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HomeMy WebLinkAbout07/21/1999BOOK AGENDA MAPLEWOOD HOUSING AND REDEVELOPMENT AUTHORITY WEDNESDAY, JULY 21, 1999 7:00 P.M. CITY HALL MAPLEWOOD ROOM 1. Call to Order 2. Roll Call 3. Approval of Minutes November 10, 1998 4. Approval of Agenda 5. Communications Annual City Tour - Monday, August 30, 1999 6. Unfinished Business 7. New Business a. Possible Future Housing Programs 8. Date of Next Meeting 9. Adjournment c:memo\HRAAGEND.MEM MINUTES OF THE MAPLEWOOD HOUSING AND REDEVELOPMENT AUTHORITY NOVEMBER 't0, 1998 CALL TO ORDER Chairperson Fischer called the meeting to order at 7:00 p.m. ROLL CALL HRA commissioners: Lorraine Fischer~ Tom Connell¥, Joe O'Brien, Gary Pearson APPROVAL OF MINUTES June 10, 1997 commissioner O'Brien moved approval of the minutes of June 10, 1997, as submitted. Ayes~atl commissioner ConnellY seconded. APPROVAL OF AGENDA Commissioner Pearson moved approval of the agenda as submitted. Ayes~all commissioner connellY seconded. coMMUNICATIONS Ken Roberts, associate planner, said he heard that on Wednesday, December 2nd, there was going to be a commissioner appreciation dinner and evening at the Community Center starting around 6:00-6:30 p.m. UNFINISHED BusINESS Commissioner Fischer asked staff about the 1998 truth-in-housing compliance report. CommisSioner Fischer said she thought that comPliance was better this year than last year. Staff said they thought the percentage was around 60-70%. NEW BUSINESS A. Truth-in-Housing Ordinance and Forms Ken Roberts, associate planner, summarized the staff report saying that the housing evaluators are asking the city to stop requiring the property owner's disclosure section in the city's truth-in-housing report. Mr. Mike Moser, representing the Minnesota Society of Housing inspectors, was present. Commissioner ConnellY said the city had originally copied the St. Paul form and wanted to know if St. Paul still had the property owner's portion on it. Mr. Moser said that St. Paul never had the property owner's portion on their form. Staff said this portion was added by staff and the city council. Maplewood HRA Minutes of 11-10-98 -2- Commissioner Fischer said the COuncil included this port/on because there Were several COmplaints from new home buyers about failed wells, failed septic systems, and easements which Weren't disclosed at the time of sale. Staff said that the HRA needed to Consider whether the city should keep any or all or none of the items in the form. Staff said if the HRA made any changes ('by adding or dropping items) they Would need to do a Code amendment and take it to the city COuncil for approval. Staff said that the forms Would be changed based upon the COuncil's decision. There was a discussion about having a separate disclosure form for the OWner to fill out and what items should be included on that form. There was aiso discussion about having the housing evaluator send the form, along with his report, to the homeowner and the homeowner would be required to fill out the form and send it in. An extra copy could also be sent to realtors. Mr. Moser said that they felt the report the evaluator fills out should be very easy for the consumer to follow, it should be more specific, and follow a prescribed set of guidelines. Mr. Moser said the proposed form that they put together follows the exact numbering of the St. Paul form. The St. Paul guidelines go number by number, pointing out all the specifics that have to be called and why. Mr. John Perriard, representing the St. Paul Area Association of Realtors, was present. Mr. Perriard said he does most of the COmmunications for the board and came to the meeting to get SOme more information about any problems the city was having in the truth-in-housing ordinance. Mr. Perriard said he Would get a message out to his members to encourage potential home buyers to have their own home inspection done. Commissioner Connell OWner's r~orti~_ ._ Y asked staff if an ordinance chart e w · ,' ,,- was made into a separate form _~+..~- .g! .. ould be necess rv if ~ signed statement by the OWner and that a format change Would not require an ordinance .,,~ ur u~nance requires a change· Commissioner Connelly said that this form could then be Updated whenever necessary because it Would be separate from the ordinance. There was a discussion about the inspection process, including license and report fees, insurance, etc. It was stressed that there was a need for housing inspectors and real estate agents to Work more closely together in the inspection process. Mr. Moser said that the evaluators want to "self police" as much as possible and they want to make sure every evaluator does the best reasonable report they can and continually get better. Commissioner Pearson said he didn't have a Problem with moving the approval of this motion but he felt that as a Commission they needed to take another look at our ordinance and is it serving the public need. Commissioner Fischer said that they should probably get SOme input from the COuncil as to whether what was a good idea ten years ago still applies today. Commissioner Fischer asked what the evaluators, opinion was on having Some type of .mandatory COmpliance. Mr. Moser said that about three quarters of the COmpliance iSsues are minor things that don't require a permit, therefore, there Would be no funds Maplewood HRA Minutes of 11-10-98 -3- for the city to do it. Cities with larger staff can handle this type of thing and do the follow-ups. The City of Minneapolis will be sending all of their people out but they are making everybody get a permit fo~ ~bst everything to fund it. Mr. Moser said the thing to consider was can the city afford to send someone out and do all of these reinspections and certifications. City staff got the impression that realtors were very fearful that their paychecks were going to go because compliance would mean sales were going to be lost or held up and that they would lose their commissions. City staff didn't see this happening based on what they have read in Minneapolis, Bloomington, St. Louis Park, Hopkins, and other cities. Mr. Perriard said the realtors were opposed to the code compliance. Mr. Perriard said the Minneapolis ordinance has not gone into effect yet and there are a lot of realtors who are going to be watching closely to see what happens when it does. Mr. Moser said the only thing Minneapolis is requiring are hazard items on grounded outlets, exposed wires, monoxide backing, etc. Structural things, unless they are in danger of collapse, are not required and would still be listed as a below item as informational and a roof would almost never be required unless it is collapsing. Mr. Moser said that if the city used the St. Paul form line for line it would be easier for everyone involved. The staff said the city's main concern was that the reports be done so that the buyer has the information. There was a discussion between the commissioners and city staff about the contents of the form. They discussed what needed to be on the form and what didn't. The consensus was to make the city's truth-in-housing form as compatible with St. Paul's form, as prepared by Mr. Moser, as possible for the inspector's part, with supplemental pages required by the City of Maplewood for the owner's disclosure. The commission instructed staff to prepare a separate owner's disclosure form to be brought back to the next meeting. Commissioner Pearson said he felt that it would be better to use the word seller instead of owner on the property disclosure form. B. 1998 Housing Plan Update Ken Roberts, associate planner, summarized the staff report. Staff said that the report reflects updated numbers from the Met Council on what affordable was for them both for home purchasing and rental costs. The commission asked staff to check to see if the figures included manufactured homes. Staff said they were confident that manufactured homes were counted in the numbers. Commissioner Fischer asked staff if the long-term Federal contracts with landlords for the set aside of units for the Section 8 and Section 236 rental assistance programs had actually expired as mentioned on Page 58 of the staff report. Commissioner Fischer said they may be expiring because the owners are taking advantage of the prepayment not because their time is up. Commissioner Fischer thought that instead of using the word expired in the last part of this sentence that it should read were maybe prepaid by the owners and thus many affordable units were lost. = Maplewood HRA Minutes of 11-10-98 Commissioner Fischer said that on Page 58 the Archer Heights address should be listed as1816 Beebe Road and 1854 Beebe Road. Staff asked if the commission had any other changes to this portion of the comprehensive plan. Commissioner Fischer asked if the Livable Communities Act was included in the action plan on Page 70 of the staff report. Staff said it wasn't. Commissioner Fischer thought the Livable Communities Act (LCA) could be listed under the Funding column across from the sentence that starts with Explore all options.., in the Action column on Page 70. There was a further discussion of the plan in general among the commissioners and staff. Commissioner Connelly moved approval of the Housing Plan as amended. Commissioner Pearson seconded. Ayes--all The motion passed. DATE OF NEXT MEETING The next HRA meeting is tentatively scheduled for December 8, 1998. ADJOURNMENT The meeting adjourned at 9:30 p.m. TO: FROM: SUBJECT: DATE: MEMORANDUM City Manager Ken Roberts, Associate Planner POSSIBLE FUTURE HOUSING PROGRAMS July 15, 1999 INTRODUCTION The city manager has asked the Housing ;md Redevelopment Authority (HRA) to study possible future housing programs in Maplewood. This is because some of the city's tax-increment financing funds may be lost if the city does not spend them in the near future. DISCUSSION The HRA has been reviewing and considering housing programs for several years. For your information, I have included three memos for you to study. They include a June 1996 Housing Program prepared by Quam and Associates (starting on page 2), a memo from Mary Ippel of Briggs and Morgan about tax-increment financing (starting on page 17) and a memo from Bannigan and Kelly about tax forfeited lands (see page 21). The city council wants to discuss possible future housing programs with the HRA at their August 2, 1999, council/manager workshop. Please put this date on your calendar. RECOMMENDATION The HRA should prepare a recommendation to the city council about possible housing programs that the city could develop for the residents of Maplewood. kr/p:misc\hsgpro.mem Attachments: 1. June 1996 QSA Study 2. October 28, 1997 memo from Mary Ippel 3. February 18, 1999 memo from Bannigan and Kelly 1 ! i 4 2 Attachment 1 :SO Cl.tl; Housing Program Concepts Evaluation City of Maplewood June, 1996 ~ mmncht Associates, Maplewood Housing Program Concepts Evaluation Introduction The Maplewood City Coundl has requested that Quam, Sumnicht and Associates, Inc. (QSA) provide this housing program evaluation and report. Scope and Purpose QSA's evaluation is to provide the City Council and the HRA with a summary of the following Maplewood program issues: The type of programs (home replacement, existing home "transformation", whole district redevelopment, etc.) that would be most effective in updating neighborhoods and conserving existing open lands, The sources of funding that might be available to Maplewood (internal fund loans, private local lender participation, TIF financing, etc.) to initiate appropriate housing incentives, and o The cost effectivenessof the initiatives (For example, could loans to start a program be recovered, along with administrative costs?) and the positive impact they might have on the taxes and revenues of the dty and its school districts. 1 6 4 Background The aging of the "Baby Boom" generation means a decline in the number of new families being formed, and hence a decline in the demand for starter homes, particularly those of the type built through the 1960's. First ring cities are threatened if housing becomes "market obsolete". Left to its own consequences, a perception of spreading deterioration and diminished positive citizenship can lead to disinvestment. If this occurs, the scope and cost of programs to restore the neighborhoods becomes unmanageable. A Metropolitan Council study entitled, Housing Markets in 2000, suggests that the course of events in these commtmities may follow any of three trends: -H the current residents like the area they are living in well enough, they could decide to stay in their homes and remodel or add space to suit their needs. If this situation is widespread in the neighborhood, the condition of the homes and the desirability of the neighborhood could be greatly enhanced. -Owners could sell their homes at lower prices than they had hoped for, enabling individuals or families with low or moderate incomes to buy the houses. This situation, if widespread, could provide opportunities for home ownership to people who rent housing that may be inadequate for their needs because they cannot afford to buy the lowest-priced home on the market. -Owners could buy new homes and rent their current homes as either a short- term or long-term solution. If this occurs to many houses in a particular area, neighborhoods that had been primarily owner-occupied housing could gradually become areas with a greater mix of owner occupied and rented housing. Poor maintenance of a number of homes in a given area could influence other homeowners to move from the area, perhaps resulting in additional rental housing. Housing Markets in 2000, pages 16,17 In communities that want to provide contemporary quality housing for growing families, there is a strong sentiment to assist in the accomplishment of the first of these scenarios. By encouraging quality home improvements, and even new home replacements, in existing areas of the community, the condition of the homes and the desirability of the neighborhoods will be significantly enhanced, rather than eroded, while at the same time, the risks inddent to decaying or unstable neighborhoods can be avoided. 