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112497 EDA Official File Copy CITY OF NEW HOPE EDA A G£NDA EDA Regular Meeting #13 November 24, 1997 Agenda #13 President W. Peter Enck Commissioner Sharon Cassen Commissioner Don Collier Commissioner Pat La Vine Norby Commissioner Gerald Otten 1. Call to Order 2. Roll Call 3. Approval of Minutes of November 10, 1997 4. Discussion Regarding Greater Minneapolis Metropolitan Housing Corporation (GMMHC) Home Ownership Resource Center Program 5. Discussion Regarding Establishment of Enterprise Facilitation Program in New Hope and Crystal and Authorization to Proceed 6. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH HENNEPIN COUNTY, MINNESOTA 55428 Approved EDA Minutes November 10, 1997 Meeting #12 CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order at 7:36 p.m. ROLL CALL Present: Enck, Cassen, Collier, Norby Otten Staff Present: Sondrall, Donahue, Leone, McDonald, Olson APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner Collier, to approve the EDA minutes of October 27, 1997. Voting in favor: All. Motion carded. PROJECT 493 President Enck introduced for discussion Item 4, Resolution Approving Third Item 4 Party Agreement for the Urban Hennepin County Community Development Block Grant Program for the Adult Daycare and/or Senior Center Public Facility at 5501 and 5425 Boone Avenue North (Improvement Project No. 493). Mr. Dan Donahue, City Manager, explained that this item was on the City Council agenda as well as the EDA agenda because the Third Party Agreement from Hennepin County is actually between the City of New Hope and the New Hope EDA. He stated the agreement establishes authority for the EDA's use of the City's CDBG funds. Mr. Donahue emphasized that no commitments have been made regarding the project. EDA Commissioner Otten introduced the following resolution and moved its RESOLUTION 97-09 approval: "RESOLUTION APPROVING THIRD PARTY AGREEMENT FOR Item 4 THE URBAN HENNEPIN COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FOR THE ADULT DAYCARE AND/OR SENIOR CENTER PUBLIC FACILITY AT 5501 AND 5425 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO. 493)." 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, Norby, Otten; 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. PROJECT NO. 495 President Enck introduced for discussion Item 5, Resolution Approving Land Item 5 Disposition Agreement (Contract No. A20867) Between Hennepin County and the New Hope Economic Development Authority in Conjunction with the Adult Daycare and/or Senior Center Public Facility at 5501 and 5425 Boone Avenue North (Improvement Project No. 493). EDA Commissioner Norby introduced the following resolution and moved its RESOLUTION 97-10 approval: "RESOLUTION APPROVING LAND DISPOSITION AGREEMENT Item 5 (CONTRACT NO. A20867) BETWEEN HENNEPIN COUNTY AND THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY IN CONJUNCTION WITH THE ADULT DAYCARE AND/OR SENIOR CENTER PUBLIC FACILITY AT 5,501 AND 5425 BOONE AVENUE NORTH (IMPROVEMENT PROJECT NO. New Hope EDA November 10, 1 997 Page 1 493)." The motion for the adoption of the foregoing resolution was seconded by Commissioner Collier, and upon vote being taken thereon, the following voted in favor'thereof: Enck, Cassen, Collier, Norby, Otten; 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. SUBURBAN President Enck introduced for discussion Item 6, Discussion Regarding and REMODELING Authorization to Participate in SUburban Remodeling Planbook Project. PLANBOOK IMP. PROJECT 623 Mr. Kirk McDonald, Management Assistant/Community Development Item 6 Coordinator, explained that dudng the past several months a number of inner- ring suburban communities have been discussing the development of a remodeling planbook. He stated a planbook would be available at each City to give remodeling ideas of different styles of homes. Each City is being asked to share in the cost up to a maximum of $5,000 per City. He stated staff is supportive of the project and funding is available in the EDA budget. Ms. Stephanie Olson, Community Development Specialist, provided background of the planbook concept. She stated the planbook is one tool to address aging housing stock and would encourage residents to remodel or expand their homes. She stated the core contract includes two house types: ramble with a detached garage and a cape cod (1-1/2 story). One proposal was $47,500. She indicated there is a possibility of adding a third house style which could increase the cost to approximately $63,000. Ms. Olson stated the printing costs will be borne by each individual city. The City of Bloomington has offered to be the lead agency, and to date, twelve cities have expressed an interest in participating in the project. Ms. Olson noted the City may recoup pdnting costs if the City charges for the planbook. Councilmember Cassen was supportive of the project and suggested that the planbook include data on the value of improvements (cost of improvements versus payback at time of resale of property); resale advantages (remodeled homes sell more quickly), and that the property owner will receive greater equity. She commented that realtors may find the planbook beneficial, and this effort will be a way to retain residents. Councilmember Cassen expressed support in charging a fee for the planbook. She noted that although fees could vary from city to city, she believes it would be best for the participating cities to make a uniform decision on whether to charge some type of a fee or none at all for the planbook. Commissioner Collier agreed with Commissioner Cassen, but cautioned against charging anything other than a nominal fee. Councilmember Otten suggested business advertisements as a means to offset the printing costs. It was noted that remodeling efforts will increase property values~ within the City. MOTION Motion was made by Commissioner Cassen, seconded by Commissioner Item 6 Norby, authorizing participation in the Suburban Remodeling Planbook Project for a cost not to exceed $$,000. Voting in favor:. All. Motion carded. New Hope EDA November 10, 1997 Page 2 ADJOURNMENT Motion was made by Commissioner Otten, seconded by Commissioner Collier, to adjourn the meeting. All present voted in favor. The New Hope EDA adjourned at 7:55 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA November 10, 1997 Page 3 EDA REQUEST FOR ACTION Originating Department Approved for Agenda EDAAgenda Section City Manager Kirk McDonald ~ 11-24-97 Item No. By: Management AsSistant By:#/ 4 / DISCUSSION REGARDING GREATER MINNEAPOLIS METROPOLITAN HOUSING CORPORATION (GMMHC) HOMEOWNERSHIP RESOURCE CENTER PROGRAM Per the enclosed correspondence and attachments, over the past year the Greater Minneapolis Metropolitan Housing Corporation (GMMHC) has been working with city staff from the cities of Brooklyn Center, Brooklyn Park, Crystal, New Hope and Robbinsdale to discuss a "Homeownership Resource Cente¢' program for the 5-city group. GMMHC has submitted several grant requests to secure funding operations of the "Homeownership Resource Center." In recent conversations with the McKnight Foundation, the Foundation indicated that it is waiting for the 5-city group, or as many cities as are going to participate, to finalize their respective funding commitments for the "Homeownership Resource Center," prior to the Foundation making a final commitment of financial support. Staff request to discuss this proposed program with the EDA and to determine if the EDA wants to make a financial commitment to support the program or not. Early in l&, Hennepin County contacted GMMHC and indicated that the county staff had met with elected officials from suburban Hennepin County communities, and many of these communities had requested assistance from the County in coordinating programs to provide a one-stop approach to assist homeowners with their housing needs. At the same time, the County Board authorized staff to identify approaches for strengthening the county's coordinating role in addressing housing issues and stabilizing the tax base. Hennepin County engaged GMMHC to look into the possibility of establishing a Home Ownership Center, like its Northeast Minneapolis model, in a suburban setting. The county targeted the Northwest area of the county for this probe. The request was revieWed by the GMMHC Board and they agreed to consider the feasibility of expanding the program. In February of 1997, GMMHC entered into a (cont'd.) ', ' Review: Administration: Finance: RFA-O01 ~ Request for Action Page 2 11-24-97 Professional Services Agreement with He.nnepin County whereby they would share the cost, up to $7,400, to undertake a suburban Hennepin County housing resource center feasibility study. Since that time there have been numerous meetings with staff, city planners and managers, as well as elected officials and other interested parties in the communities of Brooklyn Center, Brooklyn Park, Cr~stal, New Hope and Robbinsdale. They have also had other meetings with the McKnight Foundation and the Metropolitan Council in regard to funding such an initiative. The enclosed 5-City North Suburban Homeownership Resource Center Feasibility Fact Sheet states that the "center" would be structured to be a "one-stop resource" for home ownership and home improvement programs and services needed to intervene in neighborhoods on the edge; those neighborhoods poised to change from high homeownership to absentee ownership and from stable housing stock to disrepair and disinvestment. All home ownership and improvement resources, public, private and non-profit would be invited to operate out of this "one-stop resource center" and have their respective products and/or services available for the homeowner, home buyers, and renters. The "center'' would provide one-stop shopping for comprehensive housing information, tailored to the circumstances of each family and property. Information and applications would be available for all of the dozens of mortgage and home improvement loan programs available. GMMHC states that the "center" would not duplicate programs and services, rather would provide an opportunity to collaborate with other providers to make existing programs and services available at the "center." The Fact Sheet also address why a resource center is needed and outlines the benefits, programs and services that would be available. Each of the 5-city group is invited to become a sponsor of the "Homeownership Resource Center." The enclosed letter is a request from GMMHC to approve participation in the program and commit to city funding as per the initial budget amount of $5,000 in 1998, $6,000 in 1999, and $7,000 in 2000. This request for each member of the 5-city group to commit its respective funding is subject to sufficient funding becoming available from other sources, e.g., the McKnight Foundation, etc. If projected funding cannot be achieved in 1998, the operation and related budget will have to be modified to the satisfaction of the city participants. In addition, there may be other potential funding resources that may be available for this project, and GMMHC is prepared to attempt to access these resources on behalf of the 5-city group. GMMHC is prepared to move forward with its commitment to operate the suggested 5-city "Homeownership Resource Center" and awaits only the commitment of the cities to partner with GMMHC on this program. Staff is requesting direction from the EDA on this request and wants to know if the EDA is interested in participating in this 5-city venture. Staff is generally supportive of the program on a pilot project or trial basis. There are adequate EDA funds available to participate in 1998 and staff would recommend that only a one-year approval for participation be considered at this time and that funding for subsequent years be considered with the annual budget process. · ~lIl/ 514 Nicotlet Mall. Suite 500 514 Nicollet Mall Minneapolis, Minnesota 55402 THE GREATER MINNEAPOLIS (612) 339-0601 METROPOLITAN HOUSING CORPORATION FAX: 339-0608 October .30. 1997 Mr. Dan Donahue City Manager City of New Hope 440l Xylon Avenue North New Hope, MN 55428 Dear Mr. Donahue: Over the past year, the Greater Minneapolis Metropolitan Housing Corporation (GMMHC) has been working with city staff from the cities of Brooklyn Center, Brooklyn Park, Crystal, New Hope and Robbinsdale to finalize a "Homeownership resource center" program for the 5-ci~ group. GMMHC has submitted, in conjunction with the 5-city group, several grant requests to secure funding operations of the "Homeownership resource center." In recent conversations with the McKnight Foundation, the Foundation indicated that it is waiting for the 5-city group, or as many cities as are · going to participate, to finalize their respective funding commitments for the "Homeownership Resource Center, prior to the Foundation making a final commitment of financial support. Assuming that funding will be available from the McKnight Foundation, the 5-city group and pOssibly Hennepin County, GMMHC is prepared to propose a revised operating budget that will get the "Center" open and operating in early 1998. Further, GMMHC was recently informed that the Metropolitan Council will have 2 grant cycles for Livable Communities next year, so that, the 5-city "Homeownership Resource Center" can reapply for funding consideration. Recall, the 5-city 1997 application was submitted late and was rejected as a result. January 1998 will be the next opportunity to resubmit the 5-city Livable Community request to the Council. GMMHC will bring some $850,000 worth of value over a 3 year period to the 5-city Center. This will include professional staff, a physical facility and all furniture, fixtures and related equipment to operate the Center. This investment will be leveraged many times over with programs and services implemented at the Center. t':xS ~,IO, G 515 i HC\ FEAS 1097. DOC 0 The Center will provide ~he th{lowing direct benefits ~o participating communities, their respective residents, homeo~aers and potential buyers: * Full time sta~'f dedicated to deliver all of the programs and services made available at the Center. * Marketing and promotional materials prepared and distributed in the five-city area to communicate the activities and programs available to interested homeowners and potential home buyers. * A central office tbr client meetings. * Evening staff sessions open to the public and rotated to each city, hall location on a ever?'- other-monthly basis. * Evening and weekend client appointments scheduled tbr individuals not able to meet during regular Center hours. * Financial institution representatives available at the Center. * Ail office equipment, e.g.,, phones, fax, copier, etc. needed at the Center. * Coordination of all community, regional and state home ownership programs and resources. both public and private, including non-profit services, e.g., home ownership counseling, etc. * Development of new programs with state and federal agencies linked to GMMHC's home ownership resource center concept, e.g., Fannie Mae, Minnesota Housing Finance Agency. The programs that will be offered include: * Construction management specialists doing scope of work improvement plans for homeowners or interested buyers (rehabilitation and structural evaluations). * Construction financing tools and programs. * Flexible loan programs from lenders, MHFA and other programs. * Pre-purchase consulting. * Home ownership training. * City building code and building permit information. * Energy efficiency information and programs available. * Mortgage foreclosure prevention program. * Down payment, closing cost loans and grants. * Assistance with contractors and the bidding process. * Identification of substandard housing. Clients served will include: * Renters, * First time home-buyers, * Homeowners. and * Property Owners. Clients will receive individual assistance identifying financing tools that best suit their individual needs, technical construction consulting which will include on-site visits in homes and working with homeowners and contractors through all phases of construction. t ~:\S.~ICkG 3,1,~I tlC',FEAS 109?.DOC ~ Further. any service listed above that is presently aVailable ,,,,'ill be encouraged to join with GMMHC at the "Center" and provide said services so that clients will have a "one-stop-shop" all homeownership and improvement needs. GMMHC will not duplicate services already availabie in the 5-city. area. GMMHC Professional Staff Background. Dan Elsen. Vice President Dan brings extensive experience in the construction field. Both ne~v building and rehabilitation. Working as a general contractor tbr 14 years, he completed numerous projects in the private sector, working c[oseiy with public agencies, cities and many non- profit developers. Rosemary. Fagrelius. Program Manager Rosemary has spent over 20 years in the public sector with various state, regional and city, government agencies in the housing field before joining GMMHC staff. Ron Korsh. Construction Manager Ron has many years of experience in residential design and construction. Ron owned his own architectural design company for a number of years. Marci Koshiol. Program Cogrdinator Marci'started at GMMHC in 1993 and is responsible for administrating GMMHC's single family homeownership program and its ?redevelopment Revolving Loan program. [ will personally be involved in many of the administration and operational issues. I have been associated with GMMHC for the past 17 years and have been its ?resident for 5 1/2 years. These are the GMMHC personnel who would initially staff the Resource Center and provide the professional leadership to implement the Center program. Attached to this letter find a document entitled "5 City North Suburban Homeownership Resource Center Feasibility Fact Sheet". This document was prepared as part of a presentation to the Hennepin County Board. It, however, describes the "Center" program in detail. Each of the 5-city group is invited to become a sponsor of the "Homeownership Center." This letter is a request to approve participation in the program and commit to city funding as per the initial budget amount of $5,00Wfll~I~t98~ $6,000'in 1999 and $7,000 in 2000: This request for each member of the 5- city group to commit its respective funding is subject to sufficient funding becoming available from · other sources, e.g., the McKnight Foundation, etc. If projected funding cannot be achieved in 1998, the operation and related budget will have to be modified to the satisfaction of the city participants. In addition, there may other potential funding resources that may be available for this proje, ct, and GMMHC is prepared to attempt to access these resources on behalf of the 5-city group.' GMMHC is prepared to move forward with its commitment to operate the suggested 5-city ~'Homeownership Resource Center" and awaits only the commitment of the cities to partner with GMMHC on this program. U:\SMC~GMMI IC~FEAS 109?.DOC ~ Please advise if ?'ou need additional intbrmation and if you'd like GMMHC personnel to make a ~'ormal presentation to ,,'our city council. Thank you for the opportunity to work with .,,'our city on this program. Sincerely. Carolyn ~_.701son President cc: Mr. Dan Bartho!omay, McKnight Foundation Mr. Tom McElveen, Metropolitan Council Ms. Barb Hayden, Hennepin County Ms. Anne Noms, City of Crystal Mr. Tom Bublitz, City of Brooklyn Center Ms. Stacie Kvilvang, City of Brooklyn Park Mr. Bill Deblon, City of Robbinsdale ,'vis. Stephanie Olson, City of New Hope U :\SM ©,GM MI-ICSFEAS 109?.DOC 3 5 CITY NORTH SUBURBAN HOMEOWNERSHIP RESOURCE CENTER FEASIBILITY FACT SHEET Early in 1966, Barbara Hayden. Administrative Manager. Hennepin County, contacted GMMHC and asked to visit our Northeast HomeOwnership Resource Center located in Northeast Minneapoli§. She indicated that the county staff has met with elected officials from suburban Hennepin County communities, and many of these communities had requested assistance from the County, in coordinating programs to provide a one-stop approach to assist homeowners with their housing needs. At the same time the County Board authorized staff to identify, approaches for strengthening the count-y's coordinating role in addressing housing issues and stabilizing the tax base. After revie~ving the services provided at the Northeast Home Ownership Resource Center she viewed the approach to be a model program for coordinated services which could be replicated in other areas of Hennepin County,, and asked if we would consider expanding this program to serve inner-ring suburban communities. The request was reviewed by our Board and they agreed to consider the feasibility of expanding the program. In February, of 1997 we entered into a Professional Services Agreement with Hennepin County whereby they xvould share the cost, up to $7,400, to undertake a suburban Hennepin County housing resource center feasibility study. Since that time there have been numerous meetings with staff, city planners and managers, as well as elected officials and other interested parties in the communities of Brooklyn Center, Brooklyn Park, Crystal, New Hope and Robbinsdale. We have also had other meetings with the McKnight Foundation and the Metropolitan Council in regard to funding such as initiative. We are pleased to appear before you to review this project. Mission The "center" is structured to be a "one-stop resource" for home ownership and home improvement programs and services needed to intervene in neighborhoods on the edge, that is, those neighborhoods poised to change from high homeownership to absentee ownership and from stable housing stock to disrepair and disinvestment. All home ownership and improvement resources, public, private and non- profit, will be invited to operate out of this "one-stop resource center" and have their respective products and/or services available for the homeowner, home buyers, and renters. Background The "center" provides one-stop shopping for comprehensive housing information, tailored to the circumstances of each family and property. Information and applications are available for all of the dozens of mortgage and home improvement loan programs available. Most importantly, a knowledgeable staff discusses individual situations, recommends the most effective program available. and assists the resident through the entire process. t;:,.SMCXG M,M !1C5 FEAS 1097.DOC 4 Critical to the "center" success is the avaitabiiity of construction specialists ,,,,'ho can give honest. impartial and expert assessments of renovation needs and building code requirements, sub,est methods to achieve resident ~,oa~ and accurate cost estimates as well as on~oin~ assistance durin~'~he bid and construction process. R. esidents can find help to prevent mortgage ~breclosure. refinance a contract- ~br-deed. apply for energy assistance, make a plan to become a homeowner or'receive advice on selling their home. and more. The "center" will not duplicate programs and services, rather will provide nn opportunity to collaborative with other providers to make existing programs and services available at the "center." 5 City_ - Why Resource Center lis Needed t. 57.469 Housing Units '~ 4,~.87'/o Older Units - Built Pre 1970 .3. 6,187 Owner Occupied Units Need Reinvestment 4. 2,337 Rental Units Need Reinvestment 5. ,Aging Population Faced With Reinvestment in Property, 6..Aging Housing Stock in Need of Significant Reinvestment 7. Below Metro Average Property Valuations $. Concentrated Effort Can Bring Positive Impact to Neighborhoods 9. Desire to Maintain High Home Ownership Ratios - Better then 60% Average [ 0. Opportuni ,ty to Attract Younger Population With Affordable Upgraded Housing 5-City Resource Center Benefits. Programs and Services The Center will provide the following direct benefits to participating communities, their respective residents, homeowners and potential buyers: * Full time staff providing professional staff time dedicated to deliver all of the programs and services made available at the Center. * Marketing and promotional materials prepared and distributed in the five-city area to communicate the activities and programs available to interested homeowners and potential home buyers. * A central office for client meetings. * Evening staff sessions open to the public and rotated to each city hall location on a bi-monthly basis. - * Evening and weekend client appointments scheduled for individuals not able to meet during regular Center hours. * Financial institution representatives available at the Center. * All office equipment, e.g., phones, fax, copier, etc. needed at the Center. * Coordination of all community, regional and state homeownership programs and resources, both public and private, including non-profit services, e.g., home ownership counseling, etc. * Development of new programs with state and federal agencies linked to GMMHC's home ownership resource center concept, e.g., Fannie Mae, Minnesota Housing Finance Agency. t :'SMC',G M M I ICZFEAS 109?.DOC 5 The programs o(fered ~t no charge to clients include: * Construction management specialists doing scope of work improvement plans for homeo~vners or interested buyers. * Construction financing tools and programs. * Flexible loan programs from lenders. MHFA and other programs. * Pre-purchase consulting. * Home ownership training. * City building code and building permit information. * Energy efficiency in~:brmation and programs available. * Mortgage foreclosure prevention program. * Down payment, closing cost loans and grants. * Assistance with contractors and the bidding process. Clients served will include: * Renters. * First time home-buyers, * Homeowners, and * Property, Owners. Clients will receive individual assistance identifying financing tools that best suit their individual needs. technical construction consulting which will include on-site visits in homes and working with homeowners and contractors through all phases of construction. Program Justificatio~l The 5 cities have recognized the importance of maintaining th'elf existing housing stock. Further, they have over the years made a tremendous investment in infrastructure, e.g., streets, highways, sidewalks, sewer and water, utility lines, street lights, neighborhood and regional parks and schools have typically all been paid for. Maintenance of this "existing housing stock" is an indisputable bargain compared to the cost of purchasing land and building new infrastructure, even without considering other hidden considerable costs of outer suburban sprawl. Transit, shopping, churches, shade trees and other amenities are well established in these 5 cities. Like the baby-boomers who grew up in it, the housing in four of the 5 cities (Brooklyn Park being the exception) is now middle-aged and requires more maintenance. Housing is likely to need major maintenance and repair if it was built before 1960 for owner occupied and before 1970 if rental. There are some different development patterns within these 5 cities, but generally the majority of housing stock is pre- 1970. At this age, housing needs replacement of major systems, such as, roofs, siding, heating systems, plumbing and windows. These major housing investments are not easily made from homeowner savings. The age of housing stock is a major concern for the 5-cities and calls for extensive planning and programs tbr continued maintenance, rehabilitation and renewal. t~ 5.SMC',G M MilC~FEAS 109?,DOC The l:bllowing data is the basis upon which justification c.an be shown tbr a joint public, private and non-profit investment in a "home ownership resource center*' in the 5-cities. [-lousing Which Is Owner Occupied O~vner Occupied Change in % of Owner Built < 1970 Occupied 1980-1990 Brooklyn Center 70% 85% (8.75) Brooklyn Park 55% 31% 0.5 Crystal 70% 90% 0.8 New Hope 56% 81% 0.89 Robbinsdale 75% 9 l% 0.35 The high percentage of houses built before 1970 in four of the five cities raises the question of maintenance needs in order to maintain this housing stock for the future. [n addition, these homes typically suffer from functional obsolescence (housing generally with 2-3 bedrooms, one bath models under 1,200 square feet, detached garages, out-dated kitchens). With the notable exception of Brooklyn Park, each of the targeted cities have an aging population: substantially older than the county, and metro average. Substantial numbers of households are empty nesters and are nearing retirement age. Thus, over the next decade large numbers of homes built before 1970 will become available in the marketplace. U :x.S M C~G M,'vl HO FEAS 1097. DOC 7 The ~bilowing chart shows SAS head of household data forage groups ~br both owners nd renter occupied housing. The data comes from [990 census intbrmation. House[ old Data 5-Cities Cji'y/Age Group Owner-Occupied Renter-Occupied Total Households Brooklyn Center t5-24 ,','rs. 65 444 509 25-34 yrs. 1423 [080 2503 35-44 yrs. 1563 720 2283 45-54 yrs. l_8~ 235 l 518 55-64 yrs. t628 155 1783 65-74 yrs. [362 310 1672 75~- yrs. 482 476 958 Totals 7806 3420 Brooklyn Park 15-24 yrs. 207 [ 572 1779 25-34 yrs. 3739 2799 6538 35-44 yrs. 4578 1285 5863 45-54 yrs. 2808 391 3199 55-64 yrs. 1503 266 1769 65-74 yrs. 719 194 913 75+ yrs. 195 476 671 Totals 13749 6983 20732 CrT, stal 15-24 yrs. 71 296 367 25-34 yrs. 1640 815 2455 35-44 yrs. 1223 368 1825 45-54 yrs. 1341 154 1377 55-64 yrs. 958 165 1506 65-74 5'rs. 480 156 1114 75+ yrs. 7170 148 1628 Totals 2102 9272 'New Hope 15-24 yrs. 20 572 592 ~5-~4 yrs. 670 1860 2530 35-44 yrs. 1142 558 1700 45-54 yrs. 1170 255 1425 55-64 yrs. 1082 316 1334 65-74 yrs. 519 771 835 75+ yrs. 120 4584 891 Totals .. 4723 9307 t':xS M C'~G MM HC5 FEAS 109?.DOC ~ 5 CITY NORTH SUBURBAN HOMEOWNERSHIP RESOURCE CENTER FEASIBILITY FACT SHEET Early in 1966.. Barbara Hayden. Administrative Manager. Hennepin County, contacted GMMHC and asked to visit our Northeast HomeOwnership Resource Center located in Northeast Minneapolis. She indicated that the county staff has met with elected officials from suburban Hennepin County communities, and many of these commtmities had requested assistance from the County in coordinating programs to provide a one-stop approach to assist homeowners with their housing needs. At the same time the County Board authorized staff to identify approaches for strengthening the county's coordinating role in addressing housing issues and stabilizing the tax base. ARer reviewing the services provided at the Northeast Home Ownership Resource Center she viewed the approach to be a model program for coordinated services which could be replicated in other areas of Hennepin County, and asked if we would consider expanding this program to serve inner-ring suburban communities. The request was reviewed by our Board and they agreed to consider the feasibility of expanding the program, in February of 1997 we entered into a Professional Services Agreement with Hennepin County whereby they would share the cost, up to $7,400, to undertake a suburban Hennepin County housing resource center feasibility study. Since that time there have been numerous meetings with staff, city planners and managers, as well as elected officials and other interested parties in the communities of Brooklyn Center, Brooklyn Park, Crystal, New Hope and Robbinsdale. We have also had other meetings with the McKnight Foundation and the Metropolitan Council in regard to funding such as initiative. We are pleased to appear before you to review this project. Mission The "center" is structured to be a "one-stop resource" for home ownership and home improvement programs and services needed to intervene in neighborhoods on the edge, that is, those neighborhoods poised to change from high homeownership to absentee ownership and from stable housing stock to disrepair and disinvestment. All home ownership and improvement resources, public, private and non- profit, will be invited to operate out of this "one-stop resource center" and have their respective products and/or services available for the homeowner, home buyers, and renters. Background The "center" provides one-stop shopping for comprehensive housing information, tailored to the circumstances of each family and property. Information and applications are available for all of the dozens of mortgage and home improvement loan programs available. Most importantly, a knowledgeable staff discusses individual situations, recommends the most effective program available, and assists the resident through the entire process. U :\SMID, G,M M HCSFEAS i 097.DOC 4 Critical to fl'~e ",,:'enter" success is The availability of construction specialists wi'to can ~ive t'~onest. [mparzial and expert assessments of renovation needs and building code requirements, suggest methocis to achieve resident goals, and accurate cost estimates as well as ongoing assistance during the bid and construction process. Residents can find help to prevent mortgage t~oreclosure, refinance a contract- for-deed, apply ~br energy assistance, make a plan to become a homeowner or:receive advice on selling d-left home. and more. The "center" will not duplicate programs and services, rather will provide ,an · opportunity to collaborative with other providers to make existing programs and services available at the "center." 5 Cit'v - Why Resource Center Is Needed 57,469 Housing Units 2. 43.87°,/o Older Units - Built Pre t970 3. 6,187 Owner Occupied Units Need Reinvestment 4. 2.337 Rental Units Need Reinvestment 5. Aging Population Faced With Reinvestment in Property, 6. Aging Housing Stock in Need of Significant Reinvestment 7. Beloxv Metro Average Property Valuations 8. Concentrated Effort Can Bring Positive Impact to Neighborhoods 9. Desire to Maintain High Home Ownership Ratios - Better then 60% Average I0. Opportunity to Attract Younger Population With Affordable Upgraded Housing 5-City Resource Center BenefitS, Programs and Scrvice~ The Center will provide the following direct benefits to participating communities, their respective residents, homeowners and potential buyers: * Full time staff providing professional staff time dedicated to deliver all of the programs and services made available at the Center. Marketing and promotional materials prepared and distributed in the five-city area to communicate the activities and programs available to interested homeowners and potential home buyers. A central office for client meetings. Evening staff sessions open to the public and rotated to each city hall location on a bi-monthly basis. * Evening and weekend client appointments scheduled for individuals not able to meet during regular Center hours. * Financial institution representatives available at the Center. * All office equipment, e.g., phones, fax, copier, etc. needed at the Center. * Coordination of all community, regional and state homeownership programs and resources, both public and private, including non-profit services, e.g., home ownership counseling, etc. Development of new programs with state and federal agencies linked to GMMHC's home ownership resource center concept, e.g., Fannie Mae, Minnesota Housing Finance Agency. U :,,SMCXGM M IIC~,FE.'~S 1097.DOC q The programs offered at no charge to clients include:, * Construction management specialists doing scope of work improvement plans for homeo~vners or interested buyers. * Construction financing tools and programs. * Flexible 10an programs t'rom lenders, MHFA and other programs. * Pre-purchase consulting. * Home ownership training. * City building code and building permit int:brmation. * Energy efficiency intbrmation and programs available. * Mortgage foreclosure prevention program. * Down payment, closing cost loans and g'rants. * Assistance with contractors and the bidding process. Clients served will include: * Renters, * First time home-buyers, * Homeowners, and * Property, Owners. Clients will receive individual assistance identifying financing tools that best suit their individual needs, technical construction consulting which will include on-site visits in homes and working with homeowners and contractors through all phases of construction. Program Justification The 5 cities have recognized the importance of maintaining their existing housing stock. Further, they have over the years made a tremendous investment in infrastructure, e.g., streets, highways, sidewalks, sewer and water, utility lines, street lights, neighborhood and regional parks and schools have typically all been paid for. Maintenance of this "existing housing stock" is an indisputable bargain compared to the cost of purchasing land and building new infrastructure, even without considering other hidden considerable costs of outer suburban sprawl. Transit, shopping, churches, shade trees and other amenities are well established in these 5 cities. Like the baby-boomers who grew up in it, the housing in four of the 5 cities (Brooklyn Park being the exception) is now middle-aged and requires more maintenance. Housing is likely to need major maintenance and repair if it was built before 1960 for owner occupied and before 1970 if rental. There are some different development patterns within these 5 cities, but generally the majority of housing stock is pre-1970. At this age, housing needs replacement of major systems, such as, roofs, siding, heating systems, plumbing and windows. These major housing investments are not easily made from homeowner savings. The age of housing stock is a major concern for the 5-cities and calls for extensive planning and programs for continued maintenance, rehabilitation and renewal. U :~;MC~G M M HCSFEAS 109?.DOC 6 The tbtlowing data is the basis upon which'justification can be shown for a joint public, private and non-profit investment in a "home ownership resource center" in the 5-cities. Housing Which Is Owner Occupied Owner Occupied Change in % of Owner Built < 1970 Occupied 1980-1990 Brooklyn Center 70% 85% (8.75) Brooklyn Park 55% 3 [% 0.5 Crystal 70% 90% 0.8 New Hope 56% 81% 0.89 Robbinsdale 75% 91% 0.35 The high percentage of houses built before 1970 in four of the five cities raises the question of maintenance needs in order to maintain this housing stock for the future. In addition, these homes typically suffer from functional obsolescence (housing generally with 2-3 bedrooms, one bath models under 1,200 square feet, detached garages, out-dated kitchens). With the notable exception of Brooklyn Park, each of the targeted cities have an aging population; substantially older than the county and metro average. Substantial numbers of households are empty. nesters