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HomeMy WebLinkAboutEDA MIN 01-05-15 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF JANUARY 5, 2015 IN CONFERENCE ROOM 1 The meeting was called to order at 6:30 pm by Chair Peterson. Members Present: Bruce Nawrocki, Donna Schmitt, Gary Peterson, and Gerry Herringer. Newly elected council person John Murzyn was also present (not sworn in yet). Members Absent: Bobby Williams and Marlaine Szurek Staff Present: Walt Fehst, Joseph Hogeboom, Loren Wickham, and Shelley Hanson. PLEDGE OF ALLEGIANCE- RECITED 1CONSENT ITEMS . 1.Approve the Minutes from November 3, 2014. 2.Approve the Financial Report and Payment of Bills for October and November 2014 on Resolution 2015-01. Questions by Members: No questions. Motion by Schmitt, seconded by Nawrocki, to waive the reading of Resolution 2015-01, there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Nawrocki, to approve the consent agenda items as presented. All ayes. MOTION PASSED. EDA RESOLUTION 2015-01 RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA) APPROVING THE FINANCIAL STATEMENT FOR OCTOBER AND NOVEMBER 2014 AND PAYMENT OF BILLS FOR THE MONTHS OF OCTOBER AND NOVEMBER 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 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 EDA MINUTES Page 2 January 5, 2015 WHEREAS, the financial statement for the month of October and November 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 5th day of January, 2015 MOTION BY: Schmitt SECONDED BY: Nawrocki AYES: All ayes __________________________________ President Attest By: ______________________ Shelley Hanson, Secretary NEW BUSINESS 2.Resolution 2015-2 Amendment for the Scattered Site Housing Program Guidelines At the May 13, 2013 EDA meeting the Commission approved a listing agreement for the Scattered Site Housing Program with Pete Heryla and John Rockwell of Remax and Timbercraft Homes. The current agreement is valid through May 20, 2015. There is a clause in the listing agreement that after one year if the house sales are above $160,000 the buyer must pay the seller 15% of the amount by which the increase exceeds $160,000. After reviewing the lot sales, the current agreement and meeting with the Realtors to get an update on the program staff is recommending a change to the agreement: EDA Minutes Page 3 November 3, 2014 1.Remove 5.b & 5.c in the Addendum B to Exclusive Right to Sell Listing Contract Dated May 20, 2013. Staff is evaluating the Scattered Site Housing Program and will have recommendations for the EDA at the May 4, 2015 meeting prior to the current agreement expiring. However, in the meantime, staff recommends approval of the revised Addendum B to Exclusive Right to Sell Listing Contract Dated May 20, 2013 as follows: ADDENDUM B TO EXCLUSIVE RIGHT TO SELL LISTING CONTRACT DATED May 20, 2013 and Revised January 5, 2015 1.In negotiating sales of all lots of the Property, Broker will use the form of Purchase and Redevelopment Agreement attached hereto (the “Purchase Agreement”), subject to any modifications approved by Seller’s Community Development Director. 2.Broker agrees and understands that Seller’s goal is to sell all lots of the Property to builders who will construct single family homes for sale to persons who meet the income limits set forth in the Purchase Agreement. Broker will use its best efforts to market all lots to builders who will, in turn, agree to use their best efforts to sell completed homes to income-qualified buyers. 3.Broker further agrees and understands that builders will be required to construct a home on each lot using one of three models approved by Seller; the specific model for each lot will made with approval of Seller’s Community Development Director and will be specified in the Purchase Agreement. One exception to this provision is the lot at 4303 Reservoir, for which Broker will consult with Seller and proposed buyer regarding the design and specifications for the house. 4.Acceptance of any offer from a buyer for any lot, will be subject to: a.Consultation with Seller’s Community Development Director as to: purchase price; the size and model of single family home to be constructed; and construction deadlines for the home. b.Approval of the Purchase Agreement by Seller’s board of commissioners. c.Seller’s board of commissioners having held a public hearing regarding the subject lot (which hearing may be held in the aggregate for the entire Property). EDA Minutes Page 4 January 5, 2015 5.During the first year of the term of this Agreement, the Broker will list all parcels of the Property at the prices shown on Addendum A. From and after the first anniversary of the date of this Agreement, each parcel must be listed under the following terms: a.At closing on sale from Seller to builder, the builder must pay at least the list price shown in Addendum A. b.If the builder sells the completed house (including land and building) to an Owner Occupant (as defined in the Purchase Agreement) for price exceeding $160,000, then the builder shall pay to Seller 15% of the amount by which the final purchase price exceeds $160,000. Such additional payment is due upon closing of the sale by builder to the Owner Occupant. c.For example, assume Seller sells Parcel A to builder for $7,500. Builder completes a house and sells to Owner-Occupant for $170,000. Upon closing on that sale, builder shall pay to Seller an additional $1,500, or 15% of the $10,000 excess purchase price. d.Each Purchase Agreement entered into during the second year of the term of this Agreement shall be adjusted to reflect substantially the terms described in this Section. e.This Section does not apply to the parcel at 4303 Reservoir Boulevard; the list price for that parcel will remain as shown in Addendum for the term of this Agreement. 