2 5 7 Framework for Evaluation The Metropolitan Livable Communities Act. New recognition of the need for communities to take an active role in the maintenance and improvement of their housing, is evidenced by the recently enacted Metropolitan Livable Communities Act. The Urban Strategies Task Force states: The challenges cities face, such as deteriorating neighborhoods, crime and drugs, need the cooperative efforts of public, private and business interests to solve. Cities should take the lead in developing local and regional strategies that will assist them in dealing with growing neighborhood problems. Report on Urban Revitalization, 1994 Maplewood has elected to participate in this program. As a. consequence, a set of recommended Housing Goals, Policies and Activities has been developed. The following facts are pertinent to these goals: 1. Metropolitan benchmarks state that at least 69 percent of ownership and 35 percent of rental housing in a community should be affordable. Because of the substantial portion of housing developed prior to the 1970% Maplewood exceeds these benchmarks. 2. At least 29 percent of housing units should be other than single-family detached. Again, Maplewood is clearly in compliance and, given market trends and land availability issues, is likely to remain so without extraordinary dty initiatives. 3. A city goal is to continue to provide dispersed locations for a diversity of housing styles, types and price ranges. A further goal is to maintain or strengthen the character of existing neighborhoods by addressing the problem of deteriorating properties. One activity to achieve this goal, is HRA participation in programs to help property owners with home maintenance and improvements through loans and, if available, grants. Comprehensive Plan Legislation. Legislation governing the adoption and updating of comprehensive land use plans, calls for the updating of Maplewood's comprehensive plan by the end of 1998. Existing Government Programs. A variety of programs exists to assist various housing needs, at the Federal, State, Regional, and County level. While too numerous to outline within this report, (see appendix) QSA has considered their existence and purpose, and has selected relevant programs for discussion in the context of its evaluation of current Maplewood needs. 3 6 8 Program Goals At the inception of this evaluation, with input from Maplewood staff, the following goals were developed, against which to evaluate recommended programs: · Keep the Maplewood housing market viable and values increasing by constantly improving and upgrading housing, and *Eliminate problem housing, inddent costly services and enforcement by removing housing which can only deteriorate because its basic quality is inherently low. QSA Observations-Underlying Maplewood Characteristics After physically reviewing the community, and evaluating information about Maplewood, QSA observes the following community characteristics: *Maplewood is characterized by a discontinuity of identity both as to geographic shape and boundaries, and as to bonding social structures (such as school and postal districts). ~stablished Maplewood neighborhoods mix properties of disparate quality, esthetics and value, to an extent that might confuse investment and a dear sense of development potential. *Despite these observations, a better than average 82 percent of its residents (according to its 1995 survey) regard Maplewood's sense of community as excellent or good. Additional Program Goal Based upon these observations, QSA has adopted an additional Program Goal: *Create a sense of unified action in a housing program that is seen to confer a benefit on the whole community and each of its residents. The basis for this addition is two-fold. First, local government should do enough in any housing program so that the effort creates an ongoing faith in the community's commitment to better its housing. Otherwise, spot efforts or minimal assistance may result only in temporary or isolated results. A larger, broadly understood city commitment to ongoing improvement has the benefit of catalyzing additional private action throughout neighborhoods, based on its residents' faith that their investments will yield a positive return. Second, Maplewood is unique. While its physical appearance and configuration militate against a strong sense of community, nevertheless, one exists. It is critical to tap this asset, to overcome what is otherwise a difficult program goalmthat of achieving housing activity that is symbolic to, and representative of the whole community. 9 4 7 Evaluation of Program Types and Funding Sources. QSA has selected the following four types of Housing Activity for evaluation. Remodelling and Repair. Typically aimed at low to moderate income households, this activity is.essential to any healthy community. As virtually every dty does, the dty of Maplewood, through its HRA, already participates or plans to partidpate in this type of Housing program through Metropolitan Council HRA and MI-iFA assistance. Implementing this type of assistance requires targeting and informing appropriate homeowners and, in some cases, as in the case of Ramsey County CDBG and HOME programs, applying to appropriate administering agencies. Maplewood staff and the HRA are well-qualified to pursue and administer this desirable type of ongoing assistance, which typically does not require a major municipal revenue source. Home Replacement. This activity addresses the most basic redevelopment problem faced by fully developed neighborhoods. Since some of the housing in older Maplewood neighborhoods was built before zoning and building restrictions were in place, properties exist that are deteriorated and inconsistent in character from the rest of the neighborhood. There is no more effective single action that can be taken in a small residential neighborhood, than to remove existing eyesore property, replacing the worst home, with a new home that sets a new area quality standard. QSA recommends that a program for this activity be developed and presented to the HRA and City Council for approval. While some private and government programs exist for this purpose, such as Habitat for Humanity, or CDBG grants, typically these are limited to low income replacement housing. Since Maplewood is in no present danger of falling below Metropolitan Council benchmarks for this type of housing, it would be beneficial to explore municipal funding, utilizing scattered site Tax Increment, for somewhat higher value home replacement. An example recommendation is described below. 5 10 8 Existing Home "Transformation" The term "Transformation" is used to define a major reconstruction of an existing home that, rather than simple remodeling, converts it to a market competitive home that offers the amenities found in a new home. QSA's experience indicates that the market will not bear the cost of this type of reconstruction, without dty loans or grants. In addition, banks are hesitant to lend on this type of loan, first because the "transformed" home may not appraise out at a price high enough to justify the loan, and second, because the process (which first tears apart the collateral, before improving it,) seems risky to an uninvolved lender. In another community, QSA has successfully helped develop a home "Transformation" loan program through a major lender. QSA suggests that this type of program be deferred until a successful home replacement program is in place in Maplewood. After that, the improving climate in older neighborhoods will provide a greater inducement to residents who live there, to make a major investment in their existing homes, and it will be easier to get Transformation homes appraised at higher values. Funding for this type of activity would typically come from a revolving loan fund, from the city. District Redevelopment. In communities where major deterioration has occurred, whole district redevelopment is sometimes advisable. Funding is typically from Tax Increment Finandng, with possible Livable Commtmities Act funding, or Federal low income assistance for some portion. QSA does not recommend this approach in. Maplewood. Except where it might be appropriate to convert residential fringe areas to commercial, there are no major areas in Maplewood that have reached the stage of deterioration that would suggest this costly and wholesale approach. Other. Some types of housing development, such as New Subdivision Development, or Multiple-Family Unit development are not evaluated here. The character of Maplewood limits the areas in which new subdivisions can be created, and the market generally drives such development without unique dty programs or subsidy. The creation of new multi-family housing typically occurs by traditional means of development or redevelopment, and is typically market driven. Evaluation of spedal Niche HousinE. for example, executive attached homes, senior housing or duster housing typically requires separate market studies, and usually occurs at the initiative of a developer. 6 9 11 Physical Improvement Recommendation QSA recommends that Maplewood initiate a program for new home replacement. The program might begin with as few as one or two homes, if the concept is properly presented. An ongoing target of additional homes should follow. The program should start by tearing out old eyesores and repladng them with new, higher value homes. The prospect of developing a second program to encourage residents to "l'ransform" their existing homes should remain a possibility. At present, the mix of housing in Maplewood does not create an imminent demand for larger homes that would impel residents to transform existing housing into market competitive larger homes. But, after eyesore homes have been improved in given neighborhoods, this will encourage private dtizen improvement of housing, including, as a natural consequence, some home transformations, if the dty is willing at that time to help encourage it. For the present, fix the worst first. Procedural Recommendation QSA recommends that the City Council enlist and appoint residents from each planning district of the community to serve as an advisory housing task force for the following action to: *Identify an initial target area for housing improvement that would a. Symbolize the whole community to most residents, and b. Send a signal that Maplewood's residential areas will not be permitted to decline, *Identify that area's most critical housing improvement need *Select and recommend a prototype project (or projects) to sponsor a. Using the Program Types and Funding Sources outlined below b. Working closely with dty staff and coundl/HRA liaison, *Help support and broadly publicize the prototype project, and *Expand into broader program activity, in more geographic areas. 7 l0 T~T T t ! Rationale Based upon the need to begin with isolated homes, in individual neighborhoods, it is important to create a sense of broader community involvement. A task force of representatives from distant neighborhoods would tap into the sense of commtmity from which Maplewood benefits, (and address the fact that residents feel a stronger tie to their own neighborhoods than to the community as a whole.) The planning and publidty effort will then be truly community wide. While first prototypes will not be constructed in every neighborhood, the input of residents from other neighborhoods can help identify the areas of concern that represent, to all areas, a threat of community decline. In addition, the selection of a separate group of respected community citizens (rather than solely members of the Planning Commission, the HRA, or the Council), will communicate to the community, the city's intent to take a serious new initiative spedfically tailored to assure the improvement of Maplewood housing. It will also permit the task force members to devote their meeting time exclusively to this goal. (It might also serve a second purpose, in providing valuable community evaluation for the 1998 revision of the Housing portion of the Comprehensive Plan.) The cost of this procedural recommendation would primarily be city staff time, with some possible outside consultation. The source of funding could be made a part of the general budget. 13 8 Typical Example While the specific derisions about new prototypes should be developed by the task force, this hypothetical example illustrates what might be pursued. An area of Maplewood that represents "typical" older Maplewood might be selected by the task force for its first prototype. An area near English Street south of Frost might signify an area where there is concern that the effects of aging nearby St. Paul housing might spread into Maplewood. A consideration in selecting the area might include the desire to maximize the potential for new home development along the abandoned rail line. The advantage that new homes already exist along Frisbie Avenue might help other nearby residents to get higher appraisal values when improving their homes in the future.' Funding for the project could be from a general fund loan, repaid by tax increment. (Typically school districts recover more from the funding they receive when new children move into the new home, than they forego in new tax increment.) An older home appraised at $60,000 could be acquired by voluntary purchase, and razed. The lot, then worth $25,000 could be sold to a private builder under an agreement prescribing design and value requirements. A new $145,000 home might then be built on the site. Over approximately twenty years, the tax increment it would generate would pay off the lot write-down, (from $60,000 to $25,000) along with reasonable site clearance and administrative costs. (See example on Appendix B). Conclusion Over the next decade a general fund loan of~200,000 to $300,000 could potentially produce new homes in all thirteen planning districts of Maplewood. Revolving use of the funds would produce a permanent commitment likely to spur confidence among Maplewood's residential homeowners. After a few years, when word of the program spreads, a second program to help homeowners "Transform" their own homes would be appropriate, creating a rich selection of older, well-kept homes, thoroughly "transformed" market competitive homes, and design-integrated new homes. The result Of active planning and commitment will eventually spur many times the dty's investment in owner initiated upgrades and improvements, even in areas where no public money has been provided. The result will be seen in spin-off benefits both in new tax base revenues and in dtizen confidence in Maplewood. 