HomeMy WebLinkAboutEDA AGN 05-05-14AGENDA
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
Monday May 5, 2014
6:30pm City Hall, Conference Room 1
1. Call to Order /Roll Call
Gary L. Peterson, President Bobby Williams, Vice President
Bruce Nawrocki, Secretary /Treasurer Marlaine Szurek
Tammera Diehm Gerry Herringer
Donna Schmitt
2. Pledge of Allegiance
CONSENT AGENDA
3. Approve Minutes — April 7, 2014, February 3, 2014
Motion: Move to approve Consent agenda as presented.
BUSINESS ITEMS
4. Northeast Business Center— Request for Support of Project
S. Administrative Report
1) Communications and Branding Campaign
2) Huset Park/ Habitat for Humanity
3) Scattered Site Housing Program Update
6. Other Business
The next regular EDA meeting will be Monday, June 2, 2014 at City Hall.
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE MEETING OF
APRIL 7, 2014 IN CONFERENCE ROOM 1
The meeting was called to order at 6:30 pin by Chair Peterson.
Members Present: Bruce Nawrocki, Donna Schmitt, Bobby Williams, Gerry Herringer, Marlaine
Szurek, Gary Peterson, and Tami Diehm (arrived at 6:35 pm).
Staff Present: Walt Fehst, Scott Clark, Joseph Hogeboom, Shelley Hanson, and Elizabeth
Holmbeck (Intern).
2. PLEDGE OF ALLEGIANCE- RECITED
Clark Notified Board that he is adding an item to Administrative Reports regarding an Update
to the Huset Park Redevelopment Project.
3. CONSENT ITEMS
1. Approve the Minutes from February 3, 2014 and Executive Session Minutes of February 3,
2014.
2. Approve the Financial Report and Payment of Bills for January and February 2014 on Resolution
2014 -02.
Questions by Members:
Nawrocki said that he hadn't gotten the information he asked about at the last meeting as noted in
the minutes of February 3, 2014. Clark explained that the figures from the Anoka County Tax
Levy come to the City from two different pools of money and the accounting system is set up to
indicate this.
Motion by Williams, seconded by Szurek, to naive the reading of Resolution 2014 -02, there
being an ample amount of copies available to the public. All ayes. MOTION PASSED.
Motion by Williams, seconded by Szurek, to approve the consent agenda items as presented All
ayes. MOTION PASSED.
EDA RESOLUTION 2014 -02
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
(EDA) APPROVING THE FINANCIAL STATEMENT FOR JANUARY AND FEBRUARY, 2014 AND
PAYMENT OF BILLS FOR THE MONTHS OF JANUARY AND FEBRUARY 2014.
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
EDA Minutes
Page 2
April 7, 2014
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 January and February 2014 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.
Passed this 7 °1 day of April, 2014.
MOTION BY:
Williams
SECONDED BY:
Szurek
AYES:
All ayes
President
Attest By:
Shelley Hanson, Secretary
NEW BUSINESS
4. EDA Strategic Planning Guide
Clark reminded members that on January 14, 2014 the Economic Development Authority (EDA)
held a retreat to develop a long range strategic plan. The purpose of this plan has many purposes
including providing a framework for future EDA discussions and actions, providing staff formal
direction as to where time and resources should be spent and lastly, this document serves to
EDA Minutes
Page 3
April 7, 2014
communicate to all of Columbia Heights' stake holders the priorities of the EDA/ City Council. It
is also important to note that this plan serves as a framework, and as such, any action step that
would require outside consultant work and /or budget allocations from the EDA's Redevelopment
Fund 420 would have to be approved under separate action by the EDA.
The key items in the subject document prepared by Ehlers & Associates are:
1) Development of a communications plan and related branding efforts.
2) Initiation of redevelopment efforts for the Mady's site.
3) Efforts to revitalize the City's commercial strength. This would include a redevelopment plan
for Central Ave., small business education, potential modifications to zoning and related City
Ordinances and on -going discussions with various stakeholders to identify solutions to a weak
market.
