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HRA 05/06/2004 - 29530� CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY MAY 6, 2004 CALL TO ORDER: Chairperson Commers called the May 6, 2004 Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Pesent: John Meyer Virginia Schnabel Larry Commers Pat Gabel William Holm. Others Present: Grant Femelius, Assistant HRA Director Scott Hickok, Community Development Director Paul Eisenmenger, HRA Accountant Rebecca Brazys, Recording Secretary APPROVAL OF MINUTES — April 1, 2004 MOTION by Mr. Meyer, seconded by Mr. Holm, to approve the April 1St minutes. Ms. Gabel requested a correction on Page 5 under �City Council and Commission Conference Session", the third paragraph, add the word �guidelines" so the statement refers to "Met Council guidelines." UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO THE APPROVE THE MIPIUTES AS AMENDED CARRIED UNANIMOUSLY. CONSENT AGENDA — No items. ACTION: Claims and Expenses MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the claims and expenses as presented. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 2 of 7 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMIIFlERS DECLARED THE MOTION TO APPROVE THE CLAIMS AND EXPENSES CARRIED UNANIMOUSLY. Consider Gateway West Options Grant Femelius stated the purpose of tonight's discussion is to provide the members with an update of the activities that staff have been vvorking on since the last meeting and to review two redevelopment scenarios. Once that's been done, he would like consensus from the HRA members on which option is more desirable and then authorize staff to proceed. Mr. Femelius explained that since the last meeting, a fourth attempt was made to negotiate with the finro property owners at 5931 Third Street, a single family home, and 5955 Third Street, a four unit apartment building. Neither of these owners responded to staff's offer to negotiate. Consequently, staff has reached a point where a decision needs to be made on whether to pursue non-voluntary acquisitions. Mr. Femelius explained that the Gateway West project consists of two non- contiguous parcels in the Hyde Park neighborhood. The first is the old Frank's Used Car property (5700 block of Third Street on the East side) and then one block north the old Wamer's Fumiture site (5900 block of Third Street). The HRA now controls enough land to accommodate the development of eleven single- family lots. Last year, the HRA and City Council agreed to pursue a single-family development as opposed to town homes. So this is considerably smaller than previous proposals. The additional land we are looking at in the 5900 block would add two additional lots for a total of 13 single family lots. Essentially, the decision this evening is to consider whether or not to acquire those additional sites. Mr. Femelius stated the redevelopment options are to continue to pursue the additional sites at 5931 and 5955 Third Street through condemnation. The second option is to move ahead with redevelopment of the area the HRA currently controls. • Option 1 would provide for up to 13 single-family lots. Looking at it from a redevelopment perspective, we would be acquiring a total of 8 housing units, building 13 units with a net gain of 5 housing units. As far as costs, Option 1 would have a price tag of $1,952.045 with project revenues of $1,159,277 for net redevelopment costs of $792,768. • Option 2 would provide for up to 11 units, with a net gain of 8 units. Project costs would be $1,110,890 (most of which is already paid for), project revenues of $1,003,022 with a net cost of $218,957. HOUSING AND REDEVELOPMENT AiTTHORITY MEETING — MAY 6, 2004 Page 3 of 7 Mr. Femelius stated there is room to the south for an optional sixth lot, but we are suggesting that be left as open space for the development. Once we go about clearing this site, there will be no vegetation, no landscaping to create any kind of a buffer. Looking at the other part of the development on the Wamer's site, there will be five single-family lots. Mr. Femelius further explained that both of the scenarios would involve vacating the short, stub streets — 59�' and 58�' Avenue. Both of those have utilities, which creates a challenge when laying out the new lots. We think we can accommodate the lot configuration we have presented this evening without having to do any utility relocation. Mr. Fernelius stated this is a project we have been working on since the mid 1990's. We have discussed a number of different proposals for this project. The proposal for single-family homes is consistent with the comments we've heard from the neighborhood over the last several years. From a redevelopment perspective, a single-family development is probably the most expensive as it does not generate as much revenue as a higher density development. One of the realities is that you have fewer units to spread the costs, so a lower density results in higher costs. In conclusion, Mr. Femelius stated the central issue is what will the additional investment of acquiring the single family home and four un'rt building to the north achieve. From the staff perspective, given the resource constraints we have, it is difficult to recommend a project that has such a high price tag. As a result, we are working in the direction of Option #2 which is a substantially less per unit redevelopment cost. Mr. Holm asked the size of the sixth lot on the Frank's Used Car site and could it be developed at a later time. Mr. Femelius replied that lot is 60 feet wide by 140 feet deep with the 140 feet along University Avenue. It does meet the zoning standards in Hyde Park and could be developed at another time. He questioned how marketable or attractive that site would be which is a part of the reason for keepin� this undeveloped. Mr. Holm questioned how the vacation of 59th Avenue would affect the property, which has a driveway at the back of the lot for access. Mr. Fernelius stated they would be vacating the entire section of 59"' and as part of the project they would offer to provide a blacktop driveway access to Third Street for that lot. What we would accomplish by vacating 59�' and the alley behind those properties is closing that off and redeveloping that entire area. Those stub streets are also a problem for public works that have to plow and maintain them. He added that staff has not talked to that homeowner whose drive would be replaced, but will do so. HOUSING AND REDEVELOPMENT AiTTHORITY MEETING — MAY 6, 2004 Page 4 of 7 Mr. Holm commented that 5931 Third Street lot is only 40 feet wide. He recommended that the property in this proposal be laid out so that there will be a 20 foot strip available to make that 40 foot wide lot buildable in the future. Mr. Ferr�elius stated that is something we can look it, but it may be difficult to do. It may require that the apartment building site be purchased as well. The home itself at 5931 Third