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MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, April 26, 1995 - 4:00 p.m.

Members present: Beach, Glassheim.

1. Request from Shelter for Homeless for emergency shelter
funds.
Mr. Beach reported this matter referred back to this committee as several council members questioned amount of money for project that was being accomplished.

Mr. O'Leary submitted spread sheet of status of funding for the Mission; as of today $50,000 CDBG 1995 dollars, those not firm as they are still talking about rescissions; 1994 Mission got preliminary approval for $19,500 for improvements for handicapped accessibility, still some issues to be resolved with State, and those dollars not firm either; 1993 and 1994 combined - $19,178 (they had applied for $7,000 for detox counselor and $12,000 for capital improvements), those monies not yet expended; and $12,000 (had applied for $33,000) for exhaust fans, drain tiles, windows, etc. and those funds obligated out of this fiscal year, waiting for project for Shelter for the Homeless; actual carry-over funds are 1994 dollars. He reported that it was his understanding that an architect had been employed to design the restrooms that needed fans, however, that was not correct, there was an architect on board to help with design of restrooms in the basement only. The other bathrooms didn't have architect. He reported that Code reads that if window in bathroom, no fans needed; and funds put in place to remodel those bathrooms; circulation in building very poor, build up of high humidity in bathrooms creating difficulty for Mission in trying to keep those bathrooms clean (humid, mildew) and hope that fans help eliminate those problems.

Nelson Rumore asked for clarification on funds: $50,000 CDBG awaiting word; $19,500 ADA compliance on second floor; $19,178 combined 1993 and 1994 Community Needs; $12,000 1995 Community Needs Funds; and $20,000 for Emergency Shelter not included. Mr. O'Leary agreed.

Kent Doeling, consulting engineer, SSR Engineers, reviewed project with the committee, that this is four-story building, that several years ago an architectural firm hired to design men's dormitory and bathrooms in the basement, the basement doesn't have any windows, and some fans put in under that contract; however, those fans low quality and are now useless. He reported that project they took bids on recently consisted of replacing those fans and also new fans on all floors except women's dormitory/bathrooms (no windows in shower rooms or bathrooms) project includes total of 10 fans, and includes duct work, electrical wiring, cutting of concrete walls, etc., registers put on exterior walls, etc. for $9,975.00 proposal.
It was noted that because of lack of ventilation, walls crumbling, and is also matter of maintenance; and if don't do

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this, more significant expenses later. Mr. Doeling stated fans spec'd in this project, commercial quality fans.

There was some discussion re. previous project which was installed to architect's specs. and was inadequate. Mr. Doeling stated that as a general rule contractor's guarantee their projects for one year, and no obligation to an architect to replace a defective product, there is an obligation to an architect if deficient design for him to make that good. The committee asked if he spec'd wrong item; and Mr. Doeling stated he can't make that determination. The question was raised as to potential dollar amount, and Mr. Doeling stated less that $1,000 probably not worth pursuing. Mr. O'Leary advised committee that the City not a party to this contract, but between Mission and contractor who installed fans; and City would probably hold funding. Mr. Siewert reported that the architect was hired by the Shelter for Homeless, not a contract with the City and part of that was donated.

It was noted that residents involved in cleaning; Mr. Rumore stated issues they have more structural.

There was some discussion re. funding allocation, and how package projects to use old money first. Mr. O'Leary stated that normally staff does that when a proposal submitted to Urban Development and explained process for funding projects using oldest monies first.

The committee directed that their previous recommendation be forwarded to council (awarding bid to Grand Forks Heating in the amount of $9,975.00)

Mr. Doeling reported that the Shelter for Homeless is going to have to replace their heating system (steam), $100,000/120,000 project; that new system would be hot water heating system, and no way to combine the two; that if they make application for funds and are allocated portion of request, can those funds be held until have total amount for the project. Mr. O'Leary stated he would have to look at this.

2. Matter of consolidated plan.
Sue Redman submitted copies of draft plan and stated they are in a 30-day public comment period which ends on May 8, and then the full city council will consider the plan for approval/ amendments, etc on the 15th. She commented on Part IV which is the Strategic Plan, which will be guiding CDBG program in the next 5 years, barring any changes to the regulations or any new plans that have to be written. She stated that pages 37-46 lay out the City's goals in housing and working with the homeless people and in community development. She stated that this is the first year that Community Needs had to be considered; and will MINUTES/URBAN DEVELOPMENT COMMITTEE
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guide decisions on CDBG in coming years (funding at least one project that benefits disabled, funding at least one project that benefits children living in low income areas, or labeled at risk). She reported that committee can recommend changes, and she will bring summary of any comments received from the public. She reported that notice was placed in the paper, but that they have also sent out about 35 copies to council, number of non-profits that are primary beneficiaries of CDBG. It was noted that HUD is reviewing. Copies were sent to Housing Authority, Community Action, Third Street Clinic, Adult Abuse, Mission, Listen, State, Realtors Assn., County Social Services, Grand Forks County, East Grand Forks, etc.

3.) Matter of affordable housing.
4.) Matter of low income housing.
Mr. O'Leary reported on committee referrals on affordable housing to Urban Development Committee, Urban Dev. Department or Housing Authority:
D-1 (City government or a non-profit agency could develop lots and sell them at cost for affordable housing.) Mr. O'Leary stated that staff looked as possibility of purchasing lots and developing them, that Sue is in the process of applying for Home application, which would allow the City or Housing Auth. to build 7 houses in Burdick's and sell them; that there are 39 lots left in Burdick's Acres. He stated that if the Housing Auth. doesn't have funds to develop any additional lots, if going to get involved, probably have to carry some paper on it; and that top priority might be development of existing lots in Burdicks's Acres and to put those on the market.

