HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 01-24-2008MINUTES
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
January 24, 2008
PRESENT: Chairman Steve Ludovissie, Commissioners Jeff Kulaszewicz, Jim Kovach and
Councilmember Bob Stein
STAFF PRESENT: Housing Program Manager Jim Barnes, Community Development Director
Steve Juetten and Office Support Representative Janice Bergstrom
OTHERS PRESENT: Grace Management Representatives Jody Boedigheimer and Mary Jo
Grace
1. CALL TO ORDER
Chair Ludovissie called the Plymouth Housing and Redevelopment Authority meeting to order at
7:00 P.M.
2. CONSENT AGENDA
A. Approve HRA Meeting Minutes from November 15, 2007.
B. Plymouth Towne Square. Accept monthly housing reports.
C. Vicksburg Crossing. Accept monthly housing reports.
D. Willow Creek. Informational memo regarding current status of request from Housing
Preservation Project (HPP) regarding Enhanced Vouchers at Willow Creek.
E. Plymouth Towne Square and Vicksburg Crossing. Resident surveys.
MOTION by Commissioner Kovach, seconded by Commissioner Kulaszewicz, to approve the
consent agenda.
Vote. 4 Ayes. MOTION approved unanimously.
3. NEW BUSINESS
A. Vicksburg Crossing. Marketing Update — Grace Management
Chairman Ludovissie and Commissioner Kulaszewicz acknowledged the marketing update
provided helpful information.
Grace Management Representative Boedigheimer said activity has been quiet over the holiday
season with few move -ins in December; she said occupancy is at 66 units. Grace Management
Representative Boedigheimer advised that Barb Peterson started this week working part-time.
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January 24, 2008
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Housing Program Manager Barnes added that Barb Peterson, who currently works as an Office
Support Representative for the City of Plymouth HRA, originally was hired from Plymouth
Towne Square and knows some current residents. Grace Management Representative
Boedigheimer said three candidates were interviewed, and Barb proved to be the best fit for
relating to prospective tenants and Plymouth Towne Square residents are excited to hear she's
back. Grace Management Representative Boedigheimer said she and Ms. Grace have worked
with a focus group of existing residents and prospective residents to get ideas about what is
good, what needs change, and what prevents them from moving in.
Commissioner Kulaszewicz asked about advertising for the open house.
Grace Management Representative Boedigheimer said advertising was done in the Sun Sailor
and Sun Weekly. She said letters were sent to the existing interest group. Grace Management
Representative Boedigheimer said there were 60 prospects who are interested in moving in to the
building in the next 6-12 months, and added that these were not repeat visitors.
Ms. Grace said the number of potential tenants helps to create a sense of urgency to sign up or
there may not be availability. She said they plan to do an open house again. Grace Management
Representative Boedigheimer said this might be done quarterly.
Grace Management Representative Boedigheimer and Ms. Grace reviewed results of the focus
group discussions and said the leasing incentives help candidates to make a decision to move in
to the community. They said some interested persons have houses to sell. Ms. Grace said they
realize that it is best to sell their house and downsize now so they don't have to deal with
probate.
Housing Program Manager Barnes asked if they have reduced sale prices on their homes.
Chairman Ludovissie said the housing situation may be taking a longer recovery and it might be
a while before they are active prospects.
Ms. Grace said the opportunity is lost in the cost in home considering the cost to live in home.
Chairman Ludovissie concurred. Ms. Grace said a company called Elder Life Financing has a
program whereby if you can't sell your home but want to move, they will give you a loan. When
the house sells, the tenant uses a portion of the sales proceeds to pay off the loan. She said this
company is backed by M & I Bank and has $50M in funds. She said a free month's rent is less
than $800. Ms. Grace added the industry is trying to be as creative as possible.
Chairman Ludovissie asked what the resident survey indicated for satisfaction of tenants.
Grace Management Representative Boedigheimer advised that the residents are very satisfied
with the things that matter, such as location, convenience to shopping, and being close to City
Center and Plymouth Creek Center. Grace Management Representative Boedigheimer said the
washers and dryers rank number one with the residents. She said a comment repeatedly occurs
regarding bath tubs versus walk-in showers. Grace Management Representative Boedigheimer
said residents would like more common space such as a smaller area to do crafts. She said
lighting is a minor issue for closets and hallways. She added that the lack of ceiling lights
prevent the option to install a ceiling fan. Grace Management Representative Boedigheimer also
stated that shorter people have some difficulty reaching the microwaves.
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January 24, 2008
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Councilmember Stein said a door to the tub would be nice. Grace Management Representative
Boedigheimer advised a tub cutout with a hanging shower curtain is being considered at a cost of
425 per unit.
Chairman Ludovissie asked how many people have indicated interest in the tub modification.
Grace Management Representative Boedigheimer indicated that there were between 15 and 20
residents that have said it would be a nice to have a shower instead of a tub. Ms. Grace said the
HRA could consider the tub cut out instead of offering a rent incentive for prospective residents.
