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HomeMy WebLinkAboutEDA MIN 10-10-11ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE SPECIAL MEETING OF OCTOBER 10, 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, Donna Schmitt, Gerry Herringer, and Marlaine Szurek. Members Absent: Bobby Williams Staff Present: Walt Fehst, Scott Clark, and Sheila Cartney. 2. PLEDGE OF ALLEGIANCE- RECITED BUSINESS ITEMS 3. CREATION OF A SCATTERED SITE HOUSING TIF DISTRICT Clark stated that at the April 28, 2009 EDA meeting the commission directed staff to implement all necessary steps to create a Scattered Site Housing District. This district will include 23 parcels with the majority of them owned by the City. The increment generated by the District will replenish the old C8 Redevelopment District (the original source for the scattered site) to allow the city to have additional funds for housing activities. The public hearing for this Plan was called for on August 1, 2011 and an additional discussion was held on September, 6, 2011. Clark explained that the EDA is to act on the attached resolution and the City Council will act on the Plan at a public hearing following the meeting. In addition, according to TIF accounting rules a formal interfund loan must be created between the two districts and that action is memorialized in Resolution 2011-16. Staff is recommending the Plan as written. Questions/Comments from members: Bruce Nawrocki questioned if the attached report is what we paid Ehler’s $10,000 for? Scott Clark responded that the report is part of what we get for their fee along with other documents, district support and reporting assistance. Nawrocki had several questions page specific in the report they are as follows. Section 2-1 indicates the scattered site TIF district is in the Central Business District (CBD) Redevelopment Project, when was this created? Clark explained that the CBD is the enabling district that was created a long time ago. Nawrocki asked how we get tax increment from the CBD and Clark explained that appendix C describes the parcels in the scattered site district and those are the parcels we collect increment from. Nawrocki asked about the parcels the city doesn’t own and why we want to acquire them. Clark explained that we are not acquiring the lots they are just included in the district so we can collect the tax increment from those parcels. Clark confirmed this is a 25 year district. Nawrocki commented that we can’t pay for any other services for 25 years. Clark explained that in present day value that the in 25 years the city is giving up about $12,000 to the general fund and putting that money in the housing fund. Nawrocki questioned what a UTA is. Clark explained it stands for Unique Taxing Area, the watersheds decide the areas. Nawrocki questioned 2-5 the $1.4million. Clark explained that amount is the total increment collected over the life of the district best case scenario; usually districts collect 25-30% less. Nawrocki stated he does not agree with the “but for” statement in subsection 2-14. Clark explained that “but for” using tax increment we wouldn’t be able to pay back the total cost of lot acquisition, demolition and related expenses. Nawrocki questioned why we had to pay back the other district. Clark stated that is a policy question that was decided in 2009. Donna questioned Subsection 2-19 the four year rule where demolition, rehab, renovation or other site improvements must take place on the site within four years or the site shall be excluded from the original net tax capacity of the district. Clark was going to look into this further. Donna also asked if we can sell a lot to a neighbor and not develop it. Clark explained that we can we would just take that lot out of the district. Motion by Donna Schmitt, seconded by Marlaine Szurek, to waive the reading of Resolution 2011-15 there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Donna Schmitt, seconded by Marlaine Szurek, to adopt Resolution 2011-15, a Resolution adopting a Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment project, establishing the City-wide Scattered Site Housing Tax Increment Financing District therein, and adopting a TIF plan therefor. Bruce Nawrocki wanted the record to show that he is opposed to this program and that this he is of the opinion that there is a more cost effective way to dispose of the properties by putting them on the market. Roll Call: Peterson Aye, Diehm Aye, Schmitt Aye, Herringer Aye, Szurek Aye, Nawrocki Nay. Motion passes 5 to 1. Motion by Donna Schmitt, seconded by Marlaine Szurek, to waive the reading of Resolution 2011-16 there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Marlaine Szurek, seconded by Donna Schmitt, to approve Resolution 2011-16, a Resolution authorizing an interfund loan for advance of certain costs in connection with the City-wide Scattered Site Housing Tax Increment Financing District. Nawrocki questioned where this money comes from; Clark stated it comes from the tax increment district. Roll Call: Peterson Aye, Diehm Aye, Schmitt Aye, Herringer Aye, Szurek Aye, Nawrocki Nay. Motion passes 5 to 1. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011-15 RESOLUTION ADOPTING A DOWNTOWN CENTRAL BUSINESS DISTRICT (CBD) REVITALIZATION PLAN FOR THE CBD REDEVELOPMENT PROJECT, ESTABLISHING THE CITY-WIDE SCATTERED SITE HOUSING TAX INCREMENT FINANCING DISTRICT THEREIN, AND ADOPTING A TIF PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Columbia Heights Economic Development Authority (the "EDA") and the City of Columbia Heights (the "City") that the EDA adopt a Modification to the Downtown Central Business District (CBD) Revitalization Plan (the "Downtown Central Business District (CBD) Revitalization Plan Modification") for the CBD Redevelopment Project (the "Project Area") and establish the City-Wide Scattered Site Housing Tax Increment Financing District (the "District") and adopt a TIF Plan (the "TIF Plan") therefor (the Downtown Central Business District (CBD) Revitalization Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.090 through 469.1082, and Sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and Page 3 WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the EDA has