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