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HRA 03/23/2010 - 29809CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION MARCH 23, 2010 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Pat Gabel Larry Commers Stephen Eggert John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director Jim Casserly, Development Consultant Richard Pribyl, Finance Director ACTION ITEMS: 1. Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of February 4, 2010, Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Meyer. Commissioner Gabel asked for corrections on pages 2 and 4 of the minutes. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED. 3. Approval of Resolution Designating Official Depositories Richard Pribyl, Finance Director, said that annually the City and HRA designates an official bank. Wells Fargo has been the official bank for the both the City and HRA for a number of years. Wells Fargo is responsive and easy to work with and flexible with investment management. Staff recommends approval of the resolution designating Wells Fargo as the official depository for the Authority. MOTION by Commissioner Gabel to approve the resolution designating official depositories. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Approval of 2010 Mowing Contract Paul Bolin, HRA Assistant Executive Director, said that the HRA has contracted with Complete Grounds Maintenance since 2004. The service has been reliable and responsive. 2010 service rates will continue at the 2009 rates. Staff Recommends the HRA continue with Complete Grounds Maintenance for mowing services for 2010. Chairperson Commers asked if there would be any mowing services needed where the buildings were demolished. Mr. Bolin said that currently there is black dirt and the area will be seeded and once it is grown, those properties will be mowed as well. Commissioner Gabel asked how fees for the mowing are determined. Mr. Bolin said that everything is priced on a per hour basis, $36 dollars per hour, and an estimated time is give per lot that is mowed. MOTION by Commissioner Meyer to approve the 2010 Mowing Contract. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5. Approval of Realtor and Contractor for Home Improvement Demonstration Project Paul Bolin, HRA Assistant Executive Director, said that HRA purchased a rambler at 831 Mississippi Street NE consisting of 3 bedrooms, 2 baths, 1,028 sq. ft, built in 1959. The home is approximately 1,028 square feet and HRA acquired the property for $128,573.29. The current average list price for comparables was $179,959 and the average sales price for recent comparable homes is $156,333. The home at 871 Mississippi listed for $194,900. Mr. Bolin said that this program will spur reinvestment in Fridley's housing stock by showcasing a wide array of potential upgrades / improvements to make older homes more livable, demonstrating home energy efficiency, encouraging reinvestment in Single Family housing stock and promoting our loan program and remodeling advisor services. Mr. Bolin said that a Remodeling Contractor was selected after a thorough process. 16 Contractors provided their qualifications; the top three were interviewed and then submitted their remodeling ideas and estimated costs. Lennox Builders were the unanimous staff choice. Lennox Builders has experience with the Coon Rapids program and a depth of expertise. Mr. Bolin said that the real estate broker was also selected through a similar process. 15 Realtors supplied statements of qualifications/interest; the top three were interviewed and Tim Van Auken of Counselor Realty had the most innovative marketing ideas and demonstrated interest in participating in the entire project. Mr. Bolin said that staff recommends that the Authority approves the selection of Lennox Builders to be the contractor for the program and Tim Van Auken/Counselor Realty be the realtor for the program. Staff further recommends the Board Chair and Executive Director be authorized to sign the necessary agreements on behalf of the Authority. Pending approval, the following timeline has been developed with the Contractor and Realtor. Pre-remodel open house and kick-off event held Sunday April 1 ltn Remodeling work begins on April 12tn Mid-point open houses held Sunday May 23rd and Wednesday May 26tn Websites will be updated regularly Series of open houses held after completion and home listed for sale, starting on Saturday July 17tn Commissioner Gabel asked who this home would be marketed to. She had concerns about the home only being two bedrooms on the main floor which would not make it attractive to a young family. Mr. Bolin said that was a concern but as the home was looked at closer, it was decided that for a showcase home and the greatest appeal to a wide variety of residents it would be best to have a larger bedroom and the option for additional bedrooms in the basement. Commissioner Gabel asked about the area underneath the addition. Mr. Bolin said that area would be for storage. There is not a way to find a home that will suit everyone's needs. There is also a single garage that isn't ideal for everyone. The home has a lot of plusses to balance out any negatives. This proposal offered the best variety of all the designs that were presented. Commissioner Gabel asked if there was room to expand the garage. Mr. Bolin answered no but said that a detached double garage could be built behind the home. If that is something the homeowner would need, that option is available. Scott Hickok, Community Development Director, added that one of the things in the Comprehensive Plan is that there is a desire for more opportunities for seniors to stay in their home and this would offer that opportunity. Commissioner Gabel asked if the laundry was on the main level. Mr. Bolin said that there is room for that where the panty is located or in the walk in closet. Commissioner Meyers said that he is amazed what they are going to do for the money. He thought the designer did a great job and was very impressed. MOTION by Commissioner Holm to approve the realtor and contractor for home improvement demonstration project. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Tim VanAuken, Counselor Reality, said that he has a history of selling homes in Fridley and has represented numerous sellers. Recently he developed a twin home where he currently resides. He has worked with an investor in Fridley and did similar project by rehabilitating a dated home and resold the property. Commissioner Meyers asked if he had any experience with Lennox Builders. Mr. VanAuken answered no, but he did meet them today and was impressed with ideas of the remodel and the direction they are taking. The bonus this home has is the marketing capability. Lennox Builders has a good grasp on the marketing and working together as a whole, not just the property itself. This home renovation has potential to be very successful. Mr. VanAuken addressed the concern with the two bedrooms which was also his concern but agreed with Mr. Hickok that there are aging residents that want to stay in Fridley and this home would meet their needs. Also there are aging families that will be able to see that extra bedrooms can be added to the lower level. A lot of homeowners cannot sell their homes and this will help them be able to stay in Fridley. The loan programs available to the residents will help people to stay in their homes. Chairperson Commers said that it sounded like Mr. VanAuken has a lot of experience and the HRA would like this to be successful so another home rehabilitation program could be started. 6. Approval to Set Public Hearing for Potential Land Sale Paul Bolin, HRA Assistant Executive Director, said that HRA has received an offer, from Jim Faulkner / Faulkner Construction, to purchase two vacant properties the HRA has owned since early 2000. The properties are located at 6352 Old Central Avenue and1271 E. Moore Lake Drive. Mr. Bolin said that HRA purchased the two parcels in early 2000 for a total price of $143,000. The parcels are not buildable in their current state due to the depth of organic soils. Over $500,000 is needed to correct the soils and the properties have been off tax roles for 10 years. Mr. Bolin said that the Faulkner Group is seeking to obtain parcels for $100,000. Faulkner will correct soils on both sites upon closing of the sale; will construct a senior assisted living project upon completion of soil corrections, which will generate nearly $15,000 / year to the City in property tax and will construct a commercial building in near future, generating an additional $7,000 / year in City tax revenue. Mr. Bolin said that Faulkner will need City approval on the "master plan" for the site as it is located in an S-2 Redevelopment District. Staff recommends the Authority set May 6th as the date to hold a public hearing on the potential land sale. Staff also recommends that the Authority authorize the Board Chair to sign on to the "master plan" land use application as the property owner. Chairperson Commers asked if ponding was needed for this property. . Scott Hickok, Community Development Director, said that the property was originally purchased because it had soil issues. This property would sit there and be undeveloped for a long period of time. Each site in that neighborhood would not be required to have their own pond and it was thought that if a pond wasn't developed on each site the projects could do a regional pond concept. The project at the Sandy Site and Select Development Site could have their own ponding which does prove that the properties can develop without the regional pond concept. Commissioner Holm asked what it meant to have the ability to get the property back. Mr. Bolin said that once the soil corrections are done if the HRA wanted the property back some of the expenses would need to be reimbursed. Staff hopes to avoid all of that by requiring all soil corrections be completed upfront. Jim Casserly, Development Consultant, said that once the agency has financing for the senior project secured, the city would require all soil corrections be done throughout the site. If the commercial project is not completed in 3-4 years the property would be in default of the agreement and HRA would have the right to get the property back. HRA would have provisions in the agreement to protect them from certain circumstances. Chairperson Commers asked if HRA would get the property back by default. Mr. Casserly said that HRA would get the property back by default and if the developer doesn't perform. This provision has been used in a number of projects but HRA has never had to exercise that option. Commissioner Eggert asked what the time frame is for the project. Attorney Casserly said that the time frame has not been set; but given the cost of the soil correction they would probably not move forward unless they have financing for the senior housing project. A reasonable period of time will need to be built in just for the soil correction. Chairperson Commers asked if money could be saved on the soil correction. Attorney Casserly said that bids came in the mid $600,000 for all soil correction but they are using specifications from the city on max cubic yards of soil that needs to be taken out and replaced. Because of the expense involved, they will try to find cheaper soil through a project with excess soil available. Commissioner Gabel asked if the area had to be dug out 12'. Commissioner Meyers said that he would be surprised if it is that deep and would like to see the soil borings. Mr. Hickok said that pilings were considered and it was determined they would prefer soil corrections. Chairperson Commers asked if the taxes would start in 2013 or if it would get pushed back. Attorney Casserly said he didn't know. This project is market driven and they have tried to be optimistic. Commissioner Holm asked if the soil issue was throughout the site. Mr. Bolin said that it appears to be throughout both sites and is well distributed. Commissioner Holm asked about ponding on the hard surface and if it was a good space on both sites to combine. Mr. Hickok said that they have been speaking with the Public Works Director on that issue to see what ponding requirements would be in that area. If needed they could consider subsurface holding facilities rather than an open pond. That is preferred when the area for a ponding is tight. MOTION by Commissioner Holm to set public hearing for potential land sale. Contract. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS: Housing Loan Program Update Paul Bolin, HRA Executive Assistant Director, said that in February/March two RLF loans were closed which makes a total of three year to date. No remodeling advisor visits have been made so far this year. A direct mailing will go out to residents the first week in May to promote these programs. Mr. Bolin said that the Home and Garden Show was held on February 26 and over 1,000 people attended. Positive comments have been heard from those who attended. The next HRA meeting is on May 6, 2010. NONAGENDA UPDATE: None ADJOURNMENTS: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:45 P.M. Respectfully Submitted, Krista Monsrud, Recording Secretary