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HomeMy WebLinkAboutEDA MIN 11-22-05 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES NOVEMBER 22, 2005 CALL TO ORDERlROLL CALL President, Murzyn, Jr. called the meeting to order at 7:03 p.m. Present: Don Murzyn Jr., Patricia Jindra, Bobby Williams and Bruce Nawrocki, Gary L. Peterson and Bruce Kelzenberg, Tammera Ericson Diehm arrived at 7:34 pm PLEDGE OF ALLEGIANCE CONSENT AGENDA Approval of November 2, 2005 Minutes Financial Report and Pavment of Bills Nawrocki asked what are other financing uses. Streetar stated it was the EDA levy. Fehst stated it goes in and out of the account. MOTION by Williams, second by Peterson, to adopt the consent agenda items as listed. All ayes. Motion Carried. ITEMS FOR CONSIDERATION Extension of Sarna Development Al.!reement Schumacher stated the EDA entered into a Development Agreement with the Sama's for the construction of a 6,000 square foot restaurant on the comer of 40th & University. The developers have exhausted their original 120-day timeline and are requesting a 120-day extension. Nawrocki asked when did the original agreement expire. Schumacher stated it expired just afier the last EDA meeting. Motion by Peterson, second by Kelzenberg, to approve a 120 day extension of the Development Agreement with David M Sarna, James A. Sarna and James J. Sarna for the redevelopment of the City owned property at 40th & University, and furthermore; to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Resolution 2005-15, Second Amendment to Contract for Private Development Streetar stated the developer, Bruce Nedegaard has made many attempts since March to acquire the land located at 4811 Central Avenue, known as BW3, Buffalo Wild Wings, but the owner is unwilling to sell the approximately 4,100 square feet of land that sits on top of a hill, which is neededfor a temporary construction easement and a permanent street right of way easementfor the construction of a public road needed to serve the Grand Central Lofis development. There are two steps the EDA needs to perform: 1) amend the contract pledging assistance to acquire the property by condemnation, and 2) have the City Council pass a this by resolution at their November 28th meeting. Economic Development Authority Meeting Minutes November 22, 2005 Page 2 of6 Murzyn asked if anyone from BW3 said why they aren't willing to sell this portion of property. Streetar stated he had talked to the landowner, who said they are basically using this as leverage. Kelzenberg stated he thought BW3 was going to move out of the City. Streetar stated he hasn't heard anythingfi'om them. Nawrocki ask how long their lease isfor and what are we asking in dollars. Streetar stated he did not know and that it is about $31,000, which Nedegaardwould pay back infull to the City per the Development Agreement. Nawrocki asked when we did the condemnation for the savers property, didn't that include this property also. Streetar stated it did not. Motion by Williams, second by Kelzenberg, a Resolution approving a Second Amendment to the Contract for Private Development between the Columbia Heights Economic Development Authority and New Heights Development, LLC; and furthermore, to direct the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Resolution 2005-16, Approvine: Consultine: Services Ae:reement Partenheimer stated we have contracted the Greater Metropolitan Housing Corporation for the past four years to provide a variety of housing services to maintain and improve homes. The contract for 2006 is $15,000. Jennifer Bergman, GMHC stated, since 2002 the EDA has partnered with GMHC to provide Columbia Heights residents with a variety of housing services to maintain and improve their homes. They provide three things to the City: 1) housing information, which is anything from mortgage foreclosure prevention, home buyer information, home improvement information, rental information, emergency assistance, etc and 2) construction consultation, as they have a construction manager on staff, who goes out to meet with homeowners, makes recommendations on how to fix up their home, helps owners prioritize their work, writes a scope of work, provides them with a contractors list, monitors the construction, and sometimes provides a mediator when the contractor and homeowner can't come to an understanding. To date they have provided 164 construction consultations, administer a number of loans to residents like the MHF A fix up fimd., Community fix up loan, Rental rehab loan, Homeowner Rebate Program. Also, she was also at the housingfair and has done a cable shootfor the City website. Nawrocki asked how many residents have they assisted. Bergman stated 694 since 2002, and 189 this year as of the end of October. Streetar stated funding is available fi'om Fund 226-Special Projects, the agreement begins on January]"' and ends on December 31, 2006, and can be terminated by either party with 30 days notice, therefore, stafJrecommends approval of the agreement with GMHC. Streetar stated he would like to suggest the board amend the contract in two places; 1) add a new number 2 to read: Continue to Administer the Home Rebate Program with funds appropriated in 2005 and change the numbering to end with number 5. Also under Term it Economic Development Authority Meeting Minutes Novemher 22,2005 Page 3 of6 should read: if terminated by either party the EDA shall pay a prorated share of the $15,000 for services renderet[ as of the date of termination. Streetar stated Cher and the Building Official have done a goodjob of directing residents to the Housing Resource Center. Motion by Peterson, second by Ericson Diehm, to Adopt Resolution 2005-16, a Resolution approving the 2006 Consulting Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from fund 226 Special Projects Fund for the same, with the above mentioned amendments; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Resolution 2005-17 and 2005-18. 