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HomeMy WebLinkAboutWashington County HRA CITY OOAK PARK HEIGHTS 14168 N. 57th Street•Box 2007 •Oak Park Heights,MN 55082 • Phone: (612) 439-4439 • FAX 439-0574 March 25, 1998 Georgette Peterson Washington County Housing and Redevelopment Authority 321 Broadway Avenue Saint Paul Park, Minnesota 55071 Dear Ms. Peterson, Enclosed is a copy of the Joint Powers Agreement for the Federal HOME Program that was approved by the City Council at its Tuesday, March 24, 1998 meeting. For reference, the Raymie Johnson Estates is located in the City of Oak Park Heights, not Stillwater. Thank you for making this correction. Very truly yours, Thomas M. Melena City Administrator Tree City U.S.A. �• ,`���ih 411 Telephone(612 458-0936 Fax(612)458-1696 Washington County Housing and Redevelopment Authority 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 January 30, 1998 DIE - 2 SO Mr. Michael Robertson _ a Administrator City of Oak Park Heights 14168 57th Street North Oak Park Heights, Minnesota 55082 Dear Mr. Robertson: Enclosed is a packet of housing and jobs data for 1997 and 1998 for your community.. I thought with many of you re-doing your Comprehensive Plan, this material might be helpful. If you have any questions, please give me a call. cerely, <<r Jo Elam E ecutive Director Is-encl. • 1997 COUNTY GROWTH Change Hennepin +8,465 Washington +4,014 Dakota +3,884 Scott +3,661 Ramsey +3,432 Anoka +1,312 Carver +1,202 1997 County Growth Total: +25,970 CITIES WITH OVER 1,000 NEW JOBS Minnetonka 42.789 45,283 +2,494 Fort Snelling/Airport 30,980 33,061 +2,081 Brooklyn Park 20,017 21,902 +1,885 *Oakdale/Landfall 4,509 6,129 +1,620 Maple Grove 12,223 13,816 +1,593 *Woodbury 8,948 10,529 +1,581 Bumsville 28,449 29,929 +1,480 Eagan 35,683 37,059 +1,376 Eden Prairie 43,003 44,319 +1,316 Maplewood 15,778 16,901 +1,123 Cities New Jobs Total: 242,379 258,928 +16,549 COVERED WAGES Firms Total Wages Avg Weekly Wage Metropolitan Region 76,689 $12,161,490,739 $647.16 Washington County 3,909 $362,269,979 $520.27 • . WASHINGTON COUNTY EMPLOYMENT FIRST QUARTER, 1997 Number of businesses in the county: 3,990 Total jobs in the county: Jan. 96 49,595 Feb 97 53,609 Employment Jan. 96 Feb. 97 Change Manufacturing 8,819 10,520 +1,701 Agr., Forestry, Fishing 669 616 -53 Mining 33 44 +11 Contract Construction 2,080 2,194 +114 Transportation, Communications, Public Utilities 1,889 1,918 +29 Wholesale Trade 1,393 1,477 +84 Retail Trade 12,975 13,797 +822 Financial, Insurance, Real Estate 2,858 2,821 -37 Services 10,264 11,380 +1,116 Government 8,615 8,842 +227 Total Employment: 49,595 53,609 +4,014 EMPLOYMENT CENTERS Woodbury 8,948 10,529 +1,581 Stillwater 8,505 9,043 +538 West Lakeland Twp./Bayport/Oak Park Hgts. 6,390 6,134 -256 Oakdale/Landfall 4,509 6,129 +1,620 Cottage Grove 5,222 5,504 +282 Forest Lake 4,783 4,882 +99 Newport 1,966 1,969 +3 Hugo 1,389 1,466 +77 Lake Elmo 1,333 1,358 +25 Grey Cloud Island/St. Paul Park 1,248 1,251 +3 Mahtomedi/Pine Springs 1,097 1,092 -5 Total Employment Centers: 45,390 49,357 +3,977 • • COMPARISON Minneapolis - St. Paul M.S.A. Labor Force, Employment and Unemployment trends ad Washington County. TWIN CITIES M.S.A. Year Labor-Force Emolo ment Unem•Io ment Rate 1990 1,471,553 1,409,877 61,676 4.2% 1991 1,485,516 1,417,672 67,844 4.6% 1992 1,488,912 1,420,927 67,986 4.6% 1993 1,523,128 1,456,478 66,650 4.4% 1994 1,591,667 1,540,043 51,624 3.2% 1995 1,613,467 1,566,363 47,104 2.9% 1996 1,618,334 1,568,310 50,024 3.1% 1997 (Nov) 1,674,895 1,642,764 32,131 1.9% Total: +203,342 +232,887 -29,545 WASHINGTON COUNTY 1990 81,483 . 77,696 3,787 4.6% 1991 85,317 81,683 3,634 4.3% 1992 87,441 83,781 3,659, 4.2% 1993 92,580 88,946 3,634 3.9% 1994 100,000 97,338 2,800 2.8% 1995 103,770 101,051 2,719 2.6% 1996 103,944 101,082 2,863 2.8% 1997 (Nov) 107,768_ 105,973 1,7951.7% _ Total: +26,285 +28,277 -1,992 N 00 — N of N C''C rn N T'rs N C\ NI -r C CD GM C, Trr'-CN rn •O CO'D C co —r 00-4v) v1 Q N N NO 00 CT 0% 3 -" N t !' 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Al Its 4 Affords Ung; Afton 890 1,200 0 0 0 Bayport 743 900 41 20 0 Cottage Grove 8,858 11,400 . 579 162 956 Forest Lake 2,292 3,150 1 50 0 200 Lake Elmo 1,973 2,900 I 93 43 408 j Newport 1,323 1,500 0 0 • 21 Oakdale 6,699 12,200 1 1.480 1,001 799 Oak Park Heights 1,322 2,000 0 0 278 SL Paui Park 1,749 2.100 67 0 0 Stillwater 4,982 6,800 294 38 727 Willemie 227 2301 1 0 0 Woodbury 6,927 18,500 1,603 200 1,584 COUNTY TOTAL 36.163 63,060 4,208 1,464 13,185 _ 4,973 ADDITIONAL UNITS 0 . eo co Sep r .-- t t.Zt. to co > > CC + O r 0 0 0 %110 DON 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 0 0 0 0 0 r 0 O r O 0 03 0 O € �O OeL._ 00r L C N yQj 7 4004W rCe v. O r N O O NN O el r O 40 N el r r O 00NO N N 04, O N O (g r ` sa1 N r pp 8 V CO el N eh O r CO r 0 /o O m CO O CO co 0 0 0 0 0 r 0 N N O O GGG777 3 0 r r $81 03 N I'm 28 .a MI a 12 N N 0 0 00.r r 01O Or W 1. 00 CO CO O N uI O r r M r n 00 r eel O r OD P. 001. CO 3 . o tf eelrr r r4O rv. r 0) Nel r r N a0 aG. O g ..40 CO F- 00I0 ul 00 is rNNNr mec. 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E saI t `° ut% o $' mi Enclosure A Telephone(612)458-0936 f Fax(612)458-1696 Washington County Housing and Redevelopment Authority 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 December 23, 1996 Mr. Michael Robertson 1 City Administrator �J��' i i; City of Oak Park Heights DEC 4168 N. 57 St. Z4 ' P.O. Box 2007 Oak Park Heights, MN 55082 Dear Mr. Robertson: I am responding back to your fax regarding the proposed cable contract for the Raymie Johnson Estates. The discussions I have had with Barb O'Neal and Greg Hansen, it that the Raymie Johnson Estates is a subsidized housing complex. The rents there are set by the U.S. Department of Housing and Urban Development. We are unable to add this type of amenity and add it to the monthly rent cost. The contract is very appealing; however, at this time we can not go forward with the offer. If you have any questions, I can be reached at 458-6552. Sincerely, ir 4/ , /ZOO' mo Carol L. Greethurst Property Management Director Washington County HRA cc: James Heltzer, Executive Director Greg Hansen, King Video Cable Page 5 - Minutes 01/088 III County Wide Equipment Sharing Study - Robertson reported on a proposal the City received for participation in a study on the feasibility of sharing the purchase of major equipment by local governments . The proposal requests funding to hire an intern at a rate of $10 . 00 per hour to both inventory the current equipment of Washington County governments and to determine what those governments unmet equipment needs are and how that equipment could be shared. Councilmember Swenson, seconded by Kern, moved to join the venture with the stipulation that cities have equal representation on the steering committee regardless of size . Carried 5-0 . Establish a Public Hearing Date - Transfer of Liquor License - Club Tara Inc . to Club Tara Supper Club, Inc . - Councilmember Kern, seconded by Swenson, moved to establish a Public Hearing Date of February 12, 1996 . Carried 5-0 . Consent Agenda Process - Councilmember Schaaf, seconded by Swenson, moved to direct City Administrator Robertson to prepare a Consent Agenda as part of every regular meeting agenda. Carried 5-0 . The Consent Agenda will be the last item on the 6 :30 agenda. 1996 Council Meeting Dates - Councilmember Robert, seconded by Kern, moved to approve the 1996 dates for Council meetings as presented Robertson. Carried 5-0 . °3jBoard Meeting - Councilmember Schaaf, seconded by Kern, moved to adjourn to the HRA Board meeting. Carried 5-0 . Mayor O'Neal opened the meeting for business . Hearing no business, Councilmember Schaaf, seconded by Swenson, moved that the City Council be appointed officers of the HRA Board and to adjourn the HRA Board meeting to the City Council meeting. Carried 5-0 . February Newsletter - Robertson presented a list of proposed articles for the February newsletter. Council requested the following articles be added to the list : An article on the increase in sewer and water rates, Family Violence Network information, and the proposed boat access . Middle St . Croix Joint Powers Agreement - Mayor O'Neal presented the Joint Powers Agreement . Councilmember Schaaf, seconded by Swenson, moved to adopt Resolution 96-01-03, A Resolution Approving the Middle St . Croix Joint Powers Agreement . Carried 5-0 . Perro Creek Study - Mayor O'Neal reported that the Middle St . Croix Watershed Management Organization is in the process of initiating a study to estimate the cost of establishing a pump outlet on Perro Pond. 1-8-910 Enclosure 13 • Telephone(612)458-0936 Fax(612)458-1696 Washington County Housing and Redevelopment Authority 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 rogfEOWEE - June 7, 1995 JUN 8 W Mr. Michael Robertson, Administrator City of Oak Park Heights 14168 57th Street North Oak Park Heights, Minnesota 55082 Dear Mr. Robertson: Last year, you received a letter regarding a Joint Powers Agreement for the Dakota County Consortium (which includes Washington County) for the Federal HOME Program. Once again, the Joint Powers Agreement needs to be signed by each city and township's officials in order to be eligible to receive HOME Funds in that community. This must be a Resolution item. When this procedure was attempted last year, it was received with much confusion and concern. The cause for the majority of the confusion and concern, appeared to be that the Joint Powers Agreement is stated to be between the four counties in the Consortium and not including the cities and townships in Washington County. This year's Agreement specifically includes Washington County's cities and townships (See D. under Definitions, page 2 of JPA). If your community does not sign this Agreement. citizens of your community are not eligible to receive HOME Funds. The counties which are included in the Dakota County Consortium are: Anoka, Dakota, Ramsey and Washington County. The Consortium receives Federal HUD funds annually for the HOME Program which is a housing program for low income people. Those people that are eligible for the HOME Program must have an income of eighty percent (80%)or below of the Median Family Income for the Metropolitan Area. The equivalent of 80% Median Family Income in a monetary amount equals $39,900 for a family of four and $27,950 for an individual. The Dakota County Consortium has been receiving HOME funds since 1992. The Washington County Housing and Redevelopment Authority (HRA) administers the Federal HOME Program on behalf of Washington County. The HRA has offered a variety of programs with the HOME funds. An outline describing what programs have been administered with HOME funds in Washington County is enclosed. The HOME Program is authorized by Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990. • • June 7, 1995 Page - 2 - This year's executed Joint Powers Agreement will remain eligible for three (3) years, therefore, this issue will not arise again until 1998. Unfortunately, the signed Agreement's are due to HUD by June 30, 1995, therefore, it is crucial that this item be put on your next council member agenda and the necessary signature page with your seal imprint and the Resolution, be returned to the HRA by 3:00 P.M., June 30, 1995. It is realized that this will be difficult, but there are no other options. Enclosed you will find a Resolution to use and an outline that states what programs have been funded with HOME Funds. If you have any questions, or would like me to come to your Board Meeting and discuss this further, please contact me at 458-6554. Your participation is appreciated. Sincerely, o1/4w Nathan Marsten Special Projects Coordinator /s-encl. 41krt______1 0 Telephone(612)458-0936 • -•-rTc"..-.."--) • y�~ Fax(612)458-1696 Washington County Housing and Redevelopment Authority 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 Outline of HOME Funds in Washington County: 1992 - Rental Housing Rehabilitation; Parkside Apartments in Cottage Grove 1993 - Homeowner Rehabilitation Program; 18 deferred loans equaling $7,000/each to residents of Washington County 1994 - Tenant Based Rental Assistance; 41 low income seniors receive rental subsidies of up to $200/a month each - and a Rental Housing Rehabilitation at Park Place Apartments in St. Paul Park The Programs that have been run with HOME Funds have included communities throughout the County. The 1994 Tenant Based Rental Assistance Program assists Seniors in the following communities: 1. St. Paul Park 2. Stillwater 3. Forest Lake 4. Cottage Grove 5. Hugo 6. Scandia 7. Oakdale 8. Woodbury The Homeowner Rehabilitation Program assisted a variety of communities throughout Washington County and yet this only incorporated 18 of the 312 homeowners that applied for this program from the County. Future plans for HOME Funds include: down payment assistance, homebuyer education, acquisition of a house to be used as two transitional housing units for mentally ill, furthering the Tenant Based Rental Assistance Program to assist Seniors throughout the County. . .• E1NCLQSURE 14 � - Telephone(612)458-0936 • a lit • ink Fax 612 458-1696 Washington County Housing and Redevelopment Authority • 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 March 4, 1998 © l5 0 v Mr. Michael Robertson, Administrator MIS 519A8 City of Oak Park Heights 14168 57th Street North Oak Park Heights, Minnesota 55082 Dear Mr. Robertson: In June 1995, the City/Township Council approved a Resolution regarding a Joint Powers Agreement for the Dakota County Consortium (which includes Washington County) for the Federal HOME Program. Once again, the Joint Powers Agreement needs to be signed by each City and Township official in order to be eligible to receive HOME funds in your community. This must be a Resolution item on your Agenda for approval prior to signing. The counties which are included in the Dakota County Consortium are: Anoka, Dakota, Ramsey and Washington County. The Consortium receives Federal HUD funds annually for the HOME Program,.which is a housing program for low income people. Those people that are eligible for the HOME Program must have an income of eighty percent (80%) or below of the Median Family Income for the Metropolitan Area. The Iquivalent of 80% Median Family Income in a monetary amount equals $45,300 for a family of four and 31,700 for an individual. The Dakota County Consortium has been receiving HOME funds since 1992. The Washington County Housing and Redevelopment Authority (HRA) administers the Federal HOME Program on behalf of Washington County. The HRA has offered a variety of programs with the HOME funds. An outline describing what programs have been administered with HOME funds in Washington County is enclosed. The HOME Program is authorized by Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990. This year's executed Joint Powers Agreement will remain eligible for three (3) years, therefore, this issue will not arise again until 2001. The signed Agreement must be returned to the Washington County HRA by April 30, 1998, so they can be forwarded to HUD in a timely manner. Please put this Resolution on your next City Council Meeting Agenda and secure the necessary signatures with your seal imprint. If your community does not Sion this Agreement, citizens of your community are not eligible to receive HOME funds. Enclosed you will find a Resolution to use and a outline that states what programs have been funded with HOME funds. If you have any questions, or would like a representative from the Washington County HRA present at your Council Meeting to discuss this further, please call me at 458-6557. Your participation is appreciated. in erely, • • Georgette Peterson Controller • • OUTLINE OF HOME FUNDS IN WASHINGTON COUNTY • Rental Housing Rehabilitation Parkside Apartments in Cottage Grove Park Place Apartments in St. Paul Park East Metro Place in White Bear Lake Hillvale Twinhome in Oakdale Raymie Johnson Estates in Stillwater Acquisition Hillvale Twinhome in Oakdale for Transitional Housing Homeowner Rehabilitation Program 1993/1994 - 18 deferred loans equaling $7,000/each to residents of Washington County 1996/1997 -22 matching funds for deferred loans equaling $7,000-$10,000/each Tenant Based Rental Assistance Low income seniors receive rental subsidies of up to $250/month. The programs that have been run with HOME funds have included communities throughout the County. The Tenant Based Rental Assistance Program assists an average of 36 seniors, per year, in the following communities: St. Paul Park Stillwater Forest Lake Cottage grove Hugo Scandia Woodbury Future Plans For HOME Funds Continued Tenant Based Rental Assistance Program to assist seniors Homebuyer education Homeowner rehabilitation throughout the County • • • • RESOLUTION AUTHORIZING THE EXECUTION OF A JOINT POWERS CONSORTIUM AGREEMENT WHEREAS, pursuant to the Cranston-Gonzalez National Affordable Housing Act of 1990 (the "Act"), geographically contiguous units of general local government may form consortia for the purpose of applying for and receiving funding to assist in carrying out a Consolidated Plan under the Act; and WHEREAS, Minnesota Statutes, Section 471.59 (the "Joint Powers Act") provides that "two or more governmental units, by agreement entered into through action of their governing bodies, may jointly or cooperatively exercise any powers common to the contracting parties or any similar powers...." and "the Board of County Commissioners of any County may by Resolution enter into agreements with any other governmental unit to perform on behalf of that unit any service or function which that unit would be authorized to provide for itself"; and WHEREAS, Anoka County, Dakota County, Ramsey County and Washington County (the "Joint Parties") are geographically contiguous units of general local 410 government within the meaning of the Act and together with the Housing and Redevelopment Authorities, Economic Development Authorities or other local entities, each have the power to carry out the Programs provided for by the Act; and WHEREAS, there has been presented to this Board a form of Joint Powers Consortium Agreement among the Joint Parties, pursuant to which the Joint Parties will, among other things, develop and carry out a housing assistance strategy and apply for and expend such Federal assistance as may be available under the Act to consortia, NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS ("the Board") OF OAK_PARK HEIGHTS , MINNESOTA (the "Community") AS FOLLOWS: 1. The Board hereby finds and determines that it is in the best interests of the Community that the Community enter into the Joint Powers Consortium Agreement. 2. The Board hereby appoints the Washington County Housing and Redevelopment Authority and its designees to administer the HOME Program and to represent Washington County on the Joint Operating Committee of the Joint Powers Consortium. • s i • Dated this 24th day of MARCH , 1998. (seal) WASHINGTON COUNTY Community of OAK PARK HEIGHTS BY: David D. Schaaf ITS: MAYOR BY: Thomas M. Melena ITS: CTTY AfMTNTSTRATnR 111/ APPROVED AS TO FORM: Assistant County Attorney Execution Page of Washington County for the Joint Powers Consortium Agreement with The Cooperating Counties of Anoka, Dakota, Ramsey, and Washington I • CITY OF OAK PARK HEIGHTS MINUTES OF MEETING HELD MONDAY, JUNE 27, 1988 Call to order by Mayor Sommerfeldt at 7:00 P.M. Present: Torgerson, Seggelke, Doerr, O'Neal, Eckberg and Holst. Deputy Clerk read public hearing notice, presented affidavit of pub- lication and mailing list on request for a multi-family housing pro- gram from the Washington County Housing and Redevelopment Authority. A presentation was given by Miller, Hanson, Westerbeck, Bell Archi- tects, Inc. Mayor called for comments, discussion ensued. Seggelke, seconded by O'Neal, moved to close hearing. 5 aye votes. Hearing closed. O'Neal, seconded by Doerr, moved to deny above request. Roll call vote taken with 5 aye votes cast. Request denied. Deputy Clerk read public hearing notice, presented affidavit of pub- lication and mailing list on request for a variance, submitted by William Westphal. Variance not to be considered until necessary fees have been paid. Doerr, seconded by Torgerson, moved to close hearing. 5 aye votes. Hearing closed. Presentation was made by representative of the Community Volunteer Service. Donation to Community Volunteer Service to be considered for 1989 Budget. Seggelke, seconded by Doerr, moved to allow Building Inspector to issue building permit for the fifth and final phase at Sunnyside. 5 aye votes. Motion carried. O'Neal adjourned from meeting. Torgerson, seconded by Seggelke, moved to approve recommendations of Board of Review and changes made by County Assessor, contingent on letter received from County Assessor. 4 aye votes. Motion carried. Seggelke, seconded by Torgerson, moved to award bid for snow plowing and sanding to M. J. Raleigh Truckin' for the 1988-89 season. Roll call vote taken with 4 aye votes. Motion carried. Maintenance Supervisor was directed to remove dead-end sign on 55th St. Seggelke, seconded by Doerr, moved to install stop sign on south bound Upper 54th Street N. at 54th Street North. Roll call vote taken with 4 aye votes. Motion Carried. • Page two - June 13, 1988 Minutes Seggelke, seconded by Torgerson, moved to adopt Resolution #88-6- 11 approving set-up costs for Tele-Read Utility System in the amount of $7950 .00 . Roll call vote taken with 5 aye votes cast. O'Neal, seconded by Doerr, moved to amend Ordinance #401 . 03 . "In the case of single family, two family, townhouse and quadraminium dwellings, parking shall be prohibited in any portion of the front yard except designated driveways leading directly into a garage of one (1) open, surfaced space located on the side of a driveway, away from the principal use. Said extra space shall be surfaced with concrete, bituminous material, Class 5 gravel, or crushed rock. " Roll call vote with 5 ayes cast. Carried. Seggelke , seconded by Torgerson, moved to schedule a public hearing Monday, June 27 , 1988 at 7 :00 P.M. relative to Washington County Housing and Redevelopment Authority - Multi-Family Housing Program. 5 aye votes. Carried. Seggelke, seconded by Doerr, moved to approve minutes of May 9th and 23rd with following correction in May 9th minutes. "Seggelke, seconded by Doerr, moved to hire part-time summer employees: 4 aye votes and abstain by Torgerson. " 5 aye votes. Carried. Torgerson, seconded by Doerr, moved to request residents to comply with watering ban as follows: Starting Tuesday, June 14 , 1988 - please water lawns between the hours of 6 P.M. and 8 A.M. on odd/even address dates. No restrictions on new sod. Roll call vote taken with 5 aye votes cast. Carried. Seggelke, seconded by Doerr, moved to approve alternate bid from Dakota Fence of Minnesota, Inc. in the amount of $2062 .72 for fencing on the south end of tennis court at Swager Park. 5 aye votes. Carried. Park Committee will meet at City Hall Monday, June 20, 1988 at 6 :30 P.M. Doerr, seconded by O'Neal, moved to approve expenditures, at Police Chief' s discretion, in obtaining assistance from State Auditor' s office to conduct special investigation. 5 aye votes. Carried. O 'Neal, seconded by Doerr, moved to authorize Roger Benson to attend to improving Mill Road and the removal of tracks. 5 aye votes. Carried. • •�►y"- /;46..41..) CITY OF OAK PARK HEIGHTS MINUTES OF MEETING HELD MONDAY, MARCH 14 , 1988 Call to order by Acting Mayor, Doerr. Present: O 'Neal , Seggelke , Torgerson, Eckberg and Wilson. Absent: Sommerfeldt. Mr. Sam Griffith, Washington County Housing & Redevelopment Authority, discussed projects being considered in the city. Proposal from TMT Recycling, Inc . was tabled until council receives further information. Torgerson, seconded by Seggelke , moved to table the resolution request from Washington County regarding detachment of property located within the city. 4 aye votes. Carried. O 'Neal , seconded by Torgerson, moved to adopt Resolution 488-3-6 formally rejecting the above detachment request as presented March 14 , 1988 . Roll call vote taken with 4 aye votes cast. Resolution adopted. O'Neal, seconded by Seggelke , moved to approve minutes of February 8th and 22nd as presented. 4 aye votes. Carried. O'Neal, seconded , by Seggelke , moved to advertise for street sweeping bids. Bids to be opened Monday, April 11 , 1988 at 7 :00 P.M. Completion of project is Friday, May 27, 1988 . 4 aye votes. Carried. Torgerson, seconded by Seggelke , moved to hire Arthur Londroche as part-time patrolman upon Chief Ostendorf' s recommendation. Starting salary is $10 . 17 and to start immediately. 4 aye votes. Carried. O 'Neal, seconded by Torgerson, moved to approve fire protection contract with the City of Bayport. Copy available at Clerk' s office. 4 aye votes. Carried. Seggelke , seconded by O'Neal, moved to approve payment of bills and Treasurer ' s report as presented. Details available at Clerk' s office. 4 aye votes. Carried. O 'Neal, seconded by Torgerson, moved to adjourn. 4 aye votes. Adjourned at 8 :30 P.M. Vonne Wilson Administrator/Treasurer • • I Affidavit of Publication STILLWATER EVENING GAZETTE ;TATE OF MINNESOTA ) ss. OUNTY OF WASHINGTON ) John Easton,being duly sworn,on oath says that he is the publisher or authorized agent id employee of the publisher of the newspaper known as Stillwater Evening Gazette:and 3s full knowledge of the facts which are stated below: E____,__ .,Juno/T,IRS (A) The newspaper has complied with all of the requirements constituting qualification NOTICEp OF PUBLIC FEARING a qualified newspaper,as provided by Minnesota Statute 331A.02,331A.07,and other ap CITY OF OAK PARK HEIGHTS_able laws, as amended. - NOTICE IS HEREBY GIVEN,that the CM Co Park lc B)The printed r!n t i rig o f nut;1 i r J-I r a_rs n n Was�on Co..MN.,�osnduct a ptiblc ^e • f i t y nf rl, p ?r t, H i g h t s hearing (iay,, Mk,4IB(s,at tP.M. ''; Hearing to be held at City Halt,14188 N.57th SL,Oak Park Heights to consider the Wash- hich is attached was cut from the columns of said newspaper, and was printed and �n County Housing and Redevelop lent Authority-Multi Family Housing Programgram.. ,blished once each week, for 11 r1 r XaMiNie daysXvVeek5; it was first Proponents and opponents shal be heard that time. Jblished on rriray , the 17th day of ditto at Dated this 141h day of June,1988. ,. ,;;. _,and was thereafter printed and published on every — - to and in- BY ORDER OF THE CITY COUNCIL. uding the — - day of — , 19- ; and Is/LB Yonne Wilson Administrator/Possum' -inted below is a copy of the lower case alphabet from A to Z, both inclusive, which is 411I17 2reby acknowledged as being the size and kind of type used in the composition and )blication of the notice: icdefghi j klmnopgrstuvwxyz c—+0�/-t�` BY. TI Publisher ubscribed and sworn to before a on this 17thday of June , .? ,;::MppRLYHAR:IEuX1VE ►tRY PUBLIC—MINNESOTA otary Pu c HINGTON COUNTY ..... My Commission Expires Feb.28,1991 RATE INFORMATION Lowest classified rate paid by corn- 'l5 19 1, 2rcial users for comparable space SOS (J (Line,word,or inch rate) $ Maximum rate allowed by law for the Q . 1 4_ >ove matter (Line,word,or inch rate) 3) Rate actually charged for the above ` t' atter s , `- (Line,word,or inch rate) eceived Payment 19 TILLWATER EVENING GAZETTE Y 1 • iune.:15, 1988 :.. �_ Stillwater Gazette Stillwater, MN. 5508 Gentlemen: Please publish. the fallowing on 'or before Friday, June 17, 1988 NOTICE OF PUBLIC HEARING - CITY OF OAK PARK HEIGHTS NOTICE "IS,HEREBY GIVEN, that the City ,Council of the Citp"of Oak Park Heights,.Wa+ hington Ca., MN.,- shall can1uct a publi±, hoating Bond ty, .Jane 27, 1.988, at 7-.00 P.M. Hearing to be held at City Half ` 44168 N:. 57th St., ,Oak'Park Heights to consider the Washington Ceu ty Housing and Redevelopment Authority - Multi Family Housing Program. Proponents' and opponents shall be heard at ,u1►at tie. Dated Ibis 14th day of June, 1988. BYORDER OF THE" CITY COUNCIL. Administrator/Treasurer ° 4, • LAW OFFICES OF ECKBERG, LAMMERS, BRIGGS, WOLFF & VIERLING 1835 NORTHWESTERN AVENUE P.O.BOX C STILLWATER.MINNESOTA 55082 (6121 439-2878. LYLE J.ECKBERG JAMES F.LAMMERS ROBERT G.BRIGGS PAULA.WOLFF June 1, 1988 MARK J.VIERLING JAMES I.MOBERG VICKI L.GIFFORD The Honorable Mayor and City Clerk-Administrator City of Oak Park Heights 14168 - 57th Street North P. 0. Box 2007 Stillwater , Minnesota 55082 Re : Washington County Housing and Redevelopment Authority - Multi-family Housing Bond Program Dear Mr . Sommerfeldt and Ms . Wilson: I have reviewed correspondence of May 12, 1988, submitted by the City' s auditors, Voto, Tautges, Redpath & Co. , Ltd. , with its corresponding documents affecting the above- referenced project. This office concurs with the findings of the City auditor as it affects the pertinent aspects of the program and also would provide, in addition thereto, the following comments: A. To our knowledge , the City of Oak Park Heights has not currently determined that there is, in fact, a substantial need within the City at the present time for low and moderate income affordable housing. The City is well aware that at the present time there is limited land available within the City of Oak Park Heights for future development, unless annexation proposals now pending before the Minnesota Municipal Board would be granted. Even then, land available for development would not appreciably change within the City of Oak Park Heights in terms of percentage of availability as opposed to that which is currently developed. B. The project as proposed would have an impact on the City' s revenues and taxing authority as it affects the property owned by the project, and would also have a direct negative impact on the ability of the City to assess the project for expenses incurred with the City utilities and may also impact the City' s collection of revenues in terms of connection charges, tr/5 part of which also has been applied in the past to the debt service on the obligations that the City has incurred to construct the system. ,I r' 411 The Honorable Mayor and City Clerk-Adminstrator City of Oak Park Heights June 1, 1988 Page 2 C. The City is already well served by existing senior citizen and low and moderate income housing projects which have previously been constructed within the City of Oak Park Heights and which are in place. We note that the project as proposed by the Washington County H.R.A. does project that the particular project will take longer than average for other middle market unit projects in which to fill , due to the higher rental rates. D. Because the project, if allowed , would be exempt from real estate taxation, the same would also have an impact on existing and projected tax increment financing districts that would incorporate the affected area. Like the City auditor ' s office, we reviewed the enclosed documents and find contradictions in findings from the recommendations and suggestions sections of the various reports. Although the decision as to whether or not to implement the proposed program is certainly a discretionary policy decision with the Council based upon the Council' s view of what is best for the interests of the residents of the City of Oak Park Heights, this office upon reviewing the enclosed materials is not able to determine that the project as proposed would serve those interests. Consequently, we are not in the position of recommending same at this time. Yours v Ma k J. Vierlin MJV:ks ilk 0 • t LAW OFFICES LEONARD, STREET AND DEINARD SIDNEY LORBER• EDWARD M.MOERSFELDER• 930 LUMBER EXCHANGE GEORGE B.WYETH PEDER A.LARSON SIDNEY BARROWS• ROBERT LEWIS BARROWS. DAVID KANTOR NANCY WILTGEN REIBERT HAROLD D.FIELD,JR.• KENT E.RICHEY TEN SOUTH FIFTH STREET MICHAEL L.BERDE VIRGINIA B.CONE ALLEN I.SAEKS• HUGH M.MAYNARD• LOWELL V.STORTZ CATHARINE BOSCHEE THOMAS D.FEINBERG• JOHN C.KUEHN M I N N EAPOLIS, M I N N ESOTA 55402 DOUGLAS B.GREENSWAG MICHELLE A.MILLER MORRIS M.SHERMAN• BRADLEY J.GILLAN ELLEN SAMPSON MARC D.SAMPSON GEORGE REILLY• MICHAEL A.NEKICH• TELEPHONE (612) 339-7633 MARGARET M.VAN VALKENBURG SHAUN C.MOELHATTON CHARLES K.DAYTON MARTHA C.BRAND• ANGELA M.CHRISTY DAVID N.COX• DAVID N.HAYNES TELECOPIER (612) 338-2831 JAMES A.BARNUM - STEPHEN R.PFLAUM• CAROLYN CHALMERS ROSANNE NATHANSON CHARLES A.MAYS• JAMES V.ROTH' SHERRI L.KNUTH GEORGE B.LEONARD 11872-1956 1 LOWELL J.NOTEBOOM• ROBERT L.DEMAY MICHAEL G.TAYLOR ARTHUR L.H.STREET I1877.19611 GEORGE F.MCGUNNIGLE,JR.• ANGELA M.BOHMANN JOHN W.GETSINGER BENEDICT DEINARD 118 9 9-196 9 1 RICHARD G.PEPIN,JR. ROBERT P.THAVIS• THOMAS P.SANDERS AMOS S.DEINARD I1898-198 5 1 FREDRIC T.ROSENBLATT• JAMES G.BULLARD• INCLUDING THE PRACTICE OF THE FORMER ROBERT ZEGLOVITCH BYRON E.STARNS• JOSEPH M.FINLEY. TIMOTHY WELCH - JOHN H.HERMAN LAWRENCE J.FIELD PEPIN DAYTON HERMAN & GRAHAM, P.A. ELIZABETH M.NIMMO STEVEN D.DERUYTER• DAVID W.KELLEY GREGORY C.BROWN IRENE SCOTT JAMES R.DORSEY RICHARD RAPSON SUSAN M.ROBINER M.PATRICIA SCHAFFER KATHLEEN M.GRAHAM MARK S.WEITZ• ROGER DUNEKACKE DANIEL D.FOTH STEPHEN J.DAVIDSON• DAVID L.LILLEHAUG DEBRA G.STREHLOW OF COUNSEL STEPHEN R.LITMAN• DAVID C.ZALK• •PROFESSIONAL CORPORATIONS June 22, 1988 The Mayor and City Council City of Oak Park Heights RECEIVED JUN 2 7 is 88 Oak Park Heights City Hall 14168 N. 57th Street Oak Park Heights, MN 55082 Re: Proposed Payment in Lieu of Taxes Agreement for the Washington County Housing & Redevelopment Program Our File No. 4291-4 Dear Mayor and Members of the City Council : The purpose of this letter is to outline the terms of the tax agreement we have recently finished negotiating with the staff of the City of Cottage Grove . We anticipate this will be the prototype for the other payment in lieu of taxes agreements related to the Washington County Housing & Redevelopment Authority ( "HRA" ) , Moderate Income Multi-Family Housing Program. As some of you are aware, we commenced these conversations with Cottage Grove prior to other cities, because their project site is located in a tax increment district . In addition, the HRA Board recently concluded its own deliberations of its program policies regarding city participation and taxes, and these have only recently been reflected in our revised agreement . Special Assessments. The HRA will pay all special assessments levied against the property. It is our intention not to request the City to bond for any utilities or streets related to the Project, but rather to pay for them out of mortgage proceeds . In the future, if the City had circumstance where the Project would be subject to special assessments, these would be paid by the HRA. Payment in Lieu of Taxes . State law, Minn. Stat . §469 . 040 provides for payment of five percent ( 5%) of rents, net of utilities and special charges, e .g . trash removal, in lieu of -2- taxes on HRA owned and operated housing . Such tax relief is needed to deliver housing at moderate income rents . In general, for comparison, to accomplish housing at the price point proposed, other developers in communities in Washington County have recently been proposing tax increment districts of between fifteen and twenty years . For example, in Cottage Grove, an alternate developer on the same parcel has indicated he would request a twenty year tax increment program to attain rents comparable to those the HRA would provide. Obviously, under a tax increment approach, no taxes at all would be available to any taxing jurisdictions until the end of the tax increment period. The HRA has proposed the following schedule of tax payments : Years 1-8 : 5% of Shelter Rent . Years 9-11 : 7% Year 12 : 10% Years 13 & after : 1% per year increase over 10% . Our analysis of the recently enacted property tax law indicates that approximately 15% of Gross Shelter Rent would represent full taxes . Thus, the Project would be paying full taxes under the above schedule by year 17 . In addition to the above schedule, every two years after year 5, the City and HRA would select an appraiser, who would be instructed by the City and HRA, to evaluate the current revenues and rent levels on the Project, to determine if the Project could pay taxes in addition to those set forth in the above minimum schedule . In the event that the City felt additional taxes could be paid, and the HRA did not agree, the issue would be settled by binding arbitration. After year 10, if the 1% per year increase would "materially affect" the affordability of the Project, the HRA could request that the increase be deferred, and again, any dispute would be settled by binding arbitration. Payment at Sale of Taxes Deferred. On an annual basis, the difference between the taxes paid under the above agreement and those which would be payable at full taxes, would be determined. This amount would be reflected in a note payable from the HRA to the City. At the time of project sale, the note would be paid in full up to a maximum of 50% of the net proceeds of the sale of the project . Projections done indicate that at approximately the point when the property is paying full taxes, a sale would be possible at which all unpaid back taxes would be paid to the City. Under our Cottage Grove agreement, this entire amount would be paid to the City. This • ! -3- difference money promissory note results from the HRA Board ' s commitment that over the full period of project operations, the goal is to repay to the City all amounts temporarily not paid in early project years. Time of Sale. These projects are being financed by a mortgage insured by the Federal Housing Administration ( "FHA" ) . Under the FHA program, no absolute date for sale can be agreed to, because obviously the proceeds from sale must be sufficient to pay in full the mortgage debt . The HRA has indicated that it does not intend to have long term ownership and will seek to sell the projects at the earliest point at which it can make the sale subject to repayment of all debt, repayment of deferred taxes, and attainment of certain minimum requirements as to long term project unit affordability. In order to work with the City on the time of sale, the appraiser, at the City' s request, on a biennial basis after the fifth year, would also evaluate the feasibility of sale and the sale price against the outstanding liabilities of the Project. Thus, the City and HRA will have regular guidance as to the earliest date on which a sale is feasible . Under the contract, the HRA will agree to sell the Project at the earliest time when a sale is feasible, subject to agreement with the City as to the exact timing of sale . I believe there was some preliminary confusion in the information submitted to the City and its staff and consultants as to the exact nature of the proposed tax program for the Project. We apologize for this confusion and appreciate your review of the above description of the actual proposed Payment in Lieu of Taxes Program. Thank you for your attention to this matter . I look forward to meeting with you on the 27th to respond to any questions . Sincerely, LEONARD, STREET AND DEINARD John H. Herman JHH/jh cc : Robert Voto Lyle Eckberg Lavonne Wilson Sam Griffith Dennis Balyeat 4234H on#n frS;P `,4 14. a�c4 nd` }}p :t ial4 i® d eYat. t` ;f 1; " Garb?$ s8i '# � �{ 71sQ� �sFa j.����,F ls>rtM a � Q ini:,,, Per , ( 4 n' "=s,. , ,.a e"'lr,' a✓ Whf!C@� i,At Oiii } ab 1 _ 8 1� W�x?' :. Yi d tiL 4M 4:7:.?;;*-iit,110.,:?,••il'..i.,:,,, ,'..,•;:,.,,,;,,5,!;- ?..,,,:tg.".T.1',.:. ,,,,,,s,i,,, I ,::. # ., .. ,..... ,7.4:,...„,..::i.,...„.;:,1„, � k mo$h �� a i r + 9 {j t 9 i "1,5 M � r' 3'a;F ,72 Y •( k �' �4,.k y CN a a a • { £ ,y a 8 3-): > .a to :a, 4 e l n !,,,..,:..,:,,,,„::::::, i � r ., y a „: Jiu t ,�k : .:....,,...:„....1, c!,,,,,....:i,*!,...::,i...., , ..„.4t.:4i:.,....:.?...:.„1.. ..., ,.....,:,..,:, •, . .tip tc3 :. t • OUTLINE OF HOME FUNDS IN WASHINGTON COUNTY • Rental Housing Rehabilitation Parkside Apartments in Cottage Grove Park Place Apartments in St. Paul Park East Metro Place in White Bear Lake Hillvale Twinhome in Oakdale Raymie Johnson Estates in Stillwater Acquisition Hillvale Twinhome in Oakdale for Transitional Housing Homeowner Rehabilitation Program 1993/1994 - 18 deferred loans equaling $7,000/each to residents of Washington County 1996/1997 -22 matching funds for deferred loans equaling $7,000-$10,000/each Tenant Based Rental Assistance • Low income seniors receive rental subsidies of up to $250/month. The programs that have been run with HOME funds have included communities throughout the County. The Tenant Based Rental Assistance Program assists an average of 36 seniors, per year, in the following communities: St. Paul Park Stillwater Forest Lake Cottage grove Hugo Scandia Woodbury Future Plans For HOME Funds Continued Tenant Based Rental Assistance Program to assist seniors Homebuyer education Homeowner rehabilitation throughout the County • • • JOINT POWERS CONSORTIUM AGREEMENT THIS AGREEMENT has been entered into as of the 20th day of June, 1995, between and among Anoka County, Dakota County, Ramsey County, and Washington County, State of Minnesota, hereinafter referred to jointly as the "Consortium", each being governmental units of the State of Minnesota, and is made pursuant to Minnesota Statutes, Section 471.59. WITNESSETH: WHEREAS, Title I of the Cranston-Gonzales National Affordable Housing Act (the Act), affirms the national goal that every American family be able to afford a decent home in a suitable environment; and, WHEREAS, Title II of the Act provides for formula allocation of funds among eligible state and local governments; and, WHEREAS,section 216(2)of the Act,provides for formation of consortia of units of general local government for the purposes of the Act; and, WHEREAS, the aforementioned counties are jointly geographically contiguous units of general local government and each have sufficient authority and administrative capability to carry out the purposes of the Act; and, WHEREAS, the regulations published at 56 F.R. No. 53 published March 19, 1991 at page 11592, to be codified at 24 CFR Part 92, and 56 F.R. No. 23 published February 4, 1991 at page 4458,to be codified at 24 CFR Subtitle A(et esq.),and 56 F.R.No. 143 published July 25, 1991 at page 34094 set forth regulations governing the applicability and use of funds under Title I. u: '-" " American Legion picture page/12A T ON BULLETIN- orairsissaawarissaffirmarississisiiiiwaiwiraffair . 1:1 1 • ,7,7& 'ya_7/ K of deception Grove council [' Wallace allegedly advised the rescinds decisiony after, the suspect pro- victim that he had a verbal argument knife,held it to the victim's with the fictional character.By win- indicated he would kill her ning the argument,he said,he could on'ji earned.He then advised her keep the victim as his own property, R1I) tanned to kidnap her along not transporting her to Las Vegas. ro o s I femaleseeotherg already The victim reported she talked the By Lori Ann Hintz project that evening. Flying them suspect into granting her release. Staff Writer the problem and begin tot clean up the desolate area near Las Veg- Wallace allegedly drove her back to that exists. la, Wallace allegedly said Maryland Avenue in St. Paul. He The Cottage Grove CityCoun- The original proposal was women would be taught stopped passed 3-2 with councilmembers g once,advising her that if she ell unanimously voted to rescind Jack Denzer and Kevin Raun vot- an. told anyone about the incident he their decision to allow the Hous- ing toduct tape,the suspect coy- would kill her and the rest of her ing and Redevelopment Authori- about deny.Both were concerned victim's eyes and mouth fartlily.` ty the burden a tax-exempt .eded to lay her face down The victim, still blindfolded and apartment/townhouse complex developmentto build a 180-unit rsandwould put on text a-bed,tying her hands and wrapped with duct tape, was near Oakwood Park. payers and and competition e dumped out on Maryland Avenue. would create for private r said Wallace apparently After tearing off the blindfold, the Cottage Grove developers. he duct tape from the vic- victim recognized her surroundings Though the HRA would be ith, stuffing a stocking in and ran home. paying the city in lieu of taxes, instead.`"The suspect then The next momin noticin physi- The decision was made at the this would only add up to about spear to the victim that a cal signs of abuse�o the juvenile's May 18 council meeting, two 25 percent of the regular taxes. had arrived at the face, her guardian begn askingweeks after the original approval "The taxpayers would be subsi- lividualThesuspect further made questions. The victim then advised was given.The proposal had been dizing three-quarters of the taxes hat he had left the apart- her guardian of the attack. The and the table for over two months, for the project," said Raun. ng the victim alone with SPPD, once notified of the rape, and approval had come only after "Mr.Rose is right,"continued r' person who actually immediately took the victim to h much compromise and Raun, "you'll never see private St. Paul Ramsey Medical Center. . discussion. developers come in. They le letion of the just The Municipal Service Charge can't compete.We do nee more rape, Launching an investigation, the Agreement had yet to be worked housing, but not of this type and gem to make it appear arson responsible for the out in detail. Staff came to the not at the taxpayers expense,"he ft the room and he(Wal- Wallace May 18 meeting prepared to said returned." Continued on Page 2A recommend approval of the Mayor Dick Pederson voted in agreement and begin the project. favor of the original proposal HRA representatives were not because of the need for additional top present at the meeting,concerned ' housing.He said private develop- teacher citizens against the,project were. ers have made an effort to deve- Cottage Grove citizen Jim lop this area,but unsuccessfully. Rose spoke out against the prop- "But I'm very disappointed that osal for several reasons. He the HRA is not here to talk about , feared taxpayers would have to pick up the slack of the tax- their project," said Pederson. ~` exempt development in their Planning Director Anne ep rl- burt said John Hermann, repre- i lig: property taxes as well as educa- Aokit Lion."The school i boaid juSi made renting the before the meeting. She '� "" ""'"""' ,way a decision to ask fora$39 million later found out the two regular bond referendum.The kids mov- HRA representatives Sam Grif- ing into that development will be fith and Dennis Bayleat were out educated on our tax money,"said of town at a convention. k. Rose. CityAttorney ot Rose compared the develo Jack Clinton p- cautioned the council about ment to the low-income projects rescinding a decision made two fin the same area."I've talked to a weeks prior. "The HRA may resident who lives there. The feu- lum Is one of several prdrj'ects Seibert keeps busy _ •y have taken action on our decision VOTO, TAUTGES, RE[ TH & CO., LTD. • VI:Kw CERTIFIED PUBLIC ACCOUNTANTS Birch Lake Professional Building • 1310 E. Hwy. 96 •White Bear Lake, MN 55110• Phone 426-3263 ROBERT J.VOTO,CPA ROBERT G.TAUTGES,CPA May 12, 1988 JAMES S.REDPATH,CPA To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 Re: WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (HRA) - MULTI-FAMILY HOUSING BOND PROGRAM Pursuant to the request of Mr. Sam Griffith, Private Ventures Director of the HRA, we have reviewed the latest multi-family housing project proposed by the HRA. This is the project presented to the City Council at its regular meeting held March 14, 1988. To clarify, this proposed project is different than the HRA proposal of last September. The old project was basically a "joint venture" between the City and the HRA. (See my letter dated October 13, 1987. ) The new project is a proposal for HRA construction and/or acquisition; ownership; and management of multi- family housing within your City. The HRA is no longer requesting that the City become a co-developer. Accordingly, my past concerns about the City becoming a co-developer do not apply to this new proposal. The present HRA proposal is detailed in the following sets of data prepared by and/or for the HRA: A. MEMORANDUM from Mr. Sam Griffith, dated March 14, 1988. B. STUDY OF MARKET FEASIBILITY, prepared by Maxfield Research Group, Inc. for the proposed project. C. MULTI-FAMILY AND ELDERLY RENTAL HOUSING MARKET ANALYSIS, WASHINGTON COUNTY - preliminary draft for review and discussion, prepared by McGladrey, Hendrickson & Pullen. D. PROPOSED RESOLUTION for the approval of the HRA overall program and a specific project, prepared by the HRA. E. PROPOSED MUNICIPAL SERVICE CHARGE AGREEMENT relating to a specific project, prepared by the HRA. All of the above documents and/or HRA-provided examples of such documents have been reviewed by our office and City Administration. MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Two This report refers to specific sections/paragraphs contained in one or more of the above documents. Accordingly, this report should be read in conjunction with such documents. The present proposal is outlined as follows: 1 . The HRA has determined that there is a substantial need for low and moderate income/affordable housing in Washington County. According to Mr. Sam Griffith, this determination was made based upon a housing market analysis report prepared for the HRA. See copy of "Preliminary Draft for Review and Discussion". The Preliminary Draft for Review and Discussion is language used by accounting firms to indicate 'unfinished' . The Housing Market Analysis contains two sets of projections to estimate or pro- ject market demand. The first set is for Washington County households, the second set is for Secondary Market Area households (see page 31) . The secondary geographic market area is defined on page 18 of the report. The report (page 31) appears to project a household growth (1987-1992) of 2,059 units for Washington County and 28,015 units for the Secondary Market Area. This report indicates that a major portion (899 units, or 44%) of the Washington County projected needs are to be met by "projects in process or planned". Similar data is not shown for the Secondary Market Area. The actual significance of the Secondary Market Area data is not readily clear in this report. However, the summary page of the report (page 33) specifies: "The projected net market for low and moderate income multifamily rental housing in Washington County is estimated at 1 ,160 units for the period 1987 through 1992. At a rental unit cost of $50,000, this represents a potential market demand of $58,000,000. Similar- ly, the rental housing demand during this period for the Secondary Market Area is estimated at 28,015 units, or a potential market demand of $1 ,400,750,000." The report appears to conclude a limited market demand from within Washington County and a much greater market demand from and/or for the Secondary Market Area. Pages 21-24 of the report contain additional market information as to the "Income Qualified Market" and the "Target Household Market". 