR. MEYER VOTIN� AYE AND MR. MCFARLAND AHBTAININa, CHAIRPER80N CO�IlK�RB DECLARED TSE MOTION CARRIED. 12. RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TIF DISTRICTS #1 - #3. #6. #7, AND #9 - #14 MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve a Resolution Modifying the Redevelopment Plan for Redevelopment Project No. 1 and the Tax Increment Financing Plans for Tax Increment Financing Districts Nos. 1- 3, 6, 7, and 9- 14. /"'`�, QPON A VOICE VOTL, ALL VOTING AYE, CHAIRPERBON CO1rIIKERB DLCLARED THE MOTION CARRIED IINANIMOIIBLY. 13. APPROVAL OF EXTERIOR ARCHITECTURAL PLANS FOR FRIDLEY PLAZA OFFICE BUILDING Ms. Dacy stated, regarding review of the project by the Planning Commission, she feels it is minor and deals more with the HRA. There is a procedural issue in that there are no other scheduled items for the Planning Commission until August so there may be a timing issue as well. The plans deal with the canopy which is right in front of the building. Mr. Meyer stated he thought this was a larger structure and would be more prominent. OTION by Mr. Prairie, seconded by Mr. Prairie, to approval of the exterior architectural plans for the Fridley Plaza Office Building. II�N A VOICE VOTE� ALL VOTINa AYE, CHAIRPER80N COMMERB DECI�ARED THE MOTION CARRIED IINANIMOOBLY. 14. AC4UISITION OF 5833 - 2 1/2 STREET N.E. Mr. Meyer stated, on that street, the entire block is composed of '� homes which are very similar to this one. The homes are very small and built on very small lots. Some are okay and others are HOIIBINa � REDEVELOPMENT AIITHORITY MTGi. JIILY 11. 1996 PAGT 16 not in good shape. We are singling out this one. He did not know how one could spend $25,000 on a foundation for such a small home. If the house is taken out of there, he would be surprised if a neighbor would purchase the lot. Is this property on a list of houses throughout the City that are on the scattered site program? Mr. Fernelius stated this property, along with 10 othera in Hyde Park, are at the top of the list. Many of the houses on that block are in poor condition. This one is probably among the worst. We are not in a position to continue acquisitions in this area. This is taking out what we perceive to be the worst. Mr. Commers asked how this property came up at this time. Mr. Fernelius stated the owner had applied for a loan. In combination with that loan process, we were also doing a condition study through Hyde Park. We also identified this property as one of the worst. Rather than invest money in the property for repairs, we approached the owner about the possibility of selling. The owner is willing to sell. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the ,'"1 acquisition of 5833 - 2 1/2 Street N.E. for $46,700. IIPON A VOICL VOTE� ALL VOTINa AYE, CHAIRPER80N COMMERB DECLARED THE MOTION CARRIED IINANIMOIIBLY. OTHER BIIBINE88: 15. UPDATE ON THE HOUSING REPORT Mr. Fernelius stated the program is extremely successful. Ms. Dacy stated staff is trying to get Fridley Focus coverage of the 100th loan. Mr. Burns stated that Hyde Park has a neighborhood newsletter. A copy of the newsletter was shown to the members. 16. UPDATE ON SOUTHWEST OUADRANT Mr. Prairie asked what progress had been made on the Southwest Quadrant. Ms. Dacy stated Rottlund is building one model of each type of housing. The plan is to have these completed about September or October. Rottlund has a waiting list already for units to be completed. �� ADJOORI�IlrIENT : HOIIBIN� � REDEVELOPMENT AIITHORITY MTt3. JIILY 11. 1996 PAaE 17 /"� ' MOTION by Ms. Schnabel, seconded by Mr. Meyer, to adjourn the meeting. QPON A VOICL VOTE� ALL VOTINa AYE, CBAIRPER80N COI�IIKER6 DECLARED THE MOTION CARRIED AND THE JIILY 11, 1996� HOQBIN�3 AND REDEVELOPMENT AIITHOiiITY MEETINa ADJOIIRNED AT 1Ot15 P.M. Respectfully submitted, � Lavonn Cooper Recording Secretary i"� � � �� r''1 8 I G N- I N 8 H E E T HOIISING AND REDEVELOpMgNT AIITHORITY MEETING, July 1 1, 1996