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HomeMy WebLinkAbout01-27-09City of Lakeville Economic Development Commission Regular Meeting Agenda Tuesday, January 27, 2009, 5:00 p.m. City Hall, 20195 Holyoke Avenue Lakeville, MN 1. Call meeting to order 2. Approve November 25, 2008 meeting minutes 3. Election of Officers 4. Review and Discussion of 2008-2010 Strategic Plan for Economic Development Work Program for 2009 5. Update on Economic Impact Analysis 6. Director's Report 7. Adjourn Attachments: December 2008 Building Permit Report Press Release on 2008 Building Permit Statistics Lakeville Business News StarTribune Article Census findings: Edina isn't so rich, and other surprises 1/7/09 StarTribune Article Eden Prairie's "town center" idea bumps into Wal-Mart 1/16/09 City of Lakeville Economic Development Commission Meeting Minutes. November 25, 2008 Marion Conference Room, City Hall Members Present: Comms. Matasosky, Smith, Starfield, Schubert, Erickson, Emond, Brantly, Vlasak, Tushie, Pogatchnik, Ex-officio member Mayor Holly Dahl, Ex-officio member City Administrator Steve Mielke, Ex-officio member Chamber of Commerce Executive Director Todd Bornhauser. Members Absent: None. Others Present: David Olson, Community & Economic Development Director; Dennis Feller, Finance Director, Penny Brevig, Recording Secretary... 1. Call Meeting to Order Chair Matasosky called the meeting to order at 4:00 p.m. in the Marion Conference Room of City Hall, 20195 Holyoke Avenue, Lakeville, Minnesota. 2. Approve October 28, 2008 Meeting Minutes Motion 08.11 Comms. Emond/Erickson moved to approve the minutes of .the October 28, 2008 meeting as presented. Motion carried unanimously. 3. Discussion of the status of the Economic Impact Analysis Model David Olson introduced Finance Director Dennis Feller. Mr. Olson stated that. one of the goals of the 2005-07 Strategic Plan for Economic Development was to "Complete a study to determine the minimum market value of residential housng'that generates sufficient City property taxes to pay for the City services required by that housing unit." Mr. Olson and Mr. Feller discussed the goals, process, and findings of the Economic Impact Analysis Model. They indicated that a model has not been able to be developed to the point where staff is comfortable utilizing the outcomes in a public policy discussion on land use. It was concluded that it is very difficult for cities to attempt to use the results of fiscal impact analysis to practice "fiscal zoning." It was Economic Development Commission Meeting Minutes November 25, 2008 agreed that while fiscal impact analysis is an important consideration in planning and land use decisions, it is only one of several issues to be considered. Mr. Olson asked to what extent we continue to pursue this goal. The Commissioners concluded that what they would actually want is a snap shot. of what is going on right now to determine where property tax dollars are really going and what commercial/industrial taxes come back to benefit Lakeville and be able to utilize it as necessary. They indicated that the draft from the Metropolitan Council that Mr. Olson distributed entitled The Fiscal Impact of Growth on Cities was the type of information the EDC was looking for. The Commission asked staff to put something together that would show where the tax dollars really go and. what the City gets back. 4. Review of 2009 Community Development Block Grant Application Mr. Olson reviewed the 2009 Community Development Block Grant Application. He indicated that the City is anticipating an increase in funds due to a change in the CDA's funding allocation formula. The CDA is continuing its requirement that 50% of a City's activities to be funded with CDBG funds involve activities that benefit Low- Moderate Income (LMI) households. Mr. Olson stated that one of the LMI activities is the Home Rehabilitation Loan program administered by the Dakota County CDA. He indicated that preservation of the existing residential neighborhoods adjacent to the Downtown has been identified as a .goal of the City Council approved Downtown Development Guide. Because of the increase in home foreclosures and economic hardships, this program will likely remain active and potentially see an increase in demand. Mr. Olson stated that through the end of October, there is approximately an $80,000 balance available. in the current program budget. Staff would recommend a funding level increase for this program of $64,745 for 2009. Mr. Olson stated that the other activity funded with the .City's 2008 allocation is the Downtown Code Improvement Program. Staff is recommending that additional funding in the amount of $64,745 be provided in 2009. He indicated that this will provide sufficient funding to complete at least three Downtown Code Improvement grants in 2009 and 2010. Mr. Olson indicated that DARTS has inquired about a potential partnership with the City to utilize CDBG dollars for funding a yard maintenance and cleanup program for seniors that qualify. Mr. Olson stated that staff is seeking a recommendation from the EDG whether it should pursue this partnership and utilize 2009 CDBG dollars for this type of a program. 2 Economic Development Commission Meeting Minutes November 25, 2008 The Commission agreed to leave things as they are now and not add the DARTS clean up program. Motion 08.12 Comms. Tushie/Emond moved to recommend submittal of the 2009 Community Development Block Grant application, as presented, and forward this recommendation to the City Council. Motion carried unanimously.. 5. Review of final Broadband Feasibility Study Request for Proposals. Mr. Olson reviewed Mr. Kienberger's Broadband Feasibility .Study Update memo. He indicated that on November 17, 2008 the City of Lakeville sent out a Request for Proposals (RFP) for a Broadband Feasibility Study to 11 different firms. Mr. Olson explained the purpose of the study and reviewed the timeline for the process. Upon City Council selection of a consultant in February, staff will provide the EDC with regular status updates on the feasibility study and will continue to monitor the broadband and technology environment both locally and nationally and'`will remain active in the Dakota County group as they explore this issue. Mr. Mielke .indicated that the Dakota County Broadband group. is aware of the potential of fiber and the benefits of increased broadband .capabilities and are looking at sending out a flyer with information to share with businesses and residents. 6. Director's Report Mr. Olson reviewed the Director's Report. Comm. Erickson asked what the old police station will be used for. Mr. Mielke stated -that it must be a civic use and that the exact use has not yet been determined. 7. Adjourn The meeting was adjourned at 5:00 p.m. Respectfully submitted by: Attested to: Penny Brevig, Recording Secretary R. T. Brantly, Secretary 3 '~ _ ~ ,l o .City of Lakeville ' ~ Community and Economic Development Memorandum To: Economic Development Commission From: .Adam Kienberger, Economic Development Specialist Copy: Steven Mielke, City Administrator David L. Olson, Community & Economic Development Director Date: January 23, 2009 Subject: Election of OfFicers The February 22, 1994 Resolution Confirming and Defining the. Purpose, Responsibilities and Terms of Office for the Economic Development Commission state that "at the first meeting of the year, the Commission shall elect a Chairperson, Vice Chairperson and Secretary from .amongst its appointed members to serve for a term of one year." EDC members re-elected Jack Matasosky as Chair, Barry Pogatchnik as Vice Chair and. Bob Brantly as Secretary for 2008. Commissioners are asked to elect officers to serve the 2009 year. City of Lakeville Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community & Economic Development Director Copy: Steven Mielke, City Administrator Adam Kienberger, Economic Development Specialist Date: January 23, 2009 Subject: Discussion of 2009 Work Program for 2008-2010 Strategic Plan for Economic Development Attached is a portion of the 2008 2010 Strategic Plan for Economic Development that was approved by the City Council on December 17, 2007. Starting on page 17 of the plan are the approved goals and outcomes for this three-year plan. Also included in this plan are suggested years that specific goals would be pursued during the three- year plan. During the meeting Staff will review progress made in 2008 on the Strategic Plan and also provide updates on continuing initiatives. The following are specific goals that staff recommends be pursued as part of the work plan for 2009 (Year 2): Transportation O Complete the County Road 70 Interchange. O Complete the construction of transit facilities and implementation of services. by the end of 2009. O Participate in the Airlake Airport and MAC's Comprehensive Plan implementation as it relates to the realignment of Cedar Avenue. Life-cycle Housing O Help the City achieve reasonable and realistic housing goals that balance the need for different housing types for residents. O Help the City create a workforce housing approach that reflects the needs of business. Technology ~ Advocate for Lakeville to become a leader in telecommunications services. Growth Management ~ Continue to define. and provide the information future businesses and developers need in order to decide to locate in Lakeville. O Provide input on the Zoning Ordinance update being completed as a result of the approved Comprehensive Plan. Update. Communication ~ Create a single effective message/platform about economic development.. D Create and begin to implement marketing strategies. Partnerships O Develop and enhance partnerships whenever possible to achieve EDC goals. Staff is seeking comments and/or feedback from EDC members on these recommended goals to be pursued in 2009. 