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HomeMy WebLinkAbout1995 05-22 EDAP Regular Session EDA AGENDA CITY OF BROOKLYN CENTER MAY 22, 1995 (following adjournment of City Council meeting) Rough Draft r 1. Call to Order i t4 2. Roll Call 3. Approval of Agenda and Consent Agenda -The followina items are considered to be routine 6y the Economic Development Authority and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes: April 24, 1995 - Regular Session -Commissioners not present at meetings will be recorded as abstaining from he vote on the minutes. b. Resolution Authorizing Submittal of an Application for Funding Under the 1995 Minnesota City Participation Program (MCPP) 4. Commission Consideration Items A 5. Adjournment Council Mecting Date May 22, 1995 3 City of Brooklyn Center Agwda Item Number 3a- Request For Council Consideration • Item Description: EDA Minutes - April 24, 1995 - Regular Session Department Approv . G. Brad loffman, Director of Community tevelopment gol,7. 4 0 Manager's Review /Recommendation: IV No comments to supplement this report Comments below /attached Recommended City Council Action: • Summary Explanation: (supporting documentation attached Yes ) April 24, 1995 - Regular Session Barb Kalligher was excused from the meeting and the minutes will reflect her abstention from the vote on these minutes. 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 REGULAR SESSION APRIL 24, 1995 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in regular session and was called to order by President Myrna Kragness at 7:41 p.m. ROLL CALL President Myrna Kragness, Commissioners Kristen Mann, Debra Hilstrom, and Kathleen Carmody. Also present were City Manager Gerald Splinter, Director of Public Services Diane Spector, Director of Community Development Brad Hoffman, Community Development Specialist Tom Bublitz, City Attorney Charlie LeFevere, and Council Secretary Barbara ColIman. Commissioner Barb Kalligher was excused from tonight's meeting. • APPROVAL OF AGENDA AND CONSENT AGENDA President Kragness inquired if any Commissioner requested any items be removed from the consent agenda. No requests were made. There was a motion by Commissioner Mann and seconded by Commissioner Carmody to approve the April 24, 1995, agenda and consent agenda as printed. APPROVAL OF MINUTES MARCH 27 1995 - REGULAR SESSION There was a motion by Commissioner ylann and seconded by Commissioner Carmody to approve the minutes of the March 27, 1995, EDA meeting as printed. The motion passed unanimously. 4,24,95 - 1 - RESOLUTIONS RESOLUTION NO. 95 -13 Commissioner Kristen Mann introduced the following resolution and moved its adoption: RESOLUTION ACCEPTING PROPOSAL FOR APPRAISAL SERVICES PURSUANT TO EMINENT DOMAIN PROCEEDINGS ON THE BROOKDALE MOTEL LOCATED AT 6500 WEST RIVER ROAD The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Kathleen Carmody, and the motion passed unanimously. CONSIDERATION ITEMS The City Manager explained a public hearing is necessary before the sale of public land. The Community Development Specialist mentioned the fee to Habitat for Humanity for the property would be 81.00. He noted there have previously been two homes built under the program in Brooklyn Center. The proposed project would result in a rambler similar to the two built earlier and would be handicap accessible. He added there was a walk- through of the property this past Saturday by church sponsors. The sponsors spoke to residents of the neighborhood and did not receive negative responses. Construction on the project would begin in Julv and would include completion of landscaping on last year's Habitat for Humanity home. President Kragness commented she attended the dedication 'of the home built in Brooklyn • Center last year and it was a wonderful occasion. She expressed hope that Brooklyn Center will continue to be involved in the Habitat for Humanity project for many years to come. President Kragness opened the meeting for the purpose of a public hearing Regarding the Sale of Land Located at 5305 Bryant Avenue North to Twin Cities Habitat for Humanity at 8:44 p.m. She inquired if there was anyone present who wished to address the Commission. No one came forward. There was a motion by Commissioner Hilstrom and seconded by Commissioner Mann to close the public hearing at 8:45 p.m. The motion passed unanimously. Commissioner Mann asked whether the home to be built would include two or three bedrooms. A representative of the church sponsors answered the home will have three bedrooms, a basement, and a garage. 4/24{95 - ? - Commissioner Hilstrom asked whether appliances will be on the first floor in order to be handicap accessible. The representative stated the plans do not call for appliances to be on the first floor. The individual who is handicapped, in this situation, is a child. RESOLUTION NO. 95 -14 Commissioner Debra Hilstrom introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR THE SALE OF LAND LOCATED AT 5305 BRYANT AVENUE NORTH TO TWIN CITIES HABITAT FOR HUMANITY The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Kathleen Carmody, and the motion passed unanimously. ADJOURNMENT There was a motion by Commissioner Hilstrom and seconded by Commissioner Carmody to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 8:46 p.m. President • Recorded and transcribed by: Barbara Collman TimeSaver Off Site Secretarial • 4/24/95 - 3 - Council Meeting Date 5/22/95 3 City of Brooklyn Center Agenda Item Number 3.b Request For Council Consideration • Item Description: Resolution Authorizing Submittal of an Application for Funding Under the 1995 Minnesota