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HomeMy WebLinkAbout19851007_jointEDINA HOUSING AND REDEVELOPMENT AUTHORITY EDINA CITY COUNCIL MINUTES OF JOINT MEETING OCTOBER 7, 1985 Answering rollcall were Commissioners Bredesen, Kelly, Richards, Turner and Courtney. MINUTES of September 9, 1985 were approved as submitted by motion of Commissioner Kelly, seconded by Commissioner Turner. Ayes: Bredesen, Kelly, Richards, Turner, Courtney Motion carried. AWARD OF BIDS-EDINBOROUGH UTILITIES ACTION MOVED TO COUNCIL AGENDA ITEM V.A. P- CI) Ln I: m Attorney Tom Erickson explained that a Joint Powers Agreement between the H.R.A. and the City has been drafted so that the H.R.A. and the City can award as one bid two separate items of work for the Edinborough utilities,'one for the H.R.A. public work and one for the City public work. He recommended that agenda item I be moved down to the City Council agenda item V.A. for award of bids and that a joint meeting be convened at that point. Motion of Commissioner Bredesen was seconded by Commissioner Turner to take action on agenda item I in a joint meeting with the Council when it considers agenda item V.A. Ayes: Bredesen, Kelly, Richards, Turner, Courtney Motion carried. BILTMORE MOTEL REDEVELOPMENT PROPOSAL APPROVED; REDEVELOPMENT CONTRACT AUTHORIZED. Mr. Rosland recalled that the Council heard the Biltmore rezoning request on August 19, 1985 and at that time the proponent of the project, Frank Dunbar, also discussed a request for $1,000,000 of tax increment financing assistance from the H.R.A. the members of the HRA/Council expressed reservations concerning the financial assistance. Subsequently, staff and Mr. Dunbar have met on several occasions to discuss revisions to the financing proposal. requests that the City issue Housing Revenue Bonds to finance the project. Mr. Dunbar recalled that on August 19, 1985 they had proposed a concept for senior housing under a redevelopment proposal for the Biltmore Motel site. that time they presented an analysis of the market as well as a financial structure to address that market. financial structure still trying to maintain a very strong presense to the market that could be penetrated with the project. ment project to meet the goals and objectives of the redevelopment district. Mr. Dunbar said they have held the program intact from the standpoint of pre- sentation to the market after considerable discussion with Health Planning and Management Resources, Inc. and Health Central Corporation. The acceptable market is perceived as the senior citizen 55 years and older that is looking to give up their single family home and moving to a facility such as is proposed. restructured financial proposal has been modified to a Housing-Revenue Bond which would allow the developer to take advantage of the tax-exempt status. Mr. Dunbar explained that 1) they are not requesting the City to do a redevelop- ment project in a manner dissimilar to what they have previously done, and' 2) the-tax increment that is generated from the redevelopment project would be available to meet the goals and objectives of the redevelopment district as a whole.-However, it is requested that off-site improvements that would be proposed by the project and under the district objectives would be covered by the bond. of the units be provided to low and moderate households. This would be moni- tored on an annual basis to be sure that goal is met. Mr. Dunbar stated they are requesting authorization by concept approval to proceed to a redevelopment contract together with an inducement resolution for sale of the bonds. actions would be subject to final review and approval by the Council. Commissioner Turner questioned 1) why the market is directed at age 55 and older when units in the City's PSR zoning is specifically designed for occupancy by persons 62 years of age or over, 2) why the increment district would pay for off-site improvements instead of the project, 3) what the cost is to the Federal and State governments of this type of financing, and 4) whether approval of the project must be given by the MHFA. Planner Larsen responded that there is a precedent for the increment district paying for public improvements as was done for the South Haven senior project. could be worked out in the redevelopment contract and that regarding the cost to Federal/State governments the interest earned on the bonds is not taxable to the lender. With respect to MHFA approval, Mr. Hughes said they could be involved as to income limits on persons occupying the units, but that this type of bond issue would not be subject to their ceiling. ioner Bredesen, Although the City granted preliminary approval of the rezoning, Therestructuring of the proposal At Since that time they have re-analyzed primarily the ., It is still seen as a redevelop- The He pointed out that this type of financing does require that 20% Both Mr. Dunbar said the age issue In response to Commiss- Mr. Dunbar said approximately 30 units would be provided for 10 / 7 /85 -_ 2 low and moderate income occupancy. for the project. the redevelopment contract executed prior to the end of the year. that no actual work can be started on the site until the financing is secured