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EDA 1994 11 10CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY REGULAR ME~'rL~G NOVEMBER 10, 1994 Chairman Bohn called the meeting to order at 5:30 p.m. MEMBERS PRF~ENT~ Gary Boyle, Don Chmiel, Mike Mason, J'tm Bohn and Charlie Robbins MEMBER~ ABSENT; None. ~TAl~ PRI~ENT; Don Ashworth, Executive Director; and Todd Gerhardt, AssC Executive Director VISITOR PRI~ENTATION: Brad Johnmn gave a visitor presentation which was not recorded. L'0NSmER APPROVAL QF THE 199S BIr]DGET~DEBT ANALYSIS, Gerhardt: Mr. Chairman, if we could modify the agenda and switch 3 and 2 around. Let Brad go early and Don can finish his dinner. Boyle: Well sounds okay to me. CONSIDER MODIFYING THE RED~~ AGRE~II~F WITH DEAN ~IDIIN$ON QN QAK POND~ DEVELQPMENT, Gerhardt: Under this item, if you remember the project was broken out into really a variety of different phases and on the back we looked at the document that shows the dark highlighted areas. You'll notice with the dark lines outlined and these are the owner occupied townhouses that is out there fight now. And Mr. John~n was planning on just doing Phase I of that... What we did not take into consideration was the demand and success tha~ Mr. Johnson had in marketing these and the demand for this ~ype of housing in Chanhassen. He is right now has sold all 92 units. Or 90 units in both phases I and H and he says th~ Mr. Johnson, based on his marketing of those properties, finding those individuals that are interested and also just the demand out here for this type of housing. In light of that we are looking at restructuring Mr. Johnson's deal. Well before we get into ~ we kind of looked at the whole picture of this area. Then you get into the second phase of that to the north, which showed 102 rental units to the north. Brad Johnson: 104. Housing and Redevelopment Authority - November 10, 1994 Gerhardt: 104 rental units. Boyle: Is that both phases Todd? Gerhardt: Yeah, Phase I and II. And those were all rental units and some of the problems flint you%'e been seeing fight now in the rental indusuy, and Brad can talk a little bit more about this. He's been doing some projects do_wn ~n...or Austin and Duluth and just finding the financing and the people that can take this projedt on, it's been real diffi~t. And we kind of found this out as we're working with the senior housing project. So in light of that, staff met with Brad and Mr. Johnson, oh probably 3-4 months ago and talking about the availability of what his Phase HI over here, we're proposing to put senior housing. That was going to be 14 or so low townhouses in that location, and those were going to be owner occupied. And those aren't really the type of units that Dean is familiar with and he was looking, or we suggested to him that we trade the density of the rentals on this side and move those over onto the Phase HI side for the senior housing and that he may looking at coming in on this development and put in owner occupied townhouses with a value of $140,000.00 up to $180,000.00. He was amenable to that ide~ Boyle: So there would be no rental then Todd, is that it? Gerhardt: The only rental that would be there would be the senior housing project itself. Boyle: Which is Phase HI? Gerhardt: Correct. At our last meeting you approved a purchase agreement for that Phase HI land. The true price of that land is $140,000.00. The purchase price that you approved at the last meeting was $100,000.00. The other $40,000.00 we lumped into the second phase of the 54 units, or the first phase of the owner occupied as a cash payment to them in 1995 as part of that purchase agreement. Contingent upon senior housing would be approved in the Phase HI setting. And the reason for that is that helped the performa of the overall rent .sttu~e for those units in there. And if you remember those members that attended the performa presentation in the senior center, the seniors were quite concerned regarding rents. Gary Fields from Springsted presented the estimated rent goals for that With that staff has been working on trying to figure out ways of trying to bring the rents down and subsidizing them and this is one approach that we thought the I-IRA could assist in brining the overall development costs down. But the project should pay a fair price for the land and we think that $100,000.00 is a fair price. Boyle: Todd would you explain to me one more time the $40,000.00. Where that came from or what, I didn't get it. It went over my head. Housing and Redevelopment Authority - November 10, 1994 Gerhardt: Okay. The land in which the senior housing project is going to sit on, that has got a true price of what Don and I negotiated with Mr. John-gon, a purchase price is going to be $140,000.00. $40,000.00 of which would come directly out of the HRA...tax increment and be paid to Mr. Johnson throueh the private redevelopment contract and then the other $100,000.00 coming from the project itself. Boyle: Okay. Okay. (At this point the quality of the recording was very poor and hard to understand.) Gerhardt: ...The true cost of the land of what Mr. Johnson would sell it for is $140,000.00. Chmiel: That went up $40,000.00 from what it was before when we looked at it? Gerhardt: No. I think we were always around $140,000.00. What we were planning to put back in the project was $110,000.00...so what the bank would allow him to sell that for and the $140,000.00. Brad Johnson and Don Ashworth made statements which were not picked up by the tape. Bohn: Originally when he first opened up...small unit is $130,000.00 and the next time I went over there to talk to him, it went up another $10,000.00 and then every time I went over there it was another $10,000.00. Brad Johnson: You know what he's finding is that people that are buying are adding. Adding a lot of extras to the houses... Boyle: Mike, is there anything you'd like to add? Mason: No. This looks okay to me. Boyle: Don. Chmiel: On that Phase H current agreement to...being that there's only $10,000.00 difference in the cost and that's the payment for the roadway improvement, which would be in front of this facility. Is that included into Phase H from the...or just strictly Phase H? Gerhardt: In Phase II... Boyle: That same would apply then between the Phase I and proposed, isn't that true? Housing and Redevelopment Authority - November 10, 1994 Boyle: Jim? Questions or comments? Bohn: No. Boyle: Charlie, I know you just came in on this but I'm sure you've probably studied the packet and did you have any questions or comments? Robbins: Well I guess just going by what, you know the phrase you made... Boyle: Are you looking for a motion? Todd Gerhardt made a comment. Robbins: So moved. I will motion on both the items... Boyle: And that is modifying the redevelopment agreement? Robbins: Modifying the DA as well as the first_to reflect the change as well as the... Mason: Second. Robblns moved, Mason seconded that the Homing md Redevelopment AufllOlity approve the proposed change to Dean R. Johnson Private Redevelopment Agreement Phase Il for the construction of 51 units of owner occupied tuwnhomes. All voted in favor and the motion carried unanimously. ~QNSIDER APPROVAL OF THE 1995 BUDGET/DEBT ANALYSIS, Don Ashworth presented the staff report on this item. (Good quality on the tape returned at this point in the discussion.) Boyle: Sometimes you don't know whether it's $400,000.00 or $2 million or whatever else. This has been very helpful. Especially when the decision making process comes to other items. Jim. Bohn: No questions. Housing and Redevelopment Authority - November 10, 1994 Boyle: Don? Do you have comments or questions? Chmiel: No. Boyle: Mike? So I guess we need an approval. Do you need a vote to approve tho budget/debt analysis? Ashworth: You don't need one for...but you do need one. Boyle: For the budget. Ashworth: ...budget. Boyle: At our last meeting we did discuss the 1995 budget somewhat. Todd, did you have any comments on this or anything you wanted? Gerhardt: No. Nothing's changed from the last presentation. What was brought up at our last meeting was what's an objective. Whafs the balance. I think you wanted to see where we sat there before you reviewed the budget.. There's really no major changes to the '95 budget from last year. The '94 we estimate...fees for service and what took us over the top there was time spent with the vision process... Boyle: Charlie, you weren't at the last meeting. Do you have any questions or comments regarding the 1995 budget? Robbins: The comments would be just more of an observation, and nothing could change these but it appears there's not a lot of control with the income because wdve got income coming in from wherever a project's coming in so we can't control that And most of the expenses are basically driven by how big a debt on the bonds. And plus the allocations, you know by the expenditures of the manager ancL..so the remainder of those, in terms' Of my comments are it's just, most of it's given anyway. I mean we're just following guidelines from year to year, right? Gerhardt: It was brought out at the