HRA 05/08/1997 - 29798�
CITY OF FRIDLEY
HOUSING & REDEVELOPN�NT AUT80RITY MEETING
1��,Y 8, 1997
CALL TO ORDER:
Vice-Chairperson Schnabel called the May 8, 1997, Housing and
Redevelopment Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Present:
Members Absent:
Virginia Schnabel, Jim McFarland, John Meyer,
Duane Prairie
Larry Commers
Others Present: William Burns, Executive Director
Barbara Dacy, Community Development Director
Jim Casserly, Financial Consultant
Grant Fernelius, Housing Coordinator
Rick Pribyl, Finance Director
Craig Ellestad, Accountant
Frederic Knaak, City Attorney
Councilmember Billings
Paul & Joyce LaDuke, 6972 Lakeview Drive,
Lino Lakes, Minnesota
Joe Harding, 821 Raymond Avenue, St. Paul,
Minnesota
Dan King, Linn Companies
Steven Schwartz, Dealers Manufacturing
Wade Carlson, West Central Environmental
Consultants
APPROVAL OF APRIL 10, 1997, HOUSING AND REDEVELOPMENT AUTHORITY
MEETING:
MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the
April 10, 1997, Housing and Redevelopment Authority minutes as
written.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON DECLARED THE
MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1.
CONSIDER RESOLUTION AUTHORIZING EXECUTION OF DEVELOPMENT
CONTRACT, COMMERCIAL RAIL PROPERTIES, INC.
n 2. CONSIDER RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF
� TAX INCREMENT PLEDGE AGREEMENT RESPECTING $9,575,000 GENER
OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1997A
�,--1 HOUSING � REDEVELOPMENT AUTHORITY MTG., MAY 8, 1997 PAGE 2
3. REVENUE AND EXPENSES
Mr. Ellestad provided copies of additional expenses needing
approval as outlined in his memo dated May 8, 1997.
Mr. Meyer asked that the additional expenses be discussed as a
separate item.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the
Consent Agenda, except the additional expenses.
UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCffi1ABEL
DECLARED T� MOTION CARRIED UNANIMOUSLY.
ACTION ITE'N!S •
4. CONSIDER RESOLUTION AUTHORIZING EXECUTION AND DEVELOPMENT
CONTRACT, LINN PROPERTIES
Ms. Dacy stated at the last meeting a motion to authorize staff to
prepare a development contract failed on a tie vote. The HRA did
�,..1 approve the resolution to create Tax Increment Financing (TIF)
District No. 16 and to modify the redevelopment program and
project area. Subsequently, the City Council on April 28 approved
its corresponding approvals to create the TIF district.
Ms. Dacy stated, since the HRA meeting, Mr. Casserly has met with
Chairperson Commers who had a number of concerns about the
proposal and subsequent to that has met with the developer. Mr.
Casserly has a presentation to update the HRA. At the conclusion
of Mr. Casserly's remarks, staff and Mr. Casserly will be prepared
to answer any questions. Included in the agenda packet is a copy
of the resolution to authorize the execution of the development
contract.
Mr. Casserly provided copies of his memo dated February 9, 1997,
regarding Project Recapture Provisions and copies of a proposed
revenue note. When he and Mr. Commers met, Mr. Commers' concern
was setting up a program where we would be involved with a tenant
improvement assistance program, and he was concerned that while
that may be a worthwhile activity but with limited resources we
need to be careful about how we went about that. Mr. Commers also
pointed out that the HRA has had experiences where we have not
provided assistance where there has been questions involving some
major improvements. They reviewed this project. Mr. Casserly
emphasized that this is not a traditional kind of project. This
really fits into a redevelopment program, and suggested this be
^ considered iri several different ways.
^ 80USING & REDEVELOPMENT AUTHORITY MTG., 1�aY 8, 1997 PAGE 3
Mr. Casserly stated half of the project is the demolition of
existing structures, land assembly, site preparation, etc. These
are the very traditional kinds of things the HRA has done for
years. The other half of the project is the restoration of an
existing building and bringing that building up to code. In using
that approach, Mr. Commers acknowledged that he thought the
additional costs were as had been presented or $,175,000, and that
he was comfortable with that figure. Mr. Commers asked Mr.
Casserly to figure out some arrangement to recapture some of the
HRA's investment acknowledging that part of this project seemed to
be more of a tenant improvement activity.
Mr. Casserly stated he went back and found a formula they had
worked on four years ago when trying to do the project across the
street. As you may recall, they had advanced pretty far with the
project. He found a memo dated 1993 dealing with recapture
provisions, and it was essentially the provisions that had been
worked into a redevelopment contract for the northeast corner.
The project ultimately did not proceed, but it was not because of
the arrangements for the development contract. He faxed the memo
to Mr. Commers a few days ago and then spoke with him at length.
^ Mr. Commers felt comfortable and could support this if we were to
work out some arrangement with the redeveloper for recovery of
half of the investment in the project. Mr. Casserly spoke with
the redeveloper's representative, went through the formula and
explained that this is not cast in stone and needs to be worked
out for each project. We are willing to work this out. They do
understand the concept is to try to recapture part of the
investment and the approach would be to essentially follow the
formula as laid out and cut the bottom line in half representing
that half of the project is a more traditional redevelopment
project and half is more of a restoration. That is the approach
they have been trying to work out.
Mr. Casserly stated Mr. Harding is here representing Mr. Linn. He
has told Mr. Harding that he thought this was workable. The
proposed revenue note shows the proposed cash flow. The
redevelopment contract would be very much like those recently done
with a revenue note for $175,000, then it would contain a
recapture provision for roughly half based on the formula. This
needs to be fine tuned to fit this project.
Mr. Harding stated Mr. Linn was out of town and had asked him to
stand in. He spoke with Mr. Linn today subsequent to his
conversation with Mr. Casserly, and Mr. Linn is very much
generally in agreement but he does not quite understand it because
this just came to them yesterday. Mr. Linn is in agreement with
his understanding of the proposal. Mr. Casserly and he have
wrestled with the numbers but he thought they could come to some
^ HOUSING 6 REDEVEI�OPMENT AUTHORITY MTG. , 1�aY 8, 1997 PAGE 4
accord. On Mr. Linn's behalf, he would like to say to get on with
the developers agreement and they will work it out. It has to
come back through the HRA anyway.
Ms. Schnabel stated it would appear that there are areas that
still have to be negotiated and worked out. Would something be
done for the next HRA meeting or should the HRA proceed at this
time?
Mr. Casserly stated they know what the improvements will be and
they have reviewed the expenditures and what is reimbursable. The
amounts are worked out. If the concept is acceptable to the HRA,
the only thing they would need to fine tune is the recapture
provisions which must be signed by Chairperson Commers and Mr.
Burns. He would hope the HRA could approve the resolution knowing
the final sign off would have to be approved.
Ms. Schnabel asked if Mr. Harding was in agreement.
Mr. Harding stated they were.
� MOTION by Mr. Meyer, seconded by Mr. Prairie, to 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 Linn Property
Holdings, L.L.C.
Ms. Schnabel stated she felt more comfortable to proceed with the
fact that Mr. Commers has had a chance to review the request and
seems favorably inclined to approve.
UPON A VOICE VOTE, ALI� VOTING AYE, VICE-CEAIRPERSON SCffiJABET
DECLARED THE MOTION CARRIED UNANIMOUSLY.
Ms. Schnabel asked staff to report back in June.
5. CONSIDER ACQUISITION OF 5800 - 2ND STREET N.E.
Ms. Dacy stated Mr. Knaak was at the meeting to make a brief
presentation to answer questions that were raised at the last
meeting. The HRA can then act on the request to purchase the
property at 5800 - 2nd Street.
Mr. Knaak stated he was asked to come to the meeting to answer
specific questions regarding the use of the condemnation authority
for the purpose of acquiring single family housing in the City of
Fridley. He asked in response to that issue for some
/""\ clarification of what was specifically the issue that staff had in
mind. Ms. Dacy and staff did a good job of focusing his attention
^ HOOSING & REDEVELOFMENT AUTEORITY MTG. , I�Il�IY 8, 1997 PAGE 5
on what the general inquiry was at the last meeting. In response
to that, he drafted a memo to Ms. Dacy, a copy of which has been
provided. He would like to go over the options that the HRA has
for condemnation with the City. The condemnation authority, in
the statutes that we are talking about, is authority vested
exclusively in the City Council. In instances where a hazardous
building or condition is believed to exist, the City can commence
procedure, pass an order which has the effect to commence
condemnation proceedings. By passing an action, the owner that
would have interest in resisting or not wanting abatement or
razing of the hazardous building to occur has 20 days to file an
answer and, at that point if there is a contest as to whether or
not it is hazardous or whether or not it should be razed, there is
a trial on that issue.
Mr. Knaak stated, subsequent to that, if there is determination in
favor of the City, the City has a number of options. They can
either follow through with the order and raze the building and/or,
in the language that he likes to use, use the alternative option
where it can raze the building and charge and assess those costs
to the property which would then hopefully be given back to the
�.,1 City upon sale of the property.
Mr. Knaak stated another option available after the finding or
determination of hazardous conditions is condemnation. At that
point, the HRA could commence condemnation proceedings and seek to
secure or purchase the property. That is a public purpose and the
City is allowed at that point to transfer the property to the HRA.
Mr. Knaak stated his understanding is that the crux of the
question is if that is cheaper, is it effective, and is it a good
and viable alternative to voluntarily purchasing substandard
housing. His response to that generally is yes. Ordinarily it
would be better for the HRA to voluntarily acquire property. His
reason for making that statement is that ordinarily the procedures
and processes that are followed are involved and tend to be
expensive. It is good for lawyers but not necessarily good for
lawyers' clients. Because this involves the involuntary
acquisition of private property, there are lot of procedural
pitfalls and processes that you must get through in order to
arrive at the end result. If the end result is the acquisition of
property, you have to go through in essence two separate judicial
proceedings in order to get there. It is a very effective
procedure. He has recommended it for one particular case where
you have abandoned property and there is a serious hazard on site.
Ordinarily, you have no right to come in and raze a building
because it is private property. Where you have situations where
/"'\ there are public health and safety involved, you need to be able
to do some things. This is an expediting procedure which would
^ 80USING � REDEVELOPMENT AUTHORITY MTG.� 1�iY 8, 1997 PAGE 6
allow the City to do what needs to be done in relatively extreme
cases. It is used quite sparingly for that purpose. He has been
in practice for 18 years and in that time he has dealt with nine
of these cases. Most of those cases were abatements. In only one
instance did the property end up with the City and that was a
voluntary purchase agreement.
Mr. Knaak stated it is because of all the things that can happen.
For example, in one instance there was a lien holder who was
engaged in some speculation and by filing the answer to the
original complaint by the City was able to buy for themselves a
three-month delay which was almost all they needed to take full
possession of the property. That is not to say that this is not
an unavailable or unattractive alternative on some occasions.
When a property owner is not available and you are dealing with
what is clearly a hazardous condition, it is a method where you
could expedite the basis to raze the building and, once you have
razed the building, commence condemnation proceedings and follow
through and acquire the property. The way the statute is set up
as a practical matter, you are invariably better off trying to go
to a voluntary acquisition if you have a procedure in place to
^ assure that the price you are offering is close to the real price
or appraised value. As a practical matter as well, that is not
likely to be much different from the condemnation proceedings with
all of the costs involved.
Mr. Meyer stated he did not have any real questions at this
moment. He understand the explanation of the statute. He would
like to discuss the matter in general. His concern arises because
of the amount of money that we are offering the owner of this
property. As an example, his house is assessed at $35/square
foot. As far as he knows, it a completely salable house. The
habitable area in this residence is assessed at $75/square foot.
As far as he is concerned, something is out of kilter with the
system of appraisal or acquisition with such a disparity between
an average salable home and this particular residence. It is
unconscionable, and he does not understand it. He thought there
should be other methods to achieve the result of getting rid of
substandard homes in the City of Fridley. He did not think they
should pay this kind of money. He understands the difficulty and
the costs, but those are beside the point in a way. There are
other methods to achieve what we are trying to achieve and still
be fair to the owner. If, for example, we would offer the owner
some amount of money. As he remembers from the last meeting, this
is a house with 700 square feet, no basement floor, broken joists,
a caved in basement wall, deficient plumbing, bare electrical
wiring, and in need of exterior repair and paint. The house had a
^ For Sale sign on it. As far as he can see, he cannot conceive of
anyone buying that house. If we want to get rid of the house,
�.-.� HOUSING & REDEVELOPMENT AUTHORITY MTG. , NAY 8, 1997 PAGE 7
offer the owner $20,000 to $25,000 or something of that nature,
but certainly not anything what we are thinking of doing. Then,
if there is movement on the part of the owner, we could to other
things - start condemnation proceedings, issue a memo listing the
deficiencies and demand that within a certain period of time to
abate those conditions otherwise there will be some action taken.
This would let the person know that we are serious in getting rid
of that house but not with the kind of money we are talking about.
Mr. Meyer stated he thought this was something that goes beyond
this particular residence. We have other residences in the City
that are marginal or substandard, and there are other owners who
will be asking for the same type of largess. He thought this was
wrong and expensive and, in addition, is a scandal on the
taxpayers of this community to give this kind of money for this
kind of housing just for the sake of getting rid of it. There are
other methods that we should try, and he thought they should re-
examine their procedures. He is fully aware that the City
assessor and independent appraiser have both blessed this figure.
His answer to that is that there is something wrong with the
system if this is the case.
^ Ms. Schnabel asked if there were any other alternatives available.
