01/29/1991 - City Council Special r
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SPECIAL CITY COUNCIL MEETING
TUESDAY
JANUARY 29, 1991
5:00 P.M.
I. ROLL CALL
II. SENIOR HOUSING PROJECT
III. BUDGET REDUCTIONS/STATE OF MINNESOTA
IV. ANNUAL P.U.D. REVIEW
V. OTHER BUSINESS
• VI. ADJOURNMENT
•
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: JANUARY 24, 1991
SUBJECT: SPECIAL CITY COUNCIL MEETING/JANUARY 29, 1991
The enclosed agenda references 5:00 p.m. as the starting time for the Special City Council
meeting, which is an exception to the agreed upon 5:30 p.m. starting time for Council work
sessions. Originally, the only two (2) items scheduled for the work session included Senior
Housing Project and Annual P.U.D. Review. It has been anticipated that the Senior
Housing Project update and discussion will take approximately one (1) hour. The Annual
P.U.D. Review was scheduled for 6:30 p.m. with the Advisory Planning Commission.
Allowing 2 to 21/2 hours for this agenda item, the meeting would end at approximately 8:30
to 9:00 p.m. In light of the Governor's State of the State Address, newspaper articles and
other information proposing local government aid reductions, the City Administrator would
like approximately half an hour to discuss the budget constraints referencing memos that
were distributed on Friday, January 18 with the Informative Memo. To allow enough time
for discussion on the Senior Housing Project and budget reductions, an exception has been
made to begin the Special City Council workshop at 5:00 p.m. Hopefully, this exception will
not cause a problem with your schedules.
• Senior Housing Project
Mark Ulfers,Executive Director for the Dakota County HRA,and Community Development
Director Runkle will be present to discuss the status of the proposed Senior Housing Project.
The discussion will include the need for a development agreement, selection of an architect
and the ownership and management of the facility. City Councilmember McCrea, the
Director of Community Development and the City Administrator have all toured the Senior
Housing Project that was constructed and is being managed by the Dakota County HRA in
the City of Lakeville and were extremely impressed with the project.
For additional information,refer to a memo prepared by Community Development Director
Runkle, correspondence from Mark Ulfers and related attachments enclosed on pages 3
through w Staff, including Mark Ulfers, is recommending the City Council consider
retaining the architect who is presently being used by the HRA due to his experience,
performance and ability to expedite the project. Enclosed without page number is a copy
of his marketing brochure for your review.
Budget Reductions/State of Minnesota
The City Administrator would like a few minutes to review a memo he distributed to
• department heads which was included in the Informative Memo sent to the City Council on
January 18 entitled, "1991 Spending". A copy of that memo and the front page of the
January 18 Informative Memo are enclosed on pages through 27 for your review.
Based on the memo, it is suggested that the City Council discuss the impact of State budget •
reductions and that formal action be considered at the regular City Council meeting on
February 5. With all the news of budget cutbacks, it is important to send a positive message
to the community regarding how their local municipality is dealing with budget reductions
and its impact on the local delivery of services.
Annual P.U.D. Review
The Advisory Planning Commission will be joining the City Council at approximately 6:30
p.m. to conduct the annual P.U.D. review. Attached without page number is a notebook
that contains an update on each of the P.U.D.'s.
There is no action proposed for the joint meeting; it is suggested that formal action be taken
at a regular City Council meeting to approve the annual P.U.D. reviews according to City
Code.
Other Business
If time permits, the City Administrator would like direction on two other items of business
regarding: 1) further interpretation of the recent City policy for employees called to active
duty for an employee who is considering reactivating his reserve status, and 2) a proposed
adoption by residents and organizations in Eagan of a military unit that is currently stationed
in the Persian Gulf region. Enclosed on pages j2it through 3Y for your review are •
memos prepared by Assistant to the City Administrator Duffy that explain both issues.
/S/ Thomas L. Hedges
City Administrator
TLH/vmd
02.
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MEMORANDUM
110
TO: TOM HEDGES, CITY ADMINISTRATOR
FROM: DALE C. RUNKLE, COMMUNITY DEVELOPMENT DIRECTOR
DATE: JANUARY 23, 1991
RE: SENIOR HOUSING FOR THE CITY OF EAGAN
On January 29, the Community Development Department and Dakota County HRA would
like to update the City Council on the senior housing project and proceed with this project
in the spring of 1991. The City and HRA have closed on a seven-acre parcel on Cliff Road
and have worked with Federal Land Company to provide access and reroute storm water
drainage, making this site more attractive.
Staff recognizes a number of issues to be resolved prior to commencing with this project:
1) the type of housing to be provided; 2) funding; 3) types of programs; 4) development
agreement between the City and HRA; and 5) schedule.
IIIAttached is a memorandum from Mark Ulfers explaining different options for senior
housing. These options vary from private ownership to completely publicly-owned projects.
Pro formas have also been provided by Springsted, fiscal consultant to the HRA, which
provide project cost analysis, and what rents would be required for each pro forma. In my
review of the pro formas, the publicly-owned and operated would provide the lowest rents
to the seniors. Mark and I will run through the options with the Council on January 29.
In looking at timing and dollars for the project, the City has contributed $100,000 of the
1991 Block Grant to start the soft costs in preparing the site plans, architectural plan, and
other documents required for construction. In 1987, Dakota County HRA passed a special
benefit tax wherein the HRA can commit $2,000,000 within a 15-year period which would
construct approximately 40 units. In the 1980 Single Family Mortgage Revenue Bond
Program, the City has revenues of approximately $1.1 to $1.2 million dollars. If this fund
is used, we could boost the project from 40 to 65 units which would be the first phase of
construction. Ultimately, with the seven acres the City has acquired, the City would like to
construct an additional 60-65 units at some time in the future. Again, detailed site plans
have not been prepared with the total concept, but this would be part of the planning
process in the very near future. Mark will be available at the meeting to discuss the HRA
financing commitment for this project.
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The third item which will take much discussion from the City Council and HRA includes the •
types and programs feasible to provide with this project. The HRA and City have contacted
DARTS regarding transportation and a scheduling facility within this building, as well as
room for congregate dining and other programs which could fit in. Attached is a list of
programs the HRA is offering in other projects. A committee should be set up to work with
the City and HRA as to which programs could be provided.
The last item to discuss would be to determine a schedule for the construction of the facility.
It is anticipated that the platting stages will begin in early-spring; this would require detailed
site plans, as well as financial commitments for utilities and establishing a bottom line cost
for the project. It would be staff's intent to review these issues and enter into a
development agreement, spelling out the cost and type of project to be constructed. The
Dakota County HRA is in the process of putting together other projects and would like to
have only one bond sale in March and April 1991. If the City of Eagan can meet this time
schedule, there can be considerable savings in the bond work required.
This somewhat addresses some of the issues and outlines the discussion that City staff and
HRA would like to have with the City Council. There is a lot of information to review,
however some discussion should be started and additional meetings should be scheduled to
expedite the senior housing project. Mark and I will prepare a tentative schedule for you
to review at the workshop.
Community pment Director ill
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Attach.
•
JAN - 22 - `J 1 TUt 1 1 : 'L � N L/ U5 S NC. L5t KtDt v IR LI T 1-I
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DAKOTA COUNTY Housing 64. Redevelopment Authority
2496.145Th St.W • Roprmount,MN 5506$•612 4n-1S M• KIN HI:.4:i.:4::
)1 EMORAMDUX
WO: Dale Runkle, Community Development Director
FROM: Mark S. Ulfers, Executive Director 711 J t,t.
SUBJECT: SENIOR HOUSING DEVELOPMENT OPTIONS
DATE: October 24, 1990
Recently several exciting events have occurred regarding the
development of affordable, low and moderate income senior housing
in Eagan:
1. The HRA has closed on the purchase of an excellent site for
senior housing in the Park Center development. We feel this
site is extremely well located for senior housing. Given its
close proximity to compatible retail and commercial property.
