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HomeMy WebLinkAboutHRA MINUTES 02081983CITY OF ST. ANTHONY HOUSING ARID REDEVELOPMENT AUTHORITY �a MINUTES February 8, 1983 The meeting was called to order at 6:00 P.M. by Chairman Sundland. Present for roll call: Sundland, Vice Chairman Letourneau, Secretary/ Treasurer Marks, and Commissioners Enrooth and Ranallo. Also present: David Childs, Executive Director; William Soth, Attorney; and Richard Krier, Westwood Planning & Engineering Co., Planning Consultant. Motion by Secretary Treasurer Marks and seconded by Commissioner Enrooth to approve as submitted the minutes for the Housing and Rede- velopment Authority meeting held January 25, 1983. Motion carried unanimously. The Chairman read a prepared statement in which he explained the purpose of the meeting was to conduct interviews and question the two developers who had submitted proposals for the Kenzie Terrace Redevelopment Pro- ject in conformance with the procedures which had been established at the H.R.A. meeting held January 25th. He emphasized that there would be no comments or questions permitted from the floor, not because such input would not be valued by the H.R.A., but in the interest of main- taining as high degree of fairness for each proposal as possible. Instead, Chairman Sundland requested that any questions or concerns about the proposals should be submitted in writing to Mr. Childs prior to February 11th when the H.R.A. and staff would be reviewing and evaluating the proposals. Former Mayor Sally Haik and a number of Planning Commission and Task Force members were among those residents who were in attendance. The Chairman gave the background history of the redevelopment project and acknowledged the Commission and Task Force involvement in the project planning process. He then advised those present that the H.R.A intends to make a tentative selection of a developer and a plan for the project during its meeting February 22, 1983, and following that decision there would be a 90 day period prior to the signing of contract with the developer in which the fine points of that contract would be negotiated with that developer and during which it is anticipated that both the Planning Commission and Task Force would be heavily involved. At 6:05 P.M., Mr. John Curry, President of the Knutson Construction Company, opened the presentation of his firm's proposal for the re- development project by introducing the members of the team which would be involved in the project. These included Tony Vavoulis, project manager; Bruce Knutson, architect, and Art Peel, who would be responsible for the financing. Included in the presentation were discussions of the firm's previous experience with housing projects of the same type as proposed for the Kenzie Terrace area, the reasons the developers 0 -2 - consider the project could be successfully undertaken and the mix of market rate and subsidized senior housing, which would be included in the 400 to 425 units the Knutson Company proposes to develop in three stages, starting with the 125 units to be built in the next building season on the north side of the Kenzie Terrace site. The formal presentation was completed at 6:30 P.M. and at that time the developer was presented with a written list of questions about their proposal which they responded to until 6:54 P.M., at which time the meeting was recessed. The presentation and responses to the questions were taped and trans- cribed for permanent record as was the interview and questioning of the second firm whose presentation was given at 7:15 P.M., following the recess. When the meeting was resumed at 7:15 P.M., the Chairman read the same prepared statement which had preceded the Knutson presentation and at 7:20 P.M., the second team of developers presented their proposal for the redevelopment project. Stephen Yurick of the Arkell Development Company told the H.R.A. mem- bers his firm would enter into a joint venture with Kraus -Anderson, Rothschild Financial Corporation, and Saunders-Thalden & Associates, Inc., architects, to develop approximately 495 market rate and sub- sidized senior housing units in the Kenzie Terrace area in three stages, the first of which would be 135 units of market rate housing to be constructed within a year on the northern project site. Mr. Yurick introduced the representatives of the other team firms who were in attendance, including Gary Tushie of Saunders-Thalden; Gary Gustafson and Rich Kirschberg of Rothschild; and Jack. Sleddin, Dan Egglesma and Vince Kaufman of Kraus -Anderson. They joined in with the developer in discussing the various facets of their proposal and when the formal presentation was completed at 7:50 P.M., joined with Mr. Yurick in responding to a list of questions which covered the H.R.A.'s concerns about the financing options, should 202 funding not be available for the second phase; their reaction to the Developers Con- tract; their ability to develop the entire project and whether or not they foresaw difficulties in meeting the design guidelines set down for the project. The question period ended at 8:10 P.M., at which time the meeting was recessed until 8:29 P.M. Motion by Commissioner Ranallo and seconded by Commissioner Enrooth to adjourn the Housing and Redevelopment Authority at 8:30 P.M. Motion carried unanimously. Respectfully submitted, Helen Crowe, Secretary ST. ANTHONY HOUSING AND REDEVELOPMENT AUTHORITY INTERVIEW OF PROSPECTIVE DEVELOPER (ARKELL DEVELOPMENT CORPORATION/KRAUS-ANDERSON CONSTRUCTION) FOR THE KENZIE TERRACE REDEVELOPMENT PROJECT February 8, 1983 Bob Sundland app preciate the opportunity to meet with you this evening at this interview. Over the last few months we have solicited proposals for the Kenzie Terrace Redevelopment Project, in accord with the adopted plan, which was recommended by the Planning Commission and approved by the City Council last summer. The purpose of this meeting is to interview two who have responded to our requests for proposals. This is a formal interview which will proceed as follows. Each redeveloper will be given one half hour to present their proposal. That half hour will be precisely timed by our clerk. At the end of that half hour session, the redevelopers will be requested to answer questions which the H.R.A. has prepared and which deal with their particular proposal also any questions which the H.R.A. feel are appropriate will be asked at that time. The questioning will take place for one half hour. Now, we have Arkell Development. We welcome you. I believe, Mr. Yurick, Mr. Arkell, Mr. Tushie. I don't know if fir. Englesma is here from luaus Anderson, but if the clerk will start the timer, then you folks have at it. Steve Yurick T azT nY -you very much, Mr. Sundland. On behalf of the members of our redevelopment team, we'd like to thank the members of the H.R.A. for this opportunity to present our ideas and concepts for this very important program. Before introducing each member for a brief recap of their experience in the housing, redevelopment and re- construction fields, I simply would like to express our desire to be selected for this project. We have an old saying in the sales field that if you don't ask for the order, you can't get the sale, and we like to follow that whenever we can. We feel we have put together a knowledgeable and dynamic group of people who are not only experienced in residential housing, but have an emphasis on condominium development. For your additional information, booklets were distributed to you tonight that focus a little more clearly on each of the entitles that would be involved should we be selected. At this point I would like to just very briefly introduce the people who will speak to you shortly. First we have Jack Schlettee, Senior Vice President for Kraus Anderson Construction. Jack. Gary Tushie,, principle in the firm of Saunders- Thalden, John Arkell, President of the Arkell Development Corpora- tion and Gary Gustafson, Senior Vice President with Rothchild Financial Corporation. To start things off, I'd like to introduce Jack Schlettee to give you a brief word on Kraus Anderson. Jack. Jack Schlettee Just a brief description of Kraus Anderson, for everybody's sake. It's a privately owned company that was acquired by Mr. Englsma in 1939. It has 5 offices of construction companies, 2 in Minneapolis/ St. Paul, Dallas and Honolulu. Since then, he's expanded it into real estate development, leasing, property management, insurancies and advertising. Our experience related to housing, elderly, con- dominiums and such is very extensive. Over the last probably 20 years, we built somewhere in the area of between 2 and 300,000 units. We have some slides here that will give you some example of completed projects. That's a condominium project that we completed about 3 -2 - years ago on Rawaii. It's 148 units, condominiums. This one is an elderly project at Waconia, 47 units, and that was completed about 3 years ago also. This is in Edina, 200 and some odd units and that's also an elderly project. This is another project we completed in Hawaii. It's 225 units, condominiums. This is a market condominium in Rochester, 36 units. And this is an award that we received in a project in the Selby/Dale area in St. Paul. It was for the affirmative action program for participation of minority contractors on the job. This project was cooperative housing which was sponsored by the archdiocese. Gary. Garym GGustafson fpm ary Gustafson with Rothchild Financial as you can see. Well, maybe you can't. Our logo up there says we're in business since 1885 so we're just about 100 years old. We're locally owned, mid- western based company. Our home office is in St. Paul and we have other offices in various cities in the mid -west and southwest Florida. Our current servicing volume mortgage bankers are judged by how much their servicing volume is. We're currently servicing 650 million for over 100 different lenders, which ranks us about 125th nationally out of 700 mortgage banking firms throughout the country. We're involved in all facets of the real estate lending business, family lending, income property loans and construction loans. Our annual originations of loans have been running approximately $150 million and we have lines of credit of about $25 million for construction lending and single family loan warehousing. We're also involved in the property management business. We employ apprixomately 100 people in the Twin City area. Very active, I have an office out in Edina. Just a few quick shots here, haven't got much time, of some of the things we've financed over the years. This happens to be a shopping center, another shopping center we've financed, that is not a subsidized project, that is a market rate housing project we've financed, another shopping center and another conventionally financed apartment building. That happens to be a family project financed with section 8 FHA insured construction loan. We've been very heavy in the FHA area, the 202's for the non -profits and have done approximately 100 multi -family projects under the FIIA housing programs. That happens to be an elderly moderate care type facility in Edina. Gary Tushie My name is Gary Tushie . I'm with Saundess.Thalden and Associates and as Steve mentioned earlier, I'm a principle with the company in charge of this office here in Minnesota. Saunders Thalden and Associates is a nation wide firm of landscape architects and planners. Minneapolis is a regional office, our home office is in St. Louis. We specialize in working for developers and that's given us the unique opportunity of doing a wide variety of types of building, from small commercial to large commercial, from resort/hotel types of projects to small motels, shopping centers, the whole gamut. And also, more specifically, the residential market. Particularly con- dominiums and subsidized housing. This particular project is a 3 story condominium, 40 unit building, out in Minnetonka, underground parking with frame construction, another one in St. Louis Park. Again, another project that's a market rate condominium project in St. Louis Park. This is an elderly highrise building in Muscatine, IA. -3 - It's called Clark House, which was a 202 subsidized project. This is a redevelopment project, part of an existing block in St. Louis where we not only provided elderly 202 housing, but also family housing in the same development. We've also been involved in some different type of housing units. This is a renovation of a hotel that we're converting into condominiums. Because we specialize in working for developers, we also have a very close relationship to their concerns about dollars. We know that money doesn't grown on trees, so we make a very strong commitment to the developer and their typically negotiated general contractor to make sure what we designed in the beginning gets built for what everybody anticipated it to be. That's all part of the team process. So, what we've done in our office is simply to put together a team of professionals to deal with all the things that developers have to deal with to get the projects designed and built. What that means is that we're providing better places, better environments for people to live in, like this and like this and not like this. John Arkell Thank you Gary. The Arkell Development Corporation was developed in 1977 with the purchase of the remaining unsold units of the Towers Condominium in downtown Minneapolis. While we were involved with the Towers, we were fortunate enough to have about 70% of the sales there both as an employee of Knutson and afterwards, after we bought Don out of the building. our involvement here in the team concept is that of a developer and a marketer and the following are some of the pro- jects that we've been involved with. This is Ridgewood Hills. It's a 22 unit complex in South Minneapolis that was down through MHRA funds back in the late 170's, 78, I guess. This is 3 Fountains, a 36 unit again in the South side of Minneapolis again with MHRA money. This is the first project we owned as a developer and marketer. It's in Sioux Falls, SD. It is an $8h, million conversion. This is the Greenbrier. It's a 462 unit development. My associate, Steve Yurick acted as the director of marketing and finance for the Keller Corporation. Another building Steve was involved in called the Ponds, a 130 unit new construction project in Minnetonka. The building that we're just finishing up, it's probably our greatest success, in Roseville. We had over 50% internal. it's a 96 unit conversion and we currently office within the complex there. This is a very poor shot of a building we just bought. We don't have any pictures of it yet. We started the internal, I believe we went to the residents today , it's 158 unit, it's called Bridgewalk. The 158 units consist of 92 units that will be converted and 66 units which will be new construction project. Steven. Steve Yurick Thank you gentlemen. We believe that we have the individuals nec- essary put together under this team concept to complete the project as we think, in working with the City officials, and with the community itself, that should be completed. To give you some more details on what our proposal consists of, I'll turn the program back over to Gary Tushie. Gary. Gary Tushie I Thank you Steve. -4 - You're all somewhat familiar with the plans we've already submitted for this project. What we've done is put them in a presentation for- mat. What I will do now is explain some of this to you. I hope that everybody, Board members and audience alike, will get a good idea of what we've done here. Maybe if some of you would like to move around. I think the thing that impresses us most about the project is that number 1, it's in St. Anthony. St. Anthony's a very nice community. What we wanted to do with the site was respond to some of the neat characteristics that St. Anthony has, which is a park type of atmosphere. We wanted to incorporate that into the site plan and in the overall site plan, I think you can see how we've incorporated a park -like type of atmosphere, trees, boulevards coming in with the ponds as part of the second phase, buffering the first phase building from the trailor court, trying to provide sense of entry into both phases of the project. We're talking about general terms about the whole site plan, and then I want to be specific about phase 1, phase 2 and phase 3. We do consider it all as one project plan. Some of the site amenities that we've incorporated into the second phase will not only be used by the second phase, but also the people moving into the first phase will also have use of those recreational facilities, which we think is a real unique charcteristic particularly of this plan. one of those recreational facilities is a pool room that has an indoor pool, sauna, weight room and that type of facility. We also have the pond with a waterfall which we anticipate we've got a sidewalk system going around it which we anticipate will be a casual walk around the pond type of thing at night. We've also got an extensive sidewalk system that incorporates both projects and are hoping that the City will have a sidewalk system that goes particularly for this phase to St. Charles Church and then back again, you know, that type of system. So we're encouraging everybody to use the entire complex which is one reason why we've got a new stop light, 3 way stop, which is part of the project as well so that to and from both sides can actually work. We've also got tennis courts as part of the second phase, we've got some rooftop gardens which more specifically can be used by the residents of those particular buildings. In the first phase, the north side of the project, we've got shuffle board courts, horseshoe pits and those types of things. We are also hoping we can incorporate some sort of garden plots as part of that first phase so residents can grow their own vegies. Now I'm going to talk about the first phase which is the 134 unit elderly building which is this building here. We've provided a total of 103 parking spaces, which is a little bit over the average for this type of facility, but we felt that it is important to incorporate those amount of parking spaces into the project. This is the overall floor plan. It's a four story building and basically the floor plan is the same for all four floors except that there's a central court area on the first floor. We've got some things that aren't included on the top floors, like a security room, which will have a full time security guard. We've also got the party room is and lounge which is part of the first floor, the lobby and card room. We've also got a T.V. lounge and we anticipate that being an area out- side of the unit where residents can go and socialize with others -5 - in the building and watch T.V. during the day, just a place to get out of their unit. We also have greenhouses on every floor so that indoor plants can be grown in that part of the central court yard area. We've also got 2 elevators servicing the building, one would be for stretcher use and the other would be strict pedestrian use. We've got laundry facilities and that's typical on every floor as is the T.V. lounge with the janitor and trashman. Unit mix is primarily one bedroom, we've got some two bedrooms and we've got some large one bedrooms and then we also have some guest rooms for if residents have guests over they can sleep there during the night. We anticipate that being a reserved type concept, rather than a rental. One other thing that we feel is unique particularly about the unit plans is that we feel that they're fairly large sized for this type of facility and we've also provided