last meeting, you had concerns regarding personal services. What happens when the district collapses and we claim that the revenues and the taxes that come back on would be enough to cover those salaries. That was one of the big things that Mike and Am brought up. Bohn: I have a question. Are we going to be spending as much money next year as we did this year on consultant services? Boy we spend a lot of money on consulting. Housing and Redevelopment Authority - November 10, 1994 Ashworth: I would hope we wouldn't. Boyle: But didn't a lot of that relate to Vision 20017 Ashworth: Yeah, that was a big item. The entry monuments. I think you've gone to a point there where there's no use re-analyzing it. If you want to pick up some part of it and say, well let's go with landscaping. Let's go with the ~ign element. Whatever you want to pick up, we should be able to take and bid that withodt having to go back through a lot of the consulting services. Unless you decide you'd like to go a whole new direction. Boyle: I don't think we're going to do that. I just have one comment. On tho promotional services, should that really be a primary wle of liRA to fund banners, fireworks, music in the park, etc? Ashworth: Really that budget is State Statute. Exacfly...a city should not do that but right in the Statutes it says that is a function for HR2,. I think they. were looking really more, not necessarily promoting the town through 4th of July but more of a promotion of individual businesses into the community. But ifs pretty specific that I-IRA has that authority and ...responsibility. Gerhardt: The Star City program that you see some of the...as a part of your getting that sign, you have to put a promotional tape for your community together and we have one that we've been in the process of updating on that and pay for ttxin~ like th~ You're taking it a step farther when you draw people into the community that hopefully will spin off and go to some of the businesses and help our business community here. Boyle: It relates. I accept it. Don, would you hke to make any comments? Chmiel: No. I'm fmc. .:.- Boyle: Okay. So I guess I need, if there's no other comments, a motion to approve the 1995 budget as presented. Bohn: I'll make a motion we approve the budget as it was amended. Boyle: May I have a second? Chmiel: Second. Boyle: Charlie, you want to discuss? Housing and Redevelopment Authority - November 10, 1994 gobbins: Comments. With regards to the budget, again we're doing one for '95. I'm also assuming, as is a lot of other budgets, is that we can also look at the, should we say the budget for expenses quarterly and see exactly where we stand. If we want to modify it upward or downward for things we can control, i.e. back to what the Highway 5 Corridor, Vision. In other words, those are things we can control the amount of expenses we want to expend on so we can control that, correct? $o we could modify this budget aga/n quarterly. Ashworth: Once adopted by yourself and then agreed to by the City Council, you couldn't modify it upwards without their approval. You could modify it downward. Chmieh Yeah, once you establish a total dollar figure, that's your figure but you can always go less than what that's existing. Robbins: So what we're showing is the cap, not the, okay we're showing the cap then? Ashworth: Yes. You know the building permit revenue has been significantly higher in 1994 than we had originally anticipated so in a similar fashion I had a cap there. I simply went back to the City Council and said, you know we're doing much better here. What I would ask is that you consider modifying to increase both the revenue and the expense to allow me to put on two additional inspectors, and they agree& Robbins: But by us saying we agree to the budget now do we still have the same, should we say options to do that and modify it both upward and downward if it goes back to Council? Ashworth: Well once it's approved by Council, that represents a cap until the City Council would agree to a new cap. Did I do better in saying it that time? Boyle: I understand. change the budget. We would have to make a presentation to Council with the rationale to Chmieh Yeah. But you're not getting any more dollars so I don~t know how you could revise it up. Bohn moved, Chmiel seconded t~ approve the 1995 budget for the Homing and Redevelopment Authority. AH voted in favor and the motion carded unmimously. APPRQVAL OF BII.I Bohn: This $6,000.00 Hoisington, that's Vision 2000? Housing and Redevelopment Authority - November 10, 1994 Crerhardt: That's probably about 3/4 of your newsletter is in there. Chmiel: 3/4 of the newsletter? Gerhardt: Yeah. What he made, the printing and all the Vision input. Chmiel: That last one that we had? Gerhardt: No, there is more coming that is in the process. Boyle: And the gentleman that made the presentation last night from the survey results is this, that's not in here is it? Gerhardt: Yeah we paid him, we had to pay him up front. Chmiel: He's the Chairman of the Republican Party. He's smart. Boyle: Will that do it? Mason: Was he really? Chmiel: Yeah. Mason: I didn't know that. Boyle: Any other questions? Okay, can I have a motion that the bills be approved? M~mn moved, Belin ~econded that Ihe bill~ for the Homing ~nd Redevelopment Authority be approved as presented. All voted in favor and the motion canied. Boyle: Any miscellaneoiis? Bohn: Yeah, I have a couple of questions for Todd. Has there been any inquiries on our property next to the new bank? Gerhardt: We've been working with Charlie lames and... Boyle: Consider what, I'm sorry Todd? Bohn: Purchasing that property next to the bank. Housing and Redevelopment Authority - November 10, 1994 Gerhardt: Charlie has interest in purchasing the land next to Americana Bank so... Bob. n: If it's anything like Byerly's. Gerhardt: He's got some users that Byefly's won't let him use over here so he's looking at trying to put them down there. Boyle: Interesting. Bohn: I have another question for you. What turned Bachman's from not coming to Chanhassen? Chmiel: Well they are here. Bohn: No. They originally were going to, that store thafs in Eden Prairie, they were looking at Chanhassen at one time. Gerhardt: The only thing I can think of is the spot where they wanted it maybe was Outlet B at Target and ifs just not big enough. They have about 3 acres there and I think they needed well over 4. And if you look at that Eden Prairie store, ifs a fairly big store. And I don't know how well that would have laid out on that spot with the Highway 5 corridor study and they've done a nice job of laying it out but ifs...how that greenhouse is going to look and things like that. Because you're going to look right down on top of it. They can screen a lot of their back of their building with mulch and things that they have in the back for loading. Trucks. Ashworth: The Planning Commission might go nuts if you had 30 trucks... Gerhardt: But we did not discourage them. I don't think they really showed an interest. They wanted to bo as close to 494 corridor and Eden Prairie is closer to that. They've got' more of a population base surrounding them too so I heard_tried to get them here but they wanted it in Eden Prairie. Mason: I've got a meeting at 7:00 so I don't care if this meeting goes another half hour or not. ~Iust kidding. When is the lIRA going to tackle affordable housing in this city? When are we going to do if? When are we going to quit talking about it and when are we going to say, or ask staff or whatever, because I honestly don't know what can we do to see if we can do anything about affordable housing or nor? Housing and Redevelopment Authority - November 10, 1994 Robbins: You know, not to play the devil's advocate but in terms of the term affordable housing is, there's a lot of meanings to a lot of. Mason: I'm not talking, and that needs to be clarified. Robbins: Just wait. First of all we have to define the term affordable housing. That's one Mason: Fine. Robbins: Okay. So then we've got to determine, not we but in terms of you know physically, you know what land. If we can say we want to put it in or have everybody commit to it, but if there's no space, then we're kind of barking up the wrong tree here. Mason: I agree. Robbins: So you save those aspects. And thirdly, there might not be a developer or builder that really wants to do it. Mason: That could be. That's why I'm asking the question Charlie. Robbins: So those are some issues to consider before we say want to do it. You know it's like saying, if we're selling apples and no one's buying apples, they all want oranges, we~,,e not done a thing. Mason: Yeah, I believe what I said is, when are we going to tackle the issue of affordable housing. Robbins: But I think the question, the way I'm saying it in a kind of round about way, do we tackle that or do they come to us and we help them tackle the question? I don't know the Mason: Well I think we need. Chmiei: Who initiates it is the issue. Mason: I think we need to initiate it becaus/knowing what Myron Orfield wants to do and this, that and the other thing, I think