so that the first lender can have a clear title, but that there is an incentive to have the existing building down by January 2 from a tax standpoint. response to the question as to rentals, Mr. Dunbar said there would be a range of approximately $850 for one bedroom units to $1,300 for three bedroom units, including a minimum of one meal and certain other services. and moderate income units would be determined on a case by case basis depending on household income. Commissioner Bredesen commented that, concerning the issue of redevelopment, this property is not in a distressed area and questioned whether it is redevelopable without financial support. that in staff's opinion it is if the objective is to develop it for housing purposes. project, over and above normal planning time, would be picked up by the project. Mr. Dunbar responded that that issue could be addressed in the redevelopment contract. Following further discussion, Commissioner Kelly moved conceptapproval sf the project and the-drafting of a redeveLbpmeht contract. The motion-was seconded by Commissioner Turner, who commented that the public purpose of the project was to provide housing for'30 low and moderate income elderly persons and to widen the range of housing choices within the City as stated in the Comprehessive-Plan. She asked that staff consider carefully the issue of the age requirement and Edina preference in drafting the redevelopment contract. Courtney then called the motion. Commissioner Richards asked about timing Mr. Dunbar indicated that the financing must be closed and He said In Rentals for low Mr . .Hugh& responded . Commissioner Richards asked if the cost of staff time for the Mayor Rollcall : Ayes: Bredesen, Kelly, Richards, Turner, Courtney Motion carried. - .. . Commissioner Richards suggested that the City Council be convened with the €IRA at this time to consider Council agenda item VII1.B. Chairman Courtney thereupon convened a joint HRA/CounciI meeting. CITY COUNCIL ADOPTS INDUCING RESOLUTION FOR HOUSING REVENUE BONDS/BILTMORE SITE XEDEVELOPMENT. Subject to the developer paying the cost of staff time ~~ in connection with the sale of the Housing Revenue Bonds, Member Richards introduced the following resolution and moved its adoption: RESOLUTION RELATING TO THE ISSUANCE OF REVENUE BONDS PURSUANT TO CHAPTER 462C, MINNESOTA STATUTES, FOR THE PURPOSE OF FINANCING A MULTIFAMILY HOUSING DEVELOPMENT; GIVING PRELIMINARY APPROVAL TO THE DEVELOPMENT AND * CALLING FOR A PUBLIC HEARING THEREON BE IT RESOLVED by the City Council of the City of Edina, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. By the provisions of Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to plan, administer, issue and sell revenue bonds or obligations to make or purchase loans to finance one or more multifamily housing developments within its boundaries which revenue bonds or obligations shall be payable solely from the revenues of the development or other security pledged therefor. Representatives of Grandview Development Company, a Minnesota Limited Partnership (the "Developer"), have advised this Council of its desire to acquire land located within the geographical limits of the City at 5212 Vernon Avenue and construct and equip thereon a multifamily rental apartment building containing approximately 152 units, together with parking and related and subordinate facilities (the "Development"). The Development is intended primarily for occupancy by elderly persons. Total development and financing costs are pres- ently estimated by the Developer .to be approximately $13,840,000. Representatives of the Developer have requested that the City issue its revenue bonds in one or more series (the "Bonds") pursuant to the authority of the Act in such aggregate principal amount as may be necessary to finance all or a portion of the costs of the Development and make the proceeds of the Bonds available to the Developer, directly or indirectly, for the acquisition, construction and equipping of the Development, subject to agreement by the Developer to pay promptly the principal of and interest on the Bonds. The City has been advised by representatives of the Developer that conventional commercial financing is available to pay the capital costs of the Development only on a limited basis and at such high costs of borrowing that the scope of the Development and the economic feasibility of operating the Development would be significantly affected, but with the aid of municipal financing the Development can be constructed as designed and its operation can be made more economically feasible. responsible for the payment of the principal of and interest on the Bonds. 1.02. 1.03. 1.04. 1.05.. The full faith and credit of the City will not be pledged to or 1 I 1 1 I I I I I i ! I I I I I I ! I i I I I ii < 10/7/85 .. 3 Section 2. Approvals and Authorization. 2.01. It is hereby found and determined that it would be in the best interest of the City to issue the Bonds under the provisions of the Act in an amount currently estimated to be approximately $13,840,000 to finance all or a portion of the costs of the Development. The Development is hereby given preliminary approval by the City and the issuance of the Bonds for such purpose approved. issued until a multifamily housing program prepared pursuant to the requirements of Subdivision 5 of Section 462C.05 of the Act for the Development and the issuance of the Bonds (the "Program") has been reviewed and approved as provided by the Act, until the other requirements of the Act have been satisfied, until the requirements of Section 103 of the Internal Revenue Code of 1954, as amended (the "Code"), necessary in order to assure the tax-exemption of the interest hereon, have been satisfied, and until the City, the Developer and the purchaser or purchasers of the Bonds have agreed upon the details of the Bonds and the provisions for their payment. The principal of, premium, if any, and interest on each Bond, when, as and if issued, shall be payable solely from the revenues and the other security or property pledged to the payment thereof and shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. City in connection with the Development whether or not the Program is prepared or approved by the Minnesota Housing Finance Agency; whether or not the Development is carried to completion; and whether or not the Bonds are issued. participation and, accordingly, not issue the Bonds should the City at any time prior to the issuance thereof determine that it is in the best interest of the City not to issue the Bonds. 2.05. This Resolution is intended to, and shall, constitute a "bond resolution" or "some other official action" with respect to the Bonds and the Development under, and within the meaning of, Section 1.103-8(a) of the Treasury Regulations under the Code. 2.02. The Bonds shall not be 2.03. The Developer has agreed to pay any and all costs incurred by the 2.04. The City retains the right, in its sole discretion, to withdraw from Section 3. Public Hearing. 3.01. Section 462C.04, subdivision 2 of the Act requires that prior to adoption of the Program under the Act, this Council conduct a public hearing on the Program. Section 103(k) of the Internal Revenue Code of 1954, as amended, and regulations promulgated thereunder, requires that prior to this issuance of the Bonds, this Council approve the Bonds and the Development, after conducting a public hearing thereon. A public hearing on the Program and on the proposal to undertake and finance the Development through the issuance of the bonds is hereby called and shall be held on November 4, 1985, ,a$ 7 o'clock P.M., at the City Hall. 3.02. before the date on which the notice of public hearing is published in the official newspaper of the City, the City Clerk shall submit the Program to the Metropolitan Council for review and comment. published in the Edina Sun Current, the official newspaper of the City, at least once not less than fifteen (15) days prior to the date fixed for the public hearing. following f om: A draft of the Program is attached hereto as Exhibit A. On or 3.03. The City Clerk shall cause notice of the public hearing to be The notice to be published shall be in substantially the - NOTICE OF PUBLIC HEARING ON A PROPOSED PROGRAM FOR THE FINANCING OF A MULTIFAMILY HOUSING DEVELOPMENT - UNDER MINNESOTA STATUTES CHAPTER 462C, AS AMENDED AND THE ISSUANCE OF MULTIFAMILY HOUSING REVENUE BONDS, MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED CITY OF EDINA, MINNESOTA NOTICE IS HEREBY GIVEN that the City Council of the City of Edina, Minnesota (the City), will meet on November 4, 1985, at 7 o'clock P.M., at the City Hall, 4801 West 50th Street, in Edina, Minnesota, for the purpose of conducting a public hearing in accordance with Minnesota Statutes, Section 462C.04 and Section 103(k) of the Internal Revenue Code of 1954, as amended (the Code) on the proposal that the City undertake a program under Minnesota Statutes, Chapter 462C, as amended, and issue revenue bonds, in one or more series, under Minnesota Statutes, Chapter 462C, as amended, in order to finance the cost of a multifamily housing program. of the financing of the acquisition of land in the City and the constructing and equipping thereon of a multifamily housing project consisting of one or more buildings and containing approximately 152 residential units. will be owned by Grandview Development Company, a Minnesota limited partner- ship (the Borrower). City. The maximum aggregate principal amount of the proposed bond issue is $13,840,000. The bonds shall be limited obligations of the City, and the . The proposed program will consist The project The project will be located at 5212 Vernon Avenue in the 10/7/85 4 bonds and interest thereon shall be payable solely from the revenue pledged to the payment thereof, except that such bonds may be secured by a mortgage and other encumbrance on the project. have the right to compel any exercise of the taxing power of the City to pay the bonds or the interest thereon, nor to enforce payment against any property of the City except moneys payable by the Borrower to the City and pledged to the payment of the bonds. forth above, or may file written comments with the City Clerk prior to the date of the hearing set forth above. Dated: October 7, 1985 BY ORDER OF THE EDINA CITY COUNCIL - No holder of any such bonds shall ever All persons interested may appear and be