performed all actions required by law to be performed prior to the adoption of the Plans. The EDA has also requested the City Planning Commission to provide for review of and written comment on Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: The EDA hereby finds that the District is in the public interest and is a "housing district" under Minnesota Statutes, Section 469.174, Subd. 11, and finds that the adoption of the proposed Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota for affordable and high quality housing. The EDA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the Project Area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments financially feasible. The boundaries of the Project Area are not being expanded. The reasons and facts supporting the findings in this resolution are described in the Plans. The EDA elects to calculate fiscal disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3, clause a, which means the fiscal disparities contribution would be taken from outside the District. It is not anticipated that the District will contain commercial/industrial property. As a result, there should be no impact due to the fiscal disparities provision on the District. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the EDA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the EDA. Upon approval of the Plans by the City Council, the staff, the EDA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. Upon approval of the Plans by the City Council, the Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and the Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. The Executive Director of the EDA is authorized and directed to forward a copy of the Plans to the Anoka County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Passed this 10th day of October 2011. _______________________________ President, Gary Peterson ATTEST: __________________________ Executive Director, Walter Fehst Page 4 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION 2011-16 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE CITY-WIDE SCATTERED SITE HOUSING TAX INCREMENT FINANCING DISTRICT. BE IT RESOLVED by the Board of Commissioners (the "Board") of the Columbia Heights Economic Authority (the "EDA") of the City of Columbia Heights, Minnesota, as follows: WHEREAS, the City Council for the City of Columbia Heights, Minnesota (the "City"), intends to establish the City-Wide Scattered Site Housing Tax Increment Financing District (the "TIF District") within the Central Business District Redevelopment Project (the "Project"), and will adopt a Tax Increment Financing Plan (the "TIF Plan") for the purpose of financing certain improvements within the Project. WHEREAS, the EDA has determined to pay for certain costs identified in the TIF Plan consisting of land/building acquisition, site improvements/preparation, other qualifying improvements, interest and administrative costs (collectively, the "Qualified Costs"), which costs may be financed on a temporary basis from EDA funds available for such purposes. WHEREAS, under Minnesota Statutes, Section 469.178, Subd. 7, the EDA is authorized to advance or loan money from the EDA's general fund or any other fund from which such advances may be legally authorized, in order to finance the Qualified Costs. WHEREAS, the EDA intends to reimburse itself for the Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "Interfund Loan"). NOW THEREFORE BE IT RESOLVED by the Board as follows: 1. The EDA hereby authorizes the advance of up to $1,573,000 from any available EDA Funds, to pay for Qualified Costs. The term “Qualified Costs” include sale of parcels previously acquired by the EDA, which sale is made for a reduced price necessary to induce development of affordable housing. The difference between sale proceeds and the EDA’s costs in acquiring the parcel and preparing it for development represents an advance of Qualified Cost on the date of each such closing. The EDA shall reimburse itself for such advances together with interest at the rate stated below, all as described in this Resolution. Interest accrues on the principal amount of Qualified Cost from the date of each advance, at the rate of 4% (which rate is within the maximum rate of interest permitted to be charged as of the date of this Resolution). Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the EDA has Available Tax Increment (defined below), or on any other dates determined by the Executive Director of the EDA, through the date of last receipt of tax increment from the TIF District. Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the City by Anoka County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended. Payments on this Interfund Loan may be subordinated to or on parity with any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, as determined by the Executive Director. Page 5 The principal sum and all accrued interest payable under this Interfund Loan are pre-payable in whole or in part at any time by the EDA without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. This Interfund Loan is evidence of an internal borrowing by the EDA in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the EDA. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The EDA shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. The EDA may amend the terms of this Interfund Loan at any time by resolution of the Board, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Passed this 10th Day of October, 2011. _______________________________ President Gary Peterson ATTEST: ______________________________ Executive Director Walter Fehst Clark indicated the EDA would discuss disposition of these properties in November. Nawrocki asked what our options are. Fehst responded that we can contract with a builder, sell to an open market etc. Clark asked if the next EDA meeting would be the 4th Tuesday in November, November 22nd at 7pm, is workable do to the size of the agenda. This date seemed to work with the members present. He said there will be a lot of items on the agenda and named a few: BNC Bank, GMHC house on 2nd Street, Disposition of Scattered Site. The meeting was adjourned at 7:09 pm. Respectfully submitted, Sheila Cartney Acting Secretary