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HomeMy WebLinkAboutEDA AGN 08-28-07 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY August 28, 2007 7:00 PM City Hall, Conference Room 1 1. Call to Order/Roll Call Gary L. Peterson, President Patricia Jindra, Vice President Bruce Kelzenberg, SecretarylTreasurer Tammera Diehm 2. Pledge of Allegiance Marlaine Szurek Bruce Nawrocki Bobby Williams CONSENT AGENDA 3. Approve Minutes of July 24, 2007 Approve financial report and payment of bills for July, Res. 2007-16. Motion: Move to Approve the minutes and approving the Financial Report and payment of bills for the month of July, 20070n Resolution 2007-16. BUSINESS ITEMS 4. Adopt Resolution 2007-17, Third Amendment to Contract for Private Redevelopment Motion: Move to Adopt Resolution 2007-17, a Resolution Approving a Third Amendment to the Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC, and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. 5. Adopt Resolution 2007-18, Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Note, Series 2007 A MOTION: Move to Adopt Resolution 2007-18, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its taxable tax increment note, series 2007 A; and furthermore to authorize the President and Executive Director to enter into an agreement for the same. 6. Anoka County Housing and Redevelopment Authority Economic Development Activities. 7. Housing Maintenance Plan Motion: Move to Approve the Housing Maintenance Plan subject to any changes or modifications by Commissioners. 8. Other Business The next regular EDA meeting will be Tuesday, September 25, 2007 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES July 24, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 8:00 p.m. Present: Gary L. Peterson, Patricia Jindra, Bobby Williams and Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of March 2ih and May 14, 2007 meetings and the Financial Report and Payment of Bills for the months of March, April, May and June on Resolution 2007-11. Motion by Williams, second by Nawrocki, to approve the consent agenda. All ayes. Motion Carried. EDA RESOlUTIDN 2007-11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH. APRil. MAY AND JUNE 2007 AND PAYMENT OF BillS FOR THE MONTHS OF MARCH. APRil. MAY and JUNE 2007. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is 10 be applied, the EOA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the months of March, April, May, and June 2007 and the list of bills for the months of March, April, May and June 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT REBOl VED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the fist of biffs as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and allachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 24th day of July 2007. BUSINESS ITEMS Resolution 2007-12 Approvinq the Amended and Restated Contract Peterson stated two of the items on the agenda have already gone to the City Council last night for approval. Schumacher stated there are three issues associated with the Industrial Park tonight: 1) approving the amended development agreement; 2) TIF revenue bond; and 3) T1F revenue note. There are 134 units constructed in Phase 1 & 2, we are completed with Economic Development Authority Meeting Minutes July 24, 2007 Page 2 of 13 the clean up of the Industrial Park with a total of 143,000 cubic yards of contaminated soil that has been removed, along with all the buildings on the 30 acre site, used $4.5 million of grants from the State, Met Council and Anoka County to help do that and cleaned up a small lot on the north end of the project. Phase 1 will be finished this fall with the addition of a 50 unit senior coop. Things are going well with Realife as they have received 25 commitments. They need 30 before it is a go. We have over $300,000 in tax base built over there versus the 47,000 we had originally. The three issues: 1) addresses issuance of the revenue bonds and technical details regarding how Tax Increment is pledged to all obligations; 2) updates description of the various phases of development and revises the construction schedule; and 3) provides for an EDA interfund tax increment loan to repay for $75, 000 in environmental cost encountered in construction of the parkway. In the last 300 feet of the parkway we ran into contamination, which there was no grant money available for, so we had to take that contamination out and split the cost with Schafer Richardson, with $75,000 from the City and $75,000 from Schafer Richardson. We have approximately $156,000 left over in our grant, so it looks like we will be able to cover our cost with those funds. Steve Bubul drafted the contract and is here to answer any of your questions. Williams asked how many trucks would it take to remove the 143,000 cubic yards of contaminated dirt removed. Streetar stated it would be 7,944 trucks or 83 miles of trucks and even though, we hauled out 143,000 cubic yards of contaminated dirt, with the new Eminent Domain laws it wouldn't even come close to be considered. Schumacher stated the only hazardous material was from the foundry so we had to ship that to Michigan, which was very expensive. Williams stated we should let Szurek and Jindra know that we will come back and amend this again, as we put this into our original agreement. Fehst asked how we know if these are legitimate costs. Schumacher stated Mark Ruff at Ehlers and the Pro Source let us know what materials are on the site. They weigh each truck and test the soil as it is being moved. Nawrocki stated for the record, he isn't satisfied that the costs are justified, as it amounts to adding $1.5 million more to the T1F money. Motion by Diehm, second by Williams, to Adopt Resolution 2007-12, a Resolution Approving an Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki- nay, Jindra- aye, Kelzenberg- aye, Diehm- aye, Peterson- aye, Williams- aye, Szurek- aye. Motion Carried. Williams stated he would encourage Nawrocki to see Mark Ruff, give him his files and have him look at them, so maybe this will satisfy his questions. Peterson stated it has Economic Development Authority Meeting Minutes July 24, 2007 Page 3 of 13 been offered before. Nawrocki said "I beg your pardon", I have asked questions relative on the TIF deal and I don't get answers. Fehst stated it has been offered to you to go through the files and the actual bills by Streetar on many occasions. Nawrocki stated Streetar hasn't made that offer. RESOLUTION NO. 2007-12 RESOLUTION APPROVING AN AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BElWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND HUSET PARK DEVELOPMENT CORPORATION BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic DevelopmentAuthority("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections, 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority, the City of Columbia Heights ("City") and Huset Park Development Corporation (the "Redeveloper") entered into a into a Contract for Private Redevelopment dated as of October 25, 2004 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located east of University Avenue and south and west of Huset Park. 1.03. The parties have determined a need to modify the Contract in certain respects, and have caused to be prepared an Amended and Restated Contract for Private Redevelopment (the "Amended Contract"). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authoritv Aooroval: Further Proceedinas. 2.01. The Amended Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Amended Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 241h of July ,2007. Resolution 2007-13, Authorizina Issuance of Tax Increment Revenue Bonds Steve Bubul, from Kennedy & Graven stated item number five is the resolution that awards the sale of Tax Increment Revenue Bonds, which are sold to third parties and investors for approximately $3.2 million, although we think once the bonds are priced they would go for $2. 8 million, net about $2.5 million that will actually go to Huset Park to be reimbursed for various costs. These are revenue bonds, secured solely by the tax increment that comes from the whole TIF district. These are being marketed based on the expectation on the increment from all the buildings already in the ground or under construction. We have a debt service reserve fund that is also there as a layer of protection. Also the expectation is actually more increment that is needed to pay debt service another extra 25 percent. This would cover if people don't pay their taxes or market values go down. These are all risks the people buying the bonds take, not the EDA or City. Nawrocki asked if they had both resolutions last night. Bubul stated what went before the City Council was the approval of the $3.3 million Revenue Bonds. Economic Development Authority Meeting Minutes July 24, 2007 Page 4 of 13 Nawrocki stated the next item is actually increasing the maximum from the 8 to the 9 Y, percent and wondered why that wasn't on the agenda last night. Bubul stated it was discussed. The pay as you go was built into the contract at an amount of approximately 8 percent with a provision for a cost increase, which was discussed. The formal action of the council was just to approve the revenue bonds, as that is something that is required under your EDA enabling resolution. Streetar stated if we would have known what each cost would be it would have been built in that way, but we didn't know what we would get into once we started digging. Fehst asked if everyone remembered this was in the agreement. Everyone said yes. Nawrocki stated he has the original agreement before him and wants someone to tell him where it is stated in it. Fehst stated again, he would suggest that he call Schumacher or Streetar tomorrow. Nawrocki stated it was public business and it should be handled at a public meeting. Fehst said if you read the agreement, like you say you do, and maybe didn't understand it, you could ask that question, but it was in the agreement, we are not lying to you. Streetar stated it is important to point out that in the agreement it calls for when there is contamination that we make at least two efforts to apply for grants to pay for those costs, rather than using T1F. We have been very fortunate that Schumacher and ProSource have done some wonderful grant writing and collecting $4.5 million in grants. Motion by Kelzenberg, second by Diehm, to Adopt Resolution 2007-13, a Resolution Authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge of revenues, and findings, covenants, and directions relating to the issuance of such obligations; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Nawrocki stated for the record, he hears a lot of references made to things that were allegedly said or stated, he goes by what is sent to him. This is a meeting where it is a matter of record and so far it isn't a matter of record. Fehst stated for the record, the paperwork is in here, we can go through those agreements, you can ask questions, come in to talk to Streetar, talk to Bubul, it is what we say it is, it is a matter of record. Williams stated you would have to be a god to know what it would cost ahead of time, it would be impossible. Nawrocki said he recognized that, but you remember when this subject first came up, I said these estimates are probably going to be low and there are going to be increases. I didn't say that I agree to those increases, as they are trying to get more money, we're paying half again as much for that building as they actually paid for it. Economic Development Authority Meeting Minutes July 24, 2007 Page 5 of 13 RESOLUTION NO. 2007-13 RESOLUTION AUTHORIZING THE ISSUANCE OF TAX tNCREMENT REVENUE BONDS (HUSET PARK AREA REDEVELOPMENT PROJECT), SERIES 2007, AND PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING TO THE ISSUANCE OF SUCH OBLIGATIONS BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, Minnesota (the "Authority"), as follows: SECTION 1. BACKGROUND 1.01. The Columbia Heights Economic Development Authority (the "Authority") and the City of Columbia Heights, Minnesota (the "City") previously established the Husel Park Area Tax Increment Financing District (the "TIF District") pursuant to authority granted by Minnesota Statutes, Sections 469.174-469.1799, as amended (the "Tax Increment Act"), within the Downtown CBO Redevelopment Project (the "Redevelopment Project"), and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered into a Contract for Private Redevelopment, dated as of October 25, 2004, between the Authority, the City and the Redeveloper, as amended by an Amended and Restated Contract for Private Redevelopment thereto dated August 1, 2007 (the "Contract"). 1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized to issue and sell its bonds for the purpose of financing or refinancing public redevelopment costs of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. SECTION 2. ISSUANCE OF BONDS 2.01. In order to finance certain public redevelopment costs of the Redevelopment Project, the Board hereby authorizes the issuance of tax increment revenue bonds to be designated as the "Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project) Series 2007 (the "Bonds"), in a principal amount not to exceed $3,200,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Executive Director of the Authority (the "Executive Director"), provided that the yield on the Bonds (for arbitrage purposes) shall not exceed 5.75%. The Bonds may be designated such other name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or more series as the Executive Director may determine, and shall be assigned a separate series designation determined by the Executive Director for each series issued by the Authority. The Bonds are authorized to be issued as obligations the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the terms and conditions deemed reasonable by the Executive Director The Board hereby authorizes the sale of the Bonds to Piper, Jaffrey, & Co. (the "Underwriter") upon the offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement"). 2.02. There have been presented to the Board forms of the following documents: (i) a Paying Agent Agreement (the "Paying Agent Agreement"), between the Authority and a paying agent to be designated by the Authority (the "Paying Agent"); and (ii) a Bond Purchase Agreement. The Paying Agent Agreement and the Bond Purchase Agreement are hereby approved in substantially the forms on file with the Authority on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Executive Director of the Authority 2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered, and issued in such denominations, shall be subject to mandatory and optional redemptions and prepayment prior to maturity, shall be executed, sealed, and authenticated in such manner, shall be in such form, and shall have such other details and provisions as are prescribed in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes that are approved by the Executive Director. Without limiting the generality of the foregoing, the Executive Director is authorized to approve the original aggregate principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the Executive Director to be in the best interests of the Authority. The issuance and delivery of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in accordance with the authority granted by this resolution. The proceeds derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Executive Director. 2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall be payable solely from Available Tax Increment (as defined in the Paying Agent Agreement) that is expressly pledged to the payment of the Bonds pursuant to the terms of the Paying Agent Agreement. 2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase Agreement (the "Authority Documents"), and the performance of all Economic Development Authority Meeting Minutes July 24, 2007 Page 6 of 13 covenants and agreements of the Authority contained in the Authority Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the Authorityenforceable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act, and this Resolution. 2.06. Under the provisions of the Tax Increment Act, and as provided in the Paying Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against any funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any exercise by the Authority of its taxing powers (other than as contemplated by the pledge of tax increment revenues under the terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the Authority other than the property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral obligation of the Authority, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation of indebtedness. SECTION 3. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES 3.01. The Preliminary Official Statement and the Official Statement with respect to the Bonds is hereby ratified and approved. The distribution of the Preliminary Official Statement and the Official Statement prepared in conjunction with the offer and sale of the Bonds is hereby ratified and approved. In order to provide for continuing disclosure with respect to the Bonds, to the extent deemed necessary, required, or appropriate by the Executive Director, the Executive Director may execute a certificate providing for continuing disclosure with respect to the Bonds. 3.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on the date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the Official Statement (or other form of disclosure document) does not, as of the date of closing, and did not, as the time of sale of the Bonds, contain any untrue statement of a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Unless litigation shall have been commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of the Bonds, or the organization of the Authority, or incumbency of its officers, the Executive Director shall also execute and deliver a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven, Chartered, as to the validity and enforceability of the Bonds and the tax~exempt status of interest on the Bonds. 3.03. The Executive Director and other agents, officers, and employees of the Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and certifications as to facts as shown by the books and records of the Authority, and the right and authority of the Authority to issue the Bonds, and all such certified copies and certifications shall be deemed representations of fact on the part of the Authority. Such officers, employees, and agents of the Authority are hereby authorized to execute and deliver, on behalf of the Authority, all other certificates, instruments, and other wrillen documents that may be requested by bond counsel, the UndelWriter, the Paying Agent, or other persons or entities in conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver one or more UCC-1 financing statements, a certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a receipt for the proceeds derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the Authority, and an Information Return for Tax-Exempt Governmental Obligations, Form 8038 (Rev. January 2002). SECTION 4. BANK QUALIFICATION 4.01. The Authority hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and represents that the Authority does not reasonably anticipate that the Authority, the City, or any other subordinate entity of the City will issue in calendar year 2007 more than $10,000,000 of bonds or other tax- exempt obligations (excluding "private activity bonds" other than "qualified 501 (c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding obligations, that are not included in the $10,000,000 limitation set forth in Section 265(b)(3)(C)(i) of the Code). SECTION 5. MISCELLANEOUS 5.01. All agreements, covenants, and obligations of the Authority contained in this resolution and in the above-referenced documents shall be deemed to be the agreements, covenants, and obligations of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Authority and enforceable in accordance with theirterms. No agreement, covenant, or obligation contained in this resolution or in the aboveMreferenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the Board, or of any officer, employee, or agent of the Authority in that person's individual capacity. Neither the members of the Board, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. 5.02. Nothing in this resolution or in the above-referenced documents is intended or shall be constructed to confer upon any person (other than as provided in the Paying Agent Agreement, the Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution. 5.03. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall for any reason cease to be an officer, Economic Development Authority Meeting Minutes July 24, 2007 Page 7 of 13 employee, or agent of the Authority after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may be executed by a deputy or assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to sign such document. 5.04. The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code"). The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity, which would cause the Bonds to be deemed to be "arbitrage bonds," within the meaning ofSecUon 148 of the Code. Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes. 5.05. The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the Authority in connection with the transactions contemplated hereby is hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do not require the consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments do not materially adversely affect the interests of the Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such amendments are acceptable in form and substance to the Authority Attorney, bond counselor other counsel retained by the Authority to review such amendments; (e) the Authority has received, if necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character of interest on the Bonds, if the Bonds are then tax-exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director, any instrument authorized by this paragraph to be executed and delivered by the Executive Director may be executed by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to execute and deliver such document. 6.06. Effective Date. This Resolution shall take effect and be in force from and after its approval. Adopted this 24'" day of July, 2007. Resolution 2007-14. Issuance of Tax Increment Revenue Notes. Series 2007A Peterson stated as this item was talked about already, he would call for a motion if there weren't any more questions on this item, Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-14, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same, Upon Vote: Nawrocki -nay, Jindra- aye, Szurek- aye, Williams- aye, Peterson- aye, Kelzenberg- aye, Diehm-aye. Motion Carried. RESOLUTION NO. 2007.14 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2007A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1 Authorization: Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Huset Park Area Tax Increment Financing District (the "TIF District") the Downtown CeD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority and City entered into a Contract for Private Redevelopment with Huset Park Development Corporation dated as of October 25, 2004, as amended by an Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007 (the "Agreement"). Economic Development Authority Meeting Minutes July 24, 2007 Page 8 of 13 Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note, Series 2007Ain the maximum principal amountof$6,650,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Issuance. Sale. and Terms of the Note. The Authority hereby delegates to the Executive Directorthe determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Huset Park Development Corporation ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 15, 2032 and shall bear interest at the rate of 6.0 percent per annum from the date of original issue of the Note. The Note is issued in accordance with Section 3.8 of the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 A Rate Date of Oriqinallssue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Huset Park Development Corporation or registered assigns (the "Owner"), solely from the sources and in the manner hereinafter provided, the principal sum of $6,650,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer, the City of Columbia Heights and Huset Park Development Corporation dated as of October 25, 2004, as amended by the Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on July 24,2007. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Pavments. Principal and interest ("Payments") shall be paid on February 15, 2009 and each February 15 and August 15 thereafter to and including February 15, 2032 ("Payment Dates") in the amounts and payable solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accruing from the date of original issue through and including February 15, 2009 will be compounded semiannually on February 15 and August 15 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," means the Tax Increment derived from the Redevelopment Property during the six-month period preceding each Payment Date that is paid to the Authority by Anoka County in the six months preceding the Payment Date, afterdeducling $16,500 and the fees of the paying agent under the Paying Agent Agreement between the Authority and Bond Trust Services Corporation dated August 1, 2007 (the "Paying Agent Agreement") entered into in connection with the Authority's Tax Increment Revenue Bonds, Series 2007 (Huset Park Area Redevelopment Project) (the "Series 2007 Bonds"). The pledge of Available Tax Increment hereunder is subordinate to (a) the pledge of Available Tax Increment to the Series 2007 Bonds from and to the extent described in the Paying Agent Agreement; and (b) any other outstanding Refinancing Notes to the extent described in the resolution or indenture under which such obligations are issued. Further, until the Parkway Interfund Loan is paid in full or defeased in accordance with its terms, 50% of the of Available Tax Increment remaining on each Payment Date, after payment or provision for payment then due on the Series 2007 Bonds and any other outstanding Refinancing Notes, is pledged to the Parkway Interfund Loan prior to the pledge of Available Tax Increment hereunder. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. Ootional Preoavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole Economic Development Authority Meeting Miuutes July 24, 2007 Page 9 of 13 or in part at any time by the Authority without premium or penalty. If the Authority prepays the Note in part, the prepayment will be applied first to accrued interest and then to the outstanding principal amount oftha Note. Ten days' prior notice of any such prepayment shall be given by firstwcall mail by the Registrar to the registered owner of the Note. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. (b) The Note may be deemed prepaid in whole or in part in accordance with SecUon 3.9 of the Agreement. Upon any such prepayment, the Authority will deliver to the Owner a statement of the amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note after application of the deemed prepayment. Any deemed prepayment under this paragraph will be applied under the same procedures described in paragraph (a) above. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $6,650,000 issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469,001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469,179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority, Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto, 7, Reaistration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a wrillen instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and 1I1ings required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY President-Gary L. Peterson Executive Director-Walter R. Fehst REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Signature of Registration City Chief Financial Officer Registered Owner _ Huset Park Development Corporation Federal Tax 1.0, No, Section 3, Terms Execution and Deliverv, 3,01, Denomination. Payment. The Note shall be issued as a single typewritten note numbered R~1, The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein, Economic Development Authority Meeting Minutes July 24, 2007 Page 10 of 13 3.02. Dates' Interest Pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shall provide forthe registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Imorooer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Charaes. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated Lost Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrarshafl be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and DelivelV The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledae. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment to the extent described in Section 3 of the Note. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. The Authority may issue Refinancing Notes as described in the Agreement on a superior basis to the Note, and may issue additional Initial Notes as described in the Agreement on a parity basis with the Note. Economic Development Authority Meeting Minutes July 24, 2007 Page II ofl3 Section 5. Certification of Proceedinas. 5.01. Certification of Proceedinos. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this 24'" day of July, 2007. Resolution 2007-15, Providinq for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liauor Stores Proiect), Series 2007 A No.1 Bill Elrite, Finance Director stated this is almost the final stage in the Liquor Store construction project where the EDA is approving a resolution for the sale of bonds. Back on March 27th he came to the EDA with a resolution and the intent to bond. He passed out a sheet giving the updated, projected costs on the project. Some of the costs have gone up, such as the soft costs, legal fees, testing fees and construction costs along with demolition, furniture, and fixtures up approximately $5,000. The footnote on that page is an item he brought up some time ago and relates a little more to the City Council than the EDA, but he is recommending some of the overages and contingencies if needed, be funded internally on a short term internal loan, rather than adding them to the bonding expense and dedicate a large portion of our profits for the first two years to operation. Szurek stated she did not understand the repayment was called a lease payment, and asked is it the amount of what the lease would have been or is it the amount the liquor store has to pay back to the EDA. Ruff stated the lease payment is equal to the debt service. The structure is that the EDA owns the building and leases it to the City. Szurek asked if the amount of $380, 000/ year, is per store. Ruff stated that is for both stores and the exact amount would be determined at the special meeting to be held on Monday, August 27 of the EDA and at the City Council meetings. Nawrocki asked Ruff to tell him about the Delphin index. Ruff stated the Delphin is another index, which is the average that bonds are selling for around the country. They are selling from. 15 to .4 percent above general obligation bonds. It depends on what the market is at that time. What you stated last night was an average of. 3 percent, which falls right into the range that I have described. Nawrocki stated the information they got last night was that the bond buyers for this kind of bond would probably not look at the A-1 rating we would have with general obligation. Ruff stated that is part of the reason the interest rate is higher, because of that, it doesn't add on to the differential. Nawrocki stated he still wasn't satisfied that he gave him accurate information on the Delphin index, going with the.3 percent; $5 million over 20 years, it is $150,000 additional cost. The manager last night said, in 20 years $150,000 won't be anything, it is to me. Fehst stated he did not say that. He tried to explain to him before what present value means. Economic Development Authority Meeting Minutes July 24, 2007 Page 12 of 13 Diehm asked Nawrocki what the inaccurate information he received was. Nawrocki stated he wasn't given the accurate information, he asked for information on the current sale, he was only given estimates, he asked for information on recent sales on a given day. Diehm stated she is just trying to understand what inaccurate information his was given. Nawrocki again stated he wasn't given the accurate information. Williams stated we are actually saving our credit for our City, we are saving our bonds, and we can do more for our City. Nawrocki stated that is the main reason you are going this way, because you didn't want the good citizens of the community to have access to be able to use our charter as they would on a general obligation bond. Diehm stated she didn't think he could tell us to vote that way. Nawrocki stated he has talked with these folks, and in his mind, the reason for going this route is to escape the ability of the taxpayers to petition to have this as a referendum on the ballot. Fehst stated as one of those taxpayers, I wouldn't want the full faith in credit of those bonds pledged against my taxes for those buildings, and it would be astoundingly out of place with what we should be doing as fiscal judiciary officials. Williams stated other cities do this all the time. Motion by Williams, second by Szurek, to wave the reading of Resolution 2007-15, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Williams, second by Szurek, to Adopt Resolution 2007-15, a Resolution providing for the sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki-Nay, Jindra- aye, Kelzenberg-aye, Williams- aye, Peterson- aye, Diehm- aye, Szurek-aye. Resolution No, 2007-15 Resolution Providing for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A WHEREAS, the City Council of the City of Columbia Heights, Minnesota (the "City"), has heretofore determined that it is necessary and expedient for the Columbia Heights Economic Development Authority (the "EDA'") to issue its $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007 A (the "Bonds"), to finance the construction of a two new municipal liquor stores; and WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent financial advisor for the Bonds; NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Columbia Heights, Minnesota, as follows: 1. Authorization; Findings. The EDA hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The EDA Board shall meet at 6:30 p.m. and the City Council shall meet at 7:00 p.m. on August 27, 2007, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. Economic Development Authority Meeting Minutes July 24,2007 Page 13 of 13 This resolution passed this 24th day of July, 2007. Peterson stated, there will be a special meeting of the EDA at 6:30pm on August 27, 2007, prior to City Council to approve the Liquor Store proposals and awarding the sale of the bonds. ADJOURNMENT President, Peterson, adjourned the meeting at 8:43 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2007\7 -24-2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of August 28, 2007 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO:3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Cher Bakken BY: DATE: Auqust 17, 2007 BACKGROUND: The bound Financial Report for the month of July 2007 draft Resolution 2007-16 is attached for review. The enclosed Financial Report lists the Summary (white), the Check History (Green), the Expenditure Guideline with Detail (blue) and Revenue Guideline with detail (yellow) for each fund. The reports cover the activity in the calendar (fiscal) year from January 1 through July 31, 2007. RECOMMENDATION: Staff will be available to answer specific questions. If the report is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to approve Resolution 2007-16, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the month of July 2007. EDA ACTION: H:\EDAConsent2007\July Fin Rep 2007 EDA RESOLUTION 2007-16 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JULY 2007 AND PAYMENT OF BILLS FOR THE MONTH OF JULY 2007. WHEREAS, the Columbia Heights Economic Deveiopment Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financiai statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of July 2007 and the list of bills for the month of July 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this _ day of ,2007. MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L Peterson Attest by: Cheryl Bakken, Assistant Secretary H:\Resolulions2007\EDA2007-16 fin July 2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: August 28, 2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY MANAGER'S NO: 4 Community Development APPROVAL ITEM: Adopt Resolution 2007-17, BY: Randy Schumacher BY: Approving the Third Amendment to DATE: August 23,2007 Contract for Private Redevelopment BACKGROUND: The Contract for Private Development initially dated September 23, 2003, was amended by a first amendment dated April 26, 2005 and a second amendment dated November 22, 2005, providing for the redevelopment of what is now known as the Grand Central Project located between 4ih and 49th Avenue in the City of Columbia Heights. The first condo building was constructed, but then the residential real estate market softened and sales slowed significantly. The current partner, Mr. Kloeber, is continuing to market the development. Due to the market conditions and the death of his partner, the developer now needs more time to complete the construction required by the Contract for Private Development, hence the third amendment, which provides two additional years, until December 31,2010, to complete all the phases of the housing project and 2009 for the completion of commercial improvements as described in the Contract for Private Development, as amended. RECOMMENDATION: Staff recommends Adoption of Resolution 2007-17, Approving a Third Amendment to Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC. RECOMMENDED MOTION: Move to Adopt Resolution 2007-17, a Resolution Approving a Third Amendment to Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC, and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:\Consent20Q7\EDA Res2007~17 Third Amendment to Grand Central Contract COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-17 RESOLUTION APPROVING A TI-IlRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND GRAND CENTRAL PROPERTIES, LLC BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Rccitals. 1.01. The Authority and New Heights Devclopment, LLC (the "Redeveloper") entered into a Contract for Private Redcvelopment dated September 22, 2003, as amended by First Amendment thereto dated April 26, 2005 and a Second Amendment thercto dated November 22, 2005 (the "Contract"), setting forth the tcrms and conditions of rcdevelopment of celiain property within the Redevelopment Project, generally located east of Central Avcnue, between 4ih and 49'h Avenues. 1.02. New Heights Development, LLC has changed its legal name to Grand Central Properties, LLC but in all respccts remains the Redeveloper under the Contract. 1.03. The parties have determined a need to amend the Contract further, to adjust the schedule for redevelopment of the subject property due to circumstances beyond the control of the Redeveloper. 1.04. The Board has reviewed a Third Amendment to the Contract and finds that the approval and execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authoritv Approval; Further Proceedings. 2.01. The Third Amendmcnt to the Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that exccution of the documents by such o11icials shall be conelusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Third Amendment to the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of C01l1l11issioners of thc Columbia Heights Economic Development Authority this day of August, 2007. President -Gmy 1. Peterson ATTEST: Secretmy/CAP-Cheryl Bald(en 315310v3 SJB CL205-20 THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, madc on or as of the 28 day of August, 2007, by and bctween COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as thc "Act"), and GRAND CENTRAL PROPERTIES, LLC, a Minnesota limited liability company (the "Redeveloper"). WHEREAS, the Authority and New Heights Development, LLC entered into that certain Contract for Private Redevelopment datcd as of September 22, 2003, as amended by a First Amendment thereto datcd April 26, 2005 and by a Second Amcndment thereto datcd November 22, 2005 (the "Contract") providing for the redevelopment of certain property described as the Redevelopment Property in the Contract and described in Schedule A attached hereto; and WHEREAS, New Heights Development, LLC has changed its legal name to Grand Central Properties, LLC but in all rcspects remains the Redeveloper under thc Contract; and WHEREAS, construction of the Housing Improvements and Commercial Improvements has been delayed for various reasons, and the parties have determined a necd to amend the Contract in order to adjust the deadlines for completion and related matters. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: I. Section 1.1 of the Contract is amended to revise certain definitions as follows: "Available Tax Increment" means 90 percent of the Tax Increment attributable to the Redevclopment Property (or relevant portion thereof; as the context requires), received by the Authority in the six-month period before any schedule payment date on any Note, or received prior to the first payment date on any Note to the extent so provided in the resolution approving the Note. "Housing Improvements" means the construction by the Redeveloper on the I-lousing Property of the following owner-occupied housing units: at least 67 condominium units and 10 town homes ("Phase I"), at least 70 additional condominium units ("Phase II"); and at least 70 additional condominium units and at least II additional town homes ("Phase III"). 2. Notwithstanding anything to the contrary in Section 3.4 of the Contract, the Note shall be issued in accordance with the resolution attachcd as Schedule B to this Third Amendment, which supersedes in all respects Schedule B to the original Contract. 3. The parties agree and understand that, as of the date of this Third Amendment, the Negotiation Period regarding the Commercial Period under Section 3.7 has expired, and Section 3.7 has no further force or effect. 315304v3 SJB CL205-20 4. The first paragraph of Section 4.3 of the Contract is revised to read as follows: As of the date of this Third Amendment, the partics agree and understand that Phase I of the I-lousing Improvements has been substantially completed. Subject to Unavoidable Delays, the Redeveloper must commence and substantially complete construction of the balance of the Minimum Improvements as follows: Phase II Housing Improvements: Commence by April I, 2009, substantially complete by October I, 20 I O. Phase III Housing Improvements: Commence by July I, 2009, substantially complete by December 31, 2010. Commercial Improvements Commence by December 31, 2007, substantially complete by December 31,2009. All work with respect to the Minimum Improvements to be constructcd or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the Redcveloper and approved by the Authority, and with he Planning Contract. If the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to mect one or more of the abovc-referenced deadlines, the Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which neccssary action(s) must be taken or occur, the lapsc of which time would otherwise constitute a default undcr this Agrcemcnt. 3. In Section 10.6, the notice address for Redcveloper is amended to read as follows: Daivd Kloeber, Jr. Grand Central Properties LLC 3080 Centerville Road Little Canada, MN 55117 315304v3 sm CL205-20 2 IN WITNESS WHEREOF, the Authority has caused this Amendment to be duly executed in its name and behalf and its seal to be hereunto duly a11ixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on 01' as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President-Gary L. Peterson By Its Executive Director-Walter R. Fehst STATE OF MINNESOTA ) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of 2007, by Gary Peterson and Walter Fehst, the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic and corporate, on behalf of the Authority. Notary Public 315304v3 sm CL205-20 3 GRAND CENTRAL PROPERTIES, LLC By Its STATEOFMINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2007 by , the of Grand Central Properties, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public 315304v3 sm CL205-20 4 SCHEDULE A TO THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT Housing Property [Inseli current plattcd description] Commercial Property [Insert current platted description] 315304v3 sm CI ,205-20 A-I SCHEDULE B TO THIRD AMENDMENT TO CONTRACT FOR l'RIV A TE REDEVELOPMENT COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND l'ROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2007A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Eeonomie Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Seetion 1. Authorization: Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Central Avenue Tax Inerement Finaneing Distriet (the "TIF Distriet") the Downtown CBD Redevelopment Projeet (the "Projeet"), and have adopted a tax inerement financing plan for the purpose of financing eertain improvements within the Projeet. In eonneetion with the TIP Distriet, the Authority entered into a Contraet for Private Redevelopment between the Authority and New Heights Development, LLC (now known as Grand Central Properties, LLC) dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a seeond amendment thereto dated as of November 22, 2005, and a Third Amendment thereto dated as of , 2007 (the "Agreement"). Pursuant to Minnesota Statutes, Seetion 469. I 78, the Authority is authorized to issue and sell its bonds for the purpose of finaneing a portion of the pub lie development eosts of the Projeet. Sueh bonds are payable from all or any portion of revenues derived from the TIF Distriet and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Inerement Revenue Note in the maximum prineipal amount of $700,000 (the "Note") for the purpose of financing eertain pub lie redevelopment eosts of the Project. 1.03. Issuance. Sale. and Terms of the Note. The Authority hereby delegates to the Exeeutive Director the determination of the date on whieh the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Properties, LLC ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 1, 2013, shall bear interest at the rate of 6.0 % per annum from the date of original issue of the Note, and shall be in the principal amount of the Public Redevelopment Costs submitted and approved in accordance with the Agreement but in no event greater than $700,000. The Note is issued in consideration of payment by Owner of the Publie 315304v3 sm C1.205-20 A-2 Redevelopment Costs 111 at least the principal amount of the Note, 111 accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-I $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Rate Date of Original Issue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Grand Central Properties, LLC or registered assigns (the "Owner"), the principal sum of $700,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued ii'om the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of November 22, 2005, and a Third Amendment thereto dated as of , 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on August , 2007. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. I. Pavments. Principal and interest ("Payments") shall be paid on the first February I or August I after substantial completion of all the Housing Improvements and Commercial Improvements in accordance with the Agreement, and on each February I and August 1 thereafter to and including February 1, 2014 ("Payment Dates"), in the amounts and ii'om the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments arc payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are 315304v3 sm CLZ05.Z0 A-3 payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Simple interest shall accrue from the date of original issue of this Note and shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely fi'om and in the amount of the "Available Tax Increment," which means (a) on the first Payment Date, 95 percent of the Tax Increment attributable to the Housing Property as defined in the Agreement that has been paid to the Authority by Anoka County prior to that Payment Date, and (b) on each Payment Date aller the first Payment Date, 95 percent of the Tax Increment attributable to the Housing Property as defined in the Agreement that has been paid to the Authority by Anoka County in the six months preceding the Payment Date. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1,2014. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. Optional Prepayment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amourlt will be deemed to constitute, and will be applied to, prepayment of the principal amount ofthis Note. Such deemed prepayment is effective as of the Final Closing Date as defined in Section 3.4(e) of the Agreement, and will bc recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $ issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely 315304v3 SJB CL205.20 A-4 from the revcnues pledged to the payment hereof under thc Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto cxcept fl'om and to the extent of the revenues pledged hereto, and neither the fhll faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hcreto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth thcrein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Dircctor, by the Owner hereof in person or by such Owner's attorney duly authorizcd in writing, upon surrcnder of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by thc Authority with respect to such transfer or cxchange, there will be issued in thc name of the transferee a new Notc of thc same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless thc Authority has been provided with an opinion of counscl or a ccrtificatc of the transferor, in a form satisfactory to the Authority, that such transfer is exempt fl'om registration and prospectus delivery requirements of fedcral and applicable state sccurities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minncsota to be done, to exist, to happen, and to be performed in order to makc this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above, COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President REGISTRATION PROVISIONS 315304v3 sm CL205-20 A-S The ownership of the unpaid balance of the within Note is registered in the bond register ofthe City Finance Director, in the namc of the person last listed below. Date of of Registration Signature Rcgistered Owner _ City Finance Director Grand Central Properties, LLC Federal Tax I.D. No. Section 3. Tcrms, Exccution and Delivery. 3.01. Denomination, Payment. Thc Note shall be issued as a single typewritten note numbcred R-1. The Note shall be issuable only in fully registercd form. Principal of and interest on the Notc shall be payable by check or draft issucd by the Registrar describcd herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the fimctions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of thc Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of thc Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrumcnt of transfer, in form reasonably satisfactory to the Registrar, duly executcd by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as rcquested by the transfcror. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has bcen provided with an opinion of counsel or a ccrtificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close thc books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. Thc Note surrendercd upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. 315304v3 sm CL205-20 A-6 (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. ( e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of; or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability ofthe Authority upon such Note to the extent of the sum or sums so paid. (1) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.0 I. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment under the terms and as defined in the Note. 3 15304v3 SIB CL205-20 A-7 Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Available Tax respects. Additional Bonds. If the Authority issues any bonds or notes secured by Increment, such additional bonds or notes are subordinate to the Note in all Section 5. Certification of Proceedings. 5.01. Certiiication of Proceedings. The ofiicers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certiiied copies of all proceedings and records of the Authority, and such other ai1idavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, eertiiieates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be eiTective upon approval. Adopted this _ day of August, 2007. President Executive Director 315304v3 sm CL205-20 A-8 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY August 28, 2007 7:00 PM City Hall, Conference Room 1 1. Call to Order/Roll Call Gary L. Peterson, President Patricia Jindra, Vice President Bruce Kelzenberg, Secretary/Treasurer Tammera Diehm 2. Pledge of Allegiance Marlaine Szurek Bruce Nawrocki Bobby Williams CONSENT AGENDA 3. Approve Minutes of July 24, 2007 Approve financial report and payment of bills for July, Res, 2007-16, Motion: Move to Approve the minutes and approving the Financial Report and payment of bills for the month of July, 20070n Resolution 2007-16, BUSINESS ITEMS 4. Adopt Resolution 2007-17, Third Amendment to Contract for Private Redevelopment Motion: Move to Adopt Resolution 2007-17, a Resolution Approving a Third Amendment to the Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC, and furthermore, to authorize the President and Executive Director to enter into an agreement for the same, 5. Adopt Resolution 2007-18, Awarding the Sale of, and Providing the Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Note, Series 2007A MOTION: Move to Adopt Resolution 2007-18, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its taxable tax increment note, series 2007A; and furthermore to authorize the President and Executive Director to enter into an agreement for the same, 6. Anoka County Housing and Redevelopment Authority Economic Development Activities. 7. Housing Maintenance Plan Motion: Move to Approve the Housing Maintenance Plan subject to any changes or modifications by Commissioners, 8. Other Business The next regular EDA meeting will be Tuesday, September 25, 2007 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES July 24, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 8:00 p.m. Present: Gary L. Peterson, Patricia Jindra, Bobby Williams and Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of March 2ih and May 14, 2007 meetings and the Financial Report and Payment of Bills for the months of March, April, May and June on Resolution 2007-11. Motion by Williams, second by Nawrocki, to approve the consent agenda. All ayes. Motion Carried. EDA RESOLUTION 2007-11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH, APRIL, MAY AND JUNE 2007 AND PAYMENT OF BILLS FOR THE MONTHS OF MARCH, APRIL, MAY and JUNE 2007. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EOA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and jf correct, to approve them by resolution and enter the resolution in ils records; and WHEREAS, the financial statement for the months of March, April, May, and June 2007 and the list of bllls for the months of March, April, May and June 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the fjnancial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 24th day of July 2007. BUSINESS ITEMS Resolution 2007-12 Approvinq the Amended and Restated Contract Peterson stated two of the items on the agenda have already gone to the City Council last night for approval. Schumacher stated there are three issues associated with the Industrial Park tonight: 1) approving the amended development agreement; 2) T1F revenue bond; and 3) T1F revenue note. There are 134 units constructed in Phase 1 & 2, we are completed with Economic Development Authority Meeting Minutes July 24, 2007 Page 2 of 13 the clean up of the Industrial Park with a total of 143,000 cubic yards of contaminated soil that has been removed, along with all the buildings on the 30 acre site, used $4.5 million of grants from the State, Met Council and Anoka County to help do that and cleaned up a small lot on the north end of the project. Phase 1 will be finished this fall with the addition of a 50 unit senior coop. Things are going well with Realife as they have received 25 commitments. They need 30 before it is a go. We have over $300,000 in tax base built over there versus the 47,000 we had originally. The three issues: 1) addresses issuance of the revenue bonds and technical details regarding how Tax Increment is pledged to all obligations; 2) updates description ofthe various phases of development and revises the construction schedule; and 3) provides for an EDA interfund tax increment loan to repay for $75,000 in environmental cost encountered in construction of the parkway. In the last 300 feet of the parkway we ran into contamination, which there was no grant money available for, so we had to take that contamination out and split the cost with Schafer Richardson, with $75,000 from the City and $75,000 from Schafer Richardson. We have approximately $156,000 left over in our grant, so it looks like we will be able to cover our cost with those funds. Steve Bubul drafted the contract and is here to answer any of your questions. Williams asked how many trucks would it take to remove the 143,000 cubic yards of contaminated dirt removed. Streetar stated it would be 7,944 trucks or 83 miles of trucks and even though, we hauled out 143,000 cubic yards of contaminated dirt, with the new Eminent Domain laws it wouldn't even come close to be considered. Schumacher stated the only hazardous material was from the foundry so we had to ship that to Michigan, which was very expensive. Williams stated we should let Szurek and Jindra know that we will come back and amend this again, as we put this into our original agreement. Fehst asked how we know if these are legitimate costs. Schumacher stated Mark Ruff at Ehlers and the ProSource let us know what materials are on the site. They weigh each truck and test the soil as it is being moved. Nawrocki stated for the record, he isn't satisfied that the costs are justified, as it amounts to adding $1.5 million more to the T1F money. Motion by Diehm, second by Williams, to Adopt Resolution 2007-12, a Resolution Approving an Amended and Restated Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and Huset Park Development Corporation; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki- nay, Jindra- aye, Kelzenberg- aye, Diehm- aye, Peterson- aye, Williams- aye, Szurek- aye. Motion Carried. Williams stated he would encourage Nawrocki to see Mark Ruff, give him his files and have him look at them, so maybe this will satisfy his questions. Peterson stated it has Economic Development Authority Meeting Minutes July 24, 2007 Page 3 of 13 been offered before. Nawrocki said "I beg your pardon", I have asked questions relative on the TIF deal and I don't get answers. Fehst stated it has been offered to you to go through the files and the actual bills by Streetar on many occasions. Nawrocki stated Streetar hasn't made that offer. RESOLUTION NO. 2007-12 RESOLUTION APPROVING AN AMENDED AND RESTATED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY OF COLUMBIA HEIGHTS AND HUSET PARK DEVELOPMENT CORPORATION BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Aulhority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CaD Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act"). 1.02. The Authority, the City of Columbia Heights ("City") and Huset Park Development Corporation (the "Redeveloper") entered into a into a Contract for Private Redevelopment dated as of October 25, 2004 (the "Contract"), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located east of University Avenue and south and west ofHuset Park. 1.03. The parties have determined a need to modify the Contract in certain respects, and have caused to be prepared an Amended and Restated Contract for Private Redevelopment (the "Amended Contract"). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authoritv Aooroval' Further Proceedinas. 2.01. The Amended Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Amended Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 24th of July ,2007. Resolution 2007-13. Authorizinq Issuance of Tax Increment Revenue Bonds Steve Bubul, from Kennedy & Graven stated item number five is the resolution that awards the sale of Tax Increment Revenue Bonds, which are sold to third parties and investors for approximately $3.2 million, although we think once the bonds are priced they would go for $2.8 million, net about $2.5 million that will actually go to Huset Park to be reimbursed for various costs. These are revenue bonds, secured solely by the tax increment that comes from the whole T1F district. These are being marketed based on the expectation on the increment from all the buildings already in the ground or under construction. We have a debt service reserve fund that is also there as a layer of protection. Also the expectation is actually more increment that is needed to pay debt service another extra 25 percent. This would cover if people don't pay their taxes or market values go down. These are all risks the people buying the bonds take, not the EDA or City. Nawrocki asked if they had both resolutions last night. Bubul stated what went before the City Council was the approval of the $3.3 million Revenue Bonds. Economic Development Authority Meeting Minutes July 24,2007 Page 4 of 13 Nawrocki stated the next item is actually increasing the maximum from the 8 to the 9 Y, percent and wondered why that wasn't on the agenda last night. Bubul stated it was discussed. The pay as you go was built into the contract at an amount of approximately 8 percent with a provision for a cost increase, which was discussed. The formal action of the council was just to approve the revenue bonds, as that is something that is required under your EDA enabling resolution. Streetar stated if we would have known what each cost would be it would have been built in that way, but we didn't know what we would get into once we started digging. Fehst asked if everyone remembered this was in the agreement. Everyone said yes. Nawrocki stated he has the original agreement before him and wants someone to tell him where it is stated in it. Fehst stated again, he would suggest that he call Schumacher or Streetar tomorrow. Nawrocki stated it was public business and it should be handled at a public meeting. Fehst said if you read the agreement, like you say you do, and maybe didn't understand it, you could ask that question, but it was in the agreement, we are not lying to you. Streetar stated it is important to point out that in the agreement it calls for when there is contamination that we make at least two efforts to apply for grants to pay for those costs, rather than using T1F. We have been very fortunate that Schumacher and ProSource have done some wonderful grant writing and collecting $4.5 million in grants. Motion by Kelzenberg, second by Diehm, to Adopt Resolution 2007-13, a Resolution Authorizing the Issuance of Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project), Series 2007, and Providing the form, terms, pledge of revenues, and findings, covenants, and directions relating to the issuance of such obligations; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Nawrocki stated for the record, he hears a lot of references made to things that were allegedly said or stated, he goes by what is sent to him. This is a meeting where it is a matter of record and so far it isn't a matter of record. Fehst stated for the record, the paperwork is in here, we can go through those agreements, you can ask questions, come in to talk to Streetar, talk to Bubul, it is what we say it is, it is a matter of record. Williams stated you would have to be a god to know what it would cost ahead of time, it would be impossible. Nawrocki said he recognized that, but you remember when this subject first came up, I said these estimates are probably going to be low and there are going to be increases. I didn't say that I agree to those increases, as they are trying to get more money, we're paying half again as much for that building as they actually paid for it. Economic Development Authority Meeting Minutes J lily 24, 2007 Page 5 of 13 RESOLUTION NO. 2007-13 RESOLUTION AUTHORIZING THE ISSUANCE OF TAX INCREMENT REVENUE BONDS (HUSEl PARK AREA REDEVELOPMENT PROJECT), SERIES 2007, AND PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES, AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING TO THE ISSUANCE OF SUCH OBLIGATIONS BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority, Minnesota (the "Authority"), as follows: SECTION 1. BACKGROUND 1.01. The Columbia Heights Economic Development Authority (the "Authority") and the City of Columbia Heights, Minnesota (the "City") previously established the Huset Park Area Tax Increment Financing District (the "TIF District") pursuant to authority granted by Minnesota Statutes, Sections 469.174-469.1799, as amended (the "Tax Increment Act"), within the Downtown CBD Redevelopment Project (the "Redevelopment Project"), and adopted a tax increment financing plan for the purpose of financing certain improvements within the TIF District. In order to provide for the redevelopment of the Redevelopment Project and the TIF District, the Authority entered into a Contract for Private Redevelopment, dated as of October 25, 2004, between the Authority, the City and the Redeveloper, as amended by an Amended and Restated Contract for Private Redevelopment thereto dated August 1, 2007 (the "Contract"). 1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized to issue and sell its bonds for the purpose of financing or refinancing public redevelopment costs of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment financing district established within the Redevelopment Project to the payment of the principal of and interest on such obligations. SECTION 2. ISSUANCE OF BONDS 2.01. In order to finance certain public redevelopment costs of the Redevelopment Project, the Board hereby authorizes the issuance of tax increment revenue bonds to be designated as the 'Tax Increment Revenue Bonds (Huset Park Area Redevelopment Project) Series 2007 (the "Bonds"), in a principal amount not to exceed $3,200,000. The Bonds shall be issued on such date and upon the terms and conditions determined by the Executive Director of the Authority (the "Executive Director"), provided that the yield on the Bonds (for arbitrage purposes) shall not exceed 5.75%. The Bonds may be designated such other name or names as determined to be appropriate by the Executive Director. The Bonds shall be issued in one or more series as the Executive Director may determine, and shall be assigned a separate series designation determined by the Executive Director for each series issued by the Authority. The Bonds are authorized to be issued as obligations the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is effective without any additional action of the Board and shall be undertaken by the Executive Director on such date or dates and upon the terms and conditions deemed reasonable by the Executive Director. The Board hereby authorizes the sale of the Bonds to Piper, Jaffrey, & Co. (the "Underwriter") upon the offer of the Underwriter to purchase the Bonds in accordance with the terms of a Bond Purchase Agreement between the Authority and the Underwriter (the "Bond Purchase Agreement"). 2.02. There have been presented to the Board forms of the following documents: (i) a Paying Agent Agreement (the "Paying Agent Agreement"), between the Authority and a paying agent to be designated by the Authority (the "Paying Agent"); and (ii) a Bond Purchase Agreement. The Paying Agent Agreement and the Bond Purchase Agreement are hereby approved in substantially the forms on file with the Authority on the date hereof, subject to such changes not inconsistent with this resolution and applicable law that are approved by the Executive Director of the Authority. 2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated, numbered, and issued in such denominations, shall be subject to mandatory and optional redemptions and prepayment prior to maturity, shall be executed, sealed, and authenticated in such manner, shall be in such form, and shall have such other details and provisions as are prescribed in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such changes not inconsistent with this resolution and applicable law, and subject to such changes that are approved by the Executive Director. Without limiting the generality of the foregoing, the Executive Director is authorized to approve the original aggregate principal amount of each series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate principal amount for all series authorized by this resolution), to establish the terms of redemption, the principal amounts subject to redemption, and the dates of redemption of the Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the Executive Director to be in the best interests of the Authority. The issuance and delivery of the Bonds shall be conclusive evidence that the Executive Director has approved the terms and provisions of the Bonds in accordance with the authority granted bythls resolution. The proceeds derived from the sale of the Bonds, and the earnings derived from the investment of such proceeds, shall be held, transferred, expended, and invested in accordance with determinations of the Executive Director. 2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall be payable solely from Available Tax Increment (as defined in the Paying Agent Agreement) that is expressly pledged to the payment of the Bonds pursuant to the terms of the Paying Agent Agreement. 2.05. It is hereby found, determined and declared that the issuance and sale of the Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the Bond Purchase Agreement (the "Authority Documents"), and the performance of all Economic Development Authority Meeting Minutes July 24, 2007 Page 6 of 13 covenants and agreements of the Authority contained in the Authority Documents, and of all other acts required under the Constitution and laws of the State of Minnesota to make the Bonds the valid and binding special obligations of the Authority enforceable in accordance with their respective terms, are authorized by applicable Minnesota law, including, without limitation, the Tax Increment Act, and this Resolution. 2,06. Under the provisions of the Tax Increment Act, and as provided in the Paying Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or chargeable against any funds other than the revenues pledged to the payment thereof; the Authority shall not be subject to any liability thereon other than from such revenues pledged thereto; no holder of any Bonds shall ever have the right to compel any exercise by the Authority of its taxing powers (other than as contemplated by the pledge of tax increment revenues under the terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest on the Bonds, or to enforce payment thereof against any property of the Authority other than the properly expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Authority other than the revenues expressly pledged thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral obligation of the Authority, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation of indebtedness. SECTION 3. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES 3.01. The Preliminary Official Statement and the Official Statement with respect to the Bonds is hereby ratified and approved. The distribution of the Preliminary Official Statement and the Official Statement prepared in conjunction with the offer and sale of the Bonds is hereby ratified and approved. In order to provide for continuing disclosure with respect to the Bonds, to the extent deemed necessary, required, or appropriate by the Executive Director, the Executive Director may execute a certificate providing for continuing disclosure with respect to the Bonds. 3.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on the date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such officer, the Official Statement (or other form of disclosure document) does not, as of the date of closing, and did not, as the time of sale of the Bonds, contain any untrue statement of a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Unless litigation shall have been commenced and be pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment revenues generated or collected for payment of the Bonds, revenues pledged for payment of the Bonds, or the organization of the Authority, or incumbency of its officers, the Executive Director shall also execute and deliver a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven, Chartered, as to the validity and enforceability of the Bonds and the tax-exempt status of interest on the Bonds. 3.03. The Executive Director and other agents, officers, and employees of the Authority are hereby authorized and directed, individually and collectively, to furnish to the attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all proceedings and certifications as to facts as shown by the books and records of the Authority, and the right and authority of the Authority to issue the Bonds, and all such certified copies and certifications shall be deemed representations of fact on the part of the Authority. Such officers, employees, and agents of the Authority are hereby authorized to execute and deliver, on behalf of the Authority, all other certificates, instruments, and other wrillen documents that may be requested by bond counsel, the Underwriter, the Paying Agent, or other persons or entities in conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds. Without imposing any limitations on the scope of the preceding sentence, such officers and employees are specifically authorized to execute and deliver one or more UCCw1 financing statements, a certificate relating to federal tax matters including matters relating to arbitrage and arbitrage rebate, a receipt for the proceeds derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the Authority, and an Information Return for Tax-Exempt Governmental Obligations, Form 8038 (Rev. January 2002). SECTION 4. BANK QUALIFICATION 4.01. The Authority hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and represents that the Authority does not reasonably anticipate that the Authority, the City, or any other subordinate entity of the City will issue in calendar year 2007 more than $10,000,000 of bonds or other taxw exempt obligations (excluding "private activity bonds" other than "qualified 501 (c)(3) bonds," as such terms are defined in the Code, and excluding certain refunding obligations, that are not included in the $10,000,000 limitation set forth in Section 265(b)(3)(C)(i) ofthe Code). SECTION 5. MISCELLANEOUS 5.01 All agreements, covenants, and obligations of the Authority contained in this resolution and in the above-referenced documents shall be deemed to be the agreements, covenants, and obligations of the Authority to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Authority and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this resolution or in the above-referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the Board, or of any officer, employee, or agent of the Authority in that person's individual capacity. Neither the members of the Board, nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. 5.02. Nothing in this resolution or in the above-referenced documents is intended or shall be constructed to confer upon any person (other than as provided in the Paying Agent Agreement, the Bonds, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provision of this resolution. 5.03. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall for any reason cease to be an officer, Economic Development Authority Meeting Minutes July 24, 2007 Page 7 of 13 employee, or agent of the Authority after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. If for any reason the Executive Director, or any other officers, employees, or agents of the Authority authorized to execute certificates, instruments, or other written documents on behalf of the Authority shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may be executed by a deputy or assistant to such officer, or by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to sign such document. 5.04. The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity which would cause the Bonds to be deemed to be "private activity bonds," within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code"). The Authority shall not take any action or authorize any action to be taken in connection with the application or investment of the proceeds of the Bonds or any related activity, which would cause the Bonds to be deemed to be "arbitrage bonds," within the meaning of Section 148 of the Code. Furthermore, the Authority shall take all such actions as may be required under the Code to ensure that interest on the Bonds is not and does not become includable in gross income for federal income tax purposes. 5.05. The authority to approve, execute, and deliver future amendments to the documents executed and delivered by the Authority in connection with the transactions contemplated hereby is hereby delegated to the Executive Director, subject to the following conditions: (a) such amendments do not require the consent of the holders of the Bonds or, if required, such consent has been obtained; (b) such amendments do not materially adversely affect the interests of the Authority as the issuer of the Bonds; (c) such amendments do not contravene or violate any policy of the Authority; (d) such amendments are acceptable in form and substance to the Authority Attorney, bond counselor other counsel retained by the Authority to review such amendments; (e) the Authority has received, if necessary, an opinion of bond counsel to the effect that the amendments will not adversely affect the tax-exempt character of interest on the Bonds, if the Bonds are then tax-exempt obligations; and (f) such amendments do not materially prejudice the interests of the owners of the Bonds. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this resolution. The execution of any instrument by the Executive Director shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director, any instrument authorized by this paragraph to be executed and delivered by the Executive Director may be executed by such other officer of the Authority as in the opinion of the Authority Attorney is authorized to execute and deliver such document. 6.06. Effective Date. This Resolution shall take effect and be in force from and after its approval. Adopted this 24'" day of July, 2007. Resolution 2007-14, Issuance of Tax Increment Revenue Notes. Series 2007 A Peterson stated as this item was talked about already, he would call for a motion if there weren't any more questions on this item. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2007-14, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its $6,650,000 Taxable Tax Increment Revenue Notes, Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki -nay, Jindra- aye, Szurek- aye, Williams- aye, Peterson- aye, Kelzenberg- aye, Diehm-aye. Motion Carried. RESOLUTION NO. 2007-14 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTES, SERIES 2007A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Section 1 Authorization' Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Huset Park Area Tax Increment Financing District (the "TIF District") the Downtown CBD Redevelopment Project (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority and City entered into a Contract for Private Redevelopment with Huset Park Development Corporation dated as of October 25, 2004, as amended by an Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007 (the "Agreement"). Economic Development Authority Meeting Minutes J lily 24, 2007 Page 8 of 13 Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note, Series 2007Ain the maximum principal amount of $6,650,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.02. Issuance Sale and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Huset Park Development Corporation ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 15, 2032 and shall bear interest atthe rate of6.0 percent per annum from the date of original issue of the Note. The Note is issued in accordance with Section 3.8 of the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $6,650,000 TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007A Rate Date of Oriainallssue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Huset Park Development Corporation or registered assigns (the "Owner"), solely from the sources and in the manner hereinafter provided, the principal sum of $6,650,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer, the City of Columbia Heights and Huset Park Development Corporation dated as of October 25, 2004, as amended by the Amended and Restated Contract for Private Redevelopment dated as of August 1, 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on July 24,2007. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires othelWise. 1. Payments. Principal and interest ("Payments") shall be paid on February 15, 2009 and each February 15and August 15 thereafter to and including February 15, 2032 ("Payment Dates") in the amounts and payable solely from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accruing from the date of original issue through and including February 15, 2009 will be compounded semiannually on February 15 and August 15 of each year and added to principal. Interest shall be computed on the basis of a year of 360 days and twelve 30-day months. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," means the Tax Increment derived from the Redevelopment Property during the six-month period preceding each Payment Date that is paid to the Authority by Anoka County in the six months preceding the Payment Date, after deducting $16,500 and the fees of the paying agent under the Paying Agent Agreement between the Authority and Bond Trust Services Corporation dated August 1, 2007 (the "Paying Agent Agreement") entered into in connection with the Authority's Tax Increment Revenue Bonds, Series 2007 (Huset Park Area Redevelopment Project) (the "Series 2007 Bonds"). The pledge of Available Tax Increment hereunder is subordinate to (a) the pledge of Available Tax Increment to the Series 2007 Bonds from and to the extent described in the Paying Agent Agreement; and (b) any other outstanding Refinancing Notes to the extent described in the resolution or indenture under which such obligations are issued. Further, until the Parkway Interfund Loan is paid in full or defeased in accordance with its terms, 50% of the of Available Tax Increment remaining on each Payment Date, after payment or provision for payment then due on the Series 2007 Bonds and any other outstanding Refinancing Noles, is pledged to the Parkway Interfund Loan prior to the pledge of Available Tax Increment hereunder. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. OoUonal Preoavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole Economic Development Authority Meeting Minutes July 24, 2007 Page 9 of 13 or in part at any time by the Authority without premium or penally. If the Authority prepays the Note in part, the prepayment will be applied first to accrued interest and then to the outstanding principal amount of the Note. Ten days' prior notice of any such prepayment shall be given by first~call mail by the Registrar 10 the registered owner of the Note. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. (b) The Note may be deemed prepaid in whole or in part in accordance with Section 3.9 of the Agreement. Upon any such prepayment, the Authority will deliver to the Owner a statement of the amount applied to prepayment under Section 3.9 and the outstanding principal balance of the Note after application of the deemed prepayment. Anydeemed prepayment under this paragraph will be applied under the same procedures described in paragraph (a) above. 6. Nature of Obliaation. This Note is one of an issue in the total principal amount of $6,650,000 issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Reaistration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfers at is factory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required bytheConstilution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to ils terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights EconomicDevelopmentAuthority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director~Walter R. Fehst President~Gary L. Peterson REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Date of Signature of Registration City Chief Financial Officer Registered Owner _ Huset Park Development Corporation Federal Tax 1.0. No. Section 3. Terms Execution and Deliverv. 3.01. Denomination Pavment. The Note shall be issued as a single typewritten note numbered R~1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. Economic Development Authority Meeting Minutes July 24, 2007 Page 10 of 13 3.02. Dates: Interest Pavment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration. The Authority hereby appoints the City Chief Financial Officer to perform the functions of registrar, transfer agent and paying agent (the ''Registrar''). The effect of registration and the rights and duties of the Authority and the Regislrarwith respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shall provide forthe registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Imorooer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (1) Taxes Fees and Charaes. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledae. The Authority hereby pledges to the payment of the principal of and interest on the Note Available Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment to the extent described in Section 3 of the Note. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Additional Bonds. The Authority may issue Refinancing Notes as described in the Agreement on a superior basis to the Note, and may issue additional Initial Notes as described in the Agreement on a parity basis with the Note. Economic Development Authority Meeting Minutes July 24, 2007 Page II of 13 Section 5. Certification of Proceedinas. 5.01. Certification of Proceedinas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this 24'" day of July, 2007 Resolution 2007-15, Providin~ for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liauor Stores Proiect), Series 2007A No.1 Bill Elrite, Finance Director stated this is almost the final stage in the Liquor Store construction project where the EDA is approving a resolution for the sale of bonds. Back on March 2ih he came to the EDA with a resolution and the intent to bond. He passed out a sheet giving the updated, projected costs on the project. Some of the costs have gone up, such as the soft costs, legal fees, testing fees and construction costs along with demolition, furniture, and fixtures up approximately $5,000. The footnote on that page is an item he brought up some time ago and relates a little more to the City Council than the EDA, but he is recommending some of the overages and contingencies if needed, be funded internally on a short term internal loan, rather than adding them to the bonding expense and dedicate a large portion of our profits for the first two years to operation. Szurek stated she did not understand the repayment was called a lease payment, and asked is it the amount of what the lease would have been or is it the amount the liquor store has to pay back to the EDA. Ruff stated the lease payment is equal to the debt service. The structure is that the EDA owns the building and leases it to the City. Szurek asked if the amount of $380, 000/ year, is per store. Ruff stated that is for both stores and the exact amount would be determined at the special meeting to be held on Monday, August 27 of the EDA and at the City Council meetings. Nawrocki asked Ruff to tell him about the Delphin index. Ruff stated the Delphin is another index, which is the average that bonds are selling for around the country. They are selling from .15 to .4 percent above general obligation bonds. It depends on what the market is at that time. What you stated last night was an average of. 3 percent, which falls right into the range that I have described. Nawrocki stated the information they got last night was that the bond buyers for this kind of bond would probably not look at the A-1 rating we would have with general obligation. Ruff stated that is part of the reason the interest rate is higher, because of that, it doesn't add on to the differential. Nawrocki stated he still wasn't satisfied that he gave him accurate information on the Delphin index, going with the .3 percent; $5 million over 20 years, it is $150,000 additional cost. The manager last night said, in 20 years $150,000 won't be anything, it is to me. Fehst stated he did not say that. He tried to explain to him before what present value means. Economic Development Authority Meeting Minutes July 24, 2007 Page 1201'13 Diehm asked Nawrocki what the inaccurate information he received was. Nawrocki stated he wasn't given the accurate information, he asked for information on the current sale, he was only given estimates, he asked for information on recent sales on a given day. Diehm stated she is just trying to understand what inaccurate information his was given. Nawrocki again stated he wasn't given the accurate information. Williams stated we are actually saving our credit for our City, we are saving our bonds, and we can do more for our City. Nawrocki stated that is the main reason you are going this way, because you didn't want the good citizens of the community to have access to be able to use our charter as they would on a general obligation bond. Diehm stated she didn't think he could tell us to vote that way. Nawrocki stated he has talked with these folks, and in his mind, the reason for going this route is to escape the ability of the taxpayers to petition to have this as a referendum on the ballot. Fehst stated as one of those taxpayers, I wouldn't want the full faith in credit of those bonds pledged against my taxes for those buildings, and it would be astoundingly out of place with what we should be doing as fiscal judiciary officials. Williams stated other cities do this all the time. Motion by Williams, second by Szurek, to wave the reading of Resolution 2007-15, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Williams, second by Szurek, to Adopt Resolution 2007-15, a Resolution providing for the sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote: Nawrocki-Nay, Jindra- aye, Kelzenberg-aye, Williams- aye, Peterson- aye, Diehm- aye, Szurek-aye. Resolution No. 2007-15 Resolution Providing for the Sale of $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007A WHEREAS, the City Council of the City of Columbia Heights, Minnesota (the "City"), has heretofore determined that il is necessary and expedient for the Columbia Heights Economic Development Authority (the "EDA") 10 issue ils $5,040,000 Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project), Series 2007 A (the "Bonds"), to finance the construction of a two new municipal liquor stores: and WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ("Ehlers"), as its independent financial advisor for the Bonds: NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Columbia Heights, Minnesota, as follows: 1. Authorization; Findings. The EDA hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal Opening. The EDA Board shall meet at 6:30 p.m. and the City Council shall meet at 7:00 p.m. on August 27, 2007, for the purpose of considering proposals for and awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in Ihe preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. Economic Development Authority Meeting Minutes July 24, 2007 Page 13 of 13 This resolution passed this 24th day of July, 2007. Peterson stated, there will be a special meeting of the EDA at 6:30pm on August 27, 2007, prior to City Council to approve the Liquor Store proposals and awarding the sale of the bonds. ADJOURNMENT President, Peterson, adjourned the meeting at 8:43 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H:\EDAminutes2007\7 -24-2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of August 28, 2007 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO:3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Cher Bakken BY: DATE: Auaust 17, 2007 BACKGROUND: The bound Financial Report for the month of July 2007 draft Resolution 2007-16 is attached for review. The enclosed Financial Report lists the Summary (white), the Check History (Green), the Expenditure Guideline with Detail (blue) and Revenue Guideline with detail (yellow) for each fund. The reports cover the activity in the calendar (fiscal) year from January 1 through July 31, 2007. RECOMMENDATION: Staff will be available to answer specific questions. If the report is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to approve Resolution 2007-16, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the month of July 2007. EDA ACTION: H:\EDAConsent2007\July Fin Rep 2007 EDA RESOLUTION 2007-16 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JULY 2007 AND PAYMENT OF BILLS FOR THE MONTH OF JULY 2007. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of July 2007 and the list of bills for the month of July 2007 are attached hereto and made a part of this resolution; and WHEREAS, the EDA has examined the financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a part hereof, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this _ day of ,2007. MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L. Peterson Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2007\EDA2007-16 fin July 2007 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: August 28, 2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY MANAGER'S NO: 4 Community Development APPROVAL ITEM: Adopt Resolution 2007-17, BY: Randy Schumacher BY: Approving the Third Amendment to DATE: August 23,2007 Contract for Private Redevelopment BACKGROUND: The Contract for Private Development initially dated September 23, 2003, was amended by a first amendment dated April 26, 2005 and a second amendment dated November 22, 2005, providing for the redevelopment of what is now known as the Grand Central Project located between 4ih and 49th Avenue in the City of Columbia Heights. The first condo building was constructed, but then the residential real estate market softened and sales slowed significantly. The current partner, Mr. Kloeber, is continuing to market the development. Due to the market conditions and the death of his partner, the developer now needs more time to complete the construction required by the Contract for Private Development, hence the third amendment, which provides two additional years, until December 31,2010, to complete all the phases of the housing project and 2009 for the completion of commercial improvements as described in the Contract for Private Development, as amended. RECOMMENDATION: Staff recommends Adoption of Resolution 2007-17, Approving a Third Amendment to Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC. RECOMMENDED MOTION: Move to Adopt Resolution 2007-17, a Resolution Approving a Third Amendment to Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and Grand Central Properties, LLC, and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:\Consent2007\EDA Res2007-17 Third Amendment to Grand Central Contract COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-17 RESOLUTION APPROVING A THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND GRAND CENTRAL PROPERTIES, LLC BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority and New Heights Development, LLC (the "Redeveloper") entered into a Contract for Private Redevelopment dated September 22, 2003, as amendcd by First Amendment thereto dated April 26, 2005 and a Second Amendment thereto dated November 22, 2005 (the "Contract"), setting forth the tcrms and conditions of redevelopment of certain property within the Rcdevelopmcnt Project, generally located east of Central Avenue, between 4ih and 49th Avenues. 1.02. Ncw Heights Development, LLC has changed its legal name to Grand Central Properties, LLC but in all respccts remains the Redeveloper under the Contract. 1.03. Thc parties have determined a nced to amend the Contract fmther, to adjust the schedule for redevelopment of thc subject property due to circumstanccs beyond the control of the Rcdeveloper. 1.04. The Board has reviewed a Third Amendment to the Contract and finds that the approval and execution thereof and pcrformance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. Authoritv Approval; Further Proceedings. 2.01. The Third Amendmcnt to the Contract as presented to the Board is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documents by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Third Amendment to the Contract and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of C0l1U11issioners of the Columbia Heights Economic Development Authority this day of August, 2007. President-Gary L. Peterson ATTEST: Secretary/CAP-Cheryl13akken 315310v3 8m CL205-20 THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT TI-IIS AGREEMENT, made on or as of the 28 day of August, 2007, by and between COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS, MINNESOTA, a public body corporate and politic (the "Authority"), established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act"), and GRAND CENTRAL PROPERTIES, LLC, a Minnesota limited liability company (the "Redeveloper"). WHEREAS, the Authority and New Heights Development, LLC entered into that certain Contract for Private Redevelopment dated as of September 22, 2003, as amended by a First Amendment thereto dated April 26, 2005 and by a Second Amendment thereto dated November 22, 2005 (the "Contract") providing for the redevelopment of certain property described as the Redevelopment Property in the Contract and described in Schedule A attached hereto; and WHEREAS, New Heights Development, LLC has changed its legal name to Grand Central Properties, LLC but in all respects remains the Redeveloper under the Contract; and WHEREAS, construction of the Housing Improvements and Commercial Improvements has been delayed for various reasons, and the parties have determined a need to amend the Contract in order to adjust the deadlines for completion and related matters. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: I. Sectionl.1 of the Contract is amended to revise celtain definitions as follows: "Available Tax Increment" means 90 percent of the Tax Increment attributable to the Redevelopment Property (or relevant portion thereof, as the context requires), received by the Authority in the six-month period before any schedule payment date on any Note, or received prior to the first payment date on any Note to the extent so provided in the resolution approving the Note. "I-lousing Improvements" means the construction by the Redeveloper on the Housing Property of the following owner-occupied housing units: at least 67 condominium units and 10 town homes ("Phase I"), at least 70 additional condominium units ("Phase II"); and at least 70 additional condominium units and at least II additional town homes ("Phase III"). 2. Notwithstanding anything to the contrary in Section 3.4 of the Contract, the Note shall be issued in accordance with the resolution attached as Schedule B to this Third Amendment, which supersedes in all respects Schedule B to the original Contract. 3. The pmties agree and understand that, as of the date of this Third Amendment, the Negotiation Period regarding the Commercial Period under Section 3.7 has expired, and Section 3.7 has no fillther force or effect. 315304v3 sm C1.205-20 4. The first paragraph of Section 4.3 of the Contract is revised to read as follows: As of the date of this Third Amendment, the parties agree and understand that Phase I of the Housing Improvements has been substantially completed. Subject to Unavoidable Delays, the Redeveloper must commence and substantially complete construction of the balance of the Minimum Improvements as follows: Phase II I-lousing Improvements: Commence by April I, 2009, substantially complete by October 1,2010. Phase III Housing Improvements: Commence by July 1,2009, substantially complete by December 31, 2010. Commercial Improvements Commence by December 31, 2007, substantially complete by December 31, 2009. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority, and with he Planning Contract. If the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to meet one or more of the above-referenced deadlines, the Authority and the Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise constitute a default under this Agreement. 3. In Section 10.6, the notice address for Redeveloper is amended to read as follows: Daivd Kloeber, JI'. Grand Central Propelties LLC 3080 Centerville Road Little Canada, MN 55117 315304v3 sm CL205-20 2 IN WITNESS WHEREOF, the Authority has caused this Amendment to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By Its President -Gary 1. Peterson By Its Executive Director-Walter R. Fehst STATE OF MINNESOTA) ) SS. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of , 2007, by Gary Peterson and Walter Fehst, the President and Executive Director of the Columbia Heights Economic Development Authority, a public body politic ancl corporate, on behalf of the Authority. Notary Public 315304v3 SJB CL205-20 3 GRAND CENTRAL PROPERTIES, LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2007 by , the of Grand Central Properties, LLC, a Minnesota limited liability company, on behalf of the company. Notary Publie 315304v3 SJU CJ.205-20 4 SCHEDULE A TO THIRD AMENDMENT TO CONTRACT FOR PRIV ATE REDEVELOPMENT Housing Property [Inseli current platted description] Commercial Propeliy [Insert current platted description] 315304v3 sm CL205-20 A-I SCHEDULE B TO THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION A WARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2007A BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Eeonomie Development Authority, Columbia Heights, Minnesota (the "Authority") as follows: Seetion I. Authorization: Award of Sale. 1.0 I. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the Kmart/Central Avenue Tax Inerement Finaneing Distriet (the "TIF Distriet") the Downtown CBD Redevelopment Projeet (the "Project"), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. In connection with the TIF District, the Authority entered into a Contract for Private Redevelopment between the Authority and New Heights Development, LLC (now known as Grand Central Properties, LLC) dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of November 22, 2005, and a Third Amendment thereto dated as of , 2007 (the "Agreement"). Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Sueh bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment ofthe bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of $700,000 (the "Note") for the purpose of financing certain public redevelopment costs of the Project. 1.03. Issuance. Sale. and Terms of the Note. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Properties, LLC ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February 1,2013, shall bear interest at the rate of 6.0 % per annum from the date of original issue of the Note, and shall be in the principal amount of the Public Redevelopment Costs submitted and approved in aceordance with the Agreement but in no event greater than $700,000. The Note is issued in consideration of payment by Owner of the Public 315304v3 SIB CL205-20 A-2 Redevelopment Costs in at least the principal amount of the Note, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-1 $ T AXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Rate Date of Original Issue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for value received, certifies that it is indebted and hereby promises to pay to Grand Central Properties, LLC or registered assigns (the "Owner"), the principal sum of $700,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thereto dated as of November 22, 2005, and a Third Amendment thereto dated as of , 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on August , 2007. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Pavments. Principal and interest ("Payments") shall be paid on the first February 1 or August 1 after substantial completion of all the Housing Improvements and Commercial Improvements in accordance with the Agreement, and on each February 1 and August I thereafter to and including February 1, 2014 ("Payment Dates"), in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are 315304v3 SJB CL205.20 A-3 payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Simple interest shall accrue li'om the date of original issue of this Note and shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," which means (a) on the first Payment Date, 95 percent of the Tax Increment attributable to the Housing Property as delined in the Agreement that has been paid to the Authority by Anoka County prior to that Payment Date, and (b) on each Payment Date after the first Payment Date, 95 percent of the Tax Increment attributable to the Housing Property as defined in the Agreement that has been paid to the Authority by Anoka County in the six months preceding the Paymcnt Date. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1,2014. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. Optional Prepayment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3A(e) of the Agreement, one-half of such Excess Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Final Closing Date as delined in Section 3 A( e) of the Agreement, and will be recorded by the Registrar in its records lor the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $ issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely 315304v3 sm CJ.205-20 A-4 from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specitied above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President REGlSTRA TION PROVISIONS 315304v3 8m eL205-20 A-5 The ownership of the unpaid balance of the within Note is rcgistercd in the bond register of the City Finance Director, in the name of the person last listed below. Date of of Registration Signature Registered Owner _ City Finance Director Grand Central Properties, LLC Federal Tax I.D. No. Section 3. Terms. Execution and Delivery. 3.01. Denomination. Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. 315304v3 sm CL205-20 A-6 (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment at: or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (t) Taxes. Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost. Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or dcstroyed, the Registrar shall deliver a new Note of like amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolcn, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon tiling with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereat: and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such ofIicer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment under the terms and as detined in the Note. 315304v3 8m C!.205-20 A-7 Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form orNote set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the TIF District upon termination of the Note in accordance with its terms. 4.03. Available Tax respects. Additional Bonds. If the Authority issues any bonds or notes secured by Increment, such additional bonds or notes arc subordinate to the Note in all Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority arc hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts rclating to the legality and marketability of the Note as the same appear fl'om the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this day of August, 2007. President Executive Director 315304v3 sm CL205-20 A-8 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: August 28, 2007 AGENDA SECTION: Business Items ORIGINATING CITY MANAGER'S NO: 5 DEPARTMENT: Community APPROVAL Development ITEM: Adopt Resolution 2007-18, BY: Randy Schumacher BY: Awarding the Sale of, and Providing the DATE: August 23,2007 Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Note, Series 2007A BACKGROUND: The authority and the City of Columbia Heights have approved the establishment of the Kmart-Central Avenue Tax Increment Financing District and have adopted a Tax Increment Financing plan for the purpose of financing certain improvements within the project. Pursuant to the development agreement as well as Minnesota Statutes, Section 469.178, the authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the project. Before the EDA, is the authorizing resolution approving the sale of Tax Increment Financing Notes to the developer in the amount of $700,000. This authorizing resolution is before the EDA because it is anticipated the developer will be able to submit its qualified costs, thus requiring the EDA to approve up to the maximum note amount of $700,000 to cover those costs as required by the Contract for Private Development. Staff would not issue the note until the developer provides his qualified costs and the costs are verified. RECOMMENDATION: Staff recommends Adoption of Resolution 2007-18, Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its taxable tax increment note, series 2007A. RECOMMENDED MOTION: Move to Adopt Resolution 2007-18, a Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its taxable tax increment note, series 2007A; and furthermore to authorize the President and Executive Director to enter into an agreement for the same. Attachments EDA ACTION: h:\Consent2007\EDA ResZ007M18 Sale of Note Series-Grand Central COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2007-18 RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTE, SERIES 2007A BE IT RESOLVED BY thc Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority, Columbia IIeights, Minnesota (the "Authority") as follows: Section I. Authorization: Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approvcd the establishment of the Kmart/Central Avenue Tax Increment Financing District (the "TIF District") the Downtown CBD Redevclopment Project (the "Project"), and have adopted a tax increment tinancing plan for the purpose of tinancing certain improvements within the Project. In connection with the TIF District, the Authority entered into a Contract for Private Redevelopment between thc Authority and New Heights Dcvelopmcnt, LLC (now known as Grand Central Propcrties, LLC) dated as of Septcmber 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a sccond amcndment thcreto dated as of November 22, 2005, and a Third Amendmcnt thereto dated as of , 2007 (the "Agrcenlent"). Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public development costs of the Project. Such bonds are payable from all or any portion of rcvenues dcrived from the TIF District and pledged to the payment of the bonds. The Authority hereby tinds and determines that it is in the best interests of thc Authority that it issue and sell its Taxable Tax Increment Revenue Note in the maximum principal amount of $700,000 (the "Note") for the purpose of tinancing certain public redevelopment costs of the Project. 1.03. Issuance. Sale. and Terms of the Note. The Authority hcreby delegates to the Executive Dircctor the determination of the date on which the Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Properties, LLC ("Owner"). The Note shall be dated as of the date of delivery, shall mature no later than February I, 2013, shall bear intercst at the rate of 6.0 % per annum from the date of original issue of the Note, and shall be in thc principal amount of thc Public Redevelopment Costs submitted and approved in accordance with the Agrccment but in no event grcater than $700,000. The Note is issued in consideration of payment by Owner of the Public Redevelopmcnt Costs in at least the principal amount of the Notc, in accordance with the Agrcement. 316205vl MTN CL205-20 1 Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal amount and payment schedule adjusted as of the date of issue: UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGl-ITS ECONOMIC DEVELOPMENT AUTHORITY No.R-1 $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Rate Date of Original Issue 6.0% ,2007 The Columbia Heights Economic Development Authority ("Authority") for valuc received, certifies that it is indebted and hereby promises to pay to Grand Central Properties, LLC or registered assigns (the "Owner"), the principal sum of $700,000 or so much thereof as has been from time to time advanced (the "Principal Amount"), as provided in the Agrcement defined hereafter, together with interest on the unpaid balance thereof accrued from the datc of original issue hereof at thc rate of 6.0 percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of September 22, 2004, as amended by a First Amendment thereto dated as of April 26, 2005, a second amendment thcreto dated as of Novcmber 22, 2005, and a Third Amendment thcreto datcd as of , 2007 (the "Agreement") and the authorizing resolution (the "Resolution") duly adopted by the Authority on August , 2007. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Payments. Principal and intercst ("Payments") shall be paid on the first February 1 or August 1 aftcr substantial completion of all the Housing Improvements and Commercial Improvemcnts in accordancc with the Agreement, and on each February 1 and August 1 thereafter to and including February 1, 2014 ("Payment Dates"), in the amounts and ii'om the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 316205vl MTN CL205-20 2 2. Interest. Simple interest shall accrue from the date of original issue of this Note and shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. All payments on this Note are payable on each Payment Date solely ii'om and in the amount of the "Available Tax Increment," which means (a) on the first Payment Date, 90 percent of the Tax Increment attributable to the Housing Property as defined in the Agreement that has been paid to the Authority by Anoka County prior to that Payment Date, and (b) on each Payment Date after the first Payment Date, 90 percent of the Tax Increment attributable to the Housing Property as defined in the Agreement that has been paid to the Authority by Anoka County in the six months preceding the Payment Date. The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1,2014. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of the Agreement, the terms of which are incorporated herein by reference. 5. Optional Prepavment. (a) The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amount will be deemed to constitute, and will be applied to, prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Final Closing Date as defined in Section 3.4(e) of the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request of the Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after application of the deemed prepayment under this paragraph. 6. Nature of Obligation. This Note is one of an issue in the total maximum principal amount of $ issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.179. This Note is a limited obligation of the Authority which is payable solely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. 3]6205v] MTN CL205-20 3 Neither the State of Minnesota, nor any political subdivision thcreof shall be obligated to pay thc principal of or interest on this Note or other costs incident hercto exccpt 11'om and to the extent of the revcnues pledged hereto, and neither the full faith and credit nor the taxing power ofthe State of Minnesota or any political subdivision thereof is plcdged to the payment of thc principal of or interest on this Note or other costs incidcnt hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As providcd in the Rcsolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kcpt for that purposc at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note togcther with a written instrument of transfcr satisfactory to the Authority, duly executcd by thc Owner. Upon such transfer or exchange and the payment by the Owncr of any tax, fcc, or governmental charge requircd to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transferred to any person unlcss the Authority has been provided with an opinion of counselor a certificatc of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state sccurities laws. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happcn, and to be pcrfonned in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have becn performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of thc Columbia Heights Economic Development Authority have caused this Note to bc executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. Fehst President-Gary 1. Peterson REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name ofthe person last listed below. 316205vl MTNCL205-20 4 Date of of Registration Signature Registered Owner _ City Finance Director Grand Central Properties, LLC Federal Tax J.D. No. Section 3. Terms. Execution and Deliverv. 3.01. Denomination. Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges ofthe Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attomey duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improver or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur 316205v1 MTNCL205-20 5 no liability for its rcfusal, in good faith, to make transfers, which it, in its judgment, deems improper or unauthorized. ( e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time rcgistered in the bond registcr as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of rcceiving payment of, or on account of, the principal of and interest on such Note and for all other purposcs, and all such payments so made to any such rcgistered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Notc to the extent ofthe sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof suflicient to reimbursc the Registrar for any tax, fee, or other governmcntal chargc required to be paid with respect to such transfer or exchange. (g) Mutilatcd, Lost, Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or dcstroyed, the Registrar shall deliver a new Note of like amount, maturity datcs and tenor in exchangc and substitution for and upon cancellation of such mutilatcd Notc or in lieu of and in substitution for such Note lost, stolen, or dcstroyed, upon the payment of the rcasonable cxpenses and charges of the Registrar in connection thcrewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to thc Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to thc Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Deliverv. The Note shall be prepared under the direction of the Executive Director and shall bc executed on behalf of the Authority by the signatures of its President and Executive Director. In case any oflicer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Whcn the Note has been so executed, it shall be delivered by the Executive Director to the Owner thercof in accordance with the Agreement. Section 4. Securitv Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment under the terms and as defined in the Note. A vailablc Tax Incremcnt shall be applicd to payment of the principal of and intercst on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 316205vl MTN CL205.20 6 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Pund shall be transferred to the Authority's account for the TIP District upon termination of the Note in accordance with its terms. 