HRA Minutes 08-21-1997
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Thursday, August 21, 1997 - 6:30 p.m.
Special Meeting
MEMBERS PRESENT:
Chair Brad Barger, Vice Chair Steve Andrews, and Darrin Lahr.
MEMBERS ABSENT:
Bob Murray and Dan Frie.
STAFF PRESENT:
Rick Wolfsteller and Ollie Koropchak.
STAFF ABSENT:
Jeff O'Neill.
COUNCIL LIAISON:
Mayor Bill Fair.
WALKING TOUR OF FRONT STREET AREA
BRA commissioners, staff, and Mayor Fair met and observed the property located at 3 Walnut
Street. The said property is under consideration for acquisition by the HRA for the purpose of
future redevelopment. The commissioners noted the age and condition ofthe structures (home
and detached garage), storm damage to the structures, parcel size and location, and general
appeal ofthe existing neighborhood.
Additionally, the commissioners toured the lIRA property located at 220 Front Street. A garage
and small shed exist on the property and upon entering the garage, lIRA members noted storage
of two motor cycles and otber personal property not owned by the HRA. Currently, no lease
agreement exists between the HRA and another party.
SPECIAL MEETING
7:00 p.m. - City Hall
GUEST:
Larry Schleif, representing the 3 Walnut Street property.
1. Call to order.
Chair Barger called the special HRA meeting to order at 7 :20 p.m.
2. Consideration to approve tbe August 6. 1997 HRA minutes.
Darrin Lahr made a motion to approve the August 6, 1997 HRA minutes. Seconded by
Steve Andrews and with no corrections or additions, the minutes were approved as
written.
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HRA MINUTES
AUGUST 21, 1997
3. Consideration of adding items to the agenda.
Consideration to discuss the tenns and conditions of the Private Redevelopment Contract
between the HRA and Presbyterian Homes was added under item 6., Other Business.
4. Consideration to review the purchase option of August 6. 1997. for possible amendment
of the motion. (3 Walnut Street)
Chair Barger thanked Mr. Schleif for taking the time to meet with the lIRA. Schleif noted
he was surprised at the HRA's reaction that their March 1997 appraisal of$86,000 was
high. An appraisal obtained by Schleif after the storm appraised the property at $83,000.
Prior to the storm ifwould have appraised at $88,000 to $89,000 indicated Schleif
Schleif outlined his four options and noted the convenience and beauty of the location:
First, demolish the existing structure and construct duplex for rent. Next, buyout his
sister and remodel as his own residency. Thirdly, sell on the open market. And fourth,
remodel for long term rental, five plus years.
Barger noted the HRA's preference is an option to purchase rather than an out-right
purchase. Schleif stated as rental property the value will only go up. The roof and
chimney on the house were damaged by the storm and the chimney has been repaired.
The garage received roof damage plus trees were lost. He estimated repairs in the
neighborhood of $300 for chimney, $1,500 for roofs, and $150 for miscellaneous for total
repairs of$1 ,950. Schleif continued he would like something accomplished at this
meeting.
Ifthe lIRA offered $83,000 as is, will you take it? Schleif responded maybe. Schleif
agreed to the offer but since the property is in an estate he must check with his sister. Are
you interested in a contract for deed? Schleif responded he must check with his sister and
his attorney. Based on Schleifs appraisal of$83,000 and the elimination ofthe lIRA to
pay relocation and replacement costs because the property is vacant, Brad Barger made a
motion to purchase the property located at 3 Walnut Street in the amount of$83,000 on a
contract for deed thereby amending the HRA motion of August 6. Terms ofthe contract
for deed: 30-year amortization, balloon payment in four years, interest rate based on the
prevailing FHA rate at time of closing. Steve Andrews seconded the motion and with no
further discussion, the motion passed unanimously. Schleifrequested the consideration to
use the garage for storage of vehicles over the winter. This to be further discussed
pending HRA liability.
Schleif to confirm the agreed upon lIRA offer with his sister and attorney. Because the
estate is in probate he did not anticipate the closing until around the end of September.
The next HRA meetings are September 3 and October 1.
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lIRA MINUTES
AUGUST 21,1997
5. Consideration to review the approved 1998 HRA budget.
lIRA members reviewed their approved 1998 Budget and re-affrrmed their August 6
decision to not authorize a HRA levy. Budget to be submitted to the City Council as
informational.
6. Other Business.
After visiting the HRA property at 220 Front Street and noting the storage of personal
property in the garage, the lIRA requested Koropchak draft a letter to Michael O'Connor
for removal of the personal property. It is understood the two motor cycles and personal
property belong to Mr. O'Connor.
Added agenda item: Consideration to discuss the terms and conditions of the Private
Redevelopment Contract between the HRA and Presbyterian Homes. Koropchak
informed commissioners upon reviewing the contract for the first pay-as-you-go payment
due in August 1997 to Presbyterian Homes, it was noted that the BRA had not received
any reports from the owner as outlined in the Extended Low-Income Housing
Commitment Agreement between the lIRA and Presbyterian Home Housing and Assisted
Living, Inc. The owner to receive annually from each tenant a signed "Certification of
Tenant Eligibility" and submit a copy of the annual income certification, documentation,
and rent records to the HRA. Additionally, the owner agreed to submit an annual certified
report "Certificate of Continuing Program Compliance" to the HRA 30-days after each
anniversary date (May 1996) ofthe projects occupancy date. This is important to the
HRA as the TIF Housing District was approved as a "Qualified Housing District" which
means the district is exempt from the HACA Penalty. To be a "Qualified Housing
District" the project as elected by the owner must meet the 40-60 Test, Federal Code.
The 40-60 Test means at least 40% or more the residential units in the project are both
rent restricted units and occupied by persons whose income is 60% or less of area median
gross income. It is important for the HRA to receive such certification from the owner in
case the IRS would audit the lIRA states Attorney Bubul.
In speaking with Presbyterian Homes, they appear reluctant to submit such information.
Presbyterian Homes reports some authorities require nothing and others like Minnetonka
want everything. The elderly do not understand the requirement and many wish not to
share their income information. Koropchak asked HRA members whether to pursue the
issue. HRA members re-affirmed obtaining the necessary reports as agreed upon in the
executed Extended Low-Income Housing Commitment Agreement.
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BRA MINUTES
AUGUST 21, 1997
7. Acljournment.
The BRA special meeting adjourned at 8:00 p.m.
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Ollie Koropchak, HRA ....Executive Director
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