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4.1. DRAFT HRA MINUTES 08-03-2020 City of Elk Regular Meeting of the Elk River River Housing and Redevelopment Authority Held at the Elk River City Hall Monday,July 6, 2020 Members Present: Chair Larry Toth (in person), Commissioners Denny Chuba (in person), Michelle Eder (via Zoom),Nate Ovall (in person) Members Absent: Commissioner Jayme Swenson Also Present: Mikaela R. Huot,Director with Baker Tilly 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`' 'Elk River Housing and Redevelopment Authority was called to order at 5:37 p.m. by Chair Toth. 2. Pledge of Allegiance The Pledge of Allegiance was recited. 3. Roll Call Roll call was taken. 4. Consider July 6, 2020, Agenda Motion by Commissioner Chuba and seconded by Commissioner Eder to approve the July 6, 2020, HRA agenda. Motion carried 4-0. 4. Consent Agenda Moved by Commissioner Ovall and seconded by Commissioner Eder to approve the June 1, 2020, consent agenda as follows: 4.1 June 1, 2020, 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. Housing and Redevelopment Minutes Page 2 July 6,2020 ----------------------------- Motion carried 4-0. S. Open Forum No one appeared for Open Forum. 6. Public Hearings There were no public hearings. 7.1 HRA Housing Rehabilitation Loan Program Update Ms. Othoudt presented the staff report. 7.2 Hillside Heights Apartments Ms. Othoudt presented the staff report. Chair Toth asked for clarification about there eing t ases to this project and the construction timeline. Dan Walsh,representing Community Housing Development Company, explained the building phases. He explained they will apply for low income tax credits this year,proceed with formal design and the local approval process in 2021, and construction at this time next year. He indicated the future phase will come after the first phase is completed, setting up the site to work towards two phases but designing the first phase to be a standalone project on its own should phase two not happen. Chair Toth asked if the second phase will be a standalone project also. Mr. Walsh stated they would construct a lot of the common amenities in the first phase, such as the playground, and the second phase will have the same amenities inside the second building with full service property management and maintenance staff, mirroring each other across the site. Commissioner Chuba asked which building would be built first of the two L-shaped buildings. Mr. Walsh indicated the building along Twin Lakes Road would be constructed first. Commissioner Chuba stated he was looking at some of the promotional offerings created by CHDC and felt they seem to promote the Northstar Commuter Rail Line as an important amenity to this project. Mr. Walsh stated the proximity of the project is important to the rail line as they are transportation-focused with the rail station within a half-mile walk,using access of the crosswalk and sidewalk. Housing and Redevelopment Minutes Page 3 July 6,2020 ----------------------------- Commissioner Chuba stated he is in favor of workforce housing for our city but not in favor of providing workforce housing to folks that work outside of our city and stated he is ambivalent about his vote tonight. Mr. Walsh stated this project will be marketed to attract local workforce in and around Elk River as the demand analysis he found showed their affordable rents are designed for the local workforce. Commissioner Chuba stated he had read income levels are 50% of the local average income and explained the distance to a local grocery store from this location was about a 1-mile walk, not conducive in wintertime. He wonders if there's well paid jobs in the neighborhood and felt there is a need for this type of housing but not i ation. Mr. Walsh indicated the income levels are 600" . Chair Toth asked if the train station was a precursor of the apartment b`` and an amenity. Mr. Walsh stated its proximity of the housing to the train station would be considered an amenity. Commissioner Ovall asked for clarification that the financing they are applying for would be considered true workforce housing and 100%affordable income level housing. Mr. Walsh stated Commissioner Ov wa cor'r'ect. Commissioner Chuba explained his hesitation to support this location based upon his experience living in Brooklynark and the mistakes he felt were made with lower income housing. Jennifer Jacox, CEO for BDC Management which manages all of CHDC properties, explained the income level amounts and salary figures. She stated for a 1 person unit,the annual income level is $43,500 with an hourly wage of$20.88 per hour, and would cover such careers as new airline pilots and teachers. She stated a 2-person annual income level would be $50,000 with an hourly wage of$24.00. She indicated these may be one person working with one person as a stay-home parent or student. She stated a 3-person annual income level would be $56,000 and a 4-person at$62,000. She stated families would require a 3-bedroom unit, and typically would be someone works with a stay-home parent. She stated these units are true workforce housing, not Section 8 housing, and rents will be fixed and in line with other rental markets. She stated she does not foresee tenants who chose to live in these units using the light rail for working downtown. Commissioner Ovall asked about other projects and what percentage of the tenants are from the immediate community. Ms.Jacox stated a majority of tenants are from the immediate community