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HomeMy WebLinkAboutEDA MIN 02-22-11 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE REGULAR MEETING FEBRUARY 22, 2011 The meeting was called to order at 7:00 pm by President-Gary Peterson. Members Present: Bruce Nawrocki, Gary Peterson, Bobby Williams, Donna Schmitt, and Gerry Herringer (arrived 7:05 pm). Members Absent: Tammera Diehm and Marlaine Szurek Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. Clark administered the Oath of Office to Gary Peterson and Donna Schmitt. Diehm will take the oath of office later. 2. PLEDGE OF ALLEGIANCE- RECITED 3.ELECTION OF OFFICERS Chair- Williams nominated Peterson for Chair. There were no further nominations. All ayes. Vice Chair: Williams nominated Szurek for Vice Chair. There were no further nominations. All ayes. Secretary/Treasurer: Williams nominated Diehm for Secretary/Treasurer. There were no further nominations. All ayes. 4.CONSENT AGENDA 1.Approve the Minutes of November 23, 2010. 2.Approve the Financial Report and Payment of Bills for November and December 2010 and January 2011 per Resolution 2011-01 Questions from members: Nawrocki stated that he had not received any information regarding Red Wing’s Rental Inspection Program being challenged in court that was noted in the minutes of the November meeting. Cartney stated the only reference she could find was an article dated from 2008. Staff will call Red Wing to see if there was something more recent. Nawrocki questioned the payment to BNC on the November detail. Clark told him it was the TIF payment for the Huset Park Development as they are now the owner of the remaining property. He also questioned the negative balance of ($41,000) on page 8 of the report. Staff will have to ask Finance for the detail of this entry. Nawrocki then questioned the Federal Grant Pass Through amount on page 5 of the December Report. Cartney explained that was the CDBG funds that were received for the demolition of the properties in the Sheffield area. He then questioned entries on page 6 for the Ad Valorem and Area Wide Tax line items. He wants an explanation of what those entries mean. Staff EDA COMMISSION MINUTES PAGE 2 FEBRUARY 22, 2011 will check with Finance to get details on these entries. Nawrocki then questioned the $51,000 transfer from EDA Admin as reflected on page 10. He wants the details of where the funds originated and what they are for. Nawrocki asked what the payment on page 1 on the January Report to AME was for? Cartney told members it was to the Contractor who demolished four single family homes and one duplex. He then questioned the $7,500 that was transferred in from the EDA Admin fund noted on page 7. Staff told him they would check with Finance for an explanation of that posting along with the one previously noted in December. Then Nawrocki questioned the CDBG expenditure on page 9 of $50,687. Cartney said it was a carryover amount to pay for additional demolitions as approved in the amendment for use of the CDBG funds. On page 14, Nawrocki questioned an amount for $12,030 that was posted for property acquisition. Staff responded that they are working with Finance on this posting as they believe it was posted to the wrong account. It was the amount paid for the water and sewer disconnects for several properties. Finance will correct the entry if need be. Herringer questioned the payment on page 3 for NE Bank Credit Ca. for $115. Staff responded it is the department credit card payment for a seminar fee. Then the payment of $273.27 to PERA was questioned. Clark explained that was the payment to cover the employee’s share of the PERA contribution for the optional furlough time that was taken by him in an effort to save the City some money. Motion by Williams, seconded by Schmitt, to waive the Reading of Resolution 2011-01, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Schmitt, to approve the minutes and to adopt Resolution 2011-01, approving the Financial Report and payment of bills for November and December 2010, and January 2011. All ayes. MOTION PASSED. EDA RESOLUTION 2011-01 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR NOVEMBER AND DECEMBER 2010 AND JANUARY 2011 AND PAYMENT OF BILLS FOR THE MONTHS OF NOVEMBER AND DECEMBER 2010 AND JANUARY 2011. 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 months of November and December 2010 and January 2011 has been reviewed by the EDA Commission; and EDA COMMISSION MINUTES PAGE 3 FEBRUARY 22, 2011 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 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 22nd day of February, 2011. MOTION BY: Williams SECONDED BY: Schmitt AYES: All ayes BUSINESS ITEMS th 5. 37 and CENTRAL PROPOSAL Clark introduced Chris Little (owner and developer) and Mark Wold (O’Reilly’s representative). On June 24, 2008 the City of Columbia Heights and the EDA entered into a Contract for thth Redevelopment with 37 and Central LLC to redevelop the southwest corner of 37 Avenue and Central Avenue. The redevelopment plan included a 9,000 square foot commercial building. This project has had public financial assistance. The following assistance was approved as part of the Development Contract: $100,000 Anoka County EDA Levy for land acquisition costs $75,000 CDBG for land acquisition costs - $30,000 CDBG demolition $30,000 State Aide Road funds for turn lane $133,198 Land Value Write downs - $21,800 interest write down for loan Total in grant and in-kind assistance $389,998. EDA COMMISSION MINUTES PAGE 4 FEBRUARY 22, 2011 On May 11, 2009 the EDA