City Participation Program (MCPP) Department Approval: Tom Bublitz, Community Developmen S iali Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommendation: Staff recommends approval of Resolution Authorizing Submittal of an Application for Funding Under the Minnesota City Participation Program (MCPP). • Summary Explanation: su ortin documentation attached Yes ( PP g ) The Minnesota City Participation Program (MCPP) is a mortgage program offered through the Minnesota Housing Finance Agency (MHFA) for first -time home buyers. Through the MCPP, the MHFA sells bonds on behalf of cities participating in the program to obtain a pool of money for mortgage funds. The interest rates on these mortgages are typically one percentage point below market mortgage interest rates. The only direct cost to the City for this program is a processing fee charged by the Minnesota Department of Finance in the amount of $20 for each $100,000 of mortgage allotment. Additional indirect costs would consist of staff time spent on promoting and administering the program. In 1992, 1993, and 1994, the City of Brooklyn Center participated in the MCPP and was able to offer first -time home buyers a 7.10 % interest rate in 1992, a 6.125 % and subsequently 6.85 % interest rate in 1993, and a 7.15 % interest rate in 1994. The way the program works is that a specific allotment of mortgage funds are set aside for each of the cities participating in the MCPP. The mortgage funds are set aside for a period of four months for the exclusive use of the city. If they are unused at the end of four months, the unused portions are folded into a statewide pool from which all cities in the MCPP can draw upon for two additional months. In 1992, 1993, and 1994, the City of Brooklyn Center exceeded its original allocation and used funds from the pool. By exceeding the original allocation in 1992, 1993, and 1994, it demonstrates a strong interest in both the first -time home buyer program and • single- family homes in the City of Brooklyn Center. In 1994, the City of Brooklyn Center was the fourth largest user of mortgage funds under the MCPP, using over 1.7 million dollars in mortgage funds through the MCPP. In order to apply for the program for 1995, the City, through the EDA, must submit an application identifying local housing needs relative to the program. A copy of the application request is included Request For Council Consideration Page 2 with this memorandum. • A summary of the main features of the 1995 MCPP program follows: ■ In past years, the Minnesota Housing Finance Agency has normally accepted applications for funding the MCPP in the first two weeks of April. After that, an allocation meeting was held at the end of April which determined each city's mortgage allocation and funds were made available in late -June or early -July. In 1995, however, the housing pool that funds the MCPP was entirely taken up by multi - family rental issues in advance of the April 1 -15 single- family application date. Initially, it appeared that no funding would be available for a 1995 MCPP. Fortunately, the housing pool has now been restored from two sources: 1) the fall- through of some of the proposed multi- family issues; and 2) a pledge from the manufacturers' pool of tax- exempt authority. The total dollar amount that MHFA expects in the MCPP for 1995 is $43,750,000. While the program will be starting later than normal, applications will be accepted between June 1 and June 8, 1995, and MHFA anticipates availability of mortgage funds in July, provided the bond market permits an acceptable sale. ■ In past years, the allocation of the mortgage funds for each individual city was accomplished at a meeting of all participating cities. Essentially, the participating cities met on a specific' date and agreed upon a formula for allocating mortgage funds. The statute now calls for distribution of the MCPP mortgage funds on a per capita (population) basis. MHFA will simply apply this formula and notify city applicants of their allotted amount after the application deadline. What will happen is that the $43,750,000 will be divided by the total • population of the participating cities and the resulting per capita rate will be used to calculate each city's allocation. For example, if all 55 jurisdictions in last year's MCPP apply for this year's program, the per capita rate for each city will be $33.79. For Brooklyn Center, this would mean that our 1990 population of 28,887 times $33.79 would result in mortgage funds made available to the City of approximately $976,000. At this point it is impossible to predict the per capita rate since it will be dependent on the number and population of jurisdictions applying for the MCPP. If the jurisdictions applying for the 1995 MCPP result in a population of half of those that applied last year, the resulting amount would be $66.00 per capita times 28,887 population, or approximately $1,900,000 in mortgage revenue funds. In the application, cities may either specify a specific dollar allocation request or may simply indicate that they are requesting the "maximum allowable" to guarantee that they will receive the largest allocation permitted by the population formula. Given the popularity of the MCPP and the likely number of applicants, I am recommending that the Brooklyn Center EDA request the "maximum allowable" allocation. • Participating cities in the MCPP must meet a usage test of mortgage funds. The usage test requires that a city must use 50% of their allocation or they will be ineligible for the following two years of the MCPP. For 1995, the MCPP program term will run for six months, with cities having an exclusive use of their allotments for a four month period. After the four month set aside period, any unused funds will be placed in a single statewide pool available to all MCPP participating cities for the final two months of the program. • Properties that qualify for MCPP mortgages include single - family homes, townhomes, condominiums and duplexes. • The maximum borrower income limit for the program is $40,800 in household income. This is adjusted by $1,000 for each household resident. In other words, in a three- person household, the household income can total $43,800 and still remain eligible for the MCPP. Request For Council Consideration Page 3 Z • The maximum house price limits the 1995 MCPP are $95,000 in the Twin Cities metropolitan area. • In addition to the below market rate mortgage funds, eligible borrowers at $28,000 adjusted gross income or less will be eligible to receive down payment and closing cost assistance in the form of an interest -free second mortgage. • The Minnesota Department of Finance will charge a fee to cover the costs involved with processing housing pool allotment requests. This fee will amount to $20 for each $100,000 in allotment provided. • To participate in the MCPP, cities must also designate local lenders to originate mortgage loans under the program. A number of lenders have already submitted letters of intent to participate in the MCPP, copies of which are included with the MCPP application. Lenders must be selected from the current Minnesota Mortgage Program lender list. • An application deposit in the amount of 1 % of the final mortgage allocation amount must be included with the allotment agreement executed between the MHFA and the Brooklyn Center EDA. The 1 % application deposit will be refunded in full approximately one month after the closing of the bond sale. Staff will be present at Monday's EDA meeting to answer any questions the EDA may have regarding the Minnesota City Participation Program (MCPP). S • APPLICATION FOR FUNDING MINNESOTA HOUSING FINANCE AGENCY 1995 MINNESOTA CITY PARTICIPATION PROGRAM (MCPP) I. ELIGIBLE ORGANIZATION A. NAME AND ADDRESS OF ORGANIZATION Economic Development Authority City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 B. NAME AND PHONE NUMBER OF CONTACT PERSON Contact Name: Tom Bublitz Phone Number: 569 -3433 C. TYPE OF ORGANIZATION Economic Development Authority (EDA) D. AMOUNT OF T A FUNDS REQUESTED AND THE ESTIMATED NUMBER OF LOANS TO BE PROVIDED Amount of Funds Requested: Maximum allowable Estimated Number of Loans: 12 -25 loans, depending on allocation (estimated at $74,000 per loan) E. MIlVI j ALLOCATION ACCEPTED $500,000 F. INFORMATION ON ANY UNUSED MORTGAGE REVENUE BOND (MRB) OR MORTGAGE CREDIT CERTIFICATE (MCC) RESOURCES STILL AVAILABLE IN THE CITY OF BROOKLYN CENTER (NON - MHFA) There are currently no Mortgage Revenue Bond (MRB) or Mortgage Credit Certificate (MCC) programs (non -MHFA) offered or available in the City of Brooklyn Center. H. ORIGINATING LENDER Several lenders have agreed to participate in Brooklyn Center's 1995 MCPP program. Confirmation letters received from lenders as of May 18, 1995, are included with this application. Additional lenders may be added from the MHFA list of approved lenders prior to the execution of the allotment agreement. As of May 18, 1995, the following lenders have requested to participate in the 1995 MCPP: Inland Mortgage Corporation, Marquette Mortgage, Residential Mortgage Group, Inc., FBS Mortgage, TCF Mortgage and Investors Mortgage. III. HOUSING PLAN In 1982, the City of Brooklyn Center adopted the City's comprehensive plan, which included a housing plan entitled, "PROVISIONS OF THE BROOKLYN CENTER COMPREHENSIVE PLAN ADOPTED AS THE CITY'S HOUSING PLAN IN ACCORDANCE WITH MINNESOTA STATUTES 462C ". Since the 1982 Housing Plan was adopted, the City has adopted two new housing plans, one entitled, "The Brooklyn Center Housing Market: A Study of Trends and Their Impact on the Community" prepared by the Maxfield Research Group, Inc., and one entitled, "Brooklyn Center Housing Implementation Plan" prepared by Publicorp, -Inc. The Maxfield Study was adopted by the Brooklyn Center City Council in 1989, and the Brooklyn Center Housing Implementation Plan was adopted in 1990. The information presented in this application for funding will include elements of all three plans with relevant updates of housing data. The description of the housing needs identified in the plans will focus on single family housing. Additionally, complete copies of all three plans are included with this application. A. DESCRIPTION OF THE CITY OF BROOKLYN CENTER'S PRINCIPAL HOUSING NEEDS A general statement of the City of Brooklyn Center's housing needs is provided by the housing study prepared by the Maxfield Research Group, Inc. In this study, the goals are "to study the current image and condition of neighborhoods in the community, and to assess the impact of demographic and housing market trends on the vitality of each neighborhood. The objective of the study was to identify areas where trends are negatively influencing the long term potential of a particular neighborhood or sub - neighborhood, as well as to provide strategies for strengthening the livability of neighborhoods and identify goals and objectives the City can use to meet the changing housing needs of existing and future residents. " -2- A summary of the "changing housing needs of existing and future residents" include the following components which are contained in the City's housing plans. 