4) A much greater effort in the area of housing stability and the maintenance of neighborhoods.
5) Continuing efforts to ensure that Heritage Heights and Circle Terrace remain viable
neighborhoods.
6) Although an HRA function, a recognition that the sale of Parkview Villa will be a major
commitment by staff through 2014.
Questions /Comments from members:
Nawrocki asked if this is going to require additional staff to work on these goals. Clark responded
that the five staff members in the department would be the primary individuals responsible for
helping the City achieve these goals. Nawrocki then went on to say that he felt the Community
Development/Building Inspection Department was overstaffed and that only four positions were
needed. He said he thought the employee plan for the department during the Budget cycle was
approved for only 4 people, and he felt that these goals were a "make work" project and not
necessary.
Clark responded that staffing was discussed during the budget sessions and that the department
tried to function with 4 people for 8 months during 2013 and found that it doesn't work. Based on
that discussion, it was decided to somehow fill the vacant position to meet the needs of the
department. Considering the Inspector is out in the field most of the day and there are many
outside commitments for the other positions, it is often hard to provide service to residents,
contractors, developers, and others seeking information provided by the department.
Fehst said he didn't feel it is "making work" or wasting time for the City Council /EDA Board to
set goals in order to better the City. He said this is actually part of their job to steer the City in a
direction they would like to see it go, and it helps to give staff direction in order to achieve these
goals.
EDA Minutes
Page 4
April 7, 2014
Diehm stated the date on the Strategic Planning Guide should be changed to January 14, 2014 -not
April 14, 2014, as that is when the retreat was held. She also thought the document Ehlers
prepared was a good way to keep the Council /Board on track although some of the dates
established to accomplish the goals may be a bit optimistic. She said it is a good tool to help the
Council make their decisions based upon items that were discussed and agreed upon at the session
in order to make positive changes for the City's future. Clark stated that once Parkview Villa is
sold, staff will be able to put more effort into these projects to hopefully get them accomplished by
the target dates.
Motion by Nawrocki, that the document be sent back to staff to make changes to it that can be
accomplished with a staff of 4 people. Due to a lack of a second, the motion dies. Nawrocki then
stated that he thinks things in Columbia Heights are going well and there is no real need to expend
monies for these types of activities.
Motion by Diehm, seconded by Williams, to Adopt 201412015 Strategic Planning Goals Dated
April 14, 2014. Roll Call: Nawrocki -Nay -- Williams, Diehm, Szurek, Schmitt, Peterson, and
Herringer (he felt it was a lot to accomplish in the timeframe allotted). MOTIONPASSED.
5. Communication and Branding Request for Proposals
Hogeboom stated that at the January 14, 2014 Economic Development Authority (EDA) Retreat, EDA
Commissioners expressed an interest in evaluating current communication efforts made by the City as
well as the desire to initiate a conmumity branding campaign. The purpose of this endeavor would be to
identify and promote the positive attributes and unique characteristics of Columbia Heights to the
greater Twin Cities region, as well as to evaluate and improve city communication tools.
Currently, the cities of Woodbury and Brooklyn Park are also engaging in citywide branding efforts.
Community Development staff spoke with representatives from these communities to discuss the details
of their individual programs. Hogeboom said Woodbury is undertaking this project on a smaller scale,
whereas Brooklyn Park decided to do theirs on a larger scale which has been on -going for a few years
already. Based on those discussions, staff proposes the following deliverables for our campaign:
• Identify unique characteristics and strengths of the community (i.e. proximity to
Northeast Minneapolis arts community).
• Identify current regional perceptions of Columbia Heights and the near -north
suburbs.
• Engage residents, the Economic Development Authority, and business
stakeholders in forming a brand identity.
• Evaluate current City communication tools (newsletter, website, social media,
logo, etc.) and provide recommendations for improvement.
• Develop a brand "manual" that provides strategies, goals and objectives to
improve overall communication and implements branding efforts.
