Working Session

MAYOR COUNCIL WORK SESSION
Wednesday, May 2, 2007 – 4:00 p.m.
Council Chambers

Members Present: Art Bakken, Doug Christensen (joined meeting in progress), Hal Gershman, Eliot Glassheim, Curt Kreun, Mike McNamara.

Members Absent: Mayor Brown, Bob Brooks.

Gershman called the meeting to order at 4:00 p.m.

1. Matter of CDBG Lots

Greg Hoover, Director of Urban Development, and Meredith Richards, Community Development Manager, provided a presentation on the remaining residential lots that the City acquired after the 1997 flood.

Richards stated that there are about 80 residential lots throughout the community that could be available for sale. She displayed maps showing the areas where the 80 lots are located throughout the city. She pointed out some scattered lots that seem to be a good fit for the affordable infill program as was used very successfully from 2002 to 2004, as well as pointing out some lots that seem well suited to the historic infill process, particularly those in the Central Park area.

Richards continued that during the earlier process for the affordable infill program the lots were sold via an RFP process and were evaluated for other factors than just price including architecturally appropriate for the neighborhood. This earlier process resulted in 27 homes built by 7 developers and put $3.5 million worth of property on the tax rolls, resulting in $80,000 per year in tax revenue. Urban Development recommends following a similar process for the existing 23 sites.

Richards stated that the lots considered a good fit for the historic infill program are on 13 sites, 2 of which are in a designated historic district. Urban Development recommends using a hybrid RFP process whereby architectural appropriateness, size, scale, and cost vs. value are all evaluated in determining the successful bidder.

(Christensen joins the meeting.)

The remaining 44 lots are in the Walnut/Belmont/Chestnut area. This area does not have a predominant style, and would recommend evaluating proposals so that a neighborhood appeal is created and the homes built blend into the existing neighboring homes. One option being considered is replating some of the parcels, as some are variable sizes. The replat would result in 36 buildable sites that would fit the neighborhood. She stated that there would be three areas within the larger area.

Richards continued that the first area would be that fronting Belmont Road, which would be divided into four sites which would be very visible and desirable location lots. These would be larger lots and would anticipate them selling for $50,000 to 95,000 per lot.

The second area would be the Walnut/Chestnut area and be 8 sites in the 1400 block of those streets. These homes would evaluate based on value vs. affordability.

The third area if the Walnut/Chestnut south of 15th Ave S. Richards stated that this area is where a major neighborhood impact would be made. The recommendation is to use an RFP/Auction following sealed bids. The Urban Development Office would also solicit input from adjacent homeowners as to RFP parameters so that newly constructed lots fit the look of the neighborhood. Lots in this area are projected to sell for $27,000 to 42,500.

Richards continued that in the University Park area there are 4 sites. Homes in this neighborhood are a mix of sizes and styles, with varying uses. Urban Development would recommend looking at either a sealed bid or and RFP process, with projects evaluated for limited neighborhood impact vs. guiding the development to improve the neighborhood.

The remaining lots are scattered on the Southside in modern neighborhoods and propose selling them at auction.

Richards stated that there is a timing consideration, as the lots are not open for development until the flood plain is approved by FEMA, which is anticipated for August 2. She continued that the coming months will allow for time to get neighborhood input. One concern that Urban Development has is potential conflicts with Public Works projects adjacent to the current water plant and getting the waterline done on Chestnut.

Richards continued that there is a difference in lead time whether a bid or RFP process is used, and there is also a consideration of speed vs. controlled development of the lots. Other considerations that would come into play are the Right of First Refusals that were signed when the lots were acquired. She continued that those were a five year deal and Urban Development does not recommend reinstating them.

Audience member comments were that there could be interest from Habitat for Humanity for some of the lots, that some be designated for low to moderate income development, that in areas of historic homes that the proposals fit in with the existing structures.

Hoover stated that they will be working with Todd Feland on the water treatment plant concern. He continued that getting the Belmont lots done soon is manageable and would like to simultaneously run the infill program. He stated that there is value from neighborhood input and want that to be considered in the entire process, but still retain some control of the development of these lots for Council. He stated that he has a little concern over where the dollars go if we do it all at once, as there are limits within the CDBG Program Income and we have levels that we can’t exceed, but there is the potential to create a revolving fund for housing needs with some of the revenue.

Peg O’Leary, Historic Preservation, stated that her group had passed a resolution in support of participating in an RFP process. Hoover stated that he would also like to suggest that Council permit the designation of 3-4 lots for Habitat for Humanity. Bakken commented that the process looks good and would like to see the platting start as soon as possible.

Christensen expressed a preference for using the RFP process for disposition of the lots. He expressed that the lots in the Almonte area were successful and would like to see a plan developed and shared with the neighborhoods. He stated that in the area of control, we can put specifics for an architectural design review committee as we use in the downtown, maybe made up of neighborhoods residents and staff.

Glassheim agreed with the intent to not let price be the full decider of the bid, and was glad to see other factors being considered. McNamara inquired whether there was any report on the Almonte lots, and if so, requested a copy he could review. Group consensus was to proceed with the platting as soon as possible.

Grasser expressed a concern with having so many in progress at the same time in the Chestnut area could be a problem, as looking at around 30 lots in a small area. Christensen commented that perhaps since the infrastructure is already in could look at lowering the lot price to make some of these lots more affordable. Glassheim stated that he would also like to see a consideration given to whether the lots should be done by one developer or by individual contractor. Collings stated that it could be a lot of lots to force on the City at one time for development and could influence the market.

Richards stated that due to staffing constraints within the Urban Development Office, it would not be possible to have all the lots in progress at the same time or even in a one year time frame. She continued that typically in the past the most lots offered up for sale at one time was 16 each season. She continued that the recommendation would be to look at some lot sales in the Fall of 2007, Spring 2008 and then final lots Fall of 2008.

Kerian urged them to include a period of time to complete the construction so that it does not drag on and become a nuisance in the neighborhood. Glassheim suggested perhaps bringing to Finance/Development a plan for implementation, then going to COW.

Consensus was to bring the disposition plan to Finance/Development, then to COW and for Urban Development to provide copies of the presentation to Council Members in their Council mail on Friday.

Meeting adjourned.

Respectfully submitted,
Sherie Lundmark
Admin Spec Sr