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HomeMy WebLinkAboutEDA AGN 02-24-09 AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY TUESDAY, FEBRUARY 24,2009 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 28th and February 9, 2009 Approve financial report and payment of bills for January, Res. 2009-09 Motion: Move to approve the Consent Agenda Items as listed. BUSINESS ITEMS 4. Housing Program Discussion 5. TIF Expansion Motion: Move to request that at the March 9, 2009 City Council meeting the City Council call for a Public Hearing for April 13, 2009 at approximately 7:00pm for the K-Mart/Grand Central Commons TIF expansion. 6. Administrative Report 7. Adjourn ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES JANUARY 27, 2009 CALL TO ORDERIROLL CALL The meeting was called to order at 8:52 p.m. OATH OF OFFICE Clark administered the Oath of Office to Nawrocki, Williams, and Peterson. Present: Gary L. Peterson, Bobby Williams, Bruce Nawrocki, Tammera Diehm, Gerry Herringer and Bruce Kelzenberg Absent- Marlaine Szurek City Staff- Executive Director-Walter R. Fehst, Deputy Executive Director-Scott Clark, Assistant Community Development Director-Sheila Cartney and Community Development Secretary-Cher Bakken. PLEDGE OF ALLEGIANCE ELECTION OF OFFICERS Motion by Diehm, second by Kelzenberg, to keep the same officers as last year, which were Peterson for President, Szurek as Vice President and Kelzenberg as SecretarylTreasurer. All ayes. Motion carried. CONSENT AGENDA Approve Minutes of September 23 and December 8. 2008 reClular meetinQs and the Financial Report and Payment of Bills for the months of September. October. November and December on Resolution 2009-01 Herringer asked what the two checks to Bonestroo were for. Clark stated they are payments for their services on the Comprehensive Plan. Nawrocki stated his concern was that the contract only has approximately $3,000 left in it and it was to include the document, resident meetings, and other things that they haven't seen yet. Clark stated at one the Council work sessions in February they would be provided with a memo asking for council to choose either March 4 or March 11 to have a joint meeting between the City Council, Planning Commission and inviting the public to discuss the status of the plan. Resident Donna Schmidt asked if it could be broadcast from the City Council Chambers and run on the cable channel. Peterson directed staff to make the arrangements. Motion by Diehm, second by Kelzenberg, to approve the consent agenda. All ayes. Motion Carried. EDA RESOLUTION 2009-01 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STA TEMENT FOR SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER 2008 AND PA YMENT OF BILLS FOR THE MONTHS OF SEPTEMBER, OCTOBER, NOVEMBER AND DECEMBER 2008. WHEREAS, the Columbia Heights Economic Development Authority (EDA) Is required by Minnesota Statutes Economic Development Authority Meeting Minutes January 27,2009 Page 2 of7 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 treasurers 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 September, October, November and December 2008 and the list of bills for the months of September, October, November and December 2008 are attached hereto and made a paft of this resolution; and WHEREAS, Ihe EDA has examined Ihe financial statement and the list of bills and finds them to be acceptable as to both form and accuracy. NOW, THEREFORE BE IT RESOL VED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the attached financial statements and list of bills, which are attached hereto and made a paft hereof, and they are found to be correct, as to fOlm and content; and BE IT FURTHER RESOL VED 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 RESOL VED this resolution and attachments are to be made a part of the permanent records of the Columbia Heights Economic Development Authority. BUSINESS ITEMS Resolution 2009-02. Rehab Incentive and SinClle-Familv Home Deferred Loan ProClram FundinCl Sheila Cartney stated she would like to present items five and six together, as they are both contracts with GMHC. Cartney stated Item five is for the programs GMHC administers for us. The first one is the Rehab Incentive program where you can receive a rebate of up to 10, 12 or 15% of the project cost refunded, which we are looking at funding with $35,000. The second program is the Single-Family Home Deferred Loan Program, which is a low interest rate loan for residents that do exterior home improvements. We are looking to fund this program with $50,000. Item number six is for the Consulting Services Agreement with GMHC, which is funding to administer the programs for us. The cost of this service is $15,000, which would come out of the same 408 fund. Nawrocki asked, if the cost of the programs are the same as last year. Cartney stated they are asking to increase the Rehab Incentive Program from $30,000 to $35,000 and the Single-Family Deferred Home Loan from $45,000 to $50,000. Both of these increases are being requested as the funds were used up before the year was out. Motion by Kelzenberg, second by Nawrocki, to waive the reading of Resolution 2009- 02, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Kelzenberg, second by Williams, to Adopt Resolution 2009-02, a Resolution Approving Funding for the Rehab Incentive Program ($50,000) and the Single-Family Home Deferred Loan Program (SFHD) ($35,000) to the Greater Metropolitan Housing Corporation (GMHC). All ayes. Motion Carried. Economic Development Authority Meeting Minutes January 27, 2009 Page 3 of? EDA RESOLUTION NO. 2009-02 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM ($50,000) AND THE SINGLE- FAMIL Y HOME DEFERRED LOAN PROGRAM (SFHD) ($35,000) TO THE GREA TER METROPOLITAN HOUSING CORPORA TION (GMHC) WHEREAS, the Columbia Heighls 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 Maintenance Plan 2008-2017 to improve and maintain the residential homestead housing stock. WHEREAS, the Greater Metropolitan Housing Corporation has agreed to provide consulting services. WHEREAS, the Greater Metropolitan Housing Corporation has provided housing preservation services since 2002. THEREFORE, BE IT RESOL VED, that the EDA allocates $50,000 for the Rehab Incentive Program and $35,000 for the Single-Family Home Deferred Loan Program to the Greater Metropolitan Housing Corporation from Fund 408- EDA Housing Maintenance Funding. Resolution 2009-03. 2009 Consultina Services Aareement with GMHC Motion by Diehm, second by Kelzenberg, to waive the reading of Resolution of 2009- 03, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2009-03, Approving the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation (GMHC), and appropriating $15,000 from Fund 408-EDA Housing Maintenance for the same; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. EDA RESOLUTION NO. 2009-03 A RESOLUTION APPROVING THE 2009 CONSULTANT SERVICES AGREEMENT WITH THE GREATER METROPOLITAN HOUSING CORPORATION (GMHC) AND APPROPRIATING $15,000 FROM FUND 408 - EDA 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 RESOL VED, that the EDA approves the 2009 Consultant Services Agreement with the Greater Metropolitan Housing Corporation and appropriates $15,000 from Fund 408 - EDA Housing Maintenance Fund for the same. Resolution 2009-05. Amendment to Contract for Private Redevelopment for 3805 2nd Street N.E. Carlney stated Resolution 2009-05 is approving an amendment to the Contract for Private Redevelopment with GMHC for the properly at 3805 2nd Street. The EDA agreed to provide a gap financing amount of $86,647 in the original agreement. GMHC is asking to increase that amount to $124,647. The second motion for this item is to amend the Contract for Private Redevelopment extending the commencement date to Economic Development Authority Meeting Minutes January 27, 2009 Page 4 of? May 1,2010 and the completion date to December 31,2010. Staff is recommending denying the gap financing and extending the contract to 2010. Diehm asked what the implications would be if we terminate the agreement, because we think it isn't the time to build. Sheila stated she would have to look closer at the contract to see what that would be. Diehm stated there maybe more we want to talk about with GMHC. We partnered with them and need to be a responsible partner, but we don't know what the demand for single-family housing would be in two to four years and wondered if terminating the agreement would mean they get the property, is that the best result or not. Motion by Nawrocki, second by Diehm, to deny the Greater Metropolitan Housing Corporation's request to increase gap financing from $86,647 to $124,647 for the redevelopment of 3805 Second Street. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to waive the reading of Resolution 2009-05, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Herringer, to Adopt Resolution 2009-05, Amendment to Contract for Private Redevelopment by and between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and the Greater Metropolitan Housing Corporation, dated November 7,2007. All ayes. Motion Carried. EDA Resolution 2009-05 Amendment to "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation" dated November 27, 2007 WHEREAS, on November 27, 2007 the City's Economic Development Authority (EDA) approved an agreement entitled, "Contract for Private Redevelopment by and Between the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota and Greater Metropolitan Housing Corporation (the Agreement), and WHERAS, this contract outlined the terms and conditions for redevelopment of propetty addressed as 3805 Second Street, and WHEREAS, the end result of the redevelopment is the construction and sale of two single family homes by Greater Metropolitan Housing Corporation, and WHEREAS, Section 4.3 (a) "Completion of Construction" requires a commencement date of May 1, 2008 and a construction completion date of December 31, 2008. WHEREAS, due to economic conditions causing declining sales prices the redevelopment project has been delayed. NOW THEREFORE BE tT RESOLVED, The Economic Development Authority hereby agrees to amend Section 4.3 (a) of the Agreement to change commencement date from May 1, 2008 to May 1, 2010 and complete construction date from December 31, 2010 to December 31,2009. Commercial Development Aareement for 4707 Central Avenue Scott Clark stated on September 23, 2008 the EDA approved an agreement for a 52,000 sq ft commercial/office space redevelopment. The developer has come to staff saying that in this market it isn't feasible to build that large of a building. What they are proposing is eliminating the second floor above the Aldi's space, which reduces the space from 52,000 sq. ft to 35,000 sq. ft. Staff is asking for board direction as to: 1) Economic Development Authority Meeting Minutes January 27, 2009 PageS of7 would you still suppott tax increment financing with the reduction of the project size, and 2) agree to setting up a special meeting on February 9th to discuss and review the new plans with the developer. The key for the EDA is that the developer is up against the 5- year rule under the TIF laws. This means you have 5 years to establish obligation or meaning that you are going to issue a bond or as a pay as you go note or that the developer would have to incur expenses for that pay as you go note. Even if the EDA approves this, plans would have to go back to the Planning and Zoning Commission for plan approval. Diehm asked if in our current contract, we have a license and permit bond or letter of credit requirement, as she wants to make sure we have that security. Clark stated there is one. Peterson asked if we reduce the size of the parking ramp, would Met Council's grant still apply. Clark stated staff would go to Khoratty to obtain a letter of credit to present to Met Council to secure the grant funds. Motion by Diehm, second by Kelzenberg, to move to set a Special EDA meeting for Monday, February 9, 2009 at 6:00 p.m. in the City Hall, Conference Room 1. All ayes. Motion Carried. Approve Second Amendment to Amended and Restated Contract for Private Redevelopment with Schafer Richardson (Huset Park Development Corporation) Cattney stated at the time the EDA packet was ready to go out last Friday, we didn't have the information that they received tonight from our Attorney, Steve Bubul. So please disregard the Resolution. Cattney stated the EDA entered into an agreement with the Huset Park Development Corporation on October 25, 2004 for redevelopment of the Industrial Park. On August of 2007 both patties agreed to amend the agreement. At this time, staff has received a request from Schafer Richardson to amend the agreement to change the completion and commencement dates. Maureen Michalski from Schafer Richardson is here to answer any questions the board may have. Diehm asked what the current status of the senior housing was. Michalski stated they lost funding for it last year, but would be reapplying again this year. Nawrocki asked what the status was for Phase /II. Michalski stated they are still in the process of building Phase /I, the residential pottion, which is behind due to the housing market. But cettainly if someone would come to them and wanted to build a commercial building on the site they would be open to it. Diehm stated as long as we received this information last Friday and we need to have another meeting on February 9th, she didn't see any reason why they should approve this tonight. She had some questions and would like to meet with staff on them. Clark requested Diehm give him her specific questions to him prior to the February 9th meeting. Diehm agreed to do this. Motion