9 14 12 Appendix A Program Types-Tools for Physical Development · Public - City Sponsored CDBG (low income) HOME Program (low to moderate) TIF (Removal and replacement) Transformation (grant/loan) IVIFHA construction (low income credits) · Joint Venture - City acquires/Private rebuilds Home Transformation CDBG (low income) &HOME Program with e.g. Habitat Pilot Projects · Public/Private - City Encouraged CDBG (low income) & HOME Program with e.g. Habitat acquiring MFHA (low income) deferred loan and fix up programs Publicity and Support Seminars to spur private remodeling/rebuilding Advisory services to the public · Private - Market Driven Creative Lending Programs Zoning Changes Funding Sources *CDBG -Low income 50% of median income -Second mortgage, 5 years - 50% back, 10 years could be a forgiven grant -Federal money involves relocation costs if property is acquired · HOME program -Grant to acquire property (Davis/Bacon act to govern) -Can be housing grant for city created rental housing (backlog) · City resources -Loan from the general fund for TIF scattered site redevelopment -General budget allocation to fund citizen task force involvement -Revenues from Charitable Gambling · Livable Communities grants -Demonstration projects -Community driven projects .MFHA -Mortgage and home ownership assistance loans -Low income and new housing tax credits -Great Minnesota Fix-up Fund -Mortgage Revenue Bonds and Credit Certificates 13 15 Addendum (Modified Recommendations) Background On July 9,1996, QSA presented the foregoing Evaluation to the Maplewood HRA. This addendum is provided to address responses communicated by the HRA and city staff. Variation of QSA Procedural Recommendation The HRA and city staff express concern about the creation of a separate task force to identify the Program's initial target area and that area's most critical housing improvement need, and to help support, publicize and expand the program activity. Members of the HRA express interest in conducting these activities themselves, as the HRA, without the creation of an additional task force. QSA response: While the task force recommended by QSA is not intended to become a permanent new citizen body, (It's life would be limited to the completion of defined tasks set forth in the recommendation), most of the same ends could be achieved by designating the HRA as the task force, (possibly supplemented with members from the Council, the Planning Commission or others, necessary to provide city-wide representation). This approach has the advantage of harnessing the expressed enthusiasm of the HRA. If this approach is used, QSA recommends that the HRA (acting as the task force) consider holding at least one broadly publicized community input meeting to present the concept of the program to interested citizens and to take their recommendations regarding the issues that the task force is to decide. This would help retain the broad publicity and the message of community inclusiveness contemplated in QSA's task force recommendation. 17 15 Accelerated Emphasis on Home Transformations The HRA expresses an interest in accelerating the development of a Home Transformation program for Maplewood. QSA response: It is QSA's experience that a Home Transformation program is difficult to use as a first program to inspire belief in improving home values. The difficulty exists in persuading lenders and the public that a Transformed Home can attain a resale value that justifies it's expense, In areas where there are improving values, first driven by a program that replaces older homes on an infill basis, the way is paved for gaining higher assessed values through home reconstruction as well. However, given the enthusiasm the HRA expresses for this program, the HRA could be directed to begin designing a Home Transformation program immediately. QSA believes that as soon as a new home replacement program is demonstrated at least once, there should be at least a few locations where existing home owners could be induced to begin home transformations. One program approach might be to begin mixing in the construction of Transformation Home prototypes, soon after one or two replacement homes are completed. 18 16 [ [ i I I , '? MOI GAlXT Attachment 2 ~2OO £1P~T NATiONAl, BANK BUILDING 3.%2 MINNF~OT^ iTR£~T $^INT PAUL MINN~OTA ~lOl T[LE~HON~ ~612j 2~-6600 FAC/IMJLE (612) 2~6480 I~ROI~[~IONAI. A~OCIATION October 28, 1997 V/RJTER'5 DIRfCT DIAL (612) 223.6620 ' w~,l~'s ~-~^~ ippmar@emau, onggs.com Dan Faust Finance D/rector Maplewood C/ty Ig[all 1830 East County Road B Maplewood, MN of Mal eWood, Re: and 1-6 ,] Minnesota Dear Dan: - Tax Increment Financing District Nos. 1-4, On May 24, 1993, ',the City of Maplewood established Homing District Nos 1.a ~,,~ ~ and on March 21, ~995 established Housing District No. 1-6. ~These three ial i'ncr"~e~rn~e'~t financing districts ~e qualified as housing districts and are subject to the following requirements of thI Tax Increment Financing Act relating to housing districts: 1. Revenue delved from a tax increment financing district qualified ~s a housing district must'be used solely to finance the cost of housing projects as d~fined in Section 469.:i74, subdivision 11~ which provides as follows: "Hous/ng dit a project, o~ fatales of National Hc States Housi aruended an legislation, does not qu~ improvemen low and mo~ fair market agreement. the cost of estimating n~ ~ct" means a typ~ of tax increment financing district which consists ef a portion of a project, intended for occupancy, in part, by persons or w and moderate income, as defined in chapter 462A, Title II of the ~sing Act of 1934, the National Housing Act of 1959, the United ag Act of 1937, as amended, Title V of th~ Housing Act of 1949, as other similar present or future federal, state, or municipal the regulations promulgated under any of those acts. A project ify under this subdivision ff the fair market value of the s which are constructed for commercial uses or for uses other, than orate income hoasing consists of more than 20 percent of thc total alue of the plashed improvements in the development plan or Fhe fair market value of the improvements may be determined using ~mtruction, capital/zed income, or other appropriate method of trket value. 17 B:RIOG. S ~ I~IOI~G,A:N October 28, 1997 Page 2 l~roject are ¢ gross income increment ~ financed wit] than the Civ subsidies. The cost of.~u, blic improvements directly related to the hous/ng projects and the allocated a ,d~ainhtrative expenses of the City may be included in the cost of the housing prelect. For residential rental property, the property must ~tisfy the income requirements for a qualifie{d residential rental project as defined ia Section 142(d) of the Internal Re',;~nu~ Code. (This means that 20% of the units must be occupied by persons and ~fam~hes whose income does not exceed 50% of the median family income or 40% of the u.nits must be occupied by persons and families whose income does',not exceed 60% of the median family income). A property also satidies the Tequirements of Section 142(d) if 50% of the resident/al units in the ~cupied by individuals whose income is 80% or less of area median . The requ/rements of 1 and 2 apply for th~ duration of the tax ~ancing district and apply to r=sidential property receiving assistanc~ ~ tax increm=nts, including inter~t reduction, land transfe~ at less 's cost of acquisition, utility service or connections, roads or other An amount ~ qual to at least 80% of the revenue derived from tax increments paid by propertic in the tax increment financing district must be expended on activities in the tax im rement financing district or to pay bonds to the extent that the proceeds of'he bonds were used to finance activ/ties in the tax increment financing dis fict. In the case of a housing district, a housing project as defined in 469.174, Sub tivision 11~ is an activity in the district, (This means that notw/thstand ng the 80% nile the tax increments can be spent on act/v/ties outside of the tax im rement financing district ~o long ss the tax increments are ~pent on a "housing project"). Revenues deriwd from tax/ncrements are considered to have been exp~nded on an activ/ty vgtkin the tax increment financing district only ff one of the following OCCUrs: befor~ or within five years after certification of the district, the revenues are ac tually paid to a third party with respect to the activity; bonclt the procee~ of which must be used to finance the activity, are issue/ and sold to a third party before or within five years after certification of the tax increment financing district, the revenues are spent to repay the bonclt and the proc6e, cts of th~ bonds ~ither ar6, on the date of issuance, reasonably expected to be spent before the end of the later of (i) the five- ]8 I~ cl L6898809§~: 'ei't,,'i;'l :Ill '..LS/§I :ii 86,6a 1:,0 '" I NVOEO~SOOIH~ ~OH~ Dan Faust October 28, 1997 Page 3 year :cried, or (ii) a reasonable temporary period within the meaning of the ~e of that term under section 148(c)(1) of the Internal P,~venue Code, or ar~ deposited in a reasonably required r~erve or replacement fund; bindi ~g contracts with a third party are entered ~to for performance of the activ~'ty before or within five years after certification of thc tax increment finan~ing d/strict and the revenues are spent under the contractual obligation; or costs ~vith respect to the activity are paid before or w/thin five years after certfl :cation of the tax increment financing district and the revenues, are spen~, to reimburse a party for payment of the costs, including interest on unref r~butsed costs. Beginning l'evenues de that remain pay (i) outsl (iii) when has been [th the sixth year following certification of the d/strict, 80% of the ired from tax increments paid by properties in the housing district after the expenditures permitted'under 4 abov~ must be used Only to ~nding bond~, as described in 4, (ii) contracts as described in 4, and · ~ outstanding bonds have been defeased and when sufficient money aside to pay contractual obligations as described in 4 above, the tax increment fitnancing district must be decertified and the pledge of tax increment discharged. I On December 9, 1993 we requested the certification of the original net tax capacity of Tax Increment Financinl~, Districts Nos. 1-4 and 1-5 and on May 23, 1995 we req}aested certification of Tax Increment Financing District No. 1-6. 'We have not rec~:ived the certification from the County (they are always slow) but I assume that Idistrict Nos. 1-4 and :1-$ were certified by the County Sometkne in 1994. I hay{ also not received the certification from the County for Tax Increment Financing D/strict No. 1-6. I assume that district No. 1-6 was certified in 1995. Yo~ should ch~ck the certifications that I assume you received fi.om the Coanty and ~letermine the actual dates that they were certified. The City has within five y~ars of the certification date of these districts to comply with the rules set forth in ,~ above. If the City has not entered into contracts, incurred costs or issued bon~' starting with the sixth year, followin$ certification of these districts~ the City wllllonly be able to use the tax increments to pay the outstanding Devclopmerg Agreements with the Carefree Cottage of Maplewood L/mired Partnerships! For purposes of fill/ng out the forms for the State Auditor and determining ~h~ budget amounts for tax increment districts Nos. 1-4, 1-5 and you will wan! to review the aforementioned rules. You may fred that the City will 19 V ci £6898809~8 '0N/I~[ :01 ',I.S/91:0I 86,6E 't~0 ((/3/~) · NVOEOI~S00IH Dan Fa~t October :18, 1997 Pago 4 not bc able lo incur other costs within the five period and therefore you may want to reduce ti ~ budgcts for t, he.,s~ districts. If you hav~ any qu ~fions, please do not hesitate to ~ivc me a call. Mar~ [,. Ippe[/// I' MLI:tf~ ?