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HomeMy WebLinkAboutEDA AGN 09-06-11AGENDA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Special Meeting Tuesday September 6, 2011 6:30pm City Hall, Conference room 1 1. Call to Order /Roll Gary L. Peterson, President Bobby Williams Marlaine Szurek, Vice President Bruce Nawrocki Tammera Diehm, Secretary /Treasurer Gerry Herringer Donna Schmitt 2. Pledge of Allegiance CONSENT AGENDA 3. Approve Minutes of August 1, 2011 meeting Approve financial report and payment of bills for July 2011 on Resolution 2011 -12. Motions Motion: Move to waive the reading of Resolution 2011 -12, there being an ample amount of copies available to the public. Motion: Move to approve the minutes and adopt Resolution 2011 -12 approving payment of bills for July 2011. BUSINESS ITEMS 4. Review of Scattered Site Housing TIF Plan — no action 5. Allocation of funds for City's Single Family Deferred Loan Program- Resolution 2011 -13 6. Root Property investigation grant Executive Session 7. Discuss purchase of 4641 and 4647 Tyler (Sheffield) Resolution 2011 -14 8. Adjourn ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE SPECIAL MEETING OF AUGUST 1, 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, Tammera Diehm, Bobby Williams, Gerry Hettinger, Marlaine Szurek. and Donna Schmitt. Staff Present: Walt Fehst, Scott Clark, Sheila Cartney, and Shelley Hanson. 2. PLEDGE OF ALLEGIANCE- RECITED 3. CONSENT AGENDA 1. Approve the Minutes of June 6, 2011 for the Special Meeting and Executive Session. 2. Approve the Financial Report and Payment of Bills for May and June 2011 per Resolution 2011 -06 Questions from members: There were no questions /comments on the Minutes or Financial Reports. Motion by Willliams, seconded by Szurek, to waive the Reading of Resolution 2011 -06, there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Williams, seconded by Szurelr; to approve the minutes and to adopt Resolution 2011 -06, approving the Financial Report and payment of bills,for May and June 2011. All ayes. MOTION PASSED. EDA RESOLUTION 2011 -06 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR MAY AND JUNE 2011 AND PAYMENT OF BILLS FOR THE MONTH OF MAY AND JUNE 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 May and June 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 August 1, 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 I- (eights 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 I st day of August, 201 l . MOTION BY: Williams SECONDED BY: SZUrek AYES: All ayes BUSINESS ITEMS 4. RESOLUTION 2011 -07 HRA LEVY BUDGET and RESOLUTION 2011 -08 EDA LEVY BUDGET Clark explained that the 2012 budget for the Community Development Department was sent to the members in the packets. Although some of the Department's budget (fund 201) is not controlled by the EDA, traditionally the EDA reviews and acts on this budget as a whole. The actual EDA portion of the budget is fund 204 and the attached resolutions generate a recommendation to the City Council for levying both an EDA and a HRA levy. The Department's operating budget is straightforward due to the size of the department and no on -going capital and /or rolling stock requirements. This year's budget highlights are as follows 1) The 2012 HRA levy (called a special benefits levy), which is driven by a State formula using City's market value, has been reduced by $22,031 from $240,374 to $218,343. The EDA maximizes the HRA levy as a budget revenue, and the aforementioned reduction is due to market value reductions. The EDA levy has been maintained at prior year levels. 2) The reduction in the HRA levy, coupled with the EDA levy and Parkview administration revenue, balances fund 204 expenditures. As in past years, a small transfer to fund 420, Capital Improvement Development, is proposed. PDA Commission Minutes Page 3 August 1, 2011 3) Fund 201 (Protective Inspections which includes building inspections and planning) has a proposed negative $71,541 difference between revenue and expenditures. The difference will be made up by existing Fund 201 fund balance. The aforementioned loss is a projected worst case scenario and one or two unanticipated projects in 2012 could substantially change these figures. Due to the inconsistency of building inspection revenue, revenue seldom matches expenditures. Fund 201 fund balances are used to offset years in which there are losses and the fund is replenished in years when revenues exceeds expenditures. 4) Staff has curt back a number of line item expenses, especially in the area of professional and expert services. If additional funds are needed, staff will come back to the BDA for expenditures out of Fund 420, Capital Improvement Development. 5) The only major expenditure increase is for computer replacement for all members of the Department (5). The total expenditure (Funds 201 and 204 combined) of $6,125 is consistent with the recommendations of the City of Columbia Heights' IS Division. Clark explained the projections could change if Phase 3 of the I -luset Park Development moves forward. He stated that BNC is in the process of doing a market study since taking over the property from Shafer Richardson. Questions by Members: Nawrocki said he thinks it is premature to act on this department's budget since the Council hasn't seen the rest of the Department Budgets. He also expressed his belief that the Council needs to look closely at the budget, just as the State and Federal governments will be doing. The cuts they will be making could have a large impact on future funds to local governments as well, and we need to plan accordingly. Clark responded that these budgets still go to the City Council for final approval with the rest of the City budget, even if these Resolutions are approved tonight. Fehst told members that the City will receive the LGA amount that was planned on for 2011 and 2012, and explained what changes will be made to the Market Value Homestead Credit next year. Fehst also explained that there are no levy limits, which enables the City to stick with the five year plan in place to reduce our dependence on LGA as part of our Revenue stream. He explained the City froze its budget for 2011 and is holding to a 1% overall increase for 2012 in order to accomplish this. Nawrocki stated that we have a large debt for the Liquor Stores and Public Safety Building that need to be paid off. He believes we need to cut the budget and change the levy amounts and not necessarily stick to the five year plan. Fehst explained that the City actually received an upgrade of two points in its credit rating due to the fact that we established the 4 -5 year program to eliminate the need for LGA monies as a necessary component of our budget revenues. Nawrocki then questioned the Special Levy that Anoka County is collecting on our behalf. Clark stated that this is not budgeted since this is a capital fund, and tonight's action is for the CDA's operational budget. Nawrocki asked what the $37,000 amount was for in the Reimbursement account of the 204 fund. Clark stated that was the Administration Fee for Parkview Villa. EDA Commission Minutes Page 4 June 6, 2011 There was a discussion regarding the 201 Fund (Protective Inspections) and how differences between Revenues and Expenses are handled. Clark explained that the 201 Fluid is separate from the General Fund. Some years we experience a surplus and some years we have a loss. To date, we have a surplus that should help meet the expenses for 2011 and 2012. This fund constantly fluctuates depending oil the economy and construction activity which dictates the type of permits issued. Fehst stated that due to law changes the funds must be kept in the Building Inspection Fund and any surpluses cannot be transferred to the General Fund. Clark told members that Department Staff spends a great deal of time on counter assistance, answering questions on Zoning and Building Code issues. This customer service does not generate revenue, but is very important to ensure construction and remodeling is done according to the Codes in place. Nawrocki didn't feel the department needed to spend money on five new computers. Clark said the IS Department worked up the figures for the replacement computers and they recommend replacing them as they are outdated. The computers now used are seven years old and generally do not work well. It wastes a lot of staff time waiting for the software to operate as it should. Nawrocki questioned the salary increase in the 204 Fund. Clark stated that there was an adjustment to increase the 204 fund and decrease the 201 fund to reflect a division of the License /Permit Clerk's salary due to the fact that her duties now encompass work for both the EDA /Community Development Department and the Building Inspection Department. Nawrocki then asked if Jeff Sargent's salary was also divided between Fire and Protective Inspections. Clark said it was not, but as direction had been given by the EDA to be vigilant on property inspections in order to be pro - active in maintaining neighborhoods, staff is doing its best to do just that. Clark also stated that Sargent spends a smaller portion of his time, and only on a seasonal basis, doing outside inspections. Schmitt questioned telephone expenses of Funds 201 and 204 and wondered why they had increased substantially. Clark said lie would check on that and report back, He was given the figures from the IS Dept. Nawrocki stated he felt the cell phone policy for employees should be looked at. He doesn't believe all employees need one. Clark stated that only the Building Inspector and Jeff Sargent have City cell phones since they are out in the field and must be reached from time to tune. Everyone else in the Department uses a personal cell phone. Motion by Diehm, seconded by Schmitt, to waive the reading of Resolutions 2011 -07 there being couple copies available to the public. All ayes. MOTION PASSED. Motion by Diehm, seconded by Schmitt, to approve Resolution 2011 -07, Resolution Authorizing the Levy of a Special Benefit Levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6. Roll Call: Ayes- Williams, Herringer, Szurek, Schmitt, Diehm and Peterson. Nays- Nawrocki MOTION PASSED. EDA Commission Minutes Page 5 August 1, 2011 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2011-07 AUTHORIZING THE LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A BUDGET FOR FISCAL YEAR 2012 WHEREAS, pursuant to Minnesota Statutes, Section 469.090 to 469.1081 ( "EDA Act ") the City of Columbia Heights ( "City ") created the Columbia Heights Economic Development Authority (the "EDA "); and WHEREAS, pursuant to City Resolution 2001 -62 and Ordinance No. 1442, the City Council granted to the EDA all powers and duties of a housing and redevelopment authority under the provisions of Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act "), except certain powers that are allocated to the Housing and Redevelopment Authority in and for the City of Columbia Heights (the "HRA "); and WHEREAS, Section 469.033, Subdivision 6, of the HRA Act permits the EDA and I -IRA, together, to levy and collect a special benefit levy of up to .0185 percent of taxable market value in the City upon all taxable real property within the City; and WHEREAS, the EDA desires to levy a special benefit levy in the amount of .0185 percent of taxable market value in the City; and WHEREAS, the EDA understands that the HRA does not expect to levy a special benefit tax for fiscal year 2012; and WHEREAS, the EDA has before it for its consideration a copy of a budget for its operations for the fiscal year 2012 and the amount of the levy for collection in fiscal year 2012 shall be based on this budget. NOW, THEREFORE, Be It Resolved by the Board of Commissioners of the Columbia Heights Economic Development Authority: 1. The budget of $340,154 for the operations of the EDA presented for consideration by the Board of Commissioners of the EDA is hereby in all respects approved. Such budget includes the amount the EDA requests (by separate resolution) to be levied by the City under Minnesota Statutes, Section 469.107, together with the amount to be levied hereunder by the EDA under Minnesota Statutes, Section 469.033, subdivision 6. 2. Staff of the EDA are hereby authorized and directed to file the budget with the City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6. 3. There is hereby levied, subject to the approval of the City Council of the City, a special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, in the amount equal to the lesser of a levy at a rate of .0185 percent of taxable market value in City, or $218,343 with respect to taxes payable in calendar year 2012. 4. Staff of the EDA are hereby authorized and directed to seek the approval by resolution of the City Council of the City of the levy of special benefit taxes in 2012 and to take such other actions as are necessary to levy and certify such levy. Motion by: Diehm Second by: Schmitt Motion passed this 26th day of July 2011 Attest by: Walter R. Fehst, Executive Director Gary L. Peterson, President EDA Commission Minutes Page 6 August 1, 2011 Motion by Diehm, seconded by Szurek, to waive the reading of Resolutions 2011 -08 there being ample copies available to the public. All ayes. MOTIONPASSED. Motion by Williams, seconded by Diehrn, to approve Resolution 2011 -08, Approval of a Budget for Fiscal Year 2012. Roll Call: Ayes- Williams, Herringer, Szurek, Schmitt, Diehun and Peterson. Nays- Nawrocki MOTION PASSED. EDA RESOLUTION 2011 -08 RESOLUTION OF TIIE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA HEIGHTS (EDA) ADOPTING TIIE 2012 BUDGET AND SETTING THE EDA LEVY. BE IT RESOLVED By the Columbia Heights Economic Development Authority (EDA) of Columbia Heights, Minnesota as follows: WHEREAS, the Columbia Heights City Council established the Columbia Heights Economic Development Authority January 8, 1996 pursuant to Minnesota Statutes 469.090 to 469.1081; and WHEREAS, the City Council has given to the EDA the responsibility for all development and redevelopment projects and programs; and WHEREAS, the EDA is authorized under State Statutes, Section 469.107 to levy a tax on its area of operation for the purposes authorized under State Statues 469.090 to 469.108 1, subject to consent by the City Council. NOW, THEREFORE BE IT RESOLVED BY THE EDA FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA THAT: 1. The EDA adopts and recommends to the City Council for approval a budget of $340,154 for year 2012. 2. The EDA adopts and recommends to the City Council for approval a levy of $ 84,811 for year 2012. The Executive Director is instructed to transmit a copy of this resolution to the City Manager and Finance Director /City Clerk of the City of Columbia Heights, Minnesota. APPROVED THIS I DAY OF AUGUST 2011 MOTION BY: Williams SECONDED BY: Diehm Attest by: Walter R. Fehst, Executive Director Gary L. Peterson, President EDA Commission Minutes Page 7 August 1, 2011 5. RESOLUTION 2011 -09 CALLING FOR A PUBLIC HEARING TO CREATE A SCATTERED SITE HOUSING DISTRICT At the April 28, 2009 EDA meeting, the commission directed staff to implement all the necessary processes to create a Scattered Site Housing District. This included the use of all remaining TIF District C8 funds (fund balance and revenue derived until the end of the District in 2010) as a revenue source and the immediate acquisition of properties that met policy guidelines established by the EDA. To date 14 properties have been purchased through the scattered site program, in addition the Plan's initial proposal will include seven other lots owned by various parties. In order to create the district, the FDA's first step is to request that the City Council call for a public hearing to modify the Downtown CBD Revitalization Plan for the CBD Redevelopment project and the Establishment of the City-Wide Scattered Site Housing TIP District. The EDA will have to approve the plan modification as well in September and should consider holding a special meeting in early September to review the plan (the schedule was included in the packet). As is the case with all of our TIF Districts Ehlers will prepare plans with the standard fee of $10,000. The source of funds will come from the district itself. In September we will discuss marketing and selling parameters for these lots, and have included the City of Crystal and Richfield's programs for your information as to how other cities operate these types of programs. With a scattered site district the first buyer must meet certain income limits (100% area median income for one and two person and 115% of median area income for three or more persons), other than that there are not findings that need to be met or other restrictions. The EDA could establish more restrictions as part of the program. uestions from members Nawrocki asked about the Scattered Site District we have in place. Clark said we don't currently have a Scattered Site District. We previously had one that was dissolved about two years ago. Nawrocki wanted to know what impact this might have on tax revenue if established. Clark said this Resolution is to call for a Public Hearing, not to decide on the details of the Plan. As previously stated, Ehlers will prepare plans the Board can consider during the meetings and Public Hearing in September. Clark went on to explain there are currently about 20 -25 housing sites that would make up this district, which would include properties purchased by Anoka County and GMHC as they meet the necessary requirements. Fehst said one plan to consider would be to use the increased tax revenue to cover the expenses we have incurred to purchase and demolish the sites and maybe to regenerate the fund so the City could continue purchasing old, run down homes that could be rebuilt to improve neighborhoods. He said we have purchased these single family homes at reduced rates, and once new homes are built, they