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Item No. 5 Meeting Date: 5-3-99 Staff Report No. Type of Business: WK WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDBA:EDA Business Mounds View Economic Development Authority Staff Report To: Honorable Mayor and City Council Members From: Steve Dorgan, Housing Inspector Item Title/Subject: Request Financial Assistance Knollwood Green Condominium Association Date of Report: April 28, 1999 SUMMARY Staff has recently received a request from the Knollwood Green Condominium Association asking the city to cosign a loan for exterior improvements on the property. The association wishes to install vinyl siding on all of the buildings. The association indicates that the existing masonite siding requires painting every 6 years at a cost of$25,000. They estimate spending over$60,000 in maintenance over the next 15 years for painting and repairing the siding and wish to reduce the maintenance costs by installing vinyl siding on the buildings. The association has attempted to obtain a loan from a local lender for$100,000 and was unsuccessful due to lack of collateral. Knollwood Green consists of 4 buildings and 6 garage banks for a total of 32 units. The buildings were constructed in 1984, at which time a nonprofit condominium association was formed to oversee the maintenance of the property. A recent inspection of the buildings shows that the existing siding appears to be in good condition. POSSIBLE OPTIONS FOR THE CITY Staff has reviewed options available for the city to assist the Knollwood Green Condominium Association in financing the requested improvements. Options include: 1) Housing Improvement Area The City may create a"Housing Improvement Area" for the Knollwood Green property. Minnesota State Statute 428A.11-20 provides for a municipality to establish an ordinance forming a housing improvement area for a specific property(or properties). The ordinance would establish the criteria by which the City would cosign a loan with the Association. The ordinance must include findings that without the housing improvement area, the proposed improvements could not be made by the condominium association and that the improvements are necessary to maintain and preserve the housing units within the housing improvement area. The ordinance must also stipulate the portion of the City to be included in the area and the terms of the City's involvement in the loan. A petition of at least 25% of the homeowners is required for the City to consider the establishment of a housing improvement area. However, the City may require a larger percent.