Loading...
HomeMy WebLinkAbout1992 10-19 EDAM Work Session MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND STATE OF MINNESOTA EDA WORK SESSION OCTOBER 19, 1992 C BARN CALL TO ORDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Todd Paulson at 7:13 p.m. ROLL CALL President Todd Paulson, Commissioners Dave Rosene and Philip Cohen. Also present were City Manager Gerald Splinter, EDA Coordinator Brad Hoffman, Assistant EDA Coordinator Tom Bublitz and Council Secretary Nancy Berg. DISCUSSION ITEMS BUSINESS RETENTION /JOB EXPANSION UPDATE The EDA Coordinator presented the "Red Flag Alerts" as submitted by businesses in Brooklyn Center as part of the staff survey of businesses and manufacturing in the City.. The red flag alerts are items which require some kind of response from the City and will give the Council an idea of some of the things that are happening right now with this survey. The EDA Coordinator further explained the survey and red flag alerts are a way for businesses to communicate with Brooklyn Center, and a way for the City to learn which businesses are planning to expand, relocate or move. Commissioner Rosene asked if the red flag alerts are confidential or can members of the Council speak to the businesses about the alerts. The EDA Coordinator answered no, the alerts are not confidential and addressing these concerns would show the businesses the City is interested in their input and development. The EDA Coordinator informed the Council the AMM is a meeting to discuss and make policy decisions for the upcoming legislature on Thursday, November 5, and the Council also has a budget work session scheduled for that evening. He suggested the Council may want to reschedule the work session, but a decision was not necessary tonight. Staff will put this matter on the October 26 City Council agenda as a discussion item. 10/19/92 -1- HUMBOLDT AVENUE APARTMENTS UPDATE 6637 HUMBOLDT AVENUE NORTH The EDA Coordinator explained the City of Brooklyn Center now owns the apartment building at 6637 Humboldt Avenue North. He stated there are four tenants; three are current with their rent, and one is not. The EDA Coordinator further explained the tenant who is not current, is a single, low income mother who is struggling. The EDA Coordinator asked Council for direction in handling delinquent and disruptive tenants. He informed Council if the building is occupied at the time it is closed, the City will be responsible for relocation costs. The EDA Coordinator stated using unlawful detainers for delinquent tenants would be one way to phase out tenants thus eliminating the expense of relocation. Commissioner Cohen stated if the City acquires more properties, there will be a problem managing them. He favored using a management company to handle this property and any others acquired. The EDA Coordinator stated the City had looked into hiring a management firm, but for these four units it was not cost effective. He further stated if more units are involved, the City might want to look into this again. Commissioner Rosene asked how much a management firm would cost. The EDA Coordinator answered the management firm would charge $50 per unit plus $200 a month. President Paulson asked what the City is planning to do with the building in the long- term. The EDA Coordinator answered the City has not yet decided what it wants to do with the property. He further explained, until the City gains control of the buildings immediately north of this property, he would not rush a judgment about the future use of the property. He suggested the City could level the building, develop it for industrial use, or keep the building and use it as a public building such as a domestic abuse center, drop -in learning center, etc. The EDA Coordinator explained the immediate question is how to manage the building. In the long run, the City is going to want to vacate the building and when we have these opportunities, such as a tenant being behind in the rent, should we evict people and start that process. 6715 -6721 HUMBOLDT AVENUE NORTH The EDA Coordinator explained there are four buildings involved, and the bank is going through a Proceeding Subsequent on one. The other three are going to clear title, be given back to the bank and go through HUD. He stated the bank will handle all four buildings at one time. The EDA Coordinator further stated the City can start some 10/19/92 -2- serious negotiations to purchase the buildings in the next month, possibly entering into a Purchase Agreement by the 1st of December, with a closing set for the beginning of January. Commissioner Rosene asked how seriously behind in rent the tenant is at 6637 Humboldt Avenue North. The EDA Coordinator answered the tenant paid one -half the rent for September. The EDA Coordinator explained two other tenants at 6637 Humboldt have problems getting along and have called the police on several occasions. He further explained he spoke with the management firm who handled the building previously, and was told one tenant plays the stereo loud, late at night; and the other