2. The HRA proposal anticipates the issuance of $115 million in bonds to acquire and construct multi-family projects throughout the County (see Sam Griffith's memo dated March 14, 1988) . The $115 million equals approximately 200% of the Washington County projected net market of $58 million, according to the HRA Market Analysis Report. • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Three Apparently, the HRA anticipates that it can (and should) provide affordable housing for low and moderate income residents of Washington County, plus low-to- moderate income residents of the Secondary Market Area outside of Washington County. The Washington County Board Chairperson is unaware of such a Washington County policy, but has asked to receive a copy of this report. 3. The HRA proposal refers to "low and moderate income rental housing" and "affordable housing". However, the market feasibility report prepared by the Maxfield Research Group, Inc. (for the specific project in your City) appears to contradict the "low income, etc." concept. The transmittal page of the Maxfield study includes the following paragraph: "Because your project will be considered the nicest and most "up- scale" of rental projects in this Stillwater/Oak Park Heights area, and your rents will be at the top of rental rates in the market, your absorption time could be expected to be longer than an average for the other middle-market units with lower rents. Phasing your project over two years is recommended; with one-half your units coming on-line in late 1988 and the remainder through the end of 1989. We estimate an absorption of eight to ten units per month; with marketing to begin three months prior to occupancy." The "Summary of Findings" (pages 1 and 2 of the Maxfield Study) adds more defi- nition to the specific project proposed, including the following: • Underground parking • In-unit washer/dryer • "Top of the market" product • Outdoor pool • Target markets include young couples, roommates, older empty-nesters, divorced persons, and single parents with 1 or 2 children. The City Council should strongly consider the appropriateness of government sub- sidy for: A. Low and moderate income rental housing. vs. B. The nicest and most "upscale" of rental projects in the Stillwater/Oak Park Heights area with units at the top of rental rates in the market. • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Four 4. The HRA proposal anticipates continuing ownership and operation of these housing units by the HRA. As such, the City Council will be forfeiting its taxing and assessing authority over such property. According to Mr. Sam Griffith, such projects will be exempt from: A. State sales tax on construction costs and future operating costs. B. All real estate taxes - city, county, school district, and all of the various local taxing jurisdictions. • C. Special assessments benefiting such property. According to Mr. Sam Griffith, the initial project proposed for the City of Oak Park Heights is an $8,750,000 project. State subsidy (i.e., exempt from state sales tax) depends upon the level of taxable costs (material) vs. non-taxable costs (land, labor, services, capitalized financing). A 50% ratio would amount to a 3%, or $262,500, state subsidy for construction costs. This state subsidy would continue for ongoing costs (i.e. , utilities, supplies, equipment, repairs, maintenance, etc. ) . The real estate subsidy has been estimated by Mr. Sam Griffith to be approxi- mately 75% of normal real estate taxes. The 75% factor represents total exemp- tion from real estate taxes less the municipal service charge agreed to be paid in lieu of taxes. The amount of such annual local subsidy can be calculated as follows: Total Project Value $8,750,000 Assessment Ratio x 34% Calculated Assessed Value 2,975,000 Estimated Mills (105) 0.105 Gross Real Estate Tax Subsidy 312,375 Estimated Municipal Service Charge @ 25% (city, county and school district) 78,094 Calculated Annual Real Estate Tax Subsidy $ 234,281 • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Five It should be noted that the annual real estate subsidy affects all taxing juris- dictions. Such property (being owned by the HRA) is exempt property for real estate tax purposes. This exemption will continue for as long as the property is owned by the HRA. Additionally, nothing in this proposal compels the HRA to cease such ownership. Accordingly, this local subsidy should be construed to be long-term, if not permanent. The special assessment subsidy could become a future problem for the City. According to Mr. Sam Griffith, property owned by another government jurisdiction is not subject to the City's special assessment authority. Should the City find it necessary to approve local improvements (i.e. , sewer, water, streets, etc.) for an area which includes this project, the City will be unable to compel the HRA to pay their proportionate share of such costs. 5. The HRA is proposing a project (of this nature) in the City of Oak Park Heights and another project in the City of Cottage Grove. According to Mr. Sam Griffith: A. The finance officer of Cottage Grove made a determination that it would be more beneficial for Cottage Grove to use the HRA proposal than its own tax increment process. B. The City of Cottage Grove "verbally approved" a project on April 20, 1988. My telephone conversation (on April 28, 1988) with the Finance Director of the City of Cottage Grove contradicted the above statements. SUMMARY AND CONCLUSIONS The HRA proposal for county-wide "affordable housing" includes a request that the City Council adopt a resolution endorsing and approving the HRA program. Should the City Council adopt such a resolution, the HRA will be empowered to proceed with their program within the City of Oak Park Heights. The same council resolution has the effect of creating tax subsidies (both state and local) for such projects. Most important, such subsidies will continue in- definitely at the sole discretion of the HRA. The HRA proposal is based upon a "documented need" for such housing primarily in a "secondary market area" which specifically excludes the City of Oak Park Heights and all of Washington County. Additionally, the Study of Market Feasi- bility (for the project) prepared by Maxfield Research Group, Inc. appears to negate or contradict such a "documented need" for the City of Oak Park Heights in the following statements: • i To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Six * Oak Park Heights has little land available for new housing construction; as shown by the proportion of multifamily units to single-family units built since 1980. The majority of rental units are in smaller two-story duplex or four-plex buildings, with few or no common recreational ameni- ties. Also, much of the rental construction has been low-income units for families and seniors. No contemporary apartment complexes exist in the immediate study area. * The most comparable rental product to your proposed development is found in Maplewood and White Bear Lake. Rents at newer projects in these two communities range from $450 to $565 for a one bedroom unit and $520 to $735 for two bedroom units, including heat and one garage space. Those choosing to rent further out (Stillwater and Oak Park Heights) will do so if they can find comparable product but at rents at the lower end of this range. Renters will expect to pay lower rents for the tradeoff of living further from the cities. * Your proposed concept, combining more traditional apartment buildings with small rental cluster buildings of "flats", will broaden the appeal of your product. Your proposed amenities (underground parking, in-unit washer/ dryer, open floor plans) will put your product at the top of the market in the immediate area. Our suggested additions of an outdoor pool, picnic area, and tot lot will strengthen the project's appeal. The curb appeal of contemporary architecture will create excitement and will attract attention to your development. * Our suggested rents are based on a comparison of rents in newer projects in the northeastern suburbs, but are at the low end of the range because we feel the market is price-sensitive in Oak Park Heights and Stillwater. The HRA proposal is basically and fundamentally a request for subsidy in the form of exemption from state and local taxes. The City Council is being asked to approve such subsidy for itself and the other taxing jurisdictions. More importantly, once the City gives its approval, the duration of such subsidy will be at the discretion of the HRA. Respectfully submitted, 40410...-elogre VOTO, TAUTGES, REDPATH & CO. , LTD. Certified Public Accountants / 5 - r • •.--,,. .21 • iii Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-4 5 8.09 3 6 MEMORANDUM TO ALL INTERESTED PARTIES FROM: Sam Griffith/Director, Private Ventures DATE: March 14, 1988 SUBJECT: Washington County Housing and Redevelopment Authority Multi-Family Housing Bond Program This memorandum provides an explanation of the HRA's new multi-family bond program. The purpose of this memorandum is to describe the structure of the program, the financing of the program and general information of interest to the cities in which these projects would be located. Structure of the Program The HRA will be issuing a pool of essential function bonds to be used for the acquisition of existing multi-family apartment projects and the construction of new multi-family projects for the purpose of maintaining and providing affordable housing opportunities for moderate income families in Washington County. There are numerous reasons why the HRA has developed this program. Since the adoption of the new Tax Reform Act, there has been little multi-family housing development in the county. In addition, as one of the fastest growing counties in Minnesota, the county is experiencing a tremendous growth in population; therefore, vacancy rates throughout the county are very low.- -Consequently, current owners are able to raise rents and still keep their buildings fully occupied. As rents continue to trend upwards, current moderate income tenants are being forced to find more affordable housing, oftentimes outside the county. Another goal of this housingprogram is to P 9 provide safe and affordable �� housing to lower income tenants. The HRA, as manager of the Section 8 Program in the county, is finding that because of the rising rents and lack of new construction, many Section 8 tenants are unable to find affordable housing in the county. Several cities in the county have concerns about multi-family projects where maintenance is being deferred or where there are management problems. The cities have discussed the possibility of the HRA taking over such facilities to see that necessary repairs are made and management problems corrected. • • Other communities would like to see certain types of housing developed which the private sector has not been able to provide. Therefore, the HRA's multi-family housing program looks to address all of these issues through the acquisition or construction of projects in communities that desire these projects. Structure of the Bond Program The HRA will issue $115 million of essential function bonds to acquire and construct multi-family projects throughout the county. There will be a five year period during which the HRA will be able to finance specific projects. The bonds will be 40-year, fixed rate obligations, secured by a direct pay "Triple-A" rated letter of credit. The bond proceeds will be invested in an investment contract until such time as they are used to make project loans. The HRA anticipates the rate on the bonds to be approximately eight percent. As these bonds are essential function, public purpose bonds, the HRA must. be the owner of these facilities. However, the HRA has little experience in owing and operating apartment projects and will enter into contracts for "project coordinators" who are experienced entities, who will be responsible for assisting the HRA on acquiring existing projects, constructing new projects, and marketing and management of the day-to-day operations of these projects. The project coordinators will also share with the HRA with the risks associated with owning these projects, including providing the credit enhancement necessary for each projects. For their services, the coordinators will be paid a fee negotiated at project closings. ,Project Financing Each project to be acquired or constructed would be done during a five year origination period. The "Triple-A" letter of credit provider will not take any real estate risk and therefore requires that before any bond proceeds can be used, there must be an acceptable credit enhancement in place to take that direct real estate risk. The credit enhancement, in conjuunction with the bond funds, will -grow the HRA to provide itself with 100 percent financing for these projects. Acceptable credit enhancement for these projects would include FHA coinsurance or a letter of credit from acceptable financial institutions or a collateralized letter of credit. Another form would be market rate mortgages. How the Program Works The HRA will identify potential existing or' new construction projects and • • enter into negotiations with a project coordinator to assist the HRA in developing these projects. At the same time, the HRA will work with local financial institutions to develop the necessary credit enhancement. At the time an acceptable and financable project is developed, the HRA will work with each community to see that the project meets the needs and requirements of that community. The ability of the HRA to provide affordable housing opportunities for moderate income residents of the county will be developed using the HRA's multi-family housing program. There are several ways that the HRA can make each project affordable. First of all , the HRA, because of the bond financing, will be able to provide itself with 100 percent financing. Second, the HRA, as a government entity, would be exempt from sales tax for the purchase of materials in either new construction or rehabilitation projects. Third, the HRA, as a non-profit entity, does not have the investment requirement return needs of the private sector. Any excess revenues generated by a project will be used to either keep rents at an affordable level or use them on other projects to write-down project costs or rents. Fourth, as a government agency, the HRA is exempt from real estate taxes. However, the HRA is required to make a contributing payment in lieu of tax to the taxing entities. This payment in lieu of taxes is a minimum of five percent of the aggregate shelter rents in each facility. This requirement allows the project to support more debt and therefore, lower rents. Each community, however, will be assured that as each project begins to support itself, excess revenues from the project will be used to increase the payment in lieu of tax made. Timing The HRA multi-family housing bond program will be closing within the next several weeks. The HRA is making presentations to the various governing bodies in the county to make them aware of the program. The objective of this program is to develop or maintain affordable housing opportunities in each community until such tine as the private sector begins to meet this particular need. /m . ,, • MIXFLD RESEARCH ROUP 1i I{f{ ' 1 A STUDY OF MARKET FEASIBILITY FOR A PROPOSED RENTAL DEVELOPMENT AT OSGOOD AVENUE AND 60TH STREET in Oak Park Heights, Minnesota Prepared For: Dunbar-Herman Development Services, Inc. Minneapolis, Minnesota February 1988 ,_ [1. 11. i _4 , 620 KICKERNICK,430 FIRST AVENUE NORTH MINNEAPOLIS,MINNESOTA 55401 M4XFftLD RESEARCH ROUP February 11, 1988 Mr. Frank Dunbar Dunbar-Herman Development Services, Inc. Suite 311 5353 Gamble Drive Minneapolis, Minnesota 55416 Dear Mr. Dunbar: Attached is our study of the market feasibility for the proposed 144-unit rent- - al development in Oak Park Heights, Minnesota. The lack of new market rate rental housing in the Stillwater and Oak Park Heights area suggests unmet demand for rental units to meet the lifestyle needs of today's renter. Current rents in this area suggest a price sensitive mar- ket, and therefore we recommend pricing which is below the top of the market of newer Maplewood and White Bear Lake projects (those which would be most compe- titive with your proposed project), and more in-line with the lower end of the rent range of these projects. Because your project will be considered the nicest and most "upscale" of rental projects in this Stillwater/Oak Park Heights area, and your rents will be at the top of rental rates in the market, your absorption time could be expected to be longer than an average for the other middle-market units with lower rents. Phasing your project over two years is recommended; with one-half your units coming on-line in late 1988 and the remainder through the end of 1989. We estimate an absorption of eight to ten units per month; with marketing to begin three months prior to occupancy. We have enjoyed conducting this study for you and we are available to answer any questions or comments you might have as you proceed. Sincerely, MAXFIELD RESEARCH GROUP, IN •Lsiotell.4,,_ Lee A. Maxfield E1'fabeth A. Slocum President Mar et Analyst LAM/EAS:lmd Attachment 620 KICKERNICK,430 FIRST AVENUE NORTH 612-338-0012 MINNEAPOLIS,MINNESOTA 55401 • TABLE OF CONTENTS Page SUMMARY OF FINDINGS 1 PURPOSE OF SCOPE AND STUDY 3 fi SITE REVIEW 4 7 DEMOGRAPHIC REVIEW 6 Population Growth 6 Household Growth 9 Employment Growth 9 Age Distribution 12 Household Type 14 Household Tenure 16 Residential Construction 1980 to 1987 17 Rental Unit Demand 17 RENTAL MARKET OVERVIEW 20 Rental Rates 20 Vacancy 21 Planned Competitive Projects . . 21 CONCLUSIONS - 23 Demand 23 Target Markets 23 Development Concept 23 Unit Mix and Projected Pricing 24 Absorption 26 • APPENDIX 27 • • LIST OF TABLES I Table 1 Number Name Page Table 1 Study Area Population, 1970-2000 8 Table 2 Study Area Households, 1970-2000 10 Table 3 Study Area Employment, 1970-2000 11 Table 4 Study Area Age Distribution, 1970 & 1980 13 Table 5 Study Area Household Type, 1970 & 1980 15 1 Table 6 Study Area Household Tenure, 1980 16 Table 7 Study Area Residential Building Permits Issued 1980-1987 18 Table 8 Rents At Newer Projects 19 Table 9 Unit Mix and Projected Pricing (Subject Development) 25 I I I • • SUMMARY OF FINDINGS * The site of the proposed rental development has good characteristics for a rental development: it is highly visible and accessible to a major high- way providing short commuting time to employment in Maplewood and downtown St. Paul, it is convenient to retail services (including the proposed -7 Woodland Lakes Mall), and it has existing tree-cover which can be used to landscape and create privacy. However, it does not have enough site amen- ities to warrant a "luxury" development. * Household growth has been stronger than originally projected during the 1980's in virtually all study area communities. This suggests that the area is perceived as an extension of the metro area and has benefitted from growth in northern and eastern suburbs of St. Paul. Still, the mar- ket for renters is much smaller than in key growth communities of the Twin Cities, because employment in the immediate area is only a fraction of employment in the northeastern sector of the metro area. Household growth will begin to slow in the late 1980's and early 1990'-s, throughout the region, and will affect the number of new rental units needed. Still, we estimate a need for at least 50 to 60 new market rate units per year in the study area. * Oak Park Heights has little land available for new housing construction; as shown by the proportion of multifamily units to single-family units built since 1980. The majority of rental units are in smaller two-story duplex or four-plex buildings, with few or no common recreational ameni- ties. Also, much of the rental construction has been low-income units for families and seniors. No contemporary apartment complexes exist in the immediate study area. * The most comparable rental product to your proposed development is found in Maplewood and White Bear Lake. Rents at newer projects in these two communities range from $450 to $565 for a one bedroom unit and $52U to $735 for two bedroom units, including heat and one garage space. Those choosing to rent further out (Stillwater and Oak Park Heights) will do so if they can find comparable product but at rents at the lower-end of this range. Renters will expect to pay lower rents for the trade off of living further from the cities. * Your proposed concept, combining more traditional apartment buildings with small rental cluster buildings of "flats", will broaden the appeal of your product. Your proposed amenities (underground parking, in-unit washer/ dryer, open floor plans) will put your product at the top of the market in the immediate area. Our suggested additions of an outdoor pool, picnic area, and tot lot will strengthen the project's appeal. The curb appeal of contemporary architecture will create excitement and will attract at- tention to your development. Our suggested rents are based on a comparison of rents in newer projects in the northeastern suburbs, but are at the low-end of the range because we feel the market is price-sensitive in Oak Park Heights and Stillwater. 1 1 • * We estimate an average monthly absorption of eight to ten units over the marketing period with pre-leasing beginning three months prior to occupan- cy. * Target markets include young couples, roommates, older empty-nesters, divorced persons and single-parents with one or two children. • I 2 I • • • PURPOSE OF SCOPE AND STUDY The purpose of this study is to analyze the demographic and competitive factors that shape the market and affect potential demand for development of rental apartments on a site located south of 60th Street and east of Osgood Avenue, in Oak Park Heights, Minnesota. The scope of this study includes: a review of the current demographic composi- tion of population and households as well as projections for growth, and an assessment of the existing rental housing in the area as well as a review of proposed rental developments. Our recommendations considered the appropriate- ness of the site as a location for rental housing, and the type of product most appropriate to meet market demand. 3 Our report includes both primary and secondary data. Secondary data is cred- ited to the source when used and in most cases is census data or city or county projections. Secondary data is used as a basis for analysis and is carefully reviewed in light of building permits, migration trends, changes in the employ- ment base, and other market factors that have an impact on projections but may not have been considered originally. All of the market data on competitive projects and planned and proposed developments has been collected by Maxfield Research Group, Inc. and is accurate to the best of our knowledge. J I I 3 • • SITE REVIEW IThe site of the proposed 144-unit rental development is located east of Osgood Avenue, south of 60th Street (south of Highway 36), and north of 58th Street, 1 in Oak Park Heights, Minnesota. The site is gently rolling and is densely wooded with young and mature trees. Along the frontage road (60th Street) which would provide access to the development is a small, older apartment com- plex, Greenbrier Apartments, which is visible from Highway 36. This three Ibuilding complex appears to date to the early 1960's, and would not compete with the subject development. The site plan we have reviewed positions the proposed development far enough away from this older apartment complex so that it should not be a distraction. The Highway 36 - Osgood Avenue node is developed with commercial uses on two of four quadrants. On the west side of Osgood is a small, older two-story office complex and also, the St. Croix Mall (1970's) which has a movie complex, and 117,000 square feet of retail space. On the north side of Highway 36 is Oak Ridge Place, a market rate senior apartment development built in 1986. West Ialong Highway 36 there are other retail nodes offering a variety of goods and services. The Woodland Lakes Mall, a proposed 400,000 square foot retail cen- ter, will be located approximately one-half mile west of the site on High- way 36, and is scheduled to begin construction in spring 1988. Downtown Still- water, a historic retail district, is also located just a few miles east of the site. The residential uses which border the site on the south are subsidized elderly apartments and townhomes. While these buildings are compatible as neighbors, the buildings look architecturally dated. Privacy can be created for the sub- ject development by using the existing tree cover where possible to block dis- tracting views of the existing older residential buildings. The site is a good one for rental housing in that it will have good visibility, excellent access to a major Twin Cities highway, and is near a variety of ser— vices. The existing tree cover will help create privacy and offers an attrac- tive natural amenity. The site is convenient via Highway 36 to employment centers to the east, and yet is nearer to the recreational amenities of Still- water and the St. Croix River area. These characteristics combine to make the site a good one for a new rental development. .4 .�-m-a' - . ..eer_ L - - - ��• �.r`� ' �4�1 $�' 4E ° r `= s fit_ F7 A� ==°ry • � _n�'_9.n�.•._. . t ""-jam-o �!T> >. illic � ~ ; �' i .'q r ier4"1apjaatesa sai a �. r Vi a.' I' _ -§ \\%i .,. �- O A ...o s Mil t Ne � ' I?" 1 $ a • 3 • ...... ,, ..... . . _ ' it •• % ,___,...1, : k. • „A ,, . .f - r li ;..,,, , .. - . 2 (' + Ire ,/,!.1131 "." CI - . . 1111110-4.- )(3 a 11 .. ill• H A - I ...,_e / ,,_:,,t, ' : ,. .,._... . _- { I© 11 r11' 1 f`+ O� 34, . 1 - • •. a , - a--) ., • ,„._____,...4.)PA; , ,... .......„,.".,,004.04 p4 .: .. , . •1 a , ...... ... . _,.,, - ,, ., ..,,,,..., i . • -gyp II 1 H.....0 ;' ,r OINM • WWI IM implas ' - iJ IaS a�a� i JCD .» .. O ® I- .I aU a....eA 1. / ems / , r ert C7^ . % doe • • DEMOGRAPHIC REVIEW ITo better assess the demand for rental housing in Oak Park Heights, we have examined growth trends and demographic characteristics for a study area consid- ered to be the primary draw area for the subject site. This study area con- 1 sists of Oak Park Heights, Stillwater, Stillwater Township, Bayport, Bayport Township, West Lakeland Township, Grant Township, May Township, Marine on St. Croix, and New Scandia Township. Tables are presented on population, J household and employment growth, age distribution, household type and tenure, and residential construction. IPopulation Growth - Table 1 shows the population of each study area community in 1970 and 1980 with an estimate by Metropolitan Council for 1987, and projections for 1990 and 2000. The 1990 and 2000 projections were made by Maxfield Research Group, Inc. after reviewing current growth trends. These projections adjust where appro- I priate the Metropolitan Council's earlier projections (shown in parenthesis below our forecasts), which in most cases have already been exceeded based on construction trends. We have also taken into account persons per household trends in making population projections. The study area grew by 8,039 persons during the 1970's, growth of 36.4 percent. Washington County grew by 30,623 persons during the 1970's. Stillwater, by far the largest community in the study area with 10,196 persons in 1970, had the largest numerical growth during the 1970's, 2,094 persons •(20.5 percent). Oak Park Heights, a community of 1,257 persons in 1970, added 1,334 persons during I the 1970's, more than doubling in population size during the 1970's. Part of this growth was due to annexation of land from Bayport, which shows a small population loss during the 1970's. During the 1980's, population growth has slowed in both the study area and in the county; due to both demographic trends (later marriages, fewer children) as well as a slowdown in household formations in the study area in the 1980's 1 compared to the 1970's. The study area's population growth is projected to be approximately 4,000 persons during the 1980's; numerically one-half that of the 1970's growth. The Metropolitan Council shows population growth of 3,600 dur- 1 ing this period, but we have revised the population estimate upward due to large household growth than originally forecast. Oak Park Heights and Stillwa- ter will add the most persons because they will add the most households of all study area communities. This is confirmed by building permit trends, with 1 Stillwater and Oak Park Heights accounting for more than one-half of all build- ing permits issued in the study area during the 1980's. Population growth is expected to decline sharply during the 1990's, although small growth is still Iprojected in most study area communities. Washington County's population growth is expected to be numerically one-half the population growth of the 1980's, although it's growth rate of 8 percent during the 1990's, is a slightly Ihigher percentage growth than the metro area as a whole. I ,6 i__ - not-loutC. - -1 o1ita� ' i Cat, t,NwOOI, uT.0 CI I NON 1 NS O•A CROol 1 04 0 _ I[, I --- 419 1 �. I (wlr I ANOKA CO. �j 4 COL {il k ha/ N 1 %// [[O •wOOY[f ,N tact I EDR(ST((C( / N(w SC•Nu•• '(' r LAKE I T If PIN CiTt�y� . O•TTON M•K, LINO Y,f1Y( N•�5•N N.. I CN11rrtIN COON..(1105 [at I [(,IN[ / jC[NT[f Yllt( it ,/ NINO N•NOY(f - tCSIHGTON CIHCI[FMCS WASN►IGTON CO. [[0 .e sNea(SI(N r - ~-r GR([NFI[tO COOK.... NANA GOON[ ti ou Of 27 NI(N YOtTN // OfOp[t Tw PANE 12 O,Rf 1 fTlltw•TCR II:. NNITC OC,f I: IHOCCr [[ HENNEPIN CO. IPNoo[trw a % GRANT CCNTEf UIG 1 , lit IHHIGNTOw EIGHTS pwaure C HAIL pu ua« .4 I f •T[ to lus Y[O1Na KrrWTH "` - 1 IN009110(NCE to 131 HUT H 4'4 I It! ao[CYltt[ sT. ite a g 1 �� COIaN I6 i7 Nart[NOOO POat[ (t Ot --- d oNc L•[+!/� 11. [ I y HEST 0/J4' RAMSEY CO. 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SCOTT CO. fA ar111G TON I I 1 ST.t•wRENCEI E I I I ----fi--- __—L_ 1 t_ } .I NEw N•RKEi I I N I 1 I]N[N TWOOIAN(lE, I SELL(It•INE I NELEN EUREKA r llt • CEO..LATE i I CASTLE ROCK ( •fry 1 • ll Y (1 I a.r,•K[r I I I I NPrON ( DOuct•S '+ ---L_ ---1-N- i.___i [e 4 x ----I II aNOOL.A. UVNIIES s 10 IS 20 25 I Ga CENvaI( Iw.TEarp p I I Soor. I TWIN CITIES METROPOLITAN AREA Political Boundaries, 1983 I Sr NYG PA.. 9 MOONS 17 f•LCON NCICNTS 25 C(.LAKE 2 O[owo 10 110•0101t0•t( le r(NooTA 26 OIACNw000 j rI.NCIONN•N.C. 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ON -4 s4 of 4-1 )-) al al a) S+ a1 cd N a-) cad 00)) ' 00 co 0c1 w 3 0 X Z z c, 3 X •- •• 0 8 1 • • Household Growth Household growth trends are a more accurate indicator of overall housing demand than population trends since households represent occupied housing units. Table 2 lists the number of households in each study area community in 1970 and 1980, with an estimate for 1987 and forecasts for 1990 and 2000. Forecasts by Maxfield Research Group, Inc. for 1990 and 2000 were made after reviewing cur- rent estimates and comparing them with projections by Metropolitan Council. In most cases, Metropolitan Council's 1990 projections have already been exceed- ed. During the 1970's, the study area grew by 3, 169 households, 52 percent. This household growth rate was greater than the population growth rate, following metro area trends. Households have been increasing faster due to social trends such as later marriages, more divorces, and fewer children on average per household. These trends have continued during the 1980's, although to a lesser degree than the 1970's. During the 1980's, household growth has been declining throughout the study area, although it has exceeded original projections. Stillwater, the community with the largest household base, is projected to add 685 households during the 1980's compared to 1$030 during the 1970's. Oak Park Heights is projected to add 445 households during the 1980's, compared to 594 during the 1970's. Hous- ing demand in the study area as a whole has exceeded original forecasts based on new residential units constructed during the 1980's. The original Metropol- itan Council forecast growth for the study area of 1,764 households during the 1980's will be exceeded, based on building permits issued for 1980 through 1987. Our projection shows 2,221 households added during the 1980's in the study area. New housing for empty-nesters and seniors has helped fuel growth by freeing up single-family homes for young families, and the area has been attractive for new single-family construction because it is convenient to em- ployment centers in St. Paul yet appeals to those who want a small town atmo- sphere. The St. Croix River recreation area remains very popular. The availa- bility of new housing in a popular area tends to create household growth, and this has been the case in the study area. During the 199.0's, the study area is expected to follow metro area trends of declining household formations. Growth will slow because the baby boom group has already formed households, and the - generation following is smaller. Eco-nomic trends are also important in analyzing household growth, and employment growth is also projected to slow. Employment Growth Table 3 shows employment in each study area community in 1970 and 1980, with a forecast for 1990 and 2000. Although the study area experienced a substantial employment increase during the 1970's (4,440 jobs) the area's residential char- acter is revealed in the table. Only Stillwater (which accounted for more than one-half of all study area employment in 1980) and Oak Park Heights and Bayport have a significant number of jobs relative to the study area total. A large portion of study area residents commute to employment centers closer to the Twin Cities, particularly downtown St. Paul, and Maplewood (3M). 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N N 0 .4 C . 4 1 .-.4 ..t C, .,40 N E C1 •1.1 O .-.1 1--1 fa N L . 1.1 a) N OOOOOOOOOO CD CD CD Pa - • CO CDCDul u1 CD Inun u 1 .4un In 0 Ch .. .. 00 ,O I N •-1 N u1 Cs) O Op C1 v v •--1 N ,Ca 0 0 0 •-+ r-I 14 ••a 0 U •--1 CD Ot. C". 000Ou1CA O N. on0 U CD I CD CD N C's 1-1 .4 M N V1 .t CD N CM 0 !,, C N .-rMM N 0 N U 0 . 1 M N ,p '.0 M C CO .--4 In a1 a) CO aJ 1. • •1-1 .-I ,a) 0 0) 0 ,.I 0 1-a a cll .r J E, C.) L ,-4 � 0. •:44 Q. •O E- E- 0 Cd 0 u X E-I u H U CO x s. P 3.� • •rn .1 cu 0 0 ct L ) E-1 co 0 •0 a) O a) f+ R1 -1 ti '. 3 • 0 0 1•+ i >, 1.+ .. cv 3 3 s+ 3 a H 3 w u 00 a0 - a) a •-+ •-I 0 0 Es c co ›,•-i 0 0 0 .-a •' C.. aJ 4.) C •,-1U .. •1� •.4 >1 >, a) N >, 1-1 .0 0 s+ }, Ca 4-, 4-) a1 0 a) l.+ 41 cu a) L Ca C.) OCncn Waa3c9zZ2 cox CO 11 • • from 1980. This is only one-half the employment growth of the 1970's. Oak Park Heights is forecast to add 1,800 jobs during the 1980's compared to 2,600 during the 1970's. Household and population growth will be dependent on migra- tion of workers from closer to the Twin Cities and its suburbs, who desire a more rural or small town residential setting. There is only one commercial project planned for the study area. This commer- cial project is the Woodland Lakes Mall (Stillwater), scheduled for 1988/9 opening. The mall will contain 400,000 square feet of retail space, and at this time, its only anchor tenant is Herbergers department store. This mall is expected to make the study area more desirable to households, and while the mall will increase employment in the area the types of jobs will be mainly minimum wage retail jobs. Still, this influx of jobs will benefit a new rental development at your site which will be conveniently located for those who wish to shop or who work at the mall. Age Distribution The age profile of the population in a given area relates to demand for various types of housing because persons tend to choose different forms of housing in different stages of life. For rental housing, most of the demand is generated by persons in their 20's and early 30's as well as from empty-nesters and se- niors in their 60's or older. Table 4 lists the number of persons in the study area in five age categories and each category's percent of total population in 1970 and 1980. Total population figures on Table 1 and Table 4 may vary, be- cause revised population data was used for Table 1. The table reveals that strong population growth during the 1970's resulted in numerical increases in each age group. The largest increase occurred in the 20 to 34 year old category, the major market for rental housing, followed by the 35 to 54 year old category. The number of young adults (20 to 34 years old) increased by nearly 2,800 persons or 77 percent between 1970 and 1980. Child- ren and teens, however, posted a much smaller numerical increase (1,500 per- sons) and the smallest proportional increase of any age category, 16.6 percent. The small increase in young adults is reflected in the change in each group's share of total population between 1970 and 1980. Children and teens declined from 43 to 37 percent while young adults increased from 17 to nearly 23 percent of the total population. These trends are an indication of the aging baby boom population and point towards an increase in demand for rental units in the study area. Stillwater in particular exhibits these characteristics with near- ly half of all study area 20 to 34 year olds in 1980 and the largest propor- tion, 25 percent, of persons in this category compared with Oak Park Heights, Bayport and the remainder of the study area. This age group will continue to grow through 1990 although not as much as during the 1970's because of the continued aging of the baby boom population. The number of persons 35 to 54 years old increased substantially between 1970 and 1980 with in-migration of persons in this age group a major component of growth. Although not a major market for rental housing, this category will experience the largest numerical growth of any age group during the 1980's. The number of older adults and seniors (persons 55 and over) increased numeri- cally by 232 persons from 1970 to 1980. 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However, because the rest of the population grew at a larger rate, the percentage share of population of seniors decreased by 1980. Though the numbers of seniors will be relatively stable in the late 1980's and early 1990's, by the late 1990's the number of seniors will begin to increase significantly as the baby boom generation begins entering their senior years. Household Type Household type data is related to demand for housing since certain types of households tend to choose specific types of housing. Table 5 lists the number of study area households in five categories and each category's percent of all households in 1970 and 1980. The table shows that each household category experienced numerical growth be- tween 1970 and 1980 in Oak Park Heights/Bayport, Stillwater and the remainder of the study area. As mentioned previously, a strong level of migration to the study area caused a substantial increase in the number of households with each type of household sharing in the growth. The different household types experi- enced different rates of growth, however, with non-family households posting a larger proportional increase than the various family household types. Social trends mentioned earlier (later marriages, more divorces, aging baby boomers) have caused the surge in non-family households, particularly persons living alone. These households are usually very mobile and as such tend to rent rath- er than own their housing. Roommate households more than quadrupled in the study area during the 1970's but still comprised only 3 percent (271 households) of all households. Persons living alone increased by 60 percent (542 households) and comprised 16 percent of study area households in 1980. This points to an increase in renter house- holds. These non-family categories will continue to post increases into the 1990's but not as substantial as in the 1970's. Baby boomers are marrying and having children and the "baby bust" generation that replaces them is smaller and will not generate the household formations of the late 1960's, 1970's and 1980's. Demand for entry-level rental housing will stabilize with their de- cline while demand for higher quality rental housing will increase. Married couples without children posted the largest numerical increase of any household type during the 1970's. This category added 814 households or 48 percent for a total of approximately 2,500 households in 1980. This catego- ry consists primarily of two groups: young marrieds who have not yet had chil- dren and older empty-nester couples. Both groups are markets for rental hous- ing. This category is expected to continue to grow into the 1990's. Married couples with children living at home are the largest household type category comprising 45 percent of all study area households in 1980. This group is not a major market for rental housing and is expected to decline nu- merically through the 1990's. "Other family" households, primarily single parent families, experienced strong numerical growth during the 1970's adding 258 households (55 percent) during the decade. This group is also a market for rental housing but comprised just 8 percent (731 households) of all study area households in 1980. 14 0', so .0 .-1 in •--1 p 41 00 M .D • . CO .-1 N. .-1 ON O in 0 .--1 a' .--4 •-+ .--4 CD I..1 00 a) O .--1 N 01 '.D 00 .D N 00 00 O OI 00 O' O 1- O . • N. N .--1 .t 1- 1- O' Ul 1- CO O' r+ O in a) (-4 an i.0 c•') ON •-1 N N. 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N CO1 >.1 w 0 1r O cc O -I- NO I I N0 c'1 O. • u1 • •.1 CO Z 0 OON en N. el 4 O- N .--1 -I-1 N •.-4 .-a O .-1 .-1 iO 10 O .-a 0 0 0 0 a 00 - 11 C: I` oO ON .t M 10 C. ON 0 41 ...4-0 I- 'o UN ON trl . . • • 0 0 •> N.( .-•1 tf► .--1 CO O N. CO CO .t CO 1.' •.1 0 ., .--1 1--4 .--1 .-1 CO .MO.1 0 co a) • O U c.) 0 0 • 11 %0 in .-1 N .t O O 0 0 0 _O Cl) O 00 ..0 C7 CO .4 •CO CO d O�) � Oas 0. o O O O O O O 0 .-1 .-1 .--1 .1• M co .-1 .-1 .1 .-1 .-1 •-1 .i-1 w 0 . CO 11 0 0 N '0 o C, u a) .C1 CO O 0) 0 0 .0 E. o No in en .t N O O 0 O CD a) I! O CD C') 00 • • • • 4-1C� 1a x N. N n M 0 O O- CD �? O O O 0 O O a) a) .-► .-1 C) .-4 \D 0'1 .--1 .-I .--A .--1 .--1 .L". 00 I. >. 11 (1) in 0 a E 41 0 -O 0) ra r-1 CO r1 .-1 0)) o a J-t 1-1 4.1 .0 L a-1 0 a) 4-4 .tea 44 0 H El •'. 4-1 0 H Fr 0 ON a) o as a) o o Cl Pa Z x 11 1+ 0 co x N 1- 0 a) 0) L a) 1-4 •d a) a) J.J a) 11 Q a) a) 11 .M la L a) I-1 $-1 `.L 11 1-+ a) 1+ 14 a) , •• $' a>. 30 •c a � o. 3cc d a a) Cl -o a >,ra •.,, o �, 0 a >,ra •., o >, 0 •. o .15 Sx a v 14 0 u 11 .. c0 ••.1 5 cn 1-1 0 u 10.1 0 to 41 0) L Cl v 0 11 0) u 0) 0 0 Z 0 cn cd w z 134 0 cn W cry Z Z in • • 1 The household composition data combined wit h age distribution data shows that demand for rental housing will continue to increase through the early 1990's I then level off. Demand for entry-level apartments has already leveled and new, higher quality units with unique design detail, more features and amenities will be in greater demand. These trends relate to those baby boomers who are continuing to rent, many with higher incomes, as well as an older, more demanding empty-nester market. Al- though the study area has a higher proportion of family households than the metropolitan area as a whole, particularly families with children, it too is being affected by these demographic trends and will need to have housing avail- able to accommodate these shifts. Household Tenure Table 6 lists the number of owner and renter occupied households in each study area community as well as the rental vacancy rate at the time of the 1980 cen- sus. • - TABLE 6 STUDY AREA HOUSEHOLD TENURE 1980 Rental Total ---- Owner ---- ---- Renter ---- Vacancy Households Number Percent Number Percent Rate (Pct.) Oak Park Heights 955 624 65.3 331 34.7 11.3 Stillwater 4,065 3, 159 77.7 906 22.3 11.8 Stillwater Twp. 448 414 92.4 34 7.6 2.9 Bayport 677 534 78.9 143 21.1 3.4 Baytown Twp. 237 211 89.0 26 11.0 0.0 West Lakeland Twp. 355 333 93.8 22 6.2 0.0 Grant Twp. 831 779 93.7 52 6.3 1.9 May Twp. 611 563 92.1 48 7.9 5.9 Marine on St. Croix 201 177 88.1 24 11.9 27.3 New Scandia Twp. 851 803 94.4 48 5.6 0.0 Study Area Total 9,231 7,597 82.3 1,634 17.7 10.0 Metro Area Total 721,444 478, 731 66.4 242,713 33.6 4. 