HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 06-26-2008MINUTES
PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY
June 26, 2008
PRESENT: Chairman Steve Ludovissie, Commissioners Paul Caryotakis, Penny Hatcher, Jeff
Kulaszewicz, and Bob Stein
ABSENT:
STAFF PRESENT: Executive Director Steve Juetten, Housing Program Manager Jim Barnes,
HRA Specialist Patty Schaffer and Office Support Representative Chele Kovacevick
OTHERS PRESENT: Grace Management Representative Jody Boedigheimer
1. CALL TO ORDER
Chairman Ludovissie called the Plymouth Housing and Redevelopment Authority meeting to
order at 7:05 P.M.
2. PUBLIC FORUM
Introductions were made by each of the HRA Board members. Vicksburg Crossing resident
Frank Heglund introduced himself as acting as the "voice" of the residents who have provided a
two page list of concerns which they would like addressed by the Board with special priority to
be given to numbers one through three.
Prior to addressing item number one, a resident asked that the power -sweeping being conducted
at the adjacent Lowe's parking lot be rescheduled for a more reasonable time of day rather than
at midnight which is when it was done recently. Housing Manager Barnes agreed to investigate
this issue with the property manager at that site.
Housing Program Manager Barnes responded to the following concerns:
Concern # 1: Would you share some background regarding the development of this building
such as: Where did the financing came from? Is there a mortgage? Was the money provided by
the Federal, State or City? What is the chain of command?
Financing was obtained by the issuance of General Obligation Housing Revenue Bonds issued
by the Housing and Redevelopment Authority in 2005. There is a mortgage associated with the
Bonds and payments are made bi-annually. There is no State or Federal money involved in
development of the project.
The Housing and Redevelopment Authority (HRA) is a legal public entity on to itself. Board
members are appointed by the City Council to serve five year staggered terms. Meetings are
held on the fourth Thursday of each month with the exception of one time in the summer and
sometimes in December. Grace Management was hired to manage the day-to-day operations of
both Vicksburg Crossing and Plymouth Towne Square and to provide reports at each HRA
meeting. Residents are encouraged to contact the on-site representative of Grace Management
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June 26, 2008
Page 2
and if their question is not answered to their satisfaction, to contact Grace Management
Representative Jody Boedigheimer. If they still have concerns, Housing Programs Manager
Barnes recommends that they contact him at the City of Plymouth. Beyond that, Executive
Director Steve Juetten would be the contact at the City of Plymouth and ultimately the HRA
Board. Chairman Ludovissie spoke about the long-standing relationship between the HRA and
Grace Management and Grace Management's responsiveness to residents concerns.
Concern # 2: Is there a profit motive for this structure? If so, for whom?
There is no profit motive for the HRA regarding this property. It is the goal of the HRA for
Vicksburg Crossing to be a self-sustaining property with regard to the mortgage and operating
expenses. Plymouth Towne Square is partially subsidized by a tax levy. Financial health is the
goal, not profits. A healthy reserve account is also a goal in order to provide for the long-term
maintenance of the property. Chairman Ludovissie interjected that with the cooperation of the
residents in conserving energy they can further reduce operating expenses.
Concern # 3: Community Room use: Policies and Procedures
Chairman Ludovissie and resident Frank Heglund asked for residents with concerns about this
issue to please step forward to express themselves. There was no response by the residents but
another concern was expressed by resident Phyllis Clark in Unit #224. She thinks that the air
quality in her unit is poor and has contributed to some health problems. She asked if anyone else
has had a similar experience. Another resident remarked that the air quality issue is not a
widespread or common experience. Chairman Ludovissie offered to look into her concern and
respond to her. Jeannette Minney in Unit #108 would like less restrictive hours on the
Community Room use. Chairman Ludovissie asked if there were any other concerns to be
discussed. Ginny Severud in Unit #202 asked why flat finish paint was used in the units as she
finds it difficult to wash. Resident Frank Heglund said that it has been his experience that a flat
paint achieves better results than an eggshell finish when used for touch-up work.