Street has suffered from deferred maintenance and its condition is marginal. All members were in agreement that there should be an effort to ensure that the lot at 5931 Third Street would be a buildable lot. Ms. Schnabel asked if there is anything going on in the state legislature at this time that would affect the board's ability to proceed with this development. Mr. Femelius stated incfuded in tonight's packet is a legislative update. There are some issues related to tax increment, but Mr. Fernelius said that legislation deals with much larger projects. Mr. Commers asked if the HRA is under any time constraints for this project. Mr. Femelius responded there is no consequence from a funding prospective. We've already received the block grant funds and no tax increment has been created. The motive in recommending action this evening is to start moving ahead, but if the members want to wait a little longer we can do that. He added that he spoke writh a relative of the property owner at the comer of 57�' and Third Street and he indicated that owner may be interested in selling to the HRA as a part of an arrangement where she could buy one of the new properties or do some type of land swap. He added that he had not spoken to the Tallies who own the home in the middle next to the home on the comer of 57�' and Third Street. Mr. Commers asked if those two lots were added, how much property would be added. Mr. Femelius did not have the exact lot measurements but believed there may be enough land area to add two or three lots. He stated he would happy to evaluate this and report back to the HRA. Mr. Commers stated if the HRA is not under any time constraint, it might be worth it to try and obtain more information and possibfy end up with a better development. � Mr. Femelius commented that from a planning standpoint vve can fix some problems we've had since University Avenue was expanded and 57�' was cut off. 11 � HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 5 of 7 MOTION by Mr. Meyer, seconded by Ms. Schnabel, to continue this matter to the next meeting. Ms. Gabel commented that she'd like to see some kind of reconfiguration to deal with the 40-foot wide lot to the north. Mr. Holm asked if the HRA members have a position on the 40-foot lot. Ms. Gabel stated she is not willing to go into condemnation. Mr. Holm asked if the members are interested in providing an option where we could acquire that lot at a later date. The members all responded yes. UPON A VOICE VOTE, ALL VOTtNG AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO TABLE THIS MATTER TO THE NEXT REGULAR MEETING CARRIED UNANIMOUSLY. Consider Bids for Ashton / Ely Street Lot Mr. Femelius stated the staff did not receive any bids. They did receive some calls and two individuals are fairly serious bidders, but they could not get their proposals put together in time. He suggested the bid deadline be extended to June 1St MOTION by Ms. Schnabel, seconded by Ms. Gabel, to extend the bid deadline to June 1St Mr. Meyer asked if there were any comments about the minimum acceptable bid for this proposal. Mr. Femelius stated there were no comments and he added that this price is substantially less than the lot to the north. Mr. Holm encouraged the staff to readvertise this bid with the new deadline. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO EXTEND THE BID DEADLINE TO JUNE 1sr CARRIED UNANIMOUSLY. Council Commission Review Session — May 17, 2004 — 7:00 p.m. Ms. Gabel expressed her concem that inviting so many commissions and boards may make it difficult to get anything done. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, Z004 Page 6 of 7 Mr. Hickok stated the City Manager's focus at these meetings is to hear from everybody and he tries to keep the agenda tailored to address specific questions. At last meeting, they did have a mix of the Appeals Commission, Plan Commission and the City Council. The agenda for the May 17�' meeting will contain only three items; redevelopment priorities, University Avenue fence, and a discussion about capital improvements in our parks. He added that there are usually three meetings, but this year there are only finro scheduled. Ms. Gabel stated she strongly disagrees. Mr. Commers commented that it seems like the logic is a bit stretched. He added there are items being discussed which the HRA has no ability to do anything. Legislative Update — Week of April 19, 2004 Chairperson Commers asked if there is anything still moving through the legislature that would directly affect the HRA. Mr. Femelius stated the tax increment bill is under Item # 16. He explained that this is the bill Senator Betzold is carrying forward on behalf of Minnesota Solutions. The City staff had an opportunity to meet with him and encouraged his support of this bill. This is a bill that could potentially have some positive impact if the City chooses to do other redevelopment projects in the future. It's what is known as an urban renewal area, which relates to tax increment financing. An urban renewal area is a larger tax increment district, renewal area that would include a number of different tax increment districts, which would allow the c'�ty to pool resources from the individual districts. Right now, the City cannot do that. Also it eliminates the local tax rate, which is used as part of the calculation for tax increment, which creates more tax increment. Chairperson Commers suggested the third bullet point be reduced to $25,000 rather than $50,000. Ms. Schnabel asked what a$50.00 housing penalty is that is mentioned in item IV. Mr. Femelius stated this relates to the housing assistance programs, like Section 8. Individuals who are on that program who also receive public assistance and do not work, there is a penalty to their housing assistance in the amount of $50.00. Fridley operates a Section 8 program through the Met Council. This does not affect our HRA because we do not operate the Section 8 program. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Monthly Housing Report Mr. Femelius stated there is no change in our loan originations. he has raised with CEE and he is meeting with them next disappointed in the level of loan activity and believes we shoul marketing. Page 7 of 7 This is an issue week. He is d be doing more Ms. Schnabel stated she was not at the last meeting and there was an item conceming the Medtronic appraisal invoice. The minutes stated that Paul Baaken's company would be perForming the appraisal. Ms. Schnabel asked if this Baaken is related to the founder of Medtronic, Earl Baaken, to ensure there is no conflict of interest. Mr. Femelius stated he would look into this and get back to the HRA. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Ms. Schnabel to adjoum. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO ADJOURN CARRIED IDNANIMOUSLY. THE MEETING ADJOURNED AT 8:30 PM. Respectfully Submitted, �.� ' � Rebecca Brazys Recording Secretary