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HRA 03/05/1998 - 29823�, �ITY OF FRIDLEY HOUSING � REDEVELOPMENT AUTHORITY MEETING MARCH 5,1998 CALL TO ORDER: Chairperson Commers called the March 5, 1998, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer Members Absent: Jim McFarland, Duane Prairie Others Present: William Bums, Executive Director Barbara Dacy, Community Development Director Jim Casserly, Financial Consultant Rick Pribyl, Finance Director Craig Ellestad, Accountant APPROVAL OF FEBRUARY 19 1998 HOUSING AND REDEVELOPMENT AUTHORITY MEETING: n MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the February 19, 1998, Housing and Redevelopment Authority mmutes as written. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. CLAIMS & EXPENSES Mr. Commers noted that Mr. Ellestad had distributed copies of his memo dated March 5, 1998, listing additional expenses for approval. MOT by Ms. Schnabel, seconded by Mr. Meyer, to approve the Consent Agenda including the additional expenses as outlined in Mr. Ellestad's memo dated March 5, 1998. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ,�9,CTION ITEMS: 2. rONSIDER ACQUISITION OF 611 LAFAYETTE STREET � M�. Dacy stated staff is proposing to acquire 611 Lafayette Street. The proposed n HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 2 acquisition price is $3,000, and staff is also proposing to assume the demolition costs estimated to be between $4,000 and $5,000. In order to assist the owners, staff has suggested selling one of the HRA lots to the owner on a deferred loan proposal which has not been done before. Staff reviewed the proposal with the owner's attomey. At this time, they have not accepted or rejected the proposal. The policy has been that, when given an acquisition, staff only presents it when the owner consents. Given the fact that there is not an agreement� staff suggests postponing consideration until the April meeting. Mr. Commers stated the owner had a rehab loan and asked if he was correct that this loan was not from the City. Ms. Dacy stated that was correct. The owner is petitioning MHFA to have that loan forgiven entirely. Mr. Meyer asked what the status was regarding the owner's fire insurance. Ms. Dacy stated the amount of the insurance does not cover entirely the amount of the mortgage. With the proceeds of the acquisition, the owner would be able to fill that gap. The insurance company has made a determination. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to table consideration of the acquisition of 611 Lafayette Street until staff brings it back before the HRA. ^ UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: �c - � •- •� :; . , , ._�. Ms. Dacy stated the City Council on Monday evening approved all of the planning items related to this development. Regarding the suggested stipulation of the rooftop garden/ vegetation, the City Council agreed with the HRA's approach. Ms. Dacy stated that on February 27, the developer heard first hand from MnDOT the timing issues and construction schedule for the intersection. As a part of that discussion. the major concem of the developer was how to bring potential tenants into the site during the construction timeframe. After evaluating a broader map of how to get to the site, it was suggested that the tenants could be routed to the site by coming off I-694 south on Highway 65 to 53rd Avenue, and then over to 7th Street to access the southwest comer of the site. This would be on a temporary basis, and they are not anticipating intensive traffic. Ms. Dacy stated the current schedule is to open bids at the end of May, award the project in June, and initiate construction in July. They would start with such things as the underground utility relocation, excavating a portion of Moore Lake for the nght tum lane on Highway 65, etc. An up-to-date draft of the contract was received late Wednesday aftemoon. Mr. Casserly has put together a summary of the key issues pertaining to the ^ development. � HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 3 Ms. Dacy stated the first issue is the minimum assessment agreement which has been resolved. The issue regarding the date of closing is being proposed to be based on the date of initiation of the intersection construction. The draft now says the closing will occur within one month of initiation of construction, and construction of the MEPC project would begin within 60 days of the initiation of the intersection improvements. They are trying to meet with the developer to resolve the language around that particular issue. She will provide an update when that occurs. Mr. Casserly stated that at the last meeting, the chairperson asked for a draft with the changes underlined. This has been provided. When the agreement comes to you and there is consensus on the business terms, there are then a number of small issues that will come up that are considered minor or technical issues. In this instance, there have been several issues that have arisen that are not minor or technical. One of them was the valuation which was discussed at the last meeting. Another issue is when the closing has to take place and the