Chairman Ludovissie said the Board will review and respond to the balance of the issues in
memorandum form.
3. CONSENT AGENDA
A. Approve HRA Meeting Minutes from May 29, 2008.
B. Plymouth Towne Square. Accept monthly housing reports.
C. Vicksburg Crossing. Accept monthly housing reports.
MOTION was made by Commissioner Ludovissie, seconded by Commissioner Hatcher to
approve the consent agenda.
Vote. 5 Ayes. MOTION approved unanimously.
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June 26, 2008
Page 3
4. NEW BUSINESS
A. First Time Homebuyer Program
Housing Program Manager Barnes briefly explained the parameters of the CDBG program and
the Kudla's transaction history of a $25,000 housing assistance loan at the time they purchased
the subject property. He also reviewed the Kudla's request of the Board to waive the restrictive
covenant of having to sell only to a buyer who meets the 80% median income requirement.
Housing Programs Manager Barnes stated the Kudla's desire is to move to a single family home
and to sell the subject property to Kelly Kudla's father, LeRoy Bendickson. He also stated that
after a thorough review of a memorandum by Jan Olsson of the Plymouth Assessing Division, he
determined that the Kudla's are not sustaining a clear hardship other than that which the entire
real estate industry is also experiencing. Housing Programs Manager Barnes is concerned that
there are seven other properties in the "Reserve" that have restrictive covenants that would also
be eligible to request a waiver if a precedence was established by granting the request of the
Kudla's. HRA Specialist Schaffer also indicated that the occupancy standard for a family of two
adults and one child was reviewed and deemed appropriate for the subject property She also
indicated that the Kudla's' received written notice of the restrictive covenant prior to closing.
Commissioner Kulaszewicz asked if the restrictive covenants on the eight Reserve units were
designed to survive the loan payback periods. Housing Program Manager Barnes replied the
Covenants provide that the units remain affordable units for 20 years irrespective of if the HRA
loan is repaid prior to the end of the 20 years. Housing Programs Manager Barnes indicated the
Board does have the power to change the restrictive covenants if the current owner agrees to the
changes.
Housing Program Manager Barnes stated that it is the owners themselves who actually place the
restrictive covenant on the unit at the time of purchase as a condition of receiving the CDBG
funds. Commissioner Caryotakis inquired if the repayment of the HRA loan is connected at all
to the restrictive covenant. Housing Program Manager Barnes replied no. Commissioner
Hatcher asked if maintaining the restrictive covenant is in line with the affordable housing goals
of the City of Plymouth HRA. Housing Manager Barnes replied yes.
Chairman Ludovissie asked for comments from the floor. LeRoy Bendickson thanked the Board
for the opportunity to appear and to explain in more detail the Kudla's' circumstances. He
explained that the rental home that Keith and Kelly were occupying in Edina was sold and as a
result they were forced to vacate even though they had been reassured that their lease would
survive any sale transaction. In effect, he maintains that the Kudla's were put in a position to
buy under poor circumstances and were surprised to learn of the existence of the restrictive
covenant as they prepared to sell the subject property to himself. He suggested that the hardship
being demonstrated is the loss of down payment due to the downturn in the market as well as the
costs associated with a sale (other than to LeRoy Bendickson).
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June 26, 2008
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Chairman Ludovissie spoke to the overall goal of the HRA to provide affordable housing as
being more far-reaching than the immediate circumstances of the Kudla's and that merit must be
clearly demonstrated because of the issue of a precedent being established for the other seven
units in the CDBG program at the Reserve.
Kelly Kudla spoke about the problems of an active 15 -month old child unable to play in a hot,
busy driveway noting that while the interior dimensions of a home are important, there are also
the exterior spaces which determine the "livability" of a home for a growing family. She said
she did not fully understand the terms of the CDBG loan and although she knows it was not a
deliberate attempt to mislead them, that the net affect is very discouraging given their long-
standing family goals.
LeRoy Bendickson spoke of the current depressed market and the price point of the subject unit
as it relates to the ability of a moderate income person's ability to qualify for a home priced at
186,000.
