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HomeMy WebLinkAboutEDA MIN 05-15-01COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES OF MAY 15, 2001 CALL TO ORDER - The Regular Meeting of the Columbia Heights Economic Development Authority (EDA) was called to order by President Ruettimann at 6:36 p.m., Tuesday, May 15, 2001, in the Parkview Villa Community Room B, 965 40t~ Avenue NE, Columbia Heights, Minnesota. ROLL CALL Commission Members Present: Commission Members Absent: Staff Present: Robert Ruettimann, Marlaine Szurek, Gary Peterson, Julienne Wyckoff, Bruce Nawrocki, and Bobby Williams Pat Jindra Walt Fehst, Executive Director Randy Schumacher, Acting Deputy Executive Director Shirley Barnes, CEO, Crest View Corporation Cher Bakken, Community Development Secretary Mark Nagel, Community Development Staff CONSENT AGENDA (These items are considered to be routine by the EDA Board of Commissioners and will be enacted as part of the Consent Agenda by one motion). A. Adopt the consent agenda items as listed below. 1) Approval of Minutes - regular meeting of April 17, 2001 Move to adopt the minutes of the April, 2001 regular meeting as presented in writing. 2) Financial Report and Payment of Bills a. Financial Statement - April, 2001 b. Payment of Bills - April, 2001 Move to approve Resolution 2001-08, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the financial statements for April, 2001 and approving payment of bills for April, 2001. MOTION by Szurek, second by Peterson, to adopt the consent agenda items as listed. Ail ayes. MOTION CARRIED. Nawrocki asked when the Board could get a copy of the Auditors Report. Ruettimann stated that by Friday, May 2Yh the Finance Department assured us we would have the report and staff wiil provide copies to the Board members. REPORT OF THE MANAGEMENT COMPANY In Anita Kottsick's absence, Shirley Barnes gave the Management Report. There was one correction to Kottsick's written report. It should state: Unit 710 had a water leak in the bathroom ceiling, which ran down the wall. After some investigation by maintenance personnel, it was determined that the balcony had a significant crack where the balcony floor and wall meet. Personnel caulked the cracks and the leak appeared fixed until it rained again. A contractor was called to determine where the water coming in. Therefore, the unit will not be rented until the water problem is solved. Three units in the North building developed severe leaks around and above the window frames. Maintenance personnel called four different contractors for an evaluation. Two of the contractors stated that the leaks were coming in from above and working down the walls. They wiil provide a proposal to staff. The North apartment inspections were completed and maintenance is working on a list of the necessary repairs to provide to the Capital Improvement Committee. Two apartments failed inspection due to Economic Development Authority Minutes May 15, 2001 Page 2 of 7 housekeeping safety issues. Kottsick will work with the residents to make corrections. South apartment inspections will be done in late May. Unit 908 has been rented for occupancy as of June 1, 2001. Also included in the report was the breakdown of the 912 vacant days requested by the Board at a previous EDA meeting. PUBLIC HEARING FOR SALE OF 3913 POLK STREET NE. Ruettimann opened the Public Hearing at 6.'51 p.m. Schumacher indicated that State Statute requires a Public Hearing prior to the sale of property by an EDA. The Public Hearing for the sale of 3913 Polk Street NE was published in the Focus Newspaper and broadcast on Cable TV on May 3, 2001. This was the first step in the process to purchase and sell 4401 Quincy Street NE to Habitat for Humanity along with 3913 Polk Street NE to build 3 new single-family dwellings. This is contingent upon City Council approving the purchase and sale of 4401 Quincy. The purchase of 4401 Quincy Street will be financed by; 1) a $70,000 HOME Program Grant, 2) $35,650 from Habitat for Humanity, and 3) a $17,500 cash match from the EDA for a total of $123,150. If the City choses to not approve the purchase and sale of 4401 Quincy to Habitat for Humanity, the EDA could consider the sale of 3913 Polk Street NE at their June 17, 2001 meeting, but would have to turn back the $70,000 in HOME Grant Funds. The 3 owner- occupied, single-family dwellings to be constructed by Habitat for Humanity would help fulfill a commitment made by the Columbia Heights City Council in 1996 to work in partnership with Habitat for Humanity to construct 9 homes over the next 3 years in the community. The document for the 9 homes is not a binding legal agreement with Habitat for Humanity. Staff recommended the Board approve the sale of the properties to Habitat for Humanity subject to the terms of a negotiated development agreement. Ruettimann provided a spreadsheet listing the Habitat for Humanity homes in Columbia Heights, which listed the 2001 estimated market value and limited market value for payable 2002 and 2001 taxes. He also read a letter from the Nellermoe family expressing their concern that the property wasn 't put up for public sale. Pat Rosenberg, resident and volunteer for Habitat in Columbia Heights, explained how the Habitat home program works. In order to qualify for home purchase, the