construction commence because of the intersection improvements. They have operated under the assumption that even during the construction period there would be access into the site. They have been informed this is not accurate, and there will have to be an altemative way to reach the site. In sorting this but, we need to keep clarifying what it is that MnDOT is actually going to initiate. When will the contract be let? It appears that MnDOT will be opening the bids at the end of May, awarding the contract in June, and typically work would commence 30 to 45 days after that. They need to get the timing pinned down better if we can. ^ Mr. Casserly stated that as they get closer to the construction, they start finding issues that are peculiar to the project itself. They have had a couple of issues in the past regarding stormwater ponding and drainage. When they do transfer, who maintains it? What happens if there is more than one developer on the site? These are all ancillary issues and only arise when it looks like you are going to do the project. It makes sense to address them now rather than trying to do it after the agreement is executed and it gets closer to the closing. The time invested in these issues is not wasted. These are issues that need to be addressed. Mr. Casserly stated he hoped to have a final version of the development contract at the next meeting. They should quit negotiating the contract soon and resolve the remaining issues. He thought they were coming to the end. Mr. Commers stated he hoped they would be able to move forward and get something going this spring or early summer. , -�� •► •' • � � Ms. Dacy stated the HRA evaluated the acquisition of the J. R.'s Automotive site in November 1995. The HRA authorized staff to contact the owner and request a completed Phase I audit. After that contact, staff did not hear back until last month. She asked the owner that, prior to evaluating an acquisition, they requested an environmental analysis of the property. The owner did complete the Phase I audit. There is an old underground gas tank that has not been used for some time. State law requires that the tank be removed. There is also an empty above-ground tank as well. The owner was not � sure what contents were in that tank. Prior to J. R. owning the property, the site was an automofive operation. There may be the potential for some type of contamination. � HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 4 During the audit, they did not see any visible means of spillage or contamination. Ms. Dacy stated that in terms of the land use of this particular site, the site is one of four parcels that the HRA has evaluated over the last 8 to 10 years. This site is part of the Winfield redevelopment project which at that time was for a strip mall and bank. Since that time, Rapid Oil Company has developed its facility. If the HRA decides to buy the property, they would have to maintain it as is until they can get a redevelopment plan approved. The site would qualify as part of a tax increment district. The parcel could tie in with the Frank's Used Car site. If the HRA did not acquire the site, more than likely another auto use would occupy the building. If the HRA does not acquire the property, the owner will take steps to rehab the building. Ms. Dacy stated that now that a lot of other issues are coming to completion including the southwest quadrant. 57th Avenue, Lake Pointe, etc.� there is now time to go back to the Frank's site and re-evaluate a redevelopment plan. They need to do this in the next finro to three months. Ms. Dacy stated staff would like to keep discussing the issue with the owner. Staff talked with the owner and advised the owner that since he has to remove the underground tank anyway, it may be wise for him to do a Phase II audit. There are state funds to reimburse the costs. In the meantime, staff could contact an appraiser to get an analysis on the property in terms of market value. Once these items are flnished, staff would come back with a request to approve or deny the potential acquisition. ^ Ms. Dacy stated the site is located on the service road in the northeast comer of University and 57th Avenue just north of the Rapid Oil site. The site consists of approximately 16,000 square feet. The site is prominent in terms of an entrance into the community. Coupled with the Frank's Used Car site, it could change and improve the gateway into the city. Ms. Dacy stated no action is needed. If there is no objection, staff will proceed to contract an appraiser. Mr. Commers stated he was not sure this was still on the HRA's agenda. This was considered in 1995 and nothing occurred. He thought the HRA was starting over in determining where they are. It is not a priority in the budget either, so they would have to start from scratch. That does not mean, however, that if the opportunity is there, that they not do anything. Mr. Commers stated at one time they had talked about putting in housing and had discussed the need to acquire a duplex. In 1995, the attomey advised the HRA to be careful in taking those properties. The attomey was pretty observant of what the requirements might