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October 28, 1993 Work Session
NOTICE OF OFFICIAL M~ETING Notice is hereby given that an official meeting is to bc held in thc City of Columbia Heights as foHow~ Meeting of: MAYOR, CITY COUNCIL, AND CITY MANAGER Date of Meetin~ THURSDAY, OCTOBER 28, 1993 Time of Meeting: 7:00 PM Location of Meeting:. CITY HALL COUNCIL CHAMBERS 590 40TH AVENUE N.E. Purpose of Meeting: WORK SESSION 7:00 PM 1. Discuss Sheffield Development Proposal 10:30 PM 2. Discuss HRA Goals 3. Discuss HRA Staffing 4. Adjournment The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Council Secretary at 782-2800, Extension 209, to make arrangements. (TDD/782- 2806 for deaf only) AFFORDABLE SUBURBAN HOUSING, INC. PROPOSAL FOR SHEFFIELD NEIGHBORHOOD REHABILITATION AFFORDABLE SUBURBAN HOUSING, INC A Non-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 (612) 824-1628 October 26, 1993 Mr. Pa-tick Hentges, City Manager City of Columbia Heights 590 4Otb Ave Northeast Columbia Heights. MN. 55421 Dear Mr. Hentges: Enclosed please find the proposal from Affordable Suburban Housing, Inc. for the Sheffield Neighborhood Improvement Program. This submission fulfills our obligations specified in the Exclusive Preliminary Agreement dated September 16, 1993. The proposal includes the following information: 1. Program goals, objectives and strategy, 2. Overall design proposal for the project - master plan for the block bounded by Pierce. Fillmore Street, 46th ave. and 47th ave. exterior elevations and floor plans 3. Rehabilitaion scope of work 4. Property rehabilitation cost estimate - typical duplex property 5. Implementation schedule for the project 6. Potential funding sources 7. Marketing plan 8. Development budget - staff and consultant fees 9. Implementation team 10. Projects completed by members of the implementation team The information submitted with this proposal is the property of Affordable Suburban Housing, Inc. and may not be used without permission of Affordable Suburban Housing, Inc. We look forward to entering into a redevelopment con~act with you in the near future and working with you to implement this important project. Sincerely Bill S~ Executive Director Enclosures AFFORDABLE SUBURBAN HOUSING, INC ~ Non-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 (612~ 824-1628 Columbia Heights Homeownership Program Sheffield Neighborhood Goal: Restore the balance of housing (rental versus owner-occupied) of Sheffield to a !evel more typically found in lower density residential districts throughout the City. Objective: Acquire and redevelop substandard and problem properties within the Sheffield Neighborhood. Program Strategy Affcrdable Subruban Housing, Inc. will work in partnership with the City of Columbia Heights and assemble the expertise and resources necessary to accomplish the objectives of this program. The mission of Affordable Suburban Housing, inc. is the provide quality affordable housing for residents living in the Twin Cities suburban communities. This will be acccmplished in Columbia Heights by creating opportunities for homeownership and high quality rental housing. Affordable Suburban Housing, Inc., under contract with the City of Columbia Heights. will implement this program. The basic strategy for this program is for A.S.H. to acquire duplex properties, at a reasonable price, re-sell the properties for rehabilitation and owner occupancy, create a homeowners association for on-going repairs and maintenance, and coordinate the city program for neighborhood public improvements. A.S.H. will complete the following tasks during the implementation of the prog'am: 1. Acquire non-owner occupied duplex Properties. on a voluntary basis, from the current owners. 2. Develop design standards, and criteria, )'or the rehabilitation of these properties. Develop a method to ensure high quality design and construction work. and ways to monitor that work. Provide duplex buyers with professional help with design and construction. 3. Rehabilitate two duplex properties (one side-by-side, and one up and down ) for use as models in the marketing program. 4. Implement a comprehensive marketing program in order to pre-sell these properties to owners who wilt occupy the units. 5. Implement a program that will provide buyers with construction financing, and permanent mortgage financing. 6. Rehabilitate each of the duplex properties sold to owner occupants. 7. Implement a program that will assist duplex owners with finding renters for their rehabilitated rental units. 8. Create a homeowners association that will provide for ongoing property repairs and maintenance, including exterior lawn care and snow removal. 