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HomeMy WebLinkAbout19890710_joint269 MINUTES OF THE JOIJ!?T MEETING OF THE EDINA HOUSING AND REDEVELOPWENT AlJTHORITY/CITY COUNCIL HELD AT EDINA CITY HAIL 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 I11 - Centennial Lakes Condominiums. Action was taken by the HEW and Council as recorded. ROLLCAU Answering rollcall were Commissioners/Members Kelly, Paulus, Rice, Smith and Richards. MINUTES of the Joint HRA/CouncilMeeting of June 19, 1989 were approved as submitted by motion of Commissionerflember Smith, seconded by Commissionerflember Paulus . Ayes: Kelly, Paulus, Rice, Smith, Richards Motion carried. EDINA HOWESTEAD DEVELOPWENT - RPI SERVICES Rice and was seconded by Commissionerflember 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. Motion was made by Commissionerflember Ayes: Kelly, Paulus, Rice, Smith, Richards Motion carried. CONVEYANCE OF PHASE I11 - CENTENNIAL LAKES CONDOMRJIUMS AUTHORIZED Executive Director Gordon Hughes stated that the condominium developer for Centennial Lakes, Laukka Development, is requesting conveyance of the Phase I11 condominiums site for development. The Phase I11 condominium building is proposed to be somewhat different than Phases I and 11. Phase I11 will contain 42 condominium units rather than 46 units as was the case with Phases I and 11. 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. Also, an elevator will Director Hughes said that the proposal for Phase I11 is apparently responsive to a market segment covprised of older more affluent condominium purchasers. principally to the elevator, the average sale price of the Phase I11 unit will be approximately $98,800, compared to $90,100 for the Phase I1 condominium. 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 I11 will qualify for second mortgage assistance, while 34 units in Phase I1 qualified for such assistance. Under the developer's proposal, second mortgage funds that would normally be allocated to Phase I11 will instead be allocated to other buildings in the project to assist moderate income purchasers. Due Due to The East Edina Housing Foundation has reviewed the proposal for Phase I11 and has consented to the conveyance. provide a desirable housing opportunity for a different segment of condominium purchasers. They felt that provision of an elevator would 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. 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. It is 7/10/89 270 Director Hughes concluded with the recommendation that the HRA authorize conveyance of Phase I11 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. 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. Director 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. because of no elevator. they kept track of those people and had some 165-170 names listed when they worked on the preliminary designs for the Phase I11 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 I1 that will qualify for second mortgages, he felt they would use the second mortgage money in subsequent phases of the development. This included elderly from the area who could not live in Edinborough During pre-selling of units in the first two buildings Commissioner Smith introduced the following resolution and moved its adoption: BESOLUTION RATIE'YING AND AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCXIWBITS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the "ERA"), as follows: 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 ERA has acquired certain land in the area included in the Redevelopment Plan and it has been proposed that the ERA 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 ERA approved the form of the Agreement and authorized any two officers of the ERA to execute and deliver the Agreement on behalf of the ERA with such modifications as were deemed appropriate and approved by the Chairman and the Executive Director of the ERA. Pursuant to such authorization the Chairman and Vice Chairman of the ERA executed and delivered the Agreement dated on or as of March 14, 1988. Subsequently, by resolution dated September 12, 1988, the ERA approved execution and delivery by any two officers of the ERA, on behalf of the ERA, of an Amended and Restated Land Sale Agreement and Contract for Private Redevelopment between the ERA and Foundation with such modifications as the attorney for the ERA and Executive Director of the HRA should approve (the "Amended Agreement"). to such authorization the Chairman and Secretary of the ERA 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 I11 of the Condominium Development be commenced on the property described on Exhibit A hereto (the "Phase I11 Condominium Property") and that the Phase I11 Condomkium Property be conveyed pursuant to the Amended Agreement and on the same terms and conditions as the Phase I1 Condominium Property vas conveyed with such changes and modifications as may be approved by the Executive Director and the Attorney to the ERA, including those resulting from the proposed addition of an elevator and the proposed sale of units without the use of second mortgages. Any two officers of the HRA are authorized and directed to execute such instruments and agreements 1. Recitals. The HRA and the Edina City Council have previously approved a Pursuant 2. Authorization for Execution and Delivery of Documents. 7/10/90 as may be required or be desirable to accomplish the conveyance of the Phase I11 Condominium Property pursuant to the Amended Agreement with such changes and modifications as may be approved by the Executive Director and Attorney for the €IRA. ERA shall be conclusive evidence of the approval of such documents by the €lRA in accordance with this Resolution. The execution of such instruments and agreements by any two officers of the EXHIBIT A THE HOMES OF CENTENNIAL LAKES PHASE I11 CONDOMINIUM LAND DESCRIPTION Lot 3, Block I, THE HOMES OF CENTENNIAL LAKES, according to thereof. ChaiGman W e resolution was seconded by Commissioner Paulus. Rollcall : Ayes: Kelly, Paulus, Rice, Smith, Richards Resolution adopted. Preliminarv 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. sense to introduce a third market to that development. Basically, it is a business decision - does it make 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 adjournment of the HRA. ssioner Paulus for Motion Carrie