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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 07-25-2013APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY July 25, 2013 PRESENT: Commissioner Jeff Kulaszewicz, Commissioners Paul Caryotakis, Carl Runck, Toni Jelinek, and Jim Willis ABSENT: None OTHER: Grace Management Representative Bodigheimer STAFF PRESENT: Housing Program Manager Jim Barnes, Specialist Kip Berglund, Office Support Representatives Tina Beckfeld, and Janet Nelson 1. CALL TO ORDER Chairman Kulaszewicz called the Plymouth Housing and Redevelopment Authority meeting to order at 7:03 p.m. 2. CONSENT AGENDA A. Approve April 25, 2013 HRA Meeting Minutes. B. Plymouth Towne Square. Accept Monthly Housing Report. C. Vicksburg Crossing. Accept Monthly Housing/Marketing Report. D. Community Development Block Grant (CDBG). Accept Consolidated Annual Performance and Evaluation Report (CAPER). MOTION by Commissioner Willis, seconded by Commissioner Caryotakis, to approve the consent agenda. Vote. 5 Ayes. MOTION approved. 3. NEW BUSINESS A. Update on HRA/City loan/assessment program for apartment fire suppression system installations. (Tabled from April 25, 2013) Housing Manager Barnes gave an overview the staff report. Commissioner Willis asked what the term for the Fire Suppression Loan Program would be. Housing Manager Barnes replied that the term is 10 years. Commissioner Willis suggested that if the term were a deal breaker that we should extend the term to reduce payment for the applicant over a longer term. Commissioner Willis stated that the Approved Plymouth Housing and Redevelopment Authority July 25, 2013 Page 2 Vicksburg Village fire was a costly city and tax payer expenditure. If Vicksburg Village had fire protection only a portion of the damage would have occurred. Chairman Kulaszewicz asked if the interest rate would be an adjustable rate. Housing Manager Barnes explained the interest rate would be based on the city's return on its money over the past 12 months. He also stated that there are other options to consider on how the rate could be established such as 1/2% over prime, prime, or a fixed rate. Chairman Kulaszewicz stated that the main advantage of the program would be a low cost loan. Commissioner Caryotakis stated owners could also save on their insurance costs. Housing Manager Barnes stated they might see a savings of up to15% on their insurance. Commissioner Caryotakis stated the key of this program should be to provide a reasonable program and then present it to the City Council to determine the economics. Commissioner Willis asked if the city maintains an apartment list available to the public for those wanting to rent in Plymouth and if the list includes whether the apartment is sprinkled. Housing Manager Barnes replied there is a list through our rental licensing program. He stated a lot of searching for apartments is done online, but occasionally we receive calls asking for such a list. Currently the list does not provide information if the building is sprinkled. Commissioner Jelinek questioned what the incentive would be if this information was not published. Commissioner Runck stated that evidence of savings needs to be provided. He asked if the size of the loan, $125,000, was enough. He also asked if the maximum loan amount was based on the example of Parkside Apartments at Medicine Lake. Housing Manager Barnes explained there are many variables that would affect the cost such as increasing the size of the main line to increase water pressure, if the system would be a wet system, or would it also include a dry system. Parkside was able to add the sprinkler system at a lower cost because the structure was already open from the fire damage. Every project would be different based on the wants and needs of each apartment building. The $125,000 limit is a starting point. We do not have unlimited reserves. If three or four apartment communities were to ask for funding, it would use approximately half of our reserves. Commissioner Caryotakis asked if we generated interest and if there were a need for more funding, could we accommodate them. Approved Plymouth Housing and Redevelopment Authority July 25, 2013 Page 3 Housing Manager Barnes replied at that point we would hold discussions with the City Council to see if there were other financing options. Commissioner Willis noted that if the funds came from a special assessment, repayment would be protected even if bankruptcy occurred. He also suggested that bonds could be considered if the project were large enough. He added the maximum loan amount should remain flexible. Commissioner Runck commented if the program had flexible limits it would allow for one-stop shopping so the apartment owners would not have to go to the bank for a secondary loan for the financing of the project. Commissioner Caryotakis stated it would not matter where the funds came from; HRA reserves, city reserves, assessments, or the sale of bonds, as long as product, rate and term were what the property owners wanted. Chairman Kulaszewicz asked for the definition of multi -family. Housing Manager Barnes responded staff considers multi family to five or more units for this program. MOTION by Commissioner Willis, seconded by Commissioner Runck, directing staff to move the Loan/Assessment Program for apartment fire suppression