Mr. Knaak stated, if you are dealing with something that is
generally a hazardous building, the burden is on the City, at
least once, to establish that there is a hazardous condition
before you can go much further with this. If you are dealing with
a nuisance which can be abated, certainly you can raise those
issues and you can say to the owner that you have a substandard
building with probably hazardous conditions, here are our options
and the amount of time we will give for the owner to abate these
conditions. It has been his experience that the owner would
probably have abated the nuisance. Most people who own a home do
try to keep it up. As a practical matter, a house in a
deteriorating condition is often related to an owner's
deteriorating financial condition as well. As a practical matter,
that does not seem to create much leverage. Actually going in,
doing the abatement and assessing it does take care of the problem
but it may also make the property less salable. The result of the
cost for the necessary work to abate the nuisance may be assessed,
but by doing that you may actually increase the cost of the
property that you are trying to recover to greater than what the
market will bear. Certainly, the City has a full range of options
available, and he did not know why at least some of that could not
be communicated as part of a pro-active effort.
^ Mr. Burns stated that one of the topics that came up was how do we
spot a nuisance or a hazard. It was staff's opinion that, if the
�"'�
/"�
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80USING & REDEVELOPMENT AUTHORITY MTG., 1�iY 8, 1997 PAGE 8
nuisance or hazard were not readily viewable from the curb, it is
difficult to assess that a hazard even exists. How easy is it to
enter homes to determine that these conditions exist?
Mr. Knaak stated it is very difficult. The most common use that
he is aware of is the garbage nuisance where there might be a
medical call where a medical person saw the garbage. It can be
difficult. In other cases, it is less difficult but the nuisance
is probably such that you would not need to do much about it.
Mr. Meyer asked if the building inspector could come in for any
reason.
Mr. Knaak stated no, unless you are in the process of doing
repairs or seeking information. As a practical matter, unless you
have an ordinance authorizing entry and you have a reasonable
reason for going in, if someone refuses your entry, you will need
a warrant for probable cause to enter. Under some circumstances,
you can get a warrant but it is not easy.
Ms. Schnabel stated she has heard the terms hazardous, nuisance,
and substandard. She would like to know if there is a distinction
or if there is a definition for each.
Mr. Knaak stated there are definitions for each. The ordinance
defines nuisance in the City code. Hazardous as far as property
is defined as any building or property which because of inadequate
maintenance, dilapidation, physical damage, unsanitary conditions
or abandonment, constitutes a fire hazard or a hazard to the
public safety or health.
Mr. Meyer asked if the statute talks about hazards to individual
within the home.
Mr. Knaak stated hazards to health would be garbage. Conditions
other than that would have to be a finding on the part of the City
and would have to be quite clear on what that is. One would have
to persuade a judge to allow the City to intrude on private
property. The courts are reluctant to do that. The courts have
been very circumspect in allowing cities to go any further than
they need to in order to address the hazard or nuisance.
Ms. Schnabel asked if the problem they are faced with was common
in other communities. Are there any other communities finding
some answers or success in trying to address these issues?
Mr. Knaak stated he did not have multi-community experience. He
frankly finds what the HRA is doing here intriguing because it is
easier and cheaper than what they are doing in other communities.
^ HOUS ING & REDEVELOPN�:NT AUTHORI TY MTG ., NlAY 8, 19 97 PAGE 9
What he sees by and large is that by the time people are prepared
to use the ordinance and take action, they are dealing with a
significant level of neighborhood frustration. The City is
frustrated with repeated attempts to enforce zoning codes and in
dealing with eyesores over a long period of time and people will
resist efforts to do something about it. These tend to be very
difficult cases. To be seeing as he sees here a voluntary effort
strikes him as pretty imaginative. He did not know what
Minneapolis was doing. In other local communities he has not seen
anything like this. There are ways you can as a City leverage the
power that you have under the statutes to bring focus into
negotiations early on, but you need to be aware that there are
pitfalls. It really is a vehicle of last resort. He recommended
it in Fridley because the owners were not around, there was a
genuine hazard with a broken sewer pipe in the basement, open
paint cans, etc. Even in this case where there was clearly a real
pressing health and safety issue, it still took quite a long time
before they were able to get into the building, abate and take
care of the problem. A better solution is to come up to the owner
and ask them if they are interested in selling the property. It
can save everyone a lot of grief. That seems the.rational way of
� doing it. If you cannot get a good price and you are forced to
abate the situation, then you do have with this condemnation
process a process with teeth but you must know that it is an
uphill fight.
Mr. Meyer stated they have had uphill fights before and have
pulled condemnation proceedings before, but it has not stopped
them from other causes completely besides hazardous and other
conditions. When working on the southwest quadrant project, we
did not hesitate then. Now we are faced with the situation where
someone is asking us to pay too much for their property, and he
thought they must stop and say this is enough. He is sure it is
cheaper and less grief, but it goes beyond that. We have to look
at other houses down the line. Are we sending the message to
other owners of substandard houses that all they have to do is let
their house deteriorate and the City of Fridley and the HRA will
bail them out to the tune of a non-understandable assessment? How
many others are out there waiting for us to kowtow to this kind of
easy path? He thought this was a good time to try something even
though it costs us some dollars. Before going to condemnation
proceedings, offer a low price such as he suggested. He did not
know the circumstances of the individual. The property now is
probably unsalable. That person would be well advised to listen
to a minimal and fair offer. He thought this is the time to
decide that there is something wrong with the system of
approaching this and at least trying another approach to these
�"'\ substandard homes.
^ HOUSING & REDEVEI�OFN�iT AUTHORITY MTG. , L�iY 8, 1997 PAGE 10
Ms. Dacy stated she would like to make two comments. One of the
general statements about whether we are going down a road where
the HRA would be duped into paying more costs than what the
property is worth and are we establishing a program to eventually
catch up with us and encourage people not to repair their homes.
Staff is saying that that is not the case. When staff approaches
the property, they have a variety of options available - voluntary
acquisition, tax forfeit procedures, etc. There are three or four
options that staff can bring to the HRA. Because of the right of
entry issues, their ability to walk into someone's home to get an
appraisal is through voluntary contact and by asking the person if
they are interested in selling their property. Staff approached
this acquisition on that basis. Unless the attorney advises
otherwise, based on what staff knew when they approached this
site, staff had no basis to go into the home and identify hazards.
She thought it would not be appropriate to switch gears on this
site. They approached this site with a series of options and
identified those which fit that particular acquisition. The City
Council is evaluating a point of sale ordinance which would
require correction of hazardous conditions at the time of the sale
of the property. That will not get at every one but that is in
^ the future for the City Council.
Ms. Dacy stated, secondly as far as this particular site and aside
from the cost issue, the scattered site program was set up to
acquire those properties that are in such a condition and/or
design that would meet the criteria set out in the statute. There
is a risk that, if we make an offer at one-half the amount as has
been suggested, the owner would turn that down and the property
can remain on the market at an amount higher than that suggested.
There is the possibility there could be a buyer. This site meets
our criteria and she would like to see new construction and a new
home to jump start the neighborhood.
Ms. Dacy stated, as a third point, even if we would start
condemnation procedures for this property, her understanding is
that we could identify these hazards and the owner could say
he/she could fix these and we still do not achieve the purpose of
removing a smaller house and creating newer housing stock in the
area. She did not disagree with finding the most cost efficient
method to carry out the program. She is suggesting that staff is
doing that. Staff is looking at all the options and choosing the
right tool for the site. She thought they had gone too far with
this site. There is a legal issue here and she would not
recommend that we change on this particular acquisition. Staff
needs some sense of direction that you want to continue the
voluntary acquisition program. The TIF laws are in place.
