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FAIRFRITITIM, F.111 1� 2.0 Summary 2, 1 The HRA staff has been working with the W'estwood Village I Town Home Association regarding establishment of a Housing Improvement Area (HIA) as a method to assist in the financing of major exterior improvements needed to the 47-unit town home complex. Westwood Village I is proposing to replace siding, fascia and roof on all buildings. 2.2' A HIA is a tool available to local units of government provided by NN Statute 429A. I I — 4 A. 1. The HIA can be created to help fund improvements to common areas within housing areas that can not otherwise be economically feasible through private financing. The H1A works similar to a public assessment process with the payback on the cost of the improvements, plus interest and administration costs, which are added to the taxes of the owners within the identified area over a period of years. ,23 The HRA housing plan includes the review of financing multi-family renovation projects through the use of a HIA and has been evaluated by staff as a possible tool. Although 2 complexes have inquired about this tool over the past several years, Westwood Village I is the first to seriously consider this option due to the difficulty in securing private association financing and/or individual financing at an affordable price. I() Ouestions & Considerations: Sue Shea, association president from the Westwood Village 1,1 spoke to the HRA in August 2006 to provide a summary of their needed improvements and inability to finance those improvements with the association's existing reserves. Several questions were raised and answered at the HRA meeting as follows.- 1. Ouestion — How have the other Westwood Village complexes (III, III) been able to finance their improvements and We,stw,olod Village I can not? Answer by Westwood Village Association Representative - Each Westwood Village complex has been separate entities since their inception. The connection/cornmonahty is the complex names; Westwood 1, 2, or 3 (named by the contractor for the order they were built). In all fairness it's not comparing apples to apples. That's like asking how Burger Barn and Burger King could pay for something; but, Burger Hut could not. They are separate businesses, run differently, and have different issues and financial situations. Westwood Village I does not know how the others did their financing. Maybe they had a larger, reserve fund making financing less of an issue. Material prices, interest rates and transportation cost have all risen since the others did their complexes too. In addition, single-board, cedar siding was a b* sell* I I ig ing point for the on* ginal builder; owners were told when a board goes bad they could just pop it Doff ff and replace it. Since 1969 when the complex was built, previous owners believed what the contractor promised and never budgeted for full siding replacement. Today's owners are faced with attempting a major restoration without any funds reserved for this purpose. Preliminary estimates indicate this project will run about $1.2 million dollars for 47 units. The monthly payments from conventional/shorter tenn financing would be hefty; causing an extreme hardship on most owners. In addition, it is virtually impossible to the "association" to borrow these funds with normal financing methods. HIA Public Hearing (12-1,8-,01161) - Page 2 of 8