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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 10-05-2004MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY October 5, 2004 PRESENT: Commissioners Susan Henderson, Steve Ludovissie, Jenny Hibbard, and Jim Kovach ABSENT: Commissioner Tim Bildsoe STAFF PRESENT: Housing Program Manager Jim Barnes, HRA Specialist Tracy Jones, and Office Support Specialist Ranelle Gifford OTHERS PRESENT: None 1. CALL TO ORDER Chair Henderson called the Plymouth Housing and Redevelopment Authority meeting to order October 5, 2004 at 7:02 p.m. 2. CONSENT AGENDA A. Approval of the September 16, 2004 HRA Meeting Minutes. MOTION by Commissioner Ludovissie, seconded by Commissioner Kovach, approving the Consent Agenda item. Vote. 4 Ayes. Motion approved unanimously. 3. NEW BUSINESS A. Review Senior Housing Market Study Housing Manager Barnes gave an overview of the September 28, 2004 staff report in regards to the demand market study conducted by Maxfield Research Inc. He said their findings were that there is room for an additional 68 market rate units and 57 subsidized units in our targeted market area. By 2009, the study projects the need will increase to 92 subsidized apartment units, which indicates the demand is increasing over time. He said these findings support the concept of the HRA building a 60 -unit, mixed income senior facility. MOTION by Commissioner Ludovissie, seconded by Commissioner Hibbard, that the Housing and Redevelopment Authority Board give staff the authority to begin the process of developing a senior apartment facility and authorize the Executive Director to enter into the necessary contracts with consultants, including architectural, financial and legal services. Commissioner Hibbard asked what the time frame was for the senior apartment project. Housing Manager Barnes said the overall CSM project is very time sensitive. He said CSM is proposing to develop a commercial development at the existing Dana Spicer site. He said this is their Plymouth Housing and Redevelopment Authority October 5, 2004 Page 2 second proposal as their first attempt was denied; therefore it has become time sensitive. Housing Manager Barnes said the HRA's process is separate from CSM's development process. He said we would need to select an architect, issue bonds for road improvements, and acquire the land for the housing project. Chair Henderson asked if we would need to do a full market study. Housing Manager Barnes said only if the financial institution that issues the bonds would require us to. Vote. 4 Ayes. MOTION approved. B. Review Tax Increment Redevelopment District Plan for the Shops at Plymouth Creek. Housing Manager Barnes gave an overview of the September 28, 2004 staff report. He said the City's Bond Attorney had recommended the HRA, rather than the City, set up the TIF District for the CSM Shops at Plymouth Creek. He said the nature of the project relates more to the goals of a Housing Authority under Minnesota Statutes. He said this is the first time the HRA has established a TIF District. He said the City Council has approved the request by CSM Investors to reguide the Dana Spicer site, which opened up the possibility for the HRA to develop a senior housing facility. Housing Manager Barnes said as part of the reguiding review process for this property, the City conducted a traffic study to review the current traffic conditions. He said there are existing traffic issues with Vicksburg Lane and Highway 55. He said regardless of what development takes place at the Dana Spicer site, the traffic issues need to be addressed. He said the improvements would include northbound, eastbound and westbound dual left -turn lanes. A traffic signal would be needed at Vicksburg Lane and 32"d Avenue. Dual left -turn lanes are needed for the eastbound approach, and a southbound right turn lane is need due to the high right turn volume. He said the developer would be responsible for'/4 of the cost of the Vicksburg/32nd Avenue improvements. Housing Manager Barnes said the purchase price of $524,888 for the housing site is very reasonable compared to other sites we have researched. Commissioner Ludovissie asked if there is any soil preparation required for the site. Housing Manager Barnes said the developer is providing a pad -ready site, which lowers some of the original estimated costs. Housing Manager Barnes said the Tax Increment Financing district for this project would be a Redevelopment district. He said Minnesota Statutes provide that at least 90 percent of the revenues derived from tax increments from a redevelopment district be used to finance the cost of correcting conditions that allow designation of