HomeMy WebLinkAboutCity Council Minutes 08-23-1993 SpecialMINUTES
STUDY SESSION
AUGUST 23, 1993
A special meeting study session of the Plymouth City Council was called to order by
Mayor Bergman at 5:05 p.m. in the Council Conference Room of the City Center, 3400
Plymouth Blvd., on August 23, 1993.
PRESENT: Mayor Bergman, Councilmembers Helliwell and Tierney
ABSENT: Councilmembers Edson and Vasiliou
ALSO PRESENT: Ellie Singer, Board of Zoning Adjustments and Appeals member
STAFF PRESENT: Assistant City Manager Lueckert, City Clerk Rauenhorst
BOARD OF ZONING ADJUSTMENTS AND APPEALS VACANCY
The City Council interviewed the following candidates for a vacancy on the Board of
Zoning Adjustments and Appeals: Michael L. Engel, Jeffrey Mayer, Walter L. Thurman,
and Michael R. Kobs.
Mayor Bergman stated that an appointment would be made at the August 30 Council
meeting.
The meeting was adjourned at 6:00 p.m.
Cit Clerk
MINUTES
STUDY SESSION
AUGUST 23, 1993
A special meeting study session of the Plymouth City Council was called to order by
Mayor Bergman at 6:00 p.m. in the Council Conference Room of the City Center, 3400
Plymouth Blvd., on August 23, 1993.
PRESENT: Mayor Bergman, Councilmenbers Edson, Helliwell, and Tierney
ABSENT: Councilmember Vasiliou
STAFF PRESENT: City Manager Johnson, Assistant City Manager Lueckert, Bond
Counsel Dan Nelson, Housing Specialist Dale, and City Clerk
Rauenhorst
HARBOR LANE APARTMENTS - PROPOSED LOW INCOME HOUSING
AGREEMENT
City Manager Johnson presented a proposed agreement for the Harbor Lane Apartments
rehabilitation project which was prepared by Bond Counsel Dan Nelson, Best and
Flanagan.
Dan Nelson, Best and Flanagan, stated the applicant has received bonding authority from
the State for the Harbor Lane project in the amount of $9,135,000. He presented a draft
Low Income Housing Agreement between the City and the owner of the Harbor Lane
Apartments project which would be entered into in addition to the State and Federal
requirements for this bond financed project. The agreement focuses on protecting the
existing Section 8 tenants of the project and other lower income tenants by capping rent
levels until the completion of the rehabilitation of the project, and requiring the owner to
make his rehabilitation improvements to units in the project without regard to the incomes
of the tenants.
Attorney Nelson explained that under federal bonding requirements, the owner must
guarantee that 20 percent of the units will be occupied by people with less than 50 percent
of the current HUD established median income of the Minneapolis -St. Paul area, which is
51,000 for a family of four. He said income limits are as follows: 4 person family -
25,500; 3 person family - $22,950; 2 person family - $20,400; 1 person family - $17,850.
Attorney Nelson stated the developer must meet this 20 percent requirement whether or
not additional criteria is agreed to with the City. The developer is willing to work with the
City to develop a low income housing agreement which would impact rents beyond this 20
percent requirement.
Council Study Session
August 23, 1993
Page 2
Attorney Nelson stated the City cannot require the developer to have a specified number
of Section 8 holders in the units. Individuals holding Section 8 certificates have freedom
to move where they want, and the City has a limited number of certificates. He said it is
likely that Section 8 holders will remain in the building following renovation. The Harbor
Lane apartment rents are currently $80 to $100 below typical rent levels due to the age
and condition of the building. The developer has indicated that deferred maintenance has
caused problems with occupancy.
Councilmember Edson asked if rents have been increased in the last year.
Housing Specialist Dale responded that rents were recently increased by Steven Scott
Management firm, who is the court appointed management company. The average rents
are currently $435 for 1 -bedroom, $599 for 2 -bedroom, and $789 for 3 -bedroom. He
stated this complex still has among the lowest rents in Plymouth, especially as it relates to
three bedroom units which are difficult to find elsewhere in the City. He stated there has
been a history of problems at Harbor Lane, and this has never been considered a well
constructed building. It had about 70 percent occupancy rate before Gaughan Companies
took over the building several years ago. They did some major improvements but were
unable to snake the project a success. He stated there are limited amenities at Harbor
Lane apartments, however, the units are large. It was constructed in the early 1970's and
it is difficult for the owner to compete with the newer apartments in the City.
Attorney Nelson reviewed details of the proposed low income housing agreement. He
said the owner would agree not to raise the rent on any units leased to existing Section 8
tenants for a period of two years from the date of the agreement. The owner further
represents that the he does not currently expect to increase rents for existing Section 8
tenants above the HUD fair market rent limits after the two year period. The owner
would agree that, in addition to the Section 8 tenants described above, 45 additional units
in the project would be leased to tenants whose incomes, adjusted for family size, do not
exceed 50 percent of the HUD median family income for the Minneapolis -St. Paul area.
The owner would further agree to not increase the rents on any units leased to the lower
income tenants from the date of the agreement until the completion of the rehabilitation
work. Attorney Nelson said this would in essence be a rent freeze for the 45 units for the
12 to 15 month construction period. He stated the developer is willing to work with the
City if the City is interested in providing some sort of City subsidy to lower income
tenants who do not now reside in the project.
Attorney Nelson stated the owner won't guarantee frozen rents beyond the rehabilitation
period because the insurance company guaranteeing the bonds will not agree to this
provision.
Pidge Hodowanic and LaDonna Hoy represented Interfaith Outreach. Ms. Hodowanic
stated Interfaith Outreach assisted 129 Harbor Lane households in 1992/93, spending
Council Study Session
August 23, 1993
Page 3
18,223 in 1992, and $12,247 so far in 1993, for housing assistance. She stated they want
the City to be aware that there are a large number of people served by Interfaith Outreach
who could be forced out of their apartments because of increased rents. She stated there
is increased homelessness in Plymouth and many are families.
Ms. Hodowanic stated the high housing prices in Plymouth also snake it difficult for first
time home buyers. She stated they have no suggestions for resolving these problems, but
she wanted to bring them to the City's attention.
Councilmember Edson asked what income guidelines are used by Interfaith Outreach for
providing housing assistance.
Ms. Hoy stated they do not have income criteria. They provide housing subsidy on a
case-by-case basis. She stated they sometimes provide housing assistance for only one
month and other times on a continuing basis. Interfaith Outreach has occasionally
subsidized Section 8 certificate holders; however, the majority they subsidize are the
working poor who are at the edge of their financial ability to retain their apartment.
Manager Johnson stated staff had discussed with the owner the possibility of freezing the
market rents in the Harbor Lane project for a longer period of time than through the
renovation. The insurance company that will guarantee the bonds would not agree to this
time extension.
Attorney Nelson stated the City is making a positive effort to retain affordable housing in
the City. He has never seen a situation where a city has imposed limits beyond the 20
percent federal requirement.
Housing Specialist Dale briefly reported on a local rental assistance program conducted by
St. Louis Park called MAX 200. This program provided a maximum of $200 per month
assistance to individuals, with a two-year limit for assistance. The funds came from the
City's Section 8 operating reserve account.
Housing Specialist Dale stated that CDBG monies cannot be used for rental assistance;
however, the HRA could consider the possibility of using its Section 8 operating reserve,
Senior Housing Project rental subsidy reserve, or HRA unallocated tax levy funds, as
available, to start such a program in the future.
The Council generally concurred with the proposed low income housing agreement.
The meeting was adjourned at 7:05 p.m.
S iu llc e t
74—
Ci y Clerk