� Mr. Prairie stated, because this transaction has been going on and
� HOUSING & REDEVELOPMENT AUT80RITY MTG., 1�Y 8, 1997 PAGE 11
before they approve it, he thought they should consider Mr.
Meyer's concerns about homes in the future. Even if he voted for
it, he agreed with Mr. Meyer that we should try to be more cost
effective.
Ms. Schnabel asked if another commission in the City could take a
look at this. The City Council is looking at an ordinance. Could
another commission take a look at this and come up with some
recommendations about these kinds of issues that would lead us to
adopting an ordinance that would help them in situations like this
in the future?
Ms. Dacy stated she thought this issue is an HRA issue. This is
true redevelopment. We modeled this program after the scattered
site program in Richfield. Robbinsdale has been doing this for a
number of years. Out of our program, the City of Crystal is doing
it. The Cities of Minneapolis and St. Paul got in the act after
we proposed our law. In terms of the code enforcement approach to
an acquisition process, it is obvious that the statutes are in
place, but there is also some significant criteria about what has
to be present in that particular structure. Staff is doing that
�,,.1 right now. If the house is owner occupied, it presents another
whole series of issues which makes the voluntary acquisition
cheaper. We do not have to pay relocation costs. We do not have
to wait six to eight months to get through the condemnation
proceedings. We do not have to argue with the judge that this is
a hazard. The judge is going to defer to the property owner.
This slows the rehab process. The program has been in place and
successful for the last few years and is cost effective. Staff is
saving the HRA money and recapturing some of the increment back
when a new house is constructed.
Mr. Burns stated he thought Ms. Dacy made a good point when she
stated this is the most effective tool in trying to accomplish the
goal. If we want to see a house rehabbed, it would not be
included in the scattered site program. Most of these properties
are not able to be rehabbed or are too small or the lot is too
small. There is something that we want removed. Code enforcement
does not accomplish that. The only tools we can use are
condemnation and voluntary sale. Both involve an appraiser. No
matter which we are going to accomplish this objective, we still
have to rely on the appraiser. If they are not doing their job
properly, there is another. He thought that the appraisers they
use know that there is the possibility of using a review
appraiser. In addition to that, we have our own internal assessor
that works for the assessing division of the finance division to
check on the appraiser. He thought there were plenty of checks
� and balances to make sure we have a valid appraisal process. He
is very conscientious about getting the most value for the
�...� HOUSING & REDEVEI�OPMENT AUT80RITY MTG. , P�iY 8, 1997 PAGE 12
taxpayers' money.
Ms. Schnabel stated she did not think anyone means this to be
critical of what the City is doing. She is in agreement of the
program. It just seems like a high price to pay for a property
that appears to be hazardous or in a nuisance state, and it is
looking for an alternative way to still obtain that property but
without paying such a price. On the other side, the owner could
say they want a fair price for what they have, the market price is
a fair price and they should not be penalized. She did not think
anyone was being critical of the staff or of the program.
Mr. Burns stated he was expressing frustration. If we have the
direction to accomplish the scattered site objective to remove
objectionable properties, we have no alternative than to rely on
the appraiser. Eventually, the tools rely on the appraisers. The
other disappointing aspect is the sale price of the properties.
We do go through a bidding process. It has not been very
attractive from the standpoint of acquisition or from the
standpoint of the sale price. The program does remove some
substandard properties.
� Mr. Casserly stated it occurs to him that the HRA appears to be
experiencing sticker shock. He has worked in other communities
where they have expressed this problem. He did not know if they
had been exposed to the problems where a contamination issue has
been involved. What is frustrating is that from the municipal
side you believe that the property should have a much lower value
because of contaminants or pollution but he has never found the
price to adequately reflect that concern. That is what the HRA is
experiencing in this situation. It does not work out how you
think it should. It is a matter of having to experience it and
walking away constantly confused. It becomes more obvious when
you are dealing with a site that needs remediation. He cannot
figure out why the acquisition price is not discounted by the cost
of the remediation. We have to go through an appraisal process
for acquisition. We are stuck with that and have to work with it.
Mr. Meyer stated his answer to that is why. He has a house with
two floors that are habitable. The tax assessor says that house
is worth $35/square foot. We are talking about giving $75/square
foot to someone whose house cannot probably be sold. We are bound
by the tax assessor. We are bound by the appraisers. As far as
he is concerned, that leaves a great unanswered question of why
are we bound by people who, if this is the case, cannot tell the
difference between a$75/square foot house and a$35/square foot
house. That has to be rubbish. There must be more justice in
/"`� assessing what people pay for taxes. He cannot believe that there
isn't something wrong with a whole system that allows that to
� HOUSING � REDEVELOPMENT AUTHORITY MTG., MAY 8, 1997 PAGE 13
continue. He thinks staff are excellent. The program is a good
one and administrated very well. He thought there was a point
where we put a check and a balance on a certain phase of the
acquisition. Somewhere we have a right to use our common sense to
go beyond the appraisers and assessors, if you please, and decide.
If they say it cannot be done, maybe we shouldn't try to do it.
We had no reluctance in the southwest q.uadrant to take the
apartment buildings and take our chances with the commission set
up to appraise it because we wanted that property for other public
reasons. Let us do the same thing with this house.
Mr. Burns stated, in the case of the apartment buildings,
condemnation was a last resort. The City tried for months to
negotiate a purchase price before went to the condemnation
process.
Mr. Meyer stated there if we had offered twice as much as he
wanted or was entitled to, he probably would have taken it. That
is what we are doing with this property as well.
Mr. Burns stated in those condemnation cases we are ending up
� paying 130o to 150% of the appraised value on those properties by
doing through the condemnation process. In looking at the Suh
condemnation, that was a bona fide rip off and the City paid for
it. We went through a condemnation process that was a last
resort. That was the only way we were going to get that because
the owners would not negotiate fairly.
Mr. Meyer stated we went through the process of condemning it,
turning it over to a commission to decide that. We did not
arbitrarily decide to just top fighting. We got disappointed. In
this case, he thought they had an excellent chance of getting
something different from what we are offering. Beyond this is the
precedent we would establish in dealing with some of these things.
He thought it was time to tighten our belts and do the hard thing.
Ms. Schnabel stated she suspected that we have already entered
into negotiations on this particular property. While the points
are well taken, she thought they have to establish something for
the future, but she did not know that they could stop this at this
point.
Mr. Meyer stated this is just like any real estate sale. It isn't
over until it's over.
Councilmember Billings stated he thought they had progressed from
^ the overall general topic to a more specific discussion of an item
on the agenda. Unfortunately, he does not have enough detail to
�•-� 80IISING & REDEVELOPMEIQT AUTHORITY MTG. , N�iY 8, 1997 PAGE 14
adequately discuss that item on your agenda so he would prefer to
discuss the overall concept. He came to provide back up
information on some other items but this discussion has him
intrigued. He asked Mr. Meyer, out of curiosity, if his
determination of the square foot pricing included the land value.
