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HRA 05/03/2012 - 31319CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION May 3, 2012 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:04 p.m. ROLL CALL: MEMBERS PRESENT: NONMEMBERS PRESENT: ACTION ITEMS 1. Approval of Expenditures Larry Commers William Holm Pat Gabel Stephen Eggert John Meyer Paul Bolin, HRA Assistant Executive Director Becky Kiernan, Accountant William Burns, City Manager Jeff Johnson, ACCAP Developing Consultant Dave Anderson, Realtor for Novak-Fleck Builders MOTION by Commissioner Gabel to approve the expenditures as presented. Seconded by Commissioner Meyer. Chairperson Commers asked about the administrative expenses and how that stood in regards to the developments, if it included Council fees or if it all related to Real Estate Recycling (RER). Paul Bolin, HRA Assistant Executive Director, answered no, it didn't. The $11,083 is for RER expenses which RER will reimburse half of that amount. The $585 is for the Housing Replacement Program. Chairperson Commers asked when or how they would get the reimbursement from RER. Mr. Bolin answered that per the agreement RER will send checks in increments of $10,000. William Burns, City Manager, asked if HRA is getting a FEMA reimbursement for last year's tornado damage. Becky Kiernan, Accountant, said that staff received a letter that there is a reimbursement coming but she was not sure it was for the property on Mississippi Street; that reimbursement is forthcoming. Dr. Burns said the General Fund is getting $100,000. Chairperson Commers asked if that is part of the insurance coverage. City of Fridley Housing and Redevelopment Meeting of May 3, 2012 Ms. Kiernan answered yes, that is part of it. Commissioner Meyer said that staff didn't have to list all the mowing fees separately, a lump sum would be acceptable. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of April 5, 2012 Meeting Minutes MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Gabel. Commissioner Gabel noted the following corrections: • Page two, fourth paragraph, second sentence from bottom, change now to not Page five, first two sentences should read; Mr. Hyde said that there was a short €Etse timeframe with the seller that was driven by the lender and they had an unrealistic approach. Now that we are �g laying out what is involved, they now have an. .. Page five, third paragraph. second sentence, should read; just the beginning of our � ourney. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED 3. Public Hearing and Consideration of Resolution Authorizing sale of 6000 2"d Street NE MOTION by Commissioner Gabel to open the Public Hearing. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING OPENED AT 7:05 P.M. Paul Bolin, HRA Assistant Executive Director, said that this Public Hearing is to authorize the sale of 6000 2"d Street NE to Anoka County Community Action Program (ACCAP). ACCAP has great history and reputation with the HRA. The proposed use is consistent with the HRA and ACCAP mission. This would create a new investment in the neighborhood. Staff recommends authorization of this sale. Mr. Bolin said that in 2012 ACCAP paid over $3,000 in property taxes. When the building is complete it will likely be valued $1.5-1.6M which will increase the taxes that will come into the City and the Authority. Jeff Johnson, ACCAP Development Consultant, said that he has worked with ACCAP since 1992. The schematic phase is completed but the full plans or specs have not been submitted to the City. Additional work needs to be done regarding colors and elevation. Stairs and retaining walls may be included in the final development plan. Commissioner Eggert asked how many properties ACCAP owned. City of Fridley Housing and Redevelopment Meeting of May 3, 2012 Mr. Johnson answered 500 units in 50 locations. William Burns asked if the home would have any energy conservation features. Mr. Johnson answered yes; they will be incorporated in a substantial way and many are required. This home will exceed the Minnesota Energy Codes for energy conservation, heating, cooling and water usage. Commissioner Meyer asked what was wrong with the current property as it sits. Mr. Bolin answered that currently there is a vacant corner lot the Authority owns that is 40' wide and unbuildable due to its small size. Commissioner Meyer asked what other lots were in violation of code in the city or if this was the only one. Mr. Bolin said that there are a number of lots that are substandard in size and this is one that the Authority happens to own. In this case there is a nonprofit group that owns property ne�t door that has interest in purchasing this lot. HRA has many parcels out there and if the Authority owns them long term they are missing out on taxes that could be paid and missing out on an opportunity to put properties to good use. Mr. Bolin said that in this situation, ACCAP approached staff a few months back and many thought this parcel was owned by ACCAP as they have maintained it over the years. ACCAP can go after grant money for this building. It makes sense for ACCAP to ask the Authority to sell this property to increase their building from 4 units to 12 units. This also gives ACCAP room to help more people through their programs. Commissioner Meyer was concerned that the Authority may set some kind of legal precedent for future action against other properties. Chairperson Commers said that the HRA has