This property was purchased from Federal Land Company for
$185,000 using an allotment of City Community Development
Block Grant (CDBG) funds.
2. The HRA has entered into a development agreement with Federal
Land that addresses financial responsibility for various site
and city utility expenses.
3. The City has approved the final plat for the Park Center
Addition and a public improvement project has been initiated
that will result in the needed city services being installed
in the Park Center Addition. Also Federal Land has completed
initial grading of the site.
4. The City has initiated procedures regarding rezoning of the
site to the appropriate multifamily designation.
These developments have been made possible through the cooperative
efforts of the City of Eagan. The next step is to determine what
type of project should be developed and to establish both a project
time schedule and the respective financial commitments of the City
and HRA:
1. Type of Project an¢ $eed.
A needs assessment and market demand study for senior housing
was completed for Eagan by Health Planning and Management
AN EQUAL OPPORTUNITY EMPLOYER"
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JAN - 22 - 91 T U E 11 : 2S H O U S I N G a R E D E V A U T H R . 03
- 3 - .
Resources. This report was published on March 30, 1987. This
report projected a demand for housing assistance for lower
income senor households of 287 households in Eagan by 1991
(see attached Exhibit A) . In addition, the ERA has compiled
a recent list consisting of 43 senior households who are
interested in the project. This is quite encouraging since
no direct marketing has been done. In terms of the type of
housing and services that should be made available the
following would be recommended by Health Planning and
Management Resources and the HRA:
A. All developments given consideration as "senior housing"
should contain the following features as a minimum:
(1) Design features in the building itself, within the
individual units and in general access to the
building that accommodate the limitations in
mobility and other chronic disabilities that occur
in many persons as part of the aging process.
(2) Ability of the developer to provide meal service
preferably in a congregate setting or, at a minimum,
delivered to the individual unit.
(3) Security systems that provide reasonable control III
over access and are comfortable for seniors to use.
(4) Emergency call systems with rapid response by
someone with basic first response training and ready
access to more sophisticated emergency medical
response.
(5) Provision of space and opportunities for congregate
activities and some work space outside of the
individual units.
(6) Access to basic services, e.g. , grocery shopping
either by location or through provision of
transportation.
Given Eagan's relatively younger elderly population a
development for independent seniors with basic senior services
does appear like the most appropriate type project at this
point in time. In the future as Eagan develops a larger
senior population that contains more older "frail" elderly
other options like an assisted living development should be
explored.
6
JAN - 22 - 91 T U E 11 : 27 H O U S I N G R E D E I R U T H P . 04
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2. Prc 1ect Sponso .
The HRA commissioned a study by the financial advisor firm of
Springsted to review senior housing development options and
to provide a recommendation on the type of option best suited
to meeting the goal of providing affordable low and moderate
income senior housing.
The Springsted study (see attached) reviewed three
development options and two public alternatives. private
options (alternatives A, 8, and C) assumed varioushscenarios
ranging from no public assistance to providing a land write
down and an interest rate reduction tax increment subsidy.
The rents for the three private alternatives ranged from $837
to $670 per month for an average one bedroom unit. It is the
HRA's view that these rent levels are not affordable to low
and moderate income seniors. The public option where the HRA
owns the building involves the HRA use of its mill levy funds,
a land write down and tax-exempt financing. As a result the
average one bedroom rent would be $476 to $374 per month.
Although, it would be the HRA;s goal to even further reduce
the rents for very low, income seniors an average rent level
of $374 would be affordable to most low income seniors.
However, through a process called rent skewing the HRA would
attempt to reduce rents to lower levels for the most needy
seniors (i.e. those with very low incomes) . For example, our
recently completed Lakeville development has rents as low as
$250 per month for lower income seniors.
Why does private ownership result in rents that are this much
higher? The reasons are many but a few suggested by the
Springsted report were as follows:
A. The 1986 federal tax reform act dramatically shifted tax
incentives away from private rental housing.
8. The current State allocation process for allocating tax-
exempt bonds and low income tax credits results in no
allocations being available in the metro area for private
senior housing. Instead the priority is for large family
housing and other special needs housing e.g. SRO housing
for homeless.
c. Private property taxes have risen sharply. The
Springsted study estimates that real estate taxes would
average $1,650 per unit for this project, if privately
owned.
•
D. Given that rental real estate has far fewer tax
advantages for investors, a requirement for a higher
cash-on-cash return has developed. Springsted estimates
JAN - 22 - 91 T U E 1 1 : 20 HOUSING E R E D E P A U T H P - OS
s
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that a minimum of a 12% cash-on-cash rate of returns would be
expected by investors on a privately owned development. Since
an HRA project is non-profit no similar requirements exist.
Overall, private ownership as discussed in the Springsted
report is less affordable for low and moderate income seniors
because it would pay higher property taxes and mortgage
interest. Also, because tax incentives have changed, rental
housing has become less attractive to many investors.
3. prolect Financing.
The HRA has reserved funding through its Senior Housing
Development Program for a 40-50 unit development in Eagan in
1991. The Senior Housing Development Program utilizes the HRA
special benefit tax for funding of HRA owned facilities. The
exact number of units that HRA funds will be able to construct
will depend on prevailing interest rates and bidding
conditions. In addition the HRA is aware that the City may
have some funds available to assist with the project. We have
developed a draft pro-forma for the project that shows that
approximately 12 additional units could be constructed with
an additional $500,000 in City funds and approximately 25
could be constructed with an additional $1,000,000 in funds. 411
The HRA would gladly welcome additional City participation in
this project. In our recently completed project in Lakeville
the City helped with a contribution and Hastings and West St.
Paul are also planning to assist with projects planned for
their communities. From the viewpoint of the HRA an Eagan
development will be best if a strong partnership exists
between the City and HRA.
4.. groiect Timing.
Given current progress to date, there is an excellent
potential for a spring 1991 construction start. If a May 1st
start can occur an April 1st of 1992 occupancy date is a
definite possibility. Usually an eleven month construction
time frame should be quite adequate.
In summary the HRA is quite pleased and optimistic about. the
potential for developing senior housing that is affordable for low
and moderate income seniors in Eagan. The progress to date is
quite encouraging and the BRA looks forward to continuing its
cooperative relationship with the City of Eagan.
SPRINGSTED
— PUBLIC FINANCE ADVISORS
- • 85 East Seventh Place, Suite 100
Saint Paul, MN 55101-2143 AUG(612)223-3000 vu a 3 OrE
Fax: 612-223-3002 Per, `�i'
MEMORANDUM
TO: Mark Ulfers, Dakota County HRA
FROM: Rebecca Yanisch
DATE: August 22, 1990
SUBJECT: Elderly Housing Development Options
Springsted Incorporated is pleased to present the fifth annual analysis on Elderly Housing '
Development options. The purpose of the analysis is to determine the average rent required'
depending on the type and amount of public assistance provided to the development. The
initial analysis, prepared in 1986, was prompted by the changes in federal tax legislations
which dramatically shifted the tax incentives for development of elderly housing. Developers
are focusing their return objectives on before-tax project cash flows versus after-tax benefits.
The result is an increasing difficulty in providing affordable elderly housing options. The•
comparison of development options included using various levels of public financial
assistance and financing tools that are currently available to private developers plus two
options assuming public ownership of the facility j
The approach to the analysis included first defining the options to be studied; second,
projecting the project costs incurred in each development option; and finally preparing a ten-
year cash flow pro forma. The various development options would effect project costs due
to variations in interest rates, loan fees, development fees, taxes payable and marketing
costs. In each case, the average rental rate necessary to support the debt for each
alternative was derived. It was assumed in the private development options that the
developer would provide 20% equity and would require a 12% cash-on-cash return on his
equity by the third year of operation. For the public ownership options, the goal was to
achieve a 1.05 debt service coverage throughout the operation of the development.
