City Council Meeting Date: November 26, 2024
To: Mayor and City Council
From: Ben Martig, City Administrator
Melissa Hanson, Housing Coordinator
Title
Consider Resolution for Release and Termination of Declaration of Restrictions for City of Northfield property.
Body
Action Requested:
The Northfield City Council consider a motion to approve Resolution for Release and Termination of Declarations of Restrictions.
Summary Report:
During development and redevelopment of the City Hospital and Way Park, the City of Northfield has owned residential properties throughout the years. As the properties were sold, preference was given to existing tenant renters. If the tenants were unable to purchase the property, the properties were sold on the open market. In 2004, neighbors voiced concern that new owners, potentially investors, could tear down the older-rentals and build structures that were out of character with the existing neighborhood. To address neighborhood concerns, in 2006 the Hospital/City Council placed formalized Deed Restrictions, or Restrictive Covenants, on the properties prior to selling the houses.
Terms and conditions expressly stated in the Declaration of Restrictions:
• Owner-Occupancy Required
• Design Standards
• Duration of Declaration
Currently, the only known properties subject to the Declaration of Restrictions is the City of Northfield owned property at 706/716 2nd Street West currently used by Northfield Hospital & Clinics, adjacent to Way Park, as the property has been used exclusively for storage by the Hospital. The other properties that were party to the Declaration of Restrictions have fulfilled the terms and conditions.
The HRA seeks the removal of the Declaration of Restrictions as it pertains to these remaining properties in conjunction with the purchase of property. Staff has determined that the Design Standards described in the Declaration restricts building types and materials allowed in the R-2 zoning district. Further, the stipulations in the Declaration limit the allowed density in the R-2 zoning district and thereby limit the number of homes that could be constructed on the site.
The HRA’s mission is to be a partner in providing a sufficient supply of affordable, adequate, safe and sanitary dwellings in Northfield. Our goal is to create a community with housing opportunities available along the entire housing spectrum: from renters to homeownership, first-time homeowners to senior living, workforce housing, and empty nesters. We appreciate the opportunity to acquire property with the potential to add much needed housing to Northfield.
The Resolution requesting the release and termination of restrictive covenants (Attachment 1) and deed (Attachments 2) is included.
A separate action requesting approval of sale and purchase agreement follows this action.
Alternative Options:
• The City Council could choose not to remove the Declaration of Restrictions. If this is the case, the HRA will not purchase the property from the Hospital as the existing restrictive covenants will be a barrier to the creation of housing that is affordable and will limit the number of homes that can be constructed.
This is not recommended by staff.
Financial Impacts:
No immediate financial impacts to the City’s General Fund. Construction of homes will likely add to the city’s tax capacity. Purchase of the property will impact the HRA fund balance, however the purchase price is anticipated to be recouped upon sale of the parcels to (a) qualified developer(s).
Tentative Timelines:
May 2024 - City Administrator requests HRA and Parks and Recreation Advisory Board staff to review a potential property acquisition from NH+C
June 2024 - Parks and Recreation Advisory Board decline opportunity
June 2024 - HRA moves support to pursue the purchase of property
September 2024 - Hospital Board approves sale and purchase agreement
November 12, 2024 - City Council calls for public hearing
November 13, 2024 - Notice of Public Hearing published
November 21, 2024 - Planning Commission Comprehensive Plan conformance review
November 26, 2024 - City Council Public Hearing on property sale
November 26, 2024 - City Council considers resolution to release and terminate declarations
related to the property and authorizes property sale
December 31, 2024 - Closing Date