taken down other homes where the Authority splits lots or combined two lots because generally standing by themselves they are too small or large to build on. This makes sense to make a bigger project and doesn't obligate the Authority for other parcels the Authority owns. Dr. Burns said that this isn't anything new; the City has sold property to adjoining property owners in the past. Commissioner Gabel noted that in this case the Authority is not taking over; ACCAP wants to build on this lot to better meet their needs. They are just asking the Authority to sell the property and the HRA is holding it at a substantial loss. This is a great opportunity; if someone wants to buy the parcel it is our best interest to sell and get the lot developed. Commissioner Eggert noted that they are offering to pay the greater of the appraised value. Chairperson Commers asked if an appraisal needed to be done on the property. City of Fridley Housing and Redevelopment Meeting of May 3, 2012 Mr. Bolin said that ACCAP will have an appraisal done. The sale is still dependent upon City approval of the land use item. This is in the Transit Development Overlay District and ACCAP needs a master plan approval before they can develop the area. MOTION by Commissioner Gabel to close the Public Hearing. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:25 P.M. MOTION by Commissioner Holm to Authorize the sale of 6000 2"d Street NE. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Public Hearing and Consideration of Resolution Authorizing Sale of 551 Hugo Street NE MOTION by Commissioner Eggert to open the Public Hearing. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING OPENED AT 7:26 P.M. Paul Bolin, HRA Assistant Executive Director, said that Novak-Fleck Builders are asking to purchase the parcel located at 551 Hugo Street. This is a new investment in the neighborhood. The proposed home design is consistent with HRP Guidelines. The builder has experience with infill lots. The home will have three bedrooms, and 1 3/4 bath. The basement will have the third bedroom and a 3/4 bath finished. The remainder of the basement will be left unfinished. Mr. Bolin said that if approved staff will still need to finalize plans and produce a redevelopment agreement. This will be brought forth at the June meeting. Staff recommends Authority approval. Dale Anderson, Realtor for Novak-Fleck Builders, has been working with the builder for about five years. He has marketed homes for the City of Coon Rapids and Crystal. The goal is to present affordable homes to prospective homeowners. Novak-Fleck has been in business for 34 years, they are a great builder to work with, they warranty their work, and have no issues with follow up. Chairperson Commers asked about the vacant lot ne�t door. Mr .Bolin said that it is the exact same size, 75x110. Mr. Anderson said that the builder would like to start with the proposed lot for sale and if there is positive feedback they may be interested in purchasing other lots. Commissioner Gabel asked what the selling price is for the home. City of Fridley Housing and Redevelopment Meeting of May 3, 2012 Mr. Anderson answered $170,000-180,000. The price will be appealing for first time buyers. This price will be close to what the market value is on the existing homes in the area. Commissioner Eggert asked when construction would start. Mr. Anderson said as soon as they get approval; the home will take about 2-2 '/z months to build. MOTION by Commissioner Eggert to close the Public Hearing. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:40 P.M. Commissioner Holm asked if there was a legal time frame requirement for the construction. Mr. Bolin answered yes; the home must be complete by December 1, 2012 and construction started by August 1, 2012. The Development Agreement allows enough time to get the home done. MOTION by Commissioner Holm to Authorize the sale of 551 Hugo Street NE. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY INFORMATIONAL ITEMS 1. Real Estate Recycling Project Update Paul Bolin, HRA Assistant Executive Director, said that work continues on the term sheet and the Phase 1 Environmental Study. The civil design work is underway and ongoing discussions with Navy continue. They also continue to look at options for BAE to stay onsite. Staff will be back on June 7 to go through the term sheet and ask for approval. Chairperson Commers asked about the cash flow with the City regarding e�traordinary costs. 5 Mr. Bolin said that Paul Hyde is looking for ways to fill the gaps and will have a more accurate count on the work that needs to be done. The numbers that were presented in the past should not increase; they are looking to decrease those numbers. Chairperson Commers was concerned about the Assessment Agreement because of what happened with Medtronic. If the Authority is convinced an agreement isn't needed, that is okay but they have always had one. If the Authority doesn't have one, money will be given based on certain assumptions so it wouldn't hurt to have one in place. Mr. Bolin said that he has had that conversation with the developer and he would like some assessment agreement in the term sheet as well. He had a meeting with Paul Hyde, Darin Nelson and Mary Smith and everyone agrees they want this type of agreement. City of Fridley Housing and Redevelopment Meeting of May 3, 2012 2. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, said that there were no loans this past month but two loans closed in the past week They are running into a problem of people with poor credit or owe too much on their home to borrow money. Applications are coming through but not many qualify. Chairperson Commers asked if CEE was doing the loan application approvals. Mr. Bolin answered yes; they do that on our behalf. Chairperson Commers asked what their policy was regarding credit; is a loan easier to get from them rather than a bank. Mr. Bolin was not sure, he could provide more detail ne�t month. Chairperson Commers said that may be a good idea. Commissioner Gabel asked if staff could bring forth an aging account report, she doesn't think one has been submitted in a while. Mr. Bolin said that one was done for a recent audit and staff can share that the Authority. There are not many loans outstanding. Mr. Bolin said that Dr. Burns put together an article to run in the future newsletter to promote the loan program and CEE will also do a direct mailing for the Authority to get the information out there. CEE has a 2.99% loan for those who want to do energy improvement to their home; term of up to 60 months with a$10,000 max. There is also 4.9% loan for up to 120 months with a max of $20,000. These loans can be used for heating, air, light fi�tures, windows, doors, attic, ceiling insulation etc., are improvements all eligible. This is the time of year people are doing a lot of construction projects and modifications to their home. Staff is trying to do a push to get this information to residents about the loan programs. Chairperson Commers added that there is quite a bit of funds available for these kinds of home improvement projects. Mr. Bolin said that is correct. There are also very few delinquencies in the portfolio. People good about paying loans back so the money available for this program keeps growing. Mr. Bolin said that the remodeling advisor had three visits in the past month. They continue to get more calls and questions. People are doing some remodeling and smaller projects and paying for them as they go. Mr. Bolin had a conversation with realtor Tim Golie who works with Torkelson Builders. Last fall they had asked for marketing rights on a lot in the Gateway West area. He is not as upbeat as Mr. Anderson about the shape of the housing market right now. They have not had much luck with marketing the house design they put together for that site. They may be overpriced for the market at this time but will continue to market the property. The Gateway Northeast Properties had a showing to a developer this morning who has done some housing by the Elk River Rail Station and they are starting the second phase. Some developers are starting to do construction City of Fridley Housing and Redevelopment Meeting of May 3,2012 7 in Big Lake specific to senior housing. They will do more home work and come back to meet with staff in the next week to talk about the sites down there. Scott Hickok, Community Development Director, said he has taken both representatives from Faulkner and Trident Development and they expressed interest to doing something on the Gateway Northeast Project. He has heard from brokers and a few others interested in putting in office and medical buildings. The market for financing for those types of projects is pretty tight. Banks are not willing to loan a lot of money for those types of projects; but there is interest and in a few months something may be brought forward. Mr. Bolin said that earlier this week there was a purchase offer for the lot at 561 Hugo street; staff will bring a formal presentation to the HRA next month. Mr. Hickok said that staff is meeting with folks who are interested in the JLT site. Most recently the broker indicated he would like to meet with Council regarding a vision for what that site may bring. Chairperson Commers asked staff to run a projection on what is needed out of that property for the transit station. They must have some idea on what type of minimum project can be put on that site and what it will generate; show what is needed to generate sufficient funds to do the rest of the work down there. Mr. Bolin said staff can update those figures and get back to the Authority. Mr. Hickok said that other projects that are out there include the sale of the property to Faulkner on Old Central; they recently indicated they are ready to go to phase two of that project that includes 19 more units. The Sandy Site developer handed over the keys and will have a grand opening in October. There is a question when the Cub Foods redevelopment is going to happen. The plans are done and have been reviewed by staff, the permit is ready to issue and the leases are signed. The architectural plans are being developed and we should see construction some time soon. The Columbia Arena currently has some pipes on the site; construction is not happening. Center Point Energy is doing a project and has an agreement with the land owner to stage equipment and pipes on that site for six months. In exchange Center Point Energy will take out the parking lot for the site owner. The access to the fire training center and northern parking lot will be removed. ADJOURNMENT MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:05 P.M. Respectfully Submitted, jIciciir Krista Monsrud • Recording Secretary CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING old. Name and Address Agenda Item of Interest 1\0A--er_SP K1 qOU P-K- N42.,u3 eons--;akicnoc) .