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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 04-25-2013APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY April 25, 2013 PRESENT: Vice Chair Paul Caryotakis, Carl Runck, and Toni Jelinek ABSENT: Chairman Jeff Kulaszewicz and Jim Willis STAFF PRESENT: Housing Program Manager Jim Barnes and Office Support Representative Janice Bergstrom 1. CALL TO ORDER Vice Chair Caryotakis called the Plymouth Housing and Redevelopment Authority meeting to order at 7:06 p.m. 2. CONSENT AGENDA A. Approve March 28, 2013 HRA Meeting Minutes. B. Plymouth Towne Square. Accept Monthly Housing Report. C. Vicksburg Crossing. Accept Monthly Housing/Marketing Report. MOTION by Commissioner Jelinek, seconded by Commissioner Runck, to approve the consent agenda. Vote. 3 Ayes. MOTION approved. 3. NEW BUSINESS A. Update on HRA/City loan/assessment program for apartment fire suppression system installations. Housing Manager Barnes reviewed the staff report. Commissioner Runck asked if the insurance savings resulting from installing fire suppression systems had been investigated. He said an apartment owner might then see the incentive to install a sprinkler system. Housing Manager Barnes said Grace Management Representative Bodigheimer was going to provide that information, but we do not have any numbers at this time. Vice Chair Caryotakis asked if codes have changed requiring fire suppression for new construction. Approved Plymouth Housing and Redevelopment Authority April 25, 2013 Page 2 Housing Program Manager Barnes said new construction codes require fire suppression, but a remodel would not require such a system. He added cost estimates are difficult because the costs vary significantly depending on the building. Commissioner Runck said we have the most attractive rental market in the nation with a 2.3% vacancy rate and suburbs are the next boom for apartments. Commissioner Runck said cap rates have never been lower and it is the best time ever to be an apartment owner and developer since the late 1980's. Commissioner Runck pointed out apartment owners have money to install the fire suppression systems and questioned would they be forced to do it or is there incentive for them to do it. Vice Chair Caryotakis asked how much new development competes with the older properties and whether it would be cost effective to buy an older property and rehab it. Commissioner Runck said the next opportunity would be value added for suburban apartments versus the new development which is happening. Commissioner Runck said 37 of the 54 apartment buildings in Plymouth are older and do not have fire protection. Commissioner Jelinek asked what the cost split would be between a building owner and the city. Housing Program Manager Barnes said there are many ways a program could be designed depending on what the HRA Board's interests are. He added the program would have to be approved by City Council as it is not a loan program, but rather an assessment program. Commissioner Jelinek said it would make sense to offer this program whether or not building owners choose to take advantage. She said it is a benefit that the city offers which can help apartment owners provide a safe environment for tenants. Vice Chair Caryotakis said he would like further discussion on insurance savings which would help apply leverage to help apartment owners guide their decision. Commissioner Runck concurred. Housing Program Manager Barnes said we will table this item to the next meeting at which time he will provide information on insurance savings. He added he would like more direction from the Board on how to proceed before applying staff resources to create a program. Commissioner Runck suggested meeting with some apartment owners who have multiple buildings to make in -roads with some of them; Commissioner Runck volunteered to do this. Housing Manager Barnes reiterated there were only three responses from the 50 letters sent. He added Crystal has had this program in place for ten years with a few churches initially taking advantage of the program. However, there has been very little demand since. Approved Plymouth Housing and Redevelopment Authority April 25, 2013 Page 3 Commissioner Runck asked if fire suppression systems could be required when apartment ownership changes. Housing Program Manager Barnes stated it can be required only when there is a change in use. B. HRA Strategic Plan. Vice Chair Caryotakis opened discussion on the HRA strategic plan. Housing Program Manager Barnes said Chairman Kulaszewicz could not be here and requested the item be tabled. Commissioner Runck commented the report was well done and thorough. He asked for clarification on supply and demand and information on the waiting lists of all the programs to better understand actual needs. Housing Manager Barnes stated all programs listed in the report are being used. He said some such as Regulatory Fees, which have been discussed by the HRA and City Council can be removed. Housing Program Manager Barnes reviewed the four main programs which are the first time homebuyer, rehab, two senior buildings and the Section 8 . He said the waiting lists are very large for the Housing Choice Voucher program and Plymouth Towne Square one - bedroom units. Housing Program Manager Barnes said there might be an unmet need to increase the income cap. He said if the Board wanted to we could serve households up to 115% of median income if a new program were designed. Commissioner Runck asked how Plymouth compares to metro median income. Housing Manager Barnes said we are mid -$80's of median income which is about $4,000 - 5,000 higher than the Minneapolis/St. Paul MSA. Commissioner Runck said the forecast for interest rates is they are starting to go up. He said analysts predict 100 basis points in the next year and half. Commissioner Runck said in the real estate world everyone is trying to refinance or develop now because rates will never be this low again. Commissioner Runck said we did refinance the senior properties at the lower rates, but questioned if we should look at development opportunities or are we missing an opportunity with these low interest rates now. He said we may talk in two years about a project but interest rates could be 6% or higher because of inflation. Vice Chair Caryotakis said we have reserves earning very little now. Commissioner Caryotakis asked if we could deploy those reserves more effectively and are we willing to put them at risk. Housing Program Manager Barnes said while the reserves are available, the Board wanted to keep some reserves available for Vicksburg Crossing in case there were financial difficulties. He Approved Plymouth Housing and Redevelopment Authority April 25, 2013 Page 4 added the financial reports for the Vicksburg Crossing and Plymouth Towne Square show it is very expensive, especially unit turns, to maintain and operate the buildings. Vice Chair Caryotakis said no projects have warranted using reserves to date. The programs we support make sense and are needed. Housing Manager Barnes added the reserves could be used if a developer had a request, i.e. for affordable housing. We could provide a loan out of the reserves instead of creating a new TIF District. There was discussion regarding the difficulty for affordable housing when the market is geared toward the type of single family homes, rather than townhomes, being built currently. Assisting private sector developers is preferable as the City/HRA supplies only incremental support. Commissioner Runck said he could see a growing need for affordable housing on the east side of Plymouth. He asked if the city promotes to developers what the city can offer. Housing Manager Barnes said inquiries are mainly regarding incentives the city has for multi- family rental situations. He said there is very little demand for commercial/industrial as companies want to come in to Plymouth. Housing Manager Barnes recommended tabling Item 3.13. to May 23, 2013 HRA meeting for full board discussion. 4. ADJOURNMENT MOTION by Vice Chair Caryotakis, seconded by Commissioner Jelinek, to adjourn the meeting at 7:30 p.m.