1 Sources: Bureau of the Census, 1980 U.S. Census of Population and Housing Maxfield Research Group, Inc. The table shows that the percentage of households which rented their housing was low in the study area in 1980. Approximately 1,600 households or 18 per- cent of the total household base rented their housing in 1980. This compares 16 • • with a 34 percent renter occupancy rate in the metropolitan area as a whole. The more rural townships in the study area had the smallest proportion of rent- ers. The fully developed communities of Stillwater and Oak Park Heights had more than 1,200 renter households or three-quarters of the study area's total. This reflects the tendency of renters, usually mobile or lower income house- holds, to be centrally located near stores, services and employment. Stillwa- ter had 906 renter households, the largest of any study area community and roughly 22 percent of its total household base. Oak Park Heights had 331 rent- er households or 35 percent of its total, the highest proportion of renters of any study area community. Many of these were located in subsidized senior or family units. The study area exhibited a very high rental vacancy rate in 1980. Ten percent of all rental units were vacant compared with just 4 percent of rental units in the metropolitan area. A 5 percent vacancy rate is considered a normal rate in a stable, competitive rental market, to allow for normal turnover of units. A surplus of rental units existed in the communities of Stillwater, Oak Park Heights and Marine on St. Croix in 1980. Part of the surplus in Oak Park Heights was due to new rental units just constructed in 1979 and 1980 (Ray- mie Johnson Estates) which had not yet been on the market long enough to be ab- sorbed. Residential Construction 1980 to 1987 Table 7 lists the number of new residential units by type from building permits issued by Oak Park Heights and other study area communities from 1980 through 1987. The table reveals that permits were issued for 1,663 new units in the study area, an average of 208 annually. In Oak Park Heights there has been more multifamily construction than single-family construction during this peri- od. The 86-unit apartment building in 1985 was Oak Ridge Place, a senior hous- ing project. The remaining units have been "townhome" developments, some which have become rental units. Little land is available in Oak Park Heights for new single-family development, although 1987's 22 single-family units represented a significant increase from prior years during the 1980's. All of the multifamily and townhome units and a majority of single-family units in the remainder of the study area have been built in Stillwater. New single- family building was up in 1987 compared to 1986. The apartment units were in two projects in Stillwater targeted to low and moderate income persons (mainly seniors). Very few new market rate rental units have been added in the study area, rela- tive to the total number of new units added. We estimate a current rental vacancy rate of 5 percent based on market interviews as well as utility records compiled by the Metropolitan Council. Some older buildings with deferred main- tenance are likely experiencing the highest vacancy, while most buildings are experiencing vacancy under 5 percent. Rental Unit Demand Based on demographic trends and housing construction since 1980, we estimate total demand for rental units in the Oak Park Heights/Stillwater market to be 17 • • 50 to 60 units annuallyfrom rom 1988 through 1990, or 150 to 180 from 1988 through 1990. However, we feel demand could actually exceed this, because there has I been little new rental construction in the area, and there are no new market 1 rate apartment complexes. Your project, because it will be the only develop- ment of its type in the market area, could create its own demand. The demand appears strongest from families and couples looking for moderate-priced rental housing, based on our review of the market. Empty-nesters will also be a mar- ket particularly in the later 1990's. TABLE 7 STUDY AREA RESIDENTIAL BUILDING PERMITS ISSUED 1980-1987 (Number of Units) Total Single- Town- Multifamily New Family house Duplex Apt Condo Units Oak Park Heights . . 1980 16 32 0 0 0 48 1981 4 0 0 4 0 8 r� 1982 6 0 0 0 0 6 1983 1 6 8 0 0 15 e 1984 2 32 0 0 0 34 1985 2 0 0 86 33 121 1986 1 16 4 0 0 21 1987 ' 22 0 0 0 0 22 Total _ 54 86 12 90 33 275 Annual Average 7 11 1 11 4 34 Remainder of Study Area 1980 69 76 0 0 41 186 1981 - 93 0 2 0 4 99 1982 61 4 2 2 0 69 1983 149 12 28 10 8 207 1984 151 11 2 0 8 172 1985 163 0 2 0 0 165 1986 140 2 2 64 0 208 1987 171 5 2 104 0 282 Total 997 110 40 180 61 1,388 Annual Average 125 14 5 23 8 174 Sources: Metropolitan Council Data Logs Maxfield Research Group, Inc. 18 • • RENTAL MARKET OVERVIEW Rental housing in Stillwater and Oak Park Heights consists primarily of duplex, four-plex, and 12 to 16 unit buildings, with few amenities. The majority of newer rental units in the immediate area have subsidized rents, and are either family townhomes or are senior apartments (mid-rise buildings). The majority of subsidized units, both senior and family, are full, and buildings have wait- ing lists. Market rate rents for duplex style units average $450 to $550 a month, plus heat. Market rate rents in the few older well-kept apartment complexes average $450 for one bedroom units and $525 for two bedroom units; in older complexes with no upgrading rents are closer to $395 to $425 for one bedroom units and $425 to $450 for two bedroom units, including heat. These rents reflect the age of the buildings and lack of amenities. Rents at the new Cottages of Stillwater are $385 (one bedroom units) and $485 (two bedroom units) plus heat and garage. Units are smaller than average, and are geared to moderate income seniors. To find newer, more contemporary designed apartments, renters must shop Maple- wood- and White Bear Lake. From 1984 through 1987, approximately 700 new rental units were added in these two communities; the majority in Maplewood in 1986 and 1987. Absorption has been very strong (an estimated 650 units from 1984 through 1987 in these two communities). These projects include Maple Ridge, Century Ridge and Silver Ridge in Maplewood, and the new White Bear Woods in White Bear Lake. White Bear Woods has done extremely well, leasing 112 units since opening in November of 1987. Most newer complexes in Maplewood and White Bear Lake offer recreational ameni- ties including a party room, outdoor pool, exercise room and whirlpool/sauna. None include a washer/dryer in units, but instead have either a common area laundry or laundry room on each floor. A few projects have individual gas furnaces in the unit. The most "upscale" of the new projects in terms of ar- chitecture, floor plans, and design features is White Bear Woods. There are no. comparable rental projects in Oak Park Heights or Stillwater to these Maplewood/White Bear Lake projects. Rental Rates We feel that the Oak Park Heights/Stillwater market will not be able to justify rents at the average for new Maplewood and White Bear Lake units, because it is too far from the Twin Cities area, and thus people expect rates to be somewhat lower. Price sensitivity in the Oak Park Heights market area is reflected in higher vacancies in two bedroom versus one bedroom units. The Apartment Guide survey for the last quarter of 1987 also showed a higher rate of vacancy for two bedroom units in both Maplewood and White Bear Lake. Also, two bedroom units are taking longer to lease in most projects. The following table shows rents at newer market rate buildings in Maplewood and White Bear Lake, and compares them to the two newest projects in Oak Park Heights/Stillwater. 19 10 110 The average rent for a newer one bedroom unit in the Maplewood/White Bear Lake projects is $520 for 777 square feet, or $.67 per square foot. Rents for one bedroom units at the two newer Stillwater projects range from $445 to $470, for units of 648 to 700 square feet, $.67 to $.69 per square foot. TABLE 8 RENTS AT NEWER PROJECTS Com No. of Rent Per Name of Project munity Units Rents* Square Foot Sq. Ft. One Bedroom Units Maple Ridge MPWD 40 $ 510- 540 804- 900 $.60-.63 Majestic Pines WBL 15 525- 545 748- 772 .70-.71 ' Silver Ridge MPWD 62 450- 485 708 .68-.69 Century Ridge ' MPWD 36 520- 560 754 .69-.74 Lakewood Hills WBL 29 515- 555 775- 875 .63-.66 ' White Bear Woods WBL 66 525- 565 767- 820 .68-.69 Total/Average 248 $ 520 777 $ .67 Cottages of Stillwater 96 $ 445 648 $ .69 Brick Pond 4 470 700 .67 Two Bedroom Units . Maple Ridge MPWD 60 $ 620- 730 1,044 $.59-.70 Majestic Pines WBL 102 595- 640 920-1,059 .60-.65 Silver Ridge MPWD 124 520- 560 938 .55-.60 Century Ridge MPWD 36 620- 700 986-1,024 .63-.68 Lakewood Hills WBL 58 655- 705 1,050-1,100 .62-.64 White Bear Wbods WBL 150 620- 735 1,003-1,044 .62-.70 Total/Average 530 $ 633 1,004 $ .63 Cottages of Stillwater 32 $ 545 804- 966 $.56-.68 Brick Pond 26 515 950 .54 *Rent adjusted to include heat and one garage stall. An average of $30 for heat and $35 for garage is used. Source: Maxfield Research Group, Inc. 20 Two bedroom units at newer Maplewood/White Bear Lake projects average $633 for 1,004 square feet, or $.63 per square foot. Rents for two bedroom units a the two newer Stillwater projects range from $515 to $545, for units of 804 to 950 square feet, an average of $.54 to $.68 per square foot. Comparing rents and square footages reveals that lower rents at the Stillwater projects are partially attributed to very small units relative to new projects in Twin Cities suburban projects. Rents also reflect fewer amenities. (Brick Pond does not offer garages, or dishwashers. The Cottages of Stillwater are geared more to seniors, and while offering limited amenities, have very small units.). Vacancy Vacancy rates per the 1980 census in Stillwater and Oak Park Heights, were at approximately 11 percent in each community. This is partly attributed to new units which may have opened in 1979 and 1980, but which had not been absorbed yet. In Oak Park Heights, a 95-unit senior subsidized building opened in late 1979, as well as a 24-unit subsidized rental family townhome project (Ray- mie Johnson Apartments). Unabsorbed units at the complexes would account for the high vacancy in Oak Park Heights. In Stillwater, several units (mostly geared to low-incomes) opened during this 1979-1980 time period as well. Today, we estimate a more normal vacancy rate at market rate apartments in Oak Park Heights/Stillwater. Property managers of smaller scale buildings (du- plexes, four-plexes) estimate vacancy at or under 5 percent. Absorption of units at the newest projects, Cottages of Stillwater and Brick Pond, have also been good. The Cottages opened in 1987 with 124 units, and have leased 112; Brick Pond opened in July 1987 and leased all 40 units in less than six months, and today has only one vacant. The rents at these projects are reflective of a price sensitive market however, and are below the rents at newer Maplewood and White Bear Lake projects. These two projects would not be competitive with your development, because they are targeted mainly to seniors and low-income persons, offer few amenities, and do not feature contemporary floor plans or architecture. The vacancy rate at newer projects in the Maplewood/White Bear Lake area has edged upward in late 1987/early 1988, as new projects have opened, signaling a competitive market. Vacancy is highest in two bedroom units, which also sig- nals a price sensitive market. Some projects are guaranteeing no rent in- creases for the next two years, while others are offering one month free rent with a year's lease. As spring approaches traffic should improve significant- ly, lessening the use of rent concessions. Planned Competitive Projects There are only two rental projects now planned in the study area: the final 56-unit phase of the Cottages of Stillwater, and a 90-unit four-plex/eight-plex development by Swager Brothers to be located at 57th Street North, near the subject site. The 90-unit project has HRA financing, and is planned for 1988 construction. Units will feature two and three bedrooms and will be priced 21 • • from $450 to $550 plus heat and garage. They will be targeted mainly to fami- lies. No common amenities will be offered. This project will be somewhat competitive with your development for small fami- lies but would not compete for other groups, especially singles, roommates, empty-nesters who desire a more secure apartment community. Also, your project will have amenities (underground parking) that will make it more attractive to certain renter groups. { 22 A • • J I CONCLUSIONS AND RECOMMENDATIONS IIDemand We estimate an actual need for 50 to 60 new rental units per year from 1988 il through 1990 (150 to 180 total) to satisfy rental demand from households which will desire to move to the Oak Park Heights/Stillwater area. However, this is a conservative projection considering the lack of a new market rate apartment community in this area. Your contemporary apartment concept will be a new one to this market and could attract persons that would otherwise have moved to suburbs closer to the cities. Your project could also be expected to pull some , / persons out of older existing buildings. The other planned units (90 duplex V :I units and 56 units at Cottages of Stillwater for persons over 55) will satisfy some of the projected demand, but a new complex with your concept will be ex- tremely competitive because it will have more amenities, and more attractive :I floor plans and architecture. No other apartment projects are proposed or planned at this time in the study area. We feel your product has an excellent opportunity to meet a market need 141 for contemporary rental product. 3 Target Markets Your proposed development will be attractive to several groups, including small 1 families, young married couples, empty-nesters, and a few single-parents and singles. The site's proximity to shopping, and employment via Highway 36 will appeal to younger workers, and the security of a larger complex will appeal to 1 older persons. Young couples and small families who can not yet afford to purchase housing but 1 who grew up in the area will find a contemporary rental development very ap- t pealing. Most new rental housing for older adults has been subsidized with limited amenities and small units. A new rental complex will allow empty- , nesters to stay in the community after selling their homes. It will be impor- tant to use appropriate marketing messages in local and St. Paul publications, id to reach target renters. d Development Concept The proposed rental complex will consist of both traditional apartments and rental flats. The traditional apartments will be located in two larger three- story buildings, one with 64 and one with 38 units. The rental flats will be located in two attached five-unit buildings, three attached five and six-unit I buildings and four attached four-unit buildings. There will be a total of 144 units. IThe site is wooded and an effort should be made to preserve as much of the existing tree-cover as possible to enhance the natural beauty of the property as well as to provide privacy. 23 S S I Although we do not feel an extensive recreation amenity package is necessary, we would suggest you consider offering residents a picnic/barbecue area, tot lot and either an outdoor pool or whirlpool and exercise room. Providing both indoor and outdoor amenities will make you more competitive with new Maplewood and White Bear Lake projects, and more desirable than existing projects in the Stillwater/Oak Park Heights market. In-unit amenities should include walk-in closets, either two full baths or one and three-quarters baths in the two and three bedroom units, and an eating area in the kitchen. We have reviewed the preliminary floor plans for the rental flats and have noted they address all of these items. The eating area in the kitchen with the window will considerably brighten the kitchen area. Often in rental apartments, the lack of space requires an interior kitchen without win- dows which usually creates a dark, closed atmosphere. Walk-in closets allow for greater storage of personal possessions. The addition of balcony/patio areas gives prospective residents a sense of extended living space. While washer/dryer hook-ups in the units would be appropriate in this market, your suggested inclusion of the washer/dryer appliances will be very attractive to prospective renters. This upgrade will be a big plus in marketing against other properties in the area, as well as in Maplewood and White Bear Lake. In order to provide for efficient move-in/move-out of residents, to facilitate getting from the garage to upper floors and to accommodate handicapped and elderly residents, we strongly suggest incorporating an elevator in each of the three-story buildings. Underground, heated parking is becoming more common at newer rental develop- - ments throughout the metro area. Typically, storing a car in a heated garage could be considered a luxury for which some people in a price sensitive market would- not be willing to pay extra. In order to maximize use of the underground garage space, we suggest garage spaces be priced at $30 per month extra and the cost included in the rent. This will prevent an overuse of the exterior park- ing area from persons not willing to pay the extra garage rent. Parking for the rental flat units will be provided through single-loaded under- ground parking in two of the clusters and through detached garages in the re- maining ten-:unit cluster. Because rental flats are usually designed to include a garage stall, these should also be included in the rent at a price of $30 per month. We would also suggest you designate both adult and family buildings. Families with children would likely be found more often in the rental flats, however both groups will find each type of building appealing for a variety of reasons. Overall, the proposed site design maximizes use of the property and provides for a separation of the traditional apartments from the rental flats. Unit Mix and Projected Pricing Table 9 shows the unit mix and projected pricing for the proposed development. Our recommendations reflect an approximate 40 percent one bedroom and 60 per- cent two bedroom split for the traditional apartment units and a 70 percent two 24 • • OUTLINE OF HOME FUNDS IN WASHINGTON COUNTY • Rental Housing Rehabilitation Parkside Apartments in Cottage Grove Park Place Apartments in St. Paul Park East Metro Place in White Bear Lake Hillvale Twinhome in Oakdale Raymie Johnson Estates in Stillwater Acquisition Hillvale Twinhome in Oakdale for Transitional Housing Homeowner Rehabilitation Program 1993/1994 - 18 deferred loans equaling $7,000/each to residents of Washington County 1996/1997 -22 matching funds for deferred loans equaling $7,000-$10,000/each Tenant Based Rental Assistance • Low income seniors receive rental subsidies of upto $250/month. The he programs that have been run with HOME funds have included communities throughout the County. The Tenant Based Rental Assistance Program assists an average of 36 seniors, per year, in the following communities: St. Paul Park Stillwater Forest Lake Cottage grove Hugo Scandia Woodbury Future Plans For HOME Funds Continued Tenant Based Rental Assistance Program to assist seniors Homebuyer education Homeowner rehabilitation throughout the County ENCLOSURE 14 • Telephone(612)458-0936 . � 1 6 1 4 8 69 x 6 2 5 :::.:: .:..::::::::::::: ::.::.: . .:.:.:::. >' Washington County Housing and Redevelopment Authority • 321 Broadway Avenue • Saint Paul Park, Minnesota 55071 March 4, 1998 © f O W E 1 I1 NOR 51.998 Mr. Michael Robertson, Administrator City of Oak Park Heights 14168 57th Street North Oak Park Heights, Minnesota 55082 Dear Mr. Robertson: In June 1995, the City/Township Council approved a Resolution regarding a Joint Powers Agreement for the Dakota County Consortium (which includes Washington County) for the Federal HOME Program. Once again, the Joint Powers Agreement needs to be signed by each City and Township official in order to be eligible to receive HOME funds in your community. This must be a Resolution item on your Agenda for approval prior to signing. The counties which are included in the Dakota County Consortium are: Anoka, Dakota, Ramsey and Washington County. The Consortium receives Federal HUD funds annually for the HOME Program,.which is a housing program for low income people. Those people that are eligible for the HOME Program must have an income of eighty percent (80%) or below of the Median Family Income for the Metropolitan Area. The gliquivalent of 80% Median Family Income in a monetary amount equals $45,300 for a family of four and ilK31,700 for an individual. The Dakota County Consortium has been receiving HOME funds since 1992. The Washington County Housing and Redevelopment Authority (HRA) administers the Federal HOME Program on behalf of Washington County. The HRA has offered a variety of programs with the HOME funds. An outline describing what programs have been administered with HOME funds in Washington County is enclosed. The HOME Program is authorized by Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990. This year's executed Joint Powers Agreement will remain eligible for three (3) years, therefore, this issue will not arise again until 2001. The signed Agreement must be returned to the Washington County HRA by April 30, 1998, so they can be forwarded to HUD in a timely manner. Please put this Resolution on your next City Council Meeting Agenda and secure the necessary signatures with your seal imprint. If your community does not sign this Agreement, citizens of your community are not eligible to receive HOME funds. Enclosed you will find a Resolution to use and a outline that states what programs have been funded with HOME funds. If you have any questions, or would like a representative from the Washington County HRA present at your Council Meeting to discuss this further, please call me at 458-6557. Your participation is appreciated. Sin erely, Qij Georgette Peterson Controller • 411 JOINT POWERS CONSORTIUM AGREEMENT THIS AGREEMENT has been entered into as of the 20th day of June, 1995, between and among Anoka County, Dakota County, Ramsey County, and Washington County, State of Minnesota, hereinafter referred to jointly as the "Consortium", each being governmental units of the State of Minnesota, and is made pursuant to Minnesota Statutes, Section 471.59. WITNESSETH: WHEREAS, Title I of the Cranston-Gonzales National Affordable Housing Act (the Act), affirms the national goal that every American family be able to afford a decent home in a suitable environment; and, WHEREAS, Title II of the Act provides for formula allocation of funds among eligible state and local governments; and, WHEREAS,section 216(2)of the Act,provides for formation of consortia of units of general local government for the purposes of the Act; and, WHEREAS, the aforementioned counties are jointly geographically contiguous units of general local government and each have sufficient authority and administrative capability to carry out the purposes of the Act; and, WHEREAS,the regulations published at 56 F.R. No. 53 published March 19, 1991 at page 11592, to be codified at 24 CFR Part 92, and 56 F.R. No. 23 published February 4, 1991 at page 4458,to be codified at 24 CFR Subtitle A(et esq.),and 56 F.R. No. 143 published July 25, 1991 at page 34094 set forth regulations governing the applicability and use of funds under Title I. • • DAKOTA COUNTY CONSORTIUM JOINT POWERS AGREEMENT BETWEEN THE COUNTIES OF ANOKA,DAKOTA,RAMSEY,AND WASHINGTON p American Legion picture , , page/12A , TONBULLETIN YE, TIN ,.... , , ,,,..._,...._, ,,, ,,..,,_,,,,, of deceptionGrove 'council Wallace allegedly advised the rescindsdecisiony after, the suspect pro- victim that he had a verbal argumentknife,held it to the victim's with the fictional character.By win- f indicated he would kill her ring the argument,he said,he could CF-1--- reamed.He then advised her keep the victim as his own property, onFàjIIII) j)►lanned to kidnap her along not transporting her to Las Vegas. ro )0s a I ee other females already The victim re rt I that evening. l in them reported she talked the By Lori Ann Hintz 8 Flying suspect into granting her release. Staff Writer the Project and begin to clean up desolate area near Las Veg- Wallace allegedly drove her back to the problem that exists. da, Wallace allegedly said Maryland Avenue in St. Paul. He The original proposal women would be taught stoppedadvising The Cottage Grove City Coun- P posal was ens once, her that if she col unanimouslyv Passed nz with Kevinlmembervot- o'�' told anyone about the incident he their decision to allow the Hous- Jack Denier and once red duct tape, the suspect coy- would kill her and the rest of her ing and Redevelopment Authori- b to they.Both were concerned victim's eyes and mouth fattlily; :wind to' lay her face down ty (NRA) to build a 180-unit about the burden a tax-exempt a-bed,tying her hands and wrapped ctwith stillb tape, was nears Oakwood d Parke complex development would put on tax- payers and and competition it r said Wallace apparently dumped out on Maryland Avenue. would create for private PP y After tearing off the blindfold, the Cottage Grove developers. he duct tape from the vic- victim recognized her surroundings ith, stuffing a stocking in and ran home. Though the BRA would be instead."The suspectThe decision was made at the paying the city in lieu of taxes, then The next morning,noticing physi- May 18 council meeting, two this would only add regular to about pear to the victim that a cal signs of abuse to the juvenile's weeks after the original approval fividual had arrived at the face, heras25 percent of the taxes. The suspectha further made questions.her guardiantimm began advised was given.The proposal had been "The taxpayersu would thebe un. hat pe left the apart- dozing three-quarters of taxes her on the table for over two months, nga the victim alone the with guardian of the attack. The for the project," said"continued SPPD once notified of the rape, and approval had come only after « m u c h c o rn r o m i s e and Mr«Roue is nevervs,"continued person who actually immediately took the victim to the discussion. p developers"you'll see private St.e Paul Ramsey Medical Center. The Municipal Service Charge come in. They just letion of the rape, Launching an investigation, thecan't compete.We do need more to make it appear Agreement had yet to be worked em rso responsible for the out in detail. Staff came to the not at the but not ofrs this type and t the room and he _ Wallace May 18 meeting prepared not at taxpayers expense,"he eturned." (Wal Continued on Page 2A recommend d gapproval of the Mayor Dick Pederson vow in agreement and begin the project. favor of the original proposal top HRA representatives were not because of the need for additional �� present at the meeting,concerned ' housing.He said private develop- citizens against theproject were. ers have made an effort to deve- Cottage Grove citizen Jim lop this area,but uns lly Rose spoke out against the prop- "But I'm very disappointedtha ucce tat osal for several reasons. Het the HRA is not here to talk about feared taxpayers would have to their project," said Pederson. I pick up the slack of the tax- =' ����`' exempt development in their Planning Director Anne Hurl- exempt�- property taxes as well as educe- bunt said John Hermann, con- it seating the HRA did try to con- k �„ uuii."The school bow just made tact her before the meeting. She ',.., a decision to ask fora$39 million later found out the two regular t'" bond referendum.The kids mov- HRA representatives Sam Grif- � x ing into that development will be fith and Dennis Bayleat were out educated on our tax money,"said of town at a convention. Rose. Rose compared the develo City Attorney Jack Clinton P- cautioned the council about ment to the low-income projects rescinding a decision made two f '` in the same area."I've talked to a weeksprior. ` :u- lum is one of several preJ'ects Seibert keeps busy resident who lives there. The `The '` may %u- with rah.,..,. r.,. .■.._.. .._-- —.. , ,» :. « :..,_ _. y have taken action on rn�rrlrr;c;.,., • VOTO, TAUTGES, REITH & CO., LTD. • VirwK CERTIFIED PUBLIC ACCOUNTANTS Birch Lake Professional Building •1310 E. Hwy. 96 •White Bear Lake, MN 55110• Phone 426-3263 ROBERT J.VOTO,CPA May 12, 1988 ROBERT G.TAUTGES,CPA JAMES S.REDPATH,CPA To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 Re: WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (HRA) - MULTI-FAMILY HOUSING BOND PROGRAM Pursuant to the request of Mr. Sam Griffith, Private Ventures Director of the HRA, we have reviewed the latest multi-family housing project proposed by the HRA. This is the project presented to the City Council at its regular meeting held March 14, 1988. To clarify, this proposed project is different than the HRA proposal of last September. The old project was basically a "joint venture" between the City and the HRA. (See my letter dated October 13, 1987. ) The new project is a proposal for HRA construction and/or acquisition; ownership; and management of multi- family housing within your City. The HRA is no longer requesting that the City become a co-developer. Accordingly, my past concerns about the City becoming a co-developer do not apply to this new proposal. The present HRA proposal is detailed in the following sets of data prepared by and/or for the HRA: A. MEMORANDUM from Mr. Sam Griffith, dated March 14, 1988. B. STUDY OF MARKET FEASIBILITY, prepared by Maxfield Research Group, Inc. for the proposed project. C. MULTI-FAMILY AND ELDERLY RENTAL HOUSING MARKET ANALYSIS, WASHINGTON COUNTY - preliminary draft for review and discussion, prepared by McGladrey, Hendrickson & Pullen. D. PROPOSED RESOLUTION for the approval of the HRA overall program and a specific project, prepared by the HRA. E. PROPOSED MUNICIPAL SERVICE CHARGE AGREEMENT relating to a specific project, prepared by the HRA. All of the above documents and/or HRA-provided examples of such documents have been reviewed by our office and City Administration. J MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Two This report refers to specific sections/paragraphs contained in one or more of the above documents. Accordingly, this report should be read in conjunction with such documents. The present proposal is outlined as follows: 1 . The HRA has determined that there is a substantial need for low and moderate income/affordable housing in Washington County. According to Mr. Sam Griffith, this determination was made based upon a housing market analysis report prepared for the HRA. See copy of "Preliminary Draft for Review and Discussion". The Preliminary Draft for Review and Discussion is language used by accounting firms to indicate 'unfinished' . The Housing Market Analysis contains two sets of projections to estimate or pro- ject market demand. The first set is for Washington County households, the second set is for Secondary Market Area households (see page 31 ) . The secondary geographic market area is defined on page 18 of the report. The report (page 31) appears to project a household growth (1987-1992) of 2,059 units for Washington County and 28,015 units for the Secondary Market Area. This report indicates that a major portion (899 units, or 44%) of the Washington County projected needs are to be met by "projects in process or planned". Similar data is not shown for the Secondary Market Area. The actual significance of the Secondary Market Area data is not readily clear in this report. However, the summary page of the report (page 33) specifies: "The projected net market for low and moderate income multifamily rental housing in Washington County is estimated at 1 ,160 units for the period 1987 through 1992. At a rental unit cost of $50,000, this represents a potential market demand of $58,000,000. Similar- ly, the rental housing demand during this period for the Secondary Market Area is estimated at 28,015 units, or a potential market demand of $1 ,400,750,000." The report appears to conclude a limited market demand from within Washington County and a much greater market demand from and/or for the Secondary Market Area. Pages 21-24 of the report contain additional market information as to the "Income Qualified Market" and the "Target Household Market". 2. The HRA proposal anticipates the issuance of $115 million in bonds to acquire and construct multi-family projects throughout the County (see Sam Griffith's memo dated March 14, 1988) . The $115 million equals approximately 200% of the Washington County projected net market of $58 million, according to the HRA Market Analysis Report. • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Three Apparently, the HRA anticipates that it can (and should) provide affordable housing for low and moderate income residents of Washington County, plus low-to- moderate income residents of the Secondary Market Area outside of Washington County. The Washington County Board Chairperson is unaware of such a Washington County policy, but has asked to receive a copy of this report. 3. The HRA proposal refers to "low and moderate income rental housing" and "affordable housing". However, the market feasibility report prepared by the Maxfield Research Group, Inc. (for the specific project in your City) appears to contradict the "low income, etc." concept. The transmittal page of the Maxfield study includes the following paragraph: "Because your project will be considered the nicest and most "up- scale" of rental projects in this Stillwater/Oak Park Heights area, and your rents will be at the top of rental rates in the market, your absorption time could be expected to be longer than an average for the other middle-market units with lower rents. Phasing your project over two years is recommended; with one-half your units coming on-line in late 1988 and the remainder through the end of 1989. We estimate an absorption of eight to ten units per month; with marketing to begin three months prior to occupancy." The "Summary of Findings" (pages 1 and 2 of the Maxfield Study) adds more defi- nition to the specific project proposed, including the following: • Underground parking • In-unit washer/dryer • "Top of the market" product • Outdoor pool • Target markets include young couples, roommates, older empty-nesters, divorced persons, and single parents with 1 or 2 children. The City Council should strongly consider the appropriateness of government sub- sidy for: A. Low and moderate income rental housing. vs. B. The nicest and most "upscale" of rental projects in the Stillwater/Oak Park Heights area with units at the top of rental rates in the market. • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Four 4. The HRA proposal anticipates continuing ownership and operation of these housing units by the HRA. As such, the City Council will be forfeiting its taxing and assessing authority over such property. According to Mr. Sam Griffith, such projects will be exempt from: A. State sales tax on construction costs and future operating costs. B. All real estate taxes - city, county, school district, and all of the various local taxing jurisdictions. • C. Special assessments benefiting such property. According to Mr. Sam Griffith, the initial project proposed for the City of Oak Park Heights is an $8,750,000 project. State subsidy (i.e., exempt from state sales tax) depends upon the level of taxable costs (material) vs. non-taxable costs (land, labor, services, capitalized financing) . A 50% ratio would amount to a 3%, or $262,500, state subsidy for construction costs. This state subsidy would continue for ongoing costs (i.e. , utilities, supplies, equipment, repairs, maintenance, etc. ) . The real estate subsidy has been estimated by Mr. Sam Griffith to be approxi- mately 75% of normal real estate taxes. The 75% factor represents total exemp- tion from real estate taxes less the municipal service charge agreed to be paid in lieu of taxes. The amount of such annual local subsidy can be calculated as follows: Total Project Value $8,750,000 Assessment Ratio x 34% Calculated Assessed Value 2,975,000 Estimated Mills (105) 0.105 Gross Real Estate Tax Subsidy 312,375 Estimated Municipal Service Charge @ 25% (city, county and school district) 78,094 Calculated Annual Real Estate Tax Subsidy $ 234,281 • • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Five It should be noted that the annual real estate subsidy affects all taxing juris- dictions. Such property (being owned by the HRA) is exempt property for real estate tax purposes. This exemption will continue for as long as the property is owned by the HRA. Additionally, nothing in this proposal compels the HRA to cease such ownership. Accordingly, this local subsidy should be construed to be long-term, if not permanent. The special assessment subsidy could become a future problem for the City. According to Mr. Sam Griffith, property owned by another government jurisdiction is not subject to the City's special assessment authority. Should the City find it necessary to approve local improvements (i.e., sewer, water, streets, etc. ) for an area which includes this project, the City will be unable to compel the HRA to pay their proportionate share of such costs. 5. The HRA is proposing a project (of this nature) in the City of Oak Park Heights and another project in the City of Cottage Grove. According to Mr. Sam Griffith: A. The finance officer of Cottage Grove made a determination that it would be more beneficial for Cottage Grove to use the HRA proposal than its own tax increment process. B. The City of Cottage Grove "verbally approved" a project on April 20, 1988. My telephone conversation (on April 28, 1988) with the Finance Director of the City of Cottage Grove contradicted the above statements. SUMMARY AND CONCLUSIONS The HRA proposal for county-wide "affordable housing" includes a request that the City Council adopt a resolution endorsing and approving the HRA program. Should the City Council adopt such a resolution, the HRA will be empowered to proceed with their program within the City of Oak Park Heights. The same council resolution has the effect of creating tax subsidies (both state and local) for such projects. Most important, such subsidies will continue in- definitely at the sole discretion of the HRA. The HRA proposal is based upon a "documented need" for such housing primarily in a "secondary market area" which specifically excludes the City of Oak Park Heights and all of Washington County. Additionally, the Study of Market Feasi- bility (for the project) prepared by Maxfield Research Group, Inc. appears to negate or contradict such a "documented need" for the City of Oak Park Heights in the following statements: 4111 • To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 12, 1988 Page Six * Oak Park Heights has little land available for new housing construction; as shown by the proportion of multifamily units to single-family units built since 1980. The majority of rental units are in smaller two-story duplex or four-plex buildings, with few or no common recreational ameni- ties. Also, much of the rental construction has been low-income units for families and seniors. No contemporary apartment complexes exist in the immediate study area. * The most comparable rental product to your proposed development is found in Maplewood and White Bear Lake. Rents at newer projects in these two communities range from $450 to $565 for a one bedroom unit and $520 to $735 for two bedroom units, including heat and one garage space. Those choosing to rent further out (Stillwater and Oak Park Heights) will do so if they can find comparable product but at rents at the lower end of this range. Renters will expect to pay lower rents for the tradeoff of living further from the cities. * Your proposed concept, combining more traditional apartment buildings with small rental cluster buildings of "flats", will broaden the appeal of your product. Your proposed amenities (underground parking, in-unit washer/ dryer, open floor plans) will put your product at the top of the market in the immediate area. Our suggested additions of an outdoor pool, picnic area, and tot lot will strengthen the project's appeal. The curb appeal of contemporary architecture will create excitement and will attract attention to your development. * Our suggested rents are based on a comparison of rents in newer projects in the northeastern suburbs, but are at the low end of the range because we feel the market is price-sensitive in Oak Park Heights and Stillwater. The HRA proposal is basically and fundamentally a request for subsidy in the form of exemption from state and local taxes. The City Council is being asked to approve such subsidy for itself and the other taxing jurisdictions. More importantly, once the City gives its approval, the duration of such subsidy will be at the discretion of the HRA. Respectfully submitted, ZaZ" -/ °°G VOTO, TAUTGES, REDPATH & CO. , LTD. Certified Public Accountants • • gal _ Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-4 5 8.09 3 6 MEMORANDUM TO ALL INTERESTED PARTIES FROM: Sam Griffith/Director, Private Ventures DATE: March 14, 1988 SUBJECT: Washington County Housing and Redevelopment Authority Multi-Family Housing Bond Program This memorandum provides an explanation of the HRA's new multi-family bond program. The purpose of this memorandum is to describe the structure of the program, the financing of the program and general information of interest to the cities in which these projects would be located. Structure of the Program The HRA will be issuing a pool of essential function bonds to be used for the acquisition of existing multi-family apartment projects and the construction of new multi-family projects for the purpose of maintaining and providing affordable housing opportunities for moderate income families in Washington County. There are numerous reasons why the HRA has developed this program. Since the adoption of the new Tax Reform Act, there has been little multi-family housing development in the county. In addition, as one of the fastest growing counties in Minnesota, the county is experiencing a tremendous growth in population; therefore, vacancy rates throughout the county are very low.• Consequently, current owners are able to raise rents and still keep their buildings fully occupied. As rents continue to trend upwards, current moderate income tenants are being forced to find more affordable housing, oftentimes outside the county. Another goal of this housing program is to provide safe and affordable housing to lower income tenants. The HRA, as manager of the Section 8 Program in the county, is finding that because of the rising rents and lack of new construction, many Section 8 tenants are unable to find affordable housing in the county. Several cities in the county have concerns about multi-family projects where maintenance is being deferred or where there are management problems. The cities have discussed the possibility of the HRA taking over such facilities to see that necessary repairs are made and management problems corrected. • • Other communities would like to see certain types of housing developed which the private sector has not been able to provide. Therefore, the HRA's multi-family housing program looks to address all of these issues through the acquisition or construction of projects in communities that desire these projects. Structure of the Bond Program The HRA will issue $115 million of essential function bonds to acquire and construct multi-family projects throughout the county. There will be a five year period during which the HRA will be able to finance specific projects. The bonds will be 40-year, fixed rate obligations, secured by a direct pay "Triple-A" rated letter of credit. The bond proceeds will be invested in an investment contract until such time as they are used to make project loans. The HRA anticipates the rate on the bonds to be approximately eight percent. As these bonds are essential function, public purpose bonds, the HRA must. be the owner of these facilities. However, the HRA has little experience in owing and operating apartment projects and will enter into contracts for "project coordinators" who are experienced entities, who will be responsible for assisting the HRA on acquiring existing projects, constructing new projects, and marketing and management of the day-to-day operations of these projects. The project coordinators will also share with the HRA with the risks associated with owning these projects, including providing the credit enhancement necessary for each projects. For their services, the coordinators will be paid a fee negotiated at project closings. ,/Project Financing Each project to be acquired or constructed would be done during a five year origination period. The "Triple-A" letter of credit provider will not take any real estate risk and therefore requires that before any bond proceeds can be used, there must be an acceptable credit enhancement in place to take that direct real estate risk. The credit enhancement, in conjuunction with the bond funds, will -grow the HRA to provide itself with 100 percent financing for these projects. Acceptable credit enhancement for these projects would include FHA coinsurance or a letter of credit from acceptable financial institutions or a collateralized letter of credit. Another form would be market rate mortgages. How the Program Works The HRA will identify potential existing or' new construction projects and i • enter into negotiations with a project coordinator to assist the HRA in developing these projects. At the same time, the HRA will work with local financial institutions to develop the necessary credit enhancement. At the time an acceptable and financable project is developed, the HRA will work with each community to see that the project meets the needs and requirements of that community. The ability of the HRA to provide affordable housing opportunities for moderate income residents of the county will be developed using the HRA's multi-family housing program. There are several ways that the HRA can make each project affordable. First of all , the HRA, because of the bond financing, will be able to provide itself with 100 percent financing. Second, the HRA, as a government entity, would be exempt from sales tax for the purchase of materials in either new construction or rehabilitation projects. Third, the HRA, as a non-profit entity, does not have the investment requirement return needs of the private sector. Any excess revenues generated by a project will be used to either keep rents at an affordable level or use them on other projects to write-down project costs or rents. Fourth, as a government agency, the HRA is exempt from real estate taxes. However, the HRA is required to make a contributing payment in lieu of tax to the taxing entities. This payment in lieu of taxes is a minimum of five percent of the aggregate shelter rents in each facility. This requirement allows the project to support more debt and therefore, lower rents. Each community, however, will be assured that as each project begins to support itself, excess revenues from the project will be used to increase the payment in lieu of tax made. Timing The HRA multi-family housing bond program will be closing within the next several weeks. The HRA is making presentations to the various governing bodies in the county to make them aware of the program. The objective of this program is to develop or maintain affordable housing opportunities in each community until such tine as the private sector begins to meet this particular need. /m (A, • MXFLD RESEARCH ROUP A STUDY OF MARKET FEASIBILITY FOR A PROPOSED RENTAL DEVELOPMENT AT OSGOOD AVENUE AND 60TH STREET in Oak Park Heights, Minnesota Prepared For: Dunbar-Herman Development Services, Inc. Minneapolis, Minnesota February 1988 1 til 620 KICKERNICK,430 FIRST AVENUE NORTH MINNEAPOLIS,MINNESOTA 55401 • MAXFLD RESEARCH ROUP February 11, 1988 J Mr. Frank Dunbar Dunbar-Herman Development Services, Inc. Suite 311 5353 Gamble Drive Minneapolis, Minnesota 55416 Dear Mr. Dunbar: Attached is our study of the market feasibility for the proposed 144-unit rent- al development in Oak Park Heights, Minnesota. The lack of new market rate rental housing in the Stillwater and Oak Park Heights area suggests unmet demand for rental units to meet the lifestyle needs of today's renter. Current rents in this area suggest a price sensitive mar- ket, and therefore we recommend pricing which is below the top of the market of newer Maplewood and White Bear Lake projects (those which would be most compe- titive with your proposed project), and more in-line with the lower end of the rent range of these projects. Because your project will be considered the nicest and most "upscale" of rental projects in this Stillwater/Oak Park Heights area, and your rents will be at the top of rental rates in the market, your absorption time could be expected to be longer than an average for the other middle-market units with lower rents. Phasing your project over two years is recommended; with one-half your units coming on-line in late 1988 and the remainder through the end of 1989. We estimate an- absorption of eight to ten units per month; with marketing to begin three months prior to occupancy. We have enjoyed conducting this study for you and we are available to answer any questions or comments you might have as you proceed. Sincerely, MAXFIELD RESEARCH GROUP, IN '4/4' ( •c.961-61.4,,, Lee A. Maxfield Ell abeth A. Slocum President Mar et Analyst LAM/EAS:lmd Attachment 620 KICKERNICK,430 FIRST AVENUE NORTH 612-338-0012 MINNEAPOLIS,MINNESOTA 55401 4110 • TABLE OF CONTENTS P Page SUMMARY OF FINDINGS 1 PURPOSE OF SCOPE AND STUDY 3 SITE REVIEW 4 7 DEMOGRAPHIC REVIEW 6 Population Growth 6 Household Growth 9 Employment Growth 9 Age Distribution 12 Household Type 14 Household Tenure 16 Residential Construction 1980 to 1987 17 Rental Unit Demand 17 RENTAL MARKET OVERVIEW 20 Rental Rates Vacancy 20 21 Planned Competitive Projects 21 • CONCLUSIONS - Demand 23 23 Target Markets 23 Development Concept 23 Unit Mix and Projected Pricing 24 Absorption. . . . . . . 26 APPENDIX 27 • LIST OF TABLES I Table Number Name Page Table 1 Study Area Population, 1970-2000 8 Table 2 Study Area Households, 1970-2000 10 Table 3 Study Area Employment, 1970-2000 11 Table 4 Study Area Age Distribution, 1970 & 1980 13 Table 5 Study Area Household Type, 1970 & 1980 15 Table 6 Study Area Household Tenure, 1980 16 Table 7 Study Area Residential Building Permits Issued 1980-1987 18 Table 8 Rents At Newer Projects 19 Table 9 Unit Mix and Projected Pricing (Subject Development). . . . 25 • • SUMMARY OF FINDINGS The site of the proposed rental development has good characteristics for a rental development: it is highly visible and accessible to a major high- way providing short commuting time to employment in Maplewood and downtown St. Paul, it is convenient to retail services (including the proposed --7 Woodland Lakes Mall), and it has existing tree-cover which can be used to landscape and create privacy. However, it does not have enough site amen- ities to warrant a "luxury" development. * Household growth has been stronger than originally projected during the 1980's in virtually all study area communities. This suggests that the area is perceived as an extension of the metro area and has benefitted from growth in northern and eastern suburbs of St. Paul. Still, the mar- ket for renters is much smaller than in key growth communities of the Twin Cities, because employment in the immediate area is only a fraction of employment in the northeastern sector of the metro area. Household growth will begin to slow in the late 1980's and early 1990'-s, throughout the region, and will affect the number of new rental units needed. Still, we estimate a need for at least 50 to 60 new market rate units per year in the study area. * Oak Park Heights has little land available for new housing construction; as shown by the proportion of multifamily units to single-family units built since 1980. The majority of rental units are in smaller two-story duplex or four-plex buildings, with few or no common recreational ameni- ties. Also, much of the rental construction has been low-income units for families and seniors. No contemporary apartment complexes exist in the immediate study area. * The most comparable rental product to your proposed development is found in Maplewood and White Bear Lake. Rents at newer projects in these two communities range from $450 to $565 for a one bedroom unit and $52U to $735 for two bedroom units, including heat and one garage space. Those choosing to rent further out (Stillwater and Oak Park Heights) will do so if they can find comparable product but at rents at the lower-end of this range. Renters will expect to pay lower rents for the trade off of living further from the cities. * Your proposed concept, combining more traditional apartment buildings with small rental cluster buildings of "flats", will broaden the appeal of your product. Your proposed amenities (underground parking, in-unit washer/ dryer, open floor plans) will put your product at the top of the market in the immediate area. Our sug$ested additions of an outdoor pool, picnic area, and tot lot will strengthen the project's appeal. The curb appeal of contemporary architecture will create excitement and will attract at- tention to your development. * Our suggested rents are based on a comparison of rents in newer projects in the northeastern suburbs, but are at the low-end of the range because we feel the market is price-sensitive in Oak Park Heights and Stillwater. 1 1 • • * We estimate an average monthly absorption of eight to ten units over the marketing period with pre-leasing beginning three months prior to occupan- cy. * Target markets include young couples, roommates, older empty-nesters, divorced persons and single-parents with one or two children. l l l z • • • PURPOSE OF SCOPE AND STUDY The purpose of this study is to analyze the demographic Y g phic and competitive factors that shape the market and affect potential demand for development of rental apartments on a site located south of 60th Street and east of Osgood Avenue, in Oak Park Heights, Minnesota. The scope of this study includes: a review of the current demographic composi- tion of population and households as well as projections for growth, and an assessment of the existing rental housing in the area as well as a review of proposed rental developments. Our recommendations considered the appropriate- ness of the site as a location for rental housing, and the type of product most appropriate to meet market demand. Our report includes both primary and secondary data. Secondary data is cred- ited to the source when used and in most cases is census data or city or county projections. Secondary data is used as a basis for analysis and is carefully reviewed in light of building permits, migration trends, changes in the employ- went base, and other market factors that have an impact on projections but may not have been considered originally. All of the market data on competitive projects and planned and proposed developments has been collected by Maxfield Research Group, Inc. and is accurate to the best of our knowledge. I 3 : . 1 • • 1 SITE REVIEW The site of the proposed 144-unit rental de velopment is located east of Osgood Avenue, south of 60th Street (south of Highway 36), and north of 58th Street, in Oak Park Heights, Minnesota. The site is gently rolling and is densely wooded with young and mature trees. Along the frontage road (60th Street) which would provide access to the development is a small, older apartment com- plex, Greenbrier Apartments, which is visible from Highway 36. This three building complex appears to date to the early 1960's, and would not compete with the subject development. The site plan we have reviewed positions the proposed development far enough away from this older apartment complex so that 1 it should not be a distraction. The Highway 36 - Osgood Avenue node is developed with commercial uses on two of four quadrants. On the west side of Osgood is a small, older two-story office complex and also, the St. Croix Mall (1970's) which has a movie complex, and 117,000 square feet of retail space. On the north side of Highway 36 is Oak Ridge Place, a market rate senior apartment development built in 1986. West 1 along Highway 36 there are other retail nodes offering a variety of goods and services. The Woodland Lakes Mall, a proposed 400,000 square foot retail cen- ter, will be located approximately one-half mile west of the site on High- way 36, and is scheduled to begin construction in spring 1988. Downtown Still- water, a historic retail district, is also located just a few miles east of the site. The residential uses which border the site on the south are subsidized elderly apartments and townhomes. While these buildings are compatible as neighbors, the buildings look architecturally dated. Privacy can be created for the sub- ject development by using the existing tree cover where possible to block dis- tracting views of the existing older residential buildings. The site is a good one for rental housing in that it will have good visibility, excellent access to a major Twin Cities highway, and is near a variety of ser- vices. The existing tree cover will help create privacy and offers an attrac- tive natural amenity. The site is convenient via Highway 36 to employment centers to the east, and P yment yet is nearer to the recreational amenities of Still- water and the St. Croix River area. These characteristics combine to make the site a good one for a new rental development. <4 iiiiiiiiiiiiii` • '''1•*s .I ` .� lS Eq s;c¢b:sra 3g E�i¢.56 :F .; , • I r ierp,4000.,- fi-o0P p ftr., ... ) ;te V. a=_ I_ o f 4- yy E ��\�nA�I`nI I • N4 , f,r'''" . i 1/4*(--- ! i'i ! 'I "" e T 4-• r / 3 c \ _ ,• f ,ic.„, 3.- , 1oo � f _-_,-..J , II �d14 —tom It' � `w O .....F. �` '�, 2 allA` �' ; 'Ili , e 1 _is -- 'Ili ; a'® ,' L♦ '} i araaI ��� irris �]N c74,I iic 3111:ER iteeu�3 [���� ! N. (-,...,:r ' %.„„-.../. •!: ,/---- I / ,,---- "0 \ • \ \ ...":"." LI) • QMINE " „ 4J = \eJi/i . I I • • DEMOGRAPHIC REVIEW To better assess the demand for rental housing in Oak Park Heights, we have examined growth trends and demographic characteristics for a study area consid- ered to be the primary draw area for the subject site. This study area con- sists of Oak Park Heights, Stillwater, Stillwater Township, Bayport, Bayport Township, West Lakeland Township, Grant Township, May Township, Marine on St. Croix, and New Scandia Township. Tables are presented on population, household and employment growth, age distribution, household type and tenure, and residential construction. Population Growth Table 1 shows the population of each study area community in 1970 and 1980 with an estimate by Metropolitan Council for 1987, and projections for 1990 and 2000. The 1990 and 2000 projections were made by Maxfield Research Group, Inc. after reviewing current growth trends. These projections adjust where appro- priate the Metropolitan Council's earlier projections (shown in parenthesis below our forecasts), which in most cases have already been exceeded based on construction trends. We have also taken into account persons per household trends in making population projections. The study area grew by 8,039 persons during the 1970's, growth of 36.4 percent. Washington County grew by 30,623 persons during the 1970's. Stillwater, by far the largest community in the study area with 10,196 persons in 1970, had the largest numerical growth during the 1970's, 2,094 persons -(20.5 percent). Oak Park Heights, a community of 1,257 persons in 1970, added 1,334 persons during the 1970's, more than doubling in population size during the 1970's. Part of this growth was due to annexation of land from Bayport, which shows a small population loss during the 1970's. During the 1980's, population growth has slowed in both the study area and in the county; due to both demographic trends (later marriages, fewer children) as well as a slowdown in household formations in the study area in the 1980's compared to the 1970's. The study area's population growth is projected to be approximately 4,000 persons during the 1980's; numerically one-half that of the 1970's growth. The Metropolitan Council shows population growth of 3,600 dur- ing this period, but we have revised the population estimate upward due to large household growth than originally forecast. Oak Park Heights and Stillwa- ter will add the most persons because they will add the most households of all study area communities. This is confirmed by building permit trends, with Stillwater and 0ak Park Heights accounting for more than one-half of all build- ing permits issued in the study area during the 1980's. Population growth is expected to decline sharply during the 1990's, although small growth is still projected in most study area communities. Washington County's population growth is expected to be numerically one-half the population growth of the 1980's, although it's growth rate of 8 percent during the 1990's, is a slightly higher percentage growth than the metro area as a whole. 6 I ST Iv ANT"4 1 lita l I N_OO11 I v [.fT.(T«Ea I F 0..., � «u«Ne o,.cRow ---- ^ �� ■•wf[T ANOKA CO. COL UN Nus T ,„ Q, �e *500(1t MAN I,. ro,(1!L•Rf /% MEW SC•NI«• it EORESI AAA( �i� y 1 EN cll.'''. - ... I - N.•]saM eRTON• ...TA 11N0 U1(S 1 r;.IN( i11Li N CN•rrllw COON R.(110f may I I CIS I ullw[ ,/4CENICISI tt( • Nawovu // I NIKO �[L/ unwc TON ucu nwcf WASNIIGTON CO. 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During the 1970's, the study area grew by 3, 169 households, 52 household growth rate was greater than the population growth rate,cent followings metro area trends. Households have been increasing faster due to social trends such as later marriages, more divorces, and fewer children on average per household. These trends have continued during the 1980's, although to a lesser degree than the 1970's. During the 1980's, household growth has been declining throughout the study area, although it has exceeded original projections. Stillwater, the community with the largest household base, is projected to add 685 households during the 1980's compared to 1,030 during the 1970's. add 445 households during the 1980's, compared atok P594 duringark Heisthe 1970''s.is ou us- ing demand in the study area as a whole has exceeded original forecasts based on new residential units constructed during the 1980's. The original Metropol- itan Council forecast growth for the study area of 1,764 households during the 1980's will be exceeded, based on building permits issued for 1980 through 1987. Our projection shows 2,221 households added during the 1980's in the study area. New housing for empty-nesters p y-nesters and seniors has helped fuel growth by freeing up single-family homes for young families, and the area has been attractive for new single-family construction because it is convenient to em- ployment centers in St. Paul yet appeals to those who want a small town atmo- sphere. The St. Croix River recreation area remains very availa- bility of new housingin a popular. The popular area tends to create household growth, and this has been the case in the study area. During the 199.0's, the study area is expected to follow metro area trends of declining household formations. Growth will slow because the baby boom grou has already formed households, and the generation followingis smaller. - Eco- nomic trends are also important in analyzing household growth, and employment growth is also projected to slow. Employment Growth Table 3 shows employment in each study area community in 1970 and 1980, with a forecast for 1990 and 2000. Although the study area experienced a substantial employment increase during the 1970's (4,440 jobs) the area's residential char- acter is revealed in the table. 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L C Z 0 L 1J CO Ca a) N 0$1 0a) 44 CV 0Encncra00 ( = z O3 Z 0 cra 11 • • from 1980. This is only one-half the employment growth of the 1970's. Oak Park Heights is forecast to add 1,800 jobs during the 1980's compared to 2,600 during the 1970's. Household and population growth will be dependent on migra- tion of workers from closer to the Twin Cities and its suburbs, who desire a more rural or small town residential setting. There is only one commercial project planned for the study area. This commer- cial project is the Woodland Lakes Mall (Stillwater), scheduled for 1988/9 opening. The mall will contain 400,000 square feet of retail space, and at this time, its only anchor tenant is Herbergers department store. This mall is expected to make the study area more desirable to households, and while the mall will increase employment in the area the types of jobs will be mainly minimum wage retail jobs. Still, this influx of jobs will benefit a new rental development at your site which will be conveniently located for those who wish to shop or who work at the mall. Age Distribution The age profile of the population in a given area relates to demand for various types of housing because persons tend to choose different forms of housing in different stages of life. For rental housing, most of the demand is generated by persons in their 20's and early 30's as well as from empty-nesters and se- niors in their 60's or older. Table 4 lists the number of area in five age categories and each cate or 's personsa in the study 1970 and 1980. Total g Y percent of total population in population figures on Table 1 and Table 4 may vary, be- cause revised population data was used for Table 1. The table reveals that strong population growth during the 1970's resulted in numerical increases in each age group. The largest increase occurred in the 20 to 34 year old category, the major market for rental housing, followed by the 35 to 54 year old category. The number of young adults (20 to 34 years old) increased by nearly 2,800 persons or 77 percent between 1970 and 1980. Child- ren and teens, however, posted a much smaller numerical increase (1,500 per- sons) and the smallest proportional increase of any age category, 16.6 The small increase in young adults is reflected in the change in each t each group''s • share of total population between 1970 and 1980. Children and teens declined from 43 to 37 percent while young adults increased from 17 to nearly 23 percent of the total population. These trends are an indication of the aging baby boom population and point towards an increase in demand for rental units in the study area. Stillwater in particular exhibits these characteristics with near- ly half of all study area 20 to 34 year olds in 1980 and the largest propor- tion, 25 percent, of persons in this category compared with Oak Park Heights, Bayport and the remainder of the study area. This age group will continue to grow through 1990 although not as much as during the 1970's because of the continued aging of the baby boom population. The number of persons 35 to 54 years old increased substantially between 1970 and 1980 with in-migration of persons in this age e grup maj growth. Although not a major market for rentalhousing,athisor categoryent willf experience the largest numerical growth of any age group during the 1980's. The number of older adults and seniors (persons 55 and over) increased numeri- cally by 232 persons from 1970 to 1980. The 65 and over age group grew by 87 12 j O N �O .-� ^ 00 Qh M N 0 00 �1 ,f .O 04 CV .1 in O' Fa O, ._• .4 O .--/ .--1 N 00 CO 0) O> .4 1 CO Qi -• t!l Cl1 C70 O M NC)M O, ..4 PN n MD, .-1 CO O ,O N ClI VO .4 ,O .--4 .-4 coGO CO . .--1 .4 .--1 N M ,O N. O C!'l N C, N N ,t M N ,D VD • O Or ,O n CO .-1 . 1 N N - ,O W NO b0 1 . I in N N n N n -4 0 In O, cn 0 OI r\ 00 O, Vl .0 • n N C, 1 .4 .-•1 4.1 F., m0 't N .4 M -t ..4 ,0 st O N O in CO in 00 W O, N N N N N ,.4 N 01 '.0 s.f N w in Q Cn O M O\ N st Cn N CO .-1 in co C' O, ,.� O n C!1 . . . . . '•'� . 0 .-1 N .--1 N N N N N aj3 f��rri N 'J" O, M O ro CA I-I .--1 E-1 O O O` VD .4 n - • t!• N Cl) 00 00 CO O, O C•) M OO, N 0 �t H O, O,I ., .. N N -4 N N •• A •-i •--1 C1 N ,0 00 Cn 1-4 W cn cb a) N- O In 0 O, O N Cfl M .4 a t` N tP• •.-� . •p Lz] •-1 n ul t` C•l ,0 4 In N- r n N ›"4N 4-4 A � • •0 A 0 4.4 W Cn .4 .4 O ^ h. O, to N co M 00 •C� 0 00I M M CO C!l N N Cl• a • n• .-r O 0 44 O, .. .. 0") 01 ..1 C) C+l 0 p,i W .. CU O O 0 .� 4-0 0 en in n O N. 4.4in .-r .-4 40 ON 0 w O, .--1 C O C, C,N N • . . • • 'C U CJ1 O, N Cll N O O C•1 -.1- -4 -I- N • .-1 .4 ,t C•l Ch 0 O 0 0cn 0 N O • H O co .-• a s .4 on 0 0 O O O O 0 O I-- O, U1 .--1 n aJ .. 0 NI CD O O, 00 O O O O a 1+ 00` 00 O O O 'O O 0 N COO .4 ,t .-1 .b 0 •. .-•1 .-1 Ni 00 M O .0 .4 L O, N 0c c u 0 F+ a l .4 .--1 0 CO O O C d C) H 0 O, .4 CD CDO O O O O CD >, .1-1 d L. O I O O ON ,O cn Oo • O. O . Ci1 n c•1 ./ C 7 .-1 M C..) O E a OO CD O O O 'O CO 00 C0 •. .0 .0 Cr, N W CO ..1 IC a) O G) •a) O 0) a) a1 Z x 14 4-1W s+ 6 13:Ca ai x u 41) $4 6 w Ci s-I w 0 coo 'd >,. .-a d .-1 1) $.4 o c 'd >,' .-4 .4 .--1 P4 ` CO 14 cd a 3 0 'O (0 00 co a 3 C •o co C0 0) a) w >,.a .a O P., 4-10 .-1 a) a >,.-1 •,{ C >, u o ,., •• o 13 .0 0 . 1 0 j) T $4 U .4-4) O O C0 .-1 C0 'O O s+ O d 4+ 0 ,x Pt) ..4 V CO 0 E. H 11 x al •.+ a) CO 4-1 a1 L H y 0 0 ,Z 0 to C4 Cn Z P+ 0 CI) a co = Z Cl) • • persons, or 20 percent. However, because the rest of the population grew at a larger rate, the percentage share of population of seniors decreased by 1980. Though the numbers of seniors will be relatively stable in the late 1980's and early 1990's, by the late 1990's the number of seniors will begin to increase significantly as the baby boom generation begins entering their senior years. Household Type Household type data is related to demand for housing since certain types of households tend to choose specific types of housing. Table 5 lists the number of study area households in five categories and each category's percent of all households in 1970 and 1980. The table shows that each household category experienced numerical growth be- tween 1970 and 1980 in Oak Park Heights/Bayport, Stillwater and the remainder of the study area. As mentioned previously, a strong level of migration to the study area caused a substantial increase in the number of households with each type of household sharing in the growth. The different household types experi- enced different rates of growth, however, with non-family households posting a larger proportional increase than the various family household types. Social trends mentioned earlier (later marriages, more divorces, aging baby boomers°) have caused the surge in non-family households, particularly persons living alone. These households are usually very mobile and as such tend to rent rath- er than own their housing. Roommate households more than quadrupled in the study area during the 1970's but still comprised only 3 percent (271 households) of all households. Persons living alone increased by 60 percent (542 households) and comprised 16 percent of study area households in 1980. This points to an increase in renter house- holds. These non-family categories will continue to post increases into the 1990's but not as substantial as in the 1970's. Baby boomers are marrying and having children and the "baby bust" generation that replaces them is smaller and will not generate the household formations of the late 1960's, 1970's and 1980's. Demand for entry-level rental housing will stabilize with their de- cline while demand for higher quality rental housing will increase. Married couples without children posted the largest numerical increase of any household type during the 1970's. This category added 814 households or 48 percent for a total of approximately 2,500 households in 1980. This catego- ry consists primarily of two groups: young marrieds who have not yet had chil- dren and older empty-nester couples. Both groups are markets for rental hous- ing. This category is expected to continue to grow into the 1990's. Married couples with children living at home are the largest household type category comprising 45 percent of all study area households in 1980. This group is not a major market for rental housing and is expected to decline nu- merically through the 1990's. "Other family" households, primarily single parent families, experienced strong numerical growth during the 1970's adding 258 households (55 percent) during the decade. This group is also a market for rental housing but comprised just 8 percent (731 households) of all study area households in 1980. 14 M 1 C., .-+ Vr O .--i u"1 --+ CD CO M sO • • CO .--4 r-- .--•1 0, C) v'1 • .-1 .-1 O 1.1 CO 0 4 1.1 O .--1 N M NO 00 ,O N CO CO O O) CO O, O N- O • n N •-I .t r` n O, u1 r- 00 O, .--4O u1 I a) N N N en O, •-1 N N. O -4 - r-4 O O O, N. e` - CO 0. 0 00 .t ,O CO O .t M .-1 .t v1 .--1 O 1+ O, .. •• •. cn .t in .t en O •0 •-4 .-1 .-1 .t ,0 U .-1 N >, •.i N .-1 .0 .0 •.1 (1) C.) e •.I in in O, O, e7 cn '0 N .t u1 CU 1+ •O O in u1 O .--t N • • . - Fs. C a' c•1 .� ONC) fi , � .t .? in - .t 1 Z 3 r, .-I .--1 N cn N c O r-- NO 1--• N .-4 CO CO ,O .-0+ C 00I � O O, -1 n 0 a0 00 r` 1 0. O ON .. .. M N N N N O 1+ ...4 .-c N ,. 1 O 'O a' V .-) •-c ..+ 'C1 .0 0 U .t N '.0 N a0 '.0 .-1 N. O, '--4 O •.a 0 1 0 O, 00 00 .t • • . . . 00 1+ O I. en n u1 '.0 u1 O, '.0 O, I` N O, 1-1 Z O, .. .. N N N N N .--4 0 '-4 . + u1 C w) 0 O I-4 r O, 00 .t .--4 in O .t N 0 .t at A ..O I in M n N NO . . • .-c ra CO CO •--I N O ...t Cr) N en *40 in W O, 0 0 .--1 - •� Cl) .-1 .0 Er co .-a 0 dt 0 0 O en 00 -I c•1 O .-1 O,I O N0 0 O, .-c .-i O Ce .- • CU5 CU 0 P-+ w 0 P I cn cn in -4 N- o I in ,0 en O, O u1 • ••I LJ E 0 0) CO, c•1 co c•1 .t O, N a OO '.0 N •C .0 co Z .O-I .-1 n 0 0. e$ -4 0 0 o a Olt 1+ C t\ - 00 a` .t en ,O 0 O, O 4-1 •.a-O N. NO tel 0' in . 0 0 •> N. .-I N .--. 00 O N. co CO .t CO L! •.a O, ri .--1 .--. .--I co sa en a) 0 O •C 0 0 • 0 O U 0 O • 1-i 'O .r1 •--1 N .t O O O 0 0 0 CO 'L7ON -4-CID0 • O O O O 0 0 0 .a .-•. .-1 .t ch CO .-1 .-1 .-1 ..1 .-1 .-c .0 .. 0 .-1 0 N 0) H 0 .0 N- 'b 0 o yJ a) 'C) co O m O C •1C E-c O .0 u1 cn -4- N O O O O 0 0 U O O N en n M 00 • L C.> to x N. O O O, O u1 O O O O O 0 O O, •. •• O O O O O C 0 0) .i I .--1 en •--1 iO M •--1 ri .-. •--1 .-1 •C CO n >, +., a) u, CO x E µ+ 0 '0 CO .-. CO 1--1 •--1 CO •-1 .--1 0 0 a) a-+ 0 0 u 0 0 b0 0 •.+ b0 0 0 co O O u 1+ X •.� w co E+ E--1 -.-4 4-4 ea Ei H 0 0 0 0 0 0 0 o 0 a) Z x i+ 14 c0 co x 1+ 1+ a) c0 U i 0 I+ d a) 0 JJ a) 1+ d 0 0 1+ .W $a J.J 0 $4 I-+ .`l $4 1-1 a) 14 I-1 0 , •• 1+ O CU 'o >, 'CC " 1+ 0 c0 'o >, d' d a m 1.' co C. 3 0 no3 C -o a) .o a ›,.-1 ..c O >, 0 C7 0 a a >,.-1 •., C >, 0 •• C) 15 CI CU .+ CO L 'b I•1 to CO .--1 co 4.1 'O 1+ 0 I-s Sbd PO -.4CU J J a) N JJ 0 0 0 JJ a) JJ 0 0 0 z o v) x m z p" o ea x v) Z Z CO 0 • The household composition data ata combined with age distribution data shows that demand for rental housing will continue to increase through the early 1990's then level off. Demand for entry-level apartments has already leveled and new, higher quality units with unique design detail, more features and amenities will be in greater demand. 1 These trends relate to those baby boomers who are continuing to rent, many with higher incomes, as well as an older, more demanding empty-nester market. Al- though the study area has a higher proportion of family households than the metropolitan area as a whole, particularly families with children, it too is e being affected by these demographic trends and will need to have housing avail- able to accommodate these shifts. r Household Tenure Table 6 lists the number of owner and renter occupied households in each study area community as well as the rental vacancy rate at the time of the 1980 cen- sus. • TABLE 6 STUDY AREA HOUSEHOLD TENURE 1980 Total ---- Owner Rentalca ---- ---- Renter ---- Vacancy Households Number Percent Number Percent Rate (Pct.) Oak Park Heights 955 624 65.3 331 34.7 11.3 Stillwater 4,065 3, 159 77.7 906 22.3 11.8 Stillwater Twp. 448 414 92.4 34 7.6 Bayport 677 2.9 534 78.9 143 21.1 3.4 Baytown Twp. 237 211 89.0 26 11.0 0.0 West Lakeland Twp. 355 333 93.8 22 6.2 0.0 Grant Twp. 831 779 93.7 52 6.3 1.9 May Twp. 611 563 92.1 48 7.9 5.9 Marine on St. Croix 201 177 88.1 24 11.9 27.3 New Scandia Twp. 851 803 94.4 48 5.6 0.0 Study Area Total 9,231 7,597 82.3 1,634 17.7 10.0 Metro Area Total 721,444 478,731 66.4 242, 713 33.6 4. 1 Sources: Bureau of the Census, 1980 U.S. Census of Population and Housing Maxfield Research Group, Inc. The table shows that the percentage of households which rented their housing was low in the study area in 1980. Approximately 1,600 households or 18 per- cent of the total household base rented their housing in 1980. This compares 16 • • with a 34 percent renter occupancy rate in the metropolitan area as a whole. The more rural townships in the study area had the smallest proportion of rent- ers. The fully developed communities of Stillwater and Oak Park Heights had more than 1,200 renter households or three-quarters of the study area's total. This reflects the tendency of renters, usually mobile or lower income house- holds, to be centrally located near stores, services and employment. Stillwa- ter had 906 renter households, the largest of any study area community and roughly 22 percent of its total household base. Oak Park Heights had 331 rent- er households or 35 percent of its total, the highest proportion of renters of any study area community. Many of these were located in subsidized senior or family units. The study area exhibited a very high rental vacancy rate in 1980. Ten percent of all rental units were vacant compared with just 4 percent of rental units in the metropolitan area. A 5 percent vacancy rate is considered a normal rate in a stable, competitive rental market, to allow for normal turnover of units. A surplus of rental units existed in the communities of Stillwater, Oak Park Heights and Marine on St. Croix in 1980. Part of the surplus in Oak Park Heights was due to new rental units just constructed in 1979 and 1980 (Ray- mie Johnson Estates) which had not yet been on the market long enough to be ab- sorbed. Residential Construction 1980 to 1987 Table 7 lists the number of new residential units by type from building permits issued by Oak Park Heights and other study area communities from 1980 through 1987. The table reveals that permits were issued for 1,663 new units in the study area, an average of 208 annually. In Oak Park Heights there has been more multifamily construction than single-family construction during this peri- od. The 86-unit apartment building in 1985 was Oak Ridge Place, a senior hous- ing project. The remaining units have been "townhome" developments, some which have become rental units. Little land is available in Oak Park Heights for new single-family development, although 1987's 22 single-family units represented a significant increase from prior years during the 1980's. All of the multifamily and townhome units and a majority of single-family units in the remainder of the study area have been built in Stillwater. New single- family building was up in 1987 compared to 1986. The apartment units were in two projects in Stillwater targeted to low and moderate income persons (mainly seniors). Very few new market rate rental units have been added in the study area, rela- tive to the total number of new units added. We estimate a current rental vacancy rate of 5 percent based on market interviews as well as utility records compiled by the Metropolitan Council. Some older buildings with deferred main- tenance are likely experiencing the highest vacancy, while most buildings are experiencing vacancy under 5 percent. Rental Unit Demand Based on demographic trends and housing construction since 1980, we estimate total demand for rental units in the Oak Park Heights/Stillwater market to be 17 • • 1 so to 60 units annually from 1988 through 1990, or 150 to 180 from 1988 through 1990. However, we feel demand could actually exceed this, because there has 1 been little new rental construction in the area, and there are no new market j rate apartment complexes. Your project, because it will be the only develop- ment of its type in the market area, could create its own demand. The demand 1 appears strongest from families and couples looking for moderate-priced rental housing, based on our review of the market. Empty-nesters will also be a mar- ket particularly in the later 1990's. m TABLE 7 STUDY AREA RESIDENTIAL BUILDING PERMITS t ISSUED 1980-1987 (Number of Units) Single- Town- Total Multifamily New Family house Duplex Apt Condo Units Oak Park Heights . 1980 16 32 0 0 0 48 1981 4 0 0 4 0 8 1982 1983 1 6 8 0 0 6 1984 2 320 15 1985 0 0 0 34 2 0 0 86 33 121 1986 1 16 4 0 0 21 1987 22 0 0 0 0 22 Total 54 86 12 90 33 275 Annual Average 7 11 1 11 4 34 Remainder of Study Area 1980 69 76 0 0 41 186 1981 • 93 0 2 0 4 99 1982 61 4 2 2 0 69 1983 149 12 28 10 8 207 1984 151 11 2 0 8 172 1985 163 0 2 0 0 165 1986 140 2 2 64 0 208 1987 171 5 2 104 0 282 Total 997 110 40 180 61 1,388 Annual Average 125 14 5 23 8 174 Sources: Metropolitan Council Data Logs Maxfield Research Group, Inc. 18 • RENTAL MARKET OVERVIEW Rental housing in Stillwater and Oak Park Heights consists primarily of duplex, four-plex, and 12 to 16 unit buildings, with few amenities. The majority of newer rental units in the immediate area have subsidized rents, and are either family townhomes or are senior apartments (mid-rise buildings). The majority of subsidized units, both senior and family, are full, and buildings have wait- ing lists. Market rate rents for duplex style units average $450 to $550 a month, plus heat. Market rate rents in the few older well-kept apartment complexes average $450 for one bedroom units and $525 for two bedroom units; in older complexes with no upgrading rents are closer to $395 to $425 for one bedroom units and $425 to $450 for two bedroom units, including heat. These rents reflect the age of the buildings and lack of amenities. Rents at the new Cottages of Stillwater are $385 (one bedroom units) and $485 (two bedroom units) plus heat and garage. Units are smaller than average, and are geared to moderate income seniors. To find newer, more contemporary designed apartments, renters must shop Maple- wood and White Bear Lake. From 1984 through 1987, approximately 700 new rental units were added in these two communities; the majority in Maplewood in 1986 and 1987. Absorption has been very strong (an estimated 650 units from 1984 through 1987 in these two communities). These projects include Maple Ridge, Century Ridge and Silver Ridge in Maplewood, and the new White Bear Woods in White Bear Lake. White Bear Woods has done extremely well, leasing 112 units since opening in November of 1987. Most newer complexes in Maplewood and White Bear Lake offer recreational ameni- ties including a party room, outdoor pool, exercise room and whirlpool/sauna. None include a washer/dryer in units, but instead have either a common area laundry or laundry room on each floor. A few projects have individual gas furnaces in the unit. The most "upscale" of the new projects in terms of ar- chitecture, floor plans, and design features is White Bear Woods. There are no• comparable rental projects in Oak Park Heights or Stillwater to these Maplewood/White Bear Lake projects. Rental Rates We feel that the Oak Park Heights/Stillwater market will not be able to justify rents at the average for new Maplewood and White Bear Lake units, because it is too far from the Twin Cities area, and thus people expect rates to be somewhat lower. Price sensitivity in the Oak Park Heights market area is reflected in higher vacancies in two bedroom versus one bedroom units. The Apartment Guide survey for the last quarter of 1987 also showed a higher rate of vacancy for two bedroom units in both Maplewood and White Bear Lake. Also, two bedroom units are taking longer to lease in most projects. The following table shows rents at newer market rate buildings in Maplewood and White Bear Lake, and compares them to the two newest projects in Oak Park Heights/Stillwater. 19 • 0 i . The average rent for a newer one bedroom unit in the Maplewood/White Bear Lake projects is $520 for 777 square feet, or $.67 per square foot. Rents for one bedroom units at the two newer Stillwater projects range from $445 to $470, for units of 648 to 700 square feet, $.67 to $.69 per square foot. 1 I TABLE 8 1 RENTS AT NEWER PROJECTS 1 Com- No. of Rent Per Name of Project munity Units Rents* Square Foot Sq. Ft. One Bedroom Units ' Maple Ridge MPWD 40 $ 510- 540 804- 900 $.60-.63 Majestic Pines WBL 15 525- 545 748- 772 .70-.71 Silver Ridge MPWD 62 450- 485 708 .68-.69 Century Ridge ' MPWD 36 520- 560 754 .69-.74 Lakewood Hills WBL 29 515- 555 775- 875 .63-.66 White Bear Woods WBL 66 525- 565 767- 820 .68-.69 Total/Average 248 $ 520 777 $ .67 Cottages of Stillwater 96 $ 445 648 $ .69 Brick Pond 4 470 700 .67 Two Bedroom Units Maple Ridge MPWD 60 $ 620- 730 1,044 $.59-.70 Majestic Pines WBL 102 595- 640 920-1,059 .60-.65 Silver Ridge MPWD 124 520- 560 938 .55-.60 Century Ridge MPWD 36 620- 700 986-1,024 .63-.68 Lakewood Hills WBL 58 655- 705 1,050-1,100 .62-.64 White Bear Woods WBL 150 620- 735 1,003-1,044 .62-.70 Total/Average 530 $ 633 1,004 $ .63 Cottages of Stillwater 32 $ 545 804- 966 $.56-.68 Brick Pond 26 515 950 .54 *Rent adjusted to include heat and one garage stall. An average of $30 for heat and $35 for garage is used. Source: Maxfield Research Group, Inc. 20 • • Two bedroom units at newer Maplewood/White Bear Lake projects average $633 for 1,004 square feet, or $.63 per square foot. Rents for two bedroom units a the two newer Stillwater projects range from $515 to $545, for units of 804 to 950 square feet, an average of $.54 to $.68 per square foot. 1 Comparing rents and square footages reveals that lower rents at the Stillwater projects are partially attributed to very small units relative to new projects in Twin Cities suburban projects. Rents also reflect fewer amenities. Pond does not offer garages, g (Brick or dishwashers. The Cottages of Stillwater are geared more to seniors, and while offering limited amenities, have very small • units.). Vacancy Vacancy rates per the 1980 census in Stillwater and Oak Park Heights, were at approximately 11 percent in each community. This is partly attributed to new units which may have opened in 1979 and 1980, but which had not been absorbed yet. In Oak Park Heights, a 95-unit senior subsidized building opened in late 1979, as well as a 24-unit subsidized rental family townhome project (Ray- mie Johnson Apartments). Unabsorbed units at the complexes would account for the high vacancy in Oak Park Heights. In Stillwater, several units (mostly geared to low-incomes) opened during this 1979-1980 time period as well. Today, we estimate a more normal vacancy rate at market rate apartments in Oak Park Heights/Stillwater. Property managers of smaller scale buildings (du- plexes, four-plexes) estimate vacancy at or under 5 percent. Absorption of units at the newest projects, Cottages of Stillwater and Brick Pond, have also. been good. The Cottages opened in 1987 with 124 units, and have leased 112; Brick Pond opened in July 1987 and leased all 40 units in less than six months, and today has only one vacant. The rents at these projects are reflective of a price sensitive market however, and are below the rents at newer Maplewood and White Bear Lake projects. These two projects would not be competitive with your development, because they are targeted mainly to seniors and low-income persons, offer few amenities, and do not feature contemporary floor plans or architecture. The vacancy rate at newer projects in the Maplewood/White Bear Lake area has edged upward in late 1987/early 1988, as new projects have opened, signaling a competitive market. Vacancy is highest in two bedroom units, which also sig- nals a price sensitive market. Some projects are guaranteeing no rent in- creases for the next two years, while others are offering one month free rent with a year's lease. As spring approaches traffic should improve significant- ly, lessening the use of rent concessions. Planned Competitive Projects There are only two rental projects now planned in the study area: the final 56-unit phase of the Cottages of Stillwater, and a 90-unit four-plex/eight-plex development by Swager Brothers to be located at 57th Street North, near the subject site. The 90-unit project has HRA financing, and is planned for 1988 construction. Units will feature two and three bedrooms and will be priced 21 ; ' 0 • 1 from $450 to $550 plus heat and garage. They will be targeted mainly to fami- lies. No common amenities will be offered. This project will be somewhat competitive with your development for small fami- lies but would not compete for other groups, especially singles, roommates, I empty-nesters who desire a more secure apartment community. Also, your project will have amenities (underground parking) that will make it more attractive to certain renter groups. i I 1 4 1 e I 1 1 1 • 22 • •AO. CONCLUSIONS AND RECOMMENDATIONS 11 Demand We estimate an actual need for 50 to 60 new rental units per year from 1988 through 1990 (150 to 180 total) to satisfy rental demand from households which will desire to move to the Oak Park Heights/Stillwater area. However, this is a conservative projection considering the lack of a new market rate apartment dill community in this area. Your contemporary apartment concept will be a new one to this market and could attract persons that would otherwise have moved to li suburbs closer to the cities. Your project could also be expected to pull some ' / persons out of older existing buildings. The other planned units (90 duplex units and 56 units at Cottages of Stillwater for persons over 55) will satisfy some of the projected demand, but a new complex with your concept will be ex- :I tremely competitive because it will have more amenities, and more attractive floor plans and architecture. No other apartment projects are proposed or planned at this time in the study 141 area. We feel your product has an excellent o for contemporary rental product. PPortunity to meet a market need jTarget Markets Your proposed development will be attractive to several groups, including small Ali families, young married couples, empty-nesters, and a few single-parents and singles. The site's proximity to shopping, and employment 101 appeal to younger workers, and the security of a largcomplexHwillaa 36 willo older persons, appeal to Young couples and small families who can not yet afford to purchase housing but 1 who grew up in the area will find a contemporary rental development very ap- pealing. Most new rental housing for older adults has been subsidized with limited amenities and small units. A new rental complex will allow empty- nesters to stay in the community after selling their homes. It will be impor- 111 01 tant to use appropriate marketing messages in local and St. Paul publications, to reach target renters. 9 1 Development Concept The proposed rental complex will consist of both traditional apartments and rental flats. The traditional apartments will be located in two larger three- story buildings, one with 64 and one with 38 units. The rental flats will be located in two attached five-unit buildings, three attached five and six-unit buildings and four attached four-unit buildings. There will be a total of 144 units. The site is wooded and an effort should be made to preserve as much of the existing tree-cover as possible to enhance the natural beauty of the property as well as to provide privacy. 23 Although we do not feel an extensive recreation amenity package is necessary, we would suggest you consider offering residents a picnic/barbecue area, tot lot and either an outdoor pool or whirlpool and exercise room. Providing both indoor and outdoor amenities will make you more competitive with new Maplewood and White Bear Lake projects, and more desirable than existing projects in the Stillwater/Oak Park Heights market. In-unit amenities should include walk-in closets, either two full baths or one and three-quarters baths in the two and three bedroom units, and an eating area in the kitchen. We have reviewed the preliminary floor plans for the rental flats and have noted they address all of these items. The eating area in the kitchen with the window will considerably brighten the kitchen area. Often in 1 rental apartments, the lack of space requires an interior kitchen without win- dows which usually creates a dark, closed atmosphere. Walk-in closets allow for greater storage of personal possessions. The addition of balcony/patio areas gives prospective residents a sense of extended living space. While washer/dryer hook-ups in the units would be appropriate in this market, your suggested inclusion of the washer/dryer appliances will be very attractive to prospective renters. This upgrade will be a big plus in marketing against other properties in the area, as well as in Maplewood and White Bear Lake. In order to provide for efficient move-in/move-out of residents, to facilitate getting from the garage to upper floors and to accommodate handicapped and elderly residents, we strongly suggest incorporating an elevator in each of the three-story buildings. Underground, heated parking is becoming more common at newer rental develop- - ments throughout the metro area. Typically, storing a car in a heated garage could be considered a luxury for which some people in a price sensitive market would- not be willing to pay extra. In order to maximize use of the underground garage space, we suggest garage spaces be priced at $30 per month extra and the cost included in the rent. This will prevent an overuse of the exterior park- ing area from persons not willing to pay the extra garage rent. Parking for the rental flat units will be provided through single-loaded under- ground parking in two of the clusters and through detached garages in the re- maining ten-'unit cluster. Because rental flats are usually designed to include a garage stall, these should also be included in the rent at a price of $30 per month. We would also suggest you designate both adult and family buildings. Families with children would likely be found more often in the rental flats, however both groups will find each type of building appealing for a variety of reasons. Overall, the proposed site design maximizes use of the property and provides for a separation of the traditional apartments from the rental flats. Unit Mix and Projected Pricing Table 9 shows the unit mix and projected pricing for the proposed development. Our recommendations reflect an approximate 40 percent one bedroom and 60 per- cent two bedroom split for the traditional apartment units and a 70 percent two 24 piii f(Cantln cl from page ) r , a feeling," e Coil member Dick'Sege Gurbalde ..r el «^ Tohta asked Qriffltb whether he believed Moroney of TILT , more ;lower-income housing is proposed a curbside "recycling necessary since oodles* On Park! program for the city identical to the apartment complex fo1 lower-in- currently operates ill come people(Oak Ridge) is "only Lake Elmo and North St.}Paul,with half full." Griffith replied that in a pilot program in Lai*, the first place,Oak Ridge is for Se- "Recyclables are,justthat,"he said ' ' r o r citizens only; in the second of the need for the mograttt. "Untie place,Oak Rye is Still too eXpen- they get Put into the garbage, ' sive for many people dike to the ex- they're not garbage." The Cam` era services provided,such as,.: ss promised to review his p t for, - to meals and nursing servvices. ;�P`. ce-monthly pickup. "It's a different game,"he said. Residents question spending: 4,: -Griffith said that a large Japanese Two Oak Park residents in the midi- , �,bank:will be supplying the letter of ence were concerned about engi" credit for the bonds issued,and city netring cost overruns in.the•citjt's ' clerk'LaVonne Wilson wanted to Parks Department.A recent 1t lcnowhy IsPallese and not Amen- ing job was quoted at Ocrodng bet, can." ween• $3,000 and $4,000, but "Only a handful of can turned into.a$13,000 nionster once ,.provide;letters of edit that are ac- it got going.One residelt wanted to sua ly good," Griffith explained. know about the engineer: ."Does ti Also,t1 e:HRA hat found the.Jape- this guy work for the University of• i nese"+ ► to deal with" and hay- Minnesota? That's a pretty hefty . lug a "tabus reasonable rate, better overrun." than any other bank we talked:to." Council member lick Seggell i, The council also wanted to know agreed that"it's boxed us into quite how, 104 the;fIRA would'plan to a corner." the rental properties. Griffith "I'm•not happy with it," Seg- said that depends completely upon gelds said. "They)more or less dad .'the situation,down the road a few it on their own.1'm not years. with it.There's no secret hem" "The private sector cannot Council members somewhat ex- prove:affitdable housing (right pained the reasons behind the cost 'crow),"-1 he said, and, therefore, overruns, although no one seemed 11RA will hold the properties until to know exactly where the money. the private sector can afford it. went. Unexpectedly !' , "Nobody going to guarantee charges,such as$50-plus for a prits .'4 'anything 40 years out," he said. ciple engineer, $31.50 for a drailitr4k, "We can refinance or sell any or all man and $17.75 for clerical ward .:' of these particular projects... We were mentioned as possible clues.' will fkkeeep projects as iong as they Seggelke promised to get More spec• fulfill our°purpose. As long as the cifics from the engineering firm private sector doesn't provide;'we and.that"in'88,there'll be no engi will." •- I neer involved There we*tree'44)4 However,"we have no intention of handling it." ' of.owning these properties forever Don't plow the'streets: O'Neal and even and ever,"he added. . mentioned a recent phone call she; What would be the benefit to the received from a person who venbad city? "Being able to say there is the snow left,on the-streets to slow available and affordable housing in down speeders. the city;of Oak Park Heights,"Grif- "It's the first one we've heard" fith concluded,adding that the HRA from the no-plow side,she said,ifs will return to sherd- +e light upon viting constituents to call s if this subject at a later date. ' ' feel the same way ,. ',, • .Council rejects detachment New part-time -•Cahn Th • The co ncil y adopted a council last night lured ,° i, resolution laterally rejecting the Paul police officer Mt . N -;,dot of lands from Oak Park a part-time officer _ . ,,, and the subsequent elan•of Peltier,who'is retutng, ','' ;- -4::" , . I I L) .Gene.; * , i . f t :" . o' s'M a`.