families must put in a total of 350 hours of labor, attend classes, financially qualify, and must show a real need to own a home. Nellermoe was present at the meeting and expressed the following concerns: 1) all of the Habitat homes look alike and he would like to see them look like a Cape Cod or Rambler, and 2) why wasn't the property put up for sale to the public because a neighbor might be interested in buying the lot to increase the size of their property. Wyckoff felt that Habitat for Humanity is a good program, but Columbia Heights has enough Habitat homes and the EDA should look into putting in some townhomes for higher income families such as employees of the new Medtronic World Headquarters in Fridley. Ryan Karis, from Twin Cities Habitat for Humanity was present and provided information about the program. Habitat maintains an on-going staff at each site, they have a home ownership program, comprehensive training program for prospective owners which requires attendance at 12 seminars on home ownership, Habitat is a licensed general contractor; all homes have vinyl siding, Anderson windows, 90% efficient water heaters, and mechanical heating systems; and the homes are mortgaged on a 20, 25 or 30 year, zero percent mortgage with Habitat Financial. The home at 3913 Polk Street would be a single level rambler home with 1,100 square feet of living space. Nawrocki felt the garage on the property was not up to code and the entrance was too tight. He suggested the purchase agreement indicate the garage be torn down. Ruettimann stated that the Planning and Zoning Commission would have to approve that part of the development at the time the plans are reviewed. Economic Development Authority Minutes May 15, 2001 Page 3 of 7 Karis told Mrs. Nellermoe that he is willing to meet with the families on Polk Street to get ideas of what style home would be appropriate on the block. He also told Nawrocki that he will inspect the garage and if it needs to be replaced, Habitat would do so. Ruettimann stated that of the 14 existing Habitat homes in Columbia Heights, only 5 of these were purchased through the City or EDA. He asked if Habitat homeowners could buy the mortgage from Habitat due to an income change. Karis stated that in his experience with approximately 350 Habitat homes, it has only happened once, but it is possible. Williams felt that because the EDA had signed the letter of intent in 1996 with Habitat that the Board should honor it. Nawrocki was concerned that there wasn't an amount listed for Habitat to purchase the Polk Street property and what dollar amount the EDA has into the purchase and demolition of the property at this time. Schumacher stated that Habitat would be purchasing the property for one dollar. Fehst explained that we have approximately $35, O00 from Building Inspection funds into the property. With all the questions and comments finished, Ruettimann opened discussion for 4401 Quincy Street that would be affected by the sale of the Polk Street property. John Boreen, 4413 Quincy Street NE addressed the Board with his concerns; 1) the pond behind Rainbow has deteriorating walls and is full of weeds, 2) there have been several police raids at 4401 Quincy, and 3) the homes on the west side of Quincy have problerns with water and sewer back ups. Ruettimann requested Fehst check into the water and sewer problems. He stated the home is currently rented and when the Habitat home is put into place it should eliminate the police calls. Wyckoff stated Public Works is scheduled to make repairs to the pond sometime this summer. Ruettimann closed the Public Hearing at 8:04 a.m. MOTION by Ruettimann, second by Peterson, to approve the sale of the property at 3913 Polk Street NE, PIN #36-30-24-34-0105, to Habitat for Humanity; and furthermore; to authorize the President and Executive Director to enter into an agreement for the same. FRIENDLY AMENDMENT TO Tl~E MOTION by Ruettimann, second by Peterson, adding the cost of the sale is to be $1.00, provided it is a complete package as laid out in the motion. SECOND FRIENDLY AMENDMENT TO THE MOTION by Ruettimann, second by Peterson, that this sale is contingent upon the acquisition for development of 4401 Quincy, that Habitat for Humanity to meet the ordinances and regulations with the City of Columbia Heights on all three houses. Nawrocki expressed his concern that the proposal lacked the necessary detail for consideration and therefore, the property should be put up for public sale. Upon vote: Peterson- aye, Nawrocki-nay, Szurek-aye, Williams-aye, Wyckoff-nay. 3 ayes, 2 nays. Motion Carried. CREST VIEW MANAGEMENT CONTRACT RENEWAL Schumacher stated that on or about June of 1997 the EDA entered into a Management and Maintenance Agreement with Crest View Corporation that was approved by the U.S. Department of Housing and Urban Development. This agreement was amended in May of 1998 allowing for the extension of the term of the agreement to include the initial timeframe of two years, with three, one-year options that would extend the agreement to a total of five years. The agreement before the Board is for a one-year (third) extension effective June 1, 2001 though June 1, 2002 in the total amount of $140,802, plus Economic Development Authority Minutes May 15, 2001 Page 4 of 7 overtime. Salary and mileage fees are the only increases. He also passed out a spreadsheet, prepared by the Finance Department, showing fees disbursed over the last four years. Nawrocki asked for a breakdown of overtime hours in the last year and why there was a check issued for $19, 487. 