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HRA 05/07/1998 - 29825CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING MAY 7, 1998 CALL TO ORDER: Vice-Chairperson Schnabel called the May 7, 1998, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Virginia Schnabel, John Meyer, Duane Prairie, Larry Commers (arrived at 8:30 p.m.) Members Absent: Jim McFarland Others Present: William Burr�s. Executive Director Barbara Dacy, Community Development Director Grant Femelius, Housing Coordinator Jim Casserly, Financial Consultant Ron Julkowski, Chief Building Official Dave Mayer, Remodeling Advisor �` Jim Pineault, 5851 Central Avenue Carol & George Hatcher, 1015 Mississippi Street APPROVAL OF APRIL 2 1998 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: OTI : by Mr. Meyer, seconded by Mr. Prairie to approve the April 2, 1998, Housing and Redevelopment Authority minutes as presented in writing. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA: 1. rLAIMS AND EXPENSES• A list of additional expenses for HRA approval was distributed. M 10 by Mr. Prairie, seconded by Mr. Meyer, to approve the Consent Agenda. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED %"�� THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORTTY MEETING, MAY 7, 1998 PAGE 2 ,� ACTION ITEMS: 2. PUBLIC HEARING TO SELL 10 ACRES OF FRIDLEY EXECUTIVE CENTER TO MEPC AMERICAN PROPERTIES• Ms. Dacy explained that this public hearing is being held to consider the sale of 10 acres of the Fridley Executive Center site to MEPC American Properties. The hearing will bring to conclusion the process to develop the 10-acre site for a one-story tech flex building. The City Council approved the site plans on March 2, 1998, and the HRA approved a development contract and an amendment in January and February 1998. Ms. Dacy stated the proposed Phase I construction on the 10 acres is a 106,000 square foot one-story tech flex building on the westerly 10 acres of the site. Future development will include multi-story buildings totaling 250,000 square feet as well as commercial development immediately adjacent to Highway 65 including a hotel, restaurant, and a 20,000 square foot commercial facility. The proposed sale price for the 10 acres is approximately $2.50/square foot for a total of $1,089,000. The HRA is hoping to schedule a closing with the developer within the next finro months with a tentative construction start date of August 1998. The Highway 65 intersection improvements are scheduled to begin in July of this year, with the bulk of the construction being completed by next year. ^ O 10 by Mr. Prairie, seconded by Mr. Meyer, to open the public hearing at 7:40 p.m. to sell 10 acres of Fridley Executive Center to MEPC American Properties. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OFFICIALLY OPEN AT 7:40 P.M. Vice-Chairperson Schnabel asked if the 10 acres site is strictly for the tech flex building. Ms. Dacy responded in the affirmative. Jim Pineault, 5851 Central Avenue N.E., stated he did not have any comments or questions on the matter, but was in attendance for information only. Vice-Chairperson Schnabel asked if MEPC has had any conversations regarding the highway construction, and if they were comfortable with the construction schedule. Ms. Dacy stated MEPC met with John Flora, Public Works Director, and SEH to go over the plans in detail. As far as she knows, MEPC has no objections or concems as to the timing. Ms. Dacy stated she understands that MEPC has shown the plans to at least one � prospective tenant who would occupy roughly one-third of the building. MEPC has also had two contacts from potential hotel developers as well. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 3 ^ There were no further questions or comments. MOTION by Mr. Meyer, seconded by Mr. Prairie to close the public hearing at 7:44 p.m. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:44 P.M. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the sale of the 10 acres of the Fridley Executive Center Site to MEPC American Properties. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Dacy explained that Mr. Casserly, Financial Consultant, has prepared the final draft of the Development Contract to be sent to MEPC for execution and that a closing date will be scheduled. 3. ACQUISITION OF 1015 MISSISSIPPI STREET: Mr. Ferr�elius stated that this item was discussed at last month's HRA meeting. At that time, the HRA directed staff to determine the feasibility of rehabbing the structure �, versus demolishing it. On April 7, 1998, Ron Julkowski, Chief Building Inspector; Dave Mayer, Remodeling Advisor, and he went out to the property at 1015 Mississippi Street. What they found confirmed the conditions stated by the homeowners. There are no frost footings below the foundation walls. The foundation itself consists of a two-course concrete block wall resting on bare ground. Peering into the crawl space, it appears that there are undersized floor joists, beams and posts, and inadequate crawl space ventilation. This was especially evident in the kitchen where there is significant settling of the floor. There is also a