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HomeMy WebLinkAboutEDA MIN 08-28-07 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES August 28, 2007 CALL TO ORDER/ROLL CALL President, Gary L. Peterson called the meeting to order at 7:01 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg Absent: Patricia Jindra PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of July 24, 2007 regular meeting and the Financial Report and Payment of Bills for the month of July on Resolution 2007-16. Nawrocki asked about the check for family fun shows. Streetar stated it was the carnival deposit from the festival. MOTION by Nawrocki, second by Kelzenberg, to approve the consent agenda items as listed. All ayes. Motion Carried. 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 (EOA) 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 10 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 if correct, 10 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 28 day of August, 2007. BUSINESS ITEMS Resolution 2007-17, Third Amendment to Contract for Private Redevelopment Schumacher stated Mike Norian, Kennedy & Graven, as well as Dave Kloeber, the developer is here tonight to answer any questions the board may have. The Contract for Private Redevelopment was originally dated September 23, 2003, with 1st Economic Development Authority Meeting Minutes August 28, 2007 Page 2 of 10 amendment on April 26, 2005, and the 2nd Amendment was executed on November 22, 2005. The first condo building was constructed, 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. Nawrocki asked, who are we actually dealing with as he read in the St. Paul paper recently about the development in Ramsey where the City of Ramsey got their self into big problems, with the development. Kloeber stated he has owned Grand Central Properties, since December 1, 2004. He does not know who owns the Ramsey project, has never been involved with the project and never will be. The executive who was committed to the project, Jim Hisel, who used to work with Bruce Nedegaard, had fraudulently filled out purchase agreements at Grand Central, and gave people checks so they could put it back in his account. Nawrocki asked the attorney, Mike Norton if he was aware of this situation. Norton stated he was and that the transfer of the Grand Central Properties was from Nedegaard to Kloeber. Nawrocki asked what is the third change. Schumacher stated it is to change the wording of the owner and the term of the agreement is extended. Diehm expressed to Kloeber that it is a great project, timing is unfortunate, hoped he knows we are a City and committee that is very committed to this project, supports this amendment and stated that we will do what we can to help him. Szurek and Kelzenberg stated they are also in agreement with Diehm, that it is a very nice project. Williams stated he also thinks the project is very nice and suggested they leave more lights on in the building, which would attract more people to the building. Kloeber stated Streetar has been very helpful and has been reassuring him the City is committed to the project. Streetar suggested that maybe on the mayoral updates Peterson could have Kloeber join him. Peterson stated that could be arranged. Motion by Diehm, second by Szurek, 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. Nawrocki felt Nedegaard did a good job on the project, but was concerned that we get involved in the problems of the project in the City of Ramsey, he doesn't want us to get into that kind of trouble, because not enough of the right answers were asked. We are Economic Development Authority Meeting Minutes August 28, 2007 Page 3 of 10 extending the agreement for three years and the original agreement should have been done by this time, getting back the T1F money depends on the tax income of the project and at this time we aren't receiving anything. Diehm told Nawrocki that some of our reassurance is that we want it done right, and we are tied into the agreement. Upon Vote: Szurek-aye, Williams-aye, Nawrocki-aye, Peterson-aye, Diehm-aye, Kelzenberg-aye. All ayes. Motion Carried. RESOLUTION NO. 2007-17 RESOI,UTION APPROVING A THIRD AMENDMENTTOCONTRACTFOR PRIVATE RHDHYELOPMENTBETWEEN TI-IE COLUMBIA HEIGl-ITS ECONOMIC DEVELOPMENT AUTIIORITY AND GRAND CENTRAL PROPERTIES, LLC BE IT RESOLVED By the Board OfC011111lissioners ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Seetioll I. Recital:;!. 