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HomeMy WebLinkAboutEDA AGN 05-28-08 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY WEDNESDAY, May 28,2008 7:00 p.m., City Hall, Conference Room 1 1. Call to Order/Roll Call Gary L. Peterson, President Marlaine Szurek, Vice President Bruce Kelzenberg, SecretarylTreasurer Tammera Diehm Bobby Williams Bruce Nawrocki Gerry Herringer 2. Pledge of Allegiance CONSENT AGENDA 3. Approve Minutes of January 23 and April 1 , 2008 Approve financial report and payment of bills for January, February, March and April 2008, Res. 2008-04. Adopt Resolution 2008-06, Amending Res. 2007-27 and 2007-28, Regarding Fund Reclassification Number Motion: Move to Approve the Consent Agenda as written. PUBLIC HEARING 4. Resolution 2008-05, Conveyance of Land, 3710, 3718, and 3722 Central Avenue Motions: Move to Open the Public Hearing. Move to Close the Public Hearing. Move to waive the reading of Resolution 2008-05,there being an ample amount of copies available to the public. Move to Adopt Resolution 2008-05, a Resolution Conveying Economic Development Authority owned property at 3710,3718 and 3722 Central Avenue to 3yth and Central LLC, or its permitted successors and assigns; and furthermore to authorize the President and Executive Director to enter into an agreement for the same. BUSINESS ITEMS 5. Discussion on Senior Rental Housing Project (Huset Park Redevelopment) Motion: Move to have staff prepare Revised Development Agreement language based on the following EDA provisions: 6. New Perspective Proposal (Comforts of Home Site) 7. Administrative Report 8. Other Business The next regular EDA meeting will be Tuesday, June 24, 2008 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES January 23, 2008 CALL TO ORDERIROLL CALL The meeting was called to order at 7:02 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, and Bruce Kelzenberg Absent: Marlaine Szurek PLEDGE OF ALLEGIANCE CONSENT AGENDA Election of Officers Diehm stated the current officers are President, Gary Peterson-, Vice President, Pat Jindra, and SecretaryfTreasurer, Bruce Kelzenberg and that she would like to offer a motion. Motion by Diehm, second by Nawrocki, to nominate Peterson for President and Kelzenberg for SecretaryfTreasurer. All ayes. Motion Carried. Motion by Peterson, second by Diehm, to nominate Szurek for Vice President. All ayes. Motion Carried. Minutes and Financial Reports Approve Minutes of November 27, 2007 regular meeting and the Financial Report and Payment of Bills for the months of November and December, 2007 on Res. 2008-01. Nawrocki asked what the two Bonestroo checks were for. Clark stated they are for the Comprehensive Plan. Motion by Kelzenberg, second by Williams, to Adopt Resolution 2008-01, for the Financial Report and Payment of Bills for the months of November and December 2007. All ayes. Motion Carried. HRA RESOLUTION 2008-01 RESOLUTION OF THE COLUMBIA HEIGHTS HOUSING & REDEVELOPMENT AUTHORITY (HRA) APPROVING THE FINANCIAL STATEMENT FOR OCTOBER, NOVEMBER ANP DECEMBER OF 2007 AND PAYMENT OF BILLS FOR THE MONTHS OF OCTOBER, NOVEMBER AND DECEMBER OF 2007. WHEREAS, the Columbia Heights Housing and Redevelopment Authority (HRA) 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 HRA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the HRA 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 October, November, December of 2007 and the list of bills for the months of October, November, December of 2007 are attached hereto and made a part of this resolution; and WHEREAS, the HRA 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 Housing & Redevelopment 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 Housing & Redevelopment Authority. Passed this 23rd day of January 2008. Economic Development Authority Meeting Minutes January 23,2008 Page 2 of 4 BUSINESS ITEMS Adopt Resolution 2008-02. 2008 CDBG Application Scott Clark, Community Development Director stated each year Anoka County has CDBG dollars available for redevelopment that the EDA applies for. In January 2002, the City Council identified the area at the corner of 37th and Central Avenues as a redevelopment priority. The properties included the Beecroft building, two non-conforming single-family homes, the Chutney Indian Grill and adjacent parking lot. The City used CDBG funds to acquire and demolish the two single-family homes and the Beecroft building. On October 23rd the EDA entered into a Preliminary Development Agreement with Chris Little of 37"1 & Central LLC to redevelop the properties. He has proposed building five retail oullets, totaling approximately 10,000 square feet of commercial space. A site plan will be presented to the Planning Commission on February 6, 2008 and the City Council on February 11, 2008. Staff is asking the EDA to approve a CDBG application in the amount of $300, 000 for subsidizing the acquisition of/he Chutney Indian Grill and adjacent parking lot for redevelopment purposes. Nawrocki stated he had three issues with this motion: 1) the developer will probably want some funding for his project; 2) he found out the application was already sent out and felt it should have come before this body or City Council prior to submittal to Anoka County; and 3) he fell the grant funds should be used for the Public Safety building. Schumacher stated the County ranks