6.Broker and Seller agree and understand that Broker intends to work closely with Timbercraft Homes (the “Builder”), which Builder expects to acquire one or more lots and build single family homes for resale to Owner Occupants (as defined in the Purchase Agreement). Broker may sell any or all lots to Builder, provided that nothing in this Agreement is intended to give the Builder any rights under this Agreement, or any rights with respect to any lot, or to preclude sales of lots to any other person or entity. Staff is also looking into adding additional lots the City and EDA own into the Scattered Sites program. Because of restrictions with the original funding source for acquisition and demolition the City or EDA may be restricted in adding lots to the program. Pete Heryla and John Rockwell of Remax were present at the meeting on Monday to give an update on the program. Presentation by Remax— Pete stated that there were 11 lots included in the original agreement that were for sale for $7,500/lot plus the Reservoir Blvd that was sold for $35,000. Six homes have been constructed and sold thus far (5-that were 2 story design, and 1 rambler style). Pete told members that the Reservoir Blvd lot was purchased by Timbercraft so that a large rambler could be constructed on it. However, the person who EDA Minutes Page 5 January 5, 2015 had entered into an agreement for this lot had a job transfer and backed out of the deal. A second interested party deliberated for about 2 ½ months and then decided against building a home there. Now a third party is interested in the lot and Pete passed around a plan similar to one they want to build. There will be a few modifications to the plan to make it larger. He said it will be a 2 story design with approximately 1,800 sf of finished space and a double garage. It will have 3 BR and 3 bathrooms and will have an estimated value of $300,000. Before the interested party hires an architect to draw up the final design, the EDA needs to approve the plan. Members were happy with the proposed plan and felt it would fit into the neighborhood well, and the value of the home is similar to what was previously approved. Motion by Herringer, seconded by Schmitt to approve of the proposed home design similar to the one shown to members at this meeting for construction on the Reservoir Blvd lot that is part of the scattered site program. All ayes. MOTION PASSED. Pete went on to explain to members that the original agreement was based on a value of $159,000. However, construction prices were higher than planned as the City found the original design too small and more amenities were upgraded. Another factor raising the sale price is that buyers are requesting that the builder pay some of the closing costs which have averaged about $6,900 which is added into the final sales price. He said the average sale price of the homes sold thus far has been $185,881. He said the 2 story design models are listed for $179,900 and the rambler at $187,000. Pete told members that home sales prices have increased over the last 24 months. The median sale price for Columbia Heights in 2013 was $133,000 based on 297 sales and in 2014 the median sale was $141,000 based on 260 sales. So they, too, have increased the asking price of their new homes accordingly. Since the price increase, Pete said sales have slowed. He told members that the clause in the original agreement to pay an additional 15% for purchase prices above $160,000 adds even more cost to potential buyers and is hurting the goal of selling these lots and getting new houses back on the tax rolls. That is why the proposed Amendment is being considered at this meeting which would eliminate the 15% escalator from now until the agreement expires in May of 2015. At that time a new agreement can be made with new criteria set. Schmitt asked if the EDA approved more designs if that would help. Pete stated he thought it would help and that has already been discussed with staff. Fehst told Pete that they can always set a special meeting to approve a new design plan from now until the agreement expires in May if the need arises. Hogeboom told members that several changes are being considered for the terms of the new agreement. As stated earlier, the City owns other lots in the Sheffield area that could possibly be added to the program. Staff is working to determine what funds were used to purchase the properties as that will have bearing on what we can do with the vacant lots. Another option would be to vary the price of the remaining lots and the designs based on the existing neighborhoods and topography of the lots. Staff will bring back recommendations to the EDA and Council prior to the expiration of the contract in May. EDA Minutes Page 6 January 5, 2015 Staff presented the members with pictures of the 6 homes that have been constructed and a copy of an article from the Star Tribune regarding the program. Members were generally happy with the design of the homes and how well they fit into the neighborhoods. They felt it was important to get nice homes built on these lots and to get them back on the tax rolls. Members agreed that they knew this would be a losing proposition short term but would add to the community well-being long term. Therefore, the general consensus was to amend the agreement as proposed. Motion by Herringer, seconded by Schmitt, to adopt Resolution 2015-02, a Resolution approving the revised Addendum B to Exclusive Right to Sell Listing Contract Dated May 20, 2013. Roll Call: All ayes. MOTION PASSED. CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY EDA Resolution 2015-02 A Resolution Amending Addendum B of Listing Agreement for Scattered Site Housing Program WHEREAS , The Authority administers a scattered site housing program, under which the Authority acquires residential property for resale to builders or individuals for construction of new single family homes and WHEREAS , The Authority entered into an Exclusive Right to Sell Listing Contract with Team Pete & John - ReMax Synergy dated May 20, 2013. NOWTHEREFORE BE IT RESOLVED , The City of Columbia Heights’ Economic Development authorizes the following: 1)Amend Addendum B of Exclusive Right to Sell Listing Contract with Team Pete & John – ReMax Syngery dated May 20, 2013 th Passed this 5 day of January 2015. Offered by: Herringer Schmitt All ayes. __________________________ President ___________________________ Walter Fehst, Executive Director EDA Minutes Page 7 January 5, 2015 2015 Community Development Block Grant Application 3. Wickham reviewed the following memo that was enclosed in the agenda packets updating members on the CDBG Application. COMMUNITY DEVELOPMENT DEPARTMENT DATE: December 30, 2014 TO: Economic Development Authority FROM: Loren Wickham, Assistant Development Director RE: 2015 Community Development Block Grant Application Update Staff attended an information session for the 2015 Community Development Block Grant (CDBG) program in Anoka County. Staff has reviewed the high priority projects list and recommends applying for funding for Clean-Up of Contaminated Sites/Brownfields for the new library site and the Heights Gateway Redevelopment Site. The application process requires a copy of a city resolution to be submitted to the County. Staff is requesting up to $300,000 for this program. CDBG funding was awarded in the past for demolition on these properties. The next step in redevelopment of these parcels is to perform the required environmental remediation and possible soils corrections, this funding could help with that. Community Development staff as well as Public Works staff are currently devising an application for this proposed project, which must be approved by the City Council on January 12, 2015. The application deadline submittal to Anoka County is January 16, 2015. Hogeboom stated that MWMO has expressed interest in contributing some funding towards the storm water management for this project. They feel this would be a great opportunity to create a display at the new facility that would be used as an educational tool for the public to explain why dealing with storm water is important to the surrounding environment. Schmitt asked if we are awarded CDBG grant funds whether it would limit what we can do with the properties. Hogeboom said it would have some impact, but felt confident that we could meet the required criteria. O’Reilly’s had similar criteria to meet which they did by providing salary data on employees. Hogeboom said something similar could be done with whatever businesses locate on these sites. He noted that some CDBG funds have already been expended on these sites so we will have to meet the criteria anyways, and he did not see a problem. EDA Minutes Page 8 January 5, 2015 4.Single Family Home Rebate and Loan Programs The following memo was enclosed in the agenda packets for the members review. COMMUNITY DEVELOPMENT DEPARTMENT DATE: December 30, 2014 TO: Economic Development Authority FROM: Elizabeth Holmbeck, Associate City Planner RE: Single Family Home Rebate and Loan Programs The City currently offers two programs for homeowners wishing to make home maintenance repairs. The Single Family Deferred Loan Program and the Rebate Incentive Program are both aimed at assisting homeowners with the cost of repairs to improve the overall housing stock in our community. The programs were last funded through a one-time allocation of $50,000 from Fund 420 (Capital Improvement Development Fund) in 2012.The programs have been funded and managed by the City since 2007 and were previously managed by the Greater Minnesota Housing Corporation. Overall, the Rebate Incentive Program is utilized the most by Columbia Heights homeowners, as it has less strict requirements than the Single Family Deferred Loan Program. Recently, it has come to staff’s attention that Anoka County and the Minnesota Housing Finance Agency (MHFA) operate programs that are similar in nature to the programs the City offers. Programs that are available include First Time Home Buyer Loans, Energy and Accessibility Improvement Loans, and a number of other Home Improvement Loans. Due to the fact that both agencies offer a wider range of options for homeowners, the Community Development Department would like the EDA to consider dissolving the existing City-operated programs. Rather than maintaining duplicate programs, going forward, City staff proposes to refer homeowners to these two agencies for home improvement financing. If it is preferred that the City maintain its own housing maintenance/repair assistance for homeowners, staff recommends that the Single Family Deferred Loan Program dissolve, due to limited use, and that the Rebate Incentive Program continue to operate. There is currently an available fund balance of $9,488.62 for the Single Family Deferred Loan Program and an available fund balance of $8,801.92 for the Rebate Incentive Program. In 2014, approximately $10,137.65 was expended in the Single Family Deferred Loan program and approximately $35,812.77 was expended in the Rebate Incentive Program. If the programs are to continue, additional funds must be made available. Staff seeks direction from the EDA regarding future management of the Single Family Deferred Loan Program and the Rebate Incentive Program. Questions/Comments from members: Peterson didn’t see a need to duplicate services. If the County and MHFA provide similar programs to our residents we should direct them there. EDA Minutes Page 9 January 5, 2015 Murzyn asked if there was enough money left to fund the applications still out there. Hogeboom said there should be depending on how many people actually submit them. Staff has begun to forward people to the County and MHFA. He said there are more rebates processed than deferred loans so the balance in the deferred loan account could be transferred to cover any submitted rebates. Nawrocki asked if the county program is as accessible to our residents. Hogeboom said more people may qualify for the county program as the income standards are higher. The County is providing the loans and MHFA is providing the rebates. He said the County’s program is user friendly, income friendly, but logistics of having to go to the Anoka County offices may be a problem to some. Nawrocki asked if there was a way to track what the County does for our residents. He would like to see how many residents are being served and how much they get. Hogeboom will contact the County to see if they can provide some of this information for the February meeting. Hogeboom said the EDA/Council will have to decide if they want to continue the programs, and if so, where the funds will come from. We can’t use CDBG funds since the county provides this service now, so they will not grant funds for this same purpose. Previously funds from the 420 account have been used but Hogeboom said those funds are earmarked for other things. This item will be discussed again at the February meeting. 5.Administrative Report Hogeboom told members his Administrative Report was enclosed in the packets to update members. The items in this report are as follows: Communications and Branding Campaign Jeff Johnson and Haley Kilgore, Project Managers from ‘Replace’, will provide a status report regarding Phase Two of the branding and communication work. Jeff and Hailey will present to the Economic Development Authority and the Planning Thursday, January 29 from 5-6:30 pm and Zoning Commission on at Murzyn Hall. A light dinner will be served. Northeast Office Center As you are aware, the Northeast Office Center is currently in foreclosure. Venture Bank, who now owns the property, has reached out to the City to see if there is any interest in the City/EDA acquiring all or a portion of the property. The property is currently valued at $3,295,700. Other than the current zoning designation of “Central Business District”, which permits retail, restaurant and office uses, as well as residential uses above the first floor, the City has no official long term plan for this property. If the EDA were to consider acquiring part of all of the property, it would be advisable to first determine a marketable reuse for the site. EDA Minutes Page 10 January 5, 2015 There is currently interest in the site by a company that needs office space for a call center. There is also interest from a group that would like to establish a charter school within the building. As you may recall, K-12 schools are not permitted in the Central Business District, so a change to the zoning requirements would be necessary if a charter school were to be established on the site. Northeast Bank, a long time tenant in the building, has secured an extension to its lease which allows it to operate in its current location until April, 2015. The remainder of the building has been shut-off, and only minimal operations necessary for fire suppression are being maintained. Staff has conducted an inspection of the adjacent parking ramp facility, and found that the ramp is still being utilized by area businesses. Because the ramp is not being used to its full capacity, the Police Department conducts periodic inspections to ensure that criminal activity is not taking place. Upcoming Community Development Items The following items will be brought before the EDA and/or the City Council this winter:  Proposed amendments to Massage Licensing requirements.  Proposed amendments to Liquor Licensing requirements which would allow microbreweries to exist in the City.  Circle Terrace Blvd./LaBelle Park and Play lot planning.  Updated zoning requirements for the Central Business District.  Platting and environmental remediation for the Library/Heights Gateway site.  Amendments to the Scattered Site Housing Program. Hogeboom was asked if he had been contacted by Century Link regarding high speed fiber optic. Hogeboom said he had not spoken to anyone about this. Kelli Bourgeois stated she spoke with someone from Century Link briefly. She said a franchise agreement would be needed prior to them installing a fiber optic system in the right of ways, similar to the one we have with Comcast. The next regular EDA meeting will be Monday, February 2, 2015 at City Hall at 6:30 pm. The meeting was adjourned at 7:50 pm. Respectfully submitted, Shelley Hanson Secretary