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HomeMy WebLinkAboutEDA MIN 09-22-09ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING September 22, 2009 The meeti~ig was called to order at 7:00 pm by President-Gary Peterson. Meinbers Present: Members Absent: Staff Present: ~ ~ Y~C~~~U U`2~ .~~ ~.~~-- Bruce Nawrocki, Marlaine Szurelc, Tammera Diehm, Gary Peterson, a.nd Bruce Kelzeiiberg. Gerry Herruzger and Bobby Williams Walt Fehst, Scott Clarlc, and Shelley Hanson. 2. PI,EDGE OF ALLEGIANCE- RECITED 3. CONSENT AGENDA 1. Approve the Minutes of August 25, 2009. 2. Approve the Financial Report and Payment of Bills for August 2009 per Resolution 2009-26 Navv~ocki asked why there were expenditures for accounts 408, 410, and 420 when there isn't any aiuiual budget for these fiuids. He wanted to know where the money comes from to pay these expendituxes. Clark explained these are holding accounts for capital fund expenditures, a.nd that the asnounts are covered by approved transfers fiom other sources as decided by the EDA. Clark will speal~ with the Fuiance Duector and get N1r. Nawrocl~i more detailed infoimation on these accounts. Motion by Die11m, seconded by Szurek, to waive the Reading of Resolution 2009-26, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Dielun, seconded by Szurek, to approve the Minutes and Resolution 2009-26, approving the Fina.ncial Report a.nd payment of bills for August 2009. All ayes. MOTION PAS SED. EDA RESOLUTION 2009-26 RESOLUTION OF THE COLUMBIA HEIGHTS ECOIVOIV~IC DEVELOPIVY~NT AUTHORITY (EDA) APPROVIl\iG TgIE FINANCIAL STATEMENT FOR AUGUST 2009 AND PAYIV~NT OF BILLS FOR THE MOI~TTH OF AUGUST 2009. WIIEREAS, the Columbia Heights Economic Develo~ment Authority (EDA) is requu•ed by Mimlesota Statutes Section 469.096, Subd. 9, to prepare a detailed financial stateinent which shows all receipts and disbursements, their nature, the inoney on hand, the purposes to which the money on haild is to be applied, the EDA's credits and assets and its outstailding liabilities; and WI~REAS, said Statute also requires the EDA to exainine the statement ai~d treasurer's vouchers or bills and if correct, to ap~rove them by resolution and enter the resolution in its records; and Econoinic Developmeiit Authority Minutes Page 2 Septeinber 22, 2009 WIIEREAS, the financial statement for the month of August 2009 and the list of bills for the month of August 2009 are attached hereto and made a part of this resolution; and WI3EREAS, the EDA has examiued the fulancial statement and the list of bills aud finds them to be acceptable as to both foi~ 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 atta.ched hereto alid nlade a part hereof, and they are found to be correct, as to fonn and content; and BE IT FURTHER RESOLVED tlie financial statements are acknowledged and received and the list of bills as presented in writiug are approved for payment out of proper funds; aiid BE IT FURTHER RESOLVED this resolution and aftaclunents are to be made a part of the pennanent records of the Columbia Heights Economic Develo~ment Authority. Passed this 22nd day of September, 2009. MOTION BY: Dielull SECONDED BY: Szurek All ayes. Attest by: President Shelley Hanson, Recording Secretaiy 4. BUSINESS ITEMS BVK PRESENTATION- Clarlc explained that BVK Architects was scheduled to make a presentation at the EDA meet'vig of June 23, 2009 to discuss a rental housing option at the Grand Central Lofts site. BVK elected to remove the item from the agenda until a later time, but the EDA held a discussion on the general topic. At the June meeting, there was a consensus that iental was not an appropriate alternative to the origulal proposal. Tlus message was conveyed to BKV, but tliey still wished to inake a presentation to the EDA at this meeting. Cla.rk Gassen (Developer) and Jack Boarman (Sr. Partner of BVK Group) were present to share illustrations of the overall site plarl and discuss building design options with the members. Economic Development Authority Muiutes Page 3 Septeinber 22, 2009 Mr. Boai~nan stated lus fnm has beeil working on developinents of lugh-end rental buildings of this nature throughout the metro area. He said the apartments are condo quality residences that attract people that often times purchase a condo or home at a later time. He showed exaanples of other sites in Minneapolis, New Brighton, and St. Anthony. These higher end rental buildings would include their own aiuenities and space for recreational and coinmunity events. The residents of these buildings would not shale any of the facilities of the condo building. NLr Boarma.n explained the site plan would not change fiom the original, a.nd that the buildings would have the same sized footprint. The oi~ly difference being proposed is making t11e building five stories instead of foLU and that each uiut would be smaller, so each building would have 120 units rather than 66 as the origuially designed condo units. Each building would have approximately 50% of the units beulg one bedroom, 20% would be siudio/alcove apartments, and 15-20% would be two bedroom uiuts. The units would vary in size froin 700-1200 s£ The price poult would be $1.10-$1.20/sf for rent. He said the project would be constructed using lugh quality materials, maintenance free exteriors, iuce landscaping, aild the units would have 9 ft ceilings with hardwood floors and balcoiues. The plan would include underground parking and sozne perin~eter, grade level parking to provide a ratio of one space per unit. Fehst questioned whether that ratio would ineet our Zoning requirements. Clark said that is soinethulg that would be reviewed if the project moves forward and would be negotiated as part of the overall site plan consideration. Boai7i~an said the buildings could be converted to condo buildi~lgs at a later time if tlie niarlcet would indicate that as a viable option. Mr. Boarman said the typical rent at the Main Street Village ul New Brighton is $1,500 for a 1,000 sf, two bedroom unit. He said that project is about 9-10 years old and that it still is well maintained. He offered to set up totus of the various sites. Boarinan said the occupancy rate of all tlie projects has averaged at least 90%. He believes this type of project would help the transition the city is malcing in that area of towil. New development usually has a positive impact on neighborhoods and often tiines spurs other new development. He said he worlced with Pratt Ordway on the St. Anthony project and that project also has a condo building aild a rental building, and that it has worked well for that newly developed area. Clarlc asked if a marlcet study had been done. Gassen replied tliat a foi7nal study has not beeii done yet, and that it would Ue done later as pai-t of the loan process. He went on to explain that one building would be built and rented prior to the second building beulg started. He said it would be at least a year before constiuction could start if the Boaid is interested 'ui inoving forward with this project. He explained they would have to meet with the current owner, Dave Kloeber, get all the entitlement work done, talk to lenders to finance the project, do a marlcet study, and fmalize consti-uction plans before the project could start. Nawrocki stated he was opposed to changing the development agreement to allow the consti-uction of two rental buildings for the followuig reasons: 1. He feels there is enough rental property uz Cohullbia Heights already 2. He is opposed to downsizulg the utut sizes 3. He is opposed to five stories instead of four-because there were proinises made to residents of the Cheery Heights neighborhood. 4. He is concerned about what happens if the buildings are not rented to 90% capacity 5. He questioils what the buildings will loolc lil~e in 25 years Economic Development Authority Mulutes Page 4 Septeinber 22, 2009 He tlunlcs that ownership of property generally works better long term as people tend to tal~e care of their property and ulvest in it if they own it. He doesn't thinlc concentrated rental is in the best interest of the city. Nawrocl~i said he received a inessage fiom Gerry Hei~ringer, who was absent from this ineetulg, that he is opposed to changulg the Development Agieement to allow rental apartments also. Szurek stated she would rather have a nice looking rental building that is 90% filled than a condo build'u1g that is half full. Although, she was concerned whether the project would draw people willing to pay a higher end rent consider'vig where the building would be located. Peterson stated he tlunlcs the buildings in St. Aiithony and New Brighton are well designed and are nice additions to the cities. He, too, is concerned about constructing a five story build'uig as proposed. He said the four story limit was agreed upon in the Development Agreement to appease the residents of the Cheery Heights neighborhood to protect tlleir view as much as possible. Kelzenberg, Szurek, and Diehin also concurred that they could only support tlus project if the new build'ulgs would not be any higher tha.n the present condo building. Diehin said she respects Herrlliger's and Nawrocki's concerns about changing the plan to allow the construction of rental apartments, but has to consider what the best step would be to further the development of that corridor. She said it inay not be exactly what we wailt to happen there, but we have to be realistic. and adapt to what the market will bear a.nd the type of housuig people are seeking. These types of build'ulgs seem to be working in other coimlzuivties. She suggested that the Developer talk to t11e residents of the Condo building and get their support of this project prior to any heax'vlgs that will be held. She, too, was concei-ned about gettu~g people to pay high rents when the sale price of the condos have fallen and are quite low in comparison. Boai-~lzan said they would consider changing the design to a four-story building if they could gaiil support for the project. It would inean decreasulg the iuuts from approximately 120 units/building to 100/build'ulg. If the City Council doesn't want rental build'u7gs, they will wall~ away and pursue projects in other cities, Fehst stated that according to the Fue Department, the biggest probleins they face in regards to rental property is with the single fainily homes that are rented, not the well run a.nd managed larger complexes. Boai-tnan agreed, and said you ileed building with 80-100 units to make a manageinent coinpany viable, wluch helps keep the buildings in good repair. He said residents tend to be attracted to on-site masiagement that provide safety, good policing, a11d established rules for the occupa~its Clark said this project would provide a product that we don't currently have in Columbia Heights. Su1ce the Board seeined interested in the plan, staff will ineet with Gassen and Boaxman and establish an estin~ated time line, set up tours of some siinilar projects, and discuss options. He told Board meinbers there are two thulgs that would require action. 1) the Developinent Agreement would have to be amended. 2) the construction docuinents would have to go tluough the approval process by the City Commissions and the City CounciL Economic Development Authority Minutes Page 5 September 22, 2009 PROPOSED PURCHASE OF 4235 WASHINGTON ST Clark explained that as pai-t of the Scattered Site TIF District, the City is purchasing blighted properties uz the foreclosure market usiiig funds fronl the existing C8 TIF District. As part of this project, The City has the opportuiuty to purchase the property located at 4235 Washingtoil St for $39,000, plus closing and demolition costs. The subject property is on a 5,160 sq. ft. lot with a single-family home that is 490 sq. ft. that was built in 1923. The house was minimal.ly maintained and all the copper has been strip~ed from the house. The neighbors actually brought this property to staff's attention because of the transient ownerslup of the propei-ry due to the size of the prunary structure. Staff negotiated for three days on this property and feels tlie price is approximately $3,000-$4,000 more thail we nonnally have been paying, but also recoglvzes that the demolition costs should be less than other properties due to the size of tlle structure. Tlus house does meet all the guidelines set by the EDA for acquisition: 1) Acquisition price of $55,000 or less 2) All homes purchased will be demolished 3) Hoines acquired should fall ulto one of the following categories-evidence of struciural problems, hazardous conditions ulclud'vlg mold, fiuictional obsolescence, or extensive physical deterioration 4) Residual vacant lots shall meet existing zoning standards for purposes of rebuilding 5) Recognition that extenuating circuinstances inay require deviation from the above policies. The house ineets the functional obsolescence guideline due to the 490 sf size of the structure. Nawrocki asked ho~~ much it will cost to demolish the sti-ucture since there are three buildings on the site. Clark said they estuilate the deiliolition costs to be approximately $6,000. Motion by Dielull, seconded by Szurek, to waive the Reading of Resolution 2009-27 approving the acquisition of 4235 Washington St, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Dielun, seconded by Szurek, to adopt Resolution 2009-27 approving the acqnisition of 4235 Washington St and furtliennore, to authorize the EDA President and EDA Executive Director to enter into an agreement for the salne. All ayes. MOTION PASSED. COLUIl~IA H~IGHTS ECONOMIC D~VEL,OPMENT AUTHORITY RESOLUTION NO. 2009-27 R~SOI~UTION AUTHORIZING EXECUTIOIOT OF A PURCI~ASE AGREEMENT ~OR CERTAIN REAL PROPERTY LOCATED AT 4235 WASHIlVGTON STREET NORTHEAST IN THE CITY AND ASSIGNIVIENT THEREOF TO TH~ COLiTMSIA HEIGHTS ECONOMIC D~VE~,OPMENT AUTHORITY Section 1. Recitals. 1:01. The ColuinUia Heighfs Economic Development Authority (the "Authority") adini~listers the Downtown CBD Redevelopment Project (the "Project") withi~~ the City, which was established under Miiuiesota Statutes, Sections 469.001 to 469.047 (the "I~A Act"). 1.02. The Authority has uildertaken a program to acquue homes ui the Project in order to address foreclosure problems and remediate and prevent the emergence of blight. Economic Developinent Authority Minutes Page 6 September 22, 2009 1.03 City staff have negotiated a Real Estate Purchase Agreement with the Fannie Mae (the "Seller") dated as of September 21, 2009 includiug all related addenda and disclosures thereto (collectively, the "Purchase Agreeulent"), for real properiy located at 4235 Washington St~eet Northeast and legally described as follows: Colwnbia Heights Aimex to Minneapolis, Anoka County, Mumesota, North 10 feet of Lot 23, and all of Lot 24, Block 31, Coluinbia Heights Aimex (the "Property"), which Purchase Agreement is coiitingent upon approval by the Econornic Developn7ent Authority. 1.04. The Purchase Agreement has been prepared and subinitted to this Authority aaid is on file with the City Manager and/or the Executive Director of the EDA. Section 2. Approval and Assi ~.iig nent. 2.01. The Purchase Agreement for the Property is hereby a~proved, and the execution of the Purchase Agreement by the EDA is hereby ratified. Pursuant to the Purchase Agreement, the EDA will purchase the Property for $39,000. City staff and officials are authorized and d'u•ected to take all such other actions to complete the purchase of the Property, including without limitation execution of all documents and agreeinents related to such transaction. 2.02. Contingent upon approval of the Authority, the City hereby assigns its interests u~ the Purchase Agreevsent to the Authority. City staff and o~cials are authorized and duected to talce all such other actions to complete the assigmuent of the City's uiterests in the Purchase Agreement to the Authority, including without limitation executioil of any docuinents and agreements necessary to effectuate such assigmnent. Passed this 22nd day of September 2009 Offered by: Dieluu Second by: Szurek Roll Call: All ayes ATTEST: Shelley Hanson, Secretaty ADMINSTRATIVE REPOR'I'S- 47th and Central Avenue IJpdate- President Gary L. Peterson Clarlc explauled we have to go back to the Met Council for a 3rd extension for the Grant to consh-uct the parking rainp as pai~t of the cominercial developinent of tlus site. I~l Februaiy we were told we wouldn't be granted another extension. However, when staff spolce with our Met Council representative, he said 90% of the projects that were granted funds have stalled. He said he would push for an extension with the stipulation that worlc must conunence in 2010 and be complete Uy 2011 in order to receive the gra.nt. If not done, the money wouid not be paid. Based on that, staff will go before the CDC of the Met Council to formally ask for the extension. Staff will also contact Aldi's and see if they will give a comnutment to the project. The Developer told Clark he can obtain the financing if he has Aldi's and can fill the retail space, which he claims is 50% comuutted at tlus time. Claslc stated that the banlc has hued an Appraiser to provide them with ulforination regarding tlus project, so movement is being made. Economic Development Authority Minutes Page 7 September 22, 2009 37th and Central Ave- There is nothing new to repoi~t on this. October 27, 2009 EDA Meeting- It was decided not to cancel the ineeting at this time. If nothing comes in, it will be cancelled at a later date. However the HRA meeting will still be held that ivght at Parlcview Villa at 7 pm. OTHER SUSINESS As discussed above, the next regular IIRA/EDA ineeting is scheduled for Tuesday, October 27th, 2009 at 7 pm. The meeting was adj ourned at 8:3 0 pm Respectfully subnutted, Shelley Hanson Secretary