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HRA 10/06/2011 - 30018CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMIVIISSION October 6. 2011 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:30 p.rn. ROLL CALL: MEMBERS PRESENT: MEMBERS ABSENT: Larry Commers William Holm Stephen Eggert Pat Gabel John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director Becky Kiernan, Accountant Jim Casserly, Development Consultant 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 CONIIVIERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of September 1, 2011 Meeting Minutes MOTION by Commissioner Holm to approve the September 1, 2011 minutes. Seconded by Comxnissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMI��RS DECLAREID THE MOTION CARRIED UNA1vIMOUSLY 3. Approval of Agreement to Market and Build Home — 5735 3rd Street Paul Bolin, HRA Assistant Executive Director, said that staff was recently approached by realtor Tim Golie and builder Mike Torkelson seeking an opporhxnity to build and sell a new home on one of the vacant Gateway West lots. The team appears eager to deliver a salable product that will add value to the neighborhood while respecting the variety of home designs akeady found in the Hyde Park/Gateway West neighborhood. The builder and staff have reached an agreement on a home design that will incorporate cement board, stone and wide trim boards on the exterior of the home. The home is proposed to have two Housing Redevelopment Authority Meeting of October 6, 2011 2 bedrooms, one bathroom, three garage stalls and an unfinished basement to keep the home price down and allow for future expansion. Mr. Bolin said that the builder is asking the Authority to change the terms on our standard lot reservation agreement to nine months. The builder and his realtor will actively market the home sketch and lot on the MLS. Once a buyer is found a development agreement will be signed to ensure the home is built to the Authorities criteria for the Gateway West neighborhood. Mr. Bolin said that the builder would like an approval prior to creating blue prints and ordering materials etc.; some kind of assurance from HRA that they are in favor of doing this. The goal is to keep the home in the proper price range; around $185,000. Staff would recommend the Authority authorize staff to enter into a lot agreement with Mr. Torkelson. The price of the lot will be somewhere above $35,000 and below $40,000. There is no risk to the Authority to enter into this agreement. The contractor will either build a home in nine months or they will not find a buyer and the agreement would expire in nine months. The contractor will show a house plan on MLS which will advertise all vacant lots in that area. Commissioner Gabel asked why they were interested in that particular lot. Mr. Bolin said that they spent quite a bit of time looking at the different lots and they have their own ranking system. This lot was has a little more depth and is towards the top where the bend goes to the east. They like the lot at this location and it is the one they would like to build on. Commissioner Gabel asked if it would be better to fill up a vacant lot between homes rather than putting a home where there is no development. Mr. Bolin thought that making something happen down the block where there is no activity may be a good thing. This site is very visible and not surrounded by other homes. Construction will be visible for anyone driving on University and may plant a seed for others to be inspired to build in the area. From a marketing stand point they want to do something on that southern block and see opportunity there. Commissioner Gabel thought that one bathroom seemed strange; she wanted to make sure that is what they were proposing. She also noted that the photo only had a two car garage, not three. Mr. Bolin said it is a three car garage but half of the stall is two cars deep. They are trying to get all the design elements in on the home and be able to market it at a good price. There is room to expand and the buyer may choose to put more into the home. Commissioner Gabel asked if nine months was long enough to build a home with winter coming. Mr. Bolin clarified that nine months was just for the lot reservation agreement. The development agreement would be in the next phase. Commissioner Eggert asked how many lots were left in that development. Mr. Bolin answered nine. Commissioner Eggert asked if the Authority had put different prices on the lots. Mr. Bolin answered yes; 10% is taken off from the City Assessors appraised value. Most lots in this development were between $37,000 and $44,000. Housing Redevelopment Authority Meeting of October 6, 2011 Commissioner Eggert asked if the intent of the developer is to build one home and look at more in that area. Mr. Bolin answered yes; if they sell the first one they would more than likely be interested in building more of these homes. Chairperson Commers asked what the size of the lot was. Mr. Bolin answered approximately 65' wide by 180' deep. Chairperson Commers asked what the last appraised value for the land price was; he seemed to recall something like this has been done before. Mr. Bolin said that an appraisal was done three years ago but he did not recall what it was on a square footage basis, but the average was between $14,000 —$21,000. The appraisals were extremely low due to the foreclosures at that time. Commissioner Holm asked if there were any financial implications for the builder in terms of the