1.0 I. The Authority and New Heights Devclopmcnt, LLC (the "Redcveloper") t':lltered into a Contract for Private Rcdevelopment dated Scptember 22,2003, as amendcd by First Amcndment thereto dated April 26, 2005 and a Sccond Amendment thereto datcd Novcmber 22, 2005 (the "Contract"), selling forth thc tcrms and conditions ofredevclopmcllt of cerIa in propcrtywithiuthe Redevelopment Projcet, gcncrally located east of Central Avenuc, bctwcen47u1 and 49tl' Avenues. 1.02, Ncw Hcights Dcvclopmcnt, LLC has chllnged its legal nalllc to Grand Ccntrnl Properties, LLC but in all rcspccts remains the Redeveloper under the Contract. 1.03. Thc partics havc dctcrmincd a nced to lllllend the Contract furthcr, to mljust thc schcdule f(ll" redevclopmcnt of the subject properly duc to circumstances beyond the control of the Redeveloper. 1,04. The Board Illls rcvicwed a Third Amendment to the Contract and finds that the llpproval and cxecution thcrcof and performllnce of the Authority's obligations thereunder arc inthc best interest ofthc City llnd its rcsidents. Section 2, Authoritv Annroval: Further Proceedin!!s. 2.01. The Thinl Amendment to the Contract as presentcd to the Board is hereby in all respects approvcd, subject to modifications that do not illter thc substancc of the transaction and that are approved by the President lInd Executive Director, provided that execution of the doculllcnts by sllch officials shall be conclusive evidence of approval. 2.02. The Presidcnt and Exccutive Director are hereby authorized to execute on behulfofthc Authority the Third Amendlllentto the COlltract and allY documents referenccd therein requiring execution by thc Authority, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board ofCollunissioners of the Columbia Heights Economic Development Authority this 28th day of August, 2007. Resolution 2007-18, Awardina the Sale of, and Providina the Form, Terms, Covenants and Directions for the Issuance of its Taxable Tax Increment Revenue Note, Series 2007 A Schumacher stated the EDA and the City approved the establishment of the Kmart- Central A venue T1F District and adopted a T1F 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. Resolution 2007-18 approves the sale of T1F notes to the developer in the amount of $700,000. This is necessary as 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 will not issue the note until the developer provides his qualified costs and the costs are verified. Economic Development Authority Meeting Minutes AlIgllsl28, 2007 Page 4 of 10 Motion by Szurek, second by Kelzenberg, 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. All ayes. Motion Carried. n.ESOLIJTION NO. 2007-18 RESOLUTION A WARDING TIII~ SALE OF, ANI> PROVIDING Tim FORM, TERMS, COVENANTS AND DIRECTIONS FOR Tim ISSUANCE OF ITS TAXABLE TAX INCREMENT IU:VI~NlJE NOTE, SERIES 2007A OE IT RESOLVED OY thc Board ofCommissioncrs ("Board") ofthc Columbia Hcights Economic Dcvelopment Authority, Columbia Heights, Minllcsota (the "Authority") as follows: Section I. Authorization. AWllrd of Sale. 1.01. Authorizatioll. The Authority lllld the City ofColulllbia Heights have herctofhre approved the establishment of the KmarllCentral Avelllle Tax Increment rinaneing District (the "TIF District") the Downtown COD Rcdcvclopment Project (thc "Project"), and have udopted a tax increment financing plan for the purposc oftlllaneing ccrtain improvemcnts within the Projcct. In connection with the TlF District, thc Authority cntcred into a Contract for Private Rcdevelopmcnt betwccn the Authority and Ncw Heights Dcvelopment, LLC (now known as Grand Central Propcrties, L1,C) datcd as of Septcmber 22, 2004, as amended by a First Amcndmcnt thcrcto datcd as of April 26, 2005, a sccond amcndmcnt thereto dated as of Novcmbcr 22,2005, and a Third Amendmcntthcrcto dated us of ,2007 (the "Agrcement"). Pursuant to Minllcsota Statutes, Scction 469.178, the Authority is authorizcd to issuc and sell its bonds for the purpose offillancing a portion ofthc public dcvelopment costs ofthc Project. Such bonds are payablc from all or any portion ofrcvcnues derived from the TIr District and pledged to thc paymcnt ofthc bonds. The Authority hereby finds and dctcrmines that it is in the best intcrests of the Authority that it issue and sell its Taxable Tax Incrcmcnt Revcnuc Note in thc maximum principal amollnt of$700,000 (the "Note") for thc purpose oftinnncing ccrtain public redevelopmcnt costs of the Projcct. 