decks off all the units which become part of the unit along with the bay type of window in the bedroom. These are the elevations showing you the type of exterior that we're talking about. We're looking at a pitched roof, a brick and wood exterior, the wood being primarily being on the recesses of the deck areas, the rest of the building would be entirely brick. These little dormers up on the top provide vaulted ceilings on the top floor units. There is an underground parking garage as part of that building and we anticipate that part of the parking spaces inside the building will be guest parking. The way that will work is we'll have a buzzer system outside the entry into the garage and if someone has a friend coming over, they'll alert the security guard so when they come up to the door, they can press the buzzer and the security guard will let them in and tell them which stall to park in. There will be some indoor guest parking. The second phase of the project has 2 building types, the first what we anticipate being an elderly 202 project, either cooperative or rental and also a market rate condominium. This is the 202 building which would be an elderly facility, which would be a government subsidized project, hopefully if it gets approved. Again, it has similar type of building characteristics, brick with wood inserts. No decks, that's not allowed on this type of project, the units are fairly small, based on government restrictions. The brown shows circulation patterns and again we have the 75% one bedroom, 25% efficiency. The market rate condominiums which not only part of phase 2, but also the remaining 2 buildings of phase 3 all have similar type of characteristics. They'll have 2 levels of underground park- ing underneath the building itself and in addition to that all the parking requirements for the building will be in a ramp type of situation, there won't be any parking spaces outside. Now the ramp will be an open air ramp, but they'll still be under cover. Part of the problem with this site with the density is providing enough parking spaces and not covering the whole site with asphalt, that was an important part of the project. This is the overall floor plan for the building. You can see the circulation pattern is a basic . T. The building does vary in height. On the first building has 5 to 8 floors, the second building 4-7 and on the other 5-8 stories. Looking at the building from that angle, these are the greenhouses on top of the lower story buildings which lead out onto the roof top areas 16 - which we anticipate will be the primary viewing areas for Minneapolis and the surrounding parkway. This is the parking ramp here and the other parking ramp here. We've also got a rendering of the whole site which can help you visualize a little bit more how all those build- ings fit together. This would be the whole development. This would be the first phase of 134 units, the second phase, elderly 202, the second phase market rate, the parking ramp with the tennis courts on top, the two third phase buildings with a parking ramp inbetween. With that, I''d like to talk a little bit about the construction. On the first building, which is this building here, would be of steel stud type of construction, the second phase building and the remainder of the buildings , the second phase and 202, excuse me, would also be stud, the remaining buildings would be of a floor concrete con- struction. With that I'd like to turn the floor over the Steve and he's going to talk about the marketing program. Steve Yurick awn -R you Gary. I think with the time we have remaining, which must be getting fairly minimal, I would just like to comment on a few areas that we considered in our marketing proposal. Our submission was based on a very positive and aggressive marketing posture. We pro- jected the first 134 units being absorbed over a 10 month period of time. This was based really on two assumptions. One that the pro- spects for this phase are able to dispose of the units that do come to the marketplace augmented by two other positive factors. One a housing revenue bond program to assist first time home buyers in purchasing the existing homes, combined with a trade-in program to guarantee the availability of that homeowners equity being available for use in buying the home in phase 1. Our goal is to have in-home financing in approximately the 10% range. We believe this would help to ensure the the targeted 10 month absorption rate for that phase. The marketing phase for phase 2 is only slightly less optimistic as being approximately 12 units a month for a 15 month absorption period. If viable, the 202 program is going to play a very important part in the absorption rate. If the funds do become available for the 202 program, we feel that those 54 units are going to be absorbed in a very short period of time, probably in a 6 month period of time. That leaves the other 103 units being absorbed in the 15 month period of time at a much more reasonable rate of absorption. In the third phase we're talking about absorbing about 100 units per year. In normal real estate markets that is not an unreasonable amount to expect. One of our biggest concerns and I know one of the concerns that has been discussed in the analysis of this project is what is going to make people move to the City of St. Anthony. Obviously, 475 units, which is what we're proposing, are not going to be filled by St. Anthony residents. Our feeling is that by the time we get into the latter part of phase 2, and part of phase 3, St. Anthony Village is going to have acquired a much more public image throughout the Twin City area, as a result of this project. And, we feel that it is going to be more . attractive. People are going to be more aware of St. Anthony Village, and its proximity to the downtown area, its proximity to the University -7 - and a number of other amenities that enhance the appeal to the St. Anthony community. In addition, combined with a number of other projects that we're doing around the Twin Cities area, we'll be able to steer a number of people who may not feel that they fit into the other projects that we're involved in to a project such as they might find in St. Anthony that they might find more attractive. Again, while these projections are ambitious, given the appropriate market conditions and marketing strategy, we feel that they can be attainable. At this point, for the last couple of minutes, I'd like to ask Gary Gustafson to go over a little bit of the financing aspects. Gary Gustafson Quickly, there are really four things that can be done by the fin- ancing institution for this type of project. Number 1 is you have to get the project approved by the various government agencies, federal national mortgage association, FHA and VA. We have a gentleman here, Richard Kirchberg has been with us approximately a year. His background was chief regional underwriter for in Chicago so he used to look at all these projects, I don't know what even the region was, Richard, but he's very familiar with the approval process and we're glad to have him on our staff. We also have to be able to provide a construction loan. We are in that business, not only with our own funds, but arranging construction loans for people all the time. We also have to be a single family lender and units for this project need loans. And also, if the 202 thing goes, you need expertise in the FHA area. As I mentioned earlier, I think we've done 100 br 200 FHA projects, approximately 20 of the 202 variety, which this one is. Just a couple observations on this project. I think the timing is right. Certainly, with the economy coming back, people talking about housing again, I think it's an excellent time. I know there's some processes to go through and all I can do is encourage you to speed those up if you go ahead, because the time is here. I think these units, particularly the first phase which we're looking at more carefully at this point, were properly priced. I think that's a market today that homes are selling at. I think that City involvement is plus. Obviously, you people feel a project of this type can go or you wouldn't be committing City funds through the tax increment thing, so I think that's great. I'd like to reiterate what Steve said about the bond financing. I think that may well be a very important aspect of this thing and if you can pull that off and do some City bonding to provide money for first time home buyers so that these people can move into these units, I think that is excellent. I think it's an excellent project and we stand ready to work with these folks and we've worked with them before and are looking forward to it. Steve Yurick Thank you. There are two gentlemen who arrived late, I think they finally found it. Dan Englsma and Vince Kaufman, both from Krause Anderson. I think with that we'll turn it over to you for questions and answers. Thank you very much. (Sundland) Thank you very much. I think what we'll do gentlemen, we've prepared several questions for the second half of the interview and we're going to present these questions to you and ask for your comments and answers. The ones lined out are Steve Yurick r, Question number 1 is, and will you provide a elderly development?" ME the ones you answered in your presentation. "who will be architect assigned to this project list of his experience in condominium and Saunders-Thaulden will be the firm as architect on this project and I believe the information that you have should provide a fairly decent descriptive background on both condominium and elderly development. Are these questions that you would like me to answer or... CSundland) However you feel comfortable. OK. Gary would you like to respond to that. Gary Gustafson I think that's appropriate. The information that we originally pro- vided with the partial list of our