Loading...
HRA 03/06/2003 - 00027934CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 6, 2003 CALL TO ORDER: Acting Chairperson Meyer called the March 6, 2003, Housing and Redevelopment Authority meeting to order at 7:29 p.m. ROLL CALL: Members Present: John Meyer, Pat Gabel, Jay Bajwa Members Absent: Larry Commers, Virginia Schnabel Others Present: Grant Fernelius, Assistant HRA Director Scott Hickok, Community Development Director William Burns, Executive Director of HRA Paul Eisenmenger, HRA Accountant Dwight & Amy Snow, 290 58th Ave NE Gary Hegna, 5770 3�d St NE Robert Kelly, 6230 7th St NE David & Norma Rust, 5735 Quincy St NE Dick Snyder, 5901 2nd St NE APPROVE THE FEBRUARY 6, 2003 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION BY Ms. Gabel, seconded by Mr. Bajwa, to approve the minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYERS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA CLAIMS AND EXPENSES MOTION by Ms. Gabel, seconded by Mr. Bajwa, to approve the consent agenda. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: 2. UPDATE ON GATEWAY WEST PROJECT. Mr. Fernelius stated this meeting had originally been scheduled as a joint meeting with the City Council to discuss the Gateway West project. Due to some scheduling conflicts, the joint meeting had to be postponed. The joint meeting will be rescheduled probably in May. Staff would like to update the HRA and interested citizens on the Gateway West project. Staff will provide a summary of what they have been working on and then they can open it up to HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 2 questions from the HRA. While this is not a public hearing, it is up to the discretion of the HRA if they want to accept public comment at this time. Staff is willing to stay after the meeting to answer questions about the project from people in the audience. Staff is also available to meet homeowners one-on-one. Staff has already met with several homeowners who live in the area who will be affected by the Gateway West project. Mr. Fernelius stated the first area is the market feasibility study. GVA Marquette Advisors is a company that is based in Minneapolis and, at the last meeting, the HRA authorized that company to do a feasibility study of the Gateway West project. GVA Marquette Advisors has been hired to determine whether there is a market for the residential housing they have proposed in their mixed-use scenario, as well as the demand for retail/office space. Staff have talked about a mixed-use development that would include both residential and ground floor retail or offices. Mr. Fernelius stated that GVA study will essentially look at a number of different factors for both of those types of uses. On the residential side, they will look at the mix of units, some of the demographics of potential buyers, and the pricing of those units. They will also do a similar analysis on the commercial component, looking at the types of businesses that might be interested in locating in that project and how that is compatible with existing uses, the trade area, and what type of demand there would be for those kinds of business. They will also look at rental rates — what a developer might be able to charge a prospective tenant. That study will hopefully be completed within the next couple of weeks. Staff will evaluate this information and share it with the HRA, the Council, and the public. It will be a public document. GVA will conduct a formal presentation at the May meeting. Mr. Fernelius stated they have been working at refining some of the project costs, and there are a broad spectrum of expenses that would be related to a development project. Staff wanted to emphasize again that no decisions have been made on this project. This is really exploratory at this point. Obviously, the largest expenses that the City or HRA would have to pay if they were to move ahead with the project would be acquisition and relocation. Mr. Fernelius stated staff has received some information from an appraisal company that has provided them with a range of values on some of the properties. They are going to use those values as a basis of updating the financial projections. Mr. Fernelius stated the other issue is tax increment financing. This is a tool that the City would use if it were to move ahead with the Gateway West project. Tax increment financing has received a lot of attention in the paper lately, particularly as it relates to the Best Buy development in Richfield. That particular case actually worked its way through the Minnesota Appellate Court system and reached the Minnesota State Supreme Court and clearly has an impact on cities like Fridley and on projects like Gateway West. Staff is starting to analyze what those impacts might be and how that would affect Fridley, not only for Gateway West, but any future redevelopment projects. Staff continues to work with Krass & Monroe, HRA legal counsel, to identify those issues and decide how to proceed. Mr. Fernelius stated the obvious impact will be the type of tax increment district they can create which affects the length of the district and obviously has implications financially in terms of how much tax increment can be generated. So, a lot of issues need to be addressed as part of the TIF district. Mr. Fernelius stated there is no surprise with outside funding. The HRA obviously is going to fund a big bulk of this project. The state has pretty much curtailed a lot of its redevelopment funding, cleanup funding as well as its Redevelopment Grant Program. Those were two HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 3 programs staff had planned to try and take advantage of for