1,03. Issuance Salc and Tcrms of the Notc. The Authority hcrcby delcgates to thc Exccutivc Dil'ectorthcdctcrminution ofthc datc on which thc Note is to bc delivcred, ill accordance with the Agrecmcnt. Thc Note shall bc issucd to Grand Central Propcrties, LLC ("Owner"). The Noteshllll be datcd as of the date ofdelivcry. shall mature no later than Februmy 1,2013. shall bCllr interest at the rate 01'6.0 % pCrall11Um from the datc of origin III issuc ofthc Note, and shall bc inthc principal amount orthc Puhlic Redcvclopmcnt Costs submilled and upproved in accordancc with the Agreement but in no event greuter than $700,000. The Note is issucd in consideration or payment by OWllcr of the Public Redcvelopmcnt Costs in atlcast the principal amount of the Note, in accordance with the Agrccmcnt. Scction 2. Form or Note, Thc Notc shall be in sllbstantiully thc following form, with the blanks to bc properly filled in and thc principal amount and paymcnt schedule mijustcd as of the datc of issuc: UNITED STATE OF AMERICA STATE or MINNESOTA COUNTY or ANOKA COLUMBIA HEIUIITS ECONOMIC DEVELOPMENT AUTIIORITY No. R~I $-- TAXABLE TAX INCREMENT REVENUE NOTE SERIES 2007 Rate Date of Oril!inallssue 6.0% .2007 The Columbia Ilcights Economic Devcloplllcnt Authority ("Authority") for valuc rcccived, certifies that it is indebted and hereby promiscs to pay to Grand Central Propcrtics, LLC 01' registered assigns (the "Owncr"), the principal sum 01'$700,000 01' so much thcreofas has bcen from time to timc advanced (thc "Principal Amount"), as providcd in the Agreemcnt defincd hel'eaficl', togcthcr with intercst onthc unpaid bulancc thcrcofaccrued fromthc date of original issllc hcreofat the ratc or6.0 perccnt per alltlllll1 (thc "Stated Rate"). This Note is givcn in accordance with that certain Contract for Private Redcvelopment bctween the Issuer and thc Owner datcd as ofScptcmbcr 22, 2004, as amended by a rirst Amendment thereto dated liS of April 26, 2005, a second amcndment thcrcto dated as of November 22, 2005, llnd a Third Amcndment thercto datcd as of . 2007 (the "Agreement") and thc authorizing resolution (thc "Rcsolution") duly adoptcd by the Authority on August ,2007. Capitalized tcrms used and not othcrwise dCtlllCd herein have the mcaning provided for slleh tcrms in the AgreCll1Cntullless the eontcxt clearly requircs othcrwise. L Pavments. Principal and interest ("Paymcnts") shall he paid onthc first February I or August I ancr substantial completion orall thc Housing Improvements and COllllllerciallmpl'Ovemcnts in accordance with the Agrecment, llnd on each Fcbrumy I and August I thereafter to and including February 1,2014 ("Paymcnt Dates"), inthc amounts and from the sourecs sct fOl'th in Scction3 hcrcin. Paymcnts shall bc applied first to accrued intcrest, and then to unpaid principal. Economic Development Authority Meeting Minutes August 28, 2007 Page 5 of 10 Paymcnts arc payable by mail to the addrcss of the Owner or such othcr addrcss as the Owner may designatc upon 30 days written notice to the Authority. Paymcnts 011 this Notc arc payable in any coin or clIl'l'cncy of the United Stutes ofAmcrica which, on the Paymcnt Datc, is legal tender for the paymcnt of public and privatc dcbts. 2. Intcrcst. Simplc intercst shall accruc from the date of original issuc of this Notc and shall bc computed on the busis ofa ycar of 360 days und chargcd for actual days principal is unpaid. 