1. NEED FOR THE CITY OF BROOKLYN CENTER TO STAY COMPETITIVE FOR FIRST TI TE HOME BUYER MARKET The Maxfield Study describes the shrinking first time home buyer market by pointing out "from 1980 to 1990, the number of persons aged 18 to 24 will shrink by fifteen percent (15 %), and the number of persons aged 14 to 17 will shrink by twelve percent (12 %). These two groups will be the major market for both entry level rental housing and smaller, more modest, single family homes over the next twenty years." The Maxfield Study states further that: "In order to remain vital, Brooklyn Center will need to be able to compete for entry level homeowners, who may find it more desirable to purchase a modest, but new home in areas such as Anoka, Champlin, Brooklyn Park, Coon Rapids or Maple Grove, where affordable, newer starter homes are still available." Table 1 on the in the list of attachments shows a demographic profile of the shrinking first time home buyer market. The Minnesota Cities Participation Program (MCPP) would provide a needed tool to assist the City of Brooklyn Center to remain competitive in the first time home buyer market. 2. NEED TO MAINTAIN REHABILITATE AND REMODEL AGING HOUSING STOCK Census data shows that, of the approximately 11,000 housing units in Brooklyn Center, 49% had been built between 1940 and 1959. Another 31 % were built during the 1960s, and 17.6% during the 1970s. Table 2 in the list of attachments shows the age of the housing stock in Brooklyn Center and several surrounding communities. The need for a variety of efforts to provide financing programs, including loans and grants, to provide a source of funds to accomplish single family rehabilitation and remodeling is addressed in all of the City's housing plans. 3. NEED FOR SINGLE FAMILY REDEVELOPMENT THROUGH NEW HOME CONSTRUCTION The Maxfield Study points out the need to "remove any deteriorating -3- housing, or housing in areas where the land could be better utilized by buying back homes as they come up for sale." The Maxfield Study also emphasizes the need to construct single family homes in the areas cleared of deteriorated housing, and that "new, single family homes should be designed to complement existing housing, but with designs geared to today's lifestyles." 4. NEED TO PROMOTE HOME OWNERSHIP IN THE COMMUNITY The increasing difficulty of potential first time home buyers to afford to buy a home is explained in the Maxfield Study by the following: "According to a survey by Chicago Title and Trust Company, national trends show that persons who bought homes in 1988 are making larger mortgage payments, an average of 32.8 % of family income, compared to .29.3 % in 1987. Also, first time buyers are paying a larger chunk of their income (34.8%) than repeat buyers (31.4%). These trends are continuing in the 1990s and confirm that the cost of buying a home is becoming prohibitive for younger buyers." Additionally, both the Brooklyn Center Housing Implementation Plan and the City's 1982 Housing- Plan point out the need to provide home ownership opportunities, especially for persons of low and moderate income. 5. NEED TO PRONIOTE HOUSING MAINTENANCE THROUGH CONTINUED CODE ENFORCEMENT All three of the City housing plans emphasize the need to continue strong housing maintenance code enforcement to assist in maintaining the City's housing stock. 6. NEED TO ASSURE NEIGHBORHOOD PRESERVATION AND RENOVATION All three City housing plans stress the need for neighborhood preservation. This area addresses a wide variety of needs that encompasses most of the other identified needs and adds other needs such as providing for and financing public improvements (streets, curb and gutter, etc.), resident involvement in neighborhood issues and programs and neighborhood promotion. -4- i B. DATA SOURCES AND METHODS USED TO DETERMINE THE DESCRIBED NEEDS Development of City housing plans relied on a wide variety of data and information, including census data, Metropolitan Council reports and specific studies prepared by professional consultants which address housing trends throughout the Twin Cities metropolitan area. Primary research was also used in developing the plans, including personal inspections of all neighborhoods, interviews with local realtors, rental property managers, local lenders and other individuals who have a stake in trends impacting housing conditions. Data was also collected through City records and City staff interviews and research including assessment department records, building inspection records and research done by staff including an inventory conducted through a windshield survey of single family housing conditions. C. THE SPECIFIC PLAN DEVELOPED TO MEET IDENTIFIED HOUSING NEEDS INCLUDING THE RESOURCES TO BE ACCESSED AND THE METHODS USED TO CARRY OUT THE PLAN The Maxfield Research Study focused on identifying the primary housing needs 0 of the City and the relative housing market position of the City. The 1982 Housing Plan and the Housing Implementation Plan adopted in 1990 focused on specific plans and recommendations for meeting the identified housing needs. Plan elements and recommendations include the following: 1. CONTINUE SPOT RENEWAL PROGRAM This is the program that provides for acquisition and clearance of deteriorated single family properties and redevelopment of the properties with single family homes. The City has acquired and cleared ten properties under this program to date, and plans two to three additional acquisitions for 1995. 