projects. I know that Westwood Planning has contacted some of our references and particularly in the market rate condominiums and the elderly 202. Steve Yurick Question number 2 is, "of the condominiums you have listed, which ones are new construction and which ones are conversions of existing apartment buildings"? I presume which ones the Arkell Development is what you are questioning. The Ponds at Greenbriar was a new construction project undertaken by the Greenbriar Corporation of which I was the director of marketing, administration and finance during its development. The Arkell company did not directly participate in that, but through my experience with it, it was a new construction project that I'm very familar with. The ones that Arkell Development did, I believe that every other one in it is a conversion project and we are now starting on the new construction project on the St. Louis Park project, which I think John alluded to during his slide presentation. That'll be a 66 unit new construction development added to the existing 92 unit conversion project. Steve Yurick Item number 3 is "how many elderly or elderly 202 or 221D3 cooperatives have you been involved with as a redeveloper"? Please describe your involvement. Our involvement as Arkell Development Corporation is in essence non- existent. That is exactly why we have put together the team of individuals to provide the type of background in that area of develop- ment that we feel is so needed in that particular phase of the St. Anthony project. Steve Yurick Item number 4, "would you use a separate management corporation to provide management for homeowners association, if so, who?" We would not. Typically, we manage our own complexes right on to the time of turning it over to the homeowners, the first homeowner board. We take the responsibility for setting up that first homeowners ME association so it is able to function when that first homeowner board comes on line. As you may be familiar, the Minnesota Condominium Law requires that a certain number of homeowners are elected to that board at certain phases in the development of the project. We found that it is very helpful to us and to that association to have a strong effective homeowner board in operation, particularly during the last phase of a sell out of a project. At that point in time, we generally leave it up to the homeowners to determine who is going to come in and manage their property and in most cases they will go to a pro- fessional outside manager. Steve Yurick eI� when would you begin construction of the first unit?" We'd like to begin construction of the first unit very soon. A selling season is very critical to the success of any project. The sooner we can begin, the more successful that project will be. We have a little less concern about that matter in phase one than we might typically have in the other market rate sections and I think the reasons being obvious from all the studies being done, it may not matter when that particular phase is started, it should be very successful. But, to actually answer the question, I guess originally we had anticipated beginning construction in July. I do understand that that is physically impossible to follow the whole process that has to be done from the time of selection of the redeveloper to the time that would start so again, if we are selected we would like to keep in close contact with the City and do whatever we can to speed up that process and start as soon as possible. Is Steve Yurick 'Please describe specifically your redevelopment experience, including the name of the project and the City where the project is located". As Arkell Development Corporation, we have not done a redevelopment project. We again look to the experience of team members we have put together. In addition to the experience that I was able to gather in my initial years at the Knutson Companies where Knutson was involved with the City of Minneapolis in an extensive development of the downtown area. The Towers was a part of that, the River Towers for the elderly was another part of that. I was with Knutson for those two particular phases and I was involved in the application processes to the City and in the marketing process of those units. Steve Yuruck e1"Ta) n would you begin your condominium presales and how would you presell?" We typically begin our condominium presales with approximately 30 to 60 days prior to putting a hole in the ground. It would vary from project to project. In this particular case, especially for phase 1, I would think that's exactly when we would start. There is already a certain degree of enthusiasm being generated throughout the com- munity for this particular development and I think being able to capi- talize that enthusiasm will only benefit this particular development. We would presell those units probably, and I say probably because ' quite honestly we have not put together a detailed market program on this , but I would say using various community resources exclusively. -10 - Soliciting the assistance of the churches, soliciting the assistance of other community organizations that can pass the word and tell of the availability of this type of housing to other members of the St. Anthony community. As we would proceed into phase 2 and phase 3, we would get into the more conventional types of promotions, such as advertising in the newspapers, radios, and billboards. As is very common in this particular end of the real estate business, referals are a very strong part of the sales market and we're no exception to subscribing to that principle. We'd like to encourage referals when- ever possible and will make every effort to do so. Steve Yurick Item °iiave you read the contract for private redeveloper's agree- ment and do you agree or disagree with all of the items?" There are some items that, rather than say disagree with, I would say we would like to approach the HRA to negotiate on. Those items being, the amount of the letter of credit, depending on the proposed take down of the plan; the handling of the demolition costs on the existing commercial site. Steve Yurick Item 9, °how long is your offer open, when would you be willing to enter into the redeveloper's agreement?" We would like to enter into the redeveloper's agreement just as soon as we can. If we are selected, we would sit down and negotiate it post haste. The sooner the better and everybody will really know where they stand. As far as how long our offer is open, typically when we submit these we leave them open for 30 days and I think we would continue with that policy. Steve Yurick Item 12, 'have you reviewed the design guidelines and will your final design conform to those guidelines?" On that question, I'd like to defer that to Gary. Gary Tushie Yes. Steve Yurick Thank you Gary. Steve Yurick Question 12a, "what will you do if 202 is not available?" The concept there is to market that project probably with some redesign as market rate condominiums. Steve Yurick Item IT—,'are you willing to make changes in any phases of the development?" Not only are we willing, but we must say, that depending on the market conditions, it may be demanded. I think that as we proceed into the development of this project, we'll probably see some things change from what we are talking about today. What they are, I guess your guess is as good as ours. Steve Yurick ow id you arrive at your offering price?" 0 We came up with a figure of $2,800 for every unit as a price to include in our sale price. We felt that in the price range that we want to offer these units at, we had to do everything possible to minimize the costs that went into it. So, rather than taking some percentage that everybody uses, we tried to do exactly that. We tried to minimize the items that went into increase the sale price, in essence. There's just no matchable way you can come up with the number we have. That's the number we came up with when trying to minimize those costs. Steve Yurick "If there are several additional questions for which responses are necessary, would you be willing to work with our redevelopment consultant to answer these questions?" Certainly we would be. (Sundland) Questions from the Board? George Marks (HRA) You have a very impressive array of companies that you brought together for this team, and I was wondering if you could elaborate a little on your experiences of working together, the various members of this team and past experience that you have. Steve Yurick OK. Let me start with our design man, the architect. Gary Tushie and I have been trying in essence, to put together a project for some time. We have talked many times in the past on other project areas, trying to put something together. This is the first time it has clicked for the two of us. We have been very impressed with their company's background around the country and and locally with what they do in the field of design and what they do in trying to keep things from a cost standpoint within reason. It isn't just a design for doing this, but a kind of approach. They are generally aware of cost factors that have to go into a project. Rothchild Financial Corporation. They are currently financing our new development project in St. Louis Park. We are in the final stages of closing approximately two other condominium developments in the Twin City area with the assistance of their financing and their arranged financing. We have been working with them about a year and found them to be very helpful to our needs. Kraus Anderson - this would be the first time we would be working with the KA group and I guess to be quite honest, we felt we needed a name contractor to get involved in a project of this magnitude. We are not contractors ourselves and we need that type of experience, that type of expertise that Kraus Anderson provides in order to make this a viable project. (Sundland) Yes, Mr. Krier? (Krier) Is Arkell going to be the people to enter into the agree- ment or Kraus Anderson and Arkell entering into the redeveloper's agreement? , 0 C] 0 John Arkell Both of us, book. -12- it's a joint venture. I believe that's stated in the (Sundland) Any questions? Thank you very much. We're going to make our decision February 22, I'm sure we will, for tentative status. If you have any summarization you'd like to offer us at this time, let's hear it. If not, thank you very much. (Arkell) I'd just like to thank you for your time and consideration for giving us the opportunity to present it to you. (Sundland) Thank you very much. .