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HRA 06/03/2004 - 29531CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY JUNE 3, 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: Virginia Schnabel Larry Commers Pat Gabel William Holm. Members Absent: John Meyer Others Present: Grant Femelius, Assistant HRA Director Scott Hickok, Community Development Director Rebecca Brazys, Recording Secretary APPROVAL OF MINUTES — May 6, 2004 MOTION by Mr. Holm, seconded by Ms. Gabel, to approve the minutes of the May 6 meeting. Ms. Schnabel referred to the paragraph on the last page of the minutes where she had questioned the relationship between Paul Baaken, who would be performing the appraisal for the HRA on the Medtronic property, and Earl Baaken, the founder of Medtronic. She explained that she was able to confirm through family members that there is no relationship and, therefore, no conflict. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO THE APPROVE THE MINUTES CARRIED UNANIMOUSLY. CONSENT AGENDA ➢ Consider claims and expenses. MOTION by Ms. Schnabel, seconded by Ms. Gabel, to adopt the consent agenda. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING AND REDEVELOPMENT AUTHORITI' MEETING — MAY 6, 2004 Page 2 of 7 ACTION: ➢ Conduct Annual Meeting and Elect HRA Officers MOTION by Ms. Schnabel, seconded by Ms. Gabel, to nominate Larry Commers as Chairperson. MOTION by Mr. Holm, seconded by Ms. Gabel, to close the nominations. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE NOMIIVATION CARRIED UNANIMOUSLY. MOTION by Ms. Gabel, seconded by Mr. Holm, to nominate Ms. Schnabel as Vice Chairperson. MOTION by Mr. Holm, seconded by Ms. Gabel to close the nominations. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE NOMINATION CARRIED UNANIMOUSLY. INFORMATION ITEMS: ➢ Ashton Avenue Bid Summary Mr. Fernelius reported that one bid was received for the Ashton Avenue lot. This bid was from Gilmore Construction in the amount of $60,000, with the minimum acceptable bid set at $57,500. Gilmore Construction owns the lot immediately north of the property in question and plans to develop both lots at the same time. They propose to build a 1180 square foot modified-two story home with a three car attached garage. Mr. Fernelius reviewed the floor plans for the house. There will be 1180 square finished square feet with additional square footage on finro unfinished levels. The home will have an estimated sale price of $230,000. The requirement in order to submit a bid was $225,000. The builder has met all the requirements in order to prepare a bid. They are also licensed and in good standing with the State of Minnesota. The staff did check with the Commerce Department and Gilmore Construction has an active license and there are no enforcement actions against this builder. Mr.Fernelius stated the staff recommends the HRA award the bid to Gilmore Construction subject to the following conditions: 1. That the HRA hold a public hearing at the next regular HRA meeting (which is required before we actually authorize the sale of the property.) 2. That Gilmore Construction is in compliance of all the terms and conditions of our housing replacement program. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 3 of 7 3. That Gilmore Construction executes the appropriate contract documents in order to complete the transaction. Mr. Fernelius explained the next step will be to schedule the public hearing for July 1 and will work with the builder to refine the house plans and address a couple of issues from a zoning perspective. The revised plans and the development agreement will be brought back to the HRA at the July 1 meeting. Mr. Commers asked what the development agreement does beyond the sale agreement. Mr. Fernelius responded that the development agreement outlines the obligations of both parties in terms of closing date, who's responsible for taxes, what happens in the event the builder doesn't construct the house, and other details. Ms. Schnabel asked if the development agreement includes the requirements we may want to include in terms of the finish of the house, landscaping requirements, and other such issues. Mr. Fernelius stated the staff has listed as an exhibit to the agreement the quality of materials to be used in this home but we can add those items to the development agreement. Ms. Schnabel asked if they plan to construct a single family home on the lot immediately north. Mr. Fernelius stated that it is his understanding they will build a single-family home on both lots. MOTION by Ms. Gabel, seconded by Ms. Schnabel, to accept the offer of $60,000 from Gilmore Construction for the Ashton Avenue Iot. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO ACCEPT THE BID CARRIED UNANIMOUSLY. MOTION by Ms. Schnabel, seconded by Ms. Gabel, to schedule a public hearing for the Ashton Avenue lot sale at the July 1 meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO SET THE PUBLIC HEARING CARRIED UNANIMOUSLY. ➢ Gateway West Update Mr. Fernelius stated that after the last HRA meeting the staff was contacted by Eileen Pawluk, 5931 3� Street, who indicated that Ms. Pawluk was no longer living on the HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 4 of 7 property and was interested in selling the property. The staff had the property appraised by Lake State Realty Senrices. Also, the relocation consultant looked at the property and identified a comparable replacement dwelling so that the staff has a handle on what the relocation costs will be. On June 1, the staff met with the family, presented an offer of $92,000 and this offer was accepted today. They are in the process of signing the purchase agreement and Mr. Femelius does have a verbal agreement of acceptance. Ms. Pawluk will have to move in a relatively short period of time so she would like the HRA approval this evening. Mr. Femelius explained that a comparable property has been identified by the relocation consultant at approximately $120,000, which is a difference of $28,000 between the purchase prices. He explained the Uniform Relocation Act governs this requirement. Mr. Holm asked how this compares to the other properties the City has acquired in that area. Mr. Fernelius stated this property is less expensive. MOTION by Mr. Holm, seconded by Ms. Schnabel, to authorize the staff to enter into a purchase agreement with Eileen Pawluk for the purchase of the property located at 5931 3�d Street NE in the amount of $92,000. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION TO AUTHORIZE THE STAFF TO ENTER INTO A PURCHASE AGREEMENT WITH EILEEN PAWLUK CARRIED UNANIMOUSLY. Continuing the Gateway West discussion, Mr. Fernelius stated the staff met with the owners of 271 and 281 57th Place (just north of the Burger King), which are two properties the staff had tried to acquire two years ago. Those owners are now interested in negotiating with the HRA. We are currently having the properties appraised and plan to negotiate with the owners. We'd like to come back with purchase agreements to the July 1 meeting. Mr. Fernelius also stated the staff has made no additional progress with the owner of the four-plex on the north end of the Gateway West site. Two attempts have been made to contact the owner and he has not responded to voicemail messages. The staff would appreciate some direction from HRA members whether to proceed with condemnation or let the property go. The four-plex appears to be vacant. There is no rental license for the four-plex. The owner is current on taxes and utility payments. Mr. Holm stated the City should just let this property go, if the owner is not interested in negotiating. Condemnation is more expensive and he did not believe it to be a good option. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 5 of 7 Chairperson Commers stated the HRA has not favored condemning personal residences unless there is no other choice. The owner can't rent the property, it's vacant, and it doesn't make any sense why he won't negotiate. Ms. Schnabel questioned what process is required for obtaining a rental license. Mr. Fernelius explained the fire department issues rental license. The owner would have to apply for the license, an inspection would be done and the owner would be required to address any issues cited during the inspection. He added that the last information the staff had was that the property is in pretty tough shape in the interior. Also, a previous owner had tried to convert the building to an office use until the City intervened. Mr. Hikock concurred that an inspection would be done if the owner applies for a rental license. Also, because of the history of this property, they would immediately check the condition of the property to see if there are still four rental units and what concerns need to be addressed. Chairperson Commers commented that the condition of the property would detract from the appraised fair market value. Also, with no current rental history, that would be another issue. He added that the property is an eyesore and he wondered how the surrounding property owners feel about it. Ms. Gable pointed out that there are no tenants so there is no issue of displacing anyone from the building. Ms. Schnabel stated she is a little reluctant to do the condemnation at this point. She suggested the HRA review the situation in three months to give some time to see what transpires. She stated she would like to have an inspection done to have a better understanding of the condition of the property. Mr. Fernelius explained that if the four-plex property were obtained, it would only add a seventh lot; without it there would be six. What the four-plex property would allow would be to add the seventh lot and possibly increase the size of the other lots. Mr. Holm asked if proceeding with Gateway West now without the four-plex property makes it more difficult to proceed with condemnation at a later date. Mr. Fernelius stated it would not. But it would be better to assemble all of the land up front. We don't have to act tonight, however. After some discussion, Chairperson Commers suggested that the staff ask the City attorney to contact the owner and schedule a meeting to try and reach a resolution. Chairperson Commers questioned the figures on the last page of the Gateway West report. HOUSING AND REDEVELOPMENT AUTHORITY MEETING — MAY 6, 2004 Page 6 of (p Mr. Fernelius reviewed the figures and determined the far right hand column was incorrect and will have to be retabulated. ➢ Update on Settlement of Tax Valuation for Medtronic Headquarters Chairperson Commers had some questions regarding this matter and Mr. Pribyl agreed to investigate and respond. ➢ Monthly Housing Report Mr. Fernelius explained he included a new report for this month entitled "Application Summary" which will give the HRA members a sense of how many applications are being sent out and how many are being processed. For May, over 50 applications were sent out for the month of May for the revolving loan fund and three loans were closed. Not everyone who receives an application ends up submitting it. The Loan Origination report reflects no new activity for May. The Loan Servicing report for the month of April shows the collections for our various loan programs and outstanding principal balance as well as an indication of delinquencies. The delinquencies have stayed fairly constant over the past year. The last report is a summary of our Remodeling Advisor and Operation Insulation programs. We've had a total of 28 appointments, which is a little over half way to the goal of 50. For the year, we've had a total of 10 appointments for the remodeling advisor with a goal of 25 visits. ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Ms. Gabel, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MEETING ADJOURNED AT 8:50 PM. RespectFully submitted by, �� , ����'��� �� a Rebecca Brazys Recording Secretary CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING ��� ��� Name and Address Agenda Item of Interest