HRA MINUTES 10291985 - Laserfiche WebLink

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-3 - For the benefit of the Vice Chair who had come in late, it was reiterated that the bonding consultant had assured the H.R.A. that the project was "do -able", but might be difficult to accomplish before the end of the year with a hearing in November and MHFA approval required before the end of December. Mr. Soth said that, in his opinion, the Commission's reaction should legally pose no problem. He also advised that it would be possible, with some limitations, for the City to introduce someone else to do`theproject, just as had been done with the Kenzington project. The Attorney indicated he perceived if the City had any interest at all in the new concept the developers would have to be warned that it would be up to them to get a presentation put together immediately for presentation to the Planning Commission regarding a change from condo to rental. Mr. Childs said the City already had a Housing Plan in place which probably addressed rentals. Mr. Gilligan estimated the developer's initial bonding costs would be about $5,000 for attorneys fees and bonding expenses. Secretary/Treasurer Marks commented that the financial risk might be greater for the City not to do the project at all. The bonding consultant agreed, reiterating the anticipated changes in the bonds after the first of the year. Mr. Soth told the Secretary/Treasurer the City is not legally required to_permit the change to rentals_but, as a practical matter; it might 5e difficult, if not impossi6l_e, for the developers to sell the additional condominiums, because he also perceived "condos just aren't viable in today's market". And, he added, there was some truth in the developers' claim that this would be a "one time opportunity" because of the changes anticipated for tax increment financing. • There was also general agreement that commercial development in that particular area remained an unattractive alternative to housing. Secretary/Treasurer Marks said the impending action by Congress might have actually given the City an opportunity to move the project along faster. He indicated he perceived the area test _risk would be_for the Ci.ty._not to,do anything at all. The Executive Director told Commissioner Makowske after the buildings are con- structed, the tax increment payments would have to be made whether the development is occupied or not and Chairman Sundland commented that once the H.R.A. acquires the land and sells it to the developers, their investment in the project would be increased. Vice Chair Enrooth indicated he perceived the developers' credibility was critical at this stage. He was told Arkell had a history of successful projects like the one in Richfield wheret:the'developers'had been ahead in -every. phase. The con- jecture was that the developers might have opted to place all their financing in that project and then had become overextended when the condo market softened. Chairman Sundland said he personally believed the City had no other way to go. Secretary/Treasurer Marks agreed, saying he believed the City "should go for it". However, he said he would like to hear firsthand from the developers how the demographics supported the change to rental and be able to substantiate those figures with an independent study by the City. Commissioner Makowske said she could approve the change to rental as long as a first • class project is developed because she also perceived -there would bd-a more viable market for renters over 55. The Commissioner also indicated she would appreciate a listing of deadlines which must be met to allow the project to be developed.