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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 06-23-2011APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY June 23, 2011 PRESENT: Chairman Jeff Kulaszewicz, Commissioners Paul Caryotakis, David Miller, Bob Stein (arrived at 7:11 p.m.) and Jim Willis (arrived at 7:13 p.m.) ABSENT: None STAFF PRESENT: Housing Program Manager Jim Barnes and Office Support Specialist Laurie Lokken OTHERS PRESENT: Jim Waters, Danielle Fischer and Grace Management Representative Jody Boedigheimer 1. CALL TO ORDER Chairman Kulaszewicz called the Plymouth Housing and Redevelopment Authority meeting to order at 7:00 p.m. Housing Program Manager Barnes added agenda items 3. D. and 3. E. under New Business. 2. CONSENT AGENDA A. Approve HRA Meeting Minutes from April 28, 2011. B. Plymouth Towne Square. Accept April 2011 and May 2011 housing reports. C. Vicksburg Crossing. Accept April 2011 and May 2011 housing reports. MOTION by Commissioner Caryotakis, seconded by Commissioner Miller, to approve the consent agenda. Vote. 3 Ayes. MOTION approved unanimously. 3. NEW BUSINESS A. Quest Development. Request For Financial Assistance. Housing Program Manager Barnes gave an overview of the staff report. Chairman Kulaszewicz asked if this would be the same reserve fund that we use to fund the social service programs such as Treehouse. Housing Program Manager Barnes responded they are completely different funds. He said the funds that Chairman Kulaszewicz is referring to come from the CDBG program, which is a federally funded program. He said that an allocation from those funds would range from about $230,000 and $320,000 annually. He said that these Approved Plymouth Housing and Redevelopment Authority June 23, 2011 Page 2 are funds the HRA has in reserve to do projects with and are separate from the reserve accounts for the two HRA owned senior buildings. Commissioner Caryotakis stated that the reserve fund has not been used a lot over the past few years. Housing Program Manager Barnes replied that we have not. He said the largest application out of the reserve funds in the recent past was the acquisition of the accessible home, which was $140,000. Commissioner Caryotakis asked if this request would be an appropriate use of these funds. Housing Program Manager Barnes responded that staff considers it to meet our mission and our goals. Chairman Kulaszewicz asked if this Board also has the ability to create a TIF district. Housing Program Manager Barnes replied the HRA does have that ability. He said it is a policy decision by the City's senior staff and the type of district that determines which entity should create a TIF district. He said that the City Council has indicated that they would rather be the elected body to create districts and make administrative changes. He said the HRA Board can create and establish a TIF district but the public hearing has to be held by the elected body, which in our case is the City Council. Chairman Kulaszewicz asked if the term workforce housing is a marketing term or if it is a specific type of housing. Housing Program Manager Barnes responded that workforce housing is a definition that evolves over time and it could be called affordable housing. He said the State uses the term for the developments that are designed to provide housing for people currently in the workforce but may not earn enough to afford decent housing near their employment. Commissioner Caryotakis stated it distinguishes between what was previously known as housing projects that may have been more welfare related and this language is focused on people who are working and earning an income. Chairman Kulaszewicz stated these workforce units would be available to folks at 50% of the area median income with a guideline that 30% of their income would go towards housing. Housing Program Manager Barnes stated they will have to be affordable to households at 60% area median income, paying 30% of their income towards rent. He said that's where all the funding partners come in. He said their first mortgage is much smaller and because of this, they are able to set aside some of their units at lower monthly rents. He said it's also based on the tax credit laws. He said there are maximum rent limits they can charge within that and the 50% can change, depending on where you live. He said the metro area is all one number, so that doesn't change in the metro area. Chairman Kulaszewicz asked what the monthly rent would be. Mr. Jim Waters, representing Quest Development, responded that at 60% of area median income a studio rent, utilities included, would be $882 per month and at 50% of area median income, it would be about $760 per month. Approved Plymouth Housing and Redevelopment Authority June 23, 2011 Page 3 Commissioner Caryotakis asked if there is a good demand for these apartments now. Mr. Waters replied they just had a market study completed that shows this particular project would lease up in six months. He said that's very rapid and there's strong demand so the affordable rents would rent out very quickly. Chairman Kulaszewicz asked if they would still be able to do the project without this $4,000 and extra points. Mr. Waters responded they could but not with this degree of affordability. He said when you look at providing 40% or 64 units out of this project to these rental rates, the amount of mortgage dollars that you could yield with that income stream is much lower so you need these tax credits. He said if they are unable to get the tax credits, that would put them in real tough shape for providing the level of affordability they have pledged to the City of Plymouth. He said it would be difficult to go back and take a look at it again. Chairman Kulaszewicz asked about other projects in the works that they are competing against. Mr. Waters replied that they are not able to know how many projects there are but suspects there will be competition and a lot of it. He said they have a unique project in a good location. He said they do not compete against Minneapolis' or St. Paul's projects but rather they are only competing against other suburban projects. He said they believe they have a good chance of receiving funding; otherwise, they wouldn't have made the application. Commissioner Stein stated he did not have a problem with the request for $4,000. He asked if they need specific things on the application or if there was a way it could be done without including park dedication as part of the request. Housing Program Manager Barnes responded it is a waiver of fees and that park dedication would get their full amount. He said the HRA would pay $2,000 to park dedication and $2,000 to the city. He said he was not 100% sure if the proposal could all be utility fees but he didn't see why not. He said the application simply asked for reduced or waived fees. He said we are going off the model from the Sand Companies' project, which had park dedication and utilities in those same amounts. Commissioner Stein stated that he didn't want to set precedence because park dedication fund money is very limited. Commissioner Willis added that park dedication fees would not be waived but paid out of those resources. He agreed he didn't want to set precedence either. Commissioner Stein asked what is on the application. Mr. Waters responded the application states it is a contribution, a reduction. Commissioner Stein stated he didn't want to hold up the application. He said sewer and utility fees are fine; it's just park dedication fees are hard to come by. Housing Program Manager Barnes stated that in the future, staff would take that into consideration. He added that if it's acceptable to the Board and if we find out between this meeting and before the application is due that it could all be just one fee, we would make the change. Commissioner Stein stated he would appreciate that. Approved Plymouth Housing and Redevelopment Authority June 23, 2011 Page 4 MOTION by Commissioner Willis, seconded by Commissioner Stein, to approve the request to provide Quest Development with $4,000 from the HRA reserve fund to assist with development. Vote. 5 Ayes. MOTION approved unanimously. B. Plymouth Towne Square. Discuss Purchase Of New Picnic Tables. Housing Program Manager Barnes gave an overview of the staff report. Grace Management Representative Boedigheimer stated that her preference would be to purchase the picnic table with four sides because they could fit two people per side. Housing Program Manager Barnes responded that they could purchase two of the four-sided tables and one that's ADA accessible. MOTION by Commissioner Willis, seconded by Commissioner Miller, to approve the request to purchase three new picnic tables for Plymouth Towne Square. Vote. 5 Ayes. MOTION approved unanimously. C. Vicksburg Crossing April 2011 And May 2011 Marketing Reports. Grace Management Representative Boedigheimer stated that both communities have decent waiting lists. She said that they are always getting inquiries and adding names. Commissioner Caryotakis stated that they are doing a great job of filling the units as residents move out. Grace Management Representative Boedigheimer stated that they are on the smoke-free housing website. She said they have a little ad in the Senior Housing Guide, which is a web -based guide that is also printed and distributed in grocery stores. She said that it did not seem to make financial sense to place an ad in the senior section of the Apartment Living Guide but they are investigating it. D. Community Development Block Grant (CDBG) First Time Homebuyer (FTHB) Program. Remove Restrictive Covenants From 4980 Garland Court North, # G. Housing Program Manager Barnes gave an overview of the staff report. Commissioner Willis asked when this matter came to their attention. Housing Program Manager Barnes responded that staff had been working with their title company and lender on whether or not the language within the covenants only affected the sale to the private lender and then would be enforced to subsequent buyers. He said that was our original position and then after further review with the City's attorney, it was determined that the affordability requirements are no longer valid. Approved Plymouth Housing and Redevelopment Authority June 23, 2011 Page 5 MOTION by Commissioner Stein, seconded by Commissioner Willis, to approve the Resolution for the removal of the Restrictive Covenants from the property located at 4980 Garland Court North, #G. Vote. 5 Ayes. MOTION approved unanimously. E. First Time Homebuyer Program. Consider Loan Modification Request. Housing Program Manager Barnes gave an overview of the staff report. Commissioner Stein asked if a First Time Homebuyer loan is forgiven over a certain amount of time. Housing Program Manager Barnes replied that the older ones are forgiven after 20 years but most are forgiven after 30 years or when they sell their home or their home no longer is their principal place of residence. He said the newer ones, starting around 2005, 2006, are deferred with no interest and due and payable after 30 years or if the home is sold or is no longer the principal place of residence. Commissioner Caryotakis asked Ms. Fischer if it was her expectation to give herself time to recover, with the intent of selling in the future. Ms. Fischer responded yes and hopefully, the market would recover before the 10 years and she could pay back the balance due prior to the 10 years. She said she understands it is due back to the City and she is not trying to get anything waived. She said it would be difficult for her family to come up with the $17,200 down payment plus closing costs. Commissioner Caryotakis asked if she was facing any challenges from lenders about having this other property. Ms. Fischer replied this is the first step in the process. She said she understands that they would need to qualify for a second mortgage. She said since she received this grant, she had gotten married, their income has tripled and she felt they are in a good position where they would qualify for a second home in Plymouth. She said they want to stay in Plymouth and they definitely would like to sell their home but now is not the time. She said she was able to buy this home as a single mom and this is a great program. She said she knows that she's not alone and she was hoping for an exception. Chairman Kulaszewicz asked if things go according to your plan, do you have a possible perspective tenant on board. He asked if there are other units like this where she is at that are for rent and if there is a possibility that she would actually get a tenant and be able to rent it out. Ms. Fischer responded it is very possible. She said in Chelsea Woods there are a lot of properties for rent. She said she had a garage sale and a woman was very interested in renting it next summer. She said there is an interest there and there's a demand in the City. She said she was sure that they would be able to break even with the rent and the association fees. She said they have done the math and she knows that they would be financially covered to just break even on the rent to cover that mortgage and then proceed with another home. Commissioner Caryotakis stated he understood the situation and thinks that if she is willing to rent it for a period of time that would be a good solution. He said he wouldn't want it to become Approved Plymouth Housing and Redevelopment Authority June 23, 2011 Page 6 a long term solution either for her or for the property. He said hopefully the market will pick up and she will be able to sell it and get out. Commissioner Miller stated that he would like to see language included that upon sale, the full loan is paid. Housing Program Manager Barnes stated that would be incorporated into the documents. MOTION by Commissioner Willis, seconded by Commissioner Caryotakis, to approve the request for a loan modification provided that there are no violations of any CDBG regulations, that the City Attorney is able to securitize an amortizing loan on the property and the loan modification is due upon that sale of this property with a term not to exceed 10 years. Vote. 5 Ayes. MOTION approved unanimously. 4. ADJOURNMENT MOTION by Commissioner Miller, seconded by Commissioner Stein to adjourn the meeting at 7:46 p.m.