Amended the redevelopment contract to change the commencement date from May 1, 2009 to May 1, 2010 and to change the completion date from January 1, 2010 to January 2011. These dates will need to be amended again. NEW PROPOSAL th Chris Little would like to discuss a new proposal with the EDA for 37 and Central. The new concept would include a 7,500 square foot O’Reilly auto parts store. The new store would rd relocate the existing business from 43 and Central. The building in concept meets the City’s design guidelines and would be located at the southeast corner of the lot with parking to the north. If the EDA approves the concept, amendments to the Development Contract would be acted on at the April EDA meeting to approve a different type and different sized structure from the original proposed plan. Staff seeks direction from the EDA on the proposal and contract amendments Questions from members: Diehm who was not present did forward some comments on the new proposal. While she understands that redevelopment of that site is market driven and what might have worked five years ago, won’t necessarily work now, she is concerned about the level of financial assistance that was approved for this site. She isn’t necessarily against the new proposal, and thinks the new building looks fine and meets our Design Guidelines. She just questions whether the EDA should re-negotiate the terms of the assistance since the overall scope of the project has changed. Therefore, staff stated there are three options the Board can choose: 1.Turn down the new proposal, and have the Developer keep looking for other options. 2.Accept the new proposal and go ahead with existing terms of the Contract. 3.Accept the new proposal and negotiate the amount of assistance to be granted if the concept is acceptable to the members. Nawrocki asked how much the City currently has into this project. Clark stated that the City purchased three properties and then did a write down of the land values. Since the purchases were made before he came, he would have to research the total purchase prices and what funds were used to purchase the properties. He noted that some of the costs are included in the figures above and notes that funds from Anoka County EDA levy were also obligated for this project. Walt said that Chris Little also has invested a lot in this project over the last three years. Chris agreed and stated he paid between $550,000-$575,000 for the Chutney property, has paid over $100,000 for Engineering services to help design something that would work on this site, as well as the interest costs he has paid on the loans thus far. He said he has put forth a lot of effort to get the property developed with something he feels will be a good fit for the site and surrounding area. Chris stated that he will be lucky to come out even on this venture. And as time goes by, that will become more difficult. EDA COMMISSION MINUTES PAGE 5 FEBRUARY 22, 2011 Schmitt asked several questions to get a better understanding of the background of this project. Clark explained to the members that if the Board accepts this concept, it would re-open the development agreement and the terms of the agreement could be amended at that time. Chris would then have to decide if the terms are acceptable to make the new project work for him. Peterson said that Diehm was mostly concerned with the financial aspect of the project, and wasn’t against the project as a whole. Peterson thinks it is an attractive building and doesn’t have a problem with the plan. He thinks it would have minimal impact on the surrounding residential area since it will be strictly a retail store in a nice, new building that will be positioned close to the intersection. He would rather see something constructed that will add to the tax base, than to let it sit empty. He thought it would be a good fit for the area and asked Williams how it would impact his business. Williams also thought it would complement his business. He said they buy parts from them, so it would be advantageous to have them located nearby. Both he and Peterson thought it was important to keep a local business in our City. Mark Wold said the current O’Reilly’s building size is only 4,000 sf and parking is a problem on that site. They prefer to re-locate within Columbia Heights, but will look elsewhere if this proposal is not approved. Wold told members they are building a similar designed store in Wisconsin. He explained how they would place the store on the southeast corner of the property and utilize the property on the west and north sides for parking. He stated this would be strictly a retail store and there would be no auto repair work taking place on site. Heringer asked what the market value of the property would be when it’s done? Wold said he expects the construction of the building to be approximately $750,000-$800,000 and isn’t sure what the land would be valued at. Herringer said his first inclination was not favorable since we have so many automotive centers up and down Central Avenue already. But he also realizes the options are limited for this site due to the size, access, and being adjacent to residential property. He ultimately feels it is important to get something built on the site and to get the property back on the tax rolls. Schmitt stated that if it were a new auto store trying to locate on this site, she may not be in favor of this, but allowing a current business to move within our city makes sense. She also would like to see something built there and not have it sit empty. She thought the