Gateway West. It's unclear whether the State will continue to fund these programs. This year there will be no funding. They are fairly certain of that and looking ahead into future years, it is unclear whether that will continue to be funded as well. Mr. Fernelius stated the same story applies to the Metropolitan Council. The regional government is also a resource for this type of project. Met Council is under continuing funding pressure from many cities in the metro area, like Fridley, that have redevelopment projects that need assistance. They will have to wait and see whether or not Met Council will have any money, but right now there really isn't anything available. Mr. Fernelius stated federal sources are also limited. This is kind of a grim picture, but it is the reality of the times they are in. They applied for Community Development Block Grant Funds through the County, and they were turned down initially. They did have a meeting with staff on Friday, and there is the possibility of the City applying or receiving CDGB funds that were unspent from some other communities and, if that is the case, Fridley would likely have access to those funds some time this summer. So, if they did move ahead with the project, the timing would coincide with the project. He stated that is probably the one bright spot in terms of the outside funding that they can report at this meeting. Mr. Fernelius stated infrastructure cost is somewhat of an esoteric topic, but it's one of those things that can affect redevelopment projects that is not always considered until you get into a project. The City's Engineering staff has been very helpful in looking at the various development scenarios out there. The word "infrastructure" refers to things like roads and utilities. Depending upon what scenario the City moves ahead with, it would impact, that may have impacts on new roads or utilities that would have to be constructed. Mr. Fernelius stated the larger scenario that would involve the acquisition of the larger project area, the 7%2 acre site, and that probably has the greatest impact would be removing some streets, having to install new streets as well as utilities. The preliminary cost estimates are between $80,000 and $100,000 for that. Those estimates may change as there are other things that may come up. They have not talked about the issue of parking. If they did go with the big development scenario, that might involve a contribution on the part of the HRA to help construct the parking. That would be in addition to this dollar amount, but these are at least the preliminary estimates on the roads and the utilities. Mr. Fernelius stated the staff would like to spend the next month and a half refining information, continuing to pull together a lot of the research data they have been working on, and come back at the May meeting with a series of options for the HRA and the Council to consider. What they would like to do at that point is try and develop some kind of consensus on which one of the scenarios the HRA would like to move forward with, and from there proceed with the project. At that point, they could also identify a timeline in terms of when they would start contacting property owners. Obviously, a lot of residents are interested in this project, and it is staff's intent to have a neighborhood meeting, to send out a letter to the neighborhood explaining the plans. Mr. Meyer thanked Mr. Fernelius and stated there is a wide range of problems and questions that are unanswered at this stage of the game. The HRA, in conjunction with the City Council and residents, have many things to talk about and move through to get to a final goal that everyone can be happy with. He stated that at this time, he would invite anyone in the audience to make comments or ask questions. Mr. Robert Kelly, 6230 7th Street NE, stated he is curious about the Gateway project. He understands the HRA's desire to develop this area north of 57th Avenue on the west side of HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 4 University, and he believed there are only two homes left there, a bunch of vacant lots, and a building they should tear down. It's really not a residential area. He does not understand why they want to tear down the area north of 57th Avenue and south of 58th Avenue (??) and west of 2%2 Street. That does not make any sense to him. Those homes are a variety of large and small homes and some of them are multi-units, but are well kept up, and it appears that the owners work hard to keep up the appearance. Mr. Kelly stated he has been hearing a lot of noise out of the City hall lately about low-cost housing. There was a big fiasco on 5th Street recently where the Catholic Church wanted to come in with some low-cost type of housing, and the Council had voted it down. He didn't have anything to say about that one way or another except he thought the proposed building was very ugly. If a nicer looking building had been proposed, something more similar to the senior center, they might have had a better feel for it because the traffic would have been less. Mr. Kelly stated he keeps hearing the City has to have low cost housing. He stated they already have low cost housing in the area proposed for Gateway West, not the prettiest looking housing, but it's well kept and it's low cost if somebody wants live there. If that property is taken away, the owners will never find another place like it. It can't be done. He doesn't understand why they can't leave this area alone as long as it's up to standard. Mr. Meyer stated the entire Gateway West plan is still up for major discussion and no decisions have been made as to what to do with the