failing roof over the back porch which is deteriorating. There is an illegal fumace in the garage, and a multiple roof system which lacks proper ventilation in the attic space. Mr. Femelius stated that installing a proper foundation with footings would require lifting the home off the ground. It would be nea�y impossible to slide in the proper temporary beams to support the house due to the small area in the crawl space. Additionally, the undersized floor joists and nailing method would create a risk of the structure collapsing during the process. Furthermore, once these repairs started, all systems would need to be brought into compliance with current code. It is estimated that the cost to make necessary repairs would be roughly $50,000 to $60,000. The improvements would not increase the value of the property significantly. Mr. Femelius stated it is stafPs determination that repairing the house is not financially � feasible. The property would be a good candidate for the city's Housing Replacement Program, and staff is recommending that the HRA purchase the property. HOUSING & REDEVELOPMENT AUTHORITY MEETIlVG, MAY 7, 1998 PAGE 4 � Carol Hatcher, 1015 Mississippi Street, presented the HRA with copies of the original bids they had obtained for repairs to the foundation of the property. Northland Suburban Homes submitted a letter dated May 6, 1998, which stated that the property is severely deteriorating. It was their feeling that the property would not withstand the elements involved in raising the house to install a proper foundation and that the cost of bringing the house up to code would far exceed the cost of demolishmg the house and starting over. Ms. Schnabel asked at what point a property is considered for condemnation. Mr. Julkowski stated that without a set plan or policy adopted by the City, it would be difficult to condemn unless they could determine that there was an immediate danger to the homeowner. Furthermore, most single family, owner-occupied residences are not inspected for code violations via a request by the homeowner. Homeowners, per City code, must be given the opportunity to make necessary repairs to their properties prior to condemnation proceedings. Mr. Prairie noted that the property was appraised at $64,000. He asked what portion is land value. Mr. Femelius stated that the land value is $31,154 (3/98). Mr. Meyer asked what the other land values have been for other properties acquired under the Housing Replacement Program. Mr. Femelius stated that to his recollection, they have been roughly $25,000 -$30,000. This lot (107' X 250'). However, is the largest site that has been considered for acquisition under the program. Mr. Meyer stated his concern is with the amount of money that the HRA is paying to residents for deteriorating properties. The acquisition price of this property is higher than any of the others the HRA has contemplated purchasing. He understands that the lot is superior in both size and location to the other sites, however, he just feels the HRA is overpaying for the properties. It was noted that the Hatchers purchased the property and had a mortgage in 1993 of $57,000. At this time, the mortgage is $72,000. He asked for an explanation. Ms. Carol Hatcher explained that when they purchased the property, they made an $8,000 down payment and assumed the mortgage. Two years later, they obtained a home equity loan and used some of the money to make some improvements to the property. MOTION by Mr. Meyer to deny the request to purchase the property at 1015 � Mississippi. MOTION FAILED FOR LACK OF A SECOND. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 5 � Mr. Prairie stated that if the land value is deducted, the price of this property is perhaps even less than other homes purchased. MOTION by Mr. Prairie to approve the acquisition of the property at 1015 Mississippi Street N.E. Ms. Schnabel stated that she did not believe the Chairperson can second a motion. With Chairperson Commers due to arrive, it was the general consensus of the HRA to table this item until his arrival. OTIO by Mr. Prairie, seconded by Mr. Meyer, to withdraw the above motion and table this item until Chairperson Commers arrives. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. ACQI�ISITION OF SHORTY'S AT 5755 UNIVERSITY AVENUE• Ms. Dacy provided the HRA with a brief history of the JR Automotive/Shorty's Towing site on the northeast comer of 57th Avenue and University Avenue. She stated the building is now vacant, but it was previously used for an automotive repair/towing operation. The property is zoned C-2, General Business District, and is 16,860 square � feet in size. Ms. Dacy stated the building size is approximately 2,000 square feet. The land and building are valued by the assessor at $75,500, with a$50,000 value placed on the land. The owner of the site has indicated an interest in selling the property. The City's appraisal came in at $89,000; however, the owner has an offer from a vending machine company for $107,750. Additionally, there is another party who has indicated some interest in the site; however, it does not appear at this time that they plan