applications by high, medium and low. Fire stations are a medium funding application. The county has already spent the dollars that would go towards that type of application. This gap funding for the 37'h & Central project is needed as we can no longer use eminent domain to acquire properties needed for redevelopment. The developer has to pay an extremely high price to obtain the Chutney property. Diehm asked Schumacher if the County would let us reallocate the funds for a medium project. Schumacher stated the County has been relatively cooperative in the past, you can get 80% through a development project until it actually starts construction, they have been very helpful with the Industrial Park, Sarna's, and Mady's were we have had to adjust the dollars around to a different project. Motion by Diehm, second by Williams, to Adopt Resolution 2008-02, a Resolution of the Economic Development Authority of the City of Columbia Heights, Minnesota authorizing Application for the 2008 Anoka County Community Development Block Grant (CDBG) funding for the purpose of subsidizing the acquisition of the Commercial properties at 3700 and 3706 Central Avenue (Chutney Indian Grill) in the amount of $300,000 to submit said application to Anoka County. Upon Vote: Nawrocki-nay, Diehm-aye, Kelzenberg-aye, Peterson-aye, and Williams-aye. Motion Carried. RESOLUTION 2008,02 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA AUTHORIZING APPLICATION FOR 2008 ANOKA COUNTY COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING FOR THE PURPOSE OF SUBSIDIZING THE ACQUISITION OF THE COMMERCIAL PROPERTIES AT 3700 AND 3706 CENTRAL AVENUE (CHUTNEY INDIAN GRILL) IN THE AMOUNT OF $300,000, TO SUBMIT SAID APPLICATION TO ANOKA COUNTY WHEREAS, the City identified the area including the former Beecroft property, two non-conforming, single-family homes, and the Chutney Indian Grill as a redevelopment priority in January 2002; and, WHEREAS, the use of CDBG grants for acquisition is consistent with the program's national objective of aiding in the prevention and elimination of slums or blight; and, Economic Development Authority Meeting Minutes January 23, 2008 Page 3 of4 NOW, THEREFORE BE IT RESOLVED Ihallhe Columbia Heighls EDA acls as Ihe legal sponsor for Ihe 2008 Communily Developmenl Block Granl Program to be submitted on January 14,2008; and, BE IT FURTHER RESOLVED that the Columbia Heights EDA has the legal authority 10 apply for financial assistance, and the intuitional, managerial and financial capability to ensure adequate project administration; and, BE IT FURTHER RESOLVED that the Columbia Heights EDA has not violated any federal, state, or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or unlawful or corrupt practice; and, BE IT FURTHER RESOLVED that the mayor and city manager are herby authorized to execute such agreements as are necessary to implement the project(s) on behalf of the applicant; and, NOW, THEREFORE BE IT RESOLVED that the Columbia Heights Economic Development Authority has authorized staff to submit an application for $300,000 for subsidizing the acquisition of properties at 3700 and 3706 Central Avenue (Chutney Indian Grill). Passed this 23rd day of January, 2008 Redevelopment Update Comforts of Homes Schumacher stated there is about a million dollars invested into the site. Mr. Winges, the owner of Comforts of Home, indicated last year he did two other buildings similar to this one. He is in the process of selling those buildings. Like everyone else, financing is extremely tight now. They did an early start on it, invested their own money and are now having problems putting together the balance of the funding. They are going to go ahead and complete it this summer. Scott and I will be meeting with Mr. Winges next month. Winges feels that he can finish getting financing within the next month, by using smaller banks. Industrial Park Schumacher stated Ryland has just closed on two additional building pads that have seven units in each one. One building is already under construction. They are averaging 2 to 3 sales a month. Clark stated Dave Hanson, Realife Coop has 14 commitments and 20 highly interested people lined up for the old Buckles property. Diehm stated residents told her that their rese/Vation checks were returned with a notice that they were not moving forward. Schumacher stated he was told they had 14 rese/Vations and that David Hanson gets his financing from HUD, who requires 60 percent commitment, but because there had been another interest in the community for a similar type of a development coop, HUD increased it to 80 percent. After talking to Brad Schafer yesterday, he stated he was thinking of doing two smaller buildings in the same location, in phases. 391h & Central Schumacher stated Frattallone's Ace Hardware is still working to put together development plans for a 14,000 square foot building at the old Burger King site. They spent the last 60 days working with the MPCA finalizing clean up standards. Their response plan has been completed, which is a requirement of/he MPCA. Staff will be meeting with Frattallone and his builder next Tuesday to take a look at the site plan and will be bringing this development agreement to the EDA in March or April. Schumacher stated on the Mady's Site he and Scott have met with Pastor, an interested party with ideas of putting a shopping center on the site and will keep the board informed. 