by Diehm, second by Kelzenberg, to table this item until the Special Meeting of Economic Development Authority Meeting Minutes January 27, 2009 Page 6 of7 February 9, 2009. All ayes. Motion Carried. Diehm asked staff to also obtain an update from Schafer Richardson on the status of the units; how many have been sold, how many are vacant, etc. Resolution 2009-04. Decertification of TIF Districts P3/P4/S7 Clark stated the assistant finance director has requested staff bring this item to the board, as the TlF districts weren't Decertified when they were suppose to. So the City continues to receive checks. The board needs to make the Decertification final. Motion by Diehm, second by Kelzenberg, to waive the reading of Resolution 2009-04, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Diehm, second by Kelzenberg, to Adopt Resolution 2009-04, a Resolution Approving the Decertification of Tax Increment Financing Districts P3/P4/S7 of the City of Columbia Heights. All ayes. Motion Carried. CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOMENT AUTHORITY COUNTY OF ANOKA STA TE OF MINNESOTA RESOLUTION NO. 2009-04 RESOLUTION APPROVING THE DECERTlFICA TlON OF TAX INCREMENT FINANCING DISTRICT P31P41S7 OF THE CITY OF COLUMBIA HEIGHTS EDA WHEREAS, on May 27, 1997, Ihe Ci/y of Columbia Heights Economic Development Authority (the "EDA 'J created its Redevelopment Tax Increment Financing District No. P31P4 (Housing T1F #1) (the "District"), wi/hin the Central Business District Redevelopment Project (the "project'J. WHEREAS, on December 17, 2001, the EDA expanded the geographic boundaries of the district (the S7 geographic enlargement). WHEREAS, an Internal Fund Loan obligation, previously authorized, has been paid and the obligation is no tonger outstanding, and WHEREAS, there are no parcels located in the District which cUlrenlly have delinquent taxes under the duration limits; and WHEREAS, the Tax Increment Financing plan adopted on May 27, 1997 for Tax Increment Financing District No. P31P41S7 requires, pursuant to M.S. 469.176, Subd.1 b (a) (4) redevelopment districts, that the duration of the Tax Increment Financing District P31P41S7 Housing TIF #1 will be 25 years from the receipt by the EDA of the first tax increment, and WHEREAS, the receipt of first tax increment was July of 1998; and WHEREAS, December 31, 2023 is 25 years from the first receipt of increment, or the statutorily required expiration date, and WHEREAS, the EDA desires to deceriify the District prior to i/s statutorily required expiration date; and NOW THEREFORE, BE IT RESOL VED by the Economic Development Authority ofthe City of Columbia Heights that the EDA's staff shall take such action as is necessary to inform the County Audi/or of Anoka County that the District is deceriified and to no longer remit tax increment from the District to the City. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 27th day of January 2009. Economic Development Authority Meeting Minutes January 27,2009 Page 7 of? Resolution 2009-06. Amend Contract with GMHC for Additional Financial Assistance for 4141 Jefferson Street Carlney stated in 2007 the EDA entered into an agreement with GMHC for the properly at 4141 Jefferson Street. GMHC is asking for a gap increase from the original amount approved of $65, 050 to $88,850. Motion by Nawrocki second by Diehm to deny the request for additional gap funding. All ayes. Motion Carried. ADMINISTRATIVE REPORTS Clark stated the board requested information on the 5- year rule, which we have already discussed. Clark directed Cher Bakken to pass out the Columbia Heights Industrial Park Redevelopment History books that she was asked to make for them at a previous EDA meeting. ADJOURNMENT President, Peterson, adjourned the meeting at 9:55 p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary IIICAP H :\EDAminutes2009\ 1-27 -2009 ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES February 9, 2009 CALL TO ORDERIROLL CALL Even though there wasn't enough members in attendance for a quorum, President, Gary L. Peterson called the meeting to order at 6:05 p.m. to start discussing the items due to the City Council meeting at 7:00 p.m. Present: Gary L. Peterson, Bruce Nawrocki, and Bruce Kelzenberg. Bobby Williams arrived at 6:35 p.m. Absent: Marlaine Szurek, Tammera Diehm and Gerry Herringer PLEDGE OF ALLEGIANCE BUSINESS ITEMS Adopt Resolution 2009-07, Second Amendment to Amended and Restated Contract for Private Redevelopment-Huset Park Development Cartney stated due to the housing market and economic conditions, Schafer has requested the contract completion dates be amended. Under Section 4.3(c) it states "if the Redeveloper is making substantial progress with respect to the redevelopment project, and is unable to meet one or more of the above referenced deadlines, the Authority and Redeveloper shall negotiate in good faith for a reasonable period to extend the time in which necessary action(s) must be taken or occur, the lapse of which time would otherwise constitute a default of this Agreement.>> The changes to the contract dates would be: 1) 1B completion date from 12/31/08 to 4/30/2011; 2) IIA completion date from 4-30-2009 to 6-1-2010; 3) IliA Housing and Commercial commence dated from 12-31-08 to 4-1-2010 and completion date from 12-31-2010 to 4- 1-2012; 4) IIIB housing commence from 12-31-2010 to 12-31-2012 and completion date from 12-31-2012 to 12-31-2014; and 5) IIIC housing commence from 12-31-2012 to 12- 31-2014 and completion date from 12-31-2014 to 12-31-2016. Also in the packet you received Schafer Richardson has provided a status report as requested at the last EDA meeting. Fehst stated he talked with Diehm about this item. She asked him to bring up her concerns at the meeting, as she couldn't be there. One concern was that usually a principal owner would come to the City with this type of amendment. Brad Schafer was not present. Maureen Mitchalski, from Schafer Richardson said she was representing Schafer Richardson as Brad Schafer had a commitment, but he did say he would be willing to attend another meeting. Essentially, they based the dates on their agreement with Ryland, giving them enough time to build on the lots. They did tell Ryland the extension dates they are asking for tonight would be final dates, with no exceptions. Fehst stated Diehm also asked if the City decides not to approve the extension what is the downfall. Bubul stated the contract says some of these phases would be in default. Economic Development Authority Special Meeting Minutes Februaty 9, 2009 Page 2 of8 What that means is that we have two different Tax Increment Bonds that are outstanding: 1) there are TIF revenue bonds that were sold in 2007 to third party investors, which we don't have the ability to stop making payments on those and 2) there is a Pay As You Go Note for $6.5 million that is held by Schafer Richardson and our contract says we can withhold payment for any phases that are in default, but not any that are not. For example if Phase I was completed, the increment goes first to pay those bonds and second if there is left over money, it would go to pay the second note. lf Phase liB was only partially complete, even though it's not completed you would have the right to stop payment on the agreement that is default. You don't have the option to terminate the note, but you certainly can withhold payments. Nawrocki asked how many years was the TIF bond for and how many payments have been made. Bubul stated the Pay-As- You-Go note goes to the year 2032 and that the bonds were sold for the first phases and were depending on the build out of the other phases. The TIF bond was sold to third parties for $2, 890, 000 and was sold in 2008, with very little interest made. The money reimbursed to Schafer Richardson was mostly for land acquisition. Peterson stated this wasn't Ryland or Schafer Richardson's fault it's the market. They build a good product. Fehst updated Williams on the discussion of this item prior to his arrival. Mation by Kelzenberg, secand by Williams, to waive the reading of Resalutian 2009-07, there being an ample amaunt of copies available to the public. All ayes. Mation Carried. Matian by Kelzenberg, secand by Williams, ta Adapt Resalutian 2009-07, a Resalutian Appraving a Secand Amendment ta Amended and Restated Cantract far Private Redevelapment between the Calumbia Heights Ecanamic Development Autharity, the City .of Calumbia Heights and Huset Park Develapment Carporatian; and furthermare, ta autharize the President and Executive Directar ta enter inta an agreement far the same. All ayes. Matian Carried. RESOLUTl.oN N.o. 2009-07 RES.oLUTl.oN APPR.oVING A SEc.oND AMENDMENT TO AMENDED AND RESTA TED C.oNTRACT F.oR PRIVATE REDEVELOPMENT BETWEEN THE C.oLUMBIA HEIGHTS EC.oN.oMIC DEVELOPMENT AUTH.oRITY, THE CITY .oF C.oLUMBIA HEIGHTS AND HUSET PARK DEVEL.oPMENTC.oRP.oRATl.oN BE IT RES.oL VED By the Board of Commissioners ("Board'J of the Columbia Heights Economic Development Authority ("Authority'J as fof/ows: Section 1. Recitals. 1.01. The Authority has detennined a need to exercise the powers of a housing and redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Ac{'J, and is cU/Tently administering the Downtown CBD Redevelopment Project ("Redevelopment project'J pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ("HRA Act'J. Economic Development Authority Special Meeting Minutes February 9, 2009 Page 3 of8 1.02. The Authority, the City of Columbia Heights ("City') and Huset Park Deveiopment Corporation (the "Redeveiopet') entered into a into a Contract for Private Redevelopment dated as of October 25, 2004, as amended by a First Amendment thereto dated June 16, 2008 (the "Contracl'), selling fotlh the terms and conditions of redevelopment of cettain propetly within the Redevelopment Project, generally located east of University A venue and south and west of Huset Park. 1.03. The patlies have determined a need to modify the Contract in cetlain respects, and have caused to be prepared a Second Amendment to Amended and Restated Contract for Private Redevelopment (the "Amended Contracl'). 1.04. The Board has reviewed the Amended Contract and finds that the execution thereof and performance of the Authority's obligations thereunder ate in the best interest of the City and its residents. Section 2. Authoritv Aooroval: Futlher Proceedinos. 2.01. The Amended Contract as presented to the Board is hereby in all respects approved, subject to modifications thai do not aller the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the documenls by such officials shall be conclusive evidence of approval. 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Amended Contract and any documents referenced therein requiring execution by the AUlhority, and to cany out, on behalfof the Authorily its obligations theteunder. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 9'h day of Februaty 2009. Adopt Resolution 2009-08, Contract for Private Redevelopment-4707 Central Ave. Clark stated on January 27, 2009, the EDA reviewed the proposed changes to the Development Agreement originally approved in September of 2008 with Grand Central Commons LLC for construction of a retail and office facility at 4ih and Central. The major amendments are: 1) minimum improvements redefined as a 35,000 sq. ft. commercial/office complex with 180 stall parking ramp, which originally was 52,000 sq ft. with 210 stalls, 2) reduction of T1F from $440,000 to $300,000,3) additional language clarifying the existing five-year rule, 4) adding language stating the intention of the EDA is to attempt expanding the five-year rule to ten years, 5) the minimum assessment amount changed to 4,375,000, which will be fully assed to the property on January 1, 2010 regardless of the level of construction completion at that time, 6) acknowledgement language that if Met Council's grant is not fully received for whatever reason, the EDA has no obligation to make up the difference, 7) elimination of phasing language as the project will be built as one project, and 8) a June 1, 2009 construction start date. In January, the EDA asked staff to look into potentially demanding additional surety to ensure that once the building has started construction, it will be completed. Staff checked with the City Attorney and is recommending no additional surety since the provisions of the agreement should provide reasonable assurance that once started, the project will be completed. Bubul stated the key point is the grant extension and the time frame to spend the money on the development of the ramp. Fehst stated the following: 1) we have heard Aldi's really wants to come to this City, 2) we are asking the developer to start June 1, 2009, and 3)he owns the land and is a motivated developer. So we should let Khoyratty work with AJdi's and we can work on the ramp funds. Economic Development Authority Special Meeting Minutes February 9, 2009 Page 4 of8 Motion by Kelzenberg, second by Williams, to waive the reading of Resolution 2009-08, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Kelzenberg, second by Williams, to Adopt Resolution 2009-08, a Resolution Approving Contract for Private Redevelopment and Resolution Awarding the sale of, and providing the form, terms, covenants and directions for the issuance of its Taxable Tax Increment Revenue Note in the maximum principal amount of $300,000; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Nawrocki asked if staff has talked to Met Council about the funding. Clark stated staff would be meeting with a committee from Met Council next week. With this amendment to the contract, if we don't get the funding the developer would be responsible for the entire cost of the ramp. Upon Vote: All ayes. Motion Carried. RESOLUTION NO. 2009-08 RESOLUTION APPROVING CONTRACT FOR PRIVA TE REDEVELOPMENT AND RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAXABLE TAX INCREMENT REVENUE NOTE IN THE MAXIMUM PRINCIPAL AMOUNT OF $300,000 BE IT RESOLVED BY the Board of Commissioners ("Board') of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the "Authority') as follows: Section 1. Authorization. 