072417 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, July 24, 2017
Commences upon adjournment of the City Council Meeting
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Eric Lammle
Commissioner Jonathan London
1. Call to order – EDA Meeting of July 24, 2017
2. Roll call
3. Approval of Minutes:
June 26, 2017
4. Resolution approving the solicitation of rehabilitation quotes in association with
the EDA owned property at 3984 Zealand Avenue North (improvement project
no. 997)
5. Adjournment
EDA Meeting
Page 1 June 26, 2017
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes June 26, 2017
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 8:01 p.m.
ROLL CALL Present:
Kathi Hemken, President
John Elder, Commissioner
Andy Hoffe, Commissioner
Eric Lammle, Commissioner
Jonathan London, Commissioner
Staff Present:
Kirk McDonald, City Manager
Aaron Chirpich, Community Development Specialist
Valerie Leone, City Clerk
Chris Long, City Engineer
Susan Rader, Director of Parks and Recreation
Jeff Sargent, Director of Community Development
Mark Severson, Recreation Facilities Manager
Scott Slawson, Police Captain
Steve Sondrall, City Attorney
Bernie Weber, Director of Public Works
Stacy Woods, Assistant City Attorney
Also Present: Stacie Kvilvang, Ehlers
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Elder, seconded by Commissioner London,
to approve the minutes of May 22, 2017. All present voted in favor. Motion
carried.
GOOD SAMARITAN
TIF DISTRICT
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution requesting
that the City Council of the City of New Hope call for a public hearing on the
modification of redevelopment project no. 1 and the establishment of the Good
Samaritan Tax Increment Financing District (a housing district).
President Hemken disclosed that she serves on the advisory board of Good
Samaritan but has no financial interest.
Mr. Jeff Sargent, director of community development, reported Good Samaritan
Society’s interest in constructing a 31‐unit Assisted Living facility as an addition
to their existing campus. He stated Good Samaritan Society recently purchased
the property at both 2773 and 2765 Virginia Avenue (adjacent to their current
building) in anticipation of future development. He stated Community Asset
Development Group would construct and own the new building, and Good
Samaritan would conduct the operations and eventually own the building.
EDA Meeting
Page 2 June 26, 2017
Mr. Sargent stated Good Samaritan Society is interested in TIF assistance through
a pay‐as‐you‐go method. He stated Ehlers has reviewed the pro forma and has
concluded that the project is TIF eligible. Mr. Sargent stated staff has preliminarily
reviewed the proposed site plan and will be conducting a more in‐depth review.
He noted market research has been conducted and it has been determined that
there is a demand for these services in the area. Assisted living facilities are
required to pay taxes, which makes the project TIF eligible. He stated the City
Council reviewed this request at the June 19, 2017 work session, with a majority
of the Council members supporting the motion.
Mr. Sargent stated the developer would like to start construction in early
September which would require all financing to be in place beforehand. Mr.
Sargent reviewed the proposed TIF schedule. He recommended the EDA adopt
the resolution calling for a public hearing on August 14, 2017, to consider creation
of the TIF District. He stated Ehlers will prepare an analysis to allow the EDA to
make an informed decision.
Commissioner London noted that during the work session he had asked Ehlers
also consider a revenue bond backed by the credit worthiness of the city.
Mr. Sargent stated that could be done but the city of New Hope is considering
using the full $10 million in bank qualified bonds to help fund a new police
station/city hall facility. He stated the city of Butterfield has agreed to issue the
bonds for the proposed development and noted the issue is Item 8.3 on the City
Council Meeting agenda.
RESOLUTION 2017‐08
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION REQUESTING THAT THE CITY COUNCIL OF THE CITY OF
NEW HOPE CALL FOR A PUBLIC HEARING ON THE MODIFICATION OF
REDEVELOPMENT PROJECT NO. 1 AND THE ESTABLISHMENT OF THE
GOOD SAMARITAN TAX INCREMENT FINANCING DISTRICT (A
HOUSING DISTRICT)”. The motion for the adoption of the foregoing resolution
was seconded by Commissioner Lammle, and upon vote being taken thereon, the
following voted in favor thereof: Hemken, Elder, Hoffe, Lammle, 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.
