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HomeMy WebLinkAboutEDA MIN 08-26-08 ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES August 26, 2008 CALL TO ORDER/ROLL CALL President, Gary L. Peterson called the meeting to order at 7:02 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek, Gerry Herringer and Bruce Kelzenberg Staff Present: Scott Clark, Walter R. Fehst, Sheila Cartney, Cheryl Bakken PLEDGE OF ALLEGIANCE CONSENT AGENDA Approve Minutes of June 16th, July 28th and August 11, 2008 and Financial Report and Payment of Bills for the months of May, June, and July on Resolution 2008-11. Nawrocki asked a few questions on line items in the financial report. Staff clarified each item for him. Motion by Szurek, second by Williams, to waive the reading of resolution 2008-11, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Szurek, second by Kelzenberg, to approve the consent agenda. All ayes. Motion Carried. EDA RESOLUTION 2008-11 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC OEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STA TEMENT FOR MA Y, JUNE, AND JUL Y 2008 AND PA YMENT OF BILLS FOR THE MONTHS OF MA Y, JUNE AND JUL Y 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 a/l receipts and disbursements, their nature, the money on hand, tl1e 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 May, June and July 2008 and the list of bills for the months of May, June and July 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 RESOL VIED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and fist 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 RESOL VED the financial statements are acknowledged and received and the fist of bills as presented in writing are approved for payment out of proper funds; and BE IT FURTHER RESOL VED this resolution and attac/7ments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. Economic Development Authority Meeting Minutes August 26, 2008 Page 2 of6 BUSINESS ITEMS General Discussion on 4th Amendment to Contract for Private Redevelopment and Contract for Private Redevelopment. 4707 Central Avenue Clark stated on August 11, 2008 the EDA reviewed draft proposals of the two agreements and had two primary concerns: 1) relinquishing the housing developer from having to complete Phases II and III in order for the T1F note to be issued; and 2) the need to establish a "site clean-up" plan for the vacant areas of the housing development. Clark then asked all of the parties involved in this project to introduce themselves. Present was Steve Bubul, EDA Attorney, Pete Nelson, Nelson Building and Development, Jacob Ullery, Project Manager, Ehtesham Khoyratty, owner of the commercial piece, and Dave Kloeber, owner of Grand Central Lofts. Clark stated staff is recommending two compromises, which includes the site clean up actions. The first one is that the redeveloper would be required to undertake the site/landscaping improvements to be completed sometime in the fall of 2009/2010 or they would be in default of the contract. The site/landscaping improvements are: a) re- establish ground cover by removing all bituminous coverage from phase II and III, removing all gravel areas, and replacing them with seeded landscaping and complete the original grading plan; b) fill in existing excavation pit; c) establish permanent catch basin lids; d) complete seNice drive around perimeter of the south and east end of the site; e) remove existing sign frame adjacent to Grand Avenue; and f) establish sod turf on all City right-of-way areas. The second action would be regarding the building phase out, which consists of: a) the EDA would withhold 20% of available T1F on each payment under the note given to Grand Central Properties and keep those funds in an escrow account; b) if the redeveloper builds at least 70 additional units by the last payment date on the T1F note of February 1, 2014, the EDA would pay the entire amount accumulated in the escrow, including interest earnings; and c) if the redeveloper fails to build the required 70 units by February 1,2014, the EDA would retain all withheld amounts and the note is deemed paid. What makes this deal complicated is that we need the sewer expansion along Central A venue completed. If you pass the agreement, the T1F note would be split with half going to the commercial developer and half to the housing developer. Because of the sewer expansion needed, the developers would like to construct before winter. If there is an agreement, staff would come back to the EDA at a special meeting in two weeks. Nawrocki asked how much T1F funds have been collected to date and are they paying any taxes at this time. Clark stated, the housing note is estimated at $150,000 per year and taxes are being paid. To date the district has approximately $300,000 in the