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03-02-2009 HRA MINMEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, MARCH 2, 2009 Members Present: Chair Wilson, Commissioners Kuester, Lieser, Motin and Toth Members Absent: None Staff Present: Director of Economic Development Catherine Mehelich, Economic Development Assistant Annie Deckert, Recording Secretary Debbie Huebner, Gary Lore, Building Maintenance Supervisor Also Present: Mayor Klinzing 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 Wilson. 2. Consider March 2, 2009 HRA Agenda MOVED BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE MARCH 2, 2009 HRA AGENDA AS PRESENTED. MOTION CARRIED 5-0. Consider Consent Agenda MOVED BY COMMISSIONER LIESER AND SECONDED BY COMMISSIONER MOTIN TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. CONSIDER DECEMBER 1, 2008 REGULAR MEETING MINUTES 3.2. CONSIDER DECEMBER 15, 2008 SPECIAL MEETING MINUTES, WITH AMENDMENT: "NO.3 — VICE -CHAIR TOTH ADJOURNED THE MEETING" 3.3. CONSIDER JANUARY 5, 2009 REGULAR MEETING MINUTES 3.4. CONSIDER JANUARY 26, 2009 SPECIAL MEETING MINUTES 3.5. CHECK REGISTER 3.6. BALANCE SHEET 3.7. REVENUE/EXPENDITURE REPORT MOTION CARRIED 5-0. 4. Open Mike 5. Update on Neighborhood Stabilization Program Application Housing & Redevelopment Authority March 2, 2009 Page 2 Ms. Mehelich stated that the City/HRA's application for Neighborhood Stabilization Program (Foreclosure Recovery) funds in the amount of $593,820 was approved by the Minnesota Housing Finance Agency on Thursday, February 26th. Ms. Mehelich stated that the next steps include executing NSP funding agreements, environmental review, and agreements with Tri -Cap. She stated that staff anticipates a kickoff open house event in April. Ms. Mehelich stated that the program will provide down payment assistance, purchase and rehabilitation of abandoned/ foreclosed homes (both buyer and entity -driven). Commissioner Motin asked if the funds are just for Elk River. Ms. Mehelich stated yes, noting that Otsego applied for funds for the 55330 zip code but were not approved. Commissioner Lieser asked if Sherburne County made application for the funds. Ms. Mehelich stated yes, that their application was a joint application with the St. Cloud HRA. Chair Wilson asked if Elk River would have an opportunity to apply for any unused funds. Ms. Mehelich stated that they may have an opportunity for a second round of funding, and staff will wait to hear from the MN Housing Financing Agency in this regard, as they will be monitoring the process. Commissioner Toth asked when the funds will be awarded. Ms. Mehelich stated that they hope to be able to market the program in April. Commissioner Lieser asked if the city will be working with Tri -Cap to identify damaged homes. Ms. Mehelich stated that is the purpose of the program, to identify foreclosed homes that need rehabilitation, to make the improvements, and then sell the homes. 6. Update on Elk River's Foreclosure Initiatives Ms. Deckert stated that staff has developed three initiatives to stabilize and improve the city's housing stock including foreclosure prevention, preserving and securing vacant and foreclosed homes, and recovery (revitalizing properties by providing assistance to quickly make homes market -ready). Ms. Deckert noted that 60 homes have been identified as having unpaid utility bills or have had service stopped, and have not been listed on the sheriff's sale information. Commissioner Kuester asked if staff has found the pattern to be similar to other communities. Ms. Decker stated yes. Commissioner Kuester asked where flyers with the assistance information will be distributed. Ms. Deckert stated that flyers will be available at Goodwill, the Salvation Armey, local banks, CAER, and with some of the larger employers. She noted that the information is also available on the city's website, cable channel, and will be posted in the next issue of The Currre city newsletter. Ms. Mehelich noted that a direct mailing could be done for the list of homes, or local realtors or added as insert to the utility billing. Chair Stewart stated that once properties have gone to the sheriff's sale it is probably too late. He encouraged listeners to contact City Hall if they are aware of abandoned homes in their neighborhoods, or if they are aware of people in need of help. Commissioner Motin stated that the City Council will consider an ordinance amendment to allow city intervention if a utility bill is over 30 days delinquent. He noted that the sheriff's Housing & Redevelopment Authority March 2, 2009 Page 3 sale legal notice lists the property address, and suggested contacting the property owner to make then aware of counseling esources. Commissioner Toth asked how realtors are able to work with banks or mortgage companies to prevent damage to homes in foreclosure. Ms. Mehelich explained that the realtors are often contracted by banks or holding companies to monitor and maintain only after the homes have been vacated. Ms. Mehelich asked if the Commission was interested in a direct mailing. Commission Morin stated he was not in favor of a separate mailing, due to the cost. It was the consensus to direct staff to prepare an insert for the utility billing, to promote the assistance programs that are available. Discuss Improvements to HRA Buildings — 716 & 720 Main Street Ms. Mehelich stated that staff has been made aware that the buildings at 716 and 720 Main Street, owned by the HRA, have several roof leaks. Gary Lore, Building Maintenance Supervisor, stated that in consulting with a private contractor he was informed patching the problem areas is estimated to cost $3,500 and a re -roof at $35,000 — 40,000 per building. He noted that the rooftop HVAC unit may require major replacement in the future if the buildings continue to be occupied. He noted that no improvements have been made to the original roof other than patches. He stated that contractors do not want to deal with it, since they cannot guarantee it will not leak somewhere else. Mr. Lore stated that he was concerned about the 716 Main Street roof, since the Arts Alliance is using the building, and he would not want to see any artwork damaged by water. He noted that if the HRA chooses to re -roof the buildings, it may be more cost-effective to do both at the same time. Commissioner Toth asked if Mr. Lore could estimate the life left in the HVAC unit. Mr. Lore stated he would guess that it could last 2 — 5 years, and that replacement would cost approximately $5,000. Chair Stewart asked what the life of a new roof would be. Mr. Lore stated that it would be approximately 20 years. Commissioner Toth asked if the roof at 720 Main Street was also leaking. Mr. Lore stated that has not noticed any recent leaks, and that the heat is shut off. Mr. Lore stated that another option would be placement of a rubber membrane on the roof, which could be done if the plywood underneath is not damaged. He stated this would cost approximately $10 a square foot. Commissioner Motin stated that when the buildings were purchased, the intent was to tear them down, but due to the economy, this has been put off. He stated he could not support putting $35,000-40,000 into each of the buildings. Chair Wilson concurred. Commissioner Toth asked if they could have more information on the membrane only. Commissioner Kuester expressed concern for any safety or liability concerns if the roofs are not repaired/replaced. Commissioner Motin stated that he felt it would 5 —10 years before they would consider tearing down the buildings. He stated that he would not want to add $80,000 in expenses to maintain the buildings. Commissioner Toth asked who will decide when the buildings will be torn down. Housing & Redevelopment Authority March 2, 2009 Page 4 Chair Wilson stated that HRA will make that determination, since they are the owners. He stated that at a minimum, they need to consider patching the roofs. Commissioner Motin stated that these buildings may be impacted by the redesign of Highway 10, and will be studied by the Downtown Task Force when they reconvene. Commissioner Lieser asked if staff was aware of any grants to tear down the buildings. Ms. Mehelich stated that she was not aware of any unless it was part of a redevelopment project. Dave Raymond, representing the Arts Alliance — reviewed his letter to staff dated February 28, 2009, requesting use of areas of the building at 720 Main Street during the Art Soup event scheduled for June 20th, which are not normally accessed. He noted that the Arts Alliance would secure areas from the public such as the stairway to the basement, circuit breaks, water heater, attic access, etc. Mr. Lore stated that he would consult with the fire inspector for any issues he may have. Mr. Raymond stated that he would be willing to go along on the inspection, in order to address any concerns. Staff indicated they would like to be a part of the inspection as well. MOTION BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER KUESTER TO AUTHORIZE USE OF THE 720 MAIN STREET BUILDING BY THE ARTS ALLIANCE, FOR THE ONE -DAY 2009 ART SOUP EVENT, SUBJECT TO APPROVAL BY THE FIRE INSPECTOR, AND THAT REASONABLE COSTS FOR ANY IMPROVEMENTS BE PAID FOR BY THE ARTS ALLIANCE. MOTION CARRIED 5-0. Commissioner Lieser asked if the areas would be monitored. Mr. Raymond stated that the Arts Alliance would provide supervision at all times. 8. Discuss Reduced Sale Price for PropeM at 356 Jackson Street Ms. Mehelich stated that staff has received information that the price for the property at 356 Jackson Avenue Street has been reduced from $389,900 to $179,900. Commissioner Toth stated that although he advocates redevelopment, he would not be in favor or purchasing the property since the property would be impacted by the Highway 10 proposition. Ms. Mehelich noted that it is likely that a good portion of the property would be taken for road right-of-way for the proposed relocation of the railroad. MOTION BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER MOTIN TO NOT CONSIDER PURCHASE OF THE PROPERTY AT 356 JACKSON AVENUE. MOTION CARRIED 5-0. 9. Other Business — None Housing & Redevelopment Authority March 2, 2009 10. Adjournment There being no other business, Chair Wilson adjourned the meeting. The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:30 p.m. Nlinute ,prepared by De�bi5 Huebner. Tina Allard City Clerk Stewart Wilson Chair, Housing and Redevelopment Authority Page 5