2. WORK WITH AVAILABLE PROGRAMS (MIIFA AND HUD) WHICH PROVIDE FUNDS FOR REHABILITATION LOANS AND GRANTS AND HOME MORTGAGES a. The City currently operates a deferred loan (grant) program with CDBG funds. The program provides up to $15,000.00 per home for home rehabilitation, including replacement and rehabilitation I —5 -- ICI Z of mechanical systems, electrical, plumbing, windows, doors, exteriors, etc. b. The City makes use of the MHFA Home Energy Loan program and Home Improvement Loan program (fix -up fund). Those persons who do not qualify for the City's CDBG deferred loan program are referred to these programs. C. The Brooklyn Center EDA was awarded a $275,000 grant for neighborhood redevelopment under the MHFA's Community Rehabilitation Fund Program. d. The Minnesota Cities Participation Program would provide another needed element to programs currently underway in the City. 3. CONTINUATION OF HOUSING MAINTENANCE ENFORCEMENT Both the 1982 and current Housing Implementation Plan emphasize the need to maintain a high level of enforcement under the City's existing housing maintenance ordinance. A staff housing maintenance enforcement team consisting of representatives from the Community Development Department, Building Inspection staff, Police Department and City Prosecutor's Office work together to address non - routine and serious enforcement problems. Building Inspection staff respond to routine housing maintenance complaints and provide a day -to -day enforcement of the Housing Maintenance Ordinance. Additionally, as recommended by the Housing Implementation Plan, the City's Housing Commission is considering alternatives for additional enforcement tools which could be added to the City's enforcement efforts such as Point of Sale and Truth in Housing ordinances. The City of Brooklyn Center continues enforcement of multi - family properties through its rental dwelling license provisions. Additionally, there are several major multi - family rehabilitation projects currently underway in the City which total approximately one -third of the multi- family housing units in the City. Continued strict enforcement of the City's Housing Maintenance Code and rental dwelling license provisions have had a positive effect on the ultimate rehabilitation of several multi- family properties. -6 4. NEIGHBORHOOD RENEWAL AND PRESERVATION PROGRAM This element of the plan addresses many program elements that combine to afford neighborhoods opportunities to develop a comprehensive approach to maintaining and improving their neighborhoods. The Housing Implementation Plan recommends the City work with community residents to assist in planning and implementing a neighborhood revitalization strategy. Additional elements include: Identification of target areas for concentrated activity, offering design services to neighborhood residents interested in property improvements and assisting in the organization of a homeowner's association to maintain housing. The City is pursuing these recommendations through the formation of a neighborhood housing advisory committee. This group has been formed with residents of the City's southeast neighborhood. The Earle Brown (southeast) Neighborhood Housing Advisory Committee is working to promote neighborhood renewal and preservation. Projects include a neighborhood housing newsletter, sponsoring neighborhood projects such as participation in the Metro Paint -A -Thou and other activities related to housing maintenance and neighborhood improvement. 5. EXTERIOR MAINTENANCE ASSISTANCE PROGRAM The 1982 Housing Plan calls for an exterior maintenance assistance program. The City's 1994 CDBG Program allocates $9,000.00 to continue a program started in 1992. Projects under this new program will be limited to exterior maintenance, such as painting, siding, roof repair, sidewalk and step repair for persons 60 years of age and older or for disabled persons. D. DESCRIPTION OF ANY TARGET AREAS TO BE ADDRESSED IN THE PLAN The southeast (Earle Brown) neighborhood is the City's oldest. The neighborhood is bounded by Minneapolis on the south, the Mississippi River on the east, I -94/I -694 on the north and Shingle Creek on the west. The area's predominant land use is single family residential. The Maxfield Study indicates that approximately twenty -five percent (25 %) of the area's single family homes were constructed prior to 1950, and the remainder were built in he 1 r ' t 950s o earl 1960s. The area's housing le varies , reatl y g st Y greatly. -7 Located within the area are farmhouses, post -war bungalows, and two story houses built in the 1980s. The City's southeast neighborhood has been targeted as the neighborhood to focus on for neighborhood preservation and renewal. More MCPP loans were generated in the southeast neighborhood in 1992 than in any of the other 5 city neighborhoods. The 1993 and 1994 MCPP activity was also very high in the southeast neighborhood. E. PLAN IMPLEIMENTATION AND ADMINISTRATIVE CAPACITY OF CITY The implementation of the City's housing plan will be undertaken by the Economic Development Authority for the City of Brooklyn Center. In addition to EDA authority, the Brooklyn Center EDA has all powers granted to HRAs by State statute. Additionally, the City's Housing Commission and Earle Brown Neighborhood Advisory Committee will assist the EDA in implementation of the housing plan. City staff available to implement the housing plan include the Community Development Director and Community Development Specialist. Additionally, as the needs of specific projects may demand, other City staff members are called upon to provide assistance, including the Building Inspection staff, Assessing and Engineering departments. Private consultants are also utilized in specialized areas of plan implementation, such as relocation