with some tie to the area, either they grew up here or have family nearby. They also chose to live in a near proximity to the grocery store. Housing and Redevelopment Minutes Page 4 July 6,2020 ----------------------------- Commissioner Ovall asked what percentage of the tenants are seniors on a fixed income. Ms.Jacox stated about 20% of proposed tenants for this project would be senior citizens. Commissioner Ovall and Commissioner Eder both asked how this application would count towards the Maxfield Housing Study housing needs. Ms. Othoudt stated since the study was updated,Jackson Hills has 8 affordable units and those units were already considered into the Maxfield Study which still left the need for 93 affordable housing units. She explained the details of the CommonBond project being heard later this evening which would consider 60 units and utilizing tax credits. Chair Toth asked if these statistics include where are the people employed. Ms. Othoudt stated the Maxfield Housing Study does not indicate where people are employed. Ms. Huot explained when seeking TIF finapplicants can requesNeithe front financing or pay as you go. For this project, the developer has requested pay as you go *," reimbursable financing and has obtained financing up front through various funding sources, using the tax increment to specifically support a mortgage. Chair Toth asked if it would be more beneficial to the city than another form of tax increment. Ms. Huot stated' ^payau gofina c^thereis k tothe city as opposed to if the city were to issue bonds. For this project,the developer is obtaining the financing up front and shifts the risk to the developer and in this case,it is more advantageous to the city. Commissioner Ovall clarified this is a resolution indicating the HRA is open to the concept of supporting a TIF district. He felt the project is a little awkward in timing as both this project and the CommonBond project have parking ratios not in line with city standards, and is an unresolved issue. He wondered if the City Council is willing to make this accommodation and speculated if a council work session would be beneficial to work through this major design expense and other important details. He understood the affordable workforce housing aspect but there are greater conversations that haven't been had at a city level. He wanted to be open and up front to the developer about that. He stated he felt it meets zoning requirements and fits the area and the need for affordable housing is there. Motion by Commissioner Ovall and seconded by Commissioner Eder to approve Resolution 20-04 supporting the proposed use of Tax Increment Financing for Hillside Heights Apartments as outlined in the staff report. Motion carried 3-0 with Commissioner Chuba abstaining. Housing and Redevelopment Minutes Page 5 July 6,2020 ----------------------------- 7.3 Main and Gates Redevelopment Findings of Fact Ms. Othoudt presented the staff report. Motion by Commissioner Chuba and seconded by Commissioner Ovall to adopt Resolution 20-05 Finding Parcel is Occupied by Structurally Substandard Buildings as outlined in the staff report. Motion carried 4-0. 7.4 Main Street and Gates Redevelopment — Award Demolition Contract Ms. Othoudt presented the staff report. Chair Toth asked how the removal of asbestos would be handled. Ms. Othoudt explained the asbestos removal would be handled under a separate contract after the inspection was completed. Motion by Commissioner Eder and seconded by Commissioner Chuba to authorize the executive director to engage in a contract with Techtron Engineering, Inc. Environmental Solutions for pre-demolition asbestos testing of buildings located at 414, 430, 420 Main Street NW, and 326 Gates Ave NW in an amount not to exceed $2,600 and authorize the executive director and the chair to execute the contract in a form acceptable to the HRA attorney, the chair and the executive director. Motion carried 4-0. Ms. Othoudt outlined the amounts of the submitted bids for demolition of five of the seven t as outlined in the staff report for the project as follows: urf Enterprise Incorporated: $140,130.00 embrecker Companies,Inc. $134,715.00 eit Specialty Contracting: $102,000.00 Motion by Commissioner Eder and seconded by Commissioner Ovall to Authorize, by motion, the executive director to engage in a contract for the demolition of buildings located at 326 Gates Avenue NW, and 414, 420, 426 and 430 Main Street NW, in addition to two accessory structures at 406 Main and 419 3rd Ave NW with Veit Specialty Contracting in an amount not to exceed $102,000.00 and authorize the executive director and the chair to execute the contract in a form acceptable to the HRA attorney, the chair and the executive director. Motion carried 4-0. Housing and Redevelopment Minutes Page 6 July 6,2020 ----------------------------- 7.5 Propose Date for HRA Budget Workshop Ms. Othoudt presented the staff report. The HRA commission set the date for the budget workshop at 4:30 p.m. on Monday,August 3, 2020. 7.6 Comprehensive Plan Advisory Committee Appointment Ms. Othoudt presented the staff report. Chair Toth expressed an interest in volunteering for the committee. Motion by Commissioner Chuba and seconded by Commissioner Eder to appoint Commissioner Larry Toth to the Comprehensive Plan Adviso Committee. Motion carried 4-0. 8. Adjournment Chair Toth adjourned the meeting at 6:27 p.m. Minutes prepared by Jennifer Green. Tina Allard, City Clerk Larry Toth, Chair Housing&Redevelopment Authority