HomeMy WebLinkAboutEDA MIN 06-23-09ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE REGULAR MEETING
June 23, 2009
The meeting was called to order at 7:00 pm by Vice President-Marlaine Szurek.
Members Present: Bruce Nawrocki, Marlaine Szurek, Gerry Herringer, Tammera Diehm, Bobby
Williams, and Bruce Kelzenberg.
Members absent: Gary Peterson
Staff Present. Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson.
2. PI..~;1~GE OF t~I.LEGIAI'~~E- RECI~'FD
3. CONS~i~T AGEPI~~A
l. Approve the Minutes of May 27, 2009-Hen•inger noted a correction to his colnzne~zts on page 5 of
the minutes.
Motion by Williams, seconded by Herringer to approve the, minutes of M~y 27, 2009, ~s
amencled. All Ayes. MOTION Pt~SSED.
2. Approve tlle ~aii~~ncial Kepoi~t and Payment of Bills fo1- May per Resolution 2009-19
Nawrocki questioned account #391~0 of the Community I~~velapment Fund. Cl~rlt explained that
fund holds money transferred fi~zn the Parl~view Vill~ Fl~nd to our budget and that $8,942 has
been expended thus far.
Nawroclci asked abot~t clieck ~130396 for $1,000. Clark eYplained this was a refu~~cl of an escrow
deposit for corrections needed on ~an Ab~nd~ned Property. However, the sale fe11 through so the
deposit was returned to the person.
He then asked ahout clleck #130372 ~to Northeas~ Bank ~r~d Check #130506 to Firs~t Aillerican
Title Co. Clark expl~~ined these two checlcs were for the purchase of properties and that is ~~here
t11e fiznds were cleposited to cc~mplete the purchase. Check #130372 was for the purchase of 4502
~Uashington Street and Check # 1305Ub was for th~. purchase a1 4108 7~~' ~i~ee~.
Ivlotion i~y Wiliianzs, secondeci b;~ Ketzenberb, to waive the Reac~ing ~~ Resah~tiun 2009-1~, ii~e~•c
being ample cop~es available t~ the public. All ayes. MOTION P~SSED.
Motion by Willianls, seconded by I~elzenberg, to approve the Financial Report and .Payment of
Bills per Resolution 2009-19. AII ayes. MOTION PASSED.
Economic Development Authority Minutes
Page 2
June 23, 2009
EDA RESOLUTION 2009-19
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
APPROVING THE FINANCIAL STATEMENT FOR MAY 2009 AND PAYMENT OF BILLS FOR THE
MONTH OF MAY 2009.
WHEREAS, the Columbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes
Section 469.09b, Subd. 9, to prepare a detailed finaneial statement which shows ail receipts and disbursements, their
nattiire, the money on hand, the pwposes to which the money on haild is to be applied, the EDA's credifs and assets and
its outstanding liabilities; ~nd
WHEREAS, said Stat~lte also rec~uires the EDA ta eXamiile the statement and treasurer's v~uehers or bllls and if
correct, to approve tl~em by resol~ftion and et~tter the resolution in its reco~~~ds; and
~HEREAS, the ~nancial statemel7t fo~~ the moiztll of May 2009 and the list of bills for the months of May 2009 are
attached he;i~eto alid inade a part of this resolutioi~; and
VF~~IX~~~2EAS, the EDA l~as exan~~ined the financial staten~ent and the list of bills and ~~nds them to be acceptable as to
b~tl~ form and accuracy.
NOW, T'g~EREFORF ~3E IT RES€~I.VED by tf~e Board of Commissioners of the Col~m~lbia Heights Econo~nic
Development Authority that it has exalnined the attached financial st~teinerlts alid list of bills, which are attacl~eci
hereto and tnade a part hei-eo~f, and they a~~e found to be cori°eet, as to fc~tm and conteilt; and
BE IT FU~ZTHER RE~~LVED the finai~cial statements are aclcnowledged and received and the list of bills as
~~resented in writin~ ~~re appi-oved for payment aut of proper funds; and
13~ TT FURTI-~~R RESO~,~i;D this resolution and attachments are to be made a part of the ~ermanent rec~rds of the
Columbia l~eights Econonlic Development Authority.
Passed fhis 23rd day of Jun~ , 20(~9.
iW10TION BY: ~rVilliams
SECONDED BY: Kelzenberg
AYFS: All ayes
BUSII~L;~S ITEIVI~
4. BKV ~'resentati~a~a-(~rand C~~tral Lofts
Clark stated that BKV 11~s pulled this item from tlie agenda and woulci n~t be makin~; a presentatian
at this meeting. Dave Kloiber (owner of the property) and Clark Gassen (Developer) are still
discussing possible c~evelopment options, which could include units similar in style to the first coildo
builciing, but would be rental in status. Clar°k told tllein the new plan would need to go l~eFore the
EDA and P& Z Commission for approval. Clarlc ~xplained that Gassen iiltends to construct buildings
that woiilci be similar in appearallce and have a similar ntimber of units as was originally plai~ne~t.
These would be market driven rentals and are not intencled to be low illcome or subsidized units.
Economic Development Authority Minutes
Page 3
June 23, 2009
Diel~un stated she had looked at the proposed pians and though it looks similar to the project in St
Anthony, she is skeptical of additional reiltal in general. She said we have a development agreement
in place that requires owner occupied units and we should be sensitive to the current owners who
have invested in purchasing their units. If this proposal were considered, the Development
Agreement would need to be amended, as weii as the Association documents. Clark stated one issue
is that the use of the Community Center wouid also need to be resalved. Diehm asked if staff could
research the number of units that have been sold in the existing building and the range of sale prices
for the units.
Nawrocki stated he has been in th~ St Anthony rental builcling. He said the units were very ni~e to
begin with, but a{~ter being rented for a time, t11e overall condition deteriorates. IIe believes owner
occupied units remain in a b~tter state of repair long~r. He used ~the LaBelle Condos as an example.
He went on to say the current owner l~as not been maintainiilg the overall site very well so he
questions I~ZOw the biiildings woulcl be managed if it were r~rltal.
Wil~iams had mixed feelings about the project. If they were built as luxury apartrnents, he may
consider it, but he doesn't feel it would be good for the healtll of the City to add market rate or
subsidized housing to the site.
Szurek questioi~ed whether the city woulc~ legally be able to prohibit units t~~om being rcr~lt~d as
subsidized or low-income housing. Si1e stated therc have beeri other places built in the city that we,re
intended tt~ l~e for middle/upper income residents that endecl up beiilg rented to tl~ose on fhe Section 8
Holising Program. She thil2ks tl~at City Oflicials shoulcl be very ca~ltious ~
Dielun felt we shotild have owner occt~~pied buildings or coo~~rative buildings whereby the residenfs
have a vested interest~ in the properly. She doesn't believe tliat buildir~g IuXUry, high-end reiltal ~mits
will worl< on this site due to issues uz the area. The devclc~per can say that is the izitent, but she feels
re~lity would be i7luch diffe~-ent, once built.
Herringer said the curre~lt develo~~ment agreement reqtiiires buildulgs thE~~ will be owner oceupieci to
be constructed. Ilthe project is changed micl stream, it is not fair to tliose who h~~ve alread5~
piucl~~~sed their linits. This ~type of thing is what causes distrust in government a~d of the decisions
made by the el~cted offici~ls. He thinks we need to attract resi~~lents foi- lon~ terill to h~Ip stabilire
our city azld our schools. We want owners who will be inore lilcely to re-invest in tl~eu prope~-ties,
than reriters who t~se the property and move ~n. He hacl concerns that once the b~xildings are,
. .
co~~st~°ucted, ii tlle anits de~n'~ r~nt, then ~c~justlnents ~re nlade t~ ~~Il tlzem u~ ar~~ they'~e~;~~z ta
detei~iorate. He is very much opposecl to talcin~ that type of risk with this site.
Kelzenbe~~ said he couldn't supp~rt this typ~ of project. He also felt we should stick with the
origin~l developmc~lt agreement that requires ownei• occupied units to encoura~e resideilts ~to make a
colnmitment to the city.
The general consenst~zs was not to amend the I3evelopment Agreement to a11ow Rental Property to be
constructed.
Economic Developinent Authority Minutes
Page 4
June 23, 2009
5. RESOLUTION 2009-18 EDA PLEDGE AGREEMENT FOR GO BOND SERIES 2009B
Clark explained that on June 8, 2009, the City Council approved the sale of a$580,000 taxable
general obligation f~ increment bond designated for redevelopment in the Sheffield neighborhood.
This bond will be paid for by future tax incrernent generated by the existing condominiurn project
located in the Kmart/Central Redevelopment TIF District. Clark also noted that our Bond Rating was
increased which helped to lower the cost of the bond.
Nawrocki expressed his general opposition ta n~odifying or extending any of the TIF districts. He
used the University Heights TIF Dishict as an example, and stated that it should have been de-
certified since all the existing d~bts had bee1~ paid. Nawr~cki opposes ~this action because at the time
it was established, residents were told the taY increnlent fu~nds wotiici be used for city services wkich
wauld keep city and school taxes dowi~.
Motioil by Williams, secondec~ by Diehm, to waive the reading of resolution 2009-18, there being am~le
copies available to the public. All ayes. MOTION PASSED.
Motion by Wiiliains, seconded l7y KelzeYlbe~~g, to adopt ~Zesolution 2009-1$, Ai~Itllorizing Exc;cutior~ of a Tax
Increment Plecl~e Agreement with the City of Columbia Heights relating to ~580,000 Taxable General
Obligation T1~ I~icrement 33onds.
Ayes: Kelzenberg, Williams, Diehm, Szurek, and Herril~ger Nays: Nawroclci MOTION PASSED.
CO~iJMBIA HE~~HTS ECC~i'~OMTC D~~IELOPIVIFIV~'~' AUTH0~.~7CY
BE IT RESOLVFD by the Board of Cotnlnissioi~ers ~of t1~e Columbia F-leights Econos~~ic Develo~ment Aufllority
(tl~e "Autl~c~rity"), as foliows:
L ~I'he President and tl~e Executi~~e Director of the Authority are hereby a~rthorized to exeeute and deliver a
T~~ Inerement Ple~lge Agreelne~lt with the City of Colun~bia Heights, Minnesota (tl~~ '`City"), substailtially in the foim on
filc ii1 City Hal i, providing for the pledge oFtax i»cre~7ient for the pay~nent of the prirlcipal of,, ~,-e~l~iium, if any, at~id i»terest
on the City's $ 580,000 ~Faxable General Obligatioil ~I~~ Increment Bonds, Series 2009B.
2. TJiis Resolution sliall be effec~ive as of the date hereof.
Passed this 23rd day of Jui7e, 2009.
Offereci by: Williams
Second by: KElzenber~
Ayes: Kelzenber, Williams, Diehm, Szurek, Heri-inger
Nays: Nawrocki
Economic Development Authority Minutes
Page 5
June 23, 2009
6. ADMINISTRATIVE REPORT
4147 7th St-House Donation-
Clark stated thaf the City Council taok action an June 22, 2009 to approve the Scattered Site Dis~rict that
aliows City Staff to buy run down properties as they become available. Staff received a cali frozn a
family this weelc that would like to donate their mother's former house to the City. Clark explained that
the house has been appraised at $32,000. Tl~e house has major issues sizch as rotted windows, no
insulation, mold, partions of the sheet rock aild ceiliilgs zre missing, the fauizdation wa11s a~re starting to
bu~ckle, and it is built on a 30-foot lot. The f~liily doesn't think the house should be sold tc~ allyone
because of the state of disrepair. They tried to see if Habitat for Humanity wanted to renovate it, but
they tui7ied dounl the offer. If the hozise is demolished, t~i~ lc~t would be considered unbuildable because
it doesl~'t meet the 4~ foot minimiun lot widt~h. If the City accepts tl~e donation,lhere would be three
options:
l. Leave it as a~1 open l~t
2. Sell to owners on either side (one of which is going into foreclosure}
3. The Council could at some time in tize fuiure grant a~~ariance for- building a z~~:w home on ~the site.
The worst cas~; scenario is fhat the City will expei~cl between $ I E7,000-$15,000 to have it deillolished, and
rnay not se~e ~ cash rettu~n on that eYpeilse.
C1a~~•1< said the family does not want any formal reco~nition excep~t for a city resolution for t~x puipose~s.
C1ark is asking the EDA if they are interested in ~cceptin~ the do~ation.
Dielltn felt we have t~ accept st~cll an offer. If we could possibly recover any of the expenses iilcurred,_ it
would ~be ~;reat, buf slle said we can't allow this property to go baek on the m~rlcet.
Nawrocki stated that the County has the property valued at ~1~3,000 and that the ta~es are currel~t. He
suggested getting sa~neone in the~~e to w1-ite up ail estimate on what it would cost to renovate tl~e
prope~-ty.
Clark said the amount o~f ~time it would take to write up specs and arrange for bids would be a wast~ of
staff's tit~ne and money.
Szurek thought we should accept the donation and tear it dowil. She pointed out that ~n appraiser ~~~lued
it at $32,000 alid that H~bitat already turned do~~n the offer as it wasn't worth renov~~~ting.
Herringer asked if the date of construction was 1916. C1ark told hi~n that was correct. He thought it
should be torn down if the walls are buckling and there is no insulation. It doGsn't sounc~ like it woulcl be
worth repairing.
Economic Development Authority Minutes
Page 6
June 23, 2009
Rental information per EDA Request-
Clark stated that Diehrri had asked staff to loak into how other cities restrict the number af rental
units in their cities. He passed out a map showing the number of rental units we had prior to
September 2008, compared to the number we have added since that time. He said we estimated an
additional 100 new rental properties would be added in 2009 and we have already added about 80
during the first 6 months. He went on to explain that staff obtained information froin Winana and
Duiuth and that both cities approach the restrictions from a Zoning standpaint rather than a licensing
one. Winona doesn't allow more than 30% rental properties in a given block. And Duluth's policy
established for the East Side is that no single family houle can have a rentallicense if there is another
one within 300 feet. However, Apar~ments and Dnplexes are exclu~ded fron~ this ~~ule. C1ark said they
treat it as a land use and density issue, rather than a licensing ane.
Nawroclci asked how a bloek was defined. Is it lots tha1: back up to each other or both sides of a
street'? Staff will have to call Winona to see if it is defined as it wasn't pro~~ided in the information
they sent. He stated he is in favor of li~niting tlle number of rentals sonlehow. However, he was
concerned with people who have their home for sale and have been unable to sell it so they re~1t it ou~t
until ~t does sell. How do we stop owners fiom doing ~tlzat as it could force mo~~c foreclas~rres if we
prevent them from renting oLlt their prc~perty.
Diehm re.quested stafl'prepare another map that show the apartillents and du~aleYes colored differently
from the single farnily homes ~eing rented. She believes we shoulcl attempt to r-estrict the number of
rei~tal licenses a~nd the new ~map should ~ive us a better idea of the concentra~i~n rate tl~raughout the
city.
LTpdate o~~ ~pen Hoia~€;--
Cartney explained that t11e meeting will be run differently fr•oln last year with the hope ~that we wiLl
get more balanced feedbaclc by using a more cc~ntrolled ap~roach. 'Therefore, the following will be
providecl to each p~,rson who attends:
1. Paekets wi11 be prepared for each pe~son
2. Ai1 agenda with ground rules will be enclosed
3. Picti~re boards wi11 be used so visual examples caz~ l~e s~lown on what would require a corr-ec;tion
4. A power point p~~esentation will be macle
5. Index cards v~ill be prc~vided to sub~nit questions ois
6. A sumtn~ ry will be nlade
7. Questions and Answers will ~e allowed at the end with a specific ti~~ne limit allowed.
Tl~e EDA packets contained a cllax~t showiilg the different cities that have some lype af il~spectio~~ program at
the tin~e of sale and the coinparisons of each program. Nawroeki noticed the fees varied and ~ondered if t11e
inspections were also different. Sheila explained that yes, they ~re different. Some cities are usii~g tl~e
International Praperty Mair~tenance Code which is inore restrictive than wh~t we have. Each city adapts
whatever code t11ey wish to use. Ours is based c~n our Property Maiiltenance Code. Some use a Truth in
Housing iormat which is similar to the Disclosure Forln filled out if sald by a Realtor. This just informs the
buyer of the condition, but does not require corrections be made before selling (except for Hopkins that does
rec~uire correct~ions}.
Cconoinic Development Authority Minutes
Page 7
June 23, 2009
Nawrocki said the Council received an e-mail from Donna Schmitt suggesting the 10 am meeting on
Monday June 29t1i be broadcast on Cable to get the information to the public. Clark said he already spoke to
Linda Magee about this and we have no staff that is able to telecast that meeting. Several meetings are being
held so if the public wishes to attend they have three meetings to pick from.
Update on Properties Purchased-
4135 Jefferson St It was listed for $79,000-then it was raised by a Realtor to $129,000-it is being sold
"as is". It is destroyed, full of junk and the basement has been used as a bathroom. We
have offered $32,500
=~448 Quincy St Listed for $29,900-we made fu11 offer. Neiblibors coLilc~ smell odors from outside.
This ~vill ~o to the City Council in July for approval.
4030 Quincy St We Inade an offer on this one, but were too late. It has been sold. It has an addition
that was built without perinits. We will get into tlus one because it is posted as an
abandoned property.
4450 Van Bure11 St Lis~tcd for $"79,000-made offer of $35,000 which was rejected-made 2°d otfer of
$39,500 and they countered with `~5~,000 which ~~%e will reject. There was a water
break in it so the house is full of l~nold, the paint and ceilings are peeling and sheetrock
is warped. We also wi11 be able to get inta this one as it is posted as an abando~ned
pro~erty. This oile has a nice 60 ft lot~.
Sheila aLso ga~e an ~pdate on the properties Anoka Colinty has becn purchasinb with the NSP funding.
Anol:a County's policy is if t11e renovations will amaullt to more tlzan $26,000, a lead abateznent is required
fc~r the entire l~~vuse and that gets tao cc~stly~, 5o those properties are then d~rnolishecl. Nawracki wanted to
know wh~t company they are worlcizlg with for tlle renovatio~is, and thought that they could give us bids on.
some of the houses ~,~~e are buying. Clark explained that Anoka Couizty does a RFP and entcrs into a eontract
with ~vhatever co~npany they choose, and it could not include pro~erties we ~~~n. We wauld need to go
t~l~~-ough the sanie process.
Diehm asked stafftc~ ~repare a map showing tl~e propertics the City owns and t~1e properties l~eing purchased
by the County. S~?e would alsa like the i~nap to detail wllich o11es are being c~enzolish~d by the County, 1nd
whieh ones are being renov~ted.
Nawroclci asked aba~~t the 37t~' & Central Project-nothii~g rzew to repc~~-t
Biuger Kitig P~•~~crty-We are in the process of having a concept ~-~mediation action plan ~r;~pared.
K-Mart site-C1a~•k said De~~eloper is still working ori getting tl~is project oi~'the grollnd, but he doesn't have
any new i,1fu~•matio~.
7. ~THEI~ 1~fJSINESS
The nex~ regular EI~~ ineeting will be Tuesday, Jiily 28, 2009 at PaYl~view Villa.
The meeting ~vas adjourned at 8:30 pm
Respectfully submitled,
~~---~~'~-~~ ~:_.~t.,~=
She~lley Hansc~n ;~
Secretary