Last year our annual report reflected actual bids received by the HRA for the forty unit
Lakeville facility and assumptions prepared for operating expenses. This year's report is
based on the actual development cost and operating cost per unit for the Lakeville Elderly
Housing Project. Also, this year there are fewer options examined in our memorandum. Tax-
exempt housing revenue bonds and low income housing credits are increasingly attractive to
developers while at the same time, the federal government continues to limit the availability
of these tools. The process followed by the State of Minnesota in allocating bonds and tax
credit gives priority to non-elderly housing. Since there are no tax-exempt bond allocations
or low income housing tax credit allocations currently available, these options have been
omitted from this year's analysis. These and other changes in assumptions are summarized
on the following page:
• Indiana Office: Kansas Office: Wisconsin Office
135 North Pennsylvania Street 6800 College Boulevard 500 Elm Grove Road
Suite 2015 Suite 600 Suite 101
Indianapolis. IN 46204-2498 Overland Park, KS 66211-1533 Elm Grove, WI 53122-0037
(317)684-6000 (913)345-8062 (414) 782-8222
Fax 317-684-6004 Fax: (913)345-1770 Fax: 414-782-2904
Dakota County HRA
August 22, 1990
Page 2
•
• Per unit hard construction costs have increased from $42,380 to $43,500.
• Land costs were inflated to $2.50 per square foot from $2.20 per square foot to reflect
the experience in actual land acquisition for sites for the elderly housing program.
• The interest rate on tax-exempt revenue bonds was increased from 8% to 8.5% to
reflect current market conditions.
• The operating expenses were increased to reflect the updated operating pro forma
for the Lakeville project.
• The HRA's levy was increased to reflect the actual 1990 funds available, which were
again reduced by the amount of funds set aside for other rent assistance programs.
• Real estate taxes were increased by 3%from $1,600 per to $1,650 per unit.
• Payment in lieu of taxes (PILOT) was added as an expense to Alternatives X and Y.
PILOT is based on 5%of net shelter rents.
Development Concepts
The elderly housing development options are based on a development concept of 65
housing units to be built on 3.5 acres of land. The conceptual building design that was used
in determining construction costs included an "L" shaped, three story stick frame structure fri
with brick facing. The amenities assumed to be included in the building are shared dining
room facilities, general office area and lobby. One stall of surface parking per unit, and 27
underground garage stalls would be provided.
It was assumed that 13 of the 65 units would be two-bedroom apartments, averaging about
915 square feet per unit. The remaining 52 units would be one-bedroom apartments
averaging 650 square feet.
Development Options
Five development options were defined including three options for private development and
ownership (Alternative A, B and C) and two options for the HRA development and ownership
(Alternative X and Y). The alternatives are described below:
• Alternative A assumes private development and ownership with no public
participation. Conventional financing was assumed to cover 80% of the total project
costs.
• Alternative B assumes the HRA will provide a land writedown in the amount of
approximately $381,200. Once again, 80% of the remaining project costs are
financed by conventional methods.
• Alternative C, in addition to the land writedown of $381,200, assumes an interest rate
reduction to further subsidize the private development and make rent more io
affordable. The interest rate reduction assumptions were based on 90% of the future
real estate taxes to be paid back into the project annually over the 10-year pro forma.
/D
• Dakota County HRA
August 22, 1990
Page 3
• Alternative X assumes that the HRA will develop and own the project, committing an
amount equal to two years of their annual levy as equity in the project. We have
assumed that the HRA levy will generate $723,800 per year (net of $50,000 in other
rent subsidy). The remaining project costs would be financed by a tax-exempt
revenue bond supported by the net operating income of the development.
• Alternative Y also assumes public development and ownership with a higher
commitment of equity funds and reduced debt amount. In this alternative, it was
assumed that three years of HRA levy is dedicated to the development.
Development Costs
For each of the five development alternatives, a total development cost schedule was
prepared. As shown in Table 1, the cost of developing the elderly housing for Alternatives A,
B and C would be identical, since all three options assumed conventional financing. Under
public ownership Alternatives X and Y, the cost varies due to a decrease in the amount of
debt borrowed. The detailed assumptions used in formulating Table 1 are presented
following the table.
As shown in Table 1, the total development costs range from $60,290 to $65,580 per unit,
approximately 3% higher than last year's projections. The hard construction costs of
$43,500 per unit were based on actual costs for the Lakeville project. Standard allowances
were included for architectural and engineering fees, construction management,
development fees, marketing and promotion, interim costs and financing costs.
Operating Cash Flows
A separate 10-year cash flow pro forma was prepared for each development alternative to
determine the rent level needed to support the debt on the project and provide a reasonable
return to the developer. The assumptions for each cash flow schedule are attached
following Tables 2A through 2Y.
For the private development options with the higher rental rates, it was assumed that in the
first year of operation, the average occupancy will be 70%, increasing to 80% in the second
year and leveling off at full occupancy of 94% in the third year. For the public development
options, due to the lower average rents, the first year average occupancy was assumed to
be 80%, with full occupancy (94%) thereafter. The operating expenses assumed in each pro
forma are identical and include management and administrative fees, utilities, maintenance,
insurance and replacement reserves. The operating cost estimates are consistent with those
budgeted for the Lakeville elderly housing. For the private development options, real estate
taxes were estimated at $1,650 per unit for the public development options, while under
public ownership, payment in lieu of taxes was estimated at 5%of net shelter rents..
As shown in Table 2A, assuming that the elderly housing was developed with no public
participation, the average rent needed in the first year would be $905 per month per unit.
Assuming a 4% increase per year, following average market trends, by 1999 the rent would
increase to $1,288 per unit per month. By providing a land writedown, the effect on the net
rent would be to reduce them from $905 per unit per month to $850 per month as shown in
Table 2B. As shown in Table 2C, the addition of an interest rate reduction subsidy to the
land writedown results in an average rent of$725 per month.
/1
Dakota County HRA
August 22, 1990
Page 4
The cash flow schedules for public ownership reflect a much more dramatic decrease in •
average rent, due in part to the higher amount of public equity involved. In Alternative X,
rents are higher than those calculated last year due to an increase in construction and land
costs and the addition of PILOT. Under Alternative X, (Table 2X) the average monthly rent
needed to provide a 1.05 debt service coverage is $515 per month. Assuming a higher level
of public equity - equal to three years of the HRA levy -the average rent would drop to $405
per month as shown in Table 2Y. In both public ownership alternatives, the average annual
increase in rent is 1.75%, an amount sufficient to cover increases in operating costs and
retain the 1.05 debt coverage factor.
Summary
A comparison of the public participation, development costs, equity, debt and average
monthly rent for the five development alternatives is presented in Table 3. Overall average
rent together with one and two bedroom rents are shown. Assuming rents increase at 4%
per year under Alternative A through C, the increase over ten years is much greater under
the private development alterative than under public ownership. For purposes of this
analysis, it was assumed that the HRA would limit rent increases to an amount equal to the
increase in operating expenses. The HRA would have the option to increase rents closer to
market levels and use the additional cash flow for other programs.
As mentioned earlier, for the private ownership options, the average monthly rent decreased
as additional public assistance is provided, from a high of $905 per month with no
assistance to $725 per month. The Interest Rate Reductions program has the largest impact,
decreasing rent by$125 per month. Please note also the negative impact due to restrictions
on the availability of tax-exempt financing and low income housing tax credit. Last year, the
lowest effective rent was more than $100 per month less than under the best public
ownership alternative shown in this memorandum.