4.03. Available Tax respects. Additional Bonds. If the Authority issues any bonds or notes secured by Increment, such additional bonds or notes are subordinate to the Note in all Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The of1icers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other af1idavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Adopted this day of August, 2007. President-Gary 1. Peterson Executive Director-Walter R. Fehst 316205vl MTN CL205.20 7 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Meeting of: August 28, 2007 AGENDA SECTION: Business Items ORIGINATING DEPARTMENT: CITY MANAGER'S NO: "6 Community Development APPROVAL ITEM: Anoka County Housing & BY: Robert Streetar BY: Redevelopment Authority DATE: August 24,2007 Economic Development Activities This memo presents EDA Commissioners with an offer from the Anoka County Housing and Redevelopment Authority (ACHRA) to participate in ACHRA economic development activities. Commissioners are asked to make a recommendation to the City Council. If Commissioners recommend participating, the recommendation will be forwarded to the City Council at their September 10th meeting for action. If not, no further action is required. Should the City participate in the ACHRA economic development activities? BACKGROUND: Should the City participate in the ACHRA Economic Development Activities? For background on the ACHRA's offer, please read the executive summary on pages 2-4 of the Report of the Anoka County Economic Development Exploratory Committee that is attached. Analvsis To participate the City Council must pass a resolution to "opt in" to the ACHRA economic development activities. If the City chooses to participate, it must participate for a minimum of five years, after which time the City may choose to "opt out." Should the City choose to participate the ACHRA would levy a tax in Columbia Heights each year the City participated. If the City chooses not to participate it must wait five years before it may choose to "opt in." As Commissioners know, the City is faced with many redevelopment and housing challenges, which will continue to present themselves long into the future. Redevelopment and improving the housing stock renews, and revitalizes the City, but it requires sufficient investment of public resources. By participating, the City would have additional resources to invest in these im~ortant priorities. Redevelopment projects such as 3ih and Central, 39th and Central, and 40 h and University could benefit from these additional resources, as federal, state and regional resources have been declining or flat. It also means the City may not have to establish as many TIF districts, or may result in TIF districts with shorter terms, thereby ensuring the new taxes from redevelopment are placed on the tax roles sooner. In addition to increased resources for redevelopment and housing priorities, the City could also use all or part of the levy to pay for costs related to redeveloping the Heritage Heights site for the new public safety facility and/or a community center. For example, over the next fives years the ACHRA would probably levy a minimum of $1,021,245, or about $205,000 annually. If the City used all of the levy proceeds to reduce the annual debt service on the general obligation bonds to fund the acquisition, demolition and relocation costs required to make the site ready, the interest savings are estimated to be about $975,000, on a 25-year issue at 5.25%. Also, using the levy proceeds would reduce the amount of general obligation debt, thereby preserving the city's debt capacity for other needs such as public safety, or public works. The table below estimates the minimum and maximum the ACHRA could levy, and the cost to homeowner with a home with an estimated market value of $200,000. 2008 2009 2010 2011 2012 Total Minimum Levy* 196,24 $200,166 $204,169 $208,252 $212,417 $1,021,245 1 Cost** $30.20 $30.51 $30.82 $31.13 $31.44 $154.10 Maximum Levy 247,07 $252,014 $257,054 $262,195 $267,439 $1,285,776 3 Cost** $38.03 $38.42 $38.80 $39.19 $39.58 $194.02 *As determined by the ACHRA, **Estimated Market Value of Home - $200,000 In summary, the ACHRA is offering the City of Columbia Heights the opportunity to participate in the ACHRA economic development activities. This could provide additional resources for redevelopment and housing related activities, as well as reduce the cost of a public safety facility and/or community center. The cost of participating is estimated to be $30 to $40 annually. The Commissioners are asked to make a recommendation to the City Council to be acted upon at the September 10 City Council meeting. Karen Skepper, Anoka County Community Development Manager will be present to answer any questions. RECOMMENDATION: Staff recommends commissioners discuss and make a recommendation to City Council to participate or not in the ACHRA Economic Development Activities. RECOMMENDED MOTION: None Attachments EDA ACTION: I . . . . . I I I I I I I I. .. r I I r I I I I I I I I I Report of the Anoka County Economic Development Exploratory Committee Anoka County, Minnesota May 8, 2007 I I I I I I I I I I I I I I I III I I I I I I I I I I I III III III III . Table of Contents LETTER OF TRANSMITTAL 1 EXECUTIVE SUMMARY ......................................................................2 2 INTRODUCTION ................................................................................5 3 METHODOLOGY ...............................................................................7 4 FINDINGS.........................................................................................9 5 INVENTORY AND GAP ANALYSIS ......................................................14 6 ORGANIZATIONAL OPTIONS ............................................................15 7 RECOMMENDATIONS .......,....,..............................................,..........:.17 . . MINNESOTA STATUTE 469.1082 ...........~.....................................:;APPJ:NPIX I METROPOLITAN COUNCIL DEMOGRAPHIC PROJECTIONS............ APPENDIX II COMMITTEE VISIONING RESPONSES.........,................................ APPENDIX III LOCAL GOVERNMENT INVENTORY QUESTIONNAIRE.................. APPENQIX IV Mission Statement Springsted provides high quality, independent financial and management advisory services to public and non-profit organizations, and works with them in the long-term process of building their communities on a fiscally sound and well-managed basis. I I I II III I III III III II II II II II II II rI rI II I II l1li II I I I I III II m \I rKl g::~~ Springsted {\';,;.;.t;'l Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.spnngsted.com LETTER OF TRANSMITTAL May 8, 2007 Anoka County Board of Commissioners Government Center 2100 3rd Avenue Anoka, MN 55303 Dear Commissioners: On behalf of the Anoka County Economic Development Exploratory Committee, we are pleased to trausmit this report documenting the Committee's inventory of existing programs and services, its identification of program and service gaps, and its recommendation that the County Board extend the power of the Anoka Countv liRA to operate as an EDA . The Committee also recommends that the County Board authorize legal research to clarify the levy authority that can be exercised by the Anoka County HRA operating with statutory EDA powers to determine the maximum rate that can be levied and the manner in which the levy can be allocated for HRA and EDA purposes. It also recommends that the County Board consider the appropriate number of governing board members serving on the Anoka County HRA operating with statutory EDApowers, recognizing that statutes allow a county EDA to have nine members. In submitting this report for the Board's consideration, we want to thank the Committee members who participated in the inventory and analysis of economic development information and evaluated the organizational options available for the County's involvement in economic development. We also want to thank all of the cities and townships that supplied data for the Committee's review. Finally we want to express our appreciation to the Anoka County staff that provided us with previously conducted research on economic development. We have appreciated working with the County on this important study and look forward to future opportunities to be of service. Respectfully submitted, / Sharon G. Klumpp, Vice President Consultant maj Public Sector Advisors Executive Summary 1. Executive Summary I I I I I I I I I I I I I I I I I I I I I I I I I I I . III ,2 In December 2006, the Anoka County Board of Commissioners appointed an II-member Economic Development Exploratory Committee to review current economic development, housing and community development programs in the County, to identify gaps in the level of existing services provided, to assess the capacity of existing agencies to expand their services to fulfill these needs, and to formulate a recommendation on the need for a County economic development organization. The committee completed an inventory and gap analysis based on information collected through community surveys and other available background material, studied the four statutory organizational options available for County involvement in economic development, and issues this report and its recommendations in accordance with Minnesota Statutes Section 469.1 082. Findings made by the committee include: 1. Anoka County is forecast to experience continuing growth through 2030. 2. Three distinct development patterns exist in Anoka County: fully developed areas, developing areas and rural areas. More than one development pattern may exist in a single community. 3. 10 of the 21 Anoka County communities surveyed have a city Economic Development Authority (EDA). 4. Tax base growth and job creation are major themes that emerged from the committee's review of responses to the Local Government Inventory Questionnaire. 5. Transportation improvements and major development projects top the list of major economic development goals which Anoka County communities hope will make headlines in the next 10 years. 6. S~K and funding are the most frequently cited challenges to economic development encountered by Anoka County communities. Nine gaps in the level of economic development services were identified: 1. Ability to buy property with the change in eminent domain laws. 2. Limited financial resources dedicated to economic development activities. Report of the Anoka County Economic Development Exploratory Committee I I I I I I I I I I I II . I I III II II II I II II II II II II II I I I II 3 Executive Summary 3. Lack of staff dedicated to economic development activities who have the expertise and knowledge of economic development tools 4. Organizational structure for sharing information and coordinating communications among Anoka County and its cities and townships. 5. Better image of the County and a coordinated approach to "branding." 6. Feasibility study of fiber optics and other technological infrastrncture and a coordinated approach to technology development. 7. Availability of up-to-date demographic data and projections. 8. Central point of contact for businesses considering locating or expanding in Anoka County; better understanding of relationship between economic development and redevelopment subsidies and job gains and losses. 9. Ability to provide economic development services to communities tbat do not have an EDA. The committee determined that Anoka County involvement in economic development was desirable, citing the number of communities that do not have an organizational structure for economic development and the efficiency and effectiveness of a regional approach. Committee members also recognized the ability of a County economic development organization to serve as a central information clearinghouse for all Anoka County communities. The committee recommends that the Anoka County Housing Redevelopment Authority (HRA) be authorized to operate as an EDA, citing greater administrative efficiency andeffeetiyeness to administer a single economic development organization compared to administering.b.Qtb a County HRA and EDA. In making this recommendation, the committee noted that none of the Anoka County general government subdivisions exercises extraterritorial planning powers beyond its boundaries. Minnesota Statutes Section 469.1082 subdivision 3 specifically requires the committee to identify the distance that a city controls beyond its boundaries, if applicable. This provision is not applicable to Anoka County. The committee also recommends that the County authorize legal research to clarify qnestions regarding tbe levy authority that can be exercised by the Anoka County HRA operating with statutory EDA powers to determine the maximum rate that can be levied and the manner in which the levy can be allocated for HRA and EDA purposes. Committee members advise that this information will be important to each community's deliberations regarding participation in the Anoka County HRA operating as an EDA. Report of the Anoka County Economic Development Exploratory Committee I I I I II II II II II II II II II I III IIIl I III III I III I III III II III III III I III II. Executive Summary 4 Finally, the committee recommends that the County Board consider the appropriate size of the County HRA's governing board if it is authorized by the County Board to operate as an EDA, noting that Minnesota Statutes Section 469.1082 Subdivision 8 permits a county economic development authority to have a nine-member board. Report of the Anoka County Economic Development Exploratory Committee I I I I I I II II I I I I I I I I I III II 11II II II III II I II I I III I 1M 5 Introduction 2. Introduction The Anoka County Board of Commissioners appointed an II-member Economic Development Exploratory Committee in December 2006 to: . Review economic development activities conducted throughout the County, and . Identify economic development services the County could provide to communities. Under Minnesota Statutes Section 469.1082 (see Appendix A), appointment of the local committee is the first step that counties must take when considering the establishment of a county Economic Development Authority (EDA) or extending EDA powers to a county Housing and Redevelopment Authority (HRA). Subdivision 3 of this section requires the committee to issue a report within 90 days of its initial meeting recommending the preferred organizational option for a county economic development service provider. Specifically, the committee's report must contain: . Written findings on issues considered by the committee, including identification of the current level of economic development, housing, and community development programs and services provided by existing agencies, any existing gaps in programs and services and the capacity and ability of those agencies to expand their activities; and . The recommended organizational option for providing needed economic development, housing and community development services in the most efficient, effective manner. Subdivision 4 limits the organizational options the committee may recommend to: 1. A county EDA operating under Minnesota Statutes Section 469.090 to 469.1081; 2. Allowing the existing county HRA to operate as an EDA under Minnesota Statutes Sections 469.090 to 469.1081; 3. Pursuing special legislation; or 4. Maintaining the existing structure. The Anoka County Board of Commissioners appointed members to the Economic Development Exploratory Committee from among those individuals nominated by cities and townships. Consistent with the requirements of Subdivision 2, political subdivision representatives selected by their local government constituted more than 50 percent of the total committee membership, and included at least one city official, at least one HRA official, and at least one township official. Two Anoka County Commissioners also served on the committee. Statutes limited the size of the committee to 11 to 15 members. Report of the Anoka County Economic Developmenl Exploratory Committee I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I . , 6 Introduction Members of the Anoka County Economic Development Exploratory Committee are: , . Greg Hunter, Mayor, East Bethel , . Jim Scheffler, Supervisor, Burns Township ~, . Steve Billings, member, Fridley Housing and Redevelopment Authority '" Ron Wood, City Manager, Blaine '. Marc Nevinski, Community Development Manager, Coon Rapids , . Nancy Braastad, President, Ham Lake Develoment Company . Patricia Preiner, EDC Chair, Columbus . Herm Talle, Alternate, Attorney, Barna Guzy & Steffen . Dan Erhart, Commissioner, Anoka County . Dennis Berg, Commissioner, Anoka County . Paul McCarron, Chair, Anoka County Housing and Redevelopment Authority . Don Findell, member, Anoka County Housing and Redevelopment Authority Paul McCarron was elected to serve as the chair of the Economic Development Exploratory Committee. The committee completed its work in four meetings held on Febmary 7, 2007; March 14,2007; April 4; 2007 and April 25, 2007. This report, which details the committee's findings and its recommendation, is being submitted to the Anoka County Board of Commissioners for its consideration on May 8, 2007, Report of the Anoka County Economic Development Exploratory Committee DI 11 DI II II II II II ill II II II II III !II III III lIB ill ill II II II II .. l1li .. .. 1'1 II II - Methodology 7 3. Methodology The Economic Development Exploratory Committee received an overview of Minnesota Statntes Section 469.1082 at its February 7, 2007 meeting. In addition to reviewing the statutory requirements of the committee's charge, members received an overview of a county economic development service provider's area of operation as defined by Subdivisions 5, 6, and 7 explaining that: . Cities may adopt a resolution electing to participate in a county economic development organization. . Cities may adopt a resolution electing to withdraw participation, provided that the withdrawal election may be made every fifth year following adoption of the resolution electing participation in the county economic development organization and that the city retains any rights, obligations, and liabilities it obtained 01' inclll'red dlll'ing its EllrticjPllUPP. . Cities may adopt a resolution prohibiting the county economic development organization from operating within its bonndaries, which has the effect of exclnding the city's property taxpayers from the property tax levied by the connty economic development organization. . Existing city EDAs will continue to operate if a connty economic development organization is established. . Additional city EDAs may be established within the operating area of a county economic development organization without the explicit conCUl'l'ence of the county economic development organization. . Existing city and county HRAs may continue to operate if a county economic development organization is established. The following background materials were distributed to committee members at the February 7, 2007 meeting: . Demographic forecasts prepared by the Metropolitan Council showing anticipated population, household, and employment trends in 2010, 2020, and 2030; . Working Together to Shape the Future of Anoka County, a draft report of the Anoka County Development Investment Strategy )V ork Group, dated September 24, 2002 . Anoka County Industry and Workforces Trends, a PowerPoint presentation by Jerry Vitzthum, not dated . EDA Slll'vey conducted by the Anoka County HRA, EDA Interview Summary, and Preliminary Lessons Learned from Interviewing Experts on the Role of Counties in Economic Development, dated January 3, 2005. . County Economic Development Authorities, a PowerPoint presentation by Gene Goddard of the Minnesota Department of Trade and Economic Development, not dated. Report 01 the Anoka County Economic Development Exploratory Committee I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I , .8 Methodoloqv In order to reflect a County-wide perspective in its work, committee members exchanged information on current economic development activities in their respective communities and identified broad economic development goals having County-wide significance (Appendix C). They also participated in the design and dissemination of the Local Government Inventory Questionnaire used to gather data on economic development activities and needs from each city and township (Appendix D). At the committee's request, the chief elected official and chief administrative officer of each city and township received a letter explaining the committee's charge and asking for their assistance in completing the Local Government Inventory Questionnaire. City and township representatives were also informed of the dates and times of future committee meetings. Eighteen of the 21 communities completed the Local Government Inventory Questionnaire. The committee used this information to identify economic development, housing, and community development needs and determine gaps in programs and services. The committee also requested that two interviews be conducted with individuals knowledgeable about economic development activities in Anoka County: Jerry Vitzthum, Director of the Anoka Connty Workforce Center, and Dave Piggot, Executive Director of the Anoka County Economic Development Partnership. Report of the Anoka County Economic Development Exploratory Committee I . I I . I (I II II II I II II 18 II II II I I II I I I I I I I I I] II II 9 Findings 4. Findings 1. Anoka Connty is forecast to experience continuing growth through 2030. The Metropolitan Council estimated Anoka County's 2005 population at 326,393 and its number of households at 117,409. An employment estimate prepared by the Minnesota Department of Employment and Economic Development put the number of individuals working in Anoka County at 113,449 in 2004. Forecasts prepared by the Metropolitan Council project continued growth in Anoka County through 2020 and 2030 as shown below: Po ulation 326,393 393,010 Household 117,409 153,980 Em 10 ment* 113,449 138,060 'Employment estimate isfor 2004 Source: Metropolitan Council 20% 31% 22% 410,760 163,160 148,980 2. Three distinct development patterns exist in Anoka County. A variety of development patterns exist in Anoka County. Fully developed areas, found in the southern portion of the County, emphasize housing rehabilitation and redevelopment as well as commerciill-iridnsidill redevelopment. Redevelopment efforts are typically accOlupanied by reconstruction of infrastructure to accommodate the needs of redevelopment projects. Developing areas include the suburbau areas of the County where new residential growth is occurring and retail development is responding to the growing population. Generally, developing communities are involved in expanding infrastructure to accommodate growth. In rural areas, the emphasis is on maintaining rural characteristics and making business opportunities available in rural centers or along major County roads. In most rural areas, the lack of infrastructure, particularly water and sanitary sewer, limits the density of new development. Economic development expertise, tools and resources needed to support these three distinct development patterns will vary. Multiple development patterns may be present in a single community. Report of the Anoka County EconomIc Development Exploratory Commiliea ... 10 Findings 3. 