and are nearing retirement age. Thus, over the next decade large numbers of homes built before 1970 will become available in the marketplace. U :~S MCSG M M HO F EAS 1097. DOC 7 The tb[lowing chart,shows SAS head or' household data tbr age groups tbr both owners and renter occupied l~ousing. Tine data comes from 1900 census inrbrmation. Household Data 5-Cities Cit-y./Age Group ] Owner-Occupied Renter-Occupied Total Households Brooklyn Center l 5-24 yrs. 65 444 509 25-34 yrs. t423 1080 2503 35-44 yrs. [ 563 720 2283 45-54 yrs. 1283 235 t518 55-64 yrs. 1'628 155 1783 65-74 yrs. 1362 310 I672 75* yrs. 482 476 958 Totals 7806 3420 l 1226 Brooklyn Park l 5-24 yrs. 207 [ 572 1779 25-34 yrs. 3739 2799 6538 35-44 yrs. 4578 1285 5863 45-54 yrs. 2808 391 3199 55-64 yrs. 1503 266 1769 65-74 yrs. 719 194 913 75+ yrs. 195 476 671 Totals 13749 6983 20732 Crystal 15-24 yrs, 71 296 367 25-34 yrs. 1640 815 2455 35-44 yrs. 1223 368 1825 45-54 yrs. 134I 154 1377 55-64 yrs. 958 165 1506 65-74 yrs. 480 156 1 114 75-'- yrs. 7170 I48 1628 Totals 2102 9272 New Hope 15-24 yrs. 20 572 592 25-34 yrs. 670 1860 2530 35-44 yrs. 1142 558 1700 45-54 yrs. 1170 255 i425 55-64 yrs. 1082 316 1334 65-74 yrs. 519 771 835 75+ yrs. 120 4584 891 Totals 4723 9307 I ::~S.MC~G M MHC~FE,\S 1097.DOC ~ Robbinsdale ! '. ,~-_-, yrs. } t 89 35-44 ~rs. 779 239 ~0 [ 8 ¢5-54 yrs. 530 77 607 55-64 yrs. 656 t53 809 65-7~ yrs. 690 t51 84l 75- yrs. 657 425 I082 Totals 4386 [622 6008 The data clearly shows that all 5 cities have ~ aging head of household population which tr~slates into increased housing issues, such as, need for mainten~ce ~d prese~ation investment. The following cha~ sets forth the estimated public ~d private cost needed over the next decade ro maintain ~d preseme the existing housing stock in the 5 cities. The i~b~ation w~ supplied by each city ~ a pa~ of the Housing Challenge 2020 Fo~, November 1996. Public and Private Cost to Maintain and Prese~e Existing Housing in 5 Cities Ci~ Total % Older Rehab Demo Rehab Demo Owner Public Units Units Owner Owner Rental Rental Cost Cost Occupy. B. Cfr t 1.713 58.4 1,210 64 416 22 518,687,200 58.008,800 B. P~k 21,265 23.5 4,500 0 1,500 500 597.500,000 S6,000.0000 Custal 9.541 67.2 370 175 212 0 S8,730,000 58.575.000 N. Hope 8.795 27.4 57 I0 79 0 $722,500 51.562,500 Robbins 6.155 74.0 50 130 600 0 5720,000 58,580,000 7orals 57,469 43.87 6.187 379 2,337 522 5126.359.700 532.726.300 ,~other trend that will have ~ impact on eMsting housing stock over time is the rate of change from homeowner to rental prope~. [n the 5 ci~ group there ~e indicators that show this trend to be occumng, for instance, in Brooklyn Center the ci~ lost 8.75% of its o~ersMp units in the past decade. Sales Activities Single Family January_ - December 1996 Single Family Sales Units Sold Dollar Amount Ave List Price Ave Sell Price Brooklyn Center 310 $26,397,666 $86,211 $85,153 Brooklyn Park 847 $98,173,000 $116,989 $115,906 Crystal 283 $25,520,179 $91,987 $90,177 New Ho pe 197 $22,153,270 $114,093 $121,453 Robbinsdate 249 $22,5 l 1,523 $92,106 590,407 U :~SMC~,G M 51 llCkFEAS 1097.DOC 9 Sale market prices in the 5 cities are slightt'y higher than inner cit',,' sale prices. The average sales pr/ce however has been fiat for the past 5 years and has not kept pace. with inflation or sector price increases in other portions of the region. Also these residential sales, typically, are older properties in need major rehabilitation work. Current market prices in the 5 cities generally indicate a t'fat, non-growing property valuation trend. This reflects a growing need tbr 'home improvements and related housing enhancements to compete with the broader metropolitan housing valuation trends, which is showing a significant increase. The average sales price in 1990 for the region was $108.988. Maintenance and reinvestment are. therefore, critical elements to improve over time the 5-city. residential tax base. (Brooklyn Park and New Hope are exceptions to this trend.) Overall Program Feasibility The need for the program is clearly present. Home owners and potential buyers will use a ~'one-stop home ownership resource center" for a great variety, of programs and services. This has been shown by GMMHC at its Northeast Home Ownership Center. Whether or not the 5-city "resource center" can become a reality is dependent on each organization agreeing to fund a portion of the total projected operating costs of the "center".. The proposal brings together several levels of government, e.g., the cities, Hennepin County and the Metropolitan Council. the private, and non-profit sectors, e.g., GMMHC and potentially the McKnight Foundation. If one or more of these potential funding resources elects not to participate, the program would have to be revamped substantially. Projected 3 Year Source of Funding for 5-City FIomeownership Resource Center Revenue Year 1 Year 2 Year 3 Totals Sources McKnight $100,000 $100,000 $100,000 $300,000 Foundation .Metro Council $60,000 $72,500 $97,500 $230,000 .Hennepin $60,000 $72,500 $97,500 $230,000 County Cities $25,0001 $30,000 $35,000 $90,000 GMMHC $10,900i $l 1,525 $15,450] $37,875 Totals $255,900 $286,525 $345,450~ $887,875 U :\S'MC"G M M HC~'FEAS 1097. DOC 1 0 North Suburban Housing Resource Center -. Three Year ?rogram Budget Year I Year 2 Year'3 Totals Administration FTE (Salaries/Taxes/Fringe) Program Manager 0.5 :5 30,000 0.5 :5 32,000 i0.5 1:5 34,000 :5 96.000 Program Coordinator I $ 45,000 1 :5 46,500 [l ~ :5 48,050 :5 139,550 Construction Manager 2 :5 87,500 2.5 :5 109,375 ::3 i :5 131,250 $ 328,125 Proeram_ Associate t :5 30,000 ~,_ , $ 62,000 3 $ 9~,000 :5 185,000 SubTotals '4.5 S 192,500 '6 S 249,87:5 i7.5 $ 306,300 S 748,675 Professional Services Marketing & Promotional :5 7,500 :5 5,000 I 5; 5,000 $ 17,500 Accountin~Legal/Audit :5 5,000 $ 6,000 [ :5 7,000 :5 t8,000 · Sub Totals S 12,500 :5 11,000[ :5 12,000 S 35,500 Operating Expenses Equipment ' :5 25,000 :5 4,0001 :5 3,000 $ 32,000 Dues & Subscriptions S tS0 S 200 I S 250 S 600 Insurance :5 500 :5 500t :5 500 $ 1,500 Postage I :5 750~ $ 1,500 [ $ 2,250 $ 4,500 Printing 8: Publication :5 1,000 $ 1,750 [ $ 2,250 :5 5,000 Office Supplies $ [,000 $ 1,200 I S 1,400 S 3,600 Telephone $ 9,000 $ 2,000I S 2,000 $ 13,000 Rent ' S 13,000 S t4,000! S 15,000 S 42,000 Miscellaneous $ 500 $ 500] S 500 $ 1,500 Subtotals i $ 50,900 ' 5; 25,650 } $ 2.7,150 $ 103,700 Totals I 5; 255,900 S 286,525 ! $ 345,450 i 5; 887,875 GREATER ,~-rN~,'~ 1A_EP©RT lgg6 MINNEAPOLIS METROPOLITAN ~:..~. HOUSING ~':-' ~*- CORPORATION "Such a sensible idea. helpin$ people help themselves, It's reallv the neighborly' Northeast way.". · 'The staff was so helpful we actually enjoyed the process." "It seemed so complicated [ was afraid to ir,v, but the staff made it very easy'." "Lifesavers - they' got the work done and helped find a way to pay' for it.". Homeownership Program GNIIVIHC's IVilSSiON In 1970, bell bottoms were in, the hit song was 13ridge Over TOTAL 1971 -- 1996:996 Units F,'oub[ed ~zaters by Simon and GanCunkel, a cup of coffee cost 20 cents and the Twins won the Western DMsion Title/,not won again until 19871..~lso in 1970, 14 major Minneapolis corporations made a commitment to improve housing by creating the Greater Minneapolis Metropolitan Housing Corporation. The purpose: improve the availabilit?' and quality,' or affordable Predevelopment loan program housing for Iow and moderate income families and individuals. The founders saw great needs and great ideas out in the neighbor- hoods but not enough money or expertise to transform this ener- g;,,' and vision into buildings that worked. GMMHC was to become the flexible partner that could make things happen. Sometimes GMMHC provides seed money to get projects started: sometimes G.x, IMHC is the developer either alone or with other partners. Most recendy, GMMHC has initiated and now operates an information and se~-ice program for a redeveloping neighborhood. GMMHC achieves its goals through working in partnership with the Minneapolis Community Development Agency, the Minnesota TOTAL1971 ~ 1096:12,674 Housing Finance Agency, the Fa. rally Housing Fund, nonprofit housing and community, development corporations, concerned neighborhood goups and manx- local lenders. Type of Housing Assisted with Total development costs of units Predevelopment Loans, by Unit built and assisted completed & funded/in process PREDEVELOPMENT ·/' i $ 637,383,735 1971 -- 1996 TOTAL = 13,670 Units TOTAL 1971 -- 1996: $ 708,279,628 ,"IEETIf":G SPECi F, IEEDS The special pi:}'sicaI ad social suppor~ ~:eeds of everyone From emancipated :ee~a~er~ to frail ~I03 8e~ond ~venue $ou~ Chicco Avenue ~p~en~ ' ' - [housing for the homeless) ~housin~ for 60 la--lies) seniors have bee~ addressed. ~ousing ~d se~(ces Alliance Housing Central Communi~' Housing Trust have been combined creaveiv co serve ~ersons Whittier neighborhood, Minneapolis Elliot Park neighborhood. Minneapolis ~,(fi~ phF'sictd and mentJ disabthies, uhe homeless, ~,~.'t 5 parents workin~ towards self-suf'ficiencv,. i~:dividuais recox'eri~g ffoom chemical depen- dencx' :~nd chronic alcoholics in need of caring shelter. G3~21HC's m:'ede~ e!op:ent Revolving Loan Fund provides no interest loans to move projects Sh~re~ Living Residence from a good idea to a funded developnTent ready communiD, & independence for 10 frail seniors} .to star~ cc, nst:'uc~ion. Tkis seed nqone? pays for Pot~ derhorn Community ex:~est ~xone}' ih-pu:'c[xase %:eements. cu'cb, itecB. Council ' sum'e?rs and engineers, consulta~tts to fh, derhorn Park x~'ith loan app!icatio::s, lender fees. !and hoiding ::eighborhood, C~houn ~oje~ ~mst studios', Minneapolis Ar=pace PrOJecm '~:t '-' ' -: ~' Lvndale neighborhood. ' -~ ' ,~ ~,m ur,, Xiinneapolis ..~-'~'., Bo~d ~ LodFng ]I1 uni~ of housing with 24 hour support for Iow income .~noka Court? Commum? .~c~on Pro~m. Columbia ~eigh~ '- BUILDING .HOMEOWNERSHIP 2729 3rd Street North 1201 Nesvton Ave. North 720 Adams Street N.E. Anishnabe Wa&in,un Hyde P~rk SRO Alliance Center Youth Housing I'he People's Home l0 units housing for low 100 units of sober housing and 24 '30 units for homeless youth , ;0 unit residence for income singles} transitional units for individuals) aged 16-21: chronic alcoholics~ .Z~noka County Community' .Mliance Housing and Central Central CommuniLv Housing Trust .t,nerican Indian Housing Corporation Action Program Community Housing Trust Elliot Park neighborhood. ,,~ ith Project for Pride in Licing Fridley Elliot Park neighborhood, Minneapolis Phillips neighborhood, Y, linneapolis Minneapolis I :?<s - whatever is needed. These high ?.sk. Durin~ [99d. 203 units stoned construction, with ,_:nsec::red loans are to be reFaid at projec~ a roml dev&opment cos~ of nearly 815 minion. - .:'.,~sinz. Oxer S [4 million has been lent co Seed moue,.-of S833.00 wa boxowed by the .~3~5t [n :ke develomenr o[ ~2.75] housing uniu. developers'of these projecu. Projects tor~lin~ Le~s :kan [ 't r~f [ has never been reoa~d. L2t¢8 unks received 1o~ commitments of over S2 ~i[l~¢n du2n~ 1~96. Tke total development Fke~e ~oans ka,,'e also been ava[!ab[e ro projects cost of these ne~, projecu is over S [ [0 million. 'ca:ed m suburban areas - ~, here much of the :'~::~::'~ 2fS)rdztble ktmsing is bdn~ planned. 87 are under construction or in the bid process. · he n~w buyers come in all variety' of families: most have Communi~' development children, many are single parents, corporations and not?profit almost all are first-time home- housing developers also build GMMHC has built and sold buyers. Some moved in from and rehabilitate houses for pur- 909 new or rehabilitated single the suburbs, many have lived chase. Houses might be in family houses over the past 26 nearby and found the delights strate~c locations or designed ,~ ' years. The new buyers bring of new construction close to to meet special needs. GMMHC What can be done with vacant fresh energT to their blocks, their neighborhood network, provides no interest loans from lots and boarded houses m neigh- schools and churches whJle their the Revolving Loan Fund to borhoods shaken by suburban homes support increased values During 1996, 52 homes with a pay for pre-development costs flight, declining confidence and and encourage other private development cost of $ 5,940,000 such as building purchase or other urban ills? investment, were completed and sold. desig-n/engineering costs. 