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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 03-22-2012APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY March 22, 2012 PRESENT: Chairman Jeff Kulaszewicz, Commissioners Paul Caryotakis, Carl Runck and Bob Stein ABSENT: Commissioner Jim Willis STAFF PRESENT: Housing Program Manager Jim Barnes, HRA Specialist Kip Berglund and Office Support Specialist Laurie Lokken OTHERS PRESENT: None 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 Item 3.1). to the agenda. 2. CONSENT AGENDA A. Approve HRA Meeting Minutes from February 23 and March 13, 2012. B. Plymouth Towne Square. Accept Monthly Housing Report for February 2012. C. Vicksburg Crossing. Accept Monthly Housing/Marketing Report for February 2012. D. Bureau of Criminal Apprehension. Authorize HRA Executive Director Steve Juetten to sign Joint Powers Agreement on behalf of the HRA. MOTION by Commissioner Stein, seconded by Commissioner Caryotakis, to approve the consent agenda. Vote. 4 Ayes. MOTION approved. 3. NEW BUSINESS A. First Time Homebuyer Loan Modification Request. Consider Loan Modification Request For The Existing Loan For Property Located At 5465 Orleans Lane North, #5. Housing Program Manager Barnes noted that an additional email had been received and added to the public record. HRA Specialist Berglund gave an overview of the staff report. Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 2 Commissioner Stein asked if it was known how far in debt they are. HRA Specialist Berglund responded that they currently owe roughly $147,000. He said the current assessed value on the home is $123,400. Commissioner Runck stated that Zillow website had that house listed at $100,000 right now. HRA Specialist Berglund added that Ms. Hervin does make mention in her correspondence that there is a home in the neighborhood that is currently for sale for $99,000. He said that staff doesn't disagree that her property has dropped in value. He said that when she purchased the home in March 2007, it was valued at $162,000 and she purchased it for $155,900. Commissioner Stein asked if this request is for zero interest and if the previous request the HRA approved a few months ago was also zero interest. HRA Specialist Berglund responded that the proposed payments of $200 per month would be at zero interest. Housing Program Manager Barnes added that a previous request to the HRA Board was also zero interest. Commissioner Stein asked if they had any other financial issues other than the house. HRA Specialist Berglund responded that from what staff saw in 2010, their financial situation was okay as far as the amount of money that's coming into the home. He said they have never really said that they had an issue financially; however, they did have some issues that staff recommended that they get some counseling services for credit issues, etc. He said that staff is of the opinion that they want to move into a larger home but that they do not necessarily need to move into a larger home. HRA Specialist Berglund confirmed for Commissioner Stein that they have two children in a two bedroom townhome. He added that another First Time Homebuyer recipient came to the Board this past year and that he had spoken to them today. He said they are in a very similar situation as they are in a two bedroom townhome with three children. He said that they currently are making that work because they understand the economic situation and they are going to try to ride it out at this point. Chairman Kulaszewicz asked staff to clarify the previous request and the direction given by the HRA. HRA Specialist Berglund replied that the previous client had been directed by the Board that at the point there was a purchase agreement in place, the Board would consider it. Commissioner Stein stated that there was one family that came to the Board and their request had been approved. HRA Specialist Berglund confirmed that the Board approved a modification a couple of months ago where the homeowner paid a 25% initial payment and then will make annual payments for up to ten years. Housing Program Manager Barnes reiterated that staff knows that the housing market has gone down and that our program participants have felt that, just as we have all felt it. He said nobody has ever told us that housing was going to be this phenomenal investment and yet, people believe that it will. He said it is an investment and it does have risks. He said that the situation of the request before the Board is not considered overcrowding under any of our federal programs or Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 3 any other program that we operate. He said it makes it very difficult for us if we have to start taking in monthly payments. He said that we are not set up for that as we don't have the software or systems in place. He said the city does take in a lot of payments on a monthly basis but they are on totally different platforms and are tracked different. He said it is not that it can't be done by our finance department but it just becomes one more thing out there that is different than our normal day-to-day business operations that they have to track and maintain. Commissioner Stein asked how many First Time Homebuyer loans there are. Housing Program Manager Barnes responded that there are about 185 to 190 loans. He said that some are forgivable and some require repayment. He said this loan is required to be repaid at some point. He said that the loan will be due and payable if they were to sell their home, not have that home be their principal place of residence or at the end of 30 years. Chairman Kulaszewicz asked about nonrecourse loans. Housing Program Manager Barnes replied we have a nonrecourse loan that does not follow the person. Commissioner Caryotakis asked if they are in such a dire situation that they are basically moving from this property and back into a rental