Committee Minutes

FINANCE DEVELOPMENT STANDBY COMMITTEE
Monday, May 24, 2010 - - A101 - - 5:30 p.m.
Minutes

Present: Christensen, Glassheim, Gershman, McNamara (joined meeting in progress)

1. MIDA Bonds for Altru Health Systems:
a) Resolution relating to the issuance of revenue bonds on behalf of Altru Health Systes, and calling a public hearing
b) Memorandum of Understanding

Dwight Thompson, Chief Financial Officer, stated that the City Council start the process to assist us with issuance of revenue bonds for Altru Health Systems, calling of a public hearing for a date in July and a memorandum of understanding whereby any cost associated with the bond issue will be the responsibility of Altru Health System. There is no liability to the City for repayment of these bonds. Thompson explained that this year there is a unique opportunity for the bonds to be issued as bank qualified bonds without this issue counting towards the City’s issuance limit for this year and that this year the issue will not be a public sale, but will be a private placement with local lenders whom they have been working with.

Motion by Glassheim, second by Christensen, to recommend approval of the resolution and memorandum of understanding and to set a public hearing date for July 6, 2010. Aye: All. Motion Carried.

2. Application for exemption of remodeling improvements to residential building at various locations.

Mel Carsen, City Assessor, stated that he has reviewed the application and it meets City policy for granting of a 3 year exemption of increased value due to the remodeling.

Motion by Glassheim, Second by Christensen to recommend approval of the exemption. Aye: All. Motion Carried.

3. Appointments to Civil Service Commission

Committee reviewed proposed appointments of Patricia Nies and Fred MacGregor to the Civil Service Commission

Committee recommended that the appointments be forwarded to City Council for action.

4. Appointments to Grand Forks Events Center Commission.

Committee reviewed proposed appointments of Duane Hafner and Laura Block to the Grand Forks Events Center Commission.

Committee recommended that the appointments be forwarded to City Council for action.

5. Request for exemption of transient merchant license for Grand Cities Art Fest Event.

The Committee discussed that there is a fee which exhibitors pay for their participation in the event and in the past have waived the transient merchant license fee for out of area artists.

Motion by Glassheim, Second by Christensen, to recommend waiving the transient merchant license fee for exhibitors for Grand Cities Art Fest. Aye: All. Motion Carried.

6. Proposal for lot at 1815 North 3rd Street.

Matt & Kristi Aarvig addressed the Committee regarding their proposal for the lot offered for sale at 1815 North 3rd Street. They explained that they received the packet which stated that a split level was not allowed, but had submitted a proposal for a split level based on verbal information they had that they could build a split level home on the lot, but that subsequent to submission of their proposal they learned that design was not allowed based on the specifications. They provided information on different styles of homes in the area and stated that they believe that their design, while not meeting requirements in the specs, would fit in with the varying styles in the neighborhood, that they have surveyed the neighbors and a couple do not like design, but majority (14 out of 20) do not have a problem with their design, are asking to have the property actually front onto Alpha Avenue instead of 3rd Street and for approval of their proposal. Glassheim asked why decided on the split level when specifications stated not split level. Aarvig responded that were told by builder that split level is most cost effective design and does not know cost difference to change to a single or double story. Committee discussed that in past have had some remodeling and garage proposals that have been brought forward and have blended very well with existing.

The Committee discussed the process used for the sale of infill lots, that prior to issuance of the RFP there was a neighborhood meeting and unanimous as to type of home that was desired for the lot. Hoover noted that other factors besides that it is a split level were also against designs that featured a garage which was prominent on the front of home, which the submitted proposal clearly has. He stated that in the past Council has rejected other good proposals for infill lots because they did not adhere to the specifications of the RFP and cautioned that making an exception could set a precedent for future infill lot projects. Christensen stated that he would like to know how many lots have been sold in that neighborhood and when the meeting was held that set the policy for these lots and if too long ago, perhaps attitudes have changed and could look at some modification to the specifications.

The Committee discussed whether should refer this to a neighborhood meeting for review to see if there has been a change in the desires of existing neighbors and whether this proposal would now be acceptable to them.

