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HRAM 11/06/2014 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION November 6, 2014 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Larry Commers Pat Gabel Stephen Eggert Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director Darin Nelson, Finance Director Wally Wysopal, City Manager Jim Casserly, Development Consultant ACTION ITEMS: 1.Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of October 2, 2014, Meeting Minutes MOTION by Commissioner Gabel to approve the minutes. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED 3.Approval of Lot Sale – 521 Fairmont Street MOTION by Commissioner Backlund to open the public hearing. Seconded by Commissioner Holm. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING OPENED AT 7:02 P.M. City of Fridley Housing and Redevelopment Meeting of November 6, 2014 2 Paul Bolin, HRA Assistant Executive Director, stated that Mike Nelson with Habitat for Humanity would like to purchase 521 Fairmont Street. The property sits west of East River Road. The home will be a three bedroom, two bathroom home with a total of 1,400 square feet. The home design and materials meet the requirement of the housing replacement program and the style fits in well with the neighborhood. Staff recommends the Authority approve this sale. Mike Nelson, Habitat for Humanity, said that he looks forward to partnering with the City on another affordable home ownership opportunity. A lot of Minnesota products will be used in this home. They are working through Anoka County for funding and plan to get the contract signed within 60 days. The plan is to cover the lot to get a quick start in the spring. Commissioner Gabel asked how the family would be chosen for this home. Mr. Nelson said that there are 1,300 people in the Twin Cities interested in this program every year. They will get down to 700 applications and about 250 families would qualify for this program, of which 55 homes would be produced. It is a very competitive process. Currently there are four families in a mortgage pool who are ready for this home and they live in the proximity. Volunteers interview families and visit where they live now; it is a lengthy process and families are selected on a point system. There is a 22 hour class on how to become a homeowner and 500 sweat equity hours they must participate in. It takes a total of 18 months to get a home and not everyone gets a home because of the demand for this program. Commissioner Holm asked if the lot was vacant now because the photo in the presentation showed a home on the lot. Mr. Bolin said the lot is vacant; an old aerial photo was used in the presentation. Chairperson Commers asked if only half of the basement would be finished. Mr. Nelson said that the entire home isn’t finished to keep the costs down and the new homeowner has the ability to finish off the home as they wish. MOTION by Commissioner Backlund to close the public hearing. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 7:08 P.M. MOTION by Commissioner Gabel to approve the sale of 521 Fairmont Street. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY City of Fridley Housing and Redevelopment Meeting of November 6, 2014 3 th 4.Approval of Lot Sale – 281 57 Place MOTION by Commissioner Holm to open the public hearing. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 7:09 P.M. Paul Bolin , HRA Assistant Executive Director, said that Mr. Migalyuk has submitted a lot reservation agreement to build a new home on this lot. Over the last week he has come up with a builder and the first draft of the house plan. This is the final lot to sell off in the southern portion of the Gateway West neighborhood. Earlier today Real Estate Transformers sent over a draft of what the home would look like. There is a section of the home proposal that is not up to city code; the garage cannot sit more than 5’ in front of the living area of the home and the current plan has the garage sitting out 10’ so a change will need to be made to the design to address this problem. Staff will not close on the lot until the design meets HRP guidelines. This home will have five bedrooms, three bathrooms and 2,800 total finished square feet between the two levels. Staff recommends authorization of the sale of this lot. Commissioner Gabel asked if Mr. Migalyuk was a broker. Mr. Bolin answered that he is the homeowner. There is a change to the resolution in the packet. Section 2.02 should read “The Authority hereby finds that it has approved and adopted TIF District #18, Gateway West, pursuant to and in accordance with Laws of Minnesota.” The extra language should be deleted, it doesn’t apply to this case. Commissioner Holm asked if this was the final sale of the lots for Gateway West. Mr. Bolin replied that is correct. MOTION by Commissioner Holm 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 7:17 P.M. th MOTION by Commissioner Gabel to approve the lot Sale of 281 57 Place. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5.Approval of Lot Sale – 611 Buffalo Street MOTION by Commissioner Eggert to open the public hearing. Seconded by Commissioner Holm. City of Fridley Housing and Redevelopment Meeting of November 6, 2014 4 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 7:18 P.M. Paul Bolin , HRA Assistant Executive Director, said that this lot is 50’ wide by 110’ deep and the Authority purchased this lot in 1998. It is in a flood plain and relatively narrow and difficult to build on this lot. In this case Mr. Hoffer, who owns the adjacent property at 581 Broad Avenue, would like to purchase this property to combine with his existing lot to create a larger yard for his dogs to run. Mr. Hoffer has watched the HRA crew mow this property over the years and thought it is now time for him to take over the mowing. He has made an offer that seems fair based on the fact this lot is not buildable. He is going to sign a lot combination form at the closing to combine the lots and file with the County. Staff recommends approval of the resolution to authorize the sale to Mr. Hoffer. The lot combination form will prevent future home construction and the sale provides future maintenance savings for the Authority. Commissioner Backlund stated that it appears from the aerial photo that the property to the west would be an 80’ buildable lot if so inclined. Mr. Bolin replied yes; the lot next to that is 75’ in width and owned by the city proper, not the HRA. Commissioner Backlund asked if properties were taken, out of the likelihood of flooding when the dikes were added. Scott Hickok , Community Development Director, replied that it did lessen the flood potential but FEMA still believes the flooding potential exists. The creek could back up and the area could flood because it is such a low area. MOTION by Commissioner Gabel to close the public hearing. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING CLOSED AT 7:24 P.M. MOTION by Commissioner Gabel to Approve the Lot Sale of 611 Buffalo Street. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 6.Review 2015 Preliminary Budget Darin Nelson, Finance Director, reviewed the 2015 preliminary budget and provided an update of the revenues and expenses. City of Fridley Housing and Redevelopment Meeting of November 6, 2014 5 7.Approval of Resolution Supporting Grant Application – DEED Redevelopment Paul Bolin , HRA Assistant Executive Director, stated that there has been a lot of activity lately on this site; lots of clean up and now construction. As Hyde Development moves forward with redeveloping the second phase of the BAE site, they have identified a need for approximately $8M in grant funds. Tonight Mr. Hyde is looking for support for a DEED contamination clean up grant. Mr. Hyde applied for the same grant last year and received $835,000 from the program and this time he is looking for $850,000 from this program. These funds will assist with contamination investigations and cleanup of contamination in accordance with a Minnesota Pollution Control agency approved response action plan (RAP). This program provides funding to sites that are most likely to be redeveloped in the very near future and its goal is to clean up contamination in order to allow a site to retain and create new jobs. Mr. Bolin said that the second request is to obtain a grant through Metropolitan Council Tax Base Revitalization Account (TBRA) grant program, for the second phase of the Northern Stacks Redevelopment Project. TBRA awards $5M annually to clean up contaminated land for redevelopment. The goals of the program are to clean up polluted sites, increase the local tax base, add jobs and support projects that are poised for development. Last year $547,000 was awarded and this year Mr. Hyde is applying for $550,000. Staff is asking the Authority to adopt these two resolutions. Chairperson Commers asked if staff takes care of the oversight to make sure the contracts are complied with. Mr. Bolin replied that Darin Nelson and himself will take care of the oversight and answer any questions. Chairperson Commers asked if staff would ensure that Mr. Hyde and developers comply with the contracts. Mr. Bolin replied yes, there will be a series of different pay requests, applications and invoices along with sworn construction statements. Mr. Hyde stated that this is the second of four phases of redevelopment which is going faster than ever imagined. The first building will be compete 12/19 of this year and there are nd several prospects of tenants. Now there is an opportunity to redevelop the 2 phase of the project with using some portions of the existing building for an existing tenant. This will be a marvelous job creation and retention project. The grants were submitted on Monday and the resolution will complete that application. Commissioner Gabel noted that the grants were already submitted and asked if the resolution could be submitted subsequently. Mr. Hyde met with Mr. Bolin and a representative from DEED and Met Council to preview the applications and budget. As long as the resolutions are delivered everything will be in good shape. City of Fridley Housing and Redevelopment Meeting of November 6, 2014 6 Commissioner Holm asked what is requested from DEED. Mr. Hyde$ said that the fund request has increased to $900,000 from DEED and 600,000 from Met Council. The goal was to try to match the last allocation that was successful. The projects tech center will create more jobs and tax base which is one of the metrics to score in these competing grant applications. The goal is to get a high score to ensure the success of the grant being funded. These are very competitive grants and allocations won’t be known until the end of December. Commissioner Holm asked if all the funds will be used to clean