HomeMy WebLinkAboutEDA AGN 04-28-09AGENDA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
TUESDAY, April 28, 2009
7:00 p.m., City Hall, Conference Room 1
1. Call to Order /Roll Call
Gary L. Peterson, President Bobby Williams
Marlaine Szurek, Vice President Bruce Nawrocki
Bruce Kelzenberg, Secretary/Treasurer Gerry Herringer
Tammera Diehm
2. Pledge of Allegiance
CONSENT AGENDA
3. Approve Minutes of March 24, 2009
Approve financial report and payment of bills for March, Res. 2009 -11
.Motion:
Move to approve the Consent Agenda Items as listed,
BUSINESS ITEMS
4. Adopt Resolution 2009 -12, Approving Contract Amendment for 37th and
Central LLC
5. TIF — Scattered Site Housing District
6. Adopt Resolution 2009 -13, Approving Inter -fund loan to Purchase 4502
Washington Street
7. Make Heights Your Home- Pilot Program Approval
8. Adopt Resolution 2009 -14, Approving Modification to the TIF Plan for
Kmart/Central Avenue TIF District
9. Heights Housing. Protection Program Discussion (property inspection)
a. Schedule /Process
b. Housing Tour (Proposed May 11)
10. Administrative Report (Verbal)
a. TIF extension update
b. 47th and Central update
c. Conceptual RAP plan for the Burger King site
d. Huset Park Townhome Association Declarations
e. Anoka County Levy Update
11.Adjourn
Additional Items in the packet for information purposes
• Up to date Foreclosure Map
• Foreclosure Article
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE REGULAR MEETING
MARCH 24, 2009
The meeting was called to order at 7:00 pm by President -Gary Peterson.
Members Present: Gary Peterson, Bruce Nawrocki, Marlaine Szurek, Gerry Herringer, and Bruce
Kelzenberg.
Members Absent: Tammera Diehm and Bobby Williams
Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson.
PLEDGE OF ALLEGIANCE- RECITED
CONSENT AGENDA
1. Approve the Minutes of February 24, 2009
2. Approve the Financial Report and Payment of Bills for February per
Resolution 2009 -10
Nawrocki wanted a correction made to the February minutes on page 2 under concerns expressed by the
members to include: Would the programs have income restrictions that could affect low to moderate income
households. Nawrocki also questioned several vendor payments on the List of Bills Paid.
Motion by Szurek, seconded by Nawrocki, to approve the Consent Agenda items as listed with the correction
noted. All ayes. MOTION PASSED.
EDA RESOLUTION 2009 -10
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (FDA)
APPROVING THE FINANCIAL STATEMENT FOR FEBRUARY 2009 AND PAYMENT OF BILLS FOR
THE MONTH OF FEBRUARY 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 February 2009 and the list of bills for the month of February
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.
Economic Development Authority Minutes
Page 2
March 24, 2009
BUSINESS ITEMS
1. Housing Program Discussion
Clark stated he wanted to have a discussion regarding three potential housing programs to address
the housing foreclosure crisis we are experiencing. He provided a table of potential funding
sources and maps depicting the number of foreclosures and rental properties as information for
the discussion.
Clark stated that we have had 493 foreclosures since 2007. Thus far, 154 of these properties have
been sold. It is anticipated that we will see 100 additional foreclosures by the end of 2009, which
will mean that 10% of our single /double family housing will have gone through a foreclosure
process. Clark explained that most of these properties are selling at $.55 on the dollar compared
to the Estimated Market Values. The banks are dumping these properties at reduced prices, and
in an "as is" condition, which don't accurately reflect the real value of the property. As a result,
these sales are having a negative affect on the market values for entire neighborhoods. Clark
pointed out the areas of the city hardest hit by these foreclosures. He noted that the area south of
45th Avenue, between University and Central and the Sheffield area are the worst with 12 -20% of
the homes in foreclosure, respectively.
The foreclosures bring another problem as many are being bought by investors, and are being
turned into rental properties. This is increasing the percentage of rental property in the city,
which the city was trying to curb before this crisis happened. The city has gained 62 new rentals
since September of 2008, most due to investors buying foreclosed properties.
Clark went on to explain that while we are getting into those properties that are obtaining rental
licenses and a small percentage of the foreclosed homes that meet the criteria set in our
Abandoned/Vacant Property Ordinance, it still leaves a large number of homes that are not being
inspected to ensure minimum code standards. If properties do not fall into one of these
categories, we have no control over the fact that houses in very poor condition are being sold and
re- occupied without deficiencies being corrected. For this reason, staff is suggesting various
housing programs be implemented to deal with this crisis. One program by itself will have
minimal impact. But if several of the programs are implemented we could make more progress
toward the goal of maintaining and /or improving the housing stock in our city.
The three programs recommended for consideration are establishing a scattered site housing TIF
District, using Anoka County levy monies to start a down payment /rehab incentive program in
conjunction with FHA 203K loans, and to re- examine the RIBS program for a particular
timeframe, to be determined, to get us through the crisis we're currently in.
Clark told members that out of the 439 foreclosed properties presently on the market, only 80 -90
have met the criteria of being declared Abandoned /Vacant to prompt an inspection. These
properties have been posted. Fourteen houses have been inspected thus far. Clark said about
60% need minor corrections, 20% need a couple thousand dollars in repairs, and approximately
20% are in very poor condition with severe structural or hazardous issues. There are properties
that have been inspected that will need to go through the condemnation process.
Economic Development Authority Minutes
Page 3
March 24, 2009
Walt told members that the scattered site program was very successful in Robbinsdale. He said
they replaced a couple hundred homes over a period of time and that it helped revitalize
neighborhoods. Even though the rules to establish these districts have changed, he knows the
overall reward this program can have on a city.
The first thing we need to do is identify the source of funding. If TIF monies generate
approximately one million, it could be used to buy up properties. Clark said it is possible to
purchase up to 20 homes if we could pick them up for about $50,000 each. The City will need to
wait one year from the last purchase to establish the district. The City would have these homes
immediately demolished and the base would go down to land value and would allow more for
greater TIF dollars. This would clear blight throughout the city's neighborhoods.
Peterson suggested a small committee be formed to decide if a property is a good value and
recommend whether to purchase it or not. Cartney responded that staff has been aggressively
making preliminary offers, but all offers are subject to City Council approval. Up to this point, if
it was approved, then funds had to be found in order to complete the sale. If we establish this
program, the money would be available to allow staff to move more aggressively and to negotiate
purchase prices in a quicker fashion. The problem staff is starting to encounter is that banks and
mortgage companies are slow in responding to offers because they're so backlogged with all the
properties in foreclosure at the present time.
Peterson asked what it would take to de- certify the Downtown TIF district and get this program
started. Clark stated it would take about 3 weeks or so to coordinate with Ehlers and our Finance
Dept. to establish exactly how much money would be available. The C -8 District has one
additional year of funding before de- certification and can be an additional source of revenue to
compliment the existing fund dollars.
Herringer stated we would be facing more competition as private entities and investors will start
buying up the toxic mortgages as credit loosens. He thinks the city needs to move in haste if we
hope to purchase homes in poor condition, at a reduced price, for the purpose of re- developing the
sites.
Nawrocki questioned how many homes we are actually getting in to inspect. Clark told him we
have gotten into 14 abandoned properties and 62 new rentals out of the 493 properties that have
been, or are in foreclosure. This is only a small number and that is why staff is recommending
the Council look at initiating the RIBS program again. Clark understands this is a political issue,
but suggested a 3 year sunset clause which would get us through the worst of the foreclosure
caused turnover.
Szurek felt the Council will face the same opposition it did last year. Clark stated that a lot of
incorrect information was voiced at that meeting and caught people off guard. He felt a number
of things are different this year than last year. He said we were still in a more typical market last
spring and the foreclosure crisis is now affecting every neighborhood and every home's value. He
thinks that if staff articulates the program differently, the Council will better understand the
Ordinance so that any incorrect information can be addressed, and in turn, people will be more
receptive. The fact that we have done some inspections on abandoned properties has given us
some knowledge and experience to help answer questions.
Economic Development Authority Minutes
Page 4
March 24, 2009
Clark stated that the scattered site program will only address approximately 20 homes throughout
the city, and the down payment /rehab Pilot Program would only help about 30 homes. That is
why he thinks we should look at a Point of Sale (RIBS) program also, at least on a temporary
basis.
Peterson agreed the public is getting more knowledgeable about the problems this crisis is
bringing to local neighborhoods and how it is affecting them personally as their property values
drop. He feels the general public will be more receptive this time around especially if the Council
sticks together for the betterment of the community. He said that any of the Council members
who had questions or reservations about the Ordinance should speak to staff to get a better
understanding of it.
Clark suggested holding educational sessions for residents before it goes to Council to help curtail
incorrect information being passed around.
Herringer asked if there was any way to expand on the present definition of abandoned /vacant
properties to allow us to inspect more of those homes. Clark said the attorney helped establish
the criteria in the Ordinance and warned that we cannot single out a specific category of houses
without some definition.
Peterson thought staff should look into the details of the funding first, then talk to the
commission/council members that weren't present for this meeting, and to then schedule a couple
of educational forums to answer questions from the public.
Nawrocki had concerns regarding the additional expense of the inspection that the sellers would
incur if they put their home on the market. He wanted clarification as to what items would need
to be corrected prior to the sale of the house. Clark explained that items are looked at and rated
as: meets minimum code;
needs to be repaired or replaced;
or, hazardous- -needs immediate correction
Items or comments may be noted on the inspection checklist -but that doesn't mean they
necessarily need to be repaired or replaced.
The third program staff recommends is using Anoka County Levy money for a Pilot Program
similar to one Brooklyn Center has started. People purchasing a foreclosed property using the
FHA 203K program would be eligible for a 0% loan for 3.5% of the acquisition price plus the
amount to rehab, up to a maximum amount of $6,000. Sheila reviewed the criteria staff is
recommending.
Herringer suggested not offering the pro -rated payment option for the first 3 years of ownership to
encourage homeowners to stay in the home and stabilize the neighborhood.
Economic Development Authority Minutes
Page 5
March 24, 3009
Nawrocki asked who administers the 203K loans. Cartney explained any of the large banks and
mortgage companies can offer this type of loan. It is a type of FHA or HUD mortgage. Nawrocki
was also concerned with using TIF de- certification money for just housing. Clark stated that
housing is our main concern at this point, and that action needs to be taken for the well being of the
community. Nawrocki also said he is against double -digit tax increases and using all this money
towards these programs, especially since we are facing the loss of the LGA funding.
Kelzenberg asked how much relief homeowners would get if we didn't use the TIF monies for
these programs. He was told it would amount to approximately $20 /property. Kelzenberg thought
the money would be better spent in these housing programs to improve our neighborhoods.
Nawrocki then expressed concern that we should wait until we know what Anoka County is going
to do, and that we may be duplicating efforts. Clark said that Anoka County hasn't made any
decisions yet on their programs, and the amount of help Columbia Heights will receive is in
competition with other Anoka County cities. The programs they are looking at will probably affect
10 -15 homes at the most. We need to look at more than just that number in order for thereto be a
noticeable improvement. Peterson thought we should be in control of our own City and do what we
have to do to improve things, and not wait for help that may or may not be there.
Motion by Kelzenberg, seconded by Szurek to move forward with all three programs and bring
more information to the Commission with the following items understood:
1. That no formal action will be taken to implement the programs until more information
is provided
2. A strategy will be established for review of all these programs. Staff will develop an
implementation strategy for 1) Scattered Site Housing; 2) a Rehabilitation Program in
conjunction with 203K program; and 3) Staff will also bring back more information on
a housing inspection program to the next meeting for discussion.
3. Staff will talk to the commission/council members who were not in attendance tonight.
All ayes. MOTION PASSED.
3. Administrative Report
Clark reported that Mike Bjerksett will re -apply for HUD 202 project funding for the project at
39th and Huset Pkwy.
Staff met with Senator Chaudhary and the Senate Tax Committee regarding the Bill introduced to
increase the 5 -year Rule for the K -Mart Site Tax Increment District. There will be another
meeting April 3rd with the House Tax Committee and Carolyn Laine to introduce the Bill in the
House.
Vice -Chair Bobby Williams, in the absence of the HRA Chair, has called a Special HRA meeting
for Monday, March 30th at Parkview Villa at 6:30 pm. This meeting may replace our regular
April meeting. The purpose of the meeting is to amend the Capital Fund Account to accept
money from HUD as part of the Stimulus Package. Parkview Villa will receive $130,000 for
improvements, and the amendment must be made before April 10th in order to qualify for the
money.
Economic Development Authority Minutes
Page 6
March 24, 2009
Nawrocki asked how the project at 37th and Central Ave is going. Clark said there hasn't been
any recent progress on this.
Clark said he would know more about the 47th and Central Ave project within the next 2 weeks.
He will keep the members updated on the status.
He also said the final retainage payments have been made for the Sullivan Shores project and that
the project is now complete.
The meeting was adjourned at 9:00 pm
Respectfully submitted,
Shelley Hanson
Secretary
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of. April 28, 2009
AGENDA SECTION: Consent
ORIGINATING
EXECUTIVE
NO:3
DEPARTMENT: EDA
DIRECTOR
APPROVAL
ITEM: Financial Report and Payment of Bills
BY: Sheila Cartney
BY:
DATE: April 17, 2009
BACKGROUND:
The Financial Report is for the month of March 2009 will be handed out at the meeting Resolution 2009-
11 is attached for approval.
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 2009 -11, Resolution of the Columbia Heights Economic
Development Authority (EDA) approving the Financial Statement and Payment of Bills for the
month of March 2009
Attachments: Kesolution and rmancial
EDA ACTION:
EDA RESOLUTION 2009 -11
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
(EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH 2009 AND PAYMENT OF
BILLS FOR THE MONTH OF MARCH 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 March 2009 and the list of bills for the
month of March 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 12009.
MOTION BY:
SECONDED BY:
AYES:
NAYS:
Attest by:
Shelley Hanson, Recording Secretary
President
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: April 28, 2009
AGENDA SECTION: Business Items
ORIGINATING
EXECUTIVE
NO:4
DEPARTMENT: EDA
DIRECTOR
APPROVAL
ITEM: Adopt Resolution 2009 -12, Amendment
BY: Sheila Cartney
BY:
to 37th and Central LLC Redevelopment Contract
DATE: April 21, 2009
BACKGROUND:
On June 24, 2008 the City, EDA and 37t" and Central LLC, entered into a contract for private
redevelopment, located at the northwest corner of 37th and Central Avenue. The minimum improvements
in the contract means the construction of a building containing at least 9,000 square feet of commercial
redevelopment and related improvements.
Due to current economic market conditions, 37t" and Central LLC has requested completion date
amendments to the development contract. The following table represents the amendments.
Original Date
Proposed Amended Date
Commence Construction May 1, 2009
May 1, 2010
Complete Construction January 1, 2010
January 1, 2011
Staff supports the requested changes.
RECOMMENDATION:
Staff recommends the EDA amend the development contract as requested to change commencement and
completion dates for the redevelopment of 37th and Central.
RECOMMENDED MOTION:
Move to waive the reading of Resolution 2009 -12 there being amble copies available.
Move to Adopt Resolution 2009 -12 amending the development contract between 37t" and Central LLC,
and the EDA dated June24, 2008, changing commencement and completion dates.
Attachments: Resolution 2UUV -1Z, Amenament, anQ Letter noon.) / - -- anu uentral LLk-
EDA ACTION:
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2009-12
RESOLUTION APPROVING A FIRST AMENDMENT TO CONTRACT FOR
PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY AND 37t1i AND CENTRAL LLC
BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights
Economic Development Authority ( "Authority ") as follows:
Section 1. Recitals.
1.01. The Authority and 37th and Central LLC (the "Redeveloper ") entered into a Contract
for Private Redevelopment dated June 24, 2008 (the "Contract "), setting forth the terms and
conditions of redevelopment of certain property within the Redevelopment Project, generally
located west of Central Avenue at 37t" Street.
1.02. The parties have determined a need to amend the Contract to facilitate the leasing of
the Minimum Improvements by granting an extension to the Redeveloper for the commencement
of construction to May 1, 2010 and completion of construction to January 1, 2011.
1.03. The Board has reviewed a First Amendment to the Contract and finds that the
execution thereof and performance of the Authority's obligations thereunder are in the best interest
of the City and its residents.
Section 2. Authority Approval; Further Proceedings.
2.01. The First Amendment to the Contract as presented to the Board is hereby in all
respects approved, subject to modifications that do not alter the substance of the transaction and that
are approved by the President and Executive Director, provided that execution of the documents 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 First Amendment to the Contract and any documents referenced therein requiring
execution by the Authority, and to carry out, on behalf of the Authority its obligations thereunder.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 28th day of April, 2009.
President
ATTEST:
Secretary
FIRST AMENDMENT TO
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of April 2009, by and between the
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, COLUMBIA HEIGHTS,
MINNESOTA, a public body corporate and politic (the "Authority "), established pursuant to
Minnesota Statutes, Sections 469.090 to 469.1081 (hereinafter referred to as the "Act "), the CITY
OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (the "City "), and 37TH AND
CENTRAL LLC, a Minnesota limited liability company (the "Redeveloper ").
