Title
Approval of the October 9, 2013 HRA Meeting Minutes.
Body
ROLL CALL
Present: Commissioners Bostrom, Brendmoen, Khaliq, Lantry, Stark, Tolbert
Excused: Commissioner Thune
CONSENT
1. Approval of the September 25, 2013 HRA meeting minutes.
Commissioner Lantry moved approval.
VOTE: Yeas - 6 Nays - 0
PUBLIC HEARING
2. Resolution Approving the Sale of Land and Conveyance of Parcel 767 Jessamine Avenue E. under the ISP/NSP Program, Payne-Phalen, District 5, Ward 6.
Ms. Cecile Bedor, HRA Executive Director, stated that the HRA purchased 767 Jessamine Avenue in 2012 with NSP funds for $76,230. This foreclosed one story, 1,069 square foot accessible home with three bedrooms and one bath was built in 1975. The property is being sold to Sun Lee based on the after-rehab appraisal and in consideration of NSP costs for $146,000 with an owner-occupancy deed restriction. Total gap assistance is $119,569 with program income estimated at $134,000.
Commissioner Bostrom announced the public hearing. There being no testimony, Commissioner Brendmoen moved approval. Approved as set forth in resolution RES PH 13-265.
VOTE: Yeas - 6 Nays - 0
3. Resolution Approving the Sale of Land and Conveyance of Parcel 635 Edmund Avenue under the ISP/NSP Program, Thomas-Dale/Frogtown, District 7, Ward 1.
Ms. Bedor stated that the HRA purchased 635 Edmund Avenue in 2010 with NSP funds for $29,533. This foreclosed one story, 1,101 square foot accessible home with one bedroom and one bath was built in 1887. The property is being sold to Clarence Castile based on the after rehab appraisal and in consideration of NSP costs for $99,900 with an owner-occupancy deed restriction. Total gap assistance is $194,113 with program income estimated at $5,990.
Commissioner Khaliq inquired about the $211,000 rehab cost of this 1,100 square foot property; how staff estimates rehab costs; and how staff justifies a sale price lower than what was invested in the property.
PED staff member Sarah Zorn stated that the original estimate was $190,000 and that change orders related structural issues, and foundation and vandalism repairs boosted the cost. Ms. Zorn also noted that the process began with an RFP to hire scope writers and construction managers. The bids received were around $190,000. This high cost was partially due to making this property accessible. In determining the sale price, an after-rehab appraisal is complete; in this case, the property appraised at $112,500. PED lists properties at, or a little above, the appraised value as was the case with this property. When no offers were received at this price. the listing price was dropped to $99,900.
Commissioner Bostrom stated that some homes should be demolished, but are not due to other pressures to maintain the structure.
Commissioner Bostrom announced the public hearing. There being no testimony, Commissioner Khaliq moved approval. Approved as set forth in resolution RES PH 13-266.
VOTE: Yeas - 6 Nays - 0
DISCUSSION
4. Reservation of Year 2014 Low Income Housing Tax Credits for the Hamline Station Family Housing Project, District 11, Ward 2.
Ms. Bedor stated that on May 8, 2013, the HRA Board approved recommendations to the Minneapolis/Saint Paul Housing Finance Board regarding amendments to 2014 Low Income Housing Tax Credit Procedural Manual and the 2014 Qualified Allocation Plan” related to selection priorities for 2014 LIHTC. On May 15, that board approved the HRA Board recommendations, and authorized the HRA to reserve up to $1,025,857 of 2014 Credits to qualified Saint Paul developments.
The HRA issued an RFP and received three applications, which were due July 12, 2013. The three applications received were from Hamline Station, Jamestown Homes, and Prior Crossing. Hamline Station - Family Housing received 215 points; Prior Crossing received 142 points; and Jamestown Homes received 108 points.
In accordance with Article 8K of the 2014 QAP, PED staff recommended that Hamline Station - Family Housing be awarded 100% of the 2014 credits as that project received the most points.
Commissioner Stark moved approval. Approved as set forth in resolution RES 13-1564.