Commissioner Kulaszewicz asked if there were currently First Time Homebuyer money
available to which Housing Program Manager Barnes responded that there was approximately
10,000 in the fund. Commissioner Caryotakis inquired whether repaid mortgage proceeds were
recycled back into the CDBG fund, to which Housing Program Manager Barnes responded yes.
Commissioner Hatcher asked at what point the mortgage is due and payable. Housing Program
Manager Barnes explained that upon a sale, transfer of title, or 30 years; whichever occurs first.
In response to the Kudla's circumstance, the HRA has agreed to distribute their marketing
information to other First Time Homebuyer applicants.
Commissioner Stein remarked that many young families are in housing situations similar to the
Kudla's as they raise their family in townhomes with the availability of nearby parks. He also
asked Housing Manager Barnes if he would explore the option of leasing the subject property.
Housing Program Manager Barnes said he would need to do some research and would report
back to the Board. Chairman Ludovissie remarked that in our current real estate market, three
months of market time is not much time when the average market time might approach seven to
twelve months.
Commissioner Stein asked if there was a down -side to removing the restrictive covenant and
putting the repaid proceeds back into the CDBG fund in hopes of assisting another first time
homebuyer purchasing a more affordable unit in light of the market which exists. Housing
Program Manager Barnes remarked that the title work on each resale could be very cumbersome
in that restrictive covenants would have to be added to each purchase and then removed at each
subsequent resale. The program was not conceived as an "at -will" approach to long-term
affordability.
LeRoy Bendickson suggested that poor communication at the time of closing led to a
misunderstanding of the terms of the loan on the part of the Kudla's. In response, Commissioner
Hatcher said that on a letter sent to the Kudla's prior to closing, attention was called in bold
lettering, to the restrictive covenant provisions of the HRA loan. These documents are not
simply presented for the first time at a closing. Keith Kudla said there should have been more
verbal communication between the parties. Commissioner Hatcher asked the Kudla's if the
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June 26, 2008
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Board waived the restrictive covenants would they repay the First Time Homebuyer loan? Mr.
Kudla indicated they would. Commissioner Hatcher followed up and asked Mr. Bendickson if
he would then purchase the unit? Mr. Bendickson indicated he would. LeRoy Bendickson asked
the Board to please further consider the Kudla's needs. When asked by Commissioner Hatcher
what time frame the Board was considering, Housing Program Manager Barnes responded that
the Board could approve, reject or table the issue for reconsideration at a later time.
Commissioner Hatcher stated that she would struggle with a decision now given the subject
property has only been on the market for three months. Chairman Ludovissie asked the Kudla's
if they had a preference for either a decision now or to table it, but stated that this decision would
not be made by the Board on an emotional level. LeRoy Bendickson responded that they would
prefer the Board table it for future reconsideration. Commissioner Stein moved to table the
issue, seconded by Commissioner Caryotakis.
Vote. 5 Ayes MOTION approved unanimously.
Housing Program Manager Barnes invited the Kudla's to contact the Board once again, after a
reasonable amount of marketing time has elapsed, with a short update memo.
B. Vicksburg Crossing. Marketing update.
Grace Management Representative Boedigheimer distributed copies of 55 Plus magazine to the
board members for review of the Vicksburg Crossing insertion. Chairman Ludovissie restated
the reason for holding the June meeting at Vicksburg Crossing as a way to tour the property to
explore any issues the residents were having related to the property.
Grace Management Representative Boedigheimer reported that Grace Management has hired a
new Property Manager and she is excited about the energy and enthusiasm the candidate has
expressed about marketing opportunities at Vicksburg Crossing. This new employee will do a
meet and greet" at the next couple of Wednesday coffee sessions at the property and she will be
invited to meet the Board at the next meeting scheduled for July.
