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HomeMy WebLinkAboutDec 1, 1983CITY OF COLUMBIA HEIGHTS PUBLIC HEARING DECEMBER l, 1983 PURPOSE OF PUBLIC HEARING That the City Council consider Ordinance #1067, the Issuance of Industrial Develop~ ment Revenue Bonds to finance a proposed project which will consist of land acquis- ition and the construction of an approximately 36,000 square foot building, including the acquisition and installation of equipment in connection with the businesses con- ducted therein for use as commercial condominium facilities. The proposed project would be located at the northwest corner of 4Otb and Central Avenues N.E., in the City of Columbia Heights. The Public Hearing was called to order at 7:30 p.m. by Council President Hentges. Members present were: Hovland, Petkoff, Norberg and Hentges. Absent was: Mayor Nawrock i. Mr. Jensen informed those present that the Housing Authority and the developer of the proposed retail/office building have been working toward implementation of a project in this area for approximately two years. He stated that this public hear- ing is only to give preliminary approval to the availability of Industrial Develop- ment Revenue Bonds for permanent financing of the development should the City and Developer reach a determination that the project is financially feasible. He further stated that the H.R.A. and developer have an Exclusive Negotiations Agreement under which both parties are looking into the desirability of undertaking the development. If the project were to be undertaken, the H.R.A. and City of Columbia Heights would be required to hold public hearings to formally consider the project. Mr. Bocwinski noted, that the passing of Ordinance #1067 by the City Council would allow the project to continue toward the process of implementation. He stated that this project is in its initial stages and confirmed that ultimately the project must be approved by the City Council. Mr. Maciaszek from the Columbia Heights Credit Union inquired as to the design of the proposed structure. Mr. Jensen presented a preliminary drawing of a proposed building; he stated however, that the design of the building is in the preliminary planning stages. He stated that the proposed building would consist of approximately 36,000 square feet and would be a four-story office/retail building; with retail businesses on the first floor, and office spaces on the second, third and fourth floors. Mr. Jensen also stated that the buildings adiacent to the project also have to be acquired to provide parking for the development. Mr. Jensen stated the Fortieth and Central Financial Corporation (the Developer) consist of the following persons: Douglas Peterson, Ronald Kalina, John Wildenauer, William Ashford, and the Gaughan Land Company. Mr. Jensen stated that the amount of the Industr!al Development Revenue Bond Issue per the Ordinance under consideration, is three million dollars. Mr. Harry Christianson from the Mercury Tool and Engineering Company, inquired as to why the City of Columbia Heights would acquire existing businesses to assist a private enterprise for a proposed development. He stated that his existing Business woul. d be upset considerably if this were to occur. He inquired as to why the City involves itself in acquiring these properties. Mr. Jensen stated that the City of Columbia Heights created a "Redevelopment District" in 1977 for the purpose of causing new development to occur, in the area which was .Public Hearing December 1, 1983 Page 2 showing very evident signs of deterioration. He stated that for this reason, the City's H.R.A have, and will continue to work with developers who wish to examine the feasibility of new development in the area. He stated that the City and H.R.A.~ are committed to the redevelopment of the area for the welfare of the community. Norberg inquired if the project was in the Tax Increment District. Mr. Jensen informed him that this project is in the Tax Increment District. Norberg stated his concern as to whether the Tax Increment District can support an additional bond issue. Mr. Jensen stated that this has not yet been determined; he stated that an analysis of the City's Tax Increment District was performed by the law firm of Holmes and Graven. He stated that a third bond issue within that district may possibly be feasible, but that first the details of the project must be put together and examined. Norberg stated that, according to his understanding, the Housing Authority had made the decision not to proceed with recommending any additional bond issues for approximately one year. Mr. Jensen stated that at this time, the exact date as to when the implementation of the project could occur has not been d~termined; he stated that redevelopment contracts with the developer must be negotiated and that the City Council must make the final decision on the project before it can be implemented. He noted that the ordinance being considered by the City Council allows the City to remain open for the new development to occur in this area but does not bind the City to this particular project. ACTION ON ORDINANCE NO. 1067 Motion by Hovland, second by Petkoff to waive the reading of the ordinance there being ample copies available to the public. Roll call: All ayes ORDINANCE NO. 1067 BEING AN ORDINANCE GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER THE MUNICIPAL INDUSTRIAL DEVELOPMENT ACT, REFERRIrtG THE PROPOSAL TO THE MINNESOTA ENERGY AND ECONOMIC DEVELOPMENT AUTHORITY FOR APPROVAL, AND AUTHORIZING PREPARATION OF NEC- ESSARY DOCUMENTS The City of Columbia Heights does ordain: 1. It is hereby found, determined and declared as follows: 1.1 The welfare of the State of Minnesota (the "StateI') requires active promotion, attraction, encouragement and development of economically sound industry and com- merce through governmental acts to prevent, so far as possible, emergence of bli- ghted lands and areas of chronic unemployment, and it is the policy of the State to facilitate and encourage action by local government units to prevent the econ- omic deterioration of such areas to the point where the process can be reversed only by total redevelopment through the use of local, state and federal funds derived from taxation, with the attendant necessity of relocating displaced persons and of duplicating public services in other areas; and 1.2 Technological change has caused a shift to a significant degree in the area of opportunity for educated youth to processing, transporting, marketing, service and other industries, and unless existing and related industries are retained and new industries are developed to use the available resources of the City of Columbia Heights (the "City"), a large part of the existing investment of the community and of the State as a whole in educational and public service facilities will be Public Hearing December I, 1983 page 3 lost, and ~he movement of talented, educated personnel of mature age to areas where their services may be effectively used and compensated and the lessening attraction of persons and businesses from other areas for purposes of industry, commerce and tourism will deprive the City and the State of the economic and human resources needed as a base of providing governmental services and facilities for the remain- ing population; and 1.3 The increase in the amount and cost of governmental services requires the need for more intensive development and use of land to provide an adequate tax base to finance these costs; and 1.4 A representative of Fortieth and Central Financial Corporation, a Minnesota corporation (the "Developer"), has advised this City Council that it desires to undertake a project, consisting of financing the acquisition of land, the const- ruction of a building thereon and the acquisition and installation of equipment in connection with the businesses conducted therein and in related facilities for use as a commercial condominium facility located in the City (hereinafter referred to as the "Project'l); and 1.5 The existence of the Project in the City will contri'bute to more intensive development and use of land to increase the tax base in the City and overlapping taxing authorities and maintain and provide for an increase in opportunities for employment for residents of the City, including economically disadvantaged or unemployed individuals; and 1.6 The City has been advised that conventional, commercial financing to pay the capital cost of the Project is available at such costs of borrowing that the ec- onomic feasibility of operating the Project would be significantly reduced, but that with the aid of municipal financing, and its resulting lower borrowing cost, the Project is economically more feasible; and 1.7 This Council has been advised by a representative of the Developer that on the basis of information submitted to them and their discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, industrial development revenue bonds of the City could be issued and sold upon favorable rates and terms to finance the Project; and 1.8 The City is authorized by Minnesota Statutes, Chapter 474, to issue its revenue bonds to finance the cost, in whole or in part, of the acquisition, construction, reconstruction, improvement or extension of capital projects consisting of prop- erties used and useful in connection with revenue producing enterprises, such as those of the Developer and the businesses located in the project, and the issuance of such bonds by the City would be a substantial inducement to the undertaking of the Project in the City; and 2. On the basis of information given the City to date, it appears that is would be in the best interest of the City to issue its industrial development revenue bonds under the provisions of Chapter 474 to finance the costs of the Project of the Developer in an amount presently estimated not to exceed $3,000,000. 3. The Project is hereby given preliminary approval by the City and the issuance of the revenue bonds for such purpose and in such amount approved, subject to approval of the Project by the Minnesota Energy and Economic Development Authority and to the mutual agreement of this body, the Developer and the initial purchaser of the bonds as to the details of the bonds and provisions for their payment. In all events, it is understood, however, that the bonds of the City shall not constitute a charge, lien Public Hearing December l, 1983 page 4 or encumbrance legal or equitable upon any property of the City except the Project, and the bonds, when, as, and if issued, shall recite in substance that the bonds, in- cluding interest thereon, are payable solely from the revenues received from the Pro- ject and property pledged to the payment thereof, and shall not constitute a de~t of the City. 4. In accordance with Minnesota Statutes, Section 474.01, Subdivision 7a, the Mayor of the City is hereby authorized and directed to submit the proposal for the Project to the Minnesota Energy and Economic Development Authority for approval of the Pro- ject. The Mayor and other officers, employees and agents of the City are hereby au- thorized to provide the Minnesota Energy and Economic Development Authority with any preliminary information needed for this purpose, and the City Attorney is authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project, if it is approved by the Minnesota Energy and Economic Development Authority. 5. The law firm of Holmes and Graven, Chartered, is authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents relating to the Project and bonds issued in connection therewith. The Mayor, City Attorney, and other officers, employees and agents of the City are hereby authorized to assist Bond Cou- nsel in the preparation of such documents. 6. In accordance with Minnesota Statutes, Section 474.01, Subdivision ll, the City Manager and other officers, employees, and agents of the City are hereby authorized and directed to encourage the Developer to provide employment opportunities to ec- onomically disadvantaged or I~nemployed individuals. Such individuals may be iden- tified by such mechanisms as are available to the City, including a first source for employment recruitment, referral and placement. 7. The City shall have the right, in its sole discretion, to withdraw from partici- pation, and accordingly, not to issue its revenue bonds for the Project, should the City at any time prior to the issuance theeeof determine that it is in the best in- terest of the City not to issue its revenue bonds or should the parties to the trans- actions be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. The decision of the City Council with res- pect to any of the aforementioned matters shall be incontestable. 8. This Ordinance shall be in full force and effect from and after thirty (30) days after its passage. First Reading: Second Reading: Date of Passage: November 14, 1983 December l, 1983 December 1, 1983 Offered By: Hovland Seconded By: Petkoff Roll Call: All ayes Bruce G. Nawrocki, Mayor Jo-Anne Student, Council Secretary Public Hearing December I, 1983 page 5 APPOINTMENT OF SECRETARY PRO-TEM Motion by Hovland, second by Petkoff to appoint Patricia Reinarts as the acting Sec- retary Pro-rem for the Public Hearing held on December 1, 1983. Roll call: All aye~ ADJOURNMENT Motion by Hovland, second by Petkoff to adjourn the hearing at 7:55 pm. Roll call: Ail ayes Patricial Reinarts, ~;ecretary Pro-rem Kenneth Hentges, Council President