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062220 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, June 22, 2020 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of June 22, 2020 2. Roll call 3. Approval of Minutes: • June 8, 2020 4. Resolution approving forgivable loan of CDBG funds to Twin Cities Habitat for Humanity, Inc. 5. Adjournment EDA Meeting Page 1 June 8, 2020 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes June 8, 2020 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:53 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Dan Boyum, City Engineer Tim Fournier, Director of Police Megan Hedstrom, Stormwater Specialist Beth Kramer, Communications Coordinator Valerie Leone, City Clerk Susan Rader, Director of Parks & Recreation Jeff Sargent, Director of Community Development Bernie Weber, Director of Public Works Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to approve the minutes of April 27, 2020. All present voted in favor. Motion carried. 4215 LOUISIANA AVE N (IMPROVEMENT PROJECT NO. 1047) Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving contract with JACON LLC for hazardous material abatement, tree removal, demolition of site improvements, site grading, sewer lining, and water service valve replacement at 4215 Louisiana Avenue North (Improvement Project No. 1047). Mr. Jeff Alger, community development specialist, illustrated the property’s location adjacent to Cook Automotive. He stated the city acquired the property at 4215 Louisiana Avenue North in February of 2020. Staff sought quotes for demolition and recommends approval of a contract with JACON LLC fo r hazardous material abatement, tree removal, demolition of site improvements, site grading, sewer lining, and water service valve replacement for $32,278. He stated the steps are necessary to prepare the site for building demolition to facilitate redevelopment of the property with a single-family home. He noted the city has worked with this contractor in the past and has a good experience with the contractor. Funding for the work is available in the EDA budget. He also noted the intention to rezone the property from community business to single-family residential. EDA Meeting Page 2 June 8, 2020 Commissioner London inquired of the proposed expenses. Mr. Alger stated the low quote of $32,278 for demolition is less than the estimated $37,000. He also pointed out the acquisition cost was less than other scattered site projects and the new house will likely sell for $350,000. He confirmed that the RFP included the requirement to have a fence installed along the southern property line. RESOLUTION 2020-05 Item 4 Commissioner Hoffe introduced the following resolution and moved its adoption “RESOLUTION APPROVING CONTRACT WITH JACON LLC FOR HAZARDOUS MATERIAL ABATEMENT, TREE REMOVAL, DEMOLITION OF SITE IMPROVEMENTS, SITE GRADING, SEWER LINING, AND WATER SERVICE VALVE REPLACEMENT AT 4215 LOUISIANA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1047).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; 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. 3924 UTAH AVE N (IMPROVEMENT PROJECT NO. 1020) Item 5 President Hemken introduced for discussion EDA Item 5, Resolution approving sale of 3924 Utah Avenue North (Improvement Project No. 1020). Mr. Jeff Alger, community development specialist, requested the EDA to approve the sale of 3924 Utah Avenue North to Ethan Lederer for $387,000. He explained the EDA purchased the vacant and distressed property in December of 2018 as part of the city’s scattered site housing program. He stated Day Construction completed the rehabilitation of the home that included improvements to nearly all interior and exterior areas of the house. He presented “before” and “after” photographs to illustrate the improvements. Mr. Alger stated the list price was $371,900, and there were multiple offers on the property. He stated the offer is a purchase price of $387,000 with 2.5% (or $9,675) brokerage fee to buyer’s real estate agent with a closing date of July 16, 2020. He noted by selling the home without a listing agent, the city will save between $10,000 to $12,000 in brokerage fees. Mr. Alger stated there is a funding gap of only $14,152 (paid through the EDA budget), the 30-year return on investment is 4.55%, and the 30-year internal rate of return is 6.33%. Mr. Jeff Sargent, director of community development, pointed out that Day Construction did an outstanding job on the house. He congratulated Mr. Alger in skillfully managing the project and selling the property for $16,000 over asking price. The City Council and City Manager McDonald also complimented Mr. Alger on the project. President Hemken opened the public hearing for comments, and no one requested to speak at the public hearing. EDA Meeting Page 3 June 8, 2020 CLOSE HEARING Item 5 Motion was made by Council Member Hoffe, seconded by Council Member Frazier, to close the public hearing. All present voted in favor. Motion carried. RESOLUTION 2020-06 Item 5 Commissioner London introduced the following resolution and moved its adoption “RESOLUTION APPROVING SALE OF 