3ih & Central Schumacher stated Chris Little of 37'" & Central LLC is working on a development agreement for the site. He will be going to the planning commission with a site plan next month. We are going to have problems with any development along Central Avenue as we only have 109 feet of Economic Development Authority Meeting Minutes January 23, 2008 Page 4 of4 depth and with our current zoning ordinance it makes redevelopment very difficult. The site plan he is submitting will have a 9,600 square feet building, adequate parking and drive line plans under the resident ordinance requirements. Grand Central Clark stated he has made contact with Oavid Kloiber as far as the Nedegaard residential piece. Mr. Khoratty, the gentlemen that took the commercial property along Central Avenue, who is suppose to come to staff with his plans in about two weeks to review a number of key pieces. Staff did re-emphasize to him that we have a $950,000 grant from Met Council that ends in Oecember of this year. We will also have to enter into a new commercial redevelopment agreement for this. 49th & Central Clark stated Taco Bell representatives have contacted staff and are going to come in next week to start the process again with new renderings, which will not involve the car wash site. We told them we felt in the interest of the City, if there was any kind of affirmative action with Taco Bell, they would have to at least include getting rid of the car wash building as pari of that. Other Business Clark stated in his experience, when you have a down turn in the economy and you have redevelopment projects sitting out there that are 50% full or vacant, that a lot of the time the fall back position is what he calls the least common denominator and in this market, that is rental properiies. As commissioners you should be thinking about that. Nawrocki stated rental housing has been the topic of more than one discussion and the he would be strongly opposed to anymore rental housing units. Adiournment President, Peterson, adjourned the meeting at 7:35 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H :\EDAminutes2008\ 1-23-2008 ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES April 1 , 2008 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 6:01 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek, and Bruce Kelzenberg New Commissioner to be sworn in: Gerry Herringer PLEDGE OF ALLEGIANCE Oath of Office President, Gary L. Peterson stated the City Council appointed Gerry Herringer to the Commission. Gerry will be finishing out Patricia Jindra's term, which ends January 1, 2012. Peterson preformed the Oath of Office for Herringer. Development Aareement for 37th & Central Randy Schumacher introduced the developer Chris Little and Richard Little who are the proposed owners of the project, and who we have a Preliminary Development Agreement with. They are proposing to build a commercial development building approximately 10,000 square feet on the site. Schumacher then proceeded to give the board a little history of the site. In 2002 the EDA designated 37th & Central as redevelopment site. The City acquired two single- family, non-conforming homes and the Beecroft building. The developer has a purchase agreement with the owner of the Chutney Restaurant on the corner of 3ih. There are two primary difficulties with this site. They are: 1) the depth of the lots are only 109 feet, which makes it difficult to put enough square footage on the property to make it work and 2) the City no longer has eminent domain, so therefore, it is up to the developer to negotiate a price for the property. In this case that price is in excess of $50 a square foot. Staff has been working with the Little's since last August on this project. We were $550,000 apart, as far as making this work. You can only get so much for rent on a square footage basis. With this agreement the Little's are asking for assistance of: 1) $75,000 from Anoka County CDBG for a land write-down. The City approved the EDA to make application for that grant in the amount of $300, 000 and received $75,000; 2) $100,000 from the Anoka County Economic Development Authority Levy; 3) $30,000 in state aid for a turn lane because the access point will be to the north versus were it is located today; 4) up to $30,000 in surplus of Anoka County Community Development Block (CDBG) Grant money, which we used a portion of that to demolish the Beecroft building and the $30,000 left of the grant will be used for the Chutney restaurant; and 5) in order to recover our land cost of $8 per foot or $43,600 for the Beecroft property, we are asking that the developer, at the time of sale or refinancing of the project, to pay the City in full the $43,600, in not to exceed ten years. Chris Little, 37th & Central LLC, thanked everyone for taking time to listen to their proposal. He asked Richard Little to speak on some of the projects they have been involved in. Richard Little stated they started out in Maple Grove with a 17,000 square foot strip center in front of a larger shopping center. Then they did a 30-acre development, just to the east of that, which contains an 88,000 square foot Cub Foods, and 8 retail out Economic Development Authority Meeting Minules April 1, 2008 Page 2 of 4 lots, including