052493 EDA OFFICIAL F~LE COPY
C~Y OF NEW HOPE
EDA AGENDA
EDA Regular Meeting//8 May 24, 1993
Agenda//8
President Edward J. Erickson
Commissioner W. Peter Enck
Commissioner Gerald Otten
Commissioner Terri Wehling
Commissioner Marky Williamson
1. Call to Order
2. Roll Call
3. Approval of Minutes of May 10, 1993
4. Discussion Regarding Addendum to City of New Hope Development Contract for
Autohaus Addition (Improvement Project No. 467)
5. Resolution Establishing the New Hope EDA Support for Co-op Northwest
Community Revitalization Corporation, F/K/A New Hope Community
Revitalization Corporation
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes May 10, 1993
Meeting #7
CALL TO ORDER President Erickson called the meeting of the Economic Development
Authority to order at 10:46 p.m.
ROLL CALL Present: Erickson, Enck, Wehling, Otten, Williamson
APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner
Enck, to approve the EDA minutes of April 26, 1993. All present voted in
favor. Motion carried.
IMP. PROJECT 462 President Erickson introduced for discussion Item 4, Motion Approving
Item4 Supplemental Corrective Action Design Workplan for 42nd/Nevada
Avenues Soil Contamination Cleanup (Improvement Project No. 462).
MOTION Motion was made by Commissioner Enck, seconded by Commissioner
Item 4 Otten, approving supplemental corrective action design workplan for
42nd/Nevada Avenues soil contamination cleanup (Improvement Project
No. 462). All present voted in favor. Motion carried.
IMP. PROJECT 462 President Erickson introduced for discussion Item 5, Approval of Bid
Item 5 Submitted by Bergerson-Caswell, Inc. for Groundwater Quality Monitoring
Well Construction for 42nd/Nevada Avenues Soil Cleanup Project
(Improvement Project No. 462) in the amount of $6,982.00.
MOTION Motion was made by Commissioner Williamson, seconded by
Item 5 Commissioner Enck, to accept the bid submitted by Bergerson-Caswell,
Inc. for groundwater quality monitoring well construction for 42nd/Nevada
Avenues Soil Cleanup Project {Improvement Project No. 462) in the
amount of $6,982.00. All present voted in favor. Motion carried.
JOINT AGREEMENT President Erickson introduced for discussion Item 6, Resolution Approving
Item 6 Joint and Cooperative Agreement Between North Metro Business Retention
and Development Commission and City of New Hope; Authorizing the
EDA's President and Executive Director to Sign.
Mr. Donahue explained that New Hope has been invited to join the Cities
of Blaine, Brooklyn Park and Brooklyn Center in a joint effort aimed at
obtaining comprehensive information about the needs of our business
community for the purpose of retaining those businesses in the future by
serving them better and meeting their needs. The service to be provided
this year will be a survey of the City's largest 100 businesses.
Commissioner Enck asked whether there is any cost commitment on the
City's part.
New Hope EDA May 10, 1993
Page 1
Mr. Donahue stated if the City wishes to stay with the Commission, then
there may be a future assessment of approximately $30,000 per year.
Decisions can be made next fall regarding continuation for 1994.
Commissioner Wehling inquired whether this will provide adequate time to
complete the survey.
Mr. Donahue stated the survey of 100 businesses is part of the project
which will be completed at no cost even if it continues into 1994.
EDA RESOLUTION Commissioner Enck introduced the following resolution and moved its
93-08 adoption: "RESOLUTION APPROVING JOINT AND COOPERATIVE
Item 6 AGREEMENT BETWEEN NORTH METRO BUSINESS RETENTION AND
DEVELOPMENT COMMISSION AND CITY OF NEW HOPE; AUTHORIZING
THE EDA'S PRESIDENT AND EXECUTIVE DIRECTOR TO SIGN". The
adoption of the foregoing resolution was seconded by Commissioner
Wehling, and upon vote being taken thereon; the following voted in favor
thereof: Erickson, Otten, Enck, Williamson, Wehling; and the following
voted against the same: None; Absent: None; whereupon the resolution
was declared duly passed and adooted, signed by the president which was
attested to by the executive director.
ADJOURNMENT Motion was made by Commissioner Williamson, seconded by
Commissioner Enck, to adjourn the meeting. All present voted in favor.
The New Hope EDA adjourned at 10:49 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA May 10, 1993
Page 2
~(~~~ ~ REQUEST FOR ACTION
Originating Department Approved for Agenaa Agenda Section
City Manager EDA
5-24-93
Kirk McDonald I ) Item No.
By: Management Assistant By:// 4
DISCUSSION REGARDING ADDEN~DUM TO CITY OF NEW HOPE DEVELOPMENT
CONTRACT FOR AUTOHAUS ADDITION (IMPROVEMENT PROJECT NO. 467)
This matter was tabled at the April 26th EDA meeting with the understanding that the City
Engineer and staff would review the storm sewer requirements included in the plan and bring
a recommendation back to the EDA. As you are aware, Autohuas is requesting that the $26,000
bond on the project for storm sewer improvements be released so that those funds could be
utilized for improvements to the front of the site. It is staff's intention to try and view the
Autohaus site prior to the EDA meeting and be prepared to make a recommendation on the
necessity of the storm sewer improvements.
The attached Development Contract and Resolution were presented at the April 26th EDA
meeting. If the EDA determines to delete the storm sewer improvements, the Development
Contract will need to be modified.
MOTION BY ~ SECOND BY ~/~[ ~
Review: Administration: Finance:
RFA-O01 Ii
_ ot:Mirmm, t olis, Inc.
LEASING ge SALES/FOREIGN AND DOMESTIC AUTOMOBILES
Audi March 18, 1993
GM
FORD Mr. Dan Donahue, City Manager
Mr. Kirk McDonald
Management Assistant/Community Development Coordinator
NISSAN City of New Hope
4401 Xylon Avenue North
HONDA New Hope, Minnesota 55428
RE: Addendum to City of New Hope Development Contract
CHRYSLER with Autohaus of Minneapolis, Inc.
~ Dear Mr. Donahue and Mr. McDonald,
Thank you for your letter of February. 19, 1993. As you know, we would like to
BMW complete the proposed work as soon as practical, but would reiterate some of
the things that I told you of.
MERCEDES First of all, we were planning on doing the work north of the south line of the
building last fall. Because of the weather and scheduling conflicts, that could
VOLVO not be accomplished. We are planning on having that work completed as
soon as the spring weather and road conditions would allow.
ACURA We would request the City, though, to help this project, release the certificate of
deposit in the amount of $26,300 to fund a portion of this work. As you know,
T O Y O T A the car sale business has been slow and I have had some internal accounting
problems here that have delayed and affected our ability to complete the work
initially contemplated in a timely fashion.
PORSCHE
I would also like to remind you of the $187,000 initially borrowed. That balance
JAGUAR is now down to approximately $118,000. We have been trying to pay that in
advance as cash flow would allow, and our records reflect that we have paid
approximately $23,000 ahead of schedule. I would request that you take that
into consideration in releasing the certificate of deposit.
7709 42nd Avenue North ~r Minneapolis, MN 554£7 ~r (812) 555-5707
Page 2
City of New Hope, March 18, 1993
I would also like to note that we have done a substantial amount of
improvements and betterment to the property. We have painted the building,
installed new awnings and have a new sign ordered to be installed this spring.
The building's aPPearance has been dramatically improved by these efforts.
In regard to the back portion of the lot, we would request that you allow a delay
of between three and four years to complete that part of the work. You know
that we have done a lot of work back on that property, too, and have done
grading after removing bad material and products that have been dumped
there. We have also grassed in the area, so it will be neat in appearance.
The automobile industry has been severely hampered by the economic
recession that we have had. In the history of the United States, automobile
companies themselves have suffered some of the largest losses in history. Our
business is progressing, but we have not made the strides, nor had the sales
that we had hoped for, and that is another reason for the request for delaying
some of this additional work.
We have removed the building in the front part, which was an eyesore, and are
doing everything within our power to meet these development goals and
deadlines.
We would appreciate your consideration for this last request. I will be waiting
to hear from you in the hopes that we can resolve these matters on an
amicable basis. Thank you for your consideration.
. /' .
Sincerely,
/
AUTOHAUS~OF MIJ~NEAPOLIS, INC.
Tho~a~Bo~cher, President Ih Vice President
aware of it prior to the purchase of the property.
Mr. Lang maintained his position of not being able to concede to the
$10,000 stipulation.
MOTION Motion was made by Commissioner Williamson, seconded by
Item 4 Commissioner Wehling, approving Execution of Addendum to Assessment
Agreement without the $10,000 payment clause.
Preceding voting on the motion, Commissioner Enck requested clarification
on the minimum market value.
The City Attorney stated the market value will be determined by the
Hennepin County Assessor with the minimum market value set at
$5,000,000. He also clarified that based on the preceding motion the
language regarding the $10,000 payment will be deleted from the
Addendum.
VOTE ON MOTION Voting in favor: Williamson, Wehling, Otten, Erickson, Enck; Voting
Against: None; Motion carried.
Commissioner Enck conveyed his support for the amendment and pointed
out that the original purpose of the contract was to satisfy the debt of the
tax increment financing bonds.
Commissioner Otten indicated that the EDA is very pleased with the new
~ ~-~ ............ management and hopes Mr. La ng has not been offended by any
discussions which have taken place.
JECT 467 ~ President Erickson introduced for discussion Item 5, Resolution Authorizing
(?m,
Item_ 5 j ~//~ Addendum to City of New Hope Development Contract for Autohaus
~.~. - ~-t'--_5 ...... ..... · Addition (Improvement Project No. 467).
Mr. Donahue stated on April 12th the EDA approved an extension to the
development contract between the City and Autohaus. As a result, an
addendum to the development contract has been prepared and is now
before the EDA. The Addendum does not release the Letter of Credit, as
requested by Autohaus, and Autohaus would like to discuss this further.
Mr. Donahue explained that when ha recommended return of Autohaus'
advance payments of $22,000, he was unaware of their refinancing
efforts. He stated as part of the refinancing, Autohaus is using the excess
$22,000 as part of the basis for the new mortgage. The request by
Autohaus is to be relieved of the $26,000 letter of credit obligation which
guarantees the developments.
