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HomeMy WebLinkAboutMar 7 2016 EDA Min ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF MARCH 7, 2016 IN CONFERENCE ROOM 1 The meeting was called to order at 6:00 pm by Gary Peterson. Members Present: Bruce Nawrocki, Donna Schmitt, Gary Peterson, John Murzyn, Marlaine Szurek, Bobby Williams, and Gerry Herringer (arrived at 6:25 pm). Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, and Shelley Hanson. PLEDGE OF ALLEGIANCE- RECITED Hogeboom stated they had one item to add to the agenda in order to give members some information on an agenda item that will be discussed in their work session later tonight regarding the existing Library building. It will be addressed under Business Items. CONSENT ITEMS 1.Approve the Minutes from January 4, 2016 . 2.Approve the Financial Report and Payment of Bills for December 2015 and January 2016 on Resolution 2016-05. Questions by Members: Nawrocki questioned the figures on the December report, page 22, as they didn’t match up. Hogeboom said he found out that the totals are not the year end totals. He said the final transfers between funds 201 & 204 aren’t depicted on these reports. He said the final totals will be ready for the next meeting. He told members that last year they were under budget by $1,600 once the journal entries were made. Motion by Nawrocki , seconded by Schmitt , to waive the reading of Resolution 2016-05 there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki , seconded by Schmitt , to approve the consent agenda as presented. All ayes. MOTION PASSED. RESOLUTION NO. 2016-05 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for Months of December, 2015 and January, 2016 and the Payment of the Bills for the Months of December, 2015 and January, 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 EDA Minutes Page 2 March 7, 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 months of December, 2015 and January, 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. th Passed this 7 day of March, 2016. Motion by: Nawrocki Seconded by: Schmitt BUSINESS ITEM 1.Existing Library Building Kevin Hansen will be speaking to the City Council at the work session regarding plans for the existing Library Building. Hansen had Dahl do a preliminary market analysis of the existing building to obtain information on the possible market value and the amount of tax that could be expected if the building is sold. Dahl stated that he worked with Core Commercial Company that gave him a (BOV) Broker’s Opinion of Value for the site. He explained that Core Commercial classified the building as a “Class C” structure which means it is an older building that will require extensive renovations such as new windows, a sprinkler system, and modifications to make it ADA accessible. Dahl told members they felt the estimated value of the building based on comparable sales would be around $600,000. They thought it could be listed for $650,000 and would sell fairly quickly. Dahl said he contacted the County and found out that based on that value and if it were used as office space it would generate approximately $25,000/year in taxes. EDA Minutes Page 3 March 8, 2016 Schmitt asked how much the funeral home across the street from the Library sold for. Hogeboom stated he would look up that information and report back to the members in the green sheet. The sale just took place in January so staff has not received that information yet from Anoka County. Nawrocki asked if this preliminary value included the extra lot across the street where the community garden is th located (828 40 Ave). Dahl told members that it was not included in the estimate he had done. Nawrocki felt the amount of parking on the Library site is insufficient and that the extra lot could be part of the overall package. He went on to tell members that this building was originally built as a bomb shelter and that Federal funds were used. He asked whether there would be any restrictions on the sale of the building based on the funding source when it was built. Staff will research this, but since it was so long ago, they doubted it. Schmitt said research would also have to be done to see if there are any strings attached to the sale of the extra lot since it was purchased with CDBG funds. Hogeboom said there are certain objectives that must be met, but he has done some research on this and he is confident the conditions can be met. Nawrocki stated he thought there should be a “For Sale” sign up now and he would suggest it be listed for $700,000. 2.Purchase and Redevelopment Agreements with Tollberg Homes LLC-Resolution 2016-06 Dahl explained that in September 2015, the Economic Development Authority (EDA) established the Single Family Home Lot Sales Program. At the meeting of January 2016, the EDA approved resolution 2016-03, authorizing the approval of a purchase and redevelopment agreement with Tollberg Homes for six residential lots. As of February 2016, Tollberg Homes has purchased three of the six residential lots at $22,500 per lot. However, due to unexpected sewer and water improvements to the remaining three residential lots, Tollberg Homes has proposed a $4,000 purchase price reduction per lot. Tollberg Homes is now offering a purchase price of $18,500 per lot for the remaining three residential lots listed as follows: 4636 Polk Street NE PID 25-30-24-33-0025 4648 Polk Street NE PID 25-30-24-33-0023 4618 Polk Street NE PID 25-30-24-33-0028 Listing prices for the aforementioned lots were established at the Estimated Market Value for the individual properties, ranging from $40,200 to $50,600. 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 area, are of lower value than other properties throughout the City. Tollberg Homes offer of $18,500 still exceeds the estimated property value given by a local real estate agent. Tollberg Homes has included a proposal that describes the company’s portfolio and plans for the lots. Staff has reached out to other communities in which Tollberg has built homes, and has received very positive feedback about the quality of Tollberg Homes’ product, as well as the company’s professionalism. EDA Minutes Page 4 January 4, 2016 Dahl told members that he had checked with Public Works and Contractors to verify the cost of doing the extra Sewer and Water work that Tollberg claims would be required for these three lots. He said the $4,000/lot expense is a reasonable amount to use. Therefore, staff recommends approval of Resolution 2016-06, authorizing approval of the Purchase and Redevelopment Agreements with Tollberg Homes, LLC for the acquisition of the following properties: 4636 Polk Street NE PID 25-30-24-33-0025 REMOVED- 4648 Polk Street NE PID 25-30-24-33-0023-No extra work reqd. 4618 Polk Street NE PID 25-30-24-33-0028 Questions from members: Nawrocki strongly disagreed with staff’s recommendation and does not approve lowering the price of the lots any further than what was already approved at $22,500/lot. Peterson asked if we had other interested parties in these lots. Hogeboom stated that this information was posted on the Web site and notices were sent directly to 12 companies who had previously expressed interest in them. Tollberg Homes was the only one to submit a formal offer. Hogeboom stated that based on feedback he had received, other lots throughout the City would sell for more, closer to the estimated market values, but in the Heritage Heights area, sales prices tend to be less. Peterson thought $4,000/lot reduction was fair, if in fact, extra sewer and water work is necessary. Murzyn stated he thought the water and sewer disconnects on the properties the City bought were done correctly and would not need the extra work as claimed. He told staff to check the paperwork that was attached to the Purchase Orders and Payment Vouchers for detailed information on each property to determine how they were done, and if done correctly, a reduction in price would not be warranted. Peterson suggested making the motion approving a reduction contingent upon confirmation of whether the sewer and water work was not done as it should have been. Motion by Williams , seconded by Murzyn, to waive the reading of Resolution 2016-06, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams , seconded by Murzyn, to adopt Resolution 2016-06, Resolution Approving Purchase and Redevelopment Agreements with Tollberg Homes, LLC for the acquisition of certain residential lots for a price of $18,500/lot contingent on whether they have to do extra sewer and water work as determined by City staff. Roll call: ayes-Herringer, Williams, Szurek, Schmitt, Murzyn, and Peterson. Nay-Nawrocki. MOTION PASSED. EDA Minutes Page 5 March 7, 2016 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-06 RESOLUTION APPROVING REVISED PURCHASE AND REDEVELOPMENT AGREEMENTS WITH TOLLBERG HOMES, LLC. BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority has previously adopted a program called the Single Family Home Lot Sales Program (the “Program”), and has adopted guidelines in connection with the Program (the “Guidelines”). 1.02. The Authority has received an offer from Tollberg Homes, LLC (the “Buyer”) to purchase certain properties included in the Program (the “Property”), described as attached hereto as Exhibit A, and the parties have negotiated Purchase and Redevelopment Agreements (the “Agreements”) which provide for the conveyance of the Property to the Buyer and the construction by the Buyer of single-family homes on the Property, all pursuant to the Guidelines. 1.03. On October 21, 2015, the Planning Commission of the City reviewed the proposed conveyance of the Property pursuant to the Program and found that such conveyance is consistent with the City’s comprehensive plan. 1.04. On January 4, 2016, the Authority conducted a duly noticed public hearing regarding the conveyance of the Property to the Buyer, at which all interested parties were given an opportunity to be heard, and approved the Agreements. 1.05. Subsequent to Authority approval of the Agreements, the Buyer requested and the Authority agreed to a reduction in the purchase price of the Property, due to higher-than-anticipated Buyer expenses related to the water and sewer connections of the Property to City water and sewer mains. The parties agreed to amend the Agreements to reflect the reduced purchase price. 1.06. The Board has reviewed the Agreements as so amended (the “Amended Agreements”) and finds that the execution thereof and performance of the Authority's obligations thereunder, including the conveyance of the Property to the Buyer, are consistent with the Guidelines and in the best interest of the City and its residents. EDA Minutes Page 6 March 7, 2016 Section 2. Approval and Authorization of Amended Agreements and Conveyance 2.01. The Amended Agreements as presented to the Board and the conveyance of the Property provided for therein are 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 Amended Agreements by such officials shall be conclusive evidence of approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Amended Agreements as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Amended Agreements, and any deeds or other documents necessary to convey the Property to the Buyer, all as described in the Amended Agreements. Section 3. Effective Date. This resolution shall be effective upon approval. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority this 7th day of March, 2016. President ATTEST: Secretary 4648 Polk Street was removed as the extra sewer and water work was not necessary. EXHIBIT A Property ADDRESS LEGAL DESCRIPTION PID 4636 Polk Street NE Lot 5, except the North 35 feet thereof, all of Lot 6, 25-30-24-33-0025 and the North ½ of Lot 7, in Block 2, Sheffield’s Second Subdivision, Anoka County, Minnesota [Torrens] 4618 Polk Street NE Lot 11, and the North 10 feet of Lot 12, Block 2, 25-30-24-33-0028 Sheffield’s Second Subdivision, Anoka County, Minnesota [Torrens] EDA Minutes Page 7 March 7, 2016 OTHER BUSINESS 1.Blue Cross Blue Shield Active Place Demonstration Grant Dahl told members that staff has applied for the Active Places Demonstration Projects Grant offered through Blue Cross Blue Shield (BCBS) requesting $20,000. The demonstration project must support changes to policy or to the physical environment. These changes should focus on encouraging people to participate in physical activity. Staff proposed, in conjunction with the opening of the new library, temporary beautification improvements along Central Avenue NE between 39th Avenue and Gould Avenue. The temporary beautification improvements would incorporate a mural painted on the street at the intersection of Gould Ave. and Central Ave. NE, a mural painted on the South wall of the Heights Theater, and wood structure planter boxes sprouting edible vegetables lined along the East sidewalk of Central Ave. NE. Our hope is art will catch the eye, stimulate the mind, and create social responsibility shaping the communities sense of place, which will directly increase physical activity through traffic calming controls. All of the aforementioned beautification improvements would be entirely funded by the amount that is awarded to Columbia Heights from the BCBS grant. Dahl said he got a quote from an artist for a 330 sf mural for $16,000. He is hoping the mural would not have to be removed at the end of the season and yet qualifies for the grant funds. The goal of the temporary BCBS grant is to inspire change long-term to create a safe Central Avenue Business District for both pedestrians and cyclists, easily accessible for residents, and maintains a sense of place and pride within the community. It is meant to encourage the City Council and residents to support future funding for improvements similar to these temporary th ones. We will be notified on March 30 if we will be awarded the grant funds. Szurek hoped that if that kind of money is spent on the mural that it would not have to be removed. She wants staff to check further into that and any other options that the funds could be used for. She stated that the mural would not be very visible due to the placement of the Library building so close to Central. Dahl stated that the mural would only be 330 sf and would be placed close to Central Avenue. It will also be visible to Library patrons from inside the building. EDA Minutes Page 8 March 7, 2016 2.Single Family Home Lot Sales Program-ACCAP Anoka County Community Action Program (ACCAP) reached out to the City at the end of January about possible acquisition of 4641/43 Polk Street, a duplex owned by ACCAP. Previously in 2015, the City had intentions of purchasing the property for $75,000; however, both parties shared different views on how to proceed. 4641/43 Polk Street is bound by a 30 year mortgage that matures in 2028 with the Minnesota Housing Finance Agency. ACCAP believed, at this time, the only way to persuade the Minnesota Housing Financing Agency to release the property from financial commitment was to have the City condemn the property. After staff review, the property was not found to be condemnable by City standards, which resulted in no further action from both parties. If the City is still interested in acquiring the property, ACCAP is requesting the City to submit an expression of interest for the acquisition of 4641/43 Polk Street. In which case, ACCAP will then approach the Minnesota Housing Finance Agency to persuade them to release the property from financial commitment. Staff recommends, if the City is still interested in acquisition of 4641/43 Polk Street, to submit a letter to ACCAP outlining the City’s interest in the property and to offer no more than $75,000 for the property. Questions from Members Members said they may still be interested in obtaining the property, but will need to discuss it at the next meeting since time constraints didn’t allow enough time to discuss at this meeting. Hogeboom stated it was not time sensitive and can wait until the next meeting. Hogeboom reminded members that there will be a special goal setting meeting on Tuesday, th March 15 at 4 pm. at the Public Safety Building, and that the next regular meeting will be th Monday, April 4, 2016. Nawrocki stated that Coffee with a Cop is scheduled for April 4 also. Fehst and Peterson said that EDA meetings and work sessions are regularly scheduled for the first Monday of each month, so he will have to decide which meetings to attend. The meeting was adjourned at 6:45 pm. Respectfully submitted, Shelley Hanson Secretary