advisory services. The City of Brooklyn Center has been actively involved in administering housing programs for well over a decade, and has implemented numerous housing programs and projects, both single family and multi - family housing. With regard to specific programs providing for single family mortgages, the City of Brooklyn Center, along with the cities of Columbia Heights, Robbinsdale and Moorhead jointly developed and offered a single family mortgage program for first time home buyers in 1982. In this program, the City of Brooklyn Center issued $2,750,000.00 in single family mortgage loans. IV. PROGRAM SPECIFICS A. HOW PROGRAM FITS INTO COMPREHENSIVE HOUSING PLAN The ability to offer low interest mortgage loans for single family homes is an important element in the overall City housing plan. It provides a necessary tool to assist the City in keeping its housing stock competitive with housing in neighboring communities and outer ring suburban housing. The first time home buyer loan program will also help to achieve a second feature of the housing plan, which is to encourage home ownership by developing financing programs to facilitate home ownership, especially for persons of moderate and low income. B. BORROWER INCOME LIMITS To provide the greatest possible opportunity for the sale of homes under the first time home buyer program, the City of Brooklyn Center will use the maximum household income of $40,800 to qualify potential borrowers. C. HOUSE PURCHASE PRICE LIMITS The house price limits for existing homes will be $95,000.00, the MHFA limit for the Twin Cities metropolitan area. For new construction, the house price limit will also be $95,000.00, as per MHFA requirements. D. TARGETING OF SPECIFIC POPULATION GROUPS No specific target population groups will be targeted under the program. E. TARGETING OF AREA OR HOUSING STOCK The program will be open to all neighborhoods in the City. However, special marketing efforts will be made in the southeast neighborhood. F. OPTIONAL PROGRAM ENHANCEMENTS No additional program enhancements will be offered in the 1995 Minnesota City Participation Program for Brooklyn Center. G. SCHEDULE FOR RELEASE OF FUNDS The schedule for the release of funds will be immediate for the four month set aside period. H. WHY THIS PROGRAM IS A GOOD CANDIDATE FOR FUNDING The City of Brooklyn Center believes the proposal for participation in the Minnesota City Participation Program will be a valuable and successful financing tool for neighborhood revitalization for numerous reasons, including the following: -9- 1. The City of Brooklyn Center had one of the highest rates of loan originations for metropolitan cities participating in the MCPP in 1992 and 1993. In 1992, the City g exceeded its original allocation of $2,187,157 in MCPP funds. 1993 records indicate Brooklyn Center used $2,608,000 in MCPP funds, which is in excess of the City's original allocation. In 1994, the City also exceeded its allocation, using $1.7 million in MCPP funds. 2. The housing in the City of Brooklyn Center is very affordable, and over ninety percent (90%) of the single family homes are within the MHFA target values for the program. A breakdown of the number of homes in the MHFA target range is included in the list of attachments at the end of this application (Table 3). 3. The Minnesota Cities Participation Program meets an identified need in the City's housing plan which will provide additional opportunities for home ownership. 4. The age of the City's population shows a potential for considerable turnover in single family housing. A breakdown of the age of City residents is included in the list of attachments (Table 4). 5. Employment base remains strong in the City so that housing location near • employment will be a factor in home sales. V. ECONONRC VIABILITY DESCRIBE WHY YOU FEEL THERE IS SUFFICIENT DEMAND IN YOUR MARKET TO USE THE MINNESOTA CITIES PARTICIPATION PROGRAM FUNDS REQUESTED. INDICATE THE DATA SOURCES USED TO PROTECT DEMAND A. The City f Brooklyn Center exceeded its allocation Amount for mortgage u t o loans Y Y under the 1992, 1993, and 1994 MCPP. The City anticipates continued demand for MCPP funds in 1995. B. One of the indicators of demand for the Minnesota Cities Participation Program in the City of Brooklyn Center is the value of single family homes in the City. Table 3 in the list of attachments shows a summary of the number of single family homes valued at $95,000.00 or less. Over ninety percent (90 %) of the single family homes in the City of Brooklyn Center are valued within the price range eligible for the Minnesota Cities ® -10- Participation Program. • C. Real estate sales in the City f Brooklyn Center currently average approximately Y Y Y g PP Y 367 homes per year with an average $79,300.00 purchase price. The source of this real estate sales data is from the City's assessing department and is based on actual single family home sales as recorded by Hennepin County. D. Table 4 in the list of attachments shows a breakdown of the age of the Brooklyn Center population according to 1990 census data. The data shows that over twenty -four percent (24 %) of Brooklyn Center's population is fifty -five (55) and over, which is an indication that many of these people will be "turning over" their houses as many change to other living arrangements. E. As in past years, the City staff receives numerous calls from individuals who are apparently "shopping" cities to find out which city can offer the best deal for a single family mortgage. As indicated previously in this proposal, the City of Brooklyn Center is in competition with other