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HRA 02/04/1999 - 00002662CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING FEBRUARY 4, 1999 CALL TO ORDER: Chairperson Commers called the February 4, 1999, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, Pat Gabel, and John Meyer Others Present: Grant Fernelius, Housing Coordinator Ben Martig, Housing and Special Projects Intern William Burns, City Manager Jim Casserly, Financial Consultant Rick Pribyl, Finance Director APPROVAL OF THE JANUARY 7, 1999 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the January 7, 1999, 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. CONSIDER APPLICATION FOR 1999 MINNESOTA CITIES PARTICIPATION PROGRAM. 2. CLAIMS AND EXPENSES. Mr. Pribyl, Finance Director, distributed a list of additional expenses for consideration. Ms. Schnabel inquired as to the check issued to National City Bank of Minneapolis in the amount of $481,207.80. Mr. Pribyl explained that this represents the last principal and interest payment on the revenue bonds that were issued in 1985. HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 2 MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the Consent Agenda as presented. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ACTION ITEMS: 3. CONSIDER APPLICATION TO MHFA FOR SUPER RFP: Mr. Grant Fernelius, Housing Coordinator, explained that MHFA has a consolidated funding application two times each year which combines nine different funding programs into one application process. This RFP is for the single-family programs, of which approximately $13,000,000 is available. The purpose of the programs is to assist with the construction, rehabilitation and/or demolition of housing for families of low and moderate income ($30,400 to $48,640 per year). Mr. Fernelius stated staff has been talking with the Center for Energy and Environment (CEE), the non-profit organization which administers the HRA's loan programs, about developing some type of demonstration project. Two concepts were discussed. Mr. Fernelius stated one concept would be the construction of a new home to meet Healthy House Standards by the American Lung Association. This home could be constructed on one of the city's vacant lots located at 5857 Main Street N.E. and would be built to meet the American Lung Association Healthy House Standards as they relate to building materials, indoor air quality, mechanical equipment and insulation. In the past, most of these features have only been found in more expensive homes. The HRA's goal would be to construct a home with these features at an affordable price. Mr. Fernelius stated that under this project concept, CEE would apply for funds from MHFA for the construction of the property. Sussell Corporation would be hired to construct the home, and the HRA would provide the lot by taking a second mortgage on the property (similar to what was done at 5800 2"d Street N.E.). The home to be constructed would be a one and one-half story home of 1,300 to 1,600 square feet with three bedrooms, two bathrooms and a two-stall attached garage. The estimated cost of construction would be $107,000 to $110,000, with an additional $3,000 to $5,000 for Healthy House Standard improvements. The end value, including the land, would be $130, 000 to $135, 000. Mr. Fernelius stated this would essentially be a"demonstration program" which could be replicated elsewhere in Fridley or in other areas of the Twin Cities. Mr. Fernelius stated the second concept would be the rehabilitation of an existing Fridley rambler. This would help to demonstrate how a 1950s style home could be HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 3 upgraded and/or expanded to include amenities. Under this program, the HRA, along with CEE, would acquire an existing rambler and, using one of the plans identified in the Fridley Rambler Planbook, to improve the property. The property, after completion of the improvements, would then be used to demonstrate and promote the potential of older housing. The property would eventually be sold to a qualified buyer. The HRA's involvement would be limited to providing up to $15,000 to assist in the rehabilitation. MHFA would be asked to provide the acquisition funds as well as a portion of the rehabilitation costs. Ms. Schnabel noted that under concept #1, the HRA's financial participation would be recouped when the property is eventually resold; however, this is not the case in concept #2. Mr. Fernelius stated this was correct. Ms. Schnabel stated she would really like to see one of the design concepts used which was presented to the HRA at the January meeting. Mr. Fernelius stated this would be a possibility. Mr. Meyer asked how the Sussell Corporation was selected as the contractor under Project #1. Mr. Fernelius stated that the HRA has had experience working with them in the past. Mr. Meyer wondered if there would be an advantage to talking with other contractors. Mr. Fernelius stated this could be done. Mr. Meyer asked why staff feels the need to "re-invent" the rambler. He does not see this type of house as undesirable, noting that the homes continue to sell. Mr. Fernelius responded that staff's desire is to provide homeowners with ideas to show what can be done with an existing home. Many people feel the homes are too small. By providing them with remodeling ideas, it may also encourage them to look at alternatives to moving, thereby keeping them in the community. Mr. Burns, City Manager, explained that some of the plans show a re-working of the existing space which provides for uses in what otherwise would be unusable space. Mr. Meyer asked why the HRA would need to provide an actual model. He believed that drawings would be adequate. Ms. Gabel stated this would serve the same purpose as a model home serves. It provides people with ideas which are often difficult to decipher from a plan. HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 4 Mr. Meyer stated the primary goal of the housing programs is to improve the housing stock in the community. He believed using public funds for this purpose pushes the public purpose far beyond the limit, and that this could be pursued by the private sector. Mr. Burns stated he believes this will help to generate interest for residents to make improvements to their properties. Ms. Gabel stated she feels it is important to start revitalizing some of the aging housing stock in Fridley. Some of the existing homes in Fridley are less desirable than the newer modern styles. She stated she feels a project such as this would be a pro-active approach to generating an interest to improve the housing stock. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the City's participation in Project #1 by contributing the lot at 5857 Main Street, on a deferred sale basis, and to authorize staff to prepare a letter of support for the project and sign application materials. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Ms. Schnabel, seconded by Ms. Gabel, to approve the City's participation in Project #2 by contributing up to $15,000 to acquire and rehab an existing rambler and authorize staff to prepare a letter of support for the project and sign application materials. UPON A VOICE VOTE, THREE MEMBERS VOTING AYE (GABEL, SCHNABEL, COMMERS), ONE MEMBER VOTING NAY (MEYER), CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 4. CONSIDER PROPOSAL FOR SOIL BORINGS ON TH 65: Chairperson Commers noted that the AUAR study for the Medtronic project recently identified the potential need for widening of lanes on Highway 65 by adding a northbound through land and a southbound through lane from I-694 to 100 feet north of 63rd Avenue. It is felt that this will serve to mitigate some of the congestion on Highway 65, which will result if the project is developed at a higher density than originally proposed. SRF Consulting Group, which is Medtronic's consultant, has suggested that the City evaluate a sheet pile wall construction which would not necessitate the filling of the lake. In order to determine the feasibility of the construction, soil borings are necessary to determine if in fact the soil is suitable for the sheet pile wall construction. HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 5 Mr. Burns, City Manager, noted that the issue of who is responsible for payment for these soil borings has not been determined. The City is currently negotiating with Medtronic and has requested that Medtronic fully reimburse the HRA for these costs. However, the soil borings need to be completed soon. Mr. Meyer noted there was a large discrepancy in price of the three bids. He noted that two of them were similar, but that the bid from STS was considerably higher. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to authorize the Executive Director to execute a contract with Braun Intertic at a cost not to exceed $4,950 to complete soil borings on TH 65 with the stipulation that the analysis be completed by March 5, 1999, as outlined in the January 29, 1999 memo from Barbara Dacy. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. PRESENTATION: 5. FINAL REPORT ON HOUSING PROGRAM STUDY: Mr. Ben Martig, Housing and Special Projects Intern, discussed the results of the housing program study which was recently completed. The purpose of the study was to analyze the housing rehabilitation program and to determine its effectiveness on the housing stock in the city. The study included a survey of all past loan and grant recipients, a survey of all Hyde Park neighborhood residents, an analysis of building permit data and a survey of six other first-ring metro cities, similar in age and size of housing. Mr. Martig provided a presentation of the report to summarize the results of the study. The findings of the analysis determined that the rehabilitation programs are improving the housing stock in Fridley by enabling those who could not ordinarily afford to make improvements with the means to do so. Mr. Martig stated that based on the study, staff came up with a number of recommendations which could improve the existing programs. Some of these included raising the maximum loan limit from $25,000 to $35,000, to provide a brochure of the loan and grant programs to new residents in Fridley and to create a short Contractor Survey Form to be completed by homeowners who have gone through the program and available for prospective customers. Mr. Meyer stated he would not be in favor of increasing the loan limit to $35,000. The study shows that the average loan amount is $13,000. This reveals that the $25,000 limit is sufficient for most applicants. He also stated some concern as to the Contractor Survey Form, noting that some homeowners may provide information that is HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 6 not based on fact and that the contractor would not have an opportunity to rebut the accusations. Mr. Fernelius stated that before proceeding with a survey system, it would be necessary to check on the liability issue. He noted that many residents have indicated a difficulty in finding reputable contractors. It was felt that this would be a way to assist them, without staff involvement. It was the general consensus of the HRA that the information provided in the survey was very helpful and staff was commended for their fine work on this project. INFORMATION ITEMS: 6. MEDTRONIC UPDATE: Mr. Burns, City Manager, provided the HRA with a copy of an architectural rendering of the proposed Medtronic project. He noted that the parking ramps proposed for the site will consist of five stories, three stories above ground and two stories below ground. The campus will consist of approximately nine buildings which will be connected underground. Mr. Burns explained that as a part of the project, it was determined that it would be necessary to acquire seven residential properties. Mr. Dave Ryan was hired to work with the homeowners. He met with all seven property owners within a three-day period; six homeowners were agreeable to selling, with one homeowner very adamantly opposed. Since that time, Medtronic has indicated that they would be willing to remove that property from the acquisition. Mr. Casserly, Financial Consultant, noted that as architects started designing the plans, it became evident that the project was going to be a considerably larger expense than what was first expected. As a result of this, Medtronic may be asking for an extension of the Tax Increment District. Mr. Casserly provided the Commissioners with an overview of specific concerns that he felt should be addressed prior to negotiating any TIF district extension. 7. UPDATE ON WORK WITH ROBERT GERLOFF & ASSOCIATES: Mr. Fernelius explained that, per discussions held at the January 7, 1999, HRA meeting, staff has scheduled a meeting with Robert Gerloff to outline a scope of work to address house plan designs for the HRA's Scattered Site Program. This meeting will be held on February 12. After this meeting, Mr. Gerloff will prepare a proposal to identify costs for these services. An update will be provided by staff at the March HRA meeting. HOUSING & REDEVELOPMENT AUTHORITY MEETING, FEB. 4, 1999 PAGE 7 8. REMODELING PLANBOOK KICK-OFF EVENT: Mr. Fernelius noted that a kick-off event of the new Remodeling Planbook will be held at the International Market Square on February 25, 1999. Invitations will be mailed to the HRA members with more detailed information. All are invited to attend. OTHER BUSINESS: ► •CTiL� ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Ms. Gabel, to adjourn the meeting at 10:25 p.m. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING WAS ADJOURNED AT 10:25 P.M. Respectfully submitted, Tamara D. Saefke Recording Secretary