will generate higher taxes than the previous ones. Nawrocki questioned how much was left in the A3 /C8 District currently being used to purchase properties. Clark stated there is about $340,000 left which means we could possibly purchase six more homes. By establishing a new District, we call generate new revenue to replenish the fund. Nawrocki thought Ehlers fee of $10,000 to establish this District might be too high. He thought the City should go out for bids. Clark stated that there are only two companies who do this type of work and Ehlers is the more experienced of the two, and specializes in working on TIF District issues. Nawrocki asked what the median income was. Cartney stated it is between $80,000 - $82,000 and that it is established by HUD taking into account the Metro average. EDA Commission Minutes Page 8 August 1, 2011 Schmitt asked what advantage it is to establishing a TIP District rather than selling the property outright. Clark explained it gives us a mechanism to fund future housing programs for a period of time (up to 25 years), by capturing a greater portion of the tax dollar. Otherwise, the money would go back to the General Fund at 40 cents on the dollar because we would lose some money to the County, School District, etc in the normal tax process. Soto maximize our dollars to continue revitalizing neighborhoods in this way, we would want to establish the TIF District. This would make it possible to cover what has been expended, as well as replenish the fund. Otherwise, money would have to be appropriated in the General Fund if the City chose to continue purchasing properties and /or doing other type of housing programs. Motion by Williams, seconded by Szurek, to waive the reading of Resolution 2011 -09, their being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Szurek, to approve Resolution 2011 -09, a Resolution Requesting the City Council of the City of Cohnnhia Heights call for a public hearing on the modification of the CBD redevelopment project and the establishment of the chy-wide scattered site housing tax increment financing district (a scattered site housing district). Roll Cali: Ayes- Williams, Herringer, Szurek, Diehm, and Peterson Nays- Nawrocki and Schmitt MOI'IONPASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011 -09 RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF COLUMBIA HEIGHTS CALL FOR A PUBLIC HEARING ON THE MODIFICATION OF THE CBD REDEVELOPMENT PROJECT AND THE ESTABLISHMENT OF THE CITY -WIDE SCATTERED SITE HOUSING TAX INCREMENT FINANCING DISTRICT (A SCATTERED SITE HOUSING DISTRICT). BE IT RESOLVED, by the Board of Coin inissioners (the 'Board ") of the Columbia Heights Economic Development Authority, Minnesota (the 'EDA ") as follows: WHEREAS, the City Council (the "Council') of the City of Columbia Heights, Minnesota (the "City ") established the CBD Redevelopment Project pursuant to Minnesota Statutes, Minnesota Statutes, Sections 469.174 to 469.1799, inclusive, as amended, in an effort to encourage the development and redevelopment of certain designated areas within the City; and WHEREAS, the EDA is proposing the modification of the CBD Redevelopment Project and the establishment of the City -Wide Scattered Site Housing Tax Increment Financing District, pursuant to, and in accordance with, Minnesota Statutes, Sections 469.174 to 469.1799 and Sections 469.090 through 469.1082, inclusive, as amended; NOW, TI IEREFORE BE IT RESOLVED by the Board as follows: The EDA hereby requests that the Council call for a public hearing on September 26, 2011 to consider the proposed modification of the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and the proposed adoption of the TIF Plan for the City -Wide Scattered Site Housing Tax Increment Financing District (collectively, the "Plans ") and cause notice of said public hearing to be given as required by law. EDA Commission Minutes Page 9 August 1, 2011 2. The EDA directs the Executive Director to transmit copies of the Plans to the Planning Commission of the City and requests the Planning Commission's written opinion indicating whether the proposed Plans are in accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the EDA is hereby directed to submit a copy of the Plans to the Council for its approval. 4. The EDA directs the Executive Director to transmit the Plans to the county and the school district(s) in which the City -Wide Scattered Site Housing'rax Inclement Financing District is located not later than August 26, 2011. 5. Staff and consultants are authorized and directed to take all steps necessary to prepare the Plan and related documents and to undertake other actions necessary to bring the Plan before the Council. Approved by the Board on August 1, 2011. 6. PURCHASE OF 3808 JOHNSON ST- As part of the scattered site program staff has made all offer to purchase property at 3808 Johnson Street for $20,000 plus closing costs. This property meets the following guidelines for acquisition that were approved by the EDA as part of the Scattered Site program: 1) An acquisition price point of $55,000 or less 2) All homes purchased will be demolished 3) Homes acquired should fall in one of the following categories: a. Evidence of structural failure b. Hazardous conditions including extensive mold c. Functional obsolescence (size of property, interior layout) d. Extensive physical deterioration 4) Residual vacant lots shall meet existing zoning standards for purposes of rebuilding 5) Recognition that extenuating circumstances may require deviation from the above policies The existing house is 456 square feet with one bedroom and there is a detached garage. The lot is 9,000 square feet. The house has been completed stripped down to the shell there is no plumbing, furnace, cupboards, fixtures, lighting etc. The Building Official has posted this property as vacant and abandoned and uninhabitable. Fannie Mae is selling this property and we have not heard a response to our offer. The property was listed at $16,500 and there are five parties bidding on this property. That is why staff offered $3,500 more than the listing price as this would be a good house to have demolished due to the small size and possible structural issues. As we have done in the past the EDA can approve this purchase with an up to amount (or $20,000) and if Fannie Mae comes back with a counter the limit is set and staff does not have to come back to the EDA for approval. The Anoka County land value for 2012 is $61,000. Staff recommends purchasing the property at 3808 Johnson Street for $20,000 as part of the Scattered Site program. Questions from members: Schmitt stated that as long as it is posted as an abandoned property it will have to go through all inspection process and meet minimum standards. She doesn't think it makes sense to purchase it if someone is willing to do so and expend funds renovating the property. If we purchase for $20,000 and demolition expenses are approximately $18,000, the City has already expended at least $38,000 oil the property. She felt the house could be renovated, even if it is only 456 square feet in size. EDA Commission Minutes Page 10 August 1, 2011 Others thought it made sense to purchase it due to the size and condition of the structure, which meets the intent of the program. They felt it could be replaced with a newer home with more square footage that would improve the neighborhood. Motion by Williams, seconded by Herringer to waive the reading of Resolution 2011 -10, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Herringer to adopt resolution 2011 -10, approving the acquisition of 3808 Johnson Street furthermore to authorize the Mayor and City Manager to enter into an agreement for the same. Ayes- Williams, Nawrocki, Herringer, Szaurek, Diehm, and Peterson Nay - Schmitt MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011 -10 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT FOR CERTAIN REAL PROPERTY LOCATED AT 3808 JOHNSON STREET NORTHEAST IN THE CITY AND ASSIGNMENT THEREOF TO THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Section 1. Recitals 1.O1. The Columbia Heights Economic Development Authority (the "Authority ") administers the Downtown CBD Redevelopment Project (the "Project') within the City, which was established under Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act'). 1.02. The Authority has undertaken a program to acquire homes in the Project in order to address foreclosure problems and remediate and prevent the emergence of blight. 1.03 City staff have negotiated a Real Estate Purchase Agreement with the Fannie Mae (the "Seller ") dated as of July 25, 2011 including all related addenda and disclosures thereto (collectively, the "Purchase Agreement'), for real property located at 3808 Johnson Street Northeast and legally described as follows: AUDITORS SUBDIVISION OF WALTONS SUNNY ACRES THIRD ALL OF S 1/2 OF S 1/3 OF EI /2 OF BLK 15 AUD SUB OF WALTONS SUNNY ACRES 3RD -EX E 30 FT THEREOF TAKEN FOR JOHNSON ST NE - -EX W 149.96 FT THEREOF. (the "Property"), which Purchase Agreement is contingent upon approval by the Economic Development Authority. 1.04. The Purchase Agreement has been prepared and submitted to this Authority and is on file with the City Manager, and /or the Executive Director of the EDA. Section 2. Approval and Assignment 2.01. The Purchase Agreement for the Property is hereby approved, and the execution of the Purchase Agreement by the FDA is hereby ratified. Pursuant to the Purchase Agreement, the EDA will purchase the Properly for $20,000. City staff and officials are authorized and directed to take all such other actions to complete the purchase of the Property, including without limitation execution of all documents and agreements related to such transaction. EDA Commission Minutes Page 11 August 1, 2011 2.02. Contingent upon approval of the Authority, the City hereby assigns its interests in the Purchase Agreement to the Authority. City staff and officials are authorized and directed to take all such other actions to complete the assignment of the City's interests in the Purchase Agreement to the Authority, including without limitation execution of any documents and agreements necessary to effectuate such assignment. Passed this I" clay of August Offered by: Williams Second by: 1lerringer Roll Call: Ayes - Williams, Nawrocki, Dielun, Herringer, Szurek, and Peterson Nay - Schmitt ATTEST: Shelley Hanson, Secretary President Gary L. Peterson 7. PURCHASE 4133 2nd STREET - As part of the scattered site program staff has made an offer to purchase property at 4133 2nd Street for $22,500 plus closing costs. This property meets the following guidelines for acquisition that were approved by the EDA as part of the Scattered Site program: 1) An acquisition price point of $55,000 or less 2) All homes purchased will be demolished 3) Homes acquired should fall in one of the following categories: a. Evidence of structural failure b. Hazardous conditions including extensive mold c. Functional obsolescence (size of property, interior layout) d. Extensive physical deterioration 4) Residual vacant lots shall meet existing zoning standards for purposes of rebuilding 5) Recognition that extenuating circumstances may require deviation from the above policies This house has been structurally compromised and is unfit for human occupancy. The existing house is 875 square feet with two bedrooms and one bathroom and there is a detached garage that is in disrepair. The lot is 6,500 square feet. The listing has it listed as "sold as is in tough shape with strong, strong pet odor. Tear down condition. Value for lot. Make offer." As part of the purchase staff had to agree to tear down the house and not occupy the house. The Building Official has posted this property as vacant and abandoned and uninhabitable. The Anoka County land value for 2012 is $54,000. Clark passed around pictures of the house so they could see the condition of the property on the interior. Staff recommends purchasing the property at 4133 2nd Street for $22,500 as part of the Scattered Site program. The general consensus was to purchase this property since it meets the intent of the ordinance. EDA Commission Minutes Page 12 August 1, 2011 Motion by Williams, seconded by Herringer to waive the reading of Resolution 2011 -11, there being ample copies available to the public. All ayes. M077ONPASSED. Motion by Williams, seconded by Herringer, to adopt resolution 2011 -11, approving the acquisition of 4133 2' " Street furthermore to authorize the Mayor and City Manager to enter into an agreementfor the same. All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011 -11 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT FOR CERTAIN REAL PROPERTY LOCATED AT 4133 2nd STREET NORTHEAST IN THE CITY AND ASSIGNMENT THEREOF TO THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Section 1. Recitals 1.01. The Columbia Heights Economic Development Authority (the "Authority") administers the Downtown CBD Redevelopment Project (the "Project ") within the City, which was established under Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act "). 1.02. The Authority has undertaken a program to acquire homes in the Project in order to address foreclosure problems and remediate and prevent the emergence of blight. " 1.03 City staff have negotiated a Real Estate Purchase Agreement with the Remax Results (the "Seller ") dated as of July 25, 2011 including all related addenda and disclosures thereto (collectively, the "Purchase Agreement "), for real property located at 4133 2nd Street Northeast and legally described as follows: THAT PRT OF LOT 14 BLK 2 REAR OF BLK D COLUMBIA HEIGHTS ANNEX LYG SLY OF N 90 FT THEREOF & LYG WLY OF A LINE DRAWN FROM A PT ON S LINE OF N 90 FT OF SD LOT 14 129.6 FT E OF W LINE OF SD LOT l4 TO A PTON N LINE OF LOT I I SD BLK 2 129.6 FT E OF W LINE OF SD LOT I I SUBJ TO EASE OF REC. (the "Property"), which Purchase Agreement is contingent upon approval by the Economic Development Authority. 1.04. The Purchase Agreement has been prepared and submitted to this Authority and is on file with the City Manager, and /or the Executive Director of the EDA. Section 2. Approval and Assignment 2.01. The Purchase Agreement for the Property is hereby approved, 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 $22,500. City staff and officials are authorized and directed to take all such other actions to complete the purchase of the Property, including without limitation execution of all documents and agreements related to such transaction. 2.02. Contingent upon approval of the Authority, the City hereby assigns its interests in the Purchase Agreement to the Authority. City staff and officials are authorized and directed to take all such other actions to complete the assignment of the City's interests in the Purchase Agreement to the Authority, including without limitation execution of any documents and agreements necessary to effectuate such assignment. EDA Commissiou Minutes Page 13 August 1, 2011 Passed this I" clay of August Offered by: Williams Second by: Herringer Roll Call: All ayes ATTEST President Gary L. Peterson Shelley Hanson, Secretary 8. DISCUSSION ON MEETING DATES At the February 22` EDA meeting the commission decided to temporarily change the meeting date and times to the first Monday of each month prior to City Council work sessions at 6:30pm. At that meeting it was decided that after six months the commission would revisit the meeting schedule and decide if a bylaw change would be made to formally change the meeting date to the first Monday of the month rather than the fourth Tuesday of the month. If the commission would like to change the meeting date to the first Monday of the month staff will prepare a bylaw amendment for the September meeting. The theory behind the meeting date and time change is 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 FDA or HRA commissions prior to the start of a Council meeting, with the purpose of consolidating meeting nights. If the EDA would like the formally change the meeting date to the first Monday of the month at 6:30pm, staff recommends making a motion to amend the bylaws. uestions /Comments from members Diehm said this schedule has worked well for her. Schmitt said she has a conflict since the Traffic Commission isn't done by 6:30, so she prefers a different night. Kevin Hansen, Public Works Director, who was in attendance, said he would poll members of the Traffic Commission to see if they could meet at 5:30 pm rather than 6 pm. He will let everyone know. The decision will be to either double up EDA and HRA meetings, or the EDA and work sessions. We will address this again at the next meeting after we find out about the Traffic Commission. EDA Commission Minutes Page 14 August 1, 2011 9. ADMINISTRATIVE REPORTS Citizens Academy - Clark explained that the Citizens Academy is a program directed to staff through the November 2011 work plan. Staff is working to implement the program in January, 2012. The program is designed to better inform citizens of Columbia Heights on the inter - workings of local government. In this program, citizens will be able to: • BECOME MORE INFORMED ABOUT YOUR LOCAL GOVERNMENT • LEARN THE ROLE OF EACH DEPARTMENT IN THE CITY o GET HANDS -ON EXPERIENCE WITH YOUR GOVERNMENT • PARTICIPATE IN SIMULATED EXERCISES Other cities have implemented this program and found that residents were very interested and found it a good way to get involved. Clark said the handout for those interested in becoming a participant, will ask them to please sign up and further information will be distributed to them. If residents have any further questions, they may contact Jeff Sargent at (763) 706 -3673. Questions /Comments from members: Nawrocki asked if there is a budget for this. Clark said it would only cost about $300. There may be some staff time to prepare information on the department and commission functions, but otherwise the costs would be minimal for paper and refreshments. I-Ie thought the plan would be to offer this on an annual basis and that the meetings would be 2 -3 hours in length, one night a week, for six weeks. The 2010 Census Report- Clark said he included the report in the agenda packets for the members to review. Foreclosure Stats- Clark stated there are currently 366 active foreclosures in the City. And since 2007, 544 have been sold. He stated that staff is working on stats detailing the number of rentals we now have due to this foreclosure situation, and the price points that properties in the City have been selling for. Those will be distributed to members at the next meeting. Root Property- The City received notice on July 18, 2011 of Columbia Heights properties that went in to Tax Forfeiture. One of those properties is the Root Property located on the southwest corner of 40 and University Ave. Clark told members that he has sent a letter to Anoka County asking them to partner with the City of Columbia Heights to see if DEED would consider awarding an Investigation Grant for possible clean -up of this property. EDA Commission Minutes Page 15 August 1, 2011 10. OTHER BUSINESS- 37' and Central Ave -Clark reported it is moving forward and O'Reilly's may be submitting plans in September for October meeting approvals. O'Reilly's would not accept any previous reports that had been done on the site, and basically started over. That is the reason it has been delayed. The backside of the Grand Central Lofts site is being cleaned up. They have re- graded the empty land, the bituminous has been removed, and it will be re- seeded shortly. The front portion is being maintained, but there is no further word from the owner of the site as to future development. Motion by Williams, seconded by Diehm, to adjourn the meeting at 8:08 pm. Respectfully submitted, Shelley Hanson Secretary COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Special Meeting of: September 6, 2011 AGENDA SECTION: Consent ORIGINATING EXECUTIVE NO:3 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Financial Report and Payment of Bills BY: Sheila Cartney BY DATE: August 30, 2011 BACKGROUND: The Financial Report is for the months of July 2011 and Resolution 2011 -12 is attached for approval. RECOMMENDATION: Staff will be available to answer questions. If the report is satisfactorily complete, we recommend the Board take affirmative action to receive the Financial Report and approve the payment of bills. RECOMMENDED MOTION: Move to waive the reading of Resolution 2011 -12 there being ample copies available to the public. Move to approve Resolution 2011 -12, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the Financial Statement and Payment of Bills for the months of July 2011. 17197AW [fJIIM[ORii EDA RESOLUTION 2011 -12 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR JULY 2011 AND PAYMENT OF BILLS FOR THE MONTHS OF JULY 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 July 2011 has been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statements 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. 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I Z1-] xr a rod 0 0 1 0 ro q n n m W. J iMH x m m n 1mu 4 I JY �Y r z n dy w I Y I N1G ` N �zH W 1 d N d O N 1 Y O nw Y J 1 n (n M 1 n 1 N m MU i o bi W N 1 z N 1nH O I m z W 1 n W I G� FI 1 CH �k N 1 ro N p 1n 0 h1 CO 00 JC I Y N trJ I H �x mm .- H •- x - H Jln COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 6, 2011 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO:4 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Scattered Site Tax Increment Financing BY: Scott Clark BY Housing District DATE: September 1, 2011 BACKGROUND: On April 28, 2009 the EDA took the following motion: " Motion by Szurek, seconded by Williams to direct the staff to implement all necessary processes to create a Scattered Site Housing District including the use of all remaining TIF District C8 Funds (find balance and revenue derived until the end of the District in 20 10) as a revenue source and the immediate action of properties per the policies as stated in the report dated April 24, 2009." Motion passed 6 to 1. This action started the process of acquiring blighted properties, the majority of which were in foreclosure or short sale status. The goal of the EDA was to purchase these properties and then recapitalize the originating'ITF District (C8) from both sales proceeds and tax increment (to be created through a Scattered Site Housing District). These funds would be used for additional housing program needs. Staff has attached a chart which illustrates the aforementioned concept. At this meeting, the EDA will have a chance to ask questions regarding the draft TIP Plan which is a requirement in order to create the Scattered Site TIE District. The EDA will be asked to formally act on the Plan at their October meeting, with a public hearing to be held by the City Council on October 10, 2011. It is also important to note that the approval of the TIF Plan is not an agreement on how to sell the properties and at what price. There are some assumptions within the Plan but these serve as a general guideline for various computations. In November the staff will present and have a discussion on disposition policies. RECOMMENDATION: To proceed with the Plan to the October EDA meeting and City Council public hearing. RECOMMENDED MOTION: None at this time. EDA ACTION: I $ � u � O U. U D n � � c � 0 2 (1) � � � � � U m J 2 % # p CO ± e ° ƒ � 7 ® �)R k/0 LL2= S )8 r#o \ 3 v/0 2 A \ ) �» _ m 7e$ _ �)g ) c2 =0 m ) 7 ]j\ = 2 j k# m ) / / \k ]\ w% /k 2c \k =) cj ti ®® %§ �® §§ «.E `I CL Lo 2 ®& §$« t me a =& D ° =a a) E o ® 2 % t §{C �f) ] .§ % qq R 0_ } ) < E < o J 2 % # p CO ± e ° ƒ � 7 ® �)R k/0 LL2= S )8 r#o 3 v/0 2 A u �» _ m 7e$ w\/ As ofAngusl 30, 2011 Draft for Fiscal Implications Modification to the Redevelopment Plan for the Central Business District Redevelopment Project and the Tax Increment Financing Plan for the establishment of the City -Wide Scattered Site Housing Tax Increment Financing District (a housing district) within the Central Business District Redevelopment Project Columbia Heights Economic Development Authority City of Columbia Heights Anoka County State of Minnesota Public Hearing: October 10, 2011 Adopted: This document is in drafl form for distribution to the County and the School District. The TIF Plan contains the estimatedf:scal and economic implications ofthe proposed TIF District, The City and the EDA may make minor changes to this draft document prior to the public hearing. M= Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113 -1105 651 - 697 -8500 fax: 651 - 697 -8555 www.ehlers- inc.com Table of Contents (for reference purposes only) Section 1 - Modification to the Redevelopment Plan for the Central Business District Redevelopment Project Foreword.............................. ............................... 1 -1 Section 2 - Tax Increment Financing Plan for the City -Wide Scattered Site Housing Tax Increment Financing District Subsection 2 -1. Foreword ................ ............................... 2 -1 Subsection 2 -2. Statutory Authority ......... ............................... 2 -1 Subsection 2 -3. Statement of Objectives .... ............................... 2 -1 Subsection 2 -4. Redevelopment Plan Overview .............................. 2 -1 Subsection 2 -5. Description of Property in the District and Property To Be Acquired . 2 -2 Subsection 2 -6. Classification of the District .. ............................... 2 -2 Subsection 2 -7. Duration and First Year of Tax Increment of the District ........... 2 -3 Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /Increment and Notification of Prior Planned Improvements .... 2 -4 Subsection 2 -9. Sources of Revenue /Bonds to be Issued ...................... 2 -5 Subsection 2 -10. Uses of Funds ............ ............................... 2 -6 Subsection 2 -11. Fiscal Disparities Election ... ............................... 2 -6 Subsection 2 -12. Business Subsidies ........ ............................... 2 -7 Subsection 2 -13. County Road Costs ........ ............................... 2 -8 Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions ................. 2 -8 Subsection 2 -15. Supporting Documentation . ............................... 2 -10 Subsection 2 -16. Definition of Tax Increment Revenues ....................... 2 -10 Subsection 2 -17. Modifications to the District . ............................... 2 -11 Subsection 2 -18. Administrative Expenses ... ............................... 2 -11 Subsection 2 -19. Limitation of Increment .... ............................... 2 -12 Subsection 2 -20. Use of Tax Increment ..... ............................... 2 -13 Subsection 2 -21. Excess Increments ....... ............................... 2 -13 Subsection 2 -22. Requirements for Agreements with the Developer .............. 2 -14 Subsection 2 -23. Assessment Agreements .. ............................... 2 -14 Subsection 2 -24. Administration of the District ............................... 2 -14 Subsection 2 -25. Annual Disclosure Requirements ........................... 2 -14 Subsection 2 -26. Reasonable Expectations .. ............................... 2 -14 Subsection 2 -27. Other Limitations on the Use of Tax Increment ................. 2 -15 Subsection 2 -28. Summary ............... ............................... 2 -15 Appendix A Project Description ....................... ............................... A -1 Appendix B Map of the Central Business District Redevelopment Project and the District ......... B -1 Appendix C Description of Property to be Included in the District ............................ C -1 Appendix D Estimated Cash Flow for the District ......... ............................... D -1 Appendix E Housing Qualifications for the District ......... ............................... E -1 Appendix F Findings for the District .................... ............................... F -2 Section 1 - Modification to the Redevelopment Plan for the Central Business District Redevelopment Project Foreword The following text represents a Modification to the Redevelopment Plan for the Central Business District Redevelopment Project. This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Central Business District Redevelopment Project. Generally, the substantive changes include the establishment of City -Wide Scattered Site Housing Tax Increment Financing District. For further information, a review of the Redevelopment Platt for the Central Business District Redevelopment Project is recommended. It is available from the Community Development Director at the City of Columbia Heights. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Central Business District Redevelopment Project. Columbia Heights Economic Development Authority Modification to the Redevelopment Plan for the Central Business District Redevelopment Project 7 -i Section 2 - Tax Increment Financing Plan for the City -Wide Scattered Site Housing Tax increment Financing District Subsection 2 -1. Foreword The Columbia Heights Economic Development Authority (the "EDA "), the City of Columbia Heights (the "City "), staff and consultants have prepared the following information to expedite the establishment of the City -Wide Scattered Site HousingTax Increment Financing District (the "District "), a housing tax increment financing district, located in the Central Business District Redevelopment Project. Subsection 2 -2. Statutory Authority Within the City, there exist areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota Statutes CVS.'), Sections 469.090 to 469.1082, inclusive, as amended, and MS., Sections 469.174 to 469.1799, inclusive, as amended (the 'Tax Increment Financing Act" or "TIF Act "), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan ") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for the Central Business District Redevelopment Project. Subsection 2 -3. Statement of Objectives The District currently consists of 23 parcels of land and adjacent and internal rights -of -way. The District is being created to facilitate the sale and redevelopment of EDA, Anoka County and Greater Metropolitan Housing Corporation owned parcels into new single - family homes for income qualified buyers. Please see Appendix A for further District information. The EDA has not entered into an agreement to sell any of the properties or designated a developer to redevelop the properties at the time of preparation of this TIF Plan, but redevelopment of some of the parcels is likely to occur in 2012. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Central Business District Redevelopment Project. The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the Central Business District Redevelopment Project and the District. Subsection 2 -4. Redevelopment Plan Overview 1. Property to be Acquired - The EDA or City currently owns 16 parcels of property within the District. The retraining property located within the District may be acquired by the EDA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to MS., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer /homcowner's plan relating to the project and completion of the necessary legal requirements, the EDA or City may sell to a developer /homeowner selected properties that it may acquire within the District or may lease land or facilities to a developer /homeowner. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -1 4. The EDA or City may perform or provide for some or all necessary acquisition , construction, relocation, demolition, and required utilities and public street work within the District. Subsection 2 -6. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcels listed in Appendix C ofthis TIF Plan. Please also see the map in Appendix F for further information on the location of the District. The FDA or City currently owns sixteen of the parcels within the District including interior and adjacent street rights of way. Five of the parcels are owned by the Comity and one is owned by Greater Metropolitan Housing Corporation. The EDA or City may acquire any parcels owned by other entities by gift, dedication, condemnation or direct purchase in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2 -6. Classification of the District The EDA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a housing district pursuant to MS., Section 469.174, Subd. 11 and MS., Section 469.1761 as defined below: M. S., Section 469.174, Subd 11 "Housing district" means a type of tax increment financing district which consists of'a project, or a portion of a project, intended for occupancy, in part, by persons or families of'low and moderate income, as defned in chapter 462A, Title H of the National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of1937, as amended, Title VoftheHousingAct of 1949, as amended, any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts, and that satisfies the requirenents of MS., Section 469.1761. Housing project means a project, or portion of a project, that meets all the qualifications of a housing district under this subdivision, whether or not actually established as a housing district. MS.. Section 469.1761: Subd. 1. Requirement hnposed. (a) In order for a tax increment financing district to qualify as a housing district: (1) the income limilations provided in this section must be satisfied, and (2) no more than 20 percent of the square footage of buildings that receive assistance front tax increments may consist of commercial, retail, or other nonresidential uses. (b) l he requirements imposed by this section apply to property receiving assistance financed rovith tax increments, including interest reduction, land transfers at less than the Atdhority's cost of acquisition, utility service or connections, roads, parking facilities, or other subsidies. The provisions of this section do not apply to districts located within a largeted area as defined in Section 462C.02 Subd 9, clause (e). Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -2 (c) For proposes oflhe requirements ofparagraph (a), the authority may elect to treat an addition to an existing structure as a separate building if.' (1) construction of the addition begins more than three years after construction of the existing struclure was completed; and (2) for an addition that does not meek the requirements ofparagraph (a), clause (2),if it is treated as a separate building, the addition was not contemplated by the tax increment financing plan which includes the existing structure. Subd. 2. Owner occupied housing. For owner occupied residential property, 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code, Subd. 3. Rental property. For residential rental property, the property must satisfy the income requirements for a qualifled residential rental project as defined in section 142(d) of the Internal Revenue Code. The requirements of this subdivision apply for the duration of the tax ineremenl financing district. Subd 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to MS., Section 4691771. In meeting the statutory criteria the EDA and City rely on the following facts and findings: The District consists of 23 parcels. The development will consist of 23 units of single family owner occupied housing At least 95 %ofthe houses assisted with tax increment trust be occupied with persons at 100% of median income for a family of two or less and 115% of median income for families of three or more (rental housing would have stricter income limitations). Median income under this provision is the greater of the statewide median or the county median. For Anoka County, the median income is $82,700 and the statewide median is $72,900 (year 2011). Therefore, the family of three or more could earn up to $95,105 (115% of $82,700) and still qualify to live in the homes. (See Appendix E). Pursuant to MS., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that qualified Under the provisions of MS., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2 -7. Duration and First Year of Tax Increment of the District Pursuant to MS., Section 469.175, Subd. ],and Section 469.176, Subd. 1, the duration and first year of tax increment ofthe District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd lb., the duration of the District will be 25 years after receipt of the first increment by the EDA or City (a total of 26 years of tax increment). The EDA or City elects to receive the first tax increment in 2015, which is no later than four years following the year of approval of the District. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2040, or when the TIF Plan is satisfied. The EDA or City reserves the right to decertify the District prior to the legally required date. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -3 Subsection 2 -8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value /increment and Notification of Prior Planned Improvements PUY9uallt to MS., Scetion Subd. 7 and M S., Section 469177, Subd. 1, the Origi nal Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2011 for taxes payable 2012. Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning in the payment year 2015) the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court - ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the EDA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2012, assuming the request for certification is made before June 30, 2012. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to MS, Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Central Business District Redevelopment Project, upon completion of the projects within the District, will animal ly approximate tax increment revenues as shown in the table below. The EDA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2015. The ProjectTax Capacity (PTC) listed is an estimate ofvalues when the projects within the District are completed. UTA 14013I Project Estimated Tax Capacity upon Completion (PTC) $82,170 Original Estimated Net Tax Capacity (ONTO) $12,522 Estimated Captured Tax Capacity (CTC) $69,648 Original Local Tax Rate 1.25681 Pay 2011 Estimated Annual Tax Increment (CTC x Local Tax Rate) $87,534 Percent Retained by the EDA 100% Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the District when all development is completed in 2018 is estimated to be $42,884. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -4 UTA 150138 Project Estimated Tax Capacity upon Completion (PTC) $3,769 Original Estimated Net Tax Capacity (ONTC) $671 Estimated Captured Tax Capacity (CTC) $3,098 Original Local Tax Rate 1.2732 Pay 2011 Estimated Annual Tax Increment (CTC x Local Tax Rate) $3,944 P ercent Retained by t he EDA 100% Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in this chart is the estimated tax capacity of the District in year 25. The tax capacity of the District when all development in completed in 2013 is estimated to be $1,800. Pursuant to MS., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to MS., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to MS., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found that the only permits that have been issued are for the demolition of the existing structures, which will not increase the original tax capacity. Subsection 2 -9. Sources of Revenue /Bonds to be Issued The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF Plan. As presently proposed, the projects within the District will be financed by an interfund loan. Any refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The total estimated tax increment revenues for the District are shown in the table below: SOURCES OF FUNDS TOTAL Tax Increment $1,462,968 Interest $110,032 TOTAL $1,573,000 The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments from the District in a maximum principal amount of $1,037,357. Such bonds may be in the form of pay -as- you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -5 Subsection 2 -10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the sale and redevelopment of EDA, Anoka County and Greater Metropolitan Housing Corporation owned parcels into new single - family homes for income qualified buyers. The EDA and City have determined that it will be necessary to provide assistance to the project(s) for certain District costs as described in the use of funds below. In addition, tax increments may be used to pay for a land write down and repayment of an interfund loan(s). The EDA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF TAX INCREMENT FUNDS TOTAL Land/Building Acquisition $450,000 Site Improvements /Preparation $150,000 Other Qualifying Improvements $291,060 Administrative Costs (up to 10 %) $146,297 PROJECT COST TOTAL $1,037,357 Interest JaL643 PROJECT AND INTEREST COSTS TOTAL $1,573,000 The total project cost, including financing costs (interest) listed in the table above does not exceed the total projected tax increments for the District as shown in Appendix D. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. The EDA may expend funds for qualified housing activities outside of the District boundaries. Subsection 2 -11. Fiscal Disparities Election Pursuant to MS., Section 469.177, Subd. 3, the City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to MS., Section 469.177, Subd. 3, clause a, (outside the District) are followed, the following method of computation shall apply: (1) The original net tax capacity and the current net tax capacity shall be determined before the applicalion of the fiscal disparity p ofClbapter 276A or 4731%. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax capacity and no lax increment determination. Where the original net tax capacity is less than the current net tax capacity, the difference behveen the original net tax capacity and the current net tax capacity is the captured net fax capacity. This amount less anyportion thereofa the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -6 (2) The county auditor shall exclude the retained captured net lax capacity of the authorityfr•orn the net tax capacity of the local taxing districts in determining local taxing district lax rates. The local tax rates so dete pined are to be extended against the retained captured net tax capacity ofthe authority as well as the net tax capacity ofthe local taxing districts. The tae generated by the extension of the lesser of (A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the awhority. The City will choose to calculate fiscal disparities by clause a. It is not anticipated that the District will contain connnercial /industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. According to M.S., Section 469.177, Subd. 3: (c) Tlae neethod of computation of lac increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (h). Subsection 2 -12. Business Subsidies pursuant to M.S., Section 1162993, Subd 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $150,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in MS., Section 116,1.552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under MS., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers' compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and abusiness; (16) Assistance for a tax increment financing soils condition district as defined wider MS., Section 469.174, Subd 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -7 is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature; (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of $150,000 or less; (22) Federal loan funds provided through the United States Department of Commerce, Economic Development Administration; and (23) Property tax abatements granted under MS., Section 469.1813 to property that is subject to valuation under Minnesota Rules, chapter 8100. The EDA will coin ply with MS., Sections 116.1993 to II6.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. Subsection 2 -13. County Road Costs Pursuant to MS., Section 469.175, Subd. ]a, the county board may require the EDA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment Will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the EDA or City within forty - five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2 -14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxingjurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the EDA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met IMPACT ON TAX BASIC Anoka County City of Columbia Heights Columbia Heights ISD No. 13 2010 /Pay 2011 Total Net Tax Capacity 265,086,108 11,744,663 16,731,669 Estimated Captured Tax Capacity (CTC) Upon Completion 13,193 13,193 13,193 Percent of CTC to Entity Total 0.0050% 0.1123% 0.0789% Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -8 IMPACT ON TAX RATES - 14013I The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2011 rate. The total net capacity for the entities listed above are based on actual Pay 2011 figures. The District will be certified under the actual Pay 2012 rates, which were unavailable at the time this TIP Plan was prepared. Pursuant to MS. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $1,573,000; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is not expected. An increase in call load is not expected since the program is replacing blighted single family homes with new single family homes. However, blighted and vacant buildings are being removed and should eliminate some safety concerns. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or require that the City hire additional officers. The probable impact of the District on fire protection is not expected to be significant. The existing homes, which will be eliminated by the new development, are vacant and blighted which poses safety concerns. In addition, all new residential construction is required to have a smoke detector in each bedroom, which was not required at the time the existing homes were built. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -9 Pay 2011 Percent Potential Extension Rates of Total CTC Taxes Anoka County 0.372350 29.63% 12,522 4,663 City of Columbia I leights 0.618040 49.18% 12,522 7,739 Columbia Heights ISD No. 13 0.186760 14.86% 12,522 2,339 Other 0.079660 6.34% 12,522 998 Total 1.256810 100.00% 15,738 IMPACT ON TAX RATES - 15013B Pay 2011 Percent Potential Extension Rates of Total CTC Taxes Anoka County 0.372350 29.25% 671 250 City of Columbia Heights 0.618040 48.54% 671 415 Columbia Heights ISD No. 13 0.186760 14.67% 671 125 Other 0.0960507 54% 671 64 Total 1.273200 100.00% 854 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual Pay 2011 rate. The total net capacity for the entities listed above are based on actual Pay 2011 figures. The District will be certified under the actual Pay 2012 rates, which were unavailable at the time this TIP Plan was prepared. Pursuant to MS. Section 469.175 Subd. 2(b): (1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be generated over the life of the District is $1,573,000; (2) Probable impact of the District on city provided services and ability to issue debt An impact of the District on police protection is not expected. An increase in call load is not expected since the program is replacing blighted single family homes with new single family homes. However, blighted and vacant buildings are being removed and should eliminate some safety concerns. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or require that the City hire additional officers. The probable impact of the District on fire protection is not expected to be significant. The existing homes, which will be eliminated by the new development, are vacant and blighted which poses safety concerns. In addition, all new residential construction is required to have a smoke detector in each bedroom, which was not required at the time the existing homes were built. The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -9 with street maintenance, sweeping, plowing, lighting and sidewalks. Based on Metropolitan Council guidelines, no SAC credits will be required since the City is replacing single family with single family and increasing the use. The probable impact of any District general obligation tax increment bonds on the ability to issue debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) Estimated amount of tax increment attributable to school district levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is $233,613; (4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxingjurisdictions remained the same, is $465,811; (5) Additional information requested by the county or school district. The City is not aware of any standard questions in a county or school district written policy regarding tax increment districts and impact on county or school district services. The county or school district must request additional information pursuant to MS. Section 469,175 Subd. 2(b) within 15 days after receipt of the tax increment financing plan. No requests for additional information from the county or school district regarding the proposed development for the District have been received. Subsection 2 -15. Supporting Documentation Pursuant to M.S. Section 469.175, Subd. I (a), clause 7 the TIF Plan must contain identification and description of studies and analyses used to snake the findings are required in the resolution approving the District. Following is a list of reports and studies on file atthe City that supportthe EDA and City's findings: • Map of foreclosed property in the City; • 2010 Census Summary; • Housing Study. Subsection 2 -16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under MS., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the A uthority with tax increments; 4. Interest or other investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August 1, 1993; and Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -10 6. The market value homestead credit paid to the Authority under MS., Section 273.1384. Subsection 2 -17. Modifications to the District In accordance with U.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of MS., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; 4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City; 5. Increase in the estimate of the cost of the District, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the EDA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to MS Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a housing district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of MS., Section 469.174, Subd. 11 must be documented, The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (E) the EDA agrees that, notwithstanding MS., Section 469.177, Subd. 1, the original nettax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The EDA or City must notify the County Auditor of any modification to the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. Subsection 2 -18. Administrative Expenses In accordance with MS., Section 469.174, Subd. 14, administrative expenses means all expenditures of the EDA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the District; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the District; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to MS., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -11 and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the'FlF Plan or the total tax increments, as defined by MS., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. For districts for which certification was requested after July 3l, 2001, no tax increment may be used to pay any administrative expenses for District costs which exceed ten percent of total estimated tax increment expenditures authorized by the TI F Plan or the total tax increments, as defined in M. S, Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District and are not subject to the percentage limits of MS., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to MS., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the hDA or City and the County Treasurer shall pay the amount deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2 -19. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District maybe terminated ifsufficientfunds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to MS., Section 469.176, Suhd. 6: if, after four years from the date of certifcation of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation ofproperty or other site preparation, including qualified improvement of street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a lax increment financing district by the authority or by the owner ofthe parcel in accordance with the tax increment financing plan, no additional tax increment may be taken f our that parcel and the original net tax capacity of that parcel shall be excluded from the original net tae capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on thatparcel including qualified improvement of a sheet adjacent to that parcel, in accordance with the tax increment frnancingplan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner ofrevenue and add it to the original net tax capacity ofthe tax incremeralfinancingdistrict. The county auditor must enforce the provisions ofthis subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -12 submitted by February I ofthe fiftli year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The EDA or City or a property owner must improve parcels within the District by approximately October 2015 and report such actions to the County Auditor. Subsection 2 -20. Use of Tax Increment The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. to finance, or otherwise pay the cost of redevelopment of the Central Business District Redevelopment Project pursuant to MS., Sections 469.090 to 469.1082; 3. To pay for project costs as identified in the budget set forth in the TIP Plan; 4. To finance, or otherwise pay for other purposes as provided in MS., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the EDA or City or for the benefit of the Central Business District Redevelopment Project by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIP Plan or pursuant to MS., Chapter 462C. MS., Sections 469.152 through 469.165, and /or MS., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, MS., Sections 469.152 through 469.165, and /or MS., Sections 469.178. Revenues derived from tax increment from a housing district must be used solely to finance the cost of bossing projects as defined in M.S., Sections 469.174, Subd. 11 and 469.1761. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the E DA or City may be included in the cost of a housing project. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by MS., Section 469.176, Subd. 4. Subsection 2 -21. Excess Increments Excess increments, as defined in MS., Section 469.176, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The EDA or City must spend or return the excess increments under paragraph (c) within nine months after the end of the year. In addition, the EDA or City may, subject to the limitations set forth herein, choose to modify the TIP Plan in order to finance additional public costs in the Central Business District Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -13 Redevelopment Project or the District. Subsection 2 -22. Requirements for Agreements with the Developer The EDA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plats, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformance of the development with City plans and ordinances. The EDA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at airy time be owned by the EDA or City as a result of acquisition with the proceeds of bonds issued pursuant to MS., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the acreage, the EDA or City concluded an agreement for the development of the property acquired and which provides recourse for the EDA or City should the development not be completed. Subsection 2 -23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the EDA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2 -24. Administration of the District Administration of the District will be handled by the Community Development Director Subsection 2 -26. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subds, 5, 6, and 6b the EDA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August I of each year. MS., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2 -26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. hi making said determination, reliance has been placed upon written Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -14 representation made by the developer to such effects and upon EDA and City staff awareness of the feasibility of developing the project site(s) within the District. Subsection 2 -27. Other Limitations on the Use of Tax Increment General Limitations All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the Central Business District Redevelopment Project pursuant to MS., Sections 469.090 to 469.1082. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Housiug District Exceptions to Restriction on Pooling; Five Year Limit Pursuant to MS., Section 469.1763, (1) At least 80% of the tax increment derived from the District must be expended on Public Costs incurred within said district, and up to 20% of said tax increments may be spent on Public Costs incurred outside of the District but within the Central Business District Redevelopment Project; provided that in the case of a housing district, a housing project, as defined in MS., Section 469.174, Subd. 11, is deemed to be an activity in the District, even if the expenditure occurred after five years. Subsection 2 -28. Summary The Columbia Heights Economic Development Authority is establishing the District to provide an impetus for residential development and provide safe and decent life cycle housing in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113- 1105, telephone (651) 697 -8500. Columbia Heights Economic Development Authority Tax Increment Financing Plan for City -Wide Scattered Site Housing Tax Increment Financing District 2 -15 Appendix A Project Description In 2009, the City's EDA directed staff to implement all the necessary processes to create a Scattered site Housing District. This included the use of all remaining TIF District C8 funds as a revenue source for acquisition of foreclosed properties throughout the City that met guidelines established by the EDA. The following guidelines were used when buying property: 1. An acquisition price point of $55,000 or less 2. All homes purchased will be demolished 3. Homes acquired should fall into one of the following categories: a. Evidence of structUral failure b. Hazardous conditions including extensive mold c. Functional obsolescence (size of property, interior layout) d. Extensive physical deterioration 4. Residual vacant lots shall meet existing zoning standards for purposes of rebuilding 5. Recognition that extenuating circumstances may require deviation from the above policies All properties that have been purchased through this program have been demolished. The TIF District is being created to facilitate the sale and redevelopment of EDA, Anoka County and Greater Metropolitan Housing Corporation owned parcels into new single - family homes for income qualified buyers. The EDA and City have determined that it will be necessary to provide assistance to the project(s) for various District costs, including a land write down and repayment of an interfund loan(s). Appendix A -1 Appendix B Map of the Central Business District Redevelopment Project and the District Appendix B -1 Appendix C Description of Property to be Included in the District The District encompasses all property and adjacent rights -of -way and abutting roadways identified by the parcels listed below. Parcel Numbers Address Owner 35- 30 -24 -13 -0044 4235 Washington Street City of Columbia Heights 35- 30 -24 -11 -0065 4448 Quincy Street City of Columbia Heights 35- 30 -24 -13 -0191 4147 7 "' Street City of Columbia Heights 35- 30 -24 -24 -0120 4110 6 1 ' Street City of Columbia Heights 35- 30 -24 -33 -0167 3853 3"' Street City of Columbia Heights 36- 30 -24 -12 -0064 4303 Reservoir Blvd. City of Columbia Heights 35- 30 -24 -24 -0093 4108 7 "' Street City of Columbia Heights 35- 30 -24 -31 -0048 4011 5 ` Street City of Columbia Heights 35- 30 -24 -31 -0055 4039 5 "' Street City of Columbia Heights 35- 30 -24 -21 -0044 4421 5 "' Street City of Columbia Heights 36- 30 -24 -24 -0025 1307/09 Circle Terrace Blvd. City of Columbia Heights 26- 30 -24 -43 -0074 4502 Washington Street City of Columbia Heights 36- 30 -24 -33 -0076 3846 Tyler Street City of Columbia Heights 36- 30 -24 -33 -0077 3842 Tyler Street City of Columbia Heights 35- 30 -24 -44 -0046 3812 Jackson Street Anoka County HRA 26- 30 -24 -34 -0160 4522 5 "' Street Anoka County HRA 26- 30 -24 -24 -0116 4947 University Avenue Anoka County HRA 35- 30 -24 -12 -0151 4320 Madison Sheet Anoka County HRA 36- 30 -24 -42 -0055 3973 Hayes Street Anoka County HRA 26- 30 -24 -31 -0089 4833 University Avenue City of Columbia Heights 35- 30 -24 -33 -0025 3805 2 "' Street Greater Metropolitan Housing 35- 30 -24 -41 -0086 3982 Van Buren Street Columbia Height HRA 35- 30 -24 -23 -0089 4133 2 "" Street City of Columbia Heights Appendix C -1 Appendix D Estimated Cash Flow for the District Appendix D -1 v A a c o E v N H W oaoo N N N N aaaa O O O N o N Q O N r N O N O N N V O : Z m °. q 'E S m mE o a 0 C� LL o :! 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N �` �� �NNNNI N N Wnn VQMF. W4 W im m W WmmmNNmm�� ww��NN��mmn�NNWmNNmW nnnn °m °mw`�m`mmmm M_f_'_ao N_h N_-- . -oo_e ( VNNhmmN( ��' t$ mNNPNNN0000��NNNONNMMMddVVN (1(IN VIN (pNOObbm m 00� q;F 4F ?F; YdV� 0 h 0 � bb E0 0 3 b i� E f O F E y 9 6 N `W E Appendix E Housing Qualifications for the District INCOME RESTRICTIONS - ADJUSTED TOR FAMILY SIZE (OWNER- OCCUPIED HOUSING DISTRICT) -ANOKA COUNTY' No. of Persons 100% of Median Income 115% of Median Income 1 -2 persons $82,700 N/A 3 -4 persons N/A $95,105 Source: U.S. Department of Housing and Urban Development Appendix E -t Appendix F Findings for the District To be added prior to the public hearing Appendix F -2 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Special Meeting of September 6, 2011 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO:5 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Approve funding for City's single family 2011 BY: BY: deferred loan program — Resolution -13 DATE: I / BACKGROUND: For the past four years the EDA has administered two home improvement programs: Rehab Incentive Program and Single Family Deferred Loan Program (SFDL), and every year a reallocation of fiords is done by resolution to keep the programs running. In February of this year staff requested that funds be allocated to the Rehab Incentive program and not the SFDL program. The SFDL program still had $24,000 remaining from the previous year. The Rehab program was funded with $50,000 this year and the SFDL was to use the remaining funds from last year. Since the beginning of 2011 the City took over administering the programs and staff has approved five SFDL applications in a total amount of $21,587.00 therefore the 2010 funds are running out. If the EDA would like to continue this program an allocation of funds is necessary typically the EDA allocates $35,000 to this program from the Capital Improvement Development Fund (420). 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 would provide 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 ($67,200). '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. 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 fiords available to finance future loans. A lien applied to the property ensures that the loan will be repaid. RECOMMENDATION: Staff recommends the EDA fund the SFDL program RECOMMENDED MOTION: MOTION: Move to waive the reading of Resolution 2011 -13 there being ample copies available to the public. MOTION: Move to adopt Resolution 2011 -13, a Resolution approving funding for the Single Family Deferred Loan Program (SFDL) in the amount of $35,000 from Fund 420. EDA ACTION: EDA RESOLUTION NO. 2011 -13 A RESOLUTION APPROVING FUNDING FOR THE SINGLE FAMILY DEFERRED LOAN PROGRAM ($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, in 2011 the City's Community Development Department, in order to provide better service for the residence of the community, has taken over the duties of providing information and implementing these programs, and WHEREAS, this resolution seeks to authorize and provide additional fiords for the continuation of 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 $35,000 for the Single Family Deferred Loan (SFDL) Program from Fund 420 — Capital Improvement Development Fund. Passed this 6 °i Day of September President, Gary Peterson Walter Fehst, Executive Director COLUMBIA HEIGI -ITS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 6, 2011 AGENDA SECTION: Business Items ORIGINATING EXECUTIVE NO:6 DEPARTMENT: EDA DIRECTOR APPROVA ITEM: Root Property -3930 University Ave. — BY: Scott Clark BY: DEED Investigation Grants DATE: September 1, 2011 BACKGROUND: On July 18, 2011 the City of Columbia Heights received official notification from Anoka County that the Root Property, 3930 University Ave. (map enclosed) was taken into a State Trust as a tax forfeiture parcel. Based on State law, the County becomes the manager of the property and eventually handles the disposition of the parcel. It is obvious that this is an unusual property due to the potential levels of site contamination issues, and it is doubtful that the property could be sold at auction and put back into productivity. Therefore, staff is making a series of recommendations to the EDA to assist in the long term process of cleaning this property and to establish this as a redevelopment site (identified as a redevelopment "Area of Opportunity" within the City's Comprehensive Plan, August 2010 -page 20, Figure 2 -3). This site has been problematic for the City for a number of years. This includes a series of abatements of the property for general clean -up, removal of mercury containers in October of 2007 and demolition and contaminated ash removal from a fire in 2010. It should be noted that the tax forfeiture process eliminates the existing abatement assessments against the property, but once the property is sold to the private market the City can reassess. The last action to note was that the City sponsored a Department of Employment and Economic Development (DEED) grant for the property owners in 2009, but those owners failed to act on the grant due to their inability to provide the required matching equity. All of this history leaves the City in a position to be the agent of change, since Anoka County is merely a property manager of the site and have no driving reason to remedy the issues at hand. Based on this staff is recommending the following: 1) The EDA (City) should apply for an investigation clean -up grant from DEED similar to the one secured in 2009. Although the City does not own the property, DEED will allow us to apply directly based on consent of the County. In turn, staff has had discussions with the County who stated that they would allow, based on their approval process, consent to the grant and allow access to the property for investigation. Completion of these actions will position the City to apply for the next series of grants which are for the actual brownfield clean -up funds. The initial investigation grant has a 25% equity participation match so if the EDA desires to proceed, a motion to obligate these funds will be necessary. In addition to this grant, it is assumed that the City/EDA will continue on with a general clean -up grant which could be significant in cost. Based on this, staff is recommending that $50,000 in Anoka County Levy money be appropriated to a Root property fund. This appropriation would have to be acted on by the Council and actual expenditure blocks would have to be acted on by the EDA, so this is not a blanket request for expenditure authorization up to the $50,000. 2) The second part of this grant is to secure an environmental consultant that will both assist in the grant application and to do the actual work, if the grant is funded. The quotes that were received are as follows: Pro Source - range of $32,790 to $42,620 American Engineering Testing- $24,225 Bay West - $31,623.50 Since these bids were received late Thursday a recommendation will be at the meeting by staff in order for the Community Development Department to confer with the City Engineer. If the grant is successful staff will work with the County and DEED to move to the next step in the process which will be grants for actual clean -up. RECOMMENDATION: Staff recommends that the EDA apply for an investigation grant, appropriate $50,000 for a Root property clean -up fund through the Anoka County Levy funds (and authorizing an actual expenditure of $10,000 for the investigation phase) and enter into an agreement with Anoka County allowing the grant to commence, and entering into a service agreement with an environmental firm for the initial work. RECOMMENDED MOTION: Motion: Move to direct staff to initiate and complete the following: 1) Take all actions necessary to create a $50,000 appropriation fund designated for the Root Property at 3930 University -funds to be secured through the City's Anoka County HRA Levy program. 2) Authorize the staff, based on review by the City and /or EDA Attorney, to enter into an Agreement with Anoka County that will allow the City to apply for an investigation grant, through DEED, by November 1, 2011. 3) Authorize up to $10,000 of actual dollar expenditure as part of the 25% equity contribution required for the grant. 4) Accept a bid for environmental work from (to be discussed at the meeting) based on successful funding of the grant. EDA ACTION: To: Walt Fehst, City Manager From: Scott Clark, Community Development Director Re: Anoka County Levy Date: September 1, 2011 This memo is in response to questions regarding the Anoka County HRA Levy program that was approved by the City Council on September 10, 2007 (Resolution 2007 -156 attached). Attached with this memo is an excel spreadsheet dated September 1, 2011 which should give the reader most of the requested information. Staff would like to note the following: • The Levy was approved by the EDA and the City Council in 2007 as an additional resource for important redevelopment or housing priorities. • Funds must be used for programs that meet either the State's Economic Development Authority, and /or Housing and Redevelopment Authority's enabling legislation. • The approval period was a five year levy, after 2012 the City will need to decide if they want to "opt -in or opt -out" for another five year period. If they "opt -out" they will have to wait an additional five year period. • The Levy period runs from 2008 to 2012. The anticipated total five levy credited to the City will be approximately $1,033,674, depending on the final 2012 allocation. • To date, the City has three programs that have funds obligated to them totaling $346,647, leaving a net $687,000. • The three programs obligated include: o GMHC Development Agreement for gap financing at 3805 2 nd Street in the amount of $86,647. Last Agreement amendment approved on June 22, 2010. o $100,000 for the 37 and Central Agreement -last approved by the EDA on May 2, 2011. o $160,000 for Make Heights Your Home program approved by the City Council on May 26, 2009 (Resolution 2009 -66). This was a special down payment assistance program for individuals working with banks to secure combined acquisition and rehabilitation loans for major rehabilitation work. This program has not been successful in attracting participants and a reallocation of a portion of these funds to the Root property, 3930 University, clean -up efforts will be presented to the EDA. • In 2010 the plan was to use the unobligated 2010, 2011 and 2012 appropriations as part of the redevelopment costs associated with the purchase of the Mady's property. Since that did not a occur a relook at the use of these funds will need to be made by the EDA. • Since these funds are capital in nature budgeting and appropriation only occurs at the time that a specific program is developed, not on an annual basis. • Staff will present to the EDA, in either late 2011 or early 2012, ideas for obligating the remaining unobligated funds. i I 0 N CO a p0 N E Q N N Lo I i O O N LO U C 5 W c o o N r , c O E a > > Q a N c m E I y V m > o a 0. Q I _... _.. O U m 0 Q _ I Q c o m c0 Q E c w lll ro (0 (n � I N d 0 o CD v (p (O W H3 o o o 0 0 0 0 v O (O O (O O CO 6G 6G _.I..o 0 (O N (O 6c� O 00 ' m o o 0 O V' N V-J o 0 0 0 O O (0 (fl o 0 0 0 0 O d' co EA - 0 0 0 0 O 0 N� (fl 0 0 0 0 o W i 0 0 0 0 V' M N fA 0 0 0 0 0 ui N ER 0 0 0 o 0 N N fA o 0 0 O O r ( EA a fn L 01 N i.4 .