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HomeMy WebLinkAbout1992 08-17 EDAM Work Session MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA EDA WORK SESSION AUGUST 17, 1992 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Todd Paulson at 7 p.m. ROLL CALL President Todd Paulson, Commissioners Celia Scott, Dave Rosene, and Jerry Pedlar. Commissioner Philip Cohen arrived at 7:50 p.m. Also present were City Manager Gerald Splinter, EDA Coordinator Brad Hoffman, Assistant EDA Coordinator Tom Bublitz, Director of Public Works Sy Knapp, City Engineer Mark Maloney, City Assessor Mark Parish and Council Secretary Nancy Berg. DISCUSSION ITEM PROPOSED DEVELOPMENT FOR THE VACANT PARCEL SOUTH OF EARLE, BROWN COMMONS (BUSINESS CONTRACT FOR DEED) The City Manager presented the proposed development for the vacant parcel south of Earle Brown Commons. The EDA Coordinator explained this will be a three -stage development on the property south of the Earle Brown Commons. Brooklyn Center holds a contract for deed on the property. The entire project will be completed in approximately one year with the first stage, if approved, being started this fall and completed in the spring of 1993. The proposal is to develop assisted living housing for senior citizens with the first phase consisting of 30 units on a single level on the site. The developers will be using the farm theme; i.e., red with a split rail fence. The EDA Coordinator further explained the housing will be for senior citizens not needing nursing home care, but unable to live on their own. Meals, housekeeping and nursing care will be provided to residents. The EDA Coordinator stated there are three issues that will need to be resolved. The first issue is the size of the pond which needs to be a 4 to 1 slope and it currently is 2 to 1. The 8/17/92 1 second issue is the storm sewer will have to be rerouted. The third issue is whether there will be enough parking. Commissioner Pedlar asked whether it will be affordable housing for senior citizens. Mr. Blumentals, the architect, explained that the units will rent for approximately $1200 to $1800 per month which is about half the cost of nursing home care. He reported the Twin Cities do not have transitional housing like this. The Authority watched a video showing similar transitional housing. Commissioner Pedlar stated he felt there is a need for such housing in Brooklyn Center but is concerned whether it is affordable. He liked the concept, especially that transportation will be provided to residents for doctors' appointments and shopping trips. He asked if the company that developed these units around the country has conducted a market study. Mr. Blumentals replied that these units are very new. There is one located in Fargo and one in Moorhead if anyone would like to travel to see them. Commissioner Rosene stated he would like to talk to the residents in existing units. He also expressed concern whether it will be affordable to senior citizens. Commissioner Scott stated she liked the idea that it is half the cost of a nursing home and will enable senior citizens to remain reasonably independent. She further stated she believed the units will be fully rented before they are built. President Paulson asked if it would be possible to take one of the areas and make it into a community senior center. The architect answered he did not think there would be enough space at this site. Commissioner Rosene asked if there is outstanding debts on the property. The City Manager answered that there are no debts on the property, only the tax increment bonds for the Heritage Center. The EDA Coordinator stated the proceeds of the sale of the land would go back into the tax increment to repay the debt. Commissioner Scott agreed this proposal fits in well and the seniors in the high rise might need a place like this. Commissioner Pedlar shared his concern it will be too costly for the common person. He liked the concept, but would like to be assured that people will be able to afford it. 8/17/92 -2- Commissioner Rosene* stated it looks like we should proceed. Commissioner Pedlar also felt Brooklyn Center has needed a senior center for years. The City Manager believed a location at the Civic Center would be more appropriate for the senior drop -in center. The original Earle Brown Farm Committee made that recommendation and it was accepted by the City Council. Commissioner Pedlar agreed the two projects should be divided and requested the senior center be placed as a discussion item on the next City Council agenda. The City Manager agreed to proceed to look at the development of this parcel and to present it to the Planning Commission for their review and if approved to bring it back to the City Council. Commissioner Scott asked the EDA Coordinator to check out the facility in New Hope that is close to this theme. The EDA Coordinator replied he will check it out and will put together some numbers for the Council. Mayor Paulson also asked staff to pursue a senior center. Commissioner Scott felt it would be best to separate the proposed units from a senior center as the center would be for active seniors. The EDA Coordinator agreed to make available to the Council a study that was done earlier about a senior center and the City Manager agreed to have the matter put on the next City Council agenda as a discussion item. WILLOW LANE/HUMBOLDT AVENUE NORTH DEVELOPMENTSIFINANCING CONCEPTS The City Manager presented the Willow Lane/Humboldt Avenue North developments /financing concepts explaining the EDA has been actively pursuing the purchase of several apartment complexes. All of the proposed acquisitions have been or are distressed properties or properties that have been a problem for the City. The EDA Coordinator further explained they have been looking at the purchase of the apartments at 6637 Humboldt, the Lyn River apartment complex as well as the Brookdale Motel. The EDA has agreed to purchase 6637 Humboldt Avenue North at a cost of $90,000 plus approximately $2,000 in closing costs. This purchase is scheduled for closing September 1, 1992. The EDA Coordinator also explained the apartments north of 6637 Humboldt are boarded- 8/17/92 -3- up units. Barclay American Mortgage is in the process of acquiring a clear title to the property. Once that is accomplished the properties will be turned over to HUD and the EDA will start negotiations with HUD for their purchase. The EDA Coordinator further explained the 6525 Willow Lane property, which may or may not be owned by Irwin Ketroser. He explained he felt the asking price is too high. The units need significant repairs. Commissioner Cohen asked what the property, if purchased, will be used for, what are we going to do with the land, and also what are the tax implications. He believed the EDA will have to develop a well reasoned plan to develop the property possibly using the Maxfield study. He further suggested a study of the area such as the Brooklyn Boulevard study. The City Manager stated staff could come back to the EDA with some options or proposals using the information in the Maxfield study. The EDA Coordinator stated he estimated the cost of the Ketroser property, the Lyn River property and for the Brookdale Motel, would be a total of $2,305,000 to acquire the entire package. He further explained there may be some State funding through the Land Trust. Also, not included in these figures is the relocation costs. He explained it is best to allow the residents to remain in the buildings and let them move out on their own letting relocation handle itself. The total project cost is in the area of about $3 million. Commissioner Scott stated there is a problem with purchasing the Ketroser property when we believe it is not worth the amount offered. This would be setting a precedent that we do not want to have in Brooklyn Center. Mark Parish, City Assessor, explained the Ketroser property has just been involved in a tax court negotiation with the assessment value being set at $414,000 for the tax year 1990. He stated this value is two to three years old and the property has deteriorated significantly since then and has decreased in value. He further warned the City should require the seller of this property provide a title insurance policy at the seller's cost. He reported there is a question as to the true owner of the property right now. Mr. Ketroser has shown Mr. Parish a purchase agreement for the sale of the property, but it has never been registered with the County. He has viewed the property many times and it is not in compliance with the Housing Maintenance Ordinance. The City has tried many times to get the owner to comply, but it has not been easy. Commissioner Pedlar stated this is a significant issue with the Housing Maintenance Ordinance. He stated the Ordinance should be stronger, more enforceable. Commissioner Pedlar stated if the owner wants to sell and the City offers a fair value, we must also look at the costs to level the building and redevelop the property. 8/17/92 -4- Commissioner Cohen agreed the offer has to be one that does not reward the owner. He further stated if the City needs additional legislation to enforce compliance with the Housing Maintenance Ordinance, then the City should go after that legislation. Commissioner Scott asked if the owner is current on his mortgage and staff did not know. The City Manager stated the question is where do we go from here. He believed the EDA could offer the owner a price which reflects only market value with renovation costs deducted. If rejected, the EDA would continue to pursue enforcement of, the Housing Maintenance Ordinance. Commissioner Rosene agreed with the City Manager. Commissioner Pedlar stated he is an advocate of redevelopment in that neighborhood. The City needs to strictly enforce the Housing Maintenance Ordinance. Commissioner Scott also agreed to offer the owner market value less realistic renovation costs and if refused, to continue the inforcement effort. Commissioner Scott agreed the City does not need to purchase the motel at this time. The EDA Coordinator explained that Howard Atkins is proposing to build an office building for his business on his property. Mr. Atkins is proposing a building much like one in Maple Grove across from Perkins if the Councilmembers would like to see what he has in mind. Commissioner Pedlar stated the City should know who the owner of the property at 6525 Willow Lane really is. Mr. Parish replied he did not know for sure who the property owner is. It seemed to him that under the Ordinance the property owner must notify the City of any transfer of title, but it also seemed to him that perhaps this is one area of the Ordinance which should be addressed that it is the responsibility of the recorded owner to transfer title of property. The City has a problem where it has an unrecorded document that he does not believe is valid, but there is nothing in the Ordinance to prevent this from