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�.�] Summary �. l The HRA staff has been working with the Westwood 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. Westwopd Village I is proposing to replace siding, fascia and roof on all buildings. �.� A HIA is a tool available to local units of government provided by MN� Statute 429A.11 — 429A.21. 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 HTA 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. 3.:� The HRA housing plan includes the review of financing multi-family renovation projects through the use of a�-iIA and has been evaluated by staff as a possible tool. Although 2 complexes have inquired about this tool over the past several years, Westr�vood 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. �_C] Questions & Considerations: Sue Shea, association president from the Wes�vvood Village I, 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 �-TRA meeting as follows: 1. uestion — How have the other Westwood Village complexes (II, T�) been able to finance their improvements and V�estwood Village I can not? Answer bv Wes�wnod Village Association Renresen�ative - Each Westwaod Village complex has been separate entities since their inception. The anlv con�.ectionlcor�zzr�o�ality is the complex names; Wes�v�ad 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 haw Burger Bam and Burger King could pay for something; but, Burger Hut could not. They are separatebusinesses, run differently, and have different issues and financial situations. Westwaod Village I does not know how the others did their fmancing. Maybe they l�ad 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 big selling point for the original builder; owners were told when a board goes bad they could just p�p it off and replace it. Since 1969 when the complex was built, previous owners believed wl�at the contractor promised and never budgeted for full siding replacement. Today's owners are faced with attempting a maj or restoration without any funds reserved for this purpose. Preliminary estimates indicate this proj ect will run about $1.2 million dollars for 47 units. The monthly payments from conventiona1/sl�orter term financing would be hefly; causing an extreme hardship on most owners. In addition, it is virtually impossibleto the "association"to borrow these funds with nomlal financing methods. HIA PubfiC Hearing (12-I8-06) - Page 2 of 8