1.01. Authorization. The Authority and the City of Columbia Heights have heretofore approved the establishment of the KmartlCentral Avenue Tax Increment Financing District (the "TlF Districn the Downtown CBD Redevelopment Project (the "Project'), and have adopted a tax increment financing ptan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority Is authorized to issue and sell its bonds for the purpose of financing a pOllion of the public development costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TlF District and piedged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Taxabie Tax tncrement Revenue Note in the maximum principal amount of $300,000 (the "Note') for the pUlpose of financing certain public redevelopment costs of the Project. 1.02. Aoorovat of Aareement. The Contract for Private Redevelopment (the "Agreement') between the Authorily Grand Central Commons, LLC ("Grand Central Properties') is approved in substantially the form on file in City Hall, subject to modifications that do not alter the substance of the transaction that are approved by the President and Executive Director, provided that execution of the amendmenl by such officials is conclusive evidence of and their approval. 1.03. Issuance. Sale. and Terms oflhe Note. The Authority hereby delegates to the Executive Direclorthe determination of the date on which Ihe Note is to be delivered, in accordance with the Agreement. The Note shall be issued to Grand Central Commons LLC ("Owner). The Note shall be daled as of the date of delivery, shall mature no later than February 1, 2021 and shall bear interest at the rate of 7.0% per annum from the date of original issue of the Note. The Note is issued in consideration of payment by Owner of certain Public Redevelopment Costs in at least the principal amount of the Note, in accordance with the Agreement. Economic Development Authority Special Meeting Minutes February 9, 2009 Page 5 of8 Section 2. Form of Note. The Note shalt be in substantialty the foltowing form, with the blanks to be properly filled In and the principal amount and payment schedule adjusted as of the date of issue: UNITED STA TE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No.R-1 $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 20_ Rate Date of Orialnallssue 7.0% ,20_ The Columbia Heights Economic Development Authorily ("Authority') for value received, certifies that it is Indebted and hereby promises to pay to Grand Central Commons LLC or registered assigns (the "Owner), the principal sum of $ or so much thereof as has been from time to time advanced (the "Principal Amount'), as provided in Ihe Agreement defined hereafter, together with interest on the unpaid balance thereof accrued from the date of original issue hereof at the rate of _ percent per annum (the "Stated Rate"). This Note is given in accordance with that certain Contract for Private Redevelopment between the Issuer and the Owner dated as of , 2009 (the "Agreement') and the authorizing resolution (the "Resolution') duly adopted by the Authority on , 2009. Capitalized terms used and not otherwise defined herein have the meaning provided for such terms in the Agreement unless the context clearly requires otherwise. 1. Pavments. Principal and interest ("Payments') shalt be paid on August 1, 2011 and each February 1 and August 1 thereafter to and including February 1, 2021 ("Payment Dates') in the amounts and from the sources set forth in Section 3 herein. Payments shalt be applied first to accrued interest, and then to unpaid principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon 30 days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest accruing from the date of original issue through and including February 1,2011 (and not otherwise paid from Available Tax Increment) wilt be compounded semiannualty on February 1 and August 1 of each year and added to principal. Interest shalt be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. AIt payments on this Note are payable on each Payment Date solely from and in the amount of the "Available Tax Increment," which means, on each Payment Date, 90 percent of the Tax Increment attributable to the Commercial Property as defined in the Agreement that is paid to the Authority by Anoka County in the six months preceding the Payment Date. The Authority shalt have no obligation to pay principal of and tnterest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shalt not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of such pledged revenues. The Authority shalt have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final Payment on February 1, 2021. 4. Default. Upon an Event of Default by the Redeveloper under the Agreement, the Authority may exercise the remedies with respect to this Note described in Section 9.2 of tile Agreement, the terms of which are incorporated herein by reference. 5. Ootional Preoavment. (a) The principal sum and alt accrued interest payable under this Note is pre- payabte in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shalt affect the amount or timing of any other regular payment otherwise required to be made under this Note. (b) Upon receipt by Redeveloper of the Authority's written statement of the Excess Amount as defined in Section 3.4(e) of the Agreement, one-half of such Excess Amount will be deemed to constitute, and wilt be applied to, Economic Development Authority Special Meeting Minutes February 9, 2009 Page 6 of8 prepayment of the principal amount of this Note. Such deemed prepayment is effective as of the Calculation Date as defined in Section 3.4(e) of the Agreement, and will be recorded by the Registrar in its records for the Note. Upon request ofthe Owner, the Authority will deliver to the Owner a statement of the outstanding principal balance of the Note after apptication of the deemed prepayment under this paragraph. 6. Nature of Obtiaation. This Note is one of an issue in the total principal amount of $ issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001 through 469.047, and is issued pursuant to the Resolution, and pursuant to and in full confonnity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469. 174 to 469. 179. This Note is a limited obligation of the Authority which is payabie sotely from the revenues pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except from and to the extent of the revenues pledged hereto, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Reaistration and Transfel: This Note is issuabte only as a fully registered note without coupons. As provided in the Resolution, and subject to certain timitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Chief Financial Officer, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duty executed by the Owner. Upon such transferor exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates. This Note shall not be transfetred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus detivery requirements of federal and applicable state securities laws. IT IS HEREBY CERTlFtED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist. to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original tssue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY President-Gary L Peterson Executive DirectolcWalter R. Fehst REGISTRA TlON PROVIStONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Chief Financial Officer, in the name of the person last listed below. Registered Owner Signature of City Chief Financial Officer Date of Registration Grand Central Commons LLC Federal Tax 1.0. No. Section 3. Tenns. Execution and DelivelV. 3.01. Denomination. Pavment. The Note shall be issued as a single typewritten note numbered R-1. Economic Development Authority Speeial Meeting Minutes February 9, 2009 Page 7 of8 The Note shall be issuable only in fully registered fO/1/1. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates: tnterest Pavment Dates. Principal of and interest on the Note shall be payabte by mail to the owner of record thereof as of the close of business on the fifteenllJ day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Reaistration The Authority hereby appoints the City Chief Financial Officer to pertonn the functions of registrar, transfer agent and paying agent (the "Registrar;. The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in fO/1/1 reasonably satisfactDlY to the Registrar, duly executed by the registered owner thereof or by an attomey duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be transferred to any person unless the Authority has been provided with an opinion of counselor a certificate of the transferor, in a fonn satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery requirements of federal and applicable state securities laws. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Imorooer or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers, which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrarmay treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes. Fees and Charaes. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated. Lost, Stolen or Destroved Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note oflike amount, maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in fO/1/1, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees, The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated. lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its te/1/1s, it shall not be necessary to issue a new Note prior to payment. 3.04. Preoaration and Deliverv. The Note shall be prepared under the direction of the Executive Directorand shall be executed on behalf of the Authority by the signatures of its President and Executive Director, In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Ownerthereofin accordance with the Agreement. Section 4. Securitv Provisions. Economic Development Authority Special Meeting Minutes February 9,2009 Page 8 of8 4.0t. Pledae. The Authority hereby pledges to the payment of the principal of and interest on the Note all Avaitable Tax Increment under the terms and as defined in the Note. Available Tax Increment shall be applied to payment of the pl/neipal of and interest on the Note in accordance with the tenns of the fonn of Note set faith in Section 2 of this resolulion. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereoforinterestthereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund in each year all Available Tax Increment. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's account for the T1F District upon termination of the Note in accordance with its tenns. 4.03. Additional Bonds. If the Authority issues any bonds ornotes secured by Available Tax Increment, such addilional bonds or notes are subordinate to the Note in all respects. Seclion 5. Celtification of Proceedinas. 5.0t. Celtification of Proceedinas. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note celtified copies of all proceedings and records of the Authority, and such other affidavits, celtiflcates, and infonnation as may be required to show the facts relating to the legality and malketability of the Note as the same appear from the books and records under their custody and conlrol or as otherwise known to them, and all such celtifled copies, celtificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facls reeiled therein Section 6. Effective Date. This resolution shall be effective upon execution of the Agreemenl. Adopted Ihis 9th day of February 2009. ADJOURNMENT President, Peterson, adjourned the meeting at 6:51p.m. Respectfully submitted, Cheryl Bakken Community Development Secretary G :\EDAm in utes2009\2-9-2009 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: February 24, 2009 AGENDA SECTION: Consent Agenda ORIGINATING EXECUTIVE NO: 3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Adopt Resolution 2009-09, Financial BY: Cher Bakken BY: Report and Payment of Bills DATE: February 18, 2009 BACKGROUND: The bound Financial Report for the month of January 2009 draft Resolution 2009-09 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 January 31, 2009, RECOMMENDATION: Staff will be available to answer specific questions. If the report is satisfactorily compiete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to waive the reading of Resolution 2009-09, there being an ample amount of copies available to the public, Move to approve Resolution 2009-09, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the month of January 2009. EDA ACTION: H:\EOAConsent2009\January Fin Rep 2009 EDA RESOLUTION 2009-09 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JANUARY 2009 AND PAYMENT OF BILLS FOR THE MONTH OF JANUARY 2009. WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial statement which shows all receipts and disbursements, their nature, the money on hand, the purposes to which the money on hand is to be applied, the EDA's credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of January 2009 and the list of bills for the month of January 2009 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 ,2009. MOTION BY: SECONDED BY: AYES: NAYS: President- Gary L. Peterson Attest by: Cheryl Bakken, Assistant Secretary H:\Resolutions2009\EDA2009-09 fin January 2009 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: February 24, 2009 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Housing Program Discussion BY: Sheila Cartney BY: DATE: February 13, 2009 BACKGROUND: Over the past couple of weeks, staff has been asked questions about Brooklyn Center using tax increment dollars for a City sponsored housing program aimed at assisting homeowners in order to increase. sales and rehabilitation efforts for foreclosure properties. In turn, other individuals have contacted staff regarding whether our City is investigating developing programs to assist, in some fashion, developing programs that would be geared towards foreclosure properties. The purpose of this memorandum is to outline a discussion format for the Economic Development Authority to determine if the City wants to become more involved in the City's foreclosure issue. Question #1- Does the City want to become directly involved in some type of home assistance pro(lram that uses "City funds"? At this time, the City has available externally funded programs that will allow only a small number of future homeowners to buy foreclosure programs (e.g. the new Neighborhood Stabilization Program). Question#2- What funds are available to use for some type of housinq foreclosure proqram? Staff views that the City could capitalize the future four-year income stream of the Anoka County HRA levy, by means of a bond, using the aforementioned levy as the repayment mechanism. Using this approach, staff views that over $550,000 of present value could be raised to create a loan/grant pool. Question #3-What would be the (loa Is and/or obiectives of an assistance proqram? Any program should be designed around the idea of 1) Owner occupied buyers 2) Increasing the rate of homeowner sales 3) Increasing the level of, and in some cases, ensuring that properties are being rehabilitated instead of being purchased "as is" 4) Long term commitment of new owners to the community 5) Assistance would be for foreclosure properties only, homeownership counseling would be required for participants. Question #4- What type of proqram could be developed? The detailed mechanics of a program would need to be worked out, but on a general basis, the City could provide a deferred loan for down payment assistance/closing costs assistance, based on the property being rehabilitated to some agreed upon level. In most housing programs, a deferred loan for down payment assistance coverts to a forgivable loan if the buyer lives in the house for a given period of time (e.g.1 0 years). The assistance would apply to foreclosed homes only and would not be limited to first time homebuyers. As is the case with most housing programs, there are innumerable variations that could take place with the dollar amount of assistance, rehabilitation levels, combining with various bank financing etc, but the key is providing an incentive to purchase in Columbia Heights and in turn, assuring the community that the property would have reinvestment through the rehabilitation efforts. Staff has attached details from similar types of programs for the EDA to review for concepts. Question #5- What are the next steps? If the EDA is interested in pursuing this there are two broad based issues to resolve. The first issue is to deal with all issues associated with the bond. In part, the City would probably have to enter into a more formal agreement with the Anoka County HRA to ensure a repayment source for the bonds. The second will be defining a housing program and the issues associated with implementation. While no motion is required at this time, staff would like direction from the EDA on entering into a formal agreement with Anoka County HRA for the housing program discussed. Staff is further seeking direction on the type of program the EDA would like to create. The agreement and program details would be acted on at a future meeting. Attachments: Other cities/counties oroarams, memo:samole of oroaram EDA ACTION: Minneapolis Advantage - Minneapolis MN ~ Down payment assistance and closing costs assistance ~ $10,000 deferred loans forgiven over a 5 year period ~ Buying properties in neighborhoods heavily impacted by foreclosures ~ Eligible borrower: anyone that qualities for a traditional (prime or A-rated) fixed rate first mortgage or is paying in cash. ~ Borrower must complete homeownership counseling FirstHOME Program - Ramsey County y Down payment assistance and closing costs assistance ~ $20,000 second mortgage ~ Income limitations ~ One of the owner's must have a full time job within Ramsey County ~ Borrower must complete homeownership training ~ Borrower must qualify for a V A, FHA, or Fannie Mae conventional mortgage Anoka County Down Payment Assistance Program ~ $ I ,000-$1 0,000 in down payment assistance ~ Income limitations (80% AMI) ~ First time buyer ~ Borrower must live at property ~ Borrower must qualify for a V A, FHA, or Fannie Mae conventional mortgage y 25% match required -can be through other public funds ~ Homebuyer training required First Time Homebuver Downpayment and Closing Cost Assistance - MHF A y $ 3,000 deferred loan interest free first 5 years ~ Income limitations (60% AMI) 590 40th Avenue N.E., Columhia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website al: www.ci.columbia-heights.I1JIl.IIS MayoI': Gary L. Peterson Councilmcmbcl's: Bruce Nawrocki Bobby Williams Tamlllera Diehm Bruce Kclzenbcrg City Manager: Walter R. Fchst CITY OF COLUMBIA HEIGHTS COLUMBIA HEIGHTS COMMUNITY DEVELOI>MENT DEPARTMENT DATE: February 13, 2009 TO: Scott Clark, Community Development Director FROM: Sheila Cartney, Assistant Community Development Director RE: City's Homebuyer Program This memo outlines an example of the type of home buyer's Program that the city could administer with Anoka County HRA Levy money. This loan program is to help rebuild the housing market in Columbia Heights by addressing foreclosed properties, and a rapid decrease in homeownership, Tvpe of Assistance The city would ofler deferred loans up to $10,000 for down payment and/or closing cost, and renovation costs. One option is to allow the assistance of up to 10% of the cost of the house with a maximum of$10,000. The loan would bc at zero percent intercst and forgivable in 5- years as long as the buyer lived in the house for those 5 years. No monthly payments required. If the buyer sells the home or does not live there before the duration of 5 years, the loan would be required to be paid back in full to the city. The loan is due on sale, transfer of title, when the primary mortgage is paid off, if within 5 years of purchase. The 5-year forgiveness schedule tied to this loan is offered to encourage a longer term, more stable owner occupancy of the home. Five years is the amount of time considered by the real estate community as the average length of time people own a home before moving on to their next home during the earlier years of home ownership, Use of Funds The funds could be used for down payment or payment of normal and usual closing costs, The funds may be used to fund repairs and improvements to the home as part of the purchase transaction, Any portion of the loan not used with these options is rcquired to be paid back to the city, Tvpe of Propertv This assistance program is for purchasing foreclosed homes within the highest needs neighborhoods within the City of Columbia Heights. The attached map identifies those neighborhoods by census tract. Purchases in the following census tracts could qualify for this THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER program: 0513042,0514004,0514003,0514002,0514001,0513052,0513051,0515012, 0513022, and 0515001 Buver Requirements This program does not have income restrictions. The buyer must have a credit score of 625 or better. The buyer must qualify for a traditional fixed-rate mortgage loan. The buyer must receive pre-purchase home ownership counseling through an approved counseling agency. The buycr is responsible for providing this information to the City. Inspection Requirements The property must be inspected by the Columbia Heights Building Official prior to purchase (this is not the same as a home inspection that a private inspector would perform). Since the city is providing financing the "property standards" test can be elevated from our rental and abandoned property standards (example: is to mandate 1 OOamp service). If correction orders are issued the new home owner would have to make those corrections or negotiate with the seller. The assistance from the city can be used for such corrections. C") N o C") -- L!) o >:IJ. ...~ ~Q) ..... Q) Q)Z =... ~ >:IJ. ..... Q) ~... 8~ G', -=0 01+-; U 0 I+-; >:IJ. o ~ .c~ ..... < U =-'- \:l:J~SO~~ 1 -\.5'AY'lVj\,.MJ N N o L!) -- L!) o -)-;-obi fii'tlSffl'\ l' '" 11 "''I " I if ." " " z .... o " E '" " o , , '" -c Q. ID " -c ID UJ 0 ~ ~ "C .!!:! lo. z f.Il t: .~ (!) ..c Q) o '" ~ ~:~iDDDli ~0\ 0\ \ ~ "" {::> 2: s ~ COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: February 24, 2009 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO: 5 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: TIF Expansion BY: Sheila Cartney BY: DATE: February 18, 2009 BACKGROUND: As previously discussed, the existing K-Mart/Grand Central Commons TIF district is proposed to expand and include the Sheffield Neighborhood. As part of this process the City Council must hold a Public Hearing on the proposed expansion. Formally the EDA must request the City Council to schedule and hold the Public Hearing. RECOMMENDED MOTION: Move to request that at the March 9, 2009 City Council meeting the City Council call for a Public Hearing for April 13, 2009 at approximately 7:00pm for the K-Mart/Grand Central Commons TIF expansion. Attachments' Schedule EDA ACTION: SCHEDULE OF EVENTS COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF COLUMBIA HEIGHTS ANOKA COUNTY, MINNESOTA FOR THE MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT AND THE MODI FICA TION OF THE K-MART/CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT (a renewal and renovation district) (draft as of February 11,2009) February 24, 2009 EDA requests that the City Council call for a public hearing on the proposed Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the modification of the K-Mart/Central A venue Tax Increment Financing District. February 27, 2009 Project information (property idcntification numbers and legal descriptions, detailed project description, maps, but/for statement, and list of sources and uses of funds) for drafting necessaty documentation sent to Ehlers. March 9, 2009 City Council calls for a public hearing on a Modification to the Downtown CBD Revitalization Plan for the CBO Redevelopment Project and the modification of the K-Mart/Central Avenue Tax Increment Financing District. March II, 2009 Ehlers confirms with the City whether building permits have been issued on the property to be included in the TIF District. N/ A Project information submitted to the County Board for review of county road impacts ifnecessm:v* (at least 45 days prior to public hearing). *The County Board, by law, has 45 days to review the TlF Plan to determine if any county roads will be impacted by the development. Because the City staff believes that the proposed tax increment financing district will not require unplanned county road improvements, the TlF Plan was not forwarded to the County Board 45 days prior to the public hearing. Please be aware that the County Board could claim that tax increment should be used for county roads, even after the public hearing. March 13,2009 Fiscal/economic implications received by School Board Clerk and County Auditor (at least 30 days prior to public hearing). [Ehlers willfax & mail on or before March 13, 2009j EHLERS li':;;:"O-[RSIN PU3L1Cflti.\'N'C'[ SCHEDULE OF EVENTS - PAGE 2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF COLUMBIA HEIGHTS ANOKA COUNTY, MINNESOTA FOR THE MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT AND THE MODIFICATION OF THE K-MART/CENTRAL A VENUE TAX INCREMENT FINANCING DISTRICT (a renewal and rcnovation district) March 16,2009 Ehlers & Associates conducts intel'l1al review of the Plans. March 24, 2009 EOA adopts a resolution approving a Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and thc modification of the K-Mart/Central Avenue Tax Increment financing District. April 2, 2009 Date of publication of hearing notice and map for tax increment financing district (at least 10 days but not more than 30 days prior to hearing). [Sun Focus publication deadline March 26, 2009 - Ehlers will submit notice & map on or before March 26.} April 7, 2009 Planning Commission reviews Plans to determine if they are in compliance with City's comprehensive plan and adopts a resolution approving the TIf Plan. April 13, 2009 City Council holds a public hearing at 7:00 P.M. on the Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project and the modification ofthe K-Mart/Central Avenue Tax Increment Financing District and passes rcsolution approving the Plans. , 2009 Ehlers files Plans with the MN Department of Revenue and requests celtification of the TIF District from Anoka County. *Bccallsc the City staff believes that the proposed tax increment financing district will not require unplanIled county road improvements, the TIF Plan was not I'orwarded to the COllnty Board 45 days prior to the public hearing. The County Board, by law, has 45 days to review the TIP Plan to determine if any county roads will be impacted by the development. Please be aware that the County Board could claim that tax increment should be used for county roads, even after the public hearing. EHLERS llAOERS IN ~UBlIC flllAljCE