EDA Minutes
Page 5
April 7, 2014
Staff has compiled a proposed Request for Qualifications notice that, with EDA approval,
would be distributed to local consultants who specialize in communication and brand
identification methods. Hogeboom reviewed the timeline with members and said Staff
would interview applicants, and provide a recommendation for hire to the EDA in June.
The consultant's work would take approximately four months, achieving all of the
proposed deliverables by the end of September.
At the time that a successful candidate is selected, staff is recommending that the City
transfer to the EDA the budget amount from Fund 226 "Special Projects Fund." This
transfer is a future action and the motion before the EDA is to simply authorize the RFQ
and to establish a budget figure.
Comments /Ouestions from Members:
Herringer asked what types of firms specialize in this work —are they mostly PR firms and where did
staff obtain a list of who to contact? Hogeboom explained that he obtained a list of possible
companies from Ehlers and also from the cities he contacted. They have a variety of expertise such as
communications, public relations, and combination services such as those provided by Stantec that
offer expertise in marry areas. Herringer thought that a firm specializing in public relations would be
the best option for the city to help get our message out, which is something we haven't been able to
accomplish on our own.
Williams and Fehst agreed. Szurek also thought public relations and communicating our message is
important, but expressed her hesitation in considering Stantec for the job. She felt they provided poor
service when they worked on our last Comp Plan Update (under the name of Bonestroo). Fehst invited
any interested members to sit in on the interviews to help choose a firm.
Schmitt asked if $30,000 was a realistic amount. Considering it may take $15,000 or so to get a plan
from the hired firm, she wondered if $15,000 to actually implement the plan is enough. Fehst said we
may have to increase that amount later based on what plan the Board /Council finally chooses.
Hogeboom stated the amount proposed thus far should get us started, but is on the low end of what the
other conununities have spent. It will of course depend on how extensive the Council wants the
campaign to be.
Nawrocki stated he didn't think we should expend $30,000 of City funds for this project.
Motion by Herringer, seconded by Schmitt, to establish a budget in the amount of $3Q 000 for a
citywide branding campaign and to authorize staff to initiate the Requestfor Qualifications process.
Nawrocki -Nay -- Herringer, Williams, Szurek, Schmitt, Diehm, and Peterson -Ayes. MOTION
PASSED.
FDA Minutes
Page 6
April 7, 2014
A copy of the RFP is attached.
REQUEST FOR QUALIFICATIONS (RFQ)
The City of Columbia Heights is seeking professional marketing and communications services to guide
the development of a branding campaign that promotes the positive attributes of the community. The
consultant would identify and promote Columbia Heights' unique neighborhoods, business districts,
and natural features. The branding effort will highlight the City's assets, and generate a positive
perception to our residents and business community as well as to the Twin Cities regional
marketplace.
Deliverables and Responsibilities
• Identify unique characteristics and strengths of the community (i.e. proximity to
Northeast Minneapolis arts community).
• Identify current regional perceptions of Columbia Heights and the near -north
suburbs.
• Engage residents, the Economic Development Authority, and business
stakeholders in forming a brand identity.
• Evaluate current City communication tools (newsletter, website, social media,
logo, etc.) and provide recommendations for improvement.
• Develop a brand "manual" that provides strategies, goals and objectives to
improve overall communication and implements branding efforts.
Budget
The working budget for this program has been established at $30,000. Approximately
50% of the budget will be dedicated to research and brand development, and the
remainder will be dedicated to the creation and implementation of the brand manual
and possible physical infrastructure (signs, etc.).
Responses
Interested parties shall submit a document that details the proposed approach to
achieve the deliverables and responsibilities, a work plan outline, a resume and a
proposed fee. This document should be limited to five pages that include references,
case studies and other supporting material.
Evaluation Criteria and Selection
The City will create a Selection Review Committee that will consider the following
criteria:
6.
