4.1A HRSR 11-02-2015 DRAFT MIN Item 4.1a
Crty of
Elk
Special Workshop Meeting of the Elk River
Rlver Housing and Redevelopment Authority
Held at the Elk River City Hall
Tuesday, September 29, 2015
Members Present: Vice-Chair Toth,Commissioners Burandt,Chuba and Kuester
Members Absent: Chair Wilson
Staff Present: Economic Development Director Amanda Othoudt,Economic
Development Specialist Colleen Eddy and Recording Secretary/Sr.
Administrative Assistant Debbie Huebner
I. Call Meeting to Order
Pursuant to due call and notice thereof,the workshop meeting of the Elk River Housing and
Redevelopment Authority was called to order at 4:00 p.m. by Vice-Chair Toth.
2. Consider 9/29/15 Agenda
Moved by Commissioner Chuba and seconded by Commissioner Kuester to approve
the September 29, 2015, Special Workshop meeting agenda. Motion carried 4-0.
3. Discuss Blighted Properties Residential Forgivable Loan Program
Ms. Othoudt stated that criteria#3 under No. 1 of the application worksheet—"The
structures are not listed on the National Register of Historic Places; (5 points)"will be
removed.
After discussion, criteria#4 under No. 1 of the application worksheet was revised to read—
"Upon completion of the demolition,the HRA reasonably expects that the property will be
improved and these improvements will reduce blight in the municipality; (10 points)."
Commissioner Chuba asked if the intent is to keep an owner on the property or just improve
the property. Discussion followed regarding owner-occupied and whether or not a rental
end use could be considered. The question was raised as how the loan could be forgivable
and who would benefit,if the property owner did not retain ownership. The HRA also
discussed whether the intent of the program could be either demolition with a new structure
built,or to remove the blight by demolishing a structure,grading and seeding the site,or
either.
Ms. Othoudt explained that the policy before them is modeled after the state program for
blighted properties. Commissioner Chuba asked if the city has had requests for this type of
program. Ms. Othoudt stated that the requests they receive are for rehab,and the HRA has
Special Workshop Housing and Redevelopment Minutes Page 2
September 29,2015
a program for that which is being administered by CMHP. She stated that they have
received requests for commercial and industrial demolition assistance,but not for residential
demo. Ms. Othoudt noted that there are HRA's in other cities that buy lots,demo and sell
them. Ms. Eddy noted that in previous discussions,but the HRA indicated that they were
not interested in being property owners. Ms. Othoudt stated that this program could be
scrapped and the HRA could consider purchasing properties for demolition and resale. She
stated that the HRA might have an opportunity to recoup some or all of their money.
Commissioner Toth asked if city staff would have the capability to do the demo. Ms.
Othoudt stated that she did not think so. Commissioner Toth stated he would have
concerns with costs associated with demolition, such as asbestos and lead paint.
Commissioner Chuba stated that he did not feel it would be that costly.
Ms. Othoudt asked what the HRA would like to do. Discussion followed regarding
forgivable loans versus just giving a grant. The thought was that if the loan was forgivable,
the HRA would not get the money back anyway. With a grant,it would not matter if the
owner kept the property or sold it,but the blight would be gone.
Commissioner Kuester asked how many blighted residential properties are in the city. Ms.
Othoudt stated that the building department indicated there were at least a dozen. She
suggested that current target area for the program being administered by CMHP could be
expanded and more money could be added.
Discussion followed regarding the prospect of the HRA acquiring properties to demo and
resell. Ms. Othoudt stated that it was her understanding that other cities acquire properties
based on appraised value. She stated that the proposed program before them gives the
property owners the opportunity to demo and build new.
Ms. Eddy suggested that the program before the HRA could be adopted and see what the
interest or need is.
Ms. Othoudt stated the two options before the HRA are:
1. The HR purchases the property for market value,demos and resells
2. Property owners use the program to demo and rebuild,demo and sell the property.
Ms. Othoudt stated that a new policy would need to be written in order for the HRA to
acquire properties and demo them.
Commissioner Kuester asked how an appraisal value for a site with an unsound structure
compares to that same lot with the structure demolished. She stated that she felt the restore
vacant lot would be more valuable, since the expense of demolition would no longer be a
factor. Commissioner Chuba stated that some value is still given to a structure,no matter
what condition, so a lot would likely be appraised higher with the structure still on it.
Ms. Othoudt stated that there is state funding available for demolition that the HRA could
apply for,but it would be a loan,not a grant. It was the consensus that the HRA would not
gain anything by seeking a loan.
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September 29,2015
Commissioner Toth suggested adding an option for giving 25 points in Item 1 for rental,in
addition to the 50 points for owner-occupied. This option was discussed further.
Staff direction was given as follows:
• Include state statute language in the policy defining"blighted", 116G.03
• Schedule another workshop to discuss the residential blighted program
• Provide the HRA copies of other cities'HRA policies,where the HRA acquires,
demos,and markets properties for sale
• Research possible grant programs to acquire and demo properties
• Contact Sherburne County regarding number of vacant"blighted"properties in the
city
4. Discuss Blighted Properties Commercial/Industrial Forgivable Loan Program
Ms. Othoudt noted that a revision of the wage requirement on Page 16 of the policy will
made to reflect$15/hour,in accordance with the subsidy policy. This change will also be
made in the points scoring section of the policy.
5. Adjournment
There being no further business,Vice-Chair Toth adjourned the meeting. The meeting
adjourned at 5:25 p.m.
Minutes prepared by Debbie Huebner.
Tina Allard,City Clerk
Larry Toth,Vice-Chair
Housing&Redevelopment Authority