HomeMy WebLinkAboutEDA June 25, 2002
CITY OF ANDOVER
'\ 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
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) FAX (763) 755-8923. WWW.C1.ANDOVER.MN.US
Andover Economic Development Authority Meeting
Tuesday, June 25, 2002
Fire Station #1
13875 Crosstown Blvd NW
1. Call to Order - 6:30 p.m.
2. Approval of Minutes (6/12/02)
3. Andover Station-Residential Development Presentation/Commercial
Development Presentation
4. Request for Public Use of ED A Property - Clerk
5. Debris Removal South of WDE Site - Engineering
\ 6. Bunker Lake Redevelopment Project Area Options - Planning
) 7. Other Business
8. Adjournment
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CITY OF ANDOVER
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 · (763) 755-5100
FAX (763) 755-8923. WWW.C1.ANDOVER.MN.US
TO: Andover Economic Development Authority
CC: John Erar, Executive Directoj7d::-
FROM: Vicki V olk, City Clerk
SUBJECT: Approval of Minutes
DATE: June 25, 2002
INTRODUCTION
The following minutes have been provided by TimeSaver Secretarial Service:
\ June 12,2002 - Regular EDA Meeting (Knight, Schultz, Larson absent)
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ACTION REQUIRED
The EDA is requested to approve the above minutes:
Respectfully submitted,
Utl~
Vicki Volk
City Clerk
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CITY OF ANDOVER
1685 CROSSTOWN BOULEVARD N. W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923. WWW.CI.ANDOVER.MN.US
TO: Andover Economic Development Authority
CC: John Erar, Executive Directo~
FROM: Vicki V olk, City Clerk
SUBJECT: Request for Public Use of ED A Property
DATE: June 25, 2002
INTRODUCTION
The city has received a request from the Anoka Rotary Club to sell raffle tickets the weekend of
the Andover Family Fun Fest.
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, j DISCUSSION
The Rotary Club has requested that they be allowed to sell raffle tickets on property owned by
the EDA (former Anoka Auto Wrecking property). The parcel they wish to use is located by the
First Regions Banle They will also be selling raffle tickets at Anoka's Riverfest and in Ramsey.
They are raffling off three Harley Davidson motorcycles and other Harley Davidson
merchandise.
ACTION REOUIRED
The EDA is requested to consider allowing the Anoka Rotary Club use of the EDA owned parcel
described above.
Respectfully submitted,
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Vicki Volk
City Clerk
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CITY OF ANDOVER
1685 CROSSTOWN BOULEY ARD N.W.. ANDOYER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923. WWW.C1.ANDOYER.MN.US
TO:
CC: John Erar, Executive Director
FROM: Scott Erickson, City Engineer
SUBJECT: Debris Removal South ofWDE Site
DATE: June 25, 2002
INTRODUCTION
This item will be presented at the meeting.
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Respectfully submitted,
Scott Erickson
City Engineer
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CITY OF ANDOVER
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) 1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923. WWW.CI.ANDOVER.MN.US
TO: EDA President and Board
CC: John Erar, Executive Direct r
Jim Dickinson, Finance Direct
FROM: Will Neumeister, Director of Community Development d./'-.
SUBJECT: Bunker Lake Boulevard Redevelopment Options
DATE: June 25, 2002
INTRODUCTION
Since your last meeting, the staff has discussed the various options that the EDA may want to
consider regarding the Bunker Lake Redevelopment Project. There are three potential options, this
report will briefly describe them.
DISCUSSION
Option 1- Pursue strengthening the rental licensing requirements and inspection/enforcement of the
rental units in this area. Many of these housing units are rental and by increasing the standards and
licensing requirements it will tend to upgrade the units over time. This could be augmented by
offering low interest loans to help the landlords in making the necessary repairs or upgrades. Some of
the outward appearances would be improved if there were painting and lawn!landscaping upkeep,
pavement repair and sealcoating requirements that would give the units better curb appeal. The cost
of setting up a loan program for this purpose could be eligible for CDBG or Department of Trade and
Economic Development (DTED) grants in conjunction with City funds.
