CC WORKSESSION 11111985 - Laserfiche WebLink

Home Browse Search

-3- When Councilmember Makowske asked how the assessed valuations had been figured " • Mr. Childs told her they had been taken from Dick Krier's estimations, and the-Manager indicated that although he was comfortable with the H.R.A. Planning Consultant's estimated acquisition costs, he questioned whether the relocation costs might now be higher. .Mr. Soth .affirmed that the bonds could be sold and the money' invested until they had to be paid off, ' but,. he added, the $100.,000 administrative and legal expenses might be at risk. Mr.. Gilligan suggested instead, that an early call could lock in the low interest rates and bail out the issue. Commissioner Jones indicated hi.s concern that the same. amenities and maintenance be .provided with .the rental. pr.oject as. had been proposed for the condominiums, saying he perceived the rents would have to be structured to make the project viable. He also wondered whether -the developers had taken into considerationthe possibility that the government might be changing the. tax -incentives which make -rentals desirable. Mr. Brinkman said,_that since the original Kenzie Terrace project had been approved, - three years ago, there had been _a _drastic .change in the .senior housing market, with studies now showing that 70% of .the seniors preferred rentals and only. 30% continuing to buy condominiums. He said he perceived the reasoning behind this was that a senior couple could take advantage of the.one time exemption granted them. on the sale of their home and by investing that equity could almost pay the rental cost from the interest on their investment. The developer said he perceived that by going_ to rental , the City .would still be achieving its original goal to provide housing to keep their senior residents at the same time the properties left behind by the seniors would • be opened to the younger family .market. The Manager added that the total assessed valuation for 300 rentals would be almost exactly the same as for 300 condominiums. Commissioner Jones said he could agree with those assumptions, but was still concerned that the. same quality would be provided with the new project because his own limited experience with renting to seniors had been that they expected to have the same quality and maintenance in'rental that they had enjoyed in their own homes. When he put forth.the example of the Sons of Norway conversion of the old West High School building as a project which he believed was now oversold because of its quality, Mr. Yurick said he knew for a. f act that the project was only 40% sold to a great extent because some of the persons who had initially been very enthused about the, project had changed their minds when they actually saw the area they would be living in. Mr. Childs told Commissioner Jones he believed the original study of the redevelopment of the subject had only considered occupancy, by empty -nesters-..and young professionals and never young families, because of the land size constraints. Mayor Sundland indicated all the studies he had seen related to current demograhics certainly supported the assumption that more seniors were now opting to rent rather than to reinvest their home equity in another form of home ownership, but he hoped the lapse in time between the Kenzington and this project-would result in the other 30% buying 'a condominium in the Kenzington first. Councilmember'.Ranallo indicated he wanted anyone who might ask why the City wasn't considering townhomes or single family residences in the redevelopment project to understand that with a 1 .8 million dollar project to be built on only six and a half • acres, the land under the townhome units alone would probably cost close to $65,000 per unit, when many residents have indicated to him that they perceived $40,000 per lot was too high for single family residences being built on -the Johnson property.