Gershman stated that have had similar responses in the past when looking at infill lots, and if proposals submitted that do not conform, have met with individuals involved and they have modified and built their homes in compliance with specifications and that there is a concern with the precedent that could be set if decide to approve a proposal that does not meet specifications and do have other lots that will be sold in the future that could be affected by this. He recommended that any agreement to very the specifications should be obtained in writing.

(McNamara joined meeting.)

The Committee discussed the process used to determine the specifications and to review the proposals that are submitted. Hoover explained that with the infill lots have found that properties redeveloped so that they fit into the neighborhood have been successful and d utilize a review panel which includes a representative of the neighborhood. Glassheim suggested that the best approach may be to reject the bid and could then hold a new neighborhood meeting, determine new RFP specifications and readvertise the project with new specifications or could leave specifications as is and readvertise, as there may also be others that did not respond to old specifications, but would if they were modified to allow split level or front facing garage, etc. The group discussed that the review committees are made up of City Council representative of the Ward in which the lot is located, representative of Historic Preservation, Inspection Department, Urban Development Department, and neighborhood where the lot is located.

McNamara stated that he believes that if any modification is made it has to be readvertised so that it is fair and open to others that also may have considered, but not bid due to restrictions in the specs. He concurred that thus far we have been adamant that development meet the specifications as developed in the neighborhoods and has worked, but if want to change that then need to reopen to all potential bidders.

Motion by Glassheim, Second by McNamara, to recommend that the proposal be rejected and that the lot sale be readvertised as originally designed. Aye: All. Motion Carried.

7. MetroPlains Civic Redevelopment Project.

Hoover provided a brief history of the project on Civic Auditorium site. When approved initially the project included financing requiring over $500,000 in tax credits, thus far the developer has only been able to secure about half of the credits, but have been assured by the State that they will be able to get the full amount. There were some timelines included in the project so it needed to come back to request an extension to allow time for the developer to secure the rest of the credits. He continued that they have also completed a Phase 1 environmental study and found that there is some contamination from gas and diesel in the soil that will require clean up and have been asked by the developer to put in the proposal that a more detailed analysis be done which would also identify the types of remediation that would be necessary and further that if the cost would be less than $40,000 then the developer would take care of the clean up but if the anticipated cost would be more than $40,000 then the developer would work with the City to identify other potential funding sources to cover the cost of the cleanup.

Hoover stated that they are requesting an extension until December 31, 2010 to secure the remaining tax credits from the State and an extension until February 28, 2011 to finalize an agreement with the Housing Finance Authority, which would allow for construction in Spring 2011. Additionally, that MetroPlains will pay for the supplemental environmental study and bring back the results and if needed enter into good faith negotiation with the City on resources for funding the site clean up and that will be accomplished within the next 90 days.

Christensen asked how much funding the tax credits translate to. Hoover stated it is about 50 to 65 cents on the dollar. Christensen asked what the status of the Prairie Harvest project was and if there is any ability to substitute part of this project in if Prairie Harvest will not be done. Hoover stated that they have not gotten a change of mind from the church and looks like the project will not be able to go forward, but the MetroPlains project would not meet the criteria to utilize the funds that had been allocated to the Prairie Harvest project, including that the project would not be ready to go by June 1, so it looks like the City could lose the $2 million that had been allocated to the Prairie Harvest Project. Christensen commented that he thought the funds could go toward environmental remediation and asked that Hoover review that and that would like to see us be able to keep the funding in our community rather than releasing it to be used elsewhere if a project could meet the criteria.

The group discussed the timeline for the extension and that Council would prefer to see a little shorter time so that the project could begin construction as soon as possible. Hoover stated that he would follow up with the developer and that they would also like to get moving as soon as possible, but are a little dependent on when agreements and credits are secured.

Glassheim asked if the change of layout on the block was part of reason for the extension. Hoover replied that it was not, just some new factors that were not known at the time the original agreements were approved.

Motion by Glassheim, second by McNamara to approve the extension as recommended by staff. Aye: All. Motion Carried.

Respectfully submitted,


Sherie Lundmark
Admin Spec Sr