Ed051203.docCITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes May 12, 2003
Regular Meeting City Hall
CALL TO ORDER
President Enck called the meeting of the Economic Development Authority to order
at 7:56 p.m.
ROLL CALL
Present: W. Peter Enck, President
Sharon Cassen, Commissioner
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Steve Sommer, Commissioner
APPROVE MINUTES
Motion was made by Commissioner Cassen, seconded by Commissioner Gwin-
to approve the Regular Meeting Minutes of April 28, 2003
Lenth, . All present
voted in favor. Motion carried.
3625 FLAG AVENUE President Enck introduced for discussion Item 4, Resolution Releasing Second
Item 4 Mortgage in Favor of the Housing and Redevelopment Authority in and for the City
of New Hope on Property at 3625 Flag Avenue North.
Mr. Kirk McDonald, Director of Community Development, stated in 1982 the city’s
Housing and Redevelopment Authority (HRA) purchased 3625 Flag Avenue North
as rental property. The HRA owned several single-family homes and rented them to
low and moderate income households. In the late 1980’s the city discontinued the
program and sold the homes.
In February of 1988, the city sold 3625 Flag Avenue to Mark and Kathleen Pupeza.
As part of the purchase price, the HRA held a second mortgage in the amount of
$20,100. The second mortgage note provided that the loan would be forgiven in its
entirety if the buyers owned and occupied the property for a period of fifteen years
from the date of closing. Mark and Kathleen Pupeza have satisfied the terms of the
second mortgage note and have requested release of the second mortgage.
Commissioner Cassen pointed out that current housing programs no longer forgive
second mortgages.
Commissioner Gwin-Lenth questioned the powers of the Housing and
Redevelopment Authority (HRA) and the Economic Development Authority
(EDA). She noted the original transaction for the 3625 Flag property was authorized
by the HRA.
Mr. McDonald explained that the City Council and the HRA were the original
governing bodies and in 1989 state statutes allowed the creation of an Economic
Development Authority (EDA) with broader authority than the HRA.
City Attorney Sondrall noted the EDA assumed the HRA’s responsibilities.
EDA RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption
2003-03 “RESOLUTION RELEASING SECOND MORTGAGE IN FAVOR OF THE
Item 4HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF NEW HOPE ON PROPERTY AT 3625 FLAG AVENUE NORTH”.
The motion for the adoption of the foregoing resolution was seconded by
Commissioner Cassen, and upon vote being taken thereon, the following voted in
favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; and the following
EDA Minutes May 12, 2003
voted against the same: None; Abstained: None; Absent: None; whereupon the
Page 1
resolution was declared duly passed and adopted, signed by the president which was
attested to by the executive director.
favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; and the following
voted against the same: None; Abstained: None; Absent: None; whereupon the
resolution was declared duly passed and adopted, signed by the president which was
attested to by the executive director.
IMP. PROJECT 707 President Enck introduced for discussion Item 5, Resolution Approving Bass Lake
Item 5 Road Apartments Housing Development Agreement, Regulatory and Operating
Agreement and Property Management Agreement for the PPL/Bass Lake
Apartments Project at 7610 Bass Lake Road and Authorizing the President and
Executive Director to Sign Said Agreements (Improvement Project No. 707).
Mr. Kirk McDonald, Director of Community Development, explained that the
agreements are the final paperwork for this project. He noted the documents are
required by HUD and the MPHA to permit funding of the project. The agreements
are similar to the agreements processed for the Bass Lake Court Townhomes project
in 1998.
Commissioner Gwin-Lenth initiated discussion regarding requirements for an on-
site manager for the property.
Mr. Steve Sondrall, City Attorney, explained that the project involves 11 units and
the city has not required an on-site property manager. He noted the Bass Lake
Apartment Housing Development property will be overseen by the on-site manager
at the Bass Lake Court Townhomes.
Mr. McDonald indicated PPL is aware of the city’s expectations and the property
has already formed a neighborhood watch program through the police department.
Commissioner Collier commented that the last time the EDA discussed the 7610
Bass Lake Road property was during the transition of the on-site manager for Bass
Lake Court Townhomes.
Mr. McDonald interjected that there are now two caretakers and an on-site manager
at Bass Lake Court Townhomes.
Commissioner Sommer inquired regarding the reserves in the PPL contract as the
city’s redevelopment investment is large. He noted the total loan of $233,000 is
interest free for 30 years with collection of minimal property taxes. He inquired of
assurance that the property would be properly maintained.
Mr. Sondrall stated the Regulatory and Operating Agreement requires a reserve be
established for an amount equal to three times the estimated annualized amount of
the operating requirement. He noted the city is only involved with a small part of
the loan transaction. The project will be closely monitored by the Minneapolis
Public Housing Authority (MPHA) and the Department of Housing and Urban
Development (HUD). He stated the Cooperation Agreement stipulates that the city
will not assess real estate taxes against the four MHOP units within the
development for the entire 40-year exemption period. In lieu of real estate taxes, the
owner will pay the EDA a PILOT. This amount will be calculated as 5% of the
“shelter rent” which is approximately 30% of the income of the occupants of the
four MHOP units.
It was noted that the $223,000 loan includes $5,000 designated for playground
equipment.
EDA RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption
03-04 “RESOLUTION APPROVING BASS LAKE ROAD APARTMENTS
Item 5 HOUSING DEVELOPMENT AGREEMENT, REGULATORY AND
OPERATING AGREEMENT AND PROPERTY MANAGEMENT
AGREEMENT FOR THE PPL/BASS LAKE APARTMENTS PROJECT AT
7610 BASS LAKE ROAD AND AUTHORIZING THE PRESIDENT AND
EDA Minutes May 12, 2003
EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENTS
Page 2
(IMPROVEMENT PROJECT NO. 707).”
The motion for the adoption of the
foregoing resolution was seconded by Commissioner Cassen, and upon vote being
taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-
Lenth, Sommer; and the following voted against the same: None; Abstained: None;
7610 BASS LAKE ROAD AND AUTHORIZING THE PRESIDENT AND
EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENTS
(IMPROVEMENT PROJECT NO. 707).”
The motion for the adoption of the
foregoing resolution was seconded by Commissioner Cassen, and upon vote being
taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-
Lenth, Sommer; and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted,
signed by the president which was attested to by the executive director.
ADJOURNMENT
Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
to adjourn the meeting
Lenth, . All present voted in favor. Motion carried. The
New Hope EDA adjourned at 8:10 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
EDA Minutes May 12, 2003
Page 3