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HomeMy WebLinkAbout1989-07-10 HRA Regular Meeting MINUTES OF THE JOINT MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY/CITY COUNCIL HELD AT EDINA CITY HALL JULY 10, 1989 A joint meeting of the Edina Housing and Redevelopment Authority and the City Council was convened to consider concurrently: 1) Edina Homestead Development, and 2) Conveyance of Phase III - Centennial Lakes Condominiums. Action was taken by the HRA and Council as recorded. ROLLCALL Answering rollcall were Commissioners/Members Kelly, Paulus, Rice, Smith and Richards. MINUTES of the Joint HRA/Council Meeting of June 19, 1989 were approved as submitted by motion of Commissioner/Member Smith, seconded by Commissioner/Member Paulus. Ayes: Kelly, Paulus, Rice, Smith, Richards Motion carried. EDINA HOMESTEAD DEVELOPMENT - RPI SERVICES Motion was made by Commissioner/Member Rice and was seconded by Commissioner/Member Smith to continue the public hearing on final rezoning, final plat and tax increment financing assistance for Edina Homestead Development to the meeting of August 7, 1989 as requested by the proponents. Ayes: Kelly, Paulus, Rice, Smith, Richards Motion carried. CONVEYANCE OF PHASE III - CENTENNIAL LAKES CONDOMINIUMS AUTHORIZED Executive Director Gordon Hughes stated that the condominium developer for Centennial Lakes, Laukka Development, is requesting conveyance of the Phase III condominiums site for development. The Phase III condominium building is proposed to be somewhat different than Phases I and II. Phase III will contain 42 condominium units rather than 46 units as was the case with Phases I and II. Also, an elevator will be included that will serve 26 of the 42 units. This will be the first condominium building served by an elevator in Centennial Lakes or Edinborough. Director Hughes said that the proposal for Phase III is apparently responsive to a market segment comprised of older more affluent condominium purchasers. Due principally to the elevator, the average sale price of the Phase III unit will be approximately $98,800, compared to $90,100 for the Phase II condominium. Due to this increase, fewer units will be affordable to moderate income purchasers. Based on the current policy of limiting second mortgages to units selling for $90,000 or less, 11 units in Phase III will qualify for second mortgage assistance, while 34 units in Phase II qualified for such assistance. Under the developer's proposal, second mortgage funds that would normally be allocated to Phase III will instead be allocated to other buildings in the project to assist moderate income purchasers. The East Edina Housing Foundation has reviewed the proposal for Phase III and has consented to the conveyance. They felt that provision of an elevator would provide a desirable housing opportunity for a different segment of condominium purchasers. Director Hughes stated that Larry Laukka, developer, would present preliminary plans for Phase IV. The unit plans for Phase IV would be reconfigured to provide substantially larger units and would be sold to more affluent purchasers. It is anticipated that none of the units in Phase IV would be sold with second mortgage assistance. In that this proposal for Phase IV departs from the original concept of providing homeownership opportunities to moderate income people, direction is being sought from the HRA concerning this proposal. If the HRA agrees with the concept, the amount of financial assistance, if any, will have to be negotiated with the developer. H.R.A./Council July 10, 1989 Page 2 Director Hughes concluded with the recommendation that the HRA authorize conveyance of Phase III and offer comments and direction for Phase IV. Commissioner Rice asked if it is possible that there would not be a demand for the second mortgage assistance in this and future phases of the project. Director Hughes explained that, by the terms of the agreement with Laukka Development, if the money that the HRA is putting into the project ultimately is not reflected in second mortgages the developer would be obliged to pay the HRA the difference in cash. Mayor Richards said his concern would be that we not preclude someone from this market by reducing the number of units affordable to moderate income people. Larry Laukka, developer, pointed out that in the Edinborough project 80% of the units were purchased by individuals who met the criteria for the second mortgage assistance. In the Centennial Lakes project they are now addressing a broader market that would respond to the people who looked at Edinborough and were not satisfied. This included elderly from the area who could not live in Edinborough because of no elevator. During pre-selling of units in the first two buildings they kept track of those people and had some 165-170 names listed when they worked on the preliminary designs for the Phase III building to include an elevator. He concluded that there is a market to serve there and that, while there are only 11 units in Phase II that will qualify for second mortgages, he felt they would use the second mortgage money in subsequent phases of the development. Commissioner Smith introduced the following resolution and moved its adoption: RESOLUTION RATIFYING AND AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA"), as