Grace Management Representative Boedigheimer reviewed the Marketing report. Commissioner
Stein inquired how many storage units and parking spots there are at the property. Grace
Management Representative Boedigheimer responded that 40% of the rental units have a
dedicated storage unit and that there are 70 parking spaces for 94 units with one space used as a
car wash bay. Typically the ratio for both parking and storage is at least one-to-one in other
similar properties. Chairman Ludovissie asked if additional storage could be built in one of the
maintenance rooms. Grace Management Representative Boedigheimer responded yes, perhaps
30 additional storage units could be constructed in that space. Commissioner Stein asked if
individual cabinets could be placed in each parking unit stall. Housing Program Manager Barnes
indicated that it was against the building code. Grace Management Representative
Boedigheimer stated that the ratio of storage to living units at Plymouth Towne Square is one-to-
one. Housing Program Manager Barnes remarked that a decision was made during the planning
process to increase parking spaces at the expense of storage spaces.
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June 26, 2008
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Chairman Ludovissie commented that at the most recent City Council study session some
concerns were raised regarding the financial conditions at Vicksburg Crossing and the related
vacancy issue.
Commissioner Hatcher asked if there was a possibility of Vicksburg Crossing being included in
the award winning Hennepin County website as a way of generating inquiries for senior rental
information. Staff indicated that they would look into this option. Grace Management
Representative Boedigheimer noted that Vicksburg Crossing's web hits have dropped off a bit
and believes that a presence in the small community-based newspapers is important to maintain
visibility.
C. Vicksburg Crossing. Discuss landscaping issues.
Housing Program Manager Barnes toured the Vicksburg Crossing property with City Forester
Paul Buck in order to assess the condition of the trees and shrubs. Forester Buck remarked to
Housing Programs Manager Barnes that some of the landscaping appears to be stressed and some
have died. The harsh winter has taken a toll everywhere in the region but it is not unusual for
new plantings to struggle initially and yet rebound once their roots become established after a
few seasons.
It was noticed that the shrubs which were planted close to the trail, which was installed after the
plantings, did not survive being disturbed and would need to be removed permanently. In areas
where spruces have not flourished he would recommend that they can be replaced with fir which
will appear to have the same texture, but will have a better tolerance for damps conditions. On
the whole, the site looked good except for a couple of ornamental trees which may simply need
pruning. The HRA will work with the Forestry Department to address the landscaping issues.
Modifications to the original landscape plan can be made up to ten percent of the total plantings
in order to achieve success with changes in plant materials.
Housing Program Manager Barnes mentioned the washout being experienced under the sidewalk
next to the water catch -basin pond. The patterns of falling water off the roof line are washing
out the soil under the sidewalks and minor fixes tried to date have not held. One bid in the
amount of $4,500 has been submitted as well as another for a higher amount. A French drain
system which consists of underground drain tile may be another option and Housing Program
Manager Barnes recommended exploring the $4,500 option. Chairman Ludovissie
recommended that other options be considered rather than spending the $4,500 in haste.
Housing Manager Barnes remarked that a firm bid would be needed in order to know what the
complete cost of the French drain system would be. Executive Director Juetten recommended
that a definite plan with budget numbers should be secured before acting further on the erosion
issue.
D. HRA Strategic Plan. Update to the HRA Strategic Plan.
Based upon the May HRA meeting as well as the joint study session conducted with the City
Council, Housing Manager Barnes drafted some changes to the Strategic Plan as it relates to land
banking, interest rate buy -down programs, lease -up goals for Vicksburg Crossing as well as
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June 26, 2008
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Action Plan timelines. Commissioner Stein remarked that First Time Homebuyer guidelines for
2009 would also be of interest as they relate to the Strategic Plan. Housing Program Manager
Barnes responded that staff reviews the guidelines on an annual basis and brings changes to the
Board as needed prior to the next funding year. Commissioner Kulaszewicz commented that
these changes were well done and thoroughly reflected the discussions to date. Commissioner
Stein made a motion to adopt these changes as presented, seconded by Commissioner Hatcher.
Vote. 5 Ayes MOTION approved unanimously.
4. ADJOURNMENT
Motion to adjourn by Commissioner Kulaszewicz, seconded by Commissioner Hatcher.
The meeting was adjourned at 9:05 p.m.