2008-201.0 Strategic Plan Goals and Outcomes After looking at the Significant Issues Questionnaire categories, Commissioners consolidated the information into six Significant Issues and corresponding goals and outcomes to address in the 2008-2010 Strategic Plan. for Economic Development. The Commissioners agreed that they would prefer a strategic plan that had a limited number of goals to ensure the EDC-would have the time and resources to give each goal the attention it deserves. The following goals and outcomes will formulate the basis of the work plan. Seven. strategic work areas and seventeen goals were identified for the 2008-2010 Strategic Plan. The work areas and goals are listed below. *bolded items indicate the years these items will be emphasized Transportation 1. Complete the County Road 70 Interchange (Timing: Year 1, Year 2) a. Communicate with businesses during construction b. Keep focus on getting it done right c. Maintain post-interchange work d. Recommend land uses that will support current and future development 2. Participate in the development of transit in Lakeville (Year 1, Year 2, Year 3) a. .How do we make the right investment for Lakeville? b. Encourage others to promote and plan together for a viable transit plan c. We must engage this process because decisions will be made with or without us d. Can we benefit from reverse commuting? e. Assist the political stakeholders 3. Promote continued planning of the East/West Corridors (Year 1, Year 2, Year 3) a. Getting future improvements on schedule b. Addressing the planning for the doughnut hole 4. Provide assistance to the City Council on the efforts to secure additional highway funding (Year 1, Year 2, Year 3) 5. Monitor the Airlake Airport and MAC's Comprehensive Plan (Year 1, Year 2, Year 3) a. MAC procedure to adopt long range plan 17 6. Investigate options for the use of the Urban Partnership Agreement (UPA) Grant for I-35 and Cedar Avenue transit facility development (Year 1, Year 2, Year 3) Life-cycle Housing 1. Help the City create a workforce housing approach that reflects the needs of business (Year 2) 2. Help the City achieve reasonable and realistic housing goals that balance the need for different housing types for residents (Year 1, Year 2, Year 3) a. Meets market needs b. Provides quality c. Addresses need for single-family entry-level housing d. Advocate with other policy makers to agree on housing goals e. Research affordable housing options and solutions Technology 1. Advocate for Lakeville to become a leader in telecommunications services (Year 1, Year2, Year 3) a. Utilize recommendations of the Business Telecommunications Technology Task Force (BTTTF) b. Include redundancy c. Create partnerships (school district, County, private) d. Make Lakeville a place telecommunications providers choose to serve Growth Management 1. Advocate to maintain balanced growth (Year 1, Year 2, Year 3) a. Monitor, react, and if needed advocate for specific growth strategies b. Regional analysis of scenarios that may affect fiscal stability of City 2. Continue to define and provide the information future businesses and developers need in order to decide to locate in Lakeville .(Year 1, Year 2, Year 3) 3. Provide input on the Comprehensive Land Use Plan (Year 1, Year 2) a. Land use planning b. Implementation 4. Analyze the viability of additional office park locations in Lakeville 18 Communication 1. Create a single, effective message/platform about economic development (Year 1, Year 2) a. Why choose Lakeville? b. Challenges faced in Lakeville 2. Create a marketing plan that: (Year 2) a. Reflects Lakeville brand b. Identifies the right businesses to attract c. Analyzes. the resources needed to be successful d. Complements other local efforts to promote this community Partnerships 1. Develop and enhance partnerships, whenever possible, to achieve EDC goals (Year 1, Year 2, Year 3) a. Technology initiatives .must utilize partnerships to be successful 2. Explore opportunities to build relationships (Year 1, Year 2, Year 3) a. EDC representation on the Vermillion River Watershed Board Fiscal Management 1. Continue to encourage sound fiscal management by the City of Lakeville (Year 1, Year 2, Year 3) a. public/private partnerships b. Balanced and growing tax base c. Communicating values of economic. development services d. Explaining why money needs to be spent for economic development I9 2008-2010 Strategic Plan for Economic Development Outcomes 1. A transit plan for Lakeville based on the benefits to local residents and businesses 2. A housing mix that reflects Lakeville's expected population changes and job growth 3. Leadership. in telecommunications services becomes a point of distinction for Lakeville 4. A partnership with ISD 194 and possibly Dakota County is established for development of goals set forth by the Business Telecommunications Technology Task Force 5. Convey benefits of a marketing plan to the City Council 6. Secure EDC representation on the Vermillion River Watershed Board 7. New partnerships are explored and established with Dakota County 8. Lakeville remains in the bottom third for City property taxes in Dakota County 20 ~. e City of Lakeville ' ~ Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Steve Mielke, City Administrator Dennis Feller, Finance Director Adam Kienberger, Economic Development Specialist Date:. January 23, 2009 Subject: Further Discussion of Economic Impact Analysis The EDC discussed this issue at the November meeting. The following is a excerpt of the draft minutes for the conclusion of the discussion on that item: The Commissioners concluded that what they wou/d actually want is a snap shot of what is going on right now to determine where property tax dollars are really going and what commercial/industrial taxes come back to benefit Lakeville and be able to utilize it as necessary. They indicated that the draft from the Metropolitan Council that Mr. Olson distributed entitled The Fisca/Impact of Growth on Cities was the type of information the EDC was looking for. The Commission asked staff to put something together that would show where the tax dollars really go and what the City gets back. Staff is preparing a PowerPoint presentation for the January meeting that attempts to respond to some of the types of questions that were raised at the conclusion of this discussion of this item. EDC members will be encouraged to ask questions and seek further clarification of the information that is presented. City of Lakeville ' y Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Steve Mielke, City Administrator Adam. Kienberger, Economic Development Specialist Date: January 23, 2009 Subject: January Director's Report The following is the Director's Report for January of 2009. Building Permit Report The City issued building permits through the end of December with a total valuation of $125,760,060. This compares to a total of $138,922,886 in 2007. Included in this valuation were commercial and industrial permits with a total valuation of $33,999,900. This compares to a total valuation of $43,118,100 in 2007. The City issued permits for 137 single family homes in 2008 with a total valuation of $36,852,000. This compares to 182 single family home permits in 2007 with a total valuation of $48,392,000. The City issued permits for 37 townhome and condo units in 2008 which compares to 119 townhome and condo permits issued in 2007. The City issued the permits for the CDA's 87 unit Crossroads Senior Housing project and the Walker Methodist Highview Hills projects in 2007 which totaled 242 units for both projects. Attached is a copy of a press release that was sent to the local newspapers as well as the StarTribune and Pioneer Press. Also attached is a copy of the article that ran in the StarTribune. Broadband .Feasibility Study The City recently received proposals on doing a broadband feasibility study that would have two components. The first component would look at the feasibility of installing City owned fiber to connect City facilities and determine whether this is more effective than the current lease arrangement that the City has with Charter Communications. The. second component