first ring suburbs and outlying suburbs for starter homes. The Minnesota City Participation Program would provide a needed tool to address the requests of these individuals looking for the best mortgage available. F. In an interview with a mortgage loan officer from Marquette Bank Brookdale the need for additional first time home buyer funds from a local source became • apparent. Presently, Marquette Bank is authorized to fund first time home buyer loans under the Minnesota Mortgage Program. The mortgage loans under this program cannot be restricted to the City of Brooklyn Center. According to Marquette Bank Brookdale, requests for mortgage funds under the Minnesota Mortgage Program exceed funds available in the program. The Minnesota City Participation Program would help to address this unmet need for additional mortgage funding. VI. NEW CONSTRUCTION REQUIRENI TENTS No usage for new construction is anticipated for the 1995 MCPP. VII. SIGNATURES This application for funding for the Minnesota City Participation Program (MCPP) is submitted by the undersigned with the full knowledge and consent of the governing body of this organization or City and is, to the undersigned's best knowledge, accurate in all details. • -11- ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER Date: By: Myrna Kragness EDA President I I By: Gerald G. Splinter EDA Executive Director -12- i LIST OF ATTACHMENTS �. TABLE 1 - Population distribution by age 2. TABLE 2 - Age of housing stock - Brooklyn Center and area communities 3. TABLE 3 - Number and assessed value ranges of single family and two family homes 4. TABLE 4 - Age breakdown of Brooklyn Centerpopulation (1990 census) 5. TABLE 5 - Total dwelling units in the City 6. Confirmation letters from participating lenders • -13- 1 POPULATION DISTRIBUTION BY AGE Seven- County Twin Cities Area 1980 -2010 Change Change Change Group Ape 1980 1990 2000 2010 1980 -1990 1990 -2000 2000 -2010 Youth 0 -19 632,224 614,916 616,770 552 (17,308) 1,854 (64,530) Young Adult 20 -24 204,564 171,912 147 167 (32,652) (24,072) 19,720 Adult 25 -34 374,368 425,372 332,640 330,400 51,004 (92,732) (2,240) Middle -Age 35 -49 330,223 491 600 516040 161 109 (83,760) Empty Nester 50 -64 256,289 268,888 355 502 12 86 146,940 Young Senior 65 -74 105,479 130 133,980 158,120 24,557 3,944 24,140 Old Senior 75+ 82,726 101,384 122,430 132,160 18,658 21,046 9,730 Total 1,985,873 2,204,000 2410 2 218 106,000 50,000 Sources: . 19 WS. Census 1986 Metropolitan Council Estimates TABLE 2 AGE OF HOUSING STOCK BROOKLYN CENTER AND AREA COMMUNITIES 1980 -------- - - - - -- Year Structure Built ----------------- - - - - -- Year -Round 1970 -1980 1960 -1969 1940 -1959 1939 - Earlier Units No. Pct. No. Pct. No. Pct. No. Pct. Developed Area BROOKLYN CENTER 10,978 1 17.6 3,407 31.0 5,420 49.4 219 2.0 N6 Crystal 9,093 798 8.8 2,498 27,5 5,360 58.9 437 4.8 New'Hope 7,837 1,754 22.4 4,948 63.1 1,080 13.8 55 0.7 Osseo 1,040 206 19,8 266 25.6 379 36.4 189 18.2 Robbinsdale 5,798 582 10.0 861 14.8 2,915 50.3 1,440 24.8 Camden (Mpla.) 1 (N /A (N /A (N/A (N /A (N /A (N /A (N /A (N /A (N /A Subtotal 34 5 15.1 11,980 34.5 15,154 43.6 2,340 6.7 Developing Area Maple Grove 6,764 5 79.6 942 13.9 281 4.1 158 2.3 Brooklyn Park 15,803 7,625 48.2 5,643 35.7 2,307 14.6 228 1.4 Dayton (part) 606 360 59.4 98 16.2 65 10.7 83 13.7 Champlin 2,805 4475 52.6 827 29.5 350 12.5 153 5.4 Subtotal 25,978 14,843 57.1 7 28.9 3,003 11.6 622 2.4 Hennepin County 379,144 77 20,4 77,896 20,5 112 29.6 111,635 29.4 Twin Cities Seven - County Metropolitan Area 681,627 190 27.9 161,749 23.7 200 29.3 196,215 28.8 r n, C - ,., . n n n11-1 „C n... InVinn Intl n "0"0i n 1080 s CITY OF BROOKLYN CENTER OWNER OCCUPIED HOUSING INVENTORY 1994 Assessed Market Value of Brooklyn Center Homes Assessed Market Value # Homes P rcent $0- $39,999 1 0.00% $40,000 - $59,999 730 9.13% $60,000 - $74,999 4,560 57.01% $75,000 - $84,999 1,913 23.92% $85,000 - $99,999 557 6.96% $100,000 - $124,999 162 2.03% $125,000 - $149,999 44 0.55% $150,000 and up 32 0.40% 7,999* *includes single - family, duplexes and townhouses 1994 median assessed value is $73,000 for single - family properties. Age of Housing Stock Construction Date No. Dwellings Before 1949 664 1950 -1959 4,853 1960 -1969 1,416 1970 -1979 600 1980 -1989 436 1900+ 7,999* *includes single - family, duplexes and townhouses TAB1. 4 AGE OF BROOKLYN CENTER RESIDENTS (1990 CENSUS) I'll/P12. Race by Scx by Age (Unlvcm: Pcrsons) ( ----- - - - - -- Total ----- - - - - -- ) Whltc [)lack American Ind1an/L'sk3nxVAlcut AsIvJPacUk Islandcr Othcr Racc A la-u= Eernmil M)1c l:rmaic Male E mmlc Malc E malc !`laic I e iw t; )`talc Umalc rime LiaLdc Undcr 1 371 215 156 167 131 32 16 4 2 9 4 3 3 1 uid 2 933 461 469 373 382 56 59 5 8 18 14 12 6 Sand 4 858 449 409 371 325 48 55 6 3 18 21 6 5 S 435 217 218 173 .176 30 34 1 1 10 5 3 2 6 369 178 191 145 158 14 23 6 1 II 8 2 1 Ito 9 1157 581 576 497 485 54 54 8 6 14 22 8 9 10 and 11 728 385 343 317 285 40 25 6 5 16 25 6 3 12 and 13 694 346 348 293 294 30 27 7 5 11 19 5 3 14 316 168 148 135 123 20 18 3 2 6 3 4 2 15 326 174 152 148 129 13 13 2 5 10 5 1 0 16 339 166 173 140 144 19 13 0 3 6 13 1 0 17 377 185 192 162 168 it 12 2 3 9 9 1 0 18 340 181 159 159 145 13 4 1 2 8 4 0 4 19 380 198 182 179 154 10 IS 1 5 5 6 3 2 20 410 18"1 226 159 199 13 16 " 4 3 7 8 1 0 21 392 198 191 175 166 11 17 3 1 8 7 1 3 22 to 24 1327 6014 723 541 623 35 62 6 8 21 24 1 6 25 to 29 2761 1386 1375 1278 1242 60 85 14 18 28 25 6 5 30 to 34 2611 1316 1295 1219 1155 60 89 10 19 19 23 8 � 35 to 39 2030 997 1033 899 950 49 47 12 12 29 21 8 3 40 to 44 1767 819 938 760 860 32 34 5 10 24 27 8 7 15 