VOTE: Yeas - 5 Nays - 1 (Tolbert)
5. Resolution Approving and Authorizing Action to Implement 1) Key Terms of the Inspiring Communities Homeowner Program Manual and Rental Program Manual; 2) Scoring Criteria for Inspiring Communities RFP; 3) expenditure of $1,050,000 to Rehabilitate 831 Carroll, 995 Carroll, 891 Arkwright, 771 Geranium, and 662 Cottage; and 4) Updated Policy and Procedures for Sale of Splinter Parcels, Citywide.
Ms. Bedor stated that on July 24, 2013, the board approved the HRA Disposition Work Plan and Budget. This resolution allows for the implementation of that plan, which Ms. Bedor proceeded to summarize. Ms. Bedor provided details on community meetings and meetings with district councils that were held to get feedback on implementation details. Ms. Bedor then detailed the rationale behind the following staff recommendations:
1. Developer fee: Staff proposed that the Developer Fee Policy for properties with four units or less be a maximum of 10% of total development costs, less the expense of acquisition. This fee is consistent with Minnesota Housing and City of Minneapolis policies.
2. MN Green Communities certification: Staff recommended that all homes receiving subsidy from the HRA through the rental or homeowner programs must be Green Communities certified.
3. Design. Staff recommended scoring related to innovation, cost reasonableness and efficiency, and equity including local hiring.
4. Cap on HRA subsidy: Staff recommended a $150,000 subsidy cap on HRA subsidy per unit, noting that requests above $150,000 would come back to the HRA Board for approval.
5. Staff confirmed the HRA’s previous approval to dispose of properties, and allocated subsidy, via a competitive RFP process. Ms. Bedor noted that properties for which negotiations began prior to July 24, 2013, or where the HRA will act as developer, are exempt. She also noted that Commissioner Thune is seeking a waiver of this policy for some West 7th Street properties; this waiver request was the next agenda item for this meeting, but will be laid over and considered by the HRA Board at the next HRA Board meeting.
6. Ms. Bedor noted that the HRA Board previously approved a budget, and that staff is seeking $1,050,000 in spending authorization on the five properties detailed in the board report.
7. Ms. Bedor noted too that staff was seeking approval of a new Splinter Parcel Policy which updates the application form and evaluation criteria for staff to utilize, which will streamline the sale of splinter parcels.
Commissioner Brendmoen asked if the $150,000 maximum subsidy cap should be lowered to $100,000 or $125,000 based on the previous subsidies provided. Ms. Bedor noted that this was a maximum amount; that staff did not expect all developers to seek this amount; and that this allows for the efficient administration of the program. She also stated the HRA is under no obligation to go forward with any sales that does not seem reasonable. Ms. Roxanne Young, PED staff, added that the selection criteria included incentives to keep the subsidy request down: 20 points for $50,000 or less, 10 points for $100,000 or less, and 0 points between $100,000 and $150,000.
Commissioner Lantry noted that she believes this new process will be a better vehicle for deciding the best course of action for rehabilitating HRA owned properties. Ms. Bedor added that this policy will help the HRA achieve a balance between councilmember and constituency agendas.
Commissioner Khaliq asked why the HRA couldn’t design a scope of work and have developers bid. Ms. Bedor stated that what C. Khaliq just described was the process the HRA has been using, with mixed results. She noted that this new process should result in more reasonable costs. Ms. Young noted that the proposed $150,000 cap was arrived at via an analysis of recent NSP projects. Ms. Young also stated that there is a provision whereby the HRA shares in net sale proceeds under certain conditions.
Commissioner Lantry stated the City wants to make rehab work by developers is of high quality, and this process puts protections in place to ensure high quality work.
Commissioner Lantry moved approval. Approved as set forth in resolution RES 13-1592.
VOTE: Yeas - 5 Nays - 1 (Tolbert)
6. Authorization to Designate West 7th/Fort Road Federation as Tentative Developer of 17 Properties, District 9, Ward 2.
Commissioner Lantry moved to lay over this item until the next HRA meeting on October 23, 2013 at 2:00pm.
VOTE: Yeas - 6 Nays - 0
ADJOURNMENT
Commissioner Lantry moved adjournment. The HRA meeting was adjourned.