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08-03-2009 HRA MINMEETING OF THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY HELD AT THE ELK RIVER CITY HALL MONDAY, AUGUST 3, 2009 Members Present: Chair Wilson, Commissioners Lieser, Motin and Toth Members Absent: Commissioner Kuester Staff Present: Qty Administrator Lori Johnson, Director of Economic Development Catherine Mehelich, Economic Development Assistant Annie Deckert, Recording Secretary Debbie Huebner Also Present: Eric Myers, North Metro Realtors Association 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 August 3, 2009 HRA Agenda MOVED BY COMMISSIONER TOTH AND SECONDED BY COMMISSIONER LIESER TO APPROVE THE AUGUST 3, 2009 HRA AGENDA AS PRESENTED. MOTION CARRIED 4-0. Consider Consent Agenda MOVED BY COMMISSIONER MOTIN AND SECONDED BY COMMISSIONER TOTH TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. JULY 6, 2009 HRA MINUTES 3.2. CHECK REGISTER — APPROVED 3.3. BALANCE SHEET 3.4. REVENUE/EXPENDITURE REPORT MOTION CARRIED 4-0. 4. Open Mike — No one appeared for Open Mike. Consider Year 2010 HRA Budget and Resolution Regarding HRA Levy Ms. Johnson stated that the HRA has typically maintained the general operating levy at 0.0144 percent of taxable market value. She stated that in past years, market values have increased due to housing, commercial and industrial development. This year, the preliminary market value is expected to decrease 5.5 — 6 percent, (approximately $305,000 in revenues, compared to $317,000 last year). She stated that the market value is expected to decrease even more, once the county has their final numbers. She noted that the numbers are still very preliminary at this point. Housing & Redevelopment Authority August 3, 2009 Page 2 Ms. Johnson reviewed the proposed 2010 revenues and expenditures, as noted in the report to the HRA dated August 3, 2009. She noted that $30,000 has been included in the budget for expenditures for completing the downtown redevelopment plan. Also, she noted that there are some very minimal costs for maintenance, insurance costs, etc. related to the 716 and 720 Main Street buildings. Ms. Johnson noted that $82,850 has been set aside for future HRA projects. She stated that the HRA could consider adjusting that amount if they choose. Ms. Johnson explained that there is room to slightly increase the amount, but that if they chose to decrease the amount, the levy would go down considerably. Commissioner Toth asked what is in the fund now. Ms. Johnson stated that there is approximately $348,000 available for projects in the fund at the present time. Commissioner Mom* asked how the $30,000 figure for the downtown was arrived at, compared to what was spent in 2006 and 2007. Ms. Johnson stated that the figure is an estimate based on past expenditures, and includes funding for consultant fees and costs for communication with the public. Ms. Mehelich referenced page 2 in the 2006 and 2007 Actual Expenditures in the budget worksheet for this item She explained that professional services for Ehlers & Associates and Hoisington-Koegler were incurred in those years, and since the city does not have a community development director at this time, they anticipate hiring a planning consultant to provide expertise in completing the redevelopment plan. Chair Wilson stated he did not anticipate the HRA would want to raise the levy. Commissioner Motin stated he was not in favor of raising the levy, but that he supported adding to the project reserve fund. MOTION BY COMMISSIONER MOTIN, SECONDED BY COMMISSIONER LIESER TO APPROVE RESOLUTION 09-03, A RESOLUTION ESTABLISHING THE TAX LEVY FOR THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY FOR COLLECTION IN 2010. MOTION CARRIED 4-0. 6. Update on Elk River Neighborhood Stabilization Program Ms. Deckert stated that the first application for the Elk River NSP program closed last week for the $5,000 in down payment assistance. She noted that this applicant also received $10,000 in down payment assistance from the Greater MN Housing Fund. A second application will be closing on August 6th. Staff received two additional applications; one was not in a target neighborhood, but the other application is being processed. Ms. Deckert stated that no applications have been received for purchase rehabilitation assistance at this time. Staff continues to work with Tri -CAP on identifying homes to rehab and resell, but this has been a challenge since homes move quickly on the market. Also, she noted that several banks are not accepting purchase agreements with contingencies. Ms. Deckert stated they are continuing to work with MN Housing Finance Agency to streamline the process of acquisition and rehab. Staff will be attending two-day training in September which will address challenges in the NSP funding process. She noted there will be a 6 -month check-in with MN Housing in September to discuss the program's progress. Housing & Redevelopment Authority August 3, 2009 ----------------------------- Page 3 Ms. Deckert stated that staff recently completed a second mailing of foreclosure prevention brochures to local churches, banks, non -profits and businesses. She explained that staff has partnered with the North Metro Realtors Association to promote a Community Wide Open House, showcasing over 65 listed homes in the area. All NSP information and Elk River Housing Rehabilitation funding information will provided to realtors to share with potential homeowners at this event. She introduced Eric Myers, Director of Public Policy for the North Metro Realtors Association (NMRA). Mr. Myers stated that NMRA is located in Coon Rapids and has been in existence for over 50 years. The group represents 2,300 realtors in the North Metro area, which includes Anoka, Isanti, Sherburne, and parts of Kanabec and Mille Lacs counties. He stated that members of the association represent all aspects of commercial and residential real estate, as well as affiliate members including banks and title companies. Mr. Myers stated he serves on the NMRA Government Affairs and Public Policy Committee. He explained that Elk River Economic Development staff receives the 100 + Market Update Newsletter from NMRA. The current update shows a 21 percent drop in new listings, and increased closed sales. He explained that this means the supply and demand ratio is getting better. He noted that Elk River still has an above-average number of foreclosures. He stated that they are starting to see a turnaround in the market in Elk River, but they are still lagging in traditional sales compared to