follows: 1. Recitals. The HRA and the Edina City Council have previously approved a redevelopment plan, as defined in Minnesota Statutes, Section 462.421, subdivision 15, designated as the Southeast Edina Redevelopment Plan, and have approved various amendments there (as so amended, the "Redevelopment Plan") . Acting pursuant to the Redevelopment Plan, the HRA has acquired certain land in the area included in the Redevelopment Plan and it has been proposed that the HRA sell and transfer a portion of such land to the East Edina Housing Foundation (the "Foundation"), pursuant to a Land Sale Agreement by and between the HRA and the Foundation (the "Agreement"). By a resolution adopted March 7, 1988, the HRA approved the form of the Agreement and authorized any two officers of the HRA to execute and deliver the Agreement on behalf of the HRA with such modifications as were deemed appropriate and approved by the Chairman and the Executive Director of the HRA. Pursuant to such authorization the Chairman and Vice Chairman of the HRA executed and delivered the Agreement dated on or as of March 14, 1988. Subsequently, by resolution dated September 12, 1988, the HRA approved execution and delivery by any two officers of the HRA, on behalf of the HRA, of an Amended and Restated Land Sale Agreement and Contract for Private Redevelopment between the HRA and Foundation with such modifications as the attorney for the HRA and Executive Director of the HRA should approve (the "Amended Agreement") . Pursuant to such authorization the Chairman and Secretary of the HRA executed and delivered the Amended Agreement dated on or as of September 30, 1988. In connection with the transactions contemplated by the Amended Agreement, it is now proposed that Phase III of the Condominium Development be commenced on the property described on Exhibit A hereto (the "Phase III Condominium Property") and that the Phase III Condominium Property be conveyed pursuant to the Amended Agreement and on the same terms and conditions as the Phase II Condominium Property was conveyed with such changes and modifications as may be approved by the Executive Director and the Attorney to the HRA, including those resulting from the proposed addition of an elevator and the proposed sale of units without the use of second mortgages. 2. Authorization for Execution and Delivery of Documents. Any two officers of the HRA are authorized and directed to execute such instruments and agreements H.R.A./Council July 10, 1989 Page 3 as may be required or be desirable to accomplish the conveyance of the Phase III Condominium Property pursuant to the Amended Agreement with such changes and modifications as may be approved by the Executive Director and Attorney for the HRA. The execution of such instruments and agreements by any two officers of the HRA shall be conclusive evidence of the approval of such documents by the HRA in accordance with this Resolution. EXHIBIT A THE HOMES OF CENTENNIAL LAKES PHASE III CONDOMINIUM LAND DESCRIPTION Lot 3, Block 1, THE HOMES OF CENTENNIAL LAKES, according to the recorded plat thereo / Attes k Chairman Executive/ rector otion for adopt" n of the resolution was seconded by Commissioner Paulus. Rollcall: Ayes: Kelly, Paulus, Rice, Smith, Richards Resolution adopted. Preliminary Plans - Phase IV - Mr. Laukka explained that a number of requests have been made for a condominium building in which the units would be larger, e.g. approximately 1,500 square feet. In response, they worked on a conceptual design within the existing footprint of the building and without materially changing the appearance that would provide 30 units, all of which would be served by an elevator. After pricing that out, it was determined that the building could be done at approximately $160-170,000 per dwelling unit. Mr. Laukka said they had some concern for the future with the change in the tax laws, tax increment, etc. They felt that if there is a way to begin to put money back into the capital pool it would be a wise idea and that the proposed building might do that. It is estimated that they will be able to keep about $600,000 for the building in the capital pool if they take the opportunity to sell 30 semi-luxury condominium units. He said this design concept is now on the drawing board and that they are ready to proceed but cannot do that without the acquiescence of the HRA. Basically, it is a business decision - does it make sense to introduce a third market to that development. Considerable discussion on the concept for the Phase IV condominium building as proposed was held which included: 1) possible negatives from a public viewpoint, 2) monthly assessment for unit owners, 3) effect on market value/real estate taxes on other Centennial Lakes units or Edinborough, 4) effect on resale value of units in Edinborough/Centennial Lakes, 5) market for units priced at $170,000, considering the mix in the development, and 6) creating a market rate "ghetto" within the development. Following discussion, the Commissioners individually said they concurred conceptually with the proposal for the Phase IV condominium building as presented by Mr. Laukka. Motion was made by Commissioner Smith and was seconded by Commissioner Paulus for adjournment of the HRA. Motion carried unanimously. AA xec tive Di e City Clerk