• ST. ANTHONY HOUSING AND REDEVELOPMENT AUTHORITY INTERVIEW OF PROSPECTIVE DEVELOPER.- (KNUTSON CONSTRUCTION CO.) FOR THE KENZIE TERRACE REDEVELOPMENT PROJECT February 8, 1983 40 Sundland Before we start, take a few minutes, I have a prepared statement that I • would like to share with you. We appreciate the opportunity to meet with you this evening, developers, for this interview. Over the last few months we have solicited proposals for the Kenzie Terrace Redevelopment Project in accord with the adopted plan, -which was recommended by the Planning Commission and approved by the City Council last summer. The purpose of this meeting is to .interview two redevelopers who have re- sponded to our request for proposals. This is a formal interview and the proceedings will go on such as this. (1) Each developer will be given a half hour to present their proposal. That half hour will be precisely timed by a clerk. (2) At the end of the half hour session, redevelopers will be requested to answer questions which the H.R.A. has prepared to deal with their particular proposal. Also, any. questions which members of the H.R.A. Board feel are appropriate will be asked at this time. Question- ing will take place for one half hour. For the people who are here, I wish to express my gratitude for your attending the meeting here tonight. This is an accumulation of a great deal of work, as you who were on the Task Force and Planning Commission know.1 I want to recognize each of you for your tremendous amount of effort that you have put into this project and ask for your continued assistance and support over the implementation period. However, because it is important to maintain a high degree of fairness and formality in the interview process, I will not be entertaining any questions from the • floor tonight, only from the H.R.A. Commissioners. This does not mean that we do not value your opinion or that your questions are not pertin- ent. It is only a means of creating.a high degree of fairness in terms of chosing a particular redeveloper. We want comments from the public and we want your individual comments concerning these proposals. As such, I would like to invite you and the general public to put your comments and questions in writing and forward them to Mr. Childs by this coming Friday. That would certainly be helpful to us. Over the next two weeks we will be reviewing the proposals and on Febru- ary 22nd we will be announcing our decision as to which redeveloper we intend to work with. You are all invited to the February 22nd H.R.A. meeting. Once a redeveloper has been chosen, that redeveloper will be given temporary status for a period not to exceed 90 days. At the end of 90 days, the redeveloper will have entered into a formal agreement with the H.R.A. for development of the area. During this 90 day period,,the Planning Commission and the Task Force will be heavily involved in areas of their concern. With this, I wish to begin the interviews with an introduction of the redeveloper to the Board, which consists of myself, Chairman Robert Sundland, Clarence Ranallo, George Marks, Richard Letourneau, Richard Enrooth and I think.you all know Mr. Childs, Mr. Soth, our attorney, and • Mr. Krier, our consultant. I'm pleased to introduce the Knutson Company, construction company, and the people who are present to present their proposals this evening, Mr. John Curry, President, Mr. Tony Vavoulis, and Mr. Bruce Knutson. Mr. Curry I will leave the floor to you at this time. -z - John Curry I can assure you we are not going to take the 30 minutes in introductory • comments'. Am I correct that all of you have received the proposal that we had submitted before, so that information was received ahead of time. (That's correct).. Again, just to more clearly indicate, I just want to take a few minutes to indicate what we intend to do. It is that we intend to cover just briefly some of the significant things included in our proposal. Basically, what we intend to do, is that Mr. Tony Vavoulis, the man with the curly hair back.there, is going to explain briefly the proposal. Tony would be ourproject manager on this project, the man responsible for working closely with the City, resolving all the questions and seeing that the project goes forward. Sitting right in front of him is Mr. Bruce Knutson. Bruce would be the architect on the project. He's had considerable experience with this type of project. As a matter of fact, this team, that we're talking to you about tonight that we are proposing, has just completed a project of 178 units, elderly project in Richfield, a southern suburb, and we are proposing a program somewhat similar as the important first step to getting this whole redevelopment situation started, which you were talking about for Kenzie Terrace. The other member'is, I'm glad to see you here, Art. Art, I think, came out of a sick .bed to get here tonight. He's been having the flu bug that many of us have encountered in the last few weeks. Art represents our mortgage interests and is very familiar with the subsidized housing programs as well as the other programs. All of us represent the team that we're talking about on this. We have worked together before. We • are not all the same company, although you might say we're all of the same family. Not all the same family either. Bruce is a part of the family, but not a part of the company. He operates independently, and we do projects sometimes with Bruce, sometimes without him, so that is the group. Let me just give you a.brief background of what we're bringing to you. The Knutson Construction Company, which I happen to be president of, is an organization which has been in business a long time, it's been over 70 years in Minneapolis. During that time, as an organization, it's been involved in all types of construction projects and development projects. The company as an organization that was heavily involved in the develop- ment of the Gateway area. More recently, we have been involved in the development of many housing projects, and particularly we are devoting considerable emphasis to housing with emphasis on the elderly. As we are all very much aware, and I put myself in this category, we are an aging population and all communities are faced with some of the same problem that their community is aging. You have many people who have grown up, not grown, but lived in their homes and all of a sudden they are becoming empty nesters. One of the things is that they have no place to go. This is one of the problems that we are very familar with and wish to address. Fortunately, there's a synogism here that works well. If you can find something that is desireable for these people to move to, with the type of proposal we're going to be talking to, you free up all these homes for younger people to move in. By so doing the type is of proposal we're talking about, initially in the first stage, you're creating an additional tax base for the people in the type of home -3 - facility you're providing for them, is a living facility and at the same • time freeing up for further tax.base for younger population to move into the other. Briefly, that is the type of program we will be talking to you about. These are the people that will be presenting it to you and I can just say that they are a group that is experienced, has first-hand knowledge of dealing with this. Rather than my taking any more time, so that we don't run over the 30 minutes, I turn it to Tony. Tony Vavoulis alai nc y%u, John. What I would like to do is to get into a little more detail of the type of project we're talking about here and the entire scope of it, and also the approach we're taking on this project. In our initial.review of the St. Anthony/Northeast area, we saw several characteristics. Basically it's a very stable area, it is in good condition, it's well maintained and like several other areas in the City they have a.fierce devotion to their locale and want to maintain residence in that area. We also noticed that there are some basic housing needs in the area. The. .location that is being offered in the redevelopment package, in reviewing -it, it also has some good character- istics. It is very well located as the community of St. Anthony is. It has good access to the overall metropolitan area as well as within it, the various commercial aspects of the strip there, the Kenzie Terrace area strip there. In conclusion, it's a good area for development. In looking at the number of units we are proposing, it's 400-425, as broken down in our proposal. That, at first blush, looking at it is an • awful lot of units for any proposal, any area to absorb, no matter what it's characteristics. What we feel has to be done in this type of proposal, it has to be broken down into several different market groups, as well as staging it over a period of time. Our recent experience over at Lakeshore Drive is a new group that a number of developers are now looking at. It's a market rate elderly, which, up until recently, when elderly housing was talked about, it was almost exclusively subsidized housing. That is another group that is also being directed in our development proposal, but that is in phase 2. And then there is, I guess the more broad group, which is just general market rate housing that there be no particular restrictions on age. We would try to design it that it would be attractive to all ages. We do not expect this development to be heavily family oriented. The housing needs of the community in regard to that would be taken care of with people moving from their current.place of residence into this development, as was our experience of the Richfield project. About 75% of the people moved into that project within a 2 mile radius of that site and over 85% of those.people that moved into the project were homeowners. So, we've also taken that one.further in looking at who they sold their home to almost exclusively was first time home buyers, young families. The group that many housing efforts are looking at for supplementing their com- munity. And, as St. Anthony has experienced, Richfield has experienced, and really the overall community of St. Paul/Minneapolis is having a problem with is the population is reducing, the individuals per household is going down. That, in simple.observation, is the community is getting • older and alternatives for that older population need to be developed. -4 - What we got involved with at Lakeshore Drive in Richfield was a large • section of the population, which turned out to.be waiting for an opportunity to stay in their community and still maintain ownership and maintain all of those advantages that home ownership brings with it. We would be approaching this project in three phases. The first phase, which is the most important:we see, is the type of project that I spoke of. You would have to be 55 to qualify to purchase into the facility, it would be 125 units, it would be market rate. The price range would be roughly $60,000 to $90,000.. I guess I should start off with all of these figures and numbers and totals that we're talking about at this time are a proposal. We are looking to firm up, analyze, evaluate and mature this overall proposal in the next months and ultimately years to come. We do not consider ourselves, even though we have had one very successful project recently,- to know everything there is to know about either a particular community or market segment. We have what we feel is a very good educated guess at this point and we intend to spend the next months in regard to phase 1, maturing those guesses that we're making at this time. That means that this proposal for phase 1 may be modified slightly in number of units, in size of units, mix of units and in.fact, the -overall design that we develop may change around within the context here. We do feel the total number of units has to be in this range, however. We do not foresee feasibility forourtype of project going below, I'll say, 120 units. We've got 125 here, it would be very difficult for this type of facility to go below 120 and still function and provide the services that are integral in this type of • project. This type of project does have services and support within it. In looking at this overall market segment, we're often confronted with the older adult that, I don't know what the current term is, someone who is over 55, over 65 or over 75, someone who qualifies to move into our project, has a lot of unique needs. I guess in this particular com- munity, want to stay in the community first off. They have got houses that they oftentimes have raised their families in. They have certain physical limitations, sometimes severe, sometimes not severe and often- times they have, as much as anything,,psychological limitations of their home and concerns in that regard. In order to satisfy those needs, their alternatives are few. Going to a nursing home is just too large a step. very few people who moved into Lakeshore Drive were ready for that type of step, but going to a facility that didn't have any support or level of support services was not making a proper transition for them. So, what we have got within this building,it starts off in a very important area, is a 24 hour security/emergency response system. That is really the core of a lot of things that developed in this building. You have a management staff that is responsible for maintaining the security in the building. Someone is dressed and on their feet 24 hours a day, not a caretaker type of unit that you would call and request assistance in whatever hour of the day, but so you have 24 hour a day support services. That just in itself, creates an umbrella of security. Our experience has shown that that, almost as much as anything, is almost a psychological type of security that answers many of the people's needs and many of • their family's needs. That is very important. We get oftentimes in the management office at Lakeshore, families calling up and saying, my mother -5 - hasn't answered her phone for three days. Normally, that would require a • drive from wherever son or daughter is all the way over to this facility and the response has been quite often, I can see them in the community ` room, they're playing cards with their neighbors. That particular item is very important. Also, in regard to playing cards with their neighbors, is the socialization that develops in a building like Lakeshore Drive. It's been open for roughly 4 months and within the first 4 days, there was a bridge club set up and they.were having 'groups of people getting together. The need for socialization, particularly in Minnesota, in the slippery conditions that develop over the winter days, oftentimes make people that are unsure of their footing locked into their house for quite some time. So this type of project, clearly is something that is needed in many areas. It is also needed, we feel, in the St. Anthony area. Phase 1 is that type of facility. Phase 2, the first stage to that is complimentary to that. It is pro- posed,to be a 202, a subsidized type of elderly facility. We see these 2 working hand in hand, or would have the opportunity to work hand in hand with some sort of shared services, possibly a food service program in one building and being available for both. There has been many subsidized projects built'over the years. There is a continuing and ongoing need for that. It is mentioned in our proposal that this is a very competitive project. I think the City here is very aware of that. There was a proposal on the first site and it was unsuccessful. We are hoping that working with non-profit, we would have to, or is a require- ment of this program, that we would be successful next time around. If we're not, we would have to make some sort of modifications in the overall program. Another aspect of phase 2, which would be moving almost concurrently with the 202 proposal, is a market rate type of housing project, general housing. It would also be, at least•at this point in time, a condo- minium type of ownership. There are a lot of things going on in the financing world that may make variations on this possible. I guess in light of that issue, in most of our detail in this proposal, you can clearly see us directed toward phase 1. Phase 1 is the major item that we can get our teeth in because it's close at hand. We are hopeful that that can get going and get in the ground in 1983. That's going to be a tough job, but we hope we can do that. After that, we will be getting a lot of familiarity with the community and phase 2, as I mentioned, may take some slightly different shapes and forms, based on what we have learned. Phase 3 is even more a victim of that because it is so far out in the future. our perception now is that it would be about 100 to 125 units and would again be directed at the older market, at the nester market. Again; after we have gone through phase 1 and phase 2, we're going to be a whole lot smarter and should be able to direct our efforts more exactly at that market area. I guess what I'd like to do now is have Bruce give some architectural definition in this. We also, as mentioned, have Art Peal from our • mortgage company with us. Just a quick word on the financing. I'll hit the high points. We do intend to finance this in a rather traditional manner. We will just be working with our mortgage company. We will be taking the lending package to institutions around and getting financing as • for it. We intend to finance the project, at least at this point, 100%, as was our experience at Lakeshore Drive. So, I guess you could say, that's the one liner for financing. Detailed questions on that and Art, I'm sure, can fill that in. Bruce Knutson This very quickly, so we don't run out of time for your questions and answers, I'll address more specifically phase 1 and how we approached it architecturally. The basic massing of the building, we tried to pull away from Kenzie Terrace in terms of where the major part of the units would be, there's a lot of traffic on that street and as the commercial is developed, there'll probably be more traffic. So, as a basic concept we put the unit as far away from the terrace as can. Also, we do not want to encroach on single family residences behind. what we've done in terms of providing 'a transition phase, is to bring our service, our parking, all.the noisy aspects to the site, in off of Kenzie Terrace. The only contact with the residential area would be a service lane in the alley, which would be like garbage pick up.. The other thing that this provides in that kind of a•shape for the building is by keeping the vehicular traffic oriented in front of the building in the center, it allows us to provide pedestrian type circulation in the back side, allowing for landscape, berming and screening between the alley and residential area, mobile home area and some commercial in the future, but allows.a nice private area around the building that would be basically for the people's in that project. Carrying that down to phase 2 and 3, using the same