foreclosures. He stated this puts Elk River at a competitive disadvantage. Mr. Myers stated that the government affairs group meets once a month to come up with ideas to help the real estate market. He stated that theyhave found some cities that have not done anything and others cities that have gone way too far. He stated some cities are willing to do partnerships for NSP funding. He stated the group came up with the idea for the open houses to be proactive. He stated three of the cities chosen have above-average foreclosures (Elk River, Anoka and Coon Rapids), and Andover is average in foreclosures. Mr. Myers stated they applied for a $5,000 National Realtors Association (NRA) grant which they received on April 28. He stated that 91 open house were held in Coon Rapids in June, 75 in July in Andover, and they are looking at doing at least 50 in Elk River in August. He explained that the grant is foreclosure -based, but that the grant application states that the problem is not just foreclosures. He stated that the excessive inventory brings the prices down, so the goal is to move all inventory, by covering both sides of the market. Mr. Myers stated that through a strategic partnership with the city, they are able to promote this event. He encouraged all realtors in the city to hold as many open houses as possible. The open house in Elk River will be held August 161b, from 1— 4 p.m. Chair Wilson asked where information is available on the event. Mr. Myers stated that the information is available through the city's website, as well as the NMRA website, which provides all the listings, maps and information. Mr. Myers stated that when the last open house is completed in Anoka, the group will do a complete program evaluation, looking at what went well and what could be improved. He stated that they hope to do a wider area next year, holding the open houses on two weekends. He stated that planning for next year will begin in October so that they would be able to partner with cities and counties early on in the planning process. Mr. Myers stated that NMRA wants to be resource for the city and that there is a lot of good expertise within the group's membership. Commissioner Toth asked if foreclosed homes would be included in Elk River's open house. Ms. Deckert stated that would depend upon the inventory of local realtors that sign up for Housing & Redevelopment Authority August 3, 2009 ----------------------------- Page 4 the open house event. Commissioner Toth asked if the foreclosed homes have agents now. Ms. Decker stated that a percentage of them are listed and some are not. She indicated that staff periodicallyworks with realtors to go through the MLS listings. She noted that Mr. Myers has been aggressively soliciting people to list their homes, but that it is difficult for the city to be the "go between" for the mortgage companies and property owners. She stated that the city does provide a foreclosure list to those who request it. Commissioner Toth asked if there will only be minimal amount of foreclosed homes in the open house. Mr. Myers stated that he did not parcel out which are foreclosures and which are traditional sales, and that the primaryfocus is to move Elk River's market forward whether it is large percentage of foreclosed homes or not. He stated that the problem is the foreclosure process is complicated, starting with default to sheriff's sale, to redemption to equitable redemption; anywhere along that process a property can change status. He stated the property could be a short -sell, deed in lieu, or a number of other things could happen to a property. He stated that by the time a foreclosed property makes it into the MLS System, it has an agent. Whether or not an agent decides to participate in this program is not only up to them but also up to the seller. Commissioner Toth stated asked if it was correct that foreclosures technically are not in the MLS inventory. Mr. Myers stated that it depends upon where the property is in the foreclosure process. He stated that a completed foreclosure that goes back to the bank is likely to be listed immediately. If a foreclosure is in the six-month equitable redemption period that Minnesota has, the property may or may not be listed depending upon the option of the owner at the time. The owner has the option of listing or not. If not, he could be looking to short -sell, or allow the foreclosure process to complete itself. Commissioner Toth stated that the NSP program is for foreclosures and we should be promoting the sale of foreclosures. Ms. Decker stated that all the realtors that sign up for the open house, regardless of whether or not their properties are foreclosures, will receive all of the NSP information to give to homeowners and potential buyers, and they can contact the city for more information. Commissioner Toth stated that as a former realtor, he was aware that realtors prefer to sell their own listings. He stated that he is not opposed to the open house but feels the NSP program is for foreclosures. Mr. Meyer stated that the realtors are very aware of the NSP program and have been involved in the discussions. He stated they are very supportive of the NSP program and that all of the city's NSP information as well as their own will be brought together on their web page. Chair Wilson stated it is his understanding that NMRA will be promoting all real estate inventories in Elk River, including foreclosures. Mr. Myers stated that was correct. Chair Wilson stated that some type of press release buy the local paper on the event would be appreciated. 7.1. Other Business - Commissioner Motin Item Commissioner Motin stated that the Highway 10 interchange grant requested was not approved. He stated that the City Council will be discussing howto move forward on the FAST Study at an upcoming meeting. 7.2. Other Business - Commissioner Toth Item Housing &Redevelopment Authority Page 5 August 3, 2009 ----------------------------- Commissioner Toth asked for an update on the 716 Main Street building roof. Ms. Mehelich explained that the city maintenance staff will be repairing some brackets before they contractor can come back and complete the patching. She noted that there are no leaks at this time. A. Mehelich stated that the final total for the repair will be approximately $3,000. Adjournment There being no other business, Chair Wilson adjourned the meeting. The meeting of the Elk River Housing and Redevelopment Authority adjourned at 6:04 p.m Minutes pared by Deb ie Huebner. Tina Allard City Cie tewart Wilson Chair, Housing and Redevelopment Authority