Loading...
HRAM 06/05/2014 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION JUNE 5, 2014 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:04 p.m. ROLL CALL: MEMBERS PRESENT: Larry Commers William Holm Pat Gabel Stephen Eggert Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Darin Nelson, Finance Director Vickie Loher, Development Consultant Roger Fink, Cielo Partners ACTION ITEMS: 1.Approval of Expenditures MOTION by Commissioner Gabel to approve the expenditures as presented. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of May 1, 2014 Meeting Minutes MOTION by Commissioner Holm to approve the May 1, 2014 Meeting Minutes. Seconded by Commissioner Eggert. Commissioner Gabel noted the following corrections: VotineVoting Page 1 item one change to start Page 2 first paragraph third sentence should read … “warehouse in the next few” the Page 2 fourth paragraph first sentence should read… “summary of tax increment for in analysis is in the format that has been followed the last two years.” where wereare Page 2 last paragraph first sentence should read… “would remain, they ..” of Page 3 seventh paragraph fifth sentence should read “…coming out the ground…” CARRIED Pages 5, 6 and 7 correct spelling of under the MOTION in Page 6 fifth paragraph seventh sentence should read “…the neighborhood…” in Page 7 third paragraph third sentence should read “…the neighborhood…” Housing and Redevelopment Authority Meeting of June 5, 2014 2 Commissioner Backlund Rules noted on item seven should read Rosenberg’s of Order in both the item and the motion on page 8. MOTION by Commissioner Holm to approve the minutes as amended. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED 3.Election of Officers MOTION by Commissioner Holmto nominate Larry Commers as Chair and Pat Gabel as Vice Chair for the coming year. Second by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4.Continuation of the Public Hearing and Authorization of Land Sale, as part of Redevelopment Agreement, of Gateway Northeast Property to Cielo Partners. MOTION by Commissioner Backlund to reopen the public hearing. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING REOPENED AT 7:21 P.M. Paul Bolin, HRA Assistant Executive Director, stated that the proposed development will have approximately 259 apartment units, contained in (3) separate buildings. Each building is proposed to be 4-stories, with 3 stories of living above indoor, ground level parking. Two of the rd buildings proposed have 101 units and the 3 building has 57 units. Buildings 1 and 2 are proposed to be connected to each other through a skyway. Mr. Bolin stated that the acquisition of the development parcels started in 2006, the planning started in 2007, the demolition started 2009 and marketing started 2012. Discussions with Trident started in June of 2012, the “Letter of Understanding” was signed in the fall of 2013, drafting of the Development Agreement started early in 2014, the Term Sheet was developed in early March 2014 and the Development Agreement was drafted in late March. The Agreement was finalized in May 2014. Mr. Bolin said that Trident will purchase the property for a Fair Market Value of $6.25 / sq. ft. Trident will borrow against the entire site to construct improvements on all 3 lots, as well as construct building #1. Trident will complete “Extraordinary Site Cost” improvements on all 3 lots. (Tracking & documenting actual costs) Trident will be given a credit and these costs will be deducted from the purchase price, on the settlement date. Staff recommends approval of the contract for private redevelopment, which includes the land sale, of the properties known as Gateway Northeast. Housing and Redevelopment Authority Meeting of June 5, 2014 3 Commissioner Backlund asked for clarification on page 18 where it talks about insurance. A lot of government contracts have a minimum insurance rating of 7 or something like that; he was surprised that was not included in these types of agreements. Chairperson Commers agreed that the liability potential seemed like a reasonable suggestion. He asked if Mr. Fink knew what insurance was used for these liabilities. Roger Fink, Cielo Partners, replied that the insurance placed on large construction projects is through Zurich Insurance Group. Occasionally it may have been someone else but he expects for this project it will be Zurich. Commissioner Backlund did not know the rating of Zurich and thought it was something that should be considered to be included in this agreement. Vickie Loher, Development Consultant, took note and would make sure that was taken into account. Chairperson Commers asked if the HRA would be responsible for anything associated with the infrastructure like the fence along University Avenue or the water main. He thought that was part of the common areas. Mr. Bolin noted that the improvements referenced earlier were on page 47, Schedule F. They will be installed by the developer and the cost deducted from the purchase price. Chairperson Commers asked what would happen in the event of a default. Ms. Loher replied that if the developer would fail to complete the improvements of the first lots the HRA would not issue a certificate of completion. The Authority would exercise the lot release price and regain fee title to lots 2 and 3, utilizing the lot release prices that are set forth in the agreement, with the understanding the Authority is subordinating their right of recapture to the developer. Chairperson Commers said that the original financing will take care of the public improvements and if they don’t develop lots 2 and 3 the Authority has the right to take those lots back. Ms. Loher replied that is correct. MOTION by Commissioner Backlund to close the public hearing. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:37 p.m. MOTION by Commissioner Backlund to approve the Authorization of Sale, as part of Redevelopment Agreement, of Gateway Northeast Property to Cielo Partners. Seconded by Commissioner Gabel. Housing and Redevelopment Authority Meeting of June 5, 2014 4 UPON A VOICE VOTE, ALL VOTING AYE, CHARIPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Commissioner Eggert asked when construction would start. Mr. Fink thanked the staff in working together to get the legal details done for this transaction. The construction plans for the first building are completed and they will go out for competitive bidding. They applied for a building permit today and the appraisal is expected in next week. The plat is under review at Anoka County, the City has the title transfer matter to complete and it sounds like that will go through the process by mid-July which will fit well with the schedule. If the bids come in over budget they will have to go through the bids to try and close the gap. 5.Approval of Phase XI Housing Replacement Program Paul Bolin, HRA Assistant Executive Director, stated that in December 2010, the Authority approved an amended and restated plan for the HRP. Parcels can be added by HRA Resolution, provided the parcels meet required criteria. Once in the program and a new home is constructed, the Authority is able to collect increment for 15 years on the improvements. Staff recommends approval of the resolution amending the Housing Replacement Program to include Phase XI. Mr. Bolin added that since the Authority is not meeting until July, staff would like to get bids to demolish this property, and move forward with demolition in the next month, so the property can be put out for sale. MOTION by Commissioner Gabel to adopt a resolution adding Phase XI to the Housing Replacement Program. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY MOTION by Commissioner Backlund to obtain necessary demolition contractor of this property assuming $50,000 or less and using the informal bid process. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 6.Approval of Agreement to Purchase 7011 University Avenue NE Paul Bolin , HRA Assistant Executive Director, stated that negotiations began on this property last October. The appraisal said it is worth $3,555,000 if shovel ready. It is estimated that it will cost nearly $900,000 to make the site shovel ready, which is how staff arrived at the price of $2,600,000. There were many counter offers from the seller, but eventually the seller agreed to take the original offer of $2.6m. The closing will not happen until August or September so there is time to look at the mechanics on how to fund this purchase and pay for the demolition work. Housing and Redevelopment Authority Meeting of June 5, 2014 5 Mr. Bolin stated that the funds for the purchase and redevelopment of this property will come from the following:  TIF district to be created  Interfund loan from HRA & loan from City The loans will be paid back through future land sales and the TIF District. Staff recommends the Authority approve a motion accepting the purchase agreement for the Columbia Arena property located at 7011 University Avenue NE. Chairperson Commers said that the funding would evenly be divided between the city and the Authority. Mr. Bolin replied that no discussions have been held that would differ from that. Commissioner Holm asked if this is structured as a purchase of property by the HRA. Mr. Bolin said that is correct; the HRA would hold the title of the property; the City may not buy land to hold for redevelopment. Commissioner Holm asked if the city would lend HRA money to make sure the HRA is properly funded so the HRA funds are not strained and the Authority has the ability to pay. Mr. Bolin replied that is correct. Chairperson Commers said that the HRA’s ability to pay is behind the agreement that the cost would be evenly divided between the HRA and the city. The Authority will know more where they are at financially after a cash flow analysis is completed. Commissioner Holm said this is a great opportunity for the city and the HRA to get control of this property. Commissioner Eggert asked what the mechanics were for signing the purchase agreement and if the funding arrangement was contingent to closing. Mr. Bolin replied that there are no contingencies on the HRA ability to fund this purchase. The purchase agreement is before Chairperson Commers tonight for signature. The check for the earnest money is ready to go. Commissioner Backlund asked if there should be a motion authorizing to pay the $5,000 engineering fee that was agreed upon as part of this deal. Mr. Bolin replied that is listed in part of the purchase agreement so by approving the purchase agreement that will be covered on page 4, section 8.1. Commissioner Holm noted that item 9 where it talks about the closing date occurring 15 … the word days is missing. Housing and Redevelopment Authority Meeting of June 5, 2014 6 MOTION by Commissioner Backlund to approve the Agreement to Purchase 7011 University Avenue NE. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Chairperson Commers said that some people use that property for parking when they use the park. He asked if there would be anything needed to be done legally to clarify this parking. Scott Hickok , Community Development Director, said that staff is working with Jack Kirk to preserve 50 stalls for future development. There was an informal arrangement to have parking in that area for soccer games. No formal arrangement was needed because it was always publicly owned. If a private development goes in that area an easement would be needed. Informational Items 1.Housing and Loan Program Update Paul Bolin , HRA Assistant Executive Director, reported that in May there were two loans closed making a total of 5 year to date. There were two remodel advisor visits which were the first two for the year. In May there were 4 Home Energy Squad visits and in next few weeks residents will receive a letter explaining the new program in the mail. Chairperson Commers said that CEE came out to his home and for $50 they put in 36 light bulbs at no charge. There were three people there for three hours and when they are done you get a fine written report. This is a good program and $50 well spent. ADJOURNMENT MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 8:00 P.M. Respectfully Submitted, Krista Peterson, Recording Secretary