+"nW4• .,rlititAS pussy comes W fek'. � r t P,`.. 'i t'` 3I:b#•' 9 ,,#+.; new L l�'r'4000 amount Of eaPe ' ,� . •�.#r' ;, a . : , f t e OK'dOsten�'a �. ter.) 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',A:.i,:: :i0t.kj. ..,:,..0:14:•.-: 'h+'-''1!`"rs"44,,: ,,;,7 -I, .,.• ',':::. :.:.1r'''',T: .., ':.'"1: ...]: ''-''.:',''':. ::f .-''':''''.: ,''t..'14i"'%:?4'' .,•„ ,. .,, ce ! • Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 March 10, 1988 Ms. LaVonne Wilson, Administrator/Treasurer City of Oak Park Heights 14168 - 57th Street North Stillwater, Minnesota 55082 Dear Ms. Wilson : Enclosed are eight copies of a resolution to be passed by the city council of Oak Park Heights concerning the proposed multi-family rental project being considered in your community. Please note that this resolution does not give any final project approvals, rather it gives the Washington County Housing and Redevelopment Authority the authority to finance this type of project in your community and the city also approved the location of the project. Either . Dennis Balyeat or I will be present at the council meeting on Monday, March 14th at 7 : 15 p.m. to discuss the HRA' s Multi-Family Housing Program to the council . Thank you. If you have any questions, please call . Sincerely, saileavt, Sam Griffith Director, Private Ventures Enclosures • 3/" d'". ‘41)* Io ' • CERTIFICATION OF MINUTES Municipality: City of Oak Park Heights Governing Body: City Council Meeting: A meeting of the City Council of the City of Oak Park Heights held on the day of , 1988, at 7:00 p.m. in the City Council Chambers at 14168 - 57th Street North, Oak Park Heights, Minnesota. Members Present: Members Absent: Documents: A copy of an ordinance adopted by the City Council of the City of Oak Park Heights at said meeting. Certification: I , of the City of Oak Park Heights do hereby certify the following: Attached hereto is a true and correct copy of an ordinance on file and of record in the offices of the City of Oak Park Heights, which resolution was adopted by the City Council , at the meeting referred to above. Said meeting was a regular meeting of the City Council , was open to the public, and was held at the time and place at which meetings of the City Council are regularly held. Member moved the adoption of the attached resolution. The motion was seconded by Member . A vote being taken on the motion, the following voted in favor of the ordinance: and the following voted against the ordinance: Where said ordinance was declared duly passed and adopted. The attached ordinance is in full force and effect and no action has been taken by the City Council of the City of Oak Park Heights which would in any way alter or amend the attached ordinance. Witness my hand officially as the of the City of Oak Park Heights, Minnesota, this day of , 1988. • • CITY COUNCIL CITY OF OAK PARK HEIGHTS RESOLUTION NO. RESOLUTION AUTHORIZING THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY TO UNDERTAKE A PROGRAM FOR THE FINANCING OF A HOUSING DEVELOPMENT PROJECT IN THE CITY OF OAK PARK HEIGHTS TO PROVIDE MULTI-FAMILY RENTAL HOUSING FOR PERSONS AND FAMILIES OF LOW AND MODERATE INCOME. WHEREAS, Minnesota Statutes, Sections 469.001 TO 469.047 (the "Act") establishes the powers and duties of housing and redevelopment authorities in the State of Minnesota; and WHEREAS, pursuant to Section 469.001 (4) of the Act, one of the purposes of The Washington County Housing and Redevelopment Authority (the "Authority") is to remedy the shortage of housing for low and moderate income residents in situations in which private enterprise would not act without government participation or subsidies; and WHEREAS, Laws of Minnesota 1974, Chapter 475 (the "Special Law") provides that, if any housing or redevelopment project is undertaken in Washington County by the Authority, and such project is within the boundaries of any incorporated village, city or township, the location of such project shall be approved by the governing body of such village, city or township;, and WHEREAS, to assist in the alleviation of a housing shortage for low and moderate income residents, the Authority is authorized under the Act to undertake one or more Housing Development Projects (the "Projects"), as defined in Section 469.002, subd. 15, of the Act as any work or undertaking to provide housing for persons of moderate income and their families, which may include planning of building and improvements; acquisition of real property; construction, reconstruction, alteration and repair of new or existing buildings and all equipment, facilities and other real or personal property for appurtenances, streets, sewers, water service, utilities, site preparation, landscaping, administrative, community health, recreation or welfare, or other purposes; and WHEREAS, the Authority contracted with McGladrey, Hendrickson & Pullen to prepare a market analysis of multi-family and elderly rental housing supply, demand and projected needs within Washington County (the "County") including the projected needs in the City of Oak Park Heights (the "Municipality"); and WHEREAS, based upon such market analysis the Authority has determined • • that it is necessary for the Authority to undertake the Projects in order to alleviate current and projected shortages of decent, safe and sanitary housing for persons of low and moderate income and their families. In order to implement and undertake the Projects, the Authority has, by the passage of Resolution No. 87-31, on October 27, 1987 adopted a Housing Development Project Program (the "Program"), describing the policies for meeting the housing needs of the County; and WHEREAS, the Program includes among the multi-family rental housing Projects to be developed in order to carry out the policies of the Program, and Project or Projects located in the Municipality, as described in Exhibit A attached hereto; and WHEREAS, the Authority has requested that the governing body of the Municipality approve the locations of the Projects pursuant to the Special Law and the financing of such Project or Projects by the Authority pursuant to the Program: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oak Park Heights that: 1. The Municipality hereby approves the locations of the Project or Projects located within the Municipality, as described in Exhibit A. 2. The Municipality hereby approves the Program of the Authority to provide financing for the Project or Projects and authorizes the Authority to undertake the Program and develop the Project or Projects within the Municipality. 3. Nothing in this resolution or in the Program of the Authority shall authorize the expenditure of any funds of the Municipality. Any revenue bonds issued by the Authority to finance the Project or Projects shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Municipality, nor shall the Municipality be subject to any liability thereon. The holder or holders from time to time of the revenue bonds of the Authority shall have the right to compel any exercise of the taxing power of the Municipality to pay the outstanding principal on such revenue Bonds or the interest thereon or to enforce payment thereof against any property of the Municipality. Approved and adopted this day of , 1988. Mayor Attest: • • . • • EXHIBIT A Projects located in the City of Oak Park Heights to be financed by Washington County Housing and Redevelopment Authority Governmental Housing Revenue Bonds Series 1988 Number Project Location of Units Amount Oak Park Heights South of Highway 36 144 $8,750,000 (No formal project name yet) at 60th Street North f • • ...----- r'1- rh , Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 6I2-4 5 8-09 3 6 MEMORANDUM TO ALL INTERESTED PARTIES FROM: Sam Griffith/Director, Private Ventures DATE: March 14, 1988 SUBJECT: Washington County Housing and Redevelopment Authority Multi-Family Housing Bond Program This memorandum provides an explanation of the HRA's new multi-family bond program. The purpose of this memorandum is to describe the structure of the program, the financing of the program and general information of interest to the cities in which these projects would be located. Structure of the Program The HRA will be issuing a pool of essential function bonds to be used for the acquisition of existing multi-family apartment projects and the construction of new multi-family projects for the purpose of maintaining and providing affordable housing opportunities for moderate income families in Washington County. There are numerous reasons why the HRA has developed this program. Since the adoption of the new Tax Reform Act, there has been little multi-family housing development in the county. In addition, as one of the fastest growing counties in Minnesota, the county is experiencing a tremendous growth in population; therefore, vacancy rates throughout the county are very low. Consequently, current owners are able to raise rents and still keep their buildings fully occupied. As rents continue to trend upwards, current moderate income tenants are being forced to find more affordable housing, oftentimes outside the county. Another goal of this housing program is to provide safe and affordable housing to lower income tenants. The HRA, as manager of the Section 8 Program in the county, is finding that because of the rising rents and lack of new construction, many Section 8 tenants are unable to find affordable housing in the county. Several cities in the county have concerns about multi-family projects where maintenance is being deferred or where there are management problems. The cities have discussed the possibility of the HRA taking over such facilities to see that necessary repairs are made and management problems corrected. • • types of housing developed see certain ovide. which hr thecom riv to sectorwoul like to to address all of which the private has not been able to Pam looks g program ire in Therefore, the HRA' s multi-family housing p 9 through the acquisition or construction of projects these issues 9 communities that desire these projects. P r r tacquire and ion of essential function bonds to a The HRA will issue $115yprojects throughout the county. willbe constructveye mlti-family obligations, secured by a period during which the HRA willdbratelobligfinance specific five year 40-year, The boga proceeds be direct The bonds will be time o they are used will pay "Triple-A" rated letter of credit. The HRA anticipates the rate on the bonds to be to invested in an investment contract until such make project loans. percent. approximately eight p the HRA must public purpose bonds, experience However, the HRA has little be these n rd of a are facilities.l t i on,However,and w i l l enterhasinto contracts in owinge owner apartment projectswho will g and operating P experienced entities, h lll acquiring existing projects, to-day for "project for assisting st i ng11theoHRA on are acq and g existing i management of th day- responsible assisting and marketing constructing new projects, operations of these projects. tors willal.so share with the HRA with iing the credit Theas project with owning na these projects, including For their the enhancement emed ec safor each projects.° rt phis services, coordinatorsnhcemnt necessary paid a fee net ngs. will be ./ErD4eLilinanaing a five toEac be acquiredprovideringafive or construA��edetterdofecredetdr during year projectThe "Triple that before any will ot origination gestate risk and therefore requires not take any real acceptable credit enhancement in bond there must be an proceedso cank bet used, The credit enhancement, n estate risk. the HRA to provide itself place n take that direct realv with th 1nct i e with th funds, thesel projects. �, with 100 percent financinginclude FHA projects would of credit from acceptable financial institutions coiAcc sera c credit enhancementnterof for ftrom acceptable form woul t rate or as a letterAnother or a collateralized letter of credit. mortgages. th Program W The HRA will identify potential existing or new construction projects and S enter into negotiations with a project coordinator to assist the HRA in developing these projects. At the same time, the HRA will work with local financial institutions to develop the necessary credit enhancement. At the time an acceptable and financable project is developed, the HRA will work with each community to see that the project meets the needs and requirements of that community. The ability of the HRA to provide affordable housing opportunities for moderate income residents of the county will be developed using the HRA's multi-family housing program. There are several ways that the HRA can make each project affordable. First of all , the HRA, because of the bond financing, will be able to provide itself with 100 percent financing. Second, the HRA, as a government entity, would be exempt from sales tax for the purchase of materials in either new construction or rehabilitation projects. Third, the HRA, as a non-profit entity, does not have the investment requirement return needs of the private sector. Any excess revenues generated by a project will be used to either keep rents at an affordable level or use them on other projects to write-down project costs or rents. Fourth, as a government agency, the HRA is exempt from real estate taxes. However, the HRA is required to make a contributing payment in lieu of tax to the taxing entities. This payment in lieu of taxes is a minimum of five percent of the aggregate shelter rents in each facility. This requirement allows the project to support more debt and therefore, lower rents. Each community, however, will be assured that as each project begins to support itself, excess revenues from the project will be used to increase the payment in lieu of tax made. Timing The HRA multi-family housing bond program will be closing within the next several weeks. The HRA is making presentations to the various governing bodies in the county to make them aware of the program. The objective of this program is to develop or maintain affordable housing opportunities in each community until such tine as the private sector begins to meet this particular need. /m VOTO, TAUTGES, REL\TH & CO., LTD. • CERTIFIED PUBLIC ACCOUNTANTS / Birch Lake Professional Building •1310 E. Hwy. 96 •White Bear Lake, MN 55110• Phone 426-3263 ROBERT J.VOTO,CPA ROBERT G.TAUTGES,CPA JAMES S.REDPATH,CPA October 13, 1987 To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: PROPOSED JOINT VENTURE WITH HRA Tonight you will be given a presentation by the Washington County Housing and Redevelopment Authority (HRA) relating to a proposed single-family housing development within your City. This proposal was originally presented to you at a workshop meeting on September 9, 1987. At that meeting, you requested that I review and evaluate the HRA proposal to the City. I have been in communication with Mr. Balyeat of the HRA and have received (and reviewed) two sets of "additional information". See the attached copies of his letters dated September 29, 1987 and October 7, 1987. I must report to you that the review and evaluation you requested is not possible because the HRA is not (at this time) making any specific proposal. Rather, the HRA is asking if the City would like to participate in a joint venture with the HRA as a co-developer of the proposed single-family housing development. Accordingly, I will limit my review and evaluation to the joint venture/co- developer topic. First of all, the City of Oak Park Heights, Minnesota has not heretofore par- ticipated (as a developer) in any real estate development within the City. Rather, the City has acted as the representative of its citizens to monitor and regulate developers and development within the City to assure the safety and well-being of such citizens -- both current and future citizens. There is an inherent conflict between development/developers and the process of monitoring/regulating such. This inherent conflict is the element which makes the monitoring/regulating process work. Under the normal process, the developer is responsible for his plans, specifications, etc. The City Council (in turn) is responsible to review such plans, specifications, etc. to insure that they meet City requirements. • \ MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS • To the Honorable Mayor and Members of the City Council October 13, 1987 Page 2 The HRA is asking the City Council to be both developer and monitor of the proposed development (i.e. , co-developer) . Prior to agreeing to such a proposal, the City Council should consider the following questions: • Is it really possible for the City to be both developer and monitor/ regulator? • Can the City/City Council perform two conflicting functions simulta- neously? • If the City/City Council becomes a co-developer, can it properly regulate such development? After considering the above questions, the City Council may come to the conclusion that it could possibly be put into a position of conflict by becoming a co-developer. Such conflicts should be avoided. If the City does decide to participate as a co-developer, other major questions must be asked. Generally, what level of participation would the City be willing to incur? The proposal from the HRA is generally open-ended. They are asking the City to use all the various powers and abilities it has (as a City) to assist in the development. Such a broad proposal enhances the potential conflict questions addressed above. I will be in attendance at the Council Meeting of October 13, 1987 to answer any questions you may have. Respectfully submitted, VOTO, TAUTGES, REDPATH & CO. , LTD. Robert J. Voto, CPA Attachments: HRA Letter Dated September 29, 1987 HRA Letter Dated October 7, 1987 cc: City Attorney „,„„,,,,,,,,„.„„„„„„,„,„„„„„„,„„„„,„,„,A. „. „ .... .,, T-4-: , ,,„„„„„ ........„:„„„!,,,„„,„„:„.....,:.„,,,,, „ . ,,....,..,,,, ......... .............. :„,„ .... N., .:„ . .: ....,.„„„,:,,,„„,„:,„,„„,„„„„„„:,„„„„„„,„„„„„,,.„„,„„„:„„„,,:„„„„„„ .,, ,,„ :>::::. Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 September 29, 1987 Mr. Robert Voto Voto, Tautges, Redpath $ Company, Ltd. 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Oak Park Heights Housing Development Dear Mr. Voto: Pursuant to the Oak Park Heights City Council Meeting of Wednesday, September 9th, I am forwarding documents pertinent to the development of a similar project in the City of St. Paul Park. I have enclosed the Purchase Agreement and the Development Agreement between the City and the HRA regarding the Stevens Ridge project. In addition, I have enclosed a printout detailing the payback to the City and a lender from lots sold. Per your request, we have clarified the various columns. Also enclosed are loan documents between Town & Country Bank and the Housing and Redevelopment Authority. . The concept is as follows: 1 . The HRA identifies a site acceptable to the City. 2. The City and the HRA enter into a development agreement outlining both party ' s responsibilities. This development agreement is contingent upon the selection of a builder acceptable to the City./ 3. The HRA secures land acquisition financing, contingent upon a builder acceptable to all parties. The City provides assurances to the lender regarding the project. 4. The City determines the number of lots that must be sold initially to an individual builder to provide them with a comfort level necessary to issue bonds for public improvements./ Mr. Robert Voto September 29, 1987 Page Two 5. The City authorizes all design engineering. Engineering costs are recovered by the City at time of assessments. A r he key to a Joint development with the City is the development , agreement. The City would include in that development agreement ;/ all paybacks, requirements, number of units that have to be pre-sold, etc. If you have any questions as you review this, please do not hesitate to call me. I look forward to hearing from you. Si cerely, C: 1 Dennis L . Balyeat Executive Director /m Enclosures • . • Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 October 7, 1987 Mr. Robert Voto Voto, Tautges, Redpath & Company, Ltd. Birch Lake Professional Building 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Proposed Oak Park Heights Single-Family Housing Development Dear Mr. Voto: This letter is sent to respond to the concerns and questions you expressed in your letter of September 30, 1987. Your first comment related to the development agreement. The HRA provided you with a development agreement currently in place between the City of St. Paul Park and the Washington County Housing and Redevelopment Authority. The development agreement is the guide that is used to outline the responsibilities of each party in a cooperative development of single-family housing. The development agreement between the City of St. Paul Park and the Washington County HRA lays out specifically the responsibilities of the HRA and the City. I think it is important to understand the concept behind proposing this project to the City. There is a public purpose involved here -- to create housing opportunities for moderate income persons through a Joint effort of the HRA and the City of Oak Park Heights, whereby each party uses the , resources and powers available to them to reduce costs to achieve this common goal . ,At this preliminary stage, we are attempting to define the general parameters under which a joint development of single-family housing can take place. Once the City and the HRA reach a consensus on the purpose and scope of this project, a specific development agreement would be negotiated wherein each party would share the risks and rewards of the development,. To make this development affordable and to meet the public purpose, an agreement would be reached whereby the City may forego certain development procedures In return for participating in the proceeds from lot sales. This development process would not be used to circumvent the normal City process of review and approvals. It would be a way of reaching certaiif understandings at the beginning of the process whereby, because of the . • Mr. Robert Voto October 7, 1987 Page Two cooperative effort involved, may allow for some alternatives that may be used to create a project which meets the original public purpose. We would like to respond to your questions in the order that you asked them. Your first question related to the St. Paul Park development agreement in regard to a tax-increment district and whether or not there were expectations that Oak Park Heights would have a tax-increment district. Part of the preliminary development of this project would be to determine whether or not tax-increment or local improvement bonds would be necessary to provide any of the public utilities necessary to develop the site. The project has to be developed to the next stage before a final determination of that need can be made. However, an indication by the City that they would consider using tax-increment or local improvement bonds would help define the costs of development. The second question relates to the land acquisition and what involvement there would be by the City of Oak Park Heights. In our letter of September 29th, point number three stated that the HRA would be responsible for acquiring the land. Your third question related to the acceptability of a site and a builder to the City. There were also some questions related to the City approval process and City costs. The HRA is proposing this project in the hope that the site to be developed is one that the City wishes to have developed and that the City would concur with the HRA on the builder prior to the point of the constructing of homes. The builder must have the track record and the financial backing to carry out the construction of homes. The second part of the question relates to City procedures. It is the intent of the HRA to follow City procedures; however, the development agreement could be structured so that there could be some mutually agreeable shortcuts that could be undertaken. All necessary approvals, permits, etc. would still be necessary, but, because of the Joint effort, the City would have a larger say in the design and the actual development of the project -- greater than if it were privately developed. In regard to the questions of expenses related to this process, one of the items in a development agreement would be how expenses would be paid and at what point in time. If you look at the development agreement with the City of St. Paul Park, the City did forego collecting some of those fees and reimbursements until such time as lots were sold from the project. At the time of closing, the City then collected both its costs and also additional funds which the City could use as they so chose. I Mr. Robert Voto October 7, 1987 Page Three Question number four relates to the difference between the development agreement and existing City policies and procedures. The response to this is very similar to the previous question. The HRA has every intent to follow normal City procedures; however, because this would be a cooperative effort and because some agreements could be reached in the development agreement concerning this single-family housing, there might be ways to accelerate the process to help keep the cost down. thus making it more attractive to prospective moderate income buyers. Your fifth question concerned the concept of a "comfort level " and the participation of the City in this development. The HRA does not intend for the City to have any "lower comfort level ." Existing City procedures in the development agreement would allow the City to set the criteria for proceeding with this project. Having a development agreement and doing a Joint development with the HRA allows the City to get the kind of development it would like to see and at the same time, meet the public purpose of this development. The next question related to the City's involvement in design engineering. The concept behind-this is, because the HRA and the City are working together, the HRA would like to use the city engineer, the city attorney, city staff. etc. to develop the necessary information, procedures and construction criteria-that the City wishes to see on this project. Because this is a Joint effort, rather than having all expenses-paid up-front, part of the risk and reward-concept is that the City would front some of these costs in-exchan a for participating in the proceeds from the sale of lots and or bonds. Your next question related to paybacks to the City and lender from lots sold. The schedule that you were provided outlines the disbursements of the proceeds from each lot sale which identifies the following: the amount that must be paid to the bank to release a lot from the mortgage, the amount to be paid to the City to reimburse them for agreed -upon costs. The amount being paid to the City to pay off the assessments against-the lots will give you an idea of our arrangement with the City of St. Paul Park whereby the City collects for its expenses at the time of lot sale. Our structure in the City of St. Paul Park was necessary because-of the- need to do a local- improvement bond to put in-the public- utilities on the site. Also, -this particular-structure was-done-so that the City would issue the minimum size bond necessary-for the shortest -period of time necessary. Because-the City could recover a large amount-of its costs from the sate of each lot, they were- able to use these funds to reduce-the bond needs and also allowed them to front-load the bonds, thereby reducing capitalized interests costs and reducing project expenses which normally • Mr. Robert Voto October 7, 1987 Page Four would be passed along to the home buyer. This enabled the HRA to sell lots at an affordable rate to moderate income persons. To give you a better understanding, in each lot that is sold in our Stevens Ridge Development in St. Paul Park, the City receives $3,250.00 for the cost of the public utilities which were placed in this development. These are funds which the City can use for the costs of the bonds that were issued and also allows the City to invest those proceeds until such time as the bond principal and interest is due. The City has also designated $1,000 from the sale of each lot to reimburse the City for the cost of a new city well, which does not directly serve the new development but is adjacent to the site, and ensures the City that an additional needed well will be paid for. The City is also taking $1,000 from the sale of each lot to put into a specific development fund that the City will use for economic development activities city-wide. In St. Paul Park, the HRA is also paying from lot sales a $3,000 assessment for each lot. This allows the City to recapture its assessment funds up-front from lot sales, as opposed to waiting a period of years to collect those funds. In conclusion, a development agreement with the City of Oak Park Heights is dependent on the City and the HRA reaching some form of consensus as to the type of project the City would like to see developed. Until that has been discussed further with the City and the City has the opportunity to determine which risks it is willing to ,jointly share with the HRA, it is Premature to begin the drafting of any kind of development agreement. The HRA wishes to continue to pursue this matter and would be more than happy to provide additional information to the City concerning this single-family development. I hope that this letter provides you with some of the additional information you need to respond to questions that the City might have as to this development. If you have any further questions, please do not hesitate to call or write. Sincerely, Dennis L. Balyeat Executive Director /m c: Lyle J. Eckberg/City Attorney, Oak Park Heights • n " • > Washington County Housing a d Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 October 7, 1987 Mr. Robert Voto Voto, Tautges, Redpath & Company, Ltd. Birch Lake Professional Building 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Proposed Oak Park Heights Single-Family Housing Development Dear Mr. Voto: This letter is sent to respond to the concerns and questions you expressed in your letter of September 30, 1987. Your first comment related to the development agreement. The HRA provided you with a development agreement currently in place between the City of St. Paul Park and the Washington County Housing and Redevelopment Authority. The development agreement is the guide that is used to outline the responsibilities of each party in a cooperative development of single-family housing. The development agreement between the City of St. Paul Park and the Washington County HRA lays out specifically the responsibilities of the HRA and the City. I think it is important to understand the concept behind proposing this project to the City. There is a public purpose involved here -- to create housing opportunities for moderate income persons through a joint effort of the HRA and the City of Oak Park Heights, whereby each party uses the resources and powers available to them to reduce costs to achieve this common goal . At this preliminary stage, we are attempting to define the general parameters under which a joint development of single-family housing can take place. Once the City and the HRA reach a consensus on the purpose and scope of this project, a specific development agreement would be negotiated wherein each party would share the risks and rewards of the development. To make this development affordable and to meet the public purpose, an agreement would be reached whereby the City may forego certain development procedures in return for participating in the proceeds from lot sales. This development process would not be used to circumvent the normal City process of review and approvals. It would be a way of reaching certain understandings at the beginning of the process whereby, because of the i�' 0 410 Mr. Robert Voto October 7, 1987 Page Two cooperative effort involved, may allow for some alternatives that may be used to create a project which meets the original public purpose. We would like to respond to your questions in the order that you asked them. Your first question related to the St. Paul Park development agreement in regard to a tax-increment district and whether or not there were expectations that Oak Park Heights would have a tax-increment district. Part of the preliminary development of this project would be to determine whether or not tax-increment or local improvement bonds would be necessary to provide any of the public utilities necessary to develop the site. The project has to be developed to the next stage before a final determination of that need can be made. However, an indication by the City that they would consider using tax-increment or local improvement bonds would help define the costs of development. The second question relates to the land acquisition and what involvement there would be by the City of Oak Park Heights. In our letter of September 29th, point number three stated that the HRA would be responsible for acquiring the land. Your third question related to the acceptability of a site and a builder to the City. There were also some questions related to the City approval process and City costs. The HRA is proposing this project in the hope that the site to be developed is one that the City wishes to have developed and that the City would concur with the HRA on the builder prior to the point of the constructing of homes. The builder must have the track record and the financial backing to carry out the construction of homes. The second part of the question relates to City procedures. It is the intent of the HRA to follow City procedures; however, the development agreement could be structured so that there could be some mutually agreeable shortcuts that could be undertaken. All necessary approvals, permits, etc. would still be necessary, but, because of the Joint effort, the City would have a larger say in the design and the actual development of the project -- greater than if it were privately developed. In regard to the questions of expenses related to this process, one of the items in a development agreement would be how expenses would be paid and at what point in time. If you look at the development agreement with the City of St. Paul Park, the City did forego collecting some of those fees and reimbursements until such time as lots were sold from the project. At the time of closing, the City then collected both its costs and also additional funds which the City could use as they so chose. • • 4 Mr. Robert Voto October 7, 1987 Page Three Question•number -four -relates• to the difference between the development agreement and existing City policies and procedures. The response to this is very similar to the previous question. The HRA has every intent to follow normal City procedures; however, because this would be a cooperative effort and because some agreements could be reached in the development agreement concerning this single-family housing, there might be ways to accelerate the process to help keep the cost down, thus making it more attractive to prospective moderate income buyers. Your fifth question concerned the concept of a "comfort level " and the participation of the City in this development. • The HRA does not intend for the City to have any "lower comfort level ." Existing City procedures in the development agreement would allow the City to set the criteria for -proceeding with this project. Having a development agreement and doing a Joint development with the HRA allows the City to get the kind of- development- it would like to see and at the same time, meet the public purpose of this development. The next question related to the City's involvement in design engineering. . The concept behind -this is, because the HRA and the City are working together,- the HRA would like to use the city -engineer, the city attorney, city-staff, etc. to develop the necessary information, procedures and construction criteria-that the City wishes to see on this project. Because-this is a Joint effort, rather-than having all expenses-paid • • up-front, part-of the risk and reward-concept is that the City would front some of these costs in -exchange for participating in the proceeds from the sale of lots and/or bonds. Your next question related to-paybacks to the City and lender from- lots sold. The schedule that you were provided outlines the disbursements of the proceeds from each lot sale which identifies the following: the amount that must be paid to the bank to release a lot from the mortgage, the amount to be paid to the City to reimburse them for -agreed -upon costs. The amount being paid to the-City to pay off the assessments against-the lots will give you an idea of our arrangement with the City of St. Paul Park whereby the City collects for- its expenses at the time of lot sale. Our structure in the City of •St. Paul Park was necessary because -of the need to do a local- improvement bond to put in-the public utilities on the site. Also, this particular structure was done so that the City would issue the minimum size bond necessary -for the shortest period of time necessary. Because the City could recover a large amount of its costs from the sale of each lot, they were able to use these funds to reduce-the bond needs and also allowed them to front-load -the bonds, thereby reducing capitalized interests costs and reducing project expenses which normally • • Y � Mr. Robert Voto October 7, 1987 Page Four would be passed along to the home buyer. This enabled the HRA to sell lots at an affordable rate to moderate income persons. To give you a better understanding, in each lot that is sold in our Stevens Ridge Development in St. Paul Park, the City receives $3,250.00 for the cost of the public utilities which were placed in this development. These are funds which the City can use for the costs of the bonds that were issued and also allows the City to invest those proceeds until such time as the bond principal and interest is due. The City has also designated $1,000 from the sale of each lot to reimburse the City for the cost of a new city well, which does not directly serve the new development but is adjacent to the site, and ensures the City that an additional needed well will be paid for. The City is also taking $1,000 from the sale of each lot to put into a specific development fund that the City will use for economic development activities city-wide. in St. Paul Park, the HRA is also paying from lot sales a $3,000 assessment for each lot. This allows the City to recapture its assessment funds up-front from lot sales, as opposed to waiting a period of years to collect those funds. In conclusion, a development agreement with the City of Oak Park Heights is dependent on the City and the HRA reaching some form of consensus as to the type of project the City would like to see developed. Until that has been discussed further with the City and the City has the opportunity to determine which risks it is willing to jointly share with the HRA, it is premature to begin the drafting of any kind of development agreement. The HRA wishes to continue to pursue this matter and would be more than happy to provide additional information to the City concerning this single-family development. I hope that this letter provides you with some of the additional information you need to respond to questions that the City might have as to this development. If you have any further questions, please do not hesitate to call or write. Sincerely, Dennis L. Balyeat Executive Director /m c: Lyle J. Eckberg/City Attorney, Oak Park Heights VOTO, TAUTGES, RED H & CO., LTD. • TKV CERTIFIED PUBLIC ACCOUNTANTS Birch Lake Professional Building •1310 E. Hwy. 96 • White Bear Lake, MN 55110 • Phone 426-3263 ROBERT J.VOTO,CPA ROBERT G.TAUTGES,CPA September 30, 1987 IAMB S.REDPATH,CPA Mr. Dennis L. Balyeat, Executive Director Washington County Housing and Redevelopment Authority 455 Broadway Avenue St. Paul Park, Minnesota 55071 RE: PROPOSED OAK PARK HEIGHTS HOUSING DEVELOPMENT Dear Dennis: I have today received the information I was expecting to receive on September 11, 1987. As promised, I am responding with speed. As you correctly state in your transmittal letter of September 29, 1987, "the key to a joint development with the City is the development agreement". Accordingly, please provide the City with a draft "development agreement" which we may evaluate. Alternatively, provide the City with an extensive outline of such an agreement so that we may have a reasonable idea of exactly what you expect from the City of Oak Park Heights. The information provided leaves me with more questions than answers; to wit: 1. The HRA/St. Paul Park Development Agreement (the copy provided was unsigned by both parties) refers to a Tax Increment District. Do you have any expectations that Oak Park Heights will be involved with a Tax Increment District? If your answer to the above is affirmative, please explain fully exactly what is expected of the City and when. 2. The HRA/St. Paul Park Development Agreement refers to that City acquiring land which is resold to the HRA. You have included a copy of the "Purchase Agreement" conveying such land from the City to the HRA. A prime piece of information, however, is missing. What price (and at what terms) did that City pay for such land? Was there any difference (subsidy) between the City's acquisition price and selling price? Do you have any expectations that Oak Park Heights will be involved with any subsidy (or any legal costs) for such an acquisition. MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION• MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS Mr. Dennis L. Balyeat • September 30, 1987 Page 2 3. Your concept description refers to a site and a builder "acceptable to the City". As you are no doubt aware, such acceptance generally involves "out-of-pocket" costs to the City. More important, this acceptance process is very much like the process the City follows with any and all developers. Specific plans, specifica- tions, etc. are normally prepared by each developer (at their expense) and submitted to the City to start the acceptance process. Additionally, City policy is for each developer to reimburse the City for all out-of- pocket costs/expenses relating to this acceptance process. Do you have any expectations that the City of Oak Park Heights will absorb any of these costs with this development? If your answer is affirmative, please explain fully exactly what is expected of the City and when. 4. Your concept description gives a very general plan of action. Are you aware of existing City policy and procedures relating to developers and development? If so, are you proposing that this development agreement differ significantly from such existing City policy and procedures? 5. Your concept description refers to a "comfort level necessary to issue bonds for public improvements". Are you referring to Tax Increment Bonds, Local Improvement (Special Assessment) Bonds, or some other City bond issue? Any bond issue sold by the City of Oak Park Heights will be general obli- gation bonds backed by the full faith and taxing authority of the City. All such existing bond issues are sold in accordance with State Statutes and require the City to take whatever action is necessary to insure full and prompt payment of such bond principal and interest. Do you have any expectations that the City of Oak Park Heights will accept a "lower comfort level" for this development? If so, please explain fully exactly what is expected of the City and when. 6. Your concept description refers to the City authorizing all design engi- neering and recovering such costs at the time of assessment. What "design engineering costs" are you referring to? Are you referring to local improvement (special assessment) projects or are you referring to something in addition? Mr. Dennis L. Balyeat • • September 30, 1987 Page 3 7. You have provided "a printout detailing the payback to the City and a lender from lots sold". The purpose of such a schedule has still not been made clear. You are apparently asking the City of Oak Park Heights to issue local improvement/special assessment bonds to help finance this development. City policy (in this regard) is to assess all such costs to the deve- loper. Are you suggesting a different arrangement? Do you have any expectations that the City of Oak Park Heights treat this bond issue (and/or the underlying special assessments) different from other bond issues (and/or the underlying special assessments)? If so, please explain fully exactly what is expected of the City and when. To summarize, you have correctly stated that "the key to a joint development with the City is the development agreement". Such an agreement normally con- tains all the necessary stipulations to answer the questions I have stated above. The data submitted does not define what you are asking of the City. A draft or proposed "development agreement" (or an extensive outline of such an agreement) would answer these questions and enable the City to respond. The City Council wishes to pursue this matter and would like more information. To this end, they have asked me to review and evaluate your "proposal". To date, I have not received sufficient information to make such a review. Please respond with a sufficiently detailed "proposal" that I may respond to the City Council. I look forward to hearing from you on the above questions. If you have any questions, please don't hesitate to call or write. Sincerely, VOTO, TAUTGES, REDPATH & CO. , LTD. Robert J. Voto, CPA RJV/111 cc: LaVonne Wilson VOTO TAUTGES REDIH & CO., LTD. • CERTIFIED PUBLIC ACCOUNTANTS / Birch Lake Professional Building•1310 E. Hwy. %• White Bear Lake, MN 55110• Phone 426-3263 September 29, 1987 ROBERT I.VOTO,CPA ROBERT G.TAUTGES,CPA To the Honorable Mayor LAMES S.REDPATH,CPA and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: WASHINGTON COUNTY HOUSING AND REDEVELOPEMENT AUTHORITY When we last met (Wednesday, September 9, 1987) at the budget workshop meeting, the City Council was given a presentation by Mr. Dennis L. Balyeat, Executive Director of the Washington County Housing and Redevelopment Authority (HRA) . Mr. Balyeat's informal presentation was a request of the City to enter into a "Development Agreement" with the HRA. Such request was undefined as to specifics. Mr. Balyeat was asked (by the City Council) to submit the normal additional information to my office in order that such information could be reviewed and so that the City Council could make its decision based (in part) upon such review. Mr. Balyeat was advised that approximately thirty days would be required for such a review. He responded that he would have such information delivered to my office on Friday, September 11 , 1987 in order that I may complete my review and report back to the City Council on or before Monday, September 28, 1987. This was the date chosen by Mr. Balyeat to make his formal presentation to the City Council at a regular Council meeting. I have yet to receive any such additional information from Mr. Balyeat or any other source. I did receive one telephone call from Mr. Balyeat in which he again promised to mail such additional information. Mr. Balyeat asked that I perform my review in time for "the next" City Council meeting which is scheduled for Tuesday, October 13, 1987. Such timing is not possible and Mr. Balyeat was so informed. Please be advised for your planning and information that I will require a mini- mum of thirty days to perform such a review. Based upon the speed and incompleteness of past promised data; I anticipate that more than thirty days will be required. Accordingly, I do not anticipate having a report completed until November, 1987 or a later date. I will keep the City Administrator advised as to current development on this topic. Yours very truly, VOTO, TAUTGES, REDPATH & CO., LTD. Robert J. Voto, CPA RJV/smp cc: LaVonne Wilson MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS• PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS • CLIPPING FILE Publisher WASHINGTON COUNTY BULLETIN Date JULY 16, 1987 interest high in housing project despite pipeline safety question s By Jane McClure The 70-plus acres south of Herit- get into those homes sooner.Eleven' Staff Writer age Park lay vacant for many years, others were sold. after the Stevens family gave it to the The lots available vary from 75 to The dust and construction equip- University of Minnesota and other 80-plus feet, said Schultz. Lots by ment clamor on Lincoln Avenue in schools.For a time,it was an expert- Heritage Park sell for an extra$500. St.Paul Park have meant noise and mental crop area.Last year,the land Nineteen home styles are offered, inconvenience for residents.But for was purchased by the city of St.Paul he added. Homes include many. prospective homeowners, the Park, which then sold it to the styles are in the low to middle annoyances are a signal that new Washington County Housing and $70,000. homes are going up. Redevelopment Authority (HRA). The present petroleum pipeline; The first 40 lots of the Stevens Work began in June on sewer and site is shown on the map with a red; Ridge subdivision will be the focus water system,hydrants,grading and line. Schultz noted that once the of an open house this weekend by roads, as well as on the model pipeline location question was builder Gardner Brothers Homes. homes. answered, more buyers would be From 1-5 p.m. July -18-19, the Gardner Brothers was selected interested in lots. "This is such a project will hold a grand opening, 'earlier this year as developer of the marvelous piece of property," he with refreshments, a look at model first 40 lots of Stevens Ridge. The said. He praised the surrounding homes and information about the builder is offering 8 3/8 percent neighborhood and other community project. An official groundbreaking fixed rate mortgage financing, amenities as attracting buyers. ceremony will be held at noon July which it obtained through the HRA The majority of interest in the 18. in a first-time homebuyers' homes has been from first-time It's expected that the 40 lots being program. buyers,said Schultz,although he is developed by Gardner Brothers will In a recent interview,Ted Schultz seen some second-time home seek- be sold out by October of this year, of Gardner Brothers noted that four- ers. Most families are two-career in the first phase of the Stevens teen "holes had been punched" for couples, with one to three children. Ridge development. The develop- new homes by June's end. That Interest has also been seen from ment has been unique because of the includes one of the model homes area natives,who wish to move back mix of public and private sector going up and two homes built to to south Washington County, said activity involved, specifications for people needing to Schultz. I • • • A T CLIPPING FILE Publisher Date r. • .w..s - - A'is i . Ji Z a y TX ¢. y� z k,fir �4,,'^� Sa" a`- '0' ` �y�...w► -- �101. k i s sw r ;. s.. a.