<'f'::':: ' '.' f'iff:---i,- 20 NVO~O~S©OIH Attachment 3 MEMO TO: FROM: DATE: Mike McGuire Melinda Coleman Juli Stensland Bannigan & Kelly, P.A. Tax Forfeited Lands - Use Deeds February18,1999 I. Use Deeds The City of Maplewood has acquired property through use deeds that may be utilized for a public purpose such as open space or drainage. A question has been raised whether moderate income housing can be developed on property that was conveyed by a use deed. II. Three Options to Acquire Tax Forfeited Lands The three ways that the City of Maplewood can acquire tax forfeited lands are as follows: use deeds, a public auction or by purchasing the property at its appraised value for a public purpose. Because the property may be designated for residential housing, a use deed does not work for this situation. If a public auction was conducted, then anyone, including a developer, could bid on the property as well as the City. However, the City can preempt the auction and other bids if the City's Housing and Redevelopment Authority purchases the property at its appraised value. If the City wants to exercise a certain amount of control over the purchase of the property, the best option is to purchase the property at the appraised value. The City's Housing and Redevelopment Authority must purchase the property, rather than the City itself. If the City purchases land using public funds, the acquisition must be for a public purpose. Accordingly, the City could convey the property to a private party only if the public use was no longer necessary. If the sole purpose of the City's acquiring the property is to convey it to a private party, a public purpose does not exist. Attorney General Opinion, 425-C-11 (May 27, 1964); see also Attorney General Opinion 430 (Nov. 23, 1948) (attached). Therefore, the question referenced above has serious implications for the City because if a governmental subdivision to which tax forfeited land has been conveyed for a specified public use fails to put the land to that use or abandons that use, the land reverts back to the state of Minnesota. Minnesota Statutes, Section 282.01, subd. Id, lc. In addition, Ramsey County views any non-public use as suspect and I have been informed that the County will be taking a different position if the use is not specifically for the public. Hoxvever, the property would not revert back to the state of Minnesota if the sale or other conveyance of tax forfeited lands is by a housing and redevelopment authority, an economic development 21 authority or a city as authorized by chapter 469. One of the purposes of a housing and redevelopment authority is to "remedy the shortage of housing for low and moderate income residents, and to redevelop blighted areas, in situations in which private enterprise would not act without government participation or subsidies." Minnesota Statutes, Section 469.001. A certificate made by a housing and redevelopment authority stating that "the conveyance has been made as authorized by chapter 469 may be filed with the county recorder or registrar of titles, and the rights of reverter in favor of the state ... will then terminate." Minnesota Statutes, Section 282.01, subd. 1 d. Therefore, if the property is to be used in accordance with the Housing and Redevelopment Authorities, Act,. the property would not revert back to the state of Minnesota. Chapter 469 also addresses targeted neighborhood revitalization programs. In order for this project to be a targeted neighborhood revitalization program, there are various eligibility requirements pertaining to cities of the second class, such as Maplewood. For example, one criteria for the program is that a city of the second class be designated as an economically depressed area by the United States Department of ' Commerce. Minnesota Statutes, Section 469.201, subd. 2. If the City of Maplewood would like to explore this option, further research would be required. III. The Appraisal The appraisal would be conducted by Kristine Kujala, Supervisor of Tax Forfeited Land at the Department of Property Records and Revenue at Ramsey County. Patrick Kelly and I met with Ms. Kujala. Ms. Kujala stated that the property in question is approximately 3 ~A acres. She also stated that the price of the property would be the appraised value and is not subject to negotiation. However, our meeting with Ms. Kuj ala was very informative and we believe that we will be able to work with her if the City's Housing and Redevelopment Authority decides to purchase the property. IV. The Approval After Ms. Kujala appraises the land, a reconveyance application for each parcel would need to be submitted to the Tax Forfeited Land division. The application should include a statement of facts as to the use to be made of the property and the need for such property. The next step is for the Ramsey County Board and the State to approve the conveyance. However, Ms. Kujala did not emphasize the final approval process in our meeting and, therefore, I do not foresee this process hindering the acquisition of the property. Once the acquisition is approved, the ?lousing and Redevelopment Authority can exercise its discretion in selling the property to a private developer in accordance with chapter 469. Because of the involved process, the City may want to make inquiries regarding the developer before proceeding. However, it would be advisable not to get too closely involved with any particular developer because of public perception. MSA § 282.01, Tax-forfeited lands; classification, sale Page *46012 M.S.A. § 282.01 MINNESOTA STATUTES ANNOTATED PROPERTY TAX~S CHAPTER 282. TAX-FORFEITED LAND SALES CLASSIFICATION AND SALE Current through End of 1997 3rd Sp. Sess. 282.01. Tax-forfeited lands; classification, sale Subdivision 1. Classification as conservation or nonconservation. It is the general policy of this state to encourage the best use of tax-forfeited lands, reco~i~/ng that some lands in public ownership should be '. ret_ained and managed for public benefits while other lands should be returned to private ownership. Parcels of land becoming the property of the state in trust under law declaring the forfeiture of lands to the state for taxes shall be classified by the county board of the county in which the parcels lie as conservation or nonconservation. In making the classification the board shall consider the present use of adjacent lands, the productivity of the soil, the character of forest or other growth, accessibility of lands to established roads, schools, and other public services, their peculiar suitability or desirability for particular uses and the suitability of the forest resources on the land for multiple use, sustained yield management. The classification, furthermore, must encourage and foster a mode of land utilization that will facilitate the economical and adequate provision of transportation, roads, water supply, drainage, sanitation, education, and recreation; facilitate reduction of governmental expenditures; conserve and develop the natural resources; and foster and develop agriculture and other industries in the districts and places best suited to them. In m -aking the classification the county board may use information made available by any office or depa~hnent of the federal, state, or local governments, or by any other person or agency possessing pertinent information at the time the classification is made. The lands may be reclassified fi.om time to time as the county board may consider necessary or desirable, except for conservation lands held by the state flee fi.om any trust in favor of any taxing district. If the lands are located within the boundaries of an organized town, with taxable valuation in excess of $20,000, or incorporated municipality, the classification or reclassification and sale must first be approved by the town board of the town or the governing body of the municipality in which the lands are located. The town board of the town or the governing body of the municipality is considered to have approved the classification or reclassification and sale if the county board is not notified of the disapproval of the classification or reclassification and sale within 90 days of the date the request for approval was transmitted to the town board of the town or governing body of the municipality. If the town board or governing body desires to acquire any parcel lying in the town or municipality by procedures authorized in this section, it must file a written application with the county board to withhold the parcel from public sale. The application must be filed within 90 days of the request for classification or reclassification and sale. The county board shall then withhold the parcel from public sale for one year. A clerical error made by county officials does not serve to eliminate the request of the town board or governing body if the board or governing body has forwarded the application to the county auditor. *46013 Subd. la. Conveyance; generally. Tax-forfeited lands may be sold by the county board to an organized or incorporated governmental subdivision of the state for any public purpose for which the subdivision is authorized to acquire property or may be released fi.om the trust in favor of the taxing districts Copyright (e) Wost Group 1998 No claim to origiaal U.S. Govt. work~ 23 MSA § 282.01, Tax-forfeited lands; classification, sale Page 2 on application of a state agency for an authorized use at not less than their value as determined by the county board. The commissioner of revenue may convey by deed in the name of the state a tract of tax-forfeited land held in trust in favor of the taxing districts to a governmental subdivision for an authorized public use, if an application is submitted to the commissioner which includes a statement of facts as to the use to be made of the tract and the need therefor and the recommendation of the county board. Subd. lb. Conveyance; targeted neighborhood lands. (a) Notwithstanding subdivision la, in the case of tax-forfeited lands located in a targeted neighborhood, as defined in section 469.201, subdivision I0, outside the metropolitan area, as defined in section 473.121, subdivision 2, the commissioner of revenue may convey by deed in the name of the state any tract of tax-forfeited land held in trust in favor of the taxing districts, to a political subdivision that submits an application to the commissioner of revenue and the recommendation of the county board. (b) Notwithstanding subdivision la, in the case of tax-forfeited lands located in a targeted neighborhood, as defined in section 469.201, subdivision 10, in a county in the metropolitan area, as defined in section 473.121, subdivision 2, the commissioner of revenue shall convey by deed in the name of the state any tract of tax-forfeited land held in trust in favor of the taxing districts, to a political subdivision that submits an application to the commissioner of revenue and the county board. (c) The application under paragraph (a) or (b) must include a statement of facts as to the use to be made of the tract, the need therefor, and a resolution, adopted by the governing body of the political subdivision, finding that the conveyance of a tract of tax-forfeited land to the political subdivision is necessary to provide for the redevelopment of land as productive taxable property. Subd. lc. Deed of conveyance; form; approvals. The deed of conveyance must be on a form approved by the attorney general and must be conditioned on continued use for the purpose stated in the application. If, however, the governing body of the governmental subdivision by resolution determines that some other public use should be made of the lands, and the change of use is approved by the county board and an application for change of use is made to, and approved by, the commissioner, the changed use may be made without conveying the lands back to the state and securing a new conveyance for the new public use. Subd. Id. Reverter for failure to use; conveyance to state. When a governmental subdivision to which tax-forfeited land has been conveyed for a specified public use as provided in this section fails to put the land to that use, or to some other authorized public use as provided in this section, or abandons that use, the governing bod.v of the subdivision shall authorize the proper officers to convey the land, or the part of the land not required for an authorized public use, to the state of Minnesota. The officers shall execute a deed of conveyance immediately. The conveyance is subject to the approval of the commissioner and its form must be approved by the attorney general. A sale, lease, transfer, or other conveyance of tax-forfeited lands by a housing and redevelopment authority, a port authority, an economic development authority, or a city as authorized by chapter 469 is not an abandonment of use and the lands shall not be reconveyed to the state nor shall they revert to the state. A certificate made by a housing and redevelopment authority, a port authority, an economic development authority, or a city referring to a conveyance by it and stating that the conveyance has been made as authorized by chapter 469 may be filed with the county recorder or registrar of titles, and the rights of reverter in favor of the state provided by subdivision le will then terminate. No vote of the people is required for the conveyance. *46014 Subd. le. Notice and declaration of reversion. If the tax-forfeited land is not conveyed to the state in accordance with subdivision ld, the commissioner of revenue shall by written instrument, in form approved by the attorney general, declare the land to have reverted to the state, and shall serve a notice of Copyright (c) West Group 1998 No claim to original U.S. Govt. works 24 MSA § 282.01, Tax-forfeited lands; classification, sale Page 3 reversion, with a copy of the declaration, by certified mail upon the clerk or recorder of the governmental subdivision concerned. No declaration of reversion shall be made earlier than five years from the date of conveyance for failure to put land to the use specified or fi.om the date of abandonment of that use if the lands have been put to that use. The commissioner shall file the original declaration in the commissioner's office, with verified proof of service. The governmental subdivision may appeal to the district court of the county in which the land lies by filing with the court administrator a notice of appeal, specifying the grounds of appeal and the description of the land involved, mailing a copy of the notice of appeal by certified mail to the commissioner of revenue, and filing a copy for record with the county recorder or registrar of titles, all within 30 days after the mailing of the notice of reversion. The appeal shall be tried by the court in like manner as a civil action. If no appeal is taken as provided in this subdivision, the declaration of reversion is final. The commissioner of revenue shall file for record with the county recorder or registrar of titles, of the county within which the land lies, a certified copy of the declaration of reversion and proof of service. Subd. If. Land exchanges; Minneapolis. A city of the first class with a population of 450,000, or over, or its board of park commissioners, which has acquired tax-forfeited land for a specified public use under this section, may convey the land in exchange for other land of substantially equal worth located in the city. The land conveyed to the city, or its board of park commissioners, in exchange is subject to the public use and reversionary provisions of this section. The tax-forfeited land so conveyed is thereai~er free from the public use and reversionary, provisions of this section. The exchange shall in no way affect the mineral rights of the state of Minnesota, if any, in the lands exchanged. Subd. 2. Conservation lands under supervision of county board. Lands classified as conservation lands, unless reclassified as nonconservation lands, sold to a governmental subdivision of the state, designated as lands