to submit an offer. Ms. Dacy stated the JR Automotive site is one of four parcels that would comprise a 1.8 acre redevelopment area; finro of these parcels are vacant and one parcel is a duplex. Ms. Dacy reviewed the potential uses for this redevelopment site. Diagrams of various redevelopment options were p�esented for the HRA's review. The options included owner-occupied townhomes, apartment buildings, single family lots, or a neighborhood commercial center. She stated it may also be appropriate to link this development (referred to herein as Gateway East) with the Gateway West project on the west side of University Avenue. . Ms. Dacy stated the City Council has asked, if the HRA does authorize staff to proceed �..,� with the acquisition of the automotive site� that a neighborhood meeting be scheduled prior to soliciting development proposals. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 6 ,� Ms. Dacy stated there are several reasons to consider the acquisition of the site at this '` time. The cost of acquisition will be lower now than in the future with no relocation costs, the property has a negative impact on the image of the community's major gateway, and the site includes two vacant parcels; therefore, there would be no demolition costs on those. Ms. Dacy stated a redevelopment project at this site would also be a good candidate for the Livable Communities' Act funding which the Metro Council now has available for first-ring communities. Finally, redevelopment of this area would compliment the City's investment in the 57th Avenue area and Hyde Park, and it would help the City achieve a number of housing goals. Mr. Femelius presented pictures of various developments, both existing and under construction, which would be viable options for the 57th Avenue site. Ms. Schnabel asked if the owner of the duplex has been approached regarding the acquisition of his property. Ms. Dacy stated this has not been done, nor have the owners of the vacant parcels been contacted. If the HRA authorizes the purchase of the JR site, she would like to proceed with appraisals on those properties as well. ^ Ms. Dacy stated staff is recommending that the HRA authorize staff to purchase the JR Automotive/Shorty's Towing property in the amount of $108�000� with the seller being responsible for any environmental contamination on the property. Chairperson Commers amved at 8:30 p.m. OM TION by Mr. Meyer, seconded by Mr. Prairie to authorize the Executive Director and the Chairperson to execute the appropriate documents to acquire the JR Automotive/ Shorty's Towing site for $108,000, subject to the seller completing the necessary clean- up of any environmental contamination on the property. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSOIV SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. ACQUISITION OF 1015 MISSISSIPPI STREET (TABLED): MOTION by Mr. Prairie, seconded by Mr. Meyer, to remove this item from the table. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. ^ OM TION by Mr. Prairie, seconded by Ms. Schnabel to approve the acquisition of 1015 Mississippi Street N.E., in the amount of $68.000 and to authorize staff to prepare the necessary documents to close on the purchase of the property. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 7 UPON A VOICE VOTE, 3 VOTING AYE AND 1 VOTING NAY, CHAIRPERSON '� COMMERS DECLARED THE MOTION CARRIED. INFORMATION ITEMS: 6. 57TH AVENUE PROJECT UPDATE: Ms. Dacy stated that a memo had been included in the agenda packet regarding this item. She distributed a copy of the bid summary of the project, which included the original budget estimates, the engineer's estimates and the actual bid price. The lowest bidder, Forest Lake Construction, came in under the engineer's estimate on landscaping and irrigation; however, it came in substantially higher on the street lighting. The `HRA's share (50%) of the project amounts to $109,972.50. The affected property owners have been very cooperative and the City is in the process of obtaining a waiver on their right to a public hearing and agreeing to the assessment. The total amount of the assessments to the property owners are approximately $250,000, with a substantial amount coming from the Holiday store. If the plans for the project are approved by the Council on May 18, 1998, construction could begin as early as June. Ms. Dacy stated it is her recommendation that the HRA approve Resolution No. HRA 5 -1998 with the added stipulation that staff try to reduce the street light cost, if possible. �--� Mr. Prairie asked how many bids were received. Ms. Dacy stated there were four bids. The bid amounts were provided. Mr. Commers asked who is responsible for the electricity costs for the lighting. Ms. Dacy stated this would be the responsibility of the property owners, as well as the long-term maintenance of the fencing and landscaping. Ms. Dacy stated that the street lights proposed for #he 57th Avenue project are similar to those on Mississippi Street; however, these will be slightly taller to allow decorative planters or banners to be hung from them. Additionally, a decorative cage will be