2006 Budget and Levv Streetar stated the proposed 2006 EDA budget was reviewed at ajoint City Council/EDA worksession on November 7'''. Since 2002, the focus has been redevelopment of specific areas and the improvement of the housing stock in Columbia Heights. StajJrecommends adoption of resolution 2005-17 adopting the EDA 2006 budget of$246, 331 and a levy of$84, 954 and resolution 2005-18 adopting the EDA special benefit levy or HRA levy of$161, 366 and recommending approval by City Council. Murzyn asked if this was the maximum we can levy. Streetar stated it was not, we have approximately 39% in capacity, the HRA is maxed out and the EDA is about 61% and that the way the EDA levy is determined is based upon the market value not the tax capacity. Motion by Peterson, second by Kelzenberg, to Adopt Resolution 2005-17, being a Resolution of the Columbia Heights EDA Adopting the 2006 Budget of $246,331 and a Levy of $84,965 and recommending this Budget and Levy to the City Council for approval. All ayes. Motion Carried. Motion by Peterson, second by Ericson Diehm, to Adopt Resolution 2005-18, being a Resolution of the Columbia Heights EDA approving and Levying $161,366 subject to approval by the City Council. All ayes. Motion Carried. 3919 Central Avenue (Madv's) Purchase Offer Discussion Streetar stated the City Council and EDA identified the area along Central Avenue that includes Burger King, Mady's and the Columbia Heights Rental properties as a redevelopment priority. The City has: 1) acquired and demolished Burger; 2) Performed Phase 1 Environmental Site Assessments on all three properties, which show the presence of contamination; 3) performed building inspections on all three, which showed they are blighted; 4) submitted a grant request for $50,000 to DEED to pay for the Phase 11 environmental site assessments to be performed in January or February of 2006; 5) developed redevelopment concepts for this area; and 6) have scheduled a tour in December for EDA members to take a look at similar concepts already constructed Mr. Gene Mady and Doug Foss, co-owners of the Mady's building have verbalized their desire to have the City make them an ojJer for their building. Mr. Mady stated the building is generating an inadequate cash fiow. MI'. Foss, manager of two retail spaces, indicated Economic Development Authority Meeting Minutes November 22, 2005 Page 4 of6 without a significantly investment in the property he would have difficulty renting the now vacant space, and therefore, does not want to spend a lot of money to that end only to sell it to the City. Staff believes this is a good opportunity to purchase the property on afriendly basis, recommends obtaining an appraisal of the property to include fixtures, and determination of relocation benefits, which would be the basis for the offer. Mr. Brett Mady is here tonight on behalf of his father, Gene Mady and Doug Foss, who is the co-owner. The ownership has expressed their interest in at least entertaining an offer to purchase by the EDA. Staff is requesting direction to obtain an appraisal of land and the building, appraisal on fixtures, and determine what relocation costs would be in the event of an offer to the partnership. Nawrocki stated maybe we should ask them what they want for the property. Streetar stated we aren't even close to purchasing the property, he is working off of what Mr. Mady and Foss have told him, Mr Mady is interested in entertaining an offer, staff needs to know what makes sense. Doug Foss stated 1) he isn't really enthused about selling the property, he was told he had no choice in the matter; 2) his tenants were told they have anywhere from 12 to 24 months before they would be moved out; 3) he was told within 18 months there is going to be a new building on his property; 4) he has lost a tenant, as Mr. Streetar came acting like he was interested in furniture and letting the tenant know how things are going around here, basically trying to stir up trouble; 5) he has had the Salvation Army as a tenant for 10 years, they have paid over $150,000 in property taxes and he came to find out they cannot expand into the vacant space as somewhere along the way someone changed the ordinance to say they can't expand because they are a consignment shop, which he was never notified about; and 6) he would feel a little better about this transaction if he could have a little trust in what is happening. Streetar statedfor the record: 1) the loss of their tenant isn'tfrom anything he has done; 2) the reason the Salvation Army isn't aloud to occupy the vacant space is because it is a non- coriforming use, the council has indicated in the Zoning Ordinance they did not want to see the expansion of discount or consignment shops any longer in Columbia Heights; 3) he would agree with Mr. Foss that sometime ago we were on a track of 18 to 24 months for this project, but in light of the Industrial Park and staffing changes it got delayed; 4) the outcome hasn't changed; 5) he has never gone in to speak to any business owner and told them they would out in 12 to 24 months, and would ask that the particular business owner come to this meeting to support that. Mr. Foss stated he was speaking from what he has heard, he has tried to make efforts to make the Salvation Army conforming and was told he could not change the ordinance, he would be a much happier seller if the City worked with him. Murzyn stated this is something he would need to address with the Planning & Zoning Commission, as they regulate the Zoning Ordinance. Foss stated he was told by Streetar that one way or the other he isn't going to be able to run his business there, that it has been slottedfor redeveloped, a interested tenant called the City and was told the property may not be usable in 12 to 24 months. Streetar stated we have not had any phone calls that we have stated this to other than Bill Price of the Salvation Army who asked about the site and was told that his use is non-conforming to our zoning ordinance, he was told he would have our City Planner research it, send him a letter and copy to Mr. Foss by Friday. Foss stated he was not aware of that conversation, but has received the letter. Economic Development Authority Meeting Minutes November 22, 2005 Page 5 of6 Brett Mady stated they have been in business since 1964, the bowling business has gone down, with the extended time frame for the redevelopment, word has gotten out that they are closing, he takes 20 to 25 calls a week asking if they are still open, a lot of this comes from a former mayor that put an article in the Pioneer Press approximately 2 years ago stating the City was taking over the property for redevelopment, he would like to see this happen one way or another, but sooner than later. Kelzenberg asked Foss if he was in agreement to sell sooner than later. Foss stated he has some issues at this time, would entertain an offer if the price was right, but ifwe can't come to an agreement, he would want it to come to an end. Nawrocki stated he would not support the same kind of process used to buy Burger King. Fehst stated the EDA would be responsible to provide the owners with a reasonable, fair amount for the property by law. Peterson stated they could come up with a purchase price, but we still have to do an appraisal. Nawrocki stated Fehst talked about what our obligations are, our obligation is to the good citizens of Columbia Heights as to how we use public dollars, felt we did not use good business practice when we bought Burger King and certainly did not want to see us going through that kind of practice again. Murzyn asked Nawrocki if he is saying that our attorney's representation was wrong in how they directed us to do that. Nawrocki stated that wasn't what he said. Murzyn stated he did say that we purchased it based upon their value and what the attorney said we should pay for that property and how we did it. Nawrocki stated we paid too much for that property, in his mind. Peterson stated we owe it to the Mady's, Mr. Foss and our citizens as a whole to do the right thing for the City. Foss asked if the City is truly interested in the property. Fehst stated it was in the top 5 priorities the City Council set in 2002. Foss stated his understanding of the process to do the appraisals is that the City has an appraisal done and they have one done, which would be paid for by the City, is this true. Streetar stated if the City started condemnation procedures on your property, that rule would apply, but since we aren't, but are trying to do this on a fi'iendly basis, that would not apply. Motion by Peterson, second by Ericson Diehm, to direct staffto obtain the necessary appraisals as well as determine relocation benefits for the property located at 3919 Central Avenue, the Mady's property, for the purpose of making an offer to purchase. Upon vote- Nawrocki -nay, Jindra-aye, Ericson Diehm-aye, Kelzenberg- aye, Murzyn, Jr.- aye, Williams- aye, Peterson- aye. Motion Carried. ADMINISTRATIVE REPORTS Industrial Park Schumacher stated we have 25 permits pulled at this time for the Industrial Park, the development of two complexes is well underway, in Phase II demolition of the foundlY everything is coming up clean, with no contamination. Economic Development Authority Meeting Minutes November 22, 2005 Page 6 of6 Murzyn asked if the Miske's still own the envelope business over there. Fehst stated he sold the property last year. Other Business Williams asked with La Caberna's Liquor licensing being renewed, is there any movementfrom Anderson's on that. Streetar stated Anderson has had appraisals on all of the properties except for Taco Bell, because they already have that, the car wash wants approximately a half a million dollars, which is about $120,000 higher than what the appraisal came in, we told Anderson to come back to the board with all of the appraisals, purchase costs, plans, numbers, evidence of properties they have under control, etc in December or January. The owner of the exotic pet store is renting out the building to Snap On Tools on a month-to-month basis until the property is sold. Sheffield Williams stated he heard there are 8 properties for sale in the Sheffield development area. Streetar stated yes there is 8 properties up for sale, we would have to sell 2 to 3 million in TlF bonds with up to three years to set up a district, during that time the funds will capitalize and that the City needs to move quickly on this. Murzyn asked if City Council is intending to redevelop that area. Williams stated yes, they are and that there was an article in the northeaster paper last week that brings back some old issues and problems with the property that the board members should read. ADJOURNMENT Motion by Williams, second by Kelzenberg, to adjourn the meeting at 8:16 p.m. All ayes. Motion Carried. Respectfully submitted, (~t-/ ~-P-- Cheryl1kkken Community Development Secretary H:\EDAminutes2005\ 11-22-2005