tenant has a small child that disrupts the tenants below. Commissioner Cohen suggested staff recommend the delinquent tenant use mediation services as a way to learn to handle money and stay current with her rent. Commissioner Rosene stated the Council has until January or February before a decision can be made on the property, and if the City is patient with the delinquent tenant and tries to work with her perhaps she can remain in the building. Commissioner Cohen stated mediation might be able to find some help for her financially and assist her in finding another place to live. Commissioner Rosene asked if relocation costs have to be egregious. The EDA Coordinator answered the minimum cost is-$7,000. He further explained in paying relocations costs the City is required to give tenants 42 months of rent plus moving expenses. The EDA Coordinator agreed to keep the Council informed about the building, and will meet with the delinquent tenant. He also agreed to prepare a proposal for managing apartments and will put it on the Council agenda in two weeks as a discussion item. CURRENT HOUSING COMPLAINTS The EDA Coordinator stated Irwin Ketroser has contacted him asking if the EDA would reconsider buying his property for $335,000. He explained the EDA had previously offered Mr. Ketroser $335,000. The EDA Coordinator recommended the EDA give serious consideration to this proposal, however, the City would probably have to pay relocation costs for the tenants. Commissioner Rosene asked if Mr. Ketroser is indeed the owner of the building. The EDA Coordinator answered Mr. Ketroser is the owner of record. He explained Mr. Ketroser had stated earlier he had sold the property on a contract for deed, however the contract is only signed by Mr. Ketroser and not by his wife. The EDA Coordinator 10/19/92 -3- further explained when the City issues citations on this building, it is Mr. Ketroser who appears to deal with the matter. Commissioner Cohen asked if the tenants are scattered in the building or clustered. The 1 EDA Coordinator answered he did not know. He further stated if the EDA is interested, he would speak with Mr. Ketroser and report to Council at the next Council meeting. Commissioner Cohen stated if the tenants are clustered, staff could then close off part of the structure and only maintain the part that is occupied. Commissioner Cohen stated he felt a deal should be made with Mr. Ketroser. Commissioner Rosene agreed. President Paulson asked when staff needs a decision. The EDA Coordinator answered he could speak to Mr. Ketroser tomorrow and report to the Council at their next meeting on October 26. The EDA Coordinator reported on the property at 4800 71st Avenue North, showing the the EDA photos of the garage door and garbage. He stated the City has received numerous complaints about the property over the years, and has issued many citations to the property owner. He further stated the property owner indicated that "it did not really matter because the property was going to be auctioned off by the sheriff." The EDA Coordinator stated he would not put this house as a high priority. But if the the EDA wanted to make a statement about the Brooklyn Boulevard Study, this would show the City wants to clean up the area. The EDA Coordinator further stated if the EDA was really interested, staff could make an offer to the owner before the home goes to the Sheriffs auction. Commissioner Rosene stated eventually the City will have to remove single family housing from Brooklyn Boulevard and this is a way to do it. Commissioner Cohen asked staff to put together the numbers on this property. The EDA Coordinator stated he will find out what the current mortgage on the property is. Commissioner Rosene asked why the EDA Coordinator preferred to wait for the Sheriff's auction. The EDA Coordinator answered because then the City would be dealing with one party instead of two. Commissioner Cohen asked if staff is thinking of adding a special assessment for beautification. The City Manager answered staff would have to set up the project first. 10/19/92 -4- REDEVELOPMENT OF SINGLE- FAMILY LOTS. The Assistant EDA Coordinator explained the City has an inventory of five single family lots and just recently acquired six more from the Minnesota Department of Transportation. He further stated the EDA has had success in developing several of the scattered site lots, and the quality of housing built on the lots has been very good. The Assistant EDA Coordinator presented five redevelopment options for discussion: 1. Continue as is with marketing lots to individual builders. 2. Enter into a development agreement with a single developer to build on the lots. 3. Sell the lots to nonprofit corporations specializing in single family redevelopment, such as the Greater Minneapolis Housing Corporation (GMAC) or Habitat for Humanity. 