Commissioner Kulaszewicz suggested modifying 10 bath tub units.
Ms. Grace suggested doing a few of the tub upgrades, and perhaps increasing the rent. She
reiterated that the residents are 75 — 79 years of age, and showers and better lighting are
attractive to older people.
Grace Management Representative Boedigheimer pointed out that adult children of residents
were influential in residents making the move to Vicksburg Crossing. She said these children
aged 45 — 55) initiated information gathering and added that she was surprised that adult
children would be so involved in their parents search for housing.
Ms. Grace said that advertising targeting the 45 — 65 year old group has shown promising results
for move -ins of persons 75+ years of age. She said during the holidays adult children saw
firsthand that mom and dad are having difficulties with cleaning, driving, and keeping up their
single family homes. She said the newly created website should boost our first time inquiries by
30 — 40%. Ms. Grace said direct mail is costly and not as effective. Ms. Grace said the focus
group said, " `Simplify Your Life', `Be Secure', and `Downsize' " were good phrases to share.
Commissioner Kulaszewicz recommended that those lines should be advertised to the adult
children.
Grace Management Representative Boedigheimer said the fact that Vicksburg Crossing is city -
owned is a good thing as there is the perception that rents would be lower and the property would
be more secure. She also stated that the focus group participants saw a positive connection
between the building ownership and other city services such as Dial -A -Ride and the Plymouth
Creek senior center.
Councilmember Stein said that city services should be advertised if residents say that is
important.
Ms. Grace said Plymouth Towne Square is hard to get into and people may be assuming
Vicksburg Crossing is similar. Ms. Grace said from a national perspective and in comparison to
buildings with services in Atlanta which took three management companies three years to fill,
Vicksburg Crossing is doing very well in one year. She said there is still traffic coming in. Ms.
Grace suggested a direct mail to a few targeted apartment buildings which have become a
naturally occurring retirement community (NORCs), whereby managers want the seniors to
move out to facilitate turnovers in new tenant base.
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January 24, 2008
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Chairman Ludovissie said the building is losing money from not being fully occupied. While he
appreciates the efforts placed on marketing, Chair Ludovissie said he feels we need to be as
creative and aggressive as possible. He asked about advertising perimeters outside of the City.
Ms. Grace asked if it isn't a good idea to advertise further than your own marketplace. She said
people have their own church, shopping, etc. and feel very cut off and isolated if too far from
familiarity. Ms. Grace said there is a six-month window to focus on a new resident's
friends/contacts. After that the residents develop comradery and friendships inside Vicksburg
Crossing and loose touch with their old friends.
Grace Management Representative Boedigheimer indicated that it may not be advantageous to
target the Albertville/Rogers area as they are used to less expensive housing. Councilmember
Stein suggested targeting the aging communities eastward such as New Hope and Golden Valley.
Housing Program Manager Barnes said the Eden Prairie and Edina Sun Sailor and other regional
papers could be utilized. Community Development Director Juetten said the adult children of
aging New Hope/Golden Valley homeowners could be targeted.
Grace Management Representative Boedigheimer said a mailer could be sent to apartment
dwellers. She said the 1,400 names in three zip codes with $40,000 income would generate a 1%
return. She said radio advertising is expensive and difficult to do. Chairman Ludovissie
suggested checking on the cost of radio advertising. Councilmember Stein suggested having
Channel 12 do a story at Vicksburg Crossing and to advertise with flyers or a booth at the spring
home and garden show. Ms. Grace added that current residents would be good advocates to
hand out flyers at the home and garden show. Commissioner Kulaszewicz suggested advertising
at the Fire and Ice Festival.
There was discussion on microwaves and the option of setting the microwaves on the counter,
cutting down tubs, and furnishing a model. Councilmember Stein suggested renting furniture
and adding decorative items in a mini -model. He said the tub modification could be displayed
and used as an advertising option of a free month's rent or the tub cut-down.
Chairman Ludovissie said if the rent were cut dramatically in the unit with the view of the
chimney, we may be able to lease that unit. He said there is a legitimate reason to reduce the
rent. Commissioner Kulaszewicz concurred.
Housing Program Manager Barnes stated that a rent of $800 would make the unit eligible for
Section 8; however, both tenants would have to be over age 55 and be Section 8 eligible. He
said he would discuss this with Housing Specialist Paula Dorn.
Housing Program Manager Barnes noted that an amendment to the budget may be necessary in
October if all of these marketing techniques are applied.
Chairman Ludovissie said we do not want to limit Grace Management as we want them to be as
creative as possible.
Ms. Grace concluded that she understands the Board's angst, prospective need to be creative and
confident that we going to weather this.
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January 24, 2008
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MOTION by Commissioner Kulaszewicz, seconded by Commissioner Kovach, approving the
Vicksburg Crossing marketing update
Vote. 4 Ayes. MOTION approved unanimously.