„s +4y N. ' , ,.47' 'taarR. �, . • :,,la �4 i RQ v 2 3' «�Y 'V` i En+tlif ♦ _ _ y }M .•J♦ FA;" h .( 'Svc 1�' � �hrSl.. 7 't .+' 4y.,C.}'f * '' L �.is '� N s s "d,�c• K+'� r"°'-..v yr x �.�w",t' �' � ,,j. ' $ff?' tx a'f' c .�. r °x`a �(r s ,tr,.„m.•i ,,,�a.�'" ,{.: i s '4�, y � Itcek45iii. Yr .��� -.new "L4 .* yrq 4 %,45 Z. Photo by Jane McClure. Model homes are going up on the Stevens Ridge by Gardner Brothers,who will have an open housJ development in St.Paul Park.These three are built this weekend. ! 110. 4 • Washington County Housing and Redevelopment Authority 900 Third Street, St. Paul Park, Minnesota 55071 612-458-0936 October 10, 1986 Ms. LaVonne Wilson, Administrator/Treasurer City of Oak Park Heights 14168 - 57th Street North Stillwater, Minnesota 55082 Dear Ms . Wilson : The Washington County HRA has recently been allocated mortgage revenue bonds for single-family homes in Oak Park Heights. Because of the publicity associated with this, you may receive calls from interested parties regarding the guidelines for participation . At present, we have not formulated set guidelines but we will be contacting you regarding setting up programs that would best suit your community. In the interim, please feel free to refer all phone calls to the HRA St. Paul Park office, 458-0936. I look forward to working with you on this program. Sincerely, Aja-14°rtet::::'t>°ls"../. .°94414tZ— Dennis L . Balyeat Executive Director /m Ark"' • Ay "" 011 iv • :::;» Washington County Housing and Redevelopment Authority 900 Third Street, St. Paul Park, Minnesota 55071 6I2-458-0936 October 9, 1986 Mayor Frank Sommerfeldt City of Oak Park Heights 14168 North 57th Street Stillwater, Minnesota 55082 Dear Mayor Sommerfeldt: I would like to take this opportunity to inform you that the Washington County HRA has received an allocation making available $50 million in low- interest mortgage revenue bonds for first time home buyers . An allocation of $10 million has been set aside for the City of Oak Park Heights. This program is similar to the one approved by the city council last November. I will be addressing the council next month to explain the program in more detail and the timetable for availability of funds. At this time it is anticipated that mortgage rates will be 8% or less and that funds will be available by mid-January. We will be asking local lending institutions to participate in this program. As always, we look forward to working with the city. If you have any questions, please contact me. Sincerely, Dennis L. Balyeat Executive Director /m • 4 bedroomv and 30 percent three bedroom split for the Wre rental e flats. l ats.nd sitlthough we have suggested a 70/30 split on the therental city makeflats, an 80/20 a more straints and parking ratios set by our splitquara footagese and effi- cient utilization of the site. We have als�oductreviewed we have provided based on our review of competitive rental P product with your amenities. correspond- ing rents which will be appropriate for a new P garage wsiahe. Also, thesee rents Rents listed on the table incluroximately and 3 percent per year based on a metro have been trended upward by asp 1 of new area average rent increase for 1987. Because the eslioit1d8sup supply may be rental product in the study area, 5 percent more appropriate. TABLE 9 UNIT MIX AND PROJECTED PRICING (Subject Development) 1988 ------1989 1990 Rent Per Rent Per Rent Per Ft. Unit Square Rent* Sq. Ft. Rent* Sq. Units an Footage Rent* Sq.Ft• '_.— F Traditional Units• 41 1BR 725 $485-510 $.67-.70 $500-525 $.59-•72 $515-540 $.65-.74 b7 61 2BR 950 585-605 .62-.64 600-620 .63-.65 620-640 102 Rental Flats 61-.62 $680-695 $.63-.65 29 3BR 1,200-1,250 $690-710 $•59-.57 $710 730 $.58-.59 730-750 .60-.61 13 3BR 1,200 1,25 42 *Rent includes heat and garage. 1 • . Source: Maxfield Research Group, Inc. Your square footages, which were based on our preliminary recommendations, are ate for the market and will allow for competitvee rents. tal Persons ts. de- siringapprri to rent in your larger units will have an option month with 725 square feet, $.67 to Accord- ing to the table, one bedroom units in thetraditional apartment building would rent for approximately $485 to $510 perper by a7 premi- um, per square foot. The $485 base rent could Twoubedroom traditonal um, with units on the top floor renting month with 950 square $.61 to units would rent for about $585 to $605 perfeet, month $.64 per square foot. Two bedroom flats $°60dpernsquare for $footto Three bedroom with 1,050 to 1,100 square feet, $.59 • flats would rent for $690 to $710 per month with 1,200 to 1,250 square feet, $,57 per square foot. Based on our review of rents in the to and atrthetlowererange ols pricing schedule reflects a positioning but above the newer rental units of new White Bear Lake and Maplewood projects, in Oak Park Heights/Stillwater. Wfeelyou can achieve rents at the high end in your market area because this y rable Maplewood and White Bear Lake projects project will feature the nicest design and amenities. However, we feelrents must be at the lower end of comp due to your distance from the cities. Absorption new rental projects in Maplewood and White Bear Lake has ranged Absorption at from good to excellent. Absorption of the new rental units in Stillwater has been very ry good, reflecting pent-up demand for new units. Although a market may be very competitive, the excitement generated by new product has often in- ected absorption rates. Based on a somewhat price sensitive market creased pro j as lability for rental housing in Oak Park Heights/Stillwater dWhiteBearwLakeaswehwoulde lestimate of new contemporary units in Maplewood per units chedu ten month. an absorption period of 15 to 18 months, leasing eight to prior to tper led This assumes a pre-leasing program started three months occupancy, with occupancy beginning in fall 1988. 26 • • • ;V APPENDIX • 27 • 0 410 , Name: CENTURY RIDGE January 1988 i lewood MN I' Address:o 89 Century Ridge Avenue, Map Occupancy Date: July 1987 Developer: Gary Boulder Number of Units: 75 Contact Person: Rhonda Telephone: 738-1306 project Description: One building UNIT INFORMATION Rent Per Type ar Sque Feet Rent* Square Foot Number 627 $410-420 $.65-•67 3 Studio 1BR 754 .59-.63 3 485-525 .64-.70 188 986 585-625 2BR/1Ba 625-665 .61-.65 18 2BR/2Ba 1,024 Utilities: Owner pays heat; tenant pays electric. Garage Type: Heated underground, $35 per month extra. pet Policy: Small pets okay. • UNIT FEATURES N Washer/Dryer I Central .Air I Garbage Disposal I MisowaDe I Range (gas) I Balcon /Patio _ Other:r _____ I Dishwasher N Fireplace I = All units; 0 = Some units; N = Not Included. RECREATIONAL AND BUILDING AMENITIES N Sundeck I Elevator N Outdoor Pool I Rooms Security stem N Indoor Pool N Tot Guest I Party yRoomy N Whirlpool/Sauna ot I Card/Game - N Exercise N Storage Lockers N Card/Game Room I Other: Picnic _ N Tennis Court I Laundry (floor) Are_ a___ I = Included N = "Not Included Absorpti on: Began marketing May 1987, August 1987 - 20 leased (all studios, even between 1 & 2BR's). Number of Deposit Lease Policy Required & Notice Last/Next Rent Increase: Current Vacancy: .--- 8 mos. or 1 year Late 1987, $25 on some 1BR'S Vacant: 1 $350 units. 2BR's Vacant: 11 Comments: Offering free garage with a one year lease. Resident Profile: So far, variety. 28 • • January 1988 Name: SILVER RIDGE lewood MN Address: Stillwater Avenue and McKnight Road,uPaply Maplewood, June 1986 Developer:umbe 186 Contact Person: Paulette Niles Number of Units: (Asst Mgr) David Aldridge project Description: Six 3-story buildings Rutha with 24 to 36 units Telephone: 731-3040 per building. UNIT INFORMATION Rent Per Type Square Feet Rent Squ rea .Foot Number $.64 708 $450 5 1BR/Garden level 708 485 .69 1 17 57 1BR 560 .60 2BR 938 520 .55 7 2BR/Garden level 938 electric. Utilities: Owner pays heat (gas); tenantpaysear's lease; Garage Type: 186 detached garages; 1 stall included with 1 y $30 per month with 6 month's lease. pet Policy: Not allowed. UNIT FEATURES N Washer Dryer I Garbage Disposal I Unit Air Other: �_ I Balcon /Patio I Range (electric) N Fireplace I Dishwasher I = .All units; 0 =Some units N = Not Included. RECREATIONAL AND BUILDING AMENITIES N Sundeck N Elevator I Outdoor Pool RoomI Guest Rooms N Indoor Pool I Tot Lot I Security System I Whirlpool/Sauna t Lockers I party N Storage I Exercise Other: _____-- N Card/Game Room I Laundry (floor) N Tennis Court I = Included N = Not Included Absorption: Marketing began May 1986; g 86 - 110 units leased; fully occupied by January 1987. Deposit Lease Policy n t r of eq ed & Notice Last/Next Rent Increase: Currerent Vacancy: R 1BR's Vacant: 3 $200 6 or 12 month Rents increased $35 (all leases. 2BR'( Vacant: 8 units) May 1, 1987. 60 day notice. is up from 1987 - when project maintained consistantly high Comments: Vacanc y occupancy. Resident Profile: 33% are young professionals and 20% are empty-nesters/sen- iors. A number of 3M, St. Paul school district, St. Paul company employees, approximately 50% are families. 29 1111111111111111111111111111111111 ..... Name: LAKEWOOD0D HILLS January 1988 Address: Bergeron Lane and McKnight Road, White OccuBearyLake,Date MN 1987 Developer: Craig Mathes 63 - 88) Contact Person: Midge Olson Number o of Units: I - 87 (II; 779-7569 Project Description: Wood-frame building, Telephone: Three stories. UNIT INFORMATION Rent Per Number Type Square Feet* Rent Square Foot 775- 875 $450-490 $.56-.57 29 1BR 58 2BR 1,050-1,100 640 .56-.58 *Square footage approximate. Utilities: Tenant pays heat and electricity. Garage Type: 99 underground spaces; $35/mo. extra. Pet Policy: Not allowed. UNIT FEATURES N Washer/Dryer I Unit Air I Garbage DisposalOther: I Balcon /Patio I- Range (elsherctric) N Fi pace I- Dishwasher. I = All units; 0 = Some units; N = Not Included. RECREATIONAL AND BUILDING AMENITIES N Sundeck I Elevator N Outdoor Pool N Guest Rooms I Security System N Indoor Pool N Tot Lot I Party Room N Whirlpool/Sauna I Sot Lot Lockers N Card/Game Room I Exercise Other:oa N Tennis Court I Laundry (common) I = Included N = Not Included History/Absorption: Marketing began June 1987, 8/87 - 44 leased, 23 Vacancy Histor y 1BR and 21 - 2BR; 2/88 - 1 vacant. Number of Deposit Lease Policy Require d & Notice Last/Ne txt Ren Increase: Current Vacancy: New Projecct. $300 1 year lease. 1BR'S Vacant: 0 60 day notice. 2BR'( Vacant: 1 3BR's Vacant: N/A Comments: Resident Profile: Too new. 30 • 10 1 Name: MAJESTIC PINES January 1988 Address: 1441 Park, White Bear Lake, MN Occupancy Date: Dec. 1986 Developer:umberofGene Rezac Contact Person: Kathy & N 126 Larry V Project Description:Unri : - Telephone: Oarry Vray r project Three90 unit unitbd family 5b5dgs. 27 1-90 bldg.; 1 adult&wing. over wing, 1 young UNIT INFORMATION ent er Rent Square Foot Pe Square Feet Number $ 435 $ .81 Efficiency 535 435 .8 2 748 515 .66 12 3 1BR 772 .61 24 1BR 920 565 .51-.60 54 2BR/2Ba 1,000 505-595 .5 -.60 54 2BR/2Ba 1,014 565-610 .53-.56 12 2BR/1-3/4Ba 1,036 550-575 .5 -.56 6 2BR/2Ba 1,059 575-600 .54-.55 6 2BR/2Ba 1,289 700-715 6 3BR/2Ba Utilities: Tenants pay their own (gas) heat and electricity. Attached and underground parking available; one stall included in Garage Type: rent. olic : Cats allowed only; neutered, declawed w/$100 extra deposit. pet P y IT FE TURE e Disposal N Washer/Dryer Garbage I Other: Bay I Rangengeal(electric)er N Balcony/Patio dtves. I ish she N Fireplace I Dishwasher I = All units; 0 = Some units; N = Not Included. RECRE TION D UILDING NITIES N Sundeck N Outdoor Pool -N Guest Rooms I Elevator System ",1 Indoor Pool N e Lot I PartySecurityRoomI Whirlpool I TotLot Lockers I Party I Exercise I SOtorage Piocker N hard/Game Room I Laundry (common) BBQ, hories oes, N Tennis Court coquet, gaze o. N = Not Included I = Included December 1986; March 1987 - 40 leased; 8/87 - 111 Absorption: leasedMarket all beganng allleft are 2BR. Number of Deposit Lease Policy bas /Next Rent Increase: y _ u_ tree & Notice Current Vacanc . Required Late $10 to $20 on 2 $200 6 or 12 month most units. Vacant: 1 '88, leases. 60 2BR'( Vacant: 8 day notice. 3BR's Vacant: 2 Comments: Resident Profile: also some Wide variety, many young couples and roommates; families. 31 1 • • I February 1988 Name: WHITE BEAR WOODS Address: 4770 Centerville Road, White Bear Lake, MN Date: Nov. 1987 Developer: CSM Corporation OcContact Person: of Units: 225 429-8324 Number Telephone: Project Description: Three, 3-story wood exterior, 75 units each. UNIT INFORMATION Rent Per Number Type Square Feet Rent Square Foot 9 1BR - Hdcp. 786 $ 540 $ .69 66 1BR 767- 820 525-565 9 .68-.6.68-.6 150 2BR 1,003-1,044 620-735 0 Utilities: Owner pays heat and water. Tenant pays electricity. Garage Type: 1 underground garage included with rent. ' Pet Policy: None allowed. UNIT FEATURES . I Garbage Disposal N Washer/Dryer I Unit Air I Balcony I Other: I Range (electric) N Fireplace Mini-blinds I Dishwasher I = All units; 0 = Some units; N = Not Included. RECREATIONAL AND BUILDING AMENITIES I Outdoor Pool I Sundeck I Elevator Guest Rooms I- Security System N Indoor Pool I TotLot I party Room I Whirlpool/Sauna I Exercise I Storage Lockers I- Card/Game Room I- Tennis Court I Laundry (common) Other: I = Included N = Not Included open,11/87 - Phase I - 75 op , 59 leased; 2/88 - 150 units open, 112 leased, (30 2BR and 8 1BR vacant). Number of Deposit Lease policy Current Vacancy• Required & Notice Next Rent Increase. 6 or 12 month New project. 1BR's Vacant: N/A $250 2BR's Vacant: N/A lease; 30 daynotice. Comments: All units have patios except the 1,024 sq. ft. units. Resident Profile: Varies, (too new). 32 • January 1988 Name: OAR PARK HEIGHTS Address: 6120 Oxboro Avenue North, Oak ParOarkpHeights, MN 1973 Developer: � Number of Units: 72 Contact Person: Don Christianson Project Description: One building with Telephone: ' 439-5540 72 units per bldg. UNIT INFORMATION Rent Per Number Te Square Feet Rent Square Foot 4733 $435-459 $ .59 29 2BR 9 1BR 879-939 529 .56-.60 Utilities: Owner pays heat; tenant pays electric. Garage Type: Included in rent. One garage with each apartment. Pet Policy: Not allowed. - UNIT FEATURES I Unit Air I Garbage Disposal N Washer/Dryer I Balcony/Patio — • Other: I Range (electric) N Fireplace I Dishwasher I = All units; 0 = Some units; N = Not Included. RECREATIONAL AND BUILDING AMENITIES I Outdoor Pool N Sundeck N Elevator N Guest Rooms N Security System N Indoor Pool N- Party Room N Whirlpool/Sauna N Tot Lot N- Card/Game Room N Exercise N Storage Lockers N Tennis Court N Laundry (common/floor) Other: — I = Included N = Not Included Vacancy History/Absorption: N/A Number of Deposit Lease Policy Current Vacancy: Required & Notice Last/Next Rent Increase: 1BR's Vacant: 0 $200 6 mos. lease Since late 1986, rents 30 day notice have increased by approx. 2BR's Vacant: 1 10% (5% per year). Comments: Have people who are from St. Paul area, desiring to get "out of the city." However, majority of residents are local people. • Resident Profile: Variety of ages; young singles, couples, families and retired older persons. 33 c, MULTIFAMILY AND ELDERLY RENTAL HOUSING MARKET ANALYSIS WASHINGTON COUNTY, MINNESOTA PRELIMINARY DRAFT for Review and Discussion — Subject to Change III • , v MULTIFAMILY AND ELDERLY RENTAL HOUSING MARKET ANALYSIS WASHINGTON COUNTY, MINNESOTA CONTENTS Page 1 ACCOUNTANTS' REPORT GENERAL INFORMATION 2 Introduction 2 Metropolitan, Community and Adjacent Areas Demographic Data - Metropolitan Area and Washington County 3 7 Land Use and Availability 8 Housing Tenure and Occupancy 9 Housing Market Value 19 Housing Costs - Owner Occupied Units Housing Costs - Renter Occupied Units 11 1 Subsidized Housing 153 Washington County Housing Need MARKET ANALYSIS Geographic Market Area - Household Demand and Supply 18 18 Income Qualified Market 21 Target Household Market Tenure Patterns 24 2 5 Migration Patterns 29 Multifamily Housing Projects Planned or Under Construction 2 8 Vacancy Data Projected Net Market Demand 232 9 29 Capture Ratio Matrix 33 Summary Liii.i. PRELIMINARY DRAFT for Review and Discussion imili — Subject to Change • • ACCOUNTANTS' REPORT �\ I -1- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • S GENERAL INFORMATION PRELIMINARY DRAFT for Review and Discussion — Subject to Change • i MULTIFAMILY AND ELDERLY RENTAL HOUSING MARKET ANALYSIS WASHINGTON COUNTY, MINNESOTA INTRODUCTION feasibility from a This market analysis has been 1ndeloWken andto assess the moderate income multifamilyand market perspective, of developing Minnesota. elderly rental housing, in Washington County, r hic, econo- a The primary objective has been to gather and anaylze certain emog ap mic, and other relevant information and market data. Our approach to conducting the market study has included: - Analysis of the target geographic area. - Review of demographic and socioeconomic characteristics of the target market. - Analysis of housing supply and demand factors. - Definition of the qualified market. - Projection of future market for low and moderate income multifamily and J elderly rental housing. experience analysis has been based on readilaa=elconsistentsecondary withdata. industry exilhave uti- lized certain general assumptions which cer - tain analyzing market feasibiliWhave beenere localized utilizeda was In additionlaa limited county or metropolitan trendshone surveys and inter- views.ew of is latterosn rcebofninformation has gbeen lused primarily to test other This latter sources. METROPOLITAN, COMMUNITY, AND ADJACENT AREAS in edge of the Washington County is located within the eastern developing a MPpopulation Metropolitan Area of Minneapolis-St. Paul. It 430It sas the mfirst and counhadty formed in the State of Minnesota. The county cover of 113,571 in 1980. The western boundry of the county is within tfive bemiles ofl StheC Minnesota arState a Capital, while the eastern boundary sharest.WashingtonroixRiver y r as mealborder with the State miles Wisconsin. bounded north theos uth south, by sixteen miles of the measures thirty-eight River. commercially navigable Mississippi -2- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • i There are twenty-three cities and nine townships within the county. Many of the state's older communities are found in the county which is rich in heritage. The county's history is based upon the activities of people starting a new lie in a new land. As a result, the state's first farm, courthouse, sawmill, grist mill, school, church and prison are within the county 's boundaries. Washington County's local government officials and many interested andnatu are very eager and optimistic to pursue improvements to the physical environment while preserving Washington County's "character". This general empathy is a very healthy sign to insure Washington County against further phy- sical deterioration of its neighborhoods and an indicator of future accomplish- ments to make Washington County a better place to live. The County is designated as a "planned urbanization area" by the Metropolitan Council, a multi-jurisdictional planning agency for the metropolitan area. This designation reflects the Metropolitan Council's expectations and plans for significant residential and commercial development. The Cuyoninswatown s a number of large undeveloped parcels of land within close proximity ta St. Paul, the State Capital, Minneapolis-St. Paul International Airport, and the St. Croix River area which borders Wisconsin. The St. Paul Area Chamber of Commerce has assigned a full time economic develop- ment manager to organize the Metro East Development Partnership, encompassing Washington, Ramsey and Dakota Counties. This Partnership is expected to have a $250,000 annual budget in its ifirst n t three Meteo yayears atoapromote, coordinate and focus planned economic development Various cities within Washington County have obtained, or are in the process of obtaining designation of a Minnesota "Star" city, reflecting a commitment to economic development by these cities. Various cities within Washington County have designated tax increment finance districts to provide financing for certain cimprovements. s Then revenuer generated by these districts will finance publicimprovements commer- cial development within the district. Transportation and commuting time from most cities and townships within Washington County to most eastern metropolitan areas is within the 30-minute standard used as a measure by metropolitan area planning authorities. The recent upgrade of Interstate 94 and the existing capacity of Interstate 494/694 and 35E have positively effected transportation factors in the area. DEMOGRAPHIC DATA - POPULATION, HOUSEHOLDS, EMPLOYMENT AND INCOME Forecasts of metropolitan area growth show continued gains in the number of people, jobs and households. The Metropolitan Council, a multi-jurisdictional planning agency, defines the metropolitan region to include Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties in Minnesota. Seven County Regional Growth, 1970-2000 Historical Forecast Percent Change 1970 1980 1990 2 000 1980-1990 119990-20000 Population 1,874,612 1,985,873 2, 180,000 F;zro4o-,w �SCUS� Households 573,834 721,444 850,000 fc 2cR V1e on Employment 853,000 1,075,000 1,300,000 1,400, abject°to%Change 7% -3- • • Overall, the metropolitan area population is expected to increase in the current and upcoming decade. Household formation and employment is expected to increase at rates greater than population growth. The growth in population and number of households indicates expectations for smaller households. Washington County forecasts indicate population growth rates which exceed those projected for the remainder of the metropolitan area. The rate of growth fore- cast for households also exceeds the metropolitan area forecasts. The County also displays a high employment growth rate. Overall, the forecasts portray expectations for substantial county population and economic growth in the current decade, and continuation of growth at lower overall rates from 1990 to the end of the century. Washington County Growth, 1970-2000 Historical Forecast Percent Change 1970 1980 1990 2000 1980-1990 1990-2000 Population 82,716 113,545 136,880 147,860 19.8% 8.1% Households 21,304 35,081 46,000 51,000 31. 1% 10.9% Employment 16,027 27,700 37,000 44,000 33.6% 18.9% Source: 1970 and 1980 U.S. Census and Preliminary Forecasts by Community for 1990 and 2000, Metropolitan Council. The relationship between forecasted population and number of households shows a continuing decline in the number of persons per household. The relationship between forecasted number of households and employment portray expectations for residential and commercial growth in Washington County. Persons Per Household, 1970-2000 Historical Forecast Percent Change 1970 1980 1990 2000 1980-1990 1990-2000 Washington County 3.89 3.24 2.96 2.88 -8.6% -2.7% Metropolitan Area 3.27 2.75 2.57 2.49 -6.5% -3.1% Source: 1980 U.S. Census and Preliminary Forecasts by Community for 1990 and 2000, Metropolitan Council. The average number of persons per household in the County is forecast to decrease significantly in the current decade, and at a more moderate rate in the next decade. These trends indicate a combination of the more households with single parents, single persons, and fewer children. -4- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • 0 The population of Washington County was older inn1180pthan it was in 1970. The median age increased from 22.6 in 1970 to 27.4 Population by Age and Gender Per Cent Total of County Total 1980 1970 1980 1�_ Age Female Male - - 0-9 9,663 10,280 19,943 20,858 17.6% 25.7% 12,223 23,704 18,011 20.9% 22.2% 10-19 11,481 20-24 4, 176 4,407 8,583 4,542 7.6% 5.6% 18.2% 14.8% 25-34 10,402 10,320 20,722 12,059 35-59 15,042 16,103 31,145 19,138 28.4% 23.2% 60+ 5,304 4, 170 9,474 6,695 Source: 1970 and 1980 U.S. Census. The following table shows the types and sizes of County households with persons in the 60+ age group. Households by Persons and Type, 1980 60 and over 65 and over Householdson s With ---TA I--- 1,536 One per Two or more persons: 4,219 2,838 Family 113 89 Non Family Source: 1980 U.S. Census The distribution of employment types among County residents is another important economic indicator. Occupation of Residents, 1980 19- Persons Percent 21,051 38.9% managerial, sales 21 ,051 31.4% Professional, technology, 23.3% Mach Clerical, service operators 12,597845 1.6% Skilled,op forestry .6% farming, fishing, 2,603 Unskilled 54,064 100.0% Source: 1980 U.S. Census. Note: Employment of residents may or may not be in the County. -5- PRELIMINARY DRAFT for Review and Discussion - Subject to Change • • Employment trends within industry groups provide a further indication of the industries employing County residents. Employed Persons by Industry, 1980 1980 Persons Percent 3,657 6.8% Construction, agriculture, forestry, fishing 7 27.5%8 Manufacturing 4 14,86856 8.5% Transportation, communications, public utilities 28.3% Wholesale, retail 11,025,12 5.8% Finance, insurance, real estate 13 .8% Business, repair, personal services 3,24713,635 25.2%0 Health, education, professional, public services 54,064 100.0% Source: 1980 U.S. Census. Note: Employment of residents may or may not be in the County. The primary industries employing County residents include manufacturing and wholesale/retail activities. Median income of Washington County and Metropolitan households has increased substantially in the 1980's and is projected to continue to increase. 1970 1980 1987 1992 Washington County $ 11,682 $ 24,257 $ 38,645 $ 42,321 Metropolitan Area $ 10,567 $ 21,884 $ 28,471* $ 30,789* Source: 1970 and 1980 U.S. Census, CACI Market Analysis Division projection *Secondary Market Area Projection Washington County's 1980 median household income was above the Standard Metropolitan Statistical Area median household income. The Washington County percentage of persons below the poverty level was below the Metropolitan etr potal4area li percentages of persons below the poverty level. In 1980 approximately of the County's households had incomes of less than $10,000. 1980 Income Metropolitan Washington Metro Area County $ Median Household Income 121 ,886 4,257 2 ,884 $ 24,257 9 Persons below poverty level (6.7%) (4.3%)4 (percent of total) Source: 1980 U.S. Census PRELIMINARY DRAFT -6- for Review and Discussion — Subject to Change III • Th e following table presents a distribution by household income of Washington County households. Household Income, 1980 1980 Percent Households of Total 676 1.9% Under $2,500 1,297 1.9% $2,500 to $4,999 ,21 3. % $5,000 to $9,999 2881 8.2% $10,000 to $14,999 3,295,2 12. % $15,000 to $19,999 4,369 4 $20,000 to $24,999 586 16.7%1 . % $25,000 to $29,999 5,311, 15.1% $30,000 to $39,999 6,626 9% $40,000 to $49,999 21,464 5.7.0% $50,000 to $74,999 566 1.6%1 $75,000 or more 35, 1_28 100.0% Source: 1980 U.S. Census LAND USE AND AVAILABILITY Washington County's Comprehensive Plan presents information on the County's land use, development, and constraints on use. Land Use Trends - Washington County Changes Number of Acres 1970 to 1975 to 1970 to 1970 1980 1975 1980 1975 1980 1980 2,254 4,612 11,290 13,648 15,902 1924 316 Commercial 597 789 124588 473 4,139 404 184 IndustrialCmmeial 3,551 3,955 22 1,282 ublin 13,493 14,753 14,775 1,260 282 Public and Recreational 348 293 - 10,552 10,900 11,193 Water1 reets and Alleys 18,853 18,853 18,853 -2,945 -7,439 Vacant 212,435 207,941 204,996 -4,494 and Agricultural ---- ---'-- Total 270,647 27,6647 270,647 1980 Popula- Housing 1980 1980 Resi- tion/ Unit/ Popula- Housing Popula- Housing dential Resid. Resid. tion/ Unit/Aire tion Units Ate_ Acre- Acre Acre ___ Washington County 113,571 0.42 0. 14 37,182 15,902 7. 14 2.34 Source: Regionalita.(1���� Land Use Trends 1970-1980, 0,0141t -7- for Review and Discussion - Subject to Change d eas of th Prior to 1960, much the unincorporaterbeen spreadingnthroughoutagricultural the area. in nature, but since then, urbanization has The County Land Use Plan identifies thatlof Forest Lake of the tand1Stillwater the rand Service Area, the Freestanding Growth Centers the Rural Service Areas. The following chart compares the land use in Washington County with the Seven County Area. Land Use Comparison Seven County Metro Area Washingto n County Acres Percent Acres Percent 15,902 5.9% 182,864 9.5% Residential 789 0.3% 15,410 .8% ICommercial 4,139 1.5% 44,166 2.3% Streetsnreetrial 11,193 4. 1% 116,150 6.1% 148,749 7.8% Public 14,775 5.5% 96,916 5.1% Water 18,853 7.0% 1,305,912 6 Vacant or Agricultural 204,996 75.7% -- 8.4% 270,647 100.0% 1,910,167 100.0% Source: Regional Land Use Trends1970-1980, October, 1982 Metropolitan Council Since the 1980 Census was taken, permits for the construction of new housing units in Washington County have been issued as follows: Permit Authorized Construction of Residential Dwelling Units, Number of Permits Issued By Type as of October 1, 1986 1979 - 1986 Household Units Authorized 1986 Total 1979 1980 1981 1982—_ 1983 1984 1985 — — Single Family 911 518 524 384 817 981 1,003 1,629 6,867 Townhouses 208 359 108 446 9744 16 20 * * *28 346 5 Duplexes 32 18 114187 84 227 96 1,089 61 281 74 79 — — -- — Multi-Family — -- — TOTAL 1,212 1,176 — —820 603 1,172 1,081 1,250 1,753 9,067 — _ _ -- *Included in other balances Source: Metropolitan Council, Annual Reports of Permit Authorized Construction by County HOUSING TENURE AND OCCUPANCY The number The tenure patterns in Washington Cundecreasedchanged fromg8312%y from 80.2%•to 1980. The percentusingof ow increased by 14,81 housing a 68. 1% increase. The percenta of 7� of housing units increased by 14,810, �� �� �5, single-family detached housing units decreased eVlew and Discussion to 78.5% in 1980. -8- for R — Subject to Change • • Housing Units By Tenure, Occupancy Status and Number of Units in Structure, 1980 Total Percent Total Owner Renter Units of Total Occupied Occupied Occupied 27,978 26,408 1,570 Single Family, Detached 28,704 78.5% 9738 8 170 Attached 1, 103 3.0% 790 183 Duplex83 pee Family, 1, 138 3.1% 1,067 891 424 467 930 2.5% 301 2,837 ThreeF iv or fourunits 3,571 9.8% 3,13837 Mobilebe or more 1,120 3.1% 1 _ 1_ ,008 home �- --- Total 36,566 100.0% 35,088 29,332 5,756 Source: 1980 U.S. Census HOUSING MARKET VALUE The median value of owner-occupied housing ashThetsecondntable in is gthistsec- that of other counties in the metropolitan area tion shows median housing tonuCounty in oandrvalueslin the totheracounties i which are n the similar in size to Washing metropolitan area. Owner Occupant Housing by Value, 1980 Metro Area Washington County H Number Percent ousing Value, 1980 Number Percent 11. 1% 40, 2,322 9.7% 44,9161 .$39,000 or Lower 2,611 11.0 54,111 000 - 49,9992. 214,252 9 4 80,000 - 99,999 5 50,000 - 79,999 12,415 52. 1 ,222 2. 3,492 14.6 2,301 9.7 34,577 2.1 8 100,000 - 149,999 2.9 11,385 2.8 150,000 or higher 679 $ 66,900 100.0% $ 64,507 100.0% Median Value Source: 1980 U.S. Census Median Housing Values, 1980 Metro Counties Other Counties Dakota County $68'100 Stearns County $44,800 700 Lake County $33,900 Scott County $64'Ramsey County $60,500 Goodhue County $45,700 Hennepin County $65,700 St. Louis County $37,500 Anoka County $62,600 Chisago County $51,900 Carver County $64,500 Wright County $54,800 Source: 1980 U.S. Census PRELIMINARY DRAFT -9- for Review and Discussion - Subject to Change • ill HOUSING COST - OWNER-OCCUPIED UNITS stud the 1987 average house price According to a July 1, 1987 Citizen League y, for major cities and townships in asoington0County r vaStrieduffrom ra high of $121,564 for Grant Township to a lowto a low of 1987 property taxes varied from a high of $1,643 for Grant Township $509 for St. Paul Park. Assuming a 10% interest rate and a 30-year mortgage term, in 1987 the monthly interest and real estate taxes for an average price house in cost of oniCounty high of $1,204 per month for Grant Township, and Washington County varies from a $604 per month for St. Paul Park. Washington County Average House Price and Estimated 1987 Property Tax Average 1987 Esti- House mated Real Price Estate Tax City/Township $ 108,022 $ 1,500 Afton 73,463 712 Bayport 76,429 723 Cottage Grove 7 , 2 598 Forest Lake 121,564 1,643 Hugo Township 83,873 892 Hugo 108,077 1,253 Lake Elmo 84,698 1,041 Lakeville 96,005 1,237 Mahtomedi 80,658 704 New Scandia Township 8 , 58 704 Newport71,286 57 595 8 Oak Park Heights 7 , 86 5 8 Oakdale 4 64,058 509 St. Paul Park 81,535 842 Stillwater 96,116 1,133 Woodbury The preponderance of owner-occupied unitsng imn County contain two or • three bedrooms, with threebedrooms Units by Number of Bedrooms Housing Units Total Owner Number of Bedrooms Occupied Occupied 295 93 1 None 2,861 957 8,645 6,136 23 14,855 14,037 4 6,962 6,710 4 1,470 1,463 5 or more ---- 35,088 29,396 Total --"-- PRELIMINARY DRAFT Source: 1980 U.S. Census for Review and Discussion -lo- - Subject to Change O • ton County's owner-occupied households 15.9% pay over 25% of their in ehfog and 6% pay over 35% of income for housing. ncoomme for housing, Owner Occupied Units by Household Income in 1980 and Selected Monthly Costs as a Percentage of Income Monthly Costs as a Percentage of Income 0 - 19% 2�% 25 - 34% Household Income, 1980 ._-- Less 25 143 606 23 143 472 $5,001 than 9, 99 295 144 366 - $9,999 721 192 307 $10,000 - $14,999 473 1 1,090 2,030 3 $15,0007 - $19,999 $20,000 or more 12,344 2,811690 3 53 Source: 1980 U.S. Census HOUSING COSTS - RENTER OCCUPIED UNITS Based upon a sample of multifamily rental housing projects recently funded with t bond financingin the Washington County area, the average cost per tax-exemp $45,000 unit, including issuance cost, was determined to be approximately4 000 perf unit, excluding reserve funds. With inflation in mind, the cost perunit per future multifamily rental housing woinuld thebe relatedted ffering to lmemoranduml in the 5of these ,000 unit area. Projections contained recent projects also reflect an average annual cash flow bfoxpeecerceent beefoorre e per debt service and interest income from reserve funds, of app year, or $250 per month. $45,000 at 8.5% over a 30-year term is approximately $350 The debt service on month per unit, compared to per month, leaving a short-fall of $100 perequity contributionmpared cashn the flows. This short-fall is funded via the developers eq y projects sampled. Of Washington County's rental households 42.1% pay over 25% of their income for y all Renters usually housing, and 25.3% pay over 35% of their income for housing. l pay a much higher portion of their income than owners. The 1980 median gross rent was $265. Gross rents in other metro counties were $225 in Ramsey County, and $239 in Hennepin County. Renter-Occupied Housing Units by Household Income in 1980 and Gross Rent as Percentage of Income Not 0 - 19% 20%- 24% 25�y 35%+ Computed 67 26 112 574 29 112 574646 607 Less 0than 9,$5 99 26 78 18 $5,000 - $9,999 281 315 171 $10,000 - $14,999 200 1391 43 18 438 21821 35 $15,00020 or$19,9990 1,238 174 90 80 $20,000 more Source: 1980 U.S. Census -11- PRELIMINARY DRAFT for Review and Discussion — Subject to Change S S The range of monthly rents for occupied units has increased from 1970 to 1980. The following table provides a comparison of those rents. Comparison of Monthly Rents 1970-1980 Number of Units Rent per Month 1980 1970 365 1,105 0 - $149 695 1,039 $150 - $199 1,247 78 ,247 2 $200 - $299 4 $300 - $399 10 - $400 - $499 448 - $500 + 283 217 256 No cash rent Median Monthly Rent $ 265 $ 132 Source: 1970 and 1980 U.S. Census s rent The following information from the Metropolitan communitiescin thewCountyain July, 1983. ranges based on bedroom size in selected One Two Three Studio Bedroom Bedroom Bedroom Bayport $180 $210 $140 - $260 $150 - $365 $345 $290 $345 - $375 $400 - $455 $495 Bayport $500 WoodburYak - $290 $320 Oakdale Source: Metropolitan Council July, 1983 Average Rents The Guideireported published an apartment rent quarterly survey for February, 1987 which the following average rents for communities in Washington County. One Two Three Studio Bedroom Bedroom Bedroom Oakdale $359 $433 $635 $294 $ 31 $503 $623 Maplewood $350$333 $411 $458 $513 Forest Lake $401 $552 $631 $339 $552 $6 1 Woodbury Metropolitan Area $342 $418 8 -12- PRELIMINARY DRAFT for Review and Discussion — Subject to Change . • Most renter occupied units in Washington County contain one or two bedrooms, with two bedrooms being most common. Units by Number of Bedrooms Housing Units Total Renter Number of Bedrooms Occupied Occupied 295 202 1 None 2,861 1,904 8,645 2,509 23 14,855 818 4 6,962 252 4 1,470 71 5 or more Total 35,088 5,756 Source: 1980 U.S. Census SUBSIDIZED HOUSING But it does par- Wash s wn ticipate Coeadministereds not have tbyo the HWashingtoousing n County Housing and Redevelopmentee in programsAand independent agency, and other public agencies. Authority (HRA), The county has no public housing units. on The Section 8 Rental Assistance Program, which operates ineWashingtousCCounty, lds had 242 units contracted as of June that• timerty received assistance from this program Washington County currently has 582 subidizednits. T e MetropolitaandnmCouncil 's s publication, Consumer's Guide to HousingOptions available. Subsidized housing complexes are designed to assist low and moderate income per- sons. The St. Paul and Minneapolis Area Office of fhe esDep o Department f Housing and Urban Development (HUD) issues annual incomeguidelines Brae income based on family size. The following chart outlines HUD income guide- lines as of January 16, Family Low Income Moderate Income Median Income Size (50% of Median) (80% of Median) $21,300 $27,000 1 $1$15,40050 $24,300 $30,900 23 , $27,350 $34,700 4 $$19,3,8000 $30,400 $38,600 5 $20,850 $32,300 $41,700 6 $22,400 $34,200 $44,800 6 $47,900 7 $23,950 $36,100 $ , 00 51 8+ $25,500 $38,000 PRELIMINARY DRAFT Source: for Review and Discussion -13- — Subject to Change The assistance programs - Section 8, Rental Assistance, Rent Supplement and Section 236 have these common provisions: 1. Families, elderly, handicapped, disabled and displaced persone are eligible. Singles are also eligible for all programs with the exception of Section 8. Under Section 8, singles are admitted only under special conditions. 2. Included in income are items such as gross pay, social security, public assistance, unemployment benefits, alimony, child support payments, and interest and dividends on assets. 3. There are no dollar limits on assets; however, hdowever, the ermining elalue of assetsexceeding $5,000 is taken into consideration 4. There are deductions for minors under 18 years of age and for full-time stu- dents who are not the household head/spouse. 5. Anticipated medical and unusua incomel expenses, Verificationsuch willcbelrequiredcan be deducted from the total WASHINGTON COUNTY - EXISTING SECTION 8 HOUSING Total Subsi- dized Bedroom Family or Name of Development Phone # Units Mix Elderly Woodmount Townhouses (Sec. 8) 50 2,3,4 Family 8815-A So. 90th St. 459-6748 COTTAGE GROVE 55016 Forest Park II (236) 464-1207 60 1,2,3 Family/Elderly 1001 7th Avenue SW FOREST LAKE 55025 Kilkenny Court (Sec. 8) 92 1,2 Elderly 4th St. and 12th Avenue 464-7300 FOREST LAKE 55025 East Shore Place (Sec. 8) 61 1 Elderly 805 Wildwood Road 770-7964 MAHTOMEDI 55115 Diamond Estates (Sec. 8) 48 2,3 Elderly 840-860 Stillwater Blvd. 429-1499 MAHTOMEDI 55119 Red Rock Manor (202/Sec. 8) 459-2786 54 1,2 Elderly/HDCP 1420 10th Avenue NEWPORT 55055 -14- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • • WASHINGTON COUNTY Total Subsi- dized Bedroom Family or Units Mix Elderly Name of Development Phone # --- Gentry Place (Sec. 8) 48 3 Family 1343 Gentry Avenue N. 739-9490 OAKDALE 55119 Century North (236) 177 1 2 Family 4131 Geneva Avenue N. 777-6010 ' OAKDALE 55119 Waterford Townhomes (Sec. 8) 35 2,3 Family 15th St. and Hallmark 739-4269 OAKDALE 55119 Raymie Johnson Estates (Sec. 8) 439-0858 120 1,2,3 Family/Elderly 58th and Osman Avenue N. OAK PARK HEIGHTS 55082 Charter Oak (Sec. 8) 60 1,2,3 Family 1198 Curve Crest Blvd. 430-1031 STILLWATER 55082 Rivertown Commons (Sec. 8) 96 1,2 Elderly 2nd and Mulberry 439-9535 STILLWATER 55082 Victoria Villa (Sec. 8) 40 1,2 Family 65th and Oasis 439-3143 STILLWATER 55082 Birchwood (236) 51 1,2,3 Family 14830 62nd St. 439-7827 STILLWATER 55082 WASHINGTON COUNTY HOUSING NEED Washington County prepared and adopted a Comprehensive Plan in 1983. The Housing component points out that the county must and also assureeacbalanced price rangeut the uandr of new units needed for the county, assortment of housing. The Plan identifies approximately 35,160 units available in 1980, which is a 64.5% increase from 1970, and projects that 50,890 housing units will be needed by the year 1990, another 44.7% increase. -15- PRELIMINARY DRAFT for Review and Discussion Subject to Change 11111111111.11.0.1.11.1 S • ` The following table, from the Metropolitan Council's Housing Guide, indicates estimates of special housing needs in Washington County: Estimated Owners Total Need Renters 80% of Median Income 76 2 70 Family (2-4) 79626 2 1 76 35 Family (5+) 788 568 220 Elderly 50% of Median Income Family (2-4) 84 586 559 27 59 2 Famly (5+) 68468 498 170 Elderly The Metropolitan Council has identified the following number of low and moderate income households living in housing with selected conditions* in Washington County: Households By Percent of Median Income and Selected Conditions Per Cent of Median Households With Selected Conditions 62 Total Income under 62 over 824 388 1,212 50%8 0% 505 336 841 * Selected Conditions include: 1. Overcrowding - more than 1.01 persons per room; and/or 2. Lack complete plumbing; and/or f ome on . Spendbuiltre an 30%beforeo1939cand worth less and/or less 4 Housing ousi than $27,500 using g Source: 1980 U.S. Census There were 1,220 renter-occupied households in Washington tCat ountymastofrt of the were 80 Census that were built in 1939 or earlier. 5,174 owner-occupied households in units built in 1939 or earlier. -16- PRELIMINARY DRAFT for Review and Discussion — Subject to Change 0 • Housing Units by Age of Unit Housing Units Renter Year t Total Per Cent Total Owner Units of Total Occupied Occupied Occupied 1,567 1,361 206 1979 -3/80 1,963 5.4% 206 5,479 15.0% 5,232 4,552 1975 - 784 7,529 20.6% 7,357 5,833 1,524 19701960 - 694 7,936 21.7% 7,677 6,444 1,233 5 - 594,723 4, 199 524 1950 - 59 4,805 13.1%18.2% 369 2,203 6.0% 2,138 1,769 1940 - 496,394 5, 174 1,220 6,651 —_---- 1939 or earlier ---- 5,756 36,566 100.0% 35,088 29,332___ Source: 1980 U.S. Census .01 At the time of the 1980 Census, re andwere sixty�twouofythoseeweresrenter with lhouser more persons per room. One hundred holds, and 108 households had 1.51 or more persons per room. In 1980, there were 296 units in Washington County without complete plumbing, and 118 of those were rental units. -17- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • • MARKET ANALYSIS PRELIMINARY DRAFT for Review and Discussion — Subject to Change • • ' GEOGRAPHIC MARKET AREA - HOUSEHOLD DEMAND AND SUPPLY Of the many factors involved in residential locational decisions, proximity to employment is one of the most important. Locational decisions typically involve travel time to work, the availability of housing with specific characteristics and affordability. In the past, the pressure for residential development in Washington County has principally come as the result of housing demands created by St. Paul employers and major local employers. Much of the population increase forecast for Washington County is expected to come from immigration of residents from other metropolitan communities. Local residential rental demand will increase with the development of the community's infrastracture of community services, facilities, and entertainment opportunities. The employment and housing relationship will continue o develop pawith dhtheicon- tinuing diversification of the County's economy. Expected indestiny will effect the drive times and locational factors which currently exist, and will create the need for significant connector roadway construction to offset the expected increase in traffic loads. The primary geographic market area is Washington County. Washington County is made up of the following cities: Afton Lake Saint Croix Beach Oakdale Pine Springs Bayport Lakeland Lakeland Shores Saint Mary's Point Birchwood Saint Paul Park Cottage Grove Landfall Dellwood Mahtomedi StillwaterForest Lake Marine on Saint Croix WillernieWoodbury Hugo Newport Lake Elmo Oak Park Heights and the following townships: Grey Cloud Island Stillwater Baytown West Lakeland Denmark May Grant New Scandia Portions of the cities of Hastings and White Bear Lake are also in Washington County. For purposes of this study, Washington County is deemed to be the only source of household supply. However, additional household demand is expected to come from 7 ' the primary market as well as an identified secondary market area. ' On the basis of the abovementioned factors, the secondary geographic market has I been defined to include the following county, cities and townships: �1 1 South Saint Paul Center City Lindstrom Lino Lakes Stacy Centerville Taylor Falls Circle Pines Linwood Township West Saint Paul hisago Lake Township Maplewood Little Canada Chisago City White Bear Lake (partial) C White Bear Lake Township Columbus Township Mendota Mendota Heights Wyoming Hastings (partial) W oming Township Inver Grove Heights North Saint Paul y Lent Township Saint Paul PRELIMINARY DRAFT Lilydale Shafer Township for Review and Discussion Exhibit I shows a map of the primary and secondary marlcaf'to Change -18- • • EXHIBIT I MAP OF THE PRIMARY AND SECONDARY MARKET AREA -19- PRELIMINARY DRAFT for Review and Discussion — Subject to Change 0 • The population and household trend in Washington County and the secondary market ` is presented below. Population and Household Trends Population Trend Household Trend Historical Projected Projected % Growth 1970 1980 1990 2000 1987 1991 1987-1991 Afton 1,745 2,550 2,600 2,600 820 847 3. 