of the study would look at the feasibility of providing fiber to the premise (FTTP) throughout the entire City. Staff interviewed three firms of the seven that submitted proposals and will be discussing our recommendations with the City Council at a work session on January 29tH Develoament Feedback Surveys for 2008 ..The City only received four completed Development Feedback Surveys in 2008 which is not a sufficient number to make statistically comparisons or analysis. All four of the surveys that were received included positive feedback and ratings. The City will continue to send these surveys out in 2009 and will continue to track the results of the returned surveys. Development Update Construction commenced in December on the Primrose Daycare building on Co. Rd. 46 adjacent to Lakeview Bank. Construction is continuing. on the new retail buildings in Heritage Commons, TimberCrest and Crossroads East. Construction is also. progressing on the First Park Lakeville buildings located at the intersection of Dodd Blvd. and County Road 70. EDC Appointment The City Council has decided to interview additional candidates to fill the vacancy on the EDC as well as several other boards and commissions. These interviews have not been scheduled but should take place in the next month. Foreclosure Update Attached is the monthly update on foreclosures in Dakota County provided by the Dakota County CDA. There have been 286 Sheriff Sales as a result of foreclosures in Lakeville in 2008. This compares to 199 for 2007.. The Building Inspection Department is currently monitoring approximately 165 vacant foreclosed homes in the City. The Dakota County CDA has received $2.8 million in federal funding under the Neighborhood Stabilization Program. The CDA is in the process of finalizing guidelines as to how they plan to administer these funds. Attached is a budget summary that indicates how the CDA proposes to use these funds. Transit Station Development Updates The Metropolitan Council recently authorized the award of a bid to Adolphson and Peterson for $8,316,200 to construct a 750 space ramp on Kenrick Avenue and 167th Street. The original plans called fora 500 space ramp, however, the Metropolitan Council included the additional 250 stalls as a bid alternative. The bids including the bid alternate came in low enough to build the 750 space ramp and still be within the budget that was established for the 500 space ramp. This ramp will have to be completed by the end of 2009 to comply with the UPA grant funding requirements. The Metropolitan Council is also in negotiations with Joe Miller to acquire an 8 acre parcel on Cedar Avenue south of 179th Street. The plans are to construct a 200-250 stall surface parking lot to serve as a Park and Ride on Cedar Avenue. However, because of the favorable. bidding climate, the Metropolitan Council may also seek a bid alternate to construct up to a 500 stall lot which is the ultimate planned size for. this location. Dakota County Community Development Agency MEMO January 16, 2009 To: Dakota County Cities From: Dan Rogness, Director of Community Revitalization Re: Foreclosure Update .r~. 1-i ~ :~~ ~ L3tNI~'ERSHiP ~I'G~Z~°Ge~~~i -w Here is a summary of the year-end foreclosure information that is provided on pages 3 and 4 of this E-news edition. The five cities with the highest percent of Sheriff Sales per household (using Met Council 2007 household estimates) are listed below. The county average was 1.37%. for 2008 compared to l.05% for 2007. Mendota Heights had the lowest percent with 0.54%. I. Farmington = 2.64% 2. South St. Paul = 2.19% 3. Lakeville = 1.61 4. Rosemount = 1.55% 5. Apple Valley = 1.50% The five cities with the highest percent of Notices of Pendency (NOP) per household are listed below. NOPs are official notification that the foreclosure process has begun. Not all notices will result in foreclosure. The county average was 2.06% for 2008, and the city with the lowest percent was Mendota Heights at 0.85%. I. Farmington = 5.38% 2. Rosemount = 3.32% 3. South St. Paul = 2.90% 4. Apple Valley = 2.26% 5. Lakeville = 2.02% The five cities with the highest percent change from 2007-08 for Sheriff Sales are listed below. The overall change for Dakota County was 30.5%, and the change for all of .the small cities and rural areas was 48. I %. The city with the lowest percent change was Eagan at 12.0%. I. Mendota Hgts = 71.4% 2. South St. Paul = 44.4% 3. Lakeville = 43.7% 4. .Farmington = 40.5% 5. Burnsville = 35.5% Dakota County Community Development Agency Dakota County Stats -December 2008 _ HQ/vl QWNERSN:iP • # of Sheriff Sales in December - 126 (compared to 135 in December 2007) • Total Sheriff Sales for 2008 - 2,063 (compared to 1,581 Jan.- December, 2007) • # of Notice of Pendency's Filed in December - 309 • Total Notice of Pendency's Filed for 2008 - 3, 100 A Notice of Pendency is filed by a mortgage company's attorney as official notification that the foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF file have Sheriff Sale and Notice of Pendency statistics for each city. Mapping Using Dakota County GIS htt~://gis.co.dakota.m n.us/website/dakotanetgis/ The Dakota County Office of GIS is updating the 2008 Foreclosures and Notice of Pendency layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 89 I -708 I . In The News Provided in this PDF file are a few notable foreclosure articles that were published in the last month. Among the points of interest: • Defaults are rising even on modified home loans. More than half of homeowners who had their loan modified to make payments more affordable in the first half of 2008 were in default again by the end of the year. • Another wave of foreclosures may occur in 2009 and 2010 partly because of "Pick-A-. Pay" and other adjustable-rate hybrid loans. Experts say that the next wave may be even more difficult to handle than the last. • Twelve million Americans currently owe more for their home than what it is worth. With the deepening economic crisis, many homeowners may start "walking away" from their homes. • The Minnesota foreclosure rate leveled off somewhat during 2008, although numbers were still record setting. Based on HousingLink's projections, foreclosures in the Twin Cities will be up 39 percent from 2007 to 2008. The rate of change in the metro area from 2006 to 2007 was 84 percent. If you have any other concerns, .please call me at (65 I) 675-4464 or send me an email at drognessCg~dakotacda.state.mn.us. o0 . ~ .:,: ~ _ .,,~ o a N L v7 .O - L:1 -_7 > ~ u Q T • U • v ~~ Q • .N • C • • • O ~ • ~ ~ ~ A ~ ~ • L 7 ~, ~ a~ ~~. ~ O ~ ~ ~ V ~~: ~c o U . ~ ~ H ~ ~ ~ ~ H ° ~ ~ w ~ 's. ° L a~ = 0 I~ O N ~O O~ p~ O~ '~ u~ ~' d- N W N N N N N O~ o~ ~ - 00 N O~ ~A ~ 00 Q~ I~ ~ ~ N OHO ~ N ~ I~ ~ ~ ^ `O O N N N N - - - N - - - N 0: Z N ~ N O~ C~ 00 ~ N I~ N C O ~O ,~ M N M N ~' O~ M N N - - ^ ~ ~ A N N O~ u1 O M N N = 0 M O 0 ~ Q N ~ N ~ O ~ N ~ O ~ ~ ~ N N N ^ ~ M N = ~ ~ ~ W; N _ ~C Op ~A ~ - O~ - t!1 d' O~ N 1~ N ~ O~ N `C ~' N N ~ ^ ~ - ~A O N Q N N N N O N M O~ N to ~G A -- N N - ~ ~ ['V M I~ ~ ~ 00 ~. 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N r rf - N L M N N M 00 d' - ~ I~ N N ~ N N M O~ M ~ N M O~ M CO N CAD ~ N _ ~O - '~i' N ~ ~ ~ ~. ~D I~ M N O ~ N ~ N M - - N s ao • d Z T 2 ~ _ 3 ~ ~ IA ~ •~ _ b4 ~ ~ +~+ O N ~j ~ U J _ ~ c ~ a ~ m bQ W L ~ ~ = ; = ~ ~ ~ E N ~ ~ ~ ~ 3 ~ , N N ~ L Y ~ 7 Rl N 47 N H v a ~ ~ o ~ O O Z p_ ~ O ~ d ~ O N ~ f~ Z y fd N -~ GJ ~ U L ~ ~ ~' L 41 ~ L ~ ~ ~ O ~ a~i ~. L ~ .° U s '^ ~ ~ ~ ~ t ~ ~ v c ~ O a~+ u o. cc .~ o o a C ~ ~ C <«= O oU ~ O ~ ~ L c ~ Q ~ `~ ~3 h ~T y ~ C t0 ._ ~ ~ O C N N b-0 h~d0 N i ~ O `~ ~ O ed u .~ ~ Z v ~ c 4- o v -o ~~ ~~ ~, ~~ C ti ~ N o ~ H 3 u Z 'L 0 Z °' h ~.