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HomeMy WebLinkAboutHRA MINUTES 10081985• CITY OF ST. ANTHONY HOUSING AND REDEVELOPMENT AUTHORITY MINUTES October 8, 1985 The meeting was called to order by Chair Sundland at 8:11 P.M. Present for roll call: Sundland, Vice Chair Enrooth, Secretary/Treasurer Marks, and Commissioners Ranallo and Makowske. Also present: David Childs, Executive Director; William Soth, Attorney; and Richard Krier, Planning Consultant. Motion by Commissioner Makowske and seconded by Secretary/Treasurer Marks to approve as submitted the minutes of the H.R.A. meetings held August 9 and September 10, 1985. Motion carried unanimously. Motion by Commissioner Ranallo and seconded by Vice Chair Enrooth to approve payment of $2,905.65 to Dorsey & Whitney for legal services to the H.R.A. during August, 1985. Motion carried unanimously. Copies of the H.U.D. loan commitment documents for the Walker on Kenzie project • had been included in the H.R.A. agenda packet along with the proposed resolution approving the $1,469,000 loan on that project. The Executive Director indicated he.anticipated-thei,closing on the purchase of the project property from Max Saliterman would be held October 15th with the closing on the loan the following Friday. Motion by Secretary/Treasurer Marks and seconded by Commissioner Ranallo to adopt H.R.A. Resolution 1985-008. H.R.A. RESOLUTION 1985-008 A RESOLUTION APPROVING THE HOUSING AND URBAN DEVELOPMENT (HUD) LOAN COMMITMENT FOR DIRECT LOAN FINANCING FOR WALKER ON KENZIE Motion carried unanimously. Copies of the Eighth Amendment of the Redevelopment Contract with Arkand Partner- ship for the Kenzie Terrace Redevelopment Project as well as the Easement Agree- ment proposed in the amendment had been furnished that evening by the Attorney who indicated that, because only the Walker on Kenzie portion of Phase II of that project was:being developed at this time, it had seemed advisable for the H.R.A. to retain ownership of the access strip across the front of the senior housing project as a driveway and to grant an access easement to the Walker project developers and subsequent developers of the balance of Phase II. By doing so, the H.R.A. would be able to assure access to remaining Phase II property no matter who the is final developers might be. Mr. Childs said Walker would have to pay 100% of the maintenance costs of the driveway until such time as the remainder of Phase II -2 - is completed at which time their share of the costs would be about 12%. The redevelopers would reimburse the H.R.A. for the cost of the access when that hap- pens, Mr. Soth added. Motion by Commissioner Ranallo and seconded by Secretary/Treasurer Marks to adopt H.R.A. Resolution 1985-009. H.R.A. RESOLUTION 1985-009 RESOLUTION AUTHORIZING THE EIGHTH AMENDMENT TO THE REDEVELOPMENT CONTRACT Motion carried unanimously. Consideration was next given to the proposed resolution whichwould approve the Redevelopment and Tax Increment Plans for the Chandler Place_ senior rental apartment project to be erected by the St_ Anthony_Health_Center on the _vacant _lot it owns west of the health_center on the corner of 37th Avenue N.E. and Chandler Drive. Updated cash flows for the tax increment returns were submitted to the Commissioners. These showed the costs which would result if the City were to sell bonds to cover the estimated costs foracquisition, soil correction, and administration. Mr. Krier told the Commissioners this investment would help defray higher than anti- cipated soil corrections costs and would bring the costs of the project down at the same time the City would receive a good return on its investment with the tax increment receipts paying the bonds in 10 years and with the City also hold- ing a second mortgage on the property in the amount of 5700,000, to be repaid upon sale or beginning after 10 years. • A bonding attorney from Dorsey & Whitney, the H.R.A. Attorney, had raised some un- foreseen questions about the legality of the new proposal which the Planning Consult- ant questioned saying he perceived that if that opinion were accurate, most of the redevelopment projects he is involved in throughout the metropolitan area, and, indeed those all over the state, "would be in real trouble". The Executive Director indicated he was looking for the Commission reaction to a proposal from the developer for the City to use $300,000 in reserve funds to pay for part of the b_o_nd reserve_.with the loan to be_repaid__i n_.1991-.92 by tax increment revenues. --"- -" Reservations about providing safeguards for the City's investments as well -.as concerns about the lack of liquidity for the next five or six years were expressed by all the Commissioners—Commissioners_ ors Ranallo and Makowske were apprehensive about tying up the City's reserves for that length of time in the face of diminish- ing aid