29% Bayport 2,987 2,932 2,800 2,800 735 751 2. 18 Baytown Township 723 851 1,000 1,100 265 300 13.21 Birchwood 926 1,059 1,100 1,100 344 360 4.65 Cottage Grove 13,419 18,994 22,000 24,000 5,873 6,230 6.08 Dellwood 524 751 930 900 266 297 11.65 Denmark 923 1, 140 1,400 1,500 362 393 8.56 Forest Lake 3,207 4,596 5,700 6,100 2,195 2,330 6. 15 Forest Lake Township 2,990 5,331 6, 100 6,200 1,764 1,879 6.52 Grant Township 1,797 3,083 3,400 3,600 982 1,043 6.21 Grey Cloud Island 389 351 350 350 117 120 2_56 Hastings (part) 16 16 - - 2,669 3,771 4,300 4,500 1,201 1,288 7. 24 Hugo Lake Elmo 3,542 5,296 6,100 6,400 1,944 2,079 6.94 Lake St. Croix Beach 1,111 1,176 1,200 1,200 420 453 7.86 Lakeland 962 1,812 2,100 2,300 610 639 4.75 Lakeland Shores 0 72 171 210 220 88 10.00 Landfall 671 679 680 680 328 340 3.66 Mahtomedi 3,828 3,851 4,500 4,700 1,513 1,626 7.47 Marine on St. Croix 513 543 550 540 214 218 1.87 May Township 1,298 2,076 2,400 2,500 701 738 5.28 Newport 2,922 3,323 3,600 3,800 1,325 1,389 4.83 New Scandia Township 1,513 2,858 3,200 3,400 955 983 2.93 Oak Park Heights 1,256 2,591 3,800 3,900 1,178 1,243 5.52 Oakdale 7,818 12,123 15,000 17,000 5,003 5,668 13.29 Pine Springs 165 267 380 470 112 115 2.68 St. Mary's Point 319 348 360 410 123 130 5.69 St. Paul Park 5,587 4,864 4,800 4,900 1,578 1,597 1.20 Stillwater 10,208 12,290 13,200 13,300 4,464 5,008 12. 19 Stillwater Township 979 1,599 2,000 2,300 549 588 7. 10 West Lakeland Township 772 1,318 1,400 1,400 405 424 4_69 White Bear Lake (part) 23 10 - Willernie 697 654 720 690 258 271 5.04 Woodbury 6,184 10,297 19,000 23,000 5,246 6,266 19.44 Washington County Total 82,755 113,571 136,880 147,860 41,930 45,701 8.99% Secondary Market 509,207 495,252 462,581 475,860 181,141 188,168 3.88% Source: 1970 and 1980 U.S. Census Data, Metropolitan Council: Preliminary Forecasts, 1990 and 2000, CACI Market Analysis Division Projection -20- PRELIMINARY DRAFT for Review and Discussion - Subject to Change III III INCOME QUALIFIED MARKET The focus of this market study is low and moderate income multifamily and elderly rental housing. Accordingly, the potential household market must be qualified by household income levels. For purposes of this study, low and moderate income households are defined as those with a household income not more than 110% of the median household income for Washington County. At987, 110stit%d of the average household income for Washington County was $42,480, as by the CACI Market Analysis Division. Applying a linear transformation computation to the information from the CACI Market Analysis Division indicates that 60.9% of Washington County households had a hoysrincome than $ 2usehold income of les than $42,480. O as f and s3 % of the SMaket Area households had a ho Secondary Ma Washington County Households By Age and Income Level, 1987 Household Income in Households By Age of Head of Household Thousands Under 25 25-34 35-44 45-64 65 + Total Under $15 641 766 591 921 2,325 5,244 $15 to $24.9 760 1,211 699 1,060 1,412 5, 142 $25 to $34.9 718 2,222 1,961 1,852 655 7,408 $35 to $49.9 300 3,481 3,927 3,654 450 11,812 $50 to $74.9 45 1,369 3,000 3,638 269 8,321 $75 and over 29 295 1,069 1,809 158 3,360 Total households 2,493 9,344 11,247 12,934 5,269 41,287 Median Income Per Household $ 22,967 $ 37,038 $ 44,062 $ 45,813 $ 17,192 $ 38,619 Washington County Percent Distribution by Age and Income Level, 1987 Household Income in Percent By Age of Head of Household Thousands Under 25 25-34 35-44 45-64 65 + Total Under $15 25.7% 8.2% 5.3% 7. 1% 44.1% 12.7%$15 to $24.9 30.5 13.0 6.2 8,2 26.8 12.5 $25 to $34.9 28.8 23.8 17.4 14.3 12.4 17.9 $35 to $49.9 12.0 37.3 34.9 28.3 8.5289 . $50 to $74.9 1.8 14.7 26.7 28. 1 5.1 8.2 $75 and over 1.2 3.0 9.5 14.0 3. 1 1 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% -21- PRELIMINARY DRAFT for Review and Discussion - Subject to Change • • Washington County Households by Age and Income Level, 1992 Household Income in Households By Age of Head of Household Thousands Under 25 25-34 35-44 45-64 65 + Total Under $15 557 726 555 962 2,472 5,272 $15 to $24.9 610 1,052 596 1,011 1,547 4,816 $25 to $34.9 685 2,007 1,446 1,786 925 6,849 $35 to $49.9 431 3,973 3,697 4, 127 655 12,883 $50 to $74.9 91 2,129 2,967 4,474 347 10,008 $75 and over 45 862 1,850 3,568 296 6,621 Total households 2,419 10,749 11, 111 15,928 6,242 46,449 Median Income Per Household $ 25,620 $ 41,001 $ 47,004 $ 50,436 $ 19,195 $ 42,321 Washington County Percent Distribution by Age and Income Level, 1992 Household Income in Percent By Age of Head of Household Thousands Under 25 25-34 35-44 45-64 65 + Total Under $15 23.0% 6.8% 5.0% 6.0% 39.6% 11.4% $15 to $24.9 25.2 9.8 5.4 6.3 24.8 10.4 $25 to $34.9 28.3 18.7 13.0 11.2 14.8 14.7 $35 to $49.9 17.8 37.0 33.3 25.9 10.5 27.7 $50 to $74.9 3.8 19.8 26.7 28.1 5.6 21.5 $75 and over 1.9 7.9 16.6 22.5 4.7 14.3 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: CACI Market Analysis Division Projection Secondary Market Households by Age and Income Level, 1987 Household Income Households by Age of Head of Household Total In Thousands Under 25 25 - 34 35 - 44 45 - 64 65+ Under $15 6,170 8,878 4,573 6,605 21,825 48,051 $15 to $24.9 4,589 10,534 5,628 6,492 10,120 37,363 $25 to $34.9 2, 191 12,553 8, 179 8,520 4,419 35,862 $35 to $49.9 761 12,607 12,001 12,149 3,144 40,662 $50 to $74.9 150 4,676 7,171 10,606 1,554 24, 157 $75 and over 47 831 2,528 5,216 1,007 9,629 Total households 13,908 50,079 40,080 49,588 42,069 195,724 Median Income Per Household $ 16,708 $ 29,483 $ 37 ,075 $ 38,923 N A1R'Y57 DRAFT , PRE , -22- for Review and Discussion - Subject to Change . • • Secondary Market Percent Distribution by Age and Income Level, 1987 Household Income Percent by Age of Head of Household In Thousands Under 25 25 - 34 35 - 44 45 - 64 65+ Total Under $15 44.4% 17.7% 11.4% 13.3% 51.9% 24.6% $15 to $24.9 33.0 21.0 14.0 13.1 24. 1 19. 1 $25 to $34.9 15.8 25. 1 20.4 17.2 10.5 18.3 $35 to $49.9 5.5 25. 2 29.9 24.5 7.5 20.8 $50 to $74.9 1. 1 9.3 17.9 21.4 3.7 12.3 3 $75 and over .2 1.7 6.4 10.5 2.3 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Secondary Market Households by Age and Income Level, 1992 Household Income Percent by Age of Head of Household In Thousands Under 25 25 - 34 35 - 44 45 - 64 65+ Total Under $15 5,256 7,028 5,681 6,516 20,536 45,017 $15 to $24.9 3,954 8,080 6,546 6,254 10,408 35,242 $25 to $34.9 2,222 9,904 8,687 7,827 4,956 33,596 $35 to $49.9 991 12,061 13,560 12,320 3,344 42,276 $50 to $74.9 199 5,708 9, 153 11,745 1,803 28,608 $75 and over 65 1,678 4,160 7,461 1,313 14,677 Total 12,687 44,459 47,787 52,123 42,360 199,416 Median Income Per Household $ 17,750 $ 32,191 $ 38,296 $ 41,653 $ 15,619 $ 30,789 Secondary Market Percent Distribution by Age and Income Level, 1992 Household Income Percent by Age of Head of Household In Thousands Under 25 25 - 34 35 - 44 45 - 64 65+ Total Under $15 41.4% 15.8% 11.9% 12.5% 48.5% 22.6% $15 to $24.9 31.2 18.2 13.7 12.0 24.6 17.7 $25 to $34.9 17.5 22.3 18.2 15.0 11.7 16.8 $35 to $49.9 7.8 27.1 28.4 23.6 7.9 21.2 $50 to $74.9 1.6 12.8 19.2 22.5 4.3 14.3 $75 and over 0.5 3.8 8.6 14.4 3.0 7.4 Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: CACI Market Analysis Division Projection. -23- PRELIMINARY DRAFT for Review and Discussion - Subject to Change • 410 TARGET HOUSEHOLD MARKET Prospective tenants can be expected to compare Washington County rental housing to rental housing available in the surrounding geographic area. Another aspect of comparison will involve purchase or rent decisions. Currently, favorable mortgage interest rates will influence this comparison for prospective residents anticipating tenure of two or more years. These households may make such com- parisons to townhouses and condominiums in the general area. To a lesser extent, these comparisons may be made to smaller, modest-prices single family homes. The desire for a more customized housing unit, shorter tenure, and limited maintenance responsibilities will be a factor in single family home purchase comparisons by prospective rental housing residents. Rental housing, as a shelter alternative, is a preferred choice for many resi- dents and an economic requirement for others. Typical residents of these dwellings include the following: - The elderly, and others who prefer the conveniences and services (i.e. , snow removal and lawn care) provided by rental housing; - Young people and others who lack the financial resources to purchase housing; - People who expect to reside in a community for a short or indeterminate period of time; - People who travel extensively; - Mature families ("empty-nesters") whose living space requirements are significantly reduced and whose lifestyles are enhanced by simplified living arrangements; and - Widows/widowers and other single people, many of whom prefer the financial flexibility of rental housing. TENURE PATTERNS To aid in defining the households which represent the potential renter market in Washington County and the Secondary Market Area, tenure patterns were obtained from the 1980 Census. The tenure patterns in Washington County changed slightly from 1970 to 1980. The percent of owner-occupied housing decreased from 85.0% to 83.6%. The number of housing units increased by 14,417, a 63.3% increase. The percentage of single family detached housing units decrease from 85.6% in 1970 to 82.5% in 1980. The table below provides a breakdown of housing units for the County. -24 PRELIMINARY DRAFT for Review and Discussion — Subject to Change I. • Washington County Housing Unit Tenure Pattern, 1980 Total Occupied Owner Occupied Renter Occupied Units Percent Units Percent Units Percent Single Family 28,951 82.5% 27,198 81.5% 1,753 30.5% Duplex 1,067 3.0% 401 3.1% 666 11.6% Multi-Family 4,029 11.5% 725 12.3% 3,304 57 .57 4% Mobile Home 1,041 3.0% 1,008 3.1% 33 Total 35,088 100.0% 29,332 100.0% 5,756 100.0% 83.6% 16.4% Percent of Total Units 100.0%The tenure rate of 11.5% for multifamily housing is comparable to the percentage of housing permits issued for multifamily housing from 1979 to 1986 of 12%, indicating that current demand for housing reflects past tenure patterns. Secondary Market Area Housing Tenure Pattern, 1980 Total Occupied Owner Occupied Renter Occupied Units Percent Units Percent Units Percent Single Family 103,807 59.7% 97,703 87.6% 6,104 9.8% Duplex 14,680 8.5% 5,659 5.0% 9,021 14.5%Multi-Family 53,170 30.6% 6,25575.5% 5.6% 46,9151 . % 0 Mobile Home 2,112 1.2% 1,976 1.8% Total 173,769 100.0% 111,593 100.0% 62,1 76 100.0% Percent of Total Units 100.0% 64.2% 35.8% Source: 1980 U.S. Census MIGRATION PATTERNS Minnesota has grown by 3.3 percent since 1980, to an estimated population of 4,214,013 at July, 1987. Growth in the Seven County Metropolitan Area has been higher, at almost 6% since 1980, in spite of an estimated growth rate of only 1% since 1980 for Ramsey County. The primary reason for Ramsey County's low growth rate is the limited amount of undeveloped land remaining in the County. The greatest growth in the Seven County Metropolitan Area has ocurred in Dakota County, which has increased in population by an estimated 34,000 since 1980 to more than 228,000 residents in 1987. Most of this growth hataken nrplacplace lin the western part of the County in the cities of Eagan, AppleValley, Lakeville and Mendota Heights. -25- PRELIMINARY DRAFT for Review and Discussion - Subject to Change • • During this same period of time, Washington County grew by approximately 11%. The high growth rate for the Seven County Metropolitan Area, as compared to the State as a whole, since 1980 is due to births exceeding deaths as well as the migration to the Metropolitan area of population from economically depressed agricultural counties and the Iron Range. Migration data obtained from the State Demographer's office reflect annual migration patterns of Washington County for the period 1980 through 1985 as pre- sented on Exhibit II. This migration data has been assembled from Federal income tax returns reflecting changes in residence. As such, the migration data on Exhibit II reflects federal income tax returns filed, deemed to roughly approximate households. During the period 1980 through 1985 Washington County households increased from 35,081 to 40,299, an increase of 5,218 households. During this same period, the net migration in to Washington County was approximately 2,195 households. The primary source of migration in to Washington County has been from Ramsey County. Currently, the primary migration from the County has been out of State. Annual Net Migration, Washington County 1980-1985 Rate Per 1,000 Period Population 1980 - 1981 (1.9) 1981 - 1982 8.8 1982 - 1983 15.6 1983 - 1984 10.5 1984 - 1985 9.4 Total Rate 1980 - 1985 44.5 Net Migrants - Population 1980 - 1985 5,057 Net Migrants - Households 1980 - 1985 (Estimated) 2,195 Source: State Demographer's Office, Annual Net Migration Rates by Minnesota County: 1980-1985. -26- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • • . .. --1ON co w ..0en ete -.I- I", enO .O .o un co es.) es) O r O a) AD O en es) en n C enen 00 -s N p N N Q• ad CO .� `� ,..4 .—I .--4 ..i CO O CO a) b ND in NI0 NO ,.', a. (NI r In a)1 0) C OO CV NO P. 00 CV NO CA en O• CA u1 r ela) al a) CVO• N ON in en CV CV CA CV en N en CA CA G O d.) 4-1 en CV 0 Z Ca O a 0 .. .. ^ in en oo0 c) k ra AN .--- coo a ... in a enen N. 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I) MI fa U 14 CO a) O 0 0A-) H L+ 4-) la 1-11d la la )�d 1+ 1.4 a) 3 0 00 00 00 00 00 00 00 00 00 00 .-1 ►ud O cO '� •Z c0 Z Z c0 Z Z c0 Z Z 1 '.d •.I W ION CA �' PRELA1111NARV DRAFT for Review and Discussion — Subject to Change e s MULTIFAMILY HOUSING4OJECTS PLANNED OR UNDER CONSTR ION A portion of the market demand for multifamily housing in Washington County and the Secondary Market Area will be satisfied by housing projects currently planned or under construction in Washington County. To identify such projects, the respective cities and townships were contacted in a telephone survey by the Washington County Housing and Redevelopment Authority in June, 1987. As a result of this survey, the following multifamily housing projects were iden- tified as being under construction or planned by Washington County. Multifamily Housing Projects Planned or Under Construction - June, 1987 Number of City Description Units Afton Multifamily housing not permitted -0- -0- -0 None Bayport None planned _ Bayport Townshipplanned _0_ Birchwood None planned Cottage Grove Oakwood Heights - three bedroom units 96 planned for 86-87 Cottage Grove Country View Towers - project under 183 consideration Dellwood Multifamily housing not permitted -0- Denmark Township None planned -0- Forest Lake Apartment complex under construction 15 planned for 86-87 _ Noneplanned -0 Forest Lake Township -0- Grey Township None planned _ Noneplanned -0- Hugo Cloud Township -0- Lake None planned -0- LakelandLake Elmo None planned _ None planned -0- Lakeland Lakeland Shores None planned _ Noneplanned -0- Landfall -0- LakeSt. Croix Beach -0- Mahtomedi None planned _ None planned -0- Marine Marine on St. Croix None planned _ -0- May Township None planned -0 Newport Currently has a moratorium on multi- -0_-0 Nonelanned family housing _ New Scandia TownshipP Oakdale None planned 6 Oak Park Heights Pond View, 8-plexes, planned for 86-87 16 Oak Park Heights Oakridge Place, planned for 86-87 88 Oak Park Heights Sunview 2 and 3, under consideration _8-0 None 5 Pine Springs None planned _ St. Mary's Pointplanned78 St. Paul Park Park Junior High - Senior Apartments Stillwater Brick Pond - Apartments, planned for 86-87 40 -0 Stillwater Township None planned _0_ West Lakeland Township None planned Willernie Not zoned for multifamily housing -0- Woodbury Valley Crest Apartments, planned for 86-87 PRELIMINARY DRA? Total for Review and Disc ussicc9 _28_ — Subject to Change • • VACANCY DATA • Vacancy rates at a specific point in time provide a snap-shot of the market, and may provide useful information on the market's response to general aspects of the available units. Vacancy data for the Washington County rental market and the Metropolitan area is available for specific points in time, and can be obtained from several sources. One of the most consistent sources of data is compiled by the Metropolitan Council. The data is based on inactive status of electrical service to residences. The turnover of tenants is indicated by a change in electric service, this information is compiled on a quarterly basis. Multi-Family Rental Housing Vacancy and Turnover - 1986 March June September December86 Ma19rch 1986 1986 1986 Washington County Vacancy 3.6% 4.3% 4.6% 5. 1% Turnover 12. 1% % 18.1% 15.9% 12.8% Metropolitan Area Vacancy 5.0% % 7.3% 6.3% 6.3% Turnover 12.9% % 20.9% 16.1% 14.0% Source: Data - Log Social and Demographic Reports, Metropolitan Council. The sample vacancy data for Washington County represents approximately 90% of existing multi-family rental housing units. The Metropolitan area data repre- sents approximately 80% of existing multi-family rental housing units. The vacancy data indicates a relatively low vacancy rate, with active resident turnover and an apparent demand for additional rental housing. PROJECTED NET MARKET DEMAND A projected net market demand for low and moderate income multifamily and elderly rental housing for the period 1987 through 1992 can be estimated from the demand and supply information which has been assembled in this study. The detail steps in the computation of the projected net housing market demand are presented on Exhibit III. All information on Exhibit III is segregated by elderly, over 65, and the general market, under 65. The first step in the pro- cess has been to estimate the projected increase in households for Wstington County and the Secondary Market Area. Washington County is projected increase by 5,162 households through 1992, and the Secondary Market Area is pro- jected to increase by 3,692. The focus of the market study is low and moderate income households. According the household income data in the income qualified market section of this 8re0 port has been utilized to identify the percentages of households earning $42,4 less in Washington County and the Secondary Market Area (110% of the Washington County median household income at 1987). These percentages are then used on Exhibit III to estimate the projected increase in households through 1992 that will be low and moderate income households. PRELIMINARY DRAFT -29- for Review and Discussion — Subject to Change • • The next step in the process of estimating the projected net market is to pro- ject the portion of income quthefl . hincrease that inlhouseholdsll be lthattwilldbe rental housing. To estimate projected inclined toward rental housing, the historic tenure tppatterns sopjresented inathein Tenure Pattern section of this report were applied households. As a final step in estimating the projected market households, households with selected conditions were adddasdenTheled datanon the householdsowithuselectedlcon- Housing Needs section of thisreport. ditions for the Secondary Market was assembled by the Metropolitan Council from 1980 Census data information. As such, this data included only Secondary cities and townships within the Metropolitan Area. The projected market households are then reduced by multifamily housing projects planned or under construction in Washington County as identified in that respec- tive section of this report. rental for The projected net market for low tedato be income 1ID160uunitsmfor Washington the period 1987 through 1992 is thus estima County and 28,015 units for the Secondary Market Area. -30- PRELIMINARY DRAFT for Review and Discussion — Subject to Change • • • r N d� •--- .--1 N r V1 d i co ,0 Cr) N Cr. -1 •C .-I04 N 11 t+1 s•O O Z C •0 ca -.1. r� O, tr, M `0 N — N N N y H — ..1 0 0 x cC •,� B. e+1 - s ch r d 1` O, ,0 ,0 0) 0 M N d ,O co) 0 N v --� ,0 c-- Z 1. aJ 14 N N ON CO CO CO 0) a) - -t 1a 0 cC Z D, � .-1 d� 00 ^-i CO O CO 00 1- In 4 c0 %0 0 ,0 -1- • N v (NI 0 N Z N •0 O 1-1a 0 en en 40 N .-1 CO C% U .0 tf1 1!1 0) 0 .-i .-a O O ^ O � 0 O, CO N dam° - v - .•-i V1 O, `0 CO - • .• 1 CO N O 00 '� co 0 r1 �t N .0 Z w C X aO.1 .0 r1 VI � c+1 .-1 N '••' . .a ..1 0) O .t O cn ,0 W .L-1 0 0 co co) H c 4a CO A x 0 n N as CO 1 n 9, 0 0) rca J x N O, er)N. s0 v N CO -4 N L 0 G .0 1 Wa) .Ca �,t0 C ,0 1T O co N c ,O ,0 Cr, 0 •C -4 c0 N L ,O N N O, • C ,O D, c.1 0 d O N ,O CO .� U 00 0 4a D 8 1 HW ,.a CC r- V 0 o 0 ..c O •4-4 1a 2 aO.1 .1- Cr% O ^ N 0' c 1 0 o0 cC CO C O. 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E+ .0 1-1 U P+ 1 1 1 1 CV co CO 0 0 0 ^ H N x PRI LIMIt RY DICA for Review and Discussion — Subject to Change • i .` CAPTURE RATIO MATRIX - Net Rental Demand and Market Share • A capture ratio matrix has been prepared as an aid in evaluating the potential P . The market demand for low and moderate income multifamieratiosooflthe projected matrix provides the household demand at various capture net market for Washington County 80%and Washington Secondary CountyMarket and 20%Area Seconda9y2Market. As an example, for a capture ratio Area, the captured Projected Net Market households would be 6,531 (1, 160 x 80%) + (28,015 x 20%). Primary Rental Market Demand (Households) 0% 20% 40% 60% 80% 100% Secondary 0% -0- 232 464 696 928 1,160 Rental 20% 5,603 5,835 6,067 6,299 6,531 6,763 Market 40% 11,206 11,438 11,670 11,902 12,134 12,366 Demand 60% 16,809 17,041 17,273 17,505 17,737 17,969 (Households) 80% 22,412 22,644 22,876 23,108 23,340 23,572 100% 28,015 28,247 28,479 28,711 28,943 29,175 The capture ratio ultimately achieved will be a product of many factors, including: - Competition from other shelter options - Interest rates - Employment - Marketing programs and effectiveness -32- PRELIMINARY DRAFT for Review and Discussion - Subject to Change 6. ur Aft • . • ,` SUMMARY The trend of population and household growth indicates a continuing and growing demand for rental housing in the primary market area. This significant growth can be attributed to demographic trends toward smaller household size resulting from later marriages, more divorces and smaller families. The strong economic base of the market area has also contributed to this growth, as well as younger families migrating from the city to the suburbs, which are perceived to offer newer, more affordable housing in quieter settings. The aging of the existing population of the market area also creates a demand for multifamily rental housing, perceived by many seniors as desirable in terms of cost, social considerations and avoiding the responsibility for home main- tenance. The projected net market for low and moderate income multifamily rental housing in Washington County is estimated at 1,160 units for the period 1987 through 1992. At a rental unit cost of $50,000, this represents a potential market demand of $58,000,000. Similarly, the rental housing demand during this period for the Secondary Market Ar 's estimated at 28,015, units, or a potential market demand o $1,400,75°,000. '1., -ss- PRELIMINARY DRAFT for Review and Discussion — Subject to Change 1111111111111111.1111111. i • 43 el, CITY COUNCIL CITY OF OAK PARK HEIGHTS RESOLUTION NO. _ -- RESOLUTION AUTHORIZING THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY TO UNDERTAKE A PROGRAM FOR THE FINANCING OF A HOUSING DEVELOPMENT PROJECT IN THE CITY OF OAK PARK HNGGHFOR TPERSONSIDAND�AMILIESIOF RENTAL HOUSI LOW AND MODERATE INCOME. WH EREAS, Minnesota Statutes, Sections 469.001 TO Oe469.047 (theo"Aci") establishes the powers and duties of housing and in the State of Minnesota; and pursuant to Section 469.001 (4) of the Act, one of the purposes o of The Washington County Housing WH , and Redevelopment Authority (the "Authority") is to remedy the shortage of usingerprise for lowwanddmonotderate income residents in situations in wh private without government participation or subsidies; and Chapter 475 (the "Special Law") WHEREAS, Laws of Minnesota 1974, ro eat is undertaken in provides that, if any housing or redevelopment project is within the Washington County by the Authority, such township, thei locationthnhe of boundaries of any incorporated village, city such project shall be approved by the governing body of such village, city or township; and WHEREAS, to assist in the alle �ityfis author9 zed oundee r the Act for low and moderate income residents, the Autho to undertake one or more Housing Development Projects (the "Projects"), as defined in Section 469.002, subd. 15 of the Act as any work or undertaking to provide housing for persons ouilf oderatedingn income rand ththeir i ts; families, which may Include planning of and acquisition of real property; construction, reconstruction, alteration and q repair of new or existing buildings appurtenances, streets,streets, sewers, water other real or personal property for administrative,rr service, utilities, site preparation, landscaping, community health, recreation or welfare, or other purposes; and & Pullen WHEREAS, the Authority contracted with McGladrey, Hendrickson to prepare a market analysis of multi-family and elderly rental housing su ly, demand and projected needs within ashinggton0Countyr(thei" o"County") including the projected ected needs in the City "Municipality"); and WHEREAS, based upon such market analysis the Authority has determined • . that it is necessary for the Authority to undertake the Projects in order to alleviate current and projected shortages of decent, safe and sanitary housing for persons of low and moderate income and their families. In order to implement and undertake the Projects, the Authority has, by the passage of Resolution No. 87-31, on October 27, 1987 adopted a Housing Development Project Program (the "Program"), describing the policies for meeting the housing needs of the County; and WHEREAS, the Program includes among the multi-family rental housing Projects to be developed in order to carry out the policies of the Program, and Project or Projects located in the Municipality, as described in Exhibit A attached hereto; and WHEREAS, the Authority has requested that the governing body of the Municipality approve the locations of the Projects pursuant to the Special Law and the financing of such Project or Projects by the Authority pursuant to the Program: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oak Park Heights that: 1. The Municipality hereby approves the locations of the Project or Projects located within the Municipality, as described in Exhibit A. 2. The Municipality hereby approves the Program of the Authority to provide financing for the Project or Projects and authorizes the Authority to undertake the Program and develop the Project or Projects within the Municipality. 3. Nothing in this resolution or in the Program of the Authority shall authorize the expenditure of any funds of the Municipality. Any revenue bonds issued by the Authority to finance the Project or Projects shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Municipality, nor shall the Municipality be subject to any liability thereon. The holder or holders from time to time of the revenue bonds of the Authority shall have the right to compel any exercise of the taxing power of the Municipality to pay the outstanding principal on such revenue Bonds or the interest thereon or to enforce payment thereof against any property of the Municipality. Approved and adopted this day of 1988. Mayor Attest: EXHIBIT A Projects located in the City of Oak Park Heights to be financed by Washington County Housing and Redevelopment Authority Governmental Housing Revenue Bonds Series 1988 Number Financed PrQtcri- t nc-ation of nits mound Oak Park Heights South of Highway 36 144 $8,750,000 (No formal project name yet) at 60th Street North • DRAFT MUNICIPAL SERVICE CHARGE AGREEMENT by and between THE CITY OF OAK PARK HEIGHTS, MINNESOTA and THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY • s MUNICIPAL SERVICE CHARGE AGREEMENT THIS AGREEMENT, made on or as of the day of 1988, by and between the City of Oak Park Heights (the "City"), a statutory city of the ta Minnesota, "Authoritye)Wasainpublic County body Housing and RedevelopmentAuthority corporate and politic of the State of Minnesota. WITNESSETH: WHEREAS, and se oe withinutherity is corporatetboundaries of to athect Citysbyeasresoluteioniof its powers 19 , the City Council of the City adopted on pursuant to Minnesota Statutes, Section 469.005; and WHEREAS, the Authority has undertaken a housing project (the "Project"), pursuant to Minnesota Statutes, Sections 469.016 to 469.026 on certain property located within the City (described on Exhibit A to this Agreement) : and WHEREAS, pursuant to Minnesota Statutes, Section 469.040, the Authority shall pay a service charge for the services and facilities furnished to the Project; and WHEREAS, the City and the Authority have agreed that under certain circumstances the service charge paid by the Authority shall exceed the statutory amount of five percent (5%) of the aggregate annual shelter rentals of the Project; NOW, THEREFORE,o i consideration eachfof the thempremises herebyand covenanttand obligations Parties agree with the other as follows: 1 . Statement Filed With Assessor. On or before May 1 of each year after the Project has become wholly or partially occupied, the Authority shall file with the Washington County Assessor a statement of the aggregate shelter rentals of the Project collected during the preceding calendar. For purposes of this Agreement, "shelter rental" means the total rentals of the Project, exclusive of any charge forutilities d special services such as heat, water, electricity, gas, sewagedisposal , or garbage removal . 2. Base Service Charge. Five percent (5%) of the aggregate shelter rentals of the Project shall be charged to the Authority as a base service ). The charge (the from"Base the Authority ina "the same manneBraas thev shall collection of taxes collected and assessments. 3. Supplemental Service Charge. The Authority agrees to pay a Supplemental Service Charge (the "Supplemental Service Charge") in addition to the Base Service Charge as provided ine nt this t shSection r ne3. The Supplemental Service Charge shall be payable from 1 • • of the Project remaining after deducting ( i ) the Base Service Charge; ( if ) the debt service and operating expenses of the Project; ( iii ) an eat Authority administrative fee equal to five percent (5%) of g project rents (after the payments described in ( i ) and ( ii ) above); and ( iv) any other contingent or deferred expense of the Authority in connection with the Project. In its statement to the Washington County Assessor, as set forth in paragraph 1 above, the Authority shall set forth the amount of any Supplemental collected in the same manner as the collection Chgic . Tslofe Chargervice taxes shallll b and assessments. 4. Maximum Service Charge. Pursuant to Minnesota Statutes, Section 469.04 total of the se ervice and m, bdivision 3,Service Chargee a shall not exceedthesamount whichewoul any d Supplemental be payable in taxes were the Project not exempt. 5. Books and Records. The books and records of the Authority in regard to the Project shall be open to inspection by the Washington n Co C u my Assessor and the office of the IN WITNESS WHEREOF, the City has caused this Agreement to be duly executedhe ren int its duly and executedeinlf itsand nametand behalfity on oras as ofused this the date Agreement to bey first above written. CITY OF OAK PARK HEIGHTS By Its Mayor And By Its City Administrator/Treasurer THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY By Its Chair And By Its Executive Director 2 S S . % EXHIBIT A The Protect is located on property legally described as follows: • • • MUNICIPAL SERVICE CHARGE AGREEMENT THIS AGREEMENT, made on or as of the day of 1988, by and between the City of Cottage Grove (the "City"), a statutory city of the State of Minnesota, and the Washington County Housing and Redevelopment Authority ( the "Authority"), a public body corporate and politic of the State of Minnesota. WITNESSETH: WHEREAS, the Authority is authorized to transact business and exercise its powers within the corporate boundaries of the City by a resolution of the City Council adopted on , 19 , pursuant to Minnesota Statutes, Section 469.005; and WHEREAS, the Authority has undertaken a housing project (the "Project"), pursuant to Minnesota Statutes, Sections 469.016 and 469.026 on certain property located within the City (described on Exhibit A to this Agreement); and WHEREAS, pursuant to Minnesota Statutes, Sections 469.040, the Authority shall pay a service charge for the services and facilities furnished to the Project; and WHEREAS, the City and the Authority have agreed that under certain circumstances the service charge paid by the Authority shall exceed the statutory amount of five percent (5%) of the aggregate annual shelter rentals of the Project; NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Statement Filed With Assessor. On or before May 1 of each year after the project has become wholly or partially occupied, the Authority shall file with the Washington County Assessor a statement of the aggregate shelter rentals of the Project collected during the preceding calendar. For purposes of this Agreement, "shelter rental" means the total rentals of the Project, exclusive of any charge for utilities and special services such as heat, water, electricity, gas, sewage disposal, or garbage removal. 2. Base Service Charge. Five percent (5%) of the aggregate shelter rentals of the Project shall be charged to the Authority as a base service charge (the "Base Service Charge"). The Base Service Charge shall be collected from the Authority in the same manner as the collection of taxes and assessments. 3. Supplemental Service Charge. The Authority agrees to pay a Supplemental Service Charge (the "Supplemental Service Charge") in addition to the Base Service Charge as provided in this Section 3. A Supplemental Service charge equal to two percent (2.00%) of aggregate shelter rentals shall be paid in 1997, 1998 and 1999. The Supplemental Service Charge payable to 2000 and each year thereafter shall equal five percent (5.00%) of aggregate shelter rentals. In its statement to the Washington County Assessor, as set forth in paragraph 1 above, the Authority shall set forth the amount of any Supplemental Service Charge in each year. The Supplemental Service Charge shall be collected in the same manner as the collection of taxes and assessments. • • • 4. Minimum Total Services Charges. Notwithstanding the provisions of Section 2 and 3 above, the total of the annual Base Service Charges and the Supplemental Service Charges for Lots 15_and 16_F3lock 1 and Outlot A, all in Oakwood Heigbls. Second Addition, payable hereunder shall be at least equal to the annual amounts which the City certifies to the Authority are necessary to pay debt service and related charges on the City's $525,000 General Obligation Tax Increment Bonds, dated December 1, 1985, less all amounts received by or payable to the City for payment of such debt service from tax increments arising from properties other than the Project in Tax Increment District 1-1. 5. Maximum Service Charge. Pursuant to Minnesota Statutes, Section 469.040, subdivision 3, the total of the Base Service Charge and any Supplemental Service Charge shall not exceed the amount which would be payable in taxes were the Project not exempt. 6. Special Service Charge. The Authority shall also pay to the City a special service charge (the "Special Service Charge") in addition to the Base Service Charge. The_ total Special Service Charge relates to the following four parcels: Lot 15. Block 1, Lot 16, Block 1Outlot A and Outlot B, all in Oakwood Heights Second Addition. The Special Service Charge against each of the parcels consists of two parts. which shall hereinafter be referred to as Part A and Part B. Lot 15, Block 1 Part A $9,308.74 Part B $2,718.06 Lot 16, Block 1 Part A $9,308.74 Part B $2,718.06 Outlot A Part A $36,321.88 Part B $10,613.55 Outlot- B Part A $54,492.03 Part B $15,911.11 Part A of the Special Service Charge against each of the parcels is the principal sum due, which principal sum shall bear interest at the rate of 9.7% per annum according to the City resolution 87-167_adopting said Special Service Charge. Part B of the Special Service Charge against each of the parcels is the principal sum due, which principal sum shall bear interest at the rate of 7.5% per annum according to the City resolution 87-168 adopting said Special Service Charge. • • • , • • �p pn The Quthori shall pay the Special Service Char �n ual installments in 1989 and 1990, together with accrued interest. Authority_may prepay the Special Service Charge at any time in accordance The .__ _.-_ -- hapter 429. with theovisions of Minnesota Statutes, C gard to 7. Books and Records. The books and records of hCounty Assessor Authority in eand the the Project shall be open to inspection by the Washington office of the Finance Director of the City. IN WITNESS WHEREOF, the City has caused this Agreement to be duly executed in its name and behalf and the Authority has caused this gr ement to be duly executed in its name and behalf on or as of the datefirst tten. CITY OF COTTAGE GROVE By Its Mayor And By Its City Clerk Administrator • THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY By Its Chair A nd By Its Executive Director IV 004111 • Washington County Housing and Redevelopment Authority 6 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-093 May 4, 1988 Ms. LaVonne Wilson/City Administrator/Treasurer City of Oak Park Heights 14168 - 57th Street North Oak Park Heights, Minnesota 55082 Dear Lavonne: Enclosed are ten copies each ofinformation that we discussed at our meeting on Thursday, April 21 st. 1 . Market Feasibility Study tfgtreet Proposed Oak ParkRental Heights�pment at Osgood Avenue and 60h Minnesota (Maxfield Research Group, Inc. ) 2. Multi-Family and Elderly Rental (McGladrey,MHendricksonarket sg�s, Washington County, Minnesota Pullen) 3. Resolution Asking for City Approval to Use the HRA's Essential Function Bonds in the City of Oak Park Heights 4. Basic Municipal Service Charge Agreement by and between the Washington County Housing ousi gand Redevelopment Authority and the City of Oak Park9h If you need any further informmatiion for cdistributionto the Council , please do not hesitate to give Sincerely, ..c);\51„_a_1733,1 Sam Griffith Director, Private Ventures /m , Enclosures f F. *' ,Poqrt� « �----------'� ----' -C�-�--------- -'- '--------°�---��--- --- - ----�- ---- --- ---------__-w�°~e_`_��_ _______--------_---__-_-__ ww • rs • ;f 0 2 _minim .iii; 2, - - A4..0.4.....• . , (e..4.zt-___________ MI 0440411.4..4 /A7,--6. tv. _________ ________ ____ _ 4tif "--3 111 II , 0 YY.2../ ---------- w . L- -- --------- ,, imAl 1 • _ Washington County ton Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 March 30, 1988 Mayor Frank Sommerfeldt City of Oak Park Heights 14168 - 57th Street North Stillwater, Minnesota 55082 Dear Mayor Sommerfeldt: This letter is to update you on the progress of the first-time homebuyer funds program that the sbehalfnofotheyCHtysofgOakd Redevelopment Authority obtained on Park Heights. As you know, the city ' s initial allocation was $10 million . In the first nine months of the program there were 15 newbhimes eing constructed utilizing $1 . 2 million in mortgage funds, 36 new residents to the community . The average mortgage was $75, 233 and average been ehold committedincome orwas are$ in, 17 .processAdditional mortgage funds have time. Because of the demand for first-time homebuyer funds in Oak Park Heights and the HRA' s commitment to assist the community in achieving its housing cities outside Washington County 9g° t obtain thatdwerenal funds from other unable to utilize their funds. I would also like to take this opportunity to notify you that the HRA has recently sold an additional $20 million in mortgage revenue bonds for first-time homebuyers. Ten million dollars is a county-wide allocation and funds will be available in late June; the rate will be 8-3/4 percent. We anticipate approximately $2 - 2-1 /2 million will be utilized in Oak Park Heights. Is; 7 t' tp)r1) • 411 Mayor Frank Sommerfeldt March 30, 1988 Page Two We have been actively pursuing legislation that would enable the HRA tobtainl s this fall . If w are this summer regar successful , $10 we hope t to million program on behalf of your city. If you have any questions, please do not hesitate to contact me. Sincerely, Dennis L. Balyeat Executive Director /m c : LaVonne Wilson/Administrator, Treasurer IV Sally Evert/County Commissioner Robert Lafayette/HRA Board of Commissioners I..' n prd �+ # IF ti## �y •WertIS and in, fi iq'e-` militio g current de s d • ; ilgetnent of the •A over i b8Pe.the the nnO `e4` ° Cinitak 10 U� of C to the �= m' a' �'IuV0coa mktT g : `. r uni the res An ,,, eCtS tOrn f • ',� ; 8 e Path: ,. Win:halo bill Passed , ' -now an ; 1 �agate could ,n who their be nerve sued f . Opeople e ems. in 19774 keens, t a , thetl . r is giverhonaway. apply s°cial 'leak new biz d poi . b to open,*snag** under the effect �,a ff.* `;' . .,..yam >"` / . Y G,1 , ' OP `` f� , `'fiches li H.iv y That default has is ' .'Mgttlir occurred N me �that certain rnoit- aimed In the gape.dated the 18th1day of Oc0*sr'.t985, ge e,dared % r4falli* . 444+"' ''' byt;Ronald C. single as wiled by � ,ke r 8 rnaepctotermitwnsrar. .a a�rpora• tpner. , . !far record in the office Morwest ; fa and for the as mor!} a ih d = She of it nneeot•.oon dss the corms, ' and t '� i�+IN6,;at"fa orcloac WasPlnxlprr►.iryd . and No.,4tNe88 25ah d k e fif p p4i fK Yid 4 :. ..u 410<:>:::<::>: �: gib i. --.107 Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 March 10, 1988 Ms. LaVonne Wilson, Administrator/Treasurer City of Oak Park Heights 14168 - 57th Street North Stillwater, Minnesota 55082 Dear Ms. Wilson : Enclosed are eight copies of a resolution to be passed by the city council of Oak Park Heights concerning the proposed multi-family rental project being considered in your community. Please note that this resolution does not give any final project approvals, rather it gives the Washington County Housing and Redevelopment Authority the authority to finance this type of project in your community and the city also approved the location of the project. Either . Dennis Balyeat or I will be present at the council meeting on Monday, March 14th at 7: 15 p. m. to discuss the HRA' s Multi-Family Housing Program to the council . Thank you. If you have any questions, please call . Sincerely, SO-144. .19(7_, Sam Griffith Director, Private Ventures Enclosures 3/P il):;,‘ . i.j, f;;// / �Ijko � w • • CERTIFICATION OF MINUTES Municipality: City of Oak Park Heights Governing Body: City Council Meeting: A meeting of the City Council of the City of Oak Park Heights held on the day of , 1988, at 7:00 p.m. in the City Council Chambers at 14168 - 57th Street North, Oak Park Heights, Minnesota. Members Present: Members Absent: Documents: A copy of an ordinance adopted by the City Council of the City of Oak Park Heights at said meeting. Certification: 1, , of the City of Oak Park Heights do hereby certify the following: 0 Attached hereto is a true and correct copy of an ordinance on file and of record in the offices of the City of Oak Park Heights, which resolution was adopted by the City Council , at the meeting referred to above. Said meeting was a regular meeting of the City Council , was open to the public, and was held at the time and place at which meetings of the City Council are regularly held. Member moved the adoption of the attached resolution. The motion was seconded by Member . A vote being taken on the motion, the following voted in favor of the ordinance: and the following voted against the ordinance: Where said ordinance was declared duly passed and adopted. The attached ordinance is in full force and effect and no action has been taken by the City Council of the City of Oak Park Heights which would in any way alter or amend the attached ordinance. Witness my hand officially as the of the City of Oak Park Heights, Minnesota, this day of , 1988. . • • CITY COUNCIL CITY OF OAK PARK HEIGHTS RESOLUTION NO. RESOLUTION AUTHORIZING THE WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY TO UNDERTAKE A PROGRAM FOR THE FINANCING OF A HOUSING DEVELOPMENT PROJECT IN THE CITY OF OAK PARK HEIGHTS TO PROVIDE MULTI-FAMILY RENTAL HOUSING FOR PERSONS AND FAMILIES OF LOW AND MODERATE INCOME. WHEREAS, Minnesota Statutes, Sections 469.001 TO 469.047 (the "Act") establishes the powers and duties of housing and redevelopment authorities in the State of Minnesota; and WHEREAS, pursuant to Section 469.001 (4) of the Act, one of the purposes of The Washington County Housing and Redevelopment Authority (the "Authority") is to remedy the shortage of housing for low and moderate income residents in situations in which private enterprise would not act without government participation or subsidies; and WHEREAS, Laws of Minnesota 1974, Chapter 475 (the "Special Law") provides that, if any housing or redevelopment project is undertaken in Washington County by the Authority, and such project is within the boundaries of any incorporated village, city or township, the location of such project shall be approved by the governing body of such village, city or township;. and WHEREAS, to assist in the alleviation of a housing shortage for low and moderate income residents, the Authority is authorized under the Act to undertake one or more Housing Development Projects (the "Projects"), as defined in Section 469.002, subd. 15, of the Act as any work or undertaking to provide housing for persons of moderate income and their families, which may include planning of building and improvements; acquisition of real property; construction, reconstruction, alteration and repair of new or existing buildings and all equipment, facilities and other real or personal property for appurtenances, streets, sewers, water service, utilities, site preparation, landscaping, administrative, community health, recreation or welfare, or other purposes; and WHEREAS, the Authority contracted with McGladrey, Hendrickson & Pullen to prepare a market analysis of multi-family and elderly rental housing supply, demand and projected needs within Washington County (the "County") including the projected needs in the City of Oak Park Heights (the "Municipality"); and WHEREAS, based upon such market analysis the Authority has determined • • that it Is necessary for the Authority to undertake the Projects in order to alleviate current and projected shortages of decent, safe and sanitary housing for persons of low and moderate income and their families. In order to implement and undertake the Projects, the Authority has, by the passage of Resolution No. 87-31, on October 27, 1987 adopted a Housing Development Project Program (the "Program"), describing the policies for meeting the housing needs of the County; and WHEREAS, the Program includes among the multi-family rental housing Projects to be developed in order to carry out the policies of the Program, and Project or Projects located in the Municipality, as described in Exhibit A attached hereto; and WHEREAS, the Authority has requested that the governing body of the Municipality approve the locations of the Projects pursuant to the Special Law and the financing of such Project or Projects by the Authority pursuant to the Program: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oak Park Heights that: 1. The Municipality hereby approves the locations of the Project or Projects located within the Municipality, as described in Exhibit A. 2. The Municipality hereby approves the Program of the Authority to provide financing for the Project or Projects and authorizes the Authority to undertake the Program and develop the Project or Projects within the Municipality. 