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88-1087 WHITE - C�TV CLERK PINK - FINANCE COVACII CANARV - DEPf�RTM�NT G I Y OF SA I NT PAU L File NO. �� D�� BI.UE i - MAV�aR - , � uncil Resolution --�, �. Presente y � � Referre To �``�us� lv� '� � �'� �� Committee: Date �� '� � Out of C�ommittee By Date ' RESOLUTION APPROVING A VIACANT BUILDING PROGRAM WHEREAS, in March 1988 �there were eight industrial and 27 commercial prop- erties pn the vacant building list maintained by the Community Services Department Division of Public Health; aind WHEREAS, the Planning �nd Economic Development Department Division of Neigh- borhoodlDevelopment has proposed a Commercial Vacant Building Program detailed in - a document entitled, "Commenc�ial Vacant Building Program Guidelines" dated June 22, 1988, v�hich has been presented to and considered by the City Council ; and WHjEREAS, the Commercial Vacant Building Program proposes to select certain vacant building properties V�hich can only be revitalized with public assistance to aid pri�vate undertakings to return these vacant buildings to productive use thereby removing and preventing thejspread of conditions of blight, enhancing and preserving the taxj base and contributing to the general welfare; and WF�EREAS, it is proposed that the Commercial Vacant Building Program be funded in the amount of $300,000 fa~om HRA Development Fund monies designated in that fund for rer�oval of vacant and hazardous buildings by Council File No. 1436; N�W, THEREFORE, BE IT �ESOLVED by the Council of the City of Saint Paul that the Comnercial Vacant Buildjng Program is hereby approved and the Division of Neighbqrhood Development, Department of Planning and Economic Development is hereby authorized and directed to implement the Program in cooperation with the Housing and Redevelopment Authority all in accordance with the procedures and requirements contained in the Commercial� Vacant Building Program Guidelines. I � (Continued on Next Page) I � COUNCIL MEMBERS i Requested by Department of: Yeas Nays Dimond I Long __�. In Favor Goswitz j Rettman '� s�he;be� _ A gai n s t BY Sonnen I w�u�oo i Form Approved City Attorney. Adopted by Council: Date Certified Passed by Council Secretary BY — � , gy. A►pproved by lilavor: Date _ j Approved Ma fo u ' sion to Council � By ---� I I WHITE — CITY CLERK I�' PINK — FINANCE G I TY OF SA I NT PA U L Council CANARV — DEl�'ARTMENT J/'�e BLUE} — MAVOR File NO. /O�+ � C�uncil Resolution Presented By Referrey� To Committee: Date Out of �ommittee By Date Page - � - RESOLUTION APPROVING A VACANT BUILDING PROGRAM FURTHER RESOLVED that upon recommendation of the Mayor the $800,000 fund balance designated in the H 'A Development Fund for removal of vacant and hazardous buildings through Council File No. 87-1436 is hereby released with $300,000 to be allocated by the HRA Bo rd to the HRA Development Fund Commercial Vacant Building Program activity a d the balance of $500,000 added back to the HRA Development Fund unreserved,, undesignated fund balance. , I I �� Approval Recommended: I , � � ��, Gregory . B s, Budget Director COUNCIL MEMBERS Requested by rtment of: Yeas ', Nays Dimond I �� ' [n Favor Goswitz � Rettman B Scheibel Against Y . S�w--I Wilson �i JUL 14 ig88 Form Approved by City A orne Adopted by Council: Date Certified Pass uncil Se et By gy, A►pprove iNa or: Dat �3 �� Approve y May E u ' sion to Council . B �� PUBl1SHE0 J u L, 2 3 1988 � - - - i ' � �� i � .�° 011525:, PE D DS � Tl�NT - - - - - - Vince a c c Co ACT x� . 2�$-�'3� pg � , . � DA ASS G! r (See�reverse side.) ; 1 Departm nt Directar _4 Mayor (or Assistant) — Finance and �tanagem�nt Serv s Director � Gity Clerk 3 Budget irector j uncilman Wilson ?�- City At orney '� : � (Clip all location or signature.) V N ? (�Purpose/Rationale) What Will be Achieved - 'Approval the Commercial Vacant Building Ppogram to be carried out b�r::��he::Depar mer�t of Planning an i conomic Development, DiVision of Neighborfiood Development. Release of � 00,000 designated i ' he HRA �eve1opment Fund for removal of vacant and hazardous buildings. llocation of $300,0 � by the HRA Boar'd to the HRA Develapment Fund Commercial Vacant Build ng Pwogram and the �hance of'$500,000 added back to the HRA Development Fund unreserved, ndesignated fund bal ' j�ce. Council Research C�nt�r ! T U AN R � c JUN 24�988 ' �300,000 wi1 be spent to treat s vacant commercial buildings and either demolish ' or i�eturn th vacant buildings to, roductive use thereby removing. and preven�ing � the spread o conditio�s of bligfi enhance and preserve the tax base and contribute to the gener 1 welfare. IYo personnel impact, existing sta will carry out the project. N C T AC B ED D: (Zlayor's sig ture not required under $10,000.) Total t of Trans�ction: 00,000 Activity Number: 138-7660F}-6602 Funding So rce: NRA Developme Fund ;�.