9. Prepare and implement a plan for neighborhood public improvements that may include lighting, streetscape, streets and sidewalks, utilities, recreation, traffic control, etc. Program Financial Criteria In order for this program to be a financial success it will be important to develop specific financial criteria. This criteria will include acquisition costs, rehabilitation costs, program operating costs, marketing costs, legal and professional fees, title recording and closing costs. We will determine the value of each duplex after rehabilitation, the sale price to the homeowner. The sale price will be based on the market for these properties, and the appraised value for mortgage lending purposes. The financial criteria will also provide for financial assistance from the City of Columbia Heights. Program Scope of Work and Schedule In order to accomplish the goals and objectives of this program, reverse the trend in favor of homeownership, and make an impact in the marketplace, it will be important for Affordable Suburban Housing to acquire and rehabilitate a significant number of duplex properties. The number of properties acquired in the neighborhood will be based on the availability of properites for purchase at a "reasonable" pdce that meets the financial criteria for the program. r ~ .. ',"1-' .' :: ' i '. ' .i z ' I 0 0 0 0 0 .© Columbia Heights Duplex. Two Units Interior Kitchen Cabinets Countertops-Labor Paint Walls Woodwork Ceiling Floor Carpet Sanding Electrical Light Fixtures Bath/Kitchen G.F.I. FHA Codework Appliances Stove Refrigerator Washer&Dryer Hood Fan Garbage Disposal Bath Shower/Tub Waterheater Stool Vanity Sink Tile Floor Heat System Millwork Front Door Closet Doors Rear Door Roof Stucco-Redash Trim-Window Porch Yc~rd Foundation Fill Yard Grade Sod' Tree Garage 2 Parking Pads Demolition.Removal TOTAL $2,400 $4,700 $3,000 $1,600 $3,000 $6,500 $3,500 $1,200 $1,500 $3,100 $500 $8,000 $2,500 $8,000 $1,600 $],ooo $I,000 $1,ooo $54,100 COLUMBIA HEIGHTS DUPLEX ESTIMATES LANDSCAPE Approximately 637 Sq. yds. sod Tree (2) Shrubbery 800- 1,000 1,ooo 500 $ 2,300 - 2,500 BITUMINOUS $2.00 / per sq. ft. - 800 sq. ft for 2 car parking pad $ 1,600 o per unit PORCH Footings Concrete Pad (7' X 9') Columns Canopy/Roof structure Painting Shutters Stucco / Dry Vit Quoins Wroght iron ( $22.00 per lineal foot) Picket Fence ( $12.00 per lineal foot) $ 8,000 - 10,000 TOTAL $14,100 AFFORDABLE SUBURBAN HOUSING, INC A Non-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 (612) 824-1628 Columbia Heights Neighborhood Improvement Program Sheffield Neighborhood Implementation Schedule November 1993 Affordable Suburban Housing, inc. and Columbia Heights I-IRA sign redevelopment contract. ASH begin acquisition process of two properties to be rehabilitated as model units. ASH begin process of obtaining options on other properties in the neighborhood. December 1993 Architects begin design development, construction drawings, and specifications for rehabilitation of two models. January 1994 Architects complete design development, construction drawings, and specifications. Construction Manager refines construction cost estimate. Close on the purchase of two units for models. Begin preparation of financing plan for buyers. February 1994 Bid cons~uction work for two model units March 1994 Award construction contracts for two models and begin construction. Finalize financing plan for buyers. April 1994 Prepare marketing plan. Finalize public improvements plan May 1994 Complete construction of two models. Begin Marketing program. Begin Construction of public improvements. June 1994 Marketing and pre-sale of properties July 1994 Marketing and pre-sale of properties Complete construction of public improvements. August 1994 Finalize agreements with buyers. Buyers obtain financing committments. Architects complete construction documents for properties to be rehabilitated. September 1994 Begin rehabilitation of properties. October 1994 Establish homeowners association. Housing & Redevelopment Authority of Columbia Heights 590 N.E. 40th Avenue, Columbia Heights, MN 55421 Comml~lonerl p~tc:~ Jk~dm Richwd Dult~n Fax: (612) 782-2857 * (612) 782-2854 June 18, 1993 Mr. Bill Schatzlein Affordable Suburban Housing, Inc 4032 Grand Ave S. Minneapolis, MN 55409 P.~: Sheffield Neighborhood Revitalization(Possible Funding Sources) Dear Bill: As per our meeting today, the following is a list of potential funding sources for the potential Sheffield Neighborhood Revitalization Project. The possibility of securing the funds depends on the funding available, the project applied for, the quality of the application, the quality of the proposed project, program rules, and many other factors. If the City Council decides to pursue a specific type revitalization project, we, along with any outside parties such as your development group, can attempt to secure the funding as necessary from the various sources. A. Federally Funded Programs: 1. Community Development Block Grant(CDBG) through Anoka County CDBG Program. There are $99,000 from the 1992 & 1993 CDBG Neighborhood Revitalization Program available as of July 1. Use of these funds is restricted but could be used in certain cases for acquisition of deteriorated property in the area. Additional funds could be programmed from future CDBG funding--could possibly have $200,000 to $250,000 of additional funds available as of July 1, 1994. 