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HRA 12/07/2006 - 29605„—� CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY DECEMBER 7th, 2006 CALL TO ORDER: Chairperson Commers called the regular meeting of the Housing & Redevelopment Authority to order at 7:30 pm. MEMBERS PRESENT: Larry Commers, Pat Gabel, William Holm, John Meyer. Steven Billings OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Development Director William Burns, City Manager Mike Jeziroski, City Accountant APPROVE OF MINUTES: 1. Approval of November 2nd, 2006 HRA meeting minutes Commissioner Gabel stated that on page two the 4th to the last statement should read "along with soil remediation and demolition...”, page three the first paragraph it should read "To get a handle on the market value they talk to the assessor about other comparable sales... , on the �� second to the last page, last paragraph should read "We are on schedule to meet the plan..." and the last page, Mr. Casserly second to the last statement needs to be clarified. � Paul Bolin, HRA Assistant Executive Director, will verify Mr. Casserly's statement and make the other amendments to the minutes. MOTION by Commissioner Holm to approve the minutes as submitted with the above corrections. Seconded by Commissioner Meyer. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ACTION: 1. Approve of Expenses Commissioner Commers stated that he had the HRA checking statement and everyone should have a copy of the statement. He asked for a motion to approve as presented. Commissioner Holm questioned the repair brick item. Paul Bolin, HRA Assistant Executive Director, answered that the brick was located on 57th and Main Street and was part of the 1997 street improvement project. HRA originally funded a portion of that fence and it was knocked down late last summer by a hit and run driver. HRA took on the expense to fix the brick. MOTION by Commissioner Gabel to approve the HRA checking statement from November 3rd through December 7th, 2006. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. � 2. Approval of Final 2007 Budget Mike Jeziroski, HRA Accountant, presented the final 2007 Budget Document with updated tax increment figures from the County. The only thing that has changed in the budget from the last meeting was the revenues. The projected total revenue is $5.1 M for 2007 which reflects a 15.66% increase from 2006. The expenses are the same at $3.2M which is 14% less than 2006. The debt service obligations revolving loan reflects $19,963 on payment for a$1.5M loan from the City. The bond TIF 2 is $645,000 and TIF 3 is $1.2M. The bond schedule is attached in the packets reflecting a surplus of approximately $1.2M after the bond has been paid back. Commissioner Commers asked if Staff is still looking into the inactive TIF's. Paul Bolin, HRA Assistant Executive Director, answered that a meeting is scheduled on 12/14 to discuss the TIF's. Commissioner Billings stated that he viewed the prior meeting and was confident the budget is well in order. MOTION by Commissioner Gabel to approve the 2007 Budget as presented. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATIONAL ITEMS: Paul Bolin, HRA Assistant Executive Director, asked if he could have a few minutes to talk about � the potential Gateway North East Project that came about recently since the packet was mailed. At the last meeting HRA asked Staff to get some appraisals of properties in the area. At 6005 University Avenue is the former Carquest building and 6041 University Avenue is the original Van-o-Lite building. Last month HRA authorized Staff to move forward and get some appraisals on the properties. The property owners did approach Staff a few months back to see if the City would be interested in purchasing those properties. An appraisal report came in last Friday and Staff made offers to the property owners based on the fair market values. As of today Staff is still waiting for a response to the offers and in discussions with realtors representing both sellers, he said it may take another week or so for a decision. Staff recommends the HRA to authorize Chairman Commers to sign an accepted purchase offer on behalf of the HRA if an agreement is received priqr to the January 4th meeting. For tax purposes, one or both of the sellers may want to close on the properties before the end of the year. If the terms are not that different from the fair market value that is offered, HRA recommends Chairman Commers to sign the purchase agreement on behalf of the HRA. Commissioner Commers stated that he did not have a problem signing the agreement but asked if Staff would call the members of the HRA and tell them if there is a price difference from the appraisal and the final purchase price. Mr. Bolin stated that other property owners in the area also have a desire to sell. The properties will be appraised early next week and those figures will be brought back for consideration at the January meeting. Staff is not sure what to do with this property but the blight analysis will be completed and Staff will try to get a resolution passed declaring the intent to eventually include these properties in the tax increment district when it is completed. The buildings will be demolished and the planning will be started for this area. What is the future? Right now the sky is the limit as developers are not buying up the land or giving advice on what to build. This is an �,.1 opportunity for proactive planning of the area before the development pressure starts. There are a number of different options for the planning of the area. The City Council could be involved with the HRA in developing a vision for the corridor and find a developer to deliver the vision. HRA � could let the private market tell us what would work on this site or a possibility could be to work with a group called the Corridor Housing Initiative. This group is an alliance between Center for Neighborhoods in Minneapolis and the Metropolitan Design Center at the University. A number of architects and planners are involved with this group. They have an innovative planning approach where they work with people to help them visualize what the end product could be. The term they use is practical visioning. The group uses feedback from the neighborhood to see what is needed in the area. Mr. Bolin was at a meeting where the director of the group gave a presentation. So far this group has done eight corridor initiatives in the Minneapolis area. They have been successful and are looking for three suburban communities to test this project further. If this is something HRA is interested in, a representative could come to a future meeting to present the services they have to offer. Commissioner Commers stated that the reason we would acquire this property is because of the unique opportunity of the vacant buildings. After the properties are in control, we could look at the planning process. Commissioner Meyer agreed with Chairman Commers. The planning approach should involve a planning professional to take a look at both sides of University Avenue and see what should be done in the way of planning. This would be a professional acquired by the HRA and it seems that this may fit into the group Mr. Bolin spoke of. At this stage of the game, we should stay away from developers until a decision is made as to what we would like to do with the area. Developers would be contacted at a later date. Commissioner Gabel stated that it is a little early to make any concrete decisions about where we want to go with this area. She did not feel enough information was known about the Corridor Housing Initiative to make a commitment tonight. �"1 Mr. Bolin stated that he is not looking for a commitment, but he just thought it would be a good fit with what we are trying to do. This group is a professional planning group and a neutral third party between the city, residents and business owners. This process would work well when the city doesn't have control of all the land in the development area. The intent is more informational and the group could attend a future meeting to provide more information. Commissioner Gabel asked how this group is paid for their services. Mr. Bolin responded that they are funded by Fanny Mae, Local Initiative Support Corporation and the Family Housing Fund. Commissioner Gabel questioned if their services are at no charge. Mr. Bolin responded that it is possible Fridley could be chosen as one of the three trial suburban communities. To pay for this service would cost around $30,000. Commissioner Billings stated that it makes sense to gather more information either prior or after an HRA meeting. Commissioner Commers stated that until we know what we have for properly, it is hard to plan but would be good to gather more information on this company. Commissioner Gabel stated that it may be beneficial to have the presentation during the meeting so the public could also see what they have to offer. Commissioner Commers stated that it is no harm to invite them out to find out more about the �„\ Corridor Housing Initiative. William Burns, City Manager, asked if this company had a website. � Mr. Bolin stated that the website is stated on the handouts. www.centerforneighborhoods.org MOTION by Commissioner Billings to allow Chairperson Commers to execute a purchase agreement within the parameters of the appraisal and if there are significant differences, Staff will contact HRA representatives. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. Gateway West Update Paul Bolin, HRA Assistant Executive Director, stated that Blue Print Homes began excavation for the next two homes. The Council approved the second addition plat drawings on November 13th. Once the county finishes their review, we can start selling those lots to Blue Print Homes. The fence project is completed and the final inspection is tomorrow. Mr. Bolin stated that Julie Jones and the Planning Department did a nice feature on the development in the City's Community Development journal. This began airing this past weekend on channel 17. When they went to film, a new resident, the builder and realtor were present to interview. People that have been living further out in the suburbs are purchasing these homes to be closer to the city. Commissioner Commers asked if the fence was paid in full. Mr. Bolin answered that there is one payment left. �"'1 Commissioner Meyers asked about the zig zag of the fence, if it was done to preserve trees. Mr. Bolin answered that part was because of MN Dot right of ways, some for storm sewer drain pipe ends, and others to save trees. 2. Monthly Housing Report Paul Bolin, HRA Assistant Executive Director, stated that there was nothing to report for the housing report as we did not close on a single loan. Maybe because of the holidays, people are not choosing to put money into their homes or the higher interest rates. Year to date the revolving loan fund has 8 other loans and 6 deferred loans. In the packet some of the numbers do not match up. We hope to get together to simplify and standardize the report. The available balance budget was $625,000 for the revolving loan fund this year and we have $500,000 left. The deferred loan budget was $200,000 and $143,000 is left. This year we did not come close to going over budget. The remodeling advisor visits, November there were none and year to date there are 33. The cause for the drop in visits is unknown and we were on pace to make our goal of 50 visits until August, then we saw a drop. Operation Insulation had no requests in November and have had 3 requests year to date. Dr. Bums is going to plug operation insulation in the February news letter and hopefully that will generate some discussion. Mr. Bolin will also give an overview of the programs at the January City Council Meeting. Hopefully this will spike some action in these programs at the beginning of the year. Commissioner Commers stated that Staff will need to see what needs to be done to generate more loans and the programs are for the residents benefit. Mr. Bolin stated that other areas are experiencing the same difficulties and that business has � been slow. Hopefully we will see business pick up and find some innovative ideas to promote the programs. The actual loan collection was $9,500 befinreen principal and interest. The loan delinquencies, there is one loan that is 30 days late, one 30/60 days late and 4 loans that are 60+ ,.-� days past due. The overall report of 83 loans, 4 delinquent loans does not seem like a lot, but it is 6% of our loan portfolio. CRF has a good policy to collect the funds that are due. They will work with people to collect the funds and eventually the property could end in foreclosure. Commissioner Meyer asked if the only way for collection was foreclosure. Mr. Bolin stated that the policy states the number of notices that go to the property owner. Not until the property owner is very inactive and doesn't respond would foreclosure action be taken. NON AGENDA UPDATE. 1. Islands of Peace Paul Bolin, HRA Assistant Executive Director, stated that the Islands of Peace continues to move along with converting the apartment buildings into condominiums and co-housing units. There are new contractors on site and permits continue to be pulled. The recent article in the Star Tribune paper was good publicity for the developer. 2. North Star Rail Station Site Mr. Bolin met a week and a half ago with representatives from United properties. They are working with the JLT group on identifying different possibilities for the former TIRO industries site that is located on 694 and East River Road. One of their ideas was if the City would be willing to work with the developer and Burlington Northem in moving the potential North Star Rail site from 61st down to about 57th and construct an underpass of some sort and connect the road through East River Road, they felt they would be able to attract hotel, office and retail users. It is fairly late in the game to make location changes and tough negotiations have been made regarding the � current site. Burlington Northern would prefer a site further to the north. The JLT group and United properties will see if a move makes sense from an engineering prospective and if moving the rail is possible. Commissioner Commers asked if they were talking about a joint partnership where they would develop their own so they wouldn't have to purchase the entire property. Mr. Bolin answered that they wanted to be a partner in it and the actual station loading platForm would be in the rail property. Who would pay for the underpass and public improvements is unknown. Their contribution for land for parking structure etc. is very preliminary at this point. William Burns, City Manager, asked if the City has heard from Breitinger. Scott Hickok, Development Director, answered no. Mr. Breitinger has been very good to work with and straight forward about this. Because he is with United Properties and United Properties is working with JLT to contemplate development options it has been an interesting meeting dynamic. The good thing is that a lot of people are listening and good information is being exchanged befinreen parties. No commitments or hard fact outcomes, but good feedback from the folks talking about the future development has been an outcome. As United Properties sees it, it will be a very different type of development depending on where the station site is and how you might be able to cross under the tracks. With the lack of east west connections with the site, it is difficult to access the site. As such the site might still serve as a big box retail development destination with some minor other mix of retail uses. The difference is if the rail could be moved, they could work in some hotel users. The parking would be an intricate part of the development right from the beginning. It is very early on in the process and there will be some trade ofPs in regards to parking if the site were to move south. All of this discussion is very exciting ^ information, but viewed as very early discussion. Staff just wanted to make HRA aware of what is going on and will keep HRA abreast of any new developments with the project. ,,-� Commissioner Commers asked as of today where the City was on the station. Mr. Hickok replied that the community rail representatives have negotiated very hard to keep Fridley's station in the Northstar project with Burlington Northern. Burlington Northern has gotten past the paradigm that Fridley is out because it is too close to our yard. They are excited to get the underpass site done at the 61 g� Avenue site and would like to install a box culvert now. A box culvert is an underpass for pedestrian path with elevators to get up to the platForm. Burlington Northem has said that if Fridley will have a station they would like have control of the construction so it is not disruptive to train service. We are not out the picture in terms of having a station site, timing is more the issue. Commissioner Billings stated that to reiterate what Mr. Hickok said, in the negotiation process with Burlington Northern, North Star had established a budget for the project which included $90M to be paid to Burlington Northern Sante Fe for track improvements etc. In the negotiations, Bringing Northern was looking at $200M in the beginning. The price of $107M was agreed upon. This meant that North Star and the State of Minnesota Highway Department had to come up with an additional $17M somewhere to pay Burlington Northern. A number of things were looked and changes were made like looking at buying some used diesel engines but in the final analysis, the typical station site cost about $2M to build. The Fridley site, due to high acquisition costs and the tunnel is about $10M. Additionally the Fridley station would have passengers that would be boarding short distances. By removing the Fridley station they save $10M and relieve some amount of impact on the percentages and things that require the federal transportation administration to justify competition with other areas. We actually need to meet certain guidelines for the Federal Government to justify that Minnesota needs this money rather than other states. The number of passenger miles that are eliminated by taking Fridley out of the Federal Grant process has the least amount of impact on our numbers plus it is the most costly station. There is an agreement for Burlington Northern to construct a station currently at 61 st. However, right now ,� North Star is looking at where to come up with the $10M to build the station. Commissioner Commers asked who would control and operate the site. Commissioner Billings answered that the station site would be owned and operated by the state of Minnesota. Basically there are two parties who are really involved in the money part of the station, the Minnesota Department of Transportation and the Metropolitan Council. The Metropolitan Council would be the operating agency who would operate the fare box etc. and the Minnesota Dept. of Transportation will actually own everything around it like the station itself and parking lot. Maintenance of the track would be done by Burlington Northem but other maintenance would be done by the Minnesota Dept. of Transportation. North Star and the Anoka County Delegation and Commissioners are very much committed to have a station site in the City of Fridley. Commissioner Gabel asked what the issue was to being so close to their switching yard. Commissioner Billings answered that Burlington Northern is primarily in the freight business and do not want to disrupt the freight operations. Burlington Northern is willing to allow passenger trains to use their track, but they do not want it to interfere with their freight operations. The Northtown yard is the busiest switchyard for Burlington Northern between Chicago and Seattle. They have more trains coming through here than other connections. Their concem is the underground connection of the two sides of the track. If something would happen and they had to shut down for a day, it would cost them millions of dollars and could immobilize both yards. This is one of the reasons they would like to control the construction of the station. This could possibly work out for everyone and cost less money. � 3. Gateway Northeast This was discussed earlier in the meeting. �..� 4. TIF Guidelines Commissioner Commers stated that the policies were. in the packet of the final version that was adopted in 1992. The material is for informational purposes. They are trying to decide if it is appropriate to update the guidelines to today's language. 5. Anoka County EDA Commissioner Billings stated that Anoka County is establishing an exploratory committee to determine whether or not an EDA is practical. The study period will last six months. At the end of the study period, the recommendation from the exploratory committee will either be to establish an EDA, let the County peruse special legislation, or continue with the HRA. At the December 19th County Board meeting, 11 people will be nominated to this committee, six will be nominated by local governments. Commissioner Billings name will be submitted to Anoka County as a potential person to sit on the EDA Committee. We will not know until December 19th whether the Anoka County Board has chosen Commissioner Billings to be on the committee. Commissioner Commers stated that at this point we do not know where this is going to go. He questioned if any information was known about the kind of tax authority they will have or what presumption it will have with respect to the Fridley HRA. Commissioner Billings answered that based on historical action of the Anoka County Board and attempts to create an EDA, the goal would be to establish an authority that would have more ability to do economic development than the County HRA. There are a number of cities that do not participate in the HRA levy, Fridley is one of them. Based on historical action, the County Board may be looking at trying to encompass the entire counry in some kind of development levy that would be controlled by the Anoka County EDA. Even if there was an Anoka County levy, it � should not inhibit our ability as the City of Fridley HRA to actually levy the maximum amount that is allowed by the state statues. This would be something over and above that levy and it would go to the County EDA. Commissioner Commers asked how it would affect Fridley doing their own EDA and economic development districts. Commissioner Billings answered that based on the information he has received, the HRA has been in existence for 10-15 years and this should not prohibit a city EDA or HRA to establish TIF districts and things like that. In some cases there have been joint ventures. The County HRA is in connection primarily with those portions of the county that does not have City HRA's. Eliminating city EDA and HRA is not the idea of creating the Anoka County EDA. Everything is speculative at this point and we need to just wait and see where Anoka County wants to take their EDA. Commissioner Commers questioned the Vikings Stadium and if there is still talking going on between the Vikings and Anoka County. Mr. Hickok answered that the County has stated that they do not want to be a bargaining chip to get something done downtown Minneapolis. Anoka County has put an incredible amount of time and money and resource to make this a County opportunity. He is not aware that negotiations are still happening. Commissioner Billings stated that the Mayor of Blaine was considerably disappointed in some of the changes in the desires of the Vikings. Neither the County nor the City of Blaine is pursuing the Vikings at this point. �� 6. Industrial Equities - TIF Assistance Follow up � Mr. Bolin stated that the latest update is that the group that was looking at the larger building fell apart and they are not going forward with that. There will be a two building multi tenant layout coming in later this spring. Mr. Hickok added that the upside is that in a two building plan is a better opportunity for a really nice facade facing Main Street. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MEETING ADJOURNED AT 8:55 P.M. Respectfully Submitted, ���y��� � Krista Monsrud Recording Secretary � 4 � m �1 � CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING �ce�'��' � f L� � ---------------------------------------------------------------------- ---------------------------------------------------------------------- Name and Address Agenda Item of Interest