PDA Minutes
Page 7
April 7, 2014
1. Firm's demonstrated understanding of the City's needs. — 25 points
2. Firm's and individuals' experience, qualifications and technical skills. — 25 points
3. Firm's stated ability to identify and collaborate with project stakeholders. — 25 points
4. Firm's proposed fees. -25 points
Upon completion of interviews and rating of consulting firms, the Selection Review
Committee may negotiate a draft contract with the top ranted firm. The Columbia
Heights Economic Development Authority must authorize and execute the contract.
Timeline
April 21, 2014 RFQ Distributed
May 5, 2014 Deadline for Proposers' questions sent via email
May 14, 2014 Deadline for Proposals sent via email or mail
May 21, 2014 Potential candidates notified
May 27 - 30, 2014 Candidate Interviews
June 2, 2014 Candidate selection at Economic Development Authority
meeting
Contact
Please submit questions and all correspondence to:
Joe Hogeboom, Assistant Community Development Director
City of Columbia Heights
590 40th Avenue NE
Columbia Heights, MN 55421
Joseph hoQeboom (a�ci.columbia- heiphts.mn.us
(763) 706 -3675
Administrative Report
Discussion on Huset Park:
Clark passed out a memo prepared by Kennedy & Graven stating their legal opinion regarding
serving BNC Bank a Default Notice on their Redevelopment Contract with the City of
Columbia Heights. Clark explained that BNC has not paid their 2013 taxes for the three parcels
that remain undeveloped. The majority of the tax amount is for special assessments, which he
detailed for the members. Due to the fact that we sold tax exempt bonds in 2007 related to this
project, it limits us on what reasons the City can issue a Default Notice to them. We cannot use
the lack of payment of taxes as the default of the contract. However, the City can use the fact
they have failed to complete construction according to the schedule. We also can withhold
their tax increment payments and put them into an escrow account until such time they become
current. The legal opinion also states that any further changes to the contract such as proposed
construction projects, be postponed until they become current.
EDA Minutes
Page 8
April 7, 2014
Clark told members that staff will serve them with a default notice and will give them an update in
May.
Nawrocki asked if the whole project area was in default. Clark told him no, just the three remaining
parcels (the round -a -bout piece, the piece at 37 °i and University, and the parcel just north of that to
finish off the rest of the townhouses).
I-Ierringer asked if BNC would be responsible for paying penalties and interest on the defaulted
amount. Clark told him yes. When he contacted BNC regarding their lack of payment, he was told
that it was a deliberate decision on the part of BNC not to pay the tax amount, and that it wasn't an
oversight.
There was some discussion regarding the townhouse association's possible interest in purchasing the
round -a -bout parcel.
Parkview Villa Update
Clark said he thinks the framework of a deal is close to being accomplished between HUD and Aeon
for the purchase of Parkview Villa. He said there is a tentative agreement with HUD and that some
concessions will have to be made. Aeon will have to work on their tax credits and reconciliation
statements for HUD, but he is hoping for the closing to take place around January.
The next regular EDA meeting will be Monday, May 5, 2014 at City Hall at 6:30 pm.
The meeting was adjourned at 7:20 pm.
Respectfully submitted,
Shelley Hanson
Secretary
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Meeting of: May 5, 2014
AGENDA SECTION: Business Items
ORIGINATING
EXECUTIVE
NO:4
DEPARTMENT: EDA
DIRECTOR
APPROVAL
ITEM: Northeast Business Center — Request for
BY: Joe Hogeboom
BY:
Support of Project
I DATE: April 30, 2014
BACKGROUND:
During the past year and a half, the City Council has discussed the possibility of acquiring part or
all of the Northeast Business Center property. The City ultimately has chosen to focus on
relocating the new Library to an alternate site, therefore ceasing discussions concerning a
partnership with the Northeast Business Center. The owner of the Northeast Office Center is
currently pursuing another option for the property, and is working with Schuett Companies, Inc. to
develop affordable senior - targeted housing on the upper floors of the building.
