HomeMy WebLinkAboutEDA AGN 8-01-16CN COLUMBIA
HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY AGENDA
August 1, 2016
6:30 pm
1. Call to Order
2. Roll Call
3. Pledge of Allegiance
City Hall
Conference Room 1
590 40" Avenue NE
Columbia Heights, MN 55421
CONSENT AGENDA
4. Approve minutes of June 6, 2016, June 13, 2016, and July 21, 2016
S. Approve Financial Report and Payment of Bills for the months of May, 2016 and June,
2016 — Resolution 2016 -18
Motion: Move to approve Consent Agenda as presented.
BUSINESS ITEMS
6. Housing and Redevelopment Authority Levy Budget — Resolution 2016 -19
Motion: Move to waive the reading of Resolution 2016 -19, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -19, a resolution authorizing the Levy of a
Special Benefit Levy Pursuant to Minnesota State Statutes, Section 469.033, Subdivision
6 and Approval of a Budget for Fiscal year 2017.
Economic Development Authority Levy Budget — Resolution 2016 -20
Motion: Move to waive the reading of Resolution 2016 -20, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -20, a resolution of the Economic Development
Authority in and for Columbia Heights EDA adopting the 2017 budget and setting the
EDA Levy.
The next EDA meeting will on September 5 2016 at City Hall.
8. Revised Single Family Home Lot Sales Program— Resolution 2016 -21
Motion: Move to waive the reading of Resolution 2016 -21, there being ample copies
available to the public.
Motion: Move to adopt Resolution 2016 -21, a resolution approving the revised
guidelines for conveyance of certain lots owned by the Economic Development
Authority.
9. Single Family Home Lot Sales Program Concept Application Approval 4606 Polk Street
If concept application is approved:
Motion: Move to approve the concept application submitted by Home Detail for the
property located at 4606 Polk Street NE, Columbia Heights, MN 55421.
Motion: Move to authorize staff and consultants to work with Home Detail, LLC to
determine specific house plans for the construction of a single family home and to
prepare a Purchase and Redevelopment Agreement to be considered for final approval
by the EDA at its next meeting of September 5, 2016.
If concept application is rejected:
Motion: Move to reject the concept application submitted by Home Detail for the
property located at 4606 Polk Street NE, Columbia Heights, MN 55421.
OTHER BUSINESS
10. Adjourn
The next EDA meeting will on September 5, 2016 at City Hall. The July EDA
meeting will be cancelled.
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE MEETING OF
JUNE 6, 2016
The meeting was called to order at 6:30 pm by Bruce Nawrocki (Secretary/Treasurer).
Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek„ Bruce Nawrocki and
Gerry Herringer. Bobby Williams arrived at 6:55 pm.
Members Absent: Gary Peterson
Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, Joe Kloiber, Gary Gorman,
and Shelley Hanson.
Legal Counsel: Martha Ingram from Kennedy & Graven
Stacy Kvilvang from Ehlers and David Mullen from Dougherty & Co.
PLEDGE OF ALLEGIANCE- RECITED
CONSENT ITEMS
1. Approve the Minutes from April 4, 2016, and May 2, 2016—
2. Approve the Financial Report and Payment of Bills for April 2016 on Resolution 2016-
12.
Questions by Members:
No questions or comments.
Motion by Szurek , seconded by Murzyn, to waive the reading of Resolution 2016 -12 there
being an ample amount of copies available to the public. All ayes. MOTIONPASSED.
Motion by Szurek , seconded by Murzyn, to approve the Minutes and Financial Report and
Payment of Bills for April as presented. All ayes. MOTIONPASSED.
RESOLUTION NO. 2016-12
A Resolution of the Economic Development Authority of Columbia Heights, Minnesota,
Approving the Financial Statements for Month of APRIL, 2016 and the Payment of the
Bills for the Month of April, 2016.
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
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June 6, 2016
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 April, 2016 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 6th day of June, 2016.
Motion by: Szurek
Seconded by: Murzyn
BUSINESS ITEM
1. Discussion of Refinancing Tax Increment Refunding Revenue Bonds - Series 2016
for the Huset Park Redevelopment Area Project.
Hogeboom explained that Martha Ingram, the EDA Bond Attorney, had supplied the Board
members with a memorandum dated June 1, 2016 summarizing Refunding Bonds for the Huset
Park Development. This memo addressed the Series 2007 bonds issued under the prior contract
with an outstanding amount of $2,475,000 for public infrastructure improvements and another with
an outstanding amount of $6,650,000 to cover redevelopment costs within the TIF District. Ingram
reminded the members that these are not General Obligation Bonds, but are Revenue Bonds
supported by Revenues from the TIF District.
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June 6, 2016
The Redeveloper has requested a refund of the current bonds because it will lower the interest rate
which means the debt service payments on the Refunding Bonds will be lower. This will result in
some tax increment remaining after payment on the Refunding Bonds, which will be used to pay
down the TIF Note (in addition, you will recall that the Contract requires the Redeveloper to
construct a senior housing facility within the TIF District, which will generate additional tax
increment that will also be used to pay principal and interest on the TIF Note). The Redeveloper
recognizes that refunding the Current Bonds primarily benefits the Redeveloper, and has therefore
agreed to pay all actual costs of issuance related to the issuance of the Refunding Bonds. The EDA
will not pay any costs related to the refunding. In addition, the Redeveloper will pay an
administrative fee of $100,000 to the EDA to be allocated to other redevelopment purposes within
the City.
The EDA must adopt a Resolution awarding the sale of the Refunding Bonds along with approving
several documents required in connection with the refunding. The EDA's action must then be
approved by the City Council. This will be brought to both the EDA and the City Council at the
June 13, 2016 meeting for approval. Ingram further explained the format of the Resolution which
was drafted to allow flexibility for both the timing of the transaction and to get the best rates
possible without the need to wait for additional scheduled meetings. Stacy Kvilvang from Ehlers
and a representative from Dougherty & Co. were present to answer questions of the members.
Questions by members:
Nawrocki asked what the benefit was to the City. Ingram stated that the City will receive the
administrative fee of $100,000 and that the lower interest rate will allow the developer to pay down
the TIF note quicker.
Herringer asked for more detail on the parameter approach to the Resolution approving the Refund
of the Bonds which Ingram provided. He asked what rating the bonds would have. The underwriter
stated that the bonds are not rated. Herringer then asked how the amount of $100,000 was arrived at
as the administrative fee the City would be paid. Kloiber (Finance Director) told members that an
estimated figure was arrived at based on the interest savings and then the final amount was
established through further negotiations.
Hogeboom told members that no action was needed at this meeting, as the Resolution will be
considered at the June 13a' special meeting.
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June 6, 2016
2. Conveyance of Certain Real Property from the EDA to the City- Resolution 2016 -13.
Dahl told members that over the years, the Columbia Heights Economic Development Authority
(EDA) has acquired property within the City of Columbia Heights for economic development
purposes. The property that the EDA acquires is exempt from property tax under Minnesota
Statues, Section 272.02, Subdivision 39 for a specified amount of time. The EDA will start
paying property taxes at the end of the applicable exemption period. If the EDA determines that
the redevelopment for a specific property will take longer than the exemption period or the EDA
determines to utilize specific property for City use, it is in the EDA's best interest to transfer title
of certain properties to the City of Columbia Heights. Staff has identified seven properties that
are in the EDA's best interest to transfer title because these seven properties have been dedicated
for municipal use by the City; these properties are as follows:
825 41 st Ave.
837 41st Ave.
894 42nd Ave.
4301 Quincy St.
839 41st Ave.
828 40th Ave.
1309 Circle Terrace Blvd.
PID: 35-30-24-14-0151
PID: 35- 30 -24 -14 -0155
PID: 35- 30 -24 -14 -0157
PID: 35- 30 -24 -14 -0159
PID: 35- 30 -24 -14 -0160
PID: 35- 30 -24 -41 -0114
PID: 36- 30 -24 -24 -0025
Dahl told members that the first 5 properties are part of the Public Safety Site, and therefore it
makes sense to have it in the City's name to remain tax exempt. The lot at 828 40`h Avenue is
currently the community garden space across the street from the Library. If not transferred to the
City, the EDA will have to start paying taxes on the lot next year. The lot on Circle Terrace is
the site being used to build the community building at the City of Peace Park and as park land it
should be owned by the City.
Staff recommends approval of Resolution 2016 -13, a resolution authorizing the conveyance of
the aforementioned, EDA owned, properties to the City.
Questions from members:
Schmitt asked if the 828 40a' Ave site could still be sold with the Library if someone wants it.
Schmitt was told it could still be sold. Herringer asked if the transfer would have any effect on
the restrictions we have on that lot since it was purchased with CDBG funds. Kloiber stated that
the restrictions would still pertain to the site and that it could result in the City having to repay a
proportionate amount of the property value to Anoka County. However, he said Anoka County
has worked with the City in the past to re -grant the funds somehow, or there are several ways to
meet the conditions.
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June 6, 2016
Schmitt said the legal descriptions should be verified as she didn't think some of them made
sense. Staff will confirm they are correct.
Nawrocki asked how much it would cost to do the transfers. Hogeboom stated that it will only
cost the recording fees to record the Title changes and that it will save the EDA from having to
pay taxes on the properties.
Motion by Szurek, seconded by Schmitt, to waive the reading of Resolution 2016 -13, there
being ample copies available to the public. All ayes. MOTIONPASSED.
Motion by Szurek, seconded by Schmitt, to adopt Resolution 2016 -13, Resolution authorizing the
conveyance of certain property by the Columbia Heights Economic Development Authority to the
City of Columbia Heights. All ayes. MOTIONPASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-13
RESOLUTION AUTHORIZING THE CONVEYANCE OF CERTAIN PROPERTY BY
THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY TO
THE CITY OF COLUMBIA HEIGHTS
BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights Economic
Development Authority ( "Authority ") as follows:
Section 1. Recitals.
1.01, The Authority owns certain property (the "Property ") located in the City of Columbia
Heights (the "City "). A description of the Property is attached as Exhibit A.
1.02. The City has constructed a public works facility on five of the parcels making up the
Property, a community garden on the sixth parcel, and a children's playground on the seventh.
1.03. The Property thus having been dedicated to municipal uses by the City, the Authority has
determined that it is in the best interest of the Authority and City that the Authority convey the Property to the
City.
Section 2. Authority Approval; Further Proceedings.
2.01. The Authority hereby approves the conveyance of the Property to the City, to be held by the
City for its municipal purposes.
2.02. The President and Executive Director are hereby authorized to execute on behalf of the
Authority any documents required to carry out, on behalf of the Authority, the conveyance of the Property,
including without limitation any deed.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 6th day of June, 2016.
President
ATTEST:
Secretary
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EXHIBIT A (Legal Descriptions were corrected from those in agenda)
Property
Public safety facility:
Lot 1, Block 1, Northwestern 2nd Addition, Anoka County, Minnesota
Outlots A, C, E, and F, Northwestern 2nd Addition, Anoka County, Minnesota
825 41" Avenue, PID No. 35- 30 -24 -14 -0151
837 41" Avenue, PID No. 35- 30 -24 -14 -0155
894 42nd Avenue, PID No. 35- 30 -24 -14 -0157
4301 Quincy Street, PID No. 35- 30 -24 -14 -0159
839 41" Avenue, PID No. 35- 30 -24 -14 -0160
Community garden:
Lots 47 and 48, Block 63, Columbia Heights Annex to Minneapolis, Anoka County, Minnesota
828 40d' Avenue, PID No. 35- 30 -24 -41 -0114
Children's playground:
And
That part of Lot Nine (9), Block One (1), lying east of the west line of former Lot forty-three (43),
Block Four (4), Reservoir Hills, Columbia Heights, Anoka County, Minnesota, all in Circle Terrace
2nd Addition, together with an easement for driveway purposes over the southwesterly 4 feet of Lot
8, Block 1, Circle Terrace 2nd Addition, Anoka County, Minnesota. (Torrens)
That part of Lot 9, Block 1, Circle Terrace 2nd Addition which lies in Lots 41 and 42, Reservoir
Hills, together with an easement for driveway purposes over the Southwesterly 4 feet of Lot 8,
Block 1, Circle Terrace 2nd Addition, Anoka County, Minnesota. (Abstract)
1309 Circle Terrace Blvd., PID No. 36- 30 -24 -24 -0025
3. Single Family Rental Home Property Discussion
The Economic Development Authority (EDA) held a goal setting session with the Planning and
Zoning Commission (P &Z) in March to review redevelopment goals within Columbia Heights.
One of the goals reviewed was establishing a comprehensive housing program that will help
increase values, manage and reduce the number of single family rental properties, generate a
wider range of price point options and encourage reinvestment. Following direction from the
EDA, staff was advised to research single - family rental housing and reconvene a separate
meeting to discuss how the City can enhance neighborhood livability through more proactive
management of single - family rental housing. Therefore, staff desires to continue discussions
about the single - family rental housing within Columbia Heights.
EDA Minutes
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June 6, 2016
There are many factors that directly and indirectly contribute to local single - family rental
markets — including population, demographics, area median income (AMI), age of housing stock,
and area economics. Columbia Heights experienced a surge in single - family rental housing
starting in 2008 when the collapse of the housing market swept through the Twin Cities. The
economic turmoil of the Great Recession displaced many homeowners as high unemployment
increased the amount of foreclosures. And as foreclosures increased, Columbia Height's rental
market experienced a resurgence of single - family rental housing.
Since 2008, Community Development and Fire Department staff have worked in tandem to
track rental property trends. The figures below were attained by Columbia Heights through the
issuance of rental licenses over the years. 2015 is the most recent data calculated because the
total rental permits issued cannot be attained until the end of a given year. Staff would like to
note, single - family rental housing has been declining over the last few years though rental
permits have gradually increased. Also, attached is the Twin Cities Metro Rental Chart for
comparison of single - family rental housing metro wide.
2008
2009
2010
2011
2012
2013
2014
2015
Single- Family Permits
Total Rental Permits Issued Issued Percentage of Single- Family
Rental Pro ti
*Total Single - Family Properties in Columbia Heights is 5439
Rental property trends in Columbia Heights seem to have plateaued and/or started to decrease,
however rental properties are still branded with negative connotations. Community Development
staff met with colleagues from the Fire Department and Police Department to discuss property
maintenance concerns and crime associated with single - family rental housing. Staff's intent was
to determine if these negative connotations associated with rental properties are, in fact, real
problems or actually just preconceived notions.
444
66.47%
er es
8.16%
483
66.99%
8.88%
515
67.67%
947%
W66
572
66.20%
10.52%
627
7190%
11.53%
610
64.96%
11.21%
569
58.24%
10.46%
971
503 1
51.80%
9.25%
*Total Single - Family Properties in Columbia Heights is 5439
Rental property trends in Columbia Heights seem to have plateaued and/or started to decrease,
however rental properties are still branded with negative connotations. Community Development
staff met with colleagues from the Fire Department and Police Department to discuss property
maintenance concerns and crime associated with single - family rental housing. Staff's intent was
to determine if these negative connotations associated with rental properties are, in fact, real
problems or actually just preconceived notions.
EDA Minutes
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June 6, 2016
The conversations derived from the staff meeting concluded that single - family rental housing is
not the real issue and incorporating more proactive management of single - family rental housing
may not enhance neighborhood livability. The real issues that brand rental properties with
negative connotations are, in fact, contributed to rental density and cultural barriers. Attached is
Columbia Heights Single - Family Rental Housing, Crime Overlay Map to represent the
correlation between crime and rental density.
Staff isn't making a recommendation. This is only meant to provide information to the EDA to
identify different options, if any, to proceed with enhancing neighborhood livability through
more proactive management of single - family rental housing.
Comments from members:
Gary Gorman, Fire Chief, stated the figures for 2016 to date are as follows: 984 Total Rental
Units, plus 67 family exempt properties, and approximately 20 more in process.
Szurek thinks we have a much higher percentage of single family homes as rental units than
other suburbs. She thinks it is better for the City to have more owner occupied homes as owners
tend to take better care of their properties. Nawrocki agreed with Szurek.
There was a discussion as to the reasons we have such a high percentage of rental property.
During the housing/foreclosure crisis it became a lucrative investment for buyers to buy up
homes and rent them out. Our homes were especially attractive since they were affordable and
companies came in and purchased dozens of them. Gorman stated prior to the housing crisis
most rental properties were owned by individuals who had just a few homes, compared to the
present where corporations have purchased them in large numbers.
Nawrocki asked what pro - active things the Council should consider. Dahl said there are several
options for the EDA/City Council to consider:
1. Limit the number of rental. This has been attempted in several cities, but usually in small
towns with colleges. The issue of limiting rentals has gone to litigation all the way to the
Supreme Court, but was never resolved because the parties either were issued rental
licenses or they sold the properties before the case was decided.
EDA Minutes
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June 6, 2016
2. Higher density rental usually increases crimes rates in the surrounding area. Crime rates
aren't necessarily increased when comparing a specific owner occupied home to a rental
home, but when the density of rentals is significant, the crime rate tends to be higher. So
possibly limiting rentals to so many per block could be considered.
3. Our demographics are also part of the Droblem So many of our renters and owners are
immigrants and may not understand how to take care of a home and the expectations of
maintaining a house and yard. She said it might help if there were classes to help educate
them on the basics.
Gorman told members that property maintenance complaints are about the same
on owner occupied residences versus rental property. He said their department averages
about 400 -500 lawn/weed complaints per year and about 200 complaints for junk/storage
issues.
4. Let the market dictate and just keep monitoring.
5. Hold a class about how to take care of property, especially if cited.
6. Could go back to offering rebates for home improvements but limit them to work that
increases the value such as remodeling or additions, not for maintenance /repair projects.
4. Update on 4303 Reservoir Blvd
Dahl informed the Commission members that Timbercraft has submitted the plans for
the construction of the single family home for review.
Nawrocki asked if the item regarding Tollberg Homes was to be considered as part of this
agenda. Dahl explained briefly what the information passed out to the members was about and
said he would have to get more information about this before it could be brought to the EDA for
consideration. Formal action would be required to approve the request which could not happen
at this meeting.
Hogeboom reminded members there will be a special EDA meeting on June 13, 2016 prior to the
Council Meeting to take action on 3 items.
The meeting was adjourned at 7:30 pm.
Respectfully submitted,
Shelley Hanson
Secretary
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE SPECIAL MEETING OF
JUNE 13, 2016
The meeting was called to order at 6:30 pm by Gary Peterson.
Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek„ Bruce Nawrocki , Gerry
Herringer, Bobby Williams and Gary Peterson.
Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, Joe Kloiber, and Shelley
Hanson.
Also present: Martha Ingram from Kennedy & Graven and Frank Hogan from
Dougherty & Co.
PLEDGE OF ALLEGIANCE - RECITED
BUSINESS ITEM
1. Authorization to Issuance of Tax Increment Revenue Refunding Bonds ( Huset
Park Area Redevelopment Project), Series 2016, and Providing the Form, Terms,
Pledge of Revenues, and Findings, Covenants, and Directions Relating to the
Issuance of Such Obligations - Resolution 2016 -14.
Hogeboom explained that this issue was discussed at the June 6a' meeting and that he had
provided the members with a report that provided a brief history of the Columbia Heights
Economic Development Authority's $2,890,000 Tax Increment Revenue Bonds ( Huset Park
Area Redevelopment Project), Series 2007, which currently remain outstanding in the amount of
$2,475,000 (the "Current Bonds "), as well as a summary of the process required to refund the
Current Bonds. The Current Bonds were issued in connection with certain public infrastructure
improvements constructed as part of the Huset Park Tax Increment Financing District (the "TIF
District "), pursuant to the Amended and Restated Contract for Private Redevelopment between
the Columbia Heights Economic Development Authority ( "EDA "), the City of Columbia
Heights ( "City "), and BNC National Bank, as successor in interest to Huset Park Development
Corporation (`BNC "), dated as of August 1, 2007, as amended (the "Prior Contract "), and
pursuant to the Second Amended and Restated Contract for Private Redevelopment between the
EDA, the City, and Columbia Heights Leased Housing Associates I, LLLP (the "Redeveloper "),
dated as of October 30, 2015 (the "Contract ").
The EDA issued the Current Bonds pursuant to the Prior Contract. The EDA pledged tax
increment generated by all improvements to be constructed on the Redevelopment Property to
the payment of debt service on the Current Bonds. The Current Bonds were issued after the first
phases of construction required under the Prior Contract were complete, and the par amount of
the Current Bonds was based on the flow of tax increment generated by the completed phases,
such that tax increment generated by the completed phases of construction has always been
sufficient to pay principal and interest in full on each payment date.
EDA Minutes
Page 2
June 13, 2016
The EDA also issued its Taxable Tax Increment Revenue Note, Series 2007A, in the principal
amount of $6,650,000 (the "TIF Note ") to Huset Park Development Corporation ( "HPDC "), to
reimburse HPDC for certain public redevelopment costs incurred by HPDC in development of
the housing improvements within the TIF District. Like the Current Bonds, the TIF Note is also
secured by tax increment generated within the TIF District, but on a subordinate basis to the
Current Bonds. Since HPDC defaulted under the Prior Contract and never completed any
improvements beyond the first phases, there has not been enough tax increment generated within
the TIF District to pay any debt service on the TIF Note. Therefore, the TIF Note remains
outstanding in the full original principal amount. The TIF Note was assigned to the Redeveloper
on October 30, 2015 at the real estate closing on the Redevelopment Property from BNC to the
Redeveloper, and is now held by the Redeveloper.
The Contract with the Redeveloper, which the EDA and City Council approved in April of this
year, provides that the EDA will agree to refund the Current Bonds if requested by the
Redeveloper (see pertinent language in the attached Exhibit A). The Redeveloper has now made
this request. Refunding the Current Bonds is financially beneficial to the Redeveloper because
bonds issued to refund the Current Bonds (the "Refunding Bonds ") will carry lower interest
rates, which means that the debt service payments on the Refunding Bonds will be lower. This
will result in some tax increment remaining after payment on the Refunding Bonds, which will
be used to pay down the TIF Note (in addition, you will recall that the Contract requires the
Redeveloper to construct a senior housing facility within the TIF District, which will generate
additional tax increment that will also be used to pay principal and interest on the TIF Note).
The Redeveloper recognizes that refunding the Current Bonds primarily benefits the
Redeveloper, and has therefore agreed to pay all actual costs of issuance related to the issuance
of the Refunding Bonds. The EDA will not pay any costs related to the refunding. In addition,
the Redeveloper will pay an administrative fee of $100,000 to the EDA to be allocated to other
redevelopment purposes within the City.
The Redeveloper has engaged Dougherty & Company as underwriter (i.e. purchaser) for the
Refunding Bonds. In order to refund the Current Bonds, the EDA must adopt a resolution
awarding the sale of the Refunding Bonds to Dougherty and approving several documents
required in connection with the refunding, and the EDA's action must be approved by the City
Council. The actions being considered by the EDA and City Council on this date and Martha
Ingram an associate from Kennedy and Graven was present at both the EDA and the Council
meetings to answer any questions the EDA and/or City Council had about the legal documents,
the financial aspects of the process, or the contractual arrangement providing for this refunding.
A copy of the First Amendment to Paying Agent Agreement between Columbia Heights EDA
and Bond Trust Services Corp was included in the agenda packets for the members to review.
EDA Minutes
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June 6, 2016
Questions by members
Nawrocki wanted confirmation that if the Tax Revenue doesn't generate enough funds that the
City/EDA has no liability financially to the developer or bond holder. Ingram stated that is correct.
Herringer questioned the amount of interest accumulating on the outstanding note. Kloiber stated
that he can look up the exact amount for the members if they want it but the note is subordinate to
the bond and that by taking this action more money can be applied to the Note's principal and
interest. He explained that once again the City/EDA is not responsible for the Note payments.
Motion by Williams, seconded by Nawrocki, to waive the reading of Resolution 2016 -14, there
being ample copies available to the public. All ayes. MOTIONPASSED.
Motion by Williams, seconded by Nawrocki, to adopt Resolution 2016 -14, a Resolution to Issue Tax
Increment Revenue Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016, and
Providing the Form, Terms, Pledge of Revenues, and Findings, Covenants, and Directions Relating
to the Issuance of Such Obligations. All ayes. MOTIONPASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-14
RESOLUTION AUTHORIZING THE ISSUANCE OF TAX
INCREMENT REVENUE REFUNDING BONDS (HUSET PARK
AREA REDEVELOPMENT PROJECT), SERIES 2016, AND
PROVIDING THE FORM, TERMS, PLEDGE OF REVENUES,
AND FINDINGS, COVENANTS, AND DIRECTIONS RELATING
TO THE ISSUANCE OF SUCH OBLIGATIONS
BE IT RESOLVED by the Board of Commissioners (the `Board ") of the Columbia
Heights Economic Development Authority (the "Authority "), as follows:
SECTION 1. BACKGROUND.
EDA Minutes
Page 4
June 13, 2016
1.01. The Columbia Heights Economic Development Authority (the "Authority") and
the City of Columbia Heights, Minnesota (the "City ") previously established the Huset Park
Area Tax Increment Financing District (the "TIF District') pursuant to authority granted by
Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "Tax Increment Act'),
within the Downtown CBD Redevelopment Project (the "Redevelopment Project'), and adopted
a tax increment financing plan for the purpose of financing certain improvements within the TIF
District. In order to provide for the redevelopment of the Redevelopment Project and the TIF
District, the Authority entered into an Amended and Restated Contract for Private
Redevelopment, dated as of August 1, 2007, between the Authority, the City, and BNC National
Bank, as successor in interest to Huset Park Development Corporation, dated as of August 1,
2007, as amended, and pursuant to the Second Amended and Restated Contract for Private
Redevelopment, dated October 30, 2015 (the "Contract') between the Authority, the City, and
Columbia Heights Leased Housing Associates I, LLLP, a Minnesota limited liability limited
partnership (the "Redeveloper ").
1.02. Pursuant to Section 469.178 of the Tax Increment Act, the Authority is authorized
to issue and sell its bonds for the purpose of financing or refinancing public redevelopment costs
of the Redevelopment Project and to pledge tax increment revenues derived from a tax increment
financing district established within the Redevelopment Project to the payment of the principal
of and interest on such obligations.
1.03. On August 3, 2007, the Authority issued its Tax Increment Revenue Bonds ( Huset
Park Area Redevelopment Project), Series 2007 (the "Prior Bonds "), in the original aggregate
principal amount of $2,890,000, pursuant to the TIF Act, Minnesota Statutes, Sections 469.001
through 469.047, as amended, and Minnesota Statutes, Sections 469.090 through 469.1082, as
amended (collectively, the "Act'). The Authority applied the proceeds of the Prior Bonds to
finance certain public redevelopment costs of the Redevelopment Project (the "Project Costs ").
The Prior Bonds are currently outstanding in the principal amount of $2,475,000 and are subject
to redemption at the option of the Authority on or after August 15, 2015, at a price of par plus
accrued interest.
SECTION 2. ISSUANCE OF BONDS.
2.01. In order to refinance the Project Costs through the redemption and prepayment of
the outstanding Prior Bonds, pay costs of issuance and related costs with respect to the Bonds,
and fund a reserve fund, the Board hereby authorizes the issuance of its Tax Increment Revenue
Refunding Bonds ( Huset Park Area Redevelopment Project), Series 2016 (the "Bonds "), in a
principal amount not to exceed $2,800,000. The Bonds shall be issued on such date and upon the
terms and conditions determined by the Executive Director of the Authority (the "Executive
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Director "), provided that the yield on the Bonds (for arbitrage purposes) shall not exceed
3.375 %. The Bonds may be designated such other name or names as determined to be
appropriate by the Executive Director. The Bonds shall be issued in one or more series as the
Executive Director may determine, and shall be assigned a separate series designation
determined by the Executive Director for each series issued by the Authority. The Bonds are
authorized to be issued as obligations the interest on which is not includable in gross income for
federal and State of Minnesota income tax purposes. This authorization to issue the Bonds is
effective without any additional action of the Board and shall be undertaken by the Executive
Director on such date or dates and upon the terms and conditions deemed reasonable by the
Executive Director. The Board hereby authorizes the sale of the Bonds to Dougherty &
Company LLC (the "Underwriter ") upon the offer of the Underwriter to purchase the Bonds in
accordance with the terms of a Bond Purchase Agreement between the Authority and the
Underwriter (the "Bond Purchase Agreement') and conforming to the parameters set forth in this
paragraph.
2.02. There have been presented to the Board forms of the following documents: (i) a
First Amendment to Paying Agent Agreement (the "Paying Agent Agreement'), between the
Authority and Bond Trust Services Corporation (the "Paying Agent'), which amends the Paying
Agent Agreement with respect to the Prior Bonds, dated as of August 1, 2007, between the
Authority and the Paying Agent; and (ii) a Bond Purchase Agreement. The Paying Agent
Agreement and the Bond Purchase Agreement are hereby approved in substantially the forms on
file with the Authority on the date hereof, subject to such changes not inconsistent with this
resolution and applicable law that are approved by the Executive Director of the Authority.
Upon approval by the Executive Director of the Paying Agent Agreement and Bond Purchase
Agreement, the Chair and the Executive Director are authorized and directed to execute such
documents on behalf of the Authority.
2.03. The Bonds shall have the maturities, interest rate provisions, shall be dated,
numbered, and issued in such denominations, shall be subject to mandatory and optional
redemptions and prepayment prior to maturity, shall be executed, and authenticated in such
manner, shall be in such form, and shall have such other details and provisions as are prescribed
in the Paying Agent Agreement. The form of the Bonds included in the Paying Agent
Agreement is approved in substantially the form in the Paying Agent Agreement, subject to such
changes not inconsistent with this resolution and applicable law, and subject to such changes as
are approved by the Executive Director. Without limiting the generality of the foregoing, the
Executive Director is authorized to approve the original aggregate principal amount of each
series of Bonds to be issued under the terms of this resolution (subject to the maximum aggregate
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principal amount for all series authorized by this resolution), to establish the terms of
redemption, the principal amounts subject to redemption, and the dates of redemption of the
Bonds, and to approve other changes to the other terms of the Bonds which are deemed by the
Executive Director to be in the best interests of the Authority. The issuance and delivery of the
Bonds shall be conclusive evidence that the Executive Director has approved the terms and
provisions of the Bonds in accordance with the authority granted by this resolution. The
proceeds derived from the sale of the Bonds, and the earnings derived from the investment of
such proceeds, shall be held, transferred, expended, and invested in accordance with
determinations of the Executive Director. Upon approval by the Executive Director of the
Bonds, the Chair and the Executive Director are authorized and directed to execute such Bonds
on behalf of the Authority.
2.04. The Bonds shall be secured by the terms of the Paying Agent Agreement and shall
be payable solely from Available Tax Increment (as defined in the Paying Agent Agreement)
that is expressly pledged to the payment of the Bonds pursuant to the terms of the Paying Agent
Agreement. The covenants, representations and warranties of the Authority contained in the
Paying Agent Agreement are expressly incorporated herein for the benefit of the holders of the
Bonds.
2.05. It is hereby found, determined and declared that the issuance and sale of the
Bonds, the execution and delivery by the Authority of the Paying Agent Agreement and the
Bond Purchase Agreement (the "Authority Documents "), and the performance of all covenants
and agreements of the Authority contained in the Authority Documents, and of all other acts
required under the Constitution and laws of the State of Minnesota to make the Bonds the valid
and binding special obligations of the Authority enforceable in accordance with their respective
terms, are authorized by applicable Minnesota law, including, without limitation, the Tax
Increment Act, and this Resolution.
2.06. Under the provisions of the Tax Increment Act, and as provided in the Paying
Agent Agreement and under the terms of the Bonds, the Bonds are not to be payable from or
chargeable against any funds other than the revenues pledged to the payment thereof; the
Authority shall not be subject to any liability thereon other than from such revenues pledged
thereto; no holder of any Bonds shall ever have the right to compel any exercise by the Authority
of its taxing powers (other than as contemplated by the pledge of tax increment revenues under
the terms of the Paying Agent Agreement) to pay the principal of, premium, if any, and interest
on the Bonds, or to enforce payment thereof against any property of the Authority other than the
property expressly pledged thereto; the Bonds shall not constitute a charge, lien or encumbrance,
legal or equitable, upon any property of the Authority other than the revenues expressly pledged
thereto; the Bonds shall recite that the Bonds are issued without a pledge of the general or moral
obligation of the Authority, and that the Bonds, including interest thereon, are payable solely
from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of
the Authority within the meaning of any constitutional or statutory limitation of indebtedness.
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SECTION 3. REFUNDING OF PRIOR BONDS; FINDINGS; REDEMPTION OF PRIOR
BONDS.
3.01. The outstanding Prior Bonds will be called for redemption on August 15, 2016, or
the first date on which timely notice of redemption can be given (the "Redemption Date "), in the
principal amount of $2,475,000 plus accrued interest to the Redemption Date. It is hereby found
and determined that based upon information presently available from the Authority's municipal
advisor, the issuance of the Bonds will result in a reduction of debt service costs to the Authority.
3.02. It is hereby found and determined that the proceeds of the Bonds deposited in the
Redemption Fund created under the Paying Agent Agreement, along with any other funds on
hand in the reserve fund established for the Prior Bonds, will be sufficient to prepay all of the
principal of, interest on and redemption premium (if any) on the Prior Bonds on the Redemption
Date.
3.03. The Prior Bonds maturing after the Redemption Date will be redeemed and
prepaid on the Redemption Date. The Prior Bonds will be redeemed and prepaid in accordance
with their terms and in accordance with the terms and conditions set forth in the form of Notice
of Call for Redemption attached hereto as EXHIBIT A, which terms and conditions are hereby
approved and incorporated herein by reference. The registrar for the Prior Bonds is authorized
and directed to send a copy of the respective Notice of Call for Redemption to each registered
holder of the Prior Bonds at least thirty (30) days prior to the Redemption Date.
SECTION 4. DISCLOSURE DOCUMENTS AND CLOSING CERTIFICATES.
4.01. The Authority approves the preparation and distribution of a Preliminary Official
Statement and an Official Statement with respect to the offer and sale of the Bonds. In order to
provide for continuing disclosure with respect to the Bonds, to the extent deemed necessary,
required, or appropriate by the Executive Director, the Executive Director may execute a
certificate providing for continuing disclosure with respect to the Bonds.
4.02. The Executive Director is authorized to furnish to the purchasers of the Bonds, on
the date of issuance and sale of the Bonds, a certificate that, to the best of the knowledge of such
officer, the Official Statement (or other form of disclosure document) does not, as of the date of
closing, and did not, as the time of sale of the Bonds, contain any untrue statement of a material
fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Unless litigation shall have been commenced and be
pending questioning the Bonds, the proceedings for approval of the Bonds, tax increment
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revenues generated or collected for payment of the Bonds, revenues pledged for payment of the
Bonds, or the organization of the Authority, or incumbency of its officers, the Chair and the
Executive Director shall also execute and deliver a suitable certificate as to absence of material
litigation, and the Executive Director shall also execute and deliver a certificate as to payment
for and delivery of the Bonds, and the signed approving legal opinion of Kennedy & Graven,
Chartered, as to the validity and enforceability of the Bonds and the tax- exempt status of interest
on the Bonds.
4.03. The Chair, the Executive Director, and other agents, officers, and employees of
the Authority are hereby authorized and directed, individually and collectively, to furnish to the
attorneys approving the Bonds, on behalf of the purchasers of the Bonds, certified copies of all
proceedings and certifications as to facts as shown by the books and records of the Authority,
and the right and authority of the Authority to issue the Bonds, and all such certified copies and
certifications shall be deemed representations of fact on the part of the Authority. Such officers,
employees, and agents of the Authority are hereby authorized to execute and deliver, on behalf
of the Authority, all other certificates, instruments, and other written documents that may be
requested by bond counsel, the Underwriter, the Paying Agent, or other persons or entities in
conjunction with the issuance of the Bonds and the expenditure of the proceeds of the Bonds.
Without imposing any limitations on the scope of the preceding sentence, such officers and
employees are specifically authorized to execute and deliver a certificate relating to federal tax
matters including matters relating to arbitrage and arbitrage rebate, a receipt for the proceeds
derived from the sale of the Bonds, an order to the Paying Agent, a general certificate of the
Authority, and an Information Return for Tax - Exempt Governmental Obligations, Form 8038 -G
(Rev. September 2011).
SECTION 5. BANK QUALIFICATION. The Authority hereby designates the Bonds as
"qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue
Code of 1986, as amended (the "Code "), and represents that the Authority does not reasonably
anticipate that the Authority, the City, or any other subordinate entity of the City will issue in
calendar year 2016 more than $10,000,000 of bonds or other tax - exempt obligations (excluding
"private activity bonds" other than "qualified 501(c)(3) bonds," as such terms are defined in the
Code, and excluding certain refunding obligations, that are not included in the $10,000,000
limitation set forth in Section 265(b)(3)(C)(i) of the Code).
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SECTION 6. MISCELLANEOUS.
6.01. All agreements, covenants, and obligations of the Authority contained in this
resolution and in the above - referenced documents shall be deemed to be the agreements,
covenants, and obligations of the Authority to the full extent authorized or permitted by law, and
all such agreements, covenants, and obligations shall be binding on the Authority and
enforceable in accordance with their terms. No agreement, covenant, or obligation contained in
this resolution or in the above- referenced documents shall be deemed to be an agreement,
covenant, or obligation of any member of the Board, or of any officer, employee, or agent of the
Authority in that person's individual capacity. Neither the members of the Board, nor any
officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance of the Bonds.
6.02. Nothing in this resolution or in the above - referenced documents is intended or
shall be constructed to confer upon any person (other than as provided in the Paying Agent
Agreement, the Bonds, and the other agreements, instruments, and documents hereby approved)
any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any
provision of this resolution.
6.03. If for any reason the Chair or the Executive Director, or any other officers,
employees, or agents of the Authority authorized to execute certificates, instruments, or other
written documents on behalf of the Authority shall for any reason cease to be an officer,
employee, or agent of the Authority after the execution by such person of any certificate,
instrument, or other written document, such fact shall not affect the validity or enforceability of
such certificate, instrument, or other written document. If for any reason the Chair or the
Executive Director, or any other officers, employees, or agents of the Authority authorized to
execute certificates, instruments, or other written documents on behalf of the Authority shall be
unavailable to execute such certificates, instruments, or other written documents for any reason,
such certificates, instruments, or other written documents may be executed by a deputy or
assistant to such officer, or by such other officer of the Authority as in the opinion of the
Authority Attorney is authorized to sign such document.
6.04. The Authority shall not take any action or authorize any action to be taken in
connection with the application or investment of the proceeds of the Bonds or any related
activity which would cause the Bonds to be deemed to be "private activity bonds," within the
meaning of Section 141 of the Code. The Authority shall not take any action or authorize any
action to be taken in connection with the application or investment of the proceeds of the Bonds
or any related activity which would cause the Bonds to be deemed to be "arbitrage bonds,"
within the meaning of Section 148 of the Code. Furthermore, the Authority shall take all such
actions as may be required under the Code to ensure that interest on the Bonds is not and does
not become includable in gross income for federal income tax purposes.
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6.05. The authority to approve, execute, and deliver future amendments to the
documents executed and delivered by the Authority in connection with the transactions
contemplated hereby is hereby delegated to the Executive Director, subject to the following
conditions: (a) such amendments do not require the consent of the holders of the Bonds or, if
required, such consent has been obtained; (b) such amendments do not materially adversely
affect the interests of the Authority as the issuer of the Bonds; (c) such amendments do not
contravene or violate any policy of the Authority; (d) such amendments are acceptable in form
and substance to the Authority Attorney, bond counsel or other counsel retained by the Authority
to review such amendments; (e) the Authority has received, if necessary, an opinion of bond
counsel to the effect that the amendments will not adversely affect the tax - exempt character of
interest on the Bonds, if the Bonds are then tax - exempt obligations; and (f) such amendments do
not materially prejudice the interests of the owners of the Bonds. The authorization hereby given
shall be further construed as authorization for the execution and delivery of such certificates and
related items as may be required to demonstrate compliance with the agreements being amended
and the terms of this resolution. The execution of any instrument by the Executive Director shall
be conclusive evidence of the approval of such instruments in accordance with the terms hereof.
In the absence of the Executive Director, any instrument authorized by this paragraph to be
executed and delivered by the Executive Director may be executed by such other officer of the
Authority as in the opinion of the Authority Attorney is authorized to execute and deliver such
document.
SECTION 7. Effective Date. This Resolution shall take effect and be in force from and after its
approval, subject to approval by the City Council of the City of the Authority's proposed
issuance of the Bonds.
Adopted by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 1P day of June, 2016.
Gary L. Peterson, President
Attest:
Walter R. Fehst, Executive Director
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EXHIBIT A
NOTICE OF CALL FOR REDEMPTION
$2,890,000
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
TAX INCREMENT REVENUE BONDS
(HUSET PARK AREA REDEVELOPMENT PROJECT)
SERIES 2007
NOTICE IS HEREBY GIVEN that, by order of the Board of Commissioners of the Columbia
Heights Economic Development Authority (the "Authority"), there have been called for redemption and
prepayment on
August 15, 2016
all outstanding bonds (the "Bonds ") of the Authority designated as Tax Increment Revenue Bonds (Huset
Park Area Redevelopment Project), Series 2007, dated August 3, 2007, having stated maturity dates of
February I in the years 2017 through 2032, both inclusive, totaling $2,475,000 in principal amount, and with
the following CUSIP numbers:
Year of Maturity Amount CUSIP Number
2017
$ 80,000
197690 AA8
2022
510,000
197690 AB6
2032
1,885,000
197690 AD2
The Bonds are being called at a price of par plus accrued interest to August 15, 2016, on which date
all interest on said Bonds will cease to accrue. The redemption of the Bonds is contingent upon the
receipt by Bond Trust Services Corporation (the "Paying Agent'), of sufficient funds, on or before
the redemption date, for the redemption of all Bonds. If such funds are not received in accordance
with the preceding sentence then the redemption will be cancelled. Holders of the Bonds hereby called
for redemption are requested to present their Bonds for payment at the main office of Bond Trust Services
Corporation, 3060 Centre Pointe Drive, Roseville, Minnesota 55113, on or before August 15, 2016:
Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of
2003, the registrar is required to withhold a specified percentage of the principal amount of the
redemption price payable to the holder of any Bonds subject to redemption and prepayment on the
redemption date, unless the registrar is provided with the Social Security Number or Federal Employer
Identification Number of the holder, properly certified. Submission of a fully executed Request for
Taxpayer Identification Number and Certification, Form W -9, will satisfy the requirements of this
paragraph.
Dated: , 2016 BY ORDER OF THE BOARD OF COMMISSIONERS OF
THE COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By: /s/ Walter R. Fehst
Executive Director
Columbia Heights Economic Development Authority
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2. Approval of Post- Issuance Compliance Procedure and Policy for Tax - Exempt
Governmental Bonds- Resolution 2016 -15
Ingram explained in a report that the Columbia Heights Economic Development Authority (the
"Authority ") is an issuer of tax - exempt governmental bonds. Over time, the Internal Revenue
Service (the "IRS ") has developed a series of regulations that require issuers of such bonds to
take certain actions after the bonds have been issued to ensure that the bonds remain tax - exempt.
The IRS has also begun to investigate whether issuers of tax- exempt bonds are complying with
these regulations. For example, in early 2009, the IRS mailed its Governmental Bond
Financings Compliance Check Questionnaire, Form 14002 to two hundred governmental entities
that had issued tax- exempt bonds in 2005. A major focus of the IRS questionnaire is whether the
governing body of the issuer responding to the questionnaire has adopted written procedures for
its required post- issuance compliance actions. The questions in this questionnaire provide clear
guidance from the IRS on the post- issuance actions that are expected from issuers of tax - exempt
governmental bonds, the records that the IRS expects such issuers to retain, and the period of
time such records are expected to be retained. The IRS has suggested that it may send this or a
similar questionnaire to more issuers in the near future.
In September 2011, the IRS revised its Form 8038 -G, which is the informational tax return that
issuers of tax- exempt governmental bonds are required to submit in connection with each bond
issue. The new version of the Form 8038 -G requires the issuer to certify whether it has written
procedures in place for its post- issuance compliance activities. In addition, if a problem with the
tax exemption of the bonds is identified at some point, the IRS has indicated it will allow
reduced closing agreement amounts under its Voluntary Closing Agreement Program for issuers
who implement written post - issuance compliance procedures.
Ingram has prepared a model policy which, if implemented and followed, will meet IRS
requirements for post- issuance compliance. A copy was enclosed in the agenda packet. She
strongly recommended that the Board of Commissioners of the Authority adopt this policy, and
that it follow the adopted policy with regard to all of its tax - exempt bonds
Questions from members:
There were no questions or comments.
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June 13, 2016
Motion by Williams, seconded by Nawrocki, to waive the reading of Resolution 2016 -15, there
being ample copies available to the public. All ayes MOTIONPASSED.
Motion by Wlliams, seconded by Nawrocki, to adopt Resolution 2016 -15, Resolution Approving
Post - Issuance Compliance Procedure and Policy for Tax- Exempt Governmental Bonds. All ayes.
MOTIONPASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-15
RESOLUTION APPROVING POST - ISSUANCE COMPLIANCE
PROCEDURE AND POLICY FOR TAX - EXEMPT
GOVERNMENTAL BONDS
BE IT RESOLVED By the Board of Commissioners (the "Board of Commissioners ") of the
Columbia Heights Economic Development Authority, a body corporate and politic and political subdivision
of the State of Minnesota (the "Authority "), as follows:
Section 1. Recitals.
1.01. The Authority from time to time issues tax- exempt governmental bonds to finance various
public capital improvements.
1.02. Under Sections 103 and 140 to 150 of the Internal Revenue Code of 1986, as amended (the
"Code ") and related regulations, the Authority is required to take certain actions after the issuance of such
bonds to ensure that interest on those bonds remains tax- exempt.
1.03. The Authority has determined to adopt written procedures regarding how the Authority will
carry out its bond compliance responsibilities, and to that end has caused to be prepared a document titled
Post - Issuance Compliance Procedure and Policy for Tax - Exempt Governmental Bonds (the "Policy ").
1.04. The Board of Commissioners has reviewed the Policy has determined that it is in the best
interest of the Authority to adopt the Policy.
Section 2. Policy Approved.
2.01. The Board of Commissioners approves the Policy in substantially the form on file with the
Executive Director.
2.02. Authority staff are authorized to take all actions necessary to carry out the Policy.
Adopted by the Board of Commissioners of the Columbia Heights Economic Development Authority this
13th day of June, 2016.
President
ATTEST:
Secretary
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June 13, 2016
3. Consideration of Sale of Scattered Site Property Located at 4011 5`n St- Resolution
2016 -16
Dahl explained that over the last few years the Columbia Heights Economic Development
Authority (EDA) has acquired property within the City of Columbia Heights for economic
development purposes. In 2009, the EDA approved the "Scattered Site Housing Program" in an
effort to address foreclosure issues and remediate the emergence of blight within Columbia
Height's neighborhoods. The program was setup to purchase blighted residential properties,
demolish the house, and then sell the vacant lots to families seeking new construction of single -
family homes.
In 2013, the EDA approved Resolution 2013 -07, a resolution approving plan for conveyance of
certain scattered site lots owned by the EDA. The EDA intended to convey twelve properties to
contractors that will construct homes, and to that end has engaged the services of Re /Max
Synergy through an Exclusive Right to Sell Listing Contract. The property located at 4011 5th
Street Columbia Heights, MN 55421 is one of the twelve properties intended to be conveyed to a
contractor, however the aforementioned property was and is owned by the City. In order for the
EDA to convey this property to Timbercraft, the City needs to approve Ordinance 1631
conveying 4011 5th Street from the City to the EDA.
Initially, Timbercraft wanted to close on this property on May 25, 2016, however while
preparing closing documents it was determined that the EDA was not the fee owner. Timbercraft
has a buyer for the subject property and wants to close on this as soon as possible for
construction to begin late spring/ early fall.
The resolution before the EDA at this meeting is approving a Purchase and Redevelopment
Agreement between the EDA and Timbercraft for the property located at 4011 5`h Street that is
contingent upon the City of Columbia Heights transferring title of the property to the EDA, and
is enclosed in the agenda packet.
Staff recommends approval of Resolution 2016 -16, authorizing approval of the Purchase and
Redevelopment Agreement with Timbercraft Enterprises Inc. for the conveyance of 4011 51h
Street, Columbia Heights, MN 55421.
Ouestions from members:
Dahl explained this is a housekeeping matter that makes the transfer to Timbercraft easier. The
scattered site program was set up by the EDA, and the exclusive right agreement with
Timbercraft is with the EDA, not the City. Ingram stated that if sold by the EDA, we have the
right of reverter clause if the developer doesn't perform, and the City does not have that option
under State Law. Ingram told members that the proper language regarding the reverter clause
has been written into the documents regarding this property transfer.
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June 13, 2016
Dahl told members that out of the 12 sites that were part of this program, 10 have been sold, and
this will be the 11 u'. Timbercraft plans on constructing a home valued at $200,000 on this site.
Motion by Williams, seconded by Szurek, to waive the reading of Resolution 2016 -16, there
being ample copies available to the public. All ayes. MOTIONPASSED.
Motion by Williams, seconded by Szurek, to adopt Resolution 2016 -16, Resolution approving a
Purchase and Redevelopment Agreements with Timbercraft Enterprises Inc. for the conveyance
of40115`h Street, Columbia Heights, MN 55421. All ayes. MOTION PASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-16
RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT AGREEMENT
(INCLUDING THE SALE OF LAND) BETWEEN THE COLUMBIA HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY AND TIMBERCRAFT
ENTERPRISES, INC.
BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights Economic
Development Authority ( "Authority ") as follows:
Section 1. Recitals.
1.01. The Authority has determined a need to exercise the powers of a housing and redevelopment
authority, pursuant to Minnesota Statutes, Sections 469.090 to 469.108 ('EDA Act "), and has previously
established its Central Business District Redevelopment Project (the "Project") within the City of Columbia
Heights (the "City ") and its City-Wide Scattered Site Tax Increment Financing District (the "TIF District ")
within the Project, and has developed program design guidelines in connection with the construction of
homes within the 71F District (the "Guidelines ").
1.02. The Authority and TimberCraft Enterprises, Inc. (the "Buyer ") have proposed to enter into
an Amended Purchase and Redevelopment Agreement (the "Contract "), setting forth the terms and
conditions of sale and redevelopment of certain property within the TIF District, currently owned by the City,
located at 4011 5s' Street NE and described as Lot 18, Block 52, Columbia Heights Annex to Minneapolis,
Anoka County, Minnesota (the "Property").
1.03. Pursuant to the Contract, the Buyer will acquire the Property and will construct a single -
family home, subject further to the Guidelines and to the City's zoning and building codes and policies.
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June 13, 2016
1.04. On this date, the City Council of the City is scheduled to consider an ordinance approving
the conveyance of the Property to the Authority (the "Ordinance "). The conveyance of the Property by
the Authority to the Buyer is contingent on the conveyance of the Property by the City to the Authority.
1.05. The Authority has on this date conducted a duly noticed public hearing regarding the sale of
the Property to the Buyer, at which all interested persons were given an opportunity to be heard.
1.06. The Authority finds and determines that conveyance of the Property to the Buyer has no
relationship to the City's comprehensive plan, in that no amendment or modification of the comprehensive
plan is required for the conveyance or redevelopment of the Property. The activities of the parties under the
Contract implement housing goals established for the TIF District pursuant to the Tax Increment Financing
Plan for the TIF District.
1.07. The Board has reviewed the Contract and finds that the execution thereof and performance
of the Authority's obligations thereunder are in the public interest and will further the objectives of its general
Plan of economic development and redevelopment, because it will further the above - stated housing goals.
Section 2. Authority Approval• Further Proceedings.
2.01. The Contract as presented to the Board, including the sale of the Property described therein,
is hereby in all respects approved, subject to approval of the Ordinance by the City Council and subject to
modifications that do not alter the substance of the transaction and that are approved by the President and
Executive Director, provided that execution of the documents by such officials shall be conclusive evidence
of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf of the
Authority the Contract and any documents referenced therein requiring execution by the Authority, including
without limitation the deed, and to carry out, on behalf of the Authority, its obligations thereunder.
Contract. 2.03. Authority and City staff are authorized and directed to take all actions to implement the
Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this
13th day of June, 2016.
ATTEST:
secretary
President
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June 13, 2016
Hogeboom distributed plans that were submitted for the construction of the home at 4303 Reservoir
Blvd. The Planner has looked at the plans and the Building Official is now reviewing them so
construction can begin in the next few weeks. The home has an estimated value of $253,the and
will be a 2 story home with an unfinished basement. It will have 2esti finished se of feet with the
potential of additional finished space, once the basement area is complete. Hogeboom stated the
house will face Reservoir Blvd and the garage will face the alley. It was noted that one sheet of the
plans depicting the upper floor was omitted, but Hogeboom thought there would be 4 bedrooms.
He will send that information to the members.
Hogeboom told members that the July meeting has been cancelled, as has the work session for the
City Council.
The meeting was adjourned at 7:48 pm.
Respectfully submitted,
Shelley Hanson
Secretary
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE SPECIAL MEETING OF
JULY 21, 2016
The meeting was called to order at 4:00 pm by Vice Chair Bobby Williams.
Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek„ Bruce Nawrocki , Gerry
Herringer, and Bobby Williams.
Members Absent: Gary Peterson
Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, and Shelley Hanson.
Also present: Representatives from Dominium
PLEDGE OF ALLEGIANCE- RECITED
BUSINESS ITEM
1. First Amendment to Second Amended and Restated Contract for Private Redevelopment —
Resolution 2016 -17
Dahl explained that on April 04, 2016, The Columbia Heights Economic Development Authority (the
"EDA ") approved Resolution 2016 -08 authorizing the execution of the Second Amended and Restated
Contract for Private Redevelopment (the "Contract ") between City of Columbia Heights (the "City
Council ") and Columbia Heights Leased Housing Associates I, LLLP (the "Redeveloper "). The Contract
was fully executed by all parties on April 19, 2016.
After the Contract was fully executed, the Redeveloper requested an extension on the construction
deadlines and the deadline for payment of the administrative fee due to financial delays. The
Redeveloper's financial delays stem from the general market conditions present with affordable housing.
In order for the Huset Park Senior Living Apartments to be considered affordable housing, a minimum of
55% of the project needs to be funded by tax credit bonds. However, the market for tax credit bonds has
been depleted, which has delayed the Redeveloper to meet the minimum financial requirement for this
project. More tax credit bonds become available August 1, 2016 for the Redeveloper to meet the
minimum financial requirement.
A First Amendment to the Contract has been proposed to extend the required deadlines for the
commencement and completion of the construction for the Huset Park Senior Living development project
and to designate an extended deadline for the Redeveloper's payment of the Administrative Fee. Attached
for review is Resolution 2016 -17 and the First Amendment to the Contract. The City Council approved
the Contract on July 11, 2016.
Staff recommends approval of the First Amendment to Second Amended and Restated Contract for
Private Redevelopment.
EDA SPECIAL MEETING
Page 2
July 21, 2016
Discussion:
Dominium is confident they will meet the 55% requirement of tax credit bonds once more become
available in August. They expect to begin construction by March 2017 at the latest, but are hoping it
could be as soon as September of this year. They received 6 million in tax credits in the last allotment and
hope to get the remaining amount in the next go around. The representative said that they currently have
300 people on the waiting list at the Legends in St Anthony and people have been contacting them for this
building.
Motion by Schmitt, seconded by Murzyn, to waive the reading of Resolution No. 2016 -17, there being
ample copies available to the public. All ayes. MOTIONPASSED.
Motion by Schmitt, seconded by Murzyn, to adopt Resolution 2016 -17, a resolution approving a First
Amendment to the Second Amended and Restated Contract for Private Redevelopment between the City of
Columbia Heights, the Columbia Heights Economic Development Authority, and Columbia Heights
Leased Housing Associates I, LLLP. All ayes. MOTIONPASSED.
EDA RESOLUTION NO. 2016-17
RESOLUTION APPROVING A FIRST AMENDMENT OF A
SECOND AMENDED AND RESTATED CONTRACT FOR
PRIVATE REDEVELOPMENT BETWEEN THE COLUMBIA
HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, THE CITY
OF COLUMBIA HEIGHTS, AND COLUMBIA HEIGHTS LEASED
HOUSING ASSOCIATES I, LLLP
BE IT RESOLVED BY the Board of Commissioners (the `Board ") of the Columbia Heights
Economic Development Authority (the "Authority ") as follows:
Section 1. Recitals.
1.01. Pursuant to their authority under Minnesota Statutes, Sections 469.090 to 469.1082 and
469.174 to 469.1794, as amended, the Authority and the City of Columbia Heights (the "City ")
established the Huset Park Tax Increment Financing District within the Downtown CBD Redevelopment
Project (the "Project "), for the purpose of facilitating the redevelopment of certain substandard property
within the Project.
1.02. the Authority, the City, and Columbia Heights Leased Housing Associates I, LLLP (the
"Redeveloper ") entered into that certain Second Amended and Restated Contract for Private Redevelopment
dated as of October 30, 2015 (the "Contract"), amending and restating certain prior agreements and
providing, among other things, for the construction by the Redeveloper of certain improvements (the
"Minimum Improvements ") on the property legally described within the Contract (the "Redevelopment
Property"), and the disbursement of an administrative fee by the Redeveloper to the Authority (the
"Administrative Fee ") in connection with the issuance by the Authority of its Tax Increment Revenue
Refunding Bonds (Huset Park Area Redevelopment Project), Series 2016 (the "Bonds ").
EDA Special Meeting
Page 3
July 21, 2016
1.03. The parties have negotiated and propose to execute a First Amendment to the Contract (the
"First Amendment") to clarify the definition of "Minimum Improvements," to extend the required
deadlines for the commencement and completion of construction of the Minimum Improvements, and to
designate an extended deadline for payment of the Administrative Fee.
EDA SPECIAL MEETING
Page 3
July 21, 2016
1.04. The City Council of the City approved the First Amendment at its regular meeting on July
11, 2016.
Section 2. First Amendment Approved.
2.01. The First Amendment as presented to the Board is hereby in all respects approved, subject
to modifications that do not alter the substance of the transaction and that are approved by the President
and Executive Director, provided that execution of the First Amendment by such officials shall be
conclusive evidence of approval.
2.02. The President and Executive Director are hereby authorized to execute on behalf of the
Authority the First Amendment and any documents referenced therein requiring execution by the
Authority, and to carry out, on behalf of the Authority, its obligations thereunder.
2.03. Authority staff and consultants are authorized to take any actions necessary to carry out the
intent of this resolution.
Adopted by the Board of Commissioners of the Columbia Heights Economic Development
Authority this July 21, 2016.
President
ATTEST:
Secretary
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CONTRACT FOR
PRIVATE REDEVELOPMENT
This agreement is made as of 2016, by and between the COLUMBIA HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY, a public body politic and corporate (the "Authority "), the
CITY OF COLUMBIA HEIGHTS, a Minnesota municipal corporation (the "City "), and COLUMBIA
HEIGHTS LEASED HOUSING ASSOCIATES 1, LLLP, a Minnesota limited liability limited partnership
(the "Redeveloper ").
EDA SPECIAL MEETING
Page 4
July 21, 2016
WHEREAS, the Authority, the City, and the Redeveloper entered into that certain Second
Amended and Restated Contract for Private Redevelopment dated as of October 30, 2015 (the
"Contract "), amending and restating certain prior agreements and providing, among other things, for the
construction by the Redeveloper of certain improvements (the "Minimum Improvements ") on the
property legally described within the Contract (the "Redevelopment Property"), and the disbursement of
an administrative fee by the Redeveloper to the Authority (the "Administrative Fee ") in connection with
the issuance by the Authority of its Tax Increment Revenue Refunding Bonds (Huset Park Area
Redevelopment Project), Series 2016 (the "Bonds "); and
WHEREAS, the parties have determined to revise the Contract to clarify the definition of
"Minimum Improvements," to extend the required deadlines for the commencement and completion of
construction of the Minimum Improvements, and to designate an extended deadline for payment of the
Administrative Fee.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other as follows:
1. Amendment to Section 1.1 of the Contract. The definition of "Minimum Improvements"
in Section 1.1 of the Contract is amended as follows:
"Minimum Improvements" means the construction on the Redeveloper Parcels of a multistory
building containing 191 units of multifamily rental housing, along with associated underground structured
parking and surface parking.
2. Amendment to Section 3.5(b) of the Contract. Section 3.5(b) of the Contract is amended
as follows:
(b) In conjunction with execution of this Agreement, the Authority has refunded the Series
2007 Bonds to achieve debt service savings (such refunding bonds hereinafter referred to as the
"Refunding Bonds "), and the Redeveloper has paid to the Authority funds in the amount of $107,325,
representing the total actual costs of issuance (including underwriter's discount) of the Refunding Bonds.
The Redeveloper agrees that no later than August 31, 2016, the Redeveloper will pay to the Authority an
administrative fee of $100,000, which will be deposited into a legally authorized redevelopment fund to
be designated by the Authority or City.
3. Amendment to Section 4.3(a) of the Contract. Section 4.3(a) of the Contract is amended as
follows:
Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements by March 1, 2017.
Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the Minimum
Improvements by September 30, 2018. All work with respect to the Minimum Improvements to be
constructed or provided by the Redeveloper on the Redeveloper Parcels shall be in conformity with the
Construction Plans as submitted by the Redeveloper and approved by the Authority.
4. Miscellaneous. Except as amended by this Amendment, the Contract shall remain in full
force and effect. Upon execution, Redeveloper shall reimburse the Authority for all out -of pocket -costs
incurred by the Authority in connection with negotiating, drafting and approval of this Amendment.
EDA SPECIAL MEETING
Page 5
July 21, 2016
IN WITNESS WHEREOF, the Authority, the City, and the Redeveloper have caused this Amendment to
be duly executed by their duly authorized representatives as of the date first above written.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of , 2016 by
Gary Peterson and Walt Fehst, the President and Executive Director of the Columbia Heights Economic
Development Authority, on behalf of the Authority.
Notary Public
Authority signature page to First Amendment to Second Amended and Restated Contract for Private
Redevelopment
EDA SPECIAL MEETING
Page 6
July 21, 2016
CITY OF COLUMBIA HEIGHTS
By
Its Mayor
By
Its City Manager
STATE OF MINNESOTA )
SS.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of 2016 by
Gary Peterson and Walt Fehst, the Mayor and City Manager of the City of Columbia Heights, a
Minnesota municipal corporation, on behalf of the City.
Notary Public
City signature page to First Amendment to Second Amended and Restated Contract for Private
Redevelopment
EDA SPECIAL MEETING
Page 7
July 21, 2016
COLUMBIA HEIGHTS LEASED HOUSING ASSOCIATES I, LLLP, a Minnesota Limited Liability
Limited Partnership
By: Columbia Heights Leased Housing Associates I, LLC
Its General Partner
Un
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
Mark S. Moorhouse
Its Senior Vice President
The foregoing instrument was acknowledged before me this day of 2016
by Mark S. Moorhouse, the Senior Vice President of Columbia Heights Leased Housing Associates I
LLC, a Minnesota limited liability company, the General Partner of Columbia Heights Leased Housing
Associates I, LLLP, a Minnesota limited liability limited partnership, on behalf of the partnership.
Notary Public
THIS DOCUMENT DRAFTED BY:
Kennedy & Graven, Chartered (MNI)
470 US Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337 -9300
Redeveloper signature page to First Amendment to Second Amended and Restated Contract for Private
Redevelopment
EDA SPECIAL MEETING
Page 8
July 21, 2016
Cancellation of the Purchase & Redevelopment Agreement for Two Lots by Tollberg Homes
Dahl explained that in January 2016, the EDA approved resolution 2016 -03, authorizing the approval of a
Purchase and Redevelopment Agreement with Tollberg Homes for six residential lots to be sold at
$22,500 per lot. In March 2016, the EDA approved resolution 2016 -06, authorizing a reduction in the
purchase price for two lots to be sold at $18,500 per lot, due to unexpected sewer and water
improvements. As of July 2016, Tollberg Homes has purchased four of the six residential lots; two lots
for $22,500 per lot and two lots for $18,500 per lot. The remaining two lots, 4606 Polk Street and 4641
Tyler Street, have yet to close because of extensive soil remediation required before a single - family home
can be constructed. Tollberg Homes has indicated that by purchasing these remaining two lots, this
project will no longer become profitable for them. Thus, Tollberg Homes has requested a cancellation of
the Purchase and Redevelopment Agreements for the two lots listed as follows:
4606 Polk Street NE PID 25- 30 -24 -33 -0030
4641 Tyler Street NE PID 25- 30 -24 -33 -0038
Pursuant of section 10 of the Purchase and Redevelopment Agreement, Tollberg Homes must send
written notice to rescind the Purchase and Redevelopment Agreement if the soil is determined to be
unacceptable. In which case, the Purchase and Redevelopment Agreement is null and void. Attached is
the Cancellation Notice sent by Tollberg Homes. Since Tollberg Homes has cited that the soil conditions
are the main concern with purchasing the remaining two lots, they are entitled to be refunded all the
earnest money deposited. Thus, the EDA will refund $4,000 of the earnest money deposited upon
execution of the Forms of Cancellation.
Tollberg stated the lots have all needed soil corrections to some extent. A couple of the lots only required
$1,00043,000 in correction, but 2 of the other properties including 4600 Polk required $15,000 to correct.
Tollberg is assuming that both of these lots could require the same amount (especially 4606 Polk -which is
next to 4600). Members asked if soil tests have been done to verify Tollberg's claim about the two lots.
Dahl stated we are taking them at their word and to have tests done would cost us even more. Nawrocki
wanted it stated in the record that he was opposed to refunding the earnest money. Dahl said we are
obligated to return the earnest money per the agreement that was drawn up with Tollberg. Going forward
Dahl said he will remove that clause and clearly state that the lots are being sold "as is ". The City
attorney suggested we research old documents to review the terms of the contract with the Demolition
Contractor to see if we can go back after him because he didn't compact the site correctly.
Dahl told members that My Home Detail is interested in the other two lots and that he has a buyer for the
4606 Polk St Lot. Murzyn suggested that we contact other contractors also to see if they are interested in
the lots. Dahl said he would contact several of the builders who have constructed other homes within the
City.
EDA SPECIAL MEETING
Page 9
July 21, 2016
Dahl said no formal action is required by the EDA, but a cancellation agreement has been prepared, and
will be signed by Tollberg Homes and the Officers of the EDA to terminate the original purchase
agreement between the parties.
2. Acquisition Update of 4641 -43 Polk Street NE Owned by ACCAP.
Dahl reminded members that the EDA had previously approved an offer to purchase this property for
$75,000 provided ACCAP could get MHFA to release their financial attachment. ACCAP should know by
August I" if MHFA will agree to this. If they do, ACCAP has accepted our offer to purchase the property
for that price.
Hogeboom told members that the August meeting is scheduled for August 1 S` at 6:30 pm.
The meeting was adjourned at 4:20 pm.
Respectfully submitted,
Shelley Hanson
Secretary
RESOLUTION NO. 2016 -18
A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the
Financial Statements for the Month of May and June, 2016 and the Payment of the Bills for the Month of
May and June, 2016.
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, 2016 have 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.
ORDER OF ECONOMIC DEVELOPMENT AUTHORITY
Passed this day of 2016
Offered by:
Seconded by:
Roll Call:
Gary L. Peterson, President
Attest:
Shelley Hanson, Secretary
Resolution 2016 -18
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CH COLUMBIA
HEIGHTS
AGENDA SECTION
BUSINESS ITEMS
ITEM NO.
6&7
MEETING DATE
AUGUST 1, 2016
CITY OF COLUMBIA HEIGHTS - ECONOMIC DEVELOPMENT AUTHORITY
ITEM:
2017 Budget — HRA and EDA Levies
DEPARTMENT: Community Development
CITY MANAGER'S APPROVAL:
BY /DATE: Joe Hogeboom, July 25, 2016
BY /DATE:
BACKGROUND:
Attached is the 2017 budget for all of the Community Development Division (Economic Development, Planning
and Building Safety Departments). Although some of the Community Development Division's budget (Fund
201) is not controlled by the EDA, the EDA has historically reviewed and approved the entire Community
Development Department budget. The budget ultimately must be approved by the City Council.
The Economic Development Authority (EDA) portion of the budget is "Fund 204 ", and the attached resolutions
serve as a recommendation to the City Council for levying both an EDA and a HRA levy. The Department's
operating budget is relatively straightforward due to the size of the department.
The 2016 budget includes an overall increase in EDA expenses due to a reallocation of the way in which salary
expenses are charged between Fund 201 and Fund 204. The Associate Planner /Economic Development
Manager and Secretary II — Permits and Licensing positions are no longer recognized in Fund 204, while 50% of
the Director position is recognized in Fund 204, and 50% of the position is recognized in Fund 201. Due to the
return of pre- recession workloads, the Secretary II — Community Development position has been budgeted to
reflect full time working hours.
Revenue is expected to increase in the EDA fund due to levy increases based on market value. Revenue is
expected to increase in the Planning & Inspections fund due to anticipated increased permit, license and fee
income. The complete Community Development Department budget will be distributed to the City Council
later in 2016.
STAFF RECOMMENDATION:
Staff recommends approval of the Levies as presented.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolutions 2016 -19 and 2016 -20, there being ample copies available
to the public.
Motion: Move to approve Resolution 2016 -19, Resolution 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 2017.
Motion: Move to approve Resolution 2016 -20, Resolution of the Economic Development Authority (EDA) in
and for Columbia Heights Adopting the 2017 budget and setting the EDA Levy.
EDA Letter
City of Columbia Heights - EDA Letter
ATTACHMENTS:
1. Resolution 2016 -19
2. Resolution 2016 -20
3. Budget Worksheet for Funds 201 and 204
4. Revenue for Fund 204
Page 2
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016-19
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 2017
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 HRA,
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 2017; and
WHEREAS, the EDA has before it for its consideration a copy of a budget for its operations
for the fiscal year 2017 and the amount of the levy for collection in fiscal year 2017 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 $297,018 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
of $209,468, which is .0185 percent of the market value in the City.
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 2017 and to take
such other actions as are necessary to levy and certify such levy.
Motion by:
Second by:
Motion passed this 1st day of August 2016.
Attest by:
Walter R. Fehst, Executive Director Gary L. Peterson, President
EDA RESOLUTION 2016 -20
RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR COLUMBIA
HEIGHTS (EDA) ADOPTING THE 2017 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 469.1081, 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 $297,018
for year 2016.
2. The EDA adopts and recommends to the City Council for approval a levy of $84,000 for
year 2016.
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 1st day of August 2016.
MOTION BY:
SECONDED BY:
Attest by:
Walter R. Fehst, Executive Director
Gary L. Peterson, President
CITY OF COLUMBIA HEIGHTS, MINNESOTA
BUDGET 2017
DEPARTMENT: PLANNING & INSPECTIONS
201
42400
PLANNING & INSPEC4 ION5
PLANNING &INSPECTIONS
Actual
Expense
2014
Actual
Expense
2015
Adopted
Budget
2016
Department
Proposed
1 2017
City Manager
Proposed
2017
Council
Adopted
2017
Line Item Description
0999 Personal Services
1999 Supplies
2999 Other Services & Charges
4999 Capital Outlay
6999 Contingencies & Transfers
TOTALS: PLANNING & INSPECTIONS
Activity Description
215,005
258,991
263,707
411,528
2,578
3,863
1,150
1,100
14,873
15,991
13,512
12,497
13,659
13,756
15,164
15,550
246,115
292,601
293,533
440,675
1. Maintain effective, thorough and timely building inspections.
2. Maintain housing stock through rental, vacant and abandoned property inspections.
3. Maintain neighborhood stability through building and zoning enforcement.
4. Provide project management services within the City for private development requests.
S. Provide licensing services to community businesses.
6. Provide staff support to the Planning and Zoning Commission.
Objectives
1. Keep Columbia Heights a vibrant, urban community through careful planning and attention to safety and quality in the built
2. Ensure that Columbia Heights has a well - planned network of roads, transit corridors, trails and bikeways.
3. Continue to allow neighborhoods and commercial areas to thrive by actively seeking to keep zoning and other ordinances
relevant.
Ensure quality business development by through licensing and interaction with the business community.
Enhance Columbia Heights' positive image through effective communication measures.
Budget Comments on Proposed Budget
1. Increase in salary expense due to reallocation of responsibilities within positions between Fund 201 and Fund 204 (Fund
204 expenses have decreased), as well as standard cost of living and step increases.
2. Decrease in supplies due to completion of department remodeling project.
3. Decrease in Other Services and Charges due to less need for professional services due to in -house staff and decrease in
Training and Activities. (There are many free and reduced cost trainings available.)
4. Fund 201 does not rely on General Fund, levy or Local Government Aid (LGA). From year to year, revenue /expenditure
amounts vary greatly.
4. Revenue was increased due to increased construction and permitting activity, as well as a transfer from Fund 204.
uty of Lommoia neignts, mmnesota
2017 Budget Worksheet
201
42400
PLANNING & INSPECTIONS
PLANNING &INSPECTIONS
Actual
Expense
2014
Actual
Expense
2015
Adopted
Budget
2016
Department
Proposed
2017
7CityManafier
Council
Adopted
2017
Line Item Description
PERSONAL SERVICES
1000 ACCRUED SALARIES
-
1010 REGULAR EMPLOYEES
157,009
182,731
199,330
305,756
1011 PART -TIME EMPLOYEES
-
938
-
-
1012 SEASONAL EMPLOYEES
-
_
1020 OVERTIME - REGULAR
578
1,038
1,000
2,000 -
1030 VACATION & SICK
2,777
8,099
-
_
1050 SEVERANCE PAY
3,983
675
1060 MILEAGE ALLOWANCE
_
1070 INTERDEPARTMENTAL LABOR SERV
-
_
1210 P.E.R.A. CONTRIBUTION
11,344
13,776
14,928
_
22,955
1220 F.I.C.A. CONTRIBUTION
12,119
14,321
15,325
23,543 -
1225 FLEX BENEFIT FICA
1300 INSURANCE
25,911
29,651
31,580
48,191 -
1400 UNEMPLOYMENT COMPENSATION
-
6,233
-
_
1510 WORKERS COMP INSURANCE PREM
1,285
1,530
1,544
1,983
1700 ALLOCATED FRINGE
1810 COLA ALLOWANCE
-
7,100
0999 TOTALS: PERSONAL SERVICES
215,005
258,991
263,707
411,528
SUPPLIES
2000 OFFICE SUPPLIES
489
1,039
350
300
2010 MINOR EQUIPMENT
_
629
-
-
2011 COMPUTER EQUIPMENT
993
1,271
_
2020 COMPUTER SUPPLIES
_
2030 PRINTING & PRINTED FORMS
291
2171 GENERAL SUPPLIES
_
2175 FOOD SUPPLIES
43
13
-
-
2280 VEHICLE REPAIR AND PARTS
41
195
100
100 -
2282 GAS, OIL, LUBRICANTS
721
716
700
700 -
1999 TOTALS: SUPPLIES
2,578
3,863
1,150
1,100
OTHER SERVICES & CHARGES
3045 ATTORNEY FEES -OTHER
_
3050 EXPERT & PROFESSIONAL SERV.
1,065
960
5,235
500
3105 TRAINING & EDUC ACTIVITIS
868
690
500
500 -
3120 EDUCATIONAL REIMBURSEMENT
-
_
3210 TELEPHONE & TELEGRAPH
140
265
646
_
646 -
3211 CELL PHONES
1,488
1,370
600
600
3220 POSTAGE
1,133
1,013
1,200
1,000 -
3250 OTHER COMMUNICATIONS
197
216
225
209
3310 LOCAL TRAVEL EXPENSE
161
120
100
100 -
3320 OUT OF TOWN TRAVEL EXPENSE
411
-
_
3500 LEGAL NOTICE PUBLISHING
614
1,062
600
500 -
3600 INSURANCE & BONDS
965
1,291
1,781
2,452 -
4000 REPAIR & MAINT. SERVICES
3,669
3,916
900
800
4040 INFORMATION SYS:INTERNAL SVC
-
-
-
3,600 - _
4050 GARAGE, LABOR BURD.
327
734
300
300 -
4100 RENTS & LEASES
_
4300 MISC. CHARGES
-
31
-
_
_
4310 CREDIT CARD FEES
2,516
3,433
1,000
_
1,000 -
4330 SUBSCRIPTION, MEMBERSHIP
1,255
750
325
290 -
4380 COMMISSION & BOARDS
48
-
100
-
4390 TAXES & LICENSES
16
140
-
4395 STATE SALES TAX
_
2999 TOTALS: OTHER SERVICES & CHARGES
14,873
15,991
13,512
12,497 _ _
llty or Loiumoia rielgnts, Mmnesoia
2017 Budget Worksheet
201
42400
PLANNING & INSPECTIONS
PLANNING &INSPECTIONS
Actual
Expense
1 2014
Actual
Expense
1 2015 1
Adopted
Budget
2016
Department
Proposed
1 2017
City Manager
Proposed
2017
Council
Adopted
2017
Line Item Description
CAPITAL OUTLAY
4999 TOTALS: CAPITAL OUTLAY
OTHER FINANCING USES
7100 OPER. TRANSFER OUT - LABOR 13,659 13,756 15,164 15,550
8100 CONTINGENCIES _
6999 TOTALS: OTHER FINANCING USES 13,659 13,756 15,164 15,550
TOTALS: PLANNING & INSPECTIONS 246,115 292,601 293,533 440,675 - _
FUND NUMBER
201 -42400
CITY OF COLUMBIA HEIGHTS, MINNESOTA
BUDGET 2017
SUMMARY OF COST FACTORS FOR THE COMING YEAR
Exnlanatinn of Prrcnnnol
PLANNING & INSPECTIONS
Supplies
OFFICE SUPPLIES
VEHICLE REPAIR AND PARTS
GAS, OIL, LUBRICANTS
Other Services & Charges
EXPERT & PROFESSIONAL SERVICES
TRAINING & EDUC. ACTIVITIES
TELEPHONE & TELEGRAPH
CELL PHONES
POSTAGE
OTHER COMMUNICATIONS
LOCAL TRAVEL EXPENSE
LEGAL NOTICE PUBLISHING
INSURANCE & BONDS
REPAIR & MAINT. SERVICES
GARAGE, LABOR BURDEN
CREDIT CARD FEES
SUBSCRIPTION, MEMBERSHIP
INFORMATION SERVICES
TRANSFER OUT
Miscellaneous office supplies 300
Standard repairs to the Building Official vehicle 100
Anticipated fuel cost for Building Official vehicle 700
Special consultants fees
500
required training for Building Official and Planner
S00
2016 Adopted
646
Cell phone for Building Official and Director
2017 Proposed
Anticipated postage for public hearing material
1,000
Internal charge based on previous figures
209
Historical average for local travel
100
Total
500
Internal charge for insurance
Total
Anticipated maintenance of tech. equipment
F.T.E.
Labor cost for Building Official car
Total
Total
Comp
Total
Total
Comp
Position Title
2016
2017
Salaries
Fringe
& Fringe
Salaries
Fringe
& Fringe
Secretary 11 Permits
1.00
1.00
52,927
19,135
72,062
52,927
18,954
71,881
City Planner
1.00
1.00
47,469
18,265
65,734
78,287
23,109
101,396
Building Official
1.00
1.00
76,613
20,117
96,730
82,757
23,676
106,433
Secretary II Com. Dev.
0.50
1.00
-
-
-
42,254
17,401
59,655
COLA Allowance
I
-
-
- 1
5,000
2,100
7,100
Subtotal
3.50
4.00
177,009
57,517
234,526
261,225
85,240
346,465
Labor Allocation From 204
Community Dev. Director
0.20
0.50
20,724
5,447
26,171
51,531
13,532
65,063
Assistant Director
0.10
-
8,688
2,454
11,142
-
_
Labor Allocation to 204
Secretary If Permits
-0.20
-6,093
-2,041
-8,134
Plug to balance to budget
2
Total
3.60
4.50
200,328
63,377
263,707
312,756
98,772
411,528
Supplies
OFFICE SUPPLIES
VEHICLE REPAIR AND PARTS
GAS, OIL, LUBRICANTS
Other Services & Charges
EXPERT & PROFESSIONAL SERVICES
TRAINING & EDUC. ACTIVITIES
TELEPHONE & TELEGRAPH
CELL PHONES
POSTAGE
OTHER COMMUNICATIONS
LOCAL TRAVEL EXPENSE
LEGAL NOTICE PUBLISHING
INSURANCE & BONDS
REPAIR & MAINT. SERVICES
GARAGE, LABOR BURDEN
CREDIT CARD FEES
SUBSCRIPTION, MEMBERSHIP
INFORMATION SERVICES
TRANSFER OUT
Miscellaneous office supplies 300
Standard repairs to the Building Official vehicle 100
Anticipated fuel cost for Building Official vehicle 700
Special consultants fees
500
required training for Building Official and Planner
S00
Telephone charge
646
Cell phone for Building Official and Director
600
Anticipated postage for public hearing material
1,000
Internal charge based on previous figures
209
Historical average for local travel
100
Based on past legal notice publications
500
Internal charge for insurance
21452
Anticipated maintenance of tech. equipment
800
Labor cost for Building Official car
300
Credit card charges for building application fee pa'
1,000
Subscription for building code manuals and misc. F
290
New departmental charge for 15 services
3,600
Other Financing Uses
Internal charge for support staff services 15,550
CITY OF COLUMBIA HEIGHTS, MINNESOTA
BUDGET 2017
DEPARTMENT: ECONOMIC DEVELOPMENT AUTHORITY
204
463141
COMMUNITY DEVELOPMENT
ECONOMIC DEVELOPMENT AUTH
Actual
Expense
2014
Actual
Expense
2015
Adopted
Budget
2016
Department
Proposed
2017
City Manager
Proposed
2017
Council
Adopted
2017
Line Item Description
0999
Personal Services
154,801
176,374
213,097
139,753
1999
Supplies
4,037
1,079
300
-
2999
Other Services & Charges
21,953
12,888
13,204
13,549
4999
Capital Outlay
-
-
6999
Contingencies & Transfers
13,658
13,756
68,615
148,716
TOTALS: ECONOMIC DEVELOPMENT
194,449
204,096
295,216
302,018
Activity Description
1. Implement goals and objectives of the Economic Development Authority.
2. Monitor and implement housing programs to ensure that neighborhood stability is maintained.
3. Develop and implement programs that work to increase assessed property values.
4. Manage branding and communication activities for the City.
S. Enhance business opportunities within the City.
Objectives
1. Create opportunities for businesses to thrive in Columbia Heights.
2. Actively monitor and identify areas that are prime for redevelopment.
3. Collaborate with local, regional, state and federal government agencies to ensure viable funding opportunities are identified
and received.
4. Reinvest in single - family and multi - family housing throughout the community.
S. Improve the tax base of the community through productive measures that increase overall property values.
Budget Comments on Proposed Budget
I. Decrease in salary expense due to reallocation of responsibilities within the positions between Fund 201 and Fund 204,
2. Decrease in supplies due to completion of department remodeling project and continued integration of paperless
technologies into the work environment.
3. Decrease in Other Services and Charges due to the department being fully staffed and therefore having less reliance on
outside consultants to accomplish economic development and public financing - related tasks.
4. Market rate increase to Economic Development Manager salary.
uty or t,otumma neignts, mmnesota
2017 Budget Worksheet
204
46314
COMMUNITY DEVELOPMENT
ECONOMIC DEVELOPMENT AUTHORITY
Actual
Expense
2014
Actual
Expense
2015
Adopted
Budget
2016
Department
Proposed
2017
City Manager
Proposed
1 2017
Council
Adopted
2017
Line Item Description
PERSONAL SERVICES
1000 ACCRUED SALARIES
1010 REGULAR EMPLOYEES
1012 SEASONAL EMPLOYEES
1020 OVERTIME - REGULAR
1030 VACATION & SICK
1050 SEVERANCE PAY
1070 INTERDEPARTMENTAL LABOR SERV
1210 P.E.R.A. CONTRIBUTION
1220 F.I.C.A. CONTRIBUTION
1225 FLEX BENEFIT FICA
1300INSURANCE
1400 UNEMPLOYMENT COMPENSATION
1510 WORKERS COMP INSURANCE PREM
1700 ALLOCATED FRINGE
1810 COLA ALLOWANCE
0999 TOTALS: PERSONAL SERVICES
SUPPLIES
2000 OFFICE SUPPLIES
2010 MINOR EQUIPMENT
2011 COMPUTER EQUIPMENT
2020 COMPUTER SUPPLIES
2030 PRINTING & PRINTED FORMS
2171 GENERALSUPPLIES
2175 FOOD SUPPLIES
2280 VEHICLE REPAIR AND PARTS
1999 TOTALS: SUPPLIES
OTHER SERVICES & CHARGES
3045 ATTORNEY FEES -OTHER
3050 EXPERT & PROFESSIONAL SERV.
3105 TRAINING & EDUC ACTIVITIES
3120 EDUCATIONAL REIMBURSEMENT
3210 TELEPHONE & TELEGRAPH
3220 POSTAGE
3250 OTHER COMMUNICATIONS
3310 LOCAL TRAVEL EXPENSE
3320 OUT OF TOWN TRAVEL EXPENSE
3430 ADVERTISING OTHER
3500 LEGAL NOTICE PUBLISHING
3600 INSURANCE & BONDS
4000 REPAIR & MAINT. SERVICES
4020 BUILDING MAINTENANCE
4040 INFORMATION SYS:INTERNAL SVC
4050 GARAGE, LABOR BURD.
4100 RENTS & LEASES
4300 MISC. CHARGES
4330 SUBSCRIPTION, MEMBERSHIP
4376 MISCELLANEOUS CIVIC AFFAIRS
4380 COMMISSION & BOARDS
4390 TAXES & LICENSES
4395 STATE SALES TAX
2999 TOTALS: OTHER SERVICES & CHARGES
146,035
153,708
166,181
7,192
(147)
-
578
1,038
1,000
(21,781)
1,797
-
15,931
2,701
(37,000)
(27,750)
-
11,367
11,572
12,508
11,866
11,885
12,789
19,146
20,302
19,332
1,469
1,267
1,287
154,801 176,374 213,097
324 814 300
2,876 - _
181
101,756
7,600
7,784
16,110
703
5,800
139,753
152 141
504 124
4,037 1,079 300 -
12,131
1,155
715
667
197
389
641
334
1,482
802
2,381
100
250
385
323
21,953
5,918
600
807
810
235
259
328
531
1,757
598
420
595
30
12,888
7,588
300
750
700
312
300
300
2,354
3,000
646
800
301
100
300
3,302
5,100
400
200
13,204
13,549
uty or t.oIumoia neignts, mmnesota
2017 Budget Worksheet
204
46314
COMMUNITY DEVELOPMENT
ECONOMIC DEVELOPMENT AUTHORITY
Actual
Expense
1 2014
Actual
Expense
2015
I Adopted
Budget
2016
I Department
Proposed
2017
City Manager
Proposed
2017
I Council
Adopted
2017
Line Item Description
nTNCO CIIJ A kirik r item
7100 OPER. TRANSFER OUT- LABOR
7410 TRANSFER OUT TO COMM DEVELOPMENT
7413 TRANSFER TO CAP IMP DEVELOPMENT
8100 CONTINGENCIES
6999 TOTALS: OTHER FINANCING USES
TOTALS: ECONOMIC DEVELOPMENT AUTHO
13,658 13,756 15,163
15,550
- - 53,452
133,166
13,658 13,756 68,615
148,716
194,449 204,096 295,216
302,018
CITY OF COLUMBIA HEIGHTS, MINNESOTA
BUDGET 2017
FUND NUMBER ECONOMIC DEVELOPMENT AUTHORITY
204 -46314
SUMMARY OF COST FACTORS FOR THE COMING YEAR
Explanation of Personnel
Other Services & Charees
Special consultants (Ehler's, EDA attorney)
3,000
Telephone charge
646
2016 Ado p[ed
800
Cost associated with advertisements and printing
2017 Proposed
for public meetings
301
Based on past local travel expense
100
Based on past legal notice publications
300
Total
3,302
New charge for IS services
Total
Other Financing Uses
F.T.E.
Total
Total
Comp
Total
Total
Comp
Position Title
27'62017
Salaries
Fringe
& Fringe
Salaries
Fringe
& Fringe
Community Dev. Director
1.00
1.00
103,620
27,237
130,857
103,062
27,065
130,127
Assistant Director
1.00
-
86,881
24,539
111,420
Economic Dev. Manager
-
1.00
50,225
18,664
68,889
COLAAIIowance
Subtotal
2.00
2.00
190,501
51,776
242,277
4,100
157,387
1,700
47,429
5,800
204,816
Labor Allocation from 201
Secretary II Permits
0.10
-
6,093
2,041
8,134
-
-
Labor Allocation to 201
Community Dev. Director
-0.20
-0.50
- 20,724
-5,447
- 26,172
- 51,531
- 13,532
- 65,063
Assistant Director
-0.10
-
-8,688
-2,454
- 11,142
-
-
-
Total
1.80
1.50
167,182
45,916
2131097
105,856
33,897
139,753
Other Services & Charees
Special consultants (Ehler's, EDA attorney)
3,000
Telephone charge
646
Anticipated postage for public hearing notices
800
Cost associated with advertisements and printing
for public meetings
301
Based on past local travel expense
100
Based on past legal notice publications
300
Internal charge given for insurance
3,302
New charge for IS services
5,100
Other Financing Uses
Transfer to fund 201 for operating expenses
148,716
City of Columbia Heights, Minnesota
BUDGET 2017
Community Development
Expenses
0999 Personal Services
1999 Supplies
2999 Other Services and Charges
4999 Capital Outlay
6999 Contingencies & Transfers
Total Expenses
411,528
Planning &
1,100
0
Inspections
EDA
0
201
204
Revenue
440,675
302,018
30999 Taxes
0
293,468
31999 Licenses & Permits
299,709
0
32999 Intergovernmental
0
0
33999 Charge for Services
0
50
34999 Fines & Forfeits
0
0
35999 Miscellaneous
7,800
3,500
36999 Sales and Related Charges
0
0
39199 Transfers & Non Rev Receipts
133,166
0
Total Revenue
440,675
297,018
Expenses
0999 Personal Services
1999 Supplies
2999 Other Services and Charges
4999 Capital Outlay
6999 Contingencies & Transfers
Total Expenses
411,528
139,753
1,100
0
12,497
13,549
0
0
15,550
148,716
440,675
302,018
Change to Fund Balance 0 -5,000
CH COLUMBIA
HEIGHTS
AGENDA SECTION
BUSINESS ITEMS
ITEM NO.
8
MEETING DATE
AUGUST 1, 2016
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
I ITEM: I Revised Single Family Home Lot Sales Program
IDEPARTMENT: Community Development I CITY MANAGER'S APPROVAL:
[BY/DATE: Keith M. Dahl, July 25, 2016 I BY /DATE:
BACKGROUND:
In September 2015, the EDA adopted the Single Family Home Lot Sales Program for the conveyance of certain
lots owned by the EDA to builders licensed by the State of Minnesota. The program was adopted for
reinvestment in Columbia Height's neighborhoods through the construction of owner- occupied single family
homes. Currently, many of the lots in the program have been conveyed to state - licensed builders; however
with the lots that remain and the additional lots identified for EDA acquisition, modifications are
recommended to improve the clarification, effectiveness and efficiency of the program.
Attached are the revised Single Family Home Lot Sales Program and the Purchase and Redevelopment
Agreement documents. Changes are noted on both documents by a =*'°'gym .ethreug„ for a deletion and an
underline for an addition. The modifications proposed are as follows:
Rather than a First -Come, First - Served program, EDA staff will evaluate all proposals received in the
month prior to determine the proposal that best meets the program's guidelines.
• Clarification about the Program's process for state - licensed builders to purchase six -month options or
to purchase lots. Rather than the earnest deposit of $2,000 being deposited after the EDA approves a
Purchase and Redevelopment Agreement, the earnest deposit of $2,000 is proposed to be deposited
with a builder signed Purchase and Redevelopment Agreement before the EDA approves a Purchase
and Redevelopment Agreement for a specific lot.
Clarification of the $2,000 earnest dopiest being non - refundable to cover the cost of professional
service fees for drafting lot specific Purchase and Redevelopment Agreements and closing cost
preparation.
STAFF RECOMMENDATION:
Staff recommends adopting Resolution 2016 -21, a resolution revising the guidelines for conveyance.
RECOMMENDED MOTION(S):
Motion: Move to waive the reading of Resolution 2016 -21, there being ample copies available to the public.
Motion: Move to adopt Resolution 2016 -21, a resolution approving the revised guidelines for conveyance of
certain lots owned by the Economic Development Authority.
ATTACHMENTS:
1. Resolution 2016 -21
2. Revised Single Family Home Lot Sales Program Guidelines
3. Revised Purchase and Redevelopment Agreement
EDA Letter
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2016 -21
RESOLUTION APPROVING REVISED GUIDELINES FOR CONVEYANCE
OF CERTAIN LOTS OWNED BY THE ECONONOMIC DEVELOPMENT
AUTHORITY
BE IT RESOLVED By the Board of Commissioners ( "Board ") of the Columbia Heights
Economic Development Authority ( "Authority") as follows:
Section 1. Recitals.
1.01. The Authority has determined a need to exercise the powers of a housing and
redevelopment authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA
Act "), and is currently administering the Downtown CBD Redevelopment Project ( "Redevelopment
Project ") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 ( "HRA Act ").
1.02. Within the Redevelopment Project, the Authority has acquired certain parcels
suitable for the construction of single - family homes, which parcels are described in Exhibit A
hereto (the "Subject Parcels ").
1.03. The Authority created its Single Family Home Lot Sales Program and approved
preliminary guidelines for this program (the "Guidelines ") on September 8, 2015, and approved
amendments to the Guidelines on January 4, 2016. Pursuant to the Guidelines, the Authority has
conveyed certain of the Subject Parcels to contractors that will construct homes for sale to owner-
occupants, and intends to convey the remaining Subject Parcels for the same purpose. The
Authority may in the future identify additional parcels suitable for such construction.
1.04. The Authority has determined that additional revisions to the Guidelines are needed,
and has caused revisions to the Guidelines to be prepared in the form presented to the Board.
Section 2. Revised Guidelines Approved, Proceedings.
2.01. The Board approves the Guidelines as modified.
2.02. Authority staff and consultants are authorized and directed to negotiate sales of the
Subject Parcels with qualified contractors, subject to the condition that before the EDA is obligated
to sell any Subject Parcel, the Board shall approve a purchase and redevelopment agreement with
the buyer of that parcel following a duly notice public hearing thereon, as described in the
Guidelines.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 1 st day of August, 2016.
ATTEST:
Secretary
2
President
EXHBIT A
Subject Parcels
s,
LIE
Single Family Home Lot
Sales Program
COLUMBIA
HEIGHTS
COMMUNITY PROFILE
There is renewed interest in constructing new single
family homes in the first ring suburbs of Minneapolis and
St. Paul. Living closer to the urban core allows people to
have shorter commutes to work, and a plethora of dining
and entertainment opportunities. Columbia Heights is
well positioned as a first ring suburb, directly adjacent to
booming Northeast Minneapolis. Columbia Heights offers
high - quality lots in existing neighborhoods with close
Proximity to both Downtown Minneapolis and the
northern suburbs.
Despite only being two and a half miles from Downtown
lk
Minneapolis, Columbia Heights offers small town amenities, such as our own "Main Street"
along Central Avenue, our award winning School District, as well as neighborhood and
regional parks. Public and private reinvestment continues to occur in Columbia Heights,
including the construction of a new, state- of- the-art Public library, new restaurant and
shopping areas, and a water park -themed splash pad. Columbia Heights has many
community amenities, and provides exceptional real estate value to homebuyers.
Columbia Heights continues to
make a concerted effort to
reinvest in its neighborhoods.
Having implemented several
housing reinvestment programs
throughout the past several
years, Columbia Heights is
seeing a marked increase in new
single family home construction. The lots that are for sale as a part of this program were
strategically acquired by Columbia Heights' Economic Development Authority, and are
ready to be developed. We welcome you to Rediscover the Heights!
PROGRAM GUIDELINES
This program is designed to sell residential lots to state - licensed home builders for the
construction of new single family homes. The City's Economic Development Authority
(EDA) is only authorized to work with, and sell properties to, builders licensed by the State
of Minnesota. The EDA eensiders pFoposais on a "first first basis. The fi
d bad hous EDA A& w' evaluate 11 proposals
r ived in the month pdor to each r guitar meeting of the EDA Board and will Present the
o s that best the crit ria established l be
presented to the EDA Beard fer eensideratie in these G idelines at th n xt foll wing EDA
and meeting. The EDA Board retains absolute authority and discretion to decide whether
or not to accept any particular proposal. end reserves the righ to consider offers th at do no
s rictly comely wi h the guidelines tmd r c rtain ci cumstances
Proposals must be submitted by state - licensed builders who have constructed at least three
houses in Minnesota in the last five years, or have equivalent experience acceptable to the
EDA. The house may be built speculatively or for a specific buyer, andbutu it cannot be used
as a rental property. my aeeept pfoposals L The
new owner - occupied single family home must have at least three legally conforming
bedrooms, two bathrooms and a two _car garage (which may be either attached or detached,
depending on the property layout). EDA staff Miem all Proposals to determine if thev meet
EDA Program reauiremen
Builders may propose to purchase a 10t s ; °* • ^^ _ �, , or they may
propose to purchase a six -month option on the lot Either tvPe of ProPOSal must he
aPnroved in conmpt by the EDA Board After con pnt approval by th EDA Board EDA
staff will work with th builder to d termin specific _house Plans and to nrenare an n ti
Agreement or Purchase and Redevelo ment Agm met for- a - refundable fee v r $ 1,000-,
0-,
Only Option Agreements execut d by the bijilderand acromP ni by an option fee of
$i.000 will be cdered by the EDA Board for final approval at its next meeting- If the
4PWn Agreement is approved by the FDA the option fee is non-refundable and is
renewable for one additional six -month term for an additional non - refundable fee of $500.
The option provides the builder with an exclusive right to purchase the lot and build a single
family home, subject to EDA requirements.
QRtonn fee(s) will be credited toward the purchase price of the property. If the builder opts
not to purchase the lot, the EDA will re-tain the option fee(s )-wilH3e�� y �� . As
a condition of the option, the builder must list the lot with a "to -be- built" house plan
displayed on the Multiple Listing Service (MIS) for the duration of the option. No single
builder may hold more than 25% of the lot inventory in options.
FREQUENTLY ASKED QUESTIONS
Are lot prices negotiable?
Lot prices are based upon the Estimated Land Value of each individual property. The
EDA reserves the right to review and adjust lot prices periodically.
How are legal fees and closing costs handled?
In general, the Economic Development Authority's legal fees and closing costs are
included within the price of the lot. DevelepeF Bui d r is responsible for its own legal
fees and costs related to any title evidence deemed necessary by h it r. A
onrefundable $2,000 earnest deposit will be required from Develep er v
YY"
' ` "' L the builder a th tim th builder signs t_he
Purchase and Redev lonment Agreement The purchase and Redevelopment
Agreement will be drafted upeft-,alepdgr to approval whiehof the sale by the_ FDA and
will specify specific cost structures.
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FREQUENTLY ASKED QUESTIONS
Are lot prices negotiable?
Lot prices are based upon the Estimated Land Value of each individual property. The
EDA reserves the right to review and adjust lot prices periodically.
How are legal fees and closing costs handled?
In general, the Economic Development Authority's legal fees and closing costs are
included within the price of the lot. DevelepeF Bui d r is responsible for its own legal
fees and costs related to any title evidence deemed necessary by h it r. A
onrefundable $2,000 earnest deposit will be required from Develep er v
YY"
' ` "' L the builder a th tim th builder signs t_he
Purchase and Redev lonment Agreement The purchase and Redevelopment
Agreement will be drafted upeft-,alepdgr to approval whiehof the sale by the_ FDA and
will specify specific cost structures.
How does the EDA handle multiple offers?
The EDA considers proposals � "first e me+; d" basis- This
€rrstf om ime to time based on EDA taff pr entation In h ca of mul iple offer
r ceived prior to are lar EDA Bwwrdmweeting, the offer t e = ,best comnlvine with
the price and development criteria established in these Guidelines as to a given lot -will
be presented to the EDA B r for its consideration. The EDA retains absolute
discretion to decide whether or not to accept any particular proposal. Offers to purchase
lots will take precedence over offers to purchase options on lots.
Has the lot been surveyed?
No survey work has been performed by the EDA. However, with prior consent of the
EDA, the prospective b"yef uild r may have the lot surveyed by a registered land
surveyor. The EDA and City retain the right to keep a copy of all official surveys as part
of the public record for the property.
What is the condition of the property?
Each lot is sold "as is." The prospective buyer it r is responsible to perform all
necessary improvement to the lot at its own cost.
Is sewer and water available to the property?
Please contact the Columbia Heights Public Works Department (763 -706- 3700)
regarding requirements for connecting to the public sewer and water system.
How much time do I have to commence and complete construction?
After purchasing a lot, construction should begin within a reasonable time period and
must be completed within one year. See the Purchase and Redevelopment Agreement
for more details.
What are the building requirements for a new home?
All homes constructed through this program must contain the following:
• Three bedrooms
• Two bathrooms
• Two enclosed garage stalls, accessible by a paved driveway
• Windows on every wall of the home
• Basements with at least one egress window
• One canopy tree in either the front or rear yard
• All required features of the State Building Code
Can a new home become rental property?
No, all lots purchased must be developed with owner - occupied housing. Each
conveyance is subject to a ten year deed restriction requiring owner occupancy, as
required by the Purchase and Redevelopment Agreement. See Purchase and
Redevelopment Agreement for more details.
LOTS FOR SALE
PROPERTY
APPROXIMATE
AREA Minimum
ADDRESS
DIMENSIONS
'_q. ft_.) Sale Price
(wx d)
4606 POLK ST NE
4616PAL K ST
50'x 128'
6,534 g on
4641 TYLER ST NE
460QPG K- SAN€
464 ern "T-W
nc�o on9_ �R
60' x 128'
'°-,(�
c
55,3(128'
�84A
7,840g`
63-34 9 gg9
7,940
69-34
Please note that only lots listed on this chart are for sale under this program. The City or
EDA may own additional properties that are not for sale for various reasons. The City
and EDA will not entertain offers for properties not actively listed for sale.
ADDITIONAL INFORMATION
Thank you for your interest in developing housing in the City of Columbia
Heights. For more information about this program, please visit
www.columbiahgightsmn gov or contact the Community Development
Department at (763) 7o6 -367o.
CN
COLUMBIA
-HEIGHTS -
REDISCOVER THE HEIGHTS
PROPOSALFORM
(Please detach and sub thecozolete this section and submit it to the Community Development Department)
PROPERTY ADDRESS:
CHECK ONE:
BUILDER OFFERS $ TO PURCHASE THIS LOT
BUILDER OFFERS $1,000 FOR A SIX -MONTH OPTION TO PURCHASE THIS LOT FOR $
This proposal is not a purchase agreement or other binding contract. At this time, the guildeFbuilder is submitting
a proposal to purchase this lot and build a new single family house in accordance with the RFP Guidelines, or is
requesting a six- month option for the same.
If a builder's proposal is tentatively accepted by the EDA Board, then EDA staff weald argil work with the
guilderbuilder to determine the specific house plan and err ---t t At the Fle3it 111A draft an Option Aereement or
Rundhale and Red veto ment Aereement to b signed by the builder and presented to the EDA Board at it n x[
meeting with the repuued earnest mpnav n + F . If the EDA Board gives final approval at that time, toe
gkaU between the EDA and gei#derbuilder, a bindine contract
Builders may purchase a 6 -month option on a lot for $1,000, renewable for an additional 6 months for an
additional $500. The option provides the builder with exclusive right to purchase the lot and build a house subject
to the normal EDA process, requirements and guidelines. As a condition of the option, the builder must list the lot
with a to -be -built house on the MLS for the duration of the option. The number of options is limited. No builder
may have an option on more than 25% of the Program's lots.
BUILDER: (Builder is required to be a Residential Building Contractor licensed by the State of Minnesota.)
Name: State License Number:
Phone: Address:
City /State /Zip:
Email: Website:
REQUIRED ATTACHMENTS AND ADDITIONAL INFORMATION:
Attach one representative example of a house you would plan to build on this lot if your
proposal is selected. It does not need to show exactly how it would be placed on the lot, it just needs to
show the approximate size, quality and features you would anticipate a new house would have on this lot.
A specific house plan would be determined after a proposal is tentatively accepted by the EDA.
The EDA will only sell lots to licensed builders who have experience in house construction in Minnesota.
Please list the addresses of three houses you have built in Minnesota within the last five years, or attach
other evidence of qualification for review by the EDA.
House #1:
House #2:
House #3:
PROPOSAL GUIDELINES
Please provide the following information regarding the lot(s) intended for purchase:
A. Legal Description: The property is legally described as
B. Anticipated Timeline for Lot Sales.
After a builder submits a qualifying proposal, the timeline is as follows:
• EDA meeting #1: EDA rejects or tentatively accepts guildeF ild is proposal. If accepted,
gu4dedj i der prepares detailed house plans for EDA public hearing and works_ with
prepare proposed Option Agreement or Pur hase and Redevelopment Agreement,
• 21 days after EDA meeting #1• Deadline for builder to sign the Purchas & R develoom nt
Agreement and oav $2 000 earnest money or sign then f'on Agreement and Pay Option
few.
• EDA meeting #2 (approximately one month after #1): EDA holds public hearing and considers
a resolution authorizing the lot sale,
Qytlon Agreement or Purchase Stand Redevelopment Agreement ggg u
If approved fees aELn-g-n-refundable.
• 60 days after EDA meeting #2 Dea&pedeadlme for 4W4e4:kqIjJld& to close on the lot
purchase.
C. Deadline for Completion. Construction of the new house must be completed within one year of EDA
°'eetsas;zM of to in (see above)
D. Specifications.
1. Grading & Drainage
a) The lot is generally
b) Drainage from the house, garage, driveway and any other structures shall be
accommodated on the site so that water flow onto adjacent properties is
minimized. Builder's final grade shall carry water primarily to the street. If
determined by the Building Official to be necessary, guiideFbuil er will install rain
gutters to direct roof runoff to minimize impacts on adjacent properties. Builders
will restore any disturbed turf or landscaping.
c) Builder will follow Best Management Practices to minimize erosion and runoff onto
adjacent properties and public ways. At a minimum, gu4defbMj,Ir will install silt
fencing or wattle lots to prevent runoff silt from flowing ono the street or adjacent
properties.
2. Utilities
a) Utility meters shall be reasonably screened from street view; locations must be
specified on the plans submitted with the building permit application.
b) All utility service lines shall be underground. Utilities may locate necessary facilities
such as pedestals or boxes in the street right -of -way or utility & drainage
easements.
c) Any expenses for connection of the house to utilities shall be the responsibility of
43u4derb it r including any necessary landscaping or sidewalk, curb or pavement
work, but excepting reasonable costs associated with sewer stub replacement
discussed in e) below
d) Municipal Water. Municipal water is available at the lot line along
There are no WAC charges.
e) Municipal Sanitary Sewer. There are There are not SAC charges
levied by Metropolitan Council Environmental Services.
f) Private Utilities, including natural gas( ), electricity ( ), telephone ( ), and cable
television ( ). The house shall access private utilities via underground connections
only. * *Describe where utilities are located * **
g) Questions regarding city utilities should be directed to Columbia Heights Public
Works Department at 763 - 706 -3700. Questions regarding private utilities should be
directed to the respective utility company.
3. Driveways and Curb Cuts
a) A hard surfaced driveway is required to provide access from the street or alley to
the new house's garage.
b) The driveway approach (the area between the street and the front lot line) must tie
into and match the existing curb cut.
c) Alternatively- 944deF uil r may install a wider curb cut, up to a maximum of 22
feet, at its own expense, (Aa separate permit and escrow are required.. -)_ Unused
curb cut and driveway apron shall be removed and replaced with full height curb
and gutter and turf.
d) In no circumstances shall the curb cut or driveway approach from the curb cut to
the lot line exceed 22 feet in width.
e) Once onto the subject property, the driveway may exceed 22 feet in width provided
it also does not exceed the width of the overhead garage doors plus six feet.
f) The house's building permit application must include a site plan showing the
proposed driveway layout.
4. General Construction Practices.
The construction site, neighboring property and adjacent public streets shall be kept free of
construction debris at all times, and 43ui4deFbuilder must have a construction dumpster to
prevent debris from being scattered or blown around.
S. Building Standards.
a) Compliance with Columbia Heights City Code.
b) Minimum required setbacks for the house are as follows: 25' from the front lot line,
20% of lot depth for the rear lot line and _' from the side lot lines.
c) The houses shall have at least three bedrooms and two bathrooms.
d) The house shall have a full depth basement, unless the selected design results in a
split level /garden level type of basement. At a minimum, basements shall have at
least one egress window and a rough in for a future -Y bath. Additional basement
windows are desirable. Slab houses and crawlspace houses will not be considered
by the EDA.
e) Exterior materials (siding, soffit, doors and windows) shall be low maintenance. The
use of brick or stucco is encouraged. Fiber cement siding or wood siding with
natural resistance to decay are encouraged but they must be property stained or
panted. Vinyl or other low maintenance siding materials are generally acceptable
and can be made more desirable through the use of shakes and other ornamental
design features.
f) The house shall have a detached or an attached garage for at least two cars,
accessed via a hard surfaced driveway from the street or alley.
g) The design should emphasize the front door as the focal point for the front of the
house. A large and usable (minimum depth 6 feet) front porch is desired. Garage
door dominance in design should be minimized as much as possible.
h) Plans should present a balanced and pleasing distribution of wall and window areas
from all views. Each exterior wall must have at least one window.
i) The new house shall be built with a passive venting system for radon gas reduction.
j) The new house shall have Carbon Monoxide alarms in accordance with M.S.
299F.50
k) No equipment such as air - conditioning cooling structures or condensers that
generate noise shall be located within a side setback, drainage & utility easement,
or 10 feet of living quarters located in a building on adjacent property.
6. Landscaping. The lot shall be landscaped to be aesthetically pleasing in all seasons. Land
forms and plant materials shall be used to define the site and blend neatly with adjoining
property.
At a minimum the following are required:
• Plant one large species canopy shade tree in the front yard, and one large
species canopy shade tree in the back yard (if none exist).
• Grass or other vegetative cover must be provided to all non -paved outdoor
surfaces.
Species, size and specific locations of all new trees should be indicated on planting plan. Builder
must submit a planting plan to the City for review and approval prior to planting.
If 4"&F it er desires to close on the sale of the new house prior to completion and
acceptance of the landscaping, the EDA may require that funds be escrowed by the
guilderb it er to guarantee that landscaping is completed in a timely manner after closing.
TO BE DATED AS OF THE DATE OF FINAL EDA APPROVAL
PURCHASE AND REDEVELOPMENT AGREEMENT
(Address), Columbia Heights, Minnesota
Parties. This Purchase and Redevelopment Agreement is made as of
20_ between the COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of
Minnesota having its office located at 590 46m Avenue NE, Columbia Heights, MN (the
"Seller "), and a Minnesota corporation, having its principal
office at (the "Buyer ") (the "Agreement').
2. Offer /Acceptance. Buyer offers to purchase and Seller agrees to sell real property in
Anoka County, Minnesota, legally described as follows (the "Property"):
INSERT LEGAL DESCRIPTION
Check here if part or all of the land is Registered (Torrens) ❑
3. Acceptance Deadline. This offer to purchase, unless accepted sooner, shall be null and
void at 4:30 p.m. on 20_ , and in such event all earnest
money shall be refunded to Buyer.
4. Price and Terms. The price for the Property is $ ( "Purchase Price ")
which Buyer shall pay as follows: earnest money of $2,000 by check, receipt of which is
hereby acknowledged by Seller. The balance of the Purchase Price must be paid by
certified check or wire transfer on the Date of Closing. The "Date of Closing" shall be no
later than 20_. (60 days from date of this Agreement)
5. Personal Property Included in Sale. There are no items of personal property or fixtures
owned by Seller and currently located on the Property for purposes of this sale.
6. Deed. Upon performance by Buyer, Seller shall deliver a quit claim deed conveying title
to the Property to Buyer, in substantially the form attached as Exhibit A, subject to the
4729742 CL205 -55
conditions subsequent required by Sections 15, 16, and 17 of this Agreement (the
"Deed ").
Real Estate Taxes and Special Assessments.
A. Seller shall pay, at or before closing all real estate taxes due and payable in
and prior years. Real estate taxes due and payable in the year of closing shall be
pro -rated to Seller and Buyer as of the Date of Closing.
B. Seller shall pay on Date of Closing all special assessments levied against the
Property as of the date of this agreement, including those certified for payment in
the year of closing. Seller represents that there are no special assessments pending
as of the date of this agreement. If a special assessment becomes pending after the
date of this agreement and before the Date of Closing, Buyer may, as Buyer's
option:
Assume payment of the pending special assessment without adjustment to
the purchase agreement price of the property; or
2. Require Seller to pay the pending special assessment and Buyer shall pay a
commensurate increase in the purchase price of the Property, which
increase shall be the same as the estimated amount of the assessment; or
Declare this agreement null and void by notice to Seller, and earnest
money shall be refunded to Buyer.
8. Closing Costs and Related Items. The Buyer will pay: (a) the closing fees charged by the
title insurance or other closing agent, if any, utilized to close the transaction
contemplated by this Agreement; (b) fees for title evidence obtained by Buyer; (c) the
recording fees for this Agreement and for the Deed transferring title to Buyer. Seller will
pay all other fees normally paid by sellers, including (a) any transfer taxes, and Well
Disclosure fees required to enable Buyer to record its deed from Seller under this
Agreement, and (b) fees and charges related to the filing of any instrument required to make
title marketable. Each party shall pay its own attorney fees.
9. Sewer and Water. Seller warrants that city sewer is available at the Property line, and
that city water is available in the right of way adjacent to the Property. Seller makes no
warranty regarding the conditions of any existing water stub from the main to the
Property line. Seller advises Buyer to inspect the condition of the water stub.
10. Condition of Property. Buyer acknowledges that they have inspected or have had the
opportunity to inspect the Property and agree to accept the Property "AS IS." Buyer has
the right, at its own expense to take soil samples for the purpose of determining if the soil
is suitable for construction of the dwelling described in section 14 below. If the soil is
determined to be unacceptable the Buyer may rescind this agreement by written notice to
472974v2 CL205 -55
the Seller, in which case the agreement shall be null and void. Seller makes no warranties
as to the condition of the Property.
11. Marketability of Title. As soon as reasonably possible after execution of this
Agreement by both parties:
(a) Seller shall surrender any abstract of title and a copy of any owner's title insurance policy
for the property, if in Seller's possession or control, to Buyer or to Buyer's designated
title service provider; and
(b) Buyer shall obtain the title evidence determined necessary or desirable by Buyer.
The Buyer shall have 20 days from the date it receives such title evidence to raise any
objections to title it may have. Objections not made within such time will be deemed
waived. The Seller shall have 90 days from the date of such objection to affect a cure;
provided, however, that Seller shall have no obligation to cure any objections, and may
inform Buyer of such. The Buyer may then elect to close notwithstanding the uncured
objections or declare this Agreement null and void, and the parties will thereby be
released from any further obligation hereunder.
12. Title Clearance and Remedies. If Seller shall fail to have title objections timely
removed, the Buyer may, at its sole election: (a) terminate this Agreement without any
liability on its part upon provision of a quit claim deed to the Property from Buyer; or (b)
take title to the Property subject to such objections.
If title is marketable, or is made marketable as provided herein, and Buyer defaults in any
of the agreements herein, Seller may elect either of the following options, as permitted by
law:
A. Cancel this contract as provided by statute and retain all payments made
hereunder as liquidated damages. The parties acknowledge their intention that
any note given pursuant to this contract is a down payment note, and may be
presented for payment notwithstanding cancellation;
B. Seek specific performance within six months after such right of action arises,
including costs and reasonable attorney's fees, as permitted by law.
If title is marketable, or is made marketable as provided herein, and Seller defaults in any
of the agreements herein, Buyer may, as permitted by law:
C. Seek damages from Seller including costs and reasonable attorney's fees;
D. Seek specific performance within six months after such right of action arises
13. Well Disclosure. Seller's knowledge of wells is as follows:
3
4729742 CL205 -55
❑ The Seller certifies that the Seller does not know of any wells on the described
real property.
❑ A well disclosure certificate accompanies this document.
❑ 1 am familiar with the property described in this instrument and I certify that the
status and number of wells on the Property have not changed since the last
previously filed well disclosure certificate.
14. Individual Sewage Treatment System Disclosure. Seller certifies that there is no
individual sewage treatment system on or serving the Property.
15. Construction and Sale of Dwelling. Buyer agrees that it will construct a new single
family dwelling on the Property, intended for sale to a person or persons for residential
occupancy (an "Owner Occupant'). This covenant shall survive the delivery of the Deed.
A. The single family dwelling described in this Section is referred to as the
"Minimum Improvements."
B. The Minimum Improvements shall consist of a new single family dwelling, and
shall be constructed substantially in accordance with the Single Family Home Lot
Sales Program Guidelines on file at City Hall and the proposal approved by Seller
on , 20 , attached hereto as Exhibit B.
C. Construction of the Minimum Improvements must be substantially completed by
, 20_, which is one year from the Date of Closing.
Construction will be considered substantially complete when the final certificate
of occupancy has been issued by the City of Columbia Heights building official.
D. Promptly after substantial completion of the Minimum Improvements in
accordance with those provisions of the Agreement relating solely to the
obligations of the Buyer to construct such Minimum Improvements (including the
date for completion thereof), the Seller will furnish the Buyer with a Certificate of
Completion, in the form attached hereto as Exhibit C, for such improvements.
Such certification by the Seller shall be (and it shall be so provided in the Deed
and in the certification itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement and in the Deed
with respect to the obligations of the Buyer and its successors and assigns, to
construct the Minimum Improvements and the dates for completion thereof.
The certificate provided for in this Section of this Agreement shall be in such
form as will enable it to be recorded in the proper office for the recordation of
deeds and other instruments pertaining to the Property. If the Seller shall refuse or
fail to provide any certification in accordance with the provisions of this Section,
the Seller shall, within thirty (30) days after written request by the Buyer, provide
the Buyer with a written statement, indicating in adequate detail in what respects
the Buyer has failed to complete the Minimum Improvements in accordance with
4
4729742 CL205 -55
the provisions of the Agreement, or is otherwise in default, and what measures or
acts it will be necessary, in the opinion of the Seller for the Buyer to take or
perform in order to obtain such certification.
E. The Buyer represents and agrees that until issuance of the Certificate of Completion
for the Minimum Improvements:
(1) Except for any agreement for sale to an Owner Occupant, the
Buyer has not made or created and will not make or create or suffer to be made or
created any total or partial sale, assignment, conveyance, or lease, or any trust or
power, or transfer in any other mode or form of or with respect to this Agreement
or the Property or any part thereof or any interest therein, or any contract or
agreement to do any of the same, to any person or entity (collectively, a
"Transfer "), without the prior written approval of the Seller's board of
commissioners. The term "Transfer" does not include encumbrances made or
granted by way of security for, and only for, the purpose of obtaining construction,
interim or permanent financing necessary to enable the Buyer to construct the
Minimum Improvements or component thereof.
(2) If the Buyer seeks to effect a Transfer prior to issuance of the
Certificate of Completion, the Seller shall be entitled to require as conditions to
such Transfer that:
(i) any proposed transferee shall have the qualifications and
financial responsibility, in the reasonable judgment of the Seller, necessary
and adequate to fulfill the obligations undertaken in this Agreement by the
Buyer as to the portion of the Property to be transferred; and
(ii) Any proposed transferee, by instrument in writing
satisfactory to the Seller and in form recordable in the public land records
of Anoka County, Minnesota, shall, for itself and its successors and
assigns, and expressly for the benefit of the Seller, have expressly assumed
all of the obligations of the Buyer under this Agreement as to the portion
of the Property to be transferred and agreed to be subject to all the
conditions and restrictions to which the Buyer is subject as to such portion;
provided, however, that the fact that any transferee of, or any other
successor in interest whatsoever to, the Property, or any part thereof, shall
not, for whatever reason, have assumed such obligations or so agreed, and
shall not (unless and only to the extent otherwise specifically provided in
this Agreement or agreed to in writing by the Seller) deprive the Seller of
any rights or remedies or controls with respect to the Property, the
Minimum Improvements or any part thereof or the construction of the
Minimum Improvements; it being the intent of the parties as expressed in
this Agreement that (to the fullest extent permitted at law and in equity
and excepting only in the manner and to the extent specifically provided
otherwise in this Agreement) no transfer of, or change with respect to,
5
4729742 C1205 -55
ownership in the Property or any part thereof, or any interest therein,
however consummated or occurring, and whether voluntary or involuntary,
shall operate, legally, or practically, to deprive or limit the Seller of or with
respect to any rights or remedies on controls provided in or resulting from
this Agreement with respect to the Property that the Seller would have had,
had there been no such transfer or change. In the absence of specific
written agreement by the Seller to the contrary, no such transfer or
approval by the Seller thereof shall be deemed to relieve the Buyer, or any
other party bound in any way by this Agreement or otherwise with respect
to the Property, from any of its obligations with respect thereto.
(iii) Any and all instruments and other legal documents
involved in effecting the transfer of any interest in this Agreement or the
Property governed by this subsection E. shall be in a form reasonably
satisfactory to the Seller.
(3) If the conditions described in paragraph (2) above are satisfied then
the Transfer will be approved and the Buyer shall be released from its obligation
under this Agreement, as to the portion of the Property that is transferred,
assigned, or otherwise conveyed. The provisions of this paragraph (3) apply to all
subsequent transferors.
(4) Upon issuance of the Certificate of Completion, the Buyer may
Transfer the Property and/or the Buyer's rights and obligations under this Agreement
with respect to such Property without the prior written consent of the Seller.
F. The Buyer, and its successors and assigns, agree that they (a) will use the
Minimum Improvements only as a single family dwelling, and in the case of an
Owner Occupant, will occupy the Property as a residence, (b) will not rent the
Property to any person or entity, (c) will not seek exemption from real estate taxes
on the Property under State law, and (d) will not transfer or permit transfer of the
Property to any entity whose ownership or operation of the Property would result
in the Property being exempt from real estate taxes under State law (other than any
portion thereof dedicated or conveyed to the City of Columbia Heights or Seller in
accordance with this Agreement). The covenants in this paragraph run with the
land, survive both delivery of the Deed and issuance of the Certificate of
Completion for the Minimum Improvements, and shall remain in effect for ten
years after the Date of Closing.
16. Revesting Title in Seller upon Happening of Event Subsequent to Conveyance to
Buyer. In the event that subsequent to conveyance of the Property or any part thereof to the
Buyer and prior to receipt by the Buyer of the Certificate of Completion for of the Minimum
Improvements, the Buyer, subject to Unavoidable Delays (as hereafter defined), fails to
carry out its obligations with respect to the construction of the Minimum Improvements
(including the nature and the date for the completion thereof), or abandons or substantially
6
472974v2 CL205 -55
suspends construction work, and any such failure, abandonment, or suspension shall not be
cured, ended, or remedied within thirty (30) days after written demand from the Seller to the
Buyer to do so, then the Seller shall have the right to re -enter and take possession of the
Property and to terminate (and revest in the Seller) the estate conveyed by the Deed to the
Buyer, it being the intent of this provision, together with other provisions of the Agreement,
that the conveyance of the Property to the Buyer shall be made upon, and that the Deed shall
contain a condition subsequent to the effect that in the event of any default on the part of the
Buyer and failure on the part of the Buyer to remedy, end, or abrogate such default within
the period and in the manner stated in such subdivisions, the Seller at its option may declare
a termination in favor of the Seller of the title, and of all the rights and interests in and to the
Property conveyed to the Buyer, and that such title and all rights and interests of the Buyer,
and any assigns or successors in interest to and in the Property, shall revert to the Seller, but
only if the events stated in this Section have not been cured within the time periods
provided above.
Notwithstanding anything to the contrary contained in this Section, the Seller shall have no
right to reenter or retake title to and possession of a portion of the Property for which a
Certificate of Completion has been issued.
For the purposes of this Agreement, the term "Unavoidable Delays" means delays beyond
the reasonable control of the Buyer as a result thereof which are the direct result of strikes,
other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the
Minimum Improvements, litigation commenced by third parties which, by injunction or
other similar judicial action, directly results in delays, or acts of any federal, state or local
governmental unit (other than the Seller in exercising its rights under this Agreement)
which directly results in delays. Unavoidable Delays shall not include delays in the Buyer's
obtaining of permits or governmental approvals necessary to enable construction of the
Minimum Improvements by the dates such construction is required under this section of this
Agreement.
17. Resale of Reacquired Property; Disposition of Proceeds. Upon the revesting in the
Seller of title to and/or possession of the Property or any part thereof as provided in Section
16, the Seller shall apply the purchase price paid by the Buyer under Section 4 of this
Agreement as follows:
(a) First, to reimburse the Seller for all costs and expenses incurred by the Seller,
including but not limited to proportionate salaries of personnel, in connection with
the recapture, management, and resale of the Property or part thereof (but less any
income derived by the Seller from the Property or part thereof in connection with
such management); all taxes, assessments, and water and sewer charges with
respect to the Property or part thereof (or, in the event the Property is exempt from
taxation or assessment or such charge during the period of ownership thereof by
the Seller, an amount, if paid, equal to such taxes, assessments, or charges (as
determined by the Seller assessing official) as would have been payable if the
Property were not so exempt); any payments made or necessary to be made to
7
472974v2 CL205-55
discharge any encumbrances or liens existing on the Property or part thereof at the
time of revesting of title thereto in the Seller or to discharge or prevent from
attaching or being made any subsequent encumbrances or liens due to obligations,
defaults or acts of the Buyer, its successors or transferees; any expenditures made
or obligations incurred with respect to the making or completion of the Minimum
Improvements or any part thereof on the Property or part thereof; and any amounts
otherwise owing the Seller by the Buyer and its successor or transferee; and
(b) Second, to reimburse the Buyer for the balance of the purchase price remaining
after the reimbursements specified in paragraph (a) above. Such reimbursement
shall be paid to the Buyer upon delivery of an executed, recordable warranty deed
to the Property by the Buyer to the Seller.
18. Time is of the essence for all provisions of this contract.
19. Notices. All notices required herein shall be in writing and delivered personally or
mailed to the address shown at paragraph 1 above and, if mailed, are effective as of the
date of mailing.
20. Minnesota Law. This contract shall be governed by the laws of the State of Minnesota.
21. Specific Performance. This Agreement may be specifically enforced by the parties,
provided that an action is brought within one year of the date of alleged breach of this
Agreement.
22. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Seller or
Buyer is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall impair any
such right or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed expedient.
23. No Merger of Representations, Warranties. All representations and warranties contained
in this Purchase Agreement shall not be merged into any instruments or conveyance
delivered at closing, and the parties shall be bound accordingly.
24. Recording. This Agreement shall be filed of record with the Anoka County Registrar of
Titles or Office of Recorder, as the case may be. Buyer shall pay all recording costs.
25. No Broker Involved. The Seller and represent and warrant to each other that there is no
broker involved in this transaction with whom it has negotiated or to whom it has agreed to
pay a broker commission. Buyer agrees to indemnify Seller for any and all claims for
brokerage commissions or finders' fees in connection with negotiations for purchase of the
Property arising out of any alleged agreement or commitment or negotiation by Buyer, and
472974v2 CL205 -55
Seller agrees to indemnify Buyer for any and all claims for brokerage commissions or
finders' fees in connection with negotiations for purchase of the Property arising out of any
alleged agreement or commitment or negotiation by Seller.
In witness of the foregoing, the parties have executed this agreement on the year and date
written above.
SELLER: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
By:
Its President
STATE OF MINNESOTA
COUNTY OF ANOKA
} ss.
M
Its Executive Director
The foregoing was acknowledged before me this day of 20 , by
and , the President and Executive Director
of Columbia Heights Economic Development Authority, a public body corporate and politic
under the laws of Minnesota, on behalf of the public body corporate and politic.
Notary Public
9
472974v2 CL205 -55
BUYER:
STATE OF MINNESOTA
} ss.
COUNTY OF ANOKA
The foregoing was acknowledged before me this _
the of
on behalf of the
This document drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South 6`s Street
Minneapolis, MN 55402
fL17
472974v2 CL205 -55
day of 20_, by
a Minnesota
Notary Public
EXHIBIT A
to
PURCHASE AND REDEVELOPMENT AGREEMENT
FORM OF QUIT CLAIM DEED
Deed Tax Due: $
ECRV:
THIS INDENTURE, between the Columbia Heights Economic Development Authority, a
Minnesota, a public body corporate and politic (the "Grantor "), and , a
Minnesota (the "Grantee ").
WITNESSETH, that Grantor, in consideration of the sum of $ and other good
and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant,
bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or
parcel of land lying and being in the County of Anoka and State of Minnesota described as
follows, to -wit (such tract or parcel of land is hereinafter referred to as the "Property"):
Check here ifpart or all of the land is Registered (Torrens) ❑
To have and to hold the same, together with all the hereditaments and appurtenances
thereunto belonging.
SECTION 1.
It is understood and agreed that this Deed is subject to the covenants, conditions,
restrictions and provisions of an agreement recorded herewith entered into between the Grantor
and Grantee on the of 20 , identified as "Purchase and
Redevelopment Agreement" (hereafter referred to as the "Agreement ") and that the Grantee shall
not convey this Property, or any part thereof, except as permitted by the Agreement until a
certificate of completion releasing the Grantee from certain obligations of said Agreement as to
this Property or such part thereof then to be conveyed, has been placed of record. This provision,
however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain
funds for the purchase of the Property hereby conveyed or for erecting the Minimum
Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any
applicable development program and applicable provisions of the zoning ordinance of the City of
Columbia Heights, Minnesota, or for the refinancing of the same.
It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to
completion the redevelopment of the Property through the construction of the Minimum
Improvements thereon, as provided in the Agreement.
472994v2 CL205 -55
Promptly after completion of the Minimum Improvements in accordance with the
Provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument
so certifying. Such certification by the Grantor shall be (and it shall be so provided in the
certification itself) a conclusive determination of satisfaction and termination of the agreements
and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee,
and its successors and assigns, to construct the Minimum Improvements and the dates for the
beginning and completion thereof. Such certification and such determination shall not constitute
evidence of compliance with or satisfaction of any obligation of the Grantee to any holder of a
mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the
Property hereby conveyed or the Minimum Improvements, or any part thereof:
All certifications provided for herein shall be in such form as will enable them to be
recorded with the County Recorder, or Registrar of Titles, Anoka County, Minnesota. If the
Grantor shall refuse or fail to provide any such certification in accordance with the provisions of
the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by
the Grantee, provide the Grantee with a written statement indicating in adequate detail in what
respects the Grantee has failed to complete the Minimum Improvements in accordance with the
provisions of the Agreement or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain
such certification.
SECTION 2.
The Grantee's rights and interest in the Property are subject to the terms and conditions of
Sections 15, 16 and 17 of the Agreement relating to the Grantor's right to re -enter and revest in
Grantor title to the Property under conditions specified therein, including but not limited to
termination of such right upon issuance of a Certificate of Completion as defined in the
Agreement.
SECTION 3.
The Grantee agrees for itself and its successors and assigns to or of the Property or
any part thereof, hereinbefore described, that the Grantee and such successors and assigns
shall comply with Section 15F of the Agreement for a period of ten years after the date
hereof.
It is intended and agreed that the above and foregoing agreements and covenants
shall be covenants running with the land for the respective terms herein provided, and that
they shall, in any event, and without regard to technical classification or designation, legal
or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to
the fullest extent permitted by law and equity for the benefit and in favor of, and
enforceable by, the Grantor against the Grantee, its successors and assigns, and every
successor in interest to the Property, or any part thereof or any interest therein, and any
party in possession or occupancy of the Property or any part thereof.
472974v2 01205 -55
In amplification, and not in restriction of, the provisions of the preceding section, it is
intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and
covenants provided herein, both for and in its own right, and also for the purposes of protecting
the interest of the community and the other parties, public or private, in whose favor or for whose
benefit these agreements and covenants have been provided. Such agreements and covenants
shall run in favor of the Grantor without regard to whether the Grantor has at any time been,
remains, or is an owner of any land or interest therein to, or in favor of, which such agreements
and covenants relate. The Grantor shall have the right, in the event of any breach of any such
agreement or covenant to exercise all the rights and remedies, and to maintain any actions or
suits at law or in equity or other proper proceedings to enforce the curing of such breach of
agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may
be entitled; provided that Grantor shall not have any right to re -enter the Property or revest in the
Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its
obligations under this Section 3.
IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its
behalf by its President and Executive Director, this day of 20
❑ The Seller certifies that the Seller
does not know of any wells on the
described real property.
❑ A well disclosure certificate
accompanies this document or has
been electronically filed. (If
electronically filed, insert WDC
number: N.
❑ I am familiar with the property
described in this instrument and I
certify that the status and number of
wells on the described real property
have not changed since the last
previously filed well disclosure
certificate.
472974v2 CI205 -55
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
On this _ day of 20_, before me, a notary public within and for
County, personally appeared and to me
personally known who by me duly sworn, did say that they are the President and Executive
Director of the Columbia Heights Economic Development Authority (the "Authority") named in
the foregoing instrument; that said instrument was signed on behalf of said Authority pursuant to
a resolution of its governing body; and said and
acknowledged said instrument to be the free act and deed of said Authority.
This instrument was drafted by:
Kennedy & Graven, Charted
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
(612) 337 -9300
472974v2 CL205 -55
Notary Public
Tax Statements should be sent to:
EXHIBIT B
TO
PURCHASE AND REDEVELOPMENT AGREEMENT
APPROVED PROPOSAL
472974v2 CL205 -55
EXHIBIT C
TO
PURCHASE AND REDEVELOPMENT AGREEMENT
FORM OF CERTIFICATE OF COMPLETION
472974v2 CL205 -55
CERTIFICATE OF COMPLETION
WHEREAS, the Columbia Heights Economic Development Authority, a public body,
corporate and politic (the "Grantor "), conveyed land in Anoka County, Minnesota to
, a (the "Grantee "), by a Deed recorded in the
Office of the County Recorder [and in the Office of the Registrar of Titles] in and for the County
of Anoka and State of Minnesota, as Document Numbers and
respectively;
and
WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1
and 2 of said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions insofar as it is
able in a manner deemed sufficient by the Grantor to permit the execution and recording of this
certification;
NOW, THEREFORE, this is to certify that all building construction and other physical
improvements specified to be done and made by the Grantee have been completed and the above
covenants and conditions in said Deed and the agreements and covenants in Sections 14A and
14B of the Agreement (as described in said Deed) have been performed by the Grantee therein,
and the County Recorder [and the Registrar of Titles] in and for the County of Anoka and State
of Minnesota are hereby authorized to accept for recording and to record, the filing of this
instrument, to be a conclusive determination of the satisfactory termination of the covenants and
conditions of Sections 15A and 15B of the Agreement and the covenants and restrictions set
forth in Sections 1 and 2 of said Deed; provided that the covenants set forth in Sections 15F of
the Agreement, and in Section 3 of the Deed, remain in full force and effect through the period
stated thereon.
Dated: , 20
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
4729702 CL205 -55
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this _ day of
20_, by and the President and Executive
Director, respectively, of the Columbia Heights Economic Development Authority, on behalf of
the authority.
Notary Public
This document drafted by:
KENNEDY & GRAVEN, CHARTERED
470 U.S. Bank Plaza
Minneapolis, MN 55402
(612) 337 -9300
472974v2 CL205 -55
CH COLUMBIA
HEIGHTS
AGENDA SECTION
BUSINESS ITEMS
ITEM NO.
9
MEETING DATE
AUGUST 1, 2016
CITY OF COLUMBIA HEIGHTS — ECONOMIC DEVELOPMENT AUTHORITY
ITEM: I Single Family Home Lot Sales Program — Concept Application Approval 4606 Polk Street 7
IDEPARTMENT: Economic Development Authority CITY MANAGER'S APPROVAL: I
BY /DATE: Keith M. Dahl, July 26, 2016 I BY /DATE:
BACKGROUND:
In September, the Columbia Heights Economic Development Authority (EDA) created the Single Family Home
Lot Sales Program for conveyance of certain EDA owned lots to state - licensed builders. The program's lot
prices are based upon the Estimated Market Land Value for each individual property. However, the EDA has
the right to review and adjust lot prices periodically provided that sufficient evidence supports the lots price
reduction. The EDA has received a completed proposal form (Attached) from Home Detail, LLC (Home Detail)
proposing to purchase the property located at 4606 Polk St. NE for $16,000.
The Estimated Market Land Value for this particular property is $45,000. However, in speaking with various
home builders, staff received feedback that the lots currently available in the program, which are located in
the Heritage Heights neighborhood, are generally lower value than other properties throughout the City of
Columbia Heights.
Along with a completed application, Home Detail has submitted a proposal (Attached) containing a written
letter of intent and one representative example of a house that Home Detail would build on this lot if the
proposal is accepted. The house example is not exactly what Home Detail intends to build, but rather an
example of the quality and features that will be incorporate into the actual house plans.
Staff reached out to City departments and surrounding communities that have previously worked with Home
Detail. Home Detail constructed a new single family home in Columbia Heights located at 4631 Pierce Street
NE. EDA staff received negative feedback from the Building Inspections Department about two separate issues
as follows:
On August 28, 2015 a Purchase and Redevelopment Agreement, by and between, the EDA and Home
Detail was fully executed for the conveyance of an EDA owned lot located at 4631 Pierce Street NE. The
EDA conveyed the property by a Quit Claim Deed to Home Detail on September 10, 2015. Before
construction of the Single Family Home began, Home Detail conveyed the property by Warranty Deed
to an Owner Occupant on September 28, 2015. Building code stipulates that the owner of the property
is responsible for corrections to be made. In this situation, the Building Inspections Department had
no enforcement for Home Detail to make required corrections, other than enforcement sent to the
Owner Occupant to hold Home Detail accountable.
Currently, 4631 Pierce Street has been issued a Temporary Certificate of Occupancy because
completion of the Single Family Home has not been completed. Before a Certificate of Occupancy will
be issued by the Building Official, erosion controls (ie. landscaping, sodding and silt barrier) must be
completed. The Building Inspections Department has sent written orders to Home Detail to complete
the erosion controls, however the erosion controls remain unfinished.
City of Columbia Heights - EDA Letter
City of Columbia Heights - Council Letter
Page 2
EDA staff received both positive and negative feedback from surrounding communities. Much of the positive
feedback received was the quality of Home Detail's finished interior product, as well as house designs that
went above the minimum requirements of different housing programs. However, the negative feedback
received by other communities was that exterior improvements (ie. Siding, landscaping, and sodding) either
took over a year to complete or have not been completed at all.
For EDA's consideration tonight is the concept approval of Home Detail's application for the property located
at 4606 Polk Street NE. If the EDA approves the concept approval, EDA staff will work with Home Detail to
determine specific house plans and to prepare a Purchase and Redevelopment Agreement for the property to
be approved at the next EDA meeting on September 5, 2016. The EDA does not need to hold a public hearing
for 4606 Polk Street NE since a public hearing was already held on October 12, 2015 — Resolution 2015 -22.
STAFF RECOMMENDATION:
Staff recommends that the Columbia Heights Economic Development Authority decided whether or not to
approve Home Detail's concept application.
RECOMMENDED MOTION(S):
If concept application is approved:
Motion: Move to approve the concept application submitted by Home Detail for the property located at 4606
Polk Street NE, Columbia Heights, MN 55421.
Motion: Move to authorize staff and consultants to work with Home Detail, LLC to determine specific house
plans for the construction of a single family home and to prepare a Purchase and Redevelopment Agreement to
be considered for final approval by the EDA at its next meeting of September 5, 2016.
If concept application is rejected:
Motion: Move to reject the concept application submitted by Home Detail for the property located at 4606
Polk Street NE, Columbia Heights, MN 55421.
ATTACHMENTS:
1. Completed Proposal Form (2 Pages)
2. Home Detail — Letter of Intent (1 Page)
3. Example House Plan (4 Pages)
PROPOSAL FORM
(Please detach and submit the this section and submit it to the Community Development Department)
l
PROPERTY ADDRESS: 460I0 C'IIL S4', t a4LV,1)t ("I)'_-'S A, IN
CHECK ONE:
i �,000�t�SO l .4..`f(ol�U
BUILDER OFFERS $TO PURCHASE THIS LOT��((s
_ BUILDER OFFERS $1,000 FOR A SIX -MONTH OPTION TO PURCHASE THIS LOT FOR $
This proposal is not purchase agreement or other bi ndi ng contract. At this time, the Builder is submittinga
proposal topurchasethis lot and builda new si nglefa mi ly house in a ccorda ncewith the RFP Guidel i nes, or is
requesting a six -month option for the same.
If a builder's proposal is tentatively accepted by the EDA Board, then EDA staff would work with the Builder to
determine the specific house plan and present it at the next EDA meeting. If the EDA Board gives final approval at
that time, the Builder has 14 days to sign a Purchase & Redevelopment Agreement, and provide $2,000 earnest
money for the lot. Only after such Agreement is signed and earnest money paidwoulda binding contract exist
between the EDA and Builder.
Builders may purchasea 6 -month option on a lot for $1,000, renewable for an additional months for an
additional $500. The option provides the builder with exclusive rightto purchasethe lotand build housesubject
to the normal EDA process, requirements and guidelines.As a condition of the option, the builder must listthe lot
with ato -be -built house on the MLS forthe duration of the option. The number of options is limited. No builder
may have option on more than 25% of the Program's lots.
BUILDER: (Builder is required to be a Residential Building Contractor licensed by the State of Minnesota.)
l
Name: / �(x7�( p��U / State License �Number: k 3 3
Phone:;; I 5 1 rn- rI - U�N ��3 _ Address: I �Ufl - I Iy 1 r�'� 1JE
City /State/Zip: � t'Kj -\ 5
ttII��
Email: "y{}FtlY -k � h`t,tuw) Website:':
REQUIRED ATTACHMENTS ANDADDITIONAL INFORMATION:
Attach one representative example of a house you would plan to buildon this lotif your
proposal is selected. It does not need to showexactlyhow itwould be placed on the lot, itjustneeds to
show the approximate size, quality and features you would anticipate anew house would have on this lot.
A specific houseplan would be determined after a proposal is tentatively accepted by the EDA
The EDA will onlysell lots to builders who have experience in house construction in Minnesota. Please list
the addresses of three houses you have built in Minnesota within the lastfive years, or attach other
evidence of qualification for review by the EDA.
House
House
House
PROPOSAL GUIDELINES
Please provide the following information regarding the lot(s) intended for purchase:
A. Legal Description: The property is I ega I I y described as
B. Anticipated Timeline for Lot Sales.
After a builder submits a qualifying proposal, thetimeline is as follows:
• EDA meeting #1: EDA rejects or tentatively accepts Builder's proposal. If accepted, Builder
prepares detailed houseplans for EDA public hearing.
• EDA meeting #2 (approximately one month after #1): EDA holds public hearingand considers
a resolution a uthori zi ng the lot sale.
• 14 days after EDA meeting #2: Deadlinefor Builder to sign the Purchase &Redevelopment
Agreement and pay $2,000 nonrefundable earnest money.
• 60 days after EDA meeting #2 Deadlinefor Builder to closeon the lot purchase.
C. Deadline for Completion. Construction of the new house must be completed within one year of EDA
meeting #2 (see above)
D. Specifications.
1. Grading & Drainage
a) The lotis generally U R 11� �l�T(� \( n{��'��, in �(f�,C•"
b) Drainagefrom the house, garage, driveway and any otH6r structures shall be
accommodated on the sitesothat water flow onto adjacent properties is
mi ni mized. Bui Ider's final gradeshall carry water primarily to the street. If
determined by the Building Official to be necessa ry, Builder will install rain gutters
to di rect roof runoff to mini mize 1 mpacts on adjacent properties. Bui Iders wi II
restore a ny disturbed turf or landscaping.
c) Builder will follow Best Management Practi ces to minimize erosion and runoff onto
adjacent properties and public ways. At a minimum, Builder will install siltfencing
or wattle lots to prevent runoff siltfromflowingono the street or adjacent
properti es.
2. Utilities
a) Utility meters shall be reasonably screened from street view•, locations must be
specifiedonthe pi a ns s ubmi tted wi th the buIIdingpermitapplication.
b) Al I uti I i ty s ervi ce I i n es s ha 11 be underground. Uti I i ti es ma y I ocate necess a ry faci I ities
such as pedestals or boxes in the street right -of -way or utility & drainage
easements.
c) Any expenses for connecti on of the houseto uti I iti es s ha 11 be the res pons i bil ity of
Builder, includingany necessary I a ndsca pi ng or s i dewa I k, curb or pavement work,
but excepting reasonablecosts associated with sewer stub replacement discussed
in e) below f
d) Municipal Water. Municipal water is ava ilableatthe lotline along O( IL i.
There are no WAC charges.
e) Municipa I Sanitary Sewer. There are There are not SAC charges
levied by Metropolitan Council Environmental Services.
Home Detail, Inc.
1009 11811, Avenue NE
Blaine, MN. 55434
612 - 599 -4463
MvHomeDetai]Pme com
www.MyHomeDetail.com
July 21, 2016
City of Columbia Heights
Economic Development Authority
590 401h Avenue NE
Columbia Heights, MN. 55421
Dear Mr. Dahl:
We welcome the opportunity to submit a proposal to purchase 4606 Polk Street,
Columbia Heights. We are prepared to move quickly on the transaction and believe
we are well suited to do so. This letter of intent summarizes our offer to purchase.
Our offer of $16,000 is based on the amount Tollberg Homes paid for the lot at 4606
Polk Street, which to our knowledge was $22,000. Our understanding is that 4600
Polk Street required $6,000 of soil corrections and 4618 required $15,000 of soil
corrections. Based on these numbers and what appears to be a vein of bad dirt
running between these lots, we feel that soil corrections on 4606 Polk Street will be
in the neighborhood of $10,000, which in reality would mean we should be looking
at $12,000 for the lot. We feel $16,000 is a generous offer for the lot.
It is our understanding that the sewer and water is at the property line. If not, our
offer would be $10,000 for the lot. The lower offer would help make up for the cost
involved with street excavation, repairs, and hook up to main sewer and water lines.
The home we plan on building has an estimated value of $280,000.
Thank you for your consideration, we look forward to hearing from you
Sincerely,
Luke Magdik
Home Detail
612.599.4463
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