IMP. PROJECT 965
Item 5
President Hemken introduced for discussion EDA Item 5, Resolution approving
reimbursement of Regal Homes, LLC for costs associated with removal of buried
foundation at 4417 Nevada Avenue North (improvement project no. 965).
Mr. Aaron Chirpich, community development specialist, explained the EDA sold
the lots of 4415 and 4417 Nevada Avenue North to Regal Homes in September
2016. He stated the lots were sold as suitable for building.
Mr. Chirpich reported that while completing excavation work for the basement of
the first home, the contractor uncovered buried footings from an unknown
structure as well as garbage debris and organic soils. He explained the
extraordinary work required by the contractor to build the home and garage, and
the contractor’s request for reimbursement of $13,455.25 for the extra costs. He
EDA Meeting
Page 3 June 26, 2017
presented an aerial photograph from 1956 that was recently located which
revealed an outline of the old foundation.
Mr. Chirpich noted Council reviewed this item at work sessions of October17,
2016, and June 19, 2017. He stated staff supports reimbursing Regal Homes
$13,455.25 for the unforeseen costs. He reported CDBG grant funds are available
to reimburse the EDA for all soil correction costs, and no payment will be made to
Regal Homes, LLC until documentation is received to verify that all
subcontractors have been paid for the soil correction work. He also reported the
contractor will sign a hold harmless agreement certifying all costs are final.
Commissioner London asked how laborious it was to obtain the aerial photograph
that illustrated the property and former footings.
Mr. Chirpich stated the information was made available through a database held
by the University of Minnesota. He stated it will be standard procedure for staff
to utilize this tool for future scattered site housing projects.
RESOLUTION 2017‐09
Item 5
Commissioner London introduced the following resolution and moved its
adoption “RESOLUTION APPROVING REIMBURSEMENT OF REGAL
HOMES, LLC FOR COSTS ASSOCIATED WITH REMOVAL OF BURIED
FOUNDATION AT 4417 NEVADA AVENUE NORTH (IMPROVEMENT
PROJECT NO. 965)”. The motion for the adoption of the foregoing resolution was
seconded by Commissioner Lammle, and upon vote being taken thereon, the
following voted in favor thereof: Hemken, Elder, Hoffe, Lammle, 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 London, seconded by Commissioner Hoffe,
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\Development\Q & R Solicit Rehab Quotes for 3984 Zealand Ave.docx
Request for Action
July 24, 2017
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Aaron Chirpich, CD Specialist
Agenda Title
Resolution approving the solicitation of rehabilitation quotes in association with the EDA owned property at
3984 Zealand Avenue North (improvement project no. 997)
Requested Action
Staff requests that the EDA approve the attached resolution authorizing staff to solicit rehabilitation quotes
for the property located at 3984 Zealand Avenue North.
Policy/Past Practice
It is the practice of the EDA to solicit quotes whenever single‐family homes are to be rehabilitated by a
private contractor.
Background
On April 27, 2017, the EDA purchased the vacant and foreclosed single‐family home located at 3984 Zealand
Avenue North for $165,000. The intent of this purchase was to rehabilitate the house and maximize the value
of the finished product. There is substantial work needed for the exterior and interior of the home. Staff have
worked with a realtor to estimate the value of the completed home based upon the desired scope of work.
The estimated value of the completed home is $265,000. Based upon this assumption, the EDA will have a
budget of approximately $75,000 to complete the rehabilitation of the home. A copy of the project budget is
attached for review.
Staff have completed multiple inspections of the property and compiled the attached list of rehabilitation
specifications. The specifications include a list of alternate items that will be itemized and separated from the
base bid. The next step in the process would be to solicit quotes from area contractors for the completion of
the rehabilitation work. To aide in the bidding effort, the city’s building inspectors have helped to compile a
list of reputable contractors that have recently completed work in the city.
Funding
Funding for this project will come from EDA resources. CDBG grant funds will not be used, as CDBG funds
place income restrictions on potential buyers of the finished home.
Recommendation
At this time, staff requests that the EDA approve the attached resolution authorizing staff to solicit
rehabilitation quotes based upon the proposed scope of work.
Attachments
Resolution
Scope of work
Example kitchen layout
Project budget
Agenda Section
EDA
Item Number
4
CITY OF NEW HOPE
EDA RESOLUTION NO. 17‐
RESOLUTION APPROVING THE SOLICITATION OF REHABILITATION QUOTES IN ASSOCIATION
WITH THE EDA OWNED PROPERTY LOCATED AT 3984 ZEALAND AVENUE NORTH
(IMPROVEMENT PROJECT 997)
WHEREAS, the City purchased the foreclosed single family home located at 3984 Zealand Avenue
North on April 27, 2017 for $165,000; and
WHEREAS, the exterior and interior of the house located at 3984 Zealand Avenue North requires
rehabilitation to bring the house into compliance with the Building Code and suitable
living conditions; and
WHEREAS, the Comprehensive Plan calls out the enhancement of the City’s existing housing stock
as a primary goal of the city, and the rehabilitation of the property at 3984 Zealand
Avenue North would fulfill this goal.
NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority in and for the City
of New Hope as follows: That the authority given to the Community Development
Department staff to solicit quotes for the rehabilitation of the property located at 3984
Zealand Avenue North per the scope of work as outlined in the accompanying Request
For Action, is hereby approved.
Dated the 24th day of July, 2017.
_______________________________________
Kathi Hemken, President
Attest: _____________________________________
Kirk McDonald, Executive Director
3984 Zealand Scope of Work
Base Improvements
Exterior:
Remove and replace cracked concrete sections in driveway and sidewalk.
Remove vines and trees from storage area on west side of home.
Remove the two small trees from front of home (marked with green paint)
Re‐paint entire exterior of home, two colors, one for trim, and one for primary siding
areas. (colors by owner)
Paint brick and handrail on front of home to match trim.
Clean out all gutters and paint existing downspouts to match trim.
Remove garden shed from rear of home.
Remove existing fencing, deck, landscaping timbers, freestanding light, gas grill, and
doghouse from rear of home.
Build new 14’ X 12’ treated deck on back of home; include stairs and 4’ X 4’ landing.
Re‐grade disturbed areas in back yard, spread topsoil, and seed.
Remove and replace all existing light fixtures from exterior of home.
Remove all windows in home and replace with new white, energy star rated, vinyl
windows, meet egress requirements when necessary.
Paint front entry door (color by owner)
Remove and replace existing overhead garage door, maintain existing opener. New door
shall be plain white, insulated, with no windows.
Kitchen and Dining:
Remove all existing kitchen cabinets, countertops, soffit, sink, and appliances.
Install new, mid‐grade, white kitchen cabinets with laminate counters. See attached
example layout for new kitchen configuration. New layout includes a 5’ island with
overhang seating. Install and move utilities as necessary. (countertop color by owner)
Install new stainless steel double basin sink and faucet with sprayer.
Remove existing light fixtures and install new. Install new pendant fixture over island.
(color by owner)
Remove all existing wallpaper and wainscoting.
Completely remove the partition wall that separates the kitchen and dining room from
the living room. Re‐arrange mechanical work as necessary, electrical and HVAC.
Remove existing walk door and fill‐in door space. Install new 6’ patio slider door in
location of current dining room windows. Re‐arrange mechanical work as necessary,
electrical and HVAC. Re‐use walk door in basement as per specs.
Fix all sheetrock defects in walls and ceilings, and remove existing texture from the
ceiling.
Spray ceiling with medium knockdown texture.
Walls shall remain with flat finish.
Paint ceiling white.
Paint all walls in eggshell finish. (color by owner)
Remove existing flooring from kitchen and dining rooms. Install oak hardwood to match
existing flooring in living room. Stain and finish all wood flooring, new and old to match.
(color by owner)
Install new pre‐finished poplar baseboard, white.
Install new pre‐finished poplar door and window casing, white.
Main Floor Living Room:
Remove existing carpet and pad.
Re‐finish existing hardwood floors to match kitchen and dining.
Install new pre‐finished poplar baseboard and window casing, white
Re‐paint existing metal handrail. (color by owner)
Remove existing window coverings.
Fix all sheetrock defects.
Remove texture from ceiling, re‐spray with medium knock down, and maintain flat walls.
Paint ceiling white, paint walls with eggshell finish. (color by owner)
Remove and replace existing HVAC grills, outlet covers, switch covers with new, white.
Install four new can lights evenly spaced in room.
Front Entry and Stairs:
Remove and replace hanging light fixture.
Remove carpet on stairs and finish existing wood to match floors, include skirts.
Remove existing vinyl flooring on landing and replace with new vinyl flooring (color by
owner)
Fix sheetrock defects.
Remove wallpaper and prep for paint.
Install new pre‐finished poplar door casing, white
Finish ceilings to match living room.
Finish walls to match living room.
Main Floor Hallway:
Remove wallpaper and prep for paint. Maintain flat walls.
Remove carpet and pad.
Re‐finish existing hardwood flooring to match living room.
Install new pre‐finished poplar baseboard, white.
Remove existing hall closet door. Replace with pre‐finished, pre‐hung, hollow‐core, 3‐
panel door. Casing to match windows. Provide and install handle set.
Remove and replace existing surface mount light.
Provide and install new outlet and switch covers, white.
Fix all sheetrock defects.
Finish walls and ceiling to match living room.
Install smoke and CO2 detectors to meet code.
Main Bath:
Remove existing vanity and counter top. Replace with new, mid‐grade, white vanity
cabinet and pre‐formed cultured top with built‐in sink. Install new faucet.
Remove all wallpaper and tile wainscoting. Repair sheetrock where necessary.
Remove existing toilet. Replace with new white toilet with elongated bowl.
Remove existing tile flooring, repair subfloor where necessary.
Install new vinyl flooring. (color by owner)
Remove existing tub and shower surround.
Install new, white fiberglass tub/shower surround, showerhead, and faucet.
Install new HVAC grills, outlet covers, and switch covers, white.
Paint existing linen cabinet door white.
Install new white trims for existing can lights.
Re‐use existing wall mounted mirror.
Remove existing bath fan, and replace with fan/light combo in same location. Ensure that
fan is vented to the exterior of home.
Install new code compliant outlet.
Paint ceilings white.
Finish walls with flat finish, paint with semi‐gloss. (color by owner)
Remove existing entry door. Replace with pre‐finished, pre‐hung, hollow‐core, 3‐panel
door. Casing to match windows. Provide and install locking handle set.
Master Bath:
Remove existing toilet. Replace with new white toilet with elongated bowl.
Remove existing vanity and counter top. Replace with new, mid‐grade, white vanity
cabinet and pre‐formed cultured top with built‐in sink. Install new faucet.
Remove existing tile wainscoting and replace with sheetrock.
Remove all wallpaper.
Remove existing tile flooring.
Install new vinyl flooring. (color by owner)
Install new fan/light combo in main area of bathroom, vent to outside.
Remove existing mirror cabinet and replace with standard wall mount mirror centered on
new vanity.
Install new code compliant outlet for vanity.
Provide and install new wall mounted light fixture over vanity mirror.
Finish ceiling with medium knock down finish and paint white.
Finish walls with flat finish and paint with semi‐gloss. (color by owner)
Remove existing HVAC grill and replace with new, white.
Install pre‐finished, poplar window casing, white.
Remove existing entry door and closet door. Replace with pre‐finished, pre‐hung, hollow‐
core, 3‐panel doors. Casing to match windows. Provide and install locking handle set for
entry and regular handle for closet.
Main Floor Bedrooms, Including Master (3 total):
Remove existing carpet and pad.
Re‐finish existing hardwood floors. (color by owner, will match kitchen, living, dinning)
Remove existing entry door. Replace with pre‐finished, pre‐hung, hollow‐core, 3‐panel
door. Casing to match windows. Provide and install locking handle set.
Remove and replace existing HVAC grills, outlet covers, switch covers, white.
Install pre‐finished, poplar window casing on all windows, white.
Install pre‐finished, poplar baseboard, white.
Install surface mounted light fixture in center of each room.
Remove existing closet doors. Replace with pre‐finished, hollow‐core, 3‐panel, and bypass
style doors, white. Casing to match windows.
Install new white trims for can lights.
Keep existing ceiling texture, and re‐paint with white.
Fix any sheetrock defects.