fund balance. Nawrocki asked after the Met Council grant funds are used, who would be paying for Economic Development Authority Meeting Minutes August 26, 2008 Page 3 of6 the rest of the ramp. Clark stated the developer would be. Diehm stated the $750,000, is proposed to be split up and the commercial developer would receive $440,000 that will be generated from T1F. Steve Bubul stated the $440,000 is the present value number using today's dollars. Clark stated in summary, that the commercial developer is getting $440,000 over a period of 10 years, plus the given interest rate. In addition, he would receive $350,000 from the housing developer and $950,000 from the Met Council grant for the ramp. Diehm asked Kloeber what the status of the housing portion was. Kloiber stated there are 34 or 35 units left. The townhouses are not moving, as they need the sewer in place first before they can build anymore. Herringer stated in the Fourth Amendment, Page 2, Housing Improvements, it states "builds at least 70 additional condominium units", that should be changed to read: "completes construction on at least 70 additional condominium units" and to insert our owner-occupied position as that is our original preference. Bubul agreed to make the changes. Diehm asked staff for an update on how we are going deal with the upcoming Met Council grant deadline for the ramp. Clark stated Cartney has been working with Deb Jensen at Met Council on this issue. The developer views they would like an extension, but feel they are going to be done with that portion if they can start in September. Met Council seems to be in agreement to extending the funds, due to the situation. Establishment of Special Meeting Date to Consider Agenda Item No.4 Motion by Szurek, second by Williams, to set a Special Meeting Date of September 8, 2008 at 6:15 pm for consideration of 4 h Amendment to Contract for Private Redevelopment and Contract for Private Redevelopment, 4707 Central Avenue. All ayes. Motion Carried. Diehm told the developers the City is excited to get started on this development and is looking forward to working with them. Resolution 2008-09 and 2008-10, 2009 Budaet and Special Benefit Levv Clark stated this item is carried over from a previous meeting. Clark stated each year the EDA has to approve both an EDA Levy and a Special Benefits Levy as part of the overall Community Development Budget. Staff is proposing a budget total of $347,561, which is raised by: 1) EDA levy of $80,000, which is the same as 2008; and 2) a Special Benefit Levy authorized under the HRA Statutes in the amount of $267,561. The HRA levy is an increase of $71,000 from 2008 and represents an increase in the new levy amount authorized by State Statutes, at 100%. The reason this increase is necessary is because the EDA's budgeted revenue is combined with the Community Development Departments' other revenue sources (permits and licensing) to make up the total department budget. The HRA increase is necessary to balance the overall Economic Development Authority Meeting Minutes August 26, 2008 Page 4 of6 deparlments' budget due to a projected $60,000 to $70,000 decrease in building permit fees for 2009. Nawrocki asked what the $35,792 under revenue was from. Clark stated this is revenue received from Parkview Villa staff administrative time spent on Parkview issues and HUD document processing. Szurek stated she felt we shouldn't be in the rental housing business. We wouldn't need the HRA if we didn't own the building. If we let the County take over the building, that would free up funds for us to do other things in our City. Herringer stated we could possibly sell the building and use the funds for redeveloping the City. Clark stated two or three years ago staff obtained appraisals for Parkview Villa. Herringer stated with the budget the concern is the drop in permit fees based on the projects that are coming down the line. Clark stated that much of the Deparlment's inspection work in 2009 would be from permits deposited in 2008. For example, with the Public Safety building, we are receiving no funds from the project. The 4ih and Central, New Perspectives, and 3ih and Central permit funds will be permitted in 2008. Nawrocki stated he intends to vote against the motion as he objects to the increase. Motion by Szurek, second by Kelzenberg, to waive the reading of Resolution 2008-09, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Szurek, second by Kelzenberg, to Adopt Resolution 2008-09, a Resolution of the Economic Development Authority in and for Columbia Heights (EDA) Adopting the 2009 Budget and Setting the EDA Levy. Upon Vote: Szurek-aye, Herringer-aye, Nawrocki-nay, Williams-abstained, Diehm-aye, Kelzenberg-aye, Peterson-aye. Motion carried. Motion by Szurek, second by Diehm, to waive the reading of Resolution 2008-10, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Szurek, second by Kelzenberg, to Adopt Resolution 2008-10, a Resolution Authorizing the Levy of a Special Benefit Levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, and Approval of a Budget for Fiscal Year, 2009. Upon Vote: Szurek-aye, Herringer-aye, Nawrocki-nay, Diehm-aye, Williams-abstained, Kelzenberg-aye, Peterson-aye. Motion Carried. EDA RESOLUTION 2008-09 RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA HEIGHTS (EDA) ADOPTING THE 2009 BUDGET AND SETTING THE EDA LEVY. BE IT RESOL VED By the Columbia Heights Economic Development Authority (EDA) of Columbia Heigl1ts, Minnesota as follows: WHEREAS, the Columbia Heights City Council established the Columbia Heights Economic Development Authority January 8, 1996 pursuant to Minnesota Statutes 469.090 to 469.1081; and Economic Development Authority Meeting Minutes August 26, 2008 Page 5 of6 WHEREAS, the City Council has given to tile EDA the responsibility {orall development and redevelopment projects and programs; and WHEREAS, the EDA is authorized under State Statutes, Section 469.107 to levy a tax on jts area of opera/ion for the purposes authorized under State Statues 469.090 to 469.1081, subject to consent by the City Council. NOW, THEREFORE BE IT RESOL VED BY THE EDA FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA THA T: 1. The EDA adopts and recommends to the City Council for approval a budget of $347.561 for year 2009. 2. The EDA adopts and recommends to the City Councif for approval a levy of $80.000 for year 2009, The Executive Director;s instructed to transmit a copy of this resolution to the City Manager and Finance Director/City Clerk of the City of Columbia Heights, Minnesota RESOLUTION NO, 2008.10 AUTHORIZING THE LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A BUDGET FOR FISCAL YEAR 2009 WHEREAS, pursuanl to Mlnnesola Slatules, Section 469.090 to 469, 1081 ("EDA Acl') the Cltyo! Columbia Helghls ("CI/y') created the Columbia Heights Economic Development Authority (the "EDA'?; and WHEREAS, pursuant to City Resolution 2001~62 and Ordinance No. 1442, the City Council granted to the EDA all powers and duties of a housing and redevelopment authority under the provisions of Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act'?, except certain powers that are allocated to the Housing and Redevelopment Authority in and for the City of Columbia Heights (the "HRA'); and WHEREAS, Section 469. 033, Subdivision 6, of the HRA Act permits the EDA and HRA, together, to levy and collect a special benefit levy of up to .0185 percent of taxable market value in the City upon aI/ taxable real property within file City; and WHEREAS, the EDA desires to levy a special benefit levy in the amount of .0185 percent of taxable market value in the City; and WHEREAS, the EDA understands that the HRA does not expect to levy a special benefit tax for fiscal year 2009; and WHEREAS, the EDA has before it for its consideration a copy of a budget for its operations for the fiscal year 2009 and the amount of the levy for col/ection in 2009 shall be based on this budget NOW, THEREFORE, Be It Resolved by the Board of Commissioners of the Columbia Heights Economic Development Authority: 1. The budget of$347. 561 for the operations of the EDA presented for consideration by the Board of Commissioners of the EDA is hereby in all respects approved. Such budget includes the amount the EDA requests (by separate resolution) to be levied by the City under Minnesota Statutes, Section 469.107, together with the amount to be levied hereunder by the EDA under Minnesota Statutes, Section 469.033, subdivision 6. 2. Staffof the EDA are hereby authorized and directed to file the budget with the City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6. 3. There is hereby levied, subject to the approval of the City Council of the City, a special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, in the amount equal to the lesser of a levy at a rate of .0185 percent of taxable market value in City, or $267.561 with respect to taxes payable in calendar year 2009, 4. Staff of the EDA are hereby authorized and directed to seek the approval by resolution of the City Council of the City of the levy of special benefit taxes in 2009 and to take such other actions as are necessary to levy and certify such levy. Other Business The next ReQular EDA meetinq will be Tuesday, September 23, 2008 at City Hall, with the Special meeting to be held at 6:15 pm on Monday, September 8,2008, Economic Development Authority Meeting Minutes August 26, 2008 Page 6 of6 ADJOURNMENT President, Peterson, adjourned the meeting at 8:24 p.m. Respectfully submitted, {~ .6;-JL Cheryl Bakken Community Development Secretary/CAP H :\EDAm in utes2008\8-26-2008