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HomeMy WebLinkAboutEDA MIN 09-15-08 Special ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES September 15, 2008 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 6: 19 p.m. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Gerry Herringer and Bruce Kelzenberg Absent: Marlaine Szurek Staff Present: Scott Clark, Walter R. Fehst, and Cher Bakken PLEDGE OF ALLEGIANCE Nawrocki stated he objected to the way this meeting was called. Members should have been called. Fehst stated it was voted at the last meeting to have a special meeting on the 8th, which staff called to change to tonight. BUSINESS ITEMS Res.2008-12 and 13, 4th Amendment to Contract for Private Redevelopment-Grand Central Lofts and Contract for Private Redevelopment-4707 Central Avenue Clark stated both documents before you have been discussed at two previous meetings. Clark stated the first document is the Fourth Amendment to the Contract for Private Redevelopment. This document amends the original contract from September 2003. It essentially does two things: 1) splits the already agreed upon tax increment in half, between the commercial developer and the housing developer; and 2) it passes on the obligation to the commercial developer to do the sanitary sewer work necessary on Central Avenue. The concerns the Board had was that the original staff recommendation was that there was no penalty back to the housing developer if Phase /I and 11/ was not completed. Essentially, what staff brought back to the EDA at the last meeting and was agreed to, is that we will be holding back 20% of the money from the housing developer and he will have until 2014 to build Phase /I and if he doesn't, the 20% would be forfeited. In addition to that the other obligation was that the temporary site improvements, listed as Schedule E; the re-establishment of ground cover and filling in and seeding of the excavation pit would also have to be done by May of 2009. Clark stated the second development is the Contract for Private Redevelopment between the EDA and Grand Central Commons. In 2003 there was the understanding that the commercial property would come in as a separate phase and would seek tax increment financing. Staff has gone through the "but for analysis" and has completely analyzed the performa. This document provides a tax increment financing note of a net present value of $440, 000 and the rest of the agreement is all of the standard language that goes along with this type of deal, e.g., the building permit process, mortgage financing, $4.6 million minimum assessment agreement etc.. Economic Development Authority Meeting Minutes September 15, 2008 Special Meeting Page 2 of4 Clark stated the last piece is identifying the Metropolitan Council Grant for the parking ramp in the amountof$974,369. In our discussion with Metropolitan Council, they verbally stated they are willing to extend this past December 31st of this year. They would allow the ramp to be in private ownership and there would have to be a public use easement in place. Clark stated in the last 6 hours we have learned that Buffalo Wild Wings is uncommitted to the project, their lease is necessary to trigger the financing for this project. According to Mr. Khoratty his bank stated they would need a copy of both of these agreements and the lease. Khoyratty stated that a main issue is the ground freezing up for the sewer project that needs to go in. From staff's standpoint, it is important to act on the agreement if work is to commence in 2008. Staff noted a number of changes that would have to occur. For example, the temporary improvements would have to be held up until spring. Mr. Khoratty would not receive any of the funds until all of the minimum improvements are done. If the EDA is willing to proceed, staff would recommend the following Agreement modifications: 1) EDA directs staff to add language to both the Met Council grant and the financing section, explicitly stating understand that this project will be built in two phases; and 2) that all T1F money be held up until the minimum improvements are qompleted. Clark stated the EDA could potentially act on the Fourth Amendment and not act upon the other amendment. The Fourth Amendment gets into the issue of splitting the $700,000 and the obligations as far as the $350,000 is concerned on the housing development. There are no other contract issues associated with the commercial developers obligations, except for the assumption that the commercial developer is going to construct the sewer improvements. Resident, Lee Stauch asked what if Buffalo Wild Wings decides to back out of the deal. Nawrocki stated we already discussed this and they have backed out of the deal. Clark then updated Mr. Stauch on the overall proposal discussion. Diehm stated she wasn't comfortable having changes made after we have approved the agreement tonight. She would prefer we approve the agreement as is, or consider it in a week. The pipe bursting wouldn't occur this week. Khoyratty stated that is correct, it will probably be next week. Herringer stated he would be more comfortable in seeing the final draft of the contract, before approving it. Then he asked Khoyratty what would be the problem with him starting in the spring, and when would he be meeting with the bank. Khoyratty stated he would like to start the sewer project this year with construction starting next year and that he would be meeting the bank tomorrow. Clark stated the questions are: 1) do we wait until next spring; or 2) do we wait and sign these next week after the modifications have been made. The window before the ground freezes to get the sanitary sewer in is six to eight weeks. Herringer told Khoyratty that we really want this development and will work with him to Economic Development Authority Meeting Minutes September 15,2008 Special Meeting Page 3 of 4 get this approved, but felt we really need tD have this in the cDrrect wDrding and that he wDuld be willing tD CDme tD a special meeting tD get this going. Clark stated he cDuld have Bubul make the changes and have a special meeting Dn MDnday night priDr to the City Council meeting if the bDard wDuld like tD. (Bobby Williams left the meeting at 7:01 P.M.) Herringer stated he asked Dur attDrney at the last meeting tD put in Dwner-Dccupied text as much as pDssible. He alsD wDuld like tD see the verbiage changed under SectiDn 4.3 (a) and (c), Dn page 5 and 6; "subject tD unavDidable delays, must use best effDrts, as market conditiDns allDw and substantially cDmplete". The words create cDntroversy. Diehm stated we shDuld give them a deadline. We shDuld say the redevelDper must cDmplete Phase" by February 1,2014. Motion by Nawrocki, second by Kelzenberg, to table approval of the 41h Amendment to Contract for Private Redevelopment and the Contract for Private Redevelopment until our Regular Meeting on Tuesday, September 23, 2008. Upon Vote: Diehm-aye, Kelzenberg-aye, NawrDcki-aye, Herringer-aye, Peterson-aye. All ayes. Motion carried. Resolution 2008-14. Approvinq Fundinq for the Rehab Incentive Proqram Clark stated the reason he brought this tD the bDard is because SDme of Dur residents have called him to say they want to get their hDme projects done before winter and that the funding has been expended. Essentially, what we want to do tonight is to see if the EDA wants tD approve a small allDcation tonight tD help residents finish up their projects before winter. Nawrocki stated he felt we shDuld use GMHC, but did not know where the funds came from, as he cDuld not find fund 207. Clark stated the City CDuncil and EDA passed a resolutiDn tD correct that fund number to 408. MotiDn by Nawrocki, second by Herringer, tD waive the reading Df ResDlution 2008-14, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Nawrocki, second by Herringer, to Adopt Resolution 2008-14, a Resolution Approving Funding for the Rehab Incentive Program in the amount of $5,000 to the Greater Metropolitan Housing Corporation (GMHC) from Fund 408-Housing Maintenance Programs. All ayes. Motion carried. EDA RESOLUTION NO. 2008.14 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM TO THE GREA TER METROPOLITAN HOUSING CORPORA TION (GMHC) 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. Economic Development Authority Mecting Minutes Scptember 15, 2008 Special Meeting Page 4 of 4 WHEREAS. the EDA approved the Housing Maintenance Plan 2008~2017 to improve and maintain the residential homestead housing stock. WHEREAS. the Greater Metropolitan Housing Corporation has agreed to provide consulting selVices. WHEREAS, tile Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. THEREFORE, BE IT RESOL VED, thai the EDA allocates $5,000 for the Rehab Incentive Program to Ihe Greater Melropolitan Housing Corporation from Fund 408 - Housing Maintenance Programs and that the "Rehab Incentive Rebate Program Agreement", signed by the EDA on November 30, 2007, sha/J be considered amended to include the additional funding. Discussion Reqardinq Reqular Meetinq of September 23, 2008 It was decided that the meeting would be held at its regular time and date. ADJOURNMENT President, Peterson, adjourned the meeting at 7:32 p.m. Respectfully submitted, ~/~~ Cheryl Bakken Community Development Secretary H:\EDAminutes2008\9-15-2008 Special