system installations forward to the City Council for their discussion and approval on behalf of the HRA. Vote. 5 Ayes. MOTION passed unanimously. B. HRA Strategic Plan. (Tabled from April 25, 2013) Housing Manager Barnes gave an overview the staff report. Commissioner Willis noted under the Affordable Housing, First Time Homebuyers heading changes were made from investigating to consider becoming an administrator for First Time Homeowners. He asked if that could be accomplished and if we would receive administrative fees. Housing Manager Barnes stated the HRA could be come a lender for the Minnesota Housing Fix -Up Fund and Rehab loan programs which would provide administrative fees to the HRA. The downside is if the underwriting has errors we would be responsible for that loan meaning they would refuse to buy it and we would have to fund that loan with our own resources. For the First Time Homebuyer program, Housing Manager Barnes stated the HRA could partner with a local bank to apply for first mortgage funding from Minnesota Housing. However, we have not had housing projects that would be geared towards first time buyers. Plymouth's Approved Plymouth Housing and Redevelopment Authority July 25, 2013 Page 4 average home value is in the mid $300,000 range which is out of reach for most first time home buyers who access our programs. Commissioner Willis asked about Plymouth Towne Square and Vicksburg Crossings 95% occupancy. Housing Manager Barnes stated that occupancy has been at or above 95% occupancy all year and is an industry standard. Commissioner Runck asked with the onslaught of baby boomers should we consider building another senior building. Housing Manager Barnes suggested staying in a holding pattern. Dominium has 100+ units coming into Crystal. Presbyterian Homes is building 145 independent units in Wayzata; however that will serve a different market. Independent senior housing is the toughest market to lease. In 2005 when a market survey was done for Vicksburg Crossing the survey indicated there would be unmet capacity for 125 units in our market area and we took 96 units in that capacity for Vicksburg Crossing. That will be changing with the baby boomers but it is not known what kind of housing they are going to want. Grace Management Representative Bodigheimer commented the consensus is that senior housing seems overbuilt; assisted living is need driven. Assisted living unit rentals can be in the range of 2700-3200 before levels of care are assessed. It's a tough call in this market. The biggest challenge is doing it affordably. Commissioner Willis suggests holding our position if the market is already saturated. Commissioner Jelinek asked if it is such a tough market are we doing something right with our two buildings with the occupancy near 100%. Housing Manager Barnes stated we could build another building if we chose to subsidize it. If we chose to control the rents we would fill it up. Commissioner Kulaszewicz asked is it part of our mandate to provide affordable housing, and if it is, to what extent. He also asked if building another senior building is what the taxpayers of Plymouth want to pay for. Commissioner Caryotakis asked if we should be focused on one generation or give equal consideration of affordable housing to working people. Housing Manager Barnes commented to the extent that we do not own any workforce housing, but we participate financially either through the HRA or the City. Approved Plymouth Housing and Redevelopment Authority July 25, 2013 Page 5 Commissioner Runck talked about interest rates rising but that is not reason enough, but what happens five years form now if there is hyper -inflation. Housing Manager Barnes replied if the board wants, staff can start looking for a site, partners for development, and bring it back to the board on a case-by-case basis. Commissioner Kulaszewicz stated we should be open to ideas and availability. He asked if our mandate is to provide more affordable housing, then for whom, seniors or work force. Commissioner Caryotakis commented that at this juncture of the economy we should wait and see what is needed in the future. MOTION by Commissioner Jelinek, seconded by Commissioner Willis, to adopt the HRA Strategic Plan with the provision for an annual review. Vote. 5 Ayes. MOTION passed unanimously. C. Discuss Plymouth Towne Square Maintenance new position Grace Management Representative Bodigheimer reported that a Plymouth Towne Square maintenance part-time employee is resigning effective the end of August. Grace Management Representative Bodigheimer recommends changing the part-time 30 hour/week position to full time. This would allow for absorbing some of the now contracted work. In salary, taxes, worker's comp would add approximately $10,000. It would be more if they chose to take health care benefits. There is extra money in the budget because the current property manager is earning less than what is budgeted, and that person is also not taking health care benefits which were budgeted. No budget revision would be required. MOTION by Commissioner Jelinek, seconded by Commissioner Willis, to approve the full time maintenance position at Plymouth Towne Square. Vote. 5 Ayes. MOTION passed unanimously. 4. ADJOURNMENT MOTION by Commissioner Caryotakis, seconded by Commissioner Jelinek, to adjourn the meeting at 8:12 p.m.