- REC�Y� � , . List and number a I attachments. jATTACHMENTS• ( � � JUt� � �G 1. Resol uti n f 1�$d , � 2. Guidel i s, Report BUOGt� UtriCE � I ADMINI3TRA� 0 E U S I X Yes o Rules, Regulati s, Procedures, or Budget Amendment required? � �Yes _ o �f yes� are the �or .timetable attached? I i D AR E 1 I W �, CITY ATTORI!i�Y RSVIEW • � X Yes �1 Council resolutio I required? Resolution required? Yes _Nfl � _Yes _N Insurance require I Ins�rance sufficient? �Yes _No � �� ,_Yes _N Insu�ance attache I? . � , . IiI . ' ��o�� . . . ; , , M I I ;O I CITY OF SAINT P/1UL � IN�ERDEPARTMENTAL MEMORANDUM !I �0: City Council Housing and Economic Development Committee Bill Wilson ! � Tom Dimond � Kiki Sonnen FRO�I: Vince Holschbach;, PED � Katy Sears Lindb�lad, PED DAT�E: June 2, 1988 i SUBJEC�: Establishment of� a Vacant Commercial Building Program Allocation of $300,000 from HRA Development Fund to Implement . ' Program � Release of Remaining Designated $500,000 from HRA Development Fund to HRA unreser�ed, Undesignated Funds Balance ACKGRIUND ' On October 1, 1987 the Saint Paul City Council adopted a resolution design�ting $800,000 from L�he HRA Development Fund for the removal of vacant buildings. Also in Octobe�, 1987 the HRA passed a resolution authorizing implem�ntation of a Vacant Housing Program and also approved program f inanc�.ng. � On Mar�h 9, 1988 the City C�ouncil's Economic Development Committee authorized $200,OQ0 for the Community Services Department in order to allow staff to respond to the increased nuimber of vacant buildings and the increased workload caused 'by the City's reviseid Nuisance Ordinance. At that same meeting, PED request�ed the reclassification of the previously designated $800,000. Action on this item was laid over by the committee. Today staff is recommendinglthe establishment of a Vacant Commercial Building Program, along with the allbcation of $300,000 from the HRA Development Ftuid to implement the program. �Staff is further recommending the release of the remaini�ng previously designated $500,000. i VACANT COMMERCIAL BUILDING �ROGRAM os i: The purpose of th� Vacant Commercial Building Program is to bring chronically vacant commerci�l buildings into productive re-use in a way that support�s the broad goal of -nIeighborhood revitalization, consistent with relevan� development plan olijectives and design guidelines. The Commercial Vacant Building Program is ilntended to increase the City's property tax base, remove l�light, provide oppor�tunities for development and leverage other resourc�s in the public and private sectors. , ' i I � i • ' • . I, . � I � (!d '��D�� June P, 1988 I Page 2 ' Need: Vacant buildings m�y ereate a blightin influence in a nei hborhood and 8 S tend to undermine area revitalization. In March 1988, there were eight industrial and 27 commercilal vacant properties on the Division of Public Hea1tM's vacant building list. The vacant building list includes properties which are abandoned, unsec�ured, boarded, having multiple exterior code violations or unfit for ht}man habitation. The highest concentration of vacant comme�cial buildings exists in the University Avenue and Dale area and in the Payne-Arcade-Forest area �iorth of Minnehaha and south of Maryland. Though the Division of Public Health Vacant Building List is the primary data base, field observation confirms that �the list is merely representative of a much larger numbe� of vacant commercia�l buildings city wide. It is clear that not all v�acant buildings pose a problem which requires public sector intervention. Some properties will be brought into re-use through the normal market process wherle owners ad�ust their rents to meet the real market demand'. While this may reRuire a certain amount of time, eventually the properity will be occupied. There �re, however, instances where a vacant structure clearly poses a threat to the health of a commercial area. Developers and owners will be reticent to investiin an area with a vacant (and deteriorating) structure. Vacant, deteriorating