property. They are very much in the preliminary, exploratory mode at this time, and acquiring those homes is just one suggestion at this time. Mr. Fernelius agreed that no decision has been made. They are debating whether or not there are merits to acquiring those additional properties, and they don't seem to have any resolution on it. Ms. Gabel pointed out that the HRA is attempting to recover some of its costs for the Frank's Used Car lot site. The HRA used money to buy that property, and that property is just sitting there now. The HRA has some costs there that are fairly significant, and they need to do something with that site so that is kind of how the rest of this has evolved. It is just an investigation into how far to go with the plan. That is part of the reason why they are seeking input from neighbors, to find out what they do think. Mr. Kelly stated he believes some of the neighbors are seeing this as an eyesore. These homes are probably outdated, but there are houses in Europe that are 200 or 300 years old on streets that are ten feet and they live with it. He just thinks it's a bad deal for the people who are living there. If the residents were asking to be bought out, that would be different. Mr. Meyer replied that Mr. Kelly has made a very good point, and they will certainly take his comments into consideration. Mr. David Rust, 5735 Quincy Street NE, stated that if the neighbors wanted to do it, then maybe that would be the best way to start instead of going and hiring planners and people to tell them whether they can even sell the stuff. Then, later, down the road, the City will say it already has a lot of money invested in this, because they've hired a different consultant. Like Ms. Gabel said, they already have money tied up in that old Frank's Used Car site so they have to do something like this. And then they will use TIF financing, and none of neighbors will ever see that benefit to the City. It will be 25-30 years before that thing gets on the tax rolls; meanwhile the schools are getting nothing out of it. So, he just does not understand this. He believed the best way is to talk to the people in the area before they start doing anything. There is a good starter home in this area, and he knows people who don't have a lot of money and are able to HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 5 buy their first home in this area. They need starter homes in Fridley. Not everyone can afford $200,000 houses the first time. Ms. Gabel stated that she does live in this neighborhood. Mr. Rust stated he has property in that neighborhood also, and he lives across the street on the other side. He sees what has been built at Gateway East. He asked if anyone has noticed what the water does when it runs off the roof onto the little patio and then down in the front garage door and stains the siding? He hopes they don't build stuff that looks like that in Gateway West. Mr. Meyer stated the inception of developing the whole area started with the Frank's Used Car lot. That lot was an eyesore, and the HRA believed that it was decreasing property values and making the neighborhood a less desirable place to live. Now it is time to decide what to do with the property to make that part of the City a more desirable place for those who live there. Is it to build houses, single-family, multi-family? Is it to try to incorporate offices or commercial in with residential? How large? Should they be talking about taking some additional houses here and there? Or should they just leave the area as it is, the land as it is, and just utilize that land? That is the HRA's goal and to work with the City Council and the residents to decide how best to accomplish that goal. Dr. Burns stated that he believed one of the main reasons for looking at a larger area is because they know from experience, and from other cities' experience, that they have a better chance of getting a higher quality developer than they might with just a few acres. He believed they saw some of that with the contrast between the Christianson Crossing project and the Gateway East project. He thinks they did have a larger area, and they did get a much better, development at that corner. This is also the gateway entrance to the City; it's an area where you hopefully want to have a good visualize impact as people enter the City. So, they believe they should at least look at the possibility of the larger development and, if that's not feasible, they won't do it. Dr. Burns stated they do not know whether or not people are interested in selling their properties. It could be that many do want to sell, but they don't know that. He does know that under the regulations they operate under, each homeowner would be treated fairly, would be given a very good value for his/her home, would be given very good relocation benefits, and would be assisted in finding alternative housing. Mr. Fernelius stated staff is willing to meet with residents one-on-one. He stated he and Scott Hickok can also be reached by telephone and are always willing to discuss this project further. Ms. Gabel asked if staff has gotten a sense of what people want from comments they have heard. She is hearing some residents saying they want nothing. There are also some small scale projects that could be done to pay the HRA back for its investment in the used car lot. She didn't hear that from anybody in this audience, and she is wondering if they heard it from anybody he has talked to. Mr. Fernelius stated staff inet with 3-4 homeowners from the area. In general, he believed people were more interested in how it would affect them. They would be acquiring their houses possibly and that is an emotional thing to go through. Questions they had were how would it affect them and when would the City want to come and acquire the property? They did spend time at least talking about the redevelopment scenarios, and he thinks they just kind of got more questions in general from the City's timeline, and he didn't hear a stated preference on any one of the scenarios. He asked if Scott would agree with that. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 6 Mr. Hickok agreed. The homeowners had excellent questions and some very good comments, but no real sense of which option they were leaning towards. Ms. Gabel asked if anyone in the audience had a preference on any of the scenarios. Mr. Dick Snyder, 5901 Second Street NE, stated he has talked to some of the neighbors in the area, although he is not directly involved with the area that has been set up. At the last meeting he attended, Mr. Fernelius had stated he believed it was five or six different scenarios that could be done. Mr. Snyder stated he has heard that a lot of people in the area are really kind of going for the single family housing and just take up the areas that are there. He believed there are four or five lots on the Frank's Used Car lot site that could be used for single family housing. When they get into the large scale of taking people's homes (people who have lived here for years and years), they are not in favor of it. He believed a neighborhood meeting, as suggested by staff, would get all these people out to voice their own opinions. Mr. Hickok stated one additional thing that might help homeowners look at how some projects like this might work is the Community Development Journal episode that is running right now on cable channel 17. The City looked at a similar project in Golden Valley just to see what kind of issues they encountered, what kind of development they ended up with when they were done, and what kinds of image issues (streetscape issues, etc.) they worked on. As Mr. Fernelius mentioned earlier, staff is very much in an information seeking mode right now, and one of the things they are doing is visiting other communities and visiting other similar projects like this. The Golden Valley project is a larger scale project with about 10 acres. 2. MONTHLY HOUSING REPORT Mr. Fernelius replied they have provided the HRA with the customary housing program report that covers a couple of different periods. For example, on the loan origination side, they are looking at loan activity through the end of February 2003. They have provided a total of three loans with a combined value of $47,550; and it has to break down into various columns in terms of who provided the funds for those loans. The second page shows a loan servicing report for the month of January. The February report will be provided to the HRA at the next meeting. Mr. Fernelius stated the last two pages are the reports that cover the Remodeling Advisor and Operation Insulation. It's been somewhat light in terms of activity for the first couple of months. They are expecting that will pick up. The North Metro Garden Fair was held this past weekend, and a number of individuals picked up literature from CEE about the program. So they are hoping to get some additional activity as a result of that fair. Ms. Gabel asked if he knew if delinquencies have increased due to the state of the economy' for instance, what the picture would be a year ago versus what it is today. Mr. Fernelius replied he hasn't done any in-depth analysis, a year-to-year comparison, but he could certainly do that. It does seem like the delinquencies over the last several months have gone up, and he doesn't know if that's a reflection of the economy or not. Mr. Bajwa asked if they have any recourse for collection with these loans if they continue to become more and more late. Mr. Fernelius stated they do. He believed that in late 1997, the HRA adopted a policy that outlined what steps they could take. All the loans that they provide are secured with a mortgage, so they have a secure interest. So, if they wanted to call a loan due, they would basically foreclose on it; but, depending upon how much money they're talking about, that can HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 6, 2003 PAGE 7 be a very expensive proposition. But they do have a policy in place in terms of when they would consider foreclosing on a particular borrower. They have not had that in the history of the program. They more or less operate on sort of a patient mode. They know that at some point they are going to get paid, because they do have a mortgage against the property. That is generally the approach. The company that services their loans does have a system in place of reminders, and they keep track of who is on time and who is behind. He can provide that information to the HRA. Ms. Gabel stated that just due to the fact that they have never had to foreclose on a loan means they have done a pretty good job overall with their loan program. Mr. Fernelius, stated, yes, he believed that was true. Dr. Burns stated he just wanted to compliment Mr. Fernelius and others staff inembers on the great job on the North Metro Garden Fair held on March 1 at Mounds View Community Center. They had 55 contractors, and between 700-800 people attended the fair. There were seminars and other opportunities for people to learn about home remodeling. ADJOURNMENT MOTION by Mr. Bajwa, seconded by Ms. Gabel, to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYERS DECLARED THE MOTION CARRIED AND THE MARCH 6, 2003, MEETING OF THE HOUSING AND REDEVELOPMENT AUTHORITY ADJOURNED AT 8:12 P.M. Respectfully submitted, Denise M. Letendre, Recording Secretary