- o Z d U .i d N O u ai c c U ~h d t ~ N d = c u~ O `'' d - ~ u 2 O td U$ w ~ -C O +' Y u ~ 7 -~ O fd O y fd N C N O L O LL Defaults rising on even modified mortgages -Mortgage Mess m~`~y MSNBC.com Defaults rising ®n even modified mortgages Experts: Most modifications may not aid borrowers The Associated Press updated 12:03 p.m. CT, Mon., Dec. 8, 2008 Page 1 of 2 WASHINGTON -More than- half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday. The new data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision office at a housing industry forum sponsored by his agency. "I do have concerns about allocating federal resources" Reich said. However, many experts claim the bulk of loan modifications don't actually provide much financial relief for borrowers. The government's data don't include enough detail about the types of the loan modifications that were made, said Sheila Bair, chairman of the Federal Deposit Insurance Corp. "The quality of the (.modifications) are not what they should be," she said. The U.S. economic picture has darkened over the past month. One in 10 Americans with a mortgage is either behind or in foreclosure, and more than 500,000 jobs were lost in November. Unemployment stands at 6.7 percent, and the worldwide credit markets have only improved modestly from the freeze that led Congress to approve a $700 billion bailout before the election.. Monday's discussion focused on how broad the government's intervention should be, rather than whether the government should play any role at all. The U.S. is on track for 2.25 million foreclosures this year. "We need abottom-up approach, in my view, by modifying people's mortgages and helping them stay in their homes," said New Jersey Gov. Jon Corzine. Corzine called for a three to six month halt to foreclosures while the government works out a more aggressive plan. Mark Zandi, chief economist at Moody's Economy.com, said .the public is likely to be more sympathetic to efforts to assist troubled borrowers, because the link between the foreclosure crisis grid the sinking economy is increasingly clear in the midst of most Americans. "It's now in every corner of the country," Zandi said: "I think that people understand that this is a broader issue." During an interview that aired Sunday on NBC's "Meet the Press," President-elect Barack Obama declined to say how large an economic stimulus plan he envisions. He said his blueprint for recovery will include help for homeowners facing foreclosure on their mortgages if President George W. Bush has not already acted when Obama takes office next month. For nearly a year, some consumer advocates, lawmakers and think tanks have advocated a dramatic government response. The effort, they say, should be similar to created the Home Owners' Loan Corp. in 1933 to help borrowers refinance troubled home loans during the Great Depression. The Bush administration has focused mainly on voluntary industry efforts to modify loans, and those have not stopped the surge in foreclosures. http://www.msnbc.msn.com/id/28113866/print/1/displaymode/1098/ 12/8/2008 'Pay option' loans could swell defaults -Mortgage Mess ~` MSNBC.com 'I~ay option' le~a~s Could smell de~aul~s New wave of defaults likely as risky loans reset to sharply higher payments By John W. Schoen Senior producer updated 8:01 p.m. CT, Wed., Dec. 10, 2008 Page 1 of 4 Some time after Sharren McGarry went to work as a mortgage consultant at Wachovia's Stuart, Fla., branch in July 2007, she and her colleagues were directed to market a mortgage called the "Pick A Pay" loan. Sales commissions on the product were double the rates for conventional mortgages, and she was required to make sure nearly half the loans she sold were "Pick A Pay," she said. These "pay option" adjustable-rate mortgages gave borrowers a choice of payments each month. They also carried a feature that came as a nasty surprise to some borrowers, called "negative amortization." If the homeowner opted to pay less than the full monthly amount, the difference was tacked onto the principal. When the loan automatically "recasted" in five or 10 years, the owner would be locked into a new, much higher, set monthly payment. While McGarry balked at selling these pay-option ARMS, other lenders and mortgage brokers were happy to sell the loans and pocket the higher commissions. Now, as the housing recession deepens, a coming wave of payment shocks threatens to bring another surge in defaults and foreclosures as these mortgages "recast" to higher monthly payments over the next two years. "The next wave (of foreclosures) is coming next year and in 2010, and that is primarily due to these pay- option ARMS and the five-year, adjustable-rate hybrid ARMS that are coming up for reset," said William Longbrake, retired vice chairman of Washington Mutual. The giant Seattle-based bank, which collapsed this year under the weight of its bad mortgage loans, was one of the biggest originators of pay-option ARMS during the lending boom. The next wave may be even more difficult to handle than the last one. "It's going to get tougher to modify loans as these option ARMs come into their resets," Federal Deposit Insurance Corp. Chairwoman Sheila Bair told msnbc.com this week. "Those are more difficult than the subprime and traditional adjustable rates to modify because there is such a huge payment differential when they reset." Monthly quota: 45 percent With 16 years of experience in the mortgage business, McGarry didn't believe the "pay option" loan was a good deal for most of her customers, so she didn't promote it. "I looked at it and I thought: I'm 60 years old. If I were in these peoples' situation 10 years from now, where would I be?" she said. "Do I want to be in a position that 10 years from now I can't make this higher payment and I'm forced to make this payment and be forced out of my home? So I wouldn't do it." Her job description included a requirement that she meet a monthly quota of Pick A Pay mortgages, something she said wasn't spelled out when she was hired. Still, she said, she continued to steer her customers to conventional loans, even though her manager "frequently reminded me that my job requirement was that I do 45 percent of my volume in the Pick A Pay loan." In June 2008, her manager wrote a "Corrective Action and Counseling" warning, saying she wasn't meeting the bank's "expectation of production." McGarry soon left Wachovia after finding a job with another mortgage company. On June 30, the bank stopped selling mortgages with negative amortization. In October Wachovia, suffering from heavy mortgage-related losses, agreed to be acquired by Wells Fargo. A spokesman for Wachovia said that generally the bank doesn't comment on internal marketing policies. But jh4+„•/f~xn:nx~ menhr men ~nm/i~/7RnZ572R/r~aRa/2/r~rint/1 /rlier~laxrmn~a/1 nQR/ ~ ~/i i /~nnQ 'Pay option' loans could swell defaults -Mortgage Mess Page 2 of 4 he said commissions on Pick A Pay mortgages were higher because the loans were more complicated and required more work to originate. He also noted that when Wachovia's Pick A Pay loans recast, the payment increase is capped for any given year, which helps ease borrowers' burden of meeting a higher payment. The first wave of home foreclosures that hit in late 2006 and early 2007 followed the resetting of subprime adjustable mortgages with two- and three-year "teaser rates"written during the height of the lending boom earlier in the decade. But pay-option ARMs -which often don't "recast" for five years - have a longer fuse. Unless defused by aggressive public and private foreclosure .prevention programs, the bulk of these loans will explode to higher payments in 2009 and 2010. The scope of the problem was highlighted in September in a study by Fitch Ratings, one of the bond rating agencies that assesses the risk of defaults on mortgage-.backed investments. Of the $200 billion in option ARMS outstanding, Fitch estimates that some $29 billion will recast in 2009 and another $67 billion in 2010. That could cause delinquencies on these loans to more than double, Fitch said. To make matters worse, only 17 percent of option ARMS written from 2004 to 2007 required. full documentation. Many of the borrowers who took out these loans also took out a second mortgage, which means they likely have little or no equity in their home, according to the report. That means many could owe more than their house is worth when the loan recasts to unaffordable payments. Heavy losses from investments backed by pay option ARMs were a major cause of the demise of Wachovia and Washington Mutual, one of the largest originators of option ARMs during the height of the lending bubble. (Washington Mutual was seized by the FDIC in September, which arranged for the sale of its assets to JPMorgan Chase. Wachovia was acquired in October by Wells Fargo, which outbid Citibank after. it arranged a deal with the FDIC to acquire Wachovia.) Since the housing bubble began to deflate in 2006, roughly 3 million .homes have been lost to foreclosure. Over the next two years, another 3.6 million are expected to lose their homes, according to Moody's Economy.com chief economist Mark Zandi. Many of the most problematic loans -those sold with atwo- or three-year low "teaser" rates -have already reset to higher levels. Those. resets have been a major force in the first wave of foreclosures, which rose from 953,000 in 2006 to nearly 1.8 million last year and are on track to hit 3.1 million this year, according to First American Core Logic, which tracks real estate. data. And the pace of foreclosures is still climbing.. More than 259,000 U.S. homes received at least one foreclosure- related notice in November, up 28 percent from the same month last year, according to RealtyTrac. Though the pace dropped slightly from the previous month, there are indications "that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months," said RealtyTrac CEO James Saccacio. Mortgage delinquencies -homeowners who have fallen behind but not yet been hit with foreclosure -are also on the rise, according to the latest quarterly survey from the Mortgage Bankers Association. A record one in 10 American households with mortgages was overdue on payments or in foreclosure as of the end of September. The impact is being felt unevenly across the country. Foreclosures are