to 49 1515 72S 790 686 748 20 17 7 10 9 15 3 0 50 to 54 1417 606 811 583 783 10 14 2 6 It 6 0 2 55 1059 1781 807 974 790 948 10 13 3 6 3 5 1 2 60 and 61 707 343 364 333 358 4 2 2 1 4 3 0 0 62 to 64 1000 496 501 484 493 7 5 1 0 4 6 0 0 651o69 1339 643 696 633 680 5 7 1 1 2 7 2 1 701074 960 432 528 421 521 8 1 1 0 2 5 0 1 75 to 79 583 224 359 221 353 1 4 0 0 1 1 1 1 SO to 84 379 134 245 130 240 2 3 1 0 1 2 0 0 R5 and over 285 67 21 67 215 0 1 0 1 0 1 0 0 TABLE 5 TOTAL NUMBER OF D14ELLING UNITS - CITY OF BROOKLYN CENTER TOTAL UNITS/PARCELS units parcels # HMSTD % HMSTD # NONHMS Single Family 7371 7371 - 6977 94.65% 394 �+ Duplex 106 53 31 58.49% 22 Triplex 9 3 0 0.00% 3 Apartments 3225 231 5 2.16% 226 Condominiums 126 126 85 67.46% 41 Townhomes 62 622 514 82.64% 108 Totals 11459 8406 7612 90.55% 794 Marquette Mortgage A Division of Marquette Bank, N.A. 4301 Winnetka Avenue North New Hope, MN 55428 -4926 (612)536 -6262 Outside Metro Area (800)295 -6270 May 12, 1995 Tom Bublitz The City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Dear Tom: This letter is to advise you of Marquette Bank Brookdale's (dba Marquette Mortgage) desire to originate mortgage loans for The City of Brooklyn Center under the MHFA City Participation Program. Our participation in the program is, of course, subject to the approval of the Minnesota Housing Finance Agency. Thank you for the opportunity to assist in providing financing for low and moderate income first time homebuyers in the Brooklyn Center area. Feel free to contact me at (612) 536 -6261 should you have any questions. Sincerely, J L. Janss Vice President C. Karen DuCharme Inland Mortgage Corporation 5100 Gamble Drive < Suite 470 St. Louis Park, Minnesota 55416 -1522 An ! -win Financial Company May 16, 1995 Mr. Tom Bublitz Brooklyn Center EDA 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Dear Mr. Bublitz: This letter is a follow -up to my letter of January 25, 1995 requesting Inland Mortgage Corporation be a participating lender in the 1995 Minnesota City Participation Program with Minnesota Housing Finance Agency for our City. g cY Y We are very interested in working with you on this program. Thank you for your consideration. Sincerely, Tom Leland Branch Manager 6 612 546 1520 RMG residential mortgage group, inc. May 4, 1995 Tom Bublitz City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Mr. Bublitz, Please accept this letter as notice of Residential Mortgage Group's (RMG) willingness and desire to administer, process and close mortgage loans on behalf of the City of Brooklyn Center for the 1995 MCPP funds. You may list the following information for advertising purposes: Residential Mortgage Group, Inc. 6465 Wayzata Boulevard, Suite 720 St. Louis Park, MN 55426 Erin Ryan, Loan Officer Phone: 593 -1169 Should you have any questions or require additional documentation, please do not hesitate to contact me at (612)593 -1169. Sincerely, Alvin I Gelschus President 6465 Wayzata Boulevard Suite 720 • St. Louis Park, MN 55426 • 612 -593 -1169 • FAX 612 - 593 -1634 FBS e Mort a g g FBS Mortgage Corporation P.O. Box 1199 Minneapolis, Minnesota 55440 612 641 -3800 April 29, 1995 Tom Bublitz City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Dear Mr. Bublitz: Please accept this as our request for our participation in the 1995 Minnesota City Participation Program with the Minnesota Housing Finance Agency. We would be pleased to participate in this program and look forward to working with the City of Brooklyn Center. The contact at FBS Mortgage Corporation will be: Jon Peterson FBS Mortgage Corporation 200 Coon Rapids Boulevard, Suite 200 Coon Rapids, MN 55433 phone (612) 786 -0466. fax (612) 786 - 085=4. We look forward to a mutually beneficial program. Sincerely, Tricia Landers Program Coordinator cc: Jon Peterson Gene Aho, MI-1FA 3b Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING SUBMITTAL OF AN APPLICATION FOR FUNDING UNDER THE 1995 MINNESOTA CITY PARTICIPATION PROGRAM (MCPP) WHEREAS, the Minnesota City Participation Program (MCPP) provides Minnesota cities with mortgage financing for first -time home buyers; and WHEREAS, the housing plans of the City of Brooklyn Center recognize the need for affordable housing opportunities for first -time home buyers of moderate and low income; and WHEREAS, the Minnesota City Participation Program will provide needed financing for first -time home buyers in the City of Brooklyn Center. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center as follows: 1. Staff is hereby authorized to submit the application for funding under the Minnesota City Participation Program. 2. The Brooklyn y Center EDA authorizes the submission of a proposal deposit of one percent (1 %) of the final allocation of mortgage funds for the City of Brooklyn Center under the Minnesota City Participation Program with the understanding the proposal deposit will be refunded upon the sale of the mortgage revenue bonds. The source of funds for the proposal deposit shall be from the EDA special operating fund. 3. The Brooklyn Center EDA authorizes the submission of a processing fee to the Minnesota Department of Finance to cover costs involved with processing the City's mortgage fund allocation under the Minnesota City Participation Program with the understanding that the fee to be charged will be $20 for each $100,000 in allotment provided and that the fee will be non - refundable and shall be appropriated from the EDA special operating fund. Date President The motion for the adoption of the foregoing resolution was duly seconded by commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted.