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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: h: \consent Form2007\ �- O N C D- d U C i Q d D N � W Q a m D j E m p E E N E U U Of m c > m m u= t E O U U 0 E E n N 2n N W >. E M M �,a N NNa�N Nm o.o � 7 N V K N d w LL. 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C Jm W p 5r 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 This copy is for your personal, noncommercial use only. You can order presentation -ready copies for distribution to your colleagues, clients or customers here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional Information, Order a reprint of this article now. 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 Privacy Policy I Search I Corrections I RSS I First Look I Help I Contact Us I Work for Us I Site Map ,,++— .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 ■■ ■u 111► .. ��� "x/1111► �; Inwun►� - IIn1111� i/11�10 ■ �i 1111112- — ■'= =�-� '1 h1 ■�� �'_ p �� �d 101110 ■ 1 JI 1® Ilelr ul`, � f1�11_nllll■ Im 1 �� In Iluluu ' �-� m ■ � ■ nl IIloilu�11n11 ■v nl Ill�mlu■u■II��IIIII� �i ■ 111_ Ili�j 11111 1 n 1. , 11111 mu = mlmlw =_ IIIn11111= t M/M ��''LL1-11//11111111 1111 � ' '� C.. 1 Iu11uf1 ■11111111 u � � .. " n�lv■ .1�I1�1 U Illlll �r — � 1 IWII 11111:11 1 1 �■ ' �� �■ _� i Into 11 Illllmlllnnlll111�111 u■n � - - ■ milli hil i VA ���� ���� �I��lll� Ilul■� = IIG �`���- ������ ��O�y����� ::1 ■,■ ��� -1111 s