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HomeMy WebLinkAboutJune 6 2016 EDA Min 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. MOTION PASSED. Motion by Szurek , seconded by Murzyn, to approve the Minutes and Financial Report and Payment of Bills for April as presented. All ayes. MOTION PASSED. 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 1 479194v1 CL205-3 EDA Minutes Page 2 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. 2 479194v1 CL205-3 EDA Minutes Page 3 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 th considered at the June 13 special meeting. 3 479194v1 CL205-3 EDA Minutes Page 4 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 41st Ave. PID: 35-30-24-14-0151 837 41st Ave. PID: 35-30-24-14-0155 894 42nd Ave. PID: 35-30-24-14-0157 4301 Quincy St. PID: 35-30-24-14-0159 839 41st Ave. PID: 35-30-24-14-0160 828 40th Ave. PID: 35-30-24-41-0114 1309 Circle Terrace Blvd. PID: 36-30-24-24-0025 Dahl told members that the first 5 properties are part of the Public Safety Site, and therefore it th makes sense to have it in the City’s name to remain tax exempt. The lot at 828 40 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: th Schmitt asked if the 828 40 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. 4 479194v1 CL205-3 EDA Minutes Page 5 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. MOTION PASSED. 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. MOTION PASSED. 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 5 479194v1 CL205-3 EDA Minutes Page 6 June 6, 2016 EXHIBIT A (Legal Descriptions were corrected from those in agenda) Property Public safety facility: nd Lot 1, Block 1, Northwestern 2 Addition, Anoka County, Minnesota nd Outlots A, C, E, and F, Northwestern 2 Addition, Anoka County, Minnesota st 825 41 Avenue, PID No. 35-30-24-14-0151 st 837 41 Avenue, PID No. 35-30-24-14-0155 nd 894 42 Avenue, PID No. 35-30-24-14-0157 4301 Quincy Street, PID No. 35-30-24-14-0159 st 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 th 828 40 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 Page 7 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. Single-Family Permits Total Rental Permits Issued Issued Percentage of Single-Family Rental Properties 2008 668 444 66.47% 8.16% 2009 721 483 66.99% 8.88% 2010 761 515 67.67% 9.47% 2011 864 572 66.20% 10.52% 2012 872 627 71.90% 11.53% 2013 939 610 64.96% 11.21% 2014 977 569 58.24% 10.46% 2015 971 503 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 Page 8 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 Page 9 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 problem. 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