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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 02-16-2006MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY February 16, 2006 PRESENT: Commissioners Tim Bildsoe, Steve Ludovissie, Jenny Flansburg and Jim Kovach. ABSENT: Chair Susan Henderson STAFF PRESENT: Executive Director Anne Hurlburt, Housing Program Manager Jim Barnes, HRA Specialists Tracy Jones and Patty Schaffer. OTHERS PRESENT: Link Wilson from Miller Hansen Partners, Plymouth resident Linn Hirst and American Mortgage Corporation representative Vicki Smolich. 1. CALL TO ORDER Commissioner Bildsoe called the Plymouth Housing and Redevelopment Authority meeting to order February 16, 2006 at 7:03 P.M. Housing Program Manager Barnes requested item 3B be discussed prior to item 3A. The Board granted this request. Commissioner Ludovissie asked that item 2C be removed from the consent agenda and be listed as item 3D. 2. CONSENT AGENDA A. Approve January 19, 2006 HRA Meeting Minutes B. Plymouth Towne Square. — Accept monthly housing reports. MOTION by Commissioner Flansburg, seconded by Commissioner Kovak, approving the consent agenda. Vote. 4 Ayes. Motion approved. 3. NEW BUSINESS A. Vicksburg Crossing. Approve exterior materials selection. Link Wilson, representing Miller Hanson Partners (MHP), was introduced by Housing Program Manager Barnes. Mr. Wilson reviewed the exterior materials selection. He stated the color base block is complete so this item can't be changed. He stated they tried to stay in character with the rendering that was presented and stayed true to what they had Plymouth Housing and Redevelopment Authority February 16, 2006 Page 2 promised the City. He thought as soon as the weather breaks, which will probably be late March, the bricks would start to be laid so he advised the Board that the selection would need to be made soon. MOTION by Commissioner Blidsoe, seconded by Commissioner Flansburg, recommending approval of the exterior materials and colors selected by Miller Hanson Partners. Vote. 4 Ayes. Motion approved. B. First Time Homebuyer Recipient. Appeal of Executive Director's Denial of Request for Subordination Housing Program Manager Barnes introduced Linn Hirst and Vicki Smolich. Ms. Smolich stated she is with American Mortgage Corporation and is here representing Linn Hirst. Housing Program Manager Barnes presented an overview of the February 16th staff report. He stated the reason for both denials were based on the cash out and the loan -to -value ratio proposed. Ms. Smolich stated she is trying to consolidate three loans that Ms. Hirst had down to two loans which would be a savings of $500 a month. Commissioner Bildsoe asked if Ms. Smolich had read the guidelines for subordination. Ms. Smolich stated she had and realizes Ms. Hirst doesn't meet the loan to value ratio, however, she is requesting a waiver of the rules/policy. Executive Director Hurlburt asked if a new appraisal had been done. Ms. Jones stated we had the appraisal that was done in November 2005 for $185,000. Director Hurlburt asked Ms. Smolich when we denied the request for subordination if she had used the $185,000 appraisal. Director Hurlburt stated that was the number used in our formula to come up with 112% loan to value ratio. Director Hurlburt asked if any of those numbers were wrong. Ms. Smolich said the figures were correct. Commissioner Bildsoe commented that the Board looks at the rules and that is what the Board follows. The decisions made by the Board are the same for everyone. Ms. Smolich again stated that their request was for a waiver of the policy for the financial benefit that Ms. Hirst will receive in the monthly payment reduction. Commissioner Bildsoe stated Ms. Hirst had received a benefit by getting the loan from the City of Plymouth. The Board was concerned that if Ms. Hirst had to sell the home and the loan to value ratio is still at 110% with our loan considered then the payoff of our mortgage would be at risk. Commissioner Kovach stated that developing these policies and procedures were done over a substantial period of time and that these rules apply to everyone that obtains financing through the City. Plymouth Housing and Redevelopment Authority February 16, 2006 Page 3 MOTION by Commissioner Flansburg, seconded by Jim Kovak, recommending to uphold staff's denial of Ms. Hirst's request to subordinate her first time homebuyer second mortgage to a new loan offered through American Mortgage Corporation. Vote. 4 Ayes. Motion approved. C. South Shore Drive Site. Update on potential partnership with Habitat for Humanity. Housing Program Manager Barnes presented an overview of the February 16, 2006 staff report. He stated that the Builders Outreach Foundation found the development more difficult than anticipated and they withdrew from the project. In December of 2005 staff contacted Habitat for Humanity to see if they would be interested in partnering with the HRA to build 3 to 4 affordable homes at 10801 South Shore Drive. They recently informed the HRA that they are very excited about the project. Staff held discussions with Habitat and are working with them to get additional funding through Hennepin County and the State. At this time staff is looking for the Board's permission to move forward with further discussions. Commissioner Ludovissie mentioned that The Woods at Medicine Lake, a townhome project of which this area was originally a part of, has been selling units and the base price starts at $345,000 and goes to $475,000. He said it might make sense to look at selling the property and bail out of the situation and hopefully make money to utilize in another area for another project. He said he wasn't involved in the negotiation for this property and doesn't know how it developed but felt we should keep options open and maybe talk to a real estate agent about listing the property and getting their opinion as to what the value might be. If, in fact the area is developing as it appears to be and it looks like there will be another condo project across the street and if the homeowner has changed his position it could make for a larger site. It could become an option for another developer. Director Hurlburt pointed out there are a fair number of market rate developments in this area now that are in a higher price range. However, she stated it would be nice to look at how the HRA could bring some affordable units into the mix. Commissioner Bildsoe stated he feels putting affordable housing in an area that has a higher value is not the best thing to do to get the most for our money. He stated he would be interested in getting some idea of what the property would sell for. Commissioner Flansburg commented that affordable housing is needed in the City and is difficult to achieve. She stated that discussions have taken place in the past about not wanting to miss affordable housing opportunities and she feels this is an opportunity to create affordable housing which is a goal of the HRA Board. Commissioner Bildsoe stated he thought if the property could be sold, the proceeds could be used for another site that doesn't need soil corrections. He also commented that the money from Hennepin County and the State of Minnesota could also be used for another project. Plymouth Housing and Redevelopment Authority February 16, 2006 Page 4 Director Hurlburt stated the problem is identifying another site. If this property is sold another might not be found. Housing Program Manager Barnes stated we paid $125,000 for this property and by Plymouth standards that is fairly reasonable. Commissioner Bildsoe stated what he thought staff was recommending tonight was to enter into negotiations to sell the property located at 10801 South Shore Drive to Habitat for Humanity for $1 and talk to existing property owner of the neighboring property located at 10805 South Shore Drive. Housing Program Manager Barnes confirmed this. Director Hurlburt asked if staff knew what the assessed value of the parcel at 10805 South Shore Drive was and what kind of shape the house was in. Housing Program Manager Barnes stated the purchase price was just over $200,000 two years ago. With a 7% increase the value would be about $230,000. The question was asked if Habitat could buy the lot. Housing Program Manager Barnes responded that it's possible they could, but it is highly unlikely and explained how Habitat for Humanity projects work. Director Hurlburt asked if Habitat would rehab the existing house. Housing Program Manager Barnes stated from what he had seen of the exterior he didn't feel the home would be a good candidate for rehab. Director Hurlburt asked if we take the lot we already own and are able to acquire the other lot for $250,000; what the estimate would be of how many units and dollars per unit we would actually be subsidizing. Housing Program Manager stated he has not done the per unit cost evaluation on the other lot. Commissioner Flansburg stated she sees two things going on: 1) A deadline because of the request by the State to either support Habitat to go forward or say we don't know and want to explore this before making a commitment and 2) Regarding the second site there are too many unknown factors. She stated it would be to our advantage to have both sites combined to make it a more successful project. Commissioner Bildsoe stated he felt more time was needed. However, his concern was in regards to the funding cycle and he asked if we could wait another 30 days before addressing this. Housing Program Manager Barnes said Habitat could submit their application next Tuesday without a support letter. Hennepin County may or may not accept a support letter after the fact. Plymouth Housing and Redevelopment Authority February 16, 2006 Page 5 MOTION by Commissioner Bildsoe recommended Plymouth Housing and Redevelopment Authority Board of Commissioners direct staff to take no action at this time. The motion died for lack of a second. The general consensus of the Board was to take no action at this time. D. Vicksburg Crossing — Approve Lease -up and Management Contract with Grace Management. Commissioner Ludovissie stated he had a few comments regarding the management agreement and referred to page 14 - Term and Termination. He asked if there is a reason the Board wanted to leave it at October 1St instead of November 1St . Housing Program Manager Barnes stated he would change it to November and he didn't have a problem with that. Commissioner Ludovissie pointed out the last item was the Term and Termination notice periods. He thought the term 120 days on a one-year automatic renewal is allot of lead time. He would like to see those lead times cut down and suggested not more than 90 days. Director Hurlburt asked Housing Program Manager Barnes if there would be an issue with changing the time period. He responded no. MOTION by Commissioner Ludovissie, seconded by Commissioner Kovach, to approve the management agreement as submitted with two changes on page for 14 regarding the Term and Termination. October 1St will change to November 1 st and wherever it states 120 days will change to read 90 days. Vote. 4 Ayes. Motion approved. 4. ADJOURNMENT Meeting adjourned at 8:31 PM. HRA/Minutes 2/16/06