Committee Minutes

MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, October 30, 1996 - 4:00 p.m.

Members present: Beach, Hanson.

1. Matter of storefront rehab. applications.
Curt Siewert, Community Development, reported they have received 6 to 8 aps. for storefront funds, but presently have obligated all the storefront monies that have been budgeted, but also they are so close to their regulatory requirements of 70% low/mod. that he doesn't think they can act on any of the aps., and would recommend receiving and holding these aps. until after the new program year starts, January 1, then review and also request applications for new year. Terry Hansen stated that all funds obligated for 1996, and suggested they hold until next program year and address at that time. Mr. Siewert stated there are two projects re. sidewalk replacement which would have to be held until next spring.

Moved by Hanson to defer action until next funding year, which will be after January 1, at which time they will notify public that they are accepting applications. Beach seconded the motion.
Mr. Siewert submitted ap. from Sam Silverman for replacement of sidewalk adj. to public R/W at 205 DeMers Avenue, est. $600 (with $600 match). Mr. Beach expressed some concern re. project, setting bad precedence.

After further discussion Hanson and Beach withdrew their motion.

Moved by Hanson and Beach to approve application from Sam Silver- man for sidewalk replacement project at 205 DeMers Avenue, est. cost $600, out of the 1996 budget. Motion carried. (comm. only)

Moved by Hanson and Beach to accept the applications and defer action until next funding year. Motion carried. (comm. only)

2. Matter of playground equipment.
Mr. Siewert reported they have been working with Park District on this program; Park Dist. has completed playgrounds approved up to this point and are requesting to purchase play- ground equipment on which they have negotiated price with the vendor, and also to purchase swing sets for Central Park, Midtown and Richard's West parks. He noted that CDBG funds purchases equipment and Park District installs and maintains. He stated these are all low income areas and is requesting to reimburse the Park District $6200 for the pc. of equipment for Continental Homes, low income housing project on Continental Drive, and swing sets, $6009.50 for the three parks (Central; Midtown which is located on 4th Ave.N. and N. 6th St. (behind old Wash. School), and Richard's West located between 48th and 46th), large play units were put in this summer and this is to put in swing sets on those three park sites. There are funds available.

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October 30, 1996 - Page 2

Moved by Hanson and Beach to approve agreement with the Park
Park District to bid large units for Continental Homes at a cost of $6,200.00 and swing sets at a cost of $6,009.50 for the three park locations. Motion carried.

Mr. Siewert requested authorization for Park District to request proposals to purchase playground equipment for next year. It was so moved by Hanson and Beach. Motion carried. (comm. only)

3. Matter of communication from Sherman Associates, Inc. re.
financing for low/moderate income housing.
Mr. O'Leary reported that for several years Northern States Power has been talking about developing affordable housing for Grand Forks, they hired Sherman Associates to do the front work for this proposal, and is more letter of inquiry than proposal. The finance committee looked at the project.

He reported that the proposal involves 136 units built in Richard's West on property currently owned by the High Tech Park/UND Foundation; they would subdivide and use for housing. He stated that the developer would discount and sell the tax credits and use the proceeds of the sale as equity for the pro- ject. He stated this project est. to cost over $8 Million, the sale of the tax credits would generate about $2 Million, they can borrow $5 Million, and the remaining $1 proposing to acquire through TIF proposal. He stated first two requests are for housing revenue bonds (City would not be obligated for repayment of the bonds) and the request is for the City of Grand Forks to issue the bonds, in return for bonds and lower interest rate, the developer would agree that the units would be rented at 60% or less of the median income and for Grand Forks, 60% of the median income for a family of four is $22,000; and for TIF. He reported that the third part of request is how special assessments would be spread on adjoining properties (55th Street).

Mr. O'Leary reported that when finance committee heard this pro- ject, they also heard some concerns about need for this kind of housing, couple landlords there who said it wasn't needed. He stated that he indicated that this kind of housing was needed and would indicate that today. He stated that with 2-bedroom units, the market is getting better, with 3-bedroom units vacancy rate around 1% and 4-bedroom units vacancy rate so low not measurable. He stated this project would generate 36 2-bedroom units, 70 3-bedroom units and 30 4-bedroom units for a total count of 136. He reported that after the finance comm. discussed they decided to request Mr. Schmisek and himself to research additional info. re. housing revenue bonds and to provide that to the committee in 2 weeks. He stated that he believed consensus of committee was less than enthusiastic about doing tax increment financing for this project, and restructuring special assessments.


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Sue Redman submitted rental housing market information in the city to the committee and reviewed the information: vacancy rates in the city for the past three years which ranged from 1.4 to 4.4, new construction has helped; information re. percent of rental units by number of bedrooms showing short supply of 3 and 4-bedroom units; and income limits and affordable rent limits (30% of income) and fair market rents set by HUD and rental levels for the proposed project.

Mr. Beach asked for info. re. Sherman Associates. Roger Mattern, site mgr. at Gateway Terrace Mobile Home Court, reported that Sherman Associates large organization out of Minneapolis, builds units and rents out. Mr. Sherman quite versed in this type of project, and has been building NSP projects, NSP's way of putting money back into the community. Mr. O'Leary reported that project owned by NSP, Mr. Sherman consultant.

Tom Kenville, UND Aerospace, here as concerned citizen, stated he has rented number of units in city as part of his work, bringing in contracts for pilot training, rent from those developers who spoke at finance, but that's not reasonable housing as far as the markets go (rents up to 100 units, 20 units, etc.), and would be interested in seeing what other cities do. Committee questioned if Aerospace Foundation is only concerned to the extent that they are seller of the land. Mr. Kenville stated he is not working on this project, that they do have land for sale, and that this seems like a good project and have a need. He stated NSP is behind project and city wouldn't mind if NSP had their corporate offices here and this would be a step in the right direction, but doesn't guarantee anything.

Mr. O'Leary reported that demographics of project are - townhouse configuration; income demographics, 60% of median income require- ments, large families who are low income.

Mr. Schmisek reported concern expressed at the finance committee, that when get done with housing revenue bonds and sale of tax credits, the risk then falls on the TIF financing of the city, there is virtually no private equity in the project. He stated that committee wanted to look at housing revenue bonds, not lot of feeling of being able to do much on infrastructure part of proposal because of special assessment laws, assess to benefitted property unless City determines they will pay portion of that. They held because felt good project but wanted more information on housing revenue bonds and then perhaps talk to Sherman Assoc. without TIF

Mr. O'Leary reported that some of the Richard's West residents are concerned that this subdivision is getting to be dumping ground for every low income housing project in town, there are two major trailer courts out there, University Square (large

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collection of housing units, mostly low income), Burdick's Court which is low rental; and there's lot of poverty and lower income people in that neighborhood, but Sherman Assoc. been looking for pc. of property that will work for this project. He stated one concern he has is that there would lot of kids in this complex which might impact school system. Mr. Beach stated he has heard from residents in the first ward, first precinct, Richard's West Addition that they are concerned about the demographics of the project, some validity to their concerns. Mr. O'Leary stated he had met with Mr. Sherman when project being introduced couple months ago and he had number of examples of NSP projects developed in other cities, and project nicely designed, well thought out, etc. He stated NSP a for-profit corporation, they intend to make money and because equity coming from sale of housing revenue bonds, no equity; and with very little upfront money they are able to get into $8 million project.

Mr. Beach suggested they do more research on housing revenue bonds. Held in committee.

Meeting adjourned at 5:15 p.m.

Alice Fontaine
City Clerk

Dated: 10/30/96.