3. Available Tax Incrcmcnt. All paymcnts on this Notc arc payable on euch Payment Date solely from and in the amount of'the "Available Tax Inercmcnt," which means (a) on the first Payment Date, 90 percent ofthc Tax Increment allributable to the I-lousing Property as defined in thc Agrcement that has bcen paid to thc Authority by Anoka County prior to that Payment Date, and (b) on each Payment Diltc ancr the first Payment Date, 90 pcreent of the Tax Increment attributable to the I lousing Properly as defined in the Agrcemcnt that has been paid to the Authority by Anoka County in thc six months preceding the Paymcnt Date. The Authorily shall have no obligution to pay principal of and intercst on this Note 011 each Payment Datc from uny source olher limn Available Tax Increment lInd the fhilure of the Authority to pay the clltire amount of principal or interest on this Note 011 any Paymcnt Date shall not constitute a default hereunder as long as the Authority pays principal and interest hcrconto thc extent of such pledged revcllues. The Authority shall have 110 obligation to pay unpaid balance of principal or accrucd interest that lllay remain ancr thc final Payment on fcbruary I, 2014. 4. Default. Upon an Evenl of Dcihnlt by the Redevelopcr under the Agreement, thc Authority lllay exercise thc rcmedies with respect 10 this Note described in Section 9.2 orthc Agrcement, the terms of which arc incorporated hercin by reference. 5. Ontional Prenavmenl. (a) The principal sum and all aecrucd interest payablc undcr this Note is pl'epayablc ill whole or in pmt al any timc by the Authority without prcmilllll or penalty. No partial prepayment shall affect the amount or timing of any othcr rcgular payment otherwise required to be made undcr this Notc. (I>) Upon receipt by Redeveloper of the Authority's written stutement of the Excess Amounl as defined in Section 3.4(e) of thc Agreement, one-halfofstlch Excess Amount will be decmcd to constitute, and will be applied to, prepayment of the principal amountofthis Note. Such deellled prcpayment is effcetive as of the Final Closing Date as defined in Section3.4(e) onhe Agrecment, und will be recorded by the Registrar in its records for the Note. Upon request of the Owner, thc Authority will deliver to the Owner a statement ofthe oulstanding principal balance ofthe Note uncI' application ofthc decmed prepayment undcr this paragraph. 6. Naturc ofObli!!atioll. This Notc is one oran issue in the total maximulll principalalllollnt 01'$ isslled to aid in financing certain public redevelopment costs and administrative costs ofa Project undcrtakcn by the Authority pursllantto Minllesota Statutcs, Sections 469.001 through 469.047, and is issued pursuant to the Rcsolution, and pursuant to and in full conformity with thc Constitution and laws ofthc State of Minnesota, including Millncsota Statutes, Sections 469.174 to 469.179. This Note is a limitcd obligation of the Authority which is payable solely from the revenues pledged to thc payment hereof under the Resolution. This Note and the interest hcreon shallllot be dccmcd to constitute a general obligation of the State of Minncsota or any political subdivision thcrcot: including, without limitation, the Authority. Neither thc State of Minnesota, nor any political subdivision thercofshall be obligated to pay the principal of or interest Oil this Note or other costs incident hereto except from and to thc cxtent of the revenues pledged hercto. and neither the full faith and credit nor the taxing power of the State ofMinllesota or any political subdivision thereofis pledged to the payment ofthc principal of or interest Oil this Notc 01' othcr costs incident hcrcto. 7. Registratioll and Transfcr. This Note is issuablc only as a fully registered notc without coupons. As providcd in the Resolution, and subject to certainlimitlltions set forth therein, this Note is transferablc l1ponthe books of the Authorily kept for that purpose at lhe principal omceof the City Finance Director, by thc OWller hereof in person or by sllch Owner's attorney duly authorized in writing, upon surrcnder of this Note together with a written instrument of trails fer satisfaetOlY to the Authority, duly executed by the Owner. Upon such transfer or exchunge and thc payment by the Owner of any tax, fcc, or govcrmllental charge required to bc paid by the Authority with resJlcct to such transfer or exchangc, thcrc will be issued in thc name ofthc transferee a new Note of the same aggregate principal amount, bearing intcrcst at the same rate and maturing on the same dates. This Note shull not bc transferrcd to any person unless the Authority has becn provided with Ull opinion ofeoullsel or 