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Ordinance No. 1407, Establishing Innsbruck North Housing Improvement Area 05-08-2023 Ordinance No. 1407 Establishing Innsbruck North Housing Improvement Area The City Council (City Council) of the City of Fridley, Minnesota (City) hereby ordains: Section 1. Recitals 1.01. The City is authorized under Minnesota Statutes, Sections 428A.11 to 428A.21, as amended (Housing Improvement Act), to establish by ordinance a housing improvement area within which housing improvements are made or constructed and the costs of such improvements are paid in whole or in part from fees imposed within the area. 1.02. The City has determined a need to establish the Innsbruck North Housing Improvement Area as further defined herein (Innsbruck North HIA), in order to facilitate certain improvements to property known as “Innsbruck North Townhouses,” all in accordance with the Housing Improvement Act. 1.03. The City has consulted with the Innsbruck North Townhouses Association (Association) and with residents in the Innsbruck North HIA regarding the establishment of such area and the housing improvements to be constructed and financed under this ordinance. Section 2. Findings 2.01. The City Council finds that owners of approximately 62% of the housing units within the Innsbruck North HIA (which exceeds the requirement for owners of at least 50% of the housing units pursuant to Section 428A.12 of the Housing Improvement Act) have filed a petition with the City Clerk requesting a public hearing regarding establishment of such housing improvement area. 2.02. On April 24, 2023, the City Council conducted a public hearing, duly noticed in accordance with the Housing Improvement Act, regarding adoption of this ordinance at which all persons, including owners of property within the Innsbruck North HIA were given an opportunity to be heard. 2.03. The City Council finds that, without establishment of the Innsbruck North HIA, the Housing Improvements (as hereinafter defined) could not be made by the Association or the housing unit owners. 2.04. The City Council further finds that designation of the Innsbruck North HIA is needed to maintain and preserve the housing units within such area. 2.05. The City will be the implementing entity for the Innsbruck North HIA and the Housing Improvement Fee (as defined in Section 5 below). 2.06. The City Council further finds that by a resolution adopted by the City Council on the date hereof (Fee Resolution) and as provided herein, the City has provided full disclosure of public expenditures, loans, bonds, or other financing arrangements in connection with the Innsbruck North HIA (as required under Section 428A.13, subd. 1a(1) of the Housing Improvement Act). The City and the Association expect to finance the Housing Improvements in part by issuing taxable general obligation bonds primarily secured by the housing improvement fees imposed on unit owners within the Innsbruck North HIA and also secured by the City’s full faith and credit and taxing power and in part with funds from the Association. 2.07. In accordance with Section 428A.13, subd. 1a(2) of the Housing Improvement Act, the City Council determines that the Association will contract for construction of the Housing Improvements. Section 3. Housing Improvement Area Defined 3.01. The Innsbruck North HIA is hereby defined as the area of the City legally described in Exhibit A attached hereto and includes the units with the addresses listed in Exhibit A. 3.02. The Innsbruck North HIA contains 282 housing units as of the date of adoption of this ordinance, along with common areas. Section 4. Housing Improvements Defined 4.01. For the purposes of this ordinance and the Innsbruck North HIA, the term “Housing Improvements” shall mean site and utility improvements, including but not limited to the replacement of all streets and driveways; the addition of new curbs and gutters; the replacement or improvement of sanitary and storm sewer mains; the correction of drainage issues; the replacement and renovation of retaining walls, paths, sidewalks, stairways and concrete mailbox pads; and the replacement of the tennis court with green space. 