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HomeMy WebLinkAboutEDA MIN 05-25-10ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING May 25, 2010 The meeting was called to order at 7:00 pm by President -Gary Peterson. Members Present: Bruce Nawrocki, Tammera Diehm, Gary Peterson, Gerry Herringer, Bobby Williams, Bruce Kelzenberg, and Marlaine Szurek (arrived at 7:10 pm). Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. 2. PLEDGE OF ALLEGIANCE - RECITED 3. CONSENT AGENDA Approve the Minutes of April 27, 2010. 2. Approve the Financial Report and Payment of Bills for April 2010 per Resolution 2010 -07 Motion by Nawrocki, seconded by Herringer, to waive the Reading of Resolution 2010 -07, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki, seconded by Herringer, to approve the minutes and to adopt Resolution 2010 -07, approving Financial Report and payment of bills for April 2010. All ayes. MOTION PASSED. EDA RESOLUTION 2010 -07 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR APRIL 2010 AND PAYMENT OF BILLS FOR THE MONTH OF APRIL 2010. 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 FDA'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 April 2010 has been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statement and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and EDA MINUTES PAGE 2 MAY 25, 2010 WHEREAS, financials statements are held by the City's Finance Department in a method outlined by the State of Minnesota's Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, 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 check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. Passed this 25 "' day of May, 2010. MOTION BY: Nawrocki SECONDED BY: Herringer AYES: All ayes Gary Peterson, President Attest by: Shelley Hanson, Recording Secretary BUSINESS ITEMS 4. 37 "' and Central -2 "` Amendment to the Development Agreement Resolution 2010 -08 On June 24, 2008 the City, EDA and 37 and Central LLC, entered into a contract for private redevelopment, located at the northwest corner of 37 "' and Central Avenue. The minimum improvements in the contract is construction of a building containing at least 9,000 square feet of commercial redevelopment and related improvements. On April 28, 2009 the EDA extended the commencement and construction dates for one year. Due to current economic market conditions and exploration of other development options, 37 and Central LLC has requested completion date amendments to the development contract. The following table represents the amendments. Original Date (First Amendment ) Proposed Amended Date Commence Construction May 1, 2010 May 1, 2011 Complete Construction January 1, 2011 January 1, 2012 EDA MINUTES PAGE 3 MAY 25, 2010 Staff recommends the EDA amend the development contract as requested to change commencement and completion dates for the redevelopment of 37 and Central. Questions from members Nawrocki asked what constitutes a "commencement date ". Carntey told him when the building permit is issued. Motion by Herringer, seconded by Diehm, to waive the reading of Resolution 2010 -08 there being ample copies available. All ayes. MOTION PASSED. Motion by Herringer, seconded by Diehm, to Adopt Resolution 2010 -08 approving the second amendment to the contract for private development between 37 and Central LLC, and the EDA dated June 24, 2008, . changing commencement and completion dates. All Ayes. MOTION PASSED. RESOLUTION NO. 2010-08 RESOLUTION APPROVING A SECOND AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND 37` AND CENTRAL LLC BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights Economic Development Authority ( "Authority ") as follows: Section L Recitals 1.01. The Authority and 37th and Central LLC (the "Redeveloper ") entered into a Contract for Private Redevelopment dated June 24, 2008, as amended by a First Amendment thereto dated April 28, 2009 (the "Contract "), setting forth the terms and conditions of redevelopment of certain property within the Redevelopment Project, generally located west of Central Avenue at 37 "' Street. 1.02. The parties have detennined 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, 2011 and completion of construction to January 1, 2012. 1.03. The Board has reviewed a Second Amendment to the Contract and finds that the execution thereof and perfonnance of the Authority's obligations thereunder are in the best interest of the City and its residents. Section 2. AuthorityApproval; Further Proceedings 2.01. The Second 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. EDA COMMISSION MINUTES PAGE MAY 25, 2010 2.02. The President and Executive Director are hereby authorized to execute on behalf of the Authority the Second 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 25th day of May, 2010. President, Gary L Peterson ATTEST: Secretary, Shelley Hanson SECOND AMENDMENT TO THIS AGREEMENT, made on or as of the 25th day of May 2010, 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 37 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, as amended by a First Amendment thereto dated April 28, 2009 (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 hmprovements (as defined in that section) located on the Redevelopment Property and substantially complete such construction by January 1, 2011; 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: EDA COMMISSION MINUTES PAGE 5 MAY 25, 2010 1. 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, 2011 and must substantially complete construction of the Minimum Improvements by January 1, 244 2012 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. 1. Clark told members that staff recently had a meeting with various parties regarding the Root property located at 40 and University Ave. This property recently had a fire that severely damaged the structure so it needs to be demolished as soon as possible for safety reasons. However, there are concerns about the amount and type of contamination that may be present on the site. Community Development staff has taken over the demolition process from the Fire Department. Bids were obtained for an Environmental Survey and once that is complete, staff will obtain bids for the demolition, hopefully by July. Clark stated that the owners have a DEED grant to help with the assessment costs that would cover 75% of the costs with a 25% equity match. The owners, however, are having a hard time coming up with the $5,000 estimated as their share, to move forward with this. Clark stated the City has approximately $60,000 in abatement costs so far against the property, and he estimates another $25,000 more in the future, so he doesn't want to lose this grant if they don't make the match. Nawrocki asked who would be paying for the clean up? Clark explained that all expenditures would be assessed to the property through the abatement process. Nawrocki stated that the abatement costs may go over $100,000 and he is concerned that the property may not be worth that much, and therefore, the City would not recoup its expenses. Clark responded that the building is dangerous and has to come down. The only way to accomplish this is to go through the process being discussed. Herringer asked how large the parcel is. Clark stated it is approximately 2 '/z acres in size and reminded members that any action taken will go to the City Council for approval. EDA COMMISSION MINUTES PAGE 6 MAY 25, 2010 2. Clark reminded Commission members that a goal setting session would be held this summer. A survey was enclosed in the agenda packets in order to create a baseline for concerns and issues. The survey was distributed to the EDA Commission members, the P & Z Commission members, and approximately 30 staff, in order to have a broader based opinion in which to work from. Clark told members his plan is to schedule an Economic Development Summit at the June meeting. He is inviting 6 or 7 Developers to give their opinions as to what they think would be successful re- development projects for the City based on the current market. After listening to the presentations at the June meeting, he would then like to schedule the goal setting session for the July meeting. Nawrocki said the group has done this before. He asked how many staff would be involved in this process. Clark said the only staff would be the City Manager, the Asst. Community Development Director, the Commission Secretary, and himself. Nawrocki asked who the 30 staff people were that Clark had mentioned earlier. Clark clarified that 30 staff would be filling out the survey, not be involved in the goal setting session. Nawrocki thought that people who lived in the community should be filling out the survey instead of employees that don't live here. Clark explained the Commission would be adjourning to go into an Executive Session. He explained the legal procedure that must be followed during this meeting to the members before adjourning to the session. Move to Executive Session at 7:15 pm- To discuss negotiations to acquire Mady /Foss property at 3919 -3927 Central Avenue with possible reference of 3901 Central Avenue. The meeting was re- convened at 8:10 pm. Nawrocki wanted an update on the Grand Central Property Development. Clark told members there isn't anything new to report since the City Council denied the proposal to build two rental buildings on that site. Nawrocki asked if staff has had any contact with the commercial developer. Clark said that the developer had hired a broker, but there hasn't been any recent communication with either of them. Nawrocki then stated he wanted staff to check on the length of grass on the residential portion of that site. Motion by Diehm, seconded by Kelzenberg, to schedule the next regular EDA meeting for June 22, 2010 at the Public Safety Training Room. All ayes. MOTION PASSED. The meeting was adjourned at 8:10 pm. Respectfully submitted, kA (�," Shelley Hanso Secretary