2. HOME Program through Anoka County HOME Program. The HRA has applied for and expects to have $87,500($70,000 HOME/S17,500 HRA Reserves) available for housing rehabilitation grants for low inqome homeowners. These funds are expected to be available by November,~---f~93. In 1994, t6e HRA could possibly apply for additional funds foro~qS~ftypes of projects in the area; however, HOME Program rules severely limit use of the funds. 3. Other Federal Programs. There are possibly other Federally funded programs that could be tapped for use in the Sheffield Neighborhood. Further research is necessary to find such. The HRA has the Catalogue of Federal Programs and can do the research if time permits. B. State Funded/Contro}led Programs. MHFA Programs(see attached for detail on programs). (a) Neighborhood Land Trust Program(S2,000,000 for State-wide for 1993). &~(b) New Construction Tax Credit Mortgage/Bridge Loan Program. (c) Housing Trust Fund. ..~(d) Low Income Housing Tax Credit Program. (e) Rental Rehabilitation Loan Program(Now available through H~A), (f) Great Minnesota Fix-Up Fund(Rehab loans mow available through HRA). (g) Home Energy Loan Program(Now available through HRA). (h) Minnesota Mortgage Program--First Time Homebuyer Program. (i) Minnesota City Participation Program--First Time Homebuyer Program with funds set aside for Columbia Heights. (j) Partnership for Affordable Housing--provides 2. Federal tax credit programs for housing/housing revenue bonds. Equal Opportunity Employer Equal HoUsing Opportunity Agency SHEFFIELD NEIGHBORHOOD REVITALIZATION(POSSIBLE FUNDING SOURCES), JUNE 18, 1993, PAGE 2 C. Local Sources= 1. City/HRA= (a) Proceeds of $445,525+ from the refunding of the 1982 Housing Revenue Bonds in December, 1992. Limited to uses as listed on enclosed. (b) Balance of funds from the financing of the Parkview Villa South development($395,918). Limited to public purpose uses. (c) Sale of Essential Function Bonds/housing revenue bonds. (d} Tax increment financing. (e) City Reserves. _~_~_~(f) HRA Reserves(S100,000 to $200,000). (g) Westside Parking Ramp assessments fund. (h) Other? 2. Local= (a) Anoka County Community Action Program. (b) Bank Com~aunity Reinvestment Act participation. (c) Minneapolis-St Paul Family Housing Fund(McKnight Foundation) (d) General Mills. (e) Philanthropic Foundations interested in addressing housing issues. (f) Other? If you have any questions in regard to the above, please call me at 782-2855. Donald R. Schneider Executive Director Encl cc: City Manager AFFORDABLE SUBURBAN HOUSING, INC A Non-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 (612) 824-1628 Columbia Heights Neighborhood Improvement Program Sheffield Neighborhood Marketing Plan Introduction This marketing plan is based on the assumption that the first phase of the program will include the acquisition, rehabilitaion and re-sale of 20 duplex and single family homes on one block. The plan is also based on the assumption that two duplexes ( one of each type) will be acquired and rehabilitated and used for models and sales office for the marketing program. Marketing Plan Affordable Suburban Housing, Inc. in cooperation with the Columbia Heights HRA will develop a written Marketing Plan which will include marketing goals and objectives for the Neighborhood Improvement Program, In addition to the goals and objectives the plan will include a marketing schedule, and a marketing budget. The Marketing Plan will be used to obtain proposals from well established real estate marketing companies including Burnet and Edina. Proposals from each of these firms will include the Marketing strategy, written materials to be used. advertising program. staffing, model furnishings, marketing schedule and budget, and other details. A.S.H.and the Columbia Heights HRA will review proposals received from these firms and select the best qualified firm to implement the marketing program. AFFORDABLE SUBURBAN HOUSING, INC A Non-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 (612) 824-1628 Columbia Heights Neighborhood Improvement Program Sheffield Neighborhood Development Budget Assumptions - This development budget is to provide funds to Affordable Suburban Housing, Inc. for staff and consultants time associated w~th the implementation of the first phase of the Neighborhood Improvement Program. The first phase of the program will begin on the date the redevelopment contract is signed and run for two years. The first six months will be the program development and pre-construction period. The program will include a total of 32 duplex and single family homes. DEVELOPMENT BUDGET Program coordination and administration $2000 mo. Amount due at contract signing - first 3 mo. Next six months Next 15 months Total Architectural fees Amount due at contract signing - first 3 