up the site and if any restrictions were in place to use funds from one provider. This could be a financial hassle to keep track of what funds can be used for. Mr. Hyde replied that when this program first started in the mid to late 90’s they were far more complex about what they fund. Met Council funds asbestos removal, DEED will not. DEED will fund cleanup and Met Council will not. The goal is to get feedback before information is submitted to allocate what is acceptable and hope scores are high enough to get the grant. The line items are reviewed in heavy detail, requests are assembled and hopefully funds will be awarded. Commissioner Eggert noted that there are lots of points for LEED certifications. Mr. Hyde replied that certain points can be delivered with the design to get over the top and that depends on what the tenant wants to do inside. Offers will be made to the tenant to decide what they want to do and this will result with the LEED certification. Commissioner Backlund asked if the numbers in the handout needed to be revised to approve this request. Mr. Bolin replied that there are no specific dollar amounts in the resolutions. Commissioner Gabel asked for a refresher on the funds that were used for capping and if it was authorized. Mr. Hyde replied that typically there is a local match portion of the grant and in order to get the grant a local match is needed which falls into the Authority tax increment and hazardous sub district grants. Commissioner Gabel asked if the Navy treatment plant would be moved. Mr. Hyde replied that the Navy treatment won’t move at all which is wonderful because that is a significant savings to the project. Commissioner Backlund asked how much concrete would be used to cover capping the soil and if it would be concrete or asphalt. Mr. Hyde replied that there will be black top on the park and drive area and concrete on the side. City of Fridley Housing and Redevelopment Meeting of November 6, 2014 7 MOTION by Commissioner Gabel to Approve the Resolution Supporting Grant Application – DEED Redevelopment. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 8.Approval of Resolution Supporting Grant Application – Met Council TBRA MOTION by Commissioner Backlund to approve the resolution supporting grant application – Met Council TBRA. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 9.Approval of Modification to Northern Stacks Redevelopment Contract Paul Bolin , HRA Assistant Executive Director, stated that this project is moving along quickly. The development agreement was signed a year ago which HRA provided grant funds for each phase to pay for items out of the hazardous substance sub district for the remediation action plan for phase one. In the overall agreement HRA has disbursement of funds tied to the building permit for phase 2. Each phase is capped at $1.0M and not more than $3.0M can be outstanding at any one time. The trigger to start disbursement of funds for phase 2 is the issuance of a building permit. In this case Mr. Hyde has moved to phase 2 to rework the existing building and has an immediate need for HRA grant funds for remediation and a building permit will not be issued until February or March. Mr. Bolin said that staff is asking for an amendment to tie the disbursement of funds for phase 2 to signing the lease with a large employer/tenant who is currently in that northern building, that will remain in that building. The eligibility to sign that lease will be used rather than the issue of a building permit. Grants will be repaid through the hazardous substance sub district. Over $300,000 per year will be coming in until all grants are paid off. There is very little risk to the HRA to make this change and it allows Mr. Hyde to keep moving forward with phase 2 and keep the tenant on site. Commissioner Eggert said that staff is asking for a simple sequence of events; moving from a disbursement from building permit to the signing of the lease. Jim Casserly , Development Consultant, said this authorizes the ability to release funds and still meet all the requirements set in the contract. There will still be certain regulations to follow and certain funds can only be used for specific purposes. MOTION by Commissioner Eggert to approve the Modification to the Northern Stacks Redevelopment Contract. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Informational Items City of Fridley Housing and Redevelopment Meeting of November 6, 2014 8 Paul Bolin, HRA Assistant Executive Director, said that the Columbia Area sale closed on th October 30. The building is secured and it took Advanced Companies 2 ½ days to secure the building. There was broken glass, wiring stolen, spray paint cans, lights broken; a big mess everywhere. The next step is to schedule a demolition in late December or early January and plan for future uses. 1.MN CEE Housing Programs Update Paul Bolin, HRA Assistant Executive Director, reported that 2 revolving loans were closed, one deferred and two other loans making a total of 20 year to date. There was one remodel advisor visit making a total of six year to date. The Home Energy Squad had 13 visits in October for a total of 97 year to date. Home Energy Squad is booked out until mid- December. Adjournment MOTION by Commissioner Eggert 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 8:45 P.M. Respectfully Submitted, Krista Peterson, Recording Secretary