05-04-2020 HRA MIN City
oE1k
a... Virtual Meeting of the Elk River
River Housing and Redevelopment Authority
Held at the Elk River City Hall
Monday, May 4, 2020
(Due to COVID-19 Pandemic)
Members Present: Chair Larry Toth, Commissioners Denny Chuba,Michelle Eder,Nate Ovall,
and Jayme Swenson
Members Absent: None
Also Present: Gina Fiorini, Kennedy&Graven
Staff Present: Economic Development Director Amanda Othoudt, Economic
Development Specialist Colleen Eddy, and Sr. Administrative
Assistant/Recording Secretary Jennifer Green
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 5:36 p.m. by Chair Toth.
Ill 2. Roll Call
Roll call was taken.
3. Consider May 4, 2020, Agenda
Motion by Commissioner Ovall and seconded by Commissioner Eder to approve the
May 4,2020, HRA agenda.
Motion carried 5-0.
4. Consent Agenda
Moved by Commissioner Eder and seconded by Commissioner Chuba to approve
the May 4,2020, consent agenda as follows:
4.1 Meeting minutes:
April 6, 2020, Regular
April 14, 2020, Special
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 Second Amendment to the Preliminary Development Agreement with
IllModern Construction of Minnesota, Inc.
Housing and Redevelopment Minutes Page 2
May 4,2020
Motion carried 5-0. •
5. Open Forum
Due to the meeting being virtual, there was no open forum.
6. Public Hearings
There were no public hearings.
7.I HRA Housing Rehabilitation Loan Program
Ms. Othoudt presented the staff report.
Chair Toth asked about the account that's 365+ days delinquent in default and asked if there
has been contact with them on a regular basis to rectify the situation or are we currently
unable to do so. He asked what was preventing them from bringing their loan current.
Ms. Othoudt stated they are in contact with them on a regular basis as the executive order
effective March 24 does not prohibit the city from contacting them. She stated they are not
able to issue a notice of default until after the order has been lifted. She stated there was a
job problem that was preventing them from bringing their loan current.
Commissioner Ovall asked if the account in default has made any payments in the past year, •
as to him it appears the resident has done nothing to bring the account current and felt it has
been a series of broken promises. He understood them to be making payments and stated he
is beyond working with them to prevent them from going more past due.
Ms. Othoudt stated Marco with CEE has been in contact on a weekly basis and a notice of
default will be issued as soon as the executive order is lifted.
Commissioner Ovall asked if the property is listed for sale.
Ms. Othoudt stated to her knowledge the property has not been listed for sale.
8.I HRA Blighted Properties Forgivable Loan Program Discussion
Ms. Othoudt presented the staff report. She introduced Gina Fiorini with Kennedy&
Graven who has guided the HRA in modifications to these loan program documents. Ms.
Othoudt provided an overview of the previous discussions held in January. The HRA
reviewed the attorney-suggested changes made to the city's current Blighted Properties
policy:
Page 3: Qualifying Project—4. Structurally Substandard Ms. Othoudt stated she spoke with
the Building Official to get an idea of the enforcement process and how much time it would
take to evaluate a property and putting together documents supporting the structurally •
substandard. She stated part of the $500 application fee could be applied to this inspection.
Housing and Redevelopment Minutes Page 3
May 4,2020
• Page 4: Eligible Applicants Ms. Fiorini provided feedback, stating the most straightforward
approach is working with a contractor to demolish and rebuild a house on behalf of a buyer.
Allowing sweat equity becomes more difficult to apply the cost of work and protection that
the work is done to city code. Because the focus of the policy is demolition and building of a
property,it did not seem sweat equity could work in this situation. It was the consensus of
the commission was not to allow for sweat equity.
Eligible Program Costs After discussion,noting recent demolition bids were coming in
under$20,000,it was the consensus of the commission to lower the loan program maximum
dollar amount from$25,000 to $20,000 towards demolition costs.
Terms After discussion, the commission agreed the policy will be more in alignment to
require a Certificate of Occupancy (CO) issued, and at that point the initial buyers will sign
paperwork the property will be an owner-occupied property, applying for homestead and
after that is completed, the loan will be forgiven.
The commission discussed potential minimum design requirements, noting the home should
require design elements that are more in alignment with the neighborhood it is in, and
should include city standards. The consensus of the commission determined the home
should have at a minimum 2 car garage, 2 bedrooms, 1.5 bath and have at least 1500 or 1600
finished square feet.
Page 5: Forgiveness and Required Appraisals or Assessments Ms. Fiorini discussed the
• inclusion of the requirement for obtaining an appraisal was designed to allow the HRA to
evaluate and show the value the city is getting from the increase in property values and this
requirement isn't legally required. This could be removed if the HRA can decide if an
appraisal is required.The consensus of the commission was to remove this requirement and
use the assessed value of the property.
Call of the Loan—Ms. Fiorini will modify this language and bring back to a future
discussion. Commissioner Ovall asked if by removing the five-year component,he asked if
there should be a time requirement for completing the demolition and receiving a CO within
a timeframe, such as six months to one year. The commission will discuss this topic at the
next meeting.
Commissioner Chuba requested to discuss situations on how the HRA would handle
properties with unique lot sizes that require specific design requirements or if the lot, once
demolished,could even be rebuilt upon based upon current city code.
9. Adjournment
Chair Toth adjourned the meeting at 6:32 p.m.
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Housing and Redevelopment Minutes Page 4
May 4,2020
Minutes preZ y nifer Green. •
Tina Allard, City Clerk
LarjToth, Chair
Housing&Redevelopment Authority
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