77 this month to Crest View when past months checks were around $12,000. Schumacher stated he had the information on the overtime in his office and he would check with the Finance Department regarding check issued. MOTION by Wyckoff, second by Williams, to approve the one year extension of the Management and Maintenance Services Agreement to June of 2002 with Crest View Corporation, based on their proposal dated May 7, 2001 with the addition of providing a breakdown of the in-house caretakers hours on the monthly statements; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. PRESIDENTS REPORT Ruettimann recommended the Board take action to move all of the EDA owned properties to the HRA, therefore, giving the EDA an opportunity to go forth with redevelopment projects for the City. The Commissioners had some concerns regarding legal issues and suggested legal counsel look at the documents ftrst. MOTION by Ruettimann, second by Szurek, to direct staff to have the City Attorney looking into moving all EDA owned properties to the HRA to handle, thereby, giving the EDA the opportunity to go forward with redevelopment in the City. Nawrocki stated there wasn't a need to separate the two commissions (HRA/EDA). There would be problems with staffing, overtime, and the availability of commissioners to attend another meeting during the month. Upon Vote: Peterson-aye, Nawrocki-nay, Williams-aye, Szurek-aye, Wyckoff-aye. 4 ayes, 1 nay. Motion Carried. COMMUNITY DEVELOPMENT DEPARTMENT STAFFING UPDATE Schumacher reported the following changes in staffing; 0 Kathy Pepin has taken a position with the City of Coon Rapids. Her last day will be Thursday, May 17~h. We have borrowed temporary staffing from the Assessing Department until the position is filled, and 2) Mel Collova has been on a 4 hour a day medical leave the past month due to a car accident. Fehst introduced Mark Nagel to the Board. Nagel will be working in the Community Development Department on apart time basis. He has previous experience as the City Manager in Anoka, and the Housing & Redevelopment Authority Director for Scott County. PARKVIEW VILLA PA SYSTEM REWIRING STATUS Schumacher stated he contacted Fire Chief, Charlie Thompson, in regards to the potential use of the Parkview Villa Fire Alarm for paging purposes. Thompson recommended that the ftre alarm system at Parkview Villa not be used for general-purpose paging for the following reasons; 1) The MUFC Code says "A fire alarm system shall not be used for any purposes other than ftre warning unless approved; 2) Parkview Villa staff felt that the building would become more of an institution and that this matter should be discussed at a resident council meeting, 3) people making the page must have access to a key for the fire alarm panel because the microphone is in a locked compartment, 4) some residents placed cardboard in front of the speaker system in their apartment in past years because the volume on the ftre alarm was too loud, and 5) using the fire alarm system for general paging would expose several people to potential legal liability if the alarm system failed to operate properly after a paging announcement Economic Development Authority Minutes May 15, 2001 Page 5 of 7 was made. EDA LOAN PORTFOLIO Nagel reviewed the outstanding loans that the Community Development Department processes on a monthly basis and recommended the following: · Section 8 Repa),ment Agreement was made back in April of 1999 with Section 8 recipient, Duane Hagen with monthly payments of $55.51for 2 years. Hagen hasn't made a payment in 5 months and is currently without a forwarding address. Nagel recommended that the EDA declare the loan uncollectable and that no more loans of this type be accepted. · Home Improvement Promissa~_ Note (Sheffield) was made with the Warricks on June 15, 1995 for $5,000 at 2%for lO years. The monthly payments are $46.01 with a balance of $2,120.36 and payoff scheduled for June of 2005. Nagel recommended that the EDA complete the loan and establish a policy of offering residents the Home Improvement Loans and Grants through CEE. · Mortgage Loan Pa_¥ments were made by the EDA for two residents. The Chartraw loan was made on June 1, 1979 with a 30-year mortgage at 5% interest with payments of $381.34 and a balance of $20,243.70withpayoffon May 1, 2009. The Nielsen was made on July 1, 1979 with a 30-year mortgage at 5% interest with payments of $318.60 and a balance of $18,699.35 with payoff on June 1, 2009. Nagel recommended the EDA continue to process these loans but redirect the loan repayments into the BRLF account or sell the two mortgages and put the proceeds in the BRLF or housing program funds. · Business Revolving Loan Fund (BRLF)- the EDA has three outstanding loans; 1) Metro Assemblies (Robert & Priscilla Barnick) with payments of $265.99 and a balance of $13,646.31; 2) F.C. Celtic (Kenneth Hertz) with payments of $472.53 and a balance of $10,339.58; and 3) Industrial Steel (Steven & Katherine Jonak) with payments of $266. O0 and a balance of $5,246.69. ,,Ill loans