2724 N 4th Street 634 Harry Davis Lane 4011 Emerson Ave. North 3045 Portland Neighborhood celebrating the Resource Center at the Northeast Neighborhood Parade. If you don't ha~'e rdati;'es who are bankers, Carpenters, appraisers, plumbers, What have 833 people been doing a~ the Resource eledtriciaru; roofers and red-tape cutters, you should call the Northeast Housing Center since it opened in July, 19957 Resource Center. We ha;e already seen what a difference this knowledge makes for people trying to figure out what to do with their house, or how to buy one. 50 people have received 8 people needed help .Michael Rainville, Chair, St. Anthony West Development Organization information on which of with energy assistance. the many mortgage pro- The Northeast Housing Resource Center is one-stop-shopping for housing grams works for them. 229 St. Anthony West residents applied for information tailored to the individual circumstances of the family and the 28 people took the first special NRP-funded property. [t is problem soMng that is effective and personal. It saves step by attending a home loans; everyone time by' consolidating information AND applications for all of ownership training the c~ozens of mortgage and home improvement programs in one place, session. 60 have already k also goes the extra step and provides construction consultants to estimate received them. ~ork that needs to be done, We opinions on whether a new bathroom is 4 people learned how really a good idea over the garage (and whether ciw code allows it)..&Il tO refinance their 15 people had probtems at no cost to the neighborhood resident. The Center also purchases and contracts-for-deed or too complex to fit into rehabilitates problem or substandard homes for resale to new homeowners, high interest mortgages, one category, but were helped anyway. GMMHC created the Resource Center to increase home ownership, 73 people have taken their home improvement 3 houses were puchased home improvements and redevelopment in an area that is still viable, but dreams and learned the for rehabilitation and showing sig-ns of ,,~lnerability. GMMHC found the perfect partner in the best way to pay for sale to new homeowners. St. Anthony West Neighborhood Organization who invited GMMHC to them. locate the Center in their neighborhood and also provided initial support. § people received help 214 people have gotten to prevent a mortgage expert help on their ren- foreclosure. ovation plans from the construction consultants A resourceful St..-\nthonv West family survives major renovation with assistance from the Resouce Center. TIlE GREATER MINNEAPOLIS . - METROPOLITAN HOUSING CORPORATION l g97 GMMHC Sponsors OFFICERS AND BOARD OF DIRECTORS AOC Telecommunications, thc. ALLIANZ Life Insurance Co. of North America CHAIRMAN Robert L. Lumpkins American Medical Systems/Schneider!USA)/nc. · Douglas A. Scovanner Vice Chairman Andersen Consulting Sr. VPtCFO Cargill, Incorporated Arthur Andersen & Co., S.C. Dayton Hudson Corporation Bor-Son Companies Richard R. Miller Brookfield LePage Management LLC PRESIDENT Senior Vice President Cargill, Inc. · Carolyn E. Olson No~'west Investment Services Coldwell Banker Premier Homes Greater Minneapolis Metropolitan *Dayton's, Mervyn's and Target Stores by the Dayton Hudson Foundation Housing Corporation Cornell L Moore Dorsey & Whitney Foundation Partner Faegre & Benson ViCE CHAIRMEN Oorsey & Whitney RLLP. Fannie Mae Foundation · Richard M. Kovacevich Firstar Bank of Minnesota, N.A. COB/CEO James T. Porter *First Bank System Foundation Norwest Corporation Vice President. Human Resources 'General Mills Foundation Honeywell, Inc. The Graco Foundation · Gary N. Petersen Gray, Plant, Mooty, Mooty & Bennett, P.A. President/Chief Operating Officer John G. Turner Heartland Realty Investors, Inc. Minnegasco Chairman/CEO ' Honeywell Foundation Reliastar Financial Corporation KPMG/Peat Marwick · Richard W. Shcoenke Leonard, Street & Deinard President/Chief Executive Officer Robert P. Walton Lutheran Brotherhood Firstar Bank of Minnesota, N.A. Director Corporate Real Estate Madison Marquette Realty Services Senior Associate Counsel Miller & Schroeder Financial, Inc. SECRETARY/TREASURER General Mills, Inc. · Edward J. (Jim) Mclntyre 'Minnegasco VP/CFO ,Jay H, Wein 'Northern States Power Company ' Norwest Bank Minnesota, Norwest Investment Management & Trust, Northern States Power Company Chairman Norwest Capital Advisors, No.est Investment Services, Inc. Information Advantage, Inc. Old Republic National Title Insurance Co. Grace James Piper Jaffray, Inc., Piper Capital Management and Piper Trust Company Retired Laura Waterman Wittstock The Carl & Boise Pohlad Family Foundation President/Executive Producer The Prudential Insurance Company of America Albert J. Kelly, Jr MIGIZI Communications, inc. 'ReliaStar Financial Corporation President Riverside Bank Superior Sweeteners, Inc. Scherer Family Fund of the Minneapolis Foundation Gordon E. Knudsvig TCF Foundation on behalf of TCF Bank Minnesota, TCF Financial Services Managing Director TCF Mortgage Corporation and TCF Insurance Piper Jeffrey Companies, Inc. The Valspar Foundation Susan E. Lester *27 YEAR SPONSORS Executive VP Finance/CFC First Bank System, Inc. GMMHC STAFF . Carolyn E. Olson Nancy K.Pinzka President Office Manager 9aniel-E. Elsen Susan Pipkorn ~[~.e Greater [V~eaPoUs Metropollta.a VP/Construction Manager Staff Accountant ['-[ousf, ng Coz-poraQon Rosemary G. Fagrelius Ernest Rhoney 5].4 .'N'ico].]et ~{~]], Suite 500 Program Manager Program Associate .X'Iinneapolis, .X~innesota. 55402 Duane M. Fisher Antoinette Tucker Executive Vice President Accounting Assistant ~:; ~.2 :;3,q-odO 1 Marci L. Koshiol Program Coordinator 514 Nicoilet Mall. Suite 500 514 Nicollet Mail Minneapolis, Minnesota 55402 THE GREATER MINNEAPOLIS (612) 339-0601 .~tETROPOLITAN HOUSING CORPORATION FAX: 339-0608 November 4, 1996 Ms. Barbara Hayden, Administrative Manager Office of Planning and Development Development Planning Unit Hennepin County 10709 Wayzata Blvd., Suite 260 Minnetonka, MN $5305 Dear Barb: This is a follow-up to 'our previous conversations regarding the expansion of our Housing Reinvestment Program (Housing Resource Center), to suburban Hennepin County. In July of 1995 our corporation began this program and ope. ned a Housing Resource Cemer at 909 Main Street Northeast, which serves the entire 13 neighborhood area of Northeast ~fumeapolis. The program was created to increase home ownership, home improvements and redevelopment in an area that is still viable, but showing signs of vulnerability. Services and information the Center provides include construction consultations, flexible loan products from lenders, MCDA, MHI:A and other programs, pre-purchase consulting, home ownership training, city building code and building permit information, energy information, mortgage foreclosure prevention program, downpayment, closing cost loans and grants, assistance with contractors and bidding process. These services are provided at no cost to the public. The Center also administers the Neighborhood Reinvestment Program (NRP) loans and grants for the northeast neighborhoods of St. Anthony West, Coitunbia Park, Waite Park and St. Anthony East. Here we receive an administrative fee from the neighborhood organization to provide the services. The first year of this "one stop approach" has been extremely successful. The Center is open approximately 20 hours per week and has 5erved 651 persons as of August 31st. The following services were provided: NOV 0 § # OF PERSONS TYPE OF ASSISTANCE 73 home buyers with mortgage products 10 assistance on refinance/contracts for deed 160 construction consultations for homeowners 91 home improvement and rehab assistance to homeowners 44 potential buyers in home ownership training 39 energy assistance/mortgage foreclosure prevention/other 234 NRP application and loans The St. Anthony West Neighborhood Organization, with their NRP dollars, wanted to improve substandard properties in their neighborhood and committed gap funding to make this possible. We have now purchased four homes ( 3 duplexes, and one single family home) which are being rehabbed and sold to home owners. The Resource Center in Northeast 1Wmneapolis has been extremely successful, and we have found that with a little technical help, many people will take on the responsibility of improving their properties. Also, neighbors notice and come into the office looking for help to improve their properties as well. It seems like a program most communities can benefit from. We are following up on the potential to expand this program to serve inner-ring suburban communities as well, and we have hired the firm of Community Resource Partnerships, Inc. to perform the following scope of services, as we consider a Suburban Resource Center. These services will be provided in' cooperation with us and the Hennepin County staff: . Collect all relevant housing demographic and physical property data for the cities of Brooklyn Park, Brooklyn Center, Robbinsdale, New Hope and Crystal. · Prepare a Multi-Jurisdictional Home Ownership Center presentation to share with elected officials, city managers and appropriate staff of said cities. Arrange for initial meetings with appropriate elected officials, city managers, and staffto present the concept of a Multi-Jurisdictional Home Ownership Center. · Identify all organizations working on housing issues in the respective communities; meet with responsible parties and share the GMMHC home ownership concept and identify ways that could lead to synergistic and collaborative results. · Identify potential sites for the location of a home ownership center. · Work with staff members of said cities, the county and GMMHC to identify all related issues, develop an operating budget, and identify possible funding sources for both operating and project gap financing for said program. · Prepare a report for GMMHC that summarizes all data, critical issues and operating suggestions, including "how'to" staffthe Home Ownership Center and related programs. [ am requesting Hennepin County to share the cost of this study in the amount of $7,400. [ would also like the opportunity to make a presentation before the appropriate County staff and Commissioners to review the program and its potential for increasing home ownership and improving the housing stock of our communities. Thanks for your interest, Barb, and if you have any questions, please call me at 339-8703. Attached for your information is an article by Leonard Inskip on the Northeast Resource Center, a copy of our Mission, Purpose and History Statement, and our 1995 Annual Keport. Sincerely, Carolyn E. Olson President -'-':' ,C :~ Avem'-e ,'~'ort, n ~,,y,~'ail: 6!2-531.5100 C;'k/ Ha;! -~ax: .=ub/ic Wor~s: 512.533.4823 .Cub~lc Works, ax: TOO: ~12.531.5109 Fro Oe¢'t. Fax: August 14, 1997 Mr. Thomas McEIveen Deputy Director, Housing Development and Implementation Metropolitan Council Mears Park Centre 230 East Fifth Street St. Paul. MN 55101-1634 Subject: North Suburban Housing Resource Center Dear Mr. McEIveen: The City of New Hope joins with the City of Crystal in the submission of its Livable Community Demonstration Account application to establish a Home Ownership Resource Center as per the Greater Minneapolis Metropolitan Housing Corporation proposal. New Hope submits this supporting letter conditioned upon final City COuncil approval and with the understanding that all projected funding must be secured from vadous sources, e.g., Hennepin County, the McKnight Foundation, the Metropolitan Council, etc. Our City reserves the right to withdraw this support, or require that the proposal be significantly revised if all projected funding is not attained or if the City is not satisfied with the final design of GMMHC's ResOurce Center workplan. Thank you for considering this request. Sincerely, Oamet J. 8ronahue City Manager cc: City Council Kirk McDonald, Management Assistant/Community Development Coordinator Stephanie Olson, Community Development Specialist Family Styled City ,~,,;i,^,~, ~j:~,~ For Family Living m Qtrr ? cr os Originating Department Approved for Agenda Agenda Section EDA City Manager Kirk McDonald //~ 11-24-97 [tern No. By: Management Assistant By:~// DISCUSSION REGARDING ESTABLISHMENT OF ENTERPRISE FACILITATION PROGRAM IN NEW HOPE AND CRYSTAL AND AUTHORIZATION TO PROCEED At the February 24, 1997, City Council public hearing regarding the use of 1997/98 Urban Hennepin County Community Development Block Grant (CDBG) funds, the Council authorized the allocation of $15,000 for a potential joint-city pilot project with the City of Crystal for the establishment of an enterprise facilitation program. At that time, staff indicated that the City had been discussing the project with Crystal and the Hennepin County Department of Jobs and Training and that the Hennepin County Office of Planning and Development had indicated that the cities could utilize CDBG funds to finance their portion of the program due to the micro business/job creation aspect of the project.