4. Create a nonprofit corporation to develop the lots. The nonprofit could acquire the property, provide construction financing and establish a working relationship with a number of builders to develop the lots. 5. Form a joint powers group with neighboring cities to develop lots in all of the cities participating in the joint powers group. The Assistant EDA Coordinator stated it would be nice to have a model home and show interested parties where the lots are located. Commissioner Cohen expressed concern about the City getting into the development mode. He inquired what the real estate market is like right now, and asked staff to prepare a market analysis. The City Manager asked Commissioner Cohen if he wished to eliminate any options right now. Commissioner Cohen answered no, and asked for an outline of how all the programs would run. Commissioner Rosene agreed with Commissioner Cohen, and also stated he liked the idea of a joint powers group with neighboring cities. MORTGAGE REVENUE REFUNDING BONDS The EDA Coordinator stated a Resolution Authorizing Mortgage Revenue Refunding Bonds will be placed on the City Council agenda on October 26. He explained the bond issue will bring in $2 million and of that Brooklyn Center will receive $500,000. The EDA Coordinator further stated the participation fee is 1 percent of the original mortgage, and there are limitations on the use of the funds. He explained these funds can be used only for capital outlay purchases. 10/19/92 -5 The City Manager stated this is basically a refunding as the City is now paying 10 percent interest, and the City has the opportunity to refinance with Miller Schroeder at a reduced interest rate until the end of November. If the EDA does not act on it now, it cannot be accomplished again until next July. OTHER BUSINESS The EDA Coordinator asked the EDA for direction on handling capital outlay expenditures requested by parties interested in renting the Earle Brown Heritage Center. He explained such requests include electrical work, adding conference calling, and cable for television. He further explained the parties requesting the extra features pay for it through the rent, and then the Heritage Center has the added benefit of these features. Commissioner Rosene stated he wanted the EDA Coordinator to have the flexibility to make these decisions to keep the clientele coming in. He further stated he respects the EDA Coordinator's judgement. Commissioner Cohen suggesting setting a dollar limit. Commissioner Rosene suggested setting a limit up to the net cost of the event rather than the gross. The EDA Coordinator explained the capital outlay is typically in the area of $500 to $1,000, but not unusual to be $2,000 for a $5,000 show. The City Manager suggested setting a limit of $2,000 and if the request is higher, staff to contact the EDA before making a decision. The City Manager agreed to prepare a policy statement to bring before the EDA. DISCUSSION ITEMS (Continued) EVERGREEN PARK MANOR APARTMENTS (THREE-BEDROOM CONVERSION ISSUE) Commissioner Cohen submitted a memorandum in regard to the Evergreen Park Apartments 3 bedroom conversion, precedent for other applications, Federal Fair Housing Law, and Legal Aid Lawsuit against the City of Minneapolis for the EDA's review and consideration. Commissioner Cohen explained he is concerned about the legal ramifications of allowing Evergreen Park Manor Apartments to convert eight of their apartment units to three bedroom units. He stated he is not sure if there is a problem, but asked the EDA to consider his concerns at the next City Council meeting and to refer this matter to legal counsel before the Councel approves or disapproves the conversion. The City Manager informed the EDA notices have been sent to residents in the surrounding neighborhood, and staff will provide the police, fire and inspection departments reports at the next City Council meeting. 10/19/92 -6- Commissioner Rosene asked what exactly the problem is with going ahead with the three- bedroom conversion. The City Manager responded the Council must decide if the City needs more three bedroom units. If the Council decides no, their motives could be questioned. Commissioner Cohen explained adding three bedroom units would add eight additional residents to the community, and under the Federal Fair Housing Law you cannot discriminate against families unless it qualifies as housing for older citizens. He further stated the Council must look at the Federal Fair Housing Law before taking final action. The City Manager responded this is not a simple, legal question. He agreed to contact the City Attorney to obtain his preliminary comments by the next Council meeting on Monday, October 26, 1992. Commissioner Cohen stated his intent is that this is not a simple question, and he does not want to delay this matter too long. He suggested the Council discuss this matter on Monday, October 26, and allow the City Attorney until the following City Council meeting on November 9 to analyze it. ADJOURNMENT There was a motion by Commissioner Rosene and seconded by Commissioner Cohen to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 9:21 p.m. I A2 Todd Paulson, President Recorded and transcribed by: Nancy Berg Northern Counties Secretarial Services 10/19/92 -7-