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MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, August 28, 1996 - 4:00 p.m.

Members present: Beach, Hanson, Polovitz.

1. Matter of purchase of property at 524 Fenton Avenue.
Joel Manske, director of Housing Authority, reported that Mr. O'Leary had talked to Tim Dittus of the Camrud law firm to put together a purchase agreement and a letter to the owner of 524 Fenton Avenue, with a purchase price of $20,000, and agreeing that as a part of the agreement the owner would bring back taxes to date prior to the sale and that the owner would pay half the closing costs, which amount to about $600. He reported that the back taxes total $6583.50 if paid by September 15, 1996; that if the owner fails to pay the taxes prior to October 1, 1996, the property will be forfeited back to the County for failure to meet its tax obligations. He reported that he had received draft of letter to the property owner and purchase agreement, which they had reviewed today; that it is their intention to send the letter to Mr. Oliver Deschene, owner, and his daughter, Mrs. Mary Carl, East Grand Forks, who is handling the transaction. He stated that upon committee authorization the City of Grand Forks would like to make this offer of $20,000 on unit at 524 Fenton Avenue and request that the owner sign the purchase agreement and return to the City. Member Hanson reported that Mr. Deschene was going to try to fix up property to meet Code, based on finance avail- able, he was unable to do that, and there was a third party who had become involved with possibility of buying in; that Mr. Deschene has not be able to access the property at times because locks put on the doors, etc. and in talking to Mrs. Carl, she said Mr. Deschene felt comfortable with what Mr. Manske has proposed.

Oliver Deschene stated he would be agreeable to the $20,000 offer; he stated that the problem is that he was fixing up the property but had problem getting to the property; that Dale Kerian made agreement with him to assist in fixing and take off on rent (which would be about $350/mo) but no rent paid, no agreement other than verbal, and then he was locked out. He stated he has done most of the electrical work, some plumbing work. Mr. Manske advised Mr. Deschene of proposal to purchase, advised him to get legal counsel if they feel that's necessary. It was noted that at the time of closing one of he checks would be issued directly to the County and the other to Mr. Deschene; and that letter would be sent tomorrow along with purchase agreement. He stated that they would not close until after council approval, or withdraw from purchase agreement and Mr. Deschene would keep earnest money.

Mr. Deschene stated he does not occupy the premises, and that he does not have lease arrangement or contract for occupancy of the house. Mr. Manske stated they would want to wait until actually closed the transfer and then have Mr. Dittus issue a letter informing the occupant that he has seven days to remove his

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August 28, 1996 - Page 2

possessions. Mr. Manske reported that Mr. Kerian has written letters to Bev Collings, Code Enf. Officer, that he is not an occupant in this house, that he is fixing up to be an occupant in the future; there is not a certificate of occupancy issued for the premises. Mr. Manske reported that there is also a young child with him and not sure what kind of condition/environment this individual being brought up in, but have addressed that through different vehicle.

It was noted that funds would be paid out of Acquisition/Demoli- tion Funds. He also reported that the plan of the Urban Develop- ment Office would be to relocate one of the water treatment plant houses, that this is corner 50'x140' lot, with detached two-stall garage in the back; not sure there's any value in restoring this house. Curt Siewert has to go through Historical issue before can demo the building; their perspective now is that the house needs to be demo'd and put either new stick house or relocate another unit.

Moved by Hanson and Polovitz to authorize purchase of the property at 524 Fenton Avenue for $20,000 with funds from Acquisition and Demolition Program funds. Motion carried.

2. Request from Grand Forks Mission to use balance of project funds for awnings for building.
Nelson Rumore, Director of City Mission, reported that there is balance of funds allocated to them for various projects through Community Needs in the amount of $1400 or $1500, that he reviewed those proposals, have done the items requested and have balance, and presented proposal to put up 3 awnings (over front door at est. cost of $1800, and over windows on ground level) and paint front facade of the building with awnings over it. He stated they would use Mission funds to pay difference in cost. He stated this does not take care of brick but that is probably quarter million dollar project, but this would allow him to say to the community that the Mission is changing. He stated that every time they do something on the outside, community makes assumption that they are changing on the inside, which is a good assumption. Terry Hanson reported that some of the funds go back to 1993. Mr. Rumore stated he would get bids, take balance of Community Needs funds and apply to the project, and use Mission funds for the balance.