4.02. Housing Improvements shall also be deemed to include: (a) all costs of architectural and engineering services, overhead, and all similar soft costs in connection with the activities described in Section 4.01 hereof, including without limitation costs of a professional construction manager. (b) all administration, legal and consultant costs in connection with the Innsbruck North HIA; and (c) all financing costs related to financing the Housing Improvements under the Housing Improvement Act, including without limitation cost of issuance associated with the issuance of any general obligation bonds to finance the Housing Improvements, underwriter’s discount on the bonds, the administrative fee of the City, and capitalized interest on such bonds. Section 5. Housing Improvement Fee 5.01. The City may, by the Fee Resolution and in accordance with the hearing and notice procedures required under the Housing Improvement Act, impose a fee on the housing units within the Innsbruck North HIA, at a rate, term or amount sufficient to produce revenues required to provide the Housing Improvements (Housing Improvement Fee), subject to the terms and conditions set forth in this Section. 5.02. Any Housing Improvement Fee shall be allocated equally to each unit. The City Council specifically finds that such allocation is more fair and reasonable than a fee based upon the tax capacity or square footage of each housing unit (i) because most of the Housing Improvements are to common elements as defined by the Innsbruck North Townhouses Association Corrected Fourth Amended and Restated Declaration, dated November 2, 2011 (Declaration) and such Declaration provides for an equal allocation to each unit of the costs of capital improvements to common areas, (ii) the Association has proposed such allocation as an equitable basis for dividing costs, and (iii) because the nature of the Housing Improvements does not create a different benefit to different housing units on the basis of the tax capacity or square footage thereof. 5.03. The Housing Improvement Fee shall be imposed and payable for a period no greater than 20 years after the first installment is due and payable. 5.04. Any Housing Improvement Fee shall be prepayable as specified in the Fee Resolution. 5.05. The Fee Resolution may provide that any fee not prepaid by the housing unit owner shall be deemed to include interest on unpaid Housing Improvements costs as set forth therein. 5.06. The Housing Improvement Fee shall be collected at the same time and in the same manner as provided for payment and collection of ad valorem taxes, in accordance with Section 428A.15 of the Housing Improvement Act and Minnesota Statutes, Section 428A.05. As set forth in Section 428A. 14, subd. 2 of the Housing Improvement Act, the Housing Improvement Fee is not included in the calculation of levies or limits on levies imposed under any law or charter. 5.07. The Housing Improvement Fee shall not exceed the amount specified in the notice of public hearing regarding the approval of such fee; provided, however, that the Housing Improvement Fee may be reduced after approval of the Fee Resolution, based on the actual financing terms in the manner specified in such Fee Resolution. Section 6. Annual Reports 6.01. On August 15, 2023 and each August 15 thereafter until the Housing Improvement Fee and all interest thereon is paid in full and all Housing Improvement Fee revenues have been expended, the Association (and any successor in interest) shall be required to submit to the City, as the implementing entity, a copy of the Association’s audited financial statements. 6.02. The Association (and any successor in interest) shall also submit to the City any other reports or information at the times and as required by any contract entered into between that entity and the City. Section 7. Housing Improvement Bonds 7.01. At any time after a contract for construction of all or part of the Housing Improvements has been entered into or the work has been ordered, at any time after the period for prepayment without interest of the Housing Improvement Fee has ended, the City may issue its bonds secured by Housing Improvement Fees, as authorized pursuant to Section 428A.16 of the Act, in a principal amount necessary to finance the portion of the cost of the Housing Improvements, capitalized interest, costs of issuance of the bonds, the City’s administrative fee and any underwriter’s discount provided that the par amount of the bonds shall not exceed $4,790,000. Such financing shall be issued pursuant to and in accordance with Section 428A.16 of the Act. Section 8. Notice of Right to File Objections 8.01. Within five days after the adoption of this ordinance, the City Clerk is authorized and directed to mail to the owner of each housing unit in the Innsbruck North HIA: (a) a summary of this ordinance; (b) notice that owners subject to the proposed Housing Improvement Fee have a right to veto this ordinance if owners of at least 45% of the housing units within the Innsbruck North HIA file an objection with the City Clerk before the effective date of this ordinance; and (c) notice that a copy of this ordinance is on file with the