10 of the 21 Anoka County communities surveyed have a City EDA. Based on information gathered from the Local Government Inventory Questionnaire. ten communities have established city EDAs. The table below shows the economic EDAs and HRAs in existence in Anoka County and also indicates those communities where an economic development committee (EDC) or a port authority (PORT) are in operation: ;,~ih~~ml~~~~!?i(1 ~1_RiW: ~~i! t~t~~~& I I I I I I I 1 I I I I I I I I I I I I I I ! Andover Anoka Bethel Blaine Burns Two. Centerville Circle Pines Columbia Heights Columbus Coon Rapids East Bethel Fridley Ham Lake Lexington Linwood Twp. Lino Lakes Oak Grove Ramsey St. Francis Spring Lake Park x x X EDC X X X X X X EDC X X X X X EDC X X X X PORT X Source: Local Government Inventory Questionnaire (2007) 4. Tax base growth and job creation are major themes that emerged from the committee's review of responses to the Local Government Inventory Questionnaire. Two major themes dominated discussions about economic development activities: tax base growth and job creation. The County and its communities want to expand the existing tax base by attracting new businesses and retaining businesses located in Anoka County. In addition to creating a larger property tax base, business growth and retention will create more jobs. Data compiled by the Anoka County Workforce Center reported that 59% of Anoka County workers left the County daily to go to their places of employment. Moreover, Anoka County residents had the greatest travel distances and longest commuting times relative to the rest of the metro area, according to the draft Anoka County Development Investment Strategy Report, dated September 24, 2002. Report of the Anoka Counly Economic Development ExploratOl)' Committee Ii Ii II 11 1\ II II III II II II II II II II !II II !II II II II II II II II II II II II II II R 11 Findings 5. Transportation improvements and major development projects top the list of major economic development goals which Anoka County communities hope will make headlines in the next 10 years. The Local Government Inventory Questionnaire asked communities to indicate the economic development success stories that will make local, county or regional headlines in 2017. While specific community goals varied, the focus of the responding communities included: a. Major transportation projects b. Major development projects, including transit-oriented development (TOD) near transit stations c. Infrastructure in developing areas of the County d. Redevelopment in fully developed areas of the County e. Fiber optics and other communications infrastructure f. Housing redevelopment and rehabilitation g. Job creation Communities reported that they expected to focus on transportation and redevelopment projects over the next 10 years. They also expect to devote significant time to property acquisition, promoting commercial and industrial development opportunities, marketing, and infrastmcture development. 6. Staffing and funding are the most freqnently cited challenges to economic development encouiltered by Anoka County communities. Anoka County communities considered the availability of staff and funding to be the most significant challenge affecting their capacity to undertake economic . development activities, according to questionnaire respondents. Communities cited staffing as a challenge noting the extensive knowledge and breadth of expertise required to apply economic. development tools and resources. Questionnaire respondents indicated that County-wide, a total of 8.6 full-time equivalent staff are dedicated to economic development and housing activities; indicating that staffing is an issue iuvolving the number of staff and their skill levels. Communities were asked to identify the types of economic development tools they have used as well as tools they would consider using or would not use. Their responses are shown on the following page. Report of lha Anoka County Economic Development Exploratory Commlllee . . . i I I . I I I I II I II II II I, II II \I I II II II II III II II II II I Findings , " , -. ....--.- -~. flI ,12 ,):"H' ',i"j;"iij,i, ';""ii;ii;;;,iI'i"""'I'd"i~ii!;;ifi, ,IS,iiT' ''''I'd'iN'''' t' 'If -.".-7 4ve,(o'.,;: '~Y,rt(\";;",,,.OU.. .'':'':';'W;;'k;l,:,>;~,!,n:OU ..,' ..0 !,;," 1~;~V~~~;!f~~ *f~~1a~fW~.i'~;1JW :~:~*f,i~;~~~tiJ~~{~~1~f~'6;~~ Community Development Block Grants 14 4 Contamination Cleannp and Investigation Grant Program 6 8 EDAorHRA II 5 Economic Development Fund 5 9 Eminent Domain 8 6 Livable Commnnities Grant 9 6 Minnesota Investment Fnnd 3 II Redevelopment Grant 6 II Revolving Loan FundlInterest Buy Down Programs 5 10 Special Assessment 10 7 Special Service District 2 11 Tax Abatement 7 7 Tax-Exempt Financing 8 6 TIF - Redevelopment District 13 2 TIF - Renewal and Renovation District 4 8 TIF - Housing District 7 5 TIF - Economic Development District 7 6 Business Retention Program 5 8 Locality Marketing Plan 5 8 Workforce Training Plan 3 8 Business Incubator Program 1 8 Job Skills Partnership Act 1 10 Source: Local Government InventDlY Questionnaire (2007) 1 1 1 1 1 2 1 Many communities also reported funding as a major challenge, noting the limited availability of funding to cover the costs of economic development programs and services, Communities were asked to provide information on their levies for economic development and housing activities, The communities that levy for EDA and/or HRA activities are listed below: ;~;~~J"t1~(H~~~(~~t.r;:,U';t:'i.';~;",,,;;';~~~?VY :,), x X X X Anoka Columbia Hei hts X Coon Ra ids Fridle Oak Grove X Ramse X Source: Local Government Inventory Questionnaire (2007) Report 01 the Anoka County Economic Development Exploratory Committee I I I I I Ii I Ii I III III II 18 III II II II .. II .. II II II II II II II II . II II iii Findings 13 Other challenges to economic development cited by the responding commnnities included: a. The marketability of projects as development/redevelopment costs increase b. Anoka County's need for a marketing identity that will help it attract development c. The ability to assemble property with the loss of eminent domain d. Aging infrastructure e. In rural areas, balancing the non-residential tax base with maintaining a rural lifestyle. Report of the Anoka County Economic Development Exploratory Committee I I I I I I I I I I I I I I I I . I I I I I I I I I . I . . . 14 Inventory and Gap Analysis 5. Inventory and Gap Analysis After reviewing these findings, the Economic Development Exploratory Committee created a list of economic development needs, identifying where existing gaps in services and programs are not adequate to meet future needs. The table below reflects the committee's discussion of the inventory and gap analysis at its March 14 and April 4, 2007 meetings. :'~;~~~'~}~;\f;i1)!'~~~F;i~!::~~~:)~!:W;!::~\!i\!;})~XiNeea~\'ni&;t1M/;'~~!;Mit:f:II~Wtt~~:~1~j}~~{?!~; : "~~~~~I~J};~:,}f~~{,~!~}\?,1i~(;r.(n~~):k~~:N~ifitSGans.;~:t~;~;~~~;~~\:~At;~~i~;i\~~:;\\;).n'~!ti\~:f~~ij~:;'j','i 1. Assemble, acquire developable property Ability to buy property with the change in and property needed for rights of way eminent domain laws 2. Financial resources to support Limited financial resources dedicated to develooment and redevelooment oroiects economic develooment activities 3. Familiarity with the use and application Lack of staff dedicated to economic of economic development tools development activities who have the expertise and knowled"e of economic deve10nment tools 4. More communication and coordination on Organizational structure for sharing activities associated with economic information and coordinating communications development/redevelopment activities among Anoka County and its cities and townshios 5. Outdated image of Anoka County Better image of the County and a coordinated annroach to "brandin,," 6. Infrastructure for technology Feasibility study of fiber optics and other technological infrastructure and a coordinated aoproach to technologv development 7. Better information to SUPPOlt economic Availability of up-to-date demographic data development and redevelooment activities and projections 8. Increased job opportunities for County Central point of contact for businesses residents considering locating or expanding in Anoka County; better understanding of relationship between economic development and redevelopment subsidies and job gains and losses. 9. Anoka County HRA limited to housing Ability to provide economic development activities as defined by statute services to communities that do not have an EDA Report of the Anoka County Economic Development Exploratory Commillea .. I Ii I Ii I I II II II I I II I I I I II I I IIIl IIIl I I IIIl I I I I II I I Organizational Options 6. Organizational Options ',"-: .~. . II 15 Minnesota Statutes Section 469.1082 Subdivision 4 identifies four organizational options that may be recommended by a local committee formed to consider the need for a county EDA or a county HRA operating with EDA powers. These four options are listed below: I. Establishing a county EDA operating under Minnesota Statutes Section 469.090 to 469.1081; 2. Allowing the existing county HRA to operate as an EDA under Minnesota Statutes Sections 469.090 to 469.1081; 3. Pursuing special legislation; or 4. Maintaining the existing structure. Based on its findings and the results of the inventory and gap analysis, the committee determined that Anoka County involvement in economic development was desirable. Reasons given for supporting an economic development role for the County included: . Recognition that half of Anoka County's communities have not created an organizational structure to administer economic development, housing and community development programs . Interest in promoting efficiency and effectiveness by not making it necessary for every Anoka County community to create its own EDA or HRA . The ability of a County economic development organization to serve as a central information clearinghouse. The committee focused its discussion on two options: establishing a countY EDA or extending the power to operate as an EDA to the Anoka County.HRA; The evaluation of the options can be summarized as follows: 1. Authorizing the Anoka County HRA to operate as an EDA would provide a mechanism for the County's involvement in economic development without requiring the establishment of a new entity. Certain economies could be realized by extending EDA operating authority to the Anoka County HRA. Administration of a single economic development organization would promote greater administrative efficiency and effectiveness whereas the creation of a separate County EDA would entail increased administrative detail as well as coordination with the Anoka County HRA. As required by Minnesota Statutes 469.1082, the committee must specify the distance that a city controls beyond its boundaries, if applicable. The committee found that none of the County's general government subdivisions exercises planning and development control beyond its boundaries and that this statutory provision is not applicable to Anoka County. Report 01 the Anoka County Economic Development Exploratory Committee I I I I I i I I I I . I I I I I I I I I I I I I I \I III \I I I I III OrQanizational Options 16 2. Each Anoka County community must be assured that it could elect to participate or to withdraw its participation with either organizational option. The committee recognizes that County involvement in economic development could have a direct benefit to communities that have not established an EOA as well as a County-wide benefit, to the extent that the efforts of an EOA or an HRA with authority to exercise EOA powers could result in an increase in the County's property tax base. Committee members also recognize that supporting an organizational option that would increase the County's involvement in economic development would not obligate their community's participation in a County EOA or the Anoka County HRA operating with EOA powers. Rather, a community's decision whether to participate would require a resolution adopted by the community's governing body. A representative of the Anoka County Attorney's Office orally advised committee members that Minnesota Statutes Section 469.1082 provides for local determination for cities to participate in a county economic development organization, regardless of whether the county establishes an EOA or extends EOA operating powers to the existing HRA. Moreover, state law does not preclude a city's ability to form an EOA and provides a mechanism for these communities that want to establish an HRA on the operating area of a county HRA. 3. Anoka County communities will need information on how the levy will be determined and how revenues will be allocated between housing and economic development activities. In evaluating the need for an increased County role in economic development, committee members emphasize the importance that some city councils and township boards might place on local levy implications, in considering participation in a County HRA operating with EOA powers. They advise the County to research and develop information explaining the maximum levy authority of the County HRA exercising EOA powers and how revenues would be allocated between housing and economic development activities. Four possibilities exist for community participation in a County HRA exercising EOA powers: . Participation in both County HRA and EOA functions . Participation in the County HRA function but not in the EOA function . Participation in the County EOA function but not in the County HRA function . No participation in either function. Communities will find it helpful to know how the levy will be determined and how revenues will be allocated in considering which of the above options is in its best interests. Report of the Anoka County Economic Development Exploratory Committee Ii Ii Ii Ii m Ii iii Ii Ii Ii B II!I II IJI II III III II II II D .. .. II II .. .. II II II II .... Recommendations 17 7. Recommendations Based on its review of the current level of economic development, housing, and community development programs and services provided by existing agencies, existing gaps in programs and services, and the capacity and ability of existing agencies to expand their activities; the Anoka County Economic Development Exploratory Committee submits these recommendations to the Anoka County Board of Commissioners for its consideration: Recommendation I: Authorize the Anoka County HRA to operate as an EDA under Minnesota Statutes Sections 469.090 to 469.1 081, noting that none of the County's general government subdivisions exercises planning and development control beyond its boundaries. Minnesota Statutes Section 469.1082 subdivision 3 specifically requires the committee to identify the distance that a city controls beyond its boundaries, if applicable. This statutory provision is not applicable to Anoka County. Recommendation 2: Authorize legal research to clarify questions regarding the levy authority that can be exercised by the Anoka County HRA operating with statutory EDA powers to determine the maximum rate that can be levied and the manner in which the levy can be allocated for HRA and EDA purposes. Recommendation 3: Consider the appropriate size of the County HRA's governing board if it is authorized by the County Board to operate as an EDA, noting that Minnesota Statutes Section 469.1082 Subdivision 8 permits a county economic development authority to have a nine-member board. Report oltha Anoka County Economic Development Exploratory Commiftee I i i I I I I i I i I I I I . I I I I II II II II II II II II II I APPENDIX I Minnesota Statute 469.1082 IB ! 6 ~ II II Ii II Ii' II It EI: II I ![ II II: P' I &I I D: iii Dl II II: II III II II I [I I!il' 469.1082, Minnesota Statutes 2006 Copyright @ 2006 by the Office of Revisor of Statutes, State of Minnesota. 469.1082 COUNTY EDA OR HRA With EDA POWERS IN NONMETRO COUNTY. Subdivision 1. Authority to create. A county may form a county economic development authority or grant a housing and redevelopment authority the powers specified in subdivision 4, clause (2), if it receives a recommendation to do so from a committee formed under subdivision 2. An ec.onomic development authority established under this section has all the powers and rights of an authority under sections 469.090 to 469.1081, except the authority granted under section 469.094 if so limited under subdivision 4. This sect is in addition to any other authority to create a county economic development authority or service provider. Nothing in this section shall alter or impair any grant of powers, or any other authority granted to a community development agency, a county housing and redevelopment authority, or any county as provided in section 383D.41; Laws 1974, chapter 473, as amended; or Laws 1980, chapter 482, as amended. Any county that has granted economic development powers to a community development agency or a county housing and redevelopment authority under any of these provisions may not form a county economic development authority or grant a housing and redevelopment authority the powers specified in subdivision 4, clause (2). Subd. 2. Local committees. Upon notice to all local government units and development agencies within the county, a county may adopt a resolution to create a committee to recommend options for a county economic development service provider. The committee shall consist of no fewer than 11 and no more than 15 members appointed by the county board. At least one city official, at least one housing and redevelopment official, and at least one township official from the county to be served by the county economic service provider shall be included on the committee. Members may also represent school districts, political subdivisions that currently provide services under sections 469.001 and 469.047 and 469.090 to 469.1081, nonprofit or for-profit housing and economic development organizations, business, and labor organizations located within the county. Political subdivision representatives must be selected by their local governments and must constitute at least 50 percent of the total committee membership. The county may appoint no more than two county commissioners. The committee shall select a chair at its initial meeting. Subd. 3. Committee report. The committee shall issue its report within 90 days of its initial meeting. The committee may request one 60-day extension from the county board. The report must contain the committee's recommendation for the preferred organizational option for a county economic development service provider, including the distance from the boundary of the city that may be controlled by each affected city in subdivision 5. The distance may not exceed two miles from the city boundary. The report must contain written findings on issues considered by the committee including, but not limited to, the following: (1) identification of the current level of economic development, housing, and community development programs and services provided by existing agencies, any existing gaps in programs and services, and the capacity and ability of those agencies to expand their activities; and (2) the recommended organizational option for providing needed economic development, housing, and community development services in the most efficient, effective manner. I I I I I I r . I I I I I I I I I I I I I I II Subd. 4. Organizational options. The committee may only recommend: (I) establishment of a county economic development authority to operate under sections 469.090 to 469.1081, except that the county shall not have the powers of section 469.094 without the consent of an existing county housing and redevelopment authority operating within that county. For the purposes of a county economic development authority's operation, the county is considered to be the city and the county board is considered to be the city council; (2) requiring an existing county housing and redevelopment authority or multicounty housing and redevelopment authority to operate under sections 469.090 to 469.1081; (3) that the county pursue special legislation; or (4) no change in the existing structure. Subd. 5. Area of operation. The area of operation of a county economic development service provider created under this section shall include all cities within a county that have adopted resolutions electing to participate. A city may adopt a resolution electing to withdraw participation. The withdrawal election may be made every fifth year following adoption of the resolution electing participation. The withdrawal election is effective on the anniversalY date of the original resolution provided notice is given to the county economic development authority not less than 90 nor more than 180 days prior to that anniversary date. The city electing to withdraw retains any rights, obligations, and liabilities it obtained or incurred during its participation. Any city within the county shall have the option to adopt a resolution to prohibit the county economic development service provider created under this section from' operating within its boundaries and (I) within an agreed upon urban service area, or (2) within the distance approved in the committee report referenced in subdivision 3. If a city prohibits a county economic development service provider created under this section from operating within its boundaries, the city's property taxpayers shall not be subject to the property tax levied for the county economic development service provider. Subd. 6. City economic development authorities. If a county economic development service provider has been established under this section, existing city economic development authorities shall continue to function and operate under sections 469.090 to 469.1081. Additional city economic development authorities may be created within the area of operation of the county economic development service provider created under this section without the explicit concurrence of the county economic development service provider. Subd. 7. Continuation of existing county and multicounty housing and redevelopment authorities. Existing county and multicounty housing and redevelopment authorities shall continue to function and operate under the provisions of sections 469.001 to 469.047 Subd. 8. Nine-member boards authorized. In addition to the board options under section 469.095, a county economic development authority may have a nine-member board. If the authority has a nine- member board, at least two members must be county commissioners appointed by the county board. Of the county economic development authority board members initially appointed, two each shall be appointed for terms of one, two, or three years, respectively, and one each for terms of four, five or six years, respectively. Thereafter, all authority members shall be appointed for six-year terms. Source: Minnesota Office of the Revisor of Statutes I j I j I I I I I I ~ J II II II II !'II II II II II II II I I II II II II I II Excerpt from Minnesota Session Laws 2005, 1" Special Session, Chapter I Sec. 106. Minnesota Statutes 2004, section 469.1082, subdivision 1, is amended to read: Subdivision 1. [AUTHORITY TO CREATE.] A county loeated 8HtDide metrspslitan area may form a county economic development authority or grant a housing and redevelopment authority the powers specified in subdivision 4, clause (2), if it receives a recommendation to do so from a committee formed under subdivisiou 2. An economic development authority established under this section has all the powers and rights of an authority under sections 469.090 to 469.1 081, except the authority granted under section 469.094 if so limited under subdivision 4. This section is in addition to any other authority to create a county economic development authority or service provider. Nothin in this section shall alter or im air an rant of owers or an other authorit ranted to a communit develo ment a enc a count houshl and redevelo ment authorit or an count as rovided in section 353DAl Laws 1974 cha ter 473 as amended or Laws 1980 cha ter 482 as amend. An count that has ranted economic develo ment owers to a communit develo ment a enc or a count housin and redevelo ment authorit under an of these rovisions ma not form a count economic develo ment authorit or rant a housin and redevelo ment authorit the owers specified in subdivision 4, clause (2). I I [ [ [ I ( I I I I I I I I I I I I I I I I I I APPENDIX II Metropolitan Council Demographic Projections I I ! M I I I I I I I I I I I m I I I I I I I I I I I I I I I . HOUSEHOLD FORECASTS ANOKA COUNTY Metronolitan Council Honsehold Forecasts City or Township 1990 2000 2010 2020 2030 ANOKA COUNTY Andover 4,430 8,107 12,100 14,600 15,500 Anoka 6,394 7,262 7,900 8,500 9,000 Bethel 130 149 160 180 200 Blaine (at.) 12,825 15,926 20,700 29,300 31,200 B urns Two. 754 1,123 1,530 1,820 2,120 Centerville 519 1,077 1,340 1,600 1,850 Circle Pines 1,562 1,697 2,050 2,100 2,200 Columbia Hots. 7,766 8,033 8,600 9,200 9,300 Columbus Twp. 1,129 1,328 1,450 1,600 1,750 Coon Raoids 17 ,449 22,578 25,000 26,500 27,000 East Bethel 2,542 3,607 4,210 4,420 4,640 Fridlev 10,909 11,328 11,600 11,900 12,300 Ham Lake 2,720 4,139 5,100 5,300 5,500 Hilltoo 410 400 410 410 410 Lexinoton 829 819 910 950 1,000 Lino Lakes 2,603 4,857 7,100 8,600 10,100 Linwood Two. 1,146 1,578 1,820 1,950 2,090 Oak Grove 1,638 2,200 2,600 2,800 3,000 Ramsev 3,620 5,906 10,300 15,500 16,500 St. Francis 760 1,638 2,800 4,000 5,000 Sorino Lake Park (pt.) 2,302 2,676 2,700 2,750 2,950 ANOKA COUNTY TOTAL 82,437 106,429 130,980 153,980 163,610 EMPLOYMENT FORECASTS etrono Itan ouncl rnnlovrnent orecasts City or Township 1990 2000 2010 2020 2030 ANOKA COUNTY Andover 1,200 3,062 4,200 4,800 5,200 Anoka 11,755 ' 13,250 14,400 15,200 ~ 16,200 Bethel 193 248 330 380 440 Blaine (01.) 