Shifting from private to public ownership, however, produces an even more dramatic
decrease in rent. Under public ownership, no development fees would be incurred, the
interest rates on the debt and the marketing expenses would be lower, and the cash flow
requirements would decrease since no cash return to the developer would be required, and
the PILOT is less than the normal real estate tax expense.
Our analysis was structured to provide a format for comparing private versus public housing
development options. The use of the HRA levy as public equity is only one option available
to the Dakota County HRA. For example, the first two projects in the new Dakota County
HRA Common Bond Fund use tax increment revenues and reserve fund interest earnings to
supplement the project cash flow, while bonding for the total development costs. Future
projects may be based on finance plans that vary due to interest rates and other resources
available in this specific community at that time. The HRA levy is a valuable tool in
leveraging other financial resources.
Once again, the changes that have occurred over the past year have increased the
differential between rental rates for privately owned housing and that owned by the HRA.
Other than the Common Bond Fund created by the Dakota County HRA, no significant
housing finance tools have emerged over the past two years to assist in providing affordable
housing. The most recent federal tool, low income housing credits, is restricted by the
limited amount of credits available to developers. Public ownership offers the best solution
for providing affordable housing for the County's elderly population, and ensuring its
availability over the years.
/(&
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, /990
• der.. 8/21/90
TABLE 1
DAKOTA COUNTY HRA ELDERLY HOUSING PROJECT
DEVELOPMENT COST PRO FORMA
ALTERNATIVES
A,B & C
BUILDING AREA
Units 65
One Bedroom 52
Two Bedroom 13
Parking Stalls 92
PROJECT COSTS
LAND $ 381,200
HARD CONSTRUCTION COSTS $ 2,827,500
PROFESSIONAL FEES:
Arch. & Engineering 197,900
Legal/Consultants/Account. 28,300
Development Fee '
141,400
Marketing/Promotion 139,750
TOTAL PROFESSIONAL FEES $ 507,350
INTERIM COSTS:
Overhead & Admin. 56,600
SAC/WAC 68,250
Equipment/Model 50,000
TOTAL INTERIM COSTS $ 174,850
FINANCING COSTS:
Constr. Loan Fees 40,500
Perm. Loan Fees 32,700
Construction Interest 156,900
Debt Service Reserve NA
TOTAL FINANCING COSTS $ 230,100
CONTINGENCY $ 141,400
TOTAL DEVELOPMENT COST $ 4,262,400
==========
• COST PER UNIT $ 65,580
/3
8/21/90
•
TABLE 1 (continued)
DAKOTA COUNTY HRA ELDERLY HOUSING PROJECT
DEVELOPMENT COST PRO FORMA
ALTERNATIVE ALTERNATIVE
X Y
BUILDING AREA
Units 65 65
One Bedroom 52 52
Two Bedroom 13 13
Parking Stalls 92 92
PROJECT COSTS
LAND $ 381,200 $ 381,200
HARD CONSTRUCTION COSTS $ 2,827,500 $ 2,827,500
PROFESSIONAL FEES:
Arch. & Engineering 197,900 197,900
Legal/Consultants/Account. 28,300 28,300
Development Fee 0 0
Marketing/Promotion 50,000 50,000
TOTAL PROFESSIONAL FEES $ 276,200 $ 276,200
INTERIM COSTS:
Overhead & Admin. 56,600 56,600
SAC/WAC 68,250 68,250
Equipment/Model 50,000 50,000
TOTAL INTERIM COSTS $ 174,850 $ 174,850
FINANCING COSTS:
Constr. Loan Fees 95,200 65,300
Perm. Loan Fees 0 0
Construction Interest 76,500 52,400
Debt Service Reserve NA NA
TOTAL FINANCING COSTS $ 171,700 $ 117,700
CONTINGENCY $ 141,400 $ 141,400
TOTAL DEVELOPMENT COST $ 3,972,900 $ 3,918,900
i
COST PER UNIT $ 61,120 $ 60,290
4/i4
8/21/90
• TABLE 1 ASSUMPTIONS
DEVELOPMENT COST PRO FORMA
Building Area is based on the following unit mix and sizes:
Number
Unit Type Average Size of Unites
1 Bedroom 650 sq. ft. 52
2 Bedroom 915 sq. ft. 13
Parking Stalls include 27 underground spaces and 65 surface spaces to be provided.
Land cost is estimated at $2.50 per square foot for 3.5 acres of land.
Hard Construction Cost is based on a budget of$43,500 per unit. The cost estimate assumes
a three-story building with minimal amenities.
Parking Construction is estimated in the hard construction costs. The cost also includes other
landscaping and driveways.
The following fees are based on a percent of hard construction:
Arch. & Engineering 7.0%
Legal/Consult./Acct. 1.0%
Development Fee 5.0% (exc. Alt. X and Y)
Overhead/Admin. 2.0%
Contingency 5.0%
SAC/WAC was estimated at$1,050/unit and Equipment/Model was budgeted at$50,000.
Marketing/Promotion covers all leasing expenses and is budgeted at $2,150 per unit in
Alternatives, A, B and C. Alternatives X an Y use $50,000 as the base expense.
Loan Fees are based on a 1 percent construction loan fee, assuming the construction loan
covers all costs and a 1 percent permanent loan fee on the final mortgage amount for
Alternatives A, B and C. Alternatives X and Y assume no permanent loan fee and the
construction loan fee will be 4%.
Construction Interest is calculated assuming a 9 month construction schedule and the
following interest rates:
Alternative A, B & C 10.75%
Alternative X & Y 8.50%
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TABLE 2 ASSUMPTIONS
• BEFORE-TAX CASH FLOW PRO FORMA
Average Rents
Average rents in Tables A, B and C are the rents necessary to produce a 12% cash on cash
return to the developer by the third year of operation. Rents were increased by 4% annually.
Average rents in Tables X and Y are the rents needed to achieve a 1.05 debt service coverage
by the second year of operation and maintain that coverage through the tenth year of
operation. Rents were increased by an amount sufficient to cover increased operating
expenses. One and two bedroom rents are based on the average rent per rentable square
foot.
Occupancy
Occupancy rates in Tables A, B and C are based on the following assumptions:
Year 1 -70 percent
Year 2 - 80 percent
Years 3-10 -94 percent
Occupancy rates in Tables X and Y are based on the following assumptions:
Year 1 -80 percent
Years 2-10 -94 percent
• Operating Expenses
Operating expenses in all tables were based on a cost of $1,750 per unit, increased at 5%
annually. Included in operating expenses were such costs as common area utilities,
maintenance, property management, heating and a replacement reserve.
Real Estate Taxes
In Tables A, B and C, real estate taxes were based on $1,650 per unit and were escalated at
4% annually. Table X and Y include a payment in lieu of taxes (PILOT) of 5% of net shelter
rents.
It was assumed there would be no real estate tax liability in Tables X and Y.
Debt Service
Debt service amounts were based on the following assumptions:
Table Debt Amount Term In t. Rate
A $3,409,900 30 years 10.50%
B 3,105,000 30 years 10.50
C 3,105,000 30 years 10.50
X 2,525,300 30 years 8.50
Y 1,747,400 30 years 8.50
• Interest Rate Reduction
Table C assumes that 90 percent of the initial taxes payable would be used as an interest rate
reduction payment annually.
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Benefits for Seniors
Senior Services and Activities Available
at Either or Both of Our Senior Buildings
1. Congregate Dining serves noon meals on-site for a small
donation three to five times per week. Tenants may volunteer
to help with the meals if they have an interest.
2 . Tenants elect officers and run their own Tenant Association.
They meet once a month to socialize and plan activities such
as Christmas parties, pancake breakfasts, bake and craft
sales, etc.
3 . Dakota County Public Health Department sponsors Flu Shot
Clinics once a year on-site at the building for a nominal
contribution.
