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HRA 02/01/2007 - 29534I� CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY CONIlVIISSION February l, 2007 CALL TO ORDER• Chairperson Commers called the Housing and Redevelopment Authority meeting to order at 7:27 p.m. ROLL CALL: Members Present: Larry Commers Pat Gabel William Holm John Meyer Steve Billings Others Present: Mike Je�iorski, City Accountant Paul Bolin, HRA Assistant Execurive Director Jim Casserly, Development Consultant Richard Pribyl, Finance Director/Treasurer William Burns, HRA Director APPROVAL OF MINUTES: 1. Approval of December 7, 2006, Meeting Minutes MOTION by Commissioner Holm, seconded by Commissioner Gabel, to approve the minutes as amended. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ACTION: 2. Approval of Ezpenses Commissioner Gabel asked regarding removal of an uprooted spruce tree, where is that? Mr. Bolin replied that was right next to our new fence. MOTION by Commissioner Meyer, seconded by Commissioner Billings, to approve the HRA checking for the period December 8, 2006, to February 1, 2007. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMNIERS DECLARED THE MOTION CARRIED UNANIlVIOUSLY. 3. Approval of Resolution to Create TIF District #19 Paul Bolin, Assistant HI2A Director, stated John Allen of Industrial Equities plans to redevelop the site at 5110 Main Street. This is the former location of Guardian Building Products. They will recall a discussion they had on this item back in November where the HRA gave preliminary authorization for staff to move forward with the creation of TIF District #19. At the time Mr. Allen was actually proposing two options for this site: one being two buildings, totaling 202,000 squaxe feet; and the other proposal was one larger building which Mr. Bolin believed was around 240,000 square feet. Either scenario is to be used for new office warehouse. The larger building was for a specific tenant that Mr. Allen had been courting, and that tenant is no longer a possibility. At this time Mr. Allen is moving forward with his two-building design and does anticipate high costs, both for the demolition of the existing building and for soil corrections. City staff does know that after the 1965 tornado there was a trench dug on this site, and all the debris from the building that had been in place at the time was pushed into that hole. Staff does anticipate some soil corrections with that. Mr. Allen has asked for $1.5 million and pay-as-you-go financing. What that assistance it does make the site competitive with clean sites in outlying suburbs. Redevelopment is very expensive here in Fridley, but for the assistance from the HIZA, the redevelopment is not feasible for Industrial Equities. Industrial Equities will clean the site, demolish the buildings, construct a new building which they plan to own and manage for the long term as they have with their other properties here in Fridley. What this does for the City is eliminated outdoor storage problems that we had with the previous user of this site, it will correct the soil problems, provide new investment down in this neighborhood, and create new jobs in the City of Fridley. Mr. Bolin stated, therefore, staff does recommend approval of the resolution creating TIF District #19. The City Council will also hold a public hearing on this item and take action at their meeting on February 26. Also in their packet they did have a copy of the development agreement that would go along with the creation of this TIF District. It spells out the Authority's obligations to Mr. Allen, and Mr. Allen's obligations to the City and to the HRA as part of this agreement. Attorney Casserly did draft that agreement who is also an expert on the intricacies on how this TIF financing will work. Mr. Bolin thought they were going to have a representative from Industrial Equities with them tonight to answer any questions specific to the new development. In lieu of that he can try and answer some of the questions for them. Further, if they have had a chance to read through that development agreement and, if there are no substantial changes, staff would also recommend the Authority approve that tonight. If Mr. Allen gets back to the City with a number of substantial changes, staff would bring it back to the Authority again in March. Chairperson Commers would not move forward with signing the agreement until some time after the City Council officially approves the district on February 26. 2 Chairperson Commers asked if he is correct that this agreement is similar to what they had before? Jim Casserly, HItA Attorney, replied this is similar to agreements the City and HRA have done. What he did is actually took the agreement the Authority had with Allen from 1996, a district that just ended. In that particular project they provided a grant, and it was a little bit different structure in that project. It was essentially a grant and a loan, and the City provided the cash up front. In this new agreement the City is not providing any cash up front. This is a pure pay-as-you-go type project and, if the tax increment comes in and the taxes are paid timely, then the revenue note would be paid. The new taxes are pledged to the payment of the revenue note. So the City is not putting any funds up front on this. The City would make a payment over time, representing reimbursement for eligible expenses. What Mr. Allen does, and has done in the past, is take the note and essentially assign it to a lender. That is what normally generates additional revenues for the project. So it is a very common device. The Authority has in fact done it on other projects, such as with McGlynn Bakery they did a similar kind of arrangement. Attorney Cassserly thinks there are still several notes that are outstanding the City makes payments. This is one where it would be a ma,ximum of 16 years that the City would make payments on. At the end of that period of time, the note would be deemed paid in full. He can go through the provisions of the agreement. It probably does not help to see the differences that are with the previous agreement because this one really is substantially different. The only reason he did that one is, when they went to blackline it, there were whole huge pages that were changed. Chairperson Commers asked if anyone wanted to go through it? They have done these before and it is no different. The HRA has constantly wanted in a way to have some control over. the quality and design of the construction. The minimum improvements here are as defined in the construction plans which of course they have never seen. They have had different issues regarding the how the outside of the buildings look, landscaping, etc. He asked how would staff propose to have that issue resolved? Mr. Bolin replied at this time Mr. Allen is still far from getting building permits, he has not submitted any building plans yet, and is still working on his platting. He has to purchase a small parcel from the Rail, and he has not completed the platting process for that yet. Mr. Bolin does know that Scott Hickok has had a number of conversations with Mr. Allen about expectations for the exterior of the building. City Code does require some masonry products on the front and no overhead doors facing street right-of-ways. They have had a number of conversations about the landscape plan for the new building as well. Nothing as far as comments from this group have been incorporated. Mr. Allen does plan on demolition this spring. Dr. Burns asked Mr. Bolin whether he knew approximately when the new building will be erected? Mr. Bolin replied he estimated shortly after the demolition, however, he has not seen any building plans yet. 3 Chairperson Commers asked if they are getting too far ahead on this? They do want to look at those plans. He asked Commissioner Meyer if he had any comments? Commissioner Meyer asked if they approve this agreement tonight, is that inferring they already approved the construction plans? Attorney Casserly replied there are different ways of doing this and, when the Authority is different from the Council, they may want to provide a more complete description of the kind of materials they want, appearances they are expecting, and if there are some certain kinds of upgrades they are anticipating. The City clearly has control over the permitting process. Most of the time when the City and the Authority are the same body, generally there is a preriy clear line of how that is going to be done. When the bodies are different and, if they are looking for something more than the City would be requiring from the project, then they should specify what additional kinds of improvements, qualities, upgrades, materials, etc. they are expecting. Clearly it has to do all of those things and the City has to inspect it. They have to issue the Certificate of Occupancy. Meeting the requirements of this agreement is triggered off of the Certificate of Occupancy the City issues. So if they want to have something more than what the City Code requires, then they really need to identify that. There is nothing wrong with that, it is just they need to identify that. Chairperson Commers stated he did not know that is what the Authority desires. He thinks though what should come first are the plans so they can look at them and then determine if in fact, understanding the minimum Code requirements, if there is anything else that this group would then feel is appropriate. There may well not be anything else, but he thinks Mr. Allen should submit those plans. To him it seems next to impossible for them to start dictating what types of things the redeveloper should have in the plans. Attorney Casserly replied oftentimes you do not have your construction plans. Those end up being pretty detailed kinds of drawings. Most of the time those would not be done prior to the time they would approve agreements or create districts. The timing just does not work out right for that. What they could do (and particularly since Mr. Allen has done so many buildings), they could ask him what his intentions are for the facing and the appearance of this building, and they could very quickly determine if that is the quality and type of building they are expecting out of this project. They can actually put in the agreement that he is to meet the quality of whatever. He has done other projects in the City. Chairperson Commers stated his work has been good so it is not necessarily they expect any type of issue. They just want to try and do this in an orderly manner. Attorney Casserly replied he did not think there is anything unreasonable about that. He thinks what they normally do is identify either style, type, criteria, other types of buildings, and suggest or state that it needs to meet the criteria that axe contained. They could also work in the agreement the Authority would approve the building plans. They �� � need to have some kind of structure for this though. If they want to put a provision in there that the building plans have to be approved by the Authority, they can certainly work something like that in or however they want to approach it. Commissioner Gabel suggested they state that this agreement is subject to their approval of the building plans? Attorney Casserly replied, no, they would just put in there that the City would have to approve buildings plans or site plans. What they really want to know is more of an appearance and quality. Clearly it is all going to meet Code, so what he thinks they are concerned about is how does it look within the total framework and as part of the community. If they want to have some additional review of that, there is nothing inappropriate about that. Sometimes what they have done is they have specified various appearances that they want, a certain look, sometimes there are site plans that become attached to the agreement that give you a sense of the appearance of it. Commissioner Billings asked attorney Casserly, regarding the two items on the agenda, one is approval of the resolution to create the TIF district and the other is the approval of the resolution to adopt the development agreement. Regarding the TIF District, he assumes they want to pass that resolution tonight. Is there is any need to do the development agreement simultaneously? Can that be approved at any future time? Attorney Casserly replied, yes. Commissioner Billings asked Mr. Bolin whether he invited the redeveloper to attend tonight's meeting? Mr. Bolin replied, yes; he had spoken with Mr. Allen on Monday morning. He had a prior engagement in Florida this evening but he was going to have Jeff Sahlzborn (sp.), his local representative, here tonight. Commissioner Billings stated he thought it would make sense to, assuming they are in agreement on creating the TIF District, go ahead and create that tonight. He suggested they table the resolution and then attorney Casserly can come up with some additional language. Attorney Casserly stated the creation of the District is really a straightforward matter. Oftentimes you have districts and you do not have agreements for many months. So there is absolutely no reason they could not do it. Also, he believed the Authority will meet again before the City Council adopts the agreement. The HRA is going to meet on it twice so it would be good to adopt the resolution on the District tonight. In the meantime perhaps Industrial Equities will have pulled things together or have site plans that are perhaps more specific that will start showing some exterior finishing. Chairperson Commers stated he thinks those suggestions seem to make sense. They have a project that is going to go forward so it is not as if adopting the District at this time is going to start the time running or something needs to be done. As far as the 5 development agreement itself, perhaps John Allen or someone wants to be at the next meeting and go over it a little bit. He would like to get something in hand so Commissioner Meyer can at least look over it ahead of time which has kind of been their practice. Dr. Burns stated he was wondering whether it would be satisfactory to have building elevations and a site plan or does the Authority want something more than that at this point? Commissioner Meyer stated they have done this many times before. They have had site plans, elevations, materials, specifications, etc. It certainly is not unusual for them to request this and to review them. In the definitions of the agreement, there axe carefully defined construction plans — meets plans, specifications, drawings, etc. on page 3. He cannot fmd the linkage of the phraseology, construction plans, to the rest of it. Chairperson Commers pointed out there is a provision in there on minimum improvements which is construction of minimum improvements as Article IV, page 10; and it describes the minimum improvements to the redevelopment property to be in accordance with the construction plans. Commissioner Meyer stated if this is the rather specific verbiage of the agreement, they should either drop the verbiage in the agreement or do something about it. It seems to him it would be good just to leave this in and they can be somewhat informal about it. However, somehow hold the redeveloper to the requirement he bring in some sort of plans and specifications and so on even though they are not going to necessarily insist it be as detailed as the plans, specifications, and drawings that are submitted to the building inspector because that is a step beyond. He does not think they have in the past required that except on a couple of houses. He thinks if they leave that in there, they can use their discretion as to how tough they want to be. Chairperson Commers commented make it simple, stating the construction plans are subject to the Authority's review and approval. Commissioner Meyers commented they ultimately should, if they mean something, define what control they have. Do they all want a brick fa�ade? They perhaps do not have that power, but they should say these types of things. Failing that, if they just leave it that the redeveloper should submit these plans, is not saying what the Authority or he has to do with them. Attorney Casserly replied what he thought would be prudent to do is spend a little time with John Allen's building group, his architect, and see what they have put together. He does not know if the Authority really wants to approve the plans. What they probably want to do is to review the quality of the materials, the exterior perspectives; they want to have an understanding of what is going on with the site. The City is really responsible for making sure it is put up correctly and meets all the various requirements. The Authority clearly has the authority to provide an assistance when certain criteria are met, 0 and they just need to lay that out. However, in the past, he does not know if the Authority really approved the building plans. Chairperson Commers stated they certainly have looked at the designs and type of materials that are being used. They have had a couple of projects where they have told people they wanted some additional aesthetic types of things done to the property. It has never been, he thinks, to any major degree. They have tried to exercise a little bit of control, and the inability to do so on occasion has created things that are not maybe the best. Attorney Casserly stated he thinks the message is cleax, and he thinks that will be conveyed back. Commissioner Holm asked whether the TIF district will last 26 years? Attorney Casserly replied they put in that the maximum duration of the district is as allowed by law, and that is 26 years. The agreement heing suggested does not use 26 years, it is 16 years. So it is a shorter duration than what they are putting in for the statutory permissible language. Commissioner Holm asked attorney Casserly to help him understand how repayment works in terms of the $1.5 million. Does it go over $1.5 million in some cases? Is it related at all to the extra costs involved with the site improvements and so on? Attorney Casserly replied all of those things. He referred to the Authority's packet, to a two-page tax increment analysis. The front page has all of the assumptions. If they look on the front page, it shows the current market value of the property. They can see the breakdown between the land and the building. Currently the land is valued by the assessor at $1,243,000; and the building has a value of $1,215,000 for total market value of $2,548,D00. That is a pay 2006 market value. What the rest of the page is showing is how this project is ultimately valued and taxed. They just assumed that the project was going to be built out in the year 2007. Then it would be valued in 2008 for taxes payable in 2009. They can see under this analysis, if it is valued at $50 a square foot, and there is 202,000 square feet, you have a market value then of $10,144,000. Attorney Casserly sta.ted the estimated ta�c capacity on that is calculated at $202,000; and that is just really a function of using the commercial retail class rate and multiplying that by its market value. The estimated taxes on the building would be $306,416. The estimated tax incrament is $139,000. He thinks that is significant because so often people think that everything that is paid in taxes is the tax increment. Where in fact what they are showing there, the estimated taxes of $306,000, $139,000 are tax increments which is about 45.5 percent of the total taxes. There is a reason for that. At the bottom of the page there is a local tax rate and a state tax rate. The state t� rate is a very substantial portion of the combined t� rate which is 1.51033. The local tax rate (which is the city/county/school districts special taxing districts) amounts to .91 of the state tax rate is .50. So when you combine that, the 1.5 times the taxed capacity, that is what gives you 7 the estimated taxes of the in excess of $300,000 but the tax increment is only based on the local taac rate and then only after they subtract out the original market value. So they have to subtract out the $2.5 million from the $10 million. They are really calculating the tax increment on essentially $7.5 million. Then they are only using the local tax rate on which to calculate that. So that is why the taxes are in excess of $300,000 but the tax increment is about $140,000. Going to the next page (again assuming it was built in 2007 and valued in 2008, taxes payable in 2009) they can see that if they look on Column E, at the top, they see Estimated Tax Increment. This is the captured tax capacity times the local tax rate of .91 and then they subtract from that a very small amount for State Auditor's fee. All of the columns in E, F, G, H, I, and J are all stated semi-annually so they will see, again, the semi-annual tax increment is $69,736. Again, if you multiply that it is roughly the $140,000 annually. They take out the administrative fees (the Authority retains 10 percent to help with this administration) so that gives them the available tax increment and what they have done is provide a small inflation factor. That is why when they look on Column G they will see it actually rises. They wait several years before that increases. Attorney Casserly stated they do not allow the inflation factor to kick in for some years but they assume there is going to be some inflation; and they use a 2.5 percent inflation factor. This shows what the increment would be generated over a period of years throughout the life of the district. The accumulative available increment is just the sum of each semi-annual payment in Column G. The bottom of Column G and the bottom of Column H are the same. Columns I and J show what happens when you take the present value of the tax increment. When you say that you are going to provide $1.5 million of assistance, if that is the number, if this is all the value that is there, you would look at this column on the far right hand side and they would see they would be down to the year 2031 before $1.5 million could actually be paid (Line 24). But to pay the $1.5 million actually takes $3,795,000 because the difference is interest. One of the things they will find in the redevelopment contract is they do not allow the increment to be pledged for as long as it would show under this scenario. They used a more aggressive scenaxio in which they assumed there was going to be a bigger building built — 242,000 square feet. When you follow all the same format, and you use that line-up; you find that can be paid off in a period of 16 years. That is what they have provided in the agreement. So the redeveloper can only recover in this scenario the $1.5 million. Attorney Casserly stated if in fact the redeveloper builds a larger building, a building of higher market value, there is higher inflation but the likelihood of the developer recovering $1.5 million with this size building is not good. And with some of the correspondence that went back and forth, the developer and their folks clearly recognize that and wanted the HRA to extend it out further and, when they had the meeting in November and went through this kind of analysis, the clear direction he got from the Authority at that time is assume there is a larger building and this is what they are comfortable doing and no more. That is how they designed the agreement. So if at the end of the day, if they approve the agreement, they like the product and the building, they want to participate, and the redeveloper completes the building, then they will give the redeveloper a revenue note if that is the amount that is still acceptable for $1.5 million. : Then every semi-annually the redeveloper will make a payment. The money actually comes from the county and goes into an account. They retain 10 percent and then on February 1 and August 1 of each yeax they actually make a payment on the Note. At the end of 16 years, if the Note is not paid in full, the contract says it is deemed paid in full and that is the end of it. Chairperson Commers asked the 200,000 squaxe feet is not phased, correct? Attorney Casserly replied they did not put that in as phased. That is a practical matter. It is probably going to take a year to build out. So as a real practical matter the full evaluation of this thing is probably not going to come on for another year. Chairperson Commers stated they talked in the past about minimum assessment agreement. Attorney Casserly replied the reason they have used minimum assessment agreements, at least pretty clearly, is that they have issued debt of some kind. In the Industrial Equities project that they participated in before, the HRA actually provided the money up front. The HRA wanted to make sure that the valuation was there so they could recover it. In other instances, the HIZA has gone out and actually sold bonds. They wanted to know there is a value there. In this instance the HRA is not doing that. The only reason for maintaining a valuation agreement is to in some fashion assist the assessor. However, in all of these agreements which are a pay-as-you-go, the developers normally want the valuation set so low that they never come down below that amount. The reason is developers are always afraid in a recession (and this actually happened in Columbia Heights), if the valuarion drops below the assessment agreement, they then cannot rent their property at a competitive rate and it will actually make matters worse for them. So they are just absolutely petrified of having valuation agreements that may set a rate too high because if in fact, for the reasons he described, they would be in an uncompetitive position and so what they will do is set a valuation. Commissioner Holm stated, okay, they axe providing this assistance and in order to provide a site that, without this assistance, no development would take place because of the soil contamination, the fact the building has to be taken out, and so on. So they are providing $1.5 million of pay-as-you-go assistance. If the costs of demolition and soil correction, etc. are less than $1.5 million, then the developer benefits from it. If it costs more than that, they get hurt by it. He assumes this $1.5 million is a reasonable estimate of what those costs will be. Attorney Casserly replied it is fairly correct. There has been quite a bit of analysis actually done on this site, and some of the amounts are pretty clearly understood. As a practical matter it is just part of the give and take. You have a developer who was looking for more and we said, no. What we did is actually went to the City Assessor and said give us some valuations of similar property. So they did this, and he thinks this is the correct way to do it, backwards. They said what would you pay for a clean buildable piece of land, and the Assessor came back with a couple of comparables and they were E roughly in the $4 range. So when the HRA calculates its analysis, they take out the $4 a square foot. They are only going to provide assistance that would be over and above the $4. If it brings down below the $4, then there is no reason to provide that assistance. There are other ways to do it. You can get involved in a whole series of arrangements. This happens more in housing product more often, but you can have it where they have limitation on sales, profits, and percentages. Most of the time, in commerciaUindustrial, you do not do that. Commissioner Meyer stated on the resolution, Section 1.04 on the bottom of the sheet, they talk about the Authority has prepared a modified redevelopment plan and modified existing plans for the existing districts. Have they modified a redevelopment plan for the project area? Modified their existing plans for existing districts? Attorney Casserly replied every time they create a district you modify all of your previous districts. They have a single project area and a single development program. So every time they create a tax increment district, they are doing it inside the program and in fact they are amending all of their existing districts so that they have the ability, such as what they did with Medtronic, to move some of their resources around because it is not just this specific tax increment district. They are amending their entire program, including these costs. That is why they always put a bonding authority in here. They are not going to issue bonds for this project. However, they would have the ability to do that. This is more like a template. That is why these plans are so short and abbreviated because the rest of their documents are in their program and that is why this one plan is really just a page that amends their already existing program. If they look at their tax increment district, they will fmd ,it very strange the way it is numbered. It is Tax Increment #19 but it is subsection 20.1 and then it is 20.2, 20.3. That is because in essence it is the 20�' Chapter in their development program and that is why it has that very specific language. MOTION to approve Resolution No. , creating TIF District No. 19 by Commissioner Gabel. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMIV��RS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Approval of Resolution to Adopt Development Agreement Between HI2A & Industrial Equities MOTION by Commissioner Billings to table the resolution adopting the development agreement until their March meeting. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMNNI�R5 DECLARED TAE MOTION CARRIED UNANIMOUSLY. 5. Approval of City's Planning Division Request to Fund a Housing Condition Survey. 10 Mr. Bolin stated they may recall that the HRA hired an intern back in 1994 who completed a housing condition survey for the HRA. That person went through the entire City, block by block, and rated the exteriors of every home. That data was used to target promotional efforts for the different loan programs. There was a special program set up for Hyde Park that he thinks came out of part of this study. That data was used to kind of set an overall baseline for the condition of the housing stock in Fridley and was used during the visioning sessions for the 1998 Comprehensive Plan. The data was also used to set redevelopment priorities for the Council and Commissions, and Maxwell Research integrated that data into the Fridley housing plan that was done at that time. Mr. Bolin stated Planning staff has started to prepare for the upcoming visioning meetings and have started working internally with the different City departments regarding the different chapters for the 2008 Comprehensive Plan. A need for current housing conditions data has surfaced as a result of these meetings and has been viewed by the Planning staff as an essential piece to providing the most accurate view of Fridley's housing stock. The Planning division has budgeted for an intern to work with their code enforcement process during the summer of 2007. It will allow them to be more proactive during the summer months and take care of some of those code violations. They have even contemplated a joint code enforcement/housing conditions approach but, because of the different focuses, it would be very difficult to have both of those things happening at the same time. A person can do the windshield survey for the housing conditions much quicker than they can address all of the code issues that may exist on each and every property. Consequently, a separate individual is preferred for the housing study. Mr. Bolin stated based on research they have done for their code enforcement intern, they believe it will cost approximately $7,000 to fund this person for the summer. They have checked with the Police Department, and there would be a vehicle available for this person to use. They have estimated about $2,000 in gas and mileage for this. The total of the request is $9,000. The Planning division respectfully requests $9,000 to perform the housing conditions study that will help both their future planning efforts and housing efforts in the City of Fridley. He would also like to mention that he thinks this information would be very helpful for our loan programs. It may identify some different neighborhoods that they should be targeting their programs into. Really these studies are kind of a snapshot in time, and a lot has happened since the last study was done in 1994. There were the storms in 1998 resulting in a lot of reinvestment in Fridley and also the storms in 2005 that again caused people to get new roofs, etc. It would be interesting to see what effects those storms, along with the City's own programs, have had on the housing stock in Fridley. Mr. Bolin stated his instincts tell him that the age of our housing stock is not a reflection of the quality of our housing stock. Mr. Bolin thinks they have had quite a bit of reinvestment because of those storms and, although the average home is 40-45 years old, he believes those axe in much better condition than age would lead us to believe. Scott 11 Hickok did mention if the HRA had a number of concerns, he would be happy to wait until Maxch for an answer from them. Commissioner Gabel asked whether they had budgeted for this? Mr. Bolin replied, no, this really came about in the last month and really in the last two weeks. It has come up in a number of the focus groups for the Comprehensive Plan that it would be helpful to have this information. Commissioner Meyer commented regaxding the discovery that 95 percent of Fridley's housing stock will be 30 years or older or more, by 2009, just as a comment he stated around the Twin Cities, a home being 80-100 years old is not uncommon. Huge tracks of those types of homes are going strong. So just as an aside he did not want them to assume that just because Fridley's homes are 30 years old or more that they are going to hell in a handbasket. We are a young suburban/community still in terms of housing stock. Also, he understands the intern would be looking at the exterior and that is about all a person can do, but he wanted to remind them of the things that deteriorate and da.te a home are the plumbing system, the heating system, and the electrical system. These are the major things that outdate a home and inhibit a home's long-term usage. Certainly there are things like siding and deterioration of the roofing and that sort of thing, but the big things are those systems he mentioned. He understands the intern would not be able to consider those things as it would be a very time-consuming thing and a lot of expertise an intern would not have, but those are the real things determining the validity of our housing stock. Having said all of that, he thinks this would be a good move to participate in. Commissioner Billings asked the HRA if they found the last housing survey to be beneficial to the HRA? Chairperson Commers replied his recollection was that it was and he does think that this would also be beneficial to them. He is somewhat happy to see it might also help the City a little bit in their Comprehensive Plan. However, he thinks his vote for it is because it would help assist the HRA and its different programs they have for the housing stock. Commissioner Gabel replied, she does too. Commissioner Billings asked for clarification be provided as to what the intern is going to be looking for when conducting the housing survey. MOTION by Commissioner Billings that the HItA staff bring back a pro forma of what they would be expecting to be looking for with a view towards the HRA of financing an amount not to exceed $9,000 for a housing survey in 2007. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 12 6. Approval of Purchase Agreements for GWIYE Mr. Bolin stated since they last met in December, the Authority has closed on and taken ownership of the former Car Quest building located at 6005 University Avenue. The Authority has also reached an agreement and has a closing set for February 28 on the original Van-O-Lite building located at 6041 University. In December the Authority also authorized staff to contact the neighbors who border those two properties, as well as the Oriental House since it is currently vacant. The aerial he has up on the screen shows those properties that were contacted. The owners of the Sinclair station indicated that they were not necessarily interested in a sale at this point but would discuss it among themselves and contact the City if they were to change their minds. � Mr. Bolin stated he did order appraisals for the other four properties, and Dan Wilson from Wilson Development has put together purchase agreements for those properties based on the appraised values which they can find in their packet. At this time staff is recommending the Authority move forward, making offers to purchase the Tae Kwon Do Center. This would give them control of that entire block between 60�' and where the frontage road wraps around by 61St. Il Kim, the owner of the Tae Kwon Do Center, is a very willing seller and Dan Wilson anticipates fairly low location costs to move the Tae Kwon Do Center. Staff also recommends that the Authority presents offers to the owners of the newer Van-O-Lite building and also the Oriental House while those properties are vacant. That will eliminate the need to pay relocation benefits down the road. Of course final terms would be subject to Authority approval, and they would also recommend (as they did in December) Chairperson Commers to have the authority to go ahead and execute any purchase agreements they would get back from the sellers prior to the March meeting. Mr. Bolin stated at this time staff would recommend that they fiurther investigate purchase of the Citgo site. The appraised value came in much higher than anyone anticipated, and it definitely does have an impact on the City's image. However, being that it is separate from the other properties by 61St Avenue may not necessarily be crucial to any future redevelopment they would do in this neighborhood. The appraisers were shocked by the value of the Citgo station. They had a laundry list of identical-sized gas stations, where just in the last year or so, all of a sudden these are selling for $300 a square foot for the building. Commissioner Gabel asked why because if you buy those you have to get rid of the underground tanks at a significant cost? � Mr. Bolin replied, yes, they would have to get rid of the underground tanks. They went out and looked at a number of those comparables. It was typically these older, smaller gas stations have also become a gas station/tobacco shop and some other use besides the gas station and typical convenience store. 13 Commissioner Gabel commented so if you reta.in it as a gas station, that market value stays in that high bracket. Mr. Bolin replied, yes, and even these people who have turned the buildings into other uses are paying $200 a square foot. Chairperson Commers stated it has a funny location across the street in front of St. Williams, and it would be interesting to see what somebody could come up with in terms of redeveloping the property. It actually does not interfere with what they would like to do on the south side. It would still be nice to take it out of there. Mr. Bolin stated if they would like staff to make an offer on that one, they would be more than happy to do that on their behalf. Commissioner Meyer stated if they made an offer at the assessed value, rather than the appraised value, he might be willing to go along with that. He asked whether a service station has to have a special permit? Mr. Bolin replied the Sinclair site has a special use permit for its vehicle repair portion of it, but he believed gas stations themselves are a pernutted use in that zoning district. He believed some of the special uses that sometimes go along with them, for example, a car wash or minor car repair, need a special use permit. Commissioner Meyer asked if the assessor has factored in a possible soil contamination cleanup for the Citgo site? Mr. Bolin replied, yes, they do take that into consideration. However, surprisingly, in conversations he has had with the appraiser for what those are worth, typically they find that gas stations do not necessarily have the level of contamination you would think they would have. Without doing any borings on the site, they do not know if there is any contamination on this particular site. Chairperson Commers stated usually those tanks will rust out and usually have a little leakage. They have had that before. Down on the east side they had that problem. Commissioner Meyer stated if they bought that site, they would be liable for the cleanup so this is something where, if they get more serious about wanting that, he thinks they should one way or another get some soil borings. Chairperson Commers asked attorney Casserly if there is still in place the State program where they reimburse some percent of the cost to clean up gas stations? Attorney Casserly replied as far as he knows the petro fund is still functioning. Mr. Bolin stated if they would like to, between now and the March meeting, staff can do some more research on this site in particulax and try and find out if there is any 14 contamination. They can look into the petro fund and some of those and try and figure out really what the liability might be from contanunation if they were to purchase that site. Commissioner Meyer commented of course the only really good way to know is to put a couple of borings in there, and it would be several thousands dollars of investment. Mr. Bolin suggested in lieu of spending the money on the borings, he can check with the Fire Department to see what they know about this site and any leaks there and they can also check with the MPCA to see if there has been any records there as well. Commissioner Billings stated he has mixed emotions about this, while he does not want to see that corner become blighted, the other concern he has is that even if they were to acquire the property he is having a difficult time visioning what might want to go on the properiy. They could end up with a$400,000 piece of property with no inkling as to what kind of development they could get on the site or sale price they could get. Maybe a reasonable thing would be to take a half step back since it is not a key thing as to what they axe going to be doing on the south side of 61St, just let it go for a while, and see if maybe the private market will scoop it up and turn it into something that is an improvement to the site without having any fmancial influence from them. Chairperson Commers agreed and stated he thought tonight they should at least go forward with the other properties and keep the Citgo property in mind as to what they want to do with it. Commissioner Billings agreed. Commissioner Meyer stated he really felt an architectural planning group should be hired to tell them what their ideas are rather than going the other way and having individua.l private developers come in with their own individual ideas. They have not done that. It seems to him it is an opportunity. Chairperson Commers stated he thought they are going to hear some of that tonight from their guest from Corridor Housing Initiative. Commissioner Holm asked regarding their having purchased the 6005 Building and not having established a TIF District, do these buildings remain standing until they establish a TIF? Mr. Bolin replied they do not have to remain standing until they create the district. He would think that once they acquire a few more of these properties and have some sense of how soon the development may happen down here then perhaps they can go ahead and pass a resolution that says they have the intent to create a TIF district in this area and actually take the properties down. He believed then they have to get the TIF district within three years of making that resolution. 15 Attorney Casserly replied, yes, that is correct. Within three years of the demolition. Chairperson Commers commented that was an issue for them over on the west side. MOTION by Commissioner Holm to approve the right to execute purchase agreements if they come in and also authorize Commissioner Gabel as the vice-chairperson to execute those agreements. Also, to approve submitting offers to these owners at the values stated by Lake States Realty. Seconded by Commissioner Meyer. UPON A VOICE VOTE, ALL VOTING AYE, CHAIltPERSON COMN�RS DECLARED TAE MOTION CARRIED UNANIMOUSLY. INFORMATIONAL ITEMS: 7. Corridor Housing Initiative — Presentation by Gretchen Nicholls Mr. Bolin welcomed Gretchen Nicholls from the Center for Neighborhoods that has developed a very unique neighborhood planning process which they refer to as the "Corridor Housing Initiative." He has invited Gretchen to give them more information on the Corridor Housing Initiative as it may be very useful for them if they do move forward with the project on the Gateway Northeast area or for any future redevelopment areas that may come up. Gretchen Nicholls, Corridor Housing Initiative, stated Commissioner Meyer stated it quite nicely that oftentimes communities are kind of always reacting to developers as they come forwaxd with ideas. This resource and process helps get ahead of the development opportunities and help the community and the City frame what they would like to see happen. It would kind of set some goals and expectations for development that they can then market out to developers and encourage for implementing. It is building on the notion of a community visioning where they are identifying what their ideas are for what they would like to achieve with development. However, it helps further that conversation by integrating the market realities of the area. So often the visions of communities become very grand, and you can almost expect they are going to want a bookstore and a whole array of things they would like to see happen for their community but the truth of it is, is that really doable in the current marketplace, and is that really viable for development. This process convenes a series of workshops and integrates a variety of technical expertise to help facilitate the conversation to really look at some of the examples and ideas around design and development and kind of insert some of the market information into the conversations so people can become more sophisticated and knowledgeable about what is really doable for their area. Ms. Nicholls stated the Corridor Housing Initiative originated largely in partnership with the City of Minneapolis, and they have really been exploring this resource in that city now and have expanded into St. Paul. Yet they have not yet been in a suburb with this resource, and so they are interested in trying to explore whether this could be useful for Fridley. They think there is a lot of transferability so that they can adapt this resource 16 very easily to the suburban context, and do that in a respectful way that really appreciates and acknowledges the identities of the community. The resources they have are based on a lot of imagery. One of the technical supports they have is the Metropolitan Design Center, University of Minnesota. They are a very gifted group of designers who have really gathered a whole array of different housing types, different mixed use options, different kinds of development scenarios that are in their experience and local environment so people can kind of see and say, oh, yes, that is what the building feels like. Ms. Nicholls stated density is another critical issue which they find is very cumbersome in community process. They have actually found a variety of density scales throughout the suburban area that models or identifies different subsidies. The configuration of the whole idea is to help familiarize people with some of these terms and ideas and kind of take it home. The density becomes less kind of scary or difficult to talk about. Ms. Nicholls stated another facet of this process is that they also integrate some information about what affordable housing looks like. There is also a lot of concern about the appearance of affordable housing in a community and whether that is a good or bad thing. They think there are a lot of stigmas or assumptions about that type of development work, and they see there are a lot of very positive examples about that in the community. There is less about serving an affordable population but more about the design and the way that building is integrated into the community and can be viewed as an asset. Ms. Nicholls stated she thinks Fridley has an amazing opporiunity with the parcels they are aggregating along University Avenue and have actually something to talk about. What they will do is work with the City to figure out what are the goals and outcomes that they would like to see come out of the process — at the front end. They will ask who are some of the community partners they think are critical to be involved in that dialogue? Because they have not worked in the suburban communities, they really will rely on the City to help them identify who they need to bring to the table and create that conversation so people can really create an ownership over the directions they choose to go. Ms. Nicholls stated the first stage is kind of the agreement setting period. Then in that stage they are also designing a series of community workshops they will staff and support. The first workshop is often just kind of an informational setting where they are understanding what is the City's zoning code and what are some of the critical issues around these parcels. Some people want to learn about transit in development or if there is some sort of specific information people would like to have incorporated in this dialog�e. Then they bring those pieces into play. Ms. Nicholls stated regarding the dialogue about what do people want to achieve through development and what axe their concerns, it is a way of kind of sifting out all kinds of ideas and expectations people have about the area. That information has been used to form the next exercise which is called the "block" exercise. This is probably the most 17 exciting because it is really interactive, and it is really an incredible learning place for people to understand the area more effectively. Essentially what the block exercise does is asks the participants to build a development concept on a specific parcel. They take the dimensions etc. and put it into a form of spreadsheet, pump the numbers, and instantly find out if that project made any money or if it lost too many dollars. It is really a ballpark assessment but helps people appreciate how hard it is to get development to work. Also, what are some of the variations that they could explore to see what could really happen there. It is really interactive and becomes a fun process for people to learn. People are not very defensive because it is the developer saying this is what we think needs to happen here. It is really a chance to learn and understand and appreciate how this stuff works. Also, what are some of the leverage points they can utilize in working with developers to get some of the goals they would like to see happen. Ms. Nicholls stated participants create a development concept and then that gets run through the pro forma. While that is happening, there is a designer there who 'is sketching what that building could look like so you are getting an actual image of what massing could be according to certain design priorities or things people have liked about some of the different buildings in the area. They are using some of the design facets that people have liked and what could that building look like. She has some summary sheets about what some of their block exercise results have been. It shows the parcel that was explored, what it looks like currently, then some scenarios that people tended to like or kind of rose to the top in terms of what they thought were a good idea. And then it outlines the information. The example parcel she used had 67 units. They actually lost $2,500 per unit on this but that is still within reason. There is also approximately 15,000 square feet of commercial squaxe footage. Then she showed a the sketch that was developed to display what that building would look like. That is the second workshop which is often a very exciting exploration of some of these topics. Ms. Nicholls stated the third workshop is then often a panel of developers with city representatives, maybe some business leaders, to really talk about the potential for redevelopment in the area. At that point the community has a much higher appreciation for the obstacles or the difficulties that development would likely entail, and you could really have a very interesting conversation where people are kind of she thinks better suited to understand what really is going to happen. It kind of helps to manage some of the expectations and try to help guide some of the thinking further for the area. Typically in their process what they have done through the cities is the community takes that information and develops a set of development objectives. In that process they are really highlighting what they want to see happen for development in their area, and this information that gets marketed or promoted to the developers they are building relationships with. Developers in each of their project areas come forwaxd and actually proposed developments that fit within these development guidelines. It has been a very effective tool for kind of setting the stage for development of helping the community become more sophisticated in their relationships with developers and actually get to the products they would like to see created. : Ms. Nicfiolls stated she does not know if this is the exact product that would be developed for Fridley's community if if there would be a different .kind of iteration of that. They are really open to the City's thoughts and ideas for what kind of end products would be helpful to them in a process like this but it has been a very exciting and stimulating setting for people to kind of come into dialogue and people have found it incredibly useful. This block exercise is often regarded as kind of transformational of people's understanding of what is really doable. Ms. Nicholls stated they have been getting some awards for this process. They just received the National Award from the APA for this initiative, and they think it has a lot of potential. They would really love to try it with Fridley in a suburban context. Chairperson Commers stated it is certainly different than anything they have done. When they had the developers come in with their ideas, ultimately, it has not been the best of all worlds for them. They come in with some general ideas the City tries to convey to them. However, he thinks generally regarding their projects, for instance the last one they were talking about down on the river, they had some ideas but they certainly were not consistent with what the developers thought should be done. He does not know if this would have helped them get farther along before they turned it over to the developers or not. Commissioner Meyer asked Ms. Nicholls if they have a minimum size of a project that would be feasible for something like this? Ms. Nicholls replied, no, they have really allowed the community to identify what parcels they would like to explore. Often it is based on information such as who is interested in selling their sites or, if the City owns something, and this seems ready to go, can we talk about this. They worked on sites that were actually too small to develop and so they have gone through this whole process and then ended up needing to throw it out because it just was not doable, and another parcel needed to be aggregated to make something viable. Often the larger parcels have more potential to do many types of things. They have really worked on a whole range of different scales of sites. So it is really adaptable to whatever they have. Chairperson Commers asked and they have done mixed-use type things? Not just housing? IVIs. Nicholls replied, yes. Usually communities want to explore what those mixed use options could be. In the recent market, where housing has been so strong, it is difficult to actually pull those offbut she thinks there may be sorrie shifts going on. Commissioner Meyer asked for an idea of the framework on how they work. For instance, she says alright, let's get together and then there is a certain effort and finances involved and you get to a certain point. He asked for a better idea of what happens. 19 Ms. Nicholls replied, again, the end point is really up for negotiation with them as their partner because they have the resources to facilitate and coordinate this process but they do not have resources to buy parcels of land or to do the development. So essentially they are creating an educational forum and helping build information for the City and community to take that out to developers to implement those goals. Commissioner Meyer stated, alright, they develop it so they can take it to the developers and they do something with it within the framework of what they have created and the City has approved. Ms. Nicholls replied essentially what they are asking to do is set the stage for development — what do they want to see happening? Commissioner Meyer asked what kind of financial outlay would the HRA be asked to give for this? Ms. Nicholls replied this package of resources is approximately $30,000 for the whole piece. However, they have received funding from the Family Housing Fund to offer this to the HRA for free. They are able to give this resource to two communities to see if this is a useful tool, see how it would work in this kind of community, and to see if it is helpful or not. So really they are offering this as an"in kind" support to the City of Fridley and its work. Dr. Burns stated in some situations the lots do not have a lot of depth and they are right up against the residential neighborhoods. Does she see this as a problem that can be overcome? Ms. Nicholls replied that is a similar dilemma for the cities, Minneapolis as well. The frontage along the corridors is fairly shallow or they are narrow . parcels and the residential is right behind it. Yes, she thinks it is an issue they are used to and they are working with the city and trying to figure out is there some land use changes that need to be in place and how to navigate that. It is true that they are often working with developers who are very frustrated with that scenario. Their designers are comprised of a team of creative thinkers. Because this process is more proactive you get a lot of creative ideas emerging because people are not so defensive and reactive. So you are really collaborating in a more effective way about how do you make this work and what can be done. It just kind of shifts the whole feeling of the conversation, and you look for ideas to help resolve those issues. She thinks they are ready for that and see what can happen. Commissioner Meyer asked who are the participants in that? For the HRA it would be them, the City Council, and how about in the neighborhood? How do they involve the neighborhood? Ms. Nicholls replied that would be part of the fun of this is to figure out who are the stakeholders and how do they invite them into this conversation. � Commissioner Meyer asked they do not have any predisposed idea to include certain groups? Ms. Nicholls replied in the cities there are often neighborhood organizations that are kind of overseeing a lot of these issues. In the suburbs that may not be the case. So they will be looking for business associations or any sort of kind of organized groups who could lend some insight or ideas into the process. People who have a stake in the corridor and have an interest� in what is going to happen. Again, one of their technical experts who works with the process is the Center for Policy Planning and Performance. They are very skilled with outreach strategies and help strategize about how to bring in folks into the conversation and what are some of the techniques they can use. They will also use a lot of communication strategies to get information out to people about the conversation, what has been learned, and how to share that information more broadly. They will set up a website that will host all of the materials so people can access that electronically. But it really is a process that tries to bring in as many voices as possible and helps the dialogue get deeper. Mr. Bolin stated when he had talked with Ms. Nicholls before he thinks she had mentioned that in a lot or some of these neighborhoods, the city may not even own a single parcel or maybe they own one but they do involve the other existing property owners; and a lot of times they are very interested in participating and making changes and improvements to their site. Ms. Nicholls replied, yes, this is not about surprising anybody. They are letting people know what is going on and often the community has a lot of information about who is ready to go and what is the sense of the businesses' plan for the fiiture. So a lot of that findering information can come forward through this process, but they really work to involve the business owners and the landowners in the area to make sure they understand what is going on, that they can come in and involve their voices as well. In some cases they have had some property owners participating in this process, and they own the site adjacent to the site they are looking at and they go, well, it would be a lot easier to do development if you include my area and so they just kind of include their parcel into the conversation. So it is all in good will and there are no surprises for people that could create kind of a fear of something underhanded going on. Commissioner Gabel stated she likes what Ms. Nicholls is saying and it is all very positive. She asked what are some of the pitfalls? Ms. Nicholls replied, well, you are clearly signaling there is a lot of interest in the area so there could some speculation from other property owners in the area that could react in ways that would make it harder for other developments to happen in the axea. Otherwise they have not seen a lot of negative things so far. Fundamentally the communities have been very successful in drawing developers in � and building very constructive relationships with them and it works out quite well. Commissioner Gabel asked how many projects have they done? 21 Ms. Nicholls replied, the first phase, they have done five project areas and were all in the City of Minneapolis. Sometimes they front end the master planning process and so the development proposals take a while after the master planning is accomplished. However, in each of those project areas there has been a proposal that has come and is in the works, in the pipeline. It always takes a fair amount of time for development to get underway. Regaxding the second phase, which they are in currently, they have done three more. Two are in St. Paul that are underway. They are hoping to do two in suburban communities. Again, they have been doing this since 2003; and they have been very pleased with what they have experimented so far and very interested in trying to transfer this into different types of cities and see how it works. Commissioner Gabel stated she is a little confused. She asked Ms. Nicholls if they have just done this in Minneapolis and they are working in St. Paul, why does she have some things on display which say Woodbury, Chaska, and a couple of other suburban cities? Ms. Nicholls replied the Design Center, their technical parties, is a much broader resource. They have an image bank that is quite vast and contains images of all sorts of places. They anticipated trying to expand this into other kinds of communities; and so they have started to collect information from suburban cities, small towns, and trying to build some of these materials that are more relevant to Fridley's experience/development forums. Commissioner Meyer asked Ms. Nicholls regarding the five projects and have taken them up to this point, have they then gone onto the next phase with developers on any of these five to get them into reality? Ms. Nicholls replied they do not do that but the communities in the cities do. What they have done sometimes is hosted developer forums and showcased these different project areas. There was a developer firm in the City of Minneapolis where they showcased the five project areas they did in the first phase. There were about 30 developers who showed up. It was not a very talkative meeting, but there were a lot of cards being exchanged and a lot of information. She thought the developers really appreciated knowing where the City wanted to see development happen and what kind. That information seems very useful. The developers have raved about this and really appreciate the chance to come into a known environment where they understand what people are trying to do. Commissioner Meyer asked whether any of them have picked up the ball and run with actual development? Ms. Nicholls replied, yes. The first project area the City actually ended up releasing a site and did a RFP and there are developers who are now competing for that parcel, all in alignment with these development objectives the community has outlined. Regarding the second one, a developer was actually participating through the process, is getting them one of the sites, and is moving forward with that project. The third, she believed it was 22 along Nicollet Avenue; and the Lander Group identified a parcel and started working with the community and are moving forward with their proposal. South Lyndale was a four-neighborhood process that funded a master planning process and now there is a variety of proposals coming in because that is a very kind of upper-end area so there is a lot stronger development interest in that area. And then West Broadway is another corridor on the north side of Minneapolis, and there was a development that came forward from that area as well. So in each case the process is preceded kind of with information the developer can utilize and prepare a concept the community has already indicated that they would support. It is this streamline that makes the predevelopment work a lot of efficient. Commissioner Billings asked what areas of St. Paul are they working with? Ms. Nicholls replied they are starting in two very different places. One is St. Anthony community, up Como Avenue. The second is on Rice Street. So one is a wealthier area and the other is a lower-income axea. The City wanted to see how the resource worked in each and kind of contrasting those two typologies of communities. Commissioner Billings asked about her statement they have funding to do projects for two suburban municipalities, is there going to be a competition? Does everybody need to submit what they want to do or something like that? Or is she saying that they would like to do something in Fridley, and all they have to do is say, yes? Ms. Nicholls replied, it is almost that easy. She is actually out promoting this resource to different cities. She has met with Coon Rapids also and some other cities such as Richfield and is in just some initial conversations with others. So she is just spreading the word. She does not know if it is first-come, first-served. Tliey have an oversight and advisory committee who will actually receive the letters of interest and make the decisions for which project areas are chosen. They are very anxious to initiate something in a suburban setting so they have a good bet if they can move fast. Commissioner Billings asked what kind of timeline are they looking at then in terms if they were to send them a letter of interest? Is there a deadline for their oversight committee? Ms. Nicholls replied their next application round is June 1, but she thinks they would not need to hold that hard and fast. She thinks if they got a proposal in from a suburb that they could move on, they would like to move on it as quickly as they could. They have this funding through the end of the year and would like to be sure and get some opportunities going. A lot of it depends on the HRA's timing, too — is this the right time or would it be better to postpone for a few months but in essence it would be great if they would just let them know if this is a resource they think would be valuable and how. Commissioner Billings stated they have akeady made an investment in two pieces of property, and tonight they authorized three more pieces of property in this particular area where, if the offers are accepted, to go ahead and close on them. He thinks it is an area of 23 their City that they are committed to redeveloping, and at this point in time they have nothing they have identified as what they really think should happen there other than get rid of some buildings that do not look so nice. It sounds to him like the Corridor is looking for a partner and the HRA is looking for some help and maybe the time is right. Chairperson Commers stated he thought that was a very good chaxacterization of where they are at right now. 8. Monthly Housing Report Mr. Bolin stated in regards to the HRA program, this being January, the first month of the year was fairly slow for loans. There was one loan issued in Fridley by CEE, and that was using some of their private bank funds. There were no remodeling advisor visits and no home energy audit visits this month either. However, they are working hard on improving those numbers for the next few months. Regarding all of the programs, they have really been out promoting this past month. Dr. Burns wrote a nice article on the HRA's home energy audit program that is going out in the February newsletter. Brian Strand has run a number of public service announcements on Channel 17. Mr. Strand gave him some numbers earlier today and he has run them on the loan program, 135 times since January 8. He has plugged the HRA's home energy audits, 54 times since the middle of January; and the remodeling advisor services 100 times during that same time frame. Also, the post caxd they see on the screen will be making its way out to Fridley residents over the next week or so and, again, that touches on the HItA's different programs and also plugs the upcoming Home and Garden Show on Saturday, February 24, will run from 9 a.m. to 2 p.m. and will be at the Schwan's Center in Blaine. This year they have some very unique breakout sessions and seminars covering gaxdening, home safety, energy efficiency, and some different hints on interior decorating, as well as a demonstration on building your own patio walls. Another thing they are doing differently this year is they got in touch with the Minnesota Chapter of Institute of Architects and there is a group of architects from a different number of firms who have volunteered their time to meet with folks at the Home and Garden Show and offer some free architectural advice. . Dr. Burns pointed out on February 7 the Southern Anoka County Community Consortium will have Julie Parenteau as a speaker who is going to talk about housing sales in 2006 in Anoka County, the metro area, and in Fridley. Chairperson Commers asked the Commission what do they want to do about Corridor Housing Initiative program? Commissioner Meyer replied if they wish could they agree tonight to have staff prepare a Letter? He personally thinks it is an interesting try. Commissioner Gabel stated she would be willing to give it a shot. 24 Commissioner Holm stated he believed they should hold off until they come out on some of the offers. Commissioner Meyer stated, one thing is, for example if these people go through with this it could spark not only the HRA's enthusiasm but also the other people to see the possibilities. In other words it could be something that feeds on itself. He hears what they are saying but it could go the other way, too, to be a catalyst for interest and development. Commissioner Billings asked regarding the Tae Kwon Do owner, they have stated they are likely interested in negotiating a deal? Mr. Bolin replied, yes, they are interested. Commissioner Billings asked about the "new" Van-O-Lite building is on the market? Mr. Bolin replied the realtor has called him just about every day for the last two weeks to see if they have the appraisal back and are ready to make an offer. Commissioner Billings pointed out the Oriental House is kind of down the block. If they can throw something in down there it would be good, but the main focus he thinks are the two properties they have acquired and the two properties on either side of it where they understand there to be an interested seller. So he is kind of thinking with all due respect they actually do go forward. Even if they come up with a vision with what the corridor could look like, that does not mean they have to have control of it. It just means they have the neighborhood and the City and all the interested players agree this is what they kind of would like to see, whether it is the HRA or private development. He asked Commissioner Holm to expand on what his reservations are. Commissioner Holm replied his understanding was it was not that much of a slam-dunk that these other sites are interested in selling with the offers they are planning to make. If he is wrong then so be it. He guessed he did not understand why they wanted to move ahead real fast before they know where�they are. Commissioner Meyer replied there is nothing wrong with that reservation. Commissioner Gabel stated she did not think they have anything to lose by figuring out what it is they would like to see there. They already bought some of the land and know they are buying more land. By giving the community and all of them an opportunity to go ahead and figure what their vision is and significantly reduce cost to the HRA — she hates for them to pass up the opportunity. Chairperson Commers commented it does sound like they have a couple of relatively willing sellers. They know they have some vacant buildings. They are not going to let them sit forever without planning to do something with them. So he would think the chances are pretty good that they are going to be able to negotiate something on them and 25 move forward. There is no reason not to pick up the Oriental place at this time. They have already talked about Citgo, that is a bit of a different story. It seems to him, too, that their acquisitions are going to through. At that point they are going to be sitting on the property and want to acquire and get under control it but they do not have any real thoughts. By turning this over to developers they have seen what they have gotten down there on their University east side and they have been a little bit disappointed at times about it. It is a nice project but maybe something could have been a little bit different. There is no risk to them and, if they do not like it, they do not go forward with it; there is really no risk. He does not see any downside. Commissioner Holm stated his only concern was if they do not �eally have control of that much property, they do not have much of a project area to work with, yes, they could talk about a larger area but they could create more problems in terms of adjacent owners wanting more mon�y, etc. He thinks they all agree they want to do something to improve the University Avenue corridor and they certainly do not have any objections to proceeding with acquiring the adjacent properties at reasonable rates. However, would they be prepared to pay substantially more than that? He does not know if they could answer that in the same affirmative response. Commissioner Meyer asked Commissioner Holm is he thinking there is a risk of jacking the price up because somebody sees there is more potential than he might have realized himself? Commissioner Gabel commented that is probably the risk they take when they are putting projects together. Commissioner Meyer stated, yes, if you put a fine facility next to any one of these and the guy next door is thinking and, rightfully so, there is a little more money — there is always that risk anyway. He guessed he did not see any risk in giving the Corridor people a whole schmear whether they own the property or not to play with. Who knows maybe in the process the HRA will see some use of the Citgo property, outrageous in the way it is, somebody comes up with an idea and will want to find the money. Commissioner Gabel commented they are just talking about a Letter of Interest, right? Mr. Bolin stated a couple of points Ms. Nicholls made before the presentation when they have seen each other, in a couple of these instances where they have done this process, the City only owned one parcel on an entire block. They work a lot with the existing property owners and they know down in this neighborhood the Alano Society for one — they probably do not want to move. One of their board members came in and talked to him and asked if they planned on taking their property and he said, no, everything is on a voluntary basis. However, they would be involved in the planning process as well as a pet care business down the road. They necessarily would not need to control all of the property to involve them in the process. It would put them in a position to really be proactive with the development rather than reactive as sometimes happens with the reuse of Columbia Arena comes to mind, and the City has not really set forth a vision out there 26 at all and they kind of hear rumblings from the development group who has purchased that as to what they want to do with the site and it may or may not match with what the HRA wants to do with the site or the Council or the neighborhood up there. In this case they would be able to get all the players involved and, even if they did not acquire any more properties, they would have a vision for future private developers to take a look at before they come into that neighborhood. Chairperson Commers replied that seemed like it was the big benefit to it. He does not see any risk to it and if they do not like it, reject it, or do not get all the properties to do something, they do not have any downside to that. MOTION by Chairperson Billings to request staff to contact the Corridor Housing Initiative and find out what they are looking for in a Letter of Interest on behalf of the HRA inviting them to be a partner with them. Seconded by Commissioner Meyer. UPON A VOICE VOTE, CHAIRPERSON COMMERS, CO1VaVIISSIONER GABEL, COMIVIISSIONER BILLINGS AND COMIVIIS5IONER MEYER VOTING AYE, AND COMMISSIONER HOLM VOTING NAY, THE MOTION CARRIED ON A 4-1 VOTE. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer. UPON A VOICE VOTE, ALL VOTING AYE, CHAIItPERSON CONIlVIERS DECLARED THE MEETING ADJOURNED AT 9:45 P.M. Respectfully submitted, ���/�. �������J G� Denise M. Johnson Recording Secretary 27 CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING �bru.a� l�'� Name and Address Agenda Item of Interest