from state and federal sources as well as the trend towards decreased liquor revenues nationwide. (Mr. Krier told the Commissioners they would have to weigh their decision between the possibility the City might need reserve funds, which would not be available, and the fact that the City would actually be recaptur- ing its investment twice from the developers; first, from the tax increment revenues, and then from any profit on the sale of the property in the future. The latter was true, the Planning Consultant said, because the proposal had been written on the same payback principal followed by Minneapolis, Richfield, Eden Prairie, and other municipalities, related to similar investments, that, if a community experiences risk in investing in a project, its taxpayers deserve to share in the profits when • the properties they have invested in are sold. M91 Mike Miller, Assistant Administrator for the Health Center and partner in the • Chandler Place project, had been present for both the Council and H.R.A. meetings that evening. He confirmed that six bids for the soil correction had come in about $200,000 higher than expected, but Mr. Miller said, that was not really surprising considering the problems the County has encountered with their road rebuilding project in front of the property. Commissioner Makowske questioned whether describing a project to be constructed on a vacant piece of land as "redevelopment" or "deteriorated or deteriorating" could be considered to meet the intent of the Minnesota statute governing the use of tax increment financing. She referred .back to the letter from the League of Minnesota Cities warning that the future integrity of the program was in jeopardy because of abuses and the Commissioner said she just wanted to be certain the proposed project would be in conformance with the statute. Mr. Krier replied by saying new legis- lation had been passed which changed "blight" to "deteriorating" to accommodate a similar project in Edina. He suggested a case could be made that "poor soiTcon- ditions on this parcel could have the potential for having a deteriorating effect on the development of surrounding areas." Mr. Soth suggested the legislators could probably have written the statute to make a clearer distinction between "redeveloped" and "developed" properties, but; he supported the Consultant's perception that there had been many projects like Chandler Place which had gained approval for tax increment financing. f Mr. Krier said he had gone for the housing program because he perceived there would be enough of the apartment renters who would meet the low or moderate income criteria set for a housing district. Mr. Krier reminded the Commissioners that the term "moderate" covered persons whose incomes did not exceed the County median for a • family of four which was around $24,000. The Planning Consultant advised the Commissioners that the new proposal for funding the Chandler Place project should have no effect on their adopting the proposed Redevelopment anddTax Increment Plans that evening so the project could start before "the snow flies" if an acceptable Redevelopment Contract can be written which would address the Commissioners' concerns about the safeguards and liquidity of the proposed investment proposal and the legal questions are answered satis- factorily, before the October 22nd meeting. Mr. Childs commented that it would be up to him, Mr. Krier and Mr. Soth, to get that done by that date. Motion by Secretary/Treasurer Marks and seconded by Vice Chair Enrooth to adopt H.R.A. Resolution 1985-010 with the substitution of "or" for "and" in the phrase "low and moderate income" in the last paragraph. H.R.A. RESOLUTION 1985-010 A RESOLUTION APPROVING THE REDEVELOPMENT PLAN ENTITLED, "CHANDLER PLACE REDEVELOPMENT PLAN AND TAX INCREMENT PLAN", DATED OCTOBER 8, 1985 Motion carried unanimously. Motion by Secretary/Treasurer Marks and seconded by Commissioner Ranallo to adopt H.R.A. Resolution 1985-011, again changing the description of the persons and families who would benefit from the creation of the district in the second finding is to be of "low or moderate" income. -4- H.R.A. RESOLUTION 1985-011 A RESOLUTION TO DESIGNATE AND ESTABLISH A HOUSING DISTRICT NUMBER 3 PURSUANT TO THE PROVISIONS OF SECTION 462 OF THE MINNESOTA STATUTES AND TO ESTABLISH A TAX INCREMENT DISTRICT PURSUANT TO THE PROVISIONS OF SECTION 273.71 TO 273.78 INCLU- SIVE OF THE MINNESOTA STATUTES (.CHAPTER 322, LAWS OF MINNESOTA, 1979) AND ADOPT- ING A HOUSING PROGRAM AND FINANCE PLAN FOR SAID HOUSING AND TAX INCREMENT FINANCING DISTRICT Motion carried unanimously. Motion by Secretary/Treasurer Marks and seconded by Commissioner Makowske to adjourn the meeting of the St. Anthony Housing and Redevelopment Authority for the immediate resumption of the Council meeting. Respectfully submitted, Helen Crowe, Secretary 0 0