design of the building would be an improvement to what was there previously and what is there now. Wold said he thinks this location would be great for them. There isn’t another auto store south of this location for quite aways. O’Reilly’s thinks they will be able to draw customers from a large area from that location. The site would provide about 33 parking stalls as proposed. It was noted that this number wouldn’t really be enough parking for a restaurant if one was constructed about this same size. Chris said he has tried several different options for the site and due to the shallow depth of the site, it is hard to make something work. EDA COMMISSION MINUTES PAGE 6 FEBRUARY 22, 2011 Nawrocki didn’t feel it was the best use of the property, but because of the economy, there aren’t many options to consider. He is concerned about the impact on the residents and the traffic in the alley, as well as the financial impact for the City. Clark said since the consensus was to consider the new proposal, he would put some figures together and get estimates on what the taxes would be for the Board. The Board can then decide if any of the financial terms need to be revised. Chris and O’Reilly’s will move ahead with negotiations and will bring a formal plan back to the City. 6. ALLOCATION OF FUNDS FOR CITY’S REHAB INCENTIVE & LOAN PROGRAM Staff requests that the Columbia Heights Economic Development Authority (EDA) authorize $50,000 of funding for the Columbia Heights Rehab Incentive Program. Both the Rehab Incentive Program and the Deferred Loan Programs are included in the Housing Maintenance Plan 2008 – 2017, approved by the EDA on August 18, 2007. The Greater Metropolitan Housing Corporation (GMHC) administered the programs for the City in the past, but staff will administer the program from now on, and will be able to offer greater and more responsive services to our residents since GMHC is closing their Northeast office and may be closing other offices. Rehab Incentive Program The Columbia Heights Rehab Incentive Program is designed to assist homeowners in the City in maintaining and improving their homes by providing a rebate to homeowners after an improvement has been completed. The upgrades foster a stabilization and revitalization of the City’s housing stock. Homeowners of single-family or owner-occupied duplexes with a household income at 115% of the area median income or less are eligible to apply. Calculated as a percentage of total construction costs, a rebate payment of 10%, 12% or 15% may be granted, up to $3,000. Examples of eligible improvements include repairing or replacing dilapidated porches, roofs, retaining walls, siding, exterior steps or railings and heating, plumbing or electrical systems. Single-Family Home Deferred Loan Program (SFHD) The purpose of the Single-Family Home Deferred Loan Program (SFHD) is to provide low- interest loans to homeowners of lower income to complete structural improvements that would help maintain the quality of their homes and the City’s housing stock. Assistance is targeted at homeowners who need to perform home maintenance, but who may not be able to pay a monthly debt service of a conventional loan. The SFHD provides half of the total project costs, or up to $7,500, in a deferred loan to homeowners making 80% of the median area income or less. To qualify for the program, the homeowner must provide matching funds for the remaining project costs. Home equity loans or an MHFA loan qualify as matching funds. Exterior home improvements related to health and safety, code violations or energy efficiency, such as windows, siding and roofs would be eligible. EDA COMMISSION MINUTES PAGE 7 FEBRUARY 22, 2011 Repayment of the loan, plus simple interest of two percent, will be required upon sale of the house or transfer of title. The homeowner can use the proceeds from the sale of the house to pay the loan. Repaid loans will be returned to the funds available to finance future loans. A lien applied to the property ensures that the loan is repaid. Currently, there is a $24,000 balance remaining in this program, so no additional funds are being requested at this time. A new Resolution eliminating any funding for the deferred loan program was passed out at the meeting. However, Staff recommends the EDA fund the Rehabilitation Incentive Program in the amount of $50,000 from Fund 420– Capital Improvement Development Fund, so the Rehab Incentive Program can be continued. Clark explained that Staff has closed five loans in the last 6-7 weeks. Staff told members that by taking over the programs internally, we are saving $15,000/year that was paid to GMHC to administer the two programs on our behalf. Since GMHC will be closing their NE location, this provides better service and is more convenient for our residents to access. We have received very positive feedback from those we have had contact with during the last two months. Clark said this also cuts down on the duplication of services that was taking place. We already provide housing and construction information to owners, we handle the paperwork and issue permits for the work, and do the inspections to ensure compliance with the building code. They were duplicating some of these things as part of their process. Questions from members: Nawrocki asked if anyone had contacted St Anthony since an article in the paper quoted them as saying they thought the contract with GMHC was a valuable service. Clark stated he had a conversation with Mike Mornson, the City Manager, regarding this matter. He explained that St Anthony doesn’t have a large staff and there is no one there who is equipped to handle this internally for them. St Anthony contracts out for a lot of their services. Walt said Staff has expertise in this area and will provide better service to our residents. Herringer said he commended staff for saving the city money by re-assessing workloads during this slow redevelopment time and for taking on other tasks to maintain services for our residents. Nawrocki asked what fund the Rehab Incentive funds would come from. Clark answered the 420 account. Nawrocki wanted to know where that shows up in the budget. Clark explained that the 420 account is a Capital Fund and is not annually budgeted. Expenditures out of this account are made by Resolutions approved by the Board and are not line item expenditures. Nawrocki asked how much we would be allocating if GMHC still was in charge of the programs? Clark told him we would be allocating the $50,000 and the $15,000 to GMHC. Then Nawrocki stated he thought the $15,000 saved should be taken from the 420 account and put into the General Operations Budget. Clark explained to Nawrocki that the 420 Fund is the only nest egg the City has to spend on redevelopment and housing expenditures. The $15,000 saved by not contracting with GMHC can now be spent on other redevelopment. Schmitt thinks it’s better to keep the funds in the 420 Account. Peterson agreed and said any expenditures out of that account have to be acted on by the EDA. EDA COMMISSION MINUTES PAGE 8 FEBRUARY 22, 2011 Motion by Schmitt, seconded by Herringer, to waive the reading of Resolution 2011-02, there being an ample amount of copies available. All Ayes. Motion by Schmitt, seconded by Herringer, to Adopt Resolution 2011-02, a Resolution Approving funding for the Rehab Incentive Program in the amount of $50,000 from Fund 420 –Capital Improvement Development Fund. Roll Call: Schmitt, Peterson, Herringer, Williams- aye and Nawrocki-abstained. MOTION PASSED. EDA RESOLUTION NO. 2011-02 A RESOLUTION APPROVING FUNDING FOR THE REHAB INCENTIVE PROGRAM ($50,000) AND THE SINGLE-FAMILY HOME DEFERRED LOAN PROGRAM (SFHD) ($35,000) WHEREAS , since 2002 the Greater Metropolitan Housing Corporation (GMHC) has provided housing consulting services for the City of Columbia Heights, and WHEREAS, over time the majority of their service time has centered on the City’s Rehabilitation Incentive Program and the City’s Deferred Loan Program process, and WHEREAS , over time the City’s Community Development Department, in order to provide better service for the residence of the community, has increasingly taken over the duties of providing information regarding home buying and rehabilitation programs, and WHEREAS , the Community Development Department has all of the skill sets necessary to run any type of housing program including knowledge of financing, real estate and construction, and WHEREAS , the Economic Development Authority (EDA) does not have to take any formal action to sever their relationship with GMHC since their contract with the EDA ended at the end of fiscal year 2010, and WHEREAS , this resolution seeks to authorize and provide additional funds for the continuation of the City’s Rehabilitation Incentive Program and the City’s Deferred Loan Program, to be administered by the City, NOW THEREFORE BE IT RESOLVED THEREFORE, BE IT RESOLVED, that the EDA allocates $50,000 for the Rehab Incentive Program and $35,000 for the Single-Family Home Deferred Loan Program from Fund 420 – Capital Improvement Development Fund. Passed this 22nd day of February, 2011. _________________________ President ___________________________ Walter Fehst, Executive Director EDA COMMISSION MINUTES PAGE 9 FEBRUARY 22, 2011 7. MEETING DATES Over the past year staff has had discussions with Authority members regarding a discussion of meeting times at an EDA meeting. The EDA meets on the fourth Tuesday of each month, resulting in about 8 meeting nights annually. Staff would like to propose, for discussion purposes, having the EDA convene on the first Monday of each month at 6:30 p.m., prior to the Council work session. The theory behind this is that for those EDA meetings that have a short agenda they can be completed by the 7:00 p.m. work session start time. If there is a need for a longer agenda, the EDA meeting would effectively consume the first thirty minutes or so of the first part of the work session and the work session would start immediately following the EDA meeting. On the rare occasions where a lengthy meeting is required the EDA can always call a special meeting. A number of cities convene their EDA or HRA commissions prior to the start of a Council meeting, with the purpose of consolidating meeting nights. Clark said Diehm had suggested this new schedule and was in favor of trying it out. He further explained that four meetings a year tend to get cancelled because of the HRA meetings being held at Parkview Villa the same night. Clark stated it is difficult sometimes to have EDA meetings at that location and that it confuses the residents in the process. If we change to this new schedule, we would have more meetings, but they would be shorter in duration and would be scheduled prior to the work sessions, so it would free up a night for commission members. He realizes that discussions will need to stay focused, but feels it is a better utilization of time for everyone. Staff is available to answer questions regarding any of the agenda items prior to a meeting. Williams said it would be harder for him to get here by 6:30 pm, but he is willing to try it to free up a Tuesday evening. Nawrocki said he doesn’t see a problem having the EDA meetings on the same night as the HRA meetings at Parkview Villa and favors continuing on the same schedule. Schmitt suggested we try it for six months and see how it works. It was noted that special meetings can always be called for items that may require more time for discussion. Clark said he will bring back a by-law change and that the new schedule could begin in April. 8.DISCUSSION REGARDING MADY’S ACQUISITION Herringer and staff met with Gene Mady earlier today. Clark explained to Commission member Schmitt that the City made an offer to purchase the property last year, but the deal never transpired due to partnership issues. Mady went to Court in late fall to dissolve the partnership. The Court told him that in order to dissolve the partnership, one partner must buy out the other. There was a discussion to consider whether the City is still interested in purchasing this property if it becomes available once the ownership is determined to be one party or the other. Clark gave Schmitt a summary of previous terms/offers that were made during the negotiation process. She asked what the City’s vision was for the site? Clark said that would be determined by the market conditions at the time it is redeveloped. He said at this point it is a long term vision, and no specific plans are in place for the site. The opportunity to purchase will only be considered if the price and terms are reasonable. EDA COMMISSION MINUTES PAGE 10 FEBRUARY 22, 2011 Peterson asked if the City eventually purchases the property, how long it would be until it could be razed? Herringer stated that depends on how much the City is willing to spend since there are potential re-location fees, leases to buyout, etc. that would need to be negotiated before a closing could take place. Nawrocki didn’t think it was an advantage to the City to purchase this property. He said there are other sites that can’t be re-developed now, so why purchase this one? He thinks that buying out leases and paying re-location expenses could be even more detrimental to the City. Clark said he was updating the members on the fact that this site may become available again, and that he would need to confer with the EDA attorney regarding the process the City would need to follow if they decide to enter into negotiations again. Since there was a general consensus to proceed, Staff will come back with a report after speaking with the EDA attorney. 9.ADMINISTRATIVE REPORT 1)BNC/Ryland Clark reported that BNC National Bank and Ryland have been working together and that Ryland will move forward with the construction of the final 51 units in Phase 2. 2)Grocery Store He told members that Aldi’s has approached the City and informed staff that they will be constructing an Aldi’s in Columbia Heights. They will bring in their Site Plan Application in March for the April Planning & Zoning Commission meeting so they can begin construction yet this spring. 3)Buffalo Wild Wings-The store closed permanently February 7, 2011. Clark reported that staff has been in contact with the owner of the building to see what their plans are for the building and if the City can be of any help in referring a new tenant. Staff had also contacted Buffalo Wild Wings to see why they decided to vacate the space. Corporate said they wanted to go to a new prototype look for their establishment and that they couldn’t remodel that site to their satisfaction. 4)Parkview Villa Clark informed members that Diehm will be calling a special meeting of the HRA for th March 7 prior to the work session to interview three candidates for the vacant HRA position. Nawrocki asked how many candidates had applied and who they were. Clark responded that Nelson, Miner, and Sufka had applied for the vacant position. Clark also reported that RFQ’s went out for the sale of Parkview Villa. They are due back in March and interviews will be scheduled with the companies that respond. EDA members will be asked to participate in these interviews. Nawrocki noted that he didn’t think goals A-E should be modified. EDA COMMISSION MINUTES PAGE 11 FEBRUARY 22, 2011 5)Medtronics Clark reported the remodeling of the Medtronic facility is moving ahead smoothly. Medtronic will be moving approximately 500 employees to this facility in Phase 1 and up to 200 more in Phase 2. 6)Mady’s This was discussed previously in the meeting. 7)Image Committee Staff continues to work on this committee with the goal being to enhance the image of Columbia Heights through various means including a newly designed website. 8)Scattered Site Staff will bring back information on this matter in May or June. 10.OTHER BUSINESS Nawrocki stated the Anoka Union had an article that the CDBG requests had been submitted and he noted that Columbia Heights did not submit a request this year. Clark said that Columbia Heights didn’t have any programs that would fit their criteria this year. Columbia Heights has received funding the last couple of years to help us accomplish some of the goals we had as a City. Anoka County needs to spread the funds out to other communities, and this year their requirements were established to help other communities and their programs. Clark said we wouldn’t have been successful in obtaining any funds since we couldn’t meet the criteria. Staff will get him a copy of the requirements. The next meeting is scheduled for Tuesday, March 23, 2011 at City Hall. The meeting was adjourned at 9:10 pm. Respectfully submitted, Shelley Hanson Secretary