7.1. SR 06-09-2003MEMORANDUM
TO:
FROM:
DATE:
Mayor and City Council
Pat Klaers, City Admir~tor
June 9, 2003
SUBJECT: HRA Update
Item ~ 7.1.
Councilmember Motin is a member of the Housing and Redevelopment Authority (HRA). The last
regular HRA meeting was held on May 28, 2003. Additionally, a special HRA meeting was held on
Thursday, June 5, 2003.
The May 28, 2003, HRA meeting included a discussion on the housing development concept that is
being put together for some property in east Elk River and a presentation by the City of Fridley
Assistant HRA Director regarding its housing programs. The June 5, 2003, special HRA meeting
included a review of the comp plan proposal and a review of the MetroPlams downtown
redevelopment options. Attached for your information is the PowerPoint presentation from
MetroPlains from the June 5, 2003, meeting.
architects
Agenda
Review project analysis to date
Present development options
Forecast financial issues
Request progress decision from HRA
-Recommend ONE option for presentation at public
discussion forum on June 18
Primary City Goal
To assure the long-term viability of downtown by
making a
connection to the rest of the community and by
utilizing the
riverfront location. Redevelopment will enhance
downtown
Elk River's role as a residential, retail and
commercial area and
also revitalize investment in the downtown
business district.
City
· Mixed Use (residential, retail, service)
· Consideration of the of the historic context study results
· Strengthen connection to the community
· Traditional downtown design elements
· Brick, stucco, stone materials with visual breaks in the
building design
· Increased residential density
· Pedestrian orientation
· Increase exposure to the riverfront
· Recognize those buildings that have potential for rehabilitation
· Replace market/economic obsolete buildings
· Multiple types of housing products (l.s. townhomes, senior
rental coops, market rate apartments)
· Work with existing businesses
· City opportunities:
-Enhance existing storefronts
-Provide downtown park and waterfront improvements
-Help sustain existing businesses
MetroP!ains Develop
Existing Conditions
Property Information
Market Information
Commercial
-Provided by Maxfield Research, Garrison Partners, Brookstone and
MetroPlains
-Square Foot Summary
Potential Proposed
Bluff Block
Brick Block
Jackson (Gazebo) Block
10,000
Houlton Block
Existing 1st Floor
Existing 2nd Floor
Potential Effected by Dev.
21,100 5,000 9,600 10,000
23,000 10,500 14,100 10,000
7,800 0 0
20,200 6,600 0
(Houlton Block not to be developed)
-Commercial needs of 14,000 to 20,000 sq.ft, over the next five years a
rental rate of $13sq.ft./net.
Residential
-Housing needs provided by Maxfield Research, rental rates from M
-Projected needs over the next 10 years:
· Rental:
- 300-360 units
° For Sll~{).$700 (1 bedroom) rents
= t~i01)l.~i80~i~ bedroom) rents
- $150,000-$300,000 unit prices
Site Amenities
mississippi ir~
Development Sites
mississippi ~ri
Development Sites
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Development Sites
I iti I Fo
n
a cus
L
C u rre n t F oc u s
Bluff Block
Bluff Block
Bluff Block
Bluff Block
MAIN STREET
Bluff Block
Bluff Block
Brick Block
', i
Brick Block
Brick Block
] I
J
Brick Block
MAIN STREET
Brick Block
1
Brick Block
Jackson Block
Jackson Block
MAIN STREET
Jackson Block
Jackson Block
Jackson Block
Feasibility
· Jackson Block is the only site that appears financially feasible
as stand-alone redevelopment
· Redevelopment of Bluff Block and Jackson Block could be
combined to enhance financial feasibility of Bluff Block
redevelopment
· Redevelopment of Brick Block is not financially feasible
without significant outside resources, due to high land
assembly costs
· In general, the financial feasibility of redevelopment (except
the Jackson site) is negatively impacted by high land assembly
costs; this can be partially attributable to the fact that parking
for most sites is accommodated through public parking
· There are several options to closing the "gap" for the Bluff
Block, including:
-Increment from Jackson Block
-Improvement Bonds
-Cash contribution
-Increase in development density (to the extent market
feasible)
· It is likely that the Jackson Block will not qualify as a
redevelopment district. A separate housing district would
need to be established
Financial Feasibility
Elk River, Minnesota
SOURCES AND USES OF FUNDS
SOURCES
First Mortgage
Commercial Sale
TIF-25 years
Small Cities Program
Limited Partner Investment - LIHTC
Equity Gap
TOTAL SOURCES
[Jackson Block
Total
808,778
1,192,205
512,563
1,400,000
2,326,519
5,441,083
USES Total
Land/Building *
Public Parking 0
Site Work/Demo 300,000
Construction 4,038,138
Financing Fees and Expenses 314,406
Related Costs 788,539
TOTAL USES $ 5,441,083
Bluff Block
Total
10,980,500
984,877
1,226,285
0
1,254,923
$14,446,585
Total
1,736,625
450,000
9,028,115
936,209
2,295,637
$14,446,586
Bdck Block
Total
1,368,319
798,259
407,558
1,400,000
3,234,313
2,541,939
$9,750,388
Total
2,337,688
0
600,000
5,353,667
390,161
958,564
$9,640,080
* Value of land is determined and contributed to the housing portion for the grant application
Timeline
· June 18
· July '03
of Understanding
River
· July 24, '03
· Aug--Oct '03
· Sept '03
· Sept-Oct '03
· Oct '03
Group
· Nov '03
Public Open House
Purchase Agreement or Memo
with City of Elk
MHFA Application
Development Agreement
Environmental Review
TIF Conclusion
DTED Application / Small Cities
MHFA Award
· Sept '03-Jan '04
· Sept--Nov '03
· Nov-Dec '03
· Jan-June '04
Site Acquisition / Relocation
Plan Preparation
Plan Approvals
Pre-sales of "For Sale" Units
· Jan-March '04 Financial Closings
· Jan-March '04 Jurisdictional Authorities Sign-offs /
Approvals
· April-May'04 Demolition
City Goals & Develo
To assure the long-term viability of downtown by
making a
connection to the rest of the community and by
utilizing the
riverfront location. Redevelopment will enhance
downtown
Elk River's role as a residential, retail and
commercial area and
also revitalize investment in the downtown
business district.
Requests of City
Sources: & Uses
Bluff Block
Elk River, Minnesota
SOURCES AND USES OF FUNDS
SOURCES
Total Sale Price of Units
Commercial Sale
TIF-25 years
Equity Gap
TOTAL SOURCES
Total
10,980,500
984,877
1,044,282
1,436,926
$14,446,585
USES
Land/Building
Public Space
Site Work-Environmental,and Improvements
Demo
Rehabilitation/New Construction
Underground Parking
Commercial Construction and Tenant lmpro
Contingency
Architectural and Engineering
Interim Costs
Financing Fees and Expenses
Syndication Related Costs
Related Costs
Developer's Overhead/Profit
Leasing and Sale Fees
Total
1,736,625
0
250,000
200,000
7,040,530
600,000
712,500
515,085
160,000
848,011
58,198
30,000
98,500
1,310,599
886,538
TOTAL USES $14,446,585
Sources & Uses
Brick Block
Elk River, Minnesota
SOURCES AND USES OF FUNDS
SOURCES
First Mortgage
Commercial Sale
TIF-25 years
Small Cities Program
Limited Partner Investment - LIHTC
Equity Gap
TOTAL SOURCES
Total
1,368,319
798,259
422,862
1,400,000
3,234,313
2,526,635
$ 9,750,388
USES
Land/Building
Public Parking
Site Work-Demo, Environmental/Landscaping
Demo
Rehabilitation/New Construction
Contingency
Architectural and Engineering
Interim Costs
Financing Fees and Expenses
Syndication Related Costs
Related Costs
Developer's Overhead/Profit
Project Reserves
Total
2,337,688
0
600,000
4,991,299
222,368
140,000
266,180
108,981
15,000
110,309
685,000
273,564
TOTAL USES $ 9,750,388
Sources: & Uses
Jackson Block
Elk River, Minnesota
SOURCES AND USES OF FUNDS
SOURCES
First Mortgage
Commercial Sale
TIF-25 years
Small Cities Program
Limited Partner Investment - LtHTC
Equity Gap
TOTAL SOURCES
Total
808,778
1,192,205
559,053
1,4OO,O00
2,326,519
(845,473)
$ 5,441,083
USES
Land/Building
Public Parking
Site Work-Environmental, Landscaping
Demo
Rehabilitation/New Construction
Contingency
Architectural and Engineering
interim Costs
Financing Fees and Expenses
Syndication Related Costs
Related Costs
Developer's Overhead/Profit
Project Reserves
Total
0
300,000
3,683,142
214,996
t40,000
204,730
44,676
65,000
99,556
480,000
208,983
TOTAL USES $ 5,441,083