primarily suitable for forest production and sold as hereinafter provided, or released from the trust in favor of the taxing districts, as herein provided, will be held under the supervision of the county board of the county within which such parcels lie. The county board ma,v, by resolution duly adopted, declare lands classified as conservation lands as primarily suitable for timber production and as lands which should be placed in private ownership for such purposes. If such action be approved by the commissioner of natural resources, the lands so designated, or any part thereof, may be sold by the county board in the same manner as provided for the sale of lands classified as nonconservation lands. Such county action and the approval of the commissioner shall be limited to lands Lying within areas zoned for restricted uses under the provisions of Laws 1939, chapter 340, [FN1] or any amendments thereof. The county board may, by resolution duly adopted, resolve that certain lands classified as conservation lands shall be devoted to conservation uses and may submit such resolution to the commissioner of natural resources. If, upon investigation, the commissioner of natural resources determines that the lands covered by such resolution, or any part thereof, can be managed and developed for conservation purposes, the commissioner shall make a certificate describing the lands and reciting the acceptance thereof on behalf of the state for such purposes. The commissioner shall transmit the certificate to the county auditor, who shall note the same upon the auditor's records and record the same with the county recorder. The title to all lands so accepted shall be held by the state flee from any trust in favor of any and all taxing districts and such lands shall be devoted thereafter to the purposes of forestry, water conservation, flood control, parks, game refuges, controlled game management areas, public shooting grounds, or other public recreational or conservation uses, and managed, controlled, and regulated for such purposes under the jurisdiction of the commissioner of natural resources and the divisions of the departraent. In case the commissioner of natural resources shall determine that any tract of land so held by the state and situated within or adjacent to the boundaries of any governmental subdivision of the state is suitable for use by such subdivision for any authorized public Copyright (e) West Group 1998 No claim to original U.S. Govt. works I [ I I I MSA § 252.01, Tax-forfeited lands; classification, sale Page purpose, the commissioner may convey such tract by deed in the name of the state to such subdivision upon the filing with the commissioner of a resolution adopted by a majority vote of all the members of the governing body thereof, stating the purpose for which the land is desired. The deed of conveyance shall be upon a form approved by the attorney general conditioned upon continued use for the purpose stated in the resolution. All proceeds derived from the sale of timber, lease of hay stumpage, or other revenue from such lands under the jurisdiction of the natural resources commissioner shall be paid into the general fund of the state. The county auditor, with the approval of thc county board, may lease conservation lands remaining under the jurisdiction of the county board and sell timber and hay stumpage thereon in the manner hereinaRer provided, and all proceeds derived therefrom shall be distributed in the same manner as provided in section 282.04. · 46015 Subd. 3. Sale of nonconservafion lands. Ail parcels of land classified as nonconservation, except those which may be reserved, shall be sold as provided, if it is determined, by the county board of the county in which the parcels lie, that it is advisable to do so, having in mind their accessibility, their proximity to existing public improvements, and the effect of their sale and occupancy on the public burdens. Any parcels of land proposed to be sold shall be first appraised by the county board of the county in which the parcels lie. The parcels may be reappraised whenever the county board deems it necessary to carry out the intent of sections 282.01 to 282.13. In an appraisal the value of the land and any standing timber on it shall be separately determined. No parcel of land containing any standing timber may be sold until the appraised value of the timber on it and the sale of the land have been approved by the commissioner of natural resources. The commissioner shall base review of a proposed sale on the policy and considerations specified in subdivision 1. The decision of the commissioner shall be in writing and shall state the reasons for it. The county may appeal the decision of the commissioner in accordance with chapter 14. In any county in which a state forest or any part of it is located, the county auditor shall submit to the commissioner at least 30 days before the first publication of the list of lands to be offered for sale a list of all lands included on the list which are situated outside of any incorporated municipality. If, at any time before the opening of the sale, the commissioner notifies the county auditor in writing that there is standing timber on any parcel of such land, the parcel shall not be sold unless the requirements of this section respecting the separate appraisal of the timber and the approval of the appraisal by the commissioner have been complied with. The commissioner may waive the requirement of the 30-day notice as to any parcel of land which has been examined and the timber value approved as required by this section. If any public improvement is made by a municipality after any parcel of land has been forfeited to the state for the nonpayment of taxes, and the improvement is assessed in whole or in part against the property benefited by it, the clerk of the municipality shall certify to the county auditor, immediately upon the determination of the assessments for the improvement, the total amount that would have been assessed against the parcel of land if it had been subject to assessment; or if the public improvement is made, petitioned for, ordered in or assessed, whether the improvement is completed in whole or in part, at any time between the appraisal and the sale of the parcel of land, the cost of the improvement shall be included as a separate item and added to the appraised value of the parcel of land at the time it is sold. No sale of a parcel of land shall discharge or free the parcel of land fi-om lien for the special benefit conferred upon it by reason of the public improvement until the cost of it, including penalties, if any, is paid. The county board shall determine the amount, if any, by which the value of the parcel was enhanced by the improvement and include the amount as a separate item in fixing the appraised value for the purpose of sale. In classifying, appraising, and selling the lands, the county board may designate the tracts as assessed and acquired, or may by resolution provide for the subdivision of the tracts into smaller units or for the grouping of several tracts into one tract when the subdivision or grouping is deemed advantageous for the purpose of sale. Each such smaller tract or larger tract must be classified and appraised as such before being offered for sale. If any such Copyright (e) West Group 1998 No claim to original U.S. Govt. works 26 MSA § 282.01, Tax-forfeited lands; classification, sale Page lands have once been classified, the board of county commissioners, in its discretion, may, by resolution, authorize thc sale of thc smaller tract or larger tract without reclassification. '46016 Subd. 4. Sale: method, requirements, effects. The sale shall be conducted by the county auditor at the county seat of the county in which the parcels lie, provided that, in St. Louis and Koochiching counties, the sale may be conducted in any county facility within the county, and the parcels shah be sold for cash only and at not less than the appraised value, unless the county board of the county shall have adopted a resolution providing for their sale on terms, in which event the resolution shall control with respect thereto. When the sale is made on terms other than for cash only a payment of at least ten percent of the purchase price must be made at the time of purchase, thereupon the balance shall be paid in no more than ten equal annual installments. No standing timber or timber products shall be removed from these lands until an amount equal to the appraised value of all standing timber or timber products on the lands at the time of purchase has been paid by the purchaser, provided, that in case any parcel of land bearing standing timber or timber products is sold at public auction for more than the appraised value, the amount bid in excess of the appraised value shall be allocated between the land and the timber in proportion to the respective appraised values thereof, and no standing timber or timber products shall be removed from the land until the amount of the excess bid allocated to timber or timber products has been paid in addition to the appraised value thereof. The purchaser is entitled to immediate possession, subject to the provisions of any existing valid lease made in behalf of the state. For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price is subject to interest at the rate determined pursuant to section 549.09. The unpaid balance of the purchase price for sales occurring at, er December 31, 1990, is subject to interest at the rate determined in section 279.03, subdivision 1 a. The interest rate is subject to change each year on the unpaid balance in the manner provided for rate changes in section 549.09 or 279.03, subdivision la, whichever, is applicable. Interest on the unpaid contract balance on sales occurring before July 1, 1982, is payable at the rate applicable to the sale at the time that the sale occurred. Subd. 5. Sale on terms, certificate. When sales hereafter are made on terms thc purchaser shall receive a certificate from the county auditor in such form, consistent with the provisions of sections 282.01 to 282.13 and setting forth the terms of sale, as may be prescribed by the attorney, general. Failure of the purchaser or any person claiming under the purchaser, to pay any of the deferred installments with interest, or the current taxes, or to comply with any conditions that may have been stipulated in the notice of sale or in the auditors certificate herein provided for, shall constitute default; and the state may, by order of the county board, during the continuance of such default, declare such certificate canceled and take possession of such lands and may thereafter resell or lease the same in the same manner and under the same rules as other lands forfeited to the state for taxes are sold or leased. When the county board shall have adopted a resolution ordering the cancellation of such certificate or certificates and the cancellation shall have been completed in accord with section 282.40, then a reentry, shall be deemed to have been made on the part of the state without any other act or deed, and without any right of redemption by the purchaser or any one claiming under the purchaser; and the original purchaser in default or any person claiming under the original purchaser, who shall remain in possession or enter thereon shall be deemed a willful trespasser and shall be punished as such. When the cancellation of such certificate has been completed the county auditor shall cancel all taxes and tax liens, delinquent and current, and special assessments, delinquent or otherwise, imposed upon the lands described in the certificate after its issuance. *46017 Subd. 6. Duties of commissioner of revenue; issuance of conveyance. When any sale has been made by the county auditor under sections 282.01 to 282.13, the auditor shall immediately certify to the Copyright (e) West Group 1998 No claim to original U.S. Govt. works 27 I I I t I MSA § 282.01, Tax-forfeited lands; classification, sale Page 6 commissioner of revenue such information relating to such sale, on such forms as the commissioner of revenue may prescribe as will enable the commissioner of revenue to prepare an appropriate deed if the sale is for cash, or keep necessary records if the sale is on terms; and not later than October 31 of each year the county auditor shall submit to the commissioner of revenue a statement of all instances wherein any payment of principal, interest, or current taxes on lands held under certificate, due or to be paid during the pr~fling calendar years, are still outstanding at the time such certificate is made. When such statement shows that a purchaser or the purchaser's assignee is in default, the commissioner of revenue may instruct the county board of the county in which the land is located to cancel said certificate of sale in the manner provided by subdivision 5, provided that upon recommendation of the county board, and where the circumstances are such that the commissioner of revenue at~r investigation is satisfied that the purchaser has made every effort reasonable to make payment of both the annual installment and said taxes, and that there has been no willful neglect on the part of the purchaser in meeting these obligations, then the commissioner of revenue may extend the time for the payment for such period as the commissioner may deem warranted, not to exceed one year. On payment in full of the purchase price, appropriate conveyance in fee, in such form as may be prescribed by the attorney general, shall be issued by the commissioner of revenue, which conveyance must be recorded by the county and shall have the force and effect of a patent from the state subject to easements and restrictions of record at the date of the tax judgment sale, including, but without limitation, permits for telephone, telegraph, and electric power lines either by underground cable or conduit or otherwise, sewer and water lines, highways, raikoads, and pipe lines for gas, liquids, or solids in suspension. Subd. 7. County sales; notice, purchase price, disposition. The sale herein provided for shall commence at such time as the county board of the