City Clerk for public inspection. Section 9. Amendment 9.01. This ordinance may be amended by the City Council upon compliance with the public hearing and notice requirements set forth in Section 428A.13 of the Housing Improvement Act. Section 10. Effective Date 10.01. This ordinance shall be effective 45 days after adoption hereof, or on the date that is 15 days after the publication of this ordinance, whichever is later, subject to the veto rights of housing unit owners under Section 428A.18 of the Housing Improvement Act. AYES: 5 NAYS: 0 Passed by the City Council of the City of Fridley, Minnesota this 8th day of May, 2023. ______________________________________ Scott J. Lund - Mayor Attest: ________________________________________ Melissa Moore - City Clerk Public Hearing: April 24, 2023 First Reading: April 24, 2023 Second Reading: May 8, 2023 Summary Ordinance Publication: May 11, 2023 Exhibit A Legal Description The following described real property situate in the County of Anoka and State of Minnesota, to-wit: st All lots located within the plat of Innsbruck North Townhouses 1 Addition: Lots 1 through 6, inclusive, Block 1 Lots 1 through 4, inclusive, Block 2 Lots 1 through 4, inclusive, Block 3 Lots 1 through 6, inclusive, Block 4 Lots 1 through 6, inclusive, Block 5 Lots 1 through 6, inclusive, Block 6 Lots 1 through 8, inclusive, Block 7 Lots 1 through 6, inclusive, Block 8 Lot 1, Block 9 Lots 1 through 6, inclusive, Block 11 nd All lots located within the plat of Innsbruck North Townhouses 2 Addition: Lots 1 through 8, inclusive, Block 1 Lots 1 through 6, inclusive, Block 2 Lots 1 through 8, inclusive, Block 3 Lots 1 through 8, inclusive, Block 4 Lot 1, Block 5 Lots 1 through 8, inclusive, Block 6 Lots 1 through 8, inclusive, Block 7 Outlot A rd All lots located within the plat of Innsbruck North Townhouses 3 Addition: Lots 1 through 4, inclusive, Block 1 Lots 1 through 4, inclusive, Block 2 Lots 1 through 4, inclusive, Block 3 Lots 1 through 4, inclusive, Block 4 Lots 1 through 4, inclusive, Block 5 Lots 1 through 4, inclusive, Block 6 Lots 1 through 4, inclusive, Block 7 Lots 1 through 4, inclusive, Block 8 Lots 1 through 4, inclusive, Block 9 Lots 1 through 4, inclusive, Block 10 Lots 1 through 4, inclusive, Block 11 Lots 1 through 4, inclusive, Block 12 Lots 1 through 4, inclusive, Block 13 Lots 1 through 4, inclusive, Block 14 Lots 1 through 4, inclusive, Block 15 Lots 1 through 4, inclusive, Block 16 Lots 1 through 4, inclusive, Block 17 Lots 1 through 4, inclusive, Block 18 Lots 1 through 4, inclusive, Block 19 Lots 1 through 4, inclusive, Block 20 Lots 1 through 4, inclusive, Block 21 Lots 1 through 4, inclusive, Block 22 Lots 1 through 4, inclusive, Block 23 Lots 1 through 4, inclusive, Block 24 Lots 1 through 4, inclusive, Block 25 Lots 1 through 4, inclusive, Block 26 Lots 1 through 4, inclusive, Block 27 Lot 1, Block 28 All lots located within the plat of Innsbruck North Townhouses Plat 4 Lots 1 through 47, inclusive, Block 1 All lots located within the plat of Innsbruck North Townhouses Plat 5 Lots 1 through 12, inclusive, Block 1 Lots 1 through 2, inclusive, Block 2 Lots 1 through 11, inclusive, Block 3 Lots 1 through 11 inclusive, Block 4 Lots 1 through 3, inclusive, Block 5 Lots 1 through 6, inclusive, Block 6 Lots 1 through 5, inclusive, Block 7 Lots 1 through 3, inclusive, Block 8 Lots 1 through 11, inclusive, Block 9 Lot 1, Block 10 All lots located within the plat of Innsbruck North Townhouses Plat 6 Lots 1 through 4, inclusive, Block 1 Lots 1 through 12, inclusive, Block 2 Lots 1 through 11, inclusive, Block 3 Lots 1 through 3, inclusive, Block 4 Lots 1 through 5, inclusive, Block 5 Lots 1 through 6, inclusive, Block 6 Lots 1 through 3, inclusive, Block 7 Lots 1 through 11, inclusive, Block 8 Lots 1 through 3, inclusive, Block 9 Lots 1 through 5, inclusive, Block 10 Lots 1 through 6, inclusive, Block 11 Lots 1 through 11, inclusive, Block 12 Lots 1 through 12, inclusive, Block 13 Lots 1 through 3, inclusive, Block 14 Lots 1 through 11, inclusive, Block 15 Lots 1 through 2, inclusive, Block 16 Lot 1, Block 17 Lots 1 through 6, inclusive, Block 18 Lots 1 through 5, inclusive, Block 19 Lots 1 through 5, inclusive, Block 20 Lots 1 through 5, inclusive, Block 21 Lot 1, Block 1, Innsbruck North Townhouse Replat Lot 2, Block 1, Innsbruck North Townhouse Replat Lot 3, Block 1, Innsbruck North Townhouse Replat Lot 4, Block 1, Innsbruck North Townhouse Replat nd Lot 1, Block 1, Innsbruck North Townhouse Replat 2 Addition nd Lot 2, Block 1, Innsbruck North Townhouses Replat 2 Addition nd Lot 3, Block 1, Innsbruck North Townhouses Replat 2 Addition nd Lot 4, Block 1, Innsbruck North Townhouses Replat 2 Addition