concept, keeping the • vehicular input to the site down the middle and allowing green space as a buffer between the multi -family and the residential on the other side so that you have definition between the two spaces for nice land- scaping and pedestrian related kind of details. Going into the design of the building itself, we have essentially four basic units and these are all covered in your booklet so I'll just touch on them quickly. Standard one bedroom units, deluxe one bedroom, breaks into two different categories and two bedroom units. They help define and create the geometry of the building because our experience in Richfield was that, if you look .at type B units, which are one bedroom deluxes, we found in the market in the Richfield project, that people were excited about unusually shaped apartments. I guess they lived in boxes most of their lives and wanted something more exciting. As Tony suggested, that as the marketing goes on for this project, there may come a few more bends or kinks in the building depending on what the market is looking for. In Richfield, we went through several building designs, changing the unit mix, changing the angles of the building to respond to what the market was, but staying within the same number of units that was projected for the project. As you can see, the building has lots of corners, lots of interest for the units and generally it's been accepted very highly for the market and has been very successful. The building has a main entry in the middle, the social programs that • Tony addressed, the office space, hobby and exercise and all those kinds of facilities are in the middle on the first floor. In addition, the -7 - main 7 - main community space would bump off the backside, onto the private area adjacent to the residential area. This slide is a projection from up in the air of what the project would look like from the Kenzie side. I'll give you back to Tony or John, awaiting your questions. John Curry I would like to mention one thing, that he did hit on. We have worked together before and we do have this recent experience of Lakeshore Drive and we learned an awful -lot of.things about the market place and about each other and how we'work together and what has been a very successful relationship. The technique of working together and the pecking order that takes some months to peck together has been worked out and we finished that project with a great degree of efficiency. That was 178 units. It was from,ground breaking to the first occupancy was 11 months to the day. That is, we feel, quite an accomplishment. We intend to do those types of things again-. I guess the type of thing I'm talking about is being efficient. You've got to be efficient in the market place today or you end up either not providing a product that isi:acceptable or losing money or both and we intend not doing either one of those. I'd like to add one thing. I think that one of the things that we have commented about, that we'd like to leave with a thought that we hear, is that we're looking upon ourselves as providing some buildings. We • would like to think upon it as to market and do what has been talked about here, you've got to provide a program. You're dealing with a lot of people who have some very deep concerns and deep interests and you just do not provide a building, you've got to provide a program and I think we do address ourselves to the broader aspects of the whole community needs in our proposal which we made. I think it would be well for Tony to stay here because he's going to be able to field most of the questions. (Sundland) The H.R.A. is ...thank you very much, gentlemen. The H.R.A. has prepared several questions which we'd like to discuss here in the second half of the interview. We've written these out and will present them to you for your comment at this time. Tony Vavoulis (Knutson -Co.) You'd like me to go through these and address them one at a time? (Sundland) Yes. The first one, I'm going to have Art join me on this one. "Have you been involved in a Section 8 Elderly 202.2ld3 elderly cooperative in the recent past? Please describe your involvement. We've been involved, I guess, in both a construction standpoint, a general partner standpoint and in financing. Art, why don't you hit the 202 aspect of it. 0 NO Art Peel As -1m y indicated, we have been involved as a sponsor mortgagee on the • various types of programs. As a consultant on the 202 in the last 5 years, we've done 13 202's. We've represented a number of non -profits, ranging from the archdiocese to the Jewish federation in Minneapolis to a number of Lutheran nursing homes in outstate Minnesota and we've had a high degree of success in terms of achieving our goals in the.202 program. Our goal simply being, providing 100% of the financing for this type of project. I would like to go a little bit deeper than what your question asks, and that is what's happening with the 202 program in general. I think one of the advantages of this, proposal is that phase 1 is putting in an elderly project that will offer dining facilities and the like. One of the things that I don't have to spend a.great deal of time with with this Council is the fact that Washington is cutting back on funds. HUD is experiencing that also. Because of that cutback, we're seeing less and less go into the 202 buildings going up around the state. I mentioned the Jewish federation. .They broke ground 3-3'h years ago and that project has dining facilities for all the tenants, they have a great number of community spaces. I'm working on 3 right now that will not have anything that approaches what we did 3 years ago. The reason for that is just the cutback in funds. So, from a selection process, as we all know from last year, the 202's were extremely competitive and I think that if a non-profit applicant went in and showed the type of program that they could take advantage of, that Tony is discussing in phase 1, would be a leg.up in terms of going back three years, but • not laying those dollars out on the part of the federal government. So, I think in terms of staging, it's critical that a 202 would go into stage 2 from a selection process from HUD. Is there anything else? (Sundland) You see, in phase 1 when you discuss the project, you're say- ing specifically then, you are delivering the need of the 55 and up with- out the 202 financing? Art Peel Knutson Co.) That is correct. Tony Vavoulis Knutson Co.) The second question that we are to address is "it is unclear as to how we would be purchasing the property. Would we please explain in terms of the schedule". Our basic intention in all of the parcels is to purchase, actually close and pay you for the land at the time just prior to construction. So, we would be getting going through all the maturity of the concepts, the developments, the markets, the building and then moving towards, Art would then have to be working the finance packages. The reality of the project would have to depend on everything coming together and we would then be closing and purchasing and paying for the land at that time, which would happen just prior to construction. Our hope in phase 1 and there is a schedule in the proposal, phase 1, it says land acquired towards the end of October of 1983, if we can meet that, we would certainly like to go towards that kind of time schedule. Does that answer that satisfactorily? That answers it, OK. S= Tony Vavoulis • (Knutson Co.) Have we read the contract for private redevelopment, the redevelopers agreement, do we agree with all the provisions of that \ contract? Tony Vavoulis (Knutson Co.) We have read it and we agree basically with the contract. We are looking to negotiate some of the points and the next question that you have in regard to the letter of credit, I guess that is one of the items that we are particularly sensitive to. The developer's agreement had a point of not to exceed, I_guess we would need to be talking about that and with regard to what our obligations would. be. Clearly, we would not be able to post a letter of credit for the full 25% of all your costs that you would be incurring in the acquisition of.phase 2. That would not enable us to perform business as usual in either phase 1 or our company in general, so that, I guess, is a particular item of negotiation. Also, how the developer's agreement is structured in regard to phase 1 and phase 2 would also be something,that we would like to talk about more. It talks about it all at once. We are very sincere about moving forward.on the entire project, but everything is based on the success of phase 1. Phase 1 has to be successful to enable phase 2 and I'm sure you understand that and.we would have to get some basic agreement on that going forward. Is there any further questions on that subject? Tony Vavoulis (Knutson Co.) Question # 6 is will you be using a housing management corporation for the homeowners association and who do you plan to use? Tony Vavoulis •(Knutson Co.) Yes, we would, the Knutson organization would not be the managing entity in this area. We have found this area an area of great specialization and we admit at this point that it is not our area of specialization. We have not come.to any agreement at this time with any management organization. We currently, the way we did it on Lakeshore Drive, was that prior to occupancy, roughly 6 months prior to that, we on behalf of the homeowners association, is the role and responsibility that we have as being the developer entered into an agreement with the Health Central management group and.they then are acting as the manager on Lakeshore Drive. They have that contract. All of the employees, management employees, are employees of the Health Central organization. They are not employees of Lakeshore Drive condominiums. That was some- thing that we felt was very important that