11,401 16,298 20,100 21,600 , 23,100 Burns Two, 259 294 350 400 450 Centerville 168 359 520 630 670 Circle Pines 861 2,057 2,250 2,400 2,450 Columbia Hgts. 4,536 6,419 6,600 6,800 7,000 Columbus 100 482 730 900 1,000 Coon Raoids 16,449 21,462 24,200 26,000 , 27,800 East Bethel 457 1,211 1,380 1,500 1,610 Frid1ev 23,821 I 25,957 30,200 33,000 .' 35,300 Ham Lake 1,820 2,812 3,050 3,200 3,450 ,HilltoQ 250 254 350 420 470 , , 0;xington 630 631 880 1,050 1,120 Lino Lakes 1,229 2,444 2,950 3,300 3,550 Linwood Two, 50 120 140 150 160 Oak Grove 200 354 430 530 640 Ramsev , 1,941 3,587 6,700 9,100 \/11,300 St Francis 793 1,226 1,630 1,900 2,220 SoringLake Park (nt) 3,019 4,287 4,600 4,800 4,850 ANOKA COUNTY TOTAL 81,132 106,814 125,990 138,060 148,98Q ANOKA COUNTY M r C 'I E F .. I I: I I I I . . . . I I I I . I I I I I I I I I I I I APPENDIX III Committee Visioning Responses Committee Visioning Responses February 7, 2007 Question 1. What is the current emphasis of economic development activities in the area of Anoka County you represent? Ham Lake - Job creation. Columbus - Developing municipal utilities and dealing with wetland issues, since 60% of Columbus is wetland. East Bethel - Biggest thing is working with the Met Council on building a stand-alone sewer system to service the surrounding area and to enable development along the Hwy. 65 corridor. Fridley _ Redevelopment concentrating on sites that are difficult to develop. City gets involved oniy if private sector can't do it on its own. Blaine - Re-thinking future plans in the northeast area. Burns Township - 90% of our community leaves the Township to work. Working on a commercial land use plan to prepare for future and to become less of a bedroom community. Coon Rapids _ Infill development and redeveiopment, particularly along Coon Rapids Blvd. There is a shift in demand towards the service sector. Most proposals are for office buildings, not industrial projects. We are also paying more attention to our housing stock. ACHRA _ We can only work with cities and townships, our emphasis Is on doing our part, in parks and recreation, transportation, the National Sports Center, TPC, Vikings stadium, etc. We need to create an inventory of what is available so we can give people options to stay In the County. City of Anoka _ Transportation has come to the top of our list, particularly on Hwy. 10 and 47. We are excited about the rail station coming to our community. Question 2. Let's travel in time to the year 2017. What economic development success stories will have made local, state or regional headlines over the last 1 0 years? Ham Lake - To have created a positive image for the City. Burns Township - To have become a sports tourism destination. Coon Rapids _ To have completed redevelopment on Coon Rapid Blvd. and the success of commuter rail at both station sites. Anoka County - There is an interest in the Vikings stadium deal, it was successful at creating a positive image of what is available here. We have to look at the big picture, and work together. One of the things is to develop a theme, we were looking at a stadium and retail opportunities which could have made Anoka County and Blaine a sports and entertainment center in the upper Midwest. Columbus - Racetrack will be a cornerstone of our future development, and it will bring in utilities. ACHRA _ Economic development is going to impact transportation needs In Anoka County, and rather than fighting to maintain smaller road systems we need to reinvent Hwy. 65 as a full highway. I: I I I I I I I I I I I . I I I . I I I . I I I I I I I I I . w East Bethel- An entertainment area for Minnesota, potentially a NASCAR track in the northern part of the County. Fridley - Time is going to bring increased populations which will further increase the importance of transportation, in particular, it would be nice to have better north-south movement inn the County. Herm Talle - We are going to have development as individual entities, but our strength is in doing it together by having a coordinating entity. We have to put it together so that everyone agrees. Blaine - We have to move forward on issues such as crime, transportation, and image. If we don't advance in these areas Anoka County won't look much different 10 years from now. Question 3. Based on these headlines, what should be the focus of economic development activities over the next 10 years? Anoka County - We have to focus on the problems we have, and realize some territorialism. We need to recognize that we have some competitiveness, and we need to be aware of this. We need to update our image from one of traiier parks and pole buildings. Additionally, we need to talk about outcomes and how we measure success. Ham lake - Entertainment and transportation are two themes that came up the most. How will increased broadband internet availability change the employment landscape, can it be tied to easing transportation issues? How can we provide leadership for these issues? Blaine - A major factor in attracting bio-science industries is the availability of high-speed internet. How does the County and local governments go about ensuring that this resource is available? Will Anoka County reach the maximum per-mile density necessary to spur private development of these networks? How does the County go about providing this? Columbus - We are still on modems in Columbus. The focus needs to be on the young, small population cilies like Columbus who are tied with Wyoming and JOBZ on our borders. ACHRA - How about concentrating on the impact from our youth? They are smart people, and we have to trust their instincts. The older folks are hilling retirement, and the youth are going to be the job market. What are they going to be doing, and where? East Bethel - We need to look beyond just 10 years, as much as 50-100 years out. It's terrible how much money has to be set aside for right-of-way acquisition. Need to focus now on right-of-way acquisilion for projects that won't be occurring for another 50 years. Burns Township - Preparing ourselves would help, focusing on communication and the things that would invite commercial development. Coon Rapids - Planning, commitment and the will to follow through with plans. Too often the will to follow through is missing. Partnerships, building trust, and being able to work between different units of government come In baby steps. The more communicalion and good failh efforts are put forth, the better place Anoka County will be. APPENDIX IV Local Government Inventory Questionnaire I I I I I I I I I I I I I I I I I I I I I I . I I I I I I I I I I I I I I I I I . I I I I. I. I I I I I I I I . Local Government Inventory Questionnaire Local Government Name: Name: Job Title: Telephone Number: Emai! Address: 1. Do you have: (Complete the boxes that apply) Year Established Number of Members EDA BRA BRA wlEDA Powers Port Authoritv Economic Dev. Committee 2. If you have an EDA, are you using statutory ability to levy? Yes 0 No 0 3. If you have an BRA, are you using statutory ability to levy? Yes 0 No 0 4. If you have a Port Authority, are you using statutory ability to levy? Yes 0 No 0 5. Do you have paid staff specifically dedicated to economic development activities? If yes, how many FIEs? Yes 0 No 0 6. Please list examples of projects the EDAlHRA/local government has funded within the last five years, and the amount and type of funding used. Proiect Name Tvne of Fundino Amount of Fundin~ Year I I I I I I I I I I I I I I I I 7. What economic development tools have you been using or would you consider using? What tools would you absolutely not use? (Space is provided to add other types of economic development tools.) Please indicate below: Have Would Would Not Used Consider Use Community Development Block Grants Contamination Cleanup and Investigation Grant Program Economic Development Authority/Housing Redevelopment Authority Economic Development Fund Eminent Domain Livable Communities Grant Minnesota Investment Fund Municipal State Aid Street Fund Redevelopment Grant Revolving Loan Fund/Interest Buy Down Programs Special Assessment Special Service District Tax Abatement Tax-Exempt Financing TIP - Redevelopment District TIP - Renewal and Renovation District TIP - Housing District TIP - Economic Development District R R I I I I I I I I I I I I I I I I . II I II I. II I I I II I II III !II 8. What other related economic development tools has your locality employed? (Space is provided to other types of local programs.) Have Would Would Not Used Consider Use Business Retention Program Locality Marketing Plan Workforce Training Programs Business Incubator Programs Job Skills Partnership Act 9. Have you exercised the option for the EDAlHRA to be a limited partner in a relationship? Why or why not? 10. What is the current emphasis of economic development activities in your community? 11. Let's travel in time to the year 2017. What economic development success stories will have made local, county or regional headlines over the last 10 years? 12. Based on these headlines, what should be the focus of economic development activities over the next 10 years? 13. What barriers have limited economic development in your local government? 14. What has been your greatest economic development challenge? 15. Describe limitations that have been placed on the use of economic powers within your local government. 16. What projects have you wanted to do, but have been unable to accomplish? 17. If a County economic development organization were formed what factors would influence your participation? I I I I I I I I I I I I I I I R I I I I I I I I I I I B I I G ~ 18. Please indicate the most recently adopted economic development goals for your local government in the space below 19. Please list any recent studies and analytical research that has been prepared regarding the economic development environment in your local government. 20. The charts below show the Metropolitan Council projections for Population, Housing and Employment growth in Anoka County between 20 I 0 and 2030. If you have different projections for your locality please indicate in the space provided. Population 2010 2010 2020 2020 2030 2030 Citv Est. Citv Est. Citv Est: Andover 33,000 39,000 40,500 Anoka 19,000 19,800 20,800 Bethel 450 460 510 Blaine 64,800 76,100 78,000 Burns Two. 4,480 4,990 5,800 Centerville 3,700 4,100 4,700 Circle Pines 5,400 5,300 5,400 Columbia Hei"hts 20,000 21,400 21,700 Columbus 4,000 4,240 4,680 Coon Raoids 65,700 66,000 65,000 East Bethel 11,800 11,700 12,100 Fridlev 27,000 26,900 27,500 Ham Lake 15,200 15,200 15,200 Hilltoo 770 770 770 Lexin"ton 2,250 2,250 2,300 Lino Lakes 22,500 26,300 30,700 Linwood Two. 4,920 5,000 5,400 Oak Grove 7,700 8,300 8,600 Ramsev 31,300 45,000 44,000 St. Francis 7,700 10,400 12,800 Snrin" Lake Park 6,600 6,600 6,800 Anoka County Total 358,270 399,810 413,260 Households 2010 2010 2020 2020 2030 2030 City Est. City Est. City Est. Andover 12,100 14,600 15,500 Anoka 7,900 8,500 9,000 Bethel 160 180 200 Blaine 24,000 29,300 31,200 Burns Two. 1,530 1,820 2,120 Centerville 1,340 1,600 1,850 Circle Pines 2,050 2,100 2,200 Columbia Hei~hts 8,600 9,200 9,300 Columbus 1,450 1,600 1,750 Coon Raoids 25,600 26,500 27,000 East Bethel 4,210 4,420 4,640 Fridley 11,600 11,900 12,300 Ham Lake 5,100 5,300 5,500 Hilltoo 410 410 410 Lexin~ton 910 950 1,000 Lino Lakes 7,100 8,600 10,100 Linwood Two. 1,820 1,950 2,090 Oak Groye 2,700 3,000 3,220 Ramsey 10,900 16,200 16,500 St Francis 2,800 4,000 5,000 Sorin~ Lake Park 2,700 2,750 2,950 Anoka County Total 134,980 154,880 163,830 Employment 2010 2010 2020 2020 2030 2030 City Est. City Est. City Est. Andoyer 4,200 4,800 5;200 Anoka 14,400 15,200 16,200 -Bethel 330 380 440 Blaine 20,100 21,600 23,100 Burns Two. 350 400 450 - Centeryille 520 630 670 'Circle Pines 2,250 2,400 2,450 Columbia Hei~hts 6,600 6,800 7,000 Columbus 730 900 1,000 Coon Raoids 24,200 26,000 27,800 East Bethel 1,380 1,500 1,610 Fridlev 30,200 33,000 35,300 Ham Lake 3,050 3,200 3,450 Hilltoo 350 420 470 Lexin~ton 880 1,050 1,120 Lino Lakes 2,950 3,300 3,550 Linwood Two. 140 150 160 Oak Grove 500 600 680 Ramsey 6,700 9,100 11 ,300 S t. Francis 1,630 1,900 2,220 Sorin~ Lake Park 4,600 4,800 4,850 Anoka County Total 126,060 138,130 149,020 Please submit surveys to anokacounty@sprin~sted.com by Friday, February 23,2007. Questions may be directed to Sharon Klumpp with Springsted at 651.223.3053 or at sklump,p@springsted.com. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: August 28, 2007 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 7 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Housing Maintenance Plan BY: Robert Streetar BY: DATE:August24,2007 BACKGROUND: Since 2002, the one of the City Council's priorities has been maintaining and improving the housing stock. To continue this progress staff has prepared a Housing Maintenance Plan for years 2008 - 2017 that will provide support to maintain the City's housing stock. This plan represents the bare minimum to maintain the housing stock, and if resources allow should be increased. HOUSING MAINTENANCE PLAN 2008 - 2017 Maintaining the quality of the housing stock is fundamental to maintaining livable neighborhoods and a strong tax base. Residential homestead property comprises 78% of the total property tax base. The residential homestead housing stock is much older and lower in value compared to other metropolitan cities, and residents have identified deferred maintenance of the housing stock as a problem since 1992. Since improving the housing stock requires a sustained and long-term effort, staff recommends the Columbia Heights Economic Development Authority (EDA) implement the following housing programs during the period of 2008 through 2017 to maintain and improve the residential homestead housing stock. These programs include the: 1. Housing Resource Center 2. Home Rehabilitation Incentive Program 3. Single-Family Home Replacement Program 4. Single-Family Home Deferred Loan Program 5. Housing Maintenance Capacity Building Program Implementing these housing programs further achieves the City's Comprehensive Plan housing goal of "Promoting and preserving the single-family housing stock as the community's strongest asset", and by doing so implements the policy of "enhancing and maintaining the quality and appearance of the City's single-family neighborhoods and the housing stock." Housinq Resource Center Proqram (HRC) The HRC program provides home improvement loans, construction management services, and information on a variety of housing topics. The HRC is a free service for homeowners that provides comprehensive housing services to homeowners in participating communities. The HRC is a program of the Greater Metropolitan Housing Corporation (GMHC). Since 2002, services have been provided to 1,819 homeowners. Staff believes the need for this popular program will continue to grow as the EDA more effectively markets this program. The services provided by the HRC supports the Comprehensive Plan housing strategy of "supporting the upgrading and maintenance of older houses throughout the community." Therefore, staff recommends the EDA continue to annually fund the HRC program in the approximate annual average amount of $16,800. The cost of the program over 10 years is estimated to be $168,051. The estimated number of homeowners to be served over the period is 4,500. Home Rehabilitation Incentive Proqram (HRI) The HRI program provides homeowners with a cash rebate of 10%, 12% or 15% of eligible rehabilitation costs up to $3,000, depending on income. To qualify the homeowner must have a household income at or below 115% of the area median income or $88,206. This program is administered by the GMHC and funded by the EDA. Since the EDA initiated this program is 2002, 62 homeowners have received rebates, with the average rebate of $1,279, and completed $773,899 of rehabilitation. Staff believes the popularity of this program will continue to grow as the EDA more effectively markets this program. The HRI program supports the Comprehensive Plan housing strategy of "supporting the upgrading and maintenance of older houses throughout the community." Therefore, staff recommends the EDA continue to annually fund the HRI program in the approximate annual average amount of $50,500. The cost of the program over 10 years is estimated to be $505,690. The estimated number of homeowners to be served over the period is 440. Sinqle-Family Home Replacement Proqram (SFHR) The SFHR program provides funding to allow for the replacement of the most blighted and dilapidated single-family detached homes in the city with new single-family detached housing. Since 2002, the EDA, in partnership with the GMHC, has replaced five dilapidated homes with 10 new single-family homes that have had an average sale price of $232,000. The homes are at least 1,600 square feet and consist of three to four bedrooms, two bathrooms, and a two-stall garage. The project currently under construction is the located at 4141 Jefferson Street. The EDA's contribution toward these 10 new homes was $115,000. The Metropolitan Council and Minnesota Housing Finance Agency provided $240,000. These funds were used pay for the gap between the cost to acquire and demolish the dilapidated home, build the new home and the sales price of the new home. This program is a funding alternative to the special legislation the EDA pursued during the most recent legislative session. As Commissioners will recall, the EDA pursued special legislation that would have extended the A3/C7 tax increment district. The extension would have generated $650,000 funding annually enabling a very robust replacement program, but the bill died in the House of Representatives. Consequently, staff developed this funding alternative that could replace between two and four single-family homes annually with new homes. This program requires the EDA to provide $50,000 of matching funds at least every other year beginning in 2008, to leverage additional funding from the Minnesota Housing Finance Agency's (MHFA) Community Revitalization Fund, and the Metropolitan Council's Local Housing Incentives Account. This funding would then be used in partnership with GMHC to remove blighted homes and replace them with new single-family detached homes. This program supports the Comprehensive Plan housing strategy of "demolishing the most seriously deteriorated single-family homes and working with the private sector to develop appropriate replacement housing." Therefore, staff recommends the EDA annually fund the SFHR program in the amount of $50,000 at least every other year beginning in 2008. The cost of the program over 10 years is estimated to be $250,000. Based upon past experience, the EDA could be expected to leverage between $50,000 and $250,000 annually from MHFA and the Metropolitan Council. The estimated number of new homes to be replaced over the period is between 20 and 40. Sinqle-Family Home Deferred Loan Proqram (SFHD) This new program provides a no or low interest deferred loan to a homeowners of lower income to complete structural improvements that would help maintain the quality their home and the City's housing stock. Improvements could include new roofs, windows, heating and air systems, plumbing and electrical. This intent of this program is to provide assistance to homeowners who need to perform home maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The loan is deferred and becomes payable when the property is sold or changes title. When the loan is repaid the proceeds lent again to a new homeowner. This way the money is never depleted, but merely recycles. The exact parameters are yet to be developed, but would most likely be similar to other deferred loan programs, such as the Community Development Block Grant program funded by Anoka County and administered by GMHC. This program supports the strategy of "supporting the upgrading and maintenance of older houses throughout the community." Therefore, staff recommends the EDA fund the SFHD program in the approximate annual amount of $30,600. The cost of the program over 10 years is estimated to be $306,426. The estimated number of loans to be issued over the period is between 20 and 30. Housinq Maintenance Capacity Buildinq Proqram This program establishes future housing funding capacity through an EDA annual levy. By establishing this pool of resources the EDA can be assured this housing efforts that have begun will continue. Establishing the capacity ensures housing maintenance will remain a priority in the future. Establishing this capacity requires the EDA to levy an additional $50,000 annually. These funds are reserved for housing maintenance programs to be implemented after 2017 such as those listed above. If needed, these funds could also be used to fund emergency housing needs, or expand current programs should the need arise during the 2008 - 2017 period. Staff recommends the EDA fund the Housing Maintenance Capacity Building Program by levying $50,000 annually through an EDA levy beginning in 2009 and ending in 2017. The program creates a $455,931 of housing maintenance financial capacity over the1 O-year period for future housing maintenance needs. Housinq Plan Budqet 2008 - 2017 The cost to implement these five programs over the next 10 years is estimated to be $1,686,098. Funds to pay for these programs would come from fund balances in Funds 299, 235,101,226, and 410 and require the City Council to transfer $1 ,091 ,814 from those funds to the Fund 207 - Housing Maintenance Fund. The remaining revenue is generated through an EDA levy of $450,000 and interest earnings of $144,285. The cost to an owner of a $200,000 home for all of these programs, a $1,600,000 investment in housing over 10 years, would be about $66. Below is the housing maintenance summary budget. Housing Maintenance Summary Budget Sources Fund # 299 235 101 226 410 204 Uses Fund Name Housing and Redevelopment Authority Rental Housing General Fund Special Projects Capital Sheffield Redevelopment Economic Development Authority Interest Income Amount $306,426 $40,688 $138,000 $206,700 $400,000 $450,000 $144,285 $1,688,098 Program Housing Resource Center Home Rebate Incentive Program Home Replacement Program Home Deferred Loan Program Housing Maintenance Capacity Building Program Amount $168,051 $505,690 $250,000 $306,426 $455,931 $1,688,098 RECOMMENDATION: Staff recommends EDA Commissioners approve this Housing Maintenance Plan subject to any changes or modifications by Commissioners. RECOMMENDED MOTION: Move to Approve the Housing Maintenance Plan subject to any changes or modifications by Commissioners. Attachments EDA ACTION: