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HomeMy WebLinkAbout06-28-1999 EDACITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MONDAY, JUNE 28,1999 AGENDA ROLL CALL: President Coughlin, Vice President Stigney, Commissioner Marty, Commissioner Quick, Commissioner Thomason 1. AGENDA ADDITIONS: 2. APPROVAL OF MINUTES A. Approve Minutes of June 14, 1999 3. SPECIAL ORDER OF BUSINESS: None 4. CONSENT AGENDA None 5. EDA BUSINESS A. Consideration of Resolution 99 -EDA -114 authorizing the acquisition of property located at 2225 Hillview Road for the Housing Replacement Program B. Consideration of Resolution 99 -ERA -115 amending the Housing Replacement Program Policy 6. REPORTS 7. ADJOURNMENT EDA CITY OF MOUNDS VIEW MEETING MINUTES MONDAY, JUNE 14,1999 8:00 P.M. CALL MEETING TO ORDER ROLL CALL: Coughlin, Quick, Stigney, Thomason, and Marty. NOT PRESENT: None. 1. AGENDA ADDITIONS None. 2. APPROVAL OF EDA MINUTES A. Approve Minutes of May 24,1999 Mayor Coughlin stated that, with approval of Authority, he would abstain from voting on the minutes, as he was not present at the May 24, EDA meeting. MOTION/SECOND: Quick/Thomason. To approve minutes of EDA for May 24, 1999 as presented. Ayes — 3 Nays — 0 Abstain — 1 (Coughlin) Motion carried. 3. SPECIAL ORDER OF BUSINESS None. 4. CONSENT AGENDA None. 5. COUNCIL BUSINESS None. 6. REPORTS There were none at this time. C:\ADMIN\MINUTES\EDA\EDA61499.MIN 7. ADJOURNMENT Mayor Coughlin adjourned the meeting at 8:01 p.m. Respectfully submitted, Recorded and transcribed by: Trish Pearson TimeSaver Off Site Secretarial, Inc. C:\ADMIN\MINUTES\EDA\EDA61499.MIN Mounds View Economic Staff Report Item No. _j "1A__ Meeting Date: 6-21-98 Staff Report No. Type of Business: EDAB WK. • Work Session; PH. • Public Hearing; CA: ConsentAgenda; MAB: EDA Business Development Authority To: Mounds View Economic Development Authority From: Steve Dorgan, Housing Inspector Item Title/Subject: MVHRP - Proposal to Purchase 2225 Hillview Road Date of Report: June 23, 1999 SUMMARY At the EDA meeting on May 24, 1999, the commission approved the acquisition of 2225 Hillview Road for participation in the Housing Replacement Program. The EDA directed staff to pursue the use of Community Development Block Grant (CDBG) funds appropriated to the EDA by Ramsey County for the acquisition and clearance of the subject lot. Use of CDBG funds by the city for the acquisition and demolition of property is contingent on guidelines set by the Department of Housing and Urban Development. The guidelines include the value of the home and land as well as the overall condition of the proposed home. Therefore, the EDA may chose to approve the acquisition of the subject property with a priority to use CDBG funds if available and to use Tax Increment Funds in the event the property does not meet the Federal guidelines for use of CDBG funds. Attached is a resolution approving the use of CDBG and/or TIF funds for the appraisal and acquisition of the subject lot. The resolution also provides for the execution of a purchase agreement for the property. ACTION TO BE CONSIDERED Approve EDA Resolution No. 99 -EDA -114 authorizing the acquisition of property located at 2225 Hillview Road for the Housing Replacement Program. Steve Dorgan, Housing Inspector 612/717-4023 email: steved(@rcmnet.or Attachments: 1) Resolution No. 99 -EDA -114 2) Location Map RESOLUTION NO. 99 -EDA -114 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING AND AUTHORIZING THE APPRAISAL AND ACQUISITION OF 2225 HILLVIEW ROAD AS PART OF THE EDA'S HOUSING REPLACEMENT PROGRAM It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.10 The Authority has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the "Act"). 1.02 Pursuant to and in furtherance of the objectives of the Act, the Authority has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in this connection is engaged in carrying out the Mounds View Economic Development Project (the "Project") within the City. 1.03 There has been approved pursuant to the Act a Project Plan for the Project. 1.04 The Housing Replacement Program has been adopted under and as part of the Project Plan. 1.05 The redevelopment of property within the Project is a stated objective of the Project Plan and the Housing Replacement Program. 1.06 In order to achieve the objectives of the Project Plan, the Authority has determined to provide substantial aid and assistance through the financing of certain public costs of development. 1.07 The stated purposes of the Housing Replacement Program include reducing the social costs of blight, making better use of public infrastructure, and redistributing tax base to communities with higher levels of fiscal needs. The Housing Replacement Program's objectives include replacing smaller, lower -value housing on scattered sites throughout the City with larger, new and higher -value housing designed for families, the elimination of blighting influences and substandard housing, and the increase of available quality housing for families within the City. 1.08 It has been proposed that the Authority acquire the property located in the City at 2225 Hillview Road (the "Property") and that the Authority enter into a purchase agreement and/or similar agreement (s) (collectively, the "Agreement") for that acquisition and/or subsequent clearance of the property for redevelopment. Section 2. Resolved. 2.01 The Board hereby determines that the Authority's execution of the Agreement RESOLUTION NO. 99 -EDA -114 PAGE TWO OF TWO and the subsequent acquisition and/or clearance of the Property would be in furtherance of the Project Plan and the Housing Replacement Program and hereby approves and authorizes said actions, including an appraisal of the property and the execution of the Agreement by the officers of the Authority in their discretion and at such time, if any, as they may deem appropriate. 2.02 Upon execution and delivery of the Agreement, the officers and employees of the Authority (including members of the City Staff, acting in their capacity as staff to the Authority as well) are hereby authorized and directed to take or cause to be taken such actions as may be appropriate or necessary on behalf of the Authority to implement the Agreement, including the acquisition of the Property with a priority to use Community Development Block Grant funds appropriated by Ramsey County to the Mounds View EDA for acquisition and demolition of Program properties for redevelopment purposes. In the event the subject site does not meet guidelines for the use of CDBG funds, the Authority authorizes the use of TIF funds to implement the Agreement, including the acquisition of the property. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority this 28th day of June 1999. Dan Coughlin, President ATTEST: Charles S. Whiting, Executive Director G 31� 0 2225 Hillview Road F t t -I QI 1 t®1111 ooZ I]ne100000E 011 Ae Location Map Housing Replacement Program Subject Site - 2225 Hillview Road KAni inris view Communitv Development Department, June/1999. -q 14 1-1®4 11111 i 181°J ® wa°® ® I"' SWIM®VENO WA IIII MM.0w X11 Em ® qr ® _ MFE INEW ®�W.F goo ®MOTdam son go now.. ® ® ® MONO ® NOW SIMI Z. L1.l.�t�llflll , °I I'MI I114 1111 2225 Hillview Road F t t -I QI 1 t®1111 ooZ I]ne100000E 011 Ae Location Map Housing Replacement Program Subject Site - 2225 Hillview Road KAni inris view Communitv Development Department, June/1999. Item No. Staff Report No. Meeting Date: 6-28-99 Type of Business: ED --AIB WK. Work Session; PH. • Public Hearing; CA: Consent Agenda; EDAB: EDA Business Mounds View City Council Staff Report To: Honorable Mayor and City Council From: Steve Dorgan, Housing Inspector Item Title/Subject: Housing Replacement Program Policy Amendment Date of Report: June 21, 1999 SUMMARY At the EDA meeting on May 24, 1999, direction was provided by the Authority to amend the Housing Replacement Program (HRP) policy. The board reviewed draft revisions to the policy at the June 21, workshop meeting and provided requested changes for adoption. The requested changes were to include: 1) The provision of a section to the policy, which outlines requirements for the Development Agreement. 2) Submittal of a financial guarantee by the developer to the EDA which is 100% of minimum improvement value. 3) A requirement that would allow the EDA to take possession of the property and improvements in the event the developer fails to carry out its obligations as agreed. The amendments are provided in a new section of the HRP policy named "Development Agreement". This sections outlines information to be provided in development agreements. ACTION TO BE CONSIDERED Approve resolution 99 -EDA -115 amending the Housing Replacement Program as proposed. Steve orga Housing Inspector 612/717-4023 steved@rcmnet.org Attachments: 1) Mounds View HRP Policy with Amendments - DRAFT 2) Resolution 99 -EDA -115 City of Mounds View DRAFT Housing Replacement Program (Revised June 1999) A. Statement of Purpose The Mounds View Economic Development Authority Housing Replacement Program ("Program") is established to reduce the social costs of blight, improves residential neighborhoods and increases the tax base. B. Program Obiectives • Replace deteriorating lower value housing on scattered sites throughout the City with larger, higher value housing designed for families. • Eliminate the blighting influence of substandard housing. • Increase the availability for quality housing for families. C. Program Funding The Program is funded through Tax Increment Financing and administered by the Mounds View Economic Development Authority (EDA). D. Data Privacy All files and information, which identifies property and persons, is private and cannot be released. All information secured through the Program is subject to the Data Privacy Act. E. Program Options The Program offers two options for participation. O t__�ion 1: This option involves the sale of substandard single family homes and land to the EDA. The EDA's goal is to offer the property for sale for the redevelopment of new, standard housing. option 2: This option involves the property owner retaining the property where a substandard single family house is located, and receiving funding from the EDA for demolition of the house with an agreement that it will be replaced with standard housing meeting certain EDA guidelines and time frame. F. Publicizing the Program; Making Application 1. EDA staff, or their appointee(s) ("Program Staff'), will solicit participants by direct mail, advertisement, or other method. The number of applications accepted for participation in the Program will be determined by the availability of personnel and financial resources. 2. Participation in the Program must be on a voluntary basis. Interested participants must be able to furnish proof of ownership of the property, and are required to respond to the EDA DRAFT City of Mounds View Housing Replacement Program solicitation in writing, with a letter indicating: a. For Option 1: (Sale of Property to EDA): (1) An interest in selling their property to the EDA. (2) A willingness to waive relocation benefits. (3) Statement of tenant interest in the property at the time of offer. (4) Consent to the release of relevant information to potential developers and end buyers. b. For Option 2 (Funding for Demolition): (1) An interest in obtaining funding for demolition from the EDA to replace existing housing with standard housing meeting EDA guidelines. (2) Willingness to hold the EDA harmless for demolition activities (3) Willingness to enter into a legal development agreement with the EDA regarding redevelopment of the property 3. Individuals who have indicated an interest in participating shall be contacted by Program Staff to inform them of the estimated project time line and to obtain complete information on the items noted under F.2. above. G. Proverty Eligibility Criteria Program Staff shall evaluate each property for which an application is received to determine its eligibility for the Program based on the criteria in this section. Program Staff shall prepare property fact sheets for each property for which owners have expressed an interest in participating in the Program, and shall make a drive by inspection. Properties will be evaluated based on the following criteria outlined below. To be eligible for participation, the house on the property must have one of the characteristics noted in 1, 2, 3 or 4 below. 1. . Substandard as to condition, property value, size or usage. 2. Obsolete and having a faulty design for block and area in which it is located. 3. Deterioration which has caused blight to other adjoining properties. 4. Detrimental to the safety or health of abutting properties in the block. If it is determined that the property is eligible for participation based on the condition of the house, it must also meet the following criteria as outlined in 5-8 below. 5. A geographic mix of properties is achieved. 6. The site can be developed with a single family home within city code requirements, including zoning and conformance with the Comprehensive Plan. The property may be considered if a variance can be obtained (see Section I.2.). 7. The property must be owner -occupied or vacant before the owner makes application to Page 2 DRAFT City of Mounds View Housing Replacement Program the Program. Non -homesteaded vacant property will be considered for acquisition. Tenant -occupied properties will not be considered for purchase or funding for demolition by the EDA on a case-by-case basis. 8. Prior to approval by the EDA for participation in the Program, properties over 50 years old must be evaluated for historical significance. This will be accomplished by forwarding general property information and a property photo to the Minnesota Historical Society for review. The EDA will not enter into a purchase agreement or award funding for demolition on a property which qualifies for the National Registry of Historical Structures. H. Program Priorities If more than one application for acquisition or demolition funding has been received during a given month, the Program Staff shall rank the applications to determine the best candidates for Program participation based on the information and criteria noted below: 1. Properties that can meet EDA established guidelines and time frame will be considered first. 2. Properties with the lowest values and poorest visible conditions will be considered first. 3. Properties should be equally distributed by location and value throughout the City when possible, and provide a viable financial mix of properties to support Program financial requirements. I. Option 1• Acauisition of Property by EDA Blight Qualification: Once an offering letter is received from the interested participant, Program Staff shall arrange, by appointment, an inspection of the interior of the home to establish blight qualification as outlined in Section G. The following information will also be obtained during the inspection: a. Demolition information for estimating demolition credit to builder. b. A determination as to the existence of any hazardous materials on the property. This includes: (1) a visual inspection (2) a statement from the interested participant regarding any knowledge of the property's use for production, storage, deposit, or disposal of any toxic or hazardous wastes or substances or asbestos products whatsoever, during the time the interested participant owned the property and prior to the date of interested participant purchased property. Properties with environmental problems or hazards may be considered if the purchase price is reduced sufficiently to cover increased site clearance and preparation costs. Page 3 DRAFT City of Mounds View Housing Replacement Program If a property meets the blight test, acquisition procedures can continue. If the blight test cannot be met, the interested participant will be notified in writing indicating the reasons why the property cannot be considered for acquisition. 2. Need for Variances: If a variance is required to redevelop the property, the EDA may, at its sole discretion, choose not to acquire the property. This determination will be made based on the project time lines, available resources, and availability of other properties which do not require a variance. If the EDA chooses to pursue a variance to enable the acquisition of the property, an application shall be filed following the usual procedures. If a variance is not approved, the property cannot be considered for acquisition. 3. Appraisal: Determining Purchase Price: If the EDA chooses to continue with the acquisition, a fee appraisal shall be ordered at the EDA's expense and the result shall be used in determining the amount of the purchase price to offer to the interested participant. The independent fee appraiser shall be carefully instructed to document in specific terms the conditions of the property including details regarding structural condition and floor plan. The acceptance of these conditions in the market place should be discussed in the report. The appraiser's value judgement should reflect these conditions. A negotiated price considerably below the assessor's market value, may be accepted without an appraisal on a case by case basis if the interested participant concurs. 4. Purchase Agreement: Closing Procedures a. When both parties have verbally agreed upon a purchase price, Program Staff and Legal Counsel shall prepare a Purchase Agreement to be presented to the interested participant. The purchase price contained in the Purchase Agreement shall be within the range authorized by the EDA. The purchase agreement shall be contingent on the completion of an environmental evaluation suggesting no evidence of hazardous waste on the property. The interested participant shall receive a copy of the purchase agreement including the following information: (1) The purchase price (2) How the purchase price was determined. (3) The amount of earnest money (4) A date to sign the Purchase Agreement (5) A closing date b. To enable the acquisition process to continue, the interested participant must execute the purchase agreement and "waiver of relocation benefits" form. The waiver of relocation must be clearly explained to the interested participant at this time, if not explained previously. Page 4 DRAFT City of Mounds View Housing Replacement Program c. The EDA Executive Director and President shall be signatories on the purchase agreement. d. The acquisition and disposition of the property must be in conformance with the Mounds View Comprehensive Plan. e. Following EDA authorization of these agreements, interested participants and/or Program Staff will be requested to assemble and supply all required documentation prior to closing as outlined below. (1) An Abstract or RPA (as applicable) must be furnished to the Program Staff to facilitate the rendering of a title opinion. The interested participant will bear the cost of updating the Abstract or RPA as part of the closing procedures. (2) EDA Legal Counsel will be responsible for having the Abstract or RPA updated and will provide Program Staff and interested participant with a written opinion of title. EDA Legal Counsel will also secure title insurance. (3) If the title opinion indicates the property has a marketable title, purchase procedures will continue. If the title opinion does not indicate a marketable title, the EDA, at its sole discretion, may choose not to acquire the property. The EDA may determine remedies and evaluate their resolution, including the additional time and expense to provide a marketable title. The EDA may proceed to correct title deficiencies to continue the purchase of the property dependant upon the additional time and expense incurred. (4) Simultaneously with the title opinion, an environmental evaluation may be obtained from an independent environmental engineering firm or other firm performing such service. If environmental hazards are found on the site, the EDA may choose not to acquire the property. f. The seller must be prepared to vacate the property on the day of closing unless other arrangements have been made with Program Staff. g. If the interested participant decides not to sell the property after execution of the purchase agreement then the interested participant must provide the EDA with the following: (1) A letter expressing their desire not to proceed with selling the property. Page 5 DRAFT City of Mounds View Housing Replacement Program (2) The full amount of earnest money received upon execution of the purchase agreement. (3) Full payment of legal and consulting fees incurred by the EDA after the execution of the purchase agreement in preparation for the closing of the property. >. Selection of Demolition Contractor and Procedures: After the property closing, Program Staff will select a demolition contractor by sending out Requests for Proposals (RFP) to at least three demolition contractors. The bid received with the lowest price will have priority. The demolition contractor must be able to meet project deadline as outlined in the RFP prior to awarding a contract. The demolition contractor will be required to obtain all necessary City permits and pay applicable fees. Overall a designated Program Staff will provide demolition supervision. 6. Marketing: Program Staff will advertise sale of the property by contacting the St. Paul Realtors Association, Residential Developers, interested buyers and posting signs on the property. 7. Selection of Developer: Program Staff will negotiate the purchase of the property by an acceptable buyer/developer or buyer/builder team. If a buyer/developer or buyer/builder team can not be obtained, the EDA may consider selling property to a developer or builder for sale to the open market after completion. As part of the sale of the property, the buyer/developer team purchasing party must sign a development agreement with the EDA, which will stipulate housing design and time frame for completion. 8. Development Agreement: Closing Procedures a. When a redevelo ment proposal submitted b a bu er/develo er or bu er/builder team has been gppr� r the EDA. Program Staff and Legal Counsel shall prepare a Purchase and Redevelopment Agreement. The selected developer shall receive a copy of the purchase and redevelo mentagreement which will include but not be limited to the following information: 1) Construction of minimum improvements. 2) Estimated market value of the property and improvements. 3) Purchase price. 4) Completion date. 5) Financial guarantee submitted by the developer with a minimum amount equal to 100% of the minimum improvement value. 6) Revesting of Title Subject to unavoidable delays if the Developer fails to carry out its oblations with respect to the construction of the Minimum Improvements, the Page 6 DRAFT City of Mounds View Housing Replacement Program Authority will have the right to re enter and take possession of the property. The Authority at its option may declare a termination in favor of the Authority rev rt the title and that the title and all ri hts and interests of the Develo er shall revert to the Authority. J. Dation 2• Funding of Demolition 1. Blight Qualification: Properties being considered for demolition funding must meet blight qualifications as outlined in Section G. and Section I.1. 2. Need for Variances: If a variance is required to redevelop the property, the homeowner must obtain the variance prior to the award of demolition funds. If a variance is not granted, demolition funds shall not be awarded. 3. Comprehensive Plan/Zoning: The Comprehensive Plan designation and the zoning on the property must allow for its redevelopment by construction of a replacement single family residence. 4. Development Agreement: The interested participant must enter into a Development Agreement with the EDA which will stipulate housing design and site development criteria and time frame for completion. The development agreement will include estimate of new taxes generated based on the construction of replacement cost. 5. Demolition Contract: The interested participant must obtain three estimates for demolition which will assist in determining the amount of demolition funds to award for the project. The chosen demolition contractor must be able to meet project deadlines as outline by Program Staff. The demolition contractor will be required to obtain all necessary City permits and pay applicable fees. Overall demolition supervision will be provided by a designated Program Staff in conjunction with the interested participant. Economic Development Authority IM Dan Caughlin, President By: Charles S. Whiting, Executive Director Revised: June 28, 1999 Page 7 RESOLUTION NO. 99 -EDA -115 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA A RESOLUTION APPROVING AMENDMENTS TO THE HOUSING REPLACEMENT PROGRAM It is hereby resolved by the Board of Commissioners (the `Board") of the Mounds View Economic Development Authority (the "Authority") as follows: 1. Recitals. (a) Pursuant to Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108. (collectively, the "Act"), the Authority (i) has undertaken a program to promote the development and redevelopment of certain land within the City of Mounds View and in this connection is engaged in carrying out the Mounds View Economic Development Project (the "Project") within the City; (ii) has approved a Project Plan for the Project; and (iii) has approved and adopted a Housing Replacement Program under and as an aspect of the project plan. (b) The redevelopment of property within the project is a stated objective of the Project Plan and the Housing Replacement Program. (c) The Housing Replacement Program's objectives include replacing lower -value housing on scattered sites throughout the City with larger, new and higher value housing designed for families, the elimination of blighting influences and the increase of available quality housing for families within the City. (d) Including the addition and replacement of language which includes but is not limited to; (i) the provision of a section to include guidelines for drafting a Development Agreement for the sale of the property; (ii) requirement for submittal of a financial guarantee by the developer to the EDA which is 100% of the minimum improvement value; (iii) a requirement that would allow the EDA to take possession of the property and improvements in the event the developer fails to carry out its obligations as agreed. The changes are being presented as amendments to the Housing Replacement Program. 2. The Board hereby determines that including (i) the provision of a section to include guidelines for drafting a Development Agreement for the sale of the property; (ii) require the submittal of a financial guarantee by the developer to the EDA which is 100% of minimum improvement value; (iii) a requirement that would allow the EDA to take possession of the property and improvements in the event the developer fails to carry out its obligations as agreed; is consistent with and would be in furtherance of the Project Plan and hereby approves that Program. 3. The Board hereby determines that the implementation of these amendments will help realize the public purpose of the Act and would be in furtherance of the Project Plan Adopted by the Board of Commissioners of the Mounds View Economic Development Authority on June 28, 1999. Dan Coughlin, President ATTEST: Charles S. Whiting, Executive Director