they be responsible for the manpower because manpower can be a major management problem in itself and we don't want to add that to the resident's concerns, particularly because of its nature of being an elderly project. Certainly, at this point, Health Central would be the leading candidate as far as our conversations, but we do not have any agreement other than a good working relationship that we developed in Richfield. Tony Vavoulis ,Knutson Co.) What will we do if 202 financing is not available? Tony Vavoulis Knutson Co.) I addressed that briefly before. Not being available and not being successful are both possible resultants. If we were simply not successful and there was financing, I think we would probably try again the following year. If it just did not develop or Washington • eliminated it, of course, which is a possiblity or did not make it available in this geographical location which is also a possibility, we would just attempt to proceed with our other aspect of phase 2, _10 - which is the current market rate, and the other ultimately phase 3, I believe, although I didn't do.cash runs in that regard, we would still be meeting your basic needs of tax increment financing in that area. If it is not available, we just clearly cannot do it. It is, as I mentioned, a different market segment. It would be difficult to just simply add 60 units to the market rate housing. It may affect our physical design, Bruce's construction, but as far as impacting greatly the number of units we would be building in another market type of housing,.it would not affect that and we.would attempt to just move on. How Washington, the programs that are coming out of Washington and pro- grams that can and cannot be done, sometimes quickly and sometimes at unusual times, so we can be guaranteed that things change in Washington and programs change. If something.is not available in one area, there may be another opportunity in another area and we would keep our eyes open. Tony Vavoulis nu son o.) Have you read design guidelines and do you plan to reflect those guidelines? Tony Vavoulis (Knutson cc.) I guess that is in regard to the more architectural aspect and Bruce, why don't you respond. Yes, we have read them. Bruce did address those. One particular area that I picked up in reading the design guidelines, that in regard to transition areas that existing between the existing residential, the commercial, the busy streets that are around and you've got to certainly • develop transition areas. In the first phase we have.a great deal of underground parking taking care of most of our needs in that regard so we don't have large open areas of pavement and bituminous and that area even as such, is broken up somewhat with plantings different geometries. Yes, we are aware of the design guidelines and certainly we will be working with them. I guess in a broader context, design guidelines are something to work from. There are other areas of desires of the Board, of the Council, the community at large, and our attention is to develop and build a project that reflects the needs of the community. It's really the only way you can market something. Gone are the days that you can shove something down a group's throat. It's got to meet the general agreement of enough people to sell it and in this large a development, 400 units, you've got to be pretty clean going on all those various areas. I guess that reading the next question, answers that one. Tony Vavoulis nu son o.) Are you willing to make changes in the basic design of your project? Tony Vavoulis nu son o.) Certainly. All of what I said in the previous question applies to that. Tony Vavoulis 7—RUT-so-n---Co.) The next one is "how did you arrive at your offering price"? Tony Vavoulis nu son o.) I guess we arrived at that trying to meet the minimum requirement that you stated and trying not to break the back of the • project. It's very difficult to put a project together today with the costs of construction and financing and everything else. You're always looking for places to cut down the costs. I would be delighted to have lower than what we are offering price in the project. That land price is passed along dollar for dollar plus financing costs and other things to the eventual buyer. We would like to be offering this project for less money and this would be one place to look. I guess we tried to make it enough to meet your needs and keep it low.enough to meet the market needs. That's where we came from on that one. Tony Vavoulis Knutson Co.) The last question is "there are several things that are not clear to us and our redevelopment consultant will be in contact with you for some written answers. Would you be willing to provide additional information"? Tony Vavoulis Knutson Co.). Again, certainly.. We understand that this is an interview and oftentimes things that we say result in more questions than what we have answered here and they may not have come up tonight, they might come up tomorrow night. We're willing to.work on this project. If we do get selected, we look at this as a partnership. we've got to be good partners, or we can't achieve our common goals. Are there any other questions? George Marks HRA) Yes. I've got a question that has to do with the pedestrian amenities. I couldn't see on the site plan here on this proposal, how would it affect the rest of the community and if there are any other, like sidewalks that are needed, maybe adjacent to the property, would you go into that. Bruce Knutson • (Knutson Co.) Sure. The presentation requirements were more of a broad scope, we really didn't.get down into that. Basically what we do, as I said earlier, is I try to generate kind of the public side of the project and the private side. So, in terms of public access, both vehicular and pedestrian, there would be a link at this point and I don't know if there 's a planned semiphore or lights or whatever. We lined up the driveways so that there would be a controlled intersection presumably that would be where a pedestrian would cross Kenzie Terrace. That would also be the public pedestrian lane to the building. The vehicles would come up to the main entrance at this point and the pedestrians , pre- sumably if there would be a bus stop here, that would be where they would cross. In addition, there is a secondary pedestrian circulation which would be around the back side of the project. Again, this is the com- munity space and particularly in projects for older people, we like to provide meandering spaces and that would be a five or six foot wide concrete walkway, if you will that would.go in and out and it would have a lot of plan in it and we would break it so that every maybe 50 yards there would be an area that would open up with seating, maybe an area for the garden club could plant, you know each 5 or 6 people would have an area that they would plant and there would be a seating area around that area. What would occur, coming off the back or side entrance points, around the back side of the project, maybe not with a link, again that's something we work with with the homeowner's association, sometimes they prefer not to have any kind of a public link to the private yard, so I wouldn't want to say right now if that would be connected to the public sidewalk or not. r That basic concept would go on to the second phase. Again, your public pedestrian access would occur in the middle, with the private areas going around the backside. And again, the sidewalks would break up into -12- • small areas where people could congregate and talk and maybe there would be an area where they could barbeque. Again, this is a tough scale to address those kind of details. In the guidelines, it was talking about the scale of, of addressing the lights and in all of our projects we always have controlled lights and it doesn't fall off our project and on the pedestrian level, rather than having a general highlight, we prefer the small like 42" high which would put direct light on the pathway, let's say, without a lot of wear on the project so that's how we address that detail. George Marks RA ne of the things I was thinking of was the lower part of the project, for example, I wanted to walk someplace north, ..... Bruce Knutson nutson Co..) Again, the public access would come along tied into the driveway system and again there are areas here for the garden plots for the garden club or whatever and so it wouldn't be a rigid system, but it would meander through there with a lot of landscaped areas around. George Marks HRA It would connect in all directions? Bruce Knutson Knutson Co.) Right. We probably wouldn't connect, unless it was a very controlled connection, to the commercial area. I think on a housing project you want to actually want to control the amount of off site traffic that comes into it. The older people are very sensitive about who comes into their building and they really have a strong identity • that that's their building. Any other questions? Bob Sundland TH—RA-T--I--Tiave no other questions. Thank you.very much, gentlemen. Could you leave your boards, your displays? If you don't care to leave them up for the next presentation, you can stack them up here, if you'd like. John Curry w%u13Zike to add one final comment, I speak for the organization, that we're very proud of the talent and ability of this team we've put together to bring to a project like this. They not only have a lot of talent, they have a lot of caring.and we think that's very important in a project such as yours and some of us in the organization our role is more that and they never let me forget that I pick the category that this goes into and that's my role, just to provide input of that once in a while. (Sundland) They bounce it off you to see if you like it, huh? John Curry An�t7ey don't pay much attention to it after that. Thank you. Thank you.