A monthly blood pressure screening is also available free to
the residents of our building on site.
4 . Specific activity nights are scheduled in the Community Room
on a weekly basis. Tenants have a card night, bingo night,
and craft activities night.
5. Area churches sponsor religious services during the day on-
site at our building on a weekly basis. Residents need not
leave the building.
6. DARTS provides at the door pick-up for senior's shopping at
K-Mart and Rainbow. DARTS also will provide individual
transportation for doctor's appointments with a 24 hour
reservation.
7 . Residents receive a monthly newsletter written by a volunteer
editor and printed by the HRA.
8 . DARTS makes volunteer Peer Counselors available weekly in the
building for tenants to share concerns and problems with.
9 . I 'm O.K. checks are done daily at the buildings to ensure the
safety of the senior residents. Residents put their cards out
in the morning and a monitor checks all resident doors.
10. The U. S. Post Office provides a mobile postal service selling
stamps and providing package pick-up in the building.
Outgoing mail is also collected at the building so tenants
don 't need to go outside.
023
- 2 -
Our buildings were designed to specifically service senior's needs.
Some of their benefits include:
1. Total security building.
2 . Emergency pull cords in each apartment. The cords are
connected to the caretaker's apartment on site. If the
caretaker is out, calls are relayed to the Emergency Squad.
3 . Large and comfortable Community Rooms that tenants may reserve
for private entertaining.
4 . Libraries are located in each building. Tenants donate and
are able to check out reading materials.
5. Garden plots are provided for interested tenants.
6. Trash shoots are located on each floor for convenient trash
disposal.
7. Hallways are well lit, wide, and equipped with handrails.
8 . Underground parking and plug-ins are provided at a small
monthly charge.
9 . Apartment emergency maintenance services are available on a
24 hour basis 365 days a year.
Services the HRA would like to initiate:
1. Expand the transportation for seniors through DARTS, such as
regional mall shopping excursions and shorter notice for
individual reservations.
2 . Enlisting the cooperation of Dakota County large corporations
to "Adopt a Senior Building". The corporation would use
employee volunteers to sponsor special social events for the
residents as well as befriend lonely shut-ins that may enjoy
companionship. This has worked well at other housing
authorities.
a? V
MEMO TO: DEPARTMENT HEADS
• FROM: CITY ADMINISTRATOR HEDGES
DATE: JANUARY 15, 1991
SUBJECT: 1991 SPENDING
At the December 4, 1990 City Council meeting, unanimous approval
was given to the 1991 operating budget for the General Fund and
Public Enterprise Fund. Since that meeting, the fear of additional
mid-year budget cuts by the State legislature is growing due to the
$1.5 billion deficit facing the State of Minnesota. During 1990,
the General Fund was impacted by approximately $120,000 which
required a unilateral reduction in spending by all departments.
The war threat, recession and dismal economic forecast have reduced
new development activity to a near standstill. Traditionally,
residential building permits are low in January; however, it is
typical for industries relying on large purchases, such as homes
and automobiles, to suffer during a recession.
I believe it is prudent as the top management team and custodian of
public tax dollars that the City anticipate a shortfall in budgeted
revenues during 1991 and take measures to reduce spending at this
time. I also believe any freeze in spending should be re-evaluated
June 1, once the legislative session has ended and the City has
experienced six months of building and development activity given
the current environment.
I propose that the City practice the following expenditure
constraints:
1. All internships are to be evaluated and reduced if
possible.
2. All contractual positions supporting general fund
services should be evaluated and reduced if possible.
3. All future staff vacancies will be evaluated prior to
replacement.
4. All services will be reviewed to establish a priority
reflecting community desires.
5. All "new" capital equipment will be frozen (special
consideration will be given to replacement if
unserviceable) .
It should be noted that no savings are too small. Every
expenditure should be evaluated to determine if essential or if it
possible to postpone or eliminate a purchase relative to budget
constraints. Although I haven't mentioned travel and conferences,
I would ask that all travel and conferences be limited and at "a
reasonable level". I have canceled my attendance at the National
League of Cities Conference in Washington D.C. for early March in
respect of the policy.
02S
•
It is my plan to present a final draft of this memo to the City
Council for their review and consideration at the February 5 •
meeting. An additional memo will be written discussing the capital
improvements program as well as the ice arena/outdoor swimming pool
project that is currently being reviewed by the Executive Committee
of the Recreational Facilities Committee. I am concerned both
internally as an organization and externally as a community that
prudent fiscal management be applied to City operations given the
current economic conditions and, therefore, it would be difficult
to recommend that the City Council proceed with any major capital
building improvement with the use of community investment funds or
any other type of public dollar. Consistency is important as we
deal with the uncertainty of these economic conditions.
I would like to address all of our employees through staff meetings
and an all employee meeting once the City Council has ratified a
plan for the first five (5) months of spending in calendar 1991.
/S, Thomas L. Hedges
City Administrator
TLH/vmd
S
026
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: JANUARY 18, 1990
SUBJECT: INFORMATIVE
ORIENTATION SESSION
Enclosed on page 3 is an example of the letter that was sent out to newly appointed
Commission members congratulating those individuals on their appointment and inviting
them to attend an orientation session scheduled for 5:00 p.m. Tuesday, January 22. Mayor
Egan will welcome the newly appointed Commission members. The City Administrator will
provide brief remarks on organizational structure,voting responsibilities, liability and other
information pertinent to their new responsibility as an Advisory Commission member to the
City Council.
EXECUTIVE COMMITTEE/EAGAN CITIZENS RECREATIONAL
ADVISORY COMMITTEE MEETING
Enclosed on pages through /3 is a copy of the packet of information distributed to
the Executive Committee who will also be meeting at 5:00 p.m. on Tuesday, January 22 to
• review revenue source options for the proposed ice arena/outdoor pool facility project.
CITY ADMINISTRATOR'S MEMO ENTITLED "1991 SPENDING"
Early this week, the City Administrator distributed a memo to all department heads entitled
"1991 Spending". The memo, which is enclosed on pages through / for your review,
confronts the dilemma all local units of government are facing in 1991, a reduction in
revenue sources. For the City of Eagan, the reduction in revenue sources is estimated at
$199,557, a projection the League of Minnesota Cities has calculated based on Governor
Carlson's proposal to adjust the City's pay 1991 revenue base by a reduction of 2.052
percent. Although my memo was distributed on Tuesday, January 15, this information was
received at a meeting Mayor Egan and the City Administrator attended on Friday,January
25. The calculation is determined by adding the property tax levy for general fund
operations, homestead aid credit and the special levy for debt retirement, and taking that
amount times 2.052 percent. Please refer to the attachment on page 46 for a copy of the
computer printout that includes the City of Eagan. The fiscal outlook, according to
lobbyists, is worsening each week as Legislature continues to consider options for reducing
the State deficit. The $199,000 reduction forecast for June 1991 will cause a sever impact
on local government operations for this calendar year. There is also rumor that the State
Legislature may withhold a portion of the December appropriation and even more
concerning is the forecast of even greater reductions in 1992. The $199,000 reduction is
based on a$50,000,000 local government aid reduction for counties and cities. It is expected
f, that in 1992, the reduction will be approximately $200,000,000 or, in other words, the
consequence for the City of Eagan could be four times greater in 1992.
a
MEMO TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: ASSISTANT TO THE CITY ADMINISTRATOR DUFFY
DATE: JANUARY 24, 1991
SUBJECT: CITY EMPLOYEES REACTIVATING RESERVE STATUS
The City Administrator and I have received a request for
clarification of policy from a current employee. That employee is
considering reactivating his reserve status. He wanted to know if
the recent City policy regarding active duty wherein the City pays
its share of the family health insurance premium and makes up the
difference in compensation between the military and City pay would
apply to him if he were called to active duty after reactivating
his status.