1\ certificate of the transferor, in a forlll slltislllctory to the Authority, that sllch transfer is exempt from registration and prospcctus delivcry requirements of fedcral and applicable state securities luws. IT IS IIEREI3Y CERTIFIED AND RECITED tbat all acts, conditions, und things requircd by the Constitution and laws of the Slate of Minnesota to be done, to cxist, to happcn, and to be performed in order to makc this Note a valid and binding limited obligation ofthc Authority according to its terms, have becn done, do cxist, have happened, lInd have becn performed in due form, time and manncr as so required. IN WITNESS WI IEREOF, the Board of Commissioners of the Columbia I leights Economic Development Authority havc causcd this Note to bc executed with the manual signatures of its President and Executive Director, all us of the Datc of Original Issue specified above. COLUMBIA IIE1GIITS ECONOMIC DEVELOPMENT AUTHORITY Executive Director-Walter R. fchst Prcsident-Gary L. Peterson REGISTRATION PROVISIONS Economic Development Authority Meeting Minutes August 28,2007 Page 6 of 10 The ownership orllle unpaid balance of tile within Note is registered in the bond register oflhe City Finance Director, in the name of the pcrson Insl listed below. Date of Registration Registered Owner _ Signature of City Finance Director Gnmd Central Properties, LLC Federal Tux 1.0. No. Section 3. Tefms. Execution and Dclivcr)~. 3.01. Denomination Puvmcnt. The Note shall be isslled as a single typewritten note numbered R-I. The Note shall be issuable only in fully registered form. Princip111 of and interest on lhe Note shall be payable by check ordran isslled by the Registrur described herein. 3.02. Dates' Interest Payment Dales. Principal of and interest on the Note shall be payable by mail to the owncrofrecord thcrcofas of the closc ofbusines:> on the fifteenth day of the month preceding the Paymcnt Date, whethcr or not :>uch day is a bu:>incss day. 3.03. ReHistratioll. The Authority hereby uppoints the City Finanec Director to perform the fUlIctions of registrar, transfcr agent und paying agent (the "Registrar"). The cffcet of registration und the rights and duties of thc Authority and the Registrar with respect thcrcto shall be as follows: (a) Re1!:ister. The Registrar shall keep at its of1ice a bond registcr in which the Regislrarshall provide for the registration of ownership of the Note and the rcgistration of transfers and exchanges ofthc Note. (b) Tmnsfcr of Note. Upon surrender Jor transfer of the Note duly endorsed by the registercd owner thereof or accompanied by a wrillen instrumcnt of transfer, in tonn rcasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Regi:>trar shall authenticate nnd deliver, ill the name ofthe designatcd transferee or transferees, a ncw Note ofa likc aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shull 1Iot be transferred to allY pcrsonunless the Authority has becn provided with an opinion ofcounscl or a certificatc ofthc tmnsferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus dclivery requircments offcderal and applicable statc sceurities laws. The Rcgistrar may close the books for registration of any transfer ufter the i1ftccnth day of tile month preceding each Payment Date and until such Paymcnt Date. (c) CancellatiOl!. The Note surrcndered upon any transfcr shall be promptly cancelled by thc Registrar and thereafter disposed of as directed by the Authority. (d) Improneror Unauthorizcd Transfer. Whcnthe Note is presented to the Registrar for transfer, thc Rcgistrar mayrefllse to transfer the same until it is satisfied that thc endorscment 011 such Notc or scparate instrument of transfer is legally authorizcd. The Registrar shall incur no liability for its refusal, ill good faith, to makc transfers, which it, in its judgment, deems improper or unauthorized. (e) Persons Decmcd Owners. The Authority and the Registrar may treat the person in whose name thc Note is at any time registered in the bond rcgister as the absolutc owncr of the Note, whethcr the Note shall bc overdue or not, for the purpose ofrecciving payment ot: or 011 account of, the principal of and interest on such Note and for all othcr purposes, and all stich payments so made to any snch rcgistered owner or upon the owner's ordcr shall bc valid and eflcctualto satisfy and dischargc the liability of the Authority upon such Note to the cxtcnt of the sum or sUlns so paid. (I) Taxes Fccs and Char~. Forcvcry transfer or exchange ofthe Note, the Registrar lllay imposc a charge upon thc owner thereof sufficicntto rcimburse the Registrar tor any tax, fee, or othcr governmental chargc rcquired to be paid with respect to such trnnsfer or cxchange. (g) Mutilated Lost Stolen or Dcstroved Note. In case any Note shall becomc Illutilated or bc lost, stolen, or dcstroyed, the Registrar shall dcliver a new Note oflikc amount, maturity datcs and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in snbstitution for sHch Note lost, stolcn, or destroyed, upon the paymcnt ofthc rcasonable expenses and charges ofthc Registrar ill connection thcrewith; and, in the case thc Note lost, stolen, or dcstroyed, upon t1Iil1g with the Registrar ofcvidence satisfactory to it that such Note was lost, stolcn, or dcstroyed, and ofthc owncrship thereot: and upon furnishing to the Rcgistrar of an appropriatc bond or indcmnity ill form, substance, and nmotlnt satisfhctory to it, in which both the Authority and the Rcgistrar shall be namcd as obligee:>. The Note so surrendercd to the Regi:>trar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolcn, or destroyed Notc has already matmcd or been called Jor redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Prenarution and Dclivelv. The Note shall bc prepared under thc direction of the Exccutive Dircctor and shall be executcd on behalfofthc Authority by the signatures of its President and Executive Director. In casc allY ofticer whose signature shall appenron the Note shall ceuse to be sHch officer before the dclivelY of the Note, such signature shall neverthelcss be valid llnd sufficicnt for all purposes, the salllcas ifsllCh officer had rcmained in oftice until delivclY. When the Note has bccn so executed, it shall be delivered by the Executive Director to the Ownerthereofin accordancc with the Agreement. Section 4. Securitv Provisions. Economic Development Authority Meeting Minutes August 28, 2007 Page 7 of 10 4.01. Pledge. The Authority hereby pledges to the paymont oFthe principal of and interest olllhe Nole all Available Tax Increment under the terms and as defined inlhc Nole. Available Tax Increment shall be applied to payment oflhc principal of and interest Oil tlte Nole ill accordance with the terms oflhe form orNate set forth in Section 2 of this resolution. 4.02. ilond Fund. Until the date the Note is no longer outstanding and 110 principal thcreofor interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shallmuintain a separate lInd special "Bond Fund" to he used for 110 purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the I30nd Fund in each year all Available Tax Increment. Any Availablc Tax Increment rcmaining ill the I30nd Fund shall be translerred to the Authority's account for thc TIF District upon tcrmination orthe Notc ill accordance with ils terms. 4.03. Additional Bonds. Ifthc Authority issues any bonds or notes secured by Available Tax Increment, such additional bonds ornotcs arc subordinate to the Notc in all respects. Section 5. Certification of ProccedilJ~. 5.0 I. Certification ofProcecdinl!s. The of11cers ofthe Authority are hereby authorized and dircctcd to prepare and furnish to the Owner of the Note certillcd copics orall proceedings and records of the Authority, ami such other al11davits, certil1eates, and information as may be required to show the facts relnting to the legality and markctability orthe Notc as the same appear from the books and records under their custody and control or as otherwise known to them, and all sllch certil1cd copies, certificatcs, and affidavits, including any heretofore furnished, shall be deemcd representations of the Authority as to the facls rccited therein. Section 6. Effective Date. This resolution shall be cffcctive upon approval. Adopted this 28 day of August, 2007 Anoka County Housing and Redevelopment Authority Economic Development Activities Streetar stated Karen Skepper is here from Anoka County. This is an offer from the Anoka County Housing and Redevelopment Authority (ACHRA), to