B. Senior Housing Market Update. Marketing Update — Grace Management. (Verbao
Chair Ludovissie asked Ms. Grace and Ms. Boedigheimer if they had anything else to add to this
item or if they had covered all of their report in the previous item. They both indicated that they
had covered all of the issues.
C. Vicksburg Crossing. Review updated pro -forma options.
Housing Program Manager Barnes gave an overview of the January 10, 2008 staff report.
Housing Program Manager Barnes reviewed that Option 2 intermittently offers incentives while
maintaining current rents, which are at their ceiling for this type of property. Housing Program
Manager Barnes explained that if rents are lowered now, there would be greater impact in later
years. He said leases are just coming due and all are renewing. Housing Program Manager
Barnes reminded the Board that there is no scheduled rent increase for 2008. He said they will
be offering an incentive of one month free rent. Housing Program Manager Barnes said they are
currently offering residents $300 for referrals. He said there is $45,000 in incentive total and in
2009 another $15,000 in incentives under Option 2. Housing Program Manager Barnes said both
options require the HRA to contribute $40,000 for ten years to cover the property tax issue. He
said that staff continues to look for additional revenue generating options.
Chairman Ludovissie said based on the aging baby boomer generation; he views the slow lease -
up as a short term problem of 2-3 years.
Housing Program Manager Barnes concurred that it is a short term problem to get Vicksburg
Crossing to full occupancy. He said the residents are 70 years old, and the boomers are still 5-10
years out. Housing Program Manager Barnes said this is a healthier generation, and added that
our competition is more service-oriented with for sale options.
Chairman Ludovissie said he supports the shorter term incentives.
Councilmember Stein suggested offering better incentives and getting the cash in hand now.
Commissioner Kulaszewicz reviewed that the pro -forma points out the lower rents are possibly a
long term solution to a short term problem.
Community Development Director Juetten said there is a concern that if we lower rents for new
tenants the existing tenants will request the same.
Ms. Grace said the demographics of the silent generation are smaller than baby boomers, but
living longer. She said the baby boomers are not coming for ten years into senior housing.
Councilmember Stein asked if the "no services" is a detriment for attracting the 75 — 80 year old
people.
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January 24, 2008
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Ms. Grace responded that they don't want the services. Vicksburg Crossing definitely offers a
more affordable option without the additional services.
Grace Management Representative Boedigheimer said at PTS residents have aged in place. She
said there are ten residents who might have home health care, and end up staying longer because
they didn't have to pay for services when they didn't need it. Ms. Grace added that the more
services you have - the frailer the resident.
Motion by Chairman Ludovissie, seconded by Commissioner Kulascewicz, to continue with the
marketing program with incentives.
Vote. 4 Ayes. MOTION approved unanimously.
D. Community Development Block Grant. Update to the First Time Homebuyer and
Rehabilitation Procedural Guidelines.
Housing Program Manager Barnes reviewed the January 9, 2008 staff report.
Councilmember Stein asked if banks will be changing their policies in a similar manner due to
the current subprime issue.
Housing Program Manager Barnes said that is a possibility, however, banks don't care where the
down payment comes from.
Community Development Director Juetten asked if our proposed change is necessary because the
bank may be requesting that.
Housing Program Manager Barnes explained that it protects our program as a whole. He said it
is a common requirement across state mortgage programs.
Councilmember Stein asked if there is a maximum home price.
Housing Program Manager Barnes said there is no maximum purchase price; the income and
credit rating dictate what a homebuyer can purchase.
Councilmember Stein said it always better if a homeowner used some of their own money
toward the down payment but questioned if it would be better if the down payment were a
percentage of the house value. Housing Program Manager Barnes said that may become too
restrictive. Councilmember Stein said based on income requirements maximum of 37 percent,
you could figure out what they could afford at today's interest rates.
Housing Program Manager Barnes said credit scores are not required by us at this point.
Councilmember Stein said he is not sure if $1,000 is enough as the more money you can get
from somebody the better they would take care of the house. He said if you can't control the
source of the $1,000 down payment, it almost seems petty and suggested a more substantial
amount, such as 5 or 10 percent of a purchase price.
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January 24, 2008
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Commissioner Kulaszewicz asked why this $1,000 is being required.
Housing Program Manager Barnes said it would make first time homebuyers more accountable,
as currently none of the down payment is required to come from the buyer's own source of
funds.
Councilmember Stein said he would support the $1,000 on a trial basis, as he would not want to
prevent people from using the program.
Motion by Chairman Ludovissie, seconded by Councilmember Stein, to accept the update to the
First Time Homebuyer and Rehabilitation Procedural Guidelines.
Vote. 4 Ayes. MOTION approved unanimously.
ADJOURNMENT
The meeting was adjourned at 8:57 P.M.