Beach and Polovitz asked whether this was best way to use $2,000 for the mission of the Mission. Mr. Rumore stated he has other projects pending: lighting on third floor is one. After further discussion Committee asked Mr. Rumore to take to his Shelter Board, share committee's concerns. Committee took no action and asked Mr. Rumore to resubmit proposal.

2. Matter of rental rehab. funds.

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Terry Hanson reported that in May of 1994 City approved rental rehab loan/grant to Jim Kobetsky and Bill Schoen for the Roosevelt School project in the amount of $150,000 to assist in the development of 16-rental units in that facility; of the $150,000 that was approved, there was $129,757.00 that came from the actual rental rehab grants from HUD and the additional $20,000 was from program income paid back to the program from other recipients of the grant money. He reported that today they received from the developers of the Roosevelt School a request for additional funds. He reported that in 1994 there was approx. $150,000 available for this program, since then they have received an additional $84,000 in program revenue; and what they are requesting is to utilize these additional program income funds to expand their project to include elevator and ventilation system for the school. He stated that Mike Kuntz from developers was present.

Terry Hanson reported that this program is a grant to the City and when City initiated the program, they set up as loans at a 3% interest rate and deferred for 10 years. He stated that in 1991 Hud discontinued the program entirely and program funds were to be expended within a max. of 3 years of the close of the program; and they had $400-500,000 remaining in program funds as a result of the Lewis Blvd/St. Anne's Hosp., there had been approx. $500,000 approved for that project late in the 1980's and never carried forward but funds obligated; that when that project fell through they had lot of funds to get out, so funded various projects under 60% loan/40% grant with 0% interest but had to start repaying funds as soon as the project was completed. He reported that HUD requirements called for any program income as long as initial grant for Rental Rehab funds are not expended, the program is open and any program income has to be used within the same program under the same guidelines, but once they complete expending the rental rehab funds, then any program income not required to be used for this program but can be used for match for HOME programs. He noted that these funds are coming from interest on long term funds and repayment of loans, that a large portion of the $84,000 available resulted from the pre-payment from developer who went through refinancing process in 1995; other projects have been completed and started paying back in 1995.

Committee asked if availability of funds has been made public; and Mr. Hanson stated they have not re-advertised the program.

Polovitz moved to authorize the expenditure of an additional
$84,000 towards the Roosevelt School Project contingent upon availability of funds and contingent upon HUD approval. Hanson seconded the motion.

Mr. Hanson reported that once program closed out, it would be up

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to City to determine what funds would be used for, has to continue to assist low income families, etc.

Beach stated that since bulk of this money has been there since 1995, never been advertised, that there are lot of landlords who would have some good uses for it, yet general impression through- out the community has been that the rental rehab program has been dead for a few years; and if allocate funding to one project without community being aware there was any money there. He stated that that's not to say that this isn't good project, but talking about principal involved. He also stated that this particular project has had a little controversy surrounding it.

Mike Kuntz stated that ventilation and fire protection systems will be done regardless, but the $65,000 (for elevator and shaft) riding fence, they are just starting demo, and will need to make their decision whether to install elevator. It was noted that this is 3 1/2 story building, that they don't have to have elevator, can make 5% of the building accessible through a ramp. It was noted that Roosevelt School developers would be eligible to make application for these rehab funds. Terry Hanson reported they have had some inquiries re. these funds, that this program carriessome restrictions on income.

Polovitz and Hanson withdrew their motion.

Polovitz moved that Urban Development advertise the availability of those funds and take applications. Hanson seconded. Motion carried. (committee only)

4. Congratulations to Urban Development.
Chairman Beach stated that it would be appropriate if the committee took note of good work done by the Urban Development Department and particularly, Mr. Manske, in receiving awards from HUD, and moved resolution of congratulations and well done to the department and to Mr. Manske; Polovitz seconded the motion.

Mr. Manske stated they whole office, committee and council deserve credit, have demonstrated to HUD that Grand Forks place to watch. Question called and motion carried.

5. Matter of marketing plan.
Member Hanson presented copies of marketing plan for the vacant public works property at 1518 Mill Road and 1514, 1517 and 1520 North 6th Street; that the plan was to have Housing Auth. look into dividing that lot into 3 50x150' lots, property would have to be replatted. Curt Siewert reported that an application has been submitted under the CDBG program.

Meeting adjourned at 5:10 p.m.
Alice Fontaine, City Clerk