participate in ACHRA economic development activities effort. Commissioners are asked to make recommendation to the City Council for their action on September 10th If not, no further action is required. What you're being asked to participate in is their economic development activity project. The City Council must pass a resolution to opt in for a period of five years and Anoka County would levy a tax in Columbia Heights each year. In 2008 about $200,000 and every year, thereafter around the same amount, or on an average of $205, 000 every year starting in 2008-2012. The cost, on an annual basis for a home worth $200,000 would be $30 to $31 per year. The maximum they could levy is $247,000 or about another $50,000, which would raise the annual cost for a $200,000 home to $38 or $39 per year. If you choose not to opt in, you must wait five years before you can opt in. September 14, 2007 is the deadline to decide if you want in or not. Renewing the housing stock and increasing the tax base is important, but requires sufficient public revenues and resources. If you participate you can use some of these funds for redevelopment projects, housing improvement and site preparation costs if you decided to build a public safety center or community center in Heritage Heights. Streetar stated an example of how to use these funds would be to acquire, demolish, and rebuild homes in the Heritage Heights neighborhood. There is only two ways to get that money: bond for it or use the levy. If you bond for the million dollars you are using principal and interest to pay for it, as opposed to if they levy, you would request that money be returned to the community, with no interest. If the county levies the money, you won't pay interest charges. Williams asked if every dollar that Anoka County collects would come back to our City. Karen Skepper of Anoka County stated when the funds come in from taxes, they only take their administration costs out of that and the rest would be available to the City. Economic Development Authority Meeting Minutes August 28, 2007 Page 8 of 10 Williams asked if Streetar was in favor of this. Streetar stated he is in favor of it to replace blighted housing, provide for home improvement loans, cleaning contaminated property, and taking care of vacation property. He knows what resources are out there and it isn't much. Peterson asked if we would pursue the tax increment. Streetar recommend not pursuing the special legislation, but in the next agenda item he has put together a housing plan. With the decertification of the A3, C7 and C8 Tax Increment Districts in 2009 and 2010, it will put a lot of tax capacity back on the roll. That means it is estimated that your able to increase your levy in the neighborhood of four to five hundred thousand a year to pay the debt service on any bonds you may sell, for projects such as the Community Center. You could bond for $5 million and not have to see a tax increase on residents in the City. Fehst asked if cities like Fridley, Coon Rapids, or Blaine are participating. Skepper stated they have not committed at this point, but Spring Lake Park has. Fehst stated there is so much we want to do and by having this type of revenue from the county would be beneficial. When you participate in this program you do not have to levy and if you do this you could recommend the 15% be lowered to 7%. Nawrocki stated the 15% is a little bit high, but some of our programs are at 10% and asked what the maximum levy the EDA can use is. Streetar stated the $247,000 would be the maximum the City could borrow. Motion by Diehm, second by Szurek, to recommend City Council participate in the Anoka County Housing & Redevelopment Authority Economic Development Activities, with the suggestion that the 15 percent be lowered to something more reasonable. Upon Vote: Nawrocki-nay, Kelzenberg-aye, Peterson-aye, Diehm-aye, Szurek-aye, Williams-aye. Motion Carried. Housina Maintenance Plan Streetar stated since 2002, one of the City Council's priorities has been maintaining and improving the housing stock. To continue this process, staff has prepared a Housing Maintenance Plan for 2008 through 2017 that will provide support to maintain the housing stock. The plan represents the bare minimum to maintain the housing stock, and if resources allow should be increased. I am proposing five plans, which three of them you have been already participating in for many years. The programs include: 1) Housing Resource Center (HRC) provides home improvement loans, construction management services and information on a variety of housing topics. Since 2002, services have been provided to 1,819 homeowners. Staff recommends annual funding of the HRC program in the approx. annual average amount of $16, 800. 