county wherein such parcels lie, shall direct. The coun ,ty auditor shall offer the parcels of land in order in which they appear in the notice of sale, and shall sell them to the highest bidder, but not for a less sum than the appraised value, until all of the parcels of land shall have been offered, and thereafter shall sell any remaining parcels to anyone offering to pay the appraised value thereof, except that if the person could have repurchased a parcel of property under section 282.012 or 282.241, that person shall not be allowed to purchase that same parcel of property at the sale under this subdivision for a purchase price less than the sum of all delinquent taxes and assessments computed under section 282.251, together with penalties, interest, and costs that accrued or would have accrued if the parcel had not forfeited to the state. Said sale shall continue until all such parcels are sold or until the county board shall order a reappraisal or shall withdraw any or all such parcels from sale. Such list of lands may be added to and the added lands may be sold at any time by publishing the descriptions and appraised values of such parcels of land as shall have become forfeited and classified as nonconservation since the commencement of any prior sale or such parcels as shall have been reappraised, or such parcels as shall have been reclassified as nonconservation or such other parcels as are subject to sale but were omitted from the existing list for any reason in the same manner as hereinafter provided for the publication of the original list, provided that any parcels added to such list shall fa'st be offered for sale to the highest bidder before they are sold at appraised value. All parcels of land not offered for immediate sale, as well as parcels of such lands as are offered and not immediately sold shall continue to be held in trust by the state for the taxing districts interested in each of said parcels, under the supervision of the county board, and such parcels may be used for public purposes until sold, as the county board may direct. Subd. 7a. Altemate sale procedure. Land located in a home role charter or statutory city, or in a town which cannot be improved because of noncompliance with local ordinances regarding minimum area, shape, frontage or access may be sold by the coun~ auditor pursuant to this subdivision if the auditor determines that a nonpublic sale will encourage the approval of sale of the land by the city or town and promote its return to the tax rolls. If the physical characteristics of the land indicate that its highest and best use will be achieved by combining it with an adjoining parcel and the city or town has not adopted a local ordinance governing minimum area, shape, frontage, or access, the land may also be sold pursuant to this subdivision. Copyright (c) West Group 1998 No claim to original U.S. Govt. works 28 MSA § 282.01, Tax-forfeited lands; classification, sale Page 7 Thc salc of land pursuant to this subdivision shall bc subject to any conditions imposed by thc county board pursuant to section 252.03. Thc governing body 6f thc city or wwn may recommend to thc county board conditions to be imposed on the salc. The county auditor may restrict the salc to owners of lands adjoining the land to be sold. The county auditor shall conduct the sale by sealed bid or may select another means of sale. The land shall be sold to the highest bidder but in no event shall the land be sold for less than its appraised value. All owners of land adjoining the land to be *46017 sold shall be given a written notice at least 30 days prior to the sale. *46018 This subdivision shall be liberally .consWaed to encourage the sale and utilization of tax-forfeited land, to eliminate nuisances and dangerous conditions and to increase compliance with land use ordinances. Subd. $. Minerals in tax-forfeited land and tax-forfeited stockpiled metallic minerals material subject to mining; procedures. In case the commissioner of natural resources shall notify the county auditor of any county in writing that the minerals in any tax-forfeited land or tax-forfeited stockpiled metallic minerals material located on tax-forfeited land in such county have been designated as a mining unit as provided by law, or that such minerals or tax-forfeited stockpiled metallic minerals material are subject to a mining permit or lease issued therefor as provided by law, the surface of such tax-forfeited land shall be subject to disposal and use for mining purposes pursuant to such designation, permit, or lease, and shall be withheld bom sale or lease bv the county auditor until the commissioner shall notify the county auditor that such land has been remove~l bom the list of mining units or that any mining permit or lease theretofore issued thereon is no longer in force; provided, that the surface of such tax*forfeited land may be leased by the county auditor as provided by laxv, with the written approval of the commissioner, subject to disposal and use for mining purposes as herein provided and to any special conditions relating thereto that the commissioner may prescribe, also subject to cancellation for mining purposes on three months written notice fi.om the commissioner to the county auditor. Subd. 9. Tax-forfeited lands, sale of. Where a sale of tax-forfeited land under Mason's Supplement 1940, section 2139-15, was made prior to December 31, 1942, without first having the appraised value of the timber thereon approved by the commissioner of natural resources as therein provided, such sale may be ratified by the commissioner of revenue in the manner herein provided, if prior to the making of application therefor the entire purchase price of said tax-forfeited land has be~n paid. Subd. 10. Ratification of sale by county boards. The purchaser at such sale or the county auditor of the county in which said land is located shall file an application for the ratification of the sale with the board of count~ commissioners of said county, submitting therewith a statement of the facts of the case and satisfactory proof that the purchase price of such land at the sale has been paid in full. Such application shall be considered by the county board and shall therea~er be submitted by it to the commissioner of revenue with the recommendation of the county board and of the county auditor in all cases wherein the auditor is not the applicant. The commissioner of revenue shall consider said application and, on determining that the conditions above referred to exist, shall make an order ratifying the sale of said tax-forfeited land and transmit a copy thereof to the county auditor of the county in which said tax=forfeited land is located. If any such sale be ratified by the commissioner of revenue, it shall not thereafter be subject to attack for failure to have the timber appraisal approved before the sale. If no conveyance by the state has theretofore been made, the county auditor, upon receipt of said order, shall request the issuance of an appropriate conveyance as provided for in said section 2139-15. If a convc'Tance has b~n made by the state of said land pursuant to said section 2139-15, said conveyanc~ shall not thereafter be subject to attack on account of the failure to have the timber appraisal approved before the sale. *46019 Subd. 11. Pending actions not affected. The provisions of subdivisions 9 to 11 shall not apply so Copyright (¢) West C,-roup 1998 No ¢lnlm to original U.S. Govt. works 29 J [ ] ! I MSA § 282.01, Tax-forfeited lands; classification, sale Page 8 as to prejudice the rights of any person in any action or proceeding heretofore commenced to the sale in any court of this state. CREDIT(S) 1989 Main Volume Amended bylaws 1945, c. 99, .~ 1; Laws 1945, c. 150, ~3~ I, 2; Laws 1945, c. $74, ~ 1; Laws 1947, c. 140, ~ 1; Laws 1949, c. 251, .~ 1; Laws 1949, c. 359, .~ I; Laws 1953, c. 144, .{ 1; Laws 1953, c. 316, .{ 1; Laws 1953, c. 493, .~ 1; Laws 1953, c. $49, .~ 1; Laws 1957, c. 667, ~.{ 1-3; Laws 1959, c. 348, .~ !; Laws 1969, c. $99, .~ 1, eft. July 1, 1969: Laws 1969, c. 1129, art. 10, .~ 2; Laws 1973, c. 582, .{ 3; Laws 1974, c. 278, .{ 1: Laws1976, c. 181, ,{ 2; Laws 1978, c. 674, § 60; Laws 1980, c. 437, .~.~ 13, 14. eft. July 1, 1980; Laws 1982, c. 424. ~ 63, 130; Laws 1982, c. $11, §~ 24, 25, eft. March 23, 1982; Laws 1982, c. $23, art 39, .{ 3q 5, 6, eft. March 23, 1982: Laws 1983, c. 222. ~ 19, eft. July 1, 1983; Laws 1983, c. 247, ~ 121, eft. Aug. 1, 1983; Laws 1983, c. 342, art. 15, ~ 30, eft. Jan. 1, 1984; Laws 1984. c. 443, 3g 1, eft. April 24. 1984; Laws 1985, c. 300, § I3, eft. June 6, 1985; Laws 1985, lstSp., c. 14, art. 20, ~ 14; Laws 1986, c. 444; Laws 1986, lstSp., c. 3, art. 1, ~ 82; Laws 1987, c. 291, .{ 211. 1997 ELECTRONIC UPDATE Amended by Laws 1989. c. 328, art. 6, 3q I: Laws 1990, c. 480, art. 8, 3q 14, eft. Jan. 1, 1991; Laws 1990, c. 604. art. 3, .~ 37; Laws 1991, c. 291, art. 12, ~ 19, eft. June 1, 1991; Laws 1992, c. 511, art. 2. 38 27, eft. April 25, 1992; Laws 1993, c. Il, 38 1, eft. March 30, 1993; Laws 1994, c. 416, art. 1, ~ 36, eft. April 14, 1994; Laws 1997, c. 231, art. 8, 3~ $. [FN1] Sections 396.01 to 396.21 (repealed). <General Materials (GM) - References, Annotations, or Tables> HISTORICAL NOTES HISTORICAL AND STATUTORY NOTES 1998 ELECTRONIC UPDATE 1989 Legislation The 1989 amendment, in suM. 1, inserted a provision in the fourth paragraph relating to conveyance of tax-forfeited land held in trust in favor of the taxing districts to a political subdivision that submits an application to the commissioner of revenue and the county board, and, in the fu"th paragraph of suM. 1, corrected citations and inserted references to a port authority, an economic development authority, or a city. 1990 Legislation Laws 1990, c. 480, art. 8, § 14, rewrote thc second paragraph ofsubd. 4. Laws 1990, c. 480, art. 8, § 18, provides that §§ 1 to 8 [amending, respectively, § 276.09; § 276.10; § 276.11, subd. 1; § 276.111; § 277.01, subd. 1; § 277.02; § 277.05; and § 277.06], 10 [amending § 279.01, subd. 1], and 14 [amending § 282.01, sub& 4] are effective for taxes levied in 1989, payable in 1990, and thereafter. · 46020 Laws 1990, ¢. 604, art. 3, § 37, designated subds, la, lb, lc, Id, lc, and lfas such; made numerous nonsubstanfive stylistic changes throughout subds. 1 to If; in subd. lb, added "notwithstanding subdivision la, in the ease of tax-forfeited lands located in a targeted neighborhood, as defined in section 469.201, subdivision 10, outside the metropolitan area, as defined in section 473.121, subdivision 2' to the beginning of par. (a), inserted "the recommendation of" at the end of par. (a), added par. (b), and in par. (e) required that the application include a statement of facts as to the use to be made of the tract, and the need therefor. Laws 1990, e. 604, art. 3, § 48, amended Laws 1990, e. 480, art. 8, § 18, to provide in part that § 14 [amending sub& 4] is effective January 1, 1991, rather than for taxes levied in 1989, payable in 1990, and thereaRer. 1991 Legislation Copyright (c) West Group 1998 No claim to original U.S. Govt. works 30 MSA § 469.001, Purposes *69079 M.S.A. § 469.001 469.001. Purposes MINNESOTA STATUTES ANNOTATED LOCAL ECONOMIC DEVELOPMENT CHAPTER 469. ECONOMIC DEVELOPMENT HOUSING AND REDEVELOPMENT AUTHORITIES Current through End of 1997 3rd So. Seaa. The purposes of sections 469.001 to 469.047 are: Pngel (1) to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the health, safety, morals, and weffare of the citizens of this state; (2) to clear and redevelop blighted areas; (3) to perform those duties according to comprehensive plans; (4) to remedy the shortage of housing for low and moderate income residents, and to redevelop blighted areas, in situations in which private enterprise would not act without government participation or subsidies; and (5) in cities of the first class, to provide housing for persons of all incomes. Public participation in activities intended to meet the purposes of sections 469.001 to 469.047 and the exercise of powers confined by sections 469.001 to 469.047 are public uses and purposes for which private property may be acquired and public money spent. CREDIT(S) Laws 1987, c. 291, ,~ 1. 1994 Main Volume <General Materials (GM) - References, Annotations, or Tables> HISTORICAL NOTES HISTORICAL AND STATUTORY NOTES 1994 Main Volume Derivation: St 1986, § 462.415. Laws 1982, c. 424, §§ 67, 68. Laws 1974, ¢. 443, § 1. Laws 1974, e. 228, § 1. Laws 1973, e. 319, § 1. Laws 1971, e. 745, § 1. No claim to original U.S. Govt. works 31 Copyright (e) West Group 1998 I t I MSA § 469.002, Definitions Page *69081 M.S.A. § 469.002 MINNESOTA STATUTES ANNOTATED LOCAL ECONOMIC DEVELOPMENT CHAPTER 469. ECONOMIC DEVELOPMENT HOUSING AND REDEVELOPlVIENT AUTHORITIES Current through End of 1997 3rd Sp. Seas. 469.002. Definitions Subdivision 1. Generally. In sections 469.001 to 469.047, thc terms defined in this section havc thc meanings given to them herein, unless the context indicates a different meaning. Subd. 2. Authority. "Authority" means a housing and redevelopment authority created or authorized to be created by sections 469.001 to 469.047. Sub& 3. City. "City" means a home rule charter or statutory city. Subd. 4. State public body. "State public body" means any city, county, commission, district, authority, or other political subdivision or instrumentality of this state. Subd. 5. Governing body. "Governing body" means the council, board of trustees, or other body charged with governing any state public body. Subd. 6. Mayor. "Mayor" means the mayor of a city. Subd. 7. Clerk. "Clerk" means the clerk of a city or the officer of any other state public body charged with the duties customarily imposed on the clerk of a city. Sub& 8. Area of operation. "Area of operation" means, in the case of an authority created in and for a city, county, or group of counties, the area within the territorial boundaries of that city, county, or group of counties. Subd. 9. Federal government. "Federal government" includes the United States of America, the Department of Housing and Urban Development, or any other department, agency, or instrumentality of the United States of America. Subd. I0. Federal legislation. "Federal legislation" includes the United States Housing Act of 1937, United States Code, title 42, sections 1401 to 1440, as amended through December 31, 1989; the National Housing Act, United States Code, title 12, sections 1701 to 1750g, as amended through December 31, 1989; and any other legislation of the Congress of the United States relating to federal assistance for clearance or rehabilitation of substandard or blighted areas, land assembly, redevelopment projects, or housing. · 69082 Subd. 11. Blighted area. "Blighted area" means any area with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary facilities, excessive land coverage, deleterious land use, or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community. Copyright (c) West Group 1998 No claim to origimd U.S. Govt. works 32 MSA § 469.002, Definitions Page Sub& 12. Project. "Project" means a housing project, a housing development project or a redevelopment project, or any combination of those projects. The term "project" also may be applied to all real and personal property, assets, cash, or other funds, held or used in connection with the development or operation of the project. The term "project" also includes an interest reduction program authorized by section 469.012, subdivision 7. Subd. 13. Housing project. "Housing project" means any work or undertaking to provide decent, safe, and sanitary dwellings for persons of low income and their families. Such work or undertaking may include acquisition or provision of buildings, land, equipment, facilities, and other real or personal property for necessary, convenient, or desirable appurtenances, streets, sewers, water service, utilities, site preparation, landscaping, administrative, community, health, recreational, welfare, or other purposes. "Housing project" also includes the plarming of the buildings and improvements, the acquisition of property, the demolition or removal of existing structures, the construction, reconstruction, alteration, and repair of the improvements and all other work in connection therewith. Subd. 14. Redevelopment project. "Redevelopment project" means any work or undertaking: (1) to acquire blighted areas and other real property for the purpose of removing, preventing, or reducing blight, blighting factors, or the causes of blight; (2) to clear any areas acquired and install, construct or reconstruct streets, utilities, and site improvements essential to the preparation of sites for uses in accordance with the redevelopment plan; (3) to sell or lease land so acquired for uses in accordance with the redevelopment plan; (4) to prepare a redevelopment plan, and to incur initiation, planning, survey and other administrative costs of a redevelopment project, and to prepare technical and financial plans and arrangements for buildings, smactures, and improvements and all other work in connection therewith; or (5) to conduct an urban renewal project. The term "urban renewal project" may include undertakings and activities for the elimination or for the prevention of the development or spread of slums or blighted or deteriorating areas and may involve any work or undertaking for that purpose constituting a redevelopment project or any rehabilitation or conservation work. For this purpose, "rehabilitation or conservation work" may include (i) carrying out plans for a program of voluntary or compulsory repair and rehabilitation of buildings or other improvements; (ii) acquisition of real property and demolition, removal, or rehabilitation of buildings and improvements thereon where necessary to eliminate unhealthfifl, unsanitary or unsafe conditions, lessen density, reduce traffic hazards, eliminate obsolete or other uses detrimental to the public welfare, or to otherwise remove or prevent the spread of blight or deterioration, to promote historic and architectural preservation, or to provide land for needed public facilities; (iii) installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for canying out the objectives of the urban renewal project; (iv) the disposition, for uses in accordance with the objectives of the urban renewal project, of any property or part thereof acquired in the area of the project; provided that the disposition shall be in the manner prescribed in sections 469.001 to 469.047 for the disposition of property in a redevelopment project area; (v) relocation within or outside the project area of structures that will be restored and maintained for architectural or historic purposes; (vi) restoration of acquired properties of historic or architectural value; and (vii) construction of foundations and platforms necessary for the Copyright (c) West Group 1998 No claim to original U.S. Govt. works 33 MSA § 469.002, Definitions Page 3 provision of air fights sites. *69083 The term "redevelopment project" also means a redevelopment project initiated as then provided by law and approved by the governing body of the city prior to July 1, 1951, as prescribed by Minnesota Statutes 1949, section 462.521. Subd. 15. Housing development project. "Housing development project" means any work or undertaking to provide housing for persons of moderate income and their families. This work or undertaking may include the planning of building and improvements, the acquisition of real property which may be needed immediately or in the future for housing pUrPoses, the construction, recoustruction, alteration and repair of new or existing buildings and the provisions of all equipment, facilities and other real or personal property for necessary, convenient or desirable appurtenances, streets, sewers, water service, utilities, site preparation, landscaping, ~ministrative, community health, recreation or welfare or other purposes. Subd. 16. Redevelopment plan. "Redevelopment plan" means a plan approved by the governing body, or by an agency designated by the governing body for the purpose of approving such plans or authorized by law to do so, of each city in which any of a redevelopment project is to be carried out, which plan provides an outline for the development or redevelopment of the area and is sufficiently complete (1) to indicate its relationship to definite local objectives as to appropriate land uses; and (2) to indicate general land uses and general standards of development or redevelopment. Subd. 17. Persons of low income and their families. "Persons of low income and their families" means persons or families who lack a sufficient income to enable them, without financial assistance, to live in decent, safe, and sanitary dwellings, without overcrowding. Subd. 18. Persons of moderate income and their families. "Persons of moderate income and their families" means persons and families whose income is not adequate to cause private enterprise to provide without governmental assistance a substantial supply of decent, safe, and sanitary housing at rents or prices within their financial means. Subd. 19. Bonds. "Bonds" means any bonds, including refunding bonds, notes, interim certificates, debentures, or other obligations issued by an authority pursuant to sections 469.001 to 469.047. Subd. 20. Real property.. "Real property" includes all lands, together with improvements and fixtures thereon, and property of any nature appurtenant thereto, or used in connection therewith, and every estate, interest, and right, legal or equitable, therein, including terms for years. *69084 Subd. 21. Obligee of the authority; obligee. "Obligee of the authority" or "obligee" includes any bondholder, and the federal government when it is a party to any contract with the authority. Subd. 22. General plan for the development of the locality as a whole. "General plan for the development of the locality as a whole" means a plan adopted by a local planning agency or approved by the governing body of the city establishing general objectives for the future use of land in a locality, or if no such plan has been adopted or approved, the general land use proposals for the development of the locality established from time to time by the local planning agency or by the governing body of the city. Subd. 23. Veterans. "Veterans" has the meaning given in section 197.447, except as otherwise defined in a contract with the federal government providing for veterans' preferences, or as may be required by any federal law or regulation as a condition of federal financial assistance for a project. Copyright (¢) West Group 1998 No claim to original U.S. Govt. works 34 Page 4 MSA § 469.002, Definitions Subd. 24. Section 8 program. "Section $ program" means an existing homing assistance payments program under section $ of the United States Homing Act of 1937, United States Code, rifle 42, section 1437f, as amended. CREDIT(S) 1994 Main Volume Laws 1987. c. 291, ,{ 2. Amended byLaws 1990, ¢. 552, §§ 2, $: La~s 1992, ¢. $76, art. $, § I. <General Materials (G1VO - l~ferences, Annotations, or Tables> HISTORICAL lqOTES HISTORICAL AND STATUTORY NOTES 1994 Main Volume Derivation: St. 1986, § 462.421. Laws 1986, c. 444. Laws 1983,¢. 289, §llS, subd. 1. Laws 1982, e. 590, § 5. Laws 1982, c. 424, §§ 69 to 71. Laws 1981, e. 356, §§ 237,248. Laws 1976, c. 181, § 2. Laws 1974, c. 443, § 2. Laws 1974, c. 403, § 1. Laws 1973, c. 123, art. 5, § 7. Laws 1971,c. 901, § 5. Laws 1971, c. 745, §§ 2 to 5. Laws 1969, c. 676, § 1. Laws 1959, c. 545, §§ 1, 2. Laws 1957, c. 810, § 2. Laws 1955, c. 565, § 2. Laws 1953, c. 699, §§ 16, 17. Laws 1951, c. 568, § I. Laws 1951,c. 32, § 1. Laws 1949, e. 505,§§ 1,2. Laws 1947, c. 487, § 3. Thc 1990 legislation, in subd. 10, defining "federal legislation" substituted "United States Code, title 42, sections 1401 to 14a0, as amended through December 31, 1989; the National Housing Act, Unitod States Code, title 12, sections 1701 to 1750g, as amended through December 31, 1989;" for "Public Act No. 412 of the 75th Congress of thc United States, any act that amends it or adds to it," following "1937,"; and added subd. 24 defining "section 8 program". '69085 The 1992 amendment deleted "through Dcccmber 31, 1989" from the end ofsubd. 24 defining "section 8 program". REFERENCES CROSS REFERENCES Classification of cities, first, second, third, and fourth classes dc£med, see § 410.01. Home rule charter city, defined, see § 410.015. Statutory city, defined, see § 410.015. LAW REVIEW AND JOURNAL COMMENTARIES Copyright (c) We, st Croup 1998 No el-ina to original U.S. Govt. works 35 ] I T' t MSA § 469.003, City housinE and redevelopment authority Page I *69086 M.S.A. § 469.003 MINNESOTA STATUTES ANNOTATED LOCAL ECONOMIC DEVELOPMENT CHAPTER 469. ECONOMIC DEVELOPMENT HOUSING AND REDEVELOPMENT AUTHORITIES Current through End of 1997 3rd Sp. ,~ess. 469.003. City housing and redevelopment authoTty n There is created in each city in this state a - --- ~--a;.--s and dcclaratio · - ...... *,,-ri*,, in and for that · · ' lilllin Cl~;y tuaum5 · evOlO m~nt auua~, -7 . Subdivision 1. Pre . ary. .....~- known as the housing and red .P. .... :.. }~.av of thc aty ~,:_ ~...A., c~rDorate anll poutl¢, to t~. · ........ i$~ any ~oweln3 until tile gov~aua5 puouu u,,-,:, .. .. -" ...... t any business or ~z,~,,, .a r- City. NO such authority snau mu~,~ .J exist which cannot be shall, by resolution, find that in that city (1) substandard, slum, or blighted areas redeveloped without government assistance, or (2) them is a shortage of decent, safe, and sanitary dwelling accommodations available to persons of low income and their families at rentals they can afford, and shall declare that there is need for a housing and redevelopment authority to function in that city. In determining whether dwelling accommodations are unsafe or unsanitary, or whether substandard, slum, or blighted areas exist, the governing body may consider the degree of deterioration, obsolescence, or overcrowding, the percentage of land coverage, the light, air, space, and access available to inhabitants of the dwelling accommodations, the size and arrangement of rooms, the sanitary facilities, the extent to which conditions exist in the buildings that endanger life or property by fire or other causes, and the original land planning, lot layout, and conditions of title in the area. Subd 2 Public hearing. The governing body of a city shall consider such a resolution only after a public hearing is held on it after publication of notice in a newspaper of general circulation in the city at least once not less than ten days nor more than 30 days prior to the date of the hearing. Opportunity to be heard shall be granted to all residents of the city. and to all other interested persons. The resolution shall be published in the same manner in which ordinances are published in the municipality. Subd. 3. Conclusiveness of resolution. When the resolution becomes finally effective, it shall be sufficient and conclusive for all purposes if it declares that there is need for an authority and finds in substantially the terms provided in subdivision 1 that the conditions therein described exist. · 69087 Subd. 4. Copy filed with commissioner of trade and economic development. When the resolution becomes finally effective, the clerk of the city shall tile a certified copy of it with the commissioner of trade u,e~,~o~,,~' ely deemed to have become established elo mont. In any suit, acti.on,.or pr~ · _ involving the validity or enforcement of or and economic dev. P.] _t ..... ~t,~ritv the anmonty shah u~ .o .... tv., the resolution and of relating to any contract ox ~m ,, ..... and authorized to transact business and exercise its powers upon that tiling. Proof of that filing may be made in any such suit, action, or proceeding by a certificate of the commissioner of trade and economic development. · · · . off shall consist of five comnuss,oners, who sh, all..be re~s,__d,e:.n, ets of the An auth ty nbecomes imally Sub& 5. Comnuss~oner?... -~-- ~oll be annointed after the resoluUo area of operaUon of the antnonty, win, ~-,, ~-,- Sub& 6. Appointment; approval; term; vacancy. The commissioners shall be appointed by the mayor, with the approval of the governing body. Those initially appointed shall be appointed for terms of one, two, three, fool', and five