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HomeMy WebLinkAboutEDA MIN 03-27-07
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
REGULAR MEETING MINUTES
March 27, 2007
CALL TO ORDERIROLL CALL
President, Peterson called the meeting to order at 7:00 p,m.
Present: GalY L. Peterson, Patricia Jindra, Bobby Williams and Bruce Nawrocki,
Tammera Diehm, and Bruce Kelzenberg
Absent: Marlaine Szurek
PLEDGE OF ALLEGIANCE
CONSENT AGENDA
Approve Minutes of February, 2007 regular meeting and the Financial Report and
Payment of Bills for the month of February on Resolution 2007-08,
Nawrocki stated the minutes should include the actual resolutions adopted.
MOTION by Diehm, second by Jindra, to Adopt Resolution 2007-08 Approving the
Financial Report and Payment of Bills for February 2007 and approving the minutes of
the regular FebrualY EDA meeting, with the amendment to include resolutions passed,
All ayes, Motion Carried,
BUSINESS ITEMS
Resolution 2007-09. Declarinq the Official Intent of the EDA to Reimburse Certain
Expenditures from the proceeds of Bonds to be issued by the authority
Bill Elrite stated the recommendation of our financial advisor, Ehlers & Associates is to
finance the liquor store project with these bonds sold through the EDA, rather than by
the City. This doesn't commit us to selling bonds, but leaves open the door that if we
incur expenses before the bonds are sold that we could reimburse ourselves when they
are sold, This intent to bond resolution related to the intent to bond for the construction
costs of the two new liquor stores, This allows the City to reimburse itself from bond
proceeds for expenses that were incurred prior to the date the bonds are sold. This is
standard practice that the City follows for all construction projects where bonding
occurs after the project has started. The only significant difference is that the bonding
for the liquor stores will be done under the EDA as a development project rather than
under the City of Columbia Heights. Per Steve Bubul's e-mail, the resolution must be
adopted to reimburse for Central Avenue land acquisition costs and the land acquisition
costs for the 3ylh Avenue property will be paid from the existing liquor operations fund
balance.
Nawrocki asked why the EDA is getting involved in this, not the City Council. Elrite
stated, the EDA has statutory authority to issue these bonds, the City does not. The
EDA would own the building and lease the building to the City. The lease payments
from the City to the EDA would then be used to pay for the bonds. These are not
general obligation bonds and not backed by tax revenue.
Economic Development Authority Meeting Minutes
March 27, 2007
Page 2 of 5
Williams asked what the interest rate would be. Elrite stated we do not have that
information yet.
Nawrocki stated for the record, he would be voting against this on the basis that this
route will cost the City more money.
Motion by Diehm, second by Williams, to Adopt Resolution 2007-09, a Resolution
declaring the official intent of the Columbia Heights Economic Development Authority
(EDA) to reimburse certain expenditures from the proceeds of bonds to be issued by
the authority.
Upon Vote: Jindra- Aye, Nawrocki-Nay, Kelzenberg- Aye, Williams- Aye, Peterson-
Aye, Diehm- Aye. Motion Carried.
Fehst stated for the record this does not apply against the full faith in credit of the City
and as a taxpayer he prefers these bonds over general obligation bonds.
Williams stated this may do the opposite; it may make our credit better.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2007-09
DECLARING THE OFFICIAL INTENT OF THE
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
TO REIMBURSE CERTAIN EXPENDITURES FROM
THE PROCEEDS OF BONDS TO BE ISSUED BY THE AUTHORITY
WHEREAS, the Internal Revenne Service has issued Treas. Reg. Ii 1.150-2 (the "Reimbursement Regnlations")
providing that proceeds oftax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain
requirements are met; and
WHEREAS, the Columbia Heights Economic Development Authority (the "Anthority"), or the City of Columbia
Heights on behalf ofthe Authority, expects to incur certain expenditures that may be financed temporarilyfi'om somces other
than bonds, and reimbursed fi'om the proceeds of a tax-exempt bond;
WHEREAS, the Authority has determined to make this declaration of official intent (the "Declaration") to
reimburse ceItain costs fimn proceeds of bonds in accordance with the Reimbursement Regulations.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COLUMEIA
HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AS FOLLOWS:
I. The Authority, in cooperation with the City, proposes to undertake the acqnisition and
betterment of two mnnicipalliquor stores (the "p,'oject").
2. The Anthority, or the City on behalf of the Authority, reasonably expects to reimburse the
expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum
principal amount of $4,500,000.00. All reimbursed expeuditures will be capital expenditures, costs of issuance
ofthe bonds, or other expenditures eligible for reimbursement under Section I.150-2(d)(3) of the
Reimbursement Regulations.
3. This Declaration has been made not later than 60 days after payment of any original expenditure to be
Economic Development Authority Meeting Minutes
March 27, 2007
Page 3 of5
subject to a reimbursemeut allocation with respect to the proceeds of bonds, except for the following expenditures: <a)
costs of issuance of bonds; (b) costs in an amonnt not in excess of the lesser of$IOO,OOO or 5 percent onhe proceeds of an
issue; or (c) "preliminmy expenditures" up to an amount not in excess of20 percent of the aggregate issue price ofthe issue
or issues that finance or are reasonably expected by the Authority to fmance the project for which the preliminmy
expenditures were incurred. The term "preliminary expenditurcsll includes architectural, engineering, sW"veying, bond
issumlce, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation ofa project,
other than land acquisitioll, site preparation, and similar costs incident to commencement of constTuction.
4. This Declaration is an expression ofthe reasonable expectations ofthe Authority based on the facts and
circnmstances lmown to the Authority as onhe date hereof. The anticipated original expenditures for the Project and the
principal amount of the bonds described in paragraph 2 are consistent with the Authority's and the budgetmy and
financial circumstances. No sources other than proceeds of bonds to be issued by the Authority are, or are reasonably
expected to be, reserved, allocated all a long-term basis, or otherwise set aside pursuant to the Authority's or the City's
budget or financial policies to pay such Project expenditures.
5. This Declaration is intended to constitute a declaration of official intent for purposes of the
Reimbursement Regulations.
Approved by the Board ofCommissiollers of the Columbia Heights Economic Development Authority this 27 day
ofMareh 2007.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
Attest:
Presidellt-Gmy L. Peterson
Executive Director- Walter R. Fehst
Realife. Inc. Cooperative Presentation
Schumacher stated back in 2004, the EDA approved Schafer Richardson's master site
plan for the Industrial Park, which included senior cooperative units. Schafer
Richardson has partnered with Realife, Inc. of Apple Valley and plans to build 51 units
of senior cooperative housing on the former Buckles propeJty in Phase 1. The proposal
remains consistent with the original master site plan. Before they come back to the City
with a formal proposal, they seek concept support from the EDA so they can move
forward with the first step of marketing the project. They would like to begin marketing
of the project to the public to obtain the 60% of presales needed for financial approval,
which is similar to the other projects they have done. They have some of the examples
of the projects they have done, some elevation examples for the building also. He then
asked Dave Hansen to address the board.
Dave Hansen, Realife, Inc. stated he is the owner of Realife. His father started it in the
late 70's. All they do is cooperative housing. The people that live there own stock and
are the officers of the cooperative. Cooperative communities offer an alternative form
of home ownership to residents. Instead of buying and assuming the moJtgage on the
house or condo unit a resident has purchased, cooperatives hold one mortgage on the
entire property and residents purchase a share in the not-far-profit cooperative
Economic Development Authority Meeting Minutes
March 27, 2007
Page 40[5
cotporation. Monthly payments contribute to the payment ofthe morlgage on the
properly and cover the costs of maintaining the building and grounds. When members
sell, they receive a limited amount of equity based upon the number of years they have
lived in their home. Residents experience maintenance free living, and amenities such
as community and guest rooms, exercise rooms and a heated, indoor pool. They use
HUD, FHA 213 program, which gives them a 40 year, fixed rate loan. If they can get to
the 60% presale, they will give him a low interest rate.
Nawrocki asked for some addresses of the units they have built. Schumacher gave him
some of the addresses. Hansen stated the Phalen and Osseo complexes would be the
closest design to what they would like to build in Columbia Heights. Schumacher stated
each unit would have their own washer and dryer.
Williams asked if they could sub lease, will the school district get the T1F money, what
will be the unit charge and is the building taxed or is each unit. Hansen stated it could
be done and that in 20 years it has only happened two times and that each unit will get
its own statement, but it is the building that is taxed. The cost of each unit would be
about a dollar per square foot, a share would be somewhere around $50 or $60,000.
Streetar stated the school district would still get the T1F funds.
Schumacher stated there is no formal approval for this, they are just looking for the
consensus of the board so that they can go out and starl marketing the units.
Peterson asked if staff has seen any of the units they have built. Streetar stated he
saw the one at Phalen and Fehst stated he has been in the one on York Avenue, which
was very nice.
Peterson stated he would give this approval and that he would like to go through one or
two of the units. Diehm stated the concept was great; this type of structure is
something a lot of residents would be interested in. Kelzenberg, Jindra, Nawrocki and
Williams agreed. Peterson then gave Hansen the formal consensus of the board to starl
marketing the units.
ADMINISTRATIVE REPORTS
Activity Center
Parlenheimer stated they have been invited by the School Board to listen to the
architects plan.
Sarna's Classic Grill
Parlenheimer stated it is now open and the parking lot is always full.
. Diehm stated it was an interesting arlicle about the Sarna restaurant, but it was a
shame they focusing on the smoke. Streetar stated that might change as of today, the
house passed a no smoking ban on all public buildings throughout the state, which if it's
passed by the Senate, would go into effect August 1st of this year.
Economic Development Authority Meeting Minutes
March 27, 2007
Page 5 of5
Williams stated every time he goes by Sarna's he can visualize what was there before
and what is there now, it is giving our City some good publicity and that Streetar,
Schumacher and staff should take some credit as they have worked hard on this project
for years.
Nawrocki stated for the record that he felt the building looks nice, but objected to the
amount they paid for the property.
Park View
Partenheimer stated the demolition is complete in phase III.
3t/J & Stinson
Partenheimer stated the demolition of the building is complete and almost all of the
removal is done at this time.
Schumacher stated we are having our pre-construction meeting next week so you will
see some construction this summer.
Williams stated he would like to see staff look at tearing out the road and moving it.
Streetar stated Kevin Hansen has plans to do this.
Peterson stated we should set up a groundbreaking ceremony for the development.
Streetar stated staff could make the arrangements.
Other Business
Nawrocki stated he is still waiting for a copy of the extension of the T1F district bill.
Streetar distributed the document to everyone on the board at that time.
ADJOURNMENT
President, Peterson, adjourned the meeting at 7:52 p.m.
Respectfully submitted,
V-/ fi~-
Cheryl f3akken
Community Development Secretary
H :\E DAm in utes2007\3-27 -2007