Commissioner Enck cautioned the EDA against releasing the letter of credit
as it would be a significant precedent setting move in the City of New
Hope. He pointed out that the financial guarantee is designed to guarantee
certain development work and the project is not yet complete.
President Erickson questioned the possibility of the EDA holding the
New Hope EDA April 26, 1993
Page 3
, $22,000 advance payments to guarantee completion of the development
work.
Mr. Sondrall commented that even if President Erickson's suggestion was
permissible, it would not assist Autohaus since earmarking the $22,000
for development improvements would affect their financial Situation
pertaining to the refinancing issue.
Discussions continued regarding the improvements. Mr. Oestreich
contended that the financial .security was required for assurance of proper
storm sewer work when the rear property is developed. He continued by
stating since they entered into the contract the auto business has
changed. He emphasized that they have dramatically improved the rear
portion of the site by removing debris and planting grass. He mentioned
the poor economy and that they have tried to cut their overhead including
personnel cuts. Mr. Oestreich continued by reporting the drainage on the
rear property is adequate and wondered whether the EDA would release
the financial guarantee if Autohaus agreed to forego future development
of that portion of property.
He also made reference to higher property taxes due to the purchase of
the animal hospital property and school district property. He stated the
property was consolidated into one large parcel causing real estate taxes
to increase by $9,000. :
Mr, Oestreich concluded by pointing out they desperately need the funds
freed up in order to finish the front lot improvements (sign, paving,
landscaping, sidewalks, and front entrance).
The EDA expressed its desire for Autohaus to conclude the development.
Mr. Hanson confirmed that the $26,000 guarantee was required because
at the time Autohaus purchased the property from the school district they
planned to pave the rear area. The improvements included developing a
storm sewer system that would collect water from the bus garage plus the
new part of their site. The storm sewer system would bring the water to
a retention pond that would treat the storm water from the drainage area
before discharging it into the wetland (Old Dutch Pond). He pointed out
that the Autohaus property must be dealt with in accordance with the
wetland standards; however, if Autohaus' plans haVe changed, the storm
sewer improvements may not be warranted.
Mr. Sondrall raised the issue of amending the original development
contract. He stated the purpose of the loan was to allow Autohaus to
make private improvements plus public improvements for which the City
required a financial guarantee. He commented that currently the
development contract is such that it requires Autohaus to improve the rear
area and provide storm sewers. If Autohaus fails to improve the back
portion of their lot, they would be in default and the EDA could enforce the
contract by taking legal action.
He continued by stating the contract can be amended if the EDA desires
New Hope EDA April 26, 1993
Page 4
to relieve Autohaus of certain obligations involving the rear property. The
contract could be amended to proVide Autohaus the option versus the
requirement to make rear lot improvements. He pointed out that by
providing this as an option, the financial guarantee would not be necessary
until they actually request permission to develop the area.
President Erickson stated the City has cooperated extensively with
Autohaus and if necessary may have to provide another extension to the
deadline for the rear property improvements.
Commissioner Williamson suggested re-negotiating the development
contract and reconsider the necessity of drainage work in the rear of the
property.
President Erickson stated the main objective of the contract was
completion of the front yard improvements.
Mr. Donahue offered to review the site with the City Engineer and make
a recommendation regarding the contract at a future meeting.
President Erickson suggested EDA members join staff to physically view
the Autohaus site.
MOTION Motion was made by Commissioner Wehling, seconded by Commissioner
Item 5 Williamson, tabling approval of the Addendum until May 10, 1993, and
directing staff to prepare a recommendation regarding storm sewer
requirements. All present voted in favor. Motion carried.
ADJOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner
Ottsn, to adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 9:47 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA April 26, 1993
Page 5
April 23, 1993
Kirk McDonald
Management Asst.
City of New Hope
4401X¥1on Avenue North
New Hope, MN 55428
RE= Autohaus Addition
Our File No, 99.15025
Dear Kirk:
Enclosed please find a proposed Resolution Authorizing Addendum to
City of New Hope Development Contract for Autohaus Addition.
If you should have any questions, please contact me.
Sincerely,
Martin P. Malecha
s3f
Enclosures
cc: Daniel d. Oonahue
Valerie Leone (w/eno)
Steven A, $ondra11, Esq.
RESOLUTION NO. 93-
RESOLUTION AUTHORIZING ADDENDUM TO
CITY OF NEW HOPE DEVELOPMENT CONTRACT
FOR AUTOHAUS ADDITION
BE ZT RESOLVED by the City Counctl of the City of New Hope as
follows:
1, That the Addendum to City of New Hope Development
Contract between the City of New Hope, Autohaus of' Minneapolis,
Inc., and Thomas Boettcher, attached hereto as Exhtbit A~ which
modifies the original Development Contract between the parties
dated Apr~l 4~ 1991~ is in the best ~nterest of the CJty~ ts hereby
approved ~ and the C~ty Manager and Mayor are hereby authorized to
s~gn satd Addendum.
Adopted by the C~ty Council this _ day of Apr~l~ 1993.
Edw, d. Ert¢kson, Mayor .....
Attest=
Valerie Leone, Ctty Clerk
ADDENDUM TO CITY OF NEW HOPE
DEVELOPMENT CONTRACT
1. Part~e~. The parties to this Addendum are the City of New
Hope (hereafter City)~ Autohaus of Minneapolis, [nc.
(hereafter Autohaus) end Thomas W. Boettcher~ ~ndividually
(hereafter Boettcher).
2, Purpose. This Addendum shal~ modify the Aprtl 4, 1991
Development Contract entered ~nto by the partieD. Autohaus
and Boettcher acknowledge and agree that they ere in breach of
the performance conditions of said contract and in
consideration for the City's agreement not to Immediately
pursue its remedies under the terms of the April 4~ 1991
contract aoettcher and Autohaus have agreed to enter into this
Addendum.
3. UnDerform~ Cqndt[ions. Specifically, Autohaus and Boettcher
acknowledge and agree that they have fa~led to perform all the
requirements of paragraphs 2.A) through Z) and 3 of the
Development Contract, With respect to the work required by
these provisions the parties hereto agree es follows:
a,) The ~nstallation of concrete curb from the most southerly
wall of the building northward to the property ltne shall
be completed by October 31, 1993. The remainder of the
curbing aD shown on the site plan shal~ be insta~ed by
October 31, 1994. All curbing shall be of a surmountable
type es approved by the City, Autohaus and Boettcher
shall submit a diagram of said curbing fo~ approval to
the City prior to ~nstallation,
b.) Znstallation of bituminous paving ~n the body shop and
repair storage area sha~l be completed by October 31~
1994,
c.) All plant~ngs shown on the s~te plan north of the
buildings most southerly wall shall be ~nstalled by
October ~1~ 1995. All other plantings shown on the site
plan shall be ~nstalled by October 31, 1994.
d.) The six-foot opaque security fence around the per,meter
of the body shop and collision repair storage area shall
be installed by October 31~ 1994. The existing fencin~
shall remain in place until the .new security fence is
installed.
E~bit A
e,) The installation of lighting shown on the site plan eha11
be completed by October 31, 1995, However~ the parties
agree that the existing lighting for the collision repair
area as of the date of this Addendum is adequate and no
further lighting is required notwithstanding the l~ghttng
required by the site plan.
f.) All planted areas completed ~n 1953 will be sprinkled by
October 31~ 1993. All planted areas completed in 1994
will be sprinkled by October 31, 1994,
g.) The installation of the outdoor trash enclosures will be
completed by October 31, 1994.
h.) The front display area will be completed by October 31,
1993. However, the parties agree that the front d~splay
area can be paved with concrete and bjtumlnous.
~.) The islands tn the transport lane area will be installed
by October 31, 1994.
j.) The public improvements for storm water drainage and
erosion control required by paragraph 3 of the
Oevelopment Contract must be completed tn conjunction
with the construction of the bituminous paving tn the
body shop and repair storage area. Autohaus and
Boettcher &cknowledge =nd agree said bituminous paving
will not be allowed unless the drainage and erosion
control work ~s completed simultaneously with the paving
work all to be completed no later than October 31, 1994.
Effect of Adde.~du~. The parties agree that this Addendum
shall not change the other provisions of the April 4, 1991
Development Contract which shall remain ~n full force and
effect. This Addendum shall be construed as supplemental to
and not inconsistent w~th the Development Contract. The
parties further agree that a breach of this Addendum shall
&1so constitute a breach of the Apr~l 4, 1991 Mortgage,
~ecurtty Agreement and Fixture Financing Statement given by
Boettcher to secure the April 4, 1991 Mortgage Note executed
by Boettcher, Autohaus further agrees that the assignment of
the Certificate of Deposit 9~ven as financial security to
insure performance of the Development Contract shall also
extend to this Addendum.
CITY OF NEW HOPE
Dar ed: . By
It s Mayor
Dar ed: By
Its City Manager
AUTOHAUS OF MINNEAPOLIS, [NC.
Dar ed: By
Its President
Dar ed: ........
ThomasW. Boettcher, individually
STATE OF MINNESOTA )
) ss,
COUNTY OF NENNEP[N )
The foregoing wes acknowledged Before me this~ day of
, 1993, by Edw. J. Er~¢kson ~nd Da~el J.
Donahue, the Mayor and City Manager, respectiYely, of the City of
New Hopes & Minnesota municipal corporation, on ~ehalf of sa~d
municipal co~poratton.
Nota'~y-Public
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEP[N )
The foregoing was acknowledged before me this . day of
.. , 1993, by. ._ , the
President of Autohaus of M{nn~p°li~, 'Znc., a Minnesota
corporation, on behalf of said corporation.
Notary Public
STATE OF MINNESOTA )
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this day of
, 1993~ by Thomas W. Boettcher, individually.
Notary Public
c:\wp51\autohaus.add
4
'.~ q/~,.] REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager EDA
5-24-93
Kirk McDonald [~ Item No.
By:~
By: Management Assistant 5
RESOLUTION ESTABLISHING NEW HOPE EDA SUPPORT FOR CO-OP
NORTHWEST COMMUNITY REVITALIZATION CORPORATION, F.K.A. NEW HOPE
COMMUNITY REVITALIZATION CORPORATION
The New Hope Community Revitalization Corporation was originally established as a non-profit
entity for purposes of passing funds on to assist with the construction of Winnetka West, the 26-
unit housing facility for disabled persons. City staff is proposing that this non-profit entity now
be expanded to include all 5 cities involved with the Co-op Northwest Community Revitalization
Corporation. The 5-City non-profit organization would have access to Federal housing funds
through a competitive grant process that otherwise would be unavailable to local units of
governments.
The enclosed resolution states that the EDA supports the concept of the Co-op Northwest
Community Revitalization Corporation and directs staff to support the creation and operation of
the 5-City non-profit organization.
Staff recommends approval of the resolution.
Review: Admin/stration: F~nance:
RFA-O01 ~
r.!~'-r'--z~--~5 rHu 1 -L ; 1 ? ~;;ORR · ~Z.;K & SOI'--II) RALL P . 02
May 20, 1993
Dante1 d, Donahue
City Manager
City of New Hope
4401Xylon Avenue North
New Hope~ MN 55428
RE; CO-OP Northwest Community Revitalization Corporation
Our File No: 99.1002~
Dear Dan:
Enolosed you wi1] find a Resolution supportln9 the CO-OP Northwest
effort, This Resolution can be considered at the next EDA meeting.
As usuals the or~9inal has been forwarded to Valerte, along with a
fax to K~rk.
Please contact me if you have any questions.
Very truly yours~
M~rttn P. Malecha
slt
Enclosure
cc= Kirk McDonald (by Fax)
Valerte Leone (w/eno)
MAY--20--9~ THU i i : 1~ CORR I CK ~ SONBRALL P . 0~
EDA RESOLUTION 93-
RESOLUTION ESTABLISHING THE NEW HOPE EDA
SUPPORT FOR CO-OP NORTHWEST COMMUNITY
REVITALIZATION CORPORATION, F/K/A
NEW HOPE COMMUNITY REVITALIZATION CORPORATION
~, the City of New Hope (City) and the Economic
Development Authority in and for the City of New Hope (EDA) support
providing adequate, safe and sanitary housing to City residents,
and
WHEREAS, the City and the EDA are involved in a variety of
housing programs to meet this goal, and
WHEREAS, part of .the City's comprehensive housing program and
redevelopment efforts can be furthered by a non-profit organization
which has a major goal of improving the quality of housing
available to City residents, and
~, the City and its people would also benefit from a
non-profit organization which has additional goa3s of improving
human service and Jobs and training opportunities, and
WHEREAS, such a non-profit organization may have access to
funds otherwise unavailable to local units of government, and
WHEREAS, such & non-profit organization would also promote
more lo¢al control over these activities, and
WHEREAS, al~ of the above are part of the goals and benefits
of CO-OP Northwest, a task force involving the Cities of New Hope,
Crysta3, Robbinsdale, Brooklyn Center and Brooklyn Park, and
HE.~_.~~, attaining these goals and benefits can be enhanced by
changing the New Hope Community Revitalization Corporation into a
non-profit CO-OP Northwest Community Revitalization Corporation,
and
WHEREAS, support of CO-OP Northwest and its goals, and
changing the New Hope Community Revitalization Corporation into
CO-OP Northwest Community Revitalization Corporation, will be in
the best interests of the City and its people.
M~¥_20--~ THU li:i~ CORRICK & $ONDRALL P.04
NOW, THEREFORE~ BE IT RESOLVED that the Economic Development
Authority ~n and for the City of New Hope as follows:
1, That the EDA supports CO-OP Northwest and the CO-OP
Northwest Community Revitalization Corporation and
goals of providing adequate, safe and sanitary housing,
and improving human services and jobs and training
opportunlttes.
2. That the EDA staff ~s directed to take such actions as
are reasonable, necessary or convenient to support CO-OP
Northwest and the creation and operation of CO-OP
Northwest Community Revitalization Corporation,
Dated: ., 1993.
Edw. J. Er~ckson~ President
Attest:
~antel J.-DonahUe, E~eout~ve D~recto~
MEMO TO: Jerry Splinter
Dan Donahue
Jerry Dulgar
Fran Hagen
Craig Rapp
MEMO FROM: NWHH$C and the CO-OP Northwest Plannees Group
MEMO DATE: May 18, 1993
SUBJECT: Five City and NWHHSC application t~or a CHDO
Enclosed you will find information on the requirements for a Community Housing
Development Organization or CHDO. ,
CO-OP Northwest had explored the possibility of applying for a~ CHDO as a five city group
when the project began.
It is necessary to have a designated 501 C3 non-profit status to apply ~to becrme a CHDO.
Further this non-profit must be comprised of one third 'Iow income participants as well as
one third public sector and one third private sector.
New Hope has a designated 50I C3 organization entitled the Co~amunity Revitalization
Corporation created for the development of specialized housing in New Hope.
New Hope expressed a willingness to open up its existing 501 C3 to the other cities. We
met with their lawyer on May 13 to discuss revising the by-laws. This was done and the
existing board met on May 17 and voted to dissolve its existing structure to enable a CHDO
to be formed. We met with the Brooklyn Park HRA on May 13 as well. They voted to join
in this joint effort. We need to have resolutions passed by the particilating cities and/or
the sign off of the city managers to proceed with this process.
We have set aside Tuesday, March 25 from 1:00 to 4:30 p.m. t6 work on the proposal for
funding which is due to Hennepin County by June 1.
Application for funding could provide additional funds for housin[[ rehab in the participating
communities. Currently 15% of HOME funds allocated to suburban Hennepin County are
designated for CHDOs. CHDO funds are available to provide housing assistance to families
at or below 80% of the median income. None of the $240,000 in 1.992 CHDO HOME funds
have been used yet and there are $165,000 for 1993 available as well. Hennepin County
anticipates that $240,000 will be available in I994.
Their is a match for the actual rehabbing projects, but this can be accomplished through
staff in-kind time or through the difference in mortgage rates. At most, if cash were
contributed to the project, the cost would be 25% of the total.
If you have any questions, feel free to call Dave Greeman or Patty Wilder at 493-2802.
REQUEST FOR PROPOSAL '' -
g~.NNEPIN HOU$INH CONSORTIUM
INVESTMENT PARTNERSHIPS PItOHRAM
HennepEn Housing Consor~iu~ announces ~he availabil£ty o~ $~.~0~ m£~lion in
ay&liable 1993 federal Home Investment Partnership ~o~rim (~O/t~) funds.
There remains $253,350 in 1992 funds available for qualified Community Housing
Development 0rganiza=ions
PROJECT AILSA
The Hen=spin Housin~ Consortium represents all A5 suburban Hennepin County
colunt=ies. Projects must be located in suburban Hennepin County,
PR/ORITIES
Hennepin Housin~ Consortium has established as priorities for the
ac=tviC~es which propose affordable housing o~ a lon&-=erm basis for:
· very low-income families (at or below §0% of area median income);
· homeless families and individuals:
· persons wtCh special needs (Rhysical, developmental, men=ally ill,
AIDS, chemical deRendency); and
· which, when appropriate, provide supportive services.
Proposals ~or HO~ funds are limited =o =hose addresstn~ =he above priorities
through the followln6 types of activlt£es'
new cons=ruction, related infrastructure, substantial and moderate
rehabilitation for small and large families
· ~odera=e rehabilitation for existing homeowners
· moderate and substantial rehabilitation and acquisition for homeless
famiIies and individuals and persons with special needs
Proposals =o excluslvely serve the elderly or provide tenant-based rental
assistance w[ll no= Be accepted durtn& the ini=£al fundln~ process.
Community Housing Development Organizations ¢¢~DOs) may use funds
families or ~ndividuals with low-incomes (up ~o $0 percent of area median
income). Thls wilI allow CHD0s to under=eke activities involving homeowner-
ship.
~en=al housing w~ch a mixed tncom~ rental structure c*n be assisted; howevtr.
all HOHE assisted units must meet the above cricerta.~
~PPLICANTS
Eligible applicants include governmental agencies, non-profit agencies and
for-profiu entities. Requests for asses=ante to individuals will hOC be
accepted.
PRO'frAM RE~UIREHENTS
Appltcancs mus= comply wi=h all requiremen=s of the Home Inves=men= Par=ner-
pro~r~ are included in =he ~P packeu. A con=fac= ounlinin~
doc~en=s ara available upon r~ques=.
~ere is a federal ma=~h requiremen= for =he I993 fun~s: 30 per=anT f~r new
co~=~c:Ion, 2~ p,=cen= fo= all ocher ac:ivi=les. ~e ma=ch =a~= replace
pr:jec= e~uiT%. I= is =he responsibili=y of =he appli=an= =o sec~a
~der sections 92.218.92.2~0.)
He~epin Coun=y wtll review =he a~pltcaclon and cer=~fy whe=her or no= the
proposed ac=iv~ is cons is:enu wi=h =he Henna, in Ho~in~ Co~or:i~ Co.ra-
w, ch =he C~S tn or,er co be eligible for ~0~ f~din&.
HO~ assis=ed uni=s built prior :o 1978 and which may po=encially be occupied
by small child=eh m~: be =as=ed zo determine if a [aad-~ased pain= hazard
axis=s. Tes=in~ shall in~iu~e =he use of an x-ray fluorescen~ analyzer
appropriate
A pain=e~ surface iden=ified as havin~ a lead con=enu ~reazer uhan or equal
1 m~/c~ ~= be abated in accordance w~ch ~ regulations.
HO~ F~IN~ LIMITATIONS
Minim~ HOME per uni= invescmen= - $1,000.
Haxi~ HOME per uni= investmen= - $53,39~ - 0 bedrooms $96,283 3 bedrooms
$61,207 - 1 bedroom $105,690 = bedrooms
$T&,a27 - 2 bedrooms
~e rehabili=acton of exiscin$ homeo~ership proper:ies or proper=les bein~
assis=ed =hrou~ a firs=-time homebuye=s pro,ram must have an appraised value,
al=er rehahili=a=ion, which does hoc exceed =he 203(b) mor=~aga limi= for the
area. In ~ennepin Coun=y =hose limi=s are as follows:
$110,200 - 1 f~ily and condomini~ uni= $150,800 - 3 family
$12a,100 - 2 family $17A,000 - a f~ily
1993 HOME assis:ed units mus= be occupied by very-low income households (50%
or ~elow of area medi~ incom~) and bear nonpublicly-assis=ed mon=hly
INCLUDING u=ili~ =os=s which do no= exceed as folio~s: .
Sas0 - Efficiency $663 3 ~edrooms
$a78 - 1 Bedroom $740 a Bedrooms
~n=s whi=h ar~ subsidized can n~var ~c~ed the lesser of Section 8 Fair
Ha~kec ~en=s (FMR) or ren=s which are 30 percent of adjusted incom, for
households aC &5 percent of median income. ~o~h o~ chase ren~s a~e published
by ~D. '
i _ III I I , __ III I__
FUNDZ~G COIm~TI~NTS
?~o~ec~s ~i~ be selected based upon established revie~ and ~ank£n~ c~iCe:ia.
A Selection Comm£ccee consiscin~ o~ s~ven representatives of the Consorci~o
~l~ ~ke & fund£n~ recommendaC£on co the Co~nc~ So&~d.
~e initial fuadin~ co~i~en~ ~ill se~e as a prei~mtna~ co~i~enc.
~i~l Co~i~en= w~ll be made ac =he poin:a con=racu~l a~reemen= has been
executed.
~ER~D F~ING
A m[n~ of 1~ percent of =he 1993 HOHE funds, $16~.900 and $253.350 ~n 1992
HO~ funds, is rese'~ed for housin~ =o be developed, sponsored or o~ed
Co~i:y Ho~in& Deve%opmenn Organizations (CHDO~). Proposed ac:ivi:ies
meet ~e es:ablished lundin&
Ten (10) percen: of :he funds will b. utiliz.d by Hennepin Co~ty co defray
a~inis:ra~ve costs.
Proposed activities located tn Bloomtn&ton or Pl~ou:h which score more :han
80 points under :he Review and Rank~n~ System will receive f~din& at L.as: ~o
the ~oun: :heir par:ictpa:!on has brou~h~ :o the Consortia, $14~,720
$5A,890 respec:ive!y.
FO~ OF ~SIST~CE
HO~ fun~ will be allots:ed tn :he fo~ of loans (deferred, low-inceres:, or
non-ln:eres: bearing). Loans will be sa:isfied at the point of sale or if the
project does hOC meet :he :e~s and conditions of :he con:rac:ual a~reemen:.
HO~ funds wtlI require full :epa~enc whenever feasible. In projects
involvin& acquisition, new cons:~c:ion, and/or substantial r.habili:a:ion :he
HO~ loan a~reemen: w~ll contain a profi: shartn~ provision.
DE~LI~ POR PROPOS~B
All requests for He~ep~n Housin~ Consor~i~ HOME funds ~s: be submitted
:he Hennepin County Office of P%annin& and Development by the close of
b~iness June 1, 1993. ~e deadline ~or all qualified CHDO requests may be
ex:ended unctl all funds have been co~i::ed. Mail reques:s to: Hennep~n
County Office of Plannin~ and Development, 822 South ~trd S:reec, Suite 310,
Mi~mapolis, ~
~Q~ST FOR PROPOSAL
To obtain a HOME pro&r~ reques: for proposai 9acke: con:ac: :he He~epin
County Office of Plannin& and Developmen:, 822 South ~ird S::eet. Suite 310,
Minneapolis, ~ 55a15, telephone 3~8-6&18. Specific questions should be
referred ~o Barbara Hayden at
Ne~epin Co~:y rese~es :he right :o accep~ or reject ali fundin~
~d rescind :he request for proposals. Ail infor~clon submitted :hrou~h chis
solicitation becomes ~he proRer~7 of He. eRin County.
'93
IlZe
~j~c~ ~c~Ly im~, ~j~c~ for laity s~ze.
PQiflT
c~tMr~ in ~his
· s~tflc ~roj~cs ~LIc~c has pro~, c~Lec~ a~or
0-10 ~. txT~C ~ t~Ch of e~rf~e tho a~LT~CC&} hal t~ ~rki~ k~th ~or
· ALL Wrs ~nvolv~ in the Gtfcact~ wiLL
· ~iti~ to mintain t~et of s~Tive services ~er the kif. of the
0-10 .----. 3. The extent to Mqich the alkaLi(ant(s) has c~momCrateci its cap4cit¥ to
c~npLeCe the activity within the d~slgr~ted tim peri(M.
· Fine,|iL capacity of the eq~Licent to u~derteke the KtIYJty.
· The projKc sch~Le ~s reas~te.
· ~ticaflt staff [e~ets ~ e~rtise co J~t~t the ~civity.
I. Project FeasibiLity
0-10 1. The extent to khlch the aiSle(antes) has d~crec~ that the
ft~iatty vi~te.
· Pro~o~ or lamaist s~tes are c~fscent with t~C~
projecC~ rev~, o~raCim costa ~ deprKintim aiLing.
0-I0 __ 2. The extent to uhich the al~ttcant(s) has con~oi~ed other public lad/or
private funds to minimize the ~C of r~sC~ f~.
· Percentage of H~E su~i~ ~r ~it cost Is c~r~ to the ~Cire c~C.
· The H~E r~st is the mini~ ~GeSSary tO proYi~ lffor~bte
affordabLe h~using.
c~itMnc ne~ to c~[ete the icClviCy.
~S~ ~ ~x~rJ~e Of 8~Ltcantcs) [n obtaini~ thee
.... _ I I I " [ [~[ . _ _ s _. I
for ~he %lrpt
6 %o I0 ~m~ 2
11%o 15 ~ 5 ~lnts
16 to ~ ~orm 8
2~ ~ I0
~rt~ftf~ ~t ~ prov~ or ~wi~ ~ i Limit~ ~iS ~ c~r~ to
$~ific~tty ~ the c~ti~ of ~e ~its.
· D~trit~ ~ for pP~i~ h~i~.
C~ts for a~r~ate s~r~tve servic~
ire Gr~riatl for the tlrgltK
* L~ters of ~rt ~t ~ frs m ~rs~ of ~ori~ ~tf~ t
arti~imr q~ ~ jue?~L~tJ~.
Total
ProposaLs mLst score m miniflMn of 15 points in Section A, m mJfl~nJ~ of ZO points in Sectton I, ~ oVerl~
ut ~oro i iifltM of ~ ~fflts to ~ c~i~r~ for
~e N~ln N~i~ C~ortl~ uILL eke ~ remsnbLe effort to acc~te prflrm set ul~ iff the
first r~ of f~i~.
A lfniu of 1S ~rc~t of the 1~ ~ fM (s16S,~0) ~t ~ set isi~ for h~ to
s~r~, or ~ ~ r&~fit c~ity h~st~ ~L~t QPSMiZOT~ (CHOOs). There
~3,~0 ~fl 1~ ~ f~ for t~ ~
~t the{r MflJciNt1~ has b~t to the c~ort~, SlLZ,~O I~ S3~,B90 r~mtJvety.
In or~r to m~te these set aai~s, prGSltS My ~ f~ ~lch are raflk~ tMr th~ c~tl~
pr~mtm.
3/30/93
REYUAJI~.SY$
.!.993 llOt~. I'R~ S~CfLE
· Prosrm* Description approved by
He.spin County Board Ma=ch 19, 1993
· Prosram Description is subm~ed co RUD ~arch I5, 1993
· NOFA/Reques~ ~or Proposals April 1. 1993
° RUD approval of Pro,ram Description April I$. 1993
° Application Submittal Dace June 1. 1993
° Rennepfn County staff review of
applica:tons completed July 1, 1993
° Selec~ion Commi~ee~' review and ~unding
rmc~en~acions submitted co Coun=7 Board July 15, 1993'
" Councy Board awarde 1993 HO~ funds Ausus= [5, 1993'
*Ten=a=ive daces
3/23/93
M~ETING MINUTES
Planners Action Group
CO-OP Northwest
The meeting was held at Northwest Hennepin Human Services Council
on Monday, May 10. The meeting was called =o order at 9:00 a.m.
Present: Kirk McDonald (City of New Hope), Barb Hayden (Hennepin
County), Donna Datsko (City of Brooklyn Park), Julia Jones (City
of Crystal), Patty Wilder (Northwest Hennepin Human Services
Council), Klm Aasland (Northwest Hennepin Human Services Council)
and Dave Greeman (Northwes~ Hennepin Human Services Council).
The group discussed the prospect of expanding the New Hope CHDO
which has been preliminarily approved by ~UD to be a five city
and Northwest Hennepin Human Services Council CHDO in order to
obtain increased access to federal housing funds. A CHDO is a
private, nonprofit housing organization organized under state and
federal laws which has among its purposes, :he provision of
decent housing that is affordable to low-income and moderate
income persons.
Barb Hayden discussed the use of CHDO funds in suburban Hennepin
County. A certain percentage of federal housing funds are
designated for use only by qualified CHDOs. Currently 15% of
HOME funds allocated ~o suburban Hennepin County are designated
for CHDOs. CHDO funds are available to provide housing
assistance to families at or below 80% of the median income.
None of =he $240,000 in 1992 CHDO HOME funds have been used yet
and there are $165,000 for 1993 available as well. Hennepin
County anticipates that $240,000 will be~available in 1994.
According to federal regulations, at least one-third of a CHDO's
governing board must be Iow-income residents or elected
representatives of such residents. A CHDO cannot be a public
body or controlled by any one public body. It was suggested that
Northwest Hennepin Human Services Council appoint the low-income
board members since it is not controlled by any individual city
but is rather the object of a joint powers agreement.
Possible projects for HOME funds discussed at the meeting include
rehabbing or new construction for low-income and/or people with
disabilities. A strategy for winning support for the five city
CHDO from each of the cities is to have a project site in each of
the cities.
In order to apply for 1992 and 1993 CHDO funds the five city CHDO
must be established by June 1. To accomplish this we would have
to do several things, including: approval by the five city
councils; modification of the New Hope CHDO bylaws; a plan for
selecting low and moderate income people to serve on the CHDO
board, and; the development of projects for which CHDO funds will
be spent and accompanying budgets for the projects. In addition,
the CHDO will also have to secure matches for the 1993 funding.
The matches can be in several different forms including municipal
funding, in-kind support including staff hours for the CHDO,
assistance in down payments for housing purchases, and MHFA
funding. CDBG funds cannot be used as a match.
CHDO project proposals will need to include: a target population
for which the CHDO funds will be used; a determination of what
the housing needs are of the target population; a plan for
providing support services to the families receiving the
assistance, and; an estimation of how much funding is needed to
complete the projects. The Planners Action Group will hold a
work session on Monday, May 18 to plan the CHDO and possible
projects. The meeting will be at 9:30 at Northwest Hennepin
Human Services Council.