happening. Commissioner Scott stated the owner of the Lyn River apartments should be told the City may be interested in purchasing the property sometime in the future but it does not have the money right now. The staff was directed to offer market value less realistic renovation costs for the Ketroser property with no offers being made on the Lyn River or Brookdale Motel properties. SALES TAX/FOOD AND BEVERAGE EDA LEVY The City Manager presented the sales tax/food and beverage EDA levy explaining he has 8/17/92 -5- met with the Chamber's Economic Development Committee on August 13, 1992 to discuss the one percent tax. He explained the restaurant owners were very concerned about the tax although they understood the need, they did not appreciate being singled out as a tax group. Commissioner Cohen asked what the cost of administering the tax will be. The City Manager answered he does not know exactly yet, however, it will be similar to the cost for administering the hotel /motel tax. It will not be a significant cost factor as the same procedures will be used. Commissioner Cohen stated the best selling point is that it is a dedicated tax. The City Manager agreed the proposed tax is strictly dedicated to housing by state law. President Paulson stated he thought the tax included crime and drug prevention. The City Manager explained when the tax was first introduced it did include crime and drug prevention but as it went through the legislative process it was removed. Commissioner Cohen stated he believed that once the primaries are over, the Council can again discuss this with the candidates. Commissioner Rosene asked if the Chamber developed a position on the tax. The City Manager answered not at this time. It was agreed to postpone further discussion until after the primary elections. HEALTH DEPARTMENT REORGANIZATION The City Manager stated staff has had discussions with Crystal and is currently negotiating with the County to take over the Health Department but to keep it a joint powers. NEIGHBORHOOD STREET IMPROVEMENT PROGRAM The City Manager presented the proposed neighborhood street improvement program stating staff recommends initiation of a 2 -mile it improvement of ro'ect 1 n 1993. H P project e further explained, to make this possible, it is necessary to have the Council give preliminary approval as soon as possible so that staff may proceed with needed engineering work, citizen involvement, and financing. The Director of Public Works suggested that, on August 24, 1992, the Council to consider a resolution which would include: 1. Establishing the project. 2. Beginning survey work to gather data to prepare plans and specifications and 8/17/92 -6- cost estimates. 3. Retaining an appraiser to estimate the value added to properties from street reconstruction and curb and gutter installation. 4. Retaining a landscape architect to develop concepts for distinctive neighborhood aesthetic improvements. 5. Exploring street lighting alternatives with NSP and the landscape architect. 6. Televise the sanitary sewers in the two areas proposed for the pilot project. 7. Exploring funding mechanisms utilizing GO bonds, special assessments, and other sources of funds, including further refinement of an Assessment Stabilization Program. Commissioner Scott asked why it would be necessary to hire a landscape architect. The Director of Public Works answered that hiring a landscape architect maybe needed if the process goes beyond planting trees and shrubs to include such things as benches, signs and other aesthetic improvements. Commissioner Cohen asked what the net cost to the homeowner will be; i.e., what will the assessment be and what will the additional value be to the property. He suggested the City send the matter back to the neighborhood advisory committee without. The Director of Public Works stated the basic reason for establishing a project is to authorize the staff to start expending funds toward doing studies and analysis of the project. Commissioner Scott agreed staff should proceed with a feasibility study. The Director of Public Works asked the EDA for their reaction to the proposal noting that if the project is to proceed in 1993, it will be necessary to start surveys in September, 1992. The City Manager asked that he and the Director of Public Works be allowed to work on this proposal between now and the next City Council meeting on Monday, August 24, 1992. Commissioner Cohen stated the matter should be put back in the residents' hands and the City staff is working in the right direction. Commissioner Rosene stated he felt a landscape architect might be a bit frivolous, but if staff shows it is needed, he would not hesitate to give the authority to do that. The City Manager explained that the landscape architect is not part of this initial stage. Commissioner Pedlar asked for a report supporting the statement by the Director of Public Works, that the long -term reality is that streets without curb and gutter deteriorate faster." 8/17/92 -7- The EDA asked staff to bring the Neighborhood Street Improvement Program back to the Council on Monday, August 24, 1992 without a project number, for reference to the Earle Brown Neighborhood Advisory Committee. ADJOURNMENT There was a motion by Commissioner Scott and seconded by Commissioner Pedlar to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 9:50 p.m. O Todd Paulson, President Recorded and transcribed by: Nancy Berg Northern Counties Secretarial Services I 8/17/92 -8-