clustered in states that saw the biggest expansion in lending and home building. In Nevada, one in every 74 homes was hit with a foreclosure filing last month. Arizona saw one in every 149 housing units receive a foreclosure filing, and in Florida it w.as one in every 157 homes. California, Colorado, Georgia, Michigan, New Jersey, Illinois and Ohio have also been hard hit. "In the neighborhoods that have concentrations of subprime loans you already have concerns about crashing neighborhoods with too many vacant houses and crime rises," said Longbrake. "The same thing will be true for these option ARMS. They are concentrated in particular neighborhoods and particular locales around the country." htt„•//[:ixxnx~ menl~r~ men l~/lm/7/~~7RnZ~7~R/i1A(TP/~/111`llt~/~ //~7C11~A[/YYll~l1P/~ nQSZ/ ~ 7/~ ~ /7nnR 'Pay option' loans could swell defaults -Mortgage Mess Page 3 of 4 Developed in the late 1980s, pay-option ARMS were written at first only for borrowers who showed they could afford the full monthly payment.. But during the height of the lending boom, underwriting standards were lowered to qualify borrowers who could only afford the minimum payment, according to Longbrake. College savings made easy McGarry says she was encouraged to promote the idea that with a Pick A Pay loan the borrower could pay less than the full monthly payment and set aside the difference for savings or investment. The pitch included sales literature comparing two brothers. One took the Pick A Pay loan, made the minimum payment and put money in the bank. The second brother got a conforming loan. Five years later, both brothers needed to pay their children's college tuition. "(The brother with the conforming loan) didn't have the money in the bank," said McGarry. `And the brother that had the pay-option ARM could go to the bank and withdraw the money and didn't have to refinance his mortgage. That's how they sold it." McGarry said the sales pitch downplayed the impact of negative amortization. When the loan principal swells to a set threshold -typically between 110 and 125 percent of the original loan amount -the mortgage automatically "recasts" to a higher, set monthly payment that many borrowers would have a hard time keeping up with. Fitch estimates that the average potential payment increase would be 63 percent, or about $1,053 amonth - on top of the current average payment of $1,672. The impact on the millions of American families losing their homes is devastating. But the foreclosure fallout is being felt around the world. As the U.S. slides deeper into recession, foreclosures are the root cause of a downward spiral that threatens to prolong and widen the economic impact: • As the. pace of foreclosures. rises, the glut of homes on the market pushes home prices lower. That erodes home equity for all homeowners, draining consumer spending power and further weakening the economy. • The overhang of unsold homes also depresses the home building industry, one of the major engines of growth in a healthy economy. • As home values decline, investors and lenders holding bonds backed by mortgages book steeper losses. Banks holding mortgage-backed investments hoard cash, creating a credit squeeze that acts as a bigger drag on the economy. . The resulting pullback in consumer and business spending brings more layoffs. Those layoffs put additional homeowners at risk of defaulting on their mortgages, and the cycle repeats.. "Foreclosures are going to mount and the negative self-reinforcing cycle will accelerate," said Zandi. "It's already happening, but it will accelerate in a lot more parts of the country." As pay-option ARMs put more homeowners under pressure, other forces are combining to increase the risk of mortgage defaults. As of the end of September, the drop in home prices had left roughly one in five borrowers stuck with a mortgage bigger than their house is worth, according to First American Core Logic. In a normal market, homeowners who suffer a financial setback can tap some of the equity in their home or sell their home and move on. "That's a big issue," said Mark Fleming, First American Core Logic's chief economist. "As equity is being destroyed in the housing markets, more and more people are being pushed into a negative equity position. That means that they're not going to have the option. for sale or refinance if they hit hard times." "Negative equity" is also a major roadblock in negotiations between lenders and homeowners trying to modify their loan terms. After over a year of debate in Congress, and private efforts by lenders, no one has come up with the solution to the thorniest part of the problem: Who should take the hit for the trillions of dollars of home equity lost since the credit bubble burst? `(Customers) keep calling and saying `With this bailout, this isn't helping me at all,"'.said McGarry, who is now http://www.msnbc.msn.com/id/28035238/page/3/print/1/displaymode/1098/ 12/11/2008 'Pay option' loans could swell defaults -Mortgage Mess Page 4 of 4 working with clients trying modify or refinance their loans. "It really and truly is not helping them. If their lender will not agree to settle for less than they owe -even though those lenders are on the list of lenders that will work with you -they still are not working with (the borrower)." It's a monumental undertaking that was never anticipated when servicers took on the task of managing these mortgage portfolios. These companies are already struggling to keep. up with the volume of calls, and defaults are projected to keep rising. They're also swamped with calls from desperate homeowners who are falling behind on their monthly payments. "We have never seen anything this large before; we make 5 million phone calls a month to reach out to borrowers," said Tom Morano, CEO of Residential Capital, the loan servicing unit of GMAC. "The volume of calls that's coming in is much higher than it has ever been, and everybody is struggling with that." Now,. as the spiral of falling home prices is exacerbated by rising unemployment, millions of homeowners who were on a solid financial footing when they signed their loan face the prospect of a job loss that would put them at risk of foreclosure. Some servicers say that's the biggest wild card in projecting how many more Americans will lose their homes. "The concern I have is if we have an economy where unemployment gets to 8 or 9 percent," said Morano. "If that happens the amount of delinquencies is going to be staggering." With the latest monthly data showing more than half a million jobs were lost in November, some economists now believe the jobless rate could rise from the current 6.7 percent to top 10 percent by the end of next year. © 2008 msnbc.com URL: http://www.msnbc.msn.comjid/28035238Jpage/3/ MSN Privacy .Legal © 2008 MSNBC.com http://www.msnbc.msn.com/id/28035238/page/3/printll/displayrnode/1098/ 12/11/2008 Grim choice: Walking away from amortgage -Mortgage Mess Page 1 of 3 ~~`~'~~~ MSNBC.com Grim eh®iee: walking a~nray from a mortgage For many, it's either pay the mortgage or put food on the table The Associated Press updated 4:00 p.m. CT, Thurs., Dec. 18, 2008 CHICAGO -Diane Shackle found it gut-wrenching to walk away from a mortgage she took out in times that were better for both her and the U.S. economy. But the reality was undeniable: While she was keeping up with the monthly payments, she said she could no longer afford to buy food far herself or even kitty litter for her two cats. So the 44-year-old cocktail waitress walked away from her two-bedroom condo in southern California last July, turning her back on a debt of nearly $200,000. "It ripped me up to do it but I was tired of worrying and I had no food in the house," said Shackle. "I decided, you know what, I'm not living like this. I've got to quit (get out) before I kill myself." Walking away from a mortgage has always been a homeowner's last resort - it flies in the face of the American dream. And experts say it should remain aworst-case scenario. But with the deepening economic crisis fast adding to the 12 million mortgages already "underwater" -.the term for when a home's debt exceeds its market value -it's an option more are likely to consider as home prices continue to fall Mortgage and financial experts hesitate to recommend a voluntary action that not only threatens to wreck your credit score for-years but can result in authorities coming-after other assets. But depending on state laws, they acknowledge it makes sense to at least look at it in certain situations. "You have to make the best decision for yourself, business-wise, which could be walking away from the house," said Nicole Gelinas, a chartered financial analyst and senior fellow at the Manhattan Institute, a conservative think tank. Mortgage walking surfaced as a phenomenon in the wake of plummeting housing prices. The practice also is known as "jingle mail," referring to the borrower mailing the keys to the lender and surrendering the house. Bank of America Corp. brought the practice