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Frazier, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; 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 Frazier, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:17 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\06-22-20\Q - Habitat For Humanity Rehab Contract 06-22-20.docx Request for Action June 22, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Title Resolution approving forgivable loan of CDBG funds to Twin Cities Habitat for Humanity, Inc. Requested Action Staff requests approval of a resolution approving a forgivable loan of Community Development Block Grant funds in the amount of $76,250 to Twin Cities Habitat for Humanity, Inc. Policy/Past Practice The city has collaborated with Habitat for Humanity in the past on the acquisition and rehabilitation of housing units within the city. Background At the November 12, 2019, Economic Development Authority (EDA) meeting, CM Frazier requested that the city broaden its scattered site housing program to include affordable housing projects for first time homebuyers. The city has worked with Habitat for Humanity on several projects in the past, most recently on a rehabilitation project in 2012. Staff met with representatives of Habitat for Humanity in early 2020 to discuss potential opportunities for affordable scattered site housing projects. The use of Community Development Block Grant (CDBG) funds was discussed at the February 18, 2020, work session, with a majority of the City Council supporting the splitting of available funds between the Hennepin County Home Rehab Program and an affordable home rehabilitation project, through an organization such as Habitat for Humanity. According to HUD, “the CDBG Program provides annual grants on a formula basis to states, cities, and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons.” Hennepin County allocates CDBG funds from HUD to New Hope and several other cities in the county. A resolution approving use of the 2020 CDBG funds and remaining 2019 CDBG funds was approved at the February 24, 2020, City Council meeting. This included $76,250 in allocations for a rehabilitation project. Staff coordinated a call with Chad Dipman, Project Systems Supervisor with Habitat For Humanity, and the city attorney in April to discuss how an agreement would be structured. Habitat for Humanity requested the approval of non-project-specific funds in order to eliminate the need to have a funding contingency in the purchase agreement, which can be a factor in a seller’s willingness to sign an agreement with Habitat for Humanity (especially in strong housing market). A contingency requiring City Council approval of a specific project would require Habitat For Humanity to ask for at least a month long contingency. Due to the COVID- 19 pandemic, Habitat for Humanity requested until the end of 2021 (at the latest) to complete the project. The city attorney has prepared the attached resolution and loan commitment letter, providing $76,250 in CDBG funds to Habitat for Humanity in the form of a forgivable loan. Habitat for Humanity and Hennepin County reviewed the loan commitment letter and have no concerns. A third party agreement between the city and Habitat for Humanity establishing the rules of the CDBG program will be drafted by Hennepin County. Agenda Section EDA Item Number 4 Request for Action, Page 2 Funding Hennepin County cannot distribute CDBG funds until the project has been completed. The upfront loan of $76,250 to Habitat for Humanity would be funded utilizing EDA funds. Upon completion of the project, the city would request to be reimbursed for the $76,250 from Hennepin County (CDBG funds) and would then forgive the loan to Habitat for Humanity. The EDA fund would be reimbursed and the funds could be used for a future project. Recommendation Staff recommends approval of a resolution approving a forgivable loan of CDBG funds in the amount of $76,250 to Twin Cities Habitat for Humanity, Inc. Attachments  Resolution  Loan commitment letter (June 22, 2020)  City Council & EDA minutes (November 12, 2019, February 18, 2020, February 24, 2020) 1 CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 20-___ APPROVING FORGIVABLE LOAN OF CDBG FUNDS TO TWIN CITIES HABITAT FOR HUMANITY, INC. BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA is allocated Community Development Block Grant (“CDBG”) funds from Hennepin County each year; WHEREAS, the EDA has determined that it would further community redevelopment goals to lend a total of $76,250 comprised of $61,500 in 2019 CDBG allocated funds and $14,750 in 2020 CDBG allocated funds to Twin Cities Habitat for Humanity, Inc. (“Habitat”) for purposes of redevelopment of a residential property in the City of New Hope to be determined by Habitat; WHEREAS, the $76,250 will be lent to Habitat in the form of a forgivable loan to ensure that Habitat uses the funds specifically for acquisition and rehabilitation of a residential property in the City of New Hope and the loan will be secured by a mortgage; WHEREAS, Habitat will have the discretion to locate the residential property and determine the scope of the rehabilitation pursuant to their program guidelines; WHEREAS, the EDA hereby authorizes and approves the loan of $76,250 in CDBG allocated funds to Twin Cities Habitat For Humanity, Inc. per the terms of the attached Loan Commitment. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. The is hereby authorized and directed to sign the attached Loan Commitment for the loan of $76,250 in CDBG allocated funds to Twin Cities Habitat for Humanity, Inc. for the specific purposes of acquiring and rehabilitating a New Hope residential property for re-sale to a qualified buyer. 2. The President and Executive Director are further authorized and directed to take any additional and reasonable actions or steps necessary to effect the loan of the CDBG funds to Twin Cities Habitat for Humanity, Inc. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11439 CDBG Funding to Habitat for Humanity\Resolution approving loan of CDBG funds to Habitat.docx June 22, 2020 Twin Cities Habitat for Humanity, Inc. Attn: Chad Dipman, Project Systems Supervisor 1954 University Avenue West St. Paul, MN 55104 Re: Loan Commitment of CDBG Funds From New Hope EDA to Twin Cities Habitat for Humanity, Inc. Dear Mr. Dipman: Based upon discussions between the Economic Development Authority in and for the City of New Hope (‘‘EDA’’) and Twin Cities Habitat for Humanity, Inc. (‘‘Habitat’’), the EDA has agreed to loan certain Community Development Block Grant (‘‘CDBG’’) funds allocated to the EDA by Hennepin County to Habitat. Specifically, the EDA has agreed to loan a total of $76,250 (‘‘Loan’’) comprised of $61,500 in 2019 CDBG allocated funds and $14,750 in 2020 allocated CDBG funds to Habitat for the purchase and rehabilitation of a residential real property in the City of New Hope to be determined by Habitat (‘‘Real Property’’) pursuant to the terms set forth herein. The proceeds of the Loan shall be utilized by Habitat for the purpose of acquiring the Real Property in the City of New Hope and rehabilitating the same pursuant to Habitat guidelines and re-selling the Real Property to a qualified buyer (the ‘‘Project’’). A. LOAN AMOUNT. The EDA will advance to Habitat a principal amount (the ‘‘Loan Amount’’) of $76,250 once Habitat has identified a Real Property for the Project. B. PROMISSORY NOTE. The Loan Amount shall be evidenced by and payable in accordance with the terms of a Promissory Note (the ‘‘Note’’). The Note shall provide: 1. Interest Rate. Interest shall be at an annual rate of one percent (1%). 2. Payment Schedule. No payments shall be due or payable unless or until Habitat fails to acquire a Real Property in New Hope and rehabilitate it pursuant to the terms contained herein. 3. Default. If Habitat fails to acquire a Real Property in New Hope and rehabilitate it pursuant to the terms contained herein, all accrued and unpaid interest and the Principal Balance shall be paid in full. 4. Prepayment. The Note may be prepaid at any time without penalty. 2 5. Application of Payments. All payments and prepayments shall, at the option of the EDA, be applied first to the cost of collection (including reasonable attorney’s fees), second to late charges, third to accrued interest on the Note, and lastly to the principal balance. 6. Forgiveable Loan. So long as Habitat uses 100% of the Loan to acquire a residential Real Property located in New Hope and rehabilitates it on or before December 31, 2021 for purposes of re-sale to an owner -occupant, the entire Loan shall be forgiven and Habitat shall have no obligation to repay the Loan or any part thereof to the EDA. The commitment of the EDA to make the Loan is based upon the information furnished and representations made to the EDA by or on behalf of Habitat. This commitment is subject to the truth and accuracy of said information and representations as of the date of the Note. Additionally, the commitment of the EDA to make the Loan is based upon certain requirements being met and loan documentation being executed including specifically: 1. Mortgage. A Mortgage (the “Mortgage”) duly executed and delivered by Habitat granting to the EDA a mortgage lien in and to the Real Property upon which the Project is to be located and all buildings and improvements now or hereafter located thereon, all fixtures, appurtenances, hereditaments and attachments now or hereafter attached thereto, all proceeds of the foregoing to secure repayment of the Note. 2. Title Policy. The EDA shall have received a fully paid ALTA mortgagee's title insurance policy issued by a title insurance company acceptable to the EDA, in form and substance satisfactory to the EDA, naming the EDA as the insured and insuring the Mortgage to be a valid lien on marketable fee simple title in the name of the Habitat to the Real Property, subject only to such liens and encumbrances and such exceptions as are approved in writing by the EDA and, without limiting the generality of the foregoing, specifically insuring against mechanics' liens, matters which would be disclosed by a comprehensive survey, rights of parties in possession, and such other