we~ve got to stay ahead of it. And you know, I agree with every one of your issues by the way. And that's almost the preliminary work to taking a look at this but I think if we aren't on the front of that, it's going to get forced on us one way l0 Housing and Redevelopment Authority - November 10, 1994 or the other. I mean I just, in what liltle chance Pve had with Workman and what Irv Anderson is saying about Orfield's stuff getting passed, and this, that and the other thing. Chmiel: I don't think we're going to see it now. Mason: Well I think you're fight but oh, I think it's clear that Carlson would veto something like that but still, I had that uninitiated for me, I .was asked that by more than one person on the campaign trail this last time and they made iO clear, and look. I don't want low income but that line about my kid cantt afford to live in Chanhassen. Chmiel: I think what Mike is saying basically is whether it be, not be individual units, homes per se but maybe looking at condominiums with the ownership aspect. Boyle: I would assume then that staff would have to be directed to investigate property and maybe developers that would be interested in undertaking that type of project. I think that would be the first step. I don't know. I'm asking. Mason: I don't know. That's why I'm throwing it out because I don't know. Cluniel: You don't know until you get the prices back or find out those k/nds of things, and that's true. You go out to talk to developers and see what they can build or what can be built. I'm not saying slum jobs either... Mason: Oh no, no, no, no, no. Robbins: That's what I was saying is that word, and I'm in the lending business for doing these things, is that the word affordable housing has got a connotation different to all of us. I mean every one of us can come up with another...I don't know the answer. I just want you to bear in mind as far as a position. What is it? What is it? Is it low income or is it medium income or is it low to moderate? Is it looking at money funded through the MCDA"or through the MHFA money programs which I'm actively involved with, for doing those. Which are low income property. In other words, there's not an answer that says 'affordable housing~, we want it because we don't know the answer. Mason: Well okay. So then how do I or Council or HRA, if that be the pleasure of this agust body, initiate something like that to go on some exploratory mission, just to see what's out there. I don~t know. But I'd like to find out. I am worded about people not being able to, I mean you've got people working at Victory Envelope, all of these places, that can't afford to live in this town and I have some trouble with that. But again, I don't know what to do about it and I'd like to find out. ll , ii I I Housing and Redevelopment Authority - November 10, 1994 Ashworth: The work efforts to provide the answers to the questions you're asking here' are at least 90, if not 95% complete. We can reasonably come before your next agenda with the survey work, as far as the nomber of employees that work in Chanhassen and what their n~ds for housing is nearly completed. The inventory of the lands available in C~ to house affordable housing is complete. The gentleman who will bring it in front of you is named Jim Winkles. He has done affordable housing throu~out the state. He's excellent He's been working on this project for quite a period of 6me. He can go through some of the different options and discuss the...with Mr. Robbins which programs that he has had the best success with and I sincerely believe that we can do that for your next meeting. Bohn: Winkles, didn't he talk to us once before? Mason: I was going to say, that name rings a bell. Chmiel: Yes. Ashworth: He was associated with, he broke out of the housing area and went over into the private side and he was involved with the Brooks deal over here. I don't think he considers that kind of s~.. Mason: Well I'd like to see it on the agenda. I'm speaking for myself obviously. Bohn: Affordable housing is if you can buy the affordable land to build it. Mason: Well yeah. You know are we talidng subsidies or what? Boyle: Well I think the answers, like Don said, about 90% of it's done. That's bringing us up to date and then we go from there. Mason: Super. That sounds terrific. Thank you. Thanks for letting me spout for a"minute. Bohn moved, Robbins seconded to ad]om rite meeting. AH voted in favor and the motion carded. The meeting was adjourned at 6'40 l~m. Submitted by Don Ashworth Executive Director Prepared by Nann Opheim 12