Committee Minutes

MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, April 1, 1998 - 4:00 p.m.

Members present: Beach, Bouley.

1. Matter of surplus property and authorization to bid.
Curt Siewert submitted listing of properties, incl. furnaces, air conditioning cooling units, refrigerators, water heaters and boilers which came out of Electric Construction Company or 407 DeMers and are requesting the property be declared surplus so can offer for bid. He also noted that they may keep the furnaces for rehab to use in housing because they are residential units.

Moved by Bouley and Beach to declare these listed items as surplus and authorize City to advertise for bids. Motion car-ried.

Mr. Siewert reported he has put together advertisement for bid for the houses as part of standard mitigation process for the historic property and questioned whether he would have to get authorization to bid those because it was in the agreement for properties in Phase I.

After some discussion it was moved by Bouley and Beach to declare properties as listed in FEMA Standard Mitigation Measures Agree-ment, Phase I Historic Proper-ties, as surplus property and autho-rize staff to advertise for bid. Motion carried.

3. Request from Tim Lamb, Lamb Properties, for supplemental
Rental Rehab Program loan.
Mr. Lamb presented request for supplemental loan under the Rental Rehab Program, that he under-stands this has been presented in a general sense before committee but not received favorably but presenting on individual basis, committee should look at circumstances because extra funds in this Program because not used or returned because of some factors. He reported that in his case he was approved by SBA Fund but because several of his properties are under contract for deed, the SBA has cancelled those loans, and he is in peculiar situation, that he rehabbed properties and had short-fall with con-trac-tors, that he's looking for additional loan on proper-ty, monies that will be paid back for these five properties, supplemental amount to pay off con-tractors who worked on the properties. He stated he took on tremendous debt because of the flood, exceeded $85,000 in expens-es on the five properties and had a $50,000 loan on the proper-ties and asking for supple-men-tal request of $30,000 which is not a grant but loan, and there are funds in the program to provide for that.

Mr. Siewert reported applications accepted until yesterday on program which had time extension for application for funding, but they didn't accept applica-tions to increase grant amount of existing projects though they did have some requests for addi-tional funding. Mr. Lamb stated that the limit is policy set by MINUTES/URBAN DEVELOPMENT COMMITTEE
April 1, 1998 - Page 2

the City and always exceptions to the policies, that previously on his partic-ular situation he can't get loans from bank and SBA has not provided adequate supplemental funding which he account-ing on; that units are rented and that properties rehabbed to standards and been inspected and approved by the city.

Committee stated that on this amount of property, given credit standing he would think Mr. Lamb has why couldn't get any commer-cial credit. Mr. Lamb stated that banks not favoring loan requests for the rehab he has done, and only one is under con-tract for deed, that SBA lumps all properties into one batch and gives loan based on that bundle of properties, that he tried to weed out couple properties, but they said no that they wouldn't do that. He noted that he has contacted Congressmen re. this matter, and doesn't think SBA serving community as they should.

Mr. Siewert reported that pre-flood they had Rental Rehab. Program which was a dollar for dollar match and at that point had a max. of $7500, 8500 and $10,000, with 60%-40% grant-loan; that after flood didn't feel people had match money and made this 0% interest deferred loan - 10 year 0% loan with payments deferred for 5 years. He reported they then went with $5,000 for effi-ciency, 7,000 for one-bedroom, 8,000 for two-bedroom and 10,000 for 3-bedroom, as there was other funding out there, SBA, and usually if had apartment building counted units not just basement units if building flooded, so four-plex could actually get $32,000 because electrical for entire building, heating, etc. and that minimum was enough to get people up and into units and make program stretch. He also reported that people might have to put some money into units themselves but do that with 0% interest, but couldn't do duplication of benefits. He noted that SBA reduced their amounts because of these figures, but if signed SBA loan had to use that first so no duplication. He reported they took applications for 2 - 3 months, had 460 applications and funded for over $8 Million, and some people sold out, etc. and have some extra funds, that committee decided to open up again because some did not have opportunity to participate but at same time excluded existing projects, but if new project could apply. He reported he will bring new applications to committee in two weeks. He reported that they have applications where rehab has not started and those may be cancelled. He reported they have spent $4 to 5 Million, and max. allocation was $8 Million+; that these were loans and all will come back after five years.

Beach stated that standards set by the City, that City acted very responsibly in handling of whole recovery effort, and as they have stated that they can't make everybody whole in the city; that they established program and have expanded parameters of this program and would not like to do it again, because very late date and it isn't as if don't have another place to apply these
funds, that whatever money not used in this program will go
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towards City's share of dike protection, and experiencing a tightening up of these programs.

Mr. Lamb stated that there is a policy here and not trying to open door for everyone else to come in; Committee stated that if they do for one would have to do for everyone, cannot do on a case by case basis. Mr. Lamb stated that there were four-plexes given loan amounts for upstairs units that weren't damaged, and could have declared his property as four-plexes but declared as 3 or 4 bedroom units, even though rented individually to students, and therefore, his amounts were minimum.

Bouley stated that with flood they want to help everyone in every direction but that rules are rules, and could open up for extreme headaches, and with reluctance moved to reject the request, Beach seconded the motion.

Mr. Lamb then asked how many had asked for supplemental amounts, that if there aren't that many out there, should know that and how many available. Committee stated that perhaps item could be held for further information; however, Mr. Siewert reported they don't have that information as they didn't take applications and told people requesting that they weren't giving supplemental fundi-ng. He noted that there could be owners of large apartment houses that would possibly request additional funds and asking large extension of loans, and this could open that up. Mr. Lamb stated it was unfair to loan hundreds of thousands of dollars to apartment complexes where damage only in basement; Committee stated original intent of the program was to get housing stock back in shape as fast as possible and wasn't economic health of owners of the property but to get housing stock back. Mr. Lamb reported that SBA also there to help as additional supplemental provision, and if apartment owners received funds for units not damaged that should be brought to light as well. Beach stated he didn't think that was the case.

There was discussion whether to hold this matter or consider motion. Mr. Siewert reported that question was whether they want to change program or not, take exception to grant amounts and open up. After further discussion and upon call for the question to maintain program and reject request, the motion carried.

2. Matter of request from Nina Kulikov to use park on Kittson Avenue for construction.
Ms. Kulikov presented pictures of the building and park area.
It was noted this is a public park and maintained by Urban Development, and that they strongly support use of the park.
Committee suggested that if this were done that there be no damage to trees, no litter, and hold harmless agreement to the
City to protect City against liability.


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There were questions raised and Mr. Siewert stated he would meet with Ms. Kulikov and bring something back to the committee.

Held in committee and to bring back in 2 weeks.

Moved by Bouley and Beach to adjourn; meeting adjourned at 4:55 p.m.

Alice Fontaine
City Clerk

Dated: 4/02/98