2) Home Rehabilitation Incentive Program (HRI), provides homeowners with a cash rebate of 10%, 12%, or 15% of eligible rehabilitation costs up to $3,000, Economic Development Authority Meeting Minutes August 28, 2007 Page 9 of 10 depending on their income. The household income must be at or below 115% of the area median income or $88,206. Since 2002,62 homeowners have received rebates and resulted in about $775,000 of improvements. Cost over 10 years is $505,000 and the estimated number of rebates is about 440. 3) Single-Family Home Replacement Program (SFHR) 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. GMHC has been rebuilding the homes in the past few years. Staff put together an alternative program to try to do two to four homes per year. What we are recommending is that every other year beginning in 2008, the EDA provide $50,000 and staff would go to two other programs to leverage other funds, like we did in 2004 to tear down four houses and build eight new ones in their place. 4) Single-Family Home Deferred Loan Program (SFHD), provides a no or low interest deferred loan to a homeowner of lower income to complete structural improvements that would help maintain the quality of their home and the City's housing stock. The intent of the 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. The funds are then loaned out to another homeowner. Staff recommends funding this program over 10 years in an amount of $306,426, which you would expect to provide 20 to 30 loans. 5) Housing Maintenance Capacity Building Program (HMCB), 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. To establish his program the EDA would need to levy an additional $50,000 annually. The funds would be reserved for housing maintenance programs to be implemented after 2017. The program would create $455,931 of housing maintenance financial capacity over the 10-year period for future housing maintenance needs. In summary, these housing programs, with a total amount of money invested of $1.6 million over 10 years, suggest taking $1,091,000 from different fund balances and $450,000 in an annual EDA $50,000 of the levy beginning in 2009. Interest earnings on those funds over 10 years of $444, 000, be taken and invest into those programs. Fehst stated we did talk about extending the levy due to the public safety building, and activity center. He commended Streetar for coming up with this plan, which allows us something to show the residents that we are addressing the issues in housing. Nawrocki stated before we decide on raising taxes we should take a look at what we are already taxing our residents and he commended Streetar for coming up with these programs. Economic Development Authority Meeting Minutes August 28, 2007 Page 10 of 10 Diehm stated some of these programs we have already been participating, we need to be very aggressive with our housing, it is important we maintain our housing stock, the house is the biggest investment that we have, and that we have the obligation to help our residents out in maintaining this. Motion by Williams, second by Kelzenberg, to Approve the Housing Maintenance Plan subject to confirmation of these funds by the finance department. Upon Vote: Nawrocki-nay, Kelzenberg-aye, Diehm-aye, Williams-aye, Szurek-aye, Peterson-aye. Motion Carried. Other Business Streetar stated Kirsten Partenheimer passed out the agenda for the ACAC meeting that will be held tomorrow night. You are all welcome to attend. The next regular EDA meeting will be Tuesday, September 25, 2007 at City Hall. ADJOURNMENT President, Peterson, adjourned the meeting at 8:43 p.m. Respe~ctfulI~ubnJjtted , (!/. ~,,{.z...... Cheryl akken Community Development Secretary H:\EDAminutes2007\8-28-2007 regular meeting