endorsements as shall be requested by the EDA. 3. Taxes and Special Assessments on the Property. All current and all delinquent real estate taxes shall have been paid as of the date of Closing on the Property taken as security for the Loan Amount. Any deferred special assessments and all levied special assessments together with all special assessments yet to be levied for improvements which, prior to the Closing, have been authorized by any governmental unit or agency which are commenced or for which a construction contract has been entered into prior to the Closing shall have been paid 4. Loan Contingent on Successful Environmental Review. The Loan is contingent upon Hennepin County performing and receiving an acceptable environmental review of the real property as a part of the CDBG program. Habitat shall cooperate with Hennepin County in providing all necessary documentation as a part of the environmental review including scope of work and lead based paint disclosures and testing. 3 5. Compliance with Governmental Regulations. The EDA shall have received evidence satisfactory to it that the Real Property and the contemplated development and use of the Project will be permitted by all applicable restrictions and requirements in prior conveyances, zoning ordinances, subdivision and platting requirements and other laws and regulations, but subject to approval by the municipal or other governmental authorities having jurisdiction. C. Closing. This Loan must be closed on or before December 31, 2021, or the EDA’s obligation hereunder shall terminate at its discretion and Habitat shall upon demand return any portion of the Loan advanced to Habitat to the EDA. D. Representations and Warranties. By signing this Commitment, Habitat represents to the EDA that the following matters are true and correct in all respects: 1. There is no action, suit or proceeding pending or threatened against or affecting Habitat which, if adversely determined, would have a material adverse effect on the condition (financial or otherwise), properties or assets of Habitat or which would question the validity of this Commitment or any instrument, document or other agreement related thereto or required thereby, or impair the ability of Habitat to perform their obligations hereunder or thereunder. 2. Habitat is not in default of a material provision under any material agreement, instrument, decree or order to which Habitat is a party or by which Habitat is bound or affected. 3. Habitat has filed all tax returns required to be filed and have paid all taxes shown thereon to be due, including interest and penalties, which are not being contested in good faith and by appropriate proceedings, and have no information or knowledge of any objections to or claims for additional taxes in respect of federal or state income tax returns for prior years. 4. There are no judgments or tax liens outstanding or docketed against Habitat. E. Borrower Authority. 1. Habitat shall provide the following, certified to the satisfaction of the EDA: a. Certificate of Good Standing; b. Resolutions of the Board of Directors and Incumbency Certificate certified as of the closing date by the President. 4 F. General Conditions. 1. There shall, at the time of closing, be no action, proceeding or investigation pending or threatened (or any basis therefor) which might materially adversely affect the condition, business or prospect of Habitat, the Real Property, or which might adversely affect the ability of Habitat to perform its obligations under the loan documentation. 2. There shall be no default in the performance of any undertaking or agreement required to be performed by the application or this commitment. This commitment and any information, representation or warranty contained therein or furnished to the EDA in connection with the Loan shall not contain any untrue statement or omit to state any fact necessary to make the application, this commitment or any such information, representation or warranty not misleading, it being intended by Habitat that the EDA in the making of the Loan shall rely in all respects upon the truth and completeness of the application, this commitment and such information, representations and warranties. 3. All of the representations, warranties and agreements made herein, in the application for the Loan, or in connection with the Loan shall survive the closing and inure to the benefit of the EDA and the City of New Hope, its successors and assigns. 4. There shall have been no material adverse change in the interim period from the date of the application for the Loan to the closing in the financial condition or in the assets, net worth or credit standing of Habitat. If the foregoing terms, conditions and agreements are acceptable, please execute the enclosed copy of this letter and return it to the EDA. Thereupon, this Commitment will become a binding agreement between Habitat and the EDA in accordance with its terms and shall be deemed a loan agreement to the extent that the same is not inconsistent with loan documentation executed pursuant to this C ommitment Letter. Sincerely, Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota By: ________________________________ Kirk McDonald Its: Executive Director 5 CONFIRMED AND ACCEPTED AS OF THE _____ DAY OF ________, 2020. Twin Cities Habitat for Humanity, Inc. By: _______________________________ Its: ______________________________ P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11439 CDBG Funding to Habitat for Humanity\Loan Commitment.docx EDA Meeting Page 1 November 12, 2019 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes November 12, 2019 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:22 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Kirk McDonald, City Manager Jeff Alger, Community Development Specialist Tim Fournier, Police Chief Valerie Leone, City Clerk Jeff Sargent, Director of Community Development Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to approve the minutes of October 28, 2019. Voted in favor thereof: Hemken, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: Elder; Absent: None. Motion carried. IMPROVEMENT PROJECT NO. 1018 Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving purchase and redevelopment agreements with Great Buy Homes, Inc. for the sale of both lots contained within the plat of Lammle Addition (Improvement Project No. 1018). Mr. Jeff Alger, community development specialist, stated the city acquired 5355 Oregon Avenue North in April of 2018 and the site has been re -platted as two buildable lots. He noted West Metro Fire completed training exercises at the site. Mr. Alger explained the Request for Proposals (RFP) marketing proposal that was conducted for the scattered site lots located at 5353 and 5355 Oregon Avenue North. Stipulations of the RFP included a minimum lot sales price of $60,000 and that the proposed houses must be owner-occupied, single-family homes (for two years). Mr. Alger stated the city received proposals submitted by Great Buy Homes, Houston Homes, My Home Source, and Novak -Fleck. He stated staff’s recommendation is to sell the lots to Great Buy Homes for $130,000 ($65,000 per lot). He reviewed the characteristics of the house plans (total finished square footage, number of bedrooms, garage size and interior/exterior finishes) along with the cost and tax impact of the improvements, the return on investment, and tax benefit associated with the increased property value. EDA Meeting Page 2 November 12, 2019 Mr. Alger commented one of the main goals of the scattered site housing program is to improve neighborhoods. President Hemken opened the floor for comments from the audience. There was no one present desirous of addressing the EDA for the public hearing. Mr. Glen Hammer, owner of Great Buy Homes, was recognized. He thanked the EDA for the opportunity to work with the city again. Commissioner Frazier expressed support for the program as it revitalizes neighborhoods. He mentioned past projects that involved Habitat for Humanity and recommended pursuing some affordable housing projects for first time homebuyers in the future. CLOSE HEARING Item 4 Motion was made by Council Member Elder, seconded by Council Member Frazier, to close the public hearing. All present voted in favor. Motion carried. RESOLUTION 2019-11 Item 4 Commissioner London introduced the following resolution and moved its adoption “RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT AGREEMENTS WITH GREAT BUY HOMES, INC. FOR THE SALE OF BOTH LOTS CONTAINED WITHIN THE PLAT OF LAMMLE ADDITION (IMPROVEMENT PROJECT NO. 1018)”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; 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 Frazier, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 7:37 p.m. Respectfully submitted, Valerie Leone, City Clerk City Council Work Session February 18, 2020 Page 5 Discussion ensued regarding a ban on all flavored tobacco products, whether or not to prohibit pharmacies from selling tobacco products, and whether to raise the age of those legally allowed to sell tobacco products to 18. Council acknowledged concerns expressed by the business community. Council supported removing the language that makes the purchase of tobacco products by someone under the age 21 a punishable offense. A reduction of the city’s 21 tobacco licenses through attrition was discussed; the city clerk commented gas stations frequently change ownership and reduction of tobacco licenses through attrition may be difficult to administer. Council Member Elder recommended banning the flavors that target youth. Council directed staff to prepare an ordinance amendment raising the legal age to 21 to purchase tobacco products, banning cartridge based e-cigarettes except for tobacco flavor and banning flavored tobacco products except for menthol, mint, and wintergreen flavors. Mr. Bell stated the proposed ordinance amendment will be presented to Council at a future work session. AFFORDABLE SCATTERED SITE HOUSING PROJECTS Item 11.6 Mayor Hemken introduced for discussion item 11.6, Discuss affordable scattered site housing projects. Mr. Jeff Sargent, director of community development, and Mr. Jeff Alger, community development specialist, updated Council