agreement. Mr. Bolin said that in this case staff proposes one dollar for a lot reservation fee because there is not a known buyer and the builder is going to have over $1,000 in expenses. The builder will have to prepare estimates for construction materials, blue print plans and list the property on MLS. The Authority will benefit from having these lots on the MLS. Commissioner Holm asked if the lot reservation would include the price of the lot if they find a buyer. Mr. Bolin said that before the lot reservation agreement is signed, a price for the lot, which everyone agrees on, will go into the lot reservation agreement. Commissioner Gabel asked if this was the largest lot in the development. Mr. Bolin answered no, there is one larger. Chairperson Commers said he did not see any risk to try to do something in this area to move the lots. He was surprised a developer is interested in wanting to build something new in this economy. Commissioner Holm agreed with the plan but was concerned that the price of the lot may be too high to accommodate construction of the type of house the Authority would like to see in that area. MOTION by Commissioner Gabel to approve the agreement to market and build the home on 5735 3ra Street. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Awarding of Demolition Contract — Housing Replacement Program Housing Redevelopment Authority Meeting of October 6, 2011 4 Paul Bolin, HRA Assistant Executive Director, said that the City Public Works Departrnent ran a formal bid process on the Authority's behalf. Bids opened on September 23, 2011 and four bids were received (slight error in calculations). Bids ranged from $53,423.93 to $115,000 to demolish three residential properties. Staff recommends the contract be awarded to Veit Companies in the amount of $53,423.93. This bid price was within staff estimates and they will be able to complete the demolition in the desired timeframe Commissioner Eggert asked how this estimate compared to previous demolitions. Mr. Bolin said the price is similar; most of the single family demolitions have been in this price range. MOTION by Commissioner Holm to award demolition contract housing replacement program. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNAI�TIMOUSLY INFORMATIONAL ITEMS: 1. Home Improvement Demonstration Project Update Paul Bolin, HRA Assistant Executive Director, said that some action is starting to happen from the open houses. Anyone who wants to look at the home outside of these times, contact staff and they will show them the home. 2. GWNE Broker Solicitation Update Paul Bolin, HRA Assistant Executive Director, said that the Authority authorized staff to issue a request for qualifications (RFQ) to real estate brokers interested in marketing the properties in Gateway Northeast along University Avenue. Information was sent to over 25 real estate companies and the statements of qualifications were due back on 10/7/11. Brokers will be evaluated on experience, marketing methods, and experience in different market segments. Interviews will be conducted with the most qualified and their references will be checked. Staff will bring forward a recommended broker to the November 3rd meeting. 3. Housing Loan Program Update Paul Bolin, fiR� Assistant Executive Director, said that there were no loans closed in September making a total of eight year to date. There were also no remodeling visits making a total of seven year to date. CEE is going to send out a post card to residents to promote these programs. They are also offering a zero percent energy loan for residents to look into increasing the energy efficiency in their homes. Chairperson Commers noted that nine applicants were rejected; he asked what the reason was for the rej ection. Housing Redevelopment Authority Meeting of October 6, 2011 5 Mr. Bolin said it may be credit score, payment history, too much debt, or owe too much on their home. This loan program isn't any different than a loan from any other bank. Scott Hickok, Community Development Director, said that the White Pines Development recently had an open house. Very good comments were received on the finished product and it will house 14 residents. Once 20 residents are booked phase two will begin. They hope to finish up the second phase yet this year. The Sandy Site is under development of a 70 unit, three story, senior building. This will be a nice looking project. The developer has a sign out on the corner showing what the building will look like and who to call to learn about pricing etc. Mr. Hickok also noted that residents have called to ask about a Habitat for Humanity home that was built in Fridley off of Main Street. This is a County HRA project not a City HRA project. Chairperson Commers asked for an update on Cub Foods. Mr. Hickok said that the developer seemed confident that the financing will be done to start the interior of the store around the first of the year and the outside in the spring. Chairperson Commers asked who owned the building. Mr. Hickok answered the Triland Development Company owns the property. Chairperson Commers asked if anything was happening on the arena site. Mr. Hickok answered no; the developer isn't even responding to phone calls. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMNNII�RS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:45 P.M. Respectfully Submitted, � (�L�e,� Krista Monsrud, Recording Secretary � CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING ��Y� Y�l ��LI Name and Address Agenda Item of Interest I I I