Loading...
HomeMy WebLinkAboutItem 06Memorandum City of Lakeville Community & Economic Development To: Mayor and City Council Members Steven Mielke, City Administrator From: David L. Olson, Community and Economic Development Director Copy: Dennis Feller, Finance Director Adam Kienberger, Economic Development Specialist Date: April 19, 2013 Subject: Proposed Use of CDBG Funds from the Sale of the Former Senior Center The City closed on the sale of the former Senior Center to Rose Mountain LLC on December 18, 2012. The sale price was $345,000 which was the appraised value of the property. The original construction of the Senior Center was funded in part with $215,610 in Community Development Block Grant (CDBG) funds that were awarded by the Dakota County Board of Commissioners on March 27, 1984. Since the property will no longer be used in a manner that meets one of the federal objectives of the CDBG program, the U. S. Department has Housing and Urban Development has determined that City is required to reimburse the CDBG program. The amount of the reimbursement is equal to the percentage of total project cost (original development plus capital improvements and upgrades) that was funded with CDBG funds multiplied by the Estimated Market Value of the property. The calculation of the reimbursement results in a required reimbursement of $119,888. This reimbursement calculation has been reviewed and approved by Dakota County CDA staff. This reimbursement will remain in the City's CDBG account with the CDA and can be used for new CDBG eligible activities. The attached memo from Andrea Brennan of the CDA requests that the City consider allocating the reimbursement of CDBG funds from the sale of the Senior Center to the renovation of Ideal Way Townhomes which is their 8 -unit public housing project located on Ideal Way west of the Dodd Boulevard and the Heritage Commons development. The level of federal funding that the CDA has received in the past to make these types of improvements has decreased over the years. They are proposing a $140,000 in improvements to the units that would include new shingles, gutter, siding, overhead garage doors, exterior lighting and landscape improvements. The CDA also has the option of using some of their existing TIF funds to pay for these improvements. These are the same funds that they have provided for acquisition of the blighted duplex at Holyoke Ave. and 21 0th Street and that is providing funding for the Downtown Parking lot project located west of Pioneer Plaza that will be reconstructed later this year. Staff feels that this appropriate request for the following reasons: • It provides necessary improvements to existing affordable housing units in the community. ▪ It results in a timely expenditure of these grant funds and helps ensure that the City and CDA comply with the HUD expenditure timeliness requirements for the CDBG program. • it allows the City and the CDA to utilize CDA TIF funds which are much less restrictive than CDBG funds for future redevelopment projects in the Downtown Area. Action Requested: Staff needs to know if the Council is generally supportive of the CDA's request to use the funds reimbursed to the CDBG program from the sale of the Senior Center to rehab CDA owned public housing units located on Ideal Way. Dakota County ri. Community Development Agency CDA MEMORANDUM To: Dave Olson, Community & Economic Development Director, City of Lakeville From: Andrea Brennan and Lisa Henning, Dakota County CDA RE: Proposed Re- Programming of CDBG Funds to Assist CDA Public Housing Modernization Project Date: March 20, 2013 CDBG Expenditures Thank you very much for your efforts to increase the rate of CDBG spending over the last several months. The City has made great progress with the completion of economic development and ADA compliance studies, ADA improvements at City Hall, and the acquisition and demolition of a blighted property on Kenwood Trail. Additionally, the City approved reprogramming funds to senior transportation services, an eligible public service activity likely to result in the regular and consistent expenditure of CDBG funds in the future. Finally, City staff sent out a targeted mailing for the homeowner rehabilitation program, resulting in four households approved for the program and one household on the waiting list. CDBG Timeliness Policy The CDA and the municipal sub - recipients (i.e. Lakeville) are required to meet (or be below) a 1.5 timeliness rate by May 1 of each year. This has become increasing more difficult in the last several years, requiring the CDA to enforce the CDBG Timeliness Policy (attached as Exhibit A). This policy was distributed at the October 11, 2012 CDBG Workshop and is part of the CDBG sub - recipient agreement between the CDA and the City. Attached as Exhibit B is a letter from the U.S. Department of Housing and Urban Development ( "HUD ") summarizing the results of their 2012 monitoring of the Dakota County CDBG program. In their letter, HUD strongly recommends that the CDA enforce the CDBG Timeliness Policy. Despite significant efforts on the part of City staff, the City will fall short of meeting 1.5 timeliness ratio by May 1, 2013 by an estimated $50,000. The Dakota County Entitlement Community as a whole will still meet the timeliness ratio, since several cities exceeded their required rate of spending. As a result, CDA staff does not recommend reallocating any of Lakeville CDBG funds to other activities prior to the May 1, 2013 deadline. City staff has indicated a strong desire for the City's CDBG allocation to be used within the City of Lakeville, and has been resourceful and proactive in working with the CDA to accomplish this. Future CDBG Expenditures CDA staff will continue to work closely with City staff to ensure that the timeliness ratio is met by next year's deadline of May 1, 2014. This task will be made more difficult by the expected $119,888 of CDBG program income from the senior center sale proceeds. In order to ensure the City will meet the 2014 timeliness test on activities within the City, CDA staff proposes that the City approve the allocation of program income funds to the rehabilitation of the CDA's Ideal Way Townhome Development in Lakeville. Proposed Funding for Ideal Way Townhomes in Lakeville The CDA requests City CDBG funds to improve Ideal Way Townhomes, an 8 -unit public housing townhome development located at 20008 -20022 Ideal Way. Attached as Exhibit C are photos and a location map. Built and placed into service in 1982 -1983, this property is now 30 years old and in need of improvements. The CDA has received decreased federal funding to make necessary improvements to its public housing portfolio. In order to maintain properties at high quality standards, other federal and/or local funds are required. The CDA proposes to use CDBG and /or tax increment financing (TIF) funds to address roof deficiencies, improve the energy efficiency, and improve the general exterior appearance of this project, which is in a residential area visible from Dodd Avenue. Proposed improvements include replacement of 17 -year old steel siding with Hardie Board siding, new asphalt architectural shingle roof, and new windows. The project is expected to start in July 2013. The estimated cost is $140,000. The CDA requests that the City allocate $119,888 of CDBG program income funds to contribute to these costs. If the City would like to contribute additional CDBG funds to cover the full costs of the improvements and help to ensure that the 2014 timeliness test is met, the CDA welcomes any and all assistance for this project. The scope of improvements include: • New architectural shingle roof, gutters, gutter covers ▪ New fiber cement board siding and trim — khaki Hardie Board with white accent trim board • New windows • New insulated overhead garage doors with accent windows • Improved exterior lighting upgraded to LED (attached to the structures) • The addition of concrete pads for TV dish reception to reduce the disarrayed appearance of dishes • Landscape improvements near rear patio doors The CDA recently completed similar improvements to its public housing developments in Burnsville and Apple Valley. Attached as Exhibits D and E, respectively, are before and after photographs of this rehabilitation work. An alternative funding source for this work is T1F funds, which may also be used for non -CDBG- eligible activities in the City's downtown redevelopment area. Approval of this proposal would allow additional TIF funds to be used for downtown project(s) pursuant to the Joint Powers Agreement between the City and the CDA. CDA Ideal Way Townhomes Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not guaranteed. This is not a Map Scale legal document and should not be substituted for a title search,appraisal, survey, or for zoning 1 inch = 186 feet verification. Dakota County assumes no legal responsibility for the information contained in this data. 4/18/2013 w CC 0 LL w CO cc w H Q W CC 0 LL w m c 0 z aC w I LL