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HIA Recommendation (11-21-06) - Page 1 of 5 REQUEST FOR HRA ACTION Date: 11-21-06 Item No: 8.b. Staff Approval: Agenda Section: CB Action Item Description: Recommendation for Establishment of Housing Improvement Area for Westwood Village I – Tabled from 10/17/06 meeting (HF0052) 1.0 Background 1.1 The HRA tabled consideration of support for the establishment of a HIA for Westwood Village until the City Council held a work session to discuss the project and financing for the HIA. The City Council will discuss the project on November 20 th . Attached is a memo from the City Manager and HRA Executive Director regarding additional information on the project, need for public funding and possible financing options. A verbal report on the Council discussion will be provided at the HRA meeting. 2.0 Summary 2.1 The HRA staff has been working with the Westwood Village 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. 2.2 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 HIA 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. The HRA housing plan includes the review of financing multi-family renovation projects through the use of a HIA. 2.3 Sue Shea, association representative from the Westwood Village I, spoke to the HRA in August 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: Question – How have the other Westwood Village complexes (II, III) been able to finance their improvements and Westwood Village I can not? 1. Answer by Westwood Village Association Representative - Each Westwood Village complex has been separate entities since their inception. The only connection/commonality 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 appl es 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