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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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 2 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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 3 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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 4 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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 5 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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 6 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. Plymouth Housing and Redevelopment Authority January 24, 2008 Page 7 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.