be if taking the property. He stated they could continue negotiations and see where it leads. In terms of inputting a lot of land and inventory and banking it without a plan, they needed to be careful. Ms. Schnabel asked if they should have an appraisal done. Ms. Dacy stated she thought it would be worthwhile to pursue an appraisal and get that � information back. They did not have an appraisal before. They wanted to have the Phase I done first, and that was just completed last month. � HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 5 Mr. Commers stated he thought the Phase I affects the appraisal. The Phase II is not complete. They ran into problems on the Rapid Oil site. Ms. Dacy stated that is why she told the owner he would be responsible for the Phase II and the clean up costs. Mr. Meyer stated he thought they should get an appraisal in order to have a baseline. This can be updated as the need arises. Ms. Schnabel agreed. Ms. Commers stated the consensus of the HRA was to have staff proceed to get an appraisal of the site. 5. REMODELING FAIR UPDATE Ms. Dacy stated the remodeling fair will be held April 18 from 10:00 a.m. to 3:00 p.m. Fifly-finro out of 66 booths have been filled, and Mr. Femelius has received more applications since the memo was written. Seminars are planned. The Home Remodeling Advisor will have a booth. Employees from Community Development and building officials will be there to answer code questions. ^ Mr. Commers stated he would encourage residents to take advantage of this event. 6. MONTHLY HOUSING PROGRAM SUMMARY Mr. Commers stated this is a monthly report indicating where they stand on the various loan activities. He asked if the Finance Department had any oversight of this report. Mr. Pribyl stated the information comes from CEE. Mr. Femelius works with the Finance Department to put the report together for the HRA. Ms. Schnabel stated she had a question on the delinquent loans. What action is taken to encourage payments to be brought up to date? Mr. Dacy stated the contract with Community Reinvestment Fund (CRF) stated they are to do the servicing� and they use the typical procedures to contact recipients regarding payments. Mr. Femelius is kept apprised on that. The CRF staff contacts homeowners. Ms. Schnabel asked what method are they using. Ms. Dacy stated she would check. Her impression is that they contact the homeowner by mail. She is not aware of direct phone contact. Ms. Schnabel asked if there were penalty charges for delinquencies. Ms. Dacy stated she would find out. ^ OTHER BUSINESS: � HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 6 7. SURVEYS Mr. Bums stated they did a citizens' survey and then followed with a CounciVCommission survey. Altogether� 26 out of 47 surveys were retumed. Those results have been compiled with some interesting compansons with the opinions of the Council and the opinions of the Commissions. He thought it makes some interesting reading. He will make copies available and will discuss the sunreys if the HRA wishes to do so. Mr. Commers asked what they would be doing with the information. Mr. Bums stated the information is used in the goals and objectives setting process. If they see a substantial amount of agreement on issues, those will be reflected in the program proposals for 1999 and in the budget. In areas where there is disagreement, those areas will be brought back to the Council and the boards for further discussion. The survey will be used in the Council budget sessions. Oftentimes� he will take items into the budget sessions that have not been funded just to make sure they are not skipping things that should be addressed. Mr. Commers stated he thought it would be useful for the HRA to look at it to see if there are any references regarding the areas for which the HRA has responsibility. After looking at it, they can decide if they want further discussion. ^ Mr. Bums stated he would mail a copy of the surveys out to the HRA members. 8. UPDATE ON SOUTHWEST QUADRANT Mr. Meyer asked for an update on the southwest quadrant. Ms. Dacy stated that 45 out of 64 three-story townhomes have been sold. Of the 54 one and two-story homes, 31 have been sold. Councilmember Bamette had recently asked for an analysis of the age of the buyers of the one and two-story homes. More than 50% were in the empty nester range. Mr. Meyer asked if families with children were moving in there. Ms. Dacy stated she thought there were finro or three young families that purchased a finro-story home. She did not know if they had children. Mr. Commers stated it would be interesting to know how many people are from within Fridley. Ms. Dacy it seemed that the majority of owners are from Fridley, Columbia Heights, New Brighton, or the north metro area. ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to adjoum the meeting. � UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED � HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAR. 5, 1998 PAGE 7 THE MOTION CARRIED AND THE MARCH 5,1998, HOUSING AND REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 8:07 P.M. Respectfully submitted, Q,�t�1��% L vonn Cooper Recording Secretary n