-Staff requested that the Council set aside the funds for this project with the understanding that this action would not formally authorize City participation in the program and that staff would come back to the Council/EDA for formal authorization to proceed once funding commitments from other agencies had been made and the program was ready to proceed. Over the past nine months, staff have coordinated with Crystal, Hennepin County and Metro HRA to secure funding commitments and staff requests to discuss this program with the EDA and receive authorization to proceed with the establishment of the joint-agency program. Enterprise facilitation is an alternative approach to economic development which uses a grass-roots, bottom-up strategy. This model spurs economic development by working with individuals to create business opportunities rather than relying on the more traditional approach of a city attracting large businesses to a community. The program would help nurture local business development and expansion in order to stabilize the local economy and create new jobs. The program supports local entrepreneurs and encourages growth within the community. (cont'd.) MOTION BY {/~~(-~- SECOND BY Review: Administration: Finance: RFA-O01 Request for Action Page 2 11-24-97 Enterprise facilitation is based on the belief that entrepreneurs need technical assistance (rather than financial) to pursue their ideas. In order to offer the assistance, an enterprise facilitator would be hired and shared between the two cities and act as a catalyst to assist/encourage local business innovation. A local advisory board would be created to oversee the activities of the facilitator and it is anticipated that the TwinWest New Hope/Crystal Business Council could potentially serve as a portion of the board. A tentative budget for a two-year pilot project is attached and the estimated cost would be $50,000 - $60,000 per year. Metro HRA has made a commitment of $15,000 for a two-year period and Hennepin County will be making a similar contribution. Each of the two cities will be making equivalent contributions of $15,000 each for a two-year period and New Hope's share is proposed to be with CDBG funds and this use of the funds has been approved by Hennepin County. Staff will also seek contributions for the program from local businesses. The cities believe that this program will greatly benefit the many residents in our communities who operate businesses out of their home. Generally speaking, the home-based businesses are successful and provide needed services in the community. In many cases, however, the businesses have outgrown the parameters of the home and, preferably, should be located in a separate location so as not to violate local zoning ordinances and disrupt the neighborhood. This transition may be prohibitive for several reasons: inability to raise capital, unfamiliarity with the real estate industry, lack of formal accounting and business skills, and so forth, With Metro HRA's participation, the cities hope to demonstrate how enterprise facilitation can serve as another tool for self-sufficiency in the current welfare-to-work movement. The City of New Hope has a local Section 8 housing representative who provides contract services for the cities of Golden Valley, Maple Grove, Osseo, and Edina and will be actively involved in communicating the enterprise facilitation program to these Iow to moderate income residents. Additional information on the enterprise facilitation project is attached for your review. The City Manager is familiar with this concept and will be able to explain the program in greater detail at the meeting. Staff is requesting authorization to proceed with the initiation of this program and to utilize the CDBG funds allocated for this purpose. ', aw .~'cce, ~.linnesota ~5429.48~8 Police: ~ !2.531.5170 Pctice ~: ,~u'bh'c Works: ~12.533.4823 Public Wo~s F~: TOO: ~I2-531.5~9 ~;re O~'t. November 14, 1997 John McLaughtin. Planning and Information Services Manager Department of Training and. Employment Assistance 300 South Sixth Street Minneapolis, MN 55487-0012 Dear Mr. McLaughlin: Please find enclosed a request for financial assistance for a joint Enterprise Facilitation program from the cities of New Hope and Crystal. If there are any questions regarding this request, please contact either Kirk McDonald at 531-5119 or Anne Norris at 531-1140. Sincerely, Kirk McDonald Management Assistant/Community Development Coordinator Anne Non'is Assistant Manager Enclosures jd/KM/AN r~ ~1 ,~., ,For Family Living Family Styled City n"l;. ~/'",i~J~~ I. Community. Intent The cities of C¢/stal and New Hope, in partnership with Metro HRA, are requesting assistance from Hennepin County in our efforts to establish an enterprise facilitation program that will serve our communities. Both cities are committed to providing this alternative, bottom-up approach to economic development. A grass roots approach may be perceived as less intimidating than traditional economic development programs to residents who otherwis® might not seek entrepreneurial assistance. Specifically, we believe that this will greatly benefit the many residents in our communities who operate businesses out their home. Generally speaking, the home- based businesses are successful and provide needed services in the community. In many cases, however, the businesses have outgrown the parameters of the home and, preferably, should be located in a separate location so as not to violate local zoning ordinances and disrupt the neighborhood. This transition may be prohibitive for several reasons: inability to raise capital, unfamiliarity with the real estate industry, lack of formal accounting and business skills, and so forth. With Metro HIRA's participation, we hope to demonstrate how enterprise facilitation can serve as another tool for self-sufficiency in the current welfare-to-work movement. The City of New Hope has a local Section 8 housing representative who provides contract services for the cities of Golden Valley, Maple Grove, Osseo, and Edina and will be actively involved in communicating the enterprise facilitation program to these Iow to moderate income residents. The cities of New Hope and Crystal will supply staff time, advertising, and office supplies as needed. We plan to communicate the program by direct outreach, flyers, city newsletters, local newspapers, and community cable. New Hope and Crystal historically have cooperated on many local issues including health inspections, business retention efforts, and public works projects. Through the Twin West Chamber of Commerce, Crystal and New Hope operate a joint business council. This joint business council could be potential source of board members. 2. Local Financial Resource~ New Hope/Crystal Enterprise Facilitation Program Proposed Annual Budget Income City of New Hope $15,000 City of Crystal $15,000 Hennepin County $15,000 Metro HRA $15,000 T°tai $60,000 Expenses Enterprise Facilitator Salary and fringe benefits $40,000 Clerical Support 0 · Travel $1,300 Sirolli Institute Year 1 $15,000 Year 2 $6,000 Telephone 0 Office Supplies $700 Rent 0 Accounting/Audit $1,500 Computer 0 AdvertisingJPdnting $1,000 Miscellaneous $500 Total Year I $60,000 Year 2 $51,000 * In kind contribution. **Services to be provided include assisting in recruitment, selection and training of the . Advisory Committee members as well as Facilitator and ongoing support to both the Committee and Facilitator. In the second year, Sirolli Institute fees would decrease to $6,000, resulting in a second year budget of $51,000. 3. Organizational Structure The organizational structure for the enterprise facilitation program will consist of a Board of Directors that is trained by Sirolli Institute personnel. Once all members are trained, they will begin recruiting a program facilitator who handles the daily operations. This person reports directly to the Board. The ideal candidate will be someone with established business experience within the surrounding communities and preferably not someone right out of college. We will be contacting the City of Richfield to learn of their experience in hiring for this position. Although city staff is pictured on the organizational chart, the cities want to minimize the public role as much as possible if this is to be a nontraditional approach to economic development. Staff from either city will be available to provide assistance with various research requests. Also pictured on the organizational chart are the City Councils, Hennef~in County, and Metro HRA. The presence of these entities is important in terms of their financial role, but the Board will make all policies and final decisions. The dotted line represents these entities as overseers rather than active participants in the program. Enterl~rise Facilitation Program Organizational Chart IB°ard °f Direct°rs I New Hope City Council I Metro HR~ Hennapin Countyj ,I !' Crystal City Council Kink McDonald [ I A~ne NomS JaC=lUie Cavanagn I Facilitator 4. Financial Assistance Request The cities of New Hope and Crystal are requesting financial assistance in the amount of $15,000 for the enterprise facilitation project. This amount represents 25% of the annual program budget. The remainder of the program income will come from the following sourcee: City of New Hope $15,000 (1997 & 1998 Hennepin County CDBG funds) City of Crystal $15,000 (1997 & 1998 Crystal EDA-budget) Metro HRA $15,000 (1997 & 1998) .. Please refer to #2 Description of Local Financial Resources. Statement of Outcomes Without prior history, it is difficult to predict a set of outcomes. However, we anticipate the creation of seven new businesses and twelve business expansions within twelve months of program operation. We anticipate a range of 35-40 new jobs at a wage of $101 hr or greater and project over $800,000 as the dollar value increase in community economic activity. The figure includes 35 jobs at $10 per hour as well as spin-off activity and other related business investments that are much more difficult to quantify. 6. Program Commitment All parties involved are committed to support the Program for at least two years, a.nd preferably longer depending on its success. Two years will hopefully give the program enough time to gain visibility and independent cre61ibility so that future funding might come entirely from private sector investors. MetroPolitan Council . IVorkingfot' thz J~ogion. t:la, nin~tfor the Future I#t~rnal Mere Orandum DATE: November 6, 1997 TO: Chair and Membe~ ofthu Community Development FROM: Mary Ah~n, ~ SUI~RCT: ~u2rpr~ IS~tJg: Over the past several months tl~ lIRA has been involved in a number of workgroups whose locus has been an immvative approach to conmmnity economic developn~at called, "£ntn~e-he Facilitation." Thio unique model of business development starts at the gnus roots level by crest~n~ business opportunities Mth indjviduals from the 'bottom up', rather than through a pre-concaiv~d str~ttSy of an economic daveJopment project or other public agency. The process enlisLs the skills of a ~ained faolitamr that provides intenaive one-on-one essiftancc with potem~ enuvtxeneuts to work throu~ busine~q ideas and develop proger production, marketing end f'mancial msaaSen~nt sk01L An advisory committee made up of Local citizens, ofl'lcifll8 and business contacts ~rvea ~ th~ initial netw~rle for developing a client hem and abo provides a broad raflg~ of in- kind resources ofam nec~sary ia ll~ clevelopme~t, amrt up or eXlramion phases ora amah hush. ss. Among the 21oals of E~ Facilitation a:~ tha developrn~t ofn~v busin~s~s and n~w jobs, rm~Jt~ng in n mor~ ~olf su~cient popula~on. current f~d~al and at~te v~ifate tafortG policies ch~nGin~ thc £nr~ ofpubli~ usiamnoe and having aa their primary cnmponena to expoct~ support sad reward work, tho b4~.~, I~A ia in a uniqu~ pMition M provido this opportunity to its client base, ma~y of whom will be seeking employment in th~ near future. POLICY IiViPLICATIONS~ TI~ R~ionsl Bluewint id~n~ifi~ ~ following Counoil objectives that I~Omo~ the and mission of Entc~prise Faeflttation~ · Acrt~n Step lC slates that tl~ Council will suggort lo~ economi~ developmant initiatives th~u retain and foster the growth of local bu~/umes, brag n~v ~s/n~a m tha r~ion, ~ m ~ ax t~, a~enm ~ jobs for the ~gion u a whol~ are comistm with d~ Council's oth~ phm md · .4en~n Step !