Remove all wallpaper.
Keep flat finish on all walls, and re‐paint with eggshell (color by owner)
Paint existing wall shelving white.
Install smoke and CO2 detectors to meet code.
Basement Living Room and Hallway:
Remove carpet and pad.
Install new carpet and pad to living room.
Install ceramic tile in hallway.
Remove all existing wall coverings, wallpaper, paneling, faux brick, mirrors, and
sheetrock. (north wall sheetrock is water damaged)
Cover all walls with new sheetrock and finish with flat finish.
Remove faux beams on ceiling, reroute electrical.
Remove existing texture from ceilings, install new sheetrock where necessary, and finish
with medium knock down, paint white.
Replace existing awning window as part of window replacement schedule.
Install new can light trims for all can lights, white.
Remove folding partition wall and track system.
Remove living room closet and reclaim closet space as part of the utility room.
Remove window on north wall and fill in with framing. This window is under the deck
and no longer needed.
Remove existing shelf below windows on south wall. Maintain egress requirements with
the installation of the new windows.
Install pre‐finished, poplar baseboard, white.
Remove existing entry door into laundry room and hall closet door. Replace with pre‐
finished, pre‐hung, hollow‐core, 3‐panel door. Casing to match windows. Provide and
install handle set.
Remove existing HVAC grills, outlet covers, and switch covers. Replace with new, white.
Remove and replace surface mount light in hallway.
Install pre‐finished, poplar window casing on all windows, white.
Install smoke and CO2 detectors to meet code.
Utility and Laundry Room:
Inspect and repair plumbing as necessary.
Have furnace inspected and cleaned.
Have water heater inspected and cleaned.
Remove plug‐in style fluorescent light fixture.
Install two new porcelain ceiling lights in‐conjunction with existing ceiling light.
Remove chest freezer, clothes washer, and dryer.
Paint floor with garage floor paint.
Hang sheetrock on all walls, leave un‐finished
Garage:
Remove all existing wall paneling and replace with sheetrock. Tape seams of sheetrock
where necessary to meet fire code.
Retain existing overhead door opener and re‐use.
Clean and prepare floor for garage floor paint. Paint with garage floor coating. (color by
owner)
Remove all plug‐in style florescent lights from ceiling and walls.
Install four ceiling mounted lights evenly spaced throughout garage.
Remove and abandon wall heater unit. Terminate utilities as necessary.
Remove and replace awning window.
Remove existing walk door into house. Replace with door that was removed from dining
room.
Remove and replace water damaged sheetrock on walls.
Re‐paint ceiling, white.
Alternates:
1. Install granite counter tops in kitchen in place of laminate. (color by owner)
2. Install tile backsplash in kitchen.
3. Remove all existing shingles and re‐roof entire house with 30‐year architectural shingles.
(color by owner)
4. Install ceramic tile in front entry in place of vinyl. (color by owner)
5. Install ceramic tile for main bath floor in place of vinyl. (color by owner)
6. Install ceramic tile for master bath floor in place of vinyl. (color by owner)
7. Convert existing master bath linen closet into 3’ X 4’ tile shower with fiberglass pan. (tile
color by owner) Coordinate the installation of new plumbing and moving of existing
plumbing as necessary. Toilet will have to be moved. Vanity will be downsized to
accommodate the installation of a new shower. Install 12” linen cabinet next to new vanity
cabinet (wall side). Install can light over new shower.
8. Move dryer and washer location to east wall of utility room. Provide all necessary hook‐
ups on east wall for these appliances.
City of New Hope Single-Family Acquisition and Rehab-- Scattered Site Housing Program
Total Project Cost and Total Funding Sources 3984 Zealand Avenue
New Hope MN, 55427
USES
Amount
Acquisition 165,000
Rehab/Construction 75,885
Real Estate Taxes 3,115 Current Tax Value $187,000
Legal 1,500 Current Property Tax $3,115
Listing Fee/Broker Commission 13,000
Closing, Recording Fees 1,500 Estimated Tax Amount "after rehab" $4,500
"based on a value of $265,000"
Contingency 5,000
Total 265,000
SOURCES
Amount
EDA 265,000
Total 265,000
Anticipated Sales Price 265,000