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MINUTES/URBAN DEVELOPMENT COMMITTEE
Wednesday, August 13, 1997 - 4:00 p.m.

Members present: Beach, Hanson, Polovitz.

1. Matter of purchase of property for relocation of four-plexes.
Curt Siewert reported that the four-plexes are being moved from Michigan but not aware of where they would be relocated; HUD offered the four-plexes to the Housing Authority and looking for property to place the buildings; 2 buildings with four units in each building (38x46') Held in committee.

2. Matter of rental rehab. applications.
Mr. Siewert reported that committee had previously approved proceeding with up to $1M and to request $2M from the State, the Mayor has done that but not sure if received response. He distributed updated listing of applications totaling $3.189 million, have 2 applications that will be brought in later and which are requesting something different than under prescribed program (one is from former St. Anne's). Terry Hanson reported that Mr. O'Leary recommended committing $2M out of CDBG and recommended moving ahead with this.

Moved by Polovitz and Hanson to obligate a total of $3M with understanding that $2M out of CDBG and $1M from State. Motion carried.

Terry Hanson reported they will come back when have more informa- tion, and Mr. Siewert reported they are reviewing applications with SBA and Flood Insurance Program.

3. Matter of request from Phoenix Properties to continue payments
on low interest rental rehab. loan (building burned).
Mr. Hanson reported that they had received letter from Phoenix Properties, Dean Wieland, that they had received rental rehab loan on this property in 1985 for total of $75,000, deferred loan and payments began on that loan in October of 1994, they are in receipt of insurance check for $100,000 to Phoenix Properties and the City of Grand Forks (as mortgage holder of the property) and they are requesting that the City allow them to continue making payments on the loan rather than request full payment of the note so that they can use those funds for continuing to bring their operations up and running. Mr. Hanson reported that final payment is due in March 2001, and they have currently made payments through August of 1997, and monthly payments just under $1600/mo. Mr. Wieland reported they have applied for SBA, that they also debated whether and where to rebuild, they have lot of unanswered questions and crunch of cash flow - $50,000 to demolish building, which they have done.

Comm. questioned if there is no longer collateral, should have city attorney review before committee acts. Mr. Wieland stated there are personal guarantees in the loan agreement; and they expect ad-ditional insurance payment. He stated they intend to make payments and if SBA loan comes through probably take care of it then.
MINUTES/URBAN DEVELOPMENT COMMITTEE
August 13, 1997 - Page 2

It was moved by Polovitz and Hanson that we allow Phoenix Pro-perties to continue making monthly payments for up to one year, pending review of the city attorney. Motion carried.

4. Matter of concerns re. competition between City and private
sector re. rental of buildings downtown.
Shelly Corbett, Dakota Property Mgmt., and owner of building at 407 DeMers, stated that they are in process of getting building permit for the building at 407 DeMers. She stated she also manages property in St. John's Block, and expressed concern that they can't compete with City in renting space. It was noted that space in City Center Mall being rented by Mall manager and operates property to benefit of property. Mr. Hanson reported that those buildings cash flow and City not subsidizing those properties. She stated they have building which will cost $100-150,000 to get it up and running, and now talking about Noah's Ark for $7.00/sq.ft. and questioned whether worth it for them to renovate building if have to compete with City. It was noted that City owns several bldgs. in City Center Mall and the former Bill Larson Co.; it was also noted that two buildings in Mall had been sold, buyer didn't pay taxes for five years and City received buildings back for delin-quent taxes. Mr. Hanson stated that Noah's Ark is temporary, that they did market survey and going to charge market rates.

Ms. Corbett stated another issue/concern was City soliciting outside managers for property, and questioned whether she could solicit to manage City's buildings (Noah's Ark). Mr. Siewert reported that the Housing Auth. manages their own property and Housing Auth. cannot manage an unsubsidized property.

Ms. Corbett asked if there was going to be any type of grants or programs for downtown businesses. Committee stated that there probably would be some good news, but just received funding last week and is premature to say now.

Committee stated that she has some legitimate concerns, and that they would ask department to give committee a concise policy state-ment that committee could release to the public when questions arise. It was also noted that things are starting to turn downtown, limited space and rents increasing, and Mr. Siewert stated there is going to have to be some assistance available. He also noted that there has been some consideration to a joint powers for the downtown and discussion re. architectural covenants.

There was some discussion re. temp. rehab. of buildings, and that is problem with not addressing line (flood protection).

Moved by Polovitz and Hanson to adjourn; meeting adjourned at 5:00 p.m.
Alice Fontaine, City Clerk
Dated: 8/14/97.