heard at the time and place set /s Marcella M. Daehn, City Clerk EXHIBIT A City of Edina, Minnesota PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT UNDER' "ESOTA STATUTES , CHAPTER 462C 1. Grandview Development Company, a Minnesota Limited Partnership (the "Developer") intends to acquire land in the City of Ed&na, Minnesota (the "City") and construct and equip thereon a multifamily residential rental facility to be occupied primarily by elderly persons and in part by persons and families of low and moderate income. The site is located at 5212 Vernon Avenue in the City. The development will contain approximately 152 housing units, at least 20% of which will be rented to persons of "low and moderate income," under &L03(b) (4) (A) of the Internal Revenue Code of 1954, as amended (the "Code") , and the Regulations thereunder. its housing revenue bonds under the Act in a maximum aggregate principal amount of approximately $13,840,000 to finance the acquisition of the site and the construction and equipping of the development and facilities function- ally subordinate and related to the development. providing a variety of housing stock throughout the City, for persons residing in the City, including persons of low and moderate income. The development to be financed by the Program will assist the City in certain problems addressed in the Housing Plan, including (a) increasing available housing stock, (b) providing decent, sanitary and affordable housing for residents of the City, including persons of low and moderate income and their families. The development will be a "multifamily housing development" within the meaning of Subd. 5 of 8462C.02 of the Act, undertaken pursuant to Subd.4 of S462C.05 of the Act. The income limitations set fourth in Subd. 2 of 8462C.05 of the Act will not apply to this development since it will be located within a redevelopment project area under Minnesota Statutes, Chapter 462. In addition, as discussed in paragraph 1 of this Program, at least 20% of the units will be rented or available for rental to persons of low and moderate income; that is, with incomes not greater than 80% of the median family income as estimated by the United States Department of Housing and Urban Development for the statistical area in which the City is located, currently $26,240. To finance the development, the City intends to issue its housing revenue bonds pursuant to the Act, in a maximum aggregate principal amount of approximately $13,840,000 (the Bonds). Bonds to the Developer pursuant to a revenue agreement in which the Developer agrees to make loan repayments sufficient to repay the Bonds. The Bonds will be a special, limited obligation of the City, payable solely from revenues derived from payments to be made by the Developer under the revenue agreement and pledged to the payment of the Bonds. The Bonds may be secured by a mortgage and security interest in the development, or by some form of credit enhancement (which may include one or more letters of credit, insurance on the mortgage loan or the Bonds), or by a combination of such security devices. Passed and adopted by the City Council of the City of Edina, Minnesota this 7th day of October, 1985. 2. Representatives of the Developer have requested that the City issue 3. The City's Housing Plan serves as a basis for the City's goal of 4. - 5. The City will lend the proceeds of the The motion for the adoption of the foregoing resolution was duly seconded by MemberTurner and upon vote being taken thereon, the following voted in: favor thereof: and the following voted against the same: whereupon the resolution was declared duly passed and adopted and was signed by the Mayor whose signature was attested by the City Clerk. Bredesen, Kelly, Richards, Turner, Courtney None I I i 1 ! I 10 / 7 / 85 5 BIDS AWARDED FOR EDINBOROUGH UTILITIES; JOINT POWERS AGREEMENT APPROVED BY HRA AND COUNCIL. struction of the Edinborough project utilities: Mr. Rosland presented the following tabulation of bids for con- Annandale Sewer & Water $331 , 284.17 Hayes Contractors, Inc. $365,201.73 Northdale Construction 332,225.77 Brown & Cris, Inc. 374,842.95 Orfei & Sons, Inc. 333,712.03 Richard Knutson, Inc. 376,488.25 Arcon Construction Co. 336,766.90 Hennen Construction Co. 384,388.40 Q.R.S. Corporation 339,926.00 Progressive Contractors 391,458.05 S.J. Louis Construction 350,496.15 Bergstrom Retail 400,261.50 L & G Rehbein, Inc. 352,532.00 Encon Utilities 409,901.30 Barbarossa & Sons, Inc. 357,777.61 Lametti & Sons, Inc. 634,349.70 G. L. Contracting, Inc. 362,513.28 Staff would recommend award of bid to low bidder, Annandale Sewer & Water, subject to the closing on the property which is expected to be accomplished within the next few weeks. Mr. Erickson explained that part of the utilities is HRA work and part is City work and that they are physically connected and will be con- structed essentially as one package with the costs being recorded separately so that part of the cost will be assessed and part will be paid through tax increment. In order to achieve this it is recormended that a Joint Powers Agreement be executed between the HRA and the Council in order to jointly and cooperatively publish bids for, award