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HomeMy WebLinkAboutSeptember 12, 1978 TENTATIVE AGENDA ADJ.REG. SESSION SHAKOPEE, MINNESOTA SEPTEMBER 12 , 1978 Mayor Harbeck presiding. 1 . Roll Call at 8:00 P.M. 2 . Resolution No. 1305 , A Resolution of Commendation 3. Resolution No . 1306, A Resolution Amending Resolution No. 1297 by Rescheduling the Hearing Date on the Proposed Assessments for the 1978 Diseased Shade Tree Removal Program 4. Remove rom the table the motion on authorizing the filing of the Community Development Application, including all understandings and assurances contained therein, and directing and authorizing the City Administrator to act in connection with the application and to !, provide such additional information as may be required - tabled 9/51'i for the 1978 Community Development Program - 4th and Minnesota i 5. 1979 General Fund Budget 6. Motion to reschedule the public hearing on the 1979 General Fund Budget from Wed. , September 13th at 7 :45 P.M. to Tuesday, Sept . 19th at 8: 35 P.M. 7 . Other business : 8. Adjourn to Tuesday, September 19, 1978 at 7 : 30 P.M. Douglas S. Reeder City Administrator FACT SHEET HOUSING REDEVELOPMENT PROGRAM CITY OF SHAKOPEE I believe a breakdown of the project costs will help to clarify misconceptions that Federal funds are being given to the city to provide $50,000 residential lots . Clearly that amount of money would not be provided for that purpose . A breakdown of the estimated project costs are as follows : Acquisition of businesses & properties in the area $338,000 Relocation benefits to affected people 125,000 Clearance of the land 30,000 Installation of public facilities and improvements 125,000 Administrative Costs 20,000 $638,000 From this total would be subtracted the selling price of 12 residential lots at $12 ,000 per lot -144,000 This produces a net figure which the government is providing simply to improve the neighborhood by removing the businesses and trucks $494,000 Thus we see the grant monies being provided to achieve two goals ! Removal of blight from an older neighborhood or forced land use change $494,000 and, provision of 12 affordable homes by the absorption of fair market land costs $144,000 TOTAL GRANT AMOUNT $638,000 2 - Thus the government is providing us with $12,000 a lot or current fair market value to provide these homes . Advantages to the program: 1. Business for local contractors 2 . Increase in taxes received from the area by $3,000 3. First program to provide local working residents with an opportunity to buy homes . Former programs have helped mostly rental individuals , the majority of which have not been working families 4. This is the only opportunity the city will have to change the land use in the area from commercial to residential 5. Stimulation of residential development in that area, and the surrounding property is important because of limitations on the number of existing sewered lots . 6. Use of the grant money permits us to provide affordable homes of a similar quality to already existing housing in Shakopee . Nancy Engman HRA Director September 12 , 1978 J Septeaf-ber ?.2, 1978 Shakopee City Council Shakopee, I innesota. Honorary i-iayor and Coancilmem'uers: On Tuesday Hugust 29th I attended the r^eeting that I presumed Tras to represent the councils' posi.t-ion on the $638,000 grant from 1, D. I understand that a :meeting was held in Feb--nary and that adequate .notices and publications ;!ere made to the concerned citizens of Shakopee ?ne? it appears that there has been adequate time for the council to deliberate this questicn. I understood the council .resolved not to pursue this grant any further at the August 29th meetin,. i have been ver'oally ir_fonmed that another meeting tarill be held and further consideration given to this proposition. This appears to me to be highly urnasual and unprecedented. 1asn't the Az g11st 29th meeting a duly constituted meeting? If additional facts have come to light from the .last meet- ing, it is difficult foT me to understand Tfhy the urgency of another meeting t.'.110 ,,Yeeks is necessary. DU"%L ISSCJF _kccoaYiing to my understanding there are torn nrimary objectives to be accomplished. 1. To eliminate blight 2. To provide hor.sin� for lo:,,, to moderate income people Because of these t,,,o issues, it i.s difficult to evaluate and understand this proposal . If the blight issue is primary, then_ I think the citizens of Shakopee should consider these ouestions; 1 . Is this the most serious blighted area in Shakopee? 2. ?•;nuld the citizens of Shakopee be to p-.-1y out, of their taxes `,,,6'3 ,000 to elini_nate this blight? 1 . Is this the orl i solution to the blight nroblern or are their other alternatives? If tie "ir-Lme 17-s'le is rousir�, then these rpiestions should be 'Teighed. 1. Is it worth Tcell over a. million dollars to provide twelve single bacementless houses for t1he7e neonle? 2. ;;--r-e thi > rTA-1 nrl'- accomodate pos�-,i_bly fitre to ten -oercert, of the ells--i ble neonle it the area, is it :north ter to twenty—five mi.11i.on dollars to sati sf?T this need? The follo,.dnr i.s a (-Arlo from the ?J;a ,hin;ton Star, September 8, 1978, en titled 1HUT) Snen,din t :"iJ liars on Urine cessarti Acti vit4 es" . The follo-In; is a wort for '.,Ord nu ate of one of the poi_:it s M ad.e in this art icles sit r�i cant Chun'. of t,11M arm-=s to be b^r.efitdr not the moor, but t;_r?e han'ts, prri:rage 9_�-,restors, corsu7_t,in. firms and University resear.c'zers.,' As far as the low M mnoerKto income people are concerned, ,%,hat does +-,his proposal offer that &A or VA does not offer? As far as the pi-r-)-perty owners that -.,.rill be selling this land for the project, I believe these comments and questions should be evaluated: 1. 'NThy ip.rlt this ;roner`y acquired through the rQht of Emirent Domain ond normal appraisal and evhluation channels 7irsued? Acccrding to my understanding from Ns. Engman, this can be accomplished without, the necessary cor3ennation proceeding. 2. Since it is obvious that the government will pay for the "highest and best use" for the rroperV7, why shouldn't it bb used for the "highest and best use"? 3 . Vlat would private rromoters Day for this urnperty to build twelve single units? 4. 11hat is the value of this property for residential purposes since it has a lime rock base not feasible for basement houses? 5. 1,1hat are the names of the owners that will be selling this property to the goven-iment? '.,'hat i,,,ill each property owner receive? Q under- stand that the acquistion costs are planned at $60,000 for the twelve lots.) 6. 7..-rl•tat i•-1111 the cost per square- foot be for each parcel that is purchased? Uhat will the average cost ner square foot be for the twelve lots? What is the average cost per sQuare foot of building lots available in Shakopee for single houses? Ho-c, does this cost compare with the cost per square foot for the proposed project? 7. Why pay premium prices for property that has limited use and especially unsuitable for residentiN single dwellings? 8; Nhat were the total real estate taxes paid on this property under consideration for 1977, i.e. the land to be purchased by the grant. LOCAL UNTRACTOR1115 At the last meeting August 29th, I understood that local contractors would get preference . How can you avoid competitive bids from outside the city'' ECGIOHIC VALUE If the lots will cost $53,000, it is obvious that to make the proposition economically viable, it would require that a builder put five to fifteen units for each 03,000 lot. If the proposed houses are going to be built for $38,000 on $53,000 lots, this would be over $90,000 per unit. Probably with the cost escalation this could run over $100,000. These are questions that should be considered: 1. -affiat would the M0,000 investment bring in dollars or the open market? 2. If the prime purpose is to make housing available, are other alternatives more economical? 3. If the elimination of blight is the prime purpose, is this the place for the most prudent use of this grant? 4. What criteria do you use in quantifying negative esthetic values? 5. Doesn't it appear out of proportion to have a lot value that exceeds the Muse vLire? r _ 3 _ FUTU21 Pi ODLE�,.-,S If this project goes thirough, I belie�re that you rryll have 50 to 100 applicants for each unit. What criteria i-r_iLI be used in determining; :,,-ho will benefit from these houses? 1. triages or salaries earned 2. Net worth of the in ai idual 3. A combination of 1 and 2 4. Other income 5. Cash flow or taxable income For example: Assume that a roan and wife are living on savings, have no income, have ;200,000 invested in speculative property that increases every year at $30,000. Assume further, that they lire in this house for five years and sell it for $60,OOO making a profit of ;20,000 on the house and sell their sDeculative land for X350,000. This brings about this question; HOT•, CAid YOU CONTROL PROFI EEERDTG O�; A PROJECT LIKE THIS? If this project is not administered prop-arly it appears it could invite profiteering to all participants. Since the payments made on these houses viill be raised or lovIered to accomodate the income of the occupant, it appears that you will "open another can of norms" . The administrative costs for this could be nrohibiti-re. TAXPAYER As a federal and Shakopee city taxpayer, T_ believe vie have a moral obligation to make the most prudent use of this $638,000 grant. If we must build x38,000 houses on $13,000 lots that are not suitable for baser,ents,- I think other alternatives should be considered cr someone else be given the opportunity for this money. I further believe tha+. to maintain i,;.teq;rit1r and earn credibility for f,,tu.re HUD rern_test, this nropsosal should be consi_derdd and studied further. Sincerely, ' ? �rnond Effer`�z P.S. Since I r.ii11 not be available to respond to cements, I would like to point out t?-)at my interest in th.3-s p:^oject is not for the enhancement of my own. prorerty but to mainta-1-n the r..,coral integrity of this request for this grant. y MEMO TO: Mayor and City Council / 0 y y FROM: Nancy Engman, HRA Directov RE: 4th and Minnesota Redevelopment DATE: September 8, 1978 I have attached a memo from High Line regarding his investigation of 235 homes built in other communities . The points I wish to clarify and emphasize before the meeting are as follows : It is planned to construct 6 to 8 homes on the street through the State ' s "Affordable Home Program" . This program allows $37 ,500 to be spent on the construction of the home , excluding the land costs . Discussions with local developers have indicated that this is in line with what they currently spend on the homes they build in town. Their land costs and site improvements are running an additional $15,000 which produces the current selling prices of approximately $52 , 500. Discussions with local banks indicate that families with incomes aroung $16,000 would be eligible for a mortgage of approximately $38,000.00. With current selling prices at $52 , 500, a downpayment of $14, 500 would be required in most cases . This is clearly out of the reach of most families buying their first home . This City' s role would be to absorb this land cost and make the home affordable with a small downpayment . The program would operate similarly through the Federal 235 program, only the money available for home construction would be reduced to around $35 ,000. The City is investigating "agreements" that could be signeu with the homeowners regarding repayment of the land write-down costs if they sell the home within five years . This practice is followed in Bloomington. I must emphasize again that the Federal grant money is not provided simply to construct the homes ; but also, to clear the develop- ment currently in that area, and improve the neighborhood as a whole . This is the first program the City has provided to assist working peiple . The bank emphasized that job stability will be a key factor in approving these mortgages . I hope there is a good turn out at the meeting! NE/jsc CITY Or $ 4 () :" EE 129 East First Avenue, Shakopee, Minnesota 55379 i MEMO TO: Nancy Eneman FROM: . Hugh Line SUBJECT: 235 Housing Project DATE:— September 8 , 1978 I have completed my investigation into the feasibility of 235 Housing for the proposed Minnesota. Avenue site, and have found that ; although, construction costs continue to escalate at an alarming rate, sound well-constructed housing can still be built within the 235 program limits . These units, if constructed, would serve middle income residents who, because of recent inflationary trends , are unable to purchase their own home . It cannot be emphasized enough that the 235 program is not designed as a charity program to hand out free housing, instead 235 is a private developer, profit motivated plan for making the "American Dream" of safe, sound, affordable home- ownership a reality to middle income people . Another misconception about 235 housing is that it is a poorly constructed housing. There is no doubt in my mind that there have been some very poorly constructed projects ; this ; however, is a controllable element and invariably when the contrator and developer have sound reputations the housing is also sound . While investigating some of the existing 235 units in Bloomington, I had the opportunity to meet with some of the owners . They seemed very happy with the quality of their homes and all of the houses and yards seemed to be well maintained . Furthermore , the city of Bloomington is invest- igating the possibility of building 20 more 235 homes . This is not a symptom of an unsuccessful program. Many people are very dissatified with the myriad of government programs designed to dole out their tax dollars to charitable programs with questionable track records . The 235 housing, properly developed, is a chance for Shakopee to utilize a government program that helps middle income people help themselves . If the CD grant monies are not accepted, I feel that we will be doing a great disservice to the very citizens we are pledged to serve . HL/jw r StYrancis Hospital 325 WEST FIFTH AVENUE/SHAKOPEE,MINNESOTA 55379/(612)445-2322 TO: Shakopee City Council FROM: Eldon 3crkland DATE: September 12, 1978 SUBJECT: Response to questions at .September 5, 1978 Council Meeting; I. How would an A. L.S. Ambulance affect the viabilty of the hospital? P . L.S. Ambulance response within 15 minutes will soon be a requirelli,�nt for all parts of the metro Area. If St . Francis does not provide this service , some other ambulance service will, that will not have any loyalties to St . Francis or even this community . Patients may be transported to other hospitals which will remove the patients and their families from this community for health care . As soon as St . Francis Hospital does not provide essential health services, the community support for the hospital will drop off . A . L.:> . ha.3 been designated an essential health care service by the Metro Council and St . Francis agrees . II . What effect would increased rates have on utilization of the Ambulance? 1 . People would not use the ambulance in some emergency situations that should ; therefore, increase the change of further injury or death. 2 . These very high rates , i . e . $200-300, would reflect negatively on the hospital. A. L.S. is an e.•-sential community service. It is not right for everyone to have the benefit of the availability of A.L.S. and supported only by those who use it .