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HomeMy WebLinkAbout2021-05-27 HRA Regular Meeting MinutesMINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY MAY 27, 2021 7:30 A.M. I. CALL TO ORDER Chair Hovland called the meeting to order at 7:33 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. It. 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 Anderson, seconded by Commissioner Staunton, 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. V►. CONSENT AGENDA ADOPTED - AS AMENDED Member Staunton made a motion, seconded by Member Jackson, approving the consent agenda as amended, removing Item VI.B: VI.A. Approve minutes of the Regular Meeting of April 22, 2021 bidder, Grandview Distriet Publie Improvements; various VI.B. Approve request for purchase; awarding the bid to the recommended low $6,379,048.31 VI.C. Adopt Resolution No. 2021-03; Authorizing Execution of Tax Increment Pledge Agreement VI.D. Extension of 4d Program Affordability Period for Edina York Villas Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. ITEMS REMOVED FROM THE CONSENT AGENDA VI.B. APPROVE REQUEST FOR PURCHASE; GRANDVIEW DISTRICT PUBLIC IMPROVEMENTS, VARIOUS VENDORS, $6,379,048.31 - APPROVED Engineering Director Millner shared an overview of the project and highlighted sidewalk connections, lighting improvements, overhead power lines, and the roundabout that would improve traffic operations and pedestrian improvements as well as provide for a potential pedestrian bridge in the future. The Commission confirmed surface reconditioning was included with this project and sidewalks created on both sides of Eden Avenue then asked about working with property owners regarding roundabout concerns and confirmed the closure of the slip ramp as it was a major traffic and crash Page 1 Minutes/HRA/May 27, 2021 concern. They commented about work. of the public advisory group to select the engineering consultant then confirmed buses would be able to navigate roundabouts easily and not affect traffic operations. Mr. Millner said discussions continue with the northeast corner property owners on the need for easements then noted the railroad tracks were the break point for the entire two-year project. He spoke about signal timing with Vernon Avenue to help address traffic impacts and the plan to wait until 2024 for bridge completion. Member Staunton made a motion, seconded by Member Jackson, approving request for purchase; awarding the bid to the recommended low bidder, Grandview District Public Improvements; various vendors, $6,379,048.31 and to close southbound Highway 100 on -ramp from Eden Avenue. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS VII.A. METRO HRA FAMILY AFFORDABLE HOUSING PROGRAM PARTNERSHIP AGREEMENTS — APPROVED AS AMENDED Affordable Housing Manager Hawkinson shared in November 12, 2020; the HRA approved $2,000,000 to expand the Metro HRA's Family Affordable Housing Program. Staff requested a change to the program on March 11, 2021 so that rather than the HRA directly acquiring the houses and leasing to the Metro HRA, the HRA would lend the money for the Metro HRA to directly acquire the houses. She reviewed the revised program points that included how the HRA would lend Metro HRA $2,000,000 to acquire, maintain and manage the houses and make available to families who qualify for their program, and that a loan agreement between the HRA and Metro HRA would be forgiven if program requirements remained in place for 25 years. She said a Declaration of Restrictive Covenants would be placed on the houses to keep them affordable and would extend beyond the term of the loan agreement and that Edina HRA had first rights of offer if the Metro HRA elected to sell the homes. Ms. Hawkinson said the Metro HRA had secured financing from HUD for on -going rental assistance and had a robust tenant selection plan then outlined the process, income of households served, and next steps. The Commission shared concerns about restrictive covenants and clarified this request would provide rental housing opportunities by loaning funding to the Metro HRA to purchase homes for rent and how at the end of 25 years the loan would be forgiven. Attorney Selke stated the restrictive covenant was a separate document that once homes were identified would have a covenant recorded against the property then explained the process in more detail that included a right of first option to purchase. The Commission asked if a renter wished to acquire a property then asked more about loan terms and keeping the agreement open ended to keep the asset in the community. They confirmed the HRA would have the right of first refusal and rights as a lender if they were not pleased with the professional property management and how the concern could be addressed through lease default. They shared concerns about getting another mechanism to address in order to protect a neighborhood's integrity and if a mortgage was ever done to protect the lender. Mr. Selke noted there would be a significant remedy included that did not include foreclosure but had a default interest and other consequences the HRA that could be enforced should Metro HRA not perform accordingly. Metro HRA Representative Smith explained when a renter's income exceeded the rent amount they could remain on the property but at the market rate then said they were researching partnerships to help families move into home ownership. She said this program included no mortgages and was the first partnership of this type added to their portfolio. Page 2 Minutes/HRA/May 27, 2021 The Commission spoke about how they would not like to see foreclosure occur but there was a need to provide a fail-safe protection in the event property maintenance concerns occurred. They spoke about how they relied on homeowners throughout the City to maintain properties accordingly and how the Metro HRA would be held accountable in a similar fashion. Mr. Selke said he was comfortable with the level of protection included in the agreements and if property maintenance was a concern suggested a shorter cure period to ensure the Metro HRA addressed any concerns. Ms. Hawkinson suggested approving the agreement contingent upon review by the attorneys then noted the Metro HRA has had eight properties in the City since the 1990s and that no concerns had occurred regarding property management. Member Staunton made a motion, seconded by Member Pierce, approving the Loan Documents with the Metro HRA for the Family Affordable Housing Program and authorize the execution of the documents, including additional enforceability remedies as outlined in Section 3.2. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. VII.B. 7001 FRANCE AVENUE — PRELIMINARY RECOMMENDATION REGARDING TAX INCREMENT FINANCING - REVIEWED Executive Director Neal shared background on this important project and how the developer was at a milestone in the planning and was looking for input on project support before additional work was performed. Economic Development Manager Neuendorf shared this item pertained to the potential use of tax increment financing (TIF) to promote redevelopment of the underutilized site at 7001 France Avenue. The developer had the property under contract and secured preliminary approvals to re- zone the site to replace the existing office and bank buildings with four new buildings constructed on four separate pads. The developer had requested the HRA consider the creation of new TIF Districts and a pledge of TIF support upon completion of the projects. He reviewed the request that fully embraced the Southdale design experience guidelines to create a walkable and drivable project then reviewed the need for key financing input that surrounded structured parking. Mr. Neuendorf explained the total project cost of $234 million, how the developer would bear all upfront costs and financial risk if the HRA would reimburse using TIF notes, and outlined the TIF request of $25.5 million. He said most parking would be public and would assist the City's need and that staff recommended approval of up to $22 million in TIF notes to provide the additional support needed for the mixed -income housing in the future. He said a TIF term sheet would be prepared to document terms and conditions of a future TIF redevelopment agreement and that many costs would be eligible for reimbursement through TIF. Mr. Neuendorf said they would incorporate permanent public easements on most outdoor and public parking space and outlined remedies should the public project not occur then added staff recommended no funding be provided for private parking, building costs, design and other soft costs, and any costs for the single -story bank. He explained how the funding must satisfy the but -for test and how this project would not be feasible without TIF and the importance of the entire project being completed based on the strategic location of the public parking and overall degree of public benefit. The Commission asked about public plaza access and if the $22 million included Parcel C. They said they were pleased with the payoff time of 15 years and the need to understand how parking fit into the Southdale plan overall and the need to ensure the affordable housing would be built. Mr. Neuendorf outlined the process and when the TIF agreement was created it would be for market rate units for a 15-year renewal district and how the housing would be 20 years with the condition that Parcel C be deed restricted for affordable housing. Page 3 Minutes/HRA/May 27, 2021 The Commission spoke about how the project would be transformational and set a new standard of excellence then asked about interest rates for the total project cost. They spoke of how TIF would be required for any project with the goal of 1,800 units. They discussed the public benefit of the overall project, especially the district parking, and felt the vast majority of parking would be more for the tenants of the high rise and commercial site and stressed the importance of the design guidelines for this or any project. Nick Anhut, Ehlers and Associates, explained the proposed 4.25% rate for the TIF note that would total $7-8 million over the life of the note. Mr. Neuendorf commented about actual parking costs for the 600 stalls and the TIF contribution would be approximately $28,000 per stall and how the developer's cost was double that cost and would not cover it all. Ted Carlson, Carlson Partners, confirmed the project would include 1,000 total stalls throughout and if the parking was not needed in the future the project could be converted to something else in the future as the floor plates were flat. Mr. Neuendorf commented on the need for a permanent easement and if parking was not needed the developer would want to change and the need to identify public/private stalls, district and shared parking details. The Commission stressed the need for a metric to distinguish between public and private stalls and location and suggested guidance be obtained from the Nolan Mains project then asked more about the proposed partner, PPL. Brent Webb, Mortenson, explained their informal RFP process that identified PPL and how they were comfortable in working with this partner to create a ready site to bring this project to completion. The Commission shared comments about the need for parking definition and long term plans should parking change in the future and to quantify the public benefits and assurance that Parcel C developed in the future. They shared support for adherence to the design experience guidelines and the importance of public perception and the need to balance projects in the future. They noted the $22 million request equated to 8% of the total project cost which was in line with past projects and if the City wanted developers to embrace the design experience guidelines assistance would be needed and that they supported further work continue on the proposed project. VII.C. HOUSING IMPROVEMENT AREA POLICY -APPROVED Ms. Hawkinson shared the City had been approached by representatives of condominium associations seeking financial assistance for common area improvements. Some of the buildings were aging and in need of improvements and one tool used was the creation of a Housing Improvement Area whereby the City financed the improvements and was paid back through assessments. This would be considered a financing option of last resort and required authorization by a majority of the owners in the association. She said in order for Edina to consider utilizing this source of financing, the HRA must first approve a policy. She reviewed the process, defined potential improvements such as windows, siding, roofing, and elevators and said the area would be established by ordinance after a public hearing process. Ms. Hawkinson confirmed items not eligible would include ongoing maintenance issues and would require a reserve study and 70% of the membership would have to the sign petition before imposing a financing agreement for each project. The Commission asked about bonding as significant funding source and the potential risk to the City's bond rating then confirmed there would be no need for additional staffing and need to protect the City such as liens. Mr. Anhut said any debt issuance included some level of risk and the City could instead issue a loan to the HIA but would want assurances in place such as guarantees and securing property if needed. Page 4 Minutes/HRAIMay 27,2021 Member Jackson made a motion, seconded by Member Anderson, approving the Housing Improvement Area Policy as presented. Rollcall: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. Vill. HRA COMMISSIONERS' COMMENTS —Received The Commission suggested a tutorial be created to assist the Commission and public to best understand TIF district creation as more projects were presented. IX. EXECUTIVE DIRECTOR'S COMMENTS — Received Mr. Neal shared about the grand opening event on June 24 for the Amundson Flats project. X. ADJOURNMENT Motion made by Commissioner Jackson, seconded by Commissioner Pierce, to adjourn the meeting at 10:00 a.m. Roll call: Ayes: Commissioners Anderson, Jackson, Pierce, Staunton, and Chair Hovland Motion carried. Respectfully submitted, S " cctt Neal, Executive Director Page 5