We explained to him that it was our understanding that the policy
was only effective for those employees who were currently in the
reserves when the policy was passed. We also explained to him that
the Council planned to review the policy at the first meeting in
March of 1991 to determine if it should be continued/revised, etc.
He has requested that the Council be asked as soon as possible if
he would be covered by the policy should he decide to reactivate
his reserve status. Therefore, if time permits, the Council could
hold a discussion regarding this issue at the end of the special
City Council meeting of January 29, 1991.
10tL AL 1�
Assistant to the Ci y Administrator
1
MEMO TO: HONORABLE MAYOR & CITY COUNCILMEMBERS
SFROM: ASSISTANT TO THE CITY ADMINISTRATOR DUFFY
DATE: JANUARY 24, 1991
SUBJECT: ADOPTION OF A MILITARY UNIT
City Administrator Hedges and I have been contacted by an employee
(who is also a veteran) regarding an idea he has had wherein the
residents and organizations of the City of Eagan would "adopt" a
military unit currently serving in the Persian Gulf region. He is
not asking that the City of Eagan itself actually organize and
administer this program but that the Mayor and City Council endorse
the creation of such a program and support it. The provisions of
the program could consist of the following:
1. The program would not be political. It would not be pro-war
or against the war. It would only be in support of the men
and women who are serving in the Gulf region, not for or
against the reasons/policies/actions that sent them there.
2. The program itself would be organized and administered by one
or more service organizations such as the American Legion.
3 . The Municipal Center could serve as a drop-off site for
donations and/or "presents" for the military unit.
4. Organizations, residents, school classes would be encouraged
to write, send cards, etc. , to members of the selected unit.
5. It was suggested that the selected unit contain one or more
persons from the City of Eagan.
6. A sign could be constructed by volunteers and erected by the
Old Town Hall. The sign would list persons from either Eagan
or Minnesota as a whole serving in the Gulf.
7. The volunteers would use any cash donations to purchase
merchandise at cost from local merchants to send to the unit.
The above are just suggestions offered by the employee. Obviously,
the organizing group would have ideas of its own.
Enclosed for the Council 's information is a magazine article about
a town in California who did just what our employee is suggesting
during the Vietnam War. There's also a short article included
regarding Duluth.
This idea is being presented for the Council 's consideration and
discussion.1
Assistant to the C ty Administrator
�y 2
k
MORAI,E
. HIGH AS
. .
..
. . • ,.
. .t .._ ,.
L
, .. .. . . THE CID1 JIDS
When Abu Company's troopers went
{ • ... ;
In August 1967, Sergeant Artavia wrote a short letter to his
i sister, Linda Giese, then living in San Mateo, Calif. Never
did it enter his mind that his letter would set off an amazing
%. I chain of happenings.
! "Dear Linda;'Sergeant Joseph G.Artavia wrote. "Hi,there!
i r First off there is something I would like you to do for me. . . .
• ilio t y f• t ,f�. t. ,, t -. • �_ You see,by having a town or city adopt our company,it would
• --j ` I bring the morale of the guys up as high as the clouds.Then,
•; £ r on special occasions,like Christmas,people will send things
Pi"
.4+.,;'� � 1 t:. t t' to the company. People could write to us and in turn we'll,
-t, t ( all of us here,write to them. . . .I was wondering if you could
- + talk to someone in San Mateo and fix it so they would adopt
` t ti y- -- - our company. If you can get this request in the newspaper,
w .w - �.... - ,. - - we'll all of us here be grateful:'
' 'gip:- -m ; He closed his note with two words, "Please try."
-.14.0,„.,.. _. Linda Giese was no sophisticate. She had no experience
with newspaper editors, mayors, city councils, or women's
clubs. But she loved her kid brother and resolved to do what
' ' -'s'°;.il.,. * was necessary to fulfill his request.
`,-. >_' a :,S'. '�';3, 3t =` -,° j . ' A clerk in a modest savings and loan office,she approached
' her boss,Ron Wright,who suggested sending her request to
xt' �� Congressman Pete McCloskey, an ex-Marine with plenty to
_✓1„1.
f ,: r . .f i •_ c ,..%., say(mostly unfavorable)about Vietnam. He bucked the let-
- • k-�. s
ti 1. . , 1 ter through to California Senator Richard Dolwig, who, in
j. �; ;��� - turn,forwarded it to the mayor of San Mateo,Calif.Too hot
ry0'.�! �_ N. '•u , .t to handle in those days of war protests? Or too much both-
. . `' er? Who knows?
- " '_�.., 4-"- :::`" Linda found a sympathetic ear when, at the urging of
r_/�► '9i, — .. Wright,she approached the mayor of San Mateo. He told her
•a,, ' , t that two years before, he had introduced a city resolution
#-,;: e calling on the people of California to"pronounce their sup-
- V - port for the young soldiers doing their hard duty in Vietnam."
,�,i That it went over like a too controversial lead balloon didn't
matter. He suggested that Giese make her request before
j' �, , . '' .7 l: „�v•., - -"te. a Monday night session of the city council. He promised to
• .. ..; 1f.'��. a= '}r ' support her.
r Obviously nervous in such strange formal surroundings, she
` I. ' )'' r' and Wright made an emotional plea. Greeted kindly by the
i_ mayor but stonily by the council, she felt assured enough to
1 � .-r, - } •�, _ turn and snap back at a shouted protest from the audience
-4. ,�K1 , . -- \ .- . in the council chambers.The mayor then proposed a resolu-
',-",, '` y- ti.-'''' I. tion wherein the city of San Mateo would "adopt the men
of Company A,First Battalion,327th Infantry,First Brigade,
a 'k + 101st Airborne Division?'The action was to be"non-political,
y ' - he said, and merely the "adoption" of a couple of hundred
4 _ .� '- lonely young men.The council typically put matters over until
�r .` y - `- a later date.
�, , "; rE ' i! ,1 '� As the chastened Linda Giese and Ron Wright left the
1 `` rt t council chambers, she was followed by Vera Graham, long-
time city hall reporter for the San Mateo Times.Graham knew
.,• ° a good story when she heard it. Her sensitive interview with
;_ • r' Giese on Joe Artavia's request was a major story next day.
xt•: - 4 i Clubroom doors, especially ally the Elks Lodge and the Lions
P B
lk
Club,began to open up to Giese. Women's groups welcomed
her for luncheon talks. Fire Chief Noe Chanteloupe and his
firemen offered their stations as collection depots for trans-
shipping gifts. Several school teachers asked children to write
A lett• ,
ers. The people of San Mateo were truly touched. After
all, Joe Artavia was one of their own.
It took some tough political activity by the mayor and others
TOP: Company A, 1st Battalion, 327th Infantry, 101st before the cautious members of the city council majority
Airborne Division—better known by its self-chosen nickname agreed, weeks later, to take some action.
of "Abu Company"—comes home via San Mateo on Jan. On March 4, 1968, the council unanimously approved a
20, 1972. MIDDLE: Lieutenant Stephen J. Patterson cheer- resolution adopting the Abus as its own and urging full citi-
• fully sets off on a patrol. In December 1968, he provided zen support of the city's "adopted sons."
escort to Linda Giese when she visited Vietnam. In 1976, Vera Graham and the San Mateo Times ran continuing posi-
he escorted her down the aisle to make her Mrs. Linda tive articles.The people of this rather proper West Coast city,
Patterson. ABOVE: In battle dress and spit-shined hoots, with a then population of about 60,000 and located 15 miles
the Ahus prepare to meet the townsfolk who adopted them. south of San Francisco across the bay from riotous Berkeley,
24 3/
■
reacted with a wave of affection that astounded young Arta-
via,his company and,in time,his division. and Thousands of let-
i .
ters, gifts, Kool Aid, food packages, sugar an g •
to be sent by children and seniors,by families and churches,
service clubs, city hall departments, hotels, restaurants and
corporate offices. New groups and committees were continu- : •
ally established to take care of"our adopted sons." s.
