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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