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06-05-2017 HRA MINMeeting of the Elk River Housing and Redevelopment Authority Held at the Elk River City Hall Monday, June 5, 2017 Members Present: Chair Toth, Corrunissioners Chuba, Eder, Kuester and Ovall Members Absent: None Staff Present: Economic Development Director Amanda Othoudt, and Sr. Administrative Assistant/Recording Secretary Debbie Huebner I. 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 5:53 p.m. by Chair Toth. 2. Pledge of Allegiance The Pledge of Allegiance was recited. 3. Consider 06/05/ 17 Agenda Motion by Commissioner Ovall and seconded by Commissioner Chubs to approve the June 5, 2017 HRA agenda. Motion carried 5-0. 4. Consent Agenda Moved by Commissioner Ovall and seconded by Commissioner Chuba to approve the consent agenda as follows: 4.1 HRA Minutes May 1, 2017 Regular Meeting 4.2 Check Register 4.3 Balance Sheet 4.4 Revenues and Expenditures Report Motion carried 5-0. S. Open Forum Annie Deckert, Decklan Group, 629 Main Street NW — Ms. Deckert spoke regarding the Kenneth Beaudry proposed project south of the railroad tracks and west of Proctor Avenue. Housing and Redevelopment Minutes June 5, 2017 Page 2 She stated that Mr. Beaudry agreed to work with the city on a larger project to benefit the city as a whole. She explained that Mr. Beaudry submitted his application in February and since has accumulated significant additional costs to redesign his project to accommodate the city's larger plan. Ms. Deckert explained that Mr. Beaudry cannot close on the financing of his project because of the delays. She asked how the HRA or the city will be reimbursing her client for the additional costs. She requested that her client be made financially whole for additional costs incurred by incurring costs redesigning, re-engineering, increased construction costs, increased finance charges and professional fees. She stated that the added expenses are a result of cooperating with the city on a redevelopment project initiated by the city. She explained that a business owner should not be the one to foot the bill for the increased costs. She stated that she looked forward to working with the HRA and City Council in directing staff to develop a financial package and development agreement that will accommodate the applicant's increased costs. Chair Toth asked if there was a dollar amount attached to this request. Ms. Othoudt stated that the applicant and staff have been working together to create a project that is benefit to the entire city. She stated that staff has had conversations with the Decklan Group regarding increased costs associated with the project. She stated that they have received a detailed list of the increased expenses. She noted that staff will present the TIF plan to the HRA when all the elements are in place. She stated that staff will be forwarding their TIF plan to the HRA and City Council at their July 3 meetings. Commissioner Chuba asked if the overall project was growing larger. Ms. Deckert stated no, that the overall footprint is not changing, and the property is increasing by only .12 acres than originally proposed. Commissioner Chuba asked if Mr. Beaudry was incurring additional costs to accommodate the overall project. Ms. Deckert stated that the additional costs included approximately $12,000 for new civil drawings, additional contractor and architectural fees around $25,000, additional professional fees around $10,000, for a total of approximately $53,000. She noted that the estimate does not take into account additional contractor fees since the builder would not be able to honor bids from the originally scheduled April groundbreaking, or increase in financing rates, since her client was unable to lock in a rate. Cormnissioner Chuba asked if the applicant is acquiring additional land. Ms. Deckert stated no, that the city is acquiring additional property to address a road extension. Commissioner Chuba asked if the city will be putting up the land for sale. Ms. Othoudt stated no, and explained the project includes a road connection between Quinn and Proctor, as well as the location of regional storm water pond. Commissioner Ovall stated that this was a viable project for Mr. Beaudry, and his willingness to work with the city on a larger project has resulted in additional costs for him. He urged that the HRA and city work with Mr. Beaudry to come up with a means of working with Mr. Beaudry on these costs, whether that is through allowable expenses through TIF funding or HRA redevelopment funds. He stated that he can see how these expenses were incurred as a result of working with the city on a larger project. Commissioner Chuba concurred that Housing and Redevelopment Minutes June 5, 2017 Page 3 Mr. Beaudry should not be punished for being a good citizen. Commissioner Ovall stated that he would rely heavily on staffs recommendation of how those expenses could be worked out. Ms. Othoudt stated that the entire TIF plan will be presented on July 3 so that they can review the plan and all of the materials that incorporate this redevelopment TIF district, LHB's report, and the TIF plan itself. 