People said,"To hell with the politics behind this damn war!'
The only concern was they had to find enough packs of can- a;.
dy and games to send to Abu Company.The city's organized
protest groups were shouted down or ignored. Linda Giese �
was everywhere, speaking, wrapping packages, organizing f. .
new committees.
And then,only a few months after the city council's NV
's adop
tion resolution,came the terrible,shocking word that the city's
own, its first adopted son, had been killed in action.
1968, during Tet, the
Two months earlier, on January 31, g R-., •-• •
Vietnamese New Year's celebration, the North Vietnamese . t a y , 4�',c
Army and the Viet Cong had launched an offensive to over ?. ,.4�{.. ps i
run South Vietnam. One of their major objectives was the ��-3 . `:' ; `Alk
old imperial city of Hue. To its defense rushed the U.S. 1st t, r•
Marine Division,supported by elements of the U S. Army's 't:'.,•' •::.-1,7`" t . t
1st Cavalry Division and the 101st Airborne Division,includ- ,,,.ter � � y`± s 'a •
ing the 1st Battalion, 327th Infantry and its Abu Company. -4 , .•'....fi��' �' • t t f---
�► `
On March 24, 1968,while walking point at the head of a pa- � t ' : •. i
trol seeking to fix the remnants of the fleeing North Viet- ,0..,- ,: > ,jiire„
namese Army assault forces, Sergeant Artavia was killed by _ .t.'�
a burst of enemy automatic weapons fire. _
Sergeant Joe Artavia's full military funeral service at Gold- »r-- �. '•.• .-' ` t el, b
National Cemetery was attended by grieving thou- -i, •
en Gate I`auonal Ceme y •Q�,
sands of all ages who wept when they saw the bayoneted rifle 1 k- Y_--�. f;...
standing upright, crowned with a helmet, and with freshly '. ..r �-
shined combat boots on the ground by the grave. When the 'k�' _ = ..`.� v- r
/ i i a, }"rte '*r-
second bugle on a hillock echoed taps,the city's resolve was /'-7 j • . F. > w
strengthened. Joe would be remembered. ► - _, _
-
A few weeks before Christmas that year of 1968,a now self- �,� 4.. _s - _
assured Linda Giese decided to go to Vietnam. It seemed to 1 ;
be a rash act. She had no money. The whole country was
a war zone. How would she find the 101st? The city could
not allocate public funds for a private trip. Linda would not
be dissuaded. She was going.
She borrowed a few dollars, accepted cash gifts from worn-
1
en's groups, scratched it out. She wrote to Abu Company i
and advised them of her coming.The city council approved
the striking of medallions with the city's seal, surrounded
C"
with the embossed caption,"San Mateo's Adopted Sons;'and + � �t„ .._
with each soldier's name engraved on the obverse. A letter ..-
and Christmas card from the city council were printed for ,-.. ?i r� . - 4
each trooper. . .• � +•
On December 9, 1968, Linda Giese stepped off a civilian All ; . i
Boeing 707 at Tan Son Nhut Air Base where she was met by . .T.:;
Lieutenant Stephen J.Patterson of Abu Company.No sight-
seeing this trip.They flew into the Hue Airport the next day. ' • f ;_ ,• I . . ,,,,,„„.
4..
It had been planned for the company to have a four or five
I
day stand-down, but because the soldiers were engaged in 14. * 74‘.`ow a.
heavy fighting, it was decided they could only spend a day
and a half at Camp Eagle, the 101st Airborne Division base 4r � �`'+�. /k.
camp.Moreover,she'd have to wait for at least four days while f •; `~ '�`”!ri,
Abu Company fought its way out of the mountain jungle. ,- •, .,.�-i�►►
Lieutenant Patterson escorted Giese everywhere as she
toured the entire battalion rear area. She flew to the tactical TOP: Troops of the 101st Airborne prepare to move out
operations center and was put in touch by telephone with from the landing zone at the start of another ainnobile sweep.
troopers from Abu Company in the field. She worked with Abu Company's war began in earnest at My Phu in March
medics and visited a local school. Her tour of the once beau- 1966, and the outfit fought with equal distinction to relieve
tiful city of Hue,scene of the war's bloodiest battle,still stands Captain William S. "Napalm Bill" Carpenter's C
502nd Infantry, at Dak To in
out in her mind. Lieutenant Patterson was particularly atten- )u epABO��EBThelma,n who started it all. An airborne
rive, but then so was everyone.
Major General Melvin Zais,commander of the 101st, had volunteer at age 17, Joe Artavia was a sergeant at age 19.
hrr as his guest for dinner.Other meals she ate with battalion On March 24, 1968, he was killed in action.
3a 25
officers, NCOs and enlisted men. It was VIP treatment all hausted by helicopter to her cot at Fort Chasity, the nurses'
r the way because the entire division knew of San Mateo's adop- quarters of the 22nd Surgical Hospital at Phu Bai. As she was
don of Company A 1/327,but Giese only wanted to get on leaving the next day for Saigon and return to the United
with why she had come.Besides,Christmas Day was at hand States,she was given gifts—including a company guidon—by
• and the company,she was told,was still in the hills chopping Captain Shore. Abu Company went back into the jungle.
its way through the undergrowth.Suddenly,several Chinooks But they went,as Sergeant Artavia had prophesied,"with the
popped into view to set down and discharge their dirty, be- morale of the guys up as high as the clouds." While many
draggled and rain-soaked cargo. Americans serving in Vietnam,especially in the later days of
The Abu commander, Captain Christian Shore, with his the war,wondered if anyone back in the"world"knew or cared
officers and men, lined up in ragged formation to be greeted about their sacrifices,the men of Abu Company were assured
by this pretty young woman who had come alone and so far that the people of San Mateo were solidly in their corner.
to bring them Christmas greetings from a city whose Iota- During the following months,the Adopted Sons Commit-
tion they hardly knew and from people who called them tee maintained its interest and activities.Letters and pictures
"adopted sons."Linda Giese cried as she shook the hands and and mementos and plaques were sent to and from Vietnam,
embraced her soldier-brothers. between an ever-changing group of young soldiers and
After washup and a clothes change, the party began. A civilians who they might never meet. Almost every week a
small combo played dance music and Linda danced with shy young soldier,his year in the country completed, would
officers and men one after another. And the Abus laughed find his way to San Mateo as a first stop before heading back
and partied through the night.After all,it was Christmastime. home south or east or north. The city's fire stations were
Next day,at a touching ceremony,including a short memorial favorites for a break or a stateside meal. Hotels and motels
service for the members of Abu Company who had been provided free accommodations.The Villa Hotel kept a"Wel-
killed—including,of course,Linda's brother Joe Artavia—she come Adopted Sons"sign on its streetside reader board. Lists
read the city council's adoption resolution and the Christ- were maintained at firehouses or private homes where exhaust-
mas greeting letter, and presented each man with his medal- ed but excited soldiers could spend a night or a weekend.And
lion. There were few dry eyes among the troops. so it went.
