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HRA Meeting Minutes – Tuesday, November 16, 2010 Page 2 8.Presentations 9. Action/Discussion Items a.Lake Josephine Housing Improvement Area (HIA) Housing Coordinator Jeanne Kelsey provided a history of the request of the Lake Josephine Association (LJA) and their petition to the City for establishment of an HIA, at a budgeted amount estimated at $403,800. Ms. Kelsey noted that the LJA was a 23-unit complex located at 3076 Lexington Avenue, originally constructed in 1969 as an apartment building and converted into a condominium association in 1979. Ms. Kelsey advised that the complex was self-managed until January of 2006 when Advantage Townhome Management (ATM) was hired to manage their association, resulting in some annual maintenance improvements. However, Ms. Kelsey noted that the LMJ needed to update their elevator to meet 2012 State building codes, in addition to replacing windows, boilers, siding and common area improvements and mechanical work related to ventilation at an estimated cost of $403,800. Ms. Kelsey advised that, as of their annual board meeting held on November 11, 2010, the Association had received over sixty percent (60%) of appropriate property owner signatures on the petition requesting HIA. Ms. Kelsey reviewed the lack of replacement reserves to make the improvements, in addition to their attempts to finance from two banks, and subsequent denials of those requests. The HIA request is further detailed in the Request for HRA Action, and related attachments, dated November 16, 2010. Ms. Kelsey advised that representative members of the Association and their management company were present. Discussion among Members and staff included staff’s recommendation for application by the HRA for Community Block Development Grant (CBDG) funds from Ramsey County that will be available after January of 2011; and to consider other loan options, such as available HRA funds for Villa Park or in the single-family loan fund for HRA Board consideration. Ms. Kelsey recommended that the HRA make application for CBDG funds with the City HRA as the applicant and funds loaned to the LJA. Further discussion included potential terms of such a loan; special assessments impacting each unit; timing for payment of special assessments at time of sale or whether they could be assumed by new buyers of units depending on the financing mechanism and on the direction of the HRA; and current market value and sales history of the units in the current housing market. Jim Schumacher, Advantage Town Home Management (ATM) Mr. Schumacher advised that there was currently one unit being marketed at $65.000, but that it had been on the market for a lengthy time, and a short sale was currently being attempted. Mr. Schumacher advised that association dues, currently between $250 - $295 monthly, were based on each unit’s square footage. Mr. Schumacher noted that with the proposed improvements, the current annual maintenance costs of $10,000 should be dramatically reduced, allowing the LJA to increase their reserves; and estimated that the LJA currently had approximately $25,000 in its reserve fund. At the request of Chair Maschke as to how the LJA became aware of HIA’s, Mr. Schumacher advised that one of the homeowners had seen a newspaper article related to an HIA-financed project and brought it to the attention of ATM staff. Mr. Schumacher responded to other questions of the Board, including timing for roof replacement approximately twelve (12) years ago and needed boiler replacement, both representing major expenses in the overall funding request; and clarified that the common area improvements consisted of improvements to the building’s venting and mechanical systems in the hallways, and not just for aesthetic purposes.