09-10-08 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL SEPTEMBER 10, 2008 CANABURY Mayor Blesener opened the Public Hearing to consider the adoption of SQUARE an ordinance to establish the Canabury Square Condominium Housing HOUSING Improvement Area under Minnesota Statutes, Sections 428A.11 to IMPROVEMENT 428A.21. AREA The City Administrator reviewed the specific related to the establishment of Canabury Square as a Housing Improvement Area (HIA). He noted that the HIA would be used as a funding mechanism to finance various improvements to the property through fees that would be imposed on the owners of the units. The Administrator presented a detailed presentation outlining HIA specifics. As part of that presentation, the Administrator explained that an HIA is a special assessment mechanism for funding privately owned exterior improvements when housing cannot secure private financing of its own. Special assessments (fees) are collected through a special taxing district established for the HIA. The fees collected through the property tax bill provide repayment for the funding. The Adminishator noted that the HIA Statutes are MN Statutes Section 428A.11 through 428A.21. The HIA Statutes are scheduled to sunset on June 30, 2009. He also pointed out that this is financing of last resorC. In creating an HIA, the Administrator noted that the City's objectives are to preserve its housing stock and to help facilitate needed improvements through financing. The project, however, is the homeowners' association's responsibility and association members must want it. The Adminishator explained the process in detail, highlighting that if the Council adopts the HIA ordinance, property owners have veto power through a petition signed by 35% of property owners within 45 days of adoption of the HIA ordinance. The Administrator reported that the Canabury Square project costs are estimated at from $3.5 to $4 million. HIA financing would consist of the City selling taxable bonds. The HIA fees could be assessed back to property owners over a term of up to 20 years. The Administrator noted that the City would act as the paying agent for the project. If there are excess proceeds, these would be returned to the Association and held in its reserve fund. The Administrator also explained that the fee structure can be based on a number of factors, which would be determined by the homeowners' association. Once the fees are assessed, property owners can prepay full or in part up to 30 days after they are adopted. There will be no prepayments allowed after the initial 30 day period. The Administrator reviewed estimates of fees that might be charged condo property owners based on both a $3.5 million project and a $4 million project. He estimated the interest rate to property owners at 6.75%.