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HomeMy WebLinkAboutEDA MIN 05-02-11 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF MAY 2, 2011 IN CONFERENCE ROOM 1 The meeting was called to order at 6:30 pm by President-Gary Peterson. Members Present: Bruce Nawrocki, Gary Peterson, Bobby Williams, Donna Schmitt, Tammera Diehm, and Marlaine Szurek. Members Absent: Gerry Herringer Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. 2. PLEDGE OF ALLEGIANCE- RECITED 3.CONSENT AGENDA 1.Approve the Minutes of April 4, 2011. 2.Approve the Financial Report and Payment of Bills for March 2011 per Resolution 2011-04 Questions from members: Nawrocki questioned checks on page 4 (#138304 and #138484). Cartney told him they were payments made for the Housing Rehab Rebate Program. Motion by Szurek, seconded by Schmitt, to waive the Reading of Resolution 2011-04, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Szurek, seconded by Schmitt, to approve the minutes and to adopt Resolution 2011- 04, approving the Financial Report and payment of bills for March 2011. All ayes. MOTION PASSED. EDA RESOLUTION 2011-04 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MARCH 2011 AND PAYMENT OF BILLS FOR THE MONTH OF MARCH 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 month of March 2011 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 EDA COMMISSION MINUTES PAGE 2 May 2, 2011 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 2nd day of May, 2011. MOTION BY: Szurek SECONDED BY: Schmitt AYES: All ayes BUSINESS ITEMS th 4. 37 and CENTRAL AMENDED REDEVELOPMENT AGREEMENT Clark reminded members that at the April 4, 2011 meeting the EDA gave a consensus to proceed th with amendments to the 2008 “37 and Central Development Agreement” that will result in the construction of a 7,600 sq. ft. retail facility (O’Reilly’s Auto). The EDA wanted concessions from the developer and in this Agreement there is $45,310 in reduced subsidies. A redlined copy of the Agreement was included in the agenda packet for easier reading of the changes. Highlights are: 1)Minimum Improvement definition reduced to 7,500 sq.ft. 2)Ten year loan reduced to four years 3)Construction start date established as June 1, 2012 (although anticipated commencement date is in 2011) 4)Business subsidy calculations were modified in Section 3.7 (b). It is critical to note that the total of these figures are greater than the actual assistance given to the developer. This is due to idiosyncrasies in State statute definitions. 5)The amount of reduced assistance from the original Agreement is $45,310 calculated as follows: a)Developer to construct the relocated driveway per State requirement at their cost without EDA assistance $30,000 b)Loan reduction from 10 years to 4 years will reduce the amount of interest lost calculation to $13,080 c)Reduction of SAC credits from 4 to 2 will reduce assistance by $2,230 EDA Commission Minutes Page 3 May 2, 2011 Clark told members that this is a three party agreement and upon EDA approval the City Council will have to act on the same. The Agreement follows the guidelines as agreed upon by the EDA at the April 4, 2011 meeting, and as such, staff recommends approval as written. Questions from Members: Peterson and Nawrocki both questioned the start date of June 1, 2012. They thought it would be sooner than that and were concerned that the neighbors would be complaining about the site being dusty for another summer. Clark told members he thought the start date would be sooner than June 2012, but he thought the June 2012 date would give them plenty of time to go through the process so that the Development Agreement wouldn’t have to be amended again. Clark said the process before construction could begin will take a couple of months at the very least. He suggested changing the date to the end of the year, and said he thinks the developer will agree to that. Schmitt said it doesn’t make sense to add dirt and sod to the site, just to have it removed once construction begins. She said the neighbors, unfortunately, may have to put up with the dust for a little longer until the development can start. Szurek also stated it makes no sense to force improvements to the vacant lot since construction will begin shortly. Clark then answered questions on the reduction calculations listed above. st Diehm stated she hopes construction could begin before October 1. She would rather amend the agreement again than to set a start date of June 2012 now. Motion by Williams, seconded by Szurek to change the start date of the Amended Redevelopment Agreement to October 1, 2011. All ayes. MOTION PASSED. Motion by Szurek, seconded by Williams, to approve the Amended and Restated Contract for Private Redevelopment by and between Columbia Heights Economic Development Authority and the City of th Columbia Heights and 37 and Central LLC dated May 2, 2011, with the start date to read October 1, 2011 (as noted in the previous motion). Roll Call: All ayes MOTION PASSED. Clark told members the Amended and Restated Contract for Redevelopment between The City of th Columbia Heights. The EDA, and 37 and Central LLC would go before the City Council for approval th at the May 9 meeting. EDA Commission Minutes Page 4 May 2, 2011 th 5. 828 40 AVENUE PURCHASE AGREEMENT th Cartney told members that in 1999 the EDA purchased property at 828 40 Ave NE with an old TV repair building on the lot. In 2001 the building was torn town leaving a vacant green space. The EDA used CDBG money to purchase the building and for demolition costs. The purchase price was $72,246.50 and demolition $7,117.20 for a total of $79,363.70 of CDBG funds used. th Recently Larry and Millie Kewatt have presented a purchase agreement to buy the vacant lot at 828 40 Avenue in the amount of $10,000 to turn it into a parking lot. The purchase is contingent upon Anoka th County approving an entrance off 40 Avenue and soil compaction tests. Millie plans to relocate her accounting business from Northeast Minneapolis to the vacant building abutting this lot and desires to th use the EDA lot as parking for her business. After a meeting on April 28 with the Millie, she offered to allow the library to use the lot after 3pm and the city to use the lot during Jamboree. According to the Anoka County Assessor’s Department this parcel has a 2011 value of $37,000. The lot is about 6,750 square feet. Cartney said that if the City decides to sell the lot, Tholkes would still be allowed to use the lot for a garden this year and it would be paved in the fall. Walt said he spoke with Becky about the Library’s parking needs. She said the Library could definitely use the extra parking. The Kewatts have said that the Library could use the parking lot 9 months of the year after 3 pm each day. Millie Kewatt told members that she has 6 tax preparers that work for her and that during tax season they have people coming and going every ½ hour. The parking behind the buildings she is considering buying only have 6-7 spots now and she feels she needs approximately 20 spaces. Cartney explained the EDA’s policy discussion should center on the following: 1. Is the purchaser’s offer acceptable? 2. If the offer is not acceptable, is there an alternative price that would be? 3. Are there other considerations that could be made by the purchaser to affect the original price? 4. Overall, what is the benefit to the city of having a vacant green space turned into a private parking lot? 5. Do we even want to sell the lot at this time? th Staff seeks direction whether or not to proceed with a purchase agreement for the sale 828 40 Avenue. EDA MINUTES PAGE 5 MAY 2, 2011 Questions from members: Nawrocki said the property was acquired years ago for possible use as additional Library parking. He was at the Library earlier today and parking was a problem. The lot was full and so were the street th spaces on 40 and down Jackson. He thinks parking for the Library should be the first consideration. Diehm questioned why this Purchase Offer wasn’t brought before the Board for consideration and discussion in an executive session. Clark told her that is usually done if the City is trying to negotiate a purchase of property that becomes available. He said he brought this to the Board tonight as the Kewatt’s purchase of the two commercial buildings adjacent to this lot is contingent upon being able to also purchase this lot for parking. They approached staff and wanted some quick feedback from the Board so they could make their final decision. Diehm suggested that the City retain the lot for the Library’s use and let her business rent or lease some of the spaces. Millie said she would consider leasing if she doesn’t have to expend funds to develop it. Schmitt asked how much it would cost to change it into a parking lot. According to Kewatt, it would cost about $35,000-$40,000 for a 12 stall parking lot. Schmitt asked how many parking spots are required for that type of business. Clark said none are required in that zoning district. Street parking is sufficient. Nawrocki asked what the lot size is. Clark said it is approximately 54 x 125. Peterson said he thinks the price offered is too low. Since the Board hasn’t marketed the lot, he’s not sure what its value is, but he feels that $10,000 is definitely too low. He would possibly reconsider the low offer if he knew for sure that the building’s exterior would be updated or modified to aesthetically improve the entire site. Szurek thought we should keep the lot also. For the amount offered, we’d be better off keeping it for the Library to use. Diehm said if the lot is turned into a Municipal/Library parking lot, there would be many things to consider such as lease fees, and taxes that may be incurred if used as such. She would be open to exploring options, but would need time to obtain information, to make the best decision regarding future long term use of the lot. It would also have to go before the Planning & Zoning Commission first to see if it is consistent with the Comprehensive Plan. Schmitt asked what the lot was worth. Clark responded that the Estimated Market Value is $37,000 and that he has done some checking with others, and that value would be fairly close. Nawrocki said his primary concern would be for the Library’s needs. He brought up the possibility of utilizing the property on Van Buren that the City also owns. It was decided that site is too high and would require a lot of work to make it useable as a parking lot. Clark said he had discussions with the Kewatts regarding their business possibly using the Municipal Parking Lot on Van Buren, but they didn’t think that was a good option for them and their clients. EDA Commission Minutes Page 6 May 2, 2011 Scott Miller, the Realtor listing the property said it is tough to get land sale comps and explained the Kewatts would have to invest $35,000 into making it a parking lot, plus the $10,000 to purchase the land. He has worked hard at bringing a new business into the community and without this lot, the purchase probably won’t happen. They have been working with the SBA in getting all the paperwork in order, and were hoping to get this lot to complete the transaction. He stated he was disappointed that the Board was not more enthusiastic in obtaining new businesses to fill vacant sites and that he thought the $10,000 offer was a fair price. Diehm said that the EDA and Council welcome new business, but since the City wasn’t marketing the lot, and it technically wasn’t for sale, they haven’t had time to seek other information or to discuss the matter. Peterson would love to see buildings occupied, but also wants to see them updated and looking nice. It sounds like the Kewatts want to purchase the buildings since the price was reduced and they became so affordable. However, it doesn’t sound as though they have plans to do any improvements, especially to the exterior. Since the price offered for the empty lot is too low, and the appearance of the buildings wouldn’t change, he is not in favor of selling it at this time for that offer. Diehm thought it would be a good idea for the Board to sit down and set goals for each of the vacant lots the City owns so that staff knows how to respond to these requests. Clark said staff will have further discussions with the Kewatts and research some options, so that further information can be brought back to the Board at the June meeting. 5. OTHER BUSINESS The next meeting is scheduled for Monday, June 6, 2011 at City Hall. The meeting was adjourned at 7:20 pm. Respectfully submitted, Shelley Hanson Secretary