yoari, respectively. Thereafter all commissioners shall be appointed for five-year terms. Copyright (e) West Group 1998 No claim to original U.S. Govt. works 36 MSA § 469.201, Definitions *69575 M.S.A. § 469.201 MINNESOTA STATUTES ANNOTATED LOCAL ECONOMIC DEVELOPMENT Pagel CHAPTER 469. ECONOMIC DEVELOPMENT TARGETED NEIGHBORHOOD REVITALIZATION PROGRAMS Current through End of 1997 3rd Sp. Sess. 469.201. Definitions Subdivision 1. Applicability. The definitions in this section apply to sections 469.201 to 469.207. Subd. 2. City. "City" means a city of thc first class as defined in section 410.01 and a city of the second class that is designated as an economically depressed area by the United States DeparUnent of Commerce. For each city, a port authority, housing and redevelopment authority, or other agency or instrumentality, the jurisdiction of which is the territory of the city, is included within the meaning of city. Subd. 3. City council. "City council" means the city council of a city as defined in subdivision 2. Sub& 4. City matching money. (a) "City matching money" means the money of a city specified in a revitalization program. The sources of city matching money may include: (1) money from the general fund or a special fund of a city used to implement a revitalization program; (2) money paid or repaid to a city from the proceeds of a grant that a city has received from the federal government, a profit or nonprofit corporation, or another entity or individual, that is to be used to implement a revitalization program; (3) tax increments received by a city under sections 469.174 to 469.179 or other law, if eligible, to be spent in the targeted neighborhood; (4) the greater of the fair market value or the cost to the city of acquiring land, buildings, equipment, or other real or personal property that a city contributes, grants, leases, or loans to a profit or nonprofit corporation or other entity or individual, in connection with the implementation of a revitalization program; (5) city money to be used to acquire, install, reinstall, repair, or improve the infrastructure facilities of a targeted neighborhood; (6) money contributed by a city to pay issuance costs, fund bond reserves, or to otherwise provide financial support for revenue bonds or obligations issued by a city for a project or program related to the implementation of a revitalization program; (7) money derived from fees received by a city in connection with its community development activities that are to be used in implementing a revitalization program; *69576 (8) money derived from the apportionment to the city under section 162.14 or by special law, and expended in a targeted neighborhood for an activity related to tile revitalization program; Copyright (e) West Group 1998 No claim to original U.S. Govt. works 37 I I i I i MSA § 469.201, Definitions Page 2 (9) administrative expenses of the city that are incurred in connection with the planning, implementation, or reporting requirements of sections 469.201 to 469.207. (b) City matching money does not include: (1) city money used to provide a service or to exercise a function that is ordinarily provided throughout the city, unless an increased level of the service or function is to be provided in a targeted neighborhood in accordance with a revitaliTation program; (2) the proceeds of bonds issued by the city under chapter 462C or 469 and payable solely from repayments made by one or more nongovernmental persons in consideration for the financing provided by the bonds; or (3) money given by the state to fund any part of the revitalization program. Subd. 5. Commissioner. "Commissioner" means the commissioner of trade and economic development. Subd. 6. Housing activities. "Housing activities" include any work or undertaking to provide housing and related services and amenities primarily for persons and families of low or moderate income. This work or undertaking may include the planning of buildings and improvements; the acquisition of real property which may be needed immediately or in the future for housing purposes and the demolition of any existing improvements; and the construction, reconstruction, alteration, and repair of new and existing buildings. Housing activities also include the provision of a housing rehabilitation and energy improvement loan and g,'ant program with respect to any residential property located within the targeted neighborhood, the cost of relocation relating to acquiring property for housing activities, and programs authorized by chapter 462C. Subd. 7. Lost unit. "Lost unit" means a rental housing unit that is lost as a result of revitalization activities because it is demolished, converted to an owner-occupied unit that is not a cooperative, or converted to a nonresidential use, or because the gross rent to be charged exceeds 125 percent of the gross rent charged for the unit six months before the start of rehabilitation. Subd. 8. Persons and families of low income. "Persons and families of Iow income" means persons and families of low income as defined in section 469.002, subdivision 17. Subd. 9. Persons and families of moderate income. "Persons and families of moderate income" means persons and families of moderate income as defined in section 469.002, subdivision 18. *69577 Subd. 10. Targeted neighborhood. "Targeted neighborhood" means an area including one or more census tracts, as determined and measured by the Bureau of Census of the United States Department of Commerce, that a city council determines in a resolution adopted under section 469.202, subdivision 1, meets the criteria of section 469.202, subdivision 2, and any additional area designated under section 469.202, subdivision 3. Subd. I 1. Targeted neighborhood money. "Targeted neighborhood money" means the money designated in the revitalization program to be used to implement the revitalization program. Subd. 12. Targeted neighborhood revitalization and financing program. "Targeted neighborhood revitalization and financing program," "revitalization program," or "program" means the targeted neighborhood revitalization and financing program adopted in accordance with section 469.203. Copyright (c) West Group 1998 No claim to original U.S. Govt. works 38 Solicitor General TEL.6,~-.az-~83, Feb 17 99 16:22 No.O07 P.02 a~r~ate with the eo~at~. fie st c stamp~- terost u~deF nd ~r~ltted one- ~ t~ ~ne~l wh~l be app~ ~e and ~eri~ the )opulm~on bear~ and ~rou~hs population ~he ~pulaflon cluota~/ p~ovtdes ! to the ajMoial in favor of tho ~ ismu~ ~ ~e sty and ohould y ¢cner~. CoJtveyanco--Hvusinfr and Bod~vahtpmeat Authority--Conveyance of tax. forfeited land held under condlUonal deed effects reversfon.--MaA I 28~.01, Subd. I: L~ 1947, C. 457, Art, Y, See. 24. "The Housing and Rodevelopment A'athortcy of the City of Saint Paul has submit:~d the foUowing matter for ~e cunslderat/un st the Divtston o/Houlinr and Redevelopment. ~The He,ming and Rmdavelopmont Authority of the CitF of St. Paul proposes to ~utT~ co.alu l~nd which has ~n fo~eitod for non-parent ~ ~xes to the Sta~ of Mi~e~ and ~ ~ said land o~er ~ a ~de~iopment ~ation for hocsin~ ual Your a~on is ~1~ to A~icle 3, S,cgon 8, S~dl~ion 1~ of the M~cipal Housing and Redevelopm~t Act, which provides: "An lu~ority shall be a public ~ cor~b ~d poll~c t~ shall h~vo all thc powers necessary or convenient co ci~y out the pu~s this and to ~c~ion 40, 8ubdi~s~on 2. which providef · 'Every ~develooment company organlzcd and o~ra~d patsy&at to tho p~siens of this a~c!e is debated to bo an ins~entality Ihs iCa~. or~nl%~ and operatln~ to car~ out ~hc public uses and purposes of this 'lC is t~e~fore apparent thac ho~ the lloum~n~ Autho~ty ~ t~e ~developmen~ company are in~t~men~litloa st ~o ~te of ~1~o~ Tho Municipal Housing and Red~elcpment Act pro- vides i~r certain beneflt~, includinz that of tax exemption for q~li- fled ro~vclopmenc co~orations &nd providos for the power dts~ of said pro joeS by the redevelopmemt company after ~erml- nation of t~x exemption or upon the pays.at to the m~icipa]ity ~ the total oi all :he accrued taxa, for which .n exemption granted, A~ such t~me, it would appear Chat the public pu~ose for which the redeveiopm~n~ corporation was organized h~d ful~lled. 'Section 282.01 M. S, A. provides for tho dtaposltlon of lo.cited lands, One o! the modtods is through Conveyance by commissioner el taxation ~ un~ ~vcrnmental subdivision ior authorized public use withotlt ti~v paten: of any considurufion the~ior. Thc act further ~ro~de~ tha~ when any governmental subdivision ~o which tax.forf~itcd land has ~cn ~nveyed for a specified public use shall ia/1 to puc ankh lan~ ~o saeh us~ or mhall abandon such use. the ~itle shall r~ve~ to tho S~a~ at Minnesota. 39 Solicitor 6eneral TEL : 612-252-5832 Feb 17'99 16:2:5 No.O07 P.O$ TAXATION ' U~r the p~sed tm~e, wo~4 t~e ~ ~ ~-~o~ ~ the Ce~n ~ ~o t~ e~mpfion ~od or upon ~,~ bz it7 ~fr~ zd~Uona~ ~afion wi~ reap~ ~ one m~er. Red~ veiopm~t comptnf~ organ~z~ p'~n~ ~ A~cle I~ of ~o ~unici~l Hou~ng and aedeve~opm~ Acz ~ ob~n the ~neAte ~nve~ b7 th~ ~ and ma7 be ~ub~ect ~ ape~l covenanU ~en the 1~ h~ng and r~vefopmcnt auZho~tF and ~e eom- P,ny even though ~z ~empfion ~ e~ired o~ t= exemption tion conce~f~ the ~sposi~on of p~perty to ~h~ p~r~te. ~ when ~hs ~devs[opment core,ny ~dercsk~ ~ convn~ chh p~pe~y ~ a ~h~4 pa~ tree ~ the a~cltl limi~ns ~ ~e .p~m] eon~f~ed in ~e ~e~. T~ ~s~lon, ~hez~ore, is s~lar ~o ~he si~n cont~plat~ b7 .~cle ~, ~e~on 24 of ~e mtm~ acc wh~c~ aacho~ me~t a e~s a~d ~ convey tho~e sites in accordance ~h ~he provisio~ r of the act ~o ~y p~v~ individuals, ~ms, corona:ions, PS.he.hips, [~u~nce companies, or othe~ P~vG~ integers or public ag~cJos." "Would t~Ue co ~.&x-forfe~ted I~:~1 conveyed ~ a housing ~d rede- velopmen~ au:~rity p,~rauan: to Section ZSg.01 M. S. A. and br the ,housing nnd r~ovelopment au~ori~/ pursuant ~ Section ~ of ~ state ac~ or conveyed br the houslne authortt~ to an Article r~evelopment company which t~naf~s the: property to a tMrd p~)' ~ee o~ thc ~c[e IX obli~Uons and privt!e~, revert to the &ta~ of Mi~o~ upon such ~onve2~e Upinien M. S. A., Sec. 2ti2.0I, Subd. 1, provides in part: "The commissioner of taxation shell h~ve power to conver by d~ in the name of :he state any tract of :ax-forfeited !a~d ho[,] in trust favor of the taxin~ di~tric~, tu =uy ~ovemmontal .ubdJvisiou for auzhori~ed public u~e, prodded thac ~n appli~tio~ therefor sha~ ,ubmitted :o the commissioner with ~ statement of f~ta aa to the use to be made of s~ch tract and the need therefor und t~o ra~ommend~tlon the eounvy board," tsx-for~elted lund i'm' puhHo Ourpo~es. The fira~ ~viaion ~uthor~z~ the outrj~h: acq~=i~itioz~ ~f ta~-fort'eited ]un~ by "caf organized er ~ncorpm-a~ governmental ~ubdivlah3n of the e~a:e" (,r by "~ny ~tate 3gcncy" upon payment of no: l~a :hen :he~ va[t~e aa determined I:y ~h~ ~ounty bOard. The ~eeond provision author/za~ cc, nveyanee of :ax-forfeited la~d to 4O S~licitor General TEL:612-282-5832 Feb 17'99 16:25 No.O0? P.04 'stied ~ bom ~izmeiota =poa proeM: Auger. ma~r. Redo* tho Minnesota in tl~ special :cial con,naars and ~e ~m- ~xomp~on ~. The _ property ~ a o the simon ~ich aut~e. iu She provisions ~in~ and rede. and conveyed , Section ~4 of an Arflels IX , a third par~y :o the Stat~ uf :envoy by dead :old in trust vision for .refer sh~,li ,s ~o t JiG use to nmenda~ion of conveyance --authorizes thc incorporated ney" ~pon the I land ~o any · · . ~...' :,~ ..' ._~ TAXATION governmental svhli~isbn upon ~ondiidon and ~bl~ ~ revlon, h ~d~ ~ ~.wer yo~ question, it ~ ~ ~ de~i~ whether tho la l ~v~m~t~ ~bdi~ou, or a m~ ~en~ ~ ~th. It i8 libwiae n~. ~ ~ make ~ib detraction ~ ~ a ~p~nt com~ny. The terms "sovsrnmen~l s~di~ion' and "~crum, nt~i~y of the slate" ~ ~t synonymo~ te~8. A ~ver~en~l su~vislon Is alwa~ an ~i~men~ky o~ ~e ~ta~, but the convene is not alwa~ ~e, ,~ inks. md~iality of the ot&~ la not always i ~e~men~l subdi~alom A ~ve~- ~ subdi~sion exes some of ~o a~t~bvtes of Iov~ignW ~o It ~ t~o s~ within s~Ki~ tek.rial ~n~. As ~mmo~y ~ ~hi~ s~, it r~s to t ~t7, ci~, sch~l ~s~t or some other suni- vixen u~h as ~M Minneap~It~-~, Paul S~it~ Die.ct, Barmel v. Mln~- a~lh. Salnt P~ul Sani~rr Dia~ct. 201 M!~. 622, 2~ N. W. ~8; i~ she M. S, A. S~. 3~3.0~, Su~. ~, An tnl~umsni~ty o~ ~e st~to is one 5y the I~to ~ i~mplisk eno or mo~ 8~ffic ~e~men~l p~p~8 ~- out the d~ega~on of the att~but~ o~ ~verei~ty ouch, ~or example, p~lcS pewee or ~he power o~ ~tio~, ~ee ~cCe~eh v. Ms~, 4 Wheat. 180. ~o Housing and Hedovelop~nt Autho~ ~ ~ Ct~ of St. Pa~ is a governm~! s~bdlvlaion. ~na~ v. He. slag Auto. tv of City of Omaha, ~0 X. W. 4fi~, 459. A redevelopment company organlzod pursuant to L. 194T. Ch. 487, A~. J~ Sec. 37, ts ~ inst~nmlity o~ the atn~e, ibid. S~. 40, ~ubd. 2, hut d~s not have tbs elements which would ~ke i~ a ~vern- men~] nq~bdtvillen. With ~heue db~tiona bafo~ us, we will ~examine oho provis~onz ~ 3L S, A., Sec. ~2.~1, Subd. i, quoted above. :t h o~ conclusion that, upon compliance with thin provLsiofl, the ~m- missioner of ~mxa~n ma~ coney ~ therein provided to the a~horit~ to used by i~ for a p~r sp~ifled p-Ahlic pursue, bet he may no~ convey fo~ei~ land u~der this provision to ~ rn~ovelopmez~ company, Consider. ti~n of att the pertinent p~vis~ons of Suhd. 1 makes ~t clear that the contemplates t~se of ~o con~yed land for a public put, se which the ~v- emmental subdivision :o whi~ the ]and is ~nvey~ may I~w~ull~ c~y In our opinion, co~veyau~ to & ~dovelop~ant company ct ~nM o~her or co. oration by n governm~a~ sub.vis,on o~ ~x-~orfeited Jan~ to it on conditfor, under authority of ~he provls~om h~ under consideration would e~ac~ ~ reversion of the ~it]e ~ the land to the stn~ as trust, for the ~pp~pr~ate ta~inr ~ubdiv~sions. TEe provisions c~ L. 1947. Oh. 4~, V, Sec. 24, au?hoHzlng n~ authority to d~spose of its property Jo ~ot Jn manner a~ect the conditions jmp~ed upon ~ts title lo tax-forfeited ]and 5cquired under author~tF of ~[, S. A., SOc. 282,0~, S~hd. 1. GEO. B, SJOSELIUS, Dspu;y Attornoy General, C-nmmimaiuner of Administration. November 23, 1948. 41 FEB-I?-i~9 15:18 ~CAO :"ay" "";', the '~ ~ 42 FEB-l?-1999 15:10 ~CAO 651 256 ~2 P.OJ/O~ ? 43 TOTAL P.03 Z 0 U CL. ,~ '..LS NYSe3 D I I