As part of its proposal, Schuett Companies is seeking to develop approximately 80 units which
would be comprised of one and two bedroom plans. To qualify, perspective residents must earn at
or below 30% of average area household income. To finance this proposal, the developer is
seeking funding sources that are managed through the Minnesota Housing Finance Agency
(MHFA) and the Metropolitan Council.
To qualify for financing options, City support of the project is required. Specifically, the
developer is seeking authorization to submit funding applications, as well as for the City to create a
"Community Revitalization and Stabilization Plan" which would focus on the 40`x' Avenue /Central
Avenue intersection. A representative for the project will be present at the EDA meeting to discuss
the specific details about the proposal and to officially request the City's support of the project.
In addition to fundamental support of this project, the developer is requesting that the EDA
consider property tax abatement for economic development purposes. A tax abatement could be
either be permanent forgiveness or temporary deferral of property taxes, up to a certain limit. The
developer has enclosed additional information about the property tax abatement process. If the
EDA selects to consider tax abatement for this project, it should direct staff to work with Ehlers and
Associates to create a tax abatement plan.
RECOMMENDATION:
If the EDA chooses to endorse this project, staff recommends to formally enact a motion that
provides support of the project and directs staff to work with the developer to seek funding
opportunities and to create a Community Revitalization and Stabilization Plan for this area that
would include the Northeast Business Center site.
RECOMMENDED MOTION:
Motion: Move to support Schuett Companies, Inc.'s proposal for affordable senior housing at the
Northeast Business Center site and to direct staff to create a Community Revitalization and
Stabilization Plan for the vicinity around the property.
Attachments: Applicant's Narrative (4 pages), Conceptual Site Plans (4 pages), House Research on Tax Abatement (2
EDA ACTION:
Columbia Heights Senior Development
General Details
• The Schuett Companies proposes an innovative development that intersects the demands of
affordable senior housing and healthcare in Columbia Heights.
• The Schuett Companies will convert a mostly- vacant six story office building into an affordable
senior housing building. The redevelopment will deliver one story of commercial use and five
stories totaling 80 -units of affordable housing into the Central Business District.
• Amenities and services on -site will include a health clinic, fitness center, lounge, activity room
and a salon.
• Building is age restricted for those 62 years and older; the only people allowed under 62 years
old are spouses. People with disabilities can only live in the development if they are over 62
years old.
• CompassionCare will be located on site to provide a continuum of services tailored to each
individual's needs. CompassionCare is a licensed home health care provider.
2. Market Demand
3. Funding Sources and Uses
Total Development Cost = $15,636,594.92
4. Support Requested from the City of Columbia Heights
• Letter of support for proposed development
• Confirmation that the development is included in a community revitalization area
• Authorization of the LCDA grant request
• Property tax abatement for economic development (under Minn. Stat. §§ 469.1813- 469.1816)
• Allowed purposes:
• Increasing the tax base or number of jobs in the area
• Redevelopment of blighted areas
• Providing access to services for residents (e.g. housing)
• Requested Abatement Length: 15 years
• Requested Abatement Amount: 50% of net taxes generated by completed development
Baby Boomers in Minnesota and the CompassionCare Program
Minnesota State Demographic Center projects that the population over the age of 65 will more than
double from 623,200 in 2005 to 1,400,000 in 2035. The baby boomer generation is the largest ever born
and represents the beginning of a permanent shift in the age of our state's population, according to The
Minnesota Department of Human Services (DHS) Transform 2010 Data Report: Baby Boomer Survey.
The United States census bureau reported in 2010 that Columbia Heights' population consisted of 15.5%
of persons 65 years and over: 2.6% more than the state's percentage. Based on the Minnesota State
Demographic Center's projections, Columbia Heights' 65 and over population may exceed 6,800 by
2035.