WHEREAS, the City, the Authority and the Redeveloper entered into that certain Contract for
Private Redevelopment dated as of June 24, 2008 (the "Contract ") providing for the redevelopment of
certain property described as the Redevelopment Property in the Contract; and
WHEREAS, under Section 4.3(a) of the Contract, the Redeveloper is obligated to commence
construction of the Minimum Improvements (as defined in that section) located on the
Redevelopment Property and substantially complete such construction by January 1, 2010; and
WHEREAS, the Redeveloper has requested the City and the Authority to extend the time for
commencement and completion of construction due to its inability to lease space in the
Redevelopment Property to tenants who fit the needs of the City due to the ongoing problems in the
credit markets; and
WHEREAS, the parties have determined a need to amend the Contract in order to allow the
Redeveloper sufficient time to lease the Redevelopment Property and construct the Minimum
Improvements thereon.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
Section 4.3 of the Contract is amended read as follows:
Section 4.3. Completion of Construction. (a) Subject to Unavoidable Delays, the Redeveloper must
commence construction of the Minimum Improvements by May 1, 2009 2010, and must substantially
complete construction of the Minimum Improvements by January 1, 204-0 2011. All work with
respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the
Redevelopment Property shall be in substantial conformity with the Construction Plans as submitted
by the Redeveloper and approved by the Authority and the City. 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 the 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 under this Agreement.
2. All other terms and conditions of the Contract shall remain fully in effect unless amended as
provided therein.
IN WITNESS WHEREOF, the Authority has caused this Amendment to be duly executed in
its name and behalf and its seal to be hereunto duly affixed, and the City has caused this Amendment
to be duly executed in its name and behalf and its seal to be hereunto duly affixed, and the
Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date
first above written.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
STATE OF MINNESOTA )
SS.
COUNTY OF ANOKA )
Its President
Its Executive Director
The foregoing instrument was acknowledged before me this _"' day of April, 2009, by
and , the President and Executive Director of the
Columbia Heights Economic Development Authority, a public body politic and corporate, on
behalf of the Authority.
Notary Public
2
CITY OF COLUMBIA HEIGHTS
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA )
ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this day of April, 2009, by
Gary L.Peterson and Walter R. Fehst, the Mayor and City Manager of the City of Columbia
Heights, a Minnesota municipal corporation, on behalf of the City.
Notary Public
37TH AND CENTRAL LLC
By Christopher Little
Its
STATE OF MINNESOTA )
ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of April, 2009 by
Christopher Little, the of 37th and Central LLC, a Minnesota limited
liability company, on behalf of the company.
Notary Public
S1
April 20, 2009
Ms. Sheila Cartney
City of Columbia Heights
Community Development
590 - 40th Avenue NE
Columbia Heights, MN 55421
Re: Development Agreement
37th and Central
Dear Ms. Cartney:
Pursuant to our phone conversation, I am writing to request to appear before the City of
Columbia Heights Economic Development Authority (EDA) on April 28, 2009, to
respectfully request an extension on the Private Development Agreement between the
City of Columbia Heights and 37t1t and Central, LLC (Agreement).
As you know, the year 2008 and early 2009 will certainly be remembered as a year of
unprecedented change in the world's financial and commodity markets. Its effects were
widespread and profound for us all and the commercial retail industry was no exception.
As credit markets tightened and retail sales slowed, the availability of financing for the
commercial retail industry became limited. Many major retailers and small businesses
have been forced to postpone, suspend and cancel the openings of new retail stores, or in
many cases even close existing stores. 37th and Central, LLC has been proactive in its
response to the changing market, seeking out retail tenants that have been sustaining their
market status in the Twin Cities. In addition, we've been in conversations with other
interested parties with strong balance sheets that have the capacity to lease space,
regardless of the current market turmoil. That being said, we do want to make every
effort to find tenants that fit the needs and wants of the community. The current economic
market conditions have made the leasing activities slow and thus we have not been able
to fill the retail space to date and therefore cannot start construction.
In accordance with Section 4.3 of the Agreement, 37th and Central, LLC is required to
commence construction of the retail building by May 1, 2009. We have every intent of
continuing with our plans to construct and lease a new building at 37th and Central,
however, we would like to request and extension of one (1) year to do so. It is our goal to
pre -lease the space by the end of the summer 2009, however, we would like to allow
enough time to allow the financial markets to stabilize and hopefully continue discussions
with retailers that are bouncing back from the economic recession.
COMPREHENSIVE REAL ESTATE I ORGANIZATIONAL I SOLUTIONS
552 1..OMIANKI LANE I MINNEAPOLIS 1 MN 155421
1 (612) 237 -1105 I CHRISLITTLE@CROSCOMPANIES.COM
While we are disappointed in the current results of the leasing efforts, we remain
committed to the project and are optimistic about its future.
We look forward to good things in 2009 and we welcome your questions and comments.
Feel free to contact me at (612) 237 -1105 or you can also e -mail me at
chrislittlegcroscompanies.com. Thank you for your consideration in this matter and we
look forward to speaking with you further about this matter.
Sincerely,
Christopher Little
COMPREHENSIVE I REALES'CATE I ORGANIZATIONAL I SOLUTIONS
552 LOMIANHI LANE I MINNEAPOLIS I MN 1 55421
1 (612) 237-1105 1 CHRISLITTLE @CROSCOMPANIES.COM
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: April 28, 2009
AGENDA SECTION: Business Items
ORIGINATING
EXECUTIVE
NO:5
DEPARTMENT: EDA
DIRECTOR
APPROVAL
ITEM: Scattered Site TIF District
BY: Scott Clark
BY:
DATE: April 24, 2009
BACKGROUND: At the March 24, 2009 EDA meeting staff was given direction to proceed with
providing more information to the Board in order to determine if a Scattered Site TIF District should be
implemented. The purpose of this program would be to acquire and demolish the most blighted
properties in the community that are currently for sale within the foreclosure market. Staff has
determined that $998,020 of obligated tax increment revenue can be generated from the existing C8 TIF
District, this includes existing fund balance plus increment receipts in 2009 and 2010 (this district will
be decertified in 2010). Based on this revenue projection, staff is of the opinion that 15 to 18 houses
could be purchased and demolished with these funds. The end objective would be to resell the lots at a
future date (on an average staff views that 70% to 80% of the original acquisition price could be
recovered) and that tax increment would provide enough revenue to return, in full, the original
acquisition and demolition price. The aforementioned assumption is based on the current pricing in the
foreclosure market, especially in the area of small and functionally obsolete properties.
The financial steps for this program would be twofold 1) in order to "release" the existing C8 fund
balance a TIF district modification would be needed to allow pooling and 2) the creation of a new
Scattered Site TIF District to gain additional revenue. The City can start purchasing homes prior to the
creation of the C8 modification as long as either an inter -fund loan agreement is made between the City
(providing up -front financing) and the EDA, and that any home sold and demolished is memorialized by
resolution. The mechanics of creating a new Scattered Site District is explained in a memo dated April
24, 2009 by the EDA Attorney. In addition to the C8 district funds, the A3 /C7 district will be decertified
this year and approximately $110,000 of redistributed funds will be returned the City and a policy
discussion should be held if these monies should be melded into the Scattered Site Program.
As a matter of policy staff recommends the following guidelines for acquisition:
1) An acquisition price point of $55,000 or less
2) All homes purchased will be demolished
3) Homes acquired should fall in one of the following categories:
a. Evidence of structural failure
b. Hazardous conditions including extensive mold
c. Functional obsolescence (size of property, interior layout)
d. Extensive physical deterioration
4) Residual vacant lots shall meet existing zoning standards for purposes of rebuilding
5) Recognition that extenuating circumstances may require deviation from the above policies
RECOMMENDATION: Staff recommends implementing all necessary processes to create a
Scattered Site Housing District including the use all remaining TIF District C8 funds (fund balance
and revenue derived until the end of the District in 20 10) as a revenue source and the immediate
acquisition of properties per the aforementioned policies.
RECOMMENDED MOTION:
Motion to direct staff to implement all necessary processes to create a Scattered Site Housing District
including the use of all remaining TIF District C8 funds ( fund balance and revenue derived until the
end of the District in 2010) as a revenue source and the immediate acquisition of properties per the
policies as stated in this report dated April 24, 2009.
Attachments: Fund Balance Analysis for District A3 /C7 and District C8 (2 pages ), EDA Attorney's Memo dated April 24,
2009 regarding TIF Scattered Site Housing District
EDA ACTION:
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CHARTERED
TO:
FROM:
DATE:
470 US Bank Plaza
200 South Sixth Street
Minneapolis MN 55402
(612) 337 -9300 telephone
(612) 33 7-93 10 fax
http://www.kennedy-graven.com
Scott Clark
Stephen Bubul
April 23, 2009
MEMORANDUM
RE Scattered Site Housing TIF District
You asked me to generally describe the process and rules for the creation of a scattered-
site tax increment financing ( "TIF ") district. I understand that the City and the Columbia
Heights Economic Development Authority ( "EDA ") are contemplating the creation of
such a district, in order to help finance -the acquisition and redevelopment of (mostly)
single family homes throughout the City.
General Concept
Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act ") authorizes the City and
EDA to establish TIF districts that include separate, noncontiguous parcels (informally
referred to as "scattered site" districts). See Section 469.174, subd. 9 of the TIF Act,
defining a district as a "contiguous or noncontiguous geographic area within a project."
Parcels that are separated only by a public right -of -way are not considered to be
"noncontiguous." See Reding v. City of Eagan, 664 NW2d 403 (Minn. Ct. App. 2003).
For example, the EDA might select two houses on one side of a street and two directly
across the street; all four houses would be considered contiguous.
The district could include any combination of parcels, including an entire city block plus
scattered individual parcels, or might be made up entirely of scattered individual parcels.
The key point is that all the parcels combined make up a single district, from which
increment may be collected and freely, spent. This is significant mostly because of the
limitation on spending known as the "pooling rule" spelled out in Section 469.1763,
subd. 2 of the TIF Act. This rule requires that, for housing and redevelopment districts,
at least 75 percent of the increment must be spent within the geographic boundaries of the
TIF district. In the case of a scattered site district, increment may be spent within any of
the scattered parcels and it will be considered to be spent within the district.
One limitation of the pooling rule, and a complication in scattered site districts, is that it
hinders the ability to finance public improvements such as streets, sidewalks and utilities
that might serve the various scattered parcels. Many of those improvements are
physically located outside the boundaries of any of the scattered parcels, and therefore
maybe be financed only from the 25 percent "pooling allowance." Administrative costs
are also considered to be spent outside of a district, so the actual amount left for pooling
is only 15 percent if the EDA uses its full 10 percent allowable for administrative costs.
Nevertheless, to the extent increments are directed toward costs within each parcel, the
scattered site district can be a useful tool.
Specific Rules by Type of District
A scattered site district may be created using any of the types of TIF districts under the
TIF Act. The two most likely candidates for Columbia Heights are housing districts and
redevelopment districts (because these districts have 26 -year durations). The rules for
these districts are different in a scattered site context.
Redevelopment Districts
Recall that for redevelopment districts, the City Council must find that parcels consisting
of 70 percent of the area of the district are occupied by improvements of some kind (the
"coverage test "), and more than 50 percent of the buildings are structurally substandard
(the "substandard test "). In the case of a scattered site district, each scattered site
(whether an isolated parcel or a group of contiguous parcels) must independently meet
both the coverage and substandard tests, and the district as a whole must meet those tests.
This means that if the EDA wishes to designate a number of isolated single family homes
as a single redevelopment district, each home must be found to be structurally
substandard. However, if one or more of the scattered sites includes a group of
contiguous houses, that group will qualify as long as more than 50 percent of the
buildings in that group meet the substandard test.
A further limitation is that the district boundaries may not be expanded after five years
from the date of certification of the district. Therefore, the EDA would have five years to
determine which parcels to include. Each time parcels are added, the City and EDA
would need to make the required coverage and substandard findings for the added
parcel(s).
Another complication for redevelopment districts arises from the five -year rule set forth
in Section 469.1763, subd. 3. Under that rule, the EDA must issue bonds or enter into
contracts within five years after the date of certification of the district, in order for
2
expenditures to be considered spent within the district. (In the case of pay -as- you -go
financing, the reimbursable costs must be expended within that first five -year period.) As
a practical matter, this makes it difficult to administer a long -term scattered site housing
program, because all financing or expenditures must occur within the first five years.
Such a program may still be workable, but it is not ideal.
At the same time, a benefit of redevelopment districts is that the parcels may be
developed for any use — market rate housing, affordable housing, or commercial use of
any type. There are no requirements that new housing be occupied by persons with a
specified income level (unless the EDA wishes to impose such a requirement as a matter
of policy).
Housing Districts
Unlike redevelopment districts, housing districts may be created on any site without
regard to existing conditions. The only requirements are that the occupants of housing
assisted with tax increment meet certain income levels (which vary, depending on
whether the housing is rental or owner - occupied). For owner - occupied housing, the
limits apply only to the first buyer, though the EDA could impose a longer -term
requirement that applies to future owners.
A scattered site housing district, then, requires no initial findings. Any combination of
parcels may be included, anywhere within your larger "project area" (i.e., the Downtown
CBD Redevelopment Project, which includes most of the City). However, each parcel
that benefits from tax increment generated within the scattered site district will be subject
to the income limits. Therefore, this option does not allow the EDA to facilitate market
rate housing. (Having said that, the income limits for owner - occupied housing are
relatively high -100% of median income in the metropolitan area for one and two person
households, and 115% of median for households with three or more persons).
A major benefit of housing districts is that they are not subject to the pooling and five -
year rules described above, as long as the increments are used to finance housing that
meets the housing district income limits. This feature allows the EDA to establish a long-
term scattered site district, where houses could be purchased through the life of the
district without the need to accomplish all financing in the first five years. However, just
as with redevelopment districts, housing districts may not be expanded after five years
from certification.
Of course the EDA could establish more than one scattered site TIF district. One
possibility would be to establish one district that qualifies as a redevelopment district, and
one that qualifies as a housing district. That increases the administrative burdens and
costs somewhat, but might allow the greatest flexibility to carry out a scattered site
program over a longer period of time.
3
Financing
The single greatest limitation in operating a scattered site TIF program housing is
financial. The redevelopment of individual houses — whether in a redevelopment district
or housing district — creates relatively small amounts of increment. Keep in mind that the
value of the existing home is the "based value," and the only tax increment to be captured
is derived from the higher market value of the new housing (or other use) constructed on
that parcel.
For this reason, a scattered site TIF district will not typically be sufficient to pay the cost
of carrying out the redevelopment. Instead, most such programs require "seed money"
from another source, which could be grant funds or other legally available tax increment
revenues.
One such source for the EDA is district C8, a pre -1990 redevelopment TIF district, from
which revenues may be spent without regard to pooling limitations or other limits that
apply to current -law redevelopment districts. The EDA could modify the TIF Plan for
that district to authorize expenditures for housing acquisition, demolition, rehabilitation,
and site improvements as part of a scattered site program. These funds could be used
anywhere within the Project, including within any new scattered site TIF district (whether
a redevelopment or housing district).
The TIF Plan for C8 would need to be modified, with the typical process (public hearing,
30 -day notice to the county and school district). The modification must occur before the
required decertification of that district (which I understand is the end of 2010).
The EDA is also currently preparing to modify the TIF plan for the Kmart/Central
Avenue TIF District. While the major purpose of that modification is to apply
increments to acquire foreclosed houses in the Sheffield neighborhood (which is also
being added to the TIF district), the EDA could authorize use of such funds (within a
20% pooling limit) for the scattered site program. However, the five -year rule limits the
use of those funds, unless legislation that is currently under consideration is modified to
allow expenditures for new activities.
If you or EDA commissioners have further questions on these points, please let me know.
in
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: April 28, 2009
AGENDA SECTION: Business Items ORIGINATING EXECUTIVE
NO:6 DEPARTMENT: EDA DIRECTOR
APPROVAL
ITEM: Adopt Resolution 2009 -13, Approving an BY: Sheila Cartney I BY:
Inter -Fund Loan DATE: April 21, 2009
BACKGROUND
At the March 24, 2009 EDA meeting staff was given direction to proceed with providing more information to the
Board in order to determine if a Scattered Site TIF District should be implemented. The purpose of this program
would be to acquire and demolish the most blighted properties in the community that are currently for sale within
the foreclosure market. Staff has determined that approximately $998,020 of fund balance from the existing C8
TIF District, in addition to one additional year of revenue (this district will be decertified in 2010), can be used as a
revenue source for this project.
As part of the project described above the City has been given the opportunity to purchase property located at 4502
Washington Street for $35,000 plus closing costs. The subject lot is 5,160 square feet with an existing single
family home that is 993 square feet, which was built in 1928. The house has been minimally maintained. All
windows need to be replaced, the windows in the bedrooms do not meet current egress requirements. The basement
has evidence of moisture on the floor and some mold on the ceiling. The back room addition is not on frost
footings and is sinking into the ground. There is a large hole in the floor of one of the bedrooms. There is only a 60
amp electrical service (today's requirement is 100 amp). The stucco is crumbling and the paint in both the house
and garage are in such disrepair the property was sited in December 2008 by the Fire Department, and the facia
boards are rotting.
At this time, the City's (not the EDA) Housing Maintenance Fund would be the up front source of finding for the
4502 Washington Street purchase. The inter -find loan would grant the EDA the ability to repay the City, at a
future time with tax increment fiends, for the subject purchase: Since the Scattered Site TIF District is not
established (but will be in the near future if approved by both the EDA and City Council) the Washington purchase
is being made prior to the certification; therefore, an inter -fund loan is necessary to qualify this purchase as a future
tax increment obligation of the new district. An action by the City Council acknowledging this inter -fund loan,
along with the action to purchase the property, will be on the regular Council agenda of April 27, 2009.
RECOMMENDATION: Staff recommends the board adopt Resolution 2009 -13, a resolution approving terms of
an Inter -fiend Loan in connection with a future Scattered Site TIF District.
RECOMMENDED MOTION:
Move to waive the reading of Resolution 2009 -13, there being an ample amount of copies available to the public.
Move to Adopt Resolution 2009 -13, a Resolution Approving the terms of Inter -fund Loan in connection with a
future Scattered Site TIF District.
Attachments: Resolution 2009 -13
EDA ACTION:
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
Resolution 2009 -13
RESOLUTION APPROVING AND SPECIFYING
TERMS OF INTER -FUND LOAN FOR ACQUISITION OF 4502 WASHINGTON ST. NE
RECITALS
A. The City of Columbia Heights. ( "City ") and its Economic Development Authority
( "Authority ") have undertaken a program to promote the development and redevelopment of land
which is underutilized within the City, and in this connection the Authority administers the
Redevelopment Project No. 1 ( "Project ") pursuant to Minnesota Statutes, Sections 469.001 to
469.047 and Sections 469.090 to 469.1081 (the "Act").
B. Pursuant to the Act, the Authority is authorized to acquire real property for development
and redevelopment by private enterprise or public use.
C. The Authority proposes to acquire certain property in the Project located at 4502
Washington St. NE (the "Property)."
D. The Authority and City may establish a scattered -site tax increment financing district
( "TIF District ") under Minnesota Statutes, Sections 469.174 to 469.176 (the "TIF Act ") that
includes the Property in order to facilitate development of that property; or the Authority and City
may develop the property for various public uses.
E. Under Section 469.178, Subdivision 7 of the TIF Act, the City is authorized to advance
or loan money from any fund from which such advances may be legally made in order to finance
expenditures that are eligible to be paid with tax increments under the TIF Act.
F. The City has determined that it is in the best interests of the City to loan funds to the
EDA in order to acquire the Property, which loan may be reapaid from tax increments or other
sources, all as further described in this resolution.
G. By a resolution approved April 27, 2009 (the "Loan Resolution"), the City Council
authorized a loan from the City to the Authority in the maximum principal amount of $35,000 plus
actual closing costs on acquisition of the Property and the actual cost of demolition (the "Loan").
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Columbia
Heights Economic Development Authority as follows:
1. The Authority accepts and approves the Loan from the City to the Authority as
described in the Loan Resolution, and approves all terms of the Loan Resolution.
2. The Board authorizes and directs staff to take all actions and execute any collateral
documents necessary to carry out the intent of this resolution.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 28th day of April, 2009:
President
ATTEST:
Secretary
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: April 24, 2009
AGENDA SECTION: Business Items
ORIGINATING EXECUTIVE
N0:7 DEPARTMENT: EDA DIRECTOR
APPROVAL
ITEM: Make Heights Your Home —Pilot
BY: Sheila Cartney BY:
Program I DATE: April 215 2009
BACKGROUND:
At the March 12, 2009 EDA meeting, the Commission agreed to a down payment assistance program for
foreclosed home purchases, that are purchased with a 203K loan (which guarantees rehabilitation for that
property). The funding for this program will be from the 2009 Fiscal Year Anoka County Levy. Staff
plans to administer this program, 2009 will be the test year to see if this program can be a success for the
city. If GMHC administers the program on behave of the city, a charge of $500 per loan transaction
would apply. City staff will charge an administrative fee of $250 per transaction out of the Anoka
County Levy Funds. Below is an outline of the Make Heights Your Home program.
The Loan — provides zero percent interest loan of 3.5% of the acquisition cost (purchase price plus rehab
costs) up to $6,000 to be used for down payment assistance with an FHA 203K Purchase /Rehab Loan.
Guidelines — Make Heights Your Home program is a down payment program to help increase home
ownership and encourage reinvestment.
Terms
1. Assistance must be used with an FHA 203K loan
2. The assistance is a zero percent interest loan of 3.5% of the acquisition cost up to $6,000 to be
used for down payment
3. No monthly payments
4. Loan is forgiven if borrower lives in property for 10 years
5. If owner occupies the house for less than 3 years the loan must be paid in full at time of sale or
transfer of title
6. After three years of occupying the house the loan can be repaid at an equally prorated amount
depending on the number of years the borrower lives in the house (if not a full 10 years)
7. A minimum of $10,000 in home improvements is required in order to receive this assistance
8. No income limit restrictions
9. The home must be a foreclosed property
10. Construction work must be completed by a licensed contractor, with applicable permits and
inspections completed
11. A loan agreement must be signed by the home buyer who certifies they will be an owner
occupant
12. Use of local contractors is encouraged
Use of Funds
Make Heights Your Home funds must be used for down payment. The borrower may not receive any
portion of these funds as cash.
Eligible Properties
1. The property must be a single family detached dwelling
2. The property must be in foreclosure status and for sale
3. There is no sale price limit
4. Construction must start within 30 days of purchase closing. The homeowner must occupy the
home within 60 days of the completion of the construction work.
Eligible Buyer
Anyone who meets all of the following conditions:
1. Qualifies for and is receiving an FHA 203K loan from an accredited lender; borrower does not
need a co- signer to qualify
2. Household income to housing expense does not exceed 31% or a total debt ratio of 43%
3. Borrower must be an individual person or persons, not a business entity.
4. Borrower must have a credit score of at least 650.
Homeownership Education
Borrower must complete a homeownership education class
RECOMMENDATION: Staff recommends the EDA approve Make Heights Your Home down payment
assistance program as presented in this staff report and direct staff to enter into necessary agreements
with Anoka County, and have the City Attorney review any documents necessary.
RECOMMENDED MOTION:
Move to approve Make Heights Your Home down payment assistance program as presented in this staff
report and direct staff to enter into necessary agreements with Anoka County for use of the 2009 Fiscal
Year County HRA Levy Funds.
Attachments: list of applicable repairs
EDA ACTION:
203K Eligible Repairs
■ Structural alterations and reconstruction
■ Modernization and improvements to the home's function
■ Elimination of health and safety hazards
■ Changes that improve appearance and eliminate obsolescence
■ Repair /replacement /upgrade of plumbing and electrical systems
■ Adding or replacing roofing, gutters, and downspouts
■ Adding or replacing floors and /or floor treatments
■ Major landscape work and site improvements
■ Enhancing accessibility for a disabled person
■ Making energy conservation improvements
■ Repair /Replacement /upgrade of existing HVAC systems
■ Lead -based paint stabilization or abatement of lead -based paint hazards
■ Basement finishing and remodeling, which does not involve structural repairs
Basement water proofing
■ Window and door replacements and exterior wall re- siding
■ Weatherization, including storm windows and doors, insulation, weather stripping
etc.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: April 28, 2009
AGENDA SECTION: Business Items
ORIGINATING EXECUTIVE
NO:8 DEPARTMENT: EDA DIRECTOR
APPROVAL
ITEM: KMart/ Central Avenue TIF Plan BY: Scott Clark
BY:
Amendment DATE: April 24, 2009
BACKGROUND:
The item for review by the EDA is a Tax Increment Plan Modification for the KMart/Central Avenue
Tax Increment Financing District. Since the EDA was the original sponsoring agency for the district, a
resolution by the Authority needs to be acted on, but the required public hearing must be acted on by
the City Council with a similar resolution (the City Council will hold the public hearing on May 11,
2009). If approved, the modified Plan will do the following:
1) No new increment is being proposed in the Plan.
2) TIF budgets are constructed as a "not -to- exceed" budget rather than an expected budget of
costs. Since the original budget had a future value use of funds of $10,195,800 (principle
and interest) and the combined old and new district tax increment expenditures will not
exceed this, no substantive budget amendment is being made, only a geographical
amendment is needed to allow future expenditures in the Sheffield neighborhood.
3) The key element of the Plan is the use of unobligated tax increment from the original
district (condominium project north of 47th) as a revenue source for redevelopment in the
Heritage Height (Sheffield) neighborhood. The Plan provides for a wide range of
redevelopment work that is including, but not limited to, acquisition, demolition,
rehabilitation, utility and street work, etc. .
4) The number of homes included in the amended district area is 55 parcels. Staff has
conducted the rigorous redevelopment tests necessary to certify this area as a renovation
and renewal area.
5) The Plan acknowledges that the City maybe a beneficiary of a State law change that would
extend the "five -year rule to a "ten -year rule." The net effect of this is that the "five- year"
rule would only allow the City to use unobligated tax increment from the existing Phase I
condo project (assuming that a bond, which is in process before the City Council, is in
place by July 23, 2009) in the new geographic area for redevelopment purposes. The "ten -
year" rule would allow future unobligated tax increment review (primarily from condo
phase II and III) from the original project to be used in the new area, again for
redevelopment purposes. Although not specified in the Plan, but included within the
budget authority, the City /EDA anticipates the sale of a taxable GO tax increment bond in
the amount of $930,000 to be sold and available by early summer of this year.
RECOMMENDATION: Staff recommends approval of the TIF Plan as written and as stated within the
attached resolution.
RECOMMENDED MOTION:
Move to waive the reading of Resolution 2009 -14 there being ample copies available.
Move to Adopt Resolution 2009 -14, Resolution Adopting a Modification to the Downtown Central
Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and a Modification to
the Tax Increment Financing Plan for the K -Mart /Central Avenue Tax Increment Financing District.
Attachments: Resolution 2009 -14, K/Mart/Central Ave TIF District Modification Plan
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
CITY OF COLUMBIA HEIGHTS
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO. 2009-14
RESOLUTION ADOPTING A MODIFICATION TO THE DOWNTOWN
CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE
CBD REDEVELOPMENT PROJECT AND A MODIFICATION TO THE TAX
INCREMENT FINANCING PLAN FOR THE K -MART /CENTRAL AVENUE
TAX INCREMENT FINANCING DISTRICT.
WHEREAS, it has been proposed by the Board of Commissioners ( "Board ") of the Columbia
Heights Economic Development Authority ( "EDA ") and the City of Columbia Heights ( "City ") that the
EDA adopt a Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment
Project (the "Revitalization Plan Modification ") and a Modification to the Tax Increment Financing Plan
(the TIF Plan Modification ") for the K- Mart/Central Avenue Tax Increment Financing District ( "TIF
District) therein (the Revitalization Plan Modification and the TIF Plan Modification are referred to
collectively herein as the "Modifications "), all pursuant to and in conformity with applicable law,
including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1799,
inclusive, as amended (the "Act "), all as reflected in the Modifications and presented for the Board's
consideration; and
WHEREAS, the EDA has investigated the facts relating to the Modifications and has caused the
Modifications to be prepared; and
WHEREAS, the EDA has performed all actions required by law to be performed prior to the
adoption of the Modifications. The EDA has also requested the City Planning Commission to provide for
review of and written comment on Modifications and that the City Council schedule a public hearing on
the Modifications upon published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
1. The EDA hereby finds that the Modifications, are intended and, in the judgment of this
Board, the effect of such actions will be, to provide an impetus for development in the public purposes
and accomplish certain objectives as specified in the Modifications, which are hereby incorporated herein.
2. The EDA hereby finds that parcels listed in Appendix C of the TIF Plan Modification
should be included in the TIF District, and adjacent streets and right -of way property; thereby changing
the geographic shape of the TIF District.
3. The EDA hereby finds that the area being added to the TIF District as part of the
proposed Modifications meets the requirements for a "renewal and renovation district" under Minnesota
Statutes, Section 469.174, Subd. 10a, and finds that the adoption of the proposed Modifications conforms
in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of
Minnesota which is already built up and that the adoption of the proposed Modifications will help provide
public improvements, revitalize an area characterized by blight and occupied by substandard buildings,
and expand the tax base of the City, and thereby serves a public purpose.
The EDA hereby reaffirms the original findings for the TIF District, established as a
"renewal and renovation district ".
5. The EDA further finds that the Modifications will afford maximum opportunity,
consistent with the sound needs for the City as a whole, for the development or redevelopment of the
CBD Redevelopment Project by private enterprise in that the intent is to provide only that public
assistance necessary to make the private developments financially feasible.
6. The boundaries of the CBD Redevelopment Project are not being expanded.
7. The reasons and facts supporting the findings in this resolution are described in the TIF
Plan Modification and in the exhibit attached to the City resolution approving the Modifications, on file in
City Hall.
8. Conditioned upon the approval thereof by the City Council following its public hearing
thereon, the Modifications, as presented to the EDA on this date, are hereby approved, established and
adopted and shall be placed on file in the office of the Community Development Director.
9. Upon approval of the Modifications by the City Council, the staff, the EDA's advisors
and legal counsel are authorized and directed to proceed with the implementation of the Modifications
and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further
plans, resolutions, documents and contracts necessary for this purpose. Approval of the Modifications
does not constitute approval of any project or a Development Agreement with any developer.
10. Upon approval of the Modifications by the City Council, the Community Development
Director is authorized and directed to forward a copy of the Modifications to the Minnesota Department
of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a.
11. Upon approval of the Modifications by the City Council, the Community Development
Director is authorized and directed to forward a copy of the Modifications to the Anoka County Auditor
and request that the Auditor certify the original tax capacity of the parcels being added to the TIF District,
as described in the TIF Plan Modification, all in accordance with Minnesota Statutes 469.177.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 28" day of April, 2009.
EDA President
ATTEST:
Secretary
(Seal)
MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT
REVITALIZATION PLAN FOR THE CENTRAL BUSINESS DISTRICT
REDEVELOPMENT PROJECT
and the
MODIFICATION TO THE TAX INCREMENT FINANCING PLAN
FOR THE K- MART /CENTRAL AVENUE
TAX INCREMENT FINANCING DISTRICT
(a renewal and renovation district)
within
THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
14 i, a
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
CITY OF COLUMBIA HEIGHTS
COUNTY OF ANOKA
STATE OF MINNESOTA
Public Hearing: September 22, 2003
Adopted: September 22, 2003
Public Hearing for Modification: May 11, 2009
Modification Adopted:
E H L Erm R 3060 Centre Pointe Drive, Prepared
Roseville, Minnesota ASSOCIATES, 5
LEADERS IN PUBLIC: FINANCE 651 - 697 -8500 fax: 651 - 697 -8555 www.ehlers- inc.com
TABLE OF CONTENTS
(for reference purposes only)
SECTION 1
MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT REVITALIZATION
PLAN FOR THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT 1 -1
Foreword............................................................. 1 -1
Overview.............................................................. 1 -1
SECTION H
TAX INCREMENT FINANCING PLAN FOR THE
K MART /CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT ...........
2 -1
Subsection 2 -1.
Foreword ................ ...............................
2 -1
Subsection 2 -2.
Statutory Authority ......... ..............................
2
Subsection 2 -3.
Statement of Objectives .. ............................... . .
- 2
Subsection 2 -4.
Downtown CBD Revitalization Plan Overview ...................
2 -2
Subsection 2 -5.
Description of Property in the District and Property To Be Acquired .
2 -3
Subsection 2 -6.
Classification of the District .. ...............................
2 -4
Subsection 2 -7.
Duration of the District ...... ...............................
2 -5
Subsection 2 -8.
Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value /Increment and Notification of Prior Planned Improvements ................
2 -6
Subsection 2 -9.
Sources of Revenue /Bonded Indebtedness ....................
2 -8
Subsection 2 -10.
Uses of Funds ............ ...............................
2 -9
Subsection 2 -11.
State Tax Increment Financing Aid (Local Contribution) ..........
2 -11
Subsection 2 -12.
Fiscal Disparities Election .. ...............................
2 -11
Subsection 2 -13.
Business Subsidies ....... ...............................
2 -12
Subsection 2 -14.
County Road Costs ....... ...............................
2 -13
Subsection 2 -15.
Estimated Impact on Other Taxing Jurisdictions ................
2 -13
Subsection 2 -16.
Supporting Documentation . ...............................
2 -15
Subsection 2 -17.
Definition of Tax Increment Revenues .......................
2 -16
Subsection 2 -18.
Modifications to the District . ...............................
2 -16
Subsection 2 -19.
Administrative Expenses ... ...............................
2 -17
Subsection 2 -20.
Limitation of Increment .... ...............................
2 -18
Subsection 2 -21.
Use of Tax Increment ..... ...............................
2 -19
Subsection 2 -22.
Excess Tax Increments .... ...............................
2 -20
Subsection 2 -23.
Requirements for Agreements with the Developer ..............
2 -20
Subsection 2 -24.
Assessment Agreements .. ...............................
2 -20
Subsection 2 -25.
Administration of the District ...............................
2 -21
Subsection 2 -26.
Annual Disclosure Requirements ...........................
2 -21
Subsection 2 -27.
Reasonable Expectations .. ...............................
2 -21
Subsection 2 -28.
Other Limitations on the Use of Tax Increment .................
2 -21
Subsection 2 -29.
Summary ............... ...............................
2 -22
APPENDIX A
. PROJECT DESCRIPTION ................. ............................... A -1
APPENDIX B
MAPS OF THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
AND THE K- MART /CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT ... B -1
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT ............. C -1
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT .............................. D -1
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM ............................... E -1
APPENDIX F
REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT .................... F -1
APPENDIX G
BUT /FOR QUALIFICATIONS ............... ............................... G -1
APPENDIX H
PRIOR PLANNED IMPROVEMENTS ........ ............................... H -1
APPENDIX I
SPECIAL LEGISLATION ................... ............................... I -1
SECTION I
MODIFICATION TO THE DOWNTOWN CENTRAL BUSINESS DISTRICT REVITALIZATION
PLAN FOR THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
Foreword
The following text represents a Modification to the Downtown Central Business District (CBD) Revitalization
Plan for the CBD Redevelopment Project. This modification represents a continuation of the goals and
objectives set forth in the Downtown CBD Revitalization Plan for the CBD Redevelopment Project.
Generally, the substantive changes include the establishment of K- Mart /Central Avenue TIF District.
For further information, a review of the Downtown CBD Revitalization Plan for the CBD Redevelopment
Project is recommended. It is available from the Community Development Director at the City of Columbia
Heights. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment
Financing Districts located within the CBD Redevelopment Project.
Overview
The Central Business District ( "CDB ") Redevelopment Project is administered by the Columbia Heights
Economic Development Authority (the "EDA "). Previously, the CBD Redevelopment Project was
established and administered by the City of ColumbiaHeights (the "City ") and the Columbia Heights Housing
and Redevelopment Authority (the "HRA ").
The CBD Redevelopment Proj ect previously included property in the downtown area. On July 18, 1994, the
Sheffield Neighborhood Redevelopment and Housing Development Project was consolidated with the CBD
Redevelopment Project by the HRA. On January 8, 1996, the HRA transferred its authority to the EDA,
which currently administers the CDB Redevelopment Project.
On May 27, 1997, the CBD Redevelopment Project was modified to expand the project area to include the
entire City. Concurrently, Housing Redevelopment Tax Increment Financing District No. 1 ('District No.
1 ") within the CBD Redevelopment Project was established. As District No. 1 is a scattered site
redevelopment tax increment financing district, the property to be included in District No. 1 is found
throughout the City, thus necessitating the expansion of the boundaries of the CBD Redevelopment Project.
The City and the EDA have hereby modified the boundaries of the CBD Redevelopment Project to be
coterminous with the corporate limits of the City. A map of the boundaries of the CBD Redevelopment
Project can be found in Appendix B.
Columbia Heights EDA Modification to the Downtown CBD Revitalization Plan for the CBD Redevelopment Project 1 -1
SECTION II
TAX INCREMENT FINANCING PLAN FOR THE
K MART /CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT
Subsection 2 -1. Foreword
The Columbia Heights Economic Development Authority (the "EDA "), the City of Columbia Heights (the
"City "), staff and consultants have prepared the following information to expedite the establishment of the
K- Mart /Central Avenue Tax Increment Financing District ( "the District "), a renewal and renovation tax
increment financing district, located in the Central Business District (CBD) Redevelopment Project.
(AS MODIFIED MAY]], 2009, TO INCLUDE THE FOLLOWING LANGUAGE)
The Tax Increment Financing Plan is being modified to expand the boundaries of the District which
will add 55 parcels. The EDA and the City desire to continue redevelopment and development of
blighted and underdeveloped property in the City. New redevelopment opportunities have arisen in
areas adjacent to the District due to a high number of foreclosures in the area. The proposed
redevelopment will allow the City to acquire, rehabilitate and /or demolish existing residential and
commercial units and resell the rehabilitated homes and /or residential or commercial lots. In addition,
it will allow the City to make necessary public improvements to roadways, alleys, sidewalks and utilities
as required.
The District is also being modified to incorporate pending special legislation (shown in Appendix I).
This legislation is to extend the five -year rule to ten years to allow the City to expend dollars to address
the housing redevelopment needs in the expanded area. If the special legislation is not passed, the
deadline for the five -year rule is July 23, 2009. If the legislation is approved, then the new deadline is
July 23, 2014. In addition, the modification will update the budget to reflect actual project
activity /development to date.
Subsection 2 -2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota
Statutes ( "M.S.'), Sections 469.001 to 469.047, and Sections 469.090 to 469.1082, inclusive, as amended,
and M.S., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF
Act "), to assist in financing public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan ") for the K -Mart /Central Avenue Tax
Increment Financing District. Other relevant information is contained in the Modification to the Downtown
CBD Revitalization Plan for the CBD Redevelopment Project.
(AS MODIFIED MAY]], 2009)
The TIF Plan for the District is being modified to expand the boundaries of the District to add 55
parcels, to include pending legislation that will extend the rive -year rule to ten -years (from July 23,
2009 to July 23, 2014), if approved and to update the budget to reflect actual project
activity /development to date.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-1
Subsection 2 -3. Statement of Objectives
The District currently consists of six parcels of land and adjacent and internal rights -of -way. The District is
being created to facilitate the construction of 244 owner - occupied units and up to 115,000 s.f. of commercial
redevelopment along Central Avenue in the City of Columbia Heights. Contracts for this have not been
entered into at the time of preparation of this TIF Plan, but development is likely to begin in the fall of 2003.
This TIF Plan is expected to achieve many of the objectives outlined in the Downtown CBD Revitalization
Plan for the CBD Redevelopment Project.
The activities contemplated in the Modification to the Downtown CBD Revitalization Plan and the TIF Plan
do not preclude the undertaking of other qualified development or redevelopment activities. These activities
are anticipated to occur over the life of the CBD Redevelopment Project and the District.
(AS MODIFIED MAY 11, 2009, TO INCL UDE THE FOLLOWING LANGUAGE)
The TIF Plan is being modified to expand the boundaries of the district which will add 55 parcels. The
EDA and the City desire to continue redevelopment and development of blighted and underdeveloped
property in the City. New redevelopment opportunities have arisen in areas adjacent to the District
due to a high number of foreclosures in the area. The proposed redevelopment will allow the City to
acquire, rehabilitate and /or demolish existing residential and commercial units and resell the
rehabilitated homes and /or vacant residential or commercial lots. In addition, it will allow the City to
make necessary public improvements to roadways, alleys, sidewalks and utilities as required.
The district is also being modified to incorporate pending special legislation (shown in Appendix I).
This legislation is to extend the five year rule to 10 years to allow the City to expend dollars to address
the housing redevelopment needs in the expanded area. If the special legislation is not passed, the
deadline for the five -year rule is July 23, 2009. If the special legislation is approved, then the deadline
will be July 23, 2014. In addition, the modification will update the budget to reflect actual project
activity /development to date.
Subsection 2 -4. Downtown CBD Revitalization Plan Overview
1. Property to be Acquired - Selected property located within the District may be acquired by
the EDA or City and is further described in this TIF Plan.
2. Relocation Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the EDA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The EDA or City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public streets work within the District.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -2
Subsection 2 -5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights -of -way identified by the parcels listed below. See
the map in Appendix B for further information on the location of the District.
Parcel Numbers
25- 30 -24 -32 -0001
25- 30 -24 -32 -0002
25- 30 -24 -32 -0003
25- 30 -24 -32 -0004
25- 30 -24 -32 -0061
25- 30 -24 -32 -0062
The EDA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the EDA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and /or development to
accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift,
dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives ofthis TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
(AS MODIFIED ON MAY 11, 2009)
The District is being modified to add 55 parcels to the District and encompasses all property and
adjacent rights -of -way and abutting roadways identified by the parcels listed in Appendix C of this TIF
Plan (both existing parcels with corresponding new PID numbers due to redevelopment and replatting
and the 55 PID numbers for the modified area). Please also see the map in Appendix B for further
information on the location of the District.
It is the intent that the EDA or City may acquire any parcel within the existing District and modified
area including interior and adjacent street rights of way. However, if an opportunity presents itself
to further the redevelopment objectives of preventing or removing blight within the Central Business
District Redevelopment Project Area, the EDA and City may acquire property located in this area.
Any properties identified for acquisition will be acquired by the EDA or City only in order to
accomplish one or more of the following: carry out land acquisition; demolition of structures;
rehabilitation of housing and commercial units; relocation; construction of new residential and
commercial units; site improvements; storm sewer improvements; provide land for needed public
streets, sidewalks, alley ways, utilities and facilities to accomplish the uses and objectives set forth in
this plan. The EDA or City may acquire property by gift, dedication, condemnation or direct purchase
from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be
undertaken only when there is assurance of funding to finance the acquisition and related costs.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -3
Subsection 2 -6. Classification of the District
The EDA and City, in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a
renewal and renovation district pursuant to M.S., Section 469.174, Subd. 10a. as defined below:
(a) "Renewal and renovation district" means a type of tax increment financing district consisting of a
project, or portions of a project, within which the City finds by resolution that:
parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets, utilities, paved or gravel parking lots, or other similar structures;
(ii) 20 percent of the buildings are structurally substandard; and
(iii) 30 percent of the other buildings require substantial renovation or clearance
to remove existing conditions such as: inadequate street layout, incompatible uses
or land use relationships, overcrowding ofbuildings on the land, excessive dwelling
unit density, obsolete buildings not suitablefor improvement or conversion, or other
identified hazards to the health, safety, and general well -being of the community;
and
(2) the conditions described in clause (1) are reasonable distributed throughout the geographic
area of the district.
(b) Forpurposesofdeterminingwhetherabuildingisstructurallysubstandard, whetherparcels are
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures,
or whether noncontiguous areas qualify, the provisions of subdivision 10, paragraphs (c), (e),
and (fl apply.
In meeting the statutory criteria the City rely on the following facts and findings:
• The District is a renewal and renovation district consisting of six parcels.
• An inventory shows that parcels consisting of more than 70 percent of the area in the District are
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures.
• An inspection of the buildings located within the District finds that more than 20 percent of the buildings
are structurally substandard as defined in the TIF Act. (See Appendix F).
• An inspection of the buildings located within the District finds that more than 30 percent of the other
buildings require substantial renovation or clearance to remove existing conditions such as defined in the
TIF Act. (See Appendix F).
Pursuant to M..S.469.176 Subd. 7, the District does not contain any parcel or part of a parcel that qualified
under the provisions ofM.S 2 73. 111 or 273.112 or Chapter 473Hfor taxes payable in any of the five calendar
years before the filing of the request for certification of the District.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -4
(AS MODIFIED MAY 11, 2009, TO INCLUDE THE FOLLOWING LANGUAGE)
Section (b) above in the original plan is modified with the new language effective for certification
requests made after 6/30/08 to read as follows:
(b) For purposes of determining whether a building is structurally substandard, whether parcels are
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures, or
whether noncontiguous areas qualify, the provisions of subdivision 10, paragraphs (b) through 09
apply.
The EDA and City, in determining the need to modify the boundaries of a tax increment financing
district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the
modified area to be included in the District, meet the qualifications of a renewal and renovation district
pursuant to M.S., Section 469.174, Subd. 10a. as follows:
In meeting the statutory criteria the City and EDA relied on the following facts and findings:
• The modified portion of the District qualifies as a renewal and renovation district, consisting of 55
parcels.
• An inventory shows that parcels consisting of more than 70 percent of the area in the District are
occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures.
• An inspection of the buildings located within the modified portion of the District rinds that more
than 20 percent of the buildings are structurally substandard as defined in the TIF Act. (See
Appendix F).
• An inspection of the buildings located within the modified portion of the District finds that more
than 30 percent of the other buildings require substantial renovation or clearance to remove
existing conditions such as defined in the TIF Act. (See Appendix F).
Subsection 2 -7. Duration of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must
be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. I b, the duration of the District
will be 15 years after receipt of the first increment by the EDA or City (a total of 16 years of tax increment).
The date of receipt by the City of the first tax increment is expected to be 2006. Thus, it is estimated that the
District, including any modifications ofthe TIF Plan for subsequent phases or other changes, would terminate
after 2021, or when the TIF Plan is satisfied. The EDA or City reserves the right to decertify the District prior
to the legally required date.
(AS MODIFIED ON MAY 11, 2009)
This modification does not change the term of the District. The first increment was received in 2005.
Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent
phases or other changes, would terminate after 2020.
Columbia Heights Economic Development Authority
Tait Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-5
Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value /Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 andM.S., Section 469.177, Subd. I, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2003 for taxes payable 2004.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2005) the amount by which the original value has increased or decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court- ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the EDA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2004, assuming the
request for certification is made before June 30, 2004. The ONTC and the Original Local Tax Rate for the
District appear in the table below (based on current estimates).
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within the CBD Redevelopment Project, upon completion
of the project, will annually approximate tax increment revenues as shown in the table below. The EDA and
City request 100 percent of the available increase in tax capacity for repayment of its obligations and current
expenditures, beginning in the tax year payable 2005. The Project Tax Capacity (PTC) listed is an estimate
of values when the project is completed.
Project Estimated Tax Capacity upon Completion (PTC)
$820,250
Original Estimated Net Tax Capacity (ONTC)
$91,182
Fiscal Disparities Reduction
$72,600
Estimated Captured Tax Capacity (CTC)
$656,468
Original Local Tax Rate
1.08395 Pay 2003
Estimated Annual Tax Increment(CTC x Local Tax Rate)
$711,578
Percent Retained by the City
100%
Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-6
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District and found that four building permits have been
issued in the past 18 months for parcel number 25- 30 -24 -32 -0002. Should the county auditor decide that
building permits increase the original tax capacity, the impact should be minimal because the total dollar
amount of the permits is $75,575. Please see Appendix H for the building permits that were issued.
(AS MODIFIED ON MAY 11, 2009)
The original local tax rate for the modified portion of the District will be the local tax rate for taxes
payable 2010, assuming the request for certification is made after June 30, 2009. The ONTC and the
Original Local Tax Rate for the District appear in the table below (based on current estimates).
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within the CBD Redevelopment Project, upon
completion of the project, will annually approximate tax increment revenues as shown in the table
below. The EDA and City request 100 percent of the available increase in tax capacity for repayment
of its obligations and current expenditures, beginning in the tax year payable 2011. The Project Tax
Capacity (PTC) listed is an estimate of values when the project is completed.
Project Estimated Tax Capacity Upon Completion
Original Estimated Net Tax Capacity (ONTC)
Disparities Reduction
Estimated Captured Tax Capacity (CTC)
Original Local Tax Rate
Estimated Annual Tax Increment (CTC x Local Tax Rate)
Percent Retained by the City
$820,250
$161,432
$981,682
$91,182
$161,432
$252,614
$72,600
$0
$72,600
$656,468
$0
$656,468
1.08395 (Pay 2003)
1.07874 (Pay 2010 Est)
N/A
$711,578
$0
$711,578
100.00%
100.00%
100.00%
*No increase in project tax capacity is anticipated with the modification since the goal is to acquire multi -unit properties,
demolish them and build new single- family units in their place. It is estimated that the value of the new single - family
unit will be comparable to the multi- family property that is torn down.
Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany
its request for certification to the,County Auditor or its notice of the District enlargement pursuant to
M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement
for which building permits have been issued during the eighteen (18) months immediately preceding
approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County
Auditor shall increase the original net tax capacity of the District by the net tax capacity of
improvements for which a building permit was issued.
The City has reviewed the area to be included in the District and found that eight building permits have
been issued in the past 18 months for six of the parcels. Seven of the eight building permits are for
roofs and /or furnaces and water heaters which should add no value to the property. One permit was
for remodeling of rental units. Should the county auditor decide that the building permit for the
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -7
remodeling of the rental units increase the original tax capacity, the impact should be minimal because
the total dollar amount of the permits is $34,000. Please see Appendix H for the building permits that
were issued.
Subsection 2 -9. Sources of Revenue /Bonded Indebtedness
Public improvement costs, acquisition, relocation, utilities, parking facilities, streets and sidewalks, and site
preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual
collection of tax increments. The EDA or City reserves the right to use other sources of revenue legally ap-
plicable to the EDA or City and the TIF Plan, including, but not limited to, special assessments, general
property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contribu-
tions from the developer and investment income, to pay for the estimated public costs.
The EDA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF
Plan. As presently proposed, the project will be financed by a pay -as- you -go note with a developer.
Additional indebtedness may be required to finance other authorized activities. The total principal amount
of bonded indebtedness, including a general obligation (GO) TIF bond, or other indebtedness related to the
use of tax increment financing will not exceed $10,000,000 without a modification to the TIF Plan pursuant
to applicable statutory requirements.
This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur
other debt only upon the determination that such action is in the best interest of the City. The EDA or City
may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the
EDA or City or to reimburse the developer on a "pay -as- you -go" basis for eligible costs paid for by a
developer.
The estimated sources of funds for the District are contained in the table below.
SOURCES OF FUNDS TOTAL
Tax Increment
$10,195,800
PROJECT REVENUES $10,195,800
(AS MODIFIED ONMAY 11, 2009)
Acquisition, relocation, rehabilitation, demolition, construction, utilities, streets, alleys and sidewalks,
public improvement costs, and site preparation costs and other costs outlined in the Uses of Funds will
be financed primarily through the annual collection of tax increments. The EDA or City reserves the
right to use other sources of revenue legally applicable to the EDA or City and the TIF Plan, including,
but not limited to, special assessments, general property taxes, state aid for road maintenance and
construction, proceeds from the sale of land, and other contributions from the developer and
investment income, to pay for the estimated public costs.
The EDA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of
the TIF Plan. As presently proposed, the project will be financed by a pay- as -yo -go note and a bond
issue. Additional indebtedness may be required to finance other authorized activities. The total
principal amount of bonded indebtedness, including a general obligation (GO) TIF bond, or other
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-8
indebtedness related to the use of tax increment financing will not exceed $10,000,000 without a
modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that up to
$10,000,000 in interfund loans may be financed with tax increment revenues. It is estimated that up
to $10,000,000 in bonded indebtedness may be financed with tax increment revenues. Any refunding
amounts will be deemed a budgeted cost without a formal TIF Plan Modification.
This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or
incur other debt only upon the determination that such action is in the best interest of the City. The
EDA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans
from funds of the EDA or City or to reimburse the developer on a "pay -as- you -go" basis for eligible
costs paid for by a developer.
The estimated sources of funds for the District are contained in the following table.
SOURCES OF FUNDS
TOTAL
Tax Increment
$10,195,800
Interest Revenue
$100,000
PROJECT REVENUES
$10,295,800
Interfund Loans
$10,000,000
Bond Principal
$10,000,000
TIF Note Principal
$1,000,000
The other financing sources listed above are included for purposes of OSA reporting for the TIF
District. They are not intended to be cumulative.
Subsection 2 -10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the construction of 244 owner-
occupied units and up to 115,000 s.f. of commercial redevelopment along Central Avenue. The EDA and
City have determined that it will be necessary to provide assistance to the project for certain costs. The EDA
has studied the feasibility of the development or redevelopment of property in and around the District. To
facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the
use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs
and uses of funds associated with the District is outlined in the following table.
USES OF FUNDS
TOTAL
Land/Building Acquisition
$3,500,000
Site Improvements /Preparation
$500,000
Public Utilities
$500,000
Parking Facilities
$2,000,000
Streets and Sidewalks
$100,000
Interest
$2,576,220
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-9
Administrative Costs (up to 10 %) $1,019,580
PROJECT COSTS TOTAL $10,195,800
The above budget is organized according to the Office of State Auditor (OSA) reporting forms.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without fortnal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S., Section 469.1763, Subd. 2, no more than 20 percent of the tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries ofthe Central Business District Redevelopment Project, (including administrative costs, which
are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan.
(AS MODIFIED ON MAY 11, 2009)
Currently under consideration for the District is a proposal to facilitate the redevelopment of parcels
that are added to the district as part of this modification. The proposed redevelopment will allow the
City to acquire, relocate residents and /or businesses, rehabilitate and /or demolish existing residential
and commercial units and resell the homes and /or residential or commercial lots. In addition, it will
allow the City to make necessary public improvements to roadways, alleys, sidewalks and utilities as
required. The EDA and City have determined that it will be necessary to provide assistance to the
project for certain costs. The EDA has studied the feasibility of the development or redevelopment of
property in and around the District. To facilitate the modification and development or redevelopment
of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain
eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined
in the following table.
USES OF FUNDS
TOTAL
Land /Building Acquisition
$3,500,000
Site Improvements/Preparation
$500,000
Public Utilities
$500,000
Public Parking Facilities
$2,000,000
Streets and Sidewalks
$200,000
Interest
$2,576,220
Administrative Costs (up to 10 %)
$1,019,580
PROJECT COSTS TOTAL
$10,295,800
Interfund Loans
$10,000,000
Bond Principal
$10,000,000
TIF Note Principal
$1,000,000
The other financing uses listed above are included for purposes of OSA reporting for the TIF District.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -10
They are not intended to be cumulative. Transfers are included in case money is moved from one fund
to another before an expenditure. TIF is expected to be used for the project costs listed above, which
is a not -to- exceed budget rather than an expected budget of costs.
Pursuant to M.S., Section 469.175, Subd. 1 (a)(5), it is estimated that the cost of improvements,
including administrative expenses which will be paid or financed with tax increments, will equal
$10,295,800. For purposes of OSA reporting forms, it is estimated that the cost of improvements,
including financing which will be paid for with tax increment will equal $30,295,800 as is presented in
the previous budget.
Estimated costs associated with the District are subject to change among categories without a
modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will
not exceed, without formal modification, the budget above pursuant to the applicable statutory
requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 20 percent of the tax
increment paid by property within the District will be spent on activities related to development or
redevelopment outside of the District but within the boundaries of the Central Business District
Redevelopment Project, (including administrative costs, which are considered to be spent outside of
the District) subject to the limitations as described in this TIF Plan.
Subsection 2 -11. State Tax Increment Financing Aid (Local Contribution)
M.S., Section 273.1399 (LGA /HACA penalty) was repealed by the 2001 Legislature and does not apply to
the District.
Subsection 2 -12. Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the EDA or City may elect one oftwo methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the application of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial - industrial net tax capacity increase between the original year and the
current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section
276 ,4.06, subdivision 7 or M.S., Section 473F08, subdivision 6 Where the original net tax
capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereof which the authority has
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -11
The EDA will choose to calculate fiscal disparities by clause b.
According to M.S., Section 469.177, Subd. 3.
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 2 -13. Business Subsidies
Pursuant to M.S. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $25,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S. Section 116J552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S. Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S. Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature.
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $75,000 or less; and
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -12
Development Administration.
The City will comply with M.S., Section 116J.993 to 116J.994 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 2 -14. County Road Costs
Pursuant to M.S., Section 469.175, Subd. I a, the county board may require the City to pay for all or part of
the cost of county road improvements if the proposed development to be assisted by tax increment will, in
the judgement of the county, substantially increase the use of county roads requiring construction of road
improvements or other road costs and if the road improvements are not scheduled within the next five years
under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the City within forty-five days
of receipt of this TIF Plan. In the opinion of the City and consultants, the proposed development outlined
in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to
the county 45 days prior to the public hearing. The City is aware that the county could claim that tax
increment should be used for county roads, even after the public hearing.
Subsection 2 -15. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -13
IMPACT ON TAX BASE
2002/2003
Estimated Captured
Total Net
Tax Capacity (CTC) Percent
of CTC
Tax Capacity
Upon Completion
to Entily Total
Anoka County
176,930,024
656,468
0.3710%
City of Columbia Heights
8,351,648
656,468
7.8603%
Columbia Heights ISD No. 13
13,591,199
656,468
4.8301%
IMPACT ON TAX RATES
2002/2003
Percent
Potential
Extension Rates
of Total
CTC
Taxes
Anoka County
0.346170
31.94%
656,468
227,250
City of Columbia Heights
0.452720
41.77%
656,468
297,196
Columbia Heights ISD No. 13
0.137850
12.72%
656,468
90,494
Other
0.147210
13.58%
656,468
96,639
Total
1.083950
100.00%
711,578
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -13
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual 2002 /Pay 2003 rate. The total net capacity for the entities listed above are
based on actual Pay 2003 figures. The District will be certified under the actual 2003 /Pay 2004 rates, which
were unavailable at the time this TIF Plan was prepared.
(AS MODIFIED ON MAY 11, 2009)
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by
the TIF Plan would occur without the modification of the District. However, the EDA or City has
determined that such development or redevelopment would not occur "but for" tax increment
financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal
impact of the District would be as follows if the "but for" test was not met:
The estimates listed above display the captured tax capacity when all construction is completed. The
tax rate used for calculations is the Pay 2009 rate. The total net capacity for the entities listed above
are based on estimated Pay 2010 figures. The modified portion of the District will be certified under
the actual Pay 2010 rates, which were unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will
be generated over the life of the District is $10,195,800;
(2) Probable impact of the District on city provided services and ability to issue debt. No impact
of the District on police protection is expected. In fact, redevelopment of parcels within the
modified area is expected to reduce the need for police service in the area.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -14
IMPACT ON TAX BASE
2009/Pay 2010
Estimated Captured
Total Net
Tax Capacity (CTC) Percent
of CTC
Tax Capacity
Upon Completion
to Entity Total
Anoka County
313,381,171
656,468
0.2095%
City of Columbia Heights
13,356,112
656,468
4.9151%
Columbia Heights ISD No. 13
24,387,919
656,468
2.6918%
IMPACT ON TAX RATES
Pay 2009
Percent
Potential
Extension Rates
of Total
CTC
Taxes
Anoka County
0.310190
28.75%
656,468
203,630
City of Columbia Heights
0.474280
43.97%
656,468
311,350
Columbia Heights ISD No. 13
0.234130
21.70%
656,468
153,699
Other
0.060140
5.58%
656,468
39,480
Total
1.078740
100.00%
708,158
The estimates listed above display the captured tax capacity when all construction is completed. The
tax rate used for calculations is the Pay 2009 rate. The total net capacity for the entities listed above
are based on estimated Pay 2010 figures. The modified portion of the District will be certified under
the actual Pay 2010 rates, which were unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will
be generated over the life of the District is $10,195,800;
(2) Probable impact of the District on city provided services and ability to issue debt. No impact
of the District on police protection is expected. In fact, redevelopment of parcels within the
modified area is expected to reduce the need for police service in the area.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -14
No impact of the District on fire protection is expected. In fact, redevelopment of parcels
within the modified area is expected to reduce the need for fire service in the area for service
calls and inspections of properties. The existing buildings, which will be eliminated by the new
development, currently pose public safety concerns for the City.
No impact of the District on public infrastructure is expected. The redevelopment is not
expected to impact any traffic movements in the area. The current infrastructure for sanitary
sewer, storm sewer and water will be able to handle the volume generated from the proposed
redevelopment. Based on the redevelopment plans, there are no additional costs associated
with street maintenance, sweeping, plowing, lighting and sidewalks.
The probable impact of any District general obligation tax increment bonds on the ability to
issue debt for general fund purposes is expected to be minimal. The bonds that are going to be
issued in relation to this project have been sized conservatively by taking into consideration
decreases in property valuation in the area and anticipated changes in valuation in future
years.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that
the amount of tax increments over the life of the District that would be attributable to school
district levies, assuming the school district's share of the total local tax rate for all taxing
jurisdictions remained the same is $2,459,184;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to county
levies, assuming the county's share of the total local tax rate for all taxing jurisdictions
remained the same is $3,258,080;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment
districts and impact on county or school district services. The county or school district must
request additional information pursuant to M.S. Section 469.175Subd. 2(b) within 15 days after
receipt of the tax increment financing plan.
No requests for additional information from the county or school district regarding the
proposed development for the District have been received.
Subsection 2 -16. Supporting Documentation
Pursuant to M.S. Section 469.175 Subd -la, clause 7 the TIF Plan must contain identification and description
of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (2)
and the findings are required in the resolution approving the TIF district.. Following is a list of reports and
studies on file at the City that support the Authority's findings:
1. Technical Memorandum for K -Mart Redevelopment Process - DSU
2. SEH Redevelopment Findings
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -15
(AS MODIFIED ON MAY 15, 2006, TO INCLUDE THE FOLLOWING REPORTS)
3. Sheffield Neighborhood Action Plan (SNAP)
4. City Redevelopment Findings
Subsection 2 -17. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment
financing district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under
M.S., Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, purchased by the
Authority with tax increments;
3. Repayments of loans or other advances made by the Authority with tax increments; and
4. Interest or other investment earnings on or from tax increments.
(AS MODIFIED ON MAY 11, 2009)
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment
financing district include all of the items listed above in the initial TIF plan and the following
potential revenue sources:
5. Repayments or return of tax increments made to the Authority under agreements for
districts for which the request for certification was made after August 1, 1993; and
6. The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 2 -18. Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the CBD Redevelopment Project or the
District;
2. Increase in amount of bonded indebtedness to be incurred, including a determination to capitalize
interest on debt if that determination was not a part of the original plan, or to increase or decrease
the amount of interest on the debt to be capitalized;
3. Increase in the portion of the captured net tax capacity to be retained by the City;
4. Increase in total estimated tax increment expenditures; or
5. Designation of additional property to be acquired by the City,
shall be approved upon the notice and after the discussion, public hearing and findings required for
approval of the original TIF Plan.
Pursuant to M.S. Section 469.175 Subd. 4(b), the geographic area of the District may be reduced, but shall
not be enlarged after five years following the date of certification of the original net tax capacity by the
county auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination
that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, paragraph (a), clauses
(1) to (5), must be documented in writing and retained. The requirements of this paragraph do not apply if
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -16
(1) the only modification is elimination of parcel(s) from the CBD Redevelopment Project or the District and
(2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax
capacity of those parcel(s) in the District's original net tax capacity or (B) the City agrees that,
notwithstanding M.S., Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than
the current net tax capacity of the parcel(s) eliminated from the District.
The City must notify the County Auditor of any modification that reduces or enlarges the geographic area
of the CBD Redevelopment Project or the District. Modifications to the District in the form of a budget
modification or an expansion of the boundaries will be recorded in the TIF Plan.
(AS MODIFIED ON MAY 11, 2009 TO INCLUDE NEW LANGUAGE IN CURRENT LA R)
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the CBD Redevelopment Project or the
District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the
original TIF Plan;
4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City;
5. Increase in the estimate of the cost of the project, including administrative expenses, that will
be paid or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the EDA or City,
Subsection 2 -19. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, and M.S., Section 469.176, Subd. 3, administrative
expenses means all expenditures of the City, other than:
1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
project;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
project; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in sections 1 to 3.
For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982,
administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants,
and planning or economic development consultants. Tax increment may be used to pay any authorized and
documented administrative expenses for the District up to but not to exceed 10 percent of the total tax
increment expenditures authorized by the TIF Plan or the total tax increment expenditures for the CBD
Redevelopment Project, whichever is less.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -17
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District. The county may require payment of those
expenses by February 15 of the year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the City and the County Treasurer shall pay the amount deducted to
the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost
of financial reporting of tax increment financing information and the cost of examining and auditing
authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of
Revenue.
Subsection 2 -20. Limitation of Increment
Pursuant to M.S., Section 469.176, Subd. la, no tax increment shall be paid to the City for the District after
three (3) years from the date of certification of the Original Net Tax Capacity value of the taxable property
in the District by the County Auditor unless within the three (3) year period:
(1) Bonds have been issued in aid of the project containing the District pursuant to M.S., Section
469.178, or any other law, except revenue bonds issued pursuant to M.S., Sections 469.152
to 469.165, or
(2) The City has acquired property within the District, or
(3) The City has constructed or caused to be constructed public improvements within the
District.
The bonds must be issued, or the City must acquire property or construct or cause public improvements to
be constructed by approximately September, 2006 and report such actions to the County Auditor.
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax increment
financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of
property or other site preparation, including qualified improvement of a street adjacent to a parcel
but not installation of utility service including sewer or water systems, has been commenced on a
parcel located within a tax incrementfinancing district by the authority or by the owner ofthe parcel
in accordance with the tax incrementfinancingplan, no additional tax increment may be taken from
that parcel and the original net tax capacity of that parcel shall be excluded from the original net
tax capacity of the tax increment financing district. If the authority or the owner of the parcel
subsequently commences demolition, rehabilitation or renovation or other site preparation on that
parcel including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity has
commenced and the county auditor shall certify the net tax capacity thereofas most recently certified
by the commissioner of revenue and add it to the original net tax capacity of the tax increment
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-18
financing district. The county auditor must enforce the provisions of this subdivision. The authority
must submit to the county auditor evidence that the required activity has taken place for each parcel
in the district. The evidence for a parcel must be submitted by February I of the fifth year following
the year in which the parcel was certified as included in the district. For purposes of this subdivision,
qualified improvements of a street are limited to (1) construction or opening of a new street, (2)
relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street.
The City or a property owner must improve parcels within the District by approximately September, 2007
and report such actions to the County Auditor.
(AS MODIFIED ONMAY 11, 2009)
M.S., Section M.S., Section 469.176, Subd. la (three -year activity rule) was repealed by the 2005
Legislature and will not apply to the modified portion of the District.
To meet the requirements of the four -year rule listed above in the original TIF Plan, the EDA or City
or a property owner must improve the parcels located in the modified area of the District by
approximately June 30, 2013, and report such actions to the County Auditor.
Subsection 2 -21. Use of Tax Increment
The City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property
located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. To finance, or otherwise pay the capital and administration costs of the CBD Redevelopment Project
pursuant to the M.S., Sections 469.090 to 469.1082 and M.S., Sections 469.124 to 469.134;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the
City or for the benefit of the CBD Redevelopment Project by a developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and /or M.S., Sections 469.178; and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 4620, M.S., Sections 469.152
through 469.165, and /or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Anoka County to the City for the Tax Increment
Fund of said District. The City will pay to the developer(s) annually an amount not to exceed an amount as
specified in a developer's agreement to reimburse the costs of land acquisition, public improvements,
demolition and relocation, site preparation, and administration. Remaining increment funds will be used for
City administration (up to 10 percent) and the costs of public improvement activities outside the District.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2 -19
Subsection 2 -22. Excess Tax Increments
Pursuant to M.S., Section 469.176, Subd. 2, in any year in which the tax increment exceeds the amount
necessary to pay the costs authorized by the TIF Plan, including the amount necessary to cancel any tax levy
as provided in MS., Section 475.61, Subd. 3, the City shall use the excess amount to do any of the following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment therefor;
3. Pay into an escrow account dedicated to the payment of such bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
In addition, the City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order
to finance additional public costs in the Central Business District Redevelopment Project or the District.
(AS MODIFIED ONMAY 11, 2009 TO INCLUDE CURRENT LANGUAGE INLAff�
The EDA or City must spend or return the excess increments under paragraph (c) within nine months
after the end of the year. In addition, the EDA or City may, subject to the limitations set forth herein,
choose to modify the TIF Plan in order to finance additional public costs in the Central Business
District Redevelopment Project or the District.
Subsection 2 -23. Requirements for Agreements with the Developer
The City will review any proposal for private development to determine its conformance with the Downtown
CBD Revitalization Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the City to demonstrate the conformance ofthe development
with City plans and ordinances. The City may also use the Agreements to address other issues related to the
development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the City as a result of
acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from
property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the City
concluded an agreement for the development or redevelopment of the property acquired and which provides
recourse for the City should the development or redevelopment not be completed.
Subsection 2 -24. Assessment Agreements
Pursuant to M.S., Section 469.177, Subd. 8, the City may enter into a written assessment agreement in
recordable form with the developer ofproperty within the District which establishes a minimum market value
of the land and completed improvements for the duration of the District. The assessment agreement shall be
presented to the County Assessor who shall review the plans and specifications for the improvements to be
constructed, review the market value previously assigned to the land upon which the improvements are to be
constructed and, so long as the minimum market value contained in the assessment agreement appears, in the
judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum
market value agreement.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-20
Subsection 2 -26. Administration of the District
Administration of the District will be handled by the Executive Director of the EDA.
Subsection 2 -26. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subd. 5, 6 and 6a the City must undertake financial reporting for all tax
increment financing districts to the Office of the State Auditor, County Board, County Auditor and School
Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual
statement shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S. Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 2 -27. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value ofthe site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the District permitted by the TIF Plan. In making said
determination, reliance has been placed upon written representation made by the developer to such effects
and upon City staff awareness of the feasibility of developing the project site. A comparative analysis of
estimated market values both with and without establishment of the District and the use of tax increments has
been performed as described above. Such analysis is included with the cashflow in Appendix D, and
indicates that the increase in estimated market value of the proposed development (less the indicated
subtractions) exceeds the estimated market value of the site absent the establishment of the District and the
use of tax increments.
Subsection 2-28. Other Limitations on the Use of Tax Increment
General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay the capital and administration costs of the
CBD Redevelopment Proj ect pursuant to the M. S., Sections 469.124 to 469.134. Tax increments may not
be used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
2. Pooling Limitations. At least 80 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 20 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-21
3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule
set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification of the District, 75 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5.
4. Renewal and Renovation District. At least 90 percent of the revenues derived from tax increment from
a redevelopment district must be used to finance the cost of correcting conditions that allow designation
of redevelopment and renewal and renovation districts under M. S., Section 469.176 Subd. 4j. These costs
include, but are not limited to, acquiring properties containing structurally substandard buildings or
improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary
to provide a site of sufficient size to permit development, demolition and rehabilitation of structures,
clearing of the land, the removal of hazardous substances or remediation necessary for development of
the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated
administrative expenses of the City, including the cost of preparation of the development action response
plan, may be included in the qualifying costs.
Subsection 2 -29. Summary
The EDA is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and
provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers &
Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697 -8500.
Columbia Heights Economic Development Authority
Tax Increment Financing Plan for the K- Mart/Central Avenue Tax Increment Financing District 2-22
APPENDIX A
PROJECT DESCRIPTION
Nedegaard Custom Homes has obtained a purchase agreement on the vacant K -Mart property east of Central
Avenue between 47th and 49th. The developer is planning to build 244 owner occupied units on the K -Mart
site as Phase I and construct additional commercial development along Central Avenue as Phase II. Phase II
could include up to 115,000 s.f of new commercial property, depending upon the amount of land included
in the redevelopment. The Phase I assistance is limited to a developer financed note for demolition costs of
the former K -Mart structure. The majority of the tax increment will be utilized to acquire property and
construct public parking to facilitate the commercial redevelopment.
A six -month public planning process has preceded the preparation of the tax increment plan as well as
findings by SEH on the condition of the buildings to be included on the site.
(AS MODIFIED ON MAY 11, 2009, TO INCL UDE THE FOLLOWING PROJECT DESCRIPTIOA9
Over the past 15 years the City of Columbia Heights (City) and the Housing and Redevelopment Authority
of Columbia Heights (HRA) has conducted studies in the area commonly known as the Sheffield
Neighborhood surrounding the instability of the residential neighborhood. From these studies a
Redevelopment and Housing Development Plan was adopted in 1994. The 1994 plan was implemented along
Fillmore Street where duplexes were bought by the city and redeveloped into single - family homes by a
private developer. Stemming from this plan in 2006 another initiative took place for the Sheffield
Neighborhood; this initiative was to establish a Redevelopment and Renewal plan. Part of this new initiative
involved the residents of the area.
The number of blighting influence properties, vacant unsold parcels, foreclosures, need for substantial
upgrading of properties in the Sheffield Neighborhood and other problems in the area attest to the need for
public intervention to stabilize and improve the neighborhood. It is the intention of the City and HRA to
acquire residential properties within this neighborhood for rehabilitation and /or demolition and to have new
and renovated homes sold to owner occupants. In addition, the City and HRA may acquire or work in
partnership with the existing owners of the few commercial properties (or interested developers) in this
neighborhood for rehabilitation of the existing buildings and /or demolition and new construction as needed.
APPENDIX A -1
APPENDIX B
MAPS OF THE CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT
AND THE K- MART /CENTRAL AVENUE TAX INCREMENT FINANCING DISTRICT
APPENDIX B -1
,.
�.:.
a
D
Kmart / Central Ave. TIF District and
Proposed Amended Area
klub J O 4910
900 r
r
100, N d' O O N M N e0 h O N
r C, V r N
49TH
4849 O N °o m M w 10 o r N
r r r r N
4707 I'-9 4729
1069
00 OD OD c0 00
4811
o °Q 8
133 BOREALIS
■
■ ■ ■ Ii
47TH
LN
^d' 4B3 483
7 °3� 83
4657
4656
OD
W
4662
4801 °? 82
4657
4654
4650
■
4Bf 482 V
°
Q
%3 81
7) m o
4655
ae ° 1039 4
4653
4757 ° 480
■
131 KHYBER LK
4653
4648
4648
a 'o ua
`O r
w 1070
4644
UNITS:
141 N
�. r r r
U
00 118, 280.289, 300.320, 408-015
4647
4707 I'-9 4729
1069
4655
4643
4619
4613
4556 4555 4556 4567 4554 4555 4 56 4555 4
4546 4549 4550 4549 4548 4549 4550 4547 N N M M
4545, r `�
Lo 4540 4543 4542 4543 4546 4539 c ,� N
Lo
4540 4541 4536 4537 4535 4534 4531 TN N r N M M
4532 4535 4536 4532 r
4526 4529 4530 4531 4534 „.,., 4 1/2
Location Map
Q Existing District
Proposed District
® Excluded Properties
N
w< 4 1 e
S
■
■ ■ ■ Ii
47TH
4657
4656
4657
4662
4657
4654
4650
■
4655
4653
■
(~!1
4653
4648
4648
4648
4645
4644
■
■
4647
4640
4649
4642
4639
4638
4634
4641
4636
4647
4642
4636
4641
4636
4633
4632
■
■
4633
4633
4634
4637
4630
4628
4 41
4630
4633
4627
4626
■
■
4622
4626
4624
4636
4626
4624
4620
4621
4619
4629
4618
4621
4616
4617
4616
4615
4614
■
4615
4
■
■
4605
4607
4606
4609
4607
4606
4609
4608
4605
4606
–L
4602
1001
1101
1111
46
LL 4603
i■■
■■■ ■■ ■■■■■■■ ■■■■ ■■■■ ■ ■ ■■ ■ ■■F}e-PH
46TH
4557
4655
4643
4619
4613
4556 4555 4556 4567 4554 4555 4 56 4555 4
4546 4549 4550 4549 4548 4549 4550 4547 N N M M
4545, r `�
Lo 4540 4543 4542 4543 4546 4539 c ,� N
Lo
4540 4541 4536 4537 4535 4534 4531 TN N r N M M
4532 4535 4536 4532 r
4526 4529 4530 4531 4534 „.,., 4 1/2
Location Map
Q Existing District
Proposed District
® Excluded Properties
N
w< 4 1 e
S
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT
The District encompasses all property and adjacent rights -of -way identified by the parcels listed below.
Parcel Numbers
Address
25- 30 -24 -32 -0001
4801 Central Avenue NE
25- 30 -24 -32 -0002
4811 Central Avenue NE
25- 30 -24 -32 -0003
4849 Central Avenue NE
25- 30 -24 -32 -0004
4757 Central Avenue NE
25- 30 -24 -32 -0061
4707 Central Avenue NE
25- 30 -24 -32 -0062
4747 Central Avenue NE
(AS MODIFIED ON MAY 11, 2009)
The parcels listed above have since been redeveloped and new PID #'s assigned as noted in the chart
below:
In addition, the TIF district boundaries are being modified to add 55 parcels to the District. The area
to be included into the District encompasses all property and adjacent rights -of -way and abutting
roadways identified by the parcels listed below and on the following pages:
Original 11
25- 30 -24 -32 -0001
New PID
Same
Old Address
4801 Central Ave
New Address
Same
Owner
Louis Welle
25- 30 -24 -32 -0002
Same
4811 Central
Same
Inversters Could
25- 30 -24 -32 -0003
25- 30 -24 -32 -0168
4849 Central
Same
JG Columbia Heights LLC
25- 30 -24 -32 -0004
25- 30 -24 -32 -0063
4757 Central
Same
Larry & Filinda McDonald
25- 30 -24 -32 -0061
25- 30 -24 -32 -0074
4707 Central
Same
New Heights Development
25- 30 -24 -32 -0062
See Condo, Town Home
and Commercial PM's
4747 Central
Various
Various
APPENDIX C -1
Lofts Grand Central i i PIDs in Existing
Address 1
1070 Grandview Court Unit 100 25- 30 -24 -32 -0077 lNew
District
Owner
Heights Development
1070 Grandview Court Unit 101
25- 30 -24 -32 -0078
New Heights Development
1070 Grandview Court Unit 102
25- 30 -24 -32 -0079
ROBERT E SPENCER
1070 Grandview Court Unit 103
25- 30 -24 -32 -0080
New Heights Development
1070 Grandview Court Unit 104
25- 30 -24 -32 -0081
New Heights Development
1070 Grandview Court Unit 105
25- 30 -24 -32 -0082
New Heights Development
1070 Grandview Court Unit 106
25- 30 -24 -32 -0083
Judy and Michael Kurth
1070 Grandview Court Unit 107
25- 30 -24 -32 -0084
New Heights Development
1070 Grandview Court Unit 108
25- 30 -24 -32 -0085
New Heights Development
1070 Grandview Court Unit 109
25- 30 -24 -32 -0086
THOMAS KURAK
1070 Grandview Court Unit 110
25- 30 -24 -32 -0087
New Heights Development
1070 Grandview Court Unit 111
25- 30 -24 -32 -0088
New Heights Development
1070 Grandview Court Unit 112
25- 30 -24 -32 -0089
MARY JO BERGERSON
1070 Grandview Court Unit 113
25- 30 -24 -32 -0090
New Heights Development
1070 Grandview Court Unit 114
25- 30 -24 -32 -0091
New Heights Development
1070 Grandview Court Unit 115
25- 30 -24 -32 -0092
New Heights Development
1070 Grandview Court Unit 116
25- 30 -24 -32 -0093
PETER SHAWN PIOTROWICZ
1070 Grandview Court Unit 117
25- 30 -24 -32 -0094
TAMARA ANN KURAK
1070 Grandview Court Unit 118
25- 30 -24 -32 -0095
New Heights Development
1070 Grandview Court Unit 119
25- 30 -24 -32 -0096
THOMAS KURAK
1070 Grandview Court Unit 200
25- 30 -24 -32 -0097
Kurt Kurzawa & Nicole M re
1070 Grandview Court Unit 201
25- 30 -24 -32 -0098
New Heights Development
1070 Grandview Court Unit 202
25- 30 -24 -32 -0099
New Heights Development
1070 Grandview Court Unit 203
25- 30 -24 -32 -0100
Iva & John Bush
1070 Grandview Court Unit 204
25- 30 -24 -32 -0101
New Heights Development
1070 Grandview Court Unit 205
25- 30 -24 -32 -0102
SONJA R MITCHELL
1070 Grandview Court Unit 206
25- 30 -24 -32 -0103
ERIK T PETERKA
1070 Grandview Court Unit 207
25- 30 -24 -32 -0104
New Heights Development
1070 Grandview Court Unit 208
25- 30 -24 -32 -0105
New Heigh s Development
1070 Grandview Court Unit 209
25- 30 -24 -32 -0106
New Heights Development
1070 Grandview Court Unit 300
25- 30 -24 -32 -0107
New Heights Development
1070 Grandview Court Unit 301
25- 30 -24 -32 -0108
Nathan Hanes
1070 Grandview Court Unit 302
25- 30 -24 -32 -0109
NICOLE RAJKOWSKI
1070 Grandview Court Unit 303
25- 30 -24 -32 -0110
Jason Smith
1070 Grandview Court Unit 304
25- 30 -24 -32 -0111
JONATHON M RUZICKA
1070 Grandview Court Unit 305
25- 30 -24 -32 -0112
New Heights Development
1070 Grandview Court Unit 306
25- 30 -24 -32 -0113
New Heights Development
1070 Grandview Court Unit 307
25- 30 -24 -32 -0114
Lisa & Dennis Goodwin
1070 Grandview Court Unit 308
25- 30 -24 -32 -0115
GERTRUDE I RILEY
1070 Grandview Court Unit 309
25- 30 -24 -32 -0116
New Heights Development
APPENDIX C -2
Grand Central Lofts Condo PIDs in Existing
Address PID
1070 Grandview Court Unit 310 25- 30 -24 -32 -0117
District
Owner
Ralph Reiners
1070 Grandview Court Unit 311
25- 30 -24 -32 -0118
New Heights Development
1070 Grandview Court Unit 312
25- 30 -24 -32 -0119
New Heights Development
1070 Grandview Court Unit 313
25- 30 -24 -32 -0120
New Heights Development
1070 Grandview Court Unit 314
25- 30 -24 -32 -0121
Eric Moran
1070 Grandview Court Unit 315
25- 30 -24 -32 -0122
New Heights Development
1070 Grandview Court Unit 316
25- 30 -24 -32 -0123
LAURA E WILHELM
1070 Grandview Court Unit 317
25- 30 -24 -32 -0124
KRISANNE J PEDERSON
1070 Grandview Court Unit 318
25- 30 -24 -32 -0125
New Heights Development
1070 Grandview Court Unit 319
25- 30 -24 -32 -0126
New Heights Development
1070 Grandview Court Unit 320
25- 30 -24 -32 -0127
New Heights Development
1070 Grandview Court Unit 400
25- 30 -24 -32 -0128
JOHN M MCKIBBIN TRUSTEE
1070 Grandview Court Unit 401
25- 30 -24 -32 -0129
New Heights Development
1070 Grandview Court Unit 402
25- 30 -24 -32 -0130
New Heights Development
1070 Grandview Court Unit 403
25- 30 -24 -32 -0131
THOMAS KURAK
1070 Grandview Court Unit 404
25- 30 -24 -32 -0132
THOMAS KURAK
1070 Grandview Court Unit 405
25- 30 -24 -32 -0133
THOMAS KURAK
1070 Grandview Court Unit 406
25- 30 -24 -32 -0134
THOMAS KURAK
1070 Grandview Court Unit 407
25- 30 -24 -32 -0135
William Norman
1070 Grandview Court Unit 408
25- 30 -24 -32 -0136
New Heights Development
1070 Grandview Court Unit 409
25- 30 -24 -32 -0137
New Heights Development
1070 Grandview Court Unit 410
25- 30 -24 -32 -0138
MATTHEW J FRITSCHER
1070 Grandview Court Unit 411
25- 30 -24 -32 -0139
New Heights Development
1070 Grandview Court Unit 412
25- 30 -24 -32 -0140
CHAD E BERSETH
1070 Grandview Court Unit 413
25- 30 -24 -32 -0141
THOMAS KURAK
1070 Grandview Court Unit 414
25- 30 -24 -32 -0142
New Heights Development
1070 Grandview Court Unit 415
25- 30 -24 -32 -0143
THOMAS KURAK
Commercial PIDs in Existing District
25- 30 -24 -32 -0064 4729 Grand New Heights Development
25- 30 -24 -32 -0065 1069 Grandview NVy New Heights Development
25 -30 -24-32 -0165 1039 Grandview Ct New Heights Development
APPENDIX C -3
GCL Town Home PIDs in Existing District
Address
4801 Grand Avenue
' 1
25- 30 -24 -32 -0144
Owner
Andrea Holton
4807 Grand Avenue
25- 30 -24 -32 -0145
Michael Lee
4813 Grand Avenue
25- 30 -24 -32 -0146
Judith & Linda Arnold
4819 Grand Avenue
25- 30 -24 -32 -0147
Lakeland Construction
4825 Grand Avenue
25- 30 -24 -32 -0148
Lakeland Construction
4831 Grand Avenue
25- 30 -24 -32 -0149
Lakeland Construction
4837 Grand Avenue
25- 30 -24 -32 -0150
Kristin Erickson
4843 Grand Avenue
25- 30 -24 -32 -0151
Lakeland Construction
4858 Grandview Ct
25- 30 -24 -32 -0152
KAREN A KARKULA
4856 Grandview Ct
25- 30 -24 -32 -0153
Sharon Paul
4854 Grandview Ct - Vacant Land
25- 30 -24 -32 -0154
Grand Central Properties
4852 Grandview Ct - Vacant Land
25- 30 -24 -32 -0155
Grand Central Properties
4850 Grandview Ct - Vacant Land
25- 30 -24 -32 -0156
Grand Central Properties
4844 Grandview Ct - Vacant Land
25- 30 -24 -32 -0157
Grand Central Properties
4838 Grandview Ct - Vacant Land
25- 30 -24 -32 -0158
Grand Central Properties
4832 Grandview Ct - Vacant Land
25- 30 -24 -32 -0159
Grand Central Properties
4826 Grandview Ct - Vacant Land
25- 30 -24 -32 -0160
Grand Central Properties
4820 Grandview Ct - Vacant Land
25- 30 -24 -32 -0161
Grand Central Properties
4814 Grandview Ct - Vacant Land
25- 30 -24 -32 -0162
Grand Central Properties
4808 Grandview Ct - Vacant Land
25- 30 -24 -32 -0163
Grand Central Properties
4802 Grandview Ct - Vacant Land
25- 30 -24 -32 -0164
Grand Central Properties
Parcels to be Included in 2009 Modification
4
1
PIN
25- 30 -24 -33 -0053
Address
4653 Central jAnoka
Owner
County
2
25- 30 -24 -33 -0149
4633 Central
Totem Foods Inc
3
25- 30 -24 -33 -0049
4621 Central
Landmark Investments LLC
4
25- 30 -24 -33 -0048
4605 Central
Franchise Realty Interstate
5
25- 30 -24 -33 -0042
950 47th
Frank Trisko
6
25- 30 -24 -33 -0043
4654 Tyler
Tyler Properties
7
25- 30 -24 -33 -0148
4628 Tyler
Minhaus Anwaar
8
25- 30 -24 -33 -0047
4616 Tyler
Azama'i
9
25- 30 -24 -33 -0041
4657 Tyler
Joanne Rocha
10
1 25- 30 -24 -33 -0040
4653 Tyler
David Rust
11
25- 30 -24 -33 -0039
4647 Tyler
Norwest Bank
12
25- 30 -24 -33 -0038
4641 Tyler
Norwest Bank
13
25- 30 -24 -33 -0037
4633 Tyler
MERS
14
25- 30 -24 -33 -0036
4625 Tyler
Canton Lake Properties LLC
15
1 25- 30 -24 -33 -0035
4619 Tyler
Mary Marth
APPENDIX C -4
Parcels to be Included in 2009 Modification
4
16
PIN
25- 30 -24 -33 -0034
Address
4615 Tyler
Owner
Riverwood Rentals
17
25- 30 -24 -33 -0033
4607 Tyler
AntonioCastro
18
25- 30 -24 -33 -0032
1001 46th
Nistor &Urmilla Mahra'
19
25- 30 -24 -33 -0022
4656 Polk
JP Morgan Chase Bank
20
25- 30 -24 -33 -0023
4648 Polk
William Wall
21
25- 30 -24 -33 -0024
4640 Polk
Muhmer Sekzovic
22
25- 30 -24 -33 -0025
4636 Polk
City of Columbia Heights
23
25- 30 -24 -33 -0026
4628 Polk
Margaret Lubin
24
25- 30 -24 -33 -0027
4624 Polk
Harvy Ha el
25
25- 30 -24 -33 -0028
4618 Polk
City of Columbia Heights
26
25- 30 -24 -33 -0029
4612 Polk
Lisa Auca uizh i
27
25- 30 -24 -33 -0030
4606 Polk
Isadore Stewart
28
25- 30 -24 -33 -0031
4600 Polk
Green Point Mortgage Funding Inc
29
25- 30 -24 -33 -0021
4655 Polk
Barbara Cooper
30
25- 30 -24 -33 -0019
4649 Polk
Stven Pe le
31
25- 30 -24 -33 -0018
4647 Polk
City of Columbia Heights
32
25- 30 -24 -33 -0017
4641 Polk
ACCAP
33
25- 30 -24 -33 -0016
4635 Polk
Richard Stevenson
34
25- 30 -24 -33 -0015
4629 Polk
Patricia Bahr
35
25- 30 -24 -33 -0014
4617 Polk
Laos Horvath
36
25- 30 -24 -33 -0013
4609 Polk
Robert Davidson
37
25- 30 -24 -33 -0012
4605 Polk
Benjamin Lopez-Flores
38
25- 30 -24 -33 -0001
4662 Taylor
John Salchow
39
25- 30 -24 -33 -0002
4648 Taylor
John Ranweiler
40
25- 30 -24 -33 -0003
4644 Taylor
Julio Medina
41
25- 30 -24 -33 -0004
4636 Taylor
Robert Vandeveer
42
25- 30 -24 -33 -0005
4630 Taylor
Gary Anderson
43
25- 30 -24 -33 -0006
4624 Taylor
Well n Pomeroy
44
25- 30 -24 -33 -0007
4616 Taylor
Ideal Homes LLC
45
25- 30 -24 -33 -0009
4606 Taylor
Constance Vilovia
46
25- 30 -24 -33 -0145
4657 Taylor
Donald Hase
47
25- 30 -24 -33 -0144
4651 Taylor
Godfrey Edaferierhi
48
25- 30 -24 -33 -0143
4645 Taylor
Ty Thompson
49
25- 30 -24 -33 -0142
4641 Taylor
David Schavee
50
25- 30 -24 -33 -0141
4647 Taylor
Robert Bois'oli
51
25- 30 -24 -33 -0146
4633 Taylor
Saida Ibrahim
52
25- 30 -24 -33 -0139
4619 Taylor
Thomas Okerstrom
53
25- 30 -24 -33 -0138
4615 Taylor
Steven Thoreson
54
25- 30 -24 -33 -0137
4607 Taylor
Michael Atchley
55
1 25- 30 -24 -33 -0136
4601 Taylor
Chad Corbett
APPENDIX C -5
APPENDIX D
ESTIMATED CASH FLOW FOR THE DISTRICT
APPENDIX D -1
9/1612003
Page 1 of 2
.01E HLERS
K -Mart Redevelopment
City of Columbia Heights
244 Units of Owner- Occupied Townhomes and Commercial on Central
district Renovation and Renewal
District P
625
Inflation Rate - Every_ Years
0.0000%
Pay- As-You -Oo Interest Rate:
7.0000%
Note Issued Date (Present Value Date):
01- Aug-04
Local Tax Rate - Maximum
108.3950% Pay 2004 Estimate
Fiscal Disparities Election (A • outside or 13 • inside)
B
Yost District was certified
Pay 2004
Assumes First Tax Increment For District
2006
Year District was Modified
Tax Ca
Development located In modfied area
Yes
Assumes First Tex Increment For Dev
2008
Years of Tax Increment
16
Assumes Last Year of Tax Increment
2022 ,
Fiscal Disparities Ratio
24.0000% Pay 20D4 Estimate
Fiscal Disparities Metro Wide Tax Rate
132.8850%
Loral Tax Rate • Current
108,395D% Pay 2004 Estimate
State Wide Pmperty Tax Rate (Used for total lazes)
55.0000% Pay 2004 Estimate
Market Value Tax Rate (used fortotal taxes)
0.1141% Pay 2004 Estimate
Commercial Industrial Class Rate
1.5 % -2.0% Pay 2003
First 150,000
1.50%
Over 150,ODD
2.00%
Rental Class Rate
1.25% Pay 2004
Residenlat Class - Under $500,01)0
1.00%
Over $500000
1.25 %.
t
7,528
Note:
1. Residential do not pay Stale -wide Property tax or Fiscal Disparities.
Prep.red by Ehlers krnad eomm•housing combined
625
aD
Local
Tax
Fiscal
Disparities
State -wide
Property
Local
Taxes
Fiscal
Disparities
"
Loss ME
MV Hmst.
Markat
Value
Total
-
Class Rate
After
Ce aci
Tax Ca
Property
Land
Building -
Total Class
Original
After
Conversion
Date
map ID- PID
Dosed Pion
Marken Value
Market Value
Market Value Rate
Tax Capacity
Conversion
Tax Ca ac'
Payable
2S3 D2.43- 200.61
my.
152,500
276,800
429,300 1.5 %.2.0%
7,836
2.00%
8,586
2005
25.30243 - 200 -04
s,m..r.10
185,600
228,300
413,900 1.5°6.2.0%
7,528
2.00%
6,278
2005
2"02.43- 200 -03
swe.
514,300
1,231.600
1,745,900 1.5 1/4-2.0%
34,168
2.00%
34,918
2005
25.302- 43.2D0.02
v~Amw,
2D6,100
213,900
420,000 1.5°/-2.0%
7,650
2.00%
8,400
2005
25.302.43.200.02
xs.4
66,40D
2004
2,200,000 1.5 % -2.0%
43,250
1.00%
- 22,000
2004
25.302.43. 200.01
vrw
191,700
258,300
450,000 1.56/. -2.0%
8,250
2.00%
9,ODD
2005
Totals
190,000
1,260 200
2.208,900
5,659,100
08 652
216,600
91,182
2008
Note!
810,415
115,244 -
166,375
�4 268
1,105,309
66 900 0 D
820,280
Note:
1. Residential do not pay Stale -wide Property tax or Fiscal Disparities.
Prep.red by Ehlers krnad eomm•housing combined
625
Local
Tax
Fiscal
Disparities
State -wide
Property
Local
Taxes
Fiscal
Disparities
slateEds
Properly
Loss ME
MV Hmst.
Markat
Value
Total
total, Local Fiscal
Tax Tax Disparities
Phase
R;
Ce aci
Tax Ca
Rate
Tax Rate
Tax Rate
Taxes
Total
Market Value
Taxes Per
Total
Market
Class
New
Year
Date
tease
Us*
8 . FtJUnits
S , FUUnits
9 . FtJUnils
Taxes
Valus
Rate
Tax Ce .aci
Constructed
Pa ble
1
commercial
75,000
135
4.72
354,327
10,126,000
2.00%
202,500
2OD5
2008
2
Commercial,
40,000
125
4,37
174,976
5,000,000
2.00%
100,000
2007
2009
1
Row Townhoms
32
213,750
2,380.74
76,184
6,640,000
1.00%
66,40D
2004
2005
2
Townhomes
98
237,500
2,686.65
263,291
23,275,000
1.00%
232,750
2005
2007
3
Flats
114
190,000
2,074.54
238,532
21,660,000
1.00%
216,600
2006
2008
TOTAL
810,415
115,244 -
166,375
�4 268
1,105,309
66 900 0 D
820,280
Note:
Note:
1. Residential do not pay Stale -wide Property tax or Fiscal Disparities.
Prep.red by Ehlers krnad eomm•housing combined
Local
Tax
Fiscal
Disparities
State -wide
Property
Local
Taxes
Fiscal
Disparities
slateEds
Properly
Loss ME
MV Hmst.
Markat
Value
Total
total, Local Fiscal
Tax Tax Disparities
Phase
Ca ac
Ce aci
Tax Ca
Rate
Tax Rate
Tax Rate
Taxes
Taxes
Credit
Taxes
Taxes
1
202,500
153,800
.aci
48,600
1.08395
- 1.32885
0.55000
166,820
64,582
111,375
11¢50
351,327
2
100,000
76,000
24,000
1.08395
1.32885
0.55000
82,380
31,892
55,000
5,704
174,976
i
60,400
68,400
0
1.08395
O.00DDO
0.00000
74,142
0
0
. ,761
7,802
76,184
2
132,750
232,750
0 '
1.08395
0.00000
0.00000
252,289
0
O
. 15,548
26,550
263,291
3
276,600
216,600
0
1.08395
0.00000
0.00000
234,784
0
0
•22,960
24,708
236,532
TOTAL.
620.. 50:.
747,650
7.. 600
1.08395
810,415
96,475
166,375
�4 268
76 13
1 105 309
Note:
1. Residential do not pay Stale -wide Property tax or Fiscal Disparities.
Prep.red by Ehlers krnad eomm•housing combined
911612003 0 1 EHLERS a. ,.a Pape 2of2
1 e,.r
CITY OF COLUMBIA HEIGHTS
NOTES:
1. State Auditor payment is based upon tat hall,. pay 2002 actual and may increase over term of district.
2, Assumes development In constructed In 2004; assessed in 2005 and first increment Is paid In 2006.
-mount of Increment will vary depending upon market value, lox rates, class rates, construction schedule and Inflation on Market Value.
Julian on tax rates cannot be captured
5. TIP does not capture stole wide property taxes or market value property taxes.
no
Culvert Market Value - Est. 6'55.'100
New Markel Value- Est 68 00
01.erence 61 40.00
P®senl Value ar Tax Innamenl 26 63
Di.ere 6&518.362
-a
Value Likel to Occar Wdhrut Tex Increment Is lass Than: 55515 352
Prepared by Ehlers k -mam comet- housing combined
Base
Project
Captured
Semi - Annual
State
Admin.
Semi- Annual Semi- Annual
PAYMENT DATE
..IOD BEGINNING
Tax
Tax
Fiscal
Tax
Gross Tax
Auditor
at
10.00%
Net Tax
Increment
Present
Value
PERIOD ENDING
Ym.
Mth..
Yr.
Ym
Mth...
Yr.
Capacity
Ca ao
Dis parities
capacity
Increment
0.36%
0 &01
2004
0.0
02 -91
20D4
108,662-
108,682
Present Valuo Date .2-01-05
0,0
00
-
02 -01
2005
0.0'
08.01
2004
108,682
108,682
0,0
08.01
2005
0.0
02.01
2005
91,182
91,182
0
0
0
0
0
D.0
02.01
2008
0.0'
08.01
2005
91,182
91,182
0
46,400
25,148
(91)
(2,506)
22,551
21,052
0.5
0 &01
2008
0.0-
D2 -01
0 8-01
2006
2006
91,182
91,182
137,582
137,582
46,400
25,148
(91)
(21505)
22,551
41,392
1.0
02 -01
0 &01
2007
2007
0.5
1.0.
02.01
2007
91,182
370,332
279,150.
161,292
151,202
(5 45)
(15,W5)
(76,075)
135,673
135,673
159,623
273,856
1.5
2.0
02-01
2008
1.5
02-01
2007
91,182
370,332
48,600
279,150
580,468-
314,599
(645)
(1,133)
(31,347)
282,120
503,361
2.5
02-01
2008
2.0
2.5
02.01
02-01'
2008
2008
91,182
91,182
720,250
720,250
48,600
580,468
314,599
(1,133)
(31,347)
282,120
725,105
967,401
3.0
3.5
02 -01
00 -01
2009
2009
3.q
02.01
2009
91,182
820,250
72,600
656,468
656,468
355,789
355,789
(1,281)
(1,281)
,(35,451)
(35,451)
319,058
319,058
1,201,603
4.0
02 -fit
21110
3.b
0 &01
2009
91,162
820,250
72,800
72,600
656,468
355,789
(1,281)
(35,451)
319,058
1,427,680
4.5
08 -01
2010
4.0
4.5
02 -01
02-01
2010
2010
91,182
91;182
820,250
820,250
72,600
658,468
355,789
(1,281)
(35,451)
319,058
1,645,228
5.0
6.6
02-01
08-01
2011
2011
5.0
02.01
2011
91,182
820,250
72,600
656,463
355,789
355,789
(1,281)
(1,281)
(35,451)
(35,451)
319,058
319,058
1,857,373
2,061,380
8.0
02.01
2012
5.5
0 &01
2011
91,782
820,250
72,000
72,600
656,468
656,466
355,789
(1,281)
(35,451)
319,058
2,258,488
8.5
DB•01
2012
6.0
02 -01
2012
91,152
820,250
72,600
656,468
355,789
(1,281)
(35,451)
379,058
2,448,930
7.0
02.01
2073
6.6
0 &01:
02.01
2012
2013
91,182
91,182-
820,250
820,250
72,600
656,468
355,789
(1,287)
(35,451)
319,058
2,6321932
7.5
8.0
08-01
02 -01
2013
2014
7.0
7.5
02-01
2013
91,182
820,280
72,600
656,468
355,789
355,789
(1,201)
(1,281)
(35,451)
. (35,451)
319,058
319,058
2,810,713
2,982,481
8.5
0&01
2014
8.0
02 -01
2014'
91,182
820,250
72,600
72,800
656,468
658,468
355,789
(1,231)
(35,451)
319,058
3,148,440
9.0
02 -01
.2015
8.6
9.0
08A7
02
2014
2015
91,182
91,182
820,250
820,250
72,600
856,468
355,789
(1,261)
(35,451)
319,058
3,308,788
9.5
0&Ot
02.01
2015-
2018
. 9.6
-01
08-01
2015
91,182
820,250
72,800
656.468
355,789
355,789
(1,281)
(1,281)
(35,451)
(35,451)
319,058
319,058
3,453,713
3,613,399
10.0
10.5
02-01
2018
10,D
02 -01
2016
91,182
820,250
72,600
72,600
656,468
658,488
356,789
(1,281)
(35,451)
319,058
3,758,023
1110
02.01
2017
. 10.6
11.0
02-01
02.01
2016
2017
91,182
91,182
820,250
820,250
72,600
658,468
365,789
(1,281)
(35,451)
319,055
3,897,767
4,032,765
17.6
12.0
08.01
02.01
2017
2018
115
0 8-01
2017
81.182
820,250
72,600
650,468
355,789
355,789
(1,281)
(1287)
(35,451)
(35,451)
319,058
319,058
4,163,208
12.5
0 &fit
2078
12.0
02.01
2018
91,162
820,250
72,800
72,600
858,468
656,458
355,789
(1,281)
(35,451)
319,058
4,289,239
13.0
02 -01
2019
12.5
13.0
0 13-01
02.01
2018
2019
91,182
820,250
820,250
72,600-
656,468
355,789
(1,281)
(35,451)
319,058
4,411,009
4,628,661
13.5
14.0
0&01
02-01
2019
2020
13.5
02-01
2019
.91,182
91,182
820,260
72,600
656,466
355,789
355,789
(1,281)
{1,261)
(35,451)
(35,451)
319,058
319,058
4,642,334
14.5
0&01
020
14.0
02.01
2020
97,182
820250
72,600
656,468
658,488
356,789
(1,281)
(36,451)
319,056
4,762,164
15.0
02 -01
2021
14.5
08Af
2020
91,182
820,250
72,600
72,000
658,468
355,789
(1,281)
(35,451)
319,058
4,850,279
15.5
0 &O7
2021
75.0
02.01
2021
91,182
91 2
82025D
820 250
72 00
658 468
35 789..
(1,281) .
35 45
19 0511
4980 808
18.0.
.02-01
2022
15.5
0 &D7
2021
Totals..
10 23 599
136,837)
1 019 57
9176185
sent Value Dale - 2-01 -06
5 725 838
1 975
51 201
- 4 960 808
NOTES:
1. State Auditor payment is based upon tat hall,. pay 2002 actual and may increase over term of district.
2, Assumes development In constructed In 2004; assessed in 2005 and first increment Is paid In 2006.
-mount of Increment will vary depending upon market value, lox rates, class rates, construction schedule and Inflation on Market Value.
Julian on tax rates cannot be captured
5. TIP does not capture stole wide property taxes or market value property taxes.
no
Culvert Market Value - Est. 6'55.'100
New Markel Value- Est 68 00
01.erence 61 40.00
P®senl Value ar Tax Innamenl 26 63
Di.ere 6&518.362
-a
Value Likel to Occar Wdhrut Tex Increment Is lass Than: 55515 352
Prepared by Ehlers k -mam comet- housing combined
APPENDIX E
MINNESOTA BUSINESS ASSISTANCE FORM
(MINNESOTA DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT)
A Minnesota Business Assistance Form (MBAF) should be used to report and /or update each calendar year's
activity by April I of the following year.
Please see the Minnesota Department of Employment and Economic Development (DEED) website at
http://www.deed.state.mn.us/Communily/subsidies/NMAFForm.htm for information and forms.
APPENDIX E -1
APPENDIX F
REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT
To be added to prior to the public hearing
APPENDIX F -1
APPENDIX G
BUT/FOR QUALIFICATIONS
Current Market Value - Est.
New Market Value - Est.
Difference
nt Value of Tax Increment
5,659,100
66,900,000
61.240.900
5,725,5381
Difference 55,515,
lue Likelv to Occur Without Tax Increment is Less Than: 55,515,
The existing K -Mart building is a vacant building which sits on an underutilized site. The adjacent
commercial uses in the proposed TIF district are all occupied structures but are of varying age and quality.
Without the use of TIF, the initial phase of the project and the future phases of the project would not be
feasible and it is not foreseen that the scale and intensity of the proposed development would occur with the
use of TIF.
A development agreement is proposed to be adopted on the same date as the TIF plan for the first phase of
development in the district, consisting of housing development. The development agreement is expected to
cover the developer's request for TIF assistance associated with the housing. The current request is the costs
of the demolition of K -Mart totaling approximately $700,000. To fund these costs will only require a few
years of the 16 years of TIF. The development agreement is also expected to contain a requirement that the
developer finish at least a portion of the commercial development within a specific period of time and will
limit the amount of developer profit if assistance is provided.
The remaining years of TIF will be utilized to facilitate the commercial development portion of the project.
Commercial development is much harder to finance with TIF for a variety of reasons.
1. The 2001 property tax reforms introduced a state property tax which cannot be captured. Fiscal
disparities removes a significant portion ofthe local property tax stream. Commercial properties pay
less in land sale proceeds than residential property.
2. Commercial uses have a high parking requirement per s.£ of building. Therefore, structured parking
(parking decks) will also add to the cost of the project.
The demolition, acquisition and relocation costs of the non -K -Mart parcels could range from $4.5 million to
$5.5 million. One other factor, however, which would require additional assistance would be the need for
additional parking ramps on the site to accommodate the density of the commercial development. Generally,
there is a likelihood that the TIF district will run the full term if the commercial is all redeveloped. If only
a portion of the commercial strip is redeveloped, then the TIF district may run a shorter time than 16 years.
(AS MODIFIED ONMAY 11, 2009)
To be added to prior to the public hearing
APPENDIX G -1
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of. Aril 24, 2009
AGENDA SECTION: Business Items
ORIGINATING
EXECUTIVE
NO:9
DEPARTMENT: EDA
DIRECTOR
APPROVAL
ITEM: General Discussion on "Heights Housing
BY:
BY:
Protection Program"
I DATE: April 29, 2009
BACKGROUND:
At the March 24, 2009 EDA meeting a general discussion was held at reexamining the property
inspection program that terminated in late summer of 2008. From a staff recommendation standpoint, the
purpose of reexamination stems from the fact that the need for this type of program has grown
dramatically from last year. The vast number of foreclosures in the City, coupled with the conditions of
properties that are being evidenced from staff, all lead to our recommendation that a serious look at
implementing this type of program is critical to stabilizing our current and future housing. Staff has
temporarily renamed this program as "Heights Housing Protection Program," in part, to convey that the
purpose of a property inspection program is not to only assure that the house being inspected and meets
some minimum standard (thus protecting the new homeowner), but also 'a protection to established
neighborhoods. This protection is that overall housing standards will be required in the community, and
in turn, that individual housing reinvestment will occur and that the value of doing so will be protected.
As a start for program discussion, staff views that it is critical for the City Council, EDA and Planning
Commission members to gain a more "hands -on" understanding of how the program would work and
the types of repairs that are needed. As such, staff would like to recommend an open house for
officials that would operate as follows:
1) Date for the open house would be Monday May 11, 2009 from 4:30 p.m. to 6:45 p.m.
2) Staff will obtain permission from five properties to be opened
3) All properties will have had a property inspection done based on the current property
maintenance code which would be the same used for the new program
4) At each location the report will be available for review including those items that need to
be corrected.
5) A comment sheet for questions will be available so staff can respond at a future date to all
questions (staff will take additional photos for question clarification)
Staff is of the opinion that by having this type of review a number of questions can be answered in a
tangible manner rather than theoretical. If the City desires to proceed, the other request for this
meeting was to create a schedule regarding the process to be used for information, public hearings and
future City Council dates (the Council would be the body that would have to act on this type of
program). Attached with this report is the aforementioned information.
RECOMMENDATION: Staff recommends continuing the exploration of this program and to conduct
an open house on May 11, 2009.
RECOMMENDED MOTION:
Motion to continue exploring "Heights Housing Protection Program" and establishing May 11, 2009 for
an open house for various properties.
Attachments: Schedule /Process and inspection corm
EDA ACTION:
EDA Item 9a
Heights Housing Protection Program
Schedule /Process
Date 2009*
Task
April 28
EDA (Council) Direction to proceed
May 11 tentative
City Council, EDA, P &Z Members Housing Tour
Distribute proposed ordinance
May 1
Contact North Metro Realtors Association — State intent of new
proposed program
May (TBD)
Meeting with North Metro Realtors Association Board
May (TBD)
Meeting with Realtors, Mortgagers, Bankers etc.
May 6
Notice to people in attendance of previous public hearing on this
issue about upcoming information meetings
May 20
Public Information Meeting /Open House
May 28 tentative
Calendar Show
June 16
Public Information Meeting /Open House
June 22
First Reading of Ordinance
July 13
Second Reading of Ordinance
August 13
Ordinance in effect
* Subject to change
Public Relations
■ Calendar Show
■ Cable TV
■ City Website
■ Northeaster Newspaper
■ SunFocus Newspaper
■ Letters to people previously attending public hearings on this
ordinance
■ Public Information Meetings
■ North Metro Realtors Association
City of Columbia Heights
590 401' Ave NE
Columbia Heights, MN 55421
763- 706 -3670
DRAFT
Department of Community Development
Heights Housing Protection Program Inspection
Pagel Of 2
Property Address: Owner /Agent Name:
A ANT ITEMS SHALL BE CORRECTED TO COMPLY WITH COLUMBIA HE1(iH1N VKUINANUt t HAr iric ors- ricvrnicI z lvuiuv in��n��� L
LL NON- COMPLI
Area
Comply w/
standards?
Yes No
Deficiencies Requiring Corrective Action:
"H"= Immediate Safety or Hazardous Conditions
Exterior Property
Area
1. Sidewalk
2. Driveway
3. Vents
4. Accessory Struct.
5. Yard Condition
-
-
-
-
-
-
-
5A.202 D,K,M,N
Exterior Structure
6. Facia Soffit
7. Paint
8. Siding
9. Address No.
10. Structural
11. Foundation
12.Exterior walls
13. Roof
14. Overhang
15. Deck/porch
16.Handrails /stairs
17. Chimney
18. Window /door
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5A.203B -R
_
-
-
-
_
-
Interior Structure
19. Structural
20. Mold/decay
21. Stairs /handrail
22. Floor /Walls /Ceil.
23. Doors
24. Windows
-
5A.204 B -F
Ventilation
25. Bathroom
26. Habitable Space
27. Clothes dryer
28. Non - habitable
space
-
-
-
-
5A.208 A -F
Plumbing
29. Fixtures
30. Venting
31. Water Heater
32. Water
-
-
5A.209 A -F
PROPERTY ADDRESS
City of Columbia Heights
590 40`}' Ave NE
Columbia Heights, MN 55421
763 - 706 -3670
DAFT
Heights Housing Protection
Program Inspection
PAGE 2 OF 2
Area
Comply w/
standards?
Yes No
Deficiencies Requiring Corrective Action:
« H r,_ Immediate Safety or Hazardous Conditions
Mechanical
33. Heating
34. Ventilation
35.Installation
36. Fireplace
37. Combustion Air
—
—
—
—
—
—
—
—
—
5A.210 A -K
Electrical
38. Service
39. Wiring
40. Light Fixtures
41. Outlet /GFI
—
—
—
—
—
5A.211A -H
Fire Safety
42. Smoke Alarm
43. CO Alarm
44. Other
_
5A.212 A,C,D,H
Inspector
",,,,F 4/16/09:
Date
Received By /Title
In Homeowners' Latest Woe, Banks Are Skipping Foreclosures - NYTimes.com Page 1 of 3
FRINTER -TRIE MY MRMAT
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March go, 2009
Banks Starting to Walk Away on Foreclosures
By SUSAN SAULNY
SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a
sheriff s sale had been set, and notices about the foreclosure process were piling up in her mailbox.
Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets
fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she
salvaged but a lesson from her loss.
So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume
maintenance on the property. The sheriffs sale had been canceled at the last minute, leaving the property title
— and a world of trouble — in her name.
"I thought, `What kind of game is this ?" Ms. James, 41, said while picking at trash at the house, now so
worthless the city plans to demolish it — another bill for which she will be liable.
City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville,
Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of
properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to
maintenance — exceeds the diminishing value of the real estate.
The so- called bank walkaways rarely mean relief for the property owners, caught unaware months after the
fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on
the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan.
The way mortgages are bundled and resold, it can be enormously time- consuming just trying to determine
what company holds the loan on a property thought to be in foreclosure.
In Ms. James's case, the company that was most recently servicing her loan is now defunct. Its parent
company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find
a record of it.
"It is what some of us think is the next wave of the crisis," said Kermit Lind, a clinical professor at the
Cleveland - Marshall College of Law and an expert on foreclosure law.
For older industrial cities like South Bend, hard times in the mortgage market began before the recent
national downturn, as did the problem of bank walkaways. In the case of Ms. James, a home health care
administrator, the foreclosure proceedings began in the summer of 2007, when she could not keep up with
httn:// www. nvtimes. com/ 2009 /03 /30 /us /30walkaway.1-itml ?_r =1 &pagewanted =print 4/712009
In Ilomeowners' Latest Woe, Banks Are Skipping Foreclosures - NYTimes.com Page 2 of 3
the adjustable rate on her mortgage.
In Buffalo, where officials said the problem had reached "epidemic" proportions in recent months, the city
sued 37 banks last year, claiming they were responsible for the deterioration of at least 57 abandoned homes;
the city chose a sampling of houses to include in the lawsuit, even though the banks had walked away from
many more foreclosures. So far, five banks have settled.
In Kansas City, Rachel Foley, a lawyer who handles housing cases, said bank walkaways were "a rare
occurrence two to three years ago."
"We're seeing them dumped more and more at the moment," she said.
Experts suggest the bank walkaways are most visible in states where foreclosures are processed through the
courts and therefore tend to be more transparent. Other states, like Indiana and New York, have court-
mandated foreclosures, but roughly half of the states allow foreclosures to proceed without court intervention,
making it difficult to accurately count the number of bank walkaways in recent months.
The soft housing market and the vandalism that often occurs when a house sits empty are the two main
factors influencing the mortgage holders' decisions to walk away, said Larry Rothenberg, a lawyer for
Weltman, Weinberg & Reis, one of the larger creditors' rights firms in the country.
"Oftentimes when the foreclosure starts out, it's a viable property," Mr. Rothenberg said, "but by the time it
gets to a sheriff's sale, it might not have enough value to justify further expense. We've always had cases
where property was vandalized or lost value, but they were rare compared to these times."
The problem seems most acute at the bottom of the market - houses that were inexpensive to begin with —
and with investment properties, where investors and banks want speedy closure by writing off bad loans as
losses. Banks and investors typically lose 40 percent to 50 percent of their investment on every foreclosure.
Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter, said some properties had become
such liabilities for investors that it was not even worth holding on to them to strip valuable fixtures, like
kitchen appliances, toilets and hardware.
"The whole purpose of foreclosure is to take title of the property, sell it and recoup what money you can," Mr.
Cecala said. "It's just a sign of the times that things are so bad no one wants to take possession of the
property."
In South Bend, boarded -up houses for whom no one has stepped forward are dotting the landscape, adding a
flesh layer of blight to communities that were already scarred from the area's industrial decline.
The city is hoping to create a new type of legal mediation process that would bring together the homeowners
and the mortgage holders to settle their disputes while allowing the owners to remain in the home —
considered crucial to any stabilization effort.
"I'd say in the last three or four months, we've seen dozens of these cases," said Chuck Leone, the South Bend
city attorney. ".We see it one of two ways. One is that the bank will simply dismiss the foreclosure complaint.
The other is that the mortgage holder will follow through and take a judgment of foreclosure, but then not
1,tt„•/Axnxnv nvt;rnes_com /2009 /03 /30 /us /30walkaway.html? r =1 &pagewanted =print 1 4/7/2009
In Tlomeowners' Latest Woe, Banks Are Skipping Foreclosures - NYTimes.com Page 3 of 3
schedule the property for sheriff's sale."
In Ms. James's case, it has been impossible to determine who canceled the sheriff's sale, since her last
mortgage holder went out of business. Even the city cleric's records did not provide an answer.
"Nobody has any idea who owns what or who's responsible," said Judy Fox, Ms. James's lawyer at the Notre
Dame Legal Aid Clinic. "It's a very common story."
Mayor Stephen J. Luecke of South Bend added: "It's just a crime the way it puts people in limbo. They first off
have gone through the grief of losing their house, then they move out and find out that they still own it and
have responsibility for it."
In Jacksonville, Fla., Sylvester Kimbrough Jr. found himself caught in the limbo between foreclosure and
ownership last year, to years into his 3o -year mortgage on a $42,000 two - bedroom house.
Mr. Kimbrough, 56, a former driver for a car dealership who is now unemployed, had already moved out
when he learned that the foreclosure had been stopped.
"That move really almost destroyed us," Mr. Kimbrough said. "It was all for nothing."
Copvriaht 20092009 The New York Times Company
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,,++— .ii.z,- .—v—f;i 11c 1-1IM / ?On9 /n 'l /Io/ „s /Iowa]kaway.html? r= 1 &-oagewa1ited =print 4/7/2009
City of
COLUMBIA
H E I G K,
FORECLOSURES
L
E G E N D
Active
Foreclosures
2009
2008 j
2007
Sold Foreclosure.
Parcels
Water
City Limits
This map is for display purposes only.
It is not a legal document and should not be used as such.
Any questions concerning this map should be sent to the
City of Columbia Heights Community Development Department
at 763 706 -3670
0.5
Miles
Map Date: January 7, 2008
Map Update: April 20th, 2009
Sources:
Columbia Heights Community Development
Columbia Heights GIS
N
•� -
NE
°
s� v ■
NMI
■o
Total: 363 Active Foreclosures
154 Sold Foreclosures
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