situation or are they looking to sell this property and buy another property. HRA Specialist Berglund responded that staff does not know for sure. He said their first approach in 2009 was that they wanted to sell this home and move into a larger home. He said in this proposal, they stated that they want to move in with family and to get a job, which potentially could be out of state. Commissioner Stein asked if this has been going on since 2009. HRA Specialist Berglund replied that they originally approached staff in 2009 and asked for full forgiveness of the loan. He said they were denied at staff level and staff suggested that they could approach the Board and they did not. He added that she purchased the property by herself and then got married. Commissioner Runck asked if the Board could get an updated look at their finances. He said that he looked online and they are both gainfully employed. Housing Program Manager Barnes responded that staff could go back to them with the Board's request to look at their finances again. He said that they are not required to give staff that information at this point. Commissioner Caryotakis stated one of his concerns was if we could rely upon them to keep this place rented. He said if they can't cover a down payment and if they are restricted to new payments of $200 a month, do they have the means to keep this place rented and to handle the administrative responsibility. Housing Manager Barnes replied that staff had similar concerns. He said it is more difficult to find buyers and to sell a house when you are renting it out. He also indicated that staff had concerns that they will no longer provide $1,000 up front as part of the modification. Chairman Kulaszewicz stated that the first mortgage holder may not allow them to rent out their property either. He asked if the title to this property had our restrictive covenants with regards to Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 4 affordability so that if foreclosed, those terms would go to the new buyer. Housing Program Manager Barnes staid this property did not have the restrictive covenants. MOTION by Commissioner Stein, seconded by Chairman Kulaszewicz, to deny the loan modification request for the existing loan for property located at 5465 Orleans Lane North, #5. Vote. 4 Ayes. MOTION approved. B. Potential Redevelopment. Industrial Area Southeast Of Medicine Lake. Commissioner Stein gave an overview of this request. Commissioner Stein asked if it has to be designated as a blight area. Housing Program Manager Barnes confirmed affirmatively. He said that in order for this to qualify for a redevelopment district, we would have to do a blight study. He said we would have to hire an independent consultant to go out, look through all of the properties that would be included in the district and determine whether or not they meet that blight test. Chairman Kulaszewicz asked for some of the blight criteria in general. Housing Program Manager Barnes responded the overall cost to bring the building up to current codes has to exceed 15% of what a new building would cost to be built. He said the fact that they are older buildings may help in determining that the 15% is exceeded. Commissioner Runck asked that before we do a blight study, wouldn't we want to get the sniff test from other developers. He said that he knows another developer that he thinks would be really interested in doing this. He said they could do some "back of the envelope" math on the pro forma of what would work there to know what the gap would be. Housing Program Manager Barnes responded that before we start getting too far out there, especially if we were going to have to approach the businesses, that the HRA may want to hold a joint meeting with the city council since the council is going to be so involved with this as well. Commissioner Runck stated that making an office use work is pretty tough unless you have an anchor tenant lined up. He said that in an area of that size, he doesn't think there is enough intensity to make it work as retail. Chairman Kulaszewicz asked about housing around assisted living. Commissioner Runck stated that there is certainly a demand for senior housing. He doesn't know about the demand at that site but there is going to be a need for it in the future at some point. Chairman Kulaszewicz stated that as far as housing went, that would seem to be a nice location for that. Commissioner Runck said that with the lakeside park, that would seem to be logical. Commissioner Stein stated that in the past, council has talked about greater than three to five story buildings so this could be higher density than what staff is even allowing for. Commissioner Runck stated that the reason most of the new apartment buildings being built in the twin cities are not high rise is because the rents are not high enough to justify the concrete Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 5 construction for height. Housing Program Manager Barnes stated that we used our current guiding and zoning to determine options. Housing Program Manager Barnes stated to keep road and traffic improvements in mind. He said if all housing, we believe that there is enough capacity already there so there would be very little improvements needed. He said going to anything office or retail would probably trigger some major improvements, upwards of over $5 million. He said the majority of that is dealing with the Highway 169 ramps. Commissioner Runck asked if that was because they're outdated. Housing Program Manager Barnes responded that they will not work for those volumes of traffic and intensified uses, particularly during peak traffic times. Commissioner Stein stated that he didn't think anyone ever considered this site to be all office and retail. Commissioner Caryotakis asked with this kind of redevelopment, is it voluntary for the property owners to decide to cooperate. Housing Program Manager Barnes confirmed affirmatively. He said that at an earlier discussion there was no interest in eminent domain. Commissioner Caryotakis asked if we would have to be able to cover the costs of having them move. Chairman Kulaszewicz stated if they even wanted to. Commissioner Stein stated that the city council would provide a letter to the property owners that the city is interested in seeing redevelopment if it ever got that far. Housing Program Manager Barnes stated that if the redevelopment was going to be done on this or any other site that the HRA or city could be a partner in the project and provide assistance based on what the lead developer requested and what the HRA and/or city felt was reasonable. Commissioner Runck stated that if the rents at that site could be high enough, that it might make sense to have a developer contribute more and less would be needed from the city and then maybe the numbers would make sense. He said that's the variable we need to figure out. Commissioner Stein stated that if a project occurred and they requested TIF that Ehlers would do a complete analysis of the project and determine how much TIF the project would need. Commissioner Runck asked if they would use current market information in their assumptions. Housing Program Manager Barnes responded that they would use information from the current market and from the developer themselves. He said that if the developer is asking for the public subsidy, they have to meet the "but -for" test. He said they have to make the case that "but -for" public assistance or this project would not be financially feasible. Housing Program Manager Barnes suggested this item be tabled until next month's meeting so that Commissioner Willis has a chance to weigh in with thoughts. Commissioner Caryotakis stated that he thinks we would find pretty good interest in doing multifamily in this project and it's a good location. Commissioner Stein stated that up until two Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 6 to three years ago, multifamily was all that was being built in the city. He said now we are seeing more single family homes being built. He mentioned that Dominium Development was getting ready to submit an application to the city for an affordable housing project that would be multi -family. Housing Programs Manager Barnes indicated that Dominium has indicated they will ask the HRA for funds to help the project. Chairman Kulaszewicz asked if it would be a TIF district kind of thing. Housing Program Manager Barnes responded that he didn't believe it would really warrant creating a TIF district. MOTION by Commissioner Stein, seconded by Commissioner Caryotakis, to continue discussion of the properties located in the industrial area southeast of Medicine Lake to the April 26, 2012 HRA meeting. Vote. 4 Ayes. MOTION approved. C. Election of Officers. Commissioner Stein nominated Commissioner Kulaszewicz as Chairman. MOTION by Commissioner Stein, seconded by Commissioner Caryotakis, to approve Commissioner Kulaszewicz as Chairman. Vote. 4 Ayes. MOTION approved. Commissioner Stein nominated Commissioner Caryotakis as Vice Chairman. MOTION by Commissioner Stein, seconded by Chairman Kulaszewicz, to approve Commissioner Caryotakis as Vice Chairman. Vote. 4 Ayes. MOTION approved. Chairman Kulaszewicz nominated Commissioner Runck as Secretary. MOTION by Commissioner Stein, seconded by Chairman Kulaszewicz, to approve Commissioner Runck as Secretary. Vote. 4 Ayes. MOTION approved. D. Request for Special Meeting. Housing Program Manager Barnes requests a special meeting to approve the development agreement and related documents with Oppidan Development for Tax Increment Financing District 1-3. Housing Program Manager Barnes stated the Board adopted the modification to the tax increment financing plan for TIF 1-3 at the August 25, 2011 meeting. He said Oppidan believes they have all of their users identified at this point. He said that Shelter Corp (which is proposing the senior assisted living facility), McDonalds and The Davis Group will be the end users on the site. He said they have a purchase agreement with The Davis Group for a medical office building that will go on the eastern portion of the site. He said that Shelter Corp has submitted their building plans and they need to start taking action on the sale of the parcels and filing the final plat. He said Oppidan has requested a special meeting some time between April 5th and April 14th so they can close on April 15th Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 7 Chairman Kulaszewicz asked if they had wanted funding up front. Housing Program Manager Barnes responded the funding is just under $1.9 million and will be in the form of pay as you go. Commissioner Runck asked if this had all been approved by the Planning Commission. Housing Program Manager Barnes replied that the whole development has been approved as a PUD so they will have to come back for an amendment to the PUD for the medical office building. Chairman Kulaszewicz stated the developer did try to pay special attention to the neighbors adjacent to this site. Housing Program Manager Barnes added that they made some changes to work with the residents who will sit behind the senior building and McDonalds. MOTION by Chairman Kulaszewicz, without objection, to approve the request for a special meeting on Tuesday, April 10, 2012 at 6:30 p.m. to approve the development agreement and related documents with Oppidan Development for Tax Increment Financing District 1-3. MOTION approved. Commissioner Runck asked to discuss information provided by staff in their meeting packets. He referred to the city of Woodbury's program for interest -only deferred loans to help purchase foreclosed homes. He said this seems to be a practical program for folks to get houses. Housing Program Manager Barnes responded that we have been very fortunate with foreclosures in our city. He said that right now we are sitting under 4%, with around 140 homes out there at some various stage of foreclosure according to the Hennepin County website. He said we are not out of the woods but it has been very stable. He said the Woodbury program is keyed to foreclosures. He said he didn't know if it was a huge issue that you would have a lot of interest in Plymouth. He said Woodbury is using their local tax dollars to run the program. He said that is something that the city has never done as our First Time Homebuyer program has always been federal CDBG funds. Commissioner Caryotakis stated that it's a challenging project. Chairman Kulaszewicz stated they seem to have created a pool of funds from property tax dollars that they loan out and receive interest payments back with the interest payments continuing to fund the program. He said it doesn't seem to be a bad idea and asked how much funds would be needed to start the program with. Commissioner Caryotakis asked how fast the funds would come back to you because the loans are going to be a very slow recycle. Housing Program Manager Barnes stated to also consider that the First Time Homebuyer program was not funded for the upcoming year so it will most likely run out of money. He said if this is something that the Board would like staff to look at, we could look at what other communities are doing. He said that when you use tax dollars, you get more flexibility in how you design that program because we are not tied to the federal regulations. He said there is about Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 8 1.4 million in the unrestricted reserve account. He said there are other programs that could be looked at, such as, rehabilitation or energy improvement loan programs. Commissioner Stein asked how this would be different from the $25,000 First Time Homebuyer program. Housing Program Manager Barnes responded the only differences he sees in the Woodbury program is they restrict it to foreclosed properties, they serve a higher income limit and they are receiving interest back on it. He said they have a balloon payment at the end of 30 years just like our current program does and they can serve a broader range of potential buyers. Commissioner Stein asked if we have had more people call than we can serve and is the income limit restrictive. Housing Program Manager Barnes confirmed affirmatively. He said for every one we approve, we deny two based on income because they are over the limit. He said that there are not a lot that are denied but they are within $10,000 to $15,000 over the income limit so they would be under 100% of median income for our area. He said Woodbury used 115% of median income and they probably used that figure because a few of the programs offered through the State of Minnesota's Housing and Finance Agency go up to that limit. Chairman Kulaszewicz asked what our household median is. Housing Program Manager Barnes responded that we are restricted by HUD but our median income is around $90,000. Chairman Kulaszewicz asked if the Woodbury program does anything to help preserve the property market value or is that already gone because it is a foreclosed property. Housing Program Manager Barnes replied that he is unsure if anyone has studied this yet. He said it may be better to look at a program that prevents foreclosures and, therefore, would help to preserve values. Chairman Kulaszewicz stated that a program that would help people from getting foreclosed on and maintaining the property value is something that would interest him but he didn't know how you would do that. Housing Program Manager Barnes responded that there are a number of programs that operate right now if someone is four or five months behind they can get a loan to catch them up. He said the Minnesota Housing Finance Agency operates that program and they work with housing council centers to run the programs. Commissioner Caryotakis stated that the major banks have been sued and part of that settlement is the banks are supposed to provide some kind of assistance for folks in foreclosure. He said what the qualifications are for those people and what kinds of assistance the banks are going to provide are unknown but it might be a situation where if someone would qualify and if they met certain criteria, having some kind of assistance might take them over the hurdle. Chairman Kulaszewicz added which may keep the house from being foreclosed and which may help you maintain your overall property values and give you more property taxes. Commissioner Stein asked if staff has received phone calls from people looking for foreclosure assistance. Housing Program Manager Barnes responded that we don't get a lot and when we do Approved Plymouth Housing and Redevelopment Authority March 22, 2012 Page 9 we refer them to CAPSH. He said their foreclosure prevention program is their fastest growing program that they have right now and they are serving a good number of people in Plymouth. Commissioner Stein stated that he didn't want to take a lot of staff time but if they think there is a program out there that would benefit the community that we are not providing and that wouldn't take tax dollars or would be a self funding program from our reserves, he would like to hear more about it. Housing Programs Manager Barnes said staff would research what other communities are providing and see if there is something that would be beneficial for Plymouth residents. Chairman Kulaszewicz made a recommendation to staff to look at a few programs to see if there is something out there that we could do to further assist our residents. Housing Program Manager Barnes stated that staff would look into programs like Woodbury's First Time Homebuyer program and some foreclosure programs and report back to the Board. 4. ADJOURNMENT MOTION by Chairman Kulaszewicz, without objection, to adjourn the meeting at 8:00 p.m. MOTION approved.