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HomeMy WebLinkAbout2021-03-11 HRA Regular Meeting MinutesMINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY MARCH 11, 2021 7:30 A.M. 1. CALL TO ORDER Chair Hovland called the meeting to order at 7:32 a.m. and noted the meeting was being held virtually to comply with the Governor's Stay at Home Order due to the COVID-19 pandemic then explained the processes created for public comment. 11. ROLLCALL Answering rollcall were Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland. Absent: None. III. PLEDGE OF ALLEGIANCE IV. MEETING AGENDA APPROVED — AS PRESENTED Motion by Commissioner Staunton, seconded by Commissioner Jackson, approving the meeting agenda as presented. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. VI. CONSENT AGENDA ADOPTED — AS PRESENTED Member Anderson made a motion, seconded by Member Pierce, approving the consent agenda as presented: VI.A. Approve minutes of the Regular Meeting of January 28, 2021 VI.B. Approve Payment of Claims, Check Register December 2021-February 2021 totaling $366,193.33 Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS V►I.A. 5146 EDEN AVENUE — METHODOLOGY TO DETERMINE FAIR MARKET VALUE — RECEIVED Economic Development Manager Neuendorf said this item pertained to the redevelopment of the vacant property at 5146 Eden Avenue. He shared the HRA had entered into a Memorandum of Understanding (MOU) with Frauenshuh and United Properties to explore redevelopment of the site for a combination of commercial and residential uses with public benefits. He shared a proposed concept that included medical offices, public plaza, and senior cooperative housing then commented on value determination that included highest value versus fair market value, the residential element that included affordable units, the medical office element and adjustment for extra -ordinary site conditions regarding environmental contamination. Mr. Neuendorf spoke about how land value would be impacted by unit sales revenue, development costs, and site conditions including the need for structured parking, steep grade changes, and unique infrastructure costs as well as the anticipated 10% of units deemed affordable. He said the MOU required the HRA Board consider a methodology on how "fair market value" would be determined for a potential sale to Frauenshuh and United Page 1 Minutes/HRA/March 11, 2021 Properties then reviewed other potential uses that concluded general commercial likely would not fit on this site, such as retail cafe, etc. A methodology had been jointly prepared by City staff and the developers and he noted the methodology did not mandate that the HRA enter into a purchase agreement for any particular price but to identify pricing expectations up front so that both parties could work towards an agreement on price and terms. The Commission confirmed this proposal for public plaza space would be no different than if accomplished through a private development, if the senior cooperative project on York Avenue was not a comparable property due to its age, if valuation of properties not used could be considered then asked for explanation on potential use of TIF on pricing. Mr. Neuendorf responded while the project called for public space it had not yet been defined and would be incorporated into the planning, similar to the Nolan Mains project. He said this would be a similar project as to approach but agreed it would not be comparable for land values. He stated use of TIF on this site would be challenging because it was not a rental housing project then added since the district expired later this summer staff was still exploring if TIF was the correct tool. The Commission noted this was not a sketch plan but an agreement on approach should a purchase agreement come forward then asked about impact of valuation and making decisions that protected cooperative homeowners' property values. The Commission asked about environmental cleanup and DEED grants and how that would be reflected in the purchase price then thanked staff for the direction but said they would prefer to make the valuation determination once a project was fully identified. City Attorney Kendall responded the MCA did not require the HRA to approve methodology but merely consider one and felt the development team heard the Commission's direction and had satisfied the requirements of receiving the MOA. Motion by Commissioner Jackson, seconded by Commission Staunton, to receive the methodology to be used when determining a fair market price for the potential sale of property at 5146 Eden Avenue for redevelopment purposes. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. V►I.B. HOUSING REHABILITATION LOAN PROGRAM —APPROVED Affordable Housing Development Manager Hawkinson stated the City had relied on the CDBG program for the financing of home rehabilitation loans for low- and moderate -income homeowners. This program was administered by Hennepin County and must comply with HUD guidelines with regards to eligibility, of borrowers. She said the proposed pilot program served two purposes by allowing for higher income borrowers and higher valued homes than the CDBG program and provided loan forgiveness provision if the house was sold to the HRA. She shared program criteria comparison in detail then shared funding for the pilot program would come from the Affordable Housing Trust Fund sources and uses and requested allocation of $250,000 for the pilot program for marketing. The Commission asked about the proposed interest rate as simple interest rate with no amortization paid annually and why only one contractor bid was received. Ms. Hawkinson replied all interest would be deferred and accumulated with the principal and not compounded if sold to the Land Trust. She explained if not the principal balance would become the responsibility of the homeowner as part of the sale proceeds of the home as they did not want to impose an undue burden on a homeowner then added with the intense increase in construction projects it was difficult to receive multiple bids. The Commission said they wanted the ability to allow a homeowner to pay interest annually if chosen then complimented staff for the creative program that preserved smaller homes in the community. Page 2 Minutes/HRA/January 28, 2021 They inquired more about funding sources and fees for the loan servicer or administrator and applauded Ms. Hawkinson on finding creative ways to retain housing with sustainability in the City. They supported the pilot program but cautioned about how to evaluate the program for its success and the need to identify metrics for evaluation. Motion by Commissioner Staunton, seconded by Commission Jackson, to approve a pilot Home Rehabilitation Loan program in the amount of $250,000 and authorization to engage City Attorney to draft loan documents and contracts with Center for Energy and the Environment to administer the program and Community Reinvestment Fund to service the loans. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII.C. APPROVE AMENDED PARTNERSHIP WITH METRO HRA TO EXPAND THE FAMILY AFFORDABLE HOUSING PROGRAM AND AUTHORIZE STAFF TO ENGAGE AN ATTORNEY TO DRAFT LEGAL AGREEMENTS — DISCUSSED Ms. Hawkinson stated on November 12, 2020, the HRA approved $2,000,000 to expand the Metro HRA's Family Affordable Housing Program. The basics of the approved program included acquiring single family houses to lease to the Metro HRA for $1.00 each and how the Metro HRA would maintain and manage the houses and make available to families who qualified for their program. She said after further consideration and in consultation with the City attorney and financial advisor staff proposed amending the approved program to instead provide the Metro HRA with a $2,000,000 forgivable loan whereby they acquired the single-family houses to own, maintain and manage. She said this action would streamline the process as Edina already had an agreement with Metro HRA rather than creating a brand-new program. The Commission asked how we would ensure equity stayed in Edina and would not result in subsidizing homes in another city such as a right of first refusal. Ms. Hawkinson explained the differences in other ways to address affordability such as gap financing. The Commission discussed the process and the importance of maintaining title and their reluctance to give up control and while the public hearing process provided transparency these were significant funds to potentially lose control over. Consensus was to direct staff to return with an amended program with Metro HRA for further consideration. Vlll. CORRESPONDENCE — Received IX. HRA COMMISSIONERS' COMMENTS —Received IX.A. PROJECT UPDATE — 4917 EDEN AVENUE — RECEIVED Mr. Neuendorf shared staff had been in communication with Reuter Walton Development regarding their redevelopment concept for the Perkins restaurant site at 4917 Eden Avenue. The developers had requested the HRA explore use of Tax Increment Financing on this site to help redevelop the site. He explained how the Grandview Framework and Transportation plans envisioned several roadway improvements in this area and that TIF could be an effective mechanism to achieve this community benefit. He spoke about the need to retain space for a future off -ramp and roadway improvements at Wilson and Eden and that staff would be working to identify if TIF was appropriate for this site and would provide the Commission with updates once options were identified. X. ADJOURNMENT Motion made by Commissioner Jackson, seconded by Commissioner Anderson, to adjourn the meeting at 8:47 a.m. Page 3 Minutes/HRAIMarch 11, 2021 Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. Respectfully submitted, EM