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08-11-1994 HR MIN • MEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL THURSDAY, AUGUST 11, 1994 Members Present: Chair Schuldt, Commissioners Hinkle and Toth Members Absent: Commissioners Duitsman and Kropuenske Staff Present: Bill Rubin, Executive Director Also Present: Sherry Emmerson and Carol Mills of Guardian Angels of Elk River, Inc. 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River Housing and Redevelopment Authority was called to order at 7:03 p.m. by Chair Schuldt. 2. Consider August 11, 1994 HRA Agenda COMMISSIONER HINKLE MOVED TO APPROVE THE AUGUST 11, 1994 HRA AGENDA WITH THE FOLLOWING ADDITIONS: 7.1. CONSIDER AUTHORIZING A REQUEST FOR PROPOSAL(RFP) FOR THE REDEVELOPMENT OF THE NORTHWEST QUADRANT OF MAIN STREET AND KING AVENUE 11.1. CONSIDER A REQUEST FROM EVANS PARK, INC., A GUARDIAN ANGELS PROJECT,TO HAVE THE ELK RIVER HRA MONITOR EVANS PARK FOR COMPLIANCE WITH THE PROVISIONS OF MINNESOTA STATUTES, SECTION 273.1317 FOR PURPOSES OF ESTABLISHING A 4C PROPERTY CLASSIFICATION. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. 3. Consider June 1, 1994 HRA Minutes COMMISSIONER HINKLE MOVED TO APPROVE THE JUNE 1, 1994 HRA MINUTES AS PRESENTED. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. 4. Open Mike Item 11.1., a request from Evans Park, Inc.,was moved up to this spot. Carol Mills and Sherry Emmerson from Guardian Angels of Elk River, Inc., introduced themselves to the HRA Commissioners. Carol Mills explained that the Sherburne County Assessor changed the Evans Park, Inc. property tax classification from 4C (low income elderly housing) to 4A (multi-family residential • real estate-4 or more units) for taxes payable in 1994. This resulted in a property tax increase from $32,146 in 1993 to $49,708 for taxes payable in 1994. The HRA MINUTES Page 2 August 11, 1994 reason given by the County Assessor was that the Evans Park complex was not • financed by a direct loan or a federal insured loan in order to qualify for the 4C classification. Carol Mills further explained that Guardian Angels made application to the Minnesota Housing Finance Agency for the Evans Park, Inc. project. Guardian's Board of Directors elected to choose alternative financing which would permit lower rents to the tenants of the project. She explained that Evans Park and its services are designed specifically for the elderly and includes features such as 24-hour emergency system, on-site meals and activities, and a staff social worker to assist the seniors with services necessary for them to remain independent. On the basis of the current 4A classification, Guardian Angels appeared at the April 28, 1994 City Board of Review meeting. In addition, it appeared at the June 21, 1994, County Board of Equalization meeting. To preserve its opportunity for an appeal, Guardian filed an appeal with the Minnesota Tax Court, and, the first half property tax payment for 1994 has been paid. Guardian's legal counsel, Walter Baker, has met with Assistant County Attorney, Kathleen Heaney, to discuss possible solutions to resolving this issue. At this time, Sherry Emmerson reviewed the conditions found in Minnesota Statutes, Section 273.1317. Evans Park, Inc. believes it meets these thresholds. One condition or threshold is to have a local housing and redevelopment authority annually review the income records of the tenants in Evans Park to ensure compliance that 20 percent or more of the residential units are occupied by persons whose income is 50 percent or less of the area medium gross income. The agreement which provides for ensuring this compliant is typically for a period of 15 years. However, because the project is already in existence, Guardian's legal counsel has advised that the agreement can only run through the year 2001. Sherry Emmerson further stated that she has prepared a survey for completion by the Evans Park tenants. The survey will help her determine the estimated gross income of the tenants. She indicated that 27 of the 35 surveys have been received to date, and, that on the basis of the returned surveys Evans Park can qualify under the provisions of Section 273.1317. Sherry also provided an overview of the rents at Evans Park. There are 24 one-bedroom units that rent for$550 per month. The 12 2-bedroom rent for$675 per month. COMMISSIONER TOTH MOVED TO AUTHORIZE STAFF TO WORK WITH REPRESENTATIVES OF GUARDIAN ANGELS OF ELK RIVER, INC. AND SHERBURNE COUNTY TO DRAFT AN AGREEMENT SO THAT EVANS PARK, INC. RETAINS THE 4C PROPERTY CLASSIFICATION. COMMISSIONER HINKLE SECONDED THE MOTION. THE MOTION CARRIED 3-0. The agreement will be considered by the Elk River HRA at a future meeting at a time when additional Commissioners are present. 5. Consider Revised Construction Plans for the Public Improvements at the Former City Hall Site (U.S. Hiclhwav 10, Main Street, and UPA Drive) HRA MINUTES Page 3 August 11, 1994 HRA Commissioners reviewed the revised construction plans and compared the plans with the previously-approved plans of June 1, 1994. COMMISSIONER HINKLE MOVED TO APPROVE THE REVISED CONSTRUCTION PLANS FOR THE PUBLIC IMPROVEMENTS AT THE FORMER CITY HALL SITE. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. 6. Consider a Price Quote/Change Order with Forest Lake Contracting, Inc. for Public Improvements at the Former City Hall Site HRA Commissioners reviewed a July 28, 1994 memo from Terry Maurer of MSA Consulting Engineers. The memo detailed the estimated cost of the surface improvements at the former city hall site at U.S. Highway 10, Main Street, and UPA Drive. These costs total $25,826.85. In addition, site grading was estimated on a time and material basis. It is anticipated that the cost of the site grading will range from $3,000 to $5,000, bringing the total cost of the improvements between $29,000 and $31,000. Of this amount, approximately $1,700 is attributable to the Chamber's concrete sidewalk and pedestrian ramps. The Chamber has agreed to accept billing in this amount for the sidewalk and ramps. COMMISSIONER TOTH MOVED TO ALLOCATED BETWEEN $29,000 AND $31,000 FOR THE CONSTRUCTION OF THE SURFACE IMPROVEMENTS AT THE FORMER CITY HALL SITE PURSUANT TO THE CHANGE ORDER WITH FOREST LAKE CONTRACTING, INC., 411 FURTHER, APPROXIMATELY 1,700 WOULD BE BILLED TO THE CHAMBER OF COMMERCE FOR THE SIDEWALK AND PEDESTRIAN RAMPS ON ITS SITE. COMMISSIONER HINKLE SECONDED THE MOTION. THE MOTION CARRIED 3-0. 7. Discuss Opportunities to Finance Central Business District Redevelopment Activities Executive Director Bill Rubin provided an overview of the discussion conducted by the Elk River Economic Development Authority (EDA) and the Comprehensive Plan Steering Committee on this topic. In addition, results of the August 8, 1994 workshop were discussed. 7.1. Consider Authorizing a Request for Proposals (RFP) for the Redevelopment of the Northwest Quadrant of Main Street and King Avenue in Elk River, Minnesota Bill Rubin reviewed a draft of the RFP he prepared regarding the redevelopment of the northwest quadrant of Main Street and King Avenue. The RFP is an opportunity to solicit proposals from various developers in order to encourage the redevelopment of this site. The notice of the RFP would be published in the August 17, 1994, Elk River Star News and an upcoming addition of the Minnesota Real Estate Journal. The RFP does not commit the HRA into funding the redevelopment at this time. 1110 COMMISSIONER HINKLE MOVED TO AUTHORIZE THE RFP FOR THE REDEVELOPMENT OF THE NORTHWEST QUADRANT OF MAIN STREET AND HRA MINUTES Page 4 August 11, 1994 KING AVENUE. COMMISSIONER TOTH SECONDED THE MOTION. THE • MOTION CARRIED 3-0. 8. Consider Funding Shoreline Rip-Rap Improvements in the Central Business District Bill Rubin explained that the City of Elk River is in receipt of a $20,000 grant from the Minnesota Soil and Water Conservation Board for purposes of rip-rap improvements along the Mississippi River shoreline. The $20,000 grant requires a matching share of local funds bringing the total funds available for this project to$40,000. Bill Rubin explained that this grant is similar to the one the City received in 1990 in the amount of$15,000. The City's local match of funds came from the capital projects fund. The 1990 rip-rap improvements enabled the City to reinforce the shoreline up to the Nadeau property in the central business district. The current plans are to use the 1994 funds to continue these improvements westward, and, it is expected that there are sufficient funds to reinforce the shoreline up to a point near the Dare Funeral Home property. Bill Rubin suggested that it is appropriate for the HRA to consider allocating a portion of its 1994 funds as the local share for the rip-rap project. Chair Schuldt indicated he had serious reservations about utilizing HRA funds in this matter. COMMISSIONER TOTH MOVED TO NOT AUTHORIZE THE EXPENDITURE OF FUNDS FOR • THE RIP-RAP IMPROVEMENT ALONG THE MISSISSIPPI RIVER SHORELINE IN THE CENTRAL BUSINESS DISTRICT. COMMISSIONER HINKLE SECONDED THE MOTION. Discussion followed. Commissioner Hinkle explained that the HRA has been set up to help the downtown; he further explained that an opportunity exists here to participate in a project and the HRA should do it. Commissioner Toth asked to make a statement following a vote on this matter. THE MOTION FAILED 1-2, WITH COMMISSIONERS TOTH AND HINKLE VOTING NAY. At this time Commissioner Toth stated that the HRA is allocating an expenditure of funds for a project downtown without all the Commissions present. He would like the other two Commissioners to participate in this decision. COMMISSIONER HINKLE MOVED TO AUTHORIZE THE EXPENDITURE OF FUNDS FOR THE RIP-RAP IMPROVEMENT IN THE CENTRAL BUSINESS DISTRICT. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 2-1, WITH COMMISSION SCHULDT VOTING NAY. 9. Consider a $25,000 Reimbursement Request from the City of Elk River (Freeport Financial Center Project' COMMISSIONER HINKLE MOVED TO APPROVE A $25,000 PAYMENT TO THE CITY OF ELK RIVER AS THE HRA'S SHARE OF THE COSTS ASSOCIATED WITH THE FREEPORT • FINANCIAL CENTER. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. HRA MINUTES Page 5 August 11, 1994 • 10. Consider the 1995 HRA Budget and Levy Chair Schuldt requested that the HRA first consider the levy resolution. COMMISSIONER HINKLE MOVED TO APPROVE HRA RESOLUTION 94-1. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. At this time, Bill Rubin outlined the proposed 1995 HRA budget. Based on a maximum levy, it is estimated that the HRA will have revenues of approximately $58,000 in 1995. These revenues combined with the HRA's expected fund balance at the end of 1994, will result in the availability of approximately $134,500 for projects in 1995. The proposed 1995 HRA budget was outlined as follows: 1995 Development Activities Evans/Main Street Parking Lot $12,000 Landscape and Parking Lot Improvements (City lot bounded by U.S. Highway 10, Jackson Avenue and King Avenue) 30,000 Riverfront Trail (fund study and initial improvements) 17,000 Reserve for future projects 75,000 Transfer to General Fund 500 TOTAL BUDGET $134,500 Following a discussion on this matter, COMMISSIONER TOTH MOVED TO APPROVE THE 1995 HRA BUDGET IN THE AMOUNT OF $134,500. COMMISSIONER HINKLE SECONDED THE MOTION. THE MOTION CARRIED 2-1, WITH COMMISSIONER SCHULDT VOTING NAY. He stated he is voting nay because the 1995 budget is uncertain. 11. Other Business There was no additional business. 12. Adjournment There being no further business, COMMISSIONER HINKLE MOVED TO ADJOURN THE MEETING. COMMISSIONER TOTH SECONDED THE MOTION. THE MOTION CARRIED 3-0. The meeting of the Elk River Housing and Redevelopment Authority was adjourned at 9:04 p.m. Respectfully submitted, • William Rubin,