mo, Next six months Next 15 months- 30 buildings $2000 per Total $6000 $12OOO $3O,O0O $6,500 $17,500 $60,000 $48,000 $84.000 Construction management fees Amount due at contract signing - first 3 mo. Next six months Next 15 months Total $5,000 $4,800 $57.200 $67,000 Proper~y acquisition fees Amount due at con~'acting signing ~ first 3 mo. Next 21 months - commissions paid at closing $5,000 $50,000 Total $55,000 Total development budget $254,000 AFFORDABLE SUBURBAN HOUSING, INC. PROPOSAL FOR SHEFFIELD NEIGHBORHOOD REHABILITATION EXISTING CONDITIONS IN THE SHE~ NEIGHBORHOOD The Sheffield Neighborhood in Columbia Heights has experienced severe decline in property values and in the number of owner occupied residences. The result of this decline is exhibited in the break down of a sense of community for the area, transient rental tenants who have little or no investment in their property, and an increase of crime and gang related activity. The neighborhood has a high density of duplexes which are in a state of disrepair both externally and internally. Additionally, the area has no common spaces designated or design continuity to foster a sense of community within the neighborhood, a key component for neighborhood revitalization. PROPOSED PROGRAM FOR REHABILITATION OF THE SHEFFIELD NEIGHBORHOOD A long term program of housing purchases, refurbishing and resale to owner/tenants along with development of common areas to create a sense of neighborhood is proposed. The plan calls for the purchase of sixty duplexes over a two year period, resale of the properties for owner occupancy and the creation of a homeowners association for on-going leasing, assisting homeowners in screening tenants and property management. In addition, we will work with the city to create and oversee a program for neighborhood public improvements. The process will include developing design standards and criteria for the rehabilitation of these projects, creating a comprehensive design for the community while maintaining distinct neighborhood identification. We will develop a method to ensure both high quality design and construction work and to monitor that work. The process will involve the new owners in the rehabilitation of not only their own properties, but in the upgrading of the entire neighborhood, giving them a sense of pride and ownership in their community. The initial forty duplexes proposed for upgrading in the Sheffield Neighborhood comprise a significant enough portion of housing in the area to make a real impact on future real estate values. As the area improves both visually and in the resident's commitment to their community, the desirability of housing will increase, a balance of rental versus owner-occupied housing will be restored and private capital will be encouraged to invest. IMPLEMENTATION TEAM To successfully implement these objectives, a team ~f professionals has been assembled whose backgrounds and expertise encompass the range of disciplines necessary to the program. Affordable Suburban Housing, Inc., a local non-profit housing corporation,will be the cornerstone for the initial implementation of the project, the formation of the homeowners association and its oversight throughout the project, and will continue to work with residents after the project is completed. Other team members will be available throughout the project as their areas of expertise are required. Project Administrator: Bill Schatzldn - Affordable Suburban Housing, Inc., Executive Director Bill Schatzlein, owner of Schatzlein Associates, a real estate consulting firm, has a broad expertise and years of experience in providing real estate consultation to all sectors of the real estate industry. For both new construction and rehabilitation projects, he works with developers and property owners, specializing in redevelopment projects that include government assistance. Bill can provide the project with the specific services included in management of the development process and management of the construction process. Real Estate Broker: John Beai - John Beal and Associates John Beal, owner of John Beal and Associates, brings an expertise in brokerage and development of real estate properties. He has a lengthy career in providing consulting services for the investment, development, sales and purchase of a variety of properties. John also has provided management for the development of dozens of properties ranging in value from a few hundred thousand to over two hundred million dollars. His firm is a private practice engaged in commercial and multifamily real estate consulting, brokerage, leasing and mortgage finance. He has provided services for other developments such as the one proposed for the Sheffield Neighborhood including Steven's Square in Minneapolis. Home Maintenance Program: James Larson - America's Home Team Jim has an extensive background working with inner-city rehabilitation projects which require not only managing the physical upgrading of buildings but management of an ongoing program to assist homeowners maintain their properties. For two decades, Jim has worked with the renovation of very large, several hundred unit, inner-city renovation projects. These projects ranged from multifamily units to mixed use redevelopments. Additionally, the scope of services for each project included the ongoing management of tenants and physical maintenance. Steven's Court in Minneapolis is an example of Jim's success in this field. Architect: Dean Dovolis - Dovolis Johnson & Ruggieri, Inc. Dean Dovolis, principal architect for Dovolis Johnson & Ruggieri, Inc. has been responsible for neighborhood rehabilitation and redevelopment projects in the Twin Cities area since 1986. The firm of 24 architects, landscape architects and planning professionals, has demonstrated their commitment to design excellence with many award winning urban redevelopment designs, while never losing sight of the importance of people and community. Central to the success of their urban designs is the understanding that a crucial element of a successful project is the involvement of neighborhood residents in the entire rehabilitation process. Recent examples of community rehabilitation projects include Lovell Square and Mount Airy. Lovell Square is a compreher~ive redevelopment of a six block target area in north Minneapolis in which residents actively participated in design of a master plan for the area, measured buildings to be renovated Md assisted with construction. Mount Airy, an 80 acre, two year, two million dollar redevelopment for the Public Housing Authority of the City of St. Paul, has just begun construction. This redesign of miltifamily townhouses and units will incorporate the idea of individual neighborhoods within one larger community and will have common public areas to link those neighborhoods. RENOVATION AND ADAPTIVE REUSE PROJECT/LOCATION Harrison Neighborhood West Bank Community Development Corporation, Brighton Development and Harrison Neighborhood Association 30 Unit - Rehabilitation, landscaping and street improvements Location: Olson Memorial Highway and Penn Avenue North - Minneapolis, MN Loveil Square West Bank Community Development Corporation and Northside Residents Redevelopment Council 25 Unit - Rehabilitation, landscaping and street improvements Location: Irving Avenue North and James Avenue North - Minneapolis, MN Mount Airy Family Housing Public Housing Agency of the City of St. Paul 272 Unit - Rehabilitation of units and complete site re-design, including tot-lots Location: 35E and Arch-Pennsylvania Street - St. Paul, MN Plymouth Avenue Townhouses and Apartments West Bank Community Development Corporation and Northside Residents Redevelopment Council 109 Unit - Rehabilitation, landscaping and street improvements Location: Plymouth Avenue North between Humboldt Avenue and Morgan Avenue - Minneapolis, MN Station 23 Lofts Michael Lander 4 Unit - Adaptive reuse of existing fire damaged fire station Location: 3524 Hennepin Avenue South - Minneapolis, MN · Awards: 1992 Grand Award - Builder 1992 Minneapolis Heritage and Preservation Commission Award 1992 Renaissance Award - Remodeling Elliot Avenue Cooperative Twin Cities Housing Development Corporation and Phillips Neighborhood Housing Trust 15 Unit - Renovation/re¢omqguring of 5 existing ho6ses and new 3-unit townhouse. Location: 21st - 23rd Streets South and Elliot Avenue South - Minneapolis, MN · Award: 1992 CUE Award Heritage Improvements Central Community Housing Trust Selected exterior improvements Location: 624 South Ninth Street = Minneapolis, MN Chicago Avenue Apartments Central Community Housing Trust 60 Unit - Selective rehabilitation and landscaping/planning and cost estimating Location: 1500, 1504 and 1508 Chicago Avenue South - Minneapolis, MN The Barrington Apartments Central Community Housing Trust 26 Unit ~ Gutting, rehabilitation and landscaping Location: 911 Park Avenue South - Minneapolis, MN · Award: 1992 Minneapolis Heritage Preservation Commission Award The Balmoral Apartments Central Community Housing Trust 57 Unit - Selective rehabilitation and landscaping Location: 1005 Portland Avenue South - Minneapolis, MN Calypso Flats Whittier Alliance 18 Unit - Rehabilitation, landscaping and tot-lot design Location: 2620/2626 Pillsbury Avenue South - Minneapolis, MN Portland Place Apartments Phillips Neighborhood Housing Trust and Twin Cities Housing Development Corporation 17 Unit - Reconfiguration from 26 to 17 units Location 2430 Portland Avenue South - Minneapolis, MN · Award: 1990 CUE Award Finalist St. Paul Facade Guidelines St. Paul PED Analysis for storefront and streetscape improvements Location: Minneapolis and St. Paul, MN Phillips Place Cooperative Phillips Neighborhood Housing Trust 23 Unit - New construction and rehabilitation Location: East Franklin Avenue and 14th Avenue. South - Minneapolis, MN · Awards: 1989 Builder 1988 CUE Award 1988 MSAIA Award 1988 HUD Recognition Award