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HomeMy WebLinkAboutAug 1 2016 EDA Min ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF AUGUST 1, 2016 The meeting was called to order at 6:30 pm by Chair Gary Peterson Members Present: Donna Schmitt, John Murzyn, Marlaine Szurek,, Bruce Nawrocki , Bobby Williams , and Gary Peterson. Members Absent: 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 June 6, June 13, and July 21, 2016 – 2.Approve the Financial Report and Payment of Bills for May and June 2016 on Resolution 2016-18. Questions by Members: No questions or comments. Motion by Szurek , seconded by Nawrocki, to waive the reading of Resolution 2016-18 there being an ample amount of copies available to the public. All ayes. MOTION PASSED. Motion by Szurek, seconded by Nawrocki , to approve the Minutes and Financial Report and Payment of Bills for May and June as presented. All ayes. MOTION PASSED. RESOLUTION NO. 2016-18 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for Months of May and June, 2016 and the Payment of the Bills for the Months 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 EDA Minutes Page 2 August 1, 2016 WHEREAS, the financial statements for the months of May and June, 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 1st day of August, 2016. Motion by: Szurek Seconded by: Nawrocki BUSINESS ITEM 1.Housing and Redevelopment Authority Levy Budget – Resolution 2016-19 and 2.Economic Development Authority Levy Budget – Resolution 2016-20 Hogeboom stated that 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 HRA levy. The Department’s operating budