Committee Minutes

MINUTES/URBAN DEVELOPMENT COMMITTEE
Tuesday, July 26, 1994 - 4:30 p.m.

Members present: Beach, Glassheim, Hanson.

1. Proposal for financing rehab of St. Anne's property.
Gary Stenson, MetroPlains Development, Inc., St. Paul, MN reviewed proposal for financing rehab. of St. Anne's facility and reported they have some deadlines to get evidence into State of North Dakota to retain low income tax credits. Funding sources were listed as follows: Mortgage, $784,900; City CDBG $66,000; TIF $85,000; Home funds from Office of Intergovernmental Assistance $420,000, developer's equity, $10,124, limited partners financing $1,002,244, and equity gap of $249, for a total of $2,368,517. The committee also reviewed uses of funds.
Mr. Stenson presented requests to the City asking that they consider one of the following options: $151,000 funding by City - $85,000 TIF assistance and remaining $66,000 from CDBG funds; that the City explore use of the Section 108 program to borrow against future CDBG funds if current CDBG funding has been allocated; or that the City apply to the National Trust for Historic Preservation for $150,000 loan at 5%, to be paid through remaining tax increment or other city sources over the next 7 years.

He stated they are general partner, along with Grand Forks Senior Citizens, applied to State for tax credits, and those funds conditionally committed as long as they show evidence by Friday that they have other funding in place, and are looking for this committee to make recommendation to State and if committee acts favorably, they will wait until Monday night meeting to firm up City's commitment.

Mr. O'Leary reported that the council had provided a 15-year tax abatement for this property in 1986, an agreement with Clarence Peterson signed in January 1989, with abatement to start in December of 1988, with several years remaining on tax abatement. Question is can we start over again and provide them with up to 15 years, was his understanding that if property changed hands that it was possible to negate original tax increment request which has already gone through Planning and Zoning, and to issue a new district which would start at the time completion of the project occurred.

He stated that developer asking to borrow against future CDBG monies; don't have $60,000 laying around; if not possible to start over at 15 years, developer requesting to borrow against future CDBG monies, which takes program amendment, hearings and ordinances, process to go through which takes 4 to 6 weeks because of HUD regulations; had request in the past to do that and council chose not to do. He reported that the State is looking for commitment from City, City not applicant, State hasn't done this where City not an applicant, unfair to council

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July 26, 1994 - Page 2

and developer, they are encouraging City to participate in amount of $151,000. He also reproted this property has residential development potential; however building has historical value, under TIF City gives up 15 years in increased taxes, gives up potential tax revenues.

Mr. Stenson stated State's concern, asking for $420,000 funds out of that pool, represents very significant portion of that pool, using 4/5th of monies to this project, because of historical aspects, contingent upon City coming up with $151,000; that they are not asking for more than what originally agreed to, looking at 15-year tax abatement or equivalent - $151,000 to proceed with $2.4 million development; need firm commitment from City to make project work. They need statement from City that will put $151,000 into project, tax credits committed by August 1.

Mr. O'Leary reported CDBG funds increased last two years, this year $600,000 with some funds previously committed, riverbank project, Adult Abuse, etc., $300,000 in bricks and mortar, store fronts, youth centers for flow income housing projects, Listen Center, detox center.

Mr. Hanson stated that this is very reputable firm, that no one else going to take on project and building probably torn down, there are problems with the historical society, problems with the neighborhood and type of housing they would want, and that we do need housing for the elderly and that he would support this in committee.

Mr. O'Leary suggested meeting Monday night and ask city attorney to be there for report on discussion with Dorsey firm.

Martha Torkelson, Senior Citizens Assn., stated project good addition to the city and service for senior citizens. Project has probable 38 units, minimum of 35. It was also noted that demolition work basically been done, asbestos been done.

It was noted that the 6-plex on the property is owned and operated by Mr. Peterson.

Moved by Hanson and Glassheim that we recommend to the council that we grant a 15-year tax abatement on the real estate tax increment. Motion carried.

The committee will meet Monday, August 1, at 6:45 p.m.

2. Matter of Growth Fund loan to Innovative Products, Inc. (Jim
Steinke).
Terry Hanson reported council had approved $20,000 Growth Fund loan to Innovative Products to help with operating costs, developer of a handicapped vehicle; loan structured to start

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July 26,1 994 - Page 3

repayment of loan on January 1, 1993, Mr. Steinke came back to council and asked for one year's extension to begin on January 1, 1994, and again this year he has not been able to start payments. He reported $20,000 loan signed at 4% interest, with payback over 24-month period, beginning January 1, 1994 (with extension), completed December 1, 1995. He advised committee they have ability to extend.

Mr. Steinke reported that monies used for marketing, and reviewed with committee vehicles used and modifications he has made to those vehicles, and needs more time.

Moved by Glassheim and Hanson to extend payment schedule through July 1, 1995, with interest to accrue as stated. Motion carried.

2. Matter of social detox service provider recommendations.
Mr. Glassheim reported that the Mayor's Committee had recommended that we advertise for bids to provide detox services and that a committee of three, himself, Gwen Crawford and Russ Warner of United Recovery had interviewed two applicants and committee recommended that we accept the bid of Centre, Inc. Hanson recommended approval of the recommendation from the special committee, to select Centre, Inc. as detox service provider, contingent upon successful negotiation of a contract; the motion was seconded by Glassheim. Motion carried.

4. Storefront applications.
Held in committee.

4. Review of flood grant policies and procedures.
Mr. O'Leary reported that they have had approx. 200 aps/contacts, and expect most to submit application for funding, cut-off date is August 12, and expect funds to be available around 24th of August; that they are running office from 3:00 to 9:00 p.m. and 10:00 a.m.to 2:00 p.m. on Saturday. He reported that they will also scheduled meetings to go into counties, advertise in Traill and Nelson Counties by ads in official newspaper, coordinating with emergency management and putting notices up. He also reported they are in the process of putting together map showing areas of damage. He stated they are not getting response they thought they would and some comments about some don't know about program. They may also contact neighborhood associations.

He reviewed process: would like to start inspections and upon completion of inspection, write to applicant, authorize to take bids for these items and send bids back to us (get formal bids but not accept), need to make sure reasonable cost, get one bid from licensed contractor; and if get back to C.D. give formal notification that awarded grant of x-dollars and they will get contractor, etc. and after work completed, send back

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documentation that work completed.

He reported that they have been in contact with Regional Council in Grafton, not happy that Walsh County not included, and that they are attempting to be included; and if they do 4-county area need more money. (If Walsh Co. included they will negotation and bring back to committee). He stated his only concern allocation of staff time, went into because of equity in program (inspections made by same people), etc. He is hoping that by next meeting going to start doing inspection, which will give idea of magnitude of problem and how to proceed.

Glassheim suggested staff person from Quad Co., to hand out notices, pamphlets, etc. It was noted that Boy Scouts another group they possibly could use; and noted that they had staff person in Hillsboro today taking aps. He noted that a lot of middle income people not applying; and that those who have done work, can apply and turn in receipts.

Moved by Glassheim that we adopt the original handout (Tri-County Flood Relief Program) as the guidelines for the program; the motion was seconded by Hanson. (committee only - committee had been given power to act by council on July 18, 1994.)

Meeting adjourned.

Alice Fontaine
City Clerk

Dated: 7/28/94.