redevelopment districts. He said qualifying costs that meet the 90 percent requirement include purchasing the land, remediation necessary to development of the land and installation of utilities, roads, sidewalks, and parking facilities for the site. Chair Henderson asked if all of the taxes paid by the businesses inside the district would be used to pay for the improvements for the duration of the TIF district. Housing Manager Barnes said the existing value of the land and taxes paid, which are approximately $5,000,000, will still go to the County, City and other jurisdiction. He said the taxes on the new improvements will be available to pay for the improvements and when the improvements are paid for they taxes will be distributed to the respective taxing jurisdictions. Commissioner Hibbard asked if there is a way Plymouth Housing and Redevelopment Authority October 5, 2004 Page 3 for people to figure out the amount of taxes that have been generated because of the site. Housing Manager Barnes said he would address that question when he reviewed the attached Tax Increment Assumption report. Housing Manager Barnes said if the project were approved, the City would issue TIF Revenue Bonds to pay for the road improvements as well as the acquisition of the land. He said typically when we set up a TIF district from the City's perspective, you pay as you go. However, in this case, the improvements are considered public improvements hence the reason for issuing bonds. Housing Manager Barnes stated the combined costs of the traffic improvements and the acquisition of the senior housing site are $1,188,151 and based on that, the district would be in place for 16 years and the net interest rate of the bonds would be 5.975. He also said the scenarios include making a contribution to the City's Tax Increment Housing Assistance Program. This is a program that allows us to pool money and take money from existing of districts and put them into a specific account and used them at a later date for rental housing projects. The City has done this with three of the redevelopment districts. Housing Manager Barnes stated an alternative would be for the HRA to consider having the Fiscal Disparities taken from outside the district, which would reduce the TIF district period by 7 years. Chair Henderson asked for the definition of Fiscal Disparities. Housing Manager Barnes gave an overview of Fiscal Disparities and the pros and cons of taking it from outside the district vs. inside the district. Commissioner Ludovissie said Highway 55 is a state highway the State should share some of the roadway improvement costs. Housing Manager Barnes said there is a Highway 55 Corridor Commission that is currently addressing possible improvement plans. Housing Manager Barnes discussed the "But -For" Analysis. He said the traffic study shows the traffic conditions are pre-existing and regardless of the type of development that occurs, the improvements would be required. City staff, along with the City's financial consultants, have reviewed the project and have determined the project to be feasible and the costs associated to be justified. Housing Manager Barnes said the cost of the improvements would not have a direct financial impact on the City or HRA finances. Chair Henderson asked how we determine if there is enough money to fund the project. Housing Manager Barnes reviewed the assumption and projected tax increment reports prepared by Springsted Incorporated. He said Springsted reviews the project information and then provides pertinent financial figures. Commissioner Kovach asked if there would be cost overruns and if so, if there is room for adjustment. Housing Manager Barnes said it takes a couple months for the traffic engineers to get final costs so those numbers can fluctuate. He said we would have final numbers before we finalize the TIF plan. Commissioner Hibbard asked if you could establish multiple TIF Districts at one time. Housing Manager Barnes answered affirmatively. He said the City been very conservative to this point with establishing TIF districts. MOTION by Commissioner Hibbard, seconded by Commissioner Ludovissie, that the Plymouth Housing and Redevelopment Authority Board of Commissioners direct staff to prepare a TIF Plymouth Housing and Redevelopment Authority October 5, 2004 Page 4 plan and recommend that the City Council consider establishing a Tax Increment Finance Redevelopment District. Vote. 4 Ayes. MOTION approved. Chair Henderson asked if the housing project time frame would be three years. Housing Manager Barnes said it would be closer to two years for completion of the senior housing project. 4. ADJOURNMENT Meeting adjourned at 7:55 p.m. HRA/Minutes/ 10/04/04