~). stms that tbe C. mm~ will support ~,ffom to impmv~ ~ ~d~lls of tho re~on's labor for~e to mee~ the ~annmt and future needa oftha econamy, ~ m st:renSth~ tha work rendine~ of all ~hc~ seekinll emp[o~nent. youn~ and difficult-to-employ people. · ~ctMn Step 2ii. Statos that ~ Creme, il will work ,o cma~o a metropolitan en2rpriM fund or i'ands. ,_,~-g privat~ and findinl sources for a wide varim7 of revi~lmdon putpow~ examine lmuible fundtni sources and work with local governmenta, comnamity d~v~lopment ~ and 0~..T''' s m identi~ t~ritaltz~on needs. · ,4etlon St~J2 $~. smt~ d~t ~h~ Cotlilcfl will glXmmta a fl~/bla, joint plsanin~ Inoca~ wherd~y lDcaJ communitie~ &nd other govemmzmM eati~ ~a w~ t~ath~ ~ teaolva ia~es of ~/m~l cone, am ia waya ~hat am tailemd to tha needa and cot~n~ of thoa~ invoiv~L FUNDING IMPLICATIONS: Co~ ~ tl~ ain't up of an ~.,,*~ l~adlitation I~'ojm will requin~ a fina~! c.m=~itmem of $1~,000 ~ yest for twu ~ars. Curt'eat balances in ~l~ opersti~ reserve accomm for Rte Soctton I! cmiflcata and vouc~r pro,ama will rapport tach an extraditing. PREVIOU~ ACTION: N'on~ I~ISCUS~ION~ In ~ent montl~, mffhaa fommlated e propmal that would l=ovide for the emblishmen~ of-,, Enmpri~e Fecillmion grogram in collabo~n with U'm cittca of Cv/atal, New ttolm end Henuepin County. The propoaed population for this initial project will be anid~nts aftha c~tiM of C~mt and N~ Holm. A significant ouu~-ach effort will d/m~ted ~ ti~ 281 Mttm ~ cltanta that at~ curtontly nmding ~n ~ comy~m4~ end will empha~iz~ th~ lmtmatial benefits available to them for parflcil~ion. The anticipated 8oala for a Section $ client involved in Enmprise Facilitation will be fold: $) To r~alize ~n inczeese in earning capacity throush small bu,~iness davalopmenq 2) Participate tn the Family Self Sufficiency Progntm and cream a special lIRA esm-ow account from the increuses realized tn earned income; and 3) al~'uttcly 'graduate"from tl~ Section $ rcm mssisMnce program when eclf-mtticioucy is attained. Sta~il eonunitm(t m avoiding duplication with any other effom b~ing f~ded or deveinped aa pstt of other welflue reform pto~t~'m in th~ county and would in fact, look far oppommi~iee to collab,~a~ with exis~h~ t-e~outc~ or ~imilar olmrationL 11×~8/97 1~: 18 METRO ~e pm~al ~quir~s a financia; commi~nt of $15,000 ~h f~ ~ ~o citWs, H~ Coun~ ~d Me~o H~, ~or a ~o~1 of~60,~ ~t w0~d ~d ~ fi~t y~ar of ~o~s for a f~im~r a~ an advi~ commi~. Assumi~ ~ ~rc ~ ~ ~uni ~dg~k a ~ c~~t of ~ ~o~ wou~ ~ req~s~d for ~e se~nd y~t of ~tions, m well Once ~iished, ~ ~~ ad~w co~ w~ld a~a~t ~ pu~g oth~ ~an~l~s ~d ~o~s as ~te fundin~ preJ~ a~l ~om &~ s~ o~o ofHo~ ~ Urb~ Develo~ (~D). S~ It~ o~ce smEwe~ prcs~n~ at ~e Ocm~ 29, 19~'H~ Advis~ C~i~e ~e~g ~e~ ~ pmg~m ~s ~sed ~ ~mi{ ~ ~a suppa~ive of such ~CO~~ATION: ~ ~e M~/i~ Council a~ro~ t~ ~pe~i~ of ItS,~ m ~t ye~ s~ up ~n~ for ~ En~ Faci~mfi~ ~j~ ~ ~ for ~o y~ ~f ~tion~ w~l not ~cead D~[opm~t, ~on~ with a l~ ~m t~ C~ o/C~ ~t ~y d~a~ ~b jolt ~av~. Metropolitan Council ~orktng £m' the ~gion, Planning for th~ Futur~ Internal Memarttndum DA~ Octob~ 23, 19g~ TO: HRA Adviaory ~OM: M~ ~ ~ M~g= ~ up', ra~ ~ ~u~ s pm~~ ~ of ~ ~ ~l~ ~jm m o~ public ~ up ~s~ for a f~i~m~ ~ au a~ ~~. ~.m~.g ~ ~ ~ m ~ b~ a ~ co~i~t of f~ or ~veloped as pm of o~ ~b ~ ~ ~ ~ ~ ~ *~ ~ f~ l~k for cc~ ~ ~m ~ sam ~ ~~ ~ ~ ~~ f~ ~ of~-~ ~ f~ ~ p~. F~ C~cfl ~ MH b ~ m ~ ~ SI5,~ f~ $ ~l~ ogre ~fl~ Facflima~ above ~ ~t l~m ~k ~ ~ ~ ~ ~ ~~ ~ any q~m ~ ~y h~ X?'fcn Avenue North : C,,? Ha/I: ~1£-531.5100 C,'~/Hat/Fax: Minnesota 5542~.4898 ¢oiice: ~12-531.5170 Pc/ice F~: 5t2.~1.~7~ Public WorKs: ~12.533-4823 PuCiic Wo~s F~: TDD: ~12.531.5109 ~fre Oeo't. F~: '512.531.5175 October 31, 1997 Mark Hendrickson, Senior Planner Hennepin County Office of Planning and Development 10907 Wayzata Blvd., Suite 260 Minnetonka, MN 55305 SUBJECT: New Hope/Crystal Enterprise Facilitation Project UPdate Dear Mark, As you are aware, the cities of New Hope and Crystal are still pursuing a joint enterprise facilitation project with the help of the Sirolli Institute. Some details have changed since discussion began last year and we would like to inform of you of these Changes. In order to assist with funding and as well as to help the cities target recipients that could benefit the most from this type of grass roots economic development program, the two cities are including Metro HRA as a fourth partner. Metro HRA's involvement would mean a redirection in the program's target population to Metro HRA Section 8 participants currently residing in the cities of Crystal and New Hope. Metro HRA would make an annual contribution of $15,000 for the first two years, as well as provide staff and program support. The concept was presented at the Metro HRA advisory committee meeting'on October 29, 1997. Ernesto Sirolli of the Sirolli Institute gave a presentation along with Mary Ahem, Metro HRA Manager. The advisory committee approved the use of funds and recommended that it be brought before the Community Development Committee at the November 13,1997 meeting for final approval. For your records, I have enclosed letters and documentation dating back to December 1996. The city of New Hope will submit a warrant request for funding of the project as soon as the Metropolitan Council and Hennepin County grant program concept and funding approval, the New Hope City Council grants its approval, and implementation of the program is under way. If you have further questior~s or need additional information, please call me at 531-5130. Sincerely, Management Intern Enclosures cc: Kirk McDorald, Managemer', Assistant/Comm:'.qity Development Coordinator Anne Norr',. Assistant City ..~n¢¢er City of Cr -'tal Family £ '!,d Sit',' .: '1 ; ., For Fcmily Livi.,~ February 20, 1997 Kirk McDonald City of New I Iopo 4~01 X¥1on Avenue New 11o1~ MN $5428 Dcm' Kirk: The current status of the Enterprise Facilitation Program and I-Icnncpin County's role in the project is as follow~: - On February 1 l, 1997, the County Board approved a contact for seiwices with the Sirolli Institute for the balance of 1997. The contract is to secure the setwiees of Dr. Sirolli to: work with communities, g~:ogrnpNc and cultural, interested in thc Enterprise Facilitation progrnm; to provide tzaini~g to community boards or~.nized to impleme~ tho program, to provide training to facilitators employed by the community boards to deliver the Enterpri~ Facili 'ration program, he will also serve as an ongoing resource for the Community Board and facilitator. Throughout the contract period Dr. Sorilli~ will continue to be available for presentation to interested community organizations, board and commissions. - While the administrative structure for m. ana~ of the program heJ not been finalized the attachod diagram reprcsenls an attempt to dcsign a Count~/wido adminisLmtDe function responsible for f. cscnl rm~mgement, fund raising, quality contel and proD-dm evaluation while providin~ the Community Board responsibility for direct program mnnngement of local service delivery and facilitator oversight Hcnncpln Count), through the Department of Training and Employment Assistance has madc a sii~ficant commitment to implementing the Ent.erprise Facilitation program thrOugh ez,~igGment of staQ'e, nd fiscal rcso~ Hennepin Count~ Training nmi ]Zmploymenc Assistance First ~evel Sou, It C}ow:mmenr C. enrer .~-~1 300 &',,.,ti'~ Sixth 5~cet Mirmeapolis, Minnesota 554,87-0017. (612) 348-8953 FAX (612) 348-39.32 UO'd 800'oN ZO:$I Z6'O~ qad ~£6£-8~£-~I9-~ :~3£ The City of New Hope's imcr~st in the Program a.d Willingness to r~scrve Commuaity Dcvelopment Block Grant funds to support program implementation is welcome. The Co'umy looks forw~d to working with the cities of New Hope and Crystal to structure a community-based Enterprise Facilitation Program. £0'd BOO'ON L0:$I L6'0a qaj a£6£-8P£-~I9-I :93£ Urban Enterprise Facilitation Program Organizational Structure Enterprise Facilitation B d Hennepin County TEA (funders, community spot. ors) · Administrative Support .. Fund Raising/Distribution · Contract Management ~ - · Program Advocacy · Standards Development · Outcome Ev~luation Sirolli Institute (~ommunity Bad · Community Education Board(s) of Management · Trainingfl'ech Assistance · Community Contracts · Project Organization * Fundraising · Quality Assurance · Assistance to/oversight of · Facilitator Network Enterprise Facilitator Enterprise Facilitator · Facilitate Business 5tart-ups · Facilitate Business Expansions ~O'd 800'°N ~O:S~ £6'0~ qad ~£6£-8~£-glg-z :331 Urban Enterprise Facilitation Task Force Organizational Concept Statement 1. Purpose. The purpose of the Urban Enterprise Facilitation Board is to sponsor the implementation of Enterprise Facilitation Tm in Hermepin County, to assist local communities to establish Enterprise Facilitation projects, to cooperate with existing agencies and development programs, and to assure consistency and quality in the delivery of project services. 2. Membership. The Board shall be comprised initially of representatives of community groups sponsoring local projects, and funding organizations. 3. Principles. a. Enterprise FacilitationTM is the program developed and defined by the Sirolli Institute. b. The Sirolli Institute shall provide technical assistance and training to the Board with respect to project development, quality control and program philosophy. c. The Urban Enterprise Facilitation Task Force is committed to developing a community based entity which will maintain to a "bottom up" program development strategy. d. The Task Force is committed to fostering Enterprise Facilitation as a community economic development tool. 4. Functions. The Task Force shall be responsible for: a. Raising funds to support local projects. b. Distributing funds to local groups. c. Establishing project quality and consistency standards. d. Evaluating program processes and outcomes. e. Providing continuing education to individuals and communities with respect to Enterprise Facilitation. 5. Operations. a. During an initial period of operation, the Task Force shall be supported by the. Hennepin County Department of Training and Employment Assistance which shall provide administrative, fiscal and contract management services. b. The Task Force shall determine an administrative support mechanism to succeed the County following the initial period. c. The Task Force shall develop an organizational structure and operating procedures consistent with the principles and responsibilities described above. Sustainable Grass Roots Economic Development · A UNIQUE METHOD OF LOCAL COMMUNITY' DEVELOPMENT THAT HELPS ENTREPRENEURSHIP THRWE · A MODEL TO FACILITATE NEW BUSINESS INNOVATION AND EXPANSION CREATING NEW WEALTH AND NEW JOBS IN COMMUNITIES o · ENTERPRISE FACILITATION TM RESULTS IN MORE SELF- SUFFICIENT PEOPLE IN HEALTHIER COMMUNITIES SIROLLI INSTITUTE 2 Io Cirque Drive Bozeman. Montana ~)71 ~ USA Tel 1-406-~$7-154.$ Fax 1.406-~$7-$$25 email: siroilinst@aoi.com What is Enterprise Facilitation'~? ............................................................................................................ How does Enterprise Facilitation TM compliment ~ditional economic development? ....................................... 2 What have Enterprise Facilitation TM projects actually accomplished? ............................................................... 3 What communities in the US are currently operating aA Enterprise Facilitation TM program? ......................... 4 How much does an Enterprise FacilitationTM program cost to implement and run? ......................................... ['tow do communities work with the Sirolli Institute? ............................................................................ 9 SIROLLI INSTITUTE ~ I 0 Cirque D~e Bozeman. Montana 59715 USA ' Tel 1-406-557.1548 Fax 1.406-597.$$25 email: sirotlinst@aol.com Have you ever wanted to reach deep into your local community to identify and support people during ~he inspirational and creative stages of business development-before deal making or financing? Enterprise FacilitationTM is such a model. It looks to the spirit of each aspiring entrepreneur and helps to grow skilled manage, and business leaders, who in turn inspire others: It supports your local en~preneurs with free, confidential, long*term assistance in developing ~heir dresms. The process is built on the passion, creati~ty and commitment of the people in your local area, encouraging small business growth from within the community. Through the creation of an advisory committee comprised of involved citizens and officials, it becomes a local rrnssroots initiative stimulating economic development from the bottom up. The Enterprise Facilitator provides intensive one~n-one assistance that compliments and enhances other strategic (tols down) programs offered by local development organizations and professionals. The Enterprise Facilitator operates in a highly v~sible, highly accessible and intensive support rode spending as much time as necessary with each client and serves as a switchbeard to route a multitude of resources to individual entropnneurs. · The advisery committee hires and supports the t~ainin! of · full-time Facilitator as the catalyst to assist and encourage local inevat~on and job development. · Enterprise FacilitationTM builds capacity within your community or region to respond effectively to changing economic and social conditions. · As ~nmr community members look to fulfill their dream, Enterprise FacilitationTM provides au atmnspbfl~ of mentorin~ that nurtures new business, new jobs and new wealth. SIROLL! INSTITUTE 210 Qrque Ot~ve Bozernan. M~tafla 3971 ~ USA Td 1.406-557-1548 Fax l.-.~6-557-~$25 emaq: siroilinst@~i.com S.Jul.97 I The Si~olli Institute believes that Economic Development is a process that should walk on two legs: 1.) top-down strategic planning and infrastructure installation; and 2.) bottom.up entrepreneurship and innovation. Enterprise FacilitationTM works on the second leg of development, which is frequently missing as an element in a community's economic development program. · It looks to the unique needs of individuals within a community rather than offering a predetermined service or a program; it then matches individual need with uniquely tailored services · It assesses personal commitment to a business idea before critiquing that idea's business viability and shortcomings It helps take ideas from a passionate dream to a practical reality through the proper management--production management, marketing management and financial management · It teaches team building to achieve that bus/ness practicality · It maintains a long-term responsive and confidential approach to business development · It sparks aa environment of encouragement that inspires other community entrepreneurs Enterprise FacilltationT'~ does not conflict with strategic economic development in that it: [] does no* replace or duplicate eshtinf business technical assistance or research prol~r,,-,,--.it increases the need for these activities [] does not encourage entnproneurs to start new business or seek to motivate individual: it relies on the entrepreneur's nwa inner spirit of motivetioa [] does not regrait er attra~ business to rolocat: it encourages local expansion and retention from within [] does not of~ ia~eetives or loans to clients or replace micro-lending initiativu--it helps supply more qualified applicants for alternative capital sources such as mic~tending programs [] does not replace revitalization programs or long-term planning--it maximizes their effectiveness by making appropriate and timely referrals to them $1ROtLI 210 Grque Or~,e Bozeman. Montana 5971 '~ USA Td 1-405-587.1~45 Fax I--~6-~aT-$S2S emaii: siroilinst~aol.com 8-Jul-97 2 £iuco/n County, M~urtesota bas a population of appro~dmately 6,800 and is one of Minnesota's most r~ counties, lu October, 1989, a six.month pilot £nterprise Facilitation TM project was initiated by the Lincoln County Commi.i~oo. The present annual wage impact of the program is estimated at $2,000,000 in a county with a to~ labor force of 3,000. ]'his was accomplished with an annual budget of less than $60,000. Yem in O~rndon: 6 Total Projects.- 351 Successful Business Start-ups: 55 Busineu Expansions: 61 New Wages from assisted proje~: $2.0 million annually New jobs created: !S0 Avenge cost per job over six years: $1,833 Lyon County, Mhmesota bas a population of approvlmatel! 30,000 and is quite a bit more urbanized than its aeigbber to the west, Lincoln County. In late 1991, an Enterprise FacilitationTM progmn was begun in Lyon County and bas been equally successful as the program described obove. In an activity report from early 1992 to December 1995 Lyon County reported the following results: Total Office Contacts: 211 Business Start-upo: 55 Business Expansian: 66 Total current jobs from misted businesses: . 190 New Wages from misted projects US$2.7 millien annuall! Avern~ annual proi~ram cast: $32,150 Average dollm spent per job: $740 £spfrancf, JYestfru ,4astra//a has a pilot project join~ funded by the Western Australia state government and the Australian Federal Department of Local Government in a community of 10,000 people in rural Western Australia. , A~ter the first three years an independent government report stat~: "In summar~ the achievements of the Es~'anct ~ Enterln'i~ Initiative Committee between 198S*1988 consist of contributions to the formation of 45 ope'ttiag baslnese, with a combined annual ~enue of abeat A$7.1 million and directly adding 77 net ~ull-tim equivalent jobs to the economy." · By 1996 the 10-~ear-oid project had misted in the creation of 32O new businesses with a success rate of 80 percent. The prol~am has been supported by beth liberal and conservative governments in Australia and has been used as a model to replicate in 35 other cities in western Australia. $1ROLLI INSTITUTE ~210 C~rque Drive 8o:eman, Montana ~g? 15 USA Td 1.406-~$7-1 ~48 Fax 1.406-557-$$28 email: sirollinstC~aoLcom 8-Jul-97 3 Location: Heunepin County, Minnesota Population Base: 1,042,000 persons Land Area: 560 square miles Project Contacts: Larry Blaclutad, Hennepin Community Works (612) 348-5859; John McLaughlin, Training and Employment Assistance (612) 348-8912 Project Description: Hennepin County is supporting the ~ation of 5-7 demoustrafioo projects in both inner city neighborhoods and first ring suburban municipal communities. Funding: Hennepin County, Neighborhood Revitalization Program, Community Development Block Grant, Municipal HRA, Private Busineues, Foundations Location: Blue Earth County, Minnesota Population Base: 54,000 persons Laud Area: 650 square miles Project Contacts: Al Bennett, Commissioner (507) 389-8282; Milton Toratti, Enterprise Facilitator (507) 386-7285 Funding: Blue Earth County, Northwest Area Foundation, Farmer's Union, Local Businesses Project Description: Project in full operation for 30 dots. Enterprise Facilitator is serving 14 initial clients. Location: Lincoln County, Minnesota Population Base: 6,800 pemns Land Area: 540 square miles Project Contac'ts: Michad Bud&, General Ma~or, Lyon-Lincoln Electric Cooperafiv, (507) 247-5505; V~nce Rebiusoa, Enterprise Facilitator (507) 694-1470 Funding: Lincoln County, Southwest Inidatis, Fund, USDA, Private Businesses Project Description: Pro,,ct in operation for men (7) years. Most recent data available: I.) annual project cost under $60,000 annually, 2.) 55-60 new tsnsinems/expausion clients perm 3.) 177 new jobs from misted businesses; 4.) $2 million annually in new wages; 5.) approximately $2,000 per job mated. Location: Lyon County, Minnesota Population Base: 25,000 persons Land Area: 715 square miles Proj~ Contact: Mark Veglabn, Enterpris, Facilitator (507) 537-6702 Funding: Lyon County, USDA, Private Businesses Project Description: Project in operation for four (4) years. Most recent data available: 1.) annual project cost under $50,000; 2.) 60-70 new busine~expausion clients per year; 3.) $-Jul-97 4 190 jobs created in three years; 4.) $3.I million ~nually in wages ~rom e. ssisted projects; 5.) Less than $1,000 cost per job created. Location: Dakota County, Minnesota Population Base: City of Hastings- 18,000 persons Land Area: 6 square miles Project Contacts: LaDonna Boyd, Economic Development Director, Dakota Elec~c Assn. (612) 463-7134; Roe Toppin, Enterprise Facilitator (612) 480-2226 Funding: Electric Cooperative, City of Hastings, McKnight Foundation, Private Businesses Project Description: Project in full operation for 90 days. 17 clients have sought new business star~. up or expansion assistance. Location: Huron, South Dakota Population Base: 17,000 hxTning families Land Area: State-wide Project Contacts: Dennis Wiese, President, NEI~ (605) 352-6761; Guy Rusche, Enterprise Facilitator (605) 352-1885 Funding: South Dakota Farmers Union, USDA, Northwest Area Foundation, Private Business Project Description: Project in full operation for six months. 54 clients have come for~azd for services, project received partial funding as first grant awarded in America under USDA program "Fund for Rural America". Location: Badlands (Eight County Area), South Dakota' Population Base: 30,000 persons Land Area: 12,500 square miles Per Capita Income: $6,6';5 (Shannon County $3,400) Project Contacts: Carolyn Johnson, Executive Director, Badlands RC.&D (605)685-6629; Nancy Johnson, Enterprise Facilitator (605)665-6983 Funding: Badlands RCA:D, South Contzal RC&D, USDA, Northwest Area Foundation, Private Businesses Project Description: Project in fuji operation for on]~ 30 days. 'rite Enterprise Facilitator has 33 active clients. Companies incJude a start*up lnteruet service provider, a furniture stain mabr and a bed and bnakfust. Location: T~rn~r County, South Dakota Populatium Ba~:. 8,000 pemns L~nd ~ $15 square miles Project Contacts: John Chicoine, President of the Board (605) 297-4481; David Lambert, Enterprise Facilitator (605) 297-4700 Funding: Fundin~ for the project wu provided by seven (7) municipal sovernments within the county as a coopera~e project, Turner County, local hanks and businesses, USDA and South Dakota Farmers Union. 8-Jul-97 5 Project Description: Project in full operation for 30 clan, tea (10) clients have stepped forward for Location: Simton-Wahpeton, Siou Tribe, South Dakota Populatioa Base: 12,000 pe~us Land Ar6.a: 2,200 square miles Project Contacts: Gary Johnson, Director, Planning & Development (605) 695-3911; Barxy Zephier, Enterprise Facilitator (605) 695-3911 Funding:. Siueton-Wahpeton Sioux Tribe, USDA, Northwest Area Foundatioa Project Description: The project operates in conjunction with the Tri~ Community College Management Training Institute and directly interfaces with Tribal Planning Council and Tribal Credit Union. In cooperation with the Tribal College, 50 clients have been identified. The project is in its first 60 days of operation. $.Ju1-97 6 On the basis of the $iroili Institute average projects, t:irst year and annual costs to implement and operate an £nterpr~se Facilitation ~M project are as follows: FIP~? YEAR PROJECt BUDGET $irolli Institute Technical Assistance and Training See Description Belowt $25,000. Enterprise Facilitator Eight (8) month salary~ 21,333. Frln~ Benefits @ 25% x 9 months 5,333. Accountin~Auditing May be donated 1,500. Equipment ¢omputer~F~PhoneS 3,000, Insurance Directors & Officers Liabilit7 1,000. PrintinltPostoge Promotiou~luformational 1,000. Rent Ma7 be ia-kind4 3,000. Telephone In a small area - not a largo item 1,200. Travel Mllea~ @ .301mile~ 2,000. Miscellaneous Out of pocket 634. First Year Subtotal $65,000. Notes: 1.) Commuilies enter into n contract with the $irolli lastitoto for $25,000430,000 per project which start-up costs cover commaait7 edneatio,, leadership identification, stern'iai committee recruitment and training, facilitator screening a~d traiaial ami project start-op. This start-up preceu takes from four to six mouths. 2.) la the first project year the focilltalm* is ant hired ~mtil the leadership, communit7 development and capecit7 building phases are mature. In this example thes, steps hay, take~ four months. Salaries will vary with provailing wag, scale for similar employees. 3.) Proper communications is essential to succeu of the project. However, sometimes this equipment is available through a local government or bank. Oa occasion the equipment is donated. 4.) Rent to is also donated frequend7. 5.) Local travel is reimbursed at prevailing local rate per mile. 8-Jul-97 7 SECOND YEAR PROJECT BUDGET Siroili Technical Anistance See Description Belows $6,000. Enterprise Facilitator Full.year ~arT? 32,000. Frinfe Benefits @25% x 12 months S,000. Accountin~Auditinw May be donated 1,500. Insurance D~roctor's & Officers 1,200. Printin~JPostate Promotional/Information 1,200. Rent May be doaated 3,000. Traininw Facilitator Refresher Courus 2,500. Telephone Averote Expense 1,200. Travel Lscal Travel 2,000. Miscellaneous. ' Out of Pocket 400. Second Year Subtotal $$9,000. Notes: 6.) After initial project implementation the Sirolli Institute provides on*foinf suppert, trouble-shooting, monthly monitoring and annual re-certification for approximately $$00 per month depending on community needs. 7,) Salary will vary with prevailinw ~ scale for similar employees. 8.) This line item includes travel, meals and tod~ng as well as tuitioL S..Jul-97 S If you feel your community might benefit from applying Enterprise FacilitationT'~ techniques locally, please call, write or e-mail us at the Sirolli Institute. Contact the Sirolli Institute to: · Request additional information packets like this one for other memben of your community · Request Sirolli Institute about making an introductory presentation to a local leadership group or present Enterprise FacilitationTM at local seminars, forums or annual me~tings , Purchase a copy of the Sirolli Institutes introductory video to be shown at local community meetings; cost $15 per copy plus shipping and handling , Purchase a copy of the book l~pp]os ht the Zambezi bY Ernesto Sirolli for $15.00 per book plus shipping and handling · Request the Sirolli Institute send you a proposal to enter into a contract for community education and/or actual project implementation · gequost information on the $1rolli lnstitute's three (3) and five (5) day training counes SIROLLI INSTITUTE 210 Cirque Ddve Bozeman, ~4ontana 59715 USA Tel 1.406-587-1548 Fax 1.406-587-8828 email: sirollinst@aol.com 8-Jul-97 9