6. Public Hearings There were no public hearings. 7.1 Rehabilitation Loan Program Update Ms. Eddy provided an update on the Rehabilitation Loan Program as outlined in her staff report. She discussed current and completed projects. Ms. Eddy noted that marketing proposals will be discussed after the budget discussion on July 3. Commissioner Ovall asked if more information could be provided in the CMHP monthly report. Ms. Eddy stated that a financial report can be provided, as the Finance Department tracks the funds that have been lent, payments made, and costs. Commissioner Ovall stated that he would like to see a report that would provide a better picture of what funds the HRA actually has available to lend. Ms. Eddy stated they could provide a project spreadsheet, project report and financial report with the detail the HRA is looking for. 7.2 Amendment to the HRA Bylaws Ms. Othoudt stated that the revisions to the Bylaws have been made per the HRA's request. Motion by Commissioner Chuba and seconded by Commissioner Oval] to approve the changes to the HRA Bylaws for the creation of a joint finance committee with the EDA. Motion carried 5-0. 7.3 Acuity Group Management Contract for 426 Main Street Ms. Othoudt provided background information regarding the property at 426 Main Street. Commissioner Ovall asked if the city attorney has reviewed the contract. Ms. Othoudt stated that the city attorney has approved the Acuity Group contract, as Elk River Municipal Utilities have utilized them in the past. The HRA's attorney is also reviewing the contract. Chair Toth asked when the tenants were moving out. Ms. Othoudt stated this weekend, and the HRA will be receiving prorated rent from the tenants. Motion by Commissioner Eder and seconded by Commissioner Ovall to approve the management contract with Acuity Group for management services for property Housing and Redevelopment Minutes June 5, 2017 Page 4 located at 426 Main Street NW, subject to the final terms being negotiated by staff. The motion carried 5-0. 7.4 Propose HRA Budget Workshop Ms. Othoudt asked for a consensus on a date and time for a worksession to review the HRA budget. She proposed July 3 prior to the HRA meeting, or after the regular meeting. It was the consensus of the HRA to meet on July 10 at 3:00 p.m. 8. Announcements There were no announcements. The HRA recessed at 6:20 p.m. and reconvened in work session at 6:22 m. 9.1 Main Street Redevelopment Project Update Ms. Othoudt stated that the owners of the two single family properties along 3d Street the owner of 420 Main Street have indicated an interest in selling; however she has been having trouble contacting one of the property owners. She will continue to be in contact with them. It was the consensus of the HRA to have staff pursue appraisals for the properties. 9.2 Funding for HRA Rehab Program Ms. Othoudt provided financial information regarding the HRA Housing Rehab Program as outlined in the staff report. She noted that there are funds available for 4 — 5 more projects in 2017. CM14P has received three new applications to date. Ms. Othoudt stated that the HRA reserve fund balance is $1.9 million. She suggested that $50,000 - $75,000 could be allocated from the reserves to continue funding more projects in 2017. Commissioner Eder suggested they consider $75,000 - $100,000 in additional funding. Chair Toth noted that they are planning a redevelopment project on Main Street and may need to be conservative with their funding. Ms. Othoudt suggested setting aside $50,000 and they could add more later if the HRA wanted to. It was the consensus of the Commissioners to go ahead with the $50,000. Ms. Othoudt stated that funding will be discussed during the upcoming budget process. Chair Toth asked why the process seems to take so long for the rehab applications. Ms. Eddy stated that it is difficult to get construction estimates when contractors are in their busiest time of the year. She noted that there is a great deal of paperwork in processing applications, as well. She stated that she will touch base with CMHP on the time lines. 10. Adjournment Chair Toth adjourned the meeting at 6:38 p.m. Minutes prepared by Debbie Huebner. Housing and Redevelopment Minutes June 5, 2017 — Tina Allard, City Clerk Larry Toth, air Housing & Redevelopment Authority Page 5