= 0 i c l y A U ' O I O O c Y � Y N E E o 00 N E 2: � N 0 N m CD i 0 c LL C C l4 o > p Q $a C Q U _I O (0 W M (9M c O U -� I j eo o N .O U LL p . d O p L(. C p _@ 02 w O) D H m N 0 U LL N N 0 N m 0 N N 0 > N N 0 > N m .fl 0 :D i+ d 7 Q O p U y -0 d O Q J o 0 N M N O (D m' >- 00 N ! O r O N N `m } I.L N m } @ N LL m N `m o > LL N C p C'4 O LL U O O U Y Q O. O Q 0 (`p >` (p N i N N } cp Mn V-) N a ,� U N C N Q Y N a 0 .-. i' C O Q N O. 'U c> Q 4 RESOLUTION 2007 -156 CITY OF COLUMBIA HEIGHTS RESOLUTION OF THE CITY OF COLUMBIA HEIGHTS TO PARTICIPATE IN THE ANOKA COUNTY HOUSING AND REDEVELOPMENT AUTHORITY ECONOMIC DEVELOPMENT ACTIVITIES. WHEREAS, the City of Columbia Heights is an Anoka County municipality, and such is a rapidly growing and important segment of the Twin Cities Metropolitan Region, made up of rich variety of vital, desirable communities; and WHEREAS, the City of Columbia Heights Council members believe that the residents of Columbia Heights would realize many benefits from expansion of the Anoka County tax base, including but not limited to; the creation of localjob opportunities, redeveloping certain sites within the City, as well as maintaining and improving the City's housing stock, wider sharing of tax burden, and access to enhanced infrastructure, services, and retail and business activities, and, WHEREAS, in order to expand the local tax base, the Anoka County Board of Commissioners has indicated an interest in fostering a regional approach to economic development in Anoka County, and, WHEREAS, in 2007 a statutorily formed citizens exploratory committee recommended to the Board of Commissioners that the Anoka County Housing and Redevelopment Authority be granted the powers of an economic development authority, and WHEREAS, on June 12, 2007, the Anoka County Board of Commissioners, after fulfilling the statutory requirements, did authorize their Housing and Redevelopment Authority to exercise the powers of an economic development authority, and, WHEREAS, MN Stat. 469.1082 requires that a municipality shall, declare its willingness, by resolution, to join the county in its economic development activities. NOW, THEREFORE BE IT RESOLVED, that the City of Columbia Heights does hereby declare its support of Anoka County and its countywide economic development objectives and activities, and, BE IT FURTHER RESOLVED that the City of Columbia Heights does hereby elect to participate in Anoka County Housing and Redevelopment Authority economic development activities, and, BE IT FURTHER RESOLVED that the City of Columbia Heights does hereby elect to participate in the Anoka County Housing and Redevelopment Authority economic development activities to request funds to support the City's redevelopment and housing maintenance and improvement goals, and, BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the City of Columbia Heights. Passed this 10 °i day of September, 2007. Motion by: Diehm Second by: Kelzenbeig Roll Call: Ayes: Peterson, Williams, Diehm, Kelzenberg Nay: Nawrocki L. Attest: P 4., YY\ r Patricia Muscovitz, CMC - City 011erk ( k ID&V West Casfomor- Focused Eoftn , Maf & Industdaf Sa of a s August 30, 2011 Bay West Inc. 5 Empire Drive, St. Paul, MN 55103 651291 -0456 ' FAX 651- 291 -0099 www,baywest.com * infoObaywest.com City of Columbia Heights Attention Scott Clark Community Development Director 590 40th Ave NE, 55421 Phone: 763.706.3672 E -mail: Scott clark()ci columbia- heights mn us Re: Proposal for Phase I and Phase II ESA, and RAP Preparation Former Root Building 3930 University Avenue NE Columbia Heights, Minnesota 55421 Proposal Number: P110512 Dear Mr. Clark: Bay West, Inc. (Bay West) is pleased to provide this draft work plan to the City of Columbia Heights Economic Development Authority (EDA). We understand the EDA is acting as a sponsor for the above noted property and is coordinating the environmental assessment of the property with assistance from the Minnesota Pollution Control Agency (MPCA) and the Department of Employment and Economic Development (DEED) Contamination Clean Up and Investigation Grant Program. Bay West responded to an emergency response call for a mercury spill cleanup on October 26, 2007. Mercury was identified in several areas throughout the buildings. The visible mercury was containerized into drums and secured in the Root building. In addition, PCBs were detected at the Site in wipe samples collected from the main building basement and loading dock areas. Soil and groundwater contamination may be present in and around the buildings from the past uses of the Site as a trucking company and an electrical supply company with outside storage /dumping. Equal Employment Opportunity /Affirmative Action Employer 1.0 BACKGROUND During September 2009, Bay West completed a Phase I Environmental Site Assessment (ESA) for the property on behalf of Realty Executives for due diligence purposes in conjunction with seeking to qualify for the landowner liability protections (40 CFR 312.26) and to enter into the MPCA Voluntary Investigation and Cleanup (VIC) Program. Bay West completed the Phase 1, submitted it to Realty Executives, and was never paid for the work performed. That Phase I is now out of date and needs to be updated to reflect the passage of time and changes that have occurred at the Site. Some notable changes at the Site include the removal of main Site building after it caught fire and partially burned. We understand that the ash from the building was characterized as PCB contaminated waste that was disposed of as a MNO3PCB1 waste at a Michigan end facility. 3.0 SCOPE OF SERVICES The scope of services include the preparation of a Phase I ESA, Phase 11 ESA, and Remedial Action Plan and assistance in coordinating with DEED and the MPCA. Additionally, Bay West has estimated the cost for the MPCA VIC program to review and approve these documents, specifically the RAP. Bay West has been associated with this Site since 2007 when we initially responded to a call for emergency response services. Subsequently, we performed a Phase I ESA, prepared multiple proposals for additional work, aided the City and owners develop other strategies, answered many phone calls from bankers etc. It is now 2011, and very little progress has been made with the site. Our approach /scope of work has been designed to be comprehensive in nature in an attempt to gather the data needed to proceed directly to the preparation of a remedial action plan (RAP). We anticipate other proposals that may come in will not be as comprehensive as ours, as we best understand the history of this property and maintain many photographs, videos, and firsthand knowledge of the site. We hope the Columbia Heights EDA will give careful consideration to our proposal's content, and keep in mind that a comprehensive approach is what this Site needs. The Phase II Subsurface Investigation will be conducted in accordance with the MPCA's VIC and Risk -based Site Evaluation Process Guidance Documents. The anticipated sampling media will include primarily soil, with limited groundwater sampling. Soil probes will be advanced near entry and exit points of the former Site buildings, below the former main building basement floor, near areas of visible surface staining, and in select areas that help provide broad Site coverage. Based on the past use of the property, the presence of hazardous materials, the preliminary Phase I findings, and discussions with property owners, Bay West recommends the following scope of work be performed: Prepare a site - specific health and safety plan (HASP); Conduct a Site visit to update the previous Phase I Bay West had previously prepared and identify the locations of the soil probes and test pits. The probe and test pit locations will be based on current and past visual observations, our photo library of the site, and the location of adjacent or historical areas of concern; Clear public and private utilities and obtain appropriate permits for drilling work. During a Site visit on September 24, 2009, Bay West observed several metal pipes protruding from the ground east of the main building basement drive area. Bay West will attempt to identify these unknown pipes using the private locator if they are still present. Soil Probes Advance up to 20 soil probes around the Site to a depth of six feet; three probes will be advanced to the groundwater table which is estimated to be approximately 40 feet below ground surface. At least two of the 20 probes of three probes will be advanced within the foot print of the main building. Based on the historical knowledge of the Site, the interior building and exterior of the south side of the building appears to be the most likely location for contaminant releases. One of the deep probes to groundwater will be advanced in that area to assess what is likely the "worst case" area for environmental impacts. Test Pits Advance up to 10 narrow test pits around the Site to a depth of approximately six feet below the ground surface to assess if fill material or buried debris is present. Test pits will be observed by a Bay West environmental scientist who is also a Minnesota Licensed Asbestos Inspector. The test pits will be advanced in locations that appear to contain fill and /or debris and in select other areas to provide general Site coverage. The test pits will be excavated and backfilled using a rubber -tired excavator. Building Materials Field screen building materials that remain at the site with the Lumex and XRF in an attempt to identify potential hazardous materials. If elevated metals are identified, bulk samples of the material will be collected for laboratory analysis. Collect up to 5 samples of concrete floors and remaining walls of the main building for laboratory analysis to assess if the materials are hazardous and require special disposal. The samples will be analyzed for PCBs and TCLP RCRA Metals. g ay W : ma- �,rnxuwFn�w;mw�n�aNmuinsrsoctxs Page 4 Screening and Sampling Collect soil samples from each soil probe and test pit on a continuous basis, screen the samples at one foot intervals for headspace readings for organic vapors with a flame- ionization detector (FID) due to historical Site use and petroleum storage and staining observed; for mercury using a Lumex meter due to historical Site use and mercury spills; for metals using a X -ray fluorescence analyzer (XRF) due to historical Site use and observed fill and debris, and classify the samples based on geology. An on -Site asbestos inspector will observe the test pits and soil probes for the presence of potential asbestos containing materials. Submit up to 20 soil samples and three groundwater samples to the laboratory for analysis of volatile organic compounds (VOCs), polychlorinated biphenyls (PCBs), diesel range organics (DRO), asbestos, mercury only, and RCRA metals. If RCRA metals are analyzed, mercury will not be analyzed independently as mercury is included in the RCRA metals analysis. Soil samples selected for analysis will be from the top two feet of soil, or from the sample interval that exhibits the most indications of contamination following field screening (FID /Lumex/XRF) and /or visual observations. Field screening action levels that trigger laboratory sampling will be as follow: Screening Method Action Level Laborator FID >10 arts per million m VOCs, DRO Lumex , " 00 n /m Mercur XRF 200 ppm lead RCRA Metals Visual Staining Samples near building entrances and exits, or visual oil stainin VOCs, DRO, PCBs Report Prepare a Phase II Investigation Report summarizing the results of the investigation and Bay West's recommendations for the project site. Bay West will then prepare a Response Action Plan (RAP) to mitigate the release of hazardous substances within /below the remaining building structure (s) and potential releases to the subsurface soil and groundwater. Grant Assistance Bay West will provide grant assistance at no cost to the EDA. It is assumed that the EDA staff will complete the majority of the grant with Bay West supplying information for the cost analysis section and scheduling. COST SUMMARY Work will be performed on a time - and - materials basis in accordance with Bay West's Standard Rates. The following table summarizes the cost proposal: Task ' Estimated Fee Phase I ESA $2,891.50 Phase II ESA $22,236.00 Response Action Plan $5,505.00 MPCA VIC fees $1,000.00 TOTAL $31,632.50 Bay West appreciates the opportunity to complete this Work Plan and Cost Proposal for City of Columbia Heights EDA. If you have any questions or concerns regarding this project, please contact us at the below numbers. Respectfully Submitted, Matt Schemmel, P.G. Hydrogeologist (651) 291 -3410 matts(a)bavwest.com Attachments: � Fnvironmental Murdock Services Manager (651) 248 -4291 brvan m a..bavwest. com A - Cost Proposal B - Analytical Cost Summary L:ufar:erfc�unl and Bay West, Inc. (Bay West) of St. Paul, Minnesota. Client and Bay West agree as follows: CONTRACT DOCUMENT — Referred to as the "Contract Document' or "Agreement." Defined as: PROPOSAL ACCEPTANCE AGREEMENT, the Bay West Project Services Agreement, and any proposals that includes a scope of services, fee schedules and other documents listed below under PROFESSIONAL SERVICES. 2. PROFESSIONAL SERVICES — Bay West will provide professional services ( "Services ") for the Client as indicated in the following documents: Proposal entitled Phase II Environmental Site Assessment Proposal dated August 30, 2011, Proposal No. P110512. Other proposal documents by reference: Proposal Acceptance Agreement Bay West Standard Fee Schedule. 3. DESIGNATED REPRESENTATIVES —The parties designate the following named individuals as their authorized representatives to provide approvals, directives, and permissions, including changes, and to receive notices or other communications under this agreement at the following addresses: DESIGNATED REPRESENTATIVE DESIGNATED REPRESENTATIVE Bay West, Inc. CLIENT: Name Address Phone -Email -Fax Name Address Phone -Email -Fax Bryan Murdock Office: 651 - 291 -3473 Bay West bryanmebaywest.com 5 Empire Drive Fax: 651 - 291 -0099 St. Paul, Minnesota 55103 YOUR SIGNATURE INDICATES ACCEPTANCE OF THE CONTRACT DOCUMENT INCLUDING THE ATTACHED PROJECT SERVICES AGREEMENT (TERMS AND CONDITIONS), AS DEFINED ABOVE, UNLESS EXPRESSLY MODIFIED IN WRITING. ONCE EXECUTED, PLEASE RETURN A COPY OF THE EXECUTED AGREEMENT TO BAYWEST BY EMAIL, FAX OR MAIL. ACCEPTED BY: ag est (Person authorized to execute contracts) Title as oo ° a u 2 ad �U 3 �E 3 9 A a a ` x82 : b E. E ^,Y 98 $„ H a a '• i s a � � � a H; 6 w'€ s e^ S F 8 8 8 8 ' 8 8 8 8 8 8 8 g $s R 8 R R Y 8 g E w ogX ¢ 8 k 8 8m s 1 8 S - ��8 S o� C rc " ° E f N 8 8 tiq �i38. R a n �a rc � p d E� ° a ¢E " "EF "¢` 2 v 9 i E @5 m d y qq N E° e ° n a . N E a o w w E c g ¢ 3° m a y x ° • " E� Q n � A a a ` x82 : b E. E ^,Y 98 $„ ATTACHMENT Analytical Cost Summary - Subsurface Investigation Former Root Building 3930 University Avenue NE, Columbia Heights, MN Id LMy Hal .Mdtri4 , �, @q„ .:� - AnaIYSIS „�' -P,nca S, �S.ubfolal ' 20 1 2 1. Solid Pace Mercury $ 28.00 $ 56000 EPA 74719470 2 20 1 1 2 Solitl = 4 Solid Pace PCBs $ 60.00 $ 1,20000 EPA 8082 20 1 'J '.4 Solitl Pace VOCS $ 65.00 $ 1,300.00 EPA 8260 20 1 M21 Solid Pace DRO $ 25.00 $ 500.00 EPA Mod, 8015 /WI DRO 20 1 4 Solid Pace RCRA Metals $ 68,00 $ 1,360OD EPA 60109470H471 20 Asbestos $ 10.00 $ 20000 PLM S $ Soil Analyals Subtotal =l$ 5,120.D0'$ "nor V" 0 1 2 1. Solid Pace Mercury $ 28.00 $ EPA 7471U470 2 3 1 1 2 Solitl = 4 Solid Pace PCBs $ 60.00 $ 180.00 EPA 8082 3 1 'J '.4 Solitl Pace VOCS $ 85.00 $ 185.00 EPA 8260 3 1 4 Solid Pece DRO $ 25.00 5 75.00 EPA Mod. 8015/ WI DRO 3 1 4 Solid Pace RCRA Metals $ 6800 $ 20400 EPA6010947DR474 Soil Analysis Subtotal= 1 $ 654.00 $ 21.00 iutl n 2 2 Solitl Pace TCLP RCRA Metals $ 113.00 $ 228.00 EPA 1311/8010/]4]0 Concrete 2 I 1 1 2 Solitl Pare PCBs $ 60.00 $ 12000 EPA 8082 Concrete bon Hnalysls Jgglelal 5 d4a.no Total Laboratory Analysis COS1= $ 6,120.00 Cry Quantity FB = Field blank TS = Trip blank Dup. = Bupiicala sample AMERICAN ENGINEERING TESTING, INC. August 30, 2011 City of Columbia Heights 590 40 °i Avenue NE Columbia Heights, Minnesota 55421 Attn: Mr. Scott Clark RE: Proposal for Environmental Consulting Services Redevelopment Property Columbia Heights, Minnesota AET Proposal No. 03 -04141 Dear Mr. Clark: CONSULTANTS • ENVIRONMENTAL. • GEOTECHNICAL • MATERIALS • FORENSICS In response to your recent project posting, American Engineering Testing, Inc. (AET) is pleased to offer environmental consulting services to the City of Columbia Heights (hereafter referred to as "Client ") for the Redevelopment Property referenced above. This proposal describes the scope of services, schedule, fees and other information regarding our services. Protect Information AET understands the Redevelopment Property is also known as the Root Property, located at 3930 University Avenue. It is currently a vacant property with blighted industrial storage /workshop buildings. We are unaware if storage tanks are present, but it is a good possibility. Parts of the lot are covered by scrub trees. We understand that the Client is considering redeveloping the property. Purpose The purpose of the environmental consulting services is to provide general assistance with a Department of Employment and Economic Development (DEED) Investigation Grant application, prepare a Phase I Environmental Site Assessment (ESA), conduct a Phase II ESA, assist the Client in enrolling the property in Minnesota Pollution Control Agency (MPCA) voluntary programs, and prepare a Response Action Plan (RAP) to address contaminant impacts which may be identified during the Phase I and Phase II stages. We understand this Phase I ESA is being performed as part of the Client's due diligence process to satisfy one of the requirements to qualify for the innocent landowner, contiguous property owner, or bona fide prospective purchaser limitations to CERCLA liability. A complete evaluation of business environmental risks associated with the subject site may necessitate assessment beyond that identified in the ASTM Standard Practice for Environmental Site Assessments and the scope of services described below. 550 Cleveland Avenue North I 5t. Paul, MN 55114 Phone 651- 659 -90011 Toll Free 800- 972 -63641 Fax 651-659-13791 www.amengtest.comI AA /EEO This document shall not be reproduced, except in full, without written approval from American Engineering Testing, Inc. City of Columbia Heights AET Proposal No. 03 -04141 August 30, 2011 Page 2 of 5 Scone of Services AET proposes to perform the following scope of services: • Provide general assistance with content and budget for a DEED Investigation Grant application. AET assumes the City will undertake the formal preparation of the application. • Prepare a Phase I ESA report. The scope of AET's Phase I ESA is in general compliance with the Standards and Practices for All Appropriate Inquiries (AAI) rule (40 CFR Part 312, November 1, 2005) and the American Society for Testing and Materials Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process - ASTM E 1527 -05. You should be aware that, even though we follow the current AAI rule and ASTM practice standard for this service, there may be localized contamination on the property we cannot ascertain and will not be responsible for, given this scope of services. Such contamination could be related to disposal of contaminants not reported to appropriate government agencies, not made known to us or not reasonably visible to us at the time of our site observations as part of service for this Phase I ESA. • Coordinate Phase 11 ESA field sampling activities. Activities will include a site visit, public utility clearance, field instructions, and preparation. This task does not include permitting for site access, private utility locates, or clearance of surface obstructions to allow for accessibility to sample locations. • Perform ten to twelve soil borings at select locations to depths of 12 to 16 feet below grade, where we expect to encounter natural deposits underlying fill soils. The borings will be performed with a truck- mounted Geoprobe system and logged by AET environmental personnel. • AET environmental personnel will collect and screen soil samples recovered from the borings with a photoionization detector (PID) equipped with a 10.6 eV lamp for the presence of organic vapors. Also, obvious odors and visual evidence of contamination will be noted. • Collect select soil samples into laboratory- prepared containers for chemical analysis. Sample selection will be based on screening results, visual /odor observations, and our understanding of subsurface conditions. In the absence of obvious indications of contamination, representative samples of fill and natural soil will be collected for chemical analysis to confirm the samples are uncontaminated. Samples will be retained on ice or in our laboratory refrigerator until submitted to the qualified subcontract laboratory, following chain-of-custody procedures. • Direct the laboratory to perform chemical analysis of the soil samples. AET assumes the following parameters will be analyzed (anticipated maximum number of samples in brackets): - Diesel range organics (DRO) plus silica -gel treatment by WDNR method [15] - Volatile organic compounds (VOCs) by EPA8260 181 - Polycyclic aromatic hydrocarbons (PAHs) "extended list" by EPA8270 [15] City of Columbia Heights ACT Proposal No. 03 -04141 August 30, 2011 Page 3 of 5 - Polychlorinated Biphenyls (PCBs) by EPA8082 [5] - Organochlorine Pesticides by EPA8081 [5] - 8 RCRA -list metals by EPA6010B and 7471A [15] - 8 RCRA -list metals for "hazardous character" by TCLP [6] • Upon completion of the field activities and receipt of analytical results, AET will summarize the results and recommendations in a written Phase 11 ESA report. The report will include documentation on records reviewed, boring logs, methodologies used, maps, and the results of the analytical testing compared to standards established by the MPCA. • AET will assist the City in enrolling the property into the MPCA Voluntary Investigation and Cleanup (VIC) Program and the Petroleum Brownfield Program (PBP), as appropriate. AET will also provide assistance in coordinating project activities with the MPCA. • Prepare a RAP to address the identified contaminant impacts for MPCA review. Remarks Our services to you are strictly limited to the scope described above. For your information, there may be certain environmental conditions on a property that are beyond the scope of our Phase I ESA services. Some of these environmental conditions include substances that may be present on a property in quantities and under conditions that may lead to contamination of the property or of nearby properties but are not included in CERCLA's definition of hazardous substances or do not otherwise present potential CERCLA liability. Client and User, shall provide AET with all available information pertaining to the subject property, including the following: legal description(s), plats, and surveys; recorded land title records and judicial records for environmental liens or activity and use limitations; reports of environmental assessments, geotechnical exploration, hydrogeologic conditions, and environmental audits; hazardous waste generator notices and reports; notices or other correspondence with any government agency regarding contamination at the property or relating to past or current violations of environmental laws with respect to the property or relating the environmental liens encumbering the property; registrations for aboveground and underground storage tanks; plans including Community Right to Know Plans, Safety Plans, Preparedness and Prevention Plans, and Spill Prevention, Countermeasure, and Control (SPCC) Plans; material safety data sheets (MSDS); present and past owners /occupants (phone numbers and /or addresses); existing and proposed uses, activities, etc., which are pertinent to the services provided by AET as part of this proposal. This scope of services assumes ready access to the sampling locations with a conventional truck rig on a continuous basis during the field mobilization. We also assume that structures and materials at the sample locations will not obstruct borings. If these conditions are not met, then the scope may require adjustments. City of Columbia Heights AET Proposal No. 03 -04141 August 30, 2011 Page 4 of 5 Performance Schedule Based on AET's current schedule, we are available to begin the project upon receiving authorization to proceed. A Phase I ESA can be completed in three weeks. Soil borings may be scheduled within two weeks if sufficient background information and site accessibility are established; this schedule is subject to variability. We expect the borings will take two days to complete. The standard laboratory turnaround time is 5 to 10 work days. Please contact us if you need to discuss expedited turnarounds, which will affect laboratory rates. Conditions AET's services will be performed per the attached Service Agreement and Subsurface Boring Supplement. Fees AET's fees for services will be charged on a time- and - materials basis. The fee schedule is attached. We estimate total fees of $24,225. The estimate above is broken down as follows: Grant Assistance - $825 Phase I ESA - $1,750 Phase II ESA — $17,825 MPCA Assistance - $825 RAP Preparation - $3,000 The estimated fees are based on the assumptions detailed elsewhere in this proposal. If conditions vary from assumptions or the scope needs to be amended, AET will discuss the budgetary effects with the Client's representative. TECNN ®1�1E5.INC. 9219 East River Road NW Minneapolis, Minnesota 55433 763 - 786 -1445 Fax 763.786 -1030 www.p rosou rcetecii.coni September 1, 2011 Scott Clark Community Development Director City of Columbia Heights 590 40 °i Avenue NE Columbia Heights, MN 55421 RE: Professional Environmental Services 3930 University Avenue (Root Property), Columbia Heights, MN Dear Mr. Clark: ProSource Technologies, Inc. (ProSource) is pleased to submit this proposal for a Phase I and Phase 11 Environmental Site Assessment (ESA) and the preparation of a Response Action Plan (RAP) for the property located at 3930 University Avenue, Columbia Heights, Minnesota (Site). It is our understanding that these documents are needed by the Columbia Heights' Economic Development Authority (EDA) in preparing for a grant application and MPCA VIC application and review. The following project background information provides a brief description of the potential environmental history of the property and is the basis of our proposal. PROJECT BACKGROUND INFORMATION From our information search, ProSource understands that structures on the property include the remains of an abandoned warehouse with several outbuildings. The Site is purported to have been a former residence, a used electric -motor company and a machine shop formerly operated as Root Equipment Supply. The property address has been listed on internet sites as a resale, second hand & used merchandise store as well as an electrical salvage yard. ProSource has contacted Mr. Jason Moran Emergency Responder for the Minnesota Pollution Control Agency (MPCA) regarding the Site. Mr. Moran stated that he has managed emergency responses at the property twice and he was very familiar with the property. The first emergency response, in October 2007, was for the presence of free mercury in the main building on the property. The second response, in April 2010, was for the removal of four 55- gallon drums of an unknown hydrocarbon that was found to be used motor oil. Mr. Moran stated that the main building burned in mid -March 2010. Of special note — Mr. Moran stated that ProSource should be aware of other concerns he had about the property. He stated that he had walked the entire extent of the property during one of the emergency responses. He stated that he observed many unusual mounds and disturbed areas across the site. He noted the presence of several "burn areas" that also drew his attention. He shared that he would anticipate that substances and material of environmental concern might likely be present beneath these areas. He stated that these areas should be explored for the possible presence of improperly disposed containers of potentially hazardous materials, improperly disposed materials or equipment or potentially hazardous residues of burned liquids and materials. Environmental e Right of Way a Engineering e Surveying An Affirmative Action Equal Opportunity Employer Professional Environmental Services Columbia Heights Economics Development Authority ProSource reviewed Minnesota Department of Health Well and Boring Records of wells and monitoring wells in the immediate vicinity of the site. Based on these records, the depth to groundwater was recorded as 81 feet below the ground surface. The geology above the groundwater was recorded as sandy clays, sand and cobbles above 60 feet with hardness recorded as "soft." From 60 feet to the bottom of the borings, however, the hardness was recorded as `hard" as the geology transitioned into hard sandstone. This data was consistent for all of the well records reviewed. Due to the depth and geology, ProSource recommends using hollow -stem auger drilling with a traditional drilling rig. Traditional drilling also allows for the installation and removal of temporary wells far more effectively than with the GeoProbe. PHASE IElSA Upon successful funding, ProSource will conduct a Phase I ESA for the Site. The purpose of conducting the Phase I ESA is identify historical site activities that could have had environmental impacts on the Site and to determine if a reported release or threatened release of a hazardous substance, pollutant, or contaminant exists or has occurred under the meaning of the Minnesota Environmental Response and Liability Act (MERLA). hn addition, the Phase I ESA will assess the potential for environmental impacts to this Site from other nearby facilities also covered under MERLA. The Phase I ESA will be conducted following guidelines established by the American Society for Testing and Materials (ASTM), "Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, Standard E1527 -05." In addition to the ASTM guidelines, the MPCA Voluntary Investigation and Cleanup Program (VIC) Program Fact Sheet #8 "Phase I Investigation' will be utilized as a guide for conducting the work, The work to be provided by ProSource as part of the Phase I ESA includes the following: • Site Location Describe the location of the Site by street address, township and /or municipality, county, and United States Geological Survey (USGS) Quadrants to the nearest 1/4 section. • History of Ownership Provide the histories of ownership for the Site over the past 50 years or as far back as there are records, including the name of each owner and the approximate year(s) of ownership. • History of Operations For each owner /operator of the Site, determine what activities they engaged in. In particular, determine operation processes, raw products used, types and composition of any waste streams, disposal methods, environmental permits and solid or hazardous waste streams including manifests, treatment, storage, disposal, spills or enforcement actions. • Site Reconnaissance Conduct a walkover of the Site to determine the presence of items including, but not limited to underground or above ground storage tanks (USTs or ASTs), refuse disposal, wells, septic systems, sumps, pits, ponds, lagoons, catch basins, retention ponds, areas of surface soil staining, stressed vegetation, or any other indication of a potential contamination source. Adjacent properties will also be evaluated to determine if they are potential sources of contamination. • Site Maps Provide historic and current site maps, which designate the locations of all pertinent current or former features, structures and potential sources of contamination. • Database File Search Conduct a database file search of all applicable State and Federal regulatory agencies to determine the presence or known contaminated properties near the Site. proso�urce Professional Environmental Services Columbia Heights Economics Development Authority • Information Requests tests Inquire via letter or telephone interview with local officials regarding their knowledge of the Site. Persons to be contacted may include, but are not limited to the local engineering and /or public works department, planning and development personnel from the City, County or other development authorities, zoning and assessment personnel from the City or Canty, the county solid waste officer, the county hazardous waste officer and /or the local fire department. • Aerial Photogra hs Review copies of aerial photographs, or reasonable facsimiles, to check for altered land use, previous storage, etc. • Sanborn Mans Review copies of historic Sanborn fire insurance maps, or reasonable facsimiles, to check for altered land use, previous storage, etc. • City Directories Review historic city directories, which have been published to determine the history of occupancy. PHASE II SITE INVESTIGATION The purpose of the Phase II ESA is to determine if a release of a regulated substance has occurred to the underlying soils or ground water on the Site. The Phase II is also the basis for the preparation and approval of the RAP. Deep Soil Borings for the Collection of Soil and Groundwater Samples Three soil borings will be advanced for the purpose of collecting soil samples for field screening and laboratory analysis. The estimated depth for the borings is ninety (90) feet below ground surface. Recovered soil will be logged in the field using the USCS Soil Classification System. In addition, ProSource will screen the recovered soils using a photoionization detector (PID), following MPCA bag headspace methods. Upon completion, each boring will be abandoned in accordance with Minnesota Department of Health (MDH) well code using granular bentonite. Each boring will be topped off with compacted soils and staked or marked for future reference and /or survey. Groundwater samples will be collected from temporary wells that will be installed in the borings following Minnesota Department of Health requirements. Based on field screening (visual and olfactory observations, as well as P1D readings), up to 2 soil samples per boring, one groundwater sample per boring and one quality assurance sample will be collected and submitted to a laboratory for chemical analysis. A clean pair of disposable latex or nitrile gloves will be used prior to the collection of each sample. Samples will be preserved, as required and placed into clean, laboratory supplied sample containers. Each sample container will be uniquely numbered and labeled using indelible ink. Additional information on the label may include the analytical parameter(s), preservative(s), sampling personnel, date and time of sample collection, sample type (grab or composite) and the project number. The label will then be directly affixed to the appropriate sample container. The samples will then be placed on ice and maintained at a temperature of 4 °C. A chain -of- custody will be initiated and kept with the samples until custody is relinquished to the laboratory. We are assuming that drill- cutting soils can be thin spread at the surface in the vicinity of each boring location. Prior to drilling and prior to demobilization, drilling equipment will be decontaminated to minimize the potential for any cross- contamitnation. prosoxurce Professional Environmental Services Columbia Heights Economics Development Authority Chemical Analysis Six (6) to eight (8) soil and ground water samples will be submitted to and analyzed by a State of Minnesota certified laboratory for diesel range organics (DRO), gasoline range organics (GRO), volatile organic compounds (VOCs), polyaromatic hydrocarbons (PAHs), Resource Conservation and Recovery Act (RCRA) metals and polychlorinated biphenyls (PCBs). We are assuming that the analytical results will be requested using a standard laboratory turnaround time. Exploratory Excavation o(Saspicious Mounds and Burn Areas Due to the known emergency responses at the site by the MPCA and their observations shared with ProSource, several locations of potential soil impacts may exist across the site, especially around the warehouse building and observed burn areas not related to the warehouse fire. In addition, the suspect mounds and areas of disturbed soil may conceal other potential areas of environmental concern. ProSource recommends, as part of the Phase 11 Environmental Site Assessment, one day of exploration of the property with a small backhoe and field technician to investigate if these areas might present additional environmental issues. The exposed areas will be documented with digital photography and samples will be collected when appropriate. We anticipate 1 -3 samples of impacted soil or suspect material would be collected for laboratory analysis for the same parameters listed above or, with additional authorization, for forensic analysis to identify the sampled material. Chemical Analysis One (1) to three (3) soil and suspect material samples will be submitted to and analyzed by it State of Minnesota certified laboratory for diesel range organics (DRO), gasoline range organics (GRO), volatile organic compounds (VOCs), polyaromatic hydrocarbons (PAHs), Resource Conservation and Recovery Act (RCRA) metals and polychlorinated biphenyls (PCBs). We are assuming that the analytical results will be requested using a standard laboratory turnaround time. If a forensic analysis is authorized, analytic methodologies and associated cost will vary per sample. Such analysis may take longer for results. Shallow Impacted Soil Sampling Using a Geoprohe ProSource will perform additional shallow soil sampling to determine the degree and extent of environmental impacts around the former warehouse and the suspicious mounds and burn areas using a truck- mounted Geoprobe trait (Matrix Environmental, Inc.). For cost estimating purposes, we have estimated one day of sampling. The test holes will be positioned in an effort to determine potential impacts to the soil from potential Site sources. The actual location of the test holes will be based on underground utilities and Site accessibility. Soil samples will be continuously collected within the test holes using a MacroCoreTm sampler and screened on -site with a photoionization detector (PID). Based on field screening and visual /olfactory characteristics, at least one soil sample from each test hole will be collected and submitted for analytical testing, if indicated. Chemical Analysis Eight (8) to fifteen (15) soil and ground water samples will be analyzed by a State of Minnesota certified laboratory for diesel range organics (DRO), gasoline range organics (GRO), volatile organic compounds (VOCs), polyaromatic hydrocarbons (PAHs), Resource Conservation and Recovery Act (RCRA) metals and polychlorinated biphenyls (PCBs). We are assuming that the analytical results will be requested using a standard laboratory turnaround time. prosource Professional Environmental Services C olumbia Heig Economics Development Authority For this proposal, because there is limited information regarding how many areas may exhibit adverse environmental impacts; ProSource is recommending the collection and submittal of 8 to 15 soil samples from suspected areas across the site. All information gathered during the Phase I ESA and the Phase II investigation will be presented in separate reports. ProSource will also provide recommendations for any additional actions at the Site. VPIC/VIC PROGRAM ASSISTANCE Dependent on the type of contamination encountered, if any, and with additional authorization, ProSource will enroll the site into the MPCA's Voluntary Investigation and Cleanup Program (VIC) and /or Petroleum Brownfields (PB) on behalf of the City of Columbia Heights. With further additional authorization, ProSource will request a "No Association Determination Letter" from the VIC program. RESPONSE ACTION PLAN ProSource proposes to prepare a Response Action Plan (RAP) for review and approval by the MPCA Voluntary Investigation and Cleanup (VIC) program based on the information we acquire during our Phase I and II scope of services. The RAP will include the following: • Recommendations for additional assessment, if warranted; • Site Safety and Contingency Plan; • Determination of risk based cleanup goals; • Cleanup procedures (i.e. soil excavation procedures); • Material handling and potential disposal; • Confirmation sampling and analysis; and, • RAP Implementation report preparation. COST ESTIMATE Phase I Environmental Site Assessment $ 1,800 Phase II Environmental Site Assessment (Includes laboratory & drilling fees) I. Deep borings, groundwater sampling $12,326 - $13,978 2. Baekhoe exploration $ 3,476 - $ 4,294 Geoprobe evaluation $ 8,328 - $12,438 3. Preparation of Phase II report $ 1,835 - $ 2,840 Preparation of RAP report $ 3,440 - $ 4,930 Miscellaneous meetings $ 1,585 - $ 2,340 Total Estimated Project Costs $32,790 - $42,620 Please note that the above cost estimate does not include actual soil disposal costs (should that be necessary) nor does it include fees charged by the MPCA for entry into the VIC program or for MPCA review of reports. prosource TECHNOLOGIES. INC. Professional Environmental Services Columbia Heights Economics Development Authority _ ProSource is prepared to begin work on the project immediately upon receipt of your approval to proceed. Should you have any questions, please feel free to contact us at 763- 786 -1445. We look forward to working with you on this project. Sincerely, ProSource Technologies, Inc. Dfd Ile�m en Director of Environmental Services Project Manager To authorize the work, please review the attached Terms and Conditions, sign in the space provided below and return via fax to 763-786-1030. Accepted by: Name and Title Thomas H. Maiello� Date ProSource TEOHNO&OOIES,IND. Not for public. rn int iotion 'IQ -7 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) Meeting of: September 6, 2011 AGENDA SECTION: Executive Session ORIGINATING EXECUTIVE NO:6 DEPARTMENT: EDA DIRECTOR APPROVAL ITEM: Discussion on purchase of 4641 and 4647 BY: Sheila Cartney BY:, Tyler Street— Resolution 2011 -14 DATE: August 24, 2011 BACKGROUND: In May 2009, the City and EDA modified the Tax Increment Plan for the Kmart/ Central Avenue TIF District (T4) to include 55 parcels in the "Sheffield Neighborhood." The plan provides for a wide range of redevelopment work that is including, but not limited to, acquisition, demolition, utility and street work. Additionally the city was awarded a CDBG grant in the amount of $170,000 for demolition of properties located in the Sheffield neighborhood. As part of the grant application the Council approved the Sheffield Neighborhood Action Plan (SNAP) that includes a collaborative effort between departments and outside sources for this area. To date the City /EDA has purchased 7 parcels in the Sheffield neighborhood and demolished all the buildings associated with these parcels. The majority of the parcels have been located on Polk Street. There has been a significant decrease in crime and calls for service as well as code enforcement issues on Polk Street. Removing these structures are the first steps in stabilizing this area. The Police Department continues to dedicate significant time and resources to this area. City departments have been working collectively on different levels of enforcement in this area as well to try to sustain and improve these neighborhoods. Anoka County Community Action Program (ACCAP) owns the properties at 4641 and 4647 Tyler Street and has approached the city to purchase these properties. ACCAP has stated they have had difficulties in finding good tenants for these properties and no longer wish to own and operate these facilities. ACCAP approached the city before going to the open market because they support our redevelopment efforts in this area. The City /EDA does not own property on Tyler Street and see this as an excellent opportunity for a socially responsible acquisition in making a physical environmental change to this block and in our efforts to restructure the neighborhood density and land configuration (the lots are 7,680 square feet each). The Police Department has increased their resources to Tyler Street and is in full support of this purchase and sees this as another positive step for the community (see attached letter from Police Chief Nadeau, dated 8/24/11). The payable 2012 market value for the ACCAP properties is 315,000 each ($630,000 total), the appraised value for the two properties is $186,800 each ($373,600 total). ACCAP has indicated they would be willing to sell to us for a little below appraised value and they would remove usable appliances and materials from the units. Staff suggests offering a maximum purchase price of $320,000 for both properties (this equates to $40,000 a unit). If the EDA elects to purchase the properties the T4 TIF district will have a remaining balance of $327,140. RECOMMENDATION: Staff recommends entering into negotiations for the purchase of the four - plexes at 4641 and 4647 Tyler Street, by approving the Resolution authorizing a purchase price up to $320,000. RECOMMENDED MOTION: Motion: Move to waive the reading of Resolution 2011 -14, there being ample copies available to the public. Motion: Move adopt Resolution 2011 -14, authorizing staff to enter into negotiations with ACCAP for the purchase of the four - plexes located at 4641 and 4647 Tyler Street with a maximum purchase price of $320,000, using fiord 371. Furthermore to authorize the Mayor and Executive Director to enter into an agreement for the same. Mesolittim 21111 -14 Letter or support mom Po ace �mei rvnucau EDA ACTION: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011 -14 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT FOR CERTAIN REAL PROPERTY LOCATED AT 4641 TYLER STREET NORTHEAST AND 4647 TYLER STREET NORTHEAST IN THE CITY AND ASSIGNMENT THEREOF TO THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Section 1. Recitals 1.01. The Columbia Heights Economic Development Authority (the "Authority ") administers the Downtown CBD Redevelopment Project (the "Project ") within the City, which was established under Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act "). 1.02. The Authority has undertaken a program to acquire homes in the Project in order to address foreclosure problems and remediate and prevent the emergence of blight. 1.03 City staff is negoting a Real Estate Purchase Agreement with the Anoka County Community Action Program ACCAP (the "Seller ") dated as of July 25, 2011 including all related addenda and disclosures thereto (collectively, the "Purchase Agreement "), for real property located at 4641 Tyler Street Northeast and legally described as follows: ALL OF LOT 25 & S 20 FT OF LOT 26, BLK 2, SHEFFIELDS 2ND SUB and 4647 Tyler Street Northeast and legally described as follows: LOT 27 BLK 2 SHEFFIELDS 2ND SUB, TOG /W LOT 26 SD BLK, EX S 20 FT THEREOF, SUBJ TO EASE OF REC (the "Properties "), which Purchase Agreement is contingent upon approval by the Economic Development Authority. 1.04. The Purchase Agreement will be prepared once a price is negotiated and on file with the City Manager, and /or the Executive Director of the EDA. Section 2. Approval and Assignment 2.01. The Purchase for the Property is hereby approved, and the execution of the Purchase Agreement by the EDA is hereby ratified. Pursuant to the Purchase Agreement, the EDA will purchase these Properties for up to $320,000. City staff and officials are authorized and directed to take all such other actions to complete the purchase of the Property, including without limitation execution of all documents and agreements related to such transaction. 2.02. Contingent upon approval of the Authority, the City hereby assigns its interests in the Purchase Agreement to the Authority. City staff and officials are authorized and directed to take all such other actions to complete the assignment of the City's interests in the Purchase Agreement to the Authority, including without limitation execution of any documents and agreements necessary to effectuate such assignment. 1 Passed this 6 day of September Offered by: Second by: Roll Call: ATTEST: President Gary L. Peterson Shelley Hanson, Secretary A Ni M . Columbia Heights Police Department Scott Nadeau, Chief of Police '. h M" August 24, 2011 Columbia Heights Economic Development Authority City of Columbia Heights 590 40` Avenue NE Columbia Heights, MN 55421 Members of the Economic Development Authority: Subject: Acquisition of ACCAP properties at 4641 and 4645 Tyler Street It has come to my attention that Columbia Heights Community Development is considering the purchase of the properties at 4641 and 4645 Tyler Street from the Anoka County Community Action Program. I would like to write a letter in support of this effort. As you may be aware, re- development of the Sheffield area has been a city priority for over ten years, and in the past three years has been the focus of a collaborative effort between Columbia Heights city departments, the City Council and other strategic partners. Working together in the Sheffield Neighborhood Action Plan, the Columbia Heights Police Department, the Columbia Heights Fire Department and Community Development have been able to lower the incidents of criminal activity and have made some improvements to the physical environment to the Sheffield neighborhood. These improvements have included more strict code enforcement, removal of graffiti and junk vehicles, as well as the acquisition and removal of blighted and foreclosed multi - family dwellings. It is the strong opinion of the Police Department that code enforcement and a disproportionate allocation of law enforcement resources has made gains; however, these gains are not sustainable as continued changes need to be made to the physical environment in Sheffield, and on Tyler Street in particular. In the past three years, the Police Department has dedicated thousands of hours of time, including meeting with landlords to ensure that they are following ordinances and statutes in relation to tenant activity and often having to work on crime mitigation plans to try and stem activity such as narcotics, assaults, robberies and nuisance types of infractions. While dedicating law enforcement resources to the Sheffield area has produced lower crime, it has come at the cost of vast amounts of overtime, as well as the Police Department's not being able to use proactive resources in other areas of concern in the community. The issues in Sheffield can't be solved only through law enforcement and code enforcement activity. 825 41" Ave NE Columbia Heights, MN 55421 (763) 706 -8100 f.• (763) 706 -8126 www.chpolice.com Columbia Heights Economic Development Authority August 24, 2011 Page 2 In analyzing the purchase of the ACCAP property, the Police Department selected comparable properties at 4625 and 4633 Tyler Street which have a similar design as both are four -unit row -style buildings. One of these buildings was purchased by a private party in foreclosure and rehabbed in 2009. These properties have continued to present challenges for the Police Department in the terms of people loitering, drunk and disorderly activity, multiple search warrants for stolen property and narcotics, sexual assaults and other serious offenses, accounting for over 120 police calls for service since 2009. The Police Department has also served multiple search warrants and had to work with the property owner on a crime mitigation plan which reduced the incidents of crime, although the property continues to be an area of concern for the Police Department, requiring a disportionate amount of law enforcement resources. In speaking with Community Development Director Scott Clark, I have been informed that Anoka County had concerns about trying to find suitable tenants to rent these units because of the environment in the 4600 block of Tyler Street. These comments are consistent with other landlords we have regular contact with on Tyler Street, to include the owners of 4616 and 4622 Tyler Street and 4628 and 4634 Tyler Street. We feel that the redevelopment of Tyler Street is consistent with previous efforts to redevelop the Sheffield area and that the opportunity to acquire these properties from Anoka County at a significantly reduced price is an opportunity that should be seriously explored. Please contact me if you have any questions regarding this letter of support or if there is any other way the police department can provide information that would assist you in making the decisions. Sincerely,