HomeMy WebLinkAboutHRA MINUTES 02091988• C 2 TY O F S T_ ANTHONY
HOU S 2 N G AND R E D EV E L O PMENT
AUTHOR = TY M = N UT E S
FEBRUARY 9 1 9 8 8
1 The meeting was called to order at 9:30 P.M. by Chair Sundland.
2 Present for roll call: Sundland, Vice Chair Enrooth, Secretary/
3 Treasurer Marks, and Commissioners Makowske
4 and Ranallo.
5 Also present: David Childs, Executive Director
6 William Soth, H.R.A. Attorney
7 Richard Krier, Development Advisory Services,
8 Consultant
9 JANUARY 26, 1988 H.R.A. MINUTES
10 Motion by Ranallo, seconded by Marks to approve the above as
11 submitted.
12 Motion carried unanimously.
•13 CLAIMS
14 Motion by Marks, seconded by Makowske to approve payment of $2,210.00
15 to Stuart J. Bonniwell for services rendered the H.R.A. for the 1986
16 H.R.A. audit.
17 Motion carried unanimously.
18 Motion by Marks, seconded by Enrooth to approve payment of $500.40 to
19 the Dorsey & Whitney law firm for legal services rendered the H.R.A.
20 during December, 1987.
21 Motion carried unanimously.
22 KENZIE TERRACE REDEVELOPMENT PROJECT UPDATE - RICHARD KRIER
23 Both interested developers, Gaughan and Lang Nelson are still seeking
24 financing for the project. Neither has found financing yet.
25 Because Gaughan seemed to be dragging its feet to acquire financing
26 for the project, Lang Nelson was approached in December as to their
27 interest. Lang Nelson will put up $10,000 to assure they will find
28 financing in 45 days.
29 Gaughan has contacted Midland, based in Des Moines, who indicated they
30 would finance at 9-1/4t. Gaughan decided to drop them. First Bank
•31 was also contacted and indicated they would not want to do a "lower
32 floater" type of deal.
33 HUD indicated the SAMA (site/market analysis) sounded favorable
34 (considers the market, the rents, and the people). Mr. Krier
• 1 indicated that if Gaughan went with HUD a lot more time would probably
2 have to be taken before conditional commitment would be received. If
3 Gaughan did decide to obtain financing in this manner, it would
4 probably take 45 to 60 days before the bonds can be marketed. Before
5 the FHA would give final commitment the plans, specifications, etc.
6 would all have to be submitted. There are many steps in this process
7 and it would take at least 90 days to complete it.
8 Lincoln National Life from Ft. Wayne, Indiana, was also approached by
9 Gaughan. That company offered a partnership - 50% of the deal and
10 they would put up some of the equity. Mr. Krier indicated this would
11 probably be a better deal for the developer, but would also take 45-60
12 days to close.
13 Mr. Krier feels the developers are "shopping" for the best interest
14 rates and this may be the main factor in the length of time it is
15 taking for the financing of this project. He feel sure, however, that
16 both the developers are still very interested in the project and do
17 not want to drop it.
18 Commissioner Ranallo indicated he is very concerned about the length
19 of time the potential developers are taking to get the project
20 started. He said that in actual fact, the project still does not have
21 a developer. He said he understood, as did the Minneapolis residents
22 concerned with the project, that the project was ready to go back in
•23 October. The Commissioner questioned the sincerity of either
24 developer for the project.
•
25 Mr. Krier indicated he felt both developers were still very
26 interested and sincere in their efforts toward the project and
27 reiterated that they were both looking for the best interest rates for
28 the financing.
29 Mr. Krier agreed with the H.R.A. that the reality is "we have nothing
30 on the table." There are options, however.
31 1. Don't deal with either Gaughan or Lang Nelson.
32 2. Inform either or both developers that they have a
33 certain number of days to complete the financing.
34 3. Inform either or both developers we would keep their
35 $10,000 (Gaughan has already given a check in this
36 amount to the City) and raise the cost every 15 days
37 until the project is financed.
38 When Commissioner Marks wondered if we would really get the project
39 going with one of these two developers, Mr. Krier again insisted that
40 the developers are shopping the market and when the interest rates are
41 economically feasible they will commit to the project.
2
V,
1 Mr. Soth suggested that what the H.R.A. needs from each developer is
2 an indication of what would give an "edge" to one or the other. Mr.
3 Krier believes if we ask for too much money, both companies "would
4 walk" and that in actuality the commitment to this project by the
5 developer is for $8 million, not just the $700,000 for the land.
6 Finally, it was suggested that the developers realize that the H.R.A.
7 is interested in doing the deal with someone who will put up enough
8 money to prove their interest.
01
10 Motion by Ranallo, seconded by Marks to adjourn the H.R.A. meeting at
11 10:25 P.M.
12 Respectfully submitted,
13 Connie Kroeplin, Acting Secretary
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