to light a year ago, reporting that a growing number of people who defaulted on their mortgages were current on their credit cards. This suggested that at least some saw bailing out on their houses as a way to gain control of their finances. Though statistics aren't readily available on the number of mortgage walkers, a year later, Bank of America spokesman Terry Francisco acknowledges that the problem still exists and said it has been exacerbated by the housing market's further decline. "The billion-dollar question is, is it going to increase?" said Guy Cecala, publisher of the trade publication Inside Mortgage Finance, in Bethesda, Md. "We really don't know the answer." Speculators who bought houses for investment purposes rather than to live in are the likeliest to do it, he suggested. Shackle doesn't fit that category. The single, first-time homebuyer bought atwo-bedroom condo in Calimesa, Calif., in 2006 for $191,000. She wasn't required to put any money down despite her limited income as a waitress, thanks to a lofty credit score of 788. The financing consisted of two interest-only loans with initial rates of about 7 percent and 10 percent. Her http://www.msnbc.msn.com/id/28300438/page/2/print/1/displaymode/1098/ 12/19/2008 Grim choice: Walking away from amortgage -Mortgage Mess Page 2 of 3 monthly payment, including an escrow account for property taxes and insurance, was about $1,400 a month. That was manageable until she had serious. problems with asthma and missed a lot of work. Shackle was never late with a payment, she said. But after paying the bills she had no money left over to buy groceries, and lost nearly 50 pounds. Despite her pleas, she said she couldn't get the lenders to refinance once the collapse of the housing market had slashed the home's value to about $150,000. Suddenly it was no longer about an investment or the tax advantages of homeownership, it was about trying to survive the crush of bills. "When you're a homeowner you think, 'OK, I'm going to go ahead and try to pay this off,"' she said. "But when I tried to get refinanced and everybody pretty .much shut their door on me, I felt like I had no alternative." Rather than stop paying and wait to be foreclosed on, she sought help from You Walk Away, one of the companies that has emerged to address the growing number of underwater homeowners. The San Diego- based business counsels the homeowners to, as its Web site says, "take control of their financial future" by making a strategic decision to default if necessary. Jon Maddux, principal and co-founder of You Walk Away, which charges $995 for consultations about their rights regarding foreclosure, says his company doesn't advocate jingle mail per se but rather staying in the home as long as legally allowable until the bank takes it back. Underwater homeowners should exercise caution when signing up for any service that offers assistance, because consumer advocates say much of the advice can be found online or through non-profit agencies. Shackle moved out of the condo in July and rented an apartment for $750 a month. Foreclosure still hasn't taken place. But without the burden of a mortgage gone bad, she says, now "I sleep a lot better." About 1 in 6 of the nation's 75 million homeowners are underwater, according to Moody's Economy.com, and the total has doubled in a year. Their mortgage debt exceeds home equity by an average of $40,000. Half of these negative-equity homeowners owe more than 120 percent of their home's value. And 30 percent of homes sold in the past year were sold at a loss, according to real-estate Web site Zillow.com. But as with personal bankruptcy, the cost of wiping a mortgage slate clean can be steep. A default will devastate your credit rating, probably making it impossible to get any kind of loan, and could even prevent you from getting a job. Ethan Dornhelm, a senior scientist at Fair Isaac Corp., which sells credit-scoring formulas to credit bureaus, says consumers who have never missed a credit payment before would sustain an immediate hit of 200 or more points to their score if they defaulted on a mortgage. Restoring your score to a level where you would qualify for credit at reasonable terms would take a minimum of three years even if you kept up with other credit obligations, Dornhelm said. Another reason not to walk is that housing prices may recover. Perhaps the biggest risk is that the lender will come after your other assets or garnish your income. Experts say the incentive to walk despite all those costs is highest in states that prohibit mortgage lenders from suing the borrowers for additional funds after foreclosure. That means it's not illegal to walk away in those states, but what about the ethics of such an act? Gelinas of the Manhattan Institute says it would be unfair to portray mortgage walkers as villains because it's not unethical to take a loss and walk away from a bad investment that might keep you stuck in a "money hole" for a decade or two. htM~//ww~w.msnhc.men.c,gym/id/2R30~43R/nas?e/2/nrintll /disnlavmode/109R/ 12/19/2008 Grim choice: Walking away from amortgage -Mortgage Mess Page 3 of 3 "Certainly you shouldn't commit fraud when taking out debt," she said. "But when it comes to sacrificing for years and years to keep servicing debt on an inflated asset when the bank lent money against the inflated asset -you can't blame the homeowner for that." Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. URL: h~tP:/;'wwc~~.ms~~hc.rnsn.coni%id128300438/~age/2/ MSN Privacy .Legal © 2008 MSNBC.com htt„•/hxnznz~ menhr mcn nnm/irl/~R~ll(14.~R/nave/7/print/1 /c~i.cnlavmnrie/1 n9R/ 1 ~/19/2nnR State foreclosures rise a little slower -TwinCities.com TwinCities.com Page 1 of 2 Mate forecia~s~res rise a little slower but a second wave may be building, market watchers say Bye Christopher Snowbeck csnowbeck c@pioneerpress.com Arkicle Last Updated: 12;1912008 08:56:48 PM CST Foreclosures in the Twin Cities and across Minnesota keep piling up in record numbers, but the rate of increase this year has leveled off a bit, according to a report released Friday. There were 13,334 foreclosures in the Twin Cities during the first three quarters of 2008, compared. with 12,974 during all of 2007, according to the report from HousingLink, a Minneapolis nonprofit. The statewide total for the first three quarters was 20,098, the report found, compared with 20,404 last year throughout Minnesota. Based on HousingLink's projections, foreclosures in the Twin Cities will be up 39 percent from 2007 to 2008. The rate of change in the metro area from 2006 to 2007 was much greater at 84 percent. The finding supports the idea that Minnesota already has experienced what Preritiss Cox, a University of Minnesota law professor who studies the housing market, argues is the first wave of the foreclosure crisis. That wave, he said, has been tied to the "inevitable" failure of homeowners to make payments on subprime mortgages. Such foreclosures crested in Minnesota this summer, Cox believes, and likely will continue to decline, since subprime lending largely came to a halt in mid-2007. But there's still a second wave of foreclosures on . the horizon, Cox said -homeowners failing to stay current on payments for so-called "Alt-A" adjustable-rate mortgages. "Alt-A" is the slice of the mortgage loan market that ranks just above subprime in creditworthiness. Those loans were made primarily from late 2003 to 2006, and typically start resetting after five years, Cox said. Whether those homeowners will be able to stay out of foreclosure will have a lot to do with the general health of the economy, he said. "The second wave could be substantially less - we could see a moderation and a downturn in foreclosures," Cox said. "Or, it could make the first wave look bad but not. remotely as bad as the second wave." subprime loans generally are targeted to borrowers with tarnished credit histories and little savings available for down payments, according to researchers at the Federal Reserve. Borrowers with Alt-A mortgages have less serious credit-quality issues, Fed researchers say, or are unable or unwilling to provide full documentation of assets or income. Some of these borrowers are investing in real estate rather than occupying the properties they purchase. A report earlier this year from the Minneapolis Fed found that six of 10 Alt-A mortgages in Minnesota are scheduled to have their rates reset at some point after Jan. 1. This week, the Federal Reserve Bank of Atlanta issued a report that noted, among other things, that ArlverticamPnt 1..