3. Nothing in this resolution or in the Program of the Authority shall authorize the expenditure of any funds of the Municipality. Any revenue bonds issued by the Authority to finance the Project or Projects shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the Municipality, nor shall the Municipality be subject to any liability thereon. The holder or holders from time to time of the revenue bonds of the Authority shall have the right to compel any exercise of the taxing power of the Municipality to pay the outstanding principal on such revenue Bonds or the interest thereon or to enforce payment thereof against any property of the Municipality. Approved and adopted this day of , 1988. Mayor Attest: • • EXHIBIT A Projects located in the City of Oak Park Heights to be financed by Washington County Housing and Redevelopment Authority Governmental Housing Revenue Bonds Series 1988 Number,, Project Location of Units Amount Oak Park Heights South of Highway 36 144 $8,750,000 (No formal project name yet) at 60th Street North • • ,r-r 1 rh ,. Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 MEMORANDUM TO ALL INTERESTED PARTIES FROM: Sam Griffith/Director, Private Ventures DATE: March 14, 1988 SUBJECT: Washington County Housing and Redevelopment Authority Multi-Family Housing Bond Program This memorandum provides an explanation of the HRA's new multi-family bond program. The purpose of this memorandum is to describe the structure of the program, the financing of the program and general information of interest to the cities in which these projects would be located. Structure of the Progr jn The HRA will be issuing a pool of essential function bonds to be used for the acquisition of existing multi-family apartment projects and the construction of new multi-family projects for the purpose of maintaining and providing affordable housing opportunities for moderate income families in Washington County. There are numerous reasons why the HRA has developed this program. Since the adoption of the new Tax Reform Act, there has been little multi-family housing development in the county. In addition, as one of the fastest growing counties in Minnesota, the county is experiencing a tremendous growth in population; therefore, vacancy rates throughout the county are very low. Consequently, current owners are able to raise rents and still keep their buildings fully occupied. As rents continue to trend upwards, current moderate income tenants are being forced to find more affordable housing, oftentimes outside the county. Another goal of this housing program is to provide safe and affordable housing to lower income tenants. The HRA, as manager of the Section 8 Program in the county, is finding that because of the rising rents and lack of new construction, many Section 8 tenants are unable to find affordable housing in the county. Several cities in the county have concerns about multi-family projects where maintenance is being deferred or where there are management problems. The cities have discussed the possibility of the HRA taking over such facilities to see that necessary repairs are made and management problems corrected. • Other communities would like to see certain types of housing developed which the private sector has not been able to provide. Therefore, the HRA's multi-family housing program looks to address all of these issues through the acquisition or construction of projects in communities that desire these projects. Structure of the Bond Program The HRA will issue $115 million of essential function bonds to acquire and construct multi-family projects throughout the county. There will be a five year period during which the HRA will be able to finance specific projects. The bonds will be 40-year, fixed rate obligations, secured by a direct pay "Triple-A" rated letter of credit. The bond proceeds will be invested in an investment contract until such time as they are used to make project loans. The HRA anticipates the rate on the bonds to be approximately eight percent. As these bonds are essential function, public purpose bonds, the HRA must be the owner of these facilities. However, the HRA has little experience in owing and operating apartment projects and will enter into contracts for "project coordinators" who are experienced entities, who will be responsible for assisting the HRA on acquiring existing projects, constructing new projects, and marketing and management of the day-to-day operations of these projects. The project coordinators will also share with the HRA with the risks associated with owning these projects, including providing the credit enhancement necessary for each projects. For their services, the coordinators will be paid a fee negotiated at project closings. /Project Financing Each project to be acquired or constructed would be done during a five year origination period. The "Triple-A" letter of credit provider will not take any real estate risk and therefore requires that before any bond proceeds can be used, there must be an acceptable credit enhancement in place to take that direct real estate risk. The credit enhancement, in conjuunction with the bond funds, will allow the HRA to provide itself with 100 percent financing for these projects. Acceptable credit enhancement for these projects would include FHA coinsurance or a letter of credit from acceptable financial institutions or a collateralized letter of credit. Another form would be market rate mortgages. How the Program Works The HRA will identify potential existing or new construction projects and • enter into negotiations with a project coordinator to assist the HRA in developing these projects. At the same time, the HRA will work with local financial institutions to develop the necessary credit enhancement. At the time an acceptable and financable project is developed, the HRA will work with each community to see that the project meets the needs and requirements of that community. The ability of the HRA to provide affordable housing opportunities for moderate income residents of the county will be developed using the HRA's multi-family housing program. There are several ways that the HRA can make each project affordable. First of all , the HRA, because of the bond financing, will be able to provide itself with 100 percent financing. Second, the HRA, as a government entity, would be exempt from sales tax for the purchase of materials in either new construction or rehabilitation projects. Third, the HRA, as a non-profit entity, does not have the investment requirement return needs of the private sector. Any excess revenues generated by a project will be used to either keep rents at an affordable level or use them on other projects to write-down project costs or rents. Fourth, as a government agency, the HRA is exempt from real estate taxes. However, the HRA is required to make a contributing payment in lieu of tax to the taxing entities. This payment in lieu of taxes is a minimum of five percent of the aggregate shelter rents in each facility. This requirement allows the project to support more debt and therefore, lower rents. Each community, however, will be assured that as each project begins to support itself, excess revenues from the project will be used to increase the payment in lieu of tax made. Timing The HRA multi-family housing bond program will be closing within the next several weeks. The HRA is making presentations to the various governing bodies in the county to make them aware of the program. The objective of this program is to develop or maintain affordable housing opportunities in each community until such tine as the private sector begins to meet this particular need. /m VOTO, TAUTGES, RE\TH & CO., LTD. 1111 CERTIFIED PUBLIC ACCOUNTANTS / Birch Lake Professional Building •1310 E. Hwy. 96 •White Bear Lake, MN 55110• Phone 426-3263 ROBERT J.VOTO,CPA ROBERT G.TAUTGES,CPA JAMES S.REDPATH,CPA October 13, 1987 To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: PROPOSED JOINT VENTURE WITH HRA Tonight you will be given a presentation by the Washington County Housing and Redevelopment Authority (HRA) relating to a proposed single-family housing development within your City. This proposal was originally presented to you at a workshop meeting on September 9, 1987. At that meeting, you requested that I review and evaluate the HRA proposal to the City. I have been in communication with Mr. Balyeat of the HRA and have received (and reviewed) two sets of "additional information". See the attached copies of his letters dated September 29, 1987 and October 7, 1987. I must report to you that the review and evaluation you requested is not possible because the HRA is not (at this time) making any specific proposal. Rather, the HRA is asking if the City would like to participate in a joint venture with the HRA as a co-developer of the proposed single-family housing development. Accordingly, I will limit my review and evaluation to the joint venture/co- developer topic. First of all, the City of Oak Park Heights, Minnesota has not heretofore par- ticipated (as a developer) in any real estate development within the City. Rather, the City has acted as the representative of its citizens to monitor and regulate developers and development within the City to assure the safety and well-being of such citizens -- both current and future citizens. There is an inherent conflict between development/developers and the process of monitoring/regulating such. This inherent conflict is the element which makes the monitoring/regulating process work. Under the normal process, the developer is responsible for his plans, specifications, etc. The City Council (in turn) is responsible to review such plans, specifications, etc. to insure that they meet City requirements. • MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS 410/ • To the Honorable Mayor and Members of the City Council October 13, 1987 Page 2 The HRA is asking the City Council to be both developer and monitor of the proposed development (i.e. , co-developer). Prior to agreeing to such a proposal, the City Council should consider the following questions: • Is it really possible for the City to be both developer and monitor/ regulator? • Can the City/City Council perform two conflicting functions simulta- neously? • If the City/City Council becomes a co-developer, can it properly regulate such development? After considering the above questions, the City Council may come to the conclusion that it could possibly be put into a position of conflict by becoming a co-developer. Such conflicts should be avoided. If the City does decide to participate as a co-developer, other major questions must be asked. Generally, what level of participation would the City be willing to incur? The proposal from the HRA is generally open-ended. They are asking the City to use all the various powers and abilities it has (as a City) to assist in the development. Such a broad proposal enhances the potential conflict questions addressed above. I will be in attendance at the Council Meeting of October 13, 1987 to answer any questions you may have. Respectfully submitted, VOTO, TAUTGES, REDPATH & CO. , LTD. Robert J. Voto, CPA Attachments: HRA Letter Dated September 29, 1987 HRA Letter Dated October 7, 1987 cc: City Attorney A1: �• • 1. w riii .. ::::,i0:ii" : lief .: , .:0 lil >'''' Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 September 29, 1987 Mr. Robert Voto Voto, Tautges, Redpath & Company, Ltd. 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Oak Park Heights Housing Development Dear Mr. Voto: Pursuant to the Oak Park Heights City Council Meeting of Wednesday, September 9th, I am forwarding documents pertinent to the development of a similar project in the City of St. Paul Park. I have enclosed the Purchase Agreement and the Development Agreement between the City and the HRA regarding the Stevens Ridge project. In addition, I have enclosed a printout detailing the payback to the City and a lender from lots sold. Per your request, we have clarified the various columns. Also enclosed are loan documents between Town & Country Bank and the Housing and Redevelopment Authority. . The concept is as follows : 1 . The HRA identifies a site acceptable to the City. 2. The City and the HRA enter into a development agreement outlining both party ' s responsibilities. This development agreement is contingent ,upon the selection of a builder acceptable to the City./ 3. The HRA secures land acquisition financing, contingent upon a builder acceptable to all parties. The City provides assurances to the lender regarding the project. 4. The City determines the number of lots that must be sold initially to an individual builder to provide them with a comfort level necessary to issue bonds for public improvements � 4 ten\ 411 Mr. Robert Voto September 29, 1987 Page Two 5. The City authorizes all design engineering. Engineering costs are recovered by the City at time of assessments. Rfe,f The key to a Joint development with the City is the development ✓ .. �' agreement. The City would include in that development agreement all paybacks, requirements, number of units that have to be pre-sold, etc. If you have any questions as you review this, please do not hesitate to call me. I look forward to hearing from you. Si cerely, c;.?52.4;00 Dennis L . Balyeat Executive Director /m Enclosures 306111 itgroAli • • Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 October 7, 1987 Mr. Robert Voto Voto, Tautges, Redpath & Company, Ltd. Birch Lake Professional Building 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Proposed Oak Park Heights Single-Family Housing Development Dear Mr. Voto: This letter is sent to respond to the concerns and questions you expressed in your letter of September 30, 1987. Your first comment related to the development agreement. The HRA provided you with a development agreement currently in place between the City of St. Paul Park and the Washington County Housing and Redevelopment Authority. The development agreement is the guide that is used to outline the responsibilities of each party in a cooperative development of single-family housing. The development agreement between the City of St. Paul Park and the Washington County HRA lays out specifically the responsibilities of the HRA and the City. I think it is important to understand the concept behind proposing this project to the City. There is a public purpose involved here -- to create housing opportunities for moderate income persons through a Joint effort of the HRA and the City of Oak Park Heights, whereby each party uses the , resources and powers available to them to reduce costs to achieve thig common goal . ,At this preliminary stage, we are attempting to define the general _Parameters under which a .joint development of single-family housing can take place. Once the City and the HRA reach a consensus on the purpose and scope of this project, a specific development agreement would be negotiated wherein each party would share the risks and rewards of the development,. To make this development affordable and to meet the public purpose, an agreement would be reached whereby the City may forego certain development procedures in return for participating in the proceeds from lot sales. This development process would not be used to circumvent the normal City process of review and approvals. It would be a way of reaching certaiif understandings at the beginning of the process whereby, because of the . • Mr. Robert Voto October 7, 1987 Page Two cooperative effort involved, may allow for some alternatives that may be used to create a project which meets the original public purpose. We would like to respond to your questions in the order that you asked them. Your first question related to the St. Paul Park development agreement in regard to a tax-increment district and whether or not there were expectations that Oak Park Heights would have a tax-increment district. Part of the preliminary development of this project would be to determine whether or not tax-increment or local improvement bonds would be necessary to provide any of the public utilities necessary to develop the site. The project has to be developed to the next stage before a final determination of that need can be made. However, an indication by the City that they would consider using tax-increment or local improvement bonds would help define the costs of development. The second question relates to the land acquisition and what involvement there would be by the City of Oak Park Heights. In our letter of September 29th, point number three stated that the HRA would be responsible for acquiring the land.Your third question related to the acceptability of a site and a builder to the City. There were also some questions related to the City approval process and City costs. The HRA is proposing this project in the hope that the site to be developed is one that the City wishes to have developed and that the City would concur with the HRA on the builder prior to the point of the constructing of homes. The builder must have the track record and the financial backing to carry out the construction of homes. The second part of the question relates to City procedures. It is the intent of the HRA to follow City procedures; however, the development agreement could be structured so that there could be some mutually agreeable shortcuts that could be undertaken. All necessary approvals, permits, etc. would still be necessary, but, because of the Joint effort, the City would have a larger say in the design and the actual development of the project -- greater than if it were privately developed. In regard to the questions of expenses related to this process, one of the items in a development agreement would be how expenses would be paid and at what point in time. If you look at the development agreement with the City of St. Paul Park, the City did forego collecting some of those fees and reimbursements until such time as lots were sold from the project. At the time of closing, the City then collected both its costs and also additional funds which the City could use as they so chose. i Mr. Robert Voto October 7, 1987 Page Three Question number four relates to the difference between the development agreement and existing City policies and procedures. The response to this is very similar to the previous question. The HRA has every intent to follow normal City procedures; however, because this would be a cooperative effort and because some agreements could be reached in the development agreement concerning this single-family housing, there might be ways to accelerate the process to help keep the cost down. thus making it more attractive to prospective moderate income buyers. Your fifth question concerned the concept of a "comfort level " and the participation of the City in this development. The HRA does not intend for the City to have any "lower comfort level ." Existing City procedures in the development agreement would allow the City to set the criteria for proceeding with this project. Having a development agreement and doing a joint development with the HRA allows the City to get the kind of development it would like to see and at the same time, meet the public purpose of this development. The next question related to the City's involvement in design engineering. The concept behind-this is, because the HRA and the City are working • together, the HRA would like to use the city engineer, the city attorney, city staff. etc. to develop the necessary information, procedures and construction criteria that the City wishes to see on this project. Because this is a joint effort, rather-than having all expenses-paid up-front, part-of the risk and reward-concept is that the City would front some of these costs in exchange for participating in the proceeds from the sale of lots and/or bonds. Your next question related to paybacks to the City and lender from lots sold. The schedule that you were provided outlines the disbursements of the proceeds from each lot sale which identifies the following: the amount that must be paid to the bank to release a lot from the mortgage, the amount to be paid to the City to reimburse them for agreed -upon costs. The amount being paid to the City to pay off the assessments against-the lots will give you an idea of our arrangement with the City of St. Paul Park whereby the City collects for its expenses at the time of lot sale. Our structure in the City of St. Paul Park was necessary because -of the- need to do a local- improvement bond to put in the public utilities on the site. Also, this particular structure was done so that the City would issue the minimum size bond necessary for the shortest-period of time necessary. Because the City could recover a large amount of its costs from the sale of each lot, they were able to use these funds to reduce the bond needs and also allowed them to front-load-the bonds, thereby reducing capitalized interests costs and reducing project expenses which normally • Mr. Robert Voto October 7, 1987 Page Four would be passed along to the home buyer. This enabled the HRA to sell lots at an affordable rate to moderate income persons. To give you a better understanding, in each lot that is sold in our Stevens Ridge Development in St. Paul Park, the City receives $3,250.00 for the cost of the public utilities which were placed in this development. These are funds which the City can use for the costs of the bonds that were issued and also allows the City to invest those proceeds until such time as the bond principal and interest is due. The City has also designated $1,000 from the sale of each lot to reimburse the City for the cost of a new city well, which does not directly serve the new development but is adjacent to the site, and ensures the City that an additional needed well will be paid for. The City is also taking $1,000 from the sale of each lot to put into a specific development fund that the City will use for economic development activities city-wide. In St. Paul Park, the HRA is also paying from lot sales a $3,000 assessment for each lot. This allows the City to recapture its assessment funds up-front from lot sales, as opposed to waiting a period of years to collect those funds. In conclusion, a development agreement with the City of Oak Park Heights is dependent on the City and the HRA reaching some form of consensus as to the type of project the City would like to see developed. Until that has been discussed further with the City and the City has the opportunity to determine which risks it is willing to ,jointly share with the HRA, it is Premature to begin the drafting of any kind of development agreement. The HRA wishes to continue to pursue this matter and would be more than happy to provide additional information to the City concerning this single-family development. I hope that this letter provides you with some of the additional information you need to respond to questions that the City might have as to this development. If you have any further questions, please do not hesitate to call or write. Sincerely, Dennis L. Balyeat Executive Director /m c: Lyle J. Eckberg/City Attorney, Oak Park Heights ,,„„,„, „:„,,s,„„„„„„„„„„„„„,,,,..„.„„ „ „„„„„,„„„„.„,„. Washington County Housing and Redevelopment Authority 455 Broadway Avenue, St. Paul Park, Minnesota 55071 612-458-0936 October 7, 1987 Mr. Robert Voto Voto, Tautges, Redpath & Company, Ltd. Birch Lake Professional Building 1310 East Highway 96 White Bear Lake, Minnesota 55110 Re: Proposed Oak Park Heights Single-Family Housing Development Dear Mr. Voto: This letter is sent to respond to the concerns and questions you expressed in your letter of September 30, 1987. Your first comment related to the development agreement. The HRA provided you with a development agreement currently in place between the City of St. Paul Park and the Washington County Housing and Redevelopment Authority. The development agreement is the guide that is used to outline the responsibilities of each party in a cooperative development of single-family housing. The development agreement between the City of St. Paul Park and the Washington County HRA lays out specifically the responsibilities of the HRA and the City. I think it is important to understand the concept behind proposing this project to the City. There is a public purpose involved here -- to create housing opportunities for moderate income persons through a Joint effort of the HRA and the City of Oak Park Heights, whereby each party uses the resources and powers available to them to reduce costs to achieve this common goal . At this preliminary stage, we are attempting to define the general parameters under which a Joint development of single-family housing can take place. Once the City and the HRA reach a consensus on the purpose and scope of this project, a specific development agreement would be negotiated wherein each party would share the risks and rewards of the development. To make this development affordable and to meet the public purpose, an agreement would be reached whereby the City may forego certain development procedures in return for participating in the proceeds from lot sales. This development process would not be used to circumvent the normal City process of review and approvals. It would be a way of reaching certain understandings at the beginning of the process whereby, because of the rj / 1 Mr. Robert Voto October 7, 1987 Page Two cooperative effort involved, may allow for some alternatives that may be used to create a project which meets the original public purpose. We would like to respond to your questions in the order that you asked them. Your first question related to the St. Paul Park development agreement in regard to a tax-increment district and whether or not there were expectations that Oak Park Heights would have a tax-increment district. Part of the preliminary development of this project would be to determine whether or not tax-increment or local improvement bonds would be necessary to provide any of the public utilities necessary to develop the site. The project has to be developed to the next stage before a final determination of that need can be made. However, an indication by the City that they would consider using tax-increment or local improvement bonds would help define the costs of development. The second question relates to the land acquisition and what involvement there would be by the City of Oak Park Heights. In our letter of September 29th, point number three stated that the HRA would be responsible for acquiring the land. Your third question related to the acceptability of a site and a builder to the City. There were also some questions related to the City approval process and City costs. The HRA is proposing this project in the hope that the site to be developed is one that the City wishes to have developed and that the City would concur with the HRA on the builder prior to the point of the constructing of homes. The builder must have the track record and the financial backing to carry out the construction of homes. The second part of the question relates to City procedures. It is the intent of the HRA to follow City procedures; however, the development agreement could be structured so that there could be some mutually agreeable shortcuts that could be undertaken. All necessary approvals, permits, etc. would still be necessary, but, because of the Joint effort, the City would have a larger say in the design and the actual development of the project -- greater than if it were privately developed. In regard to the questions of expenses related to this process, one of the items in a development agreement would be how expenses would be paid and at what point in time. If you look at the development agreement with the City of St. Paul Park, the City did forego collecting some of those fees and reimbursements until such time as lots were sold from the project. At the time of closing, the City then collected both its costs and also additional funds which the City could use as they so chose. • Mr. Robert Voto October 7, 1987 Page Three Question number -four-relates• to the difference-between the development agreement and existing City policies and procedures. The response to this is very similar to the previous question. The HRA has every intent to follow normal City procedures; however, because this would be a cooperative effort and because some agreements could be reached in the development agreement concerning this single-family housing, there might be ways to accelerate the process to help keep the cost down, thus making it more attractive to prospective moderate income buyers. Your fifth question concerned the concept of a "comfort level " and the participation of the City in this development. The HRA does not intend for the City to have any "lower comfort level ." Existing City procedures in the development agreement would allow the City to set the criteria for -proceeding with this project. Having a development agreement and doing a joint development with the HRA allows the City to get the kind of- development- it would like to see and at the same time, meet the public purpose of this development. The next question related to the City's involvement in design engineering. The concept behind-this is, because the HRA and the City are working together,- the HRA would like to use the city engineer, the city attorney, city -staff, etc. to develop the necessary information, procedures and construction criteria-that the City wishes-to see on this project. Because-this is a Joint effort, rather than having all expenses-paid up-front, part-of -the risk and reward-concept is that the City would front some of these costs in-exchange for participating in the proceeds from the sale of lots and/or bonds. Your next question related to-paybacks to the City and lender from- lots sold. The schedule that you were provided outlines the disbursements of the proceeds from each lot sale which identifies the following: the amount that-must be paid to the bank to release a lot from the mortgage, the amount to be paid to the City to reimburse them for -agreed -upon costs. The amount being paid to the-City to pay off the assessments against-the lots will give you an idea of our arrangement with the City of St. Paul Park whereby the City collects for- its expenses-at the time of lot sale. Our structure in the City of St. Paul Park was necessary because of the. need to do a local- improvement bond to put in-the public utilities on the site. Also, this particular structure was done so that the City would issue the minimum size bond necessary -for the shortest period of time necessary. Because the City could recover a large amount of its costs from the sale of each lot, they -were able to use these funds to reduce-the bond needs and also allowed them to front-load -the bonds, thereby reducing capitalized interests costs and reducing project expenses which normally • Mr. Robert Voto October 7, 1987 Page Four would be passed along to the home buyer. This enabled the HRA to sell lots at an affordable rate to moderate income persons. To give you a better understanding, in each lot that is sold in our Stevens Ridge Development in St. Paul Park, the City receives $3,250.00 for the cost of the public utilities which were placed in this development. These are funds which the City can use for the costs of the bonds that were issued and also allows the City to invest those proceeds until such time as the bond principal and interest is due. The City has also designated $1,000 from the sale of each lot to reimburse the City for the cost of a new city well, which does not directly serve the new development but is adjacent to the site, and ensures the City that an additional needed well will be paid for. The City is also taking $1,000 from the sale of each lot to put into a specific development fund that the City will use for economic development activities city-wide. In St. Paul Park, the HRA is also paying from lot sales a $3,000 assessment for each lot. This allows the City to recapture its assessment funds up-front from lot sales, as opposed to waiting a period of years to collect those funds. In conclusion, a development agreement with the City of Oak Park Heights is dependent on the City and the HRA reaching some form of consensus as to the type of project the City would like to see developed. Until that has been discussed further with the City and the City has the opportunity to determine which risks it is willing to jointly share with the HRA, it is premature to begin the drafting of any kind of development agreement. The HRA wishes to continue to pursue this matter and would be more than happy to provide additional information to the City concerning this single-family development. I hope that this letter provides you with some of the additional information you need to respond to questions that the City might have as to this development. If you have any further questions, please do not hesitate to call or write. Sincerely, Dennis L. Balyeat Executive Director /m c: Lyle J. Eckberg/City Attorney, Oak Park Heights VOTO, TAUTGES, REDNITH & CO., LTD. • ir CERTIFIED PUBLIC ACCOUNTANTS Birch Lake Professional Building •1310 E. Hwy. % • White Bear Lake, MN 55110• Phone 426-3263 RR(TB J.VOTO. ROBERT G.TAUTGES,CPA CPA September 30, 1987 TAMES S.REDPATH,CPA Mr. Dennis L. Balyeat, Executive Director Washington County Housing and Redevelopment Authority 455 Broadway Avenue St. Paul Park, Minnesota 55071 RE: PROPOSED OAK PARK HEIGHTS HOUSING DEVELOPMENT Dear Dennis: I have today received the information I was expecting to receive on September 11, 1987. As promised, I am responding with speed. As you correctly state in your transmittal letter of September 29, 1987, "the key to a joint development with the City is the development agreement". Accordingly, please provide the City with a draft "development agreement" which we may evaluate. Alternatively, provide the City with an extensive outline of such an agreement so that we may have a reasonable idea of exactly what you expect from the City of Oak Park Heights. The information provided leaves me with more questions than answers; to wit: 1 . The HRA/St. Paul Park Development Agreement (the copy provided was unsigned by both parties) refers to a Tax Increment District. Do you have any expectations that Oak Park Heights will be involved with a Tax Increment District? If your answer to the above is affirmative, please explain fully exactly what is expected of the City and when. 2. The HRA/St. Paul Park Development Agreement refers to that City acquiring land which is resold to the HRA. You have included a copy of the "Purchase Agreement" conveying such land from the City to the HRA. A prime piece of information, however, is missing. What price (and at what terms) did that City pay for such land? Was there any difference (subsidy) between the City's acquisition price and selling price? Do you have any expectations that Oak Park Heights will be involved with any subsidy (or any legal costs) for such an acquisition. MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS• PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS Mr. Dennis L. Balyeat • • September 30, 1987 Page 2 3. Your concept description refers to a site and a builder "acceptable to the City". As you are no doubt aware, such acceptance generally involves "out-of-pocket" costs to the City. More important, this acceptance process is very much like the process the City follows with any and all developers. Specific plans, specifica- tions, etc. are normally prepared by each developer (at their expense) and submitted to the City to start the acceptance process. Additionally, City policy is for each developer to reimburse the City for all out-of- pocket costs/expenses relating to this acceptance process. Do you have any expectations that the City of Oak Park Heights will absorb any of these costs with this development? If your answer is affirmative, please explain fully exactly what is expected of the City and when. 4. Your concept description gives a very general plan of action. Are you aware of existing City policy and procedures relating to developers and development? If so, are you proposing that this development agreement differ significantly from such existing City policy and procedures? 5. Your concept description refers to a "comfort level necessary to issue bonds for public improvements". Are you referring to Tax Increment Bonds, Local Improvement (Special Assessment) Bonds, or some other City bond issue? Any bond issue sold by the City of Oak Park Heights will be general obli- gation bonds backed by the full faith and taxing authority of the City. All such existing bond issues are sold in accordance with State Statutes and require the City to take whatever action is necessary to insure full and prompt payment of such bond principal and interest. Do you have any expectations that the City of Oak Park Heights will accept a "lower comfort level" for this development? If so, please explain • fully exactly what is expected of the City and when. 6. Your concept description refers to the City authorizing all design engi- neering and recovering such costs at the time of assessment. What "design engineering costs" are you referring to? Are you referring to local improvement (special assessment) projects or are you referring to something in addition? Mr. Dennis L. Balyeat • S September 30, 1987 Page 3 7. You have provided "a printout detailing the payback to the City and a lender from lots sold". The purpose of such a schedule has still not been made clear. You are apparently asking the City of Oak Park Heights to issue local improvement/special assessment bonds to help finance this development. City policy (in this regard) is to assess all such costs to the deve- loper. Are you suggesting a different arrangement? Do you have any expectations that the City of Oak Park Heights treat this bond issue (and/or the underlying special assessments) different from other bond issues (and/or the underlying special assessments)? If so, please explain fully exactly what is expected of the City and when. To summarize, you have correctly stated that "the key to a joint development with the City is the development agreement". Such an agreement normally con- tains all the necessary stipulations to answer the questions I have stated above. The data submitted does not define what you are asking of the City. A draft or proposed "development agreement" (or an extensive outline of such an agreement) would answer these questions and enable the City to respond. The City Council wishes to pursue this matter and would like more information. To this end, they have asked me to review and evaluate your "proposal". To date, I have not received sufficient information to make such a review. Please respond with a sufficiently detailed "proposal" that I may respond to the City Council. I look forward to hearing from you on the above questions. If you have any questions, please don't hesitate to call or write. Sincerely, VOTO, TAUTGES, REDPATH & CO. , LTD. Robert J. Voto, CPA RJV/111 cc: LaVonne Wilson VOTO TAUTGES REDOH & CO., LTD. • CERTIFIED PUBLIC ACCOUNTANTS liSir Birch Lake Professional Building•1310 E. Hwy. %• White Bear Lake, MN 55110 • Phone 426-3263 ` September 29, 1987 ROBERT I.VOTO.CPA ROBERT G.TAUTGES,CPA To the Honorable Mayor LAMES S.REDPATH,CPA and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: WASHINGTON COUNTY HOUSING AND REDEVELOPEMENT AUTHORITY When we last met (Wednesday, September 9, 1987) at the budget workshop meeting, the City Council was given a presentation by Mr. Dennis L. Balyeat, Executive Director of the Washington County Housing and Redevelopment Authority (HRA) . Mr. Balyeat's informal presentation was a request of the City to enter into a "Development Agreement" with the HRA. Such request was undefined as to specifics. Mr. Balyeat was asked (by the City Council) to submit the normal additional information to my office in order that such information could be reviewed and so that the City Council could make its decision based (in part) upon such review. Mr. Balyeat was advised that approximately thirty days would be required for such a review. He responded that he would have such information delivered to my office on Friday, September 11 , 1987 in order that I may complete my review and report back to the City Council on or before Monday, September 28, 1987. This was the date chosen by Mr. Balyeat to make his formal presentation to the City Council at a regular Council meeting. I have yet to receive any such additional information from Mr. Balyeat or any other source. I did receive one telephone call from Mr. Balyeat in which he again promised to mail such additional information. Mr. Balyeat asked that I perform my review in time for "the next" City Council meeting which is scheduled for Tuesday, October 13, 1987. Such timing is not possible and Mr. Balyeat was so informed. Please be advised for your planning and information that I will require a mini- mum of thirty days to perform such a review. Based upon the speed and incompleteness of past promised data; I anticipate that more than thirty days will be required. Accordingly, I do not anticipate having a report completed until November, 1987 or a later date. I will keep the City Administrator advised as to current development on this topic. Yours very truly, VOTO, TAUTGES, REDPATH & CO., LTD. Robert J. Voto, CPA RJV/smp cc: LaVonne Wilson MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS GOVERNMENT FINANCE OFFICERS ASSOCIATION•MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS S • CLIPPING FILE Publisher WASHINGTON COUNTY BULLETIN Date JULY 16, 1987 Interest high in housing i despite pipeline safety qquestions By Jane McClure The 70-plus acres south of Herit- get into those homes sooner.Eleven' Staff Writer age Park lay vacant for many years, others were sold. after the Stevens family gave it to the The lots available vary from 75 to The dust and construction equip- University of Minnesota and other 80-plus feet, said Schultz. Lots by ment clamor on Lincoln Avenue in schools.For a time,it was an expert- Heritage Park sell for an extra$500. C.— St. Paul Park have meant noise and mental crop area.Last year,the land Nineteen home styles are offered, inconvenience for residents.But for was purchased by the city of St.Paul he added. Homes include many prospective homeowners, the Park, which then sold it to the styles are in the low to middle annoyances are a signal that new Washington County Housing and $70,000. homes are going up. Redevelopment Authority (HRA). The present petroleum pipeline; The first 40 lots of the Stevens Work began in June on sewer and site is shown on the map with a red Ridge subdivision will be the focus water system,hydrants,grading and line. Schultz noted that once the of an open house this weekend by roads, as well as on the model pipeline location question was builder Gardner Brothers Homes. homes. answered, more buyers would be From 1-5 p.m. July .18-19, the Gardner Brothers was selected interested in lots. "This is such a project will hold a grand opening, earlier this year as developer of the marvelous piece of property," he with refreshments, a look at model first 40 lots of Stevens Ridge. The said. He praised the surrounding homes and information about the,7builder is offering 8 3/8 percent neighborhood and other community project. An official groundbreaking ' fixed rate mortgage financing, amenities as attracting buyers. ceremony will be held at noon July which it obtained through the HRA The majority of interest in the 18. in a first-time homebuyers' homes has been from first-time It's expected that the 40 lots being program. buyers,said Schultz,although he is developed by Gardner Brothers will In a recent interview,Ted Schultz seen some second-time home seek- be sold out by October of this year, of Gardner Brothers noted that four- ers. Most families are two-career in the first phase of the Stevens teen "holes had been punched" for couples, with one to three children. Ridge development. The develop- new homes by June's end. That Interest has also been seen from ment has been unique because of the includes one of the model homes area natives,who wish to move back mix of public and private sector going up and two homes built to to south Washington County, said activity involved, specifications for people needing to Schultz. 40 • A T CLIPPING FILE Publisher Date • �� .qMw- �� ce i ,. .. ). r" .� J n , r e....„•.,.,.,..iiif.4 ..t. ... ii, . i.......: • ...„....„......„.h. • . .....,.........,, .• .........., , „.,.:•;i:•.,:;•.,...y.,..i.,•••::,.i.,..,...,,,,ttir,-.47,...,. , t-7- tilt - ' ,ti, 3.,„„i„„htei,,,,,e,„,„ix,...,-- Sr i1t« ..%...l.L+sf 't >_ __' $"' .ell,.<h,—e.4 `+. , • 4, a sy.."ijp'%*3 .. ;4-: s.Y.2..0 y, t' F 7 -a '.. .-- . ,,:• • t <. (-;:gip, .fi i.. .. ...' +t ,- 4 ""c «,.. n ''-tY ` '° *,'.a ti-: ,' "y - 4.. . '.C` # R i" yF*(s.a'*4 i.w'r" - s 3- #'^ "lam t4'.. t s tyi' < .� s-"' .,.x `' „t ,� ! kq«y,.Ti ,,a^+�� k+cr 4y11174 Photo by Jane McClure. Model homes are going upon the Stevens Ridge by Gardner Brothers,who will have an open housJ development In St.Paul Park.These three are built this weekend. ! ............... ............... ............... ............... ............... ............... ............... :.:::.:. ....... 110 :::::::: Washington County Housing and Redevelopment Authority 900 Third Street, St. Paul Park, Minnesota 55071 612-458-0936 October 10, 1986 Ms. LaVonne Wilson, Administrator/Treasurer City of Oak Park Heights 14168 - 57th Street North Stillwater, Minnesota 55082 Dear Ms. Wilson : The Washington County HRA has recently been allocated mortgage revenue bonds for single-family homes in Oak Park Heights. Because of the publicity associated with this, you may receive calls from interested parties regarding the guidelines for participation . At present, we have not formulated set guidelines but we will be contacting you regarding setting up programs that would best suit your community. In the interim, please feel free to refer all phone calls to the HRA St. Paul Park office, 458-0936. I look forward to working with you on this program. Sincerely, 442°11441-44:2�nJ� Dennis L . Balyeat Executive Director /m ������ Washington County Housing and RedevelopmentAuthorit y 900 Third Street, St. Paul Park, Minnesota 5507 I 6I 2-458-0936 October 9, 1986 Mayor Frank Sommerfeldt City of Oak Park Heights 14168 North 57th Street . Stillwater, Minnesota 55082 Dear Mayor Sommerfeldt: I would like to take this opportunity to inform you that the Washington County HRA has received an allocation making available $50 million in low- interest mortgage revenue bonds for first time home buyers. An allocation of $10 million has been set aside for the City of Oak Park Heights. This program is similar to the one approved by the city council last November. I will be addressing the council next month to explain the program in more detail and the timetable for availability of funds. At this time it is anticipated that mortgage rates will be 8% or less and that funds will be available by mid-January . We will be asking local lending institutions to participate in this program. As always, we look forward to working with the city . If you have any questions, please contact me. Sincerely, Dennis L. Balyeat Executive Director /m