were for $25,000 at a 5% interest rate. In February of 1999, it was noted that all BRLF monies were currently out on loan. As of the 2001 Management Report, there is over $25,000 available. Nagel recommended the EDA continue to administer the contracts, but negotiate a contract with CEE to administer this program and update the loan terms. By adding funds from the home mortgage loans and BRLF repayments, the BRLF can be self-sustaining and no longer in need of EDA monies. Nagel will put together consent letters with motions for Board approval at the June meeting. HOUSING UPDATE Nagel reported on the current Housing Programs. · Elevator Modernization project at Parkview Villa is complete and the City has been reimbursed all of the $271,488 in CIAP funds. There is one outstanding issue regarding the Davis-Bacon documents for the project that will be reviewed with HUD. This was detected in the ,4uditors findings stating that on the $ 75,128 in wages paid for the project, the prevailing wage forms need to be reconstructed. · On Monday, April 30th stafffrom the Center for Energy and Environment (CEE) met with City staff and provided an update on the Home Improvement Programs. CEE has administered a total of 62 loans totaling $727,826. · MHFA Rental Rehabilitation and Energy Loan Programs are moving slowly. Therefore, plans are being made to develop an information packet to be sent to owners of rental units. · CEE's contract expires on December 31, 2001. Nagel requested copies of their insurance certificates and an updated Exhibit B reflecting the new, lower interest rates under the MHFA programs. · CEE has closed on a total of 9 Home Improvement Grants using $117, 723 of the 1997 CDBG Funds and another $27,398 of the 1998funds for 3 more loans. In addition, another $133,725 in 1998 CDBG funds are being processed at this time. Their goal is to close on these loans and expend the remaining $90,000 by September of this year or it will have to be returned to Anoka Economic Development Authority Minutes May 15, 2001 Page 6 of 7 · MHFA First Time Homebuyers Program has $30 million to loan statewide at 6.25%, at one and a halfpoints. A total of $6.87 million is allocated to Anoka County residents. Thisprogram requires no EDA or City funds. · Transition Block Redevelopment Project has begun the 22 affordable townhomes. We will be processing the necessary paperwork for the ftrst draw of $235, 350for property acquisition reimbursement under the Metropolitan Livable Communities Act Grant. The remaining $309,650 grant funds will be used for the development of the senior assisted living facility. CITY/EDA/HRA OWNED PROPERTY UPDATE, Schumacher stated an updated list of EDA, City, and HRA owned properties was included in the packet for review per the Board's request. The list does not include any City owned parks, corner lots, or the two Park~iew Villa properties owned by the HRA, and 4607 Tyler Street NE owned by the EDA. Peterson questioned the status of 828 40'h Avenue NE, the old Heights TV building. Schumacher reported that a week ago the Columbia Heights Fire Explorers cleaned out all of the electronic equipment from the building which ftlled a 40yard dumpster. The next step will be to contact the Fire Chief to use the buildingfor ftre training. EDA OWNED PARKING RAMP UPDATE Schumacher met with Mr. Vedi last Friday, in regards to a quote for performing a physical audit on both of the City owned parking ramps. After reviewing the contract for the City owned bank building parking ramp, it was determined by our attorney that the EDA does have the right to request an inspection of the ramp. Vedi reduced the inspection proposal cost from $6,710 to $6,310 each. $chumacher suggested that we sit down with the two individuals responsible and get written commitments for them to pay for this process, and then enter into an agreement for the audits. Staff will make these arrangements. LEASE FOR PARKVIEW VILLA Nawrocki questioned why we use a month-to-month versus a six or twelve month lease and felt that if the lease was changed to a longer term it would help reduce the amount of moves in the building. Barnes stated that Crest View has always used a month-to-month lease for all facilities they own and manage. Barnes stated she couM change the lease term upon Board approval. Nawrocki asked if Crest View does a credit check/background check for renter and employees, and if they charge late fees. Barnes stated there is a credit check required and late fees are not required in the lease. Barnes also recommended, that City legal counsel and staff look at the lease and up date it. Amendment to Minutes: Nawrocki requested staff provide the answers to the following questions on the current lease agreement for Parkview Villa 1) Why do we use a month-to-month lease instead of a 6-month or 12-month? 2) Do we run Credit Checks on prospective tenants? 3) Do we run Background Checks on prospective tenants? 4) Do we charge any late fees to residents? ADJOURNMENT The meeting was adjourned by President, Ruettimann at 9:37 p.m. Economic Development Authority Minutes May 15,2001 Page 7 of 7 MEETINGS The next EDA meeting is scheduled £or 6:30 p.m., Tuesday, June 19, 2001 in Community Room B at Parkview Villa. Respectfully submitted, Cheryl Bakken Recording Secretary H:\EDAminutes2001\5-15-2001