D-2 (Rejuvenation of older neighborhoods). Mr. O'Leary reported that staff is actively looking for old houses in older neighborhoods suitable for demolition; that they have put HUD on notice through FHA that they want to exercise their right to be first buyer of houses foreclosed upon; landlords also interested in buying those lots and driving up the cost. He stated there's another way to do - target some blocks, and if committee wants them to pursue, they would do that.

D-3 (Expand City program to assist lower income families with down payments) Mr. O'Leary reported that council had approved a $90,000 expenditure out of CDBG for rehab and down-payment; that is an expansion of that program.

E-1 (Conduct comprehensive study of the impact base personnel have on local housing market). Mr. O'Leary reported they have hired a junior from the Management Department at UND, who will be an intern working under Sue to study the impact Base has had on housing market, and who will get some additional information from professors at the UND on what study should consist of; and when first draft of outline done, will bring to committee. Mr. Beach

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asked if this was duplicating something that mayor's office has in progress. Mr. O'Leary stated it was his understanding that it was not, that study lot more generic that this.

E-2 (Encourage development of additional rental units without amenities such as air-conditioning, laundry, garages, etc.) Mr. O'Leary reported that the Housing Auth. is looking at that but at loss how to encourage that to happen; developers respond to the market and they perceive the market to be nicer apartments with those kinds of amenities. Mr. Glassheim stated that's not just to the market but to profitability in the market, profit per unit; doesn't mean there isn't a market but the supply is controlled by the people who would rather make more on one sale that having to make two sales. Mr. O'Leary stated these are rental units not owner-occupied units.

F-1 (Explore utilization of new investment vehicles such as real estate investment trusts) Mr. O'Leary reported they haven't taken any action on that. Mr. Beach stated that a real estate investment trust requires min. of 100 shareholders, is basically another form of a corporation, significant characteristics is that a large percentage of investments have to be in real estate or in real estate mortgages; they have to distribute at least 90% of their earnings every year and then exempt from taxation (shareholder taxed on their earnings); however, one of the catches is that you have to have at least 100 shareholders. He stated that intent of Congress in drafting this legislation in about 1960, was that they wanted this vehicle to be something available to the person on the street. Mr. Beach stated there is only one in North Dakota. Terry Hanson reported there is also one in Fargo.

Mr. O'Leary reported that (E-2) Housing Auth. doing some rehab work on housing complex on 4th Ave., existing units; that this is something that receives low priority in terms of Housing Auth. in issuing vouchers and certificates. He stated that there may be some possibilities of using a non-profit on the development of those kinds of housing opportunities; and question raised why Jobs Development Authority (Growth Fund) hasn't been used more extensively to develop housing. He reported that problem with Housing Auth. doing it is that they don't have any money; another way to get into development game is using JDA to be the developer. He stated that there is some equity in JDA which may be used as collateral position. He stated that they have looked at JDA primarily as economic development tool, but could be used as housing tool. He stated that CDBG funds cannot be used for new construction; could use to buy and develop lots, but would have to be sold to low income families. He stated CDBG could be used to develop rental units, or to leverage bond money; JDA could sell bonds backed by the City. Mr. O'Leary stated that with vacancy rate of 1 1/2-2% not lot of opposition in market

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they would be looking at. Mr. Glassheim stated they would do things that market is not wanting to do; sleeping rooms, etc. Mr. O'Leary stated that Housing Authority doing that, Housing Auth. partnering with Northeast Human Services. Mr. O'Leary stated there continues to be a need for large apartments.

Mr. Glassheim stated he is interested in pursuing - developing lots, look at demolition of whole block plan, look at using CDBG in buying older houses, renovating and reselling, and also E-2. Mr. O'Leary stated they can continue to look at older neighborhoods, difficult to take whole block, but if City did with TIF with direct subsidy out of the general fund; have land and infrastructure in place use housing revenue bonds and put in a row of 10-15 townhouses with zero lot lines, could landscape and set aside playground area; could use as buffer between single family and housing complex. Mr. Beach stated if City takes activist role, they should be doing things private market cannot do or refuses to do.

Held in committee.

5. Matter of reduction in Community Development Block Grant
(CDBG) funds for 1995.
Mr. O'Leary reported they have had no word as of yet. Held in committee.

6. Matter of comments from State Historical Society.
Mr. Beach reported he received phone call from local Historical Preservation Commission and they had been contacted by the State Historical Society which was irate because some of the structures that we have purchased and demolished had not gone through the appropriate Section 106 checklist, and to resolve, he said he would bring to attention of the committee to make sure that this office was aware and make it a matter of record. He stated that the Grand Forks Historic Preservation Commission is a COG (certified local government) and do have the authority to make these Section 106 checklists and that editorially speaking, thinks they would be easier to deal with than the State Historical Society. Curt Siewert stated they may want to ask the State Historical Society if they want to turn over that responsibility to do the 106 review. Mr. O'Leary stated that as long as matter of record they need to respond somewhat, the State may have maintained that they didn't follow the 106 Review at 409 Walnut, but he would submit that they did. He stated that the State has 30 days to review and comment on that project, they failed to do that. He stated that Curt did talk to the local Historical Review Board and are going to make some changes in the form that would be more invitational for them to make comment on that process. He stated they have tried very hard to cooperate with the State and local Commissions, and if State feels they didn't follow law, he would be interested in hearing the MINUTES/URBAN DEVELOPMENT COMMITTEE
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specifics of that so would have an opportunity to respond because once it appears in the minutes, Denver will be wondering why they didn't. Mr. Beach suggested that any staff member involved in this perhaps contact the chair of the local commission. Mr. Siewert stated he has already done that. Information only.

Meeting adjourned at 5:50 p.m.

Alice Fontaine
City Clerk

Dated: 4/27/95.