Option 2- The City could set up a new Tax Increment District (Redevelopment District for 25 years)
and do site acquisition, relocation, demolition of all the units in the area and then resell the cleared
site to a developer for either townhomes or apartments. Estimated expenses in implementing this
option include the following:
Land Acquisition $7,185,000
Relocation $ 750,000
Legal $ 25,000
TIF District Setup $ 10,000
Structure Demolition $ 350,000
Well Capping $ 10.000
TOTAL $8,330,000
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There are currently 78 housing units on the property, of which only six are estimated to be owner
occupied.
; To recover/finance these costs, the EDA would need to market the property to a developer and it is
estimated that the gross site area could accommodate approximately 100 housing units that would be
approximately $200,000 per unit. The sale of land would generate approximately $2,000,000. The
project would produce approximately $4,225,000 of increment over 25 years if the units were owner
occupied. This would result in a gap of approximately $2,105,000 to the EDA that could be filled
with funds from the Andover Station TIF district (staff still needs to research this through legal
counsel to determine that it is possible). Another option that could finance this amount sooner is if
the units were rental. It is estimated that the payback would then cover the costs over the 25 years
allowed for by a redevelopment project of this nature.
Option 3- The third option is to consider a mixed use development where townhomes and offices
would equally share the site (Le. offices along Bunker with townhomes along the wetland edge).
Based on the projections staff has made, there would be $3,200,000 of potential office development.
This estimated valuation is based on eight office buildings that would be similar in style to the ones
on Commercial Boulevard near the movie theatre. There would also be approximately fifty
townhomes at $200,000 in valuation for the other portion ofthe site. This combination would yield
$4,350,000 in increment over 25 years and result in a gap of $1 ,980,000.
ACTION REQUIRED
The EDA is requested to discuss these three options and provide staff direction.
Respectfully submitted,
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Will Newneister
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CITY OF ANDOVER
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923 . WWW.CLANDOVER.MN.US
TO: EDA Members
CC: John Erar, City Administrato~
FROM: Scott Erickson, City Engineer
SUBJECT: Debris Removal South of WDE Site - Engineering
DATE: June 25, 2002
INTRODUCTION
The EDA is requested to accept quotes for removal of the stockpiled debris east of l5t Regions
Banle
DISCUSSION
A considerable amount of construction debris was temporarily stockpiled on the property located
just east of the 1 ST Regions Bank site. The material was stockpiled at this location to allow for
the construction of the bank. The debris was generated from the original site (Anoka Auto) after
the EDA purchased the property from them. The work identified herein provides only for the
removal of the stockpiled debris. Additional site cleanup will need to be performed in the future
(by the EDA or future developer) as development plans for this area continue to move forward.
Quotes received are as follows:
Sauter & Sons, Inc. $7,400.00
WPL Construction, Inc. $13,500.00
BUDGET IMPACT
Funding will be from TIF Project Funds.
ACTION REOUIRED
The EDA is requested to accept quotes for removal of stockpiled debris east of l5t Regions Bank
and authorize Sauter & Sons, Inc. to perform the work for $7,400.00.
Sauter & Sons, Inc.
Excavatomg & Grading
6651 141sl. AVE. N.W.. RAMSEY, MINNESOTA 55303. (763) 421-7919 Fax (763) 421-0797
June 17,2002
Dave Berkowitz
City of Andover
1685 Crosstown Blvd
Andover, mn 55304
BID PROPOSAL
RE: Site next to Bank of Bunker Lake Blvd
Bid Includes:
1. Haul concrete & asphalt
2. Haul misc wood & trees
3. Level existing fill to Blvd areas
Bid does not Include:
1. Winter Conditions
2. Soil Testing or Correction
3. Hazardous Waste Removal
TOTAL BID $7,400.00
Alt.#l Haul existing sand to Slide Area ~
& cap with l' blackdirt. Bid is valid for 30 days. If you should have any questions concerning this bid, I can be
reached at the above number.
Sincerely,
Thomas Sauter
President
JUN-Z~-Z00Z 08:~Z AM WPL CONSTUCTION 765 4'0'7 4860 r.~.A.
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,..~ IWPL Construction, Inc.