~d http://www.twincities.com/business/ci 11274430?nclick check=l 12/22/2008 E) ~~ ~~. NEIGHBORHOOD STABILIZATION PROGRAM (NSP) Dakota County Budget (18 months ending 6/30/10) Activity Amount Percent 1. Financing for Homebuyers of Foreclosed Homes (a) Assist 27 buyers w/ $15,000 loan $405,000.00 (b) Assist 17 buyers w/ $5,000 grant $85,000.00 (c) Appraisals, 40 @ $500 each $20,000.00 (d) Inspections (HQS and LBP) $10,000.00 (e) Soft Costs -legal, etc. $5,000.00 Subtotal $525,000.00 19.0% 2. Purchase & Rehab for Owner and/or Rental Units a Acquire foreclosed vacant ro ert $450,000.00 b Rehab 5 housin units $21.0,000.00 c Rehab pro'ect administration $20,000.00 (d) Soft Costs -legal, title, etc. $12,000.00 Subtotal: $692,000.00 .25.0% 3. Establish Land -Bank (hold property up to 10 years) a Ac wire 10 homes $100,000 av $1,000,000.00 b A raisals, 15 $500 each $7,500.00 c Soft Costs - le al, title, etc.- $13,750.00 d Land Holdin Costs 3-6 ears $30,000.00 Subtotal: $1,051,250.0.0 38.0% 4. Demolish Blighted Structures a Demolish 12 bld s $16,250 each $195,000.00 b Asbestos/hazmat surve s $31,750.00 Subtotal: $226,750.00 8.2% 5. General Administration $270,991.00 9.8% TOTAL BUDGET: $2,765,991.00 100.0% Updated 11/25/08 Scott County sees biggest drop in new housing ~~~rTI'`~~}ut1~~:C~J-ITl rkTIt~I~dE1aP~~LI~ - ~T. F' I~ i;, P~1 "~ JSt~T~_ Scott County sees.. biggest drop in new housing By DAVID PETERSON, Star Tribune January 17, 2009 Lakeville took another big hit last year. Page 1 of 2 Builders pulled permits for only 137 new single-family homes during the whole of 2008 - a new low in the suburb's recent history. The peak this decade was 424, five years ago. And the total has been slipping annually by at least a few dozen ever since. Yet there's no denying what the city's planning director has to say about the number 137. "A lot of communities," said Daryl Morey, "would be thrilled by that." New Prague, once afast-growing community, plummeted to just five new homes, according to newly released data from the Builders Association of the Twin Cities. Jordan had just two all year. Belle Plaine, which peaked at 195 new units a few years back, had seven. Other south-suburban communities with less than a quarter of the new residential units they were seeing just two years ago included Prior Lake, Savage, Eagan, Mendota Heights and Inver Grove Heights. Of the seven metro counties, Scott saw the greatest decline .over those two years -- a much greater drop-off for instance than its neighbor to the west, Carver County. Dakota County did better than any suburban county in maintaining its numbers, although that still meant only about half as many new housing units in 2008 as in 2006. Those differences in performance most likely stem from differences in the cycles each county is in, said Scott County's director of community development, Michael Sobota. Like Scott a decade ago, Carver is now benefitting from a newly opened freeway, which is opening its countryside to fast trips to work. And in contrast with Scott, one of the most youthful counties in the Midwest, Dakota is beginning to age and see more senior and other multifamily housing. Lakeville, for instance, is doing better than any other south-of--the-river suburb in maintaining its numbers, with 414 new housing units in 2008, when single-family and multifamily development are factored in. That compares with 444 two years ago. That ratio is better than all but a handful of major suburbs in the entire metro area. But Lakeville's success is due mostly to two apartment projects for seniors, one of them subsidized housing built by Dakota County. http://www.startribune.com/templates/Print This_Story?sid=37778609 01/23/2009 Scott County sees biggest drop in new housing Page 2 of 2 One important caveat: This new data from the builders group does not include every community within any county. It seeks to capture activity in the major cities, especially fast-growing ones. But it becomes available months before the Metropolitan Council issues its comprehensive annual survey. Scott County does quickly survey all cities and townships, and it released on Friday a summary showing a total of 331 new housing units in 2008. That's less than half of last year's 783 and just a fraction of the decade's peak of more than 2,500. Steady stream of bad news Participants at a Friday morning conclave of officials from around .the county bemoaned the drip, drip, drip of bad news on the housing front, Sobota said. "It's 'market psychology,' if you will," he-said, with consumer psychology affected by a steady stream of economic negativity. "No one's panicking that we're going to be having major, long- term issues; it's a pause." At the same time, .though, he and the county`s departing administrator, Dave Unmacht, agree that it will be vital for Scott County to improve. its transportation infrastructure and address its need for more jobs closer to home -- those that don't rely on increasingly. congested river crossings. "The odds are we will not have a big east-west corridor without a lot of help from other people,'" Unmacht said. "So we need to look at 35W and 169 as our economic engines. On 35W, Elko New Market represents a huge opportunity. On 169, how can we help Jordan and Belle Plaine attract economic development, versus 'It's their job to develop themselves?"' David Peterson • 952-882-9023 ©2009 Star Tribune. All rights reserved http://www.startribune.com/templates/Print This_Story?sid=37778609 01/23/2009 o\ °o ~' a -cl .~ a a ~, .~ o ~ ^.I /~ . U 1~1 ~i ~~ ~, ~~ ~~ a N a ~, o°n z~ 0 ~ a o~~ooooooo~ooa\--~o00000000000000000000 W o~nv,oo~ooooc.oo~ooooo00000000000000000 O ~~ O O ~ O O O N O O ~~ 0 0 0 0 C. 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O ~ O U m ~ y s>. ~ ~ C y f++ ~ ~ > N T y ~ ~ w + ~6! N G «. r + a Er v~ ~~ w a y r N d w ri F from the City of Lakeville FOR IMMEDIATE RELEASE, January 13, 2009 CONTACT: David Olson, Community & Economic Development Director 952-985-4421 City of Lakeville issues over $125 million in permits in 2008 The City of Lakeville issued building permits in 2008 with valuation of $125,760,060. This compares to a total building permit valuation of $138,922,866 in 2007. Included in this valuation were permits for 137 new single family homes and 37 townhomes with a combined valuation of $42.2 million. While these numbers are down from previous years in Lakeville, they do represent some of the higher residential permit numbers in the Twin Cities metropolitan area. With the total number of residential units at 414 in 2008, Lakeville ranked third behind Bloomington and Minneapolis. In addition, the City issued permits for 242 senior apartment units in 2008. This included the 155 unit Highview Hills project located at 202"a Street and Highview Avenue and the 87 unit Crossroads Commons project on Glasgow Avenue near the intersection of Cedar Avenue and Dodd Boulevard. The total value of these two senior projects is over $29 million. Both of these projects will provide a variety of housing options for Lakeville seniors. With the total number of residential units at 414 in 2008, Lakeville ranked third in the metro area behind Minneapolis and Bloomington. The commercial and industrial permit values were nearly $34 million for 2008. Included in this valuation were two large warehouse /distribution facilities that are being constructed in First Park Lakeville located at County Road 70 and Dodd Boulevard. Also included in these numbers were new commercial retail buildings located in the TimberCrest, Crossroads, and Heritage Commons shopping centers. According to Community and Economic Development Director, David Olson, while the tota12008 permit numbers are down by approximately 9% from the previous year, they still represent strong levels of both residential and commercial /industrial development when compared to the development levels in other cities in the region. -30- ~ensus findings: Edina isn't so rich, and other surprises http://www.startribune.com/templates/Print This_Story?sid°37015214 ~ar~rl~Un~,~!C~~~'~ I `E~F'CiLx~ -~T. F_r ~.r~.,1*'_`~tl, ~i~I' Census findings: Edina isn't so rich, and other surprises By MARY JANE SMETANKA, Star Tribune January 7, 2009 A Metropolitan Council analysis of three years of U.S. Census Bureau data from 2005 to 2007 provides some revealing and surprising details about 41-Twin Cities communities. Edina isn't as rich as you think. Eden Prairie isn't swamped with seniors despite being ranked by a national magazine as a prime place to retire. And if you hear Spanish or Somali being spoken by someone in a bank or grocery in Richfield, they're very likely to be a resident of that city. The following snippets are from the report, which can be viewed on the Web at www.metrocouncil.orq/Census/ACS/Overview.odf. Not all that old ... Edina does skew old, with almost 21 percent of its residents age 65 and .older. Among all 41 Twin Cities communities, only Roseville has a higher share of senior citizens. But with almost one-quarter of its residents under age 18, Edina also has a higher proportion of young people. than Minneapolis and 13 of the 19 suburbs that are~classified as fully developed, including Bloomington, Burnsville and Minnetonka. Cn Eden Prairie, which U.S."News & World Report last fall ranked the third-best place in the nation to retire, just 6.5 percent of residents. are 65 and older. And not as wealthy, either The stereotype of Edina as rich flies out the window