regarding affordable scattered site housing projects. Mr. Sargent explained that the scattered site housing program has allowed the city to remove deteriorated homes and increase property values through new construction. Staff has been directed to target distressed single-family properties throughout the city, with the goal of improving residential neighborhoods. He stated since 2014, the city has coordinated the rehabilitation of two single-family homes and the construction of 20 new single-family homes on 16 lots. Mr. Sargent stated at the council meeting of November 12, 2019, Council Member Frazier requested that the city broaden its scattered site housing program to include affordable housing projects for first time homebuyers. As a result, staff met with representatives from Habitat For Humanity and Homes Within Reach in January of 2020. The city has worked with both organizations in the past on affordable scattered site housing projects, most recently in 2012. Mr. Sargent reported the city will be receiving $91,000 in Community Development Block Grant (CDBG) funds to be utilized between July 1, 2020, and June 30, 2021. The funds can be used for Habitat For Humanity and Homes Within Reach projects, including acquisition, rehabilitation, and in some cases, demolition. Owners of the new and/or rehabilitated homes would need to adhere to income restrictions specific to the program(s), equating to 60% of the AMI levels. He stated the city has a couple of options to use the CDBG funds for 2020. The two areas the city has historically dedicated the funds towards include the single -family housing rehabilitation loan program and the scattered site housing program. The home City Council Work Session February 18, 2020 Page 6 rehab loan program enables income-qualified residents to request loans to make needed improvements to their homes. The scattered site housing program funds would have to be used towards acquisition/rehabilitation, where the home would be sold to an income-qualified individual or family. The city could pursue this option on its own, or help support outside organizations such as Habitat for Humanity or Homes Within Reach. Hennepin County staff recently informed the city that the city has approximately 61,000 that it still needs to allocate from the 2019 CDBG funding cycle. In 2019, the city allocated $30,000 towards the single-family housing rehabilitation loan program, however that money was quickly used up, and there are still 11 people on the waiting list in need of these resources. In 2019, no money was allocated towards the scattered site housing program, since Hennepin County indicated that funds may no longer be used for acquisition/demolition of structures. For 2020, the city can disperse the CDBG funds in a couple ways. First, the city could allocate the total $91,000 towards the single-family housing rehabilitation loan program, along with the $61,000 left over from 2019. This would fund the program with $152,000, which would most likely be able to help all 11 people on the waiting list. Second, the city could divide the funds between the housing rehab and scattered site housing programs. Staff is seeking direction from the City Council on how the funds should be used. He stated the public hearing for the CDBG program funds will be held on February 24, 2020. President Hemken polled the commissioners on their preferences for use of the funds. Council Member Frazier indicated he would like to focus on the single-family housing rehabilitation loan program and the scattered site housing program that would aid in the construction or rehabilitation of an affordable home for low -income families. Council Member London recommended adding higher end housing to attract higher income residents and/or using the funds for rehab loans for single-family homeowners to benefit existing residents. Council Member Hoffe expressed support for the scattered site housing program. Council Member Elder and Mayor Hemken supported splitting the funds between the rehab program and the scattered site housing program. Mr. Sargent stated by allocating half of the $152,000 funds, about six families would benefit by the single-family rehabilitation loan program. He stated the other half of the funding could be used for a Habitat for Humanity house. Mr. Sargent stated the EDA budget could supplement the scattered site housing program. ADJOURNMENT The meeting was adjourned at 9:19 p.m. as there was no further business to come before the Council at its work session. Respectfully submitted, New Hope City Council February 24,2020 Page 2 RESOLUTION 2020 26 Item 6.4 Resolution approving agreement between the city of New Hope and Home Free for the 2020 Domestic Assault Intervention Project. MOTION Item 6.5 Motion waiving permit fees for temporary signs for New Hope Lions Pancake Breakfast on April 26,2020. MOTION Consent Items Motion was made by Council Member Elder,seconded by Council Member Hoffe, to approve Consent items 6.1 and 6.5.All present voted in favor.Motion carried. HOME FREE AGREEMENT Item 6.4 Mayor Hemken introduced for discussion Item 6.4,Resolution approving agreement