07-06-2010 Council Minutes - Laserfiche WebLink

Home Search

CITY COUNCIL WORK SESSION July 6,2010 APPROVED 1 CITY OF LINO LAKES 2 MINUTES 3 4 DATE : July 6,2010 5 TIME STARTED : 5:30 p.m. 6 TIME ENDED : 11:10 p.m. 7 MEMBERS PRESENT : Councilmember Gallup, O'Donnell, 8 Rafferty, Roeser and Mayor Reinert 9 MEMBERS ABSENT : None 10 11 12 Staff members present: Acting Administrator Dan Tesch; Community Development 13 Director Michael Grochala; Economic Development Coordinator Mary Alice Divine; 14 City Engineer Jim Studenski; Police Captain Kent Strege; Public Works Employee Tim 15 Payne; Finance Director Al Rolek; City Clerk Julie Bartell 16 17 1. Willow Ponds—Economic Development Coordinator Divine explained that the 18 Willow Ponds project was built with tax increment assistance from the city in 1995 and 19 the development agreements included a covenant instituted by the city that requires the 20 project remain senior housing through the year 2026. The project is now being purchased 21 by Mr. Charles Reisenberg through financing provided by the U.S. Department of 22 Housing and Urban Development(HUD). HUD is requiring subordination of the 23 restrictive covenant. She recalled that the council discussed this matter at the June work 24 session and asked staff to respond to questions and concerns about how the city can 25 maintain certain assurances on this project. Attorney consultant Steve Bubul of Kennedy 26 and Graven has prepared a response that is included in the staff report. It outlines the 27 results of his negotiations with HUD on the matters of mortgage assignment and 28 subordination of the city's restrictive covenant. He reported that HUD has agreed to 29 subordinate the agreement as the city requested. If there were a foreclosure on the 30 mortgage, HUD could terminate the senior covenant but he did get HUD to agree to get 31 the city's (Lino Lakes Economic Development Authority) consent on a change. 32 33 When a council member asked about the significance of the change from"age 55"to "age 34 62" in the agreement, Mr. Reisenberg explained that it has little impact since there are 35 few tenants between the age of 55 and 62. 36 37 The council was informed that much work went into convincing HUD to make the 38 change on allowing the subordination. On the question of management, Mr. Reisenberg 39 confirmed that the function is fully budgeted in his plans and the management company 40 in fact will not change. On the question of ensuring future upkeep of the project, 41 Community Development Director Grochala explained that the condition of the property 42 will be monitored under the city's housing maintenance code. Mr. Reisenberg confirmed 43 that there are no deferred maintenance items planned but there is funding planned for 44 future capital needs. 45 1