users like KFC, Midas, Pizza Hut, Kinder Care, Hyland Bank and Ace Hardware. The next project was a 20,000 square foot building in front of CUB Foods containing Blockbuster, Star Liquor, and A T & T Wireless. Then they did a 20,000 square foot project south of that, which contains Caribou Coffee, Kinko's, Broadway Pizza, Vision World, and Verizon Wireless. They did a 7,000 square foot, Pet Hospital, and a 4.5-acre project with an Applebee's and Fuddruckers. Chris passed out a copy of his draft site plans and stated he needs them back, as they are not the finals. The final plans will be going before the Planning & Zoning Commission and City Council soon. The building is going to be approximately 9,800 square feet of retail space, with 3 to 6 tenants. The parking is going to change slightly as they originally were going to propose two buildings, and now it is only going to be one. They have been working with MNDOT to obtain access from Central Avenue, and they have received approval. This approval is contingent upon a couple of modifications: 1) the 100 foot turn lane on Central; and 2) shifting the access as far away from Central as possible. They said they have done a lot of research in this area and have been talking to a lot of different tenants. Diehm asked if they were comfortable in telling the board who those possible tenants are. Chris stated there is Bear Creek Coffee, a dry cleaner, a couple of hair cut places, Kinkos, Subway, Altell, AT & T and Sprint. They are potentially looking for tenants that would complement the City. Diehm asked if the coffee shop would be a drive through. Chris stated they have looked into two different scenarios. Part of the challenge with a drive through is that we would have to get rid of the patio and would be short on parking. Therefore, at this time it is possible, but not definite. Nawrocki asked how many public dollars are invested in the land and what the total square footage of the development site would be. Schumacher stated from the two single-family homes $159,000 of CDBG money was used. The Beecroft building was $248,000, which we will be getting $43,000 for land back from the developer and the balance would be taken from fund 420, which is a redevelopment fund. The cost to demolish the buildings was $23,600 for Beecroft and the two single-family homes were $18,575. Chris stated the square footage is . 65-acres, or 28, 106 square feet, which includes the restaurant and the City properties. Nawrocki asked what the taxes would be if the property was developed as proposed and asked if staff has checked into this. Chris stated the taxes would be around$5.75 per square foot, which is a little high, but would be passed through to the tenants. Schumacher stated staff does not have the projected taxes in hand, but will provide this information to the Commissioner if desired.. Nawrocki asked if they own the other properties they developed and if the property owners surrounding it have been notified of these meetings. Richard stated they hold onto properties for several years before they sell them. Szurek stated the residents have been notified of the meetings for P & Z and that the agenda for tonight's P & Z meeting has the Comprehensive Plan approval on it for this project. Clark clarified that Economic Development Authority Meeting Minutes April I, 2008 Page 3 of4 the Planning and Zoning Commission action is a technical item related to State Statute regarding redevelopment activities. The Commission must find that the proposed use, in this case retail, meets the City's Comprehensive Plan. Clark also noted that the formal plan would go through a hearing notice in either Mayor June. Diehm stated, we need to understand that we are only approving the Development Agreement plan. The actual site plan would have to go before the Planning and Zoning Commission and the City Council for approval. Peterson stated we are at step one of the redevelopment of this site, they aren't going to put money into this if the City isn't going to approve the agreement. Diehm stated we have found it is very beneficial to have meetings with residents to get their feedback, and wanted to know if the Little's would be doing this for this redevelopment project. Richard Little stated they have had meetings with residents in the past and are planning on having them with Columbia Heights residents. Clark stated if you look at section 3.2, which is the conditions of the conveyance, it states very clearly that the authorities obligations convey the City's parcels to the developer subject to various conditions. One of these items is that the City must approve and grant all required land use and plan approvals. Nawrocki stated it looks like we are giving it away. The county has it on the tax roll for $179,000 and we are giving it away for $43, 600. What is the sale price for the property on the corner. Fehst stated you need to keep in mind that we have had a hard time getting someone to even look at redeveloping this property. Chris stated the Chutney property price is $570,000. Herringer asked what the status of the property is and what will be their mortgage finance rate. Chris stated they do not own it at this time. Little stated they have a purchase agreement with Golden Holding and are looking at a mortgage rate of approximately 7%. Peterson asked the residents in attendance