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HomeMy WebLinkAboutApr 4 2016 EDA Min ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF APRIL 4, 2016 IN CONFERENCE ROOM 1 The meeting was called to order at 6:30 pm by Gary Peterson. Members Present: Donna Schmitt, Gary Peterson, John Murzyn, Marlaine Szurek, Bobby Williams, Bruce Nawrocki ,and Gerry Herringer Staff Present: Walt Fehst, Joseph Hogeboom, Keith Dahl, Joseph Kloiber, and Shelley Hanson. PLEDGE OF ALLEGIANCE- RECITED CONSENT ITEMS 1.Approve the Minutes from March 7 and March 15, 2016 . 2.Approve the Financial Report and Payment of Bills for February 2016 on Resolution 2016-07. Questions by Members: Herringer asked what the payment to Carlson McCain was for. Dahl stated that is for finishing some of the environmental remediation work that was started in 2004. Motion by Nawrocki, seconded by Szurek, to waive the reading of Resolution 2016-07 there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Nawrocki , seconded by Szurek, to approve the consent agenda as presented. All ayes. MOTION PASSED. RESOLUTION NO. 2016-07 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for Month of February, 2016 and the Payment of the Bills for the Month of February, 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 April 4, 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 February, 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 4 day of April, 2016. Motion by: Nawrocki Seconded by: Szurek BUSINESS ITEM 1.Ratifying the Approval of a Second Amended and Restated Contract for Private Redevelopment with the City of Columbia Heights and Columbia Heights Leased Housing Associates I, LLP-Resolution 2016-08 Dahl stated that on October 12, 2015, the Economic Development Authority authorized the execution of the Second Amended and Restated Contract for Private Development at Huset Park with Columbia Heights Leased Housing Associates I, LLLP (Dominium). The contract was approved, contingent upon that no modifications affect the substance of the transaction. Before the contract was executed, Dominium proposed a modification to incorporate additional language, a new Section 3.5(b) relating to the refunding of the EDA’s outstanding Tax Increment Revenue Bond, series 2007. This additional language constitutes a modification to the substance of the transaction, which requires approval by the EDA and the City. EDA Minutes Page 3 April 4, 2016 Previously, during negotiations the City, the EDA and Dominium discussed the possibility of refunding the EDA’s Bonds, which were originally issued to finance the public infrastructure for the Huset Park development. The Bonds are secured by a first-priority pledge of tax increment from the TIF District. The EDA also issued a TIF Note to the original redeveloper, which has been assigned to Dominium. The TIF Note is also secured by tax increment, but on a subordinate basis to the Bonds. If the Bonds are refunded at a lower interest rate, less increment will be required to pay debt service on the Bonds, which will result in a greater amount of left- over increment available to pay the principal and interest on the TIF Note. At the time the EDA and City approved the Second Amended and Restated Contract for Private Redevelopment, the parties had not come to an agreement on the refunding of the Bonds, and therefore the refunding concept was not included in the contract. At the beginning of 2016, however, the Redeveloper expressed renewed interest in the refunding. The parties have negotiated a new Section 3.5(b) to the contract adding the following:  The EDA will issue refunding bonds to achieve debt service savings.  The Redeveloper will pay all costs associated with the issuance of the refunding bonds.  The Redeveloper will pay an administrative fee of $100,000 to the EDA, to be deposited into a redevelopment fund designated by the EDA and the City. Staff recommends ratifying the approval to the Second Amended and Restated Development Contract for Private Development between the Economic Development Authority, the City of Columbia Heights and Columbia Heights Leased Housing Associates I, LLLP. A copy of the Amended Contract was given to the members for review prior to the meeting and is on file. Questions from Members: Fehst asked how much was being re-financed. Kloiber stated that 2.475 million is being re- financed out of the original 2.9 million that began in 2007. Kloiber went on to say that because this bond is generating a lower interest amount, the administrative fee of $100,000 payable to the EDA was part of the negotiated agreement. Nawrocki asked what happens if the debt service is not paid. Fehst stated that it is not the City’s responsibility to make the payments. Nawrocki then asked how many years were left on the re- payment schedule. Hogeboom stated the original bonds were issued in 2007 for 20 years. So there is 11-12 years left. Nawrocki asked what the taxes would be once the building is finished if it wasn’t in the TIF District. Hogeboom said he would get Nawrocki that figure. Fehst reminded members that if the site had not been in a TIF District, redevelopment probably would never have happened since it enabled the City to qualify for grant funds to assist with the clean - up of the site. EDA Minutes Page 4 April 4, 2016 Kloiber said even if Dominium or Shafer Richardson weren’t involved, the re-financing of the bonds would still be on the table to lower the interest rate. Herringer asked if the time table for it to come off the TIF status remains the same. Kloiber said it did. Kloiber also explained to members how the City receives the funds and then the funds are applied to the “Pay as you Go” notes, which is in the City’s best interest overall. Schmitt asked when we get the $100,000 in administrative fees. Hogeboom stated at the time of the re-financing. Szurek asked when the ground breaking would be. Hogeboom stated they want to start mid- May. Motion by Szurek , seconded by Williams , to waive the reading of Resolution 2016-08, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Szurek , seconded byWilliams, to adopt Resolution 2016-08, Resolution Ratifying the Approval 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 for the “Redeveloper Parcels” at Huset Park Senior Living. All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2016-08 RESOLUTION RATIFYING APPROVAL 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 ("Board") of the Columbia Heights Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. The Authority, the City of Columbia Heights (the “City”), and Columbia Heights Leased Housing Associates I, LLLP (the “Developer”) have negotiated a Second Amended and Restated Contract for Private Redevelopment (the “Contract”) to allow for the redevelopment of certain property originally included in a Contract for Private Redevelopment between the City, Authority, and Shafer Richardson dated as of October 25, 2004, as previously amended and restated (the “Prior Contract”), regarding redevelopment of certain property within the City located in the area known as Huset Park (the “Redevelopment Property”). EDA Minutes Page 5 April 4, 2016 1.02. The Authority previously approved the Contract on October 12, 2015, subject to modifications that do not alter the substance of the transaction, and the Redeveloper has acquired the Redevelopment Property, but the Contract has not been fully executed. 1.03. The Authority, the City and the Redeveloper have proposed to modify Section 3.5 of the Contract to allow for the refunding of the Authority’s outstanding Tax Increment Revenue Bonds, Series 2007, to achieve debt service savings. This revision constitutes a modification that alters the substance of the transaction, and as such requires the approval of the Authority and City. 1.04. The Board has reviewed the Contract as proposed to be revised and finds that the execution thereof and performance of the Authority’s obligations thereunder are in the best interest of the City and its residents. Section 2. Authority Ratification of Approval; Further Proceedings. 2.01. The Contract 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 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, and to carry out, on behalf of the Authority its obligations thereunder. Approved by the Board of Commissioners of the Columbia Heights Economic Development th Authority this 4 day of April, 2016. President ATTEST: Secretary EDA Minutes Page 6 April 4, 2016 OTHER BUSINESS There was no other business to discuss. The meeting was adjourned at 7:00 pm. Respectfully submitted, Shelley Hanson, Secretary