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HomeMy WebLinkAbout09/22/15WRIIA Wheat Ridge Housing Authority Minutes of Meeting September 22, 2015 A. CALL THE MEETING TO ORDER The meeting was called to order at 4:03 p.m. by Chair Thomson in the Second Floor Conference Room of the Municipal Building, 7500 West 29` Avenue, Wheat Ridge, Colorado. B. ROLL CALL OF MEMBERS Authority Members Present: Thomas Abbott Chad Harr Tracy Langworthy Janice Thompson Jennifer Walter Authority Members Absent: None Also Present: Lauren Mikulak, Senior Planner Kenneth Johnstone, Community Development Director Jim Hartman, Hartman Ely Investments (HEI) Susan Ely, Hartman Ely Investments (HEI) Justin Brunson Eric Clayman Tammy Odean, Recording Secretary C. APPROVAL OF MINUTES: 1. April 28, 2015 It was moved by Mr. Abbott and seconded by Mr. Harr to approve the minutes of April 28, 2015 as amended. Motion approved 5-0. 2. August 18, 2015 Housing Authority Minutes September 22, 2015 It was moved by Ms. Walter and seconded by Mr. Abbott to approve the minutes of August 18, 2015 as amended. Motion approved 4-0-1. Ms. Langworthy abstained. D. OFFICERS REPORTS There were no officers' reports. E. PUBLIC FORUM Dale Pitcher 5398 B State Hwy 92, Torrington, WY 82240 Mr. Pitcher is working with Cedar Springs Hospital in Colorado Springs and he would be interested in using the Fruitdale building for Alternative Therapy for pediatric trauma, it would be medically based using a light source. Ms. Mikulak mentioned that the Housing Authority is not entertaining any new proposals for Fruitdale and will not be able to comment on anything new at this time. Claudia Worth, WR Historical Society 4650 Oak St., Wheat Ridge, CO Ms. Worth was unaware of the proposal being discussed today and was disappointed Mr. Pitcher came all the way from Wyoming with a possible proposal. Chair Thompson stated the current proposal being discussed today has been ongoing. She stated that the minutes are with the city and was sorry Ms. Worth did not know about it. F. NEW BUSINESS G. OLD BUSINESS 1. Fruitdale School - Update from Hartman Ely Investments Ms. Mikulak gave a brief introduction into what has happened in the past and stated a few other proposals had fallen through. The Housing Authority has been working with HEI since February of 2015 and they have been doing their work pro bono. The motion that would be entertained at the end of this proposal would be to enter into a sale and purchase agreement. Mr. Hartman introduced his partner Susan Ely and the tenants of the Fruitdale Artisanal Meat Company, Justin Brunson and Eric Clayman. Mr. Hartman had been working with Mr. Clayman on other restaurant projects and mentioned he was looking for a wholesale butcher facility to provide meat to their custom restaurants as well as Housing Authority Minutes 2 September 22, 2015 other restaurants in the area. Mr. Hartman told Mr. Clayman and Mr. Brunson about the Fruitdale building. After touring the site, the fit for them, on a scale of 1-10, was a 12. Mr. Clayman stated the part of the project that he and Mr. Brunson are interested in is the 1950's addition to the school. To be a USDA meat processing business they need to have refrigeration. The kitchen will be the cook room, the cafeteria will be the raw room and the gym will become the cooler and the dry -aging room. The vision for the business is to develop a local meat processing business and to source everything from Colorado. Mr. Brunson, who has been a chef for 17 years is self-taught on curing meats and wants to teach others the dying art. He is excited that Fruitdale can become a school once more with apprentices coming in to learn. Mr. Harman stated that the educational side to this project is great especially with the prospect of partnering with Warren Tech and Johnson Wales University. The project will also have a great artisanal feel and he wants to propose that the manager of the meat market live in one of the apartments on the site as well as there be a live/work training existence for the apprentices. Mr. Hartman summarized his presentation from the Agenda stating this project is a viable economic reuse plan and the redevelopment total cost is approximately $6 million and there will be a $640,000 gap funding for the city, but he also presented a variety of potential ways for the city to fund this $640,000. They included, but are not limited to: affordable housing unit subsidy, community event space subsidy, job creation subsidy, Business Development Zone sales tax give -back or ESTIP, and subsidy for Jeffco shared parking. Mr. Hartman stated that in the end we will be able to give back to the community when this project is complete. Ms. Thompson stated she really likes the project and the preservation of the Fruitdale building and entertained any questions or comments. Ms. Langworthy would like to know the time frame for seeing the benefits from the economic development from the meat company. Mr. Clayman stated 1/3 of the meat company business will sell meats to their restaurants, 1/3 will sell to other restaurants and 1/3will be a charcuterie to sell to the public and mail order. Justin added that the drying process can take 6months to a year, but we will also have fresh sausages and ground beef to sell. He stated that their business plan starts humbly and they really want to show what they can do. Housing Authority Minutes 3 September 22, 2015 Mr. Hartman stated that there is a vacancy allowance in the numbers and the sales volume will happen in 2017. Mr. Johnstone stated that the city plans to use good standard practices and get a third party to look at the numbers in the deal. The city want to make sure the deal is good fundamentally for the city and Housing Authority. Mr. Abbott asked if the meat processing part of the building, because of USDA requirement, is a building inside a building and if all the equipment that is being added to the building could be re -used elsewhere. Mr. Hartman stated confirmed all equipment could be re -used. Mr. Brunson and Mr. Clayman stated that the kitchen is not changing and they will be building large walk in freezers in the gym and adding drying rooms as well. The windows will stay on outside walls and insulated walls will be added on the interior. There was also more discussion by Ms. Thompson with regards to the importance of the meat processing company to the community and she has seen it first hand through friends in Wyoming who had a similar business. Mr. Abbott reiterated how important he thought the business was as a trade and likes the connection with Warren Tech and Johnson Wales University. Ms. Thompson thought it is great the meat company will have a link to local restaurants and Mr. Harr wanted to know why there would not be a restaurant at this location. Mr. Brunson stated that there should not be a USDA inspector and a restaurant together at the same location. Mr. Hartman added that there may be one day permits for a sausage cart or special events such as a harvest dinner. Ms. Walter questioned the funding for Phase 1 and possible Phase 2. Mr. Hartman stated the funding is there and Ms. Mikulak added an application has been submitted to the EPA to approve the use of the City's Brownfield grant funding and she is waiting to hear back from them. Talk then started about the buildings themselves and the plans for the exterior. Mr. Hartman said the old school will be front and center with the old cottage being torn down and other building being painted brown. Solar panels will be on the canopy and some trees will be replaced. Ms. Mikulak added that a possible grant from the Historical Fund could dictate some of those entities. Mr. Hartman stated there are ten, two level apartments proposed, six on the backside of the building and four on the front. Eight of these units will be one bedroom apartments and two will be two bedroom apartments. A lot of creativity will be used Housing Authority Minutes 4 September 22, 2015 for the space that is currently there. Also, there will be two apartments behind the meat company for the store manager and apprentice. Ms. Langworthy wanted to know if there will be both affordable and market rate housing within this project. Mr. Hartman believed there would be and Ms. Mikulak confirmed there should be an ideal mix of mixed income tenants for this project. After a meeting with the Jefferson County Community Development, who manage the CDBG and Home funds; Home funds are intended for the creation of new affordable units and will be better to tap than CDBG which is not an appropriate source because of the mixed housing we want for this project. Mr. Johnstone added that by deed restrictions there will be floating numbers as to how many units will be affordable and how many will be market rate. He also stated that by using Home funds we will move closer to our goal of filling the gap. Mr. Harr asked Mr. Hartman if HEI will own, manage and maintain the apartments. Mr. Hartman replied yes, but stated they may also contract out the property management. If we do, we want to find a good community manager. Mr. Harr also wanted to know if there is enough parking on the site. Mr. Hartman stated they have 51spaces, which is more than is required. Also, there is easy access to the bus and Goldline. Ms. Langworthy still had concerns about the finances. Mr. Hartman stated that it is important for them that the finances work fairly for everyone involved. His hopes are to share the payback funds, but to get the initial funding we have to solve the gap. Ms. Mikulak stated the gap in Pro forma is closer to $1 million, but if Housing Authority makes the decision to sell the land to HEI for a nominal fee of $10 the gap is then closer to $640,000. Mr. Johnstone stated there is no guarantee in payback funds, but we have a good project here and there are sources such as Home funds, tax credits and grants to help out. Ms. Langworthy wants to know what the Housing Authority is willing to accept as a cost and what are we going to ask City Council for. Ms. Thompson knows the Housing Authority has not always broken even and wants to know Ms. Mikulak's take on the Home aspect of the project. Ms. Mikulak stated that on the last two we have lost $15,000420,000. Subsidizing residential units sounds logical and we are trying to figure out if having a developer partnership makes sense, but there is not a magical number to give to the city yet. Housing Authority Minutes 5 September 22, 2015 Ms. Langworthy crunched some numbers and is wondering if we have $200,000 to subsidize and get some of that back. Mr. Harr wanted to know how much the Housing Authority has put into the building so far. Ms. Mikulak stated $295,000 so far; this includes the money we put up for the matching component for State Historical Fund grants. Mr. Abbott feels like the Housing Authority is an equity partner on this project and thinks it fits, and should partner with the developer for the residential component. He stated we may not get a check every month, but feels we will get our income back in different ways. Mr. Harr stated that his hesitation is looking at the numbers put into the $295,000, because the money is being given to a for profit business. He likes the project and what it will do for the community, but is concerned if we are being responsible with tax dollars. Ms. Thompson agrees the Housing Authority has struggled with the building, but thinks we are getting a lot out of this project. All money aside, we will be getting affordable housing, and educational partnership, a historical component, saving the name of Fruitdale, improvement on 44`h Avenue, an agricultural element and it's a gathering place. I'm troubled by the money, but looking at what we get as a whole, I'm excited, especially excited about the meat company. I see the long term future and how much we can get back from this project Ms. Langworthy stated that we may not get the $295,000 back, but we will save the building. Mr. Johnstone and Ms. Mikulak stated that we will need numbers by the November 1 City Council meeting and we will have a third party advising us. There will also be a reimbursement clause in the development agreement. It was moved by Ms. Langworthy and seconded by Ms. Walter to authorize staff to negotiate and execute a purchase contract with Hartman Ely Investments for the sale of the Fruitdale School property at 10803 W. 44`h Avenue for a purchase price of $10.00 and further to limit closing costs incurred by the Wheat Ridge Housing Authority. Motion carried 5-0 2. Fruitdale School — Next Steps Housing Authority Minutes 6 September 22, 2015 Ms. Mikulak stated that in preparing Fruitdale School for redevelopment, the Housing Authority needs to consider several additional motions: Motion 1— Land Swaa Ms. Mikulak explained that a portion of the Norma Anderson playground is located on the property owned by the Housing Authority. A land swap between the Housing Authority and school district would return the playground to Jeffco Schools and would provide the Fruitdale property with additional land area to the north. It was moved by Ms. Walter and seconded by Mr. Harr to authorize staff to negotiate and execute a land swap with Jefferson County Public Schools conveying the playground portion of the property to the school district and accepting additional vacant land to the north. Motion carried 5-0 Motion 2 — Land Use Entitlements Ms. Mikulak explained that the property has a variety of different zonings on it and will need to be rezoned to Mixed Use -Neighborhood (MU -N) which would allow for residential uses as well as a limited range of commercial and retail uses. Along with rezoning the property it will need to be consolidated through a platting process. The Fruitdale site has never been platted and appears to be comprised of several parcels. The platting will require a surveying company which we are awaiting several quotes, and could cost $15,000. We are looking at an entity that has done a lot of work in the City of Wheat Ridge and is reputable. It was moved by Mr. Abbott and seconded by Ms. Langworthy to authorize staff to submit and process all necessary land use applications on behalf of the Wheat Ridge Housing Authority and further to engage necessary professional services at a cost not to exceed $15,000. Motion carried 5-0 Motion 3 — Deed Restriction/Reverter Clause Ms. Mikulak and Mr. Johnstone explained that when the Fruitdale Property was conveyed in 1883 to the Jefferson County School District, the deed included a reverter clause stating "...the said land hereby conveyed being for school purposes and if at any time the same shall cease to be used for said purposes the land hereby conveyed shall revert to the Grantors, as in their first and former estate." The clause could be a red flag to lenders and the City Attorney has recommended the Housing Authority proceed with a quiet title action; meaning we need to notify any person of interest (family members of the two gentleman who deeded the property in 1883). Once they Housing Authority Minutes 7 September 22, 2015 are properly notified and if no interest in purchasing the property, the reverter clause can be removed by count order. It was moved by Ms. Langworthy and seconded by Mr. Abbott to authorize staff to initiate quiet title action in order to remove the reverter clause and clear title for the Fruitdale School property. Motion carried 5-0 Motion/Consideration 4 - Subsidy Ms. Mikulak stated with reference to the gap funding the staff has engaged a neutral third party to review HEI's pro forma. Economic & Planning Systems (EPS) will be providing this review. They City Manager's office has authorized an amount of $5,000 to pay for the first phase of this analysis in an effort to facilitate the redevelopment project. It is appropriate to do a cost share and have the Housing Authority contribute for the second $5,000. It was moved by Ms. Walter and seconded by Mr. Harr to approve payment in an amount not to exceed $5,000 for the services provided by Economic & Planning Systems. Motion carried 5-0 Mr. Johnstone said the he and Ms. Mikulak will be going in front of City Council Study Session October 5 to discuss this redevelopment. Ms. Langworthy stated it would be good to have someone present from the Housing Authority at the City Council meeting on October 5. Mr. Hartman said that after construction and when the facility is operational, which should be by 2017; then roughly two years after that HEI wants to give as much payback to the Housing Authority that we can. Ms. Mikulak stated that EPS can be at the next meeting to let the Housing Authority know what the deal points are. H. OTHER Ms. Thompson would like to have a thank you meal/get together with Cornerstone. Ms. Mikulak stated she had let Cornerstone know we still want to do dinner but had not committed to a date. Ms. Thompson said we should maybe wait until after the first of the year and Ms. Walter said to look at January 4. Housing Authority Minutes September 22, 2015 Ms. Thompson asked how it would be paid for and Ms. Mikulak stated the Housing Authority budget can cover the cost but it wouldn't look good if tax dollars paid for the dinner at a restaurant so the dinner should be catered in. I. ADJOURNMENT It was moved by Mr. Harr and seconded by Ms. Walter to adjourn the meeting; at 6:49 p.m. Motion carried 5-0 Next meeting is a special session scheduled for October 20, 2015. -� � .an ill �eThompson�,ha.�ir� Housing Authority Minutes September 22, 2015 Tammy Od Recording Secretary E