if they had any questions. Residents Wendy Howell, 3711 Van Buren, stated she is here to listen to what they are proposing, is are very excited, has been waiting and wondering and was glad to see that something is going in there. Resident, Bill Johanneck, 3713 Van Buren, stated there is alley problems; 1) the speed of the alley; 2) it is the cut through to get to 39th; and 3) he gets a lot of traffic by his house. Resident, Jim King, 3717 Van Buren, stated he is excited to see the new developments popping up around the City and is interested to see what will be going into the 3ih & Central corner. Peterson stated if any of them have questions, please feel free to contact any of the board members or staff and we will try to answer questions. Economic Development Authority Meeting Minutes April I, 2008 Page 4 of4 Motion by Diehm, second by Szurek, to Adopt Resolution 2008-03, a Resolution Approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority, the City of Columbia Heights and 3ih and Central LLC; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Upon Vote- Szurek-aye, Nawrocki- abstain, because he did not feel he had enough information on the project, Peterson-aye, Williams-aye, Diehm-aye, Herringer-aye, Kelzenberg-aye. Motion Carried. Herringer stated he would have liked to have seen more information presented on the project. ADJOURNMENT President, Peterson, adjourned the meeting at 6:52 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary H :\EDAminutes2008\4-1-2008 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of May 28, 2008 AGENDA SECTION Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Cher Bakken BY: DATE: Mav 19, 2008 BACKGROUND: The bound Financial Report for the months of January, February, March and April 2008 draft Resolution 2008-04 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 April 30, 2008. 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 2008-04, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the months of January, February, March and April 2008. EDA ACTION: EDA RESOLUTION 2008-04 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JANUARY, FEBRUARY, MARCH AND APRIL 2008 AND PAYMENT OF BILLS FOR THE MONTHS OF JANUARY, FEBRUARY, MARCH AND APRIL 2008. 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 months of January, February, March and April of 2008 and the list of bills for the months of January, February, March and April of 2008 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 ,2008. MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L. Peterson Attest by: Cheryl Bakken, Assistant Secretary COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: May 28, 2008 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2008-06, Amending BY: Scott Clark BY: Resolution 2007-27 and 2007-28, DATE: May 19, 2008 Regarding Fund Reclassification Number BACKGROUND: Per the City's Finance Department the attached EDA resolution needs to be modified so that Fund references are modified from #207 to #408. This same request is being made to a previous City Council resolution passed on October 22, 2007. RECOMMENDATION: Staff recommends Adoption of Resolution 2008-06, a Resolution Amending Resolutions 2007-27 and 2007-28 Regarding Fund Reclassification Number. RECOMMENDED MOTION: Move to waive the Reading of Resolution 2008-06, there being an ample amount of copies available to the public. Move to Adopt Resolution 2008-06, a Resolution Amending Resolutions 2007-27 and 2007- 28, Regarding Fund Reclassification Number. EDA ACTION: RESOLUTION 2008-06 RESOLUTION AMENDING RESOLUTIONS 2007-27 AND 2007-28 REGARDING FUND RECLASSFICA TION NUMBER WHEREAS, on November 27, 2008 the Economic Development Authority approved two resolutions, #2007-27 and #2007-28, which referenced an appropriation of housing dollars from Fund #207, and WHEREAS, the City's Finance Department desires that the aforementioned Fund #207 be reclassified as Fund #408, THEREFORE, BE IT RESOLVED, that all references to Fund #207 in EDA Resolution 2007-27 and 2007-28 be amended to Fund #408. Passed this day of ,2008. OFFERED BY: SECOND BY: ROLL CALL: Gary L. Peterson, President Walter R. Fehst, Executive Director EDA RESOLUTION NO. 2007-27 A RESOLUTION APPROVING THE 2008 CONSULTANT SERVICES AGREEMENT WIT THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) AN APPROPRIATING $15,000 FROM FUND 207 - HOUSING MAINTENANCE FUND FOR THE SAME. WHEREAS, the Greater Metropolitan Housing Corporation (GMHC) has agreed to provide consulting services. WHEREAS, the Columbia Heights Economic Development Authority through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. WHEREAS, the residents have found these services to be a significant assistance to help preserve and maintain their homes. THEREFORE, BE IT RESOLVED, that the EDA approves the 2008 Consultant Services Agreement with the Greater Metropolitan Housing Corporation and appropriates $15,000 from Fund 207 - Housing Maintenance Fund for the same. Passed this 2ih day of November, 2007 Offered by: Seconded by: Roll Call: ~~ Walter R. Fehst, Executive Director Gary L. Peterson, President EDA RESOLUTION NO. 2007-28 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM ($45,137) AND THE SINGLE-FAMILY HOME DEFERRED LOAN PROGRAM (SFIID) ($30,643) TO THE GREATER METROPOLITAN HOUSING CORPORATION (GMIlC) WHEREAS, the Columbia Heights Economic Development Authority (EDA) through its Comprehensive Plan has established as a goal the preservation of the single-family housing stock. WHEREAS, the EDA approved the Housing Maintenilllce Plan 2008-2017 to improve illld maintain the residential homestead housing stock. WHEREAS, the Greater Metropolitilll Housing Corporation has agreed to provide consulting services. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. THEREFORE, BE IT RESOLVED, that the EDA allocates $45,13 7 for the Rehab Incentive Progra11l and $30,643 for the Single-Family Home Deferred Loan Progrillll to the Greater metropolitan Housing Corporation from Fund 207 - Housing Maintenance Pro grams. Passed tins ;L 1 day of '</0 If e~ 2007. Offered by: Seconded by: Roll Call: w,ltcr~m :=--. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: May 2S, 200S AGENDA SECTION: Public Hearing ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 200S-05, BY: Scott Clark BY: Conveyance of Land, 3710, 371S DATE: May 19, 2008 and 3722 Central Avenue BACKGROUND: Pursuant to provisions in the 3yth and Central Redevelopment Agreement (Chris Little), dated April 22, 2008, the Economic Development Authority needs to transfer ownership of these three parcels to the Agreement's Redeveloper of record. Based on State law, this transfer must be done through a public hearing process. RECOMMENDATION: Staff recommends Adoption of Resolution 2008-05, a Resolution Conveying EDA owned property at 3710, 3718 and 3722 Central Avenue from the City of Columbia Heights Economic Development Authority to the Agreement's Redeveloper. RECOMMENDED MOTION: Move to Open the Public Hearing. Move to Close the Public Hearing. Move to waive the Reading of Resolution 2008-05, there being an ample amount of copies available to the public. Move to Adopt Resolution 2008-05, a Resolution Conveying Economic Development Authority owned property at 3710, 3718 and 3722 Central Avenue to 3yth and Central LLC, or its permitted successors and assigns; and furthermore to authorize the President and Executive Director to enter into an agreement for the same. Attachments: Resolution 2008-05, Public Hearina Notice, Location Man EDA ACTION: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2008-05 RESOLUTION CONVEYING ECONOMIC DEVELOPMENT AUTHORITY OWNED PROPERTY AT 3710, 3718 AND 3722 CENTRAL AVENUE TO 37TH AND CENTRAL LLC, OR ITS PERMITTED SUCCESSORS AND ASSIGN WHERAS, on April 22, 2008 the City of Columbia Heights Economic Development Authority approved an Agreement entitled, Contract for Private Redevelopment By and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and The City of Columbia Heights, Minnesota and 37'h and Central LLC. WHEREAS, the City owned parcels identified as 3710,3718 and 3722 Central Avenue and referenced as such within the aforementioned Agreement, and WHEREAS, Section 3.1 of the subject Agreement requires the City to transfer ownership of the subject parcels to the Economic Development Authority in order for the same agency to convey ownership to 37'h and Central LLC, or its permitted successors and assigns, and WHEREAS, City Council on behalf of the City of Columbia Heights approved Ordinance No. 1543 on April 28, 2008 to transfer the subject properties to the Economic Development Authority, and WHEREAS, Pursuant to State Law a Public Hearing has been published in the City's authorized newspaper, and NOW, THEREFORE BE IT RESOLVED, that the Columbia Heights Economic Development Authority (EDA) President and Executive Director are authorized to sign any and all documents necessary for the Conveyance of Land for parcels 3710, 3718 and 3722 Central Avenue, Columbia Heights, Minnesota to 37'h and Central LLC, or its permitted successors and assigns. I certify that the above resolution was adopted by the Columbia Heights Economic Development Authority. PASSED THIS _ Day of OFFERED BY: SECOND BY: ROLL CALL: ,2008. Gary L. Peterson- President Walter R. Fehst-Executive Director NOTICE OF PUBLIC I-IEARlNG NOTICE is hereby given that the Board of Commissioners of the Columbia Heights Economic Dev~lopment Autho~'ity (EDA) will meet in the Columbia Heights City Hall, 590 - 40th Avenue NE, Columbia Heights, Minnesota 55421 at 7:00 p.m. on May 28, 2008, to conduct a public hearing on the question of whether the EDA Board should authorize the sale or conveyance of real estate to 37'h and Central LLC for redevelopment in accordance with the Contract for Privatc Redevelopment by and between the City of Columbia Heights, the EDA and 37'h and Central LLC for the redevelopment of37'h and Central Avenues. Said real estate is located at 3710,3718 and 3722 Central Avenues. A detailed legal description of said real estate and a map depicting said real estate are on tile in the office of the Executive Director of the EDA and are available for public inspection at the Columbia Heights City Hall during regular business hours or by contacting Scott Clark, City of Columbia Heights Community Development Director, at 763-706-3672. Any person wishing to express an opinion on the matters to be considered at the public hearing will be heard orally or in writing. . BY ORDER OF THE BOARD OF COMMISSIONERS. Dated: , 2008 (Date of Publication) Executive Director Columbia Heights Economic Development Authority 3956 3955 3956 3957 3952 D-~ 3952 3953 3951 - 3951 950 3948 3949 3946 3947 --3946- (f)~ 3944 3943 3942 3943 0::: .... 3938 3938 3939 3932 W 0 0 3934 3935 3935 3939 3940 I- .... 3934 WL- 3930 3931 3930 3931 3928 (L 3923 3922 3923 3924 ... 0 3921 3918 3918 0 0 3917 3914 3915 3912 3919 I 3911 3911 3910 (MINNESOTA 3907 3906 LO a> 3900 ~ 3901 ~ 0 a> 0 3! 3901 3900 C') a> ~;;'7 39TH 3856 3855 850 3859 I- 3850 I- 3853 3854 3853 940 950 3850 3850 (f) 3849 (f) 3849 J>011.? 3848 3845 3844 3847 3851 3840 3841 3842 3841 3844 3847 3827 J>0110 3836 3837 3838 3839 3841 J>OJ>O 3832 3835 3834 3835 3837 J>O.?O 3828 3829 3830 3829 J>O.?O 3824 3825 3824 3825 3828 3825 J>01. 3820 3821 3820 3823 11 J>O J>01 3816 3818 3819 00 J>O.?,> 3812 3815 3812 3815 W J>O.? 3810 3809 3810 3807 Z .1 ' 3806 3805 3806 W 8,S 3800 3801 3800 3801 3800 ~ J>OO 3701 .1 'B " 3730 3731 3728 3729 ) {<- 80S 3726 3725 372~ cS J>>- J>,> 3720 3723 3722 Z 37 ~ 3722 ~ 11, .J,>~ Z 3716 W 3718 $ J>'>J>J> J>;< .?O 3716 3719 0::: 37 L ~ ~ - 0 Ii J>,>.?,> 3714 :J ~~ 3710 .J '0 3708 (f) CO 371i\.l <f J>,>.? .J;<~O ~ ~ ~ 3709 3710 3704 U Z 3706 J>,> , <( 3700 ~ 3705 3701 ',> 961 ~/ 3700 3701 3701 3700 -" 'L 37th & Central Ave. City-owned Parcels Location Map W~~E S ~ ~y =;;;~, ",<; \. ~~~~~-=-,._-=~~~~-=-"!"=~-===--==:......,::;:..~~-=.=~ enueN'ii [jUS ......'_..~_m._.__ ._.____-=----~~__.~"'...... (j) :J c:: (j) .it ~ - c:: (j) o ~ -~-- - .....J"'r , - [ .ttl:g., ,0 . ,g~ .O',vZ , ~ ~~ I ,r T .11'0 I . , I b ~. I . '1''''' I e I . I ~1 L1J_LW,._Uo -., b I ~ I .._ ~ o ~ ~ ~ J I I I L_____=____~_gJ '"n ~'""d - ~ ; f . ~ -.....---l ~ ro 5:, Q)b ~" (j);' ". 'WQOI:"-~~O'''''-'ln 11') U"'~""'.M'}J.'~l1!"'.U UN 1'>l,nlo:)"O\'lJt{rr>Po[<.Jrl ~tm ~"H"\-a eetlna 0 : av , AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 5 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Discussion on Senior Rental Housing BY: Scott Clark. BY: Project(Huset Park Redevelopment) DATE: May 19, 2008 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) M f M 28 2008 BACKGROUND: Due to failures in the residential economy Real Life Cooperatives has declined a purchase agreement to purchase a 1.31 acre site located at the southwest corner of Huset Parkway and Jefferson as part of the Huset Park Redevelopment (see attached location map). The master developer of the project has entered into another agreement with NHHI, Inc, a developer and owner of both accessible and senior housing, to construct senior rental on the subject parcel. The exact proposal would be to have NHHI, Inc construct a four-story, 50 unit, income qualified senior rental project (using a HUD 202 mortgage) on the southerly portion of the parcel. The master developer would then construct and own a three story, 28 unit, market rate senior rental on the north side of the lot that would be physically connected to the aforementioned building. It is assumed that the market rate rental project would require financing through tax-exempt bonds and that NHHI, Inc. would possibly be contracted with to manage this building. Michael Bjerkesett, President of NHHI, Inc. will be present to make a formal presentation to the EDA on this proposal. As is the case with many redevelopment contracts, there are a number of decisions which gets divided between the City (in this case deciding on zoning related items) and the EDA's role of making policy decisions relevant to the original redevelopment agreement (Contract for Private Redevelopment By and Between Columbia Heights Economic Development Authority Columbia Heights, Minnesota and City of Columbia Heights and Huset Park Development Corporation, dated October 25, 2004, as amended). If the EDA desires to move forward with this project there will be a number of amendments to the original Agreement that will have to be made that constitutes the policy discussion for the EDA. These are: 1) The original Agreement does not contemplate any rental projects. The intended uses are declared under the definition of Minimum Improvements (Section 1.1) and reads as follows: "Minimum Improvements" means the construction on the Phase I Property of approximately 179 units of owner occupied townhomes, condominiums or cooperative housing units, and approximately 11,650 square feet of commercial facilities (together, "Phase I"); and the construction on the Phase II Property of approximately 120 units of owner-occupied townhomes ("Phase II"), and the construction on the Phase III Property of approximately 256 owner occupied condominium or cooperative housing units ("Phase III"). 2) Section 3.1. (d) Status of the Property- this section of the Agreement defines the minimum sales price on a per unit cost for residential properties. The minimum transfer price is $18,000 for a condominium or cooperative unit but does not factor in rental projects. NHHI, Inc. purchase agreement reflects a $10,000 per unit ($500,000 for 50 units) value. Staff including the Mayor, has viewed NHHI, Inc's Meadows Project in Bloomington, which would be identical in size and scope. From a staff standpoint, this project would be a benefit to the community serving both lower income seniors, a strong building design and would meet the overall objectives of the redevelopment goals. As stated above, Mr. Bjerkesett will be at the meeting to give a formal proposal and if the EDA Commissioners desire any specific information prior to the meeting please contact staff accordingly. RECOMMENDATION: Staff recommends directing staff to prepare revised Development Agreement language. RECOMMENDED MOTION: Move to have staff prepare Revised Development Agreement language based on the following EDA provisions: Attachment: Site MaD EDA ACTION: Project Area ~ HUSET 530 HUSET PARK .... ~ ~ 635 to to / P."" . - . ,. 