That night there was another party with Christmas carols When a Bob Hope Christmas show in Vietnam for the 101st
followed by a midnight Christmas mass. Giese returned ex— was televised,the citizens of the city were proud to see a young
TS VIETNAWWF?. .,'�t •: O 'E
San Mateo was not the only Ameri- '
i
can city to show its support for Ameri- .,,.=A„.,-; X;, i � '
• co's fighting forces in Vietnam.Duluth,' :r:? � h� . _ k
Minnesota also did its bit, thanks to A ,ir: 1 -_�
the efforts of Jack Soetebier, a Korean
W
I
ar-era Army veteran who owned ' ts-.�
the Patty,:Cake Shop, a small retail ,4' ,� �• _ —\=��\--, •- t
bakery.In 1967,he had the idea of mak- j '- _ • r;'
ing and sending Christmas cookies to
Duluth servicemen and servicewomen : . �� ;• t
in Vietnam and throughout the Pacif- ,4- .." . _ '' ` ' �$ t '
ic.When of his effort got around,• 'v►- - -
a local coffee distributor, the-'Arco . +
Company,offered to vacuum-pack the `
I cookles.in their two-pound coffee tins; krill r-, `` • _. 3,'-°_ • 4
, .bakery suppliers donated;the ingre- ,. ,, • . '' ''
i dients :the°Duluth Welcome Wagon - ,o,„.-0.1/.
BOKIIS E-r.
Newcomers Club volunteered to pack . i �'_' ., .
I the coalues and address the boxes;and r 7 t7:11
E
the Chamber of Commerce volun- ••_ �"' _ _ _ _ ,
teered to pay_the postage. Duluth postmaster'Frank Blatnikc, Ray Rouse,Arco Coffee's John Andresen
• Thousands of macaroons, spritz, and John Soetebier prepare to mail 2,000 dozen cookies to Vietnam.
sugar and ginger cookies were baked, _ ,-.. ,
and, during the-first year, some:423, _from Air Force'radai operators and. '.flight suit in a soggy shack in Phu Bai,
• packages_were mailed to provide ra from d Burse at Udon Royal Thai Air -Vietnam:'it read."Picture this sad guy
"little bit of northern Minnesota Scan- -Force.Base.s"..' , thinking about missing Christmas and
i. dinaviari-and German Christmas"'in .:'After such man overwhelming're- trying only to live long enough to lay
the steaming jungles of Southeast' sponse,the'whole"Christmas Cookie eyes on a new daughter he hasn't seen.
Asia.Thanks,mostly by way of Christ- Caper" was repeated again and again Now picture.how he felt when he
. mas cards,came from Army artillery, at Patty Cake until the war came to an - whooshed open the Arco coffee can to
armor, engineer, :'helicopter, radar end. It was an effort long remembered find real cookies:' fresh, honest-to-
* • and transportation units from the by Duluth veterans.I_n October 1984, , goodness Duluth Christmas cookies.It
1st Cavalry Division and the 1st Bri- .. a letter-to-the-editor was published in '. was a life-saver...it's almost 16 years
gade, 5th Infantry Division, along the the local newspaper. "Picture a tired, ago,and I haven't forgotten the cook-
DMZ. They came from the U.S.S. El- mean, old, grumped-out 26-year-old ies in the coffee can."
dorado,Montrose and Prairie.They came Marine captain sitting in a stinking Ginny Mae Mattson
26 33 ,
soldier hold up a hand-printed placard. "Hello, San Mateo"
is all it said. That was thanks enough. .
Late in 1971, the once-mayor, still a member of the city
council, learned that the 101st Airborne was scheduled to L11 /��fJ7�, HOME
leave Vietnam. He proposed that the Army be asked, as a ...xi., l EAGLES •
tribute to the city's efforts, to route its "Adopted Company SCREAMING
V G
A"home by way of San Mateo fora real welcome reception. SAN ADOPtE� SONS
Retired Army Colonel John F. Condon, then serving as
mayor of San Mateo,promptly agreed, as did the city coun- —
cil. Telegrams, letters and phone calls were exchanged. The ,ry
president was from California. The Pentagon well knew of
San Mateo's adoption.The word came down.The paper shuf-
flers cut the orders. ,
On January 20, 1972, San Mateo erupted with joy as 160 ii. ...„
0 ..,„
troopers, in camouflage and newly shined boots, marched -
proudly up Third Avenue to Central Park, where they were i
kissed and hugged and mauled and fed hot barbecue and cold '
local beer.They had been red carpeted from Saigon to Travis a tr;: X41 ' ''
Air Force Base in Fairfield and bused to San Mateo—VIP all t !is11Il
the way. In San Mateo,they didn't see a single bearded anti- I ` •
war protester, just happy children and seniors and families BRNIE kt;
" with their BROS. - iiR
I wearing"Welcome Home, Adopted Sons"badges
eagles screaming away.At that post-parade picnic in the park, r t
the delighted young troopers surrendered their helmets and '�\
insignia and patches as souvenirs—one sergeant even gave up ■Dwuiiga
his trousers and had to be shipped to a hotel in a cab. ��...�.�.
The smiling thousands of San Mateans did not realize or '
even care that they were making history, or that San Mateo A - i J •�' -1`a.= --r"` yr
would be the only city in the country to so welcome home t --
troops from Vietnam.The men were assigned private homes _'�`= ''- ''°..■'"_'
g P t.��a a..._ t�
in which to stay after the civic banquet and an old time pan- .�,��'- `
cake breakfast in the park the next day. Miss San Mateo and t ,-
Miss This and That from neighboring cities and schools, in ,
white gowns and sashes, were their dates. It was one hell of ; ; •4Agr a bash. Bay area newspapers and TV stations, finally awake :'
to the adoption, were there en masse. It was a once-in-a-
lifetime welcome home orgy of joy and love. ....„:4:_;:.k ` ; ,'ic..."�"' „ }-
The troops went back to their families and that should have . 4 .%". � .",--- _,.4-7.rSlt '-'
been the end of it.But it was not. So many plaques,pictures, - • �'• .- *' �;v — ,,
letters, news articles and memorabilia (no weapons, no war "f,..'30- i ,- /4,. _ 4
material)had been collected during the past years and at the •t, • '4_ . ��a�'_ r` '� ti, •-•
welcome home celebration that proper storage was a prob- Via. .. _,.� �* `/ ��
lem. The mayor suggested that a 101st Memorial Room be .� a .`_ �i-
established in the main library. Businesses and individuals �, : r , �i.
contributed to a fund for cases and frames and reproductions. :` ( �"
The dedication ceremony turned the city into a minor mili- • _•.r
tary encampment once again. Active military of all branches— w- •• om 7
from the Presidio at San Francisco,from Fort Ord,from nearby
Treasure Island and from Moffet Naval Air Base—attended. — ■•t
The delegation from the 101st Airborne,Fort Campbell,Ky., .� tor-
of course, were the stars. The "Screaming Eagles Memorial
Room"continues to be a place for thanks and a silent prayer. ;.
On March 4, 1988,San Mateo commemorated the 20th an- r r� I --; f _
niversary of the adoption with a touching ceremony in the i ••; "_i L '"
Screaming Eagles Room. Linda Giese and Steve Patterson 4 i •
(who were married in 1976) recalled past events to a visibly . : .,tt� �'
moved audience.Representatives from Fort Campbell brought _ :. I
formal notification that San Mateo had not been forgotten
there. Every new Abu was fully indoctrinated about San a 4 I '--1)
Mateo and its continuing love affair with the company and ON i
the division.The commanding general, 101st Airborne Divi- 3-- ,-.1 .
sion, sent a certificate declaring that "every citizen of San . "'r _
Mateo is hereby made an honorary member of the 101st Air- 4''
borne (Air Assault) Division from this day forward."o TOP: A "Screaming Eagles" banner goes up to greet the
4111
returning Abus as they arrived to meet their collective
John J. Murray,Jr., served 16 years on the San Mateo city coun- family-au ay-from-home. ABOVE: Joe Artavia closed his
cil, including four terns as mayor. Further readings:About Face, unusual request to his sister with the words, "Please try.
b. David H. Hacku'orth; and The Offering, by Torn Carhart, Try she did, and succeed she did. She was there to meet
contain accounts of Ahu Company's combat actions in Vietnam. the Alms when they came to San Mateo on Jan. 20, 1972.
3V 27