installed over the globe providing a more modem appearance. The fencing will be similar to the fencing at Christenson Crossing, but will be approximately three feet high and will not run contiguous. OM TION by Ms. Schnabel, seconded by Mr. Meyer to adopt Resolution No. HRA 5- 1998, a Resolution Authorizing Payment to the City of Fridley for Landscaping, Irrigation and Street Light Improvements for the 57th Avenue Construction Project in an amount up to $109�972.50. ^ UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 8 � 6. LAKE POINTE INTERSECTION UPDATE: Ms. Dacy stated that a memo dated April 30, 1998, to Mr. Bums was inciuded in the Agenda packet and provided an update on this matter. She stated that MnDOT has agreed to pay for the $30,000 additional engineering charge and, therefore, the HRA's cost will be "right on target" ($386,387.47). '�' •► ►�. = �•' . "• '• � Mr. Femelius explained that the HRA received $734,000 for the Minnesota Cities Participation Program. Under this program, MHFA sells bonds on behalf of participating communities, and the HRA accesses those funds for the First Time Homebuyer Mortgage Program. Participating lenders will be working with the borrowers. The program started on April 15th and will end on December 15, 1998. The program will be advertised in the City Newsletter as well as the Focus Newspaper. Mr. Commers asked how many loans have been made in Fridley under this program. Mr. Femelius explained that this is the fourth year that Fridley has participated and he believes 21 or 22 loans have been made. Each year's allocation has been fully expended. n 8. �JPDATE ON HOME REMODELING FAIR: Mr. Commers noted the April 29th memo in the agenda packet. He asked if there was some speculation on the reduction of attendees. Mr. Femelius stated staff believes it is due to a number of factors. The newsletter did not go out in time to allow for the event to be advertised. This is one of the primary means of advertising. The event was advertised several times in the Focus News. Also, a contributing factor may have been the timing of the event. The fair was held later than last year; and with favorable weather, it is likely that residents had other commitments. A survey was sent to vendors and attendees for input. This information, as well as staff recommendations, will be available at a future meeting. Mr. Commers commented that staff might want to consider holding the event bi- annually in the future. OTHER BUSINESS• 1. HOUSING PROGRAM SUMMARY Mr. Commers noted that the monthly housing program summary was included in the ^ agenda packet. He asked about the loan delinquency status. Mr. Femelius stated there are currently six delinquencies out of 182 loans. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 9 Mr. Commers stated he would like to see some kind of policy put together for loan delinquencies that the HRA can review. Mr. Meyer stated his concem is that the housing programs are not benefiting the areas which are really in need such as the Hyde Park neighborhood. Mr. Commers stated that this issue has been addressed in the past. A discussion followed. Ms. Dacy stated that if property owners are unable to repay loans, the City may need to look at providing more grant assistance. However, this also has a financial implication to the HRA. Mr. Burris stated one of the big problems during winter months has been the lack of adequate parking for the apartment units in the neighborhood. Mr. Meyer stated he feels loans and grant requirements need to be made more liberal in Hyde Park. The stated goal is to improve the housing stock, and he feels the Cifiy needs to look closer at where the money is really going. Mr. Bums stated he did not disagree, but feels that the City needs to work with the � residents, Council, and HRA to identify and prioritize the problems in that area. Ms. Schnabel suggested having a public hearing or a neighborhood meeting and encouraging the residents to come. : ►�•� �►.�:•�� Mr. Fernelius noted that the HRA members each received a copy of the Remodeling Handbook. This handbook was unveiled at the Remodeling Fair, and it appeared to be of great interest to many residents. 3. RESIGNATION OF DUANE PRAIRIE: Mr. Prairie noted that he has resigned from the HRA after senring for 20 years. He expressed his appreciation to members of the Commission. Ms. Dacy stated that Pat Gabel has been appointed to replace Mr. Prairie on the HRA. The HRA members and staff took this opportunity to thank Mr. Prairie for his many years of dedicated service to the City of Fridley. �,,,, MOTION by Mr. Meyer, seconded by Ms. Schnabel, to recognize Duane Prairie's 20 years of dedicated service to the City of Fridley. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 7, 1998 PAGE 10 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED n THE MOTION CARRIED UNANIMOUSLY. : � • : � 1��# MOTION by Ms. Schnabel, seconded by Mr. Prairie. to adjoum the meeting at 9:18 p.m. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MAY 7, 1998 MEETING OF THE H.R.A. WAS ADJOURNED AT 9:18 P.M. Respectfully submitted, � � �� D. Saeflce � Tamara �� Recording Secretary n ,�"'