contracts for, .and do the public utility work. and moved its adoption: Commissioner/Councilmember Bredesen then introduced the following resolution RESOLUTION BE IT RESOLVED by the Housing and Redevelopment Authority of Edina, Minnesota, and the Edina City Council that they hereby authorize and direct the execution of a Joint Powers Agreement between the HRA and the Council in order to jointly and cooperatively publish bids for, award contracts for, and do the public utility work for the Edinborough project. Motion for adoption of the resolution was seconded by Commissioner/Councilmember Kelly. Rollcall : Ayes: Bredesen, Kelly, Richards, Turner, Courtney Resolution adopted. Commissioner/Councilmember Bredesen then made a motion to award the bid for the Edinborough public utility work to recommended low bidder, Annandale Sewer & Water, for $331,284.17, subject to the closing on the property. Motion was seconded by .Commissioner/Councilmember Turner. Ayes: . Bredesen, Kelly, Richards, Turner, Courtney Motion carried. , Mayor Courtney adjourned the joint HRA/Council meeting at this pointin the meeting. RESOLUTION ADOPTED RELATING TO EAST EDINA HOUSING FOUNDATION. Mr. Erickson recalled that at its May 6, 1985 meeting the HRA had adopted a resolution relating to the Southeast Edina Redevelopment Plan and authorizing the execution of the redevelopment contract, which has now been done. specific documents will be involved in the bond issue which the City authorized for the elderly development, e.g. the Interest Reduction Agreement and Deed. The Interest Reduction Agreement is the payment by the HRA out of tax increment of certain monies and the Deed provides for the low and moderate cost restrict- ions. & recommended, Commissioner Bredesen introduced the following resolution and moved its adoption: In addition, two RESOLUTION RELATING TO THE SOUTHEAST EDINA REDEVELOPMENT AGREEMENTS AND AUTHORIZING THE EXECUTION OF VARIOUS OTHER DOCUMENTS ' PLAN; RATIFYING AND AFFIRMING THE EXECUTION OF VARIOUS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the %J3A1'), as follows: The HRA and the Edina City Council have previously approved a redevelopment plan, as defined in Minnesota Statutes, Section 462.421, sub- division 15 , designated as the Southeast Edina Redevelopment Plan (the "Plan") . Acting pursuant to the Plan the HRA has acquired certain land in the area included in the 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 May 6, 1985, the HRA approved the form of the Agreement and authorized the Chairman and Secretary or Assistant Secretary of the HRA to execute and deliver the Agreement on behalf of the HRA with such modifications as are deemed appropriate and approved by the attorney for the HRA and the Executive Director of the HRA. Pursuant to such authori- zation the Chairman and Secretary of the HRA have executed and delivered the Agreement to the Foundation. In connection with the transactions contemplated by the Agreement there has been prepared and submitted to the HRA an Elderly Housing Interest Reduction Agreement (the "Interest Reduction Agreement"), 1. Recitals. 10/7/85 dated as of October 1, 1985, between the HRA and the Edina Park Plaza Associates Limited Partnership, an Illinois limited partnership to be formed (the "Partnership") , and a Deed and Covenants Running with the Land (the "Deed") from the HRA to the Partnership. and delivery of the Agreement by the Chairman and Secretary of the HRA is hereby ratified and affirmed. 3. Authorization for Execution and Delivery of Further Documents. The form of the Interest Reduction Agreement and Deed are hereby approved subject to such modifications as are deemed appropriate and approved by the attorney for the HRA and the Executive Director of the HRA, which approval shall be con- .elusively evidenced by the execution of the Agreement by the Chairman and Secretary or Assistant Secretary of the HRA. The Chairman and Secretary or Assistant Secretary of the HRA are directed to execute the Interest Reduction Agreement and the Deed. The Chairman and Secretary or Assistant Secretary of the HRA are also authorized and directed to execute such other instruments as may be required to accomplish the transaction herein contemplated including but not limited to any amendments or supplements to the Agreement, the Interest Reduction Agreement and the Deed and other agreements as may be necessary to accomplish the transactions contemplated by the Agreement. The execution of any such amendments, supplements or agreements by the Chairman and Secretary or Assistant Secretary of the HRA shall be conclusive evi'dence of the approval of such documents by the HRA in accordancewith this Resolution. Dated this 7th day of October, 1985. 2. Ratification of Execution and Delivery of Agreement. The execution - L-&ecutive DuirdLtor " . hairman V The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Turner, and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared passed and adopted and was signed by the Chairman and his signature attested by the Executive Director. Bredesen, Kelly, Richards, Turner, Courtney None The HRA meeting was adjourned by motion of Commissioner Bredesen, seconded by Commissioner Turner. Motion carried.