buildings te�d to bring down surrounding property values. The age of the vacant structur�:, its size and limited development options often act as, deterrents to its redevelopment. In such instances, it is necessary for the public to act in tlne interest of the overall well being of the area. There also may be instance� where the owner of vacant property is unwilling to invest' in, or even allow tt�e re-use of, the property despite the blighting effect� it may have on the neighborhood. This is also an occasion which may warrant public sector inte�vention, especially in a redevelopment area where powers �of condemnation can be used. o u el s: DraftlProgram Guidelines are attached for your consideration. STAFF RECOMMENDATION Staff �*ecommends the adoption of the attached guidelines and the establishment of the Vacant Commercial Bu�ilding Program, to be administered by PED. Staff further recommends the alla,cation of $300,000 from the HRA Development Fund to impleme�nt the first year of the program. Finally, staff recommends the release of the previously dlesignated $500,000 to the HRA's unreserved, undesig�nated developmnet fund balance. I I� � � I . I I� ,�/�� . , i • � � ` � I ; I June 22, 1988 � COMMERCIAL VACANT BUILDING PROGRAM GUIDELINES I: �trategy: The Vacant Building Program will use the following strategy � to bring vacant p�operties into productive re-use. General steps include: i A. site identifidation and selection � B. site control i C. marketing and �brokerage D. sale or lease E. rehabilitation or demolition F. rent subsidy i The sequence and n'eed for these activities will vary from project to ' pro�ect depending upon the unique situation encountered with each � property. � A. Site Identification and Selection: This activity imiolves a periodic revie�b of the Division of Public Health's Vacant Building ' List, Tax Forfe�it List and other sources of information to identify � potential vacant buildings. Suggestions will also be sought from District Planni�ng Councils and other neighborhood organizations. i Selection will be based upon the selection criteria and priorities detailed in Seations III and IV of this proposal. Properties will � be selected by a staff committee including PED and Community Services staff 'meeting on a monthly basis. , B. �ite Control: A building may be optioned for a period of six to twelve months, �during which time the site will be marketed for � redevelopment. If an option cannot be obtained, and the property is a priority for �edevelopment, funds may be used by the City to ' acquire the pro erty. Vacant Commercial Building Program funds may , be used for pur�hase options� direct acquisition, or second mortgages. ; I C. M�rket;ng and B�okera¢e: The City may act as an advocate for ' development of vacant buildings by engaging in active marketing of , specific sites �or development and re-use. PED's Neighborhood Development Div�.sion staff may market a site whether it is owned � privately or is to be acquired by the City for redevelopment. An RFP process maylbe used to identify developers for the project. See ! Section VII below for the Developer Selection Process. i � D. Sale or Lease: IVacant Commercial Building Program funds may be used , for acquisition cost write downs. In this case, funding will be structured as alsubordinate loan with possible deferral of principal i and interest until the user can afford graduated repayment or the i building is sol�. i I I i i � . . , . ! . �� ,o�� . . � � � I, E. �ehabilitationl: Program funds may be used to rehabilitate a vacant , building consistent with the marketing plan for that property. Vacant Commerc�al Building Program funds as well as other , appropriate resources such as the Commercial Rehabilitation Loan Program will b� packaged once a private developer and re-use is , identified. F. �raduated Rent� Subsi�: Rent incentfves and graduated rent subsidies alsojprovide a means of attracting new tenants to i commercial sites. The City may provide a rent subsidy sufficient to effectively ma�ket the site and bring it back into occupancy without a change in owtiership. Properties in target neighborhoods may not be able to com�and rent levels sufficient to cash flow the property after rehabilitation costs have been incurred. Therefore a rent subsidy may be needed to cover the gap between market rents and rent necessary to support costs. Eligibility standards and financial � analysis will �e required to target buildings and tenants who are in need of a subs dy. Graduated rents aay be used to create an � incubator environment for 3-4 years, ultimately "graduating" the tenants and bu�lding into a market rate environment. Thus new ' business develc�pment and long term productive re-use of problem commercial str�tctures is achieved. The above strat�egies are not mutually exclusive and may be used in � combination. It should be assumed the other development resources will be used s�ch as NPP or Commercial Rehabilitation Loans. II.I Use of Funds: �n�s may be used for acquisition, write down of ' renovation or demo].ition cost, and purchase options. Funds may be used as loans to privat� developers or tenants to accomplish the purpose of � the program. Loans may be of deferred interest or interest and principle to the e �xtent necessary to make the project financially ' feasible. Funds may be used to leverage a line of credit from a local bank for temporary !acquisition and disposition. No more than $100�000 i of Commercial Vacant Building Program funds will be used on any single property. ! III. Selection Criteria:i Properties must meet the following criteria in ! order to be eligible for this program. I 1. The building has been vacant at least one year. ! 2. It has been determined that a financing gap exists which can only be filled by this program. I " I 3. The building isino larger than 25,000 gross square feet above grade. 4. No more than $1Q0,000 of program funds are used for a single � building. I I I I� � I . . . . ' , . � ��-i�� I � , �V. �lprtinn D,.;,...i�:_ �y�L1��CS: The following characteristics will be examined to determine whichlproperties will receive attention through the Commercial I Vacant Building Program. ' 1. The vacant b�ilding is located in a designated redevelopment or URAP area. r � ' ! 2. The propertylhas potential for re-use. . ' 3. The vacant b�ilding has high visibility in the area in which it is located. i 4• The vacant building, when rehabilitated I will stimulatte other private redevelopmentdandcinvestmentleared, 5• The property'!s redevelopment plan includes the leveraging of private ' resources, i II 6. The pro�ect wktll maintain and increase the City's property tax base. I 7. For-profit bu�ers are preferred, however non-profit buyers or tenants are e�igible. �. 9�her ProQram Fesitures: A. Tax Fore -��su$e: Special efforts will be made to bring tax ' delinquent prqperties back into production either through cooperation with the owner or through foreclosure and redevelopment. � B. A�ressive Code En orcemenr: Dangerous or seriously blighted property willlbe a focus where other criteria can be met. Vigorous enforcement of' codes will be followed by condemnation to overcome recalcitrant property owners. Condemnation will be carried out by the HRA sub�ec�t to applicable statues. I �• �rdination with the Comm�•►�ry Serv �Ps Division: The Community ' Services Divis�on will provide its normal activities of enforcing emergency abat�ment� substantial abatement and the nuisance ordinance� as �qell as providing on-going surveillance of vacant ; properties. In addition, Community Services will provide inspection reports to insWre properties rehabilitated meet all applicable codes � and enforce the demolition process when necessary. ' D. Clearancg; Acq�uisition for clearance will only be undertaken whe I an effective market exists� or other re-use such as parking will n result. In add�ition, acquisition of a vacant building for the i purpose of clearance for parking must be accompanied by a written commitment from� the local area business association or other � neighborhood or�anization to make the necessary improvements and I i � � . . ' . � �,v�� . . � � . � I� I� ' perform ongoir�g maintenance. VIF Program Administration: It is proposed that staff of PED's Neighborhood Development Divis�on administer the Commercial Vacant Building Program � in a manner similar to its administration of the Commercial Rehabilitation Lo�n Program. ; Where condemnatio� is required, HRA action will be necessary, because it is the HRA tha# has the statutory suthority to condemn property. I A staff committee !composed of Community Services (Building Department) and PED (Neighbort�ood Development, Housing, Pro�ect Services) staff will , select properties 'in accordance with the selection criteria and priorities detaile�d in Sections III and IV above. VII.I Develoner Selectioln Process: A simplified two-step process in the ! selection of a developer will be used. These steps are outlined below. A. Step 1 - Submi�ssions Format All prospectiv� developers will be invited to submit Letters of ' Development Intient� expressing the prospective developer's interest in purchasing �nd developing the site and including the following � information. , I 1. Identificat�on of developers, including architect, builder (if known) , marketing and management component, and a brief description! of recent pro�ects and experience including ' illustrativg �aterial. 2. Narrative dpscription of the development proposed, including the � approximate sales or rental price. In addition, for new constructio#� preliminary drawings shall be submitted� including ' as a mini , a site plan showing the building, landscaped areas� dri�ways, parking and other site elements and architecturfl drawings showing building elevations and floor plans. All plans shall be drawn to scale and include identification of proposed site improvements, exterior building ' materials and interior rooms. For properties to be , rehabilitat�d, a Scope of Work to be performed including a , ' breakdown of� the costs shall be submitted. 3. Brief descri�ption of proposed nethod of financing. A � developer's financial statement should be included. 4. Brief descri�ption of proposed marketing plan. i I I , li , . . � l��ia�� . . , ;� � 5. A Money Or er/Cashier's Check in the amount of 10� of the purchase p ice must be submitted with the above described documentat on, which represents 108 Good Faith Deposit. B. Step 2 - Final Developer Selection and Land Sale Upon completio of the advertising period� the above mentioned material will e evaluated by HRA/PED staff, based on developer qualifications� experience, development concept� and financial capabilities. The most qualified developer will then be selected. A Contract forllSale and Redevelopment of Land will then be drafted and executed, orking drawings completed and deeding of the land to the developer �ill occur immediately, prior to commencement of construction• �I At the time of the final closing of said site, a Servicing Fee of 3� of the Purchas Price will be retained for assistance and documentation reparation performed by the HRA. This Service Fee would be made part of the Proposal Documents (formal) as well as the Contract f r Sale of Land for Private Redevelopment. Nothing contai ed in these Development Controls releases the Developer from compliance with applicable codes and ordinances of the City of Saint Paul. The Redevelopel assumes the obligation to take whatever affirmative actions are ne essary to assure equal employment opportunity in all aspecte in emp oyment, irrespective of race, color� creed� national origin or sex. It is hereby derstood that submission of these requirements in any of the phases o the HRA imposes no obligation upon the HRA to proceed with t e sale of the subject properties; and it is only the obligation of he HRA's staff to make recommendations to the HRA Board of Commi sioners as to the sale of the sub�ect properties; and inasmuch as on y the Board of Commissioners is vested with the exclusive powe to make final determination regarding the sale to a Redeveloper. ! �I I I I I �I II�I ,I I 1 � Members: i. Bill Wiison ch � � ,�',��, : � CITY OF �AINT PAUL Tom Dimond�--'" �„"""" Kiki Sonnen �� OFFICE OF THE CITY COIINCIL Date: July 7, 1988 �� /6� � WILLIAM L. WILSON Committee Report MARK VOERDING Councilman Legielative Aide To: Saint Paul City Council From : Housing and Econornic Development Committee Bill Wilson, Chair SPECIAL MEETING July 6, 1988 l. Ordin9.nce repealing Ord. No. 17498 (C.F. 87-1377) adopted October 9, 1987, pertaining to helipads or heliports by repealing the ordinance in its entirety. (C.F. 88-889) SUBSTITUTED ATTACHED RESOLUTION FOR THE LANGUAGE IN THE ORDINANCE AND RECOMMENDED APPROV�L OF THE SUBSTITUTED RESOLUTION 2. Resolution approving a policy for interium spending for the Low Income Housing Development Fund (HRA) COMMITTEE RECOMMENDED APPROVAL (3-1 vo �.;, Re�ort on Vacant Build ng Initiative and Resoltt�ion approving a Co�mmerci�.1 Vacant Buil��ng Program ar.d authorizing PE�'s Neighborhood Development Division to implement said program. �C.F. 88-1087) CQMMITTEE R,�COMMENDED t�PPROV.AL (unanimous vote) CTTY HALL SEVENTH FLO�R SAINT PAUL, MINNESOTA 55102 612/298-4646 s�ae