compared with other cities in the report -- at least when looking at annual incomes. Edina residents' median household income of $76,805. ranks fifth among fully developed suburbs, behind Champlin, Minnetonka, Golden Valley and Shoreview. But income trends higher in younger suburbs like Eden Prairie, Chanhassen, Savage and Woodbury, all of which had median household incomes that topped $92,000, dwarfing that in the older cities. Met Council analyst Libby Starling said that may be because the newer cities have more young families with two wage earners in good jobs. Of course, these numbers don't reflect accumulated wealth. Hey, neighbor If you've known your neighbors for a long time, you most likely live in Shoreview, Crystal, Andover, Ramsey, Roseville or Edina, where less than 43 percent of residents moved in after 2000. Cities with the highest proportions of new residents include Shakopee, with 70 percent of newer residents, and Woodbury, with 60 percent, Among fully developed suburbs, higher shares of new residents were found in St. Louis oft 1/7/2009 1:32 PM 'ensus findings: Edina isn't so rich, and other surprises http://wwwatarnibune.com/templates/Print This_Story?sid=37015214 Park (54 percent), Burnsville (58 percent) and New Hope (52 percent). ~Habla Espanol? Richfield is remarkably diverse, with more than 22 percent of residents speaking a language other than English at home. Only St. Paul, Brooklyn Center and Brooklyn Park have a higher share of residents whose primary language is something other than English. Linguistically speaking, the least diverse cities are Hastings and Prior Lake. Housing stress While residents of Minneapolis and St. Paul were most likely to report that paying for housing was a "severe burden" -- almost 20 percent of residents in both cities reported that they spend at least half of their income on housing -- more than 16 percent of residents in Richfield, Brooklyn Center and Burnsville said the same thing. ..Perhaps not coincidentally, housing costs were a relatively low source of concern in communities where people have large incomes, including Eden Prairie, Lakeville and Woodbury. At least it's a tax deduction In all but three still-developing suburbs (Chaske, Hastings and Inver Grove Heights), more #han 80 percent of homeowners still are paying. off their mortgages. Who owns their house outright -- or at least doesn't have a mortgage? Almost 40 percent of Roseville residents lead the way, followed by homeowners in Fridley, Edina, New Brighton, Richfield and Bloomington. With almost 43 percent of households comprised of just one person, Minneapolis has more people living alone than any other city in the report. In St. Louis Park, Roseville, St. Paul and Richfield -- some with populations that tilt young, others skewing old -- at least 37 percent of households have just one person. For "Leave It to Beaver" neighborhoods with married couples who have kids, try Andover; Chanhassen, Lakeville and Savage, where more than 40 percent of households have that traditional family structure. SINGLES POPULATION HOUSEHOLD INCOME GROWING DIVERSITY HOW OLD? WHERE WE LIVE ©2009 Star Tribune. RII rights reserved. oft 1/7/2009 1:32 PM Eden Prairie's 'town center' idea bumps into Wal-Mart. ~~,~t"~Ci~li<n~?a C~nl ' P~TI'~~1~1E,~.F'45L~~~ - °I'. F`T.?~L, I~~I~'', T`-~~>C?TA. Eden. Prairie's 'town center' idea bumps into Wal-Mart By LAURIE BLAKE, Star Tribune January 16, 2009 Page 1 of 3 Eden Prairie envisions a new "town center" in its future, and Wal-Mart -- to the company's dismay -- has a store right in the middle of it. Wal-Mart has urged Eden Prairie to alter its redevelopment plans for the area north of Eden Prairie Mall to take its store out of the plan. The city's concept calls for smaller, pedestrian-oriented businesses forming a new 100-acre downtown that would completely encompass the current Wal-Mart site. An all-new "Main Street" would even cut right across Wal-Mart's existing parking lot. Wal-Mart likes its Eden Prairie location and plans to stay put, regional vice president Michael Gardner said in a letter to Mayor Phil Young. He asked that the city revise its plans to "reflect accurately Wal-Mart's plans for the future of its property," and to "modify the plan so that it no longer shows a new road that would bi-sect the Wal-Mart site." City surveys havefound that Eden Prairie residents are eager for a downtown where people can live and walk to shops, restaurants and transit, city officials say. While stressing that they don't want to drive business out of town, .council members in December unanimously approved the future town center concept, Main Street and all. The "town center" is one. of the most ambitious parts of Eden Prairie's 2030 planning guide, which the city -- like every other locality in the metro area -- has sent to the Metropolitan Council for approval Eden Prairie's hope is that private developers will recast the area that is now home to Wal-Mart, Emerson Process Management and the Brunswick Zone bowling alleys, transforming it into an area of four- to six-story buildings with commercial establishments at street level and housing above. The city figures it would have space for about 600 new units of housing. A key question for the future is whether Wal-Mart's plans for its store and the city's vision for the town center can come together. Eden Prairie Community Development Director Janet Jeremiah said Wal-Mart is welcome to stay where it is if it does not enlarge its store. Wal-Mart has said it would like to turn the store into a super center. Jeremiah said she thinks it's possible that the city and Wal- Mart can both achieve their goals. "We are just starting to work with the new representatives at Wal-Mart to get a better http://www.startribune.com/templates/Print This Story?sid=37686459 01/16/2009 Eden Prairie's 'town center' idea bumps into Wal-Mart Page 2 of 3 sense of how interested they may be in redevelopment," Jeremiah said. " At this point they have indicated that they are interested in working with us." Wal-Mart has a large site and "they could wind up selling-off parcels and developing [the store] in a more compact manner," Jeremiah said. "We believe it is possible to do a two- story Wal-Mart and still have the parking and still have room for additional development." Wal-Mart intends to cooperate with the city, said its senior manager of public affairs, Lisa Nelson. "We are going to work with the city in any way possible to help them achieve what they want to achieve." But, said Nelson, "We would like to bring our customers in Eden Prairie the convenience. of a super center." And, "The road is not in our plans." Officials from the city and Wal-Mart are scheduled to talk later this month. Jerry Pitzrick, a member of the city's Planning Commission and the only city official to vote against the 2030 plan, said he is all for creating a town center. But at the chosen location, he thinks the plans will be doomed not only by the resistance of current businesses, but by ahigh-voltage power line that runs right along the route of the new Main Street, from Technology Drive on the north to Prairie Center Drive on the south. The city found that it would cost more than $20 .million to bury the line, which is now slung from steel towers, including one that stands right in the middle of Wal-Mart's parking lot. The cost of moving the line would be $3 million to $6 million, Pitzrick said. "I don't think it's viable to do residential in that area as long as the power fine is there," Pitzrick said. "People will not buy residential with a view of ahigh-voltage power line that sings to you during the warm summer evenings." After studying the question, the city "decided to keep [the power line] where it is, perhaps in a green median in the center of the future road," city planner Mike Franzen said. "I don't think anyone really likes the look of it, but it kind of is what it is," said Planning Commission Chair Jon Stoltz. "To bury it and pass on those costs to the citizens of Eden Prairie would not be the right thing to do." As a consultant in the building industry, Pitzrick said, "I see lots of big development projects all over the country. When you see what we have .going against our plan, the probability of this ever happening is not too good." Said Stoltz: , "I don't think it's going to be smooth sailing by any stretch of the imagination." Some changes undoubtedly will be made to the plan. "We want Wal-Mart in the city. We're going to work it out." The creation of a town center will depend on private developers getting interested, Jeremiah said. http://wwwatartribune.com/templates/Print_This_Story?sid=37686459 01/16/2009 Eden Prairie's 'town center' idea bumps into Wal-Mart "We would like this to be market-driven. The city does not have any intent to purchase properties or otherwise try to force redevelopment." Laurie Blake • 612-673-1711 ©2009 Star Tribune. All rights reserved. Page 3 of 3 http://www.startribune.com/templates/Print_This_Story?sid=3768.6459 01/16/2009