12630 43rd Street NE Saint Michael, MN
\ (763)497 -9202 Fax(763)497 -4680
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)\,~. \\. FAX COVER SHEET
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TO: City of Andover
ATTN: Dave Berkowitz
FROM: Wayne Lindquist
DATE: 6/24/02
SUBJECT: Quote for cleanup on Bunker Lake Blvd.
We have sent 2 page(s) INCLUDING the cover sheet. If
you did not receive all of the pages please call us at
(763)497-9202 so we can resend any missing pages.
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JUN 25 2002 09: 08 763 497 4860 PAGE. 01
765 4':17 4860 P.E:J:'::
JUK-Z5-ZeeZ 08:55 AM WPL CONSTUCTION
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Construction, Inc
City of Andover 6/24/02
Attn: Dave Berkowitz
RE: Quote for Site Cleanup West of Bank on Bunker Lake Blvd.
Bid Includes:
1. Blacktop/Concrete Removal and Disposal
2. Debris Cleanup and Disposal
3. Tree/Brush Disposal
4. Permits
5. Dump Fee
6. Grading of Dirt Piles on Site
7. Traffic Control
Does Not Include:
1. Soil Testing/Correction
2. Winter Conditions
3. Hazardous Waste
Bid $13,500.00
Alternate #1 Haul Dirt Piles Off Site ~o
*Bid valid for 30 days Wayne Lindquist
763 497 4860 PAGE. 02
JUN 25 2002 09: 08
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DATE OF PHOTOGRAPHY: APRIL 200 I
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CITY OF ANDOVER
1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304. (763) 755-5100
FAX (763) 755-8923. WWW.CI.ANDOVERMN.US
TO: EDA President and Board
FROM: John Erar, Executive Director
SUBJECT: Great River Energy - Relocation/Land Cost Estimates
DATE: July 25, 2002
INTRODUCTION
Attached, please find information from Great River Energy regarding their good faith estimates on
costs associated with relocation of the utility infrastructute pertaining to GRE and Connexus site
assets. In addition, land costs for the two parcels has also been included.
DISCUSSION
The attached letter from Gary Ostrom, GRE Land Rights Supervisor is self-explanatory. However,
for ease of calculation with respect to land sale, GRE is asking for a combined or blended per square
foot cost of $4.97 for parcels A and B. This figure, while negotiable to a certain extent, apparendy
already takes into consideration the easement encroachments associated with utility lines running
through the two properties. With respect to Lot B, these encroachments would severely limit the
development potential of the site due to the utility constraints.
BUDGET IMPACT
To be discussed. It is questionable whether the EDA could successfully assess the entire costs of
relocation and land acquisition for these two parcels against other benefiting properties in Andover
Station North.
ACTION REQUIRED
EDA Board consideration and direction with regards to site acquisition of the subject GRE parcels.
Respect~ submitted,
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Jfhn Erar
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GREAT RIVER
ENERGY.
17845 East Highway 10 . . p.o. Box 800 . Elk River, Minnesota 55330-0800 . 763-441-3121 . Fax 763-241-2366
July 23,2002
Mr. John Erar
City Administrator
City of Andover
1685 Crosstown Blvd.
Andover, MN 55304
Subject: Connexus/GRE Estimated Costs Associated with Bunker Lake Land Sale
Dear John:
The following is a breakdown of the estimated costs associated with the relocation of the
Connexus substation and distribution feeders and the reconfiguration of GRE's transmission line
and related work on the GRE transmission substation. Also included is the fee value of Parcel
A and Parcel B per John Dahl with McKinzie Metro Appraisal.
Substation Relocation and Land Purchase; Includes Related Transmission & Distribution work.