between the city of New Hope and Home Free for the 2020 Domestic Assault Intervention Project. Council Member Elder commented regarding the 15%fee increase.He noted the rate was flat for the past three years.He stated Home Free is a dedicated partner to the northwest metro in aiding persons of domestic abuse. Mr.Tim Fournier,director of police,explained that funds are in the 2020 budget to cover the 36,900 contractual arrangement.He stated the services provided by Home Free greatly benefit the community.He introduced Elsa Swenson of Home Free. Ms.Swenson,Program Manager of Home Free,explained the funding increase represents the cost of 5 full time equivalent legal advocate dedicated to the city of New Hope.She reported that Home Free provides an immediate response to domestic assault for victims in northwest Hennepin County,responding to over 100 incidents of domestic assault in the city of New Hope annually.She indicated although the number of people served since 2016 has not significantly increased, the advocates are working with people for a longer period of time and also deal with a greater variety of issues mental health and chemical abuse).She also spoke of the housing shortage and the need for safe housing. Council thanked Ms.Swenson for the work provided by Home Free. RESOLUTION 2020 26 Item 6.4 Council Member Elder introduced the following resolution and moved its adoption:RESOLUTION APPROVING AGREEMENT BETWEEN THE CITY OF NEW HOPE AND HOME FREE FOR THE 2020 DOMESTIC ASSAULT INTERVENTION PROJECT.”The motion for the adoption of the foregoing resolution was seconded by Council Member Frazier,and upon vote being taken thereon,the following voted in favor thereof:Hemken,Elder,Frazier,Hoffe, London;and the following voted against the same:None;Abstained:None; Absent:None;whereupon the resolution was declared duly passed and adopted, signed by the mayor which was attested to by the city clerk. PUBLIC HEARING 2020 CDBG FUNDS Item 7.1 Mayor Hemken introduced for discussion Item 7.1,Resolution approving application for 2020 Urban Hennepin County Community Development Block Grant CDBG)Program funds and authorizing execution of sub recipient agreement with Urban Hennepin County and any third party agreements. New Hope City Council February 24,2020 Page 3 Mr.Jeff Sargent,director of community development,explained the purpose of the public hearing is to consider the projected use of CDBG program funds.He stated the city is projected to receive 107,000 in 2020 of which 15%or approximately 16,000)will be allocated for Public Service Activities.Similar to last year,Public service agencies will apply for the funding directly through Hennepin County.Taking into account the unspent 2019 grant funds of 61,000 and the 2020 allocation of 91,000,the city has a total of 152,000 to allocate to eligible programs.He noted at the February work session Council discussed resources for housing programs and Council expressed support for splitting the funds between the single family housing rehab program and the scattered site housing program that could aid in the construction or rehab of an affordable home for low income families. Council Member London recalled discussion at the work session regarding the rehabilitation loan program for residents to make repairs to single family homes. He noted Habitat for Humanity may not be prepared to undertake a project this year. Mr.Sargent stated the county has 11 people on the waiting list for the housing rehab loan program and the 152,000 would likely satisfy the funding needs of all the applicants.He stated he believes Habitat for Humanity is interested in pursuing a project in New Hope for an income qualified family to live in New Hope. Mayor Hemken opened the public hearing for comments.There was no one present to address the Council for the public hearing. Council Member Frazier noted by splitting the funds between the two programs, it allows the city to assist current residents and to attract new residents. Mayor Hemken explained the housing programs have been successful and the city will continue to retain options. CLOSE HEARING Item 7.1 Motion was made by Council Member Frazier,seconded by Council Member Elder,to close the public hearing.All present voted in favor.Motion carried. RESOLUTION 2020 27 Item 7.1 Council Member Frazier introduced the following resolution and moved its adoption:RESOLUTION APPROVING APPLICATION FOR 2020 URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT CDBG)PROGRAM FUNDS AND AUTHORIZING EXECUTION OF SUB RECIPIENT AGREEMENT WITH URBAN HENNEPIN COUNTY AND ANY THIRD PARTY AGREEMENTS.”The motion for the adoption of the foregoing resolution was seconded by Council Member Elder,and upon vote being taken thereon,the following voted in favor thereof:Hemken,Elder,Frazier,Hoffe;and the following voted against the same:London;Abstained:None;Absent:None; whereupon the resolution was declared duly passed and adopted,signed by the mayor which was attested to by the city clerk. EXCHANGE OF COMMUNICATION Mayor Hemken introduced for discussion Item 12.1,Exchange of communication between members of the City Council.