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HomeMy WebLinkAbout12-20-1984RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL ���� CITY OF ROCHESTER, MINNESOTA Adjourned Meeting No.M, - December 20, 1984 Agenda Item A-1 President Postier called the meeting to.order at 7:30 P.M., the following members being.present: President Postier Aldermen Bluhm, Duffy, Powers, Solinger and Strain. Absent Alderman Allen. B-1 A Hearing on the Request for Housing Revenue Bonds for the Rochester Village Apartments. Wishing to be heard was John Freeman of 3753 Oliver Street , Washington, D.C. He is one of the sponsors of the Rochester Village Apartments and also stated that representat- ives from Miller -Schroeder Bonding Agency were present for any questions that the Council may have. Mr. Freeman stated that this complex creates many dollars worth of taxes to the community and that this housing complex is an important one. He stated that it would require 1 to 1 and 2 millioh dollars worth of construction. He also stated that this complex is made up of mixed variety of housing and -that is what makes it interesting to the community. Mr. Freeman stated that this complex is in poor condition and needs repair badly. This use of Housing Revenue. Bonds would not cost the City of Rochester any money at all, this use is merely a tool to help finance projects. Mr. Freeman stated that this complex is an asset to the City and without help of this tool to finance the project the complex could remain run-down and become somewhat of a problem in the City. Alderman Powers questioned the future of this complex if this method of financing were turned down. Mr. Freeman stated that they would have a difficult time economically but they would make the best effort to provide the best possible housing within the resources that they do have at this time. The basic problem of the entire complex being run down may not be over- come at this time. President Postier asked Mr. Freeman if he expected to ask the City for use of these bonds when the complex was purchased. Mr. Freeman answered "No." Alderman Bluhm asked Mr. Freeman what he paid for the complex. -.,.,in May when it was purchased? Mr. Freeman said 11 million dollars. Alderman Bluhm commented that the assessment market value is less than half of what was paid. Mr. Freeman stated that some of the material conditions were not evident at the time of purchase. Alderman Duffy questioned Mr. Freeman on how long have they purchased property in the United States. Mr. Freeman stated "8 years". Aldmern Duffy:asked Mr. Freeman how long he had been with the firm. Mr. Freeman stated 8 years. Alderman Duffy asked if they owned other units and Mr. Freeman stated that they have control of 3,000. other units in the United States. Alderman Duffy asked if they owned any other complex in Minnesota. Mr. Freeman stated they did not. Alderman Duffy asked Mr. Freeman if he was aware of the condition and if he had an appraissal done and was he aware of the results in the appraisal on the said condition, of. the Rochester complex_before 2336 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL CITY OF ROCHESTER, MINNESOTA Adjourned Meeting No. 22 - December 20, 1984 Agenda Item B-1 they purchased it. Mr. Freeman stated that they had an appraisal and they were aware of the condition, however not to the extent that they found when they started to remodel and repair some of the units. They originally expected to spend 112 million on the compilex due to the current condition it would cost between 1 and 1 112 milli Alderman Solinger questioned Mr. Freeman if any of the other projects that they were working with used.Rehabili.tation loans. Mr. Freeman stated that they were mixed projects. He used this method of financing in three of the 19 other projects. Alderman Strain asked Mr. Freeman if this method of financing was approved by the Rochester City Council, would all the money stay in Rochester for improvement to the Rochester complex? Mr. Freeman stated that it would stay in Rochester. Alderman Strain also wondered if these units would stay rental units and not condominiums. Mr. Freeman stated that they would stay rental units. Alderman Bluhm asked Mr. Freeman if conventional financing was feasible. Mr. Freeman stated that it really had not been sought after, but the funding is very limited and is not easy to get. Wishing to be heard was Joe Weis of Rochester, Minnesota and urged the Council to approve this method of financing. He stated that it is in need of repair and rental units are difficult to build and manage. Alderman Solinger asked Mr. Weiss what the additional need is for new rental housing?. Mr. Weiss stated that he ran a survey & that-= 900 units have under 3% vacancy. He ureged the Council to consider this method of financing. Wishing to be heard was Bob Bjerke of 1567 9th Ave . N. E. and is a member of the Housing and Redevelopment Authority. He approves of this method of financing. He stated that it was a tool to be used and this area needs "cleaning up He also urged the Counci:lto approv this. Wishing to be heard was Linda Lemmer, Rochester, Minnesota. She lives in the complex and urged the Council to approve this. She said that the apartments are in really bad shape and that she can't afford any- thing else to live in. Having no one else present that wished to be heard, President Postier closed the hearing. Letter written by Mr. and Mrs. J.D.Finnesgard of 1001 17th St. N.E. in opposition to this request was entered in the official record. 1 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL 2337 CITY OF ROCHESTER, MINNESOTA Adjourned Meeting No. 22 - December 20, 1984 Agenda Item B-1 Letter written by State Representative Don Frericks was entered in opposition to this request. President Postier asked City Finance Director Paul Utesch what his opinion of the request for bonds would be. Mr. Ut.:esch stated that this is a type of financing available to people requesting it. The method can be a useful tool to use. Mr. Utesch quoted bonding statistics from the Wall Street Journal and when asked about the impact to the City of Rochester, he stated that the City is in contention for the bond market too, and if this method were used in the United States to a great extent, the City of Rochester would feel this when we needed bonding. Mr. Utesch stated that Congress is in the process of changing all the programs and he personally feels that cutbacks would be made ' this type ,of financing and a limit may be established in the near future. Thus,it is a little hard to determine the exact outcome when Congress has not acted on arything at this time. Alderman Strain stated that everyone on the Council knows his feelings on.use of bonds to bail people out. However, in this case he would change his philosophy and support the request. He feels that this is a tool that can be used and really would not hurt the City of Rochester. Alderman Solinger stated that ,he is not totally against this request. He stated that the property is in bad shape and needs to be developed. He stated that this improvement would bring the value.of the complex up and would be beneficial to the City of Rochester. He stated that residents of Madonna Towers, a neighbor, sees sheets and towels in the windows so that they can keep out the cold drafts, etc. He supports this request. Alderman Bluhm agreed with Alderman Strain and Solinger and supports this request. Alderman Duffy opposes this. request. He stated that the buyer should have known what -condition -:the complex was in before -they purchased it. He -stated that the Federal and State levels do have this method of bonding.however, the City of Rochester will have competitor i-n bonding i.f this is abused. He does not think that the taxpayers whether they be in the City of Rochester or anywhere else should have to bail out developers. He is opposed to this. Alderman Powers is concerned about this situation. He stated that other requests for Industrial Revenue Bonding have been submitted to the Council, guidelines have been presented and studychas been made. This is brought before the Council in a two week period and decisions are expected to be made in that short of time. No real study has been made and he is concerned about the quickness of this project. He stated that he has mixed feelings though, because Housing Revenue Bonds is a tool for financing rehabilitation and hates to see this turned down by the Council. RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL 2t�38 CITY OF ROCHESTER, MINNESOTA Adjourned Meeting N o. 22 - December 20, 1984 Agenda Item i E-1 President Postier stated that he agreed with Alderman Duffy and having looked at the track record of the developer, he stated that they must have known the condition of the complex before they bought it. He is opposed to this. Having no further discussion, Alderman Solinger moved, Bluhm second to approve this request making sure that the equity is as stated in the criteria attached to the Request for Council Action. Upon Roll call vote, Aldermen Bluhm, Solinger and Strain voted Aye. Ayes (3), Aldermen Duffy, Powers and President Postier voted Nay. Nays (3). Because a tie vote is a negative vote, the Motion did not carry. Alderman Powers stated that he may have voted for this project if he had more guidelines and time to study this request. Request for reconsideration of Parkland acquisitions approved at the.12-3-84 meeting were brought back to the Council.The area of concern was the 5.5 acres along Mayo Run east of Homestead Park. Alderman Powers stated that the neighbors in the area have worked very hard to establish this area as a nature preserve. Wishing to be heard was Harold Stewart of 1535 Graham Court S. E. The Council granted him permission to be heard - normally this is not a public hearing. Mr. Stewart intoduced David Carrish of Homestead 1►"ails and gave the Council a brief explanation of how this area was formed. In mid 1982 neighbors formed a steering committee to solicit neighbors to purchase the land and donate it to the City. This is a single proposal and they spent a great deal of time and effort to get this project going. In 1982 the Park Board gave this committee their backing that they would be willing to work with them and help them to succeed with this project. In 1983 the Park Board still agreed with the project and backed the committee. In 1984, they found that they were dollars short and the Park Board again indicated to them that they were willing to back the project. Alderman Strain wondered how many acres are in the tax exempt State area wildlife reserve and where this land is located in conjunction with the park land in question. Mr. Dave Carrish of 724 Neville Ct. was present and explained where the land in question was located. He said it would tie in with the park land proposed. Mr. Carrish also stated that this is now in the Flood Fringe and unless it is filled, would be difficult to develope. Wishing to comment was Mr. Curt Taylor of the Rochester Park and Recreation Department. Mr.Taylor stated that the Park Board is interested in helping the neighbors with the purchase is because the area.is in the Flood Fringe and unless this is used as a potentia for water run-off, it could cause flooding. In other words if this area was filled in and developed, flooding could occur. He stated that the Council has indicated to the Park Board to purchase land along the river as it would be a good method of flood control. It was mentioned that the neighbors wanted to stipulate that this be left a wildlife preserve and be left as such forever. 1 RECORD OF OFFICIAL PROCEEDINGS OF THE COMMON COUNCIL �`3�� CITY OF ROCHESTER, MINNESOTA Adjourned.Meetinq No. 22 - December 20. 1984 Agenda Item E-1 Mr. David Carrish stated that the neighbors would like to see trails, skiing ( cross country ), etc. would be acceptable, but they would not like to see baseball diamonds, etc. be in the area. Tree removal should be kept to a minimum and only at the discretion of the Park Department. President Postier stated that there should be no separate stipulatioi and the land should be purchased as any other park property. Having no further discussion, Bluhm moved, Powers second to agree to purchase the Parcel No. 3 (5.5) acres adjacent to.Mayo Run. Overall cost is to be $50,000. with the City paying $30,000. and the neighborhood paying $20,000.00. Ayes (6), Nays (0). Motion carried. Strain moved, Powers second to purchase Parcel No. 2 which is a 5 acre land donation in Marvale Subdivision from the James Leon Joyce estate. Ayes (6), Nays (0). Motion carried. Discussion was held on Parcel No. 1 which is a 3.5 acre.area at llth Avenue S.-E. and 16th Street S.E. This would be an Outlot zoned R3-FF (Medium Density Residential Flood Fringe ). Mr. Curt Taylor explained that this property has come before the Park Board on a couple of occasions and that the neighborhood really can use this for an additional park. Wishing to..be heard was Rick Gentling of R. R. Douglas, Mn. He stated that he wanted to sell this -land to the.City and that the statement that he wanted to donate it was in error. He did offer it to the church nearby, but the Church Council denied this request. He stated that Gerald Thorkelson appraised this for $43,000.00 and he is asking the City to pay $10,000..00 for this land. Mr. Taylor stated that access could be made from llth Avenue and the area would be maintain- ed from that Avenue. No other access is needed by anyone else. Having -no further discussion, Alderman. Strain moved, Powers second to approve the purchase. Ayes (6), Nays (0).Motion carried. Having no further business, Bluhm moved, Strain second to adjourn the meeting. Ayes (6), Nays (0). Motion carried. City Clerk