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4.1. HRA DRAFT MINUTES 11-04-2019 Regular Meeting of the Elk River Housing and Redevelopment Authority Held at the Elk River City Hall Monday, October 7, 2019 Members Present: Chair Larry Toth, Commissioners Denny Chuba, Michelle Eder, Louise Kuester, and Nate Ovall Members Absent: None Staff Present: Economic Development Director Amanda Othoudt, Economic Development Specialist Colleen Eddy, and Sr. Administrative Assistant/Recording Secretary Jennifer Green 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 5:30 p.m. by Chair Toth. 2. Pledge of Allegiance The Pledge of Allegiance was recited. 3. Consider October 7, 2019, Agenda Motion by Commissioner Chuba and seconded by Commissioner Ovall to approve the October 7, 2019, HRA agenda. Motion carried 5-0. 4. Consent Agenda Moved by Commissioner Ovall and seconded by Commissioner Chuba to approve the October 7, 2019, consent agenda as follows: 4.1 September 3, 2019, minutes. 4.2 Check Register as outlined in the staff report. 4.3 Balance Sheet as outlined in the staff report. 4.4 Revenue/Expenditure Report as outlined in the staff report. 4.5 Satisfaction Agreement – Barbara and Jerome Olesen. Motion carried 5-0. 5. Open Forum No one appeared for Open Forum. Housing and Redevelopment Minutes Page 2 October 7, 2019 ----------------------------- 6. Public Hearings There were no public hearings. 7.1 HRA Housing Rehabilitation Loan Program Update Ms. Othoudt presented the staff report. Commissioner Ovall asked what step the city should take to collect the late payments for the borrower who was 90+ days late. Ms. Othoudt stated the loan could be called and asked that it be paid in full. She indicated the borrower is making payments but is unable to bring the loan current. Ms. Othoudt indicated the borrower had a job loss which caused them to become behind on their payments but they are making monthly payments and they are in communication with Ms. Othoudt. Commissioner Ovall suggested a loan modification to collect incurred interest and get the borrower back on track, taking into consideration the fact the borrower experienced a one- time event like a job loss which caused them to fall behind and they are continuing to make monthly payments. Commissioner Eder asked if Commissioner Ovall recommend adding the principle balance to end of loan. Commissioner Ovall stated yes. It was the consensus of the HRA to have Ms. Othoudt work with CEE and the borrower to modify the loan. Commissioner Eder suggested if the borrower wasn’t already on auto payments that Ms. Othoudt secure auto payments when the loan is modified to ensure future payments. 7.2 Main and Gates Redevelopment Findings of Fact – Resolution Ms. Othoudt presented the staff report. Commissioner Chuba stated this sounds like a good idea for the fire and police departments. He asked if the city could contact Habitat for Humanity to allow them to take any needed items from the homes before demolition to use in their future home projects. Ms. Othoudt stated that could be a possibility and will look into that. Commissioner Ovall stated he understood that part of the bids received or obtained from contractors for tear down included prices for things like cabinetry or windows they could salvage. He stated he wasn’t sure how that would be worked in if the fire department would be using the home for training. Housing and Redevelopment Minutes Page 3 October 7, 2019 ----------------------------- Ms. Othoudt indicated she could provide several options for the HRA to consider. She stated she could receive updated demolition bids. She stated they will need to conduct an inspection for abatement of asbestos or other contamination of those properties that weren’t inspected. She stated she will get costs of demolition if the fire department were to use the building for training, and will find out if it’s possible to donate materials to Habitat for Humanity. Chair Toth asked if asbestos will be a problem in any of the properties. Ms. Othoudt indicated one property they suspect has siding material containing asbestos. She stated having an inspection of the properties makes the contractors more comfortable bidding on the demolition knowing what issues the properties may contain. Commissioner Chuba asked if there is a timeframe to demolition. Ms. Othoudt stated the HRA has three years from approval of the resolution to certify the district as a TIF district. She stated she would like to have those buildings taken down in that period of time. Commissioner Chuba stated based on what Ms. Othoudt was indicating and with everything that has to happen before certifying the district, he understands that demolition probably won’t happen this fall. Ms. Othoudt stated demolition probably will not happen this fall. She explained the unique opportunity for the police and fire to conduct trainings in buildings that are next to each other if the HRA is comfortable allowing for that training. She indicated the removal of the buildings would be next spring, noting the buildings are already winterized so the only cost to the HRA during this winter would be snow removal, if needed. She asked the HRA to approve by motion the resolution finding the parcels to be occupied by structurally substandard buildings and requested direction from the HRA on how to proceed with demolition and if they would allow police and fire to do the trainings. She stated she would then come back in two to three months with updated demolition bids. Motion by Commissioner Chuba and seconded by Commissioner Ovall to approve Resolution 19-06 finding parcels are occupied by structurally substandard buildings as outlined in the staff report. Motion carried 5-0. Commissioner Ovall stated he felt torn as he would like to see the buildings come down sooner than later as he felt the project has taken quite a bit longer than expected. He asked if it could be done before winter but felt that might be unrealistic if the commission were to allow for police and fire training. Chair Toth agreed and asked what kinds of training the police department would hold. Ms. Othoudt wasn’t sure of the type of training. She stated there were many trainings the fire department could conduct in the buildings that wouldn’t require the use of fire and this was Housing and Redevelopment Minutes Page 4 October 7, 2019 ----------------------------- an awesome opportunity for both the police and fire. She stated it would take some time to get the demolition bids back and do some research on Habitat for Humanity. She stated when she spoke with the departments they would need about 2-3 months to conduct trainings. Commissioner Eder asked about any safety concerns with these trainings on city property. Ms. Othoudt indicated the city’s insurance provider would cover these concerns. Commissioner Chuba agreed with Commissioner Ovall that demolition occur sooner than later but at this point, doesn’t think there’s time until spring. It was the consensus of the HRA to allow police and fire training and obtaining the demolition bids with the intent to remove the buildings as soon as possible. 7.3 Preliminary Development Agreement with Modern Construction of MN Ms. Othoudt presented the staff report. She explained parcels 75-405-0230 and 75-405-0235 are owned by the HRA and she is in the process of transferring ownership of those properties from the HRA to the city and stated that should occur by the end of the month. Ms. Othoudt also explained once those parcels are transferred, unless the developer requests any financing from the HRA, the HRA won’t be involved in any future contracts of this project should it proceeds. Commissioner Ovall asked that it be documented in the report how the HRA came to own those properties so when they are transferred their history is included. Commissioner Chuba asked about ownership of 716 and 720 Main Street and because the HRA owns those properties, he wondered if they are listed as assets and if that transfer would affect the HRA’s asset balance. Ms. Othoudt stated the properties would be quit claim deeded to the city and they would continue to remain as assets of the city. Ms. Othoudt introduced Jesse Hartung, owner of Modern Construction of MN, who presented his request to allow him to prepare a proposal that would express his beliefs and viewpoints into a mixed use downtown redevelopment concept. He stated this would include apartments and commercial spaces. He indicated he likes to “push the envelope” by offering opportunities for green spaces, solar power, rooftop decks, and explained his vision of relocating his restaurant, Tipsy Chicken, downtown once the lease is up at their current location. He stated as a current business owner with an office located in the downtown area, he explained he has been looking at this for a while and think it’s a great time for him to dig in a little deeper. He said this agreement will give them the opportunity to exploring the idea of developing the land in the next 4 months to provide a fleshed out proposal of what could be proposed, along with dressing major concerns like parking and traffic. Chair Toth asked for clarification of the area Mr. Hartung was proposing for the Housing and Redevelopment Minutes Page 5 October 7, 2019 ----------------------------- redevelopment. Mr. Hartung explained the area and stated he would like to include the property at 724 Main St. NW as part of the project. He stated he would discuss his proposal with the property owner if this agreement is approved. Ms. Othoudt reviewed the development agreement and highlighted key areas. Commissioner Chuba stated it would seem like a logistical nightmare for the developer and wished them good luck at this proposal, noting as long as someone was willing to develop this he would support it. Chair Toth asked if there was a timeframe. He stated he felt the agreement as presented seems to cover everything. Mr. Hartung stated he would determine the timeline of start and completion dates of the project during the next few months should the agreement be approved. Commissioner Ovall stated he is torn by this project and stated it’s easy to get sidetracked by the vision of the project itself but gets hung up on the cart being before the horse when the developer hasn’t done a project of this size. He stated generally speaking the agreement is written well enough to protect the interests of the city. Chair Toth asked if Mr. Hartung had done a project of this size before. Mr. Hartung stated he hasn’t done a project quite like this but has done his due diligence to prepare for a project this size and feels like now is the right time to ask the city for him to proceed. Motion by Commissioner Eder and seconded by Commissioner Chuba to approve the Preliminary Development Agreement with Modern Construction of MN as outlined in the staff report. Motion carried 5-0. HRA recessed at 6:09 p.m. in order to go in to work session. The meeting reconvened at 6:14 p.m. 8.1 Blighted Properties Discussion Ms. Othoudt presented her staff report. She introduced Kristin DeGrande, Housing Programs Coordinator with the City of Coon Rapids, who shared with the HRA the details on the Front Door Grant Program. She distributed their grant application outlining the process for a resident to apply for grant monies. She explained how not only does this type of improvement energize the exterior of the homes but it benefits the entire neighborhood and the city as a whole. She explained Coon Rapid’s main thoroughfares were recently reconstructed but noted how tired the houses along those routes appeared and indicated it was time for a “bolt of energy” to the exterior of the homes. She explained their funding Housing and Redevelopment Minutes Page 6 October 7, 2019 ----------------------------- source was from the Coon Rapids Home Improvement Foundation, originally from the 70s for a housing tax credit. It provided a low interest rate to borrowers and when the mortgages were paid back, that money came back to the city. They currently have an $11M balance available for properties in their city. Ms. DeGrande discussed the Home for Generations grant program, which provides financial incentives to homeowners who undertake large remodeling projects valued at $35,000 or more. She stated financial incentives include a grant up to $5,000 and a rebate of 50% of the building permit fees. She explained the average grant was approximately $2400 and the city used approximately $180,000 in 2019 with over a million dollars overall leveraged in improvements. She suggested deciding on what makes sense for the Elk River community and create that “bolt of energy” that everyone can benefit from. She stated the unexpected volume of applicants for the Front Door Grant Program was initially overwhelming but became easier after they instilled a lottery process. 9. Adjournment Chair Toth adjourned the meeting at 6:39 p.m. Minutes prepared by Jennifer Green. _____________________ Tina Allard, City Clerk _____________________ Larry Toth, Chair Housing & Redevelopment Authority