Mr. Meyer stated on his appraisal he took $20,000 off for his lot
and he took $5,000 off the other lot. So basically it is
structure to structure.
Councilmember Billings stated he thought they would find on a more
plush home the value of the property becomes a smaller percentage
of the total value. On a home that is in sad shape, the land
value becomes a higher percentage. He has no idea what the
appraised value of the land and buildings on these sites are. He
was sure that anyone at home who is watching is going to agree
with you that, if in fact someone had this on the market, the
first thing he would take a look at would be the advertised price.
That is a matter of public information. If that advertised price
is in the realm that Mr. Meyer is speaking of $25,000, then
perhaps you are right. Perhaps the HRA should take a step back
^ and re-evaluate where they are at. He would hope that staff and
the appraisers have taken that fact into consideration. If they
have not, he would be sadly disappointed. In a more general broad
term discussion, he thought Mr. Meyer mentioned the fact that
there was some condemnation of apartment buildings across the
street. As you will recall, that was a decision that was made
jointly between the HRA and the City Council on a 9 to 1 vote.
Being the one dissenting vote on that, he would like to remind Mr.
Meyer that in addition to the cost of the acquisition, the
attorneys fees for the condemnation proceeding, and everything
else, the City paid a substantial sum of money in a lawsuit that
was brought by the occupants of the building. Through no intent
of the City of Fridley, we somehow managed to do some damage to a
protected class of people. His guess would be that if we start
looking at the occupants of these properties that are in such sad
shape we are probably going to find that they are close to or
below the poverty level in terms of income and we could find
ourselves being faced with an accusation that we would have to
defend in court at substantial cost to the City and/or the HRA
that we are aggressively going out and persecuting this class of
people that cannot afford to maintain their houses. That is not
our intent. As I am sure you are aware, the courts in this land
are severely tilted toward the oppressed, actual or perceived. We
as a City would be perceived as those with deep pockets, and in
our society today we would ultimately lose that. That may be a
defeatist attitude, but he thought that is a practical attitude.
/"1 He cannot address the merits of the particular acquisition you
were discussing. He would hope that the HRA would use all
^ HOUSING & REDEVELOPMENT AUTHORITY MTG., 1�Y 8, 1997 PAGE 15
diligence and wisdom in making their determination on how they
vote. He thought that this one property notwithstanding the HRA,
staff, and the City Council is pursuing a reasonable course in the
acquisition of scattered sites.
Councilmember Billings stated another factor, all the HRA members
were probably here in the mid-60's when the HRA got started and it
got shelled many years and they were not able to accommodate any
of the things we should have been working on in the mid-60's until
the early 1980's. One of the reasons for that was the scare
tactics of a few people who went around the City and said, if you
elect this guy mayor, he is going to come in and tear down your
houses and they are going to be inside your houses looking at what
you are doing. Certainly, from a political standpoint, he thought
they need to be reassuring the citizens of the City that is not
something that we are advocating. He is not saying that we should
be spending $1 for a 50 cent ice cream cone. There are trade offs
and there are things that we have to take into consideration.
There are events that are well intended but are perceived as other
than well intended. If there are enough people out there that are
willing to be reactionary and militant, we could find ourselves
� faced with a situation where we have to wait until the housing
falls down and then see where we are at. He didn't think any of
us wanted to do that. There is a balance somewhere. On this
particular piece of property, he did not know if this could be
achieved. Perhaps it makes sense to pay more because of the
peripheral things that you get.
Mr. Meyer stated he needed no reminder of the 1965 HRA. He was
one of the appointees at that time. In addition to people saying
that other people would tear down their houses, the other cry was
that the HRA would saddle your house with unconscionable tax
burdens to pay for renovating other people's properties. He knows
those forces have been mute for the last few years, but they are
still there. This is one reason he has been concerned on this
issue and other issues for the scattered sites, loans, etc., that
we create no scandal to the public to make them think that the HRA
is subsidizing people who can do things for themselves readily and
who are here getting special consideration. One way to do that is
to insure that our programs are based on demonstrated need for the
community and aid is given to those people who truly need aid, and
to watch how far beyond that line we step.
Ms. Schnabel stated she thought the HRA should move ahead on this
particular proposal.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the
� purchase of 5800 - 2nd Street N.E. and to authorize the Executive
Director to execute the necessary documents to complete the
�
�"�
�
HOUSING � REDEVELOFMENT AUTHORITY MTG., 1�iY 8, 1997 PAGE 16
purchase.
UPON A VOICE VOTE, WITH MS . SCffi�iABEL, Nat. MCFARLAND, AND 1�Ilt.
PRAIRIE VOTING AYE, AND NIlZ. MEYER VOTING NAY, VICE-CBAIRPERSON
SCi�iABEL DECLARED THE MOTION CARRIED BY A NIl�JORITY VOTE .
6. ADDITIONAL EXPENSES
Mr. Meyer asked how the acquisition got onto the additional
expenses.
Mr. Fernelius stated ordinarily they would not do this. Given the
circumstances with this particular acquisition and the timing, it
was necessary to get approval of the check on the agenda. It was
done after the regular agenda went out and it would have been
considered as part of the acquisition. Had the HRA not approved
the acquisition, the check would not have been processed. That is
the reason behind the expense being on the agenda.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the
additional expenses as outlined in Mr. Ellestad's memo of May 8,
1997.
UPON A VOICE VOTE, ALL VOTING AYE, VICE-CBAIRPERSON SCffiQABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
INFORM�,TION ITEMS:
7. FRIDLEY EXECUTIVE CENTER UPDATE
Ms. Dacy stated she had no additional information to report. She
called MEPC to get an update but unfortunately they were unable to
connect. There are two building proposals out there. At this
time, we don't have any definitive responses.
Ms. Dacy stated she expects the draft inserts for the community
brochure at any time. She is waiting for the final proofs which
she will bring before the HRA.
Mr. Meyer stated it seems as though the HRA authorized the
brochure some time ago. What is the problem that this is being
delayed?
Ms. Dacy stated the brochure folder is done. When they prepared
the folder, it contained quotes from some of the major industries
in town and it was time consuming to get the quotes authorized.
On the inserts, we have about eight different types of inserts on
a variety of topics. This required a lot of research which is
time consuming to put together.
^ HOUSING 6 REDEVELOPMENT AUTHORITY MTG., MAY 8, 1997 PAGE 17
8. HOUSING FUND UPDATE
Mr. Fernelius stated last Wednesday, he, Ms. Dacy, Mr. Casserly
met with Michael Haley and Kathy Aanerud, who work for the
Minnesota Housing Finance Agency (MHFA), to discuss our request
for participation by the state in funding for our revolving loan
programs. The meeting went well. The MHFA representative seemed
interested in what we were doing. They did not commit to any
particular proposal, but they wanted to meet with us as well as
other first ring suburbs in similar situations to discuss ideas
and go from there. To that extent, it was a positive meeting. We
have more work to do. The sense that staff got from the meeting
was that it is going to take some time before something will
happen. There is a regional task force meeting next Wednesday
involving the first ring suburbs. He will be attending and will
report back at the next meeting.