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Site Plan Huset Park Feasibility Plan Columbia Heights, MN 04.30.2008 ,( Apartment Building Summary 28 Dwelling Unils 28 Enclosed Parking Slalls NHH\ Housing Summary 50 OwelllngUnils 38 Surface Parklng Stalls Note: NHHl width approxImately 62' __.JL" _ URBANWORKS COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meetina of: Mav 28, 2008 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 6 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: New Perspective Proposal BY: Scott Clark BY: (Comforts of Home Site) DATE: May 20,2008 BACKGROUND: Staff has recently been contacted by a company called" New Perspective", who specializes in senior living, as a potential candidate to take over the Comforts of Home Project at approximately 3i" and Hart Blvd. As the EDA may be aware of, this project has been non- operational for the past seven months. New Perspective is currently attempting a work-out agreement with all affected parties (mortgage bank, equity partners, contractors) with the goal that their firm purchase, develop and manage a 76 unit memory and assisted unit facility. New Perspective is seeking approximately $320,000 in public assistance as part of their work- out plan. In a typical work-out, the developer needs to ascertain what the net project cost needs to be in order to make a project economically viable by balancing the new construction costs with the obligations that currently exist on the property. In a typical situation, the current obligations are negotiated so that affected parties only receive a portion of their projected revenue. In this case, New Perspective has preliminary concession indications of almost $800,000 (meaning that selected parties will not be fully paid for work performed or various equity positions will be reduced), and secondly, their company will not take a front-end developer lease-up fee. Even with the aforementioned discounts and fee waiver, equaling over $1,000,000, they have projected a need for an additional $320,000 (the gap financing portion from the City) to make the deal work. A representative from New Perspective will be in attendance at the EDA meeting and will give a detailed presentation on the work-out and who their organization is. Staff has not had any review of the pro-forma done by our outside financial consultants, as the first step in this process is to ascertain whether the EDA desires to participate in this type of activity. If assistance is provided it appears that the main tool that could be used is tax abatement. An abatement allows the project itself to effectively act as the source of revenue so that no up- front City costs would have to be expended. RECOMMENDATION: Staff recommends board direction on this matter. RECOMMENDED MOTION: None. EDA ACTION: PROJECT COST STATEMENT Lighthouse at Columbia Heights USES OF CASH Cost Per Unit LAND & IMPROVEMENTS Land Sale Price $1,639,000 $21,566 Other Land Improvements $50,000 $658 TOTAL LAND & IMPROVEMENTS $1,689,000 $22,224 BUILDING Parking Sq Ft 15,409 Existing Improvements (actual cost) $1,151,000 Tolal Existing Cost (workouI75%) $863,250 New Building Area (SqFI) 52,863 Cost per sq ft $90.00 New Building Cost $4,757,625 SUBTOTAL $5,620,875 $73,959 Construction Contingency 5% $281,044 BUILDING 5,901,919 $77,657 SOFT COSTS Design Architect & Engineering Fees $175,000 $2,303 Plan Review/Permitting/Impact Fees/Utility $50,000 $658 Activities Van $55,000 $724 Markel Study & Surverys $15,000 $197 Appraisal, Environmental, Engineering $25,000 $329 Title, Closing, Bank legal $50,000 $658 legal Fees $75,000 $987 Underwriting $25,000 $329 Administrative $350,000 $4,605 Developer Lease up fee (3K per unit) $0 $0 Construction letter of Credit $10,000 $132 Marketing/leasing & Property Mgmt Start $228,000 $3,000 FF&E $380,000 $5,000 Soft Cost Contingency $100,000 $1,316 TOTAL SOFT COSTS $1,538,000 $20,237 FINANCING FEES & RESERVES Origination Fee 1.00% $79,540 $1,047 Construction Interest 6.50% $517,008 $6,803 Working Capilalllnterest Reserve $879,832 $11,577 $1,476,381 $19,426 TOTAL COSTS $10,605,299 $139,543 SOURCES OF CASH % of cost Mortgage 75% $7,953,974 Class A Equity 25% $2,651,325 TOTAL SOURCES $10,605,299 5/21/2008 Columbia Heighls Modelcsend_1.xls Administrative Report 1. Staff will give a verbal update on the Burger King site/Frattalone Hardware negotiations. Staff will be seeking further direction from the EDA as part of these discussions. 2. Staff will be giving an update on the commercial development at 4yth and Central. At this time, this item will be going to the Planning Commission in June with an anticipated start date in August/September. However, a development agreement must first be drafted, and reviewed and approved by the EDA, in order for the developer to secure our Metropolitan Council grant plus other considerations. Staff is meeting with the developer on Friday, May 23rd and the results of that discussion will be critical to how fast all necessary documents can be drafted and acted on.