-,/ Connexus Costs:
Rebuild Distribution Feeders $ 235,000
Substation Reconstruction 525,000
Temporary Facilities - Mobile Sub., Crane Service, Etc 35,000
Subtotal $ 795,000
-,/ Retirement:
Retirement Substation Structure $ 35,000
Removal of Fence, Foundation & Disposal 55,000
High Side Structure 5,000
Subtotal $ 95,000
Total Connexus Distribution & Substation Costs $ 890,000
-,/ GRE Costs:
Distribution Substation Metering $ 15,000
Reconfigure Transmission System: EP Strs. 4B-7B and
Interconnect High Side Including Switch & Retirement 153,000
Total GRE Transmission & Bulk Substation Costs $ 168,000
Total Utility Relocation Costs $ 1,058,000
-,/ Total Land: Parcels A & B Combined (see attachment) $ 743,100
Grand Total $ 1,801,100
Direct Dial (763)241-2377 E-,Mail gostrom@grenergy.com FAX (763)241-6177
A Touchstone Energy"Cooperative ~t-)I;
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John Erar, City of Andover
July 23, 2002
Page -2-
The area of proposed land sale is highlighted on the attached diagram. We would agree to sell
two blocks of land. One block measuring 250' x 220', Lot 8, is the area where the Connexus
Sub is located~ the other block measuring 350' x 270', Lot A, located west and adjoining the
parcel where the Connexus sub is located.
The enclosed print shows the relocation of GRE's transmission facilities located along the
easterly portion of parcel (lot) 8. Previously I sent you a print showing the location of the
existing easements for the Xcel and GRE overhead transmission lines as well as Connexus
underground distribution feeders.
The Xcel 345 and GRE 69 transmission system encumber a major portion of the available land
within both parcel A and parcel B. The use of this area would be restricted to parking lots and
other such uses. At this juncture, Xcel has not been advised of the potential land sale.
Please keep in mind that the amounts provided are estimated costs and the actual construction
costs may deviate from this estimate.
Please contact me at your convenience if you would like Connexus and GRE to pursue the
matter further.
Sincerely,
GREAT R1ZERGY
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Gary Ostrom, SR/WA
Supervisor, Land Rights
EnclosureS
c: Connexus: Mike Felber
Larry Peterson
Matt Yseth
Matt Hotzler
Paul Orndorff
Xcel Energy: Dave Callahan
GRE: Chuck Lukkarila
Ivars Vancers
Kevin Lennon
GO:lb:R:\subs\bunkerlake\02-July 23.Estimated Cost Ltr
Direct Dial (763) 241-2377 E-Mail gostrom@grenergy.com FAX (763) 241-6177
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BOZ Construction LLC
Proposed Plan to City of Andover
For site known as
Andover Station
Presented by
Mike J echorek
Brad Dunham
Edina Realty
(651) 636-2299
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Contents:
Preface
Front page signed agreement with BOZ Construction LLC and Hans Hagen Homes
Preliminary Plat
Grading, Drainage, Erosion Control & Tree Protection Plan
Architectural Rendering of Future Andover Station Project
Front, Rear & Side Elevations of Units
Floor Plans:
End Unit Main Level
End Unit Second Level
Middle Unit Main Level
Middle Unit Second Level
Center Unit Main Level
Center Unit Second Level
Bank Reference
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www.edinarealty.com I
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AN AFFILIATE OF EDINA REALTY HOME SERVICES, A COMPlETE REAL ESTATE SERVICES COMPANY !
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Preface I
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Boz Construction LLC is excited about the opportunity to develop the Andover Station
project. Boz Construction has worked with Hans Hagen Homes to secure a licensing
agreement to build the plans previously designed and presented by Hans Hagen Homes. I
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Additionally, Boz has purchased the Preliminary Plat, Grading Plans, Preliminary Utility i
Plans, Landscape Plans, and a Phase 1 Assessment from Hans Hagen Homes. Boz I
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acquired all ofthe forementioned information in an effort to expedite the development I
and in the belief the plan is already considered favorable by the City of Andover. !
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We are ready to begin the next phases of this development with United Properties and the ,
City of Andover, and we hope that the EDA finds our proposal favorable as well.
Brad Dunham
Michael Jechorek
Edina Realty
Boz Construction LLC
NEW BRIGHTON OFFICE 1900 Silver lake Rood Suite 308 New 8righton, MN 55112 PHONE 651.636.2299 FAX 651 .638.8752
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1 ST Page of Si.gned Agreement wi.th BOZ & HHH
AGREEMENT
This Agreement is entered into this 24th day of June, 2002, by and between
Hans Hagen Homes, Inc. , a Minnesota Corporation, ("HHH") and BOZ
Construction, a Minnesota Corporation, ("BOZ")
WHEREAS , HHH has investigated the purchase of property in Andover known
as Andover Station. In this process HHH gathered and assembled preliminary
property information to determine the investment potential of said
property. This property information included the Prelimi.nary Plat,
Grading Plans, prelimi.nary utility Plans, Landscape Plan, and a (Phase 1)
Assessment, collective referred to as "property Information."
WHEREAS, HHH has agreed to sell and BOZ has agreed to purchase the
Property Information for the purchase price of $ , all of which is
payable upon the date of this agreement.
WHEREAS, HHH has designed to"mhome plans ( "Copyrighted Plans")
HHH has agreed to sell and BOZ has agreed to purchase a license to use the
Copyrighted plans for the sum of $
NOW, THEREFORE , in consideration of the promises contained herein, the
parties agree as follows:
1. HHH has agreed to sell and BOZ has agreed to purchase the Copyrighted
Plans for the sum of $ payable upon issuance of building permits
to BOZ.
2. BOZ understands, acknowledges and agrees that HHH grants BOZ the right
to duplicate the Copyrighted Plans under the following conditions
only:
l. The copyrighted Plans may only be duplicated exclusively
for securing governmental approval, the construction
and marketing of the same at the Andover Station site.
2. The license to use the Copyrighted Plans is non-
transferable, non-assignable and are geographically
restricted to use at the Andover Station Site.
3. BOZ is strictly prohibited from duplicating, selling or
reproducing the Copyrighted Plans
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'200 Coon Rapids Bou!evan!Suite 326 '
Coon Rapids, MN5S433
763.784.3400 Office
763:784,6766 Fax
17271KenyouAvenue Suite 101
'Lakeville, MN 55044
952,898.3400 Office
95.2:898.3411 Fax
www.contractorscaoitaLconi
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,Maximizinc.:yourprojits with our integrity
CitYdtA~doverandAndoyerJ?DA
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,SteveWirzand Boz.Construction Ltefor I11<iny years andtheyhave ,an e,xcelletit
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Pleasefeelfreetocontad-me directly With any questions; ,
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L A N 0 T R U S T
Background .
Since 1995 Minnetonka has added or preserved the affordability of over 600 rental and
owner-occupied units. In addition. Minnetonka is participating in the Metropolitan
Council's Family Affordable Housing program. Of the 600 plus units, 150 have been
owner-occupied. It is the City's experience in attempting to preserve the long-term
affordability of the 150 owner-occupied units for low to moderate-income homebuyers
that led to the creation of the West Hennepin Affordable Housing Land Trust.
Beginning in 1995 Minnetonka invested $5.4 million dollars to reduce the sale price of
150 owner-occupied units to an affordable level; that is an average per unit investment
of $36.000. To ensure long-term affordability, a deed restriction was used to index the
resale price. After 5 years. the City's experience has shown that:
1. Indexing does not maintain the affordability of the units. After just five years.
these units are selling at prices far above what is considered affordable. Even if
indexing the resale price did work. the deed restriction expires after 30 years and
the unit is sold on the open market.
2. Affordability has not been maintained. This will eventually result in the loss of
$5.4 million dollars that was invested by the City to create initial affordability.
3. Subsequent homebuyers have not been of low to moderate-income. There is no
real effective way to ensure that subsequent sales. beyond the initial sale, will be
to low to moderate-income homebuyers; the very reason the City made the
investment.
In addition, a fourth reason that led to the creation of the West Hennepin Affordable
Housing Land Trust was the City Council's desire for a scattered-site. homeownership
program. Minnetonka is fully developed and o'pportunities to add significant nu mbers of
units at one time are limited. Further, as important as it has been to add new
affordable, owner-occupied units. the Council felt it was equally important to attempt to
preserve the affordability of existing, scattered-site, owner-occupied units. .
As a result. the City Council encouraged the creation the West Hennepin A..ffordable
Housing Land Trust. The Trust is an affordable. homeownership program that
addresses the shortcomings of current approaches, by ensuring permanent affordability
for low to moderate-income homebuyers, and in doing so preserves the public
investment.
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West Hennepin Affordable Housing Land Trust
The West Hennepin Affordable Housing Land Trust is based on the Community Land
Trust (CL T) model. As the name indicates, the Trust has been created to serve all of
suburban Hennepin County. A CL T is a private, non-profit corporation established to
acquire and hold land for the benefit of community residents. Specifically, a CL T works
to help meet the housing needs of residents least served by the prevailing
homeownership market. The primary benefit of a CL T is its ability to create an
expanding and permanently affordable supply of owner-occupied housing for low to
moderate-income households; something traditional approaches are unable to do.
Because the home remains permanently affordable the public investment is never lost.
Essentially the pubic investment is recycled with each new homeowner. The following
table briefly compares the traditional and community land trust approaches to
affordable, owner-occupied housing.
Traditional Community Land Trust
Maximum Length of Affordability 30 years. (Maximum allowed Permanent
under state statute)
Serves Does not guarantee that Guarantees every homebuyer is of
subsequent buyers, after the low to moderate-income.
initial buyer, will be of low to
moderate-income.
Public Investment Lost: Never lost, recycles with each new
1. After the first sale. homeowner
2. When restriction expires
3.when indexing no longer
maintains an affordable
price.
Acquisition
A CL T acquires land through purchase or donation with the intention of retaini ng title in
perpetuity, thereby removing the land from the speculative market. The land is leased
to a household that owns the home on the land. The ground lease is typically for a
period of 99 years and is renewable.
Initial Affordabilitv
A CL T establishes initial affordability by removing the market value of the land from the
mortgage equation. For example, a CL T could purchase an existing owner-occupied
home when it is placed for sale on the open market, then sell just the home to a low to
moderate-income household. The CL T retains ownership of the land and enters a 99-
year ground lease with the leaseholder-homeowner. Removing the market value of the
land from the mortgage equation results in a lower, more affordable, monthly payment
of principal and interest. It also results in a lower down payment and lower closing
costs.
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Permanent Affordabilitv
A CL T ensures permanent afford ability of the home through two provisions found in the
ground lease. The first is a pricing formula that provides the owner with a fair amount of
equity, while ensuring the sale price for subsequent low to moderate-income
households is affordable. The second provision requires the homeowner to sell to either
another low to moderate-income household or to the CL T.
Benefits To Homeowner -
A CL T leaseholder-homeowner receives essentially the same benefits as non-CL T
homeowners such as the ability to build equity, to deduct interest and property tax
payments from federal income tax, and to pass on the lease interest and home to their
heirs.
Example
Below is an example of how the CL T creates initial and permanent afford ability. The
example also compares the difference in affordability after ten years under the CL T and
under the conventional model. The values used are associated with an existing
Minnetonka property.
The example shows that removing the value of the land from the mortgage equation to
create initial affordability results in monthly savings of principal and interest of $404, and
saves $4,646 in down payment and closing costs. The CL T leaseholder-homeowner
pays property tax on both the home and the land, even though they do not own the
land. The write-down of the entire land cost of $63,000 is typically paid for using
Federal, State, and City and/or foundation contributions.
The example shows that after ten years, the CL T home sells for $142.753 as opposed
to $293,201 under the conventional model. a difference of $150,448. This is due to two
facts, the first is the land has been permanently removed from the speculative market
and the second is the leaseholder-homeowner receives a percentage of the
appreciation of the just the home when they decide to sell. In this example, the owner
receives 35% or $25,753, based on a formula that is fairly standard among CL Ts across
the United States. Because the homeowner receives only a portion of the appreciation,
the home becomes more affordable with each subsequent sale.
3
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CL T I Conventional Model Comparison
CL T MODEL CONVENTIONAL
MODEL
Acquisition Costs
Market Value Land $63,000 $63,000
Market Value Home $117.000 $117.000
Total $180,000 $180,000
Subsidy -
Subsidy/Write-down $63.000 $-0-
Sale Price $117,000 $180,000
Housing Costs
Principal and Interest1 $816 $1,255
Property Taxes $200 $200
Mortgage and Homeowner Insurance $135 $135
Land Lease Fee $35 n/a
Total Principal, Interest, Taxes, Insurance $1,186 $1,590
Down Payment $5.850 $9.000
Closing Costs $2.779 $4.275
Market Value After 10 Years
Market Value Home $190,581 n/a
Market Value Land and Home nla $293.639
Increase in Value2 $73,581 $113,201
Sale Price Calculation
Percentage of Appreciation to Owner 35% 100%
Owners Share of Appreciation $25,753 $113,201
Sale Price of Home $142,753 $293,201
'Mortgage Interest Rate 8%. Term 30 years, Loan to value 95%
2 Annual average increase in market value 5%
Minnetonka's Role in the Creation of the Trust
The Economic Development Authority (EDA) first reviewed the CL T idea in November
of 1999. The EDA spent the next few months leaming about and discussing this
approach. After two work sessions with the City Council, and further review by the
EDA, the EDA recommended the City Council authorize the creation a work group to
create the trust. The Council authorized and funded a work group in November of 2000.
With input from the City Council, 15 community members stepped forward to form the
work group. The work group members were passionate and brought a variety of talents
to this effort. Members included representatives from Firstar, Wells Fargo and
Americana Banks, Fannie Mae, the faith community, buildersldevelopers etc. The chair
of the workgroup was the City's past Economic Development Authority President and
leadership was provided by City Council members Terry Schneider and Jan Callison.
4
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Staff support was provided by Bob Streetar, Minnetonka Community Development
Coordinator Ron Rankin, Minnetonka Community Development Director, Desyl
Peterson, Minnetonka City Attorney, and Steve Bubul an attorney with Kennedy and
Graven, Kris Madson of Minnesota Housing Resources, and a lot of support from the
Rondo Community Land Trust Staff in St. Paul.
After only 6 months, the work group completed their charge, which included but was not
limited to, drafting the Articles of Incorporation, the Bylaws and Ground Lease as well as
resolving a variety of policy issues. .
Minnetonka's On-qoinq Role
Minnetonka's ongoing role will be to provide some operational support to the Trust as
well some of the funds used to write-down the land.
Potential sources for both operational and project support includes but is not limited to:
1. Private Foundations: One advantage of the CL T approach is that as a non-profit
corporation the Trust has the ability to raise funds from private sources that Cities
do not. This is a significant source of funding for land Trusts.
2. Minnesota Housing Finance Agency (MHFA)
3. HOME funds
4. Private Contributions
5. City Community Development Block Grant (CDBG)
6. The City's Livable Communities Housing Account.
7. Contributions by developers, which could include money, land or homes
Status of WHAHL T as of 6/15/02
The West Hennepin Affordable Housing Land Trust (WHAHL T) was formally
incorporated May 3'd, 2001 and received it's authorization from the IRS as a 501
(c) (3) charitable corporation in April 2002, and has purchased two homes in
Minnetonka, has purchase agreements to purchase two additional ho mes in
Minnetonka and one in Richfield. It hopes to acquire at least seven homes in
Minnetonka in 2002. Its service territory is all of suburban Hennepin County.
To date it has raised over $838,000 in public and private funds for both operating
and land acquisition costs. It has received and processed applications from 19
households to purchase WHAHL Thomes. Selected three households that will
purchase the initial homes.
5
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The Trust Board hired Jan Callison as it's first time Executive Director, and
expanded the Board to the following ten members:
Terry Egge - President
Ann Perry - Vice President
Sandal Hart - Treasurer
Jerry Nystuen - Secretary
Lucy Mathews Heegaard
Doug McNamara .
Ruth Ruffin
Doug Winter
Elaine Robinson
Terry Schneider
Further information:
For further information you can contact Jan Callison at West Hennepin Affordable
Housing Land Trust, 5101 Thimsen Ave., Suite 200, Minnetonka, MN 55345; Phone
952-401-7071; email WHAHL T@mn.rr.com.
Summary
The West Hennepin Affordable Housing Land Trust, which is based on the community
land trust model, provides an approach to affordable homeownership that addresses the
shortcomings of traditional approaches and is an approach that all suburban Hennepin
County Cities can use to:
1. Create an expanding and permanently affordable supply of owner-occupied
housing;
2. Specifically for low to moderate-income households;
3. And in doing so preserve and maximize the effectiveness of the public
investment.
6
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