Mr. Casserly stated a senator have introduced legislation asking
to do a study to analyze the needs of fully developed suburban
communities and to report back to the legislature. Whether the
timing will work for the next legislative session remains to be
� seen. It may take longer than that. The entire state did 2100
loans for last year. For our community there were 130 loans for
the same year. That shows the disparity that exists for the
needs. They were interested but he thought they were interested
in the complexity of the program and how it was being managed.
They were fascinated by how the originations were handled, how the
servicing was handled, the staff time and commitment, and saw it
as being cost effective.
9. CONSIDER THREE RESOLUTIONS FOR CONTAMINATION CLEAN-UP PROGRAM
FOR DEALERS MANUFACTURING, 5130 MAIN STREET N.E.
Ms. Dacy stated this is a request to apply to the Department of
Trade and Economic Development (DTED) Contamination Clean-Up Fund
and the Metropolitan Council Tax Base Revitalization Fund. The
request was brought to staff's attention by Dealers Manufacturing
Company. They have been in the City since the early 1960's and
are located at 5130 Main 5treet. The request is to ask the H�tA to
act as the applicant and essentially the sponsor of a grant
application to each of the above funds. Each of these programs
have been set up to provide funding sources for companies to
conduct these types of projects. The total project cost is
approximately $559,000 and includes costs that have been incurred
to date and also includes costs which will be incurred in the next
five years. 500 of the project cost is proposed to be funded from
DTED and the remaining 50o would come from the Metropolitan
^ Council application. DTED requires a local match which would come
from the HRA. DTED staff suggested the Dealers Manufacturing
�..�., HOUSING & REDEVELOPMENT AUTSORITY MTG. , N�iY 8, 1997 PAGE 18
Company could provide the source of funds for the local match.
Ms. Dacy stated, usually when the HRA provides assistance, it does
recover its funds either through tax increment or through a loan
repayment. A grant has not been a policy of the HRA. The company
is willing to provide a source of funds for the local match.
There is a deadline of next Thursday for both of the grant
applications.
Ms. Dacy stated there is a concrete container under the building
which cracked and leaked contamination into the surface area
underneath the building. When this was detected, the company
hired a consultant in compliance of MPCA requirements that they
prepare an interim response plan for a clean up project. They
have also installed a new technology well inside the building
which mixes water and air to treat the contaminants below the
surface. This system will be described in more detail by the
consultant.
Ms. Dacy stated, based on the information received to date, about
$273,000 has been spent on the clean-up by the company and they
^ anticipate spending $208,000 in the next five years. Essentially,
� the grant applications will help reimburse the costs to date.
Ms. Dacy stated the HRA is being asked to act as the applicant.
The application form states either the City or a public entity
such as the HRA has to act as the applicant. The company's
consultant, however, would be responsible for preparing the
applications, reports and details. The HRA would essentially act
as a pass-through agency. The HRA would be responsible for
reviewing invoices of the work that has been completed and work to
be done verifying that it is consistent with the grant
applications and submitting the invoices to the state or council.
They give the money to the HRA and the HRA passes it on to the
company. After applying on May 15, the decision would be made in
July. If the applications are awarded, there would be two
agreements that the HRA would enter into at that time for
administration of the grant. Staff is suggesting a separate
agreement with the company to verify that 1) they would provide
the funds, 2) they would indemnify the HRA from any liability
issues associated with the clean-up, and 3) they reimburse any
additional costs the City may incur as part of administrating the
grant.
Ms. Dacy stated the information provided includes a resolution
authorizing application to DTED fund, a resolution authorizing
application to the Metropolitan Council fund, and a resolution
/'1 authorizing the chair and executive director to execute an
agreement with the company to verify the three conditions stated
� HOUSING & REDEVELOPI�TT AUTHORITY MTG., 1�Y 8, 1997 PAGE 19
above.
Ms. Dacy stated another minor detail is that DTED staff suggested
the payment of the company to act as a local match. She contacted
the DTED staff and asked for a letter from their office or from
the attorney general to verify that this would be an appropriate
source of funds. Typically in the TIF world, a developer payment
as a source of what the state calls "unrestricted funds" is not a
legal source of funds. This is different because it is a grant
application. Staff requested the letter before determination of
the award of the grant that this is appropriate. Staff inet with
the company and thought they understood the City's position and
they have agreed to reimburse additional administrative costs.
Mr. Schwartz, Engineering Director for Dealers Manufacturing, and
Mr. Carlson, consultant, are present to answer questions.
Mr. Prairie asked what kind of services has the HRA provided in
the past like this.
Ms. Dacy stated this is new as far as she knew. We have done a
number of grant applications. Mr. Fernelius administers the CDBG
program and the home programs. It is not that it is unusual in
� terms of doing the paperwork. These pollution clean-up programs
are really new in the industry. There is a series of programs and
grants to see if some of these contamination issues can be
corrected and to enable companies to be able to obtain financing
so they can continue to operate. The environmental issues are
putting such clouds on the title and financing issues that it is
becoming difficult for some companies to continue operation.
Mr. Prairie asked if the applications had been done by others
before and if that is now changing.
Ms. Dacy stated the tax based revitalization program was created
as part of the Livable Communities Act passed two years ago.
There were three sources of funds created to help communities
redevelop or create a buildable site for new development. She
believed the DTED grant had been available for two years.
Mr. Prairie stated that clean-ups have been done for 20 years.
Ms. Dacy stated the federal source of funds was called the Super
Funds. Some of those funds are administrated through the MPCA.
From what she understands, there are a number of those sites that
have used a substantial amount of the dollars available for that
in addition to funding cutbacks. This is a local initiative,
^ local programs set up by the state and region to provide these
funds.
� HOUSING & REDEVELOPMENT AUT80RITY MTG., NIlDiY 8, 1997 PAGE 20
Mr. Schwartz stated he was the Engineering Manager at Dealers
Manufacturing Company. The Dealers Manufacturing Company is a
Minnesota corporation organized in 1961. The company has re-
manufactured Ford engines and engine parts since 1944. The
company acquired Fleet Supply and Machine in 1983 which permitted
the company to expand its business to include distribution of
small to medium size diesel engines. In 1987, the company moved
its St. Paul operations to the Fridley facility. At this time,
the company undertook re-manufacturing diesel engines. They
currently re-manufacture medium size (150-300 horsepower) diesel
engines at this site. In 1985, they moved the gasoline engine re-
manufacturing from Fridley to Portage, Wisconsin. By 1990, the
company had opportunities to expand its Ford dealership. They
sell basically through the Ford dealerships and have the territory
of North Dakota, South Dakota, Minnesota, Wisconsin and the upper
peninsula of Michigan.
Mr. Schwartz stated the company positioned itself with warehouses
in Milwaukee and a central warehouse in Minneapolis. In 1996 the
company moved its corporate headquarters and its main distribution
� center from the Fridley site to a facility in Brooklyn Center.
The company re-manufactures gasoline, automobile and truck
engines; diesel engines; engine components; and automobile parts.
The company uses its warehouse facilities in Minneapolis and
Milwaukee to distribute products directly to Ford automobile and
truck dealers. The company also distributes products through Ford
and other re-manufacturers throughout the United States and
directly to Ford Motor Company.
Mr. Schwartz stated the plant in Fridley is doing nothing but
diesel engines which they are shipping to the lower 48 states and
to Canada. The building in Fridley was constructed in 1961 for
the purpose of re-manufacturing gasoline engines and small parts.
It was originally 48,300 square feet. Subsequently with three
additions were built, the most recent of 7,000 square feet last
year. Currently, they have 66,112 square feet. They currently
have 207 employees on two shifts and will be adding a third shift
on Sunday. By the year 2001, they expect to have 417 employees on
three shifts. Sales are expected to continue to increase through
the year 2000.
Mr. Schwartz stated their employees are from the local area. 50%
are from Fridley or the first tier of suburbs connected to
Fridley. Dealers Manufacturing has always been a good partner
with the City of Fridley. In 1995, Dealers received the Fridley
Pride Business Beautification Award in the city.
�"\
Mr. Schwartz stated May 2 was a big day for the company. They had
^ HOUSING & REDEVELOPMENT AUTHORITY MTG., 1�aY 8, 1997 PAGE 21
been working hard to obtain a QS9000 quality certification and
last Friday they received unconditional approval. This meant they
had zero minor noncompliances. They have been supplier to Ford
Motor Company since 1993. With the current contamination on the
site, they are not able leverage any money against the property.
They have not applied for property tax relief due to the
contamination. They are paying full property taxes. Dealers
Manufacturing is applying for this grant aid to help with their
brown spot. They are requesting this because their capital is not
of infinite depth and without it they would have to make decisions
between the clean-up of the contamination, production equipment
and improvements, and enlargement to the facility.
Mr. Carlson provided handouts providing information on the history
of the project, site map, source area map, UVB cross section and
details, and cost estimates. Mr. Carlson is the environmental
consultant and has been working with Dealers Manufacturing since
19973. His experience with them is nothing but the very best.
They are a pro-active company in addressing environmental
concerns.
^ Mr. Carlson stated the engine re-manufacturing process requires a
number of cleaning processes and in the earlier years a lot of
solvents were used. In 1986, Dealers was given an order to
investigate a potential spill on their property. They thought it
was a spill on the ground surface. That started with an
investigation in 1988 by the MPCA to investigate reported spills.
This is now called a site screening investigation. In 1988, they
did not have voluntary investigation programs like today. All
they had was the Super Fund. Dealers Manufacturing went through
the scoring process and was placed on the list of priorities for
the Minnesota Super Fund. In 1993, they were able financially to
address the contamination issues on the property. That is when he
came on board.
Mr. Carlson stated it started out simple with an overall quality
plan and where the project would go. At the time, they did not
know if there was a problem and how big the problem would be. In
1994, they completed both the Phase 1 and Phase 2 work. The Phase
2 work was very extensive and included a significant amount of
drilling and a feasibility study. They identified some
contamination on the property. That contamination was in regard
to an old waste trap that was underneath the building. Dealers
had no idea that the problem had occurred. With the practices
back in the 1960's and 1970's, these solvents got into the waste
stream. There was a waste trap below the floor slab that they
cleaned out routinely, but it did leak and soil and groundwater
^ was impacted.
^ HOUSING & REDEVELOPMENT AZ7'PHORITY MTG. , NIl�iY 8, 1997 PAGE 22
Mr. Carlson stated in 1995 they conducted a pilot testing.
Because the problem was actually underneath the building, without
demolishing the building they had to dig everything up. They
looked at alternatives for treatment in place without causing
significant disruption to the business operations. They went
through a process of selecting remedial alternatives. They came
up with a new German technology which was installed in January
1995. The system has been operating for a year and they have seen
a significant clean-up on the site. This will be going on for the
next five years. Through this project, Dealers Manufacturing has
been able to operate on a voluntary basis, have been pro-active,
and have been able to reduce costs. Dealers has been recognized
by the MPCA as a model site. On the other side, it is very
costly.
Mr. Carlson reviewed the site map indicating the location of the
contamination. The source area map shows a close up view of the
inside of the building and the area of contamination under the
building.
Mr. Carlson stated the UVB cross section and details shows the
^ technology installed. They do not extract any groundwater to the
surface. They pump water from a lower screen in the well drilled
inside the building. The water is brought into the lower screen
and aerated in place so what you have is an in place circulation
cell. Water passes through that stripping unit multiple times.
Contamination is drawn off by vacuum and exhausted off the top of
the building. They have been running this for 16 months and have
found it very cost effective.
Mr. Carlson stated the last page of the handout is a breakdown of
the costs including incurred costs and estimates of future costs.
Mr. Carlson stated, regarding the grant applications, typically
these programs work with the voluntary programs. They require
that you have an approved response action plan. Dealers
Manufacturing was a little unusual in the fact that they had to do
some immediate clean-up work and do some aggressive work in the
source area. Their interim response is working so well that they
will not have to go through a final stage. They have the
qualifications for meeting the requirements for the grant.
Dealers again is a little unusual because they are a responsible
party. If the property was vacated, the state Super Fund would
look for responsible parties for remediation of the property. It
is a bit unusual, but the grants provide a good opportunity to get
reimbursed for some of the past costs and for future costs.
^ MOTION by Mr. Meyer, seconded by Mr. Prairie, to recommend
approval of a Resolution Authorizirig Execution and Delivery of an
� HOUSING & REDEVELOPMENT AUTHORITY MTG., MAY 8, 1997 PAGE 23
agreement By and Between the Housing & Redevelopment Authority In
and For the City of Fridley and Dealers Manufacturing Company for
a Pollution Clean-Up Program; a Resolution Authorizing Application
for the Tax Base Revitalization Account; and a Resolution
Authorizing Application to the Department of Trade and Economic
Development for Contamination Clean-Up Funds for Dealers
Manufacturing.
UPON A VOICE VOTE, ALL VOTING AYE, VICE-CEAIRPERSON SC�TABEL
DECI�ARED THE MOTION CARRIED UNANIMOUSLY.
10. RESOLUTION IMPLEMENTING THE PROVISIONS OF PREVAILIIVG WAGE
ORDINANCE
Ms. Dacy stated no action is proposed. She provided copies of the
ordinance adopted by the City Council. The ordinance would not
apply for the following: a) projects with a value of $25,000 or
less, b) housing projects or programs for owner occupancy, c)
housing projects or programs for rental rehab with eight or fewer
units, and d) and residential rehabilitation projects funded by
non-HRA or community funds. Unless otherwise indicated, staff
will place this on the June agenda to approve a corresponding
^ resolution as it applies to development contracts for the HRA
projects.
Mr. Meyer asked what the status was of this type of ordinance in
other communities.
Ms. Dacy stated, in the suburban community, the City may be the
first in terms of a local ordinance. It is typical for the
prevailing wages to apply in all suburban communities when state
funds or community funds are used.
Councilmember Billings stated he was available for questions. The
City Council adopted the resolution setting the policy for the
implementation of the ordinance based on the policy of Anoka
County. Basically, they used their language primarily. The City
Council did on a unanimous request of the HRA implement a similar
policy for placing it in our development contracts so the
developer can see how they are to interact with the their
contractors. He talked with Chairperson Commers about the
changes. Mr. Commers seemed to be comfortable with those changes
and, in concept, thought that the adoption of a policy by the HRA
was a reasonable practice.
11. HIGHWAY 65 STREET LIGHT DISCUSSION
Ms. Dacy stated a number of years ago the intersection design for
^ the Lake Pointe intersection was reviewed and approved by the City
and the HRA. A few months ago, we discussed this at the budget
�
�'_\
HOUSING & REDEVELOPMENT AUTHORITY MTG., NIl�,Y 8, 1997 PAGE 24
workshop and she advised the HRA that the streetlight issue may be
coming up.
Ms. Dacy stated it is now time to revisit the issue. The City
receive ISTEA funds which reduced the HRA's involvement in the
project financially from $1.9 million down to $389,000. It is
appropriate to decide whether or not the City wants to pursue
installation of the street lights along Highway 65 north to East
More Lake Drive. The City Council discussed this at their meeting
last Monday. Councilmember Schneider was not able to attend the
meeting. However, a majority were in favor of the project if
staff would meet individually with Councilmember Schneider, if the
HRA would evaluate the proposal and determine if it is also
agreeable, if there is any funding source which the HRA would be
the logical option, and the mayor requested a neighborhood
meeting.
Ms. Dacy stated, while staff is not asking the HRA to decide
anything at this time, they are asking for general direction if
the HRA is willing to evaluate the proposal. The consultants for
the intersection design need to know whether or not to include it
in the plans and specifications by July 1. They do have time to
conduct a neighborhood meeting. Staff would then propose an
action item on the June agenda. She reviewed the proposed
location of the street lights.
Mr. Prairie asked what the street lights looked like.
Ms. Dacy stated there were a number of options. The lights are
basically the typical highway light that is 40 feet tall. The
standard could be square, round or fancier with decoration. The
spacing is at 150 feet. NSP and MnDOT would have to review the
spacing according to their standards. The lights would be located
on either side of the right-of-way as you go north on Highway 65
stopping at East Moore Lake Drive. There are approximately 26
standards and costs vary depending on the type of fixture selected
and the number required.
Ms. Dacy stated it was suggested at the City Council meeting that
before the neighborhood meeting the City should pick the standard
it would like to proceed with and provide an informational meeting
around that particular design. The neighbors invited would be
those on the west side of the lake and east of Central Avenue
across from the beach area. Staff would answer questions and
assure the residents that the lights would be just on the highway.
Ms. Dacy stated she brought this to the HRA to bring it to their
^ attention, to answer questions, and to see if the HRA had any
initial comments on this proposal. These costs would be in
� 80USING & REDEVELOPMENT AUTHORITY MTG., MAY 8, 1997 PAGE 25
addition to the $389,000. However, the City and HRA are
experiencing a savings because of the receipt of the ISTEA funds.
Ms. Schnabel asked if the purpose of the lighting was decorative
or for safety. Is this a requirement?
Ms. Dacy stated she thought the lighting could be both decorative
and for safety. MnDOT does not require the lighting. If we
choose to install it, the City would have to comply with their
standards, design criteria, height and wattage. What is permitted
is the same as what is represented in a memo from Mr. Flora 10
years ago. They are using the same assumptions as 10 years ago.
Ms. Schnabel stated, if MnDOT does not require it, the lighting
then becomes an option to do it on our own.
Ms. Dacy stated to choose to install the lighting becomes
decorative in purpose but, once they install it, they may have to
meet some criteria. The thought process 10 years ago was the
overall design and decorative approach. At that time, there was
the University Avenue corridor study and design standards
� established. In reading the comprehensive plan from the 1980's,
there was a policy that the City in certain areas should invest in
design improvements to establish an attraction to the area, to
attract business and industry, and to try to improve the
appearance of the overall area. One of the comments was that it
helps to add an identity to the community. That is the same
concept that was discussed a number of years ago.
Ms. Schnabel asked if there was any statistics to indicate there
is a safety factor on Highway 65 at night.
Ms. Dacy stated she can research that. There is a Highway 65
corridor committee. She did know that an accident analysis was
done as part of their work program. They are looking at all the
intersections from Columbia Heights to the northern border of
Anoka County. They are looking at the entire road design and
signal systems. The design at I-694 will help in their traffic
flow. Staff did a video showing other examples of similar
projects in other communities.
Ms. Schnabel stated she was asking those questions because her
initial reaction is that she is not in favor of lights going up on
the lake. If we put in light standards, it can detract from the
lights that are there now. There is a certain something that
highlights the lake when lights shine on it. She would hate to
see us detract from that. She thought it was unique and a plus
� for the City. She was not sure they needed this lighting.
^ HOIISING & REDEVELOPMENT AUTHORITY MTG., 1�Y 8, 1997 PAGE 26
Mr. McFarland asked why the cost burden falls on the HRA rather
than on the City.
Ms. Dacy stated it is a policy question that the City Council and
HRA have to work out. In this case 10 years ago, a lot of the
design improvements and installations have typically been paid for
by the HRA as part of a revitalization program. In the case
approved tonight on 57th Avenue, tax increment districts are
established to help pay for the cost. In the past, the City has
assumed the role by paying the electric and maintenance for the
street lights. She believed there was a lot of discussion on the
maintenance role and who does it. Because this intersection and
the highway links Lake Pointe and Moore Lake, she thought that was
why it was linked to the HRA. There will be an action item on the
June agenda requesting installation.
12. UPDATE ON OSBORNE ROAD
Ms. Schnabel stated staff's memo indicated they are still waiting
for enough participation.
^ 13. UPDATE ON MEETING WITH ANOKA COUNTY
Mr. Fernelius stated the Anoka County expressed their concerns
that our decision to go with CEE has had the unintended
consequence of increasing their cost to administer the program.
Staff talked with them. Nothing was resolved. Staff reiterated
their position that the reason they chose CEE was to lower costs,
to consolidate services under one roof with one agency, and to
give better service to residents. Anoka County seemed to respect
that, but for some reason wanted Fridley staff to resolve that
issue which they did not feel was necessarily their
responsibility. The City has a contract with CEE for two years.
When that contract is over, staff would evaluate the options that
are available at that time.
14. FRIDLEY LOAN PROGRAM SUMMARY
Ms. Schnabel stated this was provided for their information.
15. AMERICAN PLANNING ASSOCIATION NATIONAL CONFERENCE
Ms. Dacy attended the American Planning Association National
Conference held in San Diego.
ADJOU'RNMENT -
^ MOTION by Mr. Prairie, seconded by Mr. Meyer, to adjourn the
meeting.
^ HOUSING & REDEVELOPMENT AUTflORITY MTG. , 1�iY 8, 1997 PAGE 27
UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCffi�TABEL
DECLARED T� MOTION CARRIED AND TSE I�iY 8, 1997, HOUSING AND
REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:50 P.M.
Respectfully submitted,
����CL Z.�/1 ' l �Lf�
Lavonn Cooper
Recording Secretary
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