Minnesota DHS conducted a baby boomer survey in order to better understand the implications of this
historic age population shift and to focus on how baby boomers expect to approach work as well as
housing issues over the next ten years. The survey asked the respondents about how many years they
lived in their current community. 73% of the respondents reported they had lived in their current
community for over 10 or more years; of these respondents, 51% reported that they had lived in the
same community for more than 20 years. The survey also asked all respondents how many additional
years they expect they will stay in their community. Nearly half of all respondents (49 %) indicated that
they plan to remain in their current community for the next 10 years or more; of these respondents,
31% indicated that they plan to stay for 20 or more years.
As Columbia Heights' 65+ population rapidly grows, affordable housing with health care services will be
required in order to meet the baby boomers' demand to age in place and live within their current
communities.
The Schuett Companies Columbia Heights Senior housing proposal helps meet the demand of these
baby boomers. The project will offer affordable rents and health care services tailored to each
individual's needs. CompassionCare will offer a continuum of services that will assist the semi active
senior to the senior with high ADL needs. CompassionCare is a licensed home health care provider
currently serving over 80 clients throughout Minnesota. The average age of a CompassionCare client is
80 years with an average income of $14,000 annually. The mission of CompassionCare is to provide
compassionate and timely care to seniors citizens in effort to allow them to remain in their home in
comfort and peace and provide a higher quality of life. To meet the needs of our low income
community, CompassionCare enrolled in the Minnesota Department of Human Services Home and
Community based programs in 2011. We currently serve clients under the Elderly Waiver and
Alternative Care programs. These programs are designed to give seniors the ability to manage their lives
and be able to continue living in their homes. On February 13, 2014 the Minnesota Department of
Health conducted a home care provider survey with CompassionCare for the purpose of assessing
compliance with state licensing regulations. During this survey, the director of nursing was told by the
state surveyors that "CompassionCare's home health model is exactly what the state's aging programs
were designed for."
In 1968, Jack Schuett founded The Schuett Companies, Inc. Jack began as a syndicator of project -based
section 8 developments. The company was originally named The Schuett Investment Company, but
changed its' name as the core business became property development and management rather than
property investment and syndication. The portfolio of properties grew to over 2,000 units as Jack
syndicated over 25 partnerships representing approximately 2,500 units. The company now has 16
properties and nearly 1,100 units.
Tom Schuett, Jack's son, is currently the President and CEO. Tom is a CPA and has over 20 years of
experience in real estate development. Tom's an expert in land development, multi - family apartment
development, multi - family town home development, neighborhood shopping center development, and
financial analysis & projection.
In March 2011, Tom started CompassionCare, an affiliate of The Schuett Companies, Inc. The mission of
CompassionCare is to provide compassionate and timely care to senior citizens, in an effort to allow
them to remain in their homes in comfort and peace and provide a higher quality of life.
CompassionCare is a Home Health Care Service that offers customizable care plans to individuals who
need help living independently. Assistance is offered for daily, weekly, and monthly activities to improve
quality of life. CompassionCare ensures that our staff is qualified and properly trained to deliver our
clients a professional, caring experience.
The Schuett Companies currently offers CompassionCare in six of its affordable senior rental properties
and are continuing to integrate them into our remaining portfolio. The Schuett Companies and
CompassionCare together offer a kind of affordable housing with services for seniors. We bring a new
vitality and way of living to our communities, and propose this innovative intersection of housing and
healthcare in Columbia Heights. In Columbia Heights, we will be able to serve more seniors and the
upcoming baby boomers population so they can remain independent in their home. We have been in
conversations with multiple large medical providers who are interested in partnering with us to keep
our residents in their homes and out of nursing homes and assisted living facilities.
I
Ir,- "7,R
i2wo
I
E
rl
Joel Michael Updated: Jame 2012
Property Tax Abatements for Economic Development
What is economic Minnesota law authorizes political subdivisions to grant property tax abatements
development for economic development (e.g., to encourage a business to locate or expand at a
property tax location or to redevelop an area). Minn. Stat. §§ 469.1813 - 469.1816.
abatement? Abatements may be either permanent forgiveness or temporary deferral of
property tax. Abatements can serve similar purposes to tax increment financing
(TIF), a widely used development tool. The legislature enacted the abatement
law in 1997 to provide an alternative to TIF and to supplement it.
These economic development tax abatements should be distinguished from
property tax abatements that are granted by the county board primarily to correct
errors (e.g., to reduce the assessor's market value or to change the classification
of the property). Minn. Star. § 375.192.
For what proposes The law allows abatements to be used for a broad range of projects and
may abatements be purposes, if the political subdivision finds that public benefits exceed the costs.
used? Permitted uses of abatements include the following:
General economic development, such as increasing the tax base or the
number of jobs in the area
• Construction of public facilities or infrastructure (e.g., streets and roads)
• Redevelopment of blighted areas
• Providing access to services for residents (e.g., housing or retail would
be common examples)
• Deferring or phasing in a large (over 50 percent) property tax increase
• Stabilizing the tax base resulting from the updated utility valuation
administrative rules
-
• Providing relief for businesses with estimated market value of $250,000
or less who have disrupted access due to public transportation projects
Which local
Counties, cities, towns, and school districts may grant abatements of the taxes
governments can
they impose. The governing body grants an abatement by resolution. For
grant abatements?
towns, action at the town meeting is not required. Taxes imposed by special
taxing districts (e.g., watersheds or regional agencies) cannot be abated.
Similarly, the state general property tax (on commercial /industrial and seasonal -
recreational properties) cannot be abated. In the Twin Cities metropolitan area
and on the Iron Range, the fiscal disparities tax cannot be explicitly abated.
However, a political subdivision may increase its abatement amount to reflect
the amount of the tax imposed under fiscal disparities. The abatement does not
directly enter into the fiscal disparities calculations.
How long floes an
The political subdivision sets the length of the abatement, which cannot exceed
abatement apply?
15 years. The term can be extended to 20 years if only two of the three political
subdivisions (city /town, county, and school district) grant an abatement.
What is the The total amount of property taxes abated may not exceed the larger of
limitation on • 10 percent of the net tax capacity of the political subdivision, or
abatements? • $200,000.
How do the The abatement resolution, approved by the political subdivision, specifies the
mechanics of duration and the amount of property taxes that will be abated. The political
abatement work? subdivision has considerable flexibility in setting the terms of the abatement; for
example, it may set the abatement as a percentage of tax payable, a dollar
amount, tax attributable to a portion of the parcel's market value, or something
else. The local government adds the abatement to its property tax levy for the
year. (The abatement levy is not subject to levy limits.) The owner pays
property tax on a parcel and the political subdivision uses the payments as
provided by the abatement resolution. For example, the abatement may be used
to pay bonds or be given back to the property owner.
May abatements be The abatement law authorizes the issuance of bonds to be paid back with the
used to hay bonds? abatements. For example, bonds could be issued to construct public
improvements or to pay for a site for a business. As the property owners pay the
abated taxes, they are used to pay the bonds. These bonds can be general
obligation bonds or revenue bonds. The abatement bond provisions parallel
those in the TIF law: the abatement bonds are not subject to referendum
approval and are excluded from debt limits.
How do abatements The legislature designed the abatement law as an alternative to and a supplement
compare with TIF? to TIE The two programs can be used for similar purposes and both rely upon
property tax funding. Both programs have very similar bonding powers.
However, abatement and TIF differ in important respects. Some differences
include:
• TIF can be used for longer durations (up to 25 years in some cases) than
abatements (typically 15 years)
• TIF requires approval only by the municipality (usually the city) to
capture all local property taxes, while abatement requires each entity's
approval to capture its taxes and cannot capture special district taxes
• TIF use is subject to more legal restrictions than abatement. These
include a blight test for redevelopment districts, but -for findings, and
stricter limits on what increments may be spent on. Abatement is more
flexible.
How widely has The following amounts of abatement
abatement been levies were reported for property taxes
used? payable in 2011, as reported to the
Departments of Revenue (cities and
counties) and Education (schools).
For more information: Contact legislative analyst Joel Michael at joel.tnichael @house.mn. Also see the
House Research publication Tar Increment Financing, October 2011.
The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative,
legal, and information services to the entire House.
House Research Department 1 600 Stale Office Building I St. Paul, MN 55155 1651-296-6753 1 www.house,ninlhrdlhrd.htm
Number
Amount
Cities
62
$8,152,836
Counties
31
3,211,570
Schools
8
881,069
Total
101
$12,245,475
For more information: Contact legislative analyst Joel Michael at joel.tnichael @house.mn. Also see the
House Research publication Tar Increment Financing, October 2011.
The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative,
legal, and information services to the entire House.
House Research Department 1 600 Stale Office Building I St. Paul, MN 55155 1651-296-6753 1 www.house,ninlhrdlhrd.htm
M M
r`
COMMUNITY DEVELOPMENT DEPARTMENT
DATE: April 30, 2014
TO: Economic Development Authority
FROM: Joe Hogeboom, Community Development Director
RE: Administrative Report
I would like to provide an update to the Economic Development Authority (EDA) regarding
several ongoing matters that are being followed by the Community Development
Department. Please contact me at 763 - 706 -3675 or Joseph hoEeboom@ci.columbia-
NJ hts.mn.us if you have any questions or concerns about any of these items.
Communications and Branding Campaign
A Request for Qualifications for the Columbia Heights Communications and Branding
Campaign was released to approximately 30 local firms that specialize in marketing, branding
and communications. To be considered for this project, qualified firms or individuals must
submit a Letter of Interest to the City no later than May 14. Staff intends to bring the
recommended proposal before the EDA in June for approval.
Huset Park/ Habitat for Humanity
As mentioned at the April EDA meeting, there are issues related to the Development
Agreement for the Huset Park site that must be resolved before consideration of the Habitat
for Humanity proposal can occur. Consideration of the Habitat for Humanity proposal would
first require an amendment to the Development Agreement to reflect the current proposal,
followed by the Site Plan approval process with the Planning and Zoning Commission and City
Council.
Habitat for Humanity continues to move forward with its internal planning process for the
site. Habitat for Humanity has taken into consideration the EDA's feedback about the design
and layout of the site, and is working with an engineer and architect to amend its site plan.
Assuming the issue with the Development Agreement and the current owner will be resolved
soon, Habitat for Humanity intends to take its revised plan before the EDA in June.
Habitat for Humanity is seeking funding for this project through the Metropolitan Housing
Finance Agency (MHFA). Similar to the Northeast Business Center /Schuett Companies, Inc.
proposal, the MHFA will require the City to create a "Cooperatively Developed Plan" for this
area that must be enacted in order to allow the funding application to be submitted.
Unfortunately, the MHFA funding application deadline is June 1. This deadline falls before
any formal action can be taken for this project. If the EDA consents to allowing staff to work
with Habitat for Humanity to create a Cooperatively Developed Plan, Habitat for Humanity
can meet its application deadline for this funding source. Staff seeks direction from the EDA
in how to best proceed with this item.
Scattered Site Housing Program Update
The City recently sold two Scattered Site Housing Program Lots. The lots are located at 4108
71h Ave. NE and 4039 51h Ave. NE.
The lot at 4303 Reservoir Blvd. sold earlier this year. Unfortunately, due to personal
circumstances, the prospective buyers are no longer able to proceed with the sale.
Timbercraft Homes, which now technically owns the property, will continue to market the
property with the model home that was approved by the EDA for the site. If a new
prospective buyer wishes to construct an alternate model, we will bring the plans before the
EDA for approval.
Remax Realty, who is contracted for the sale and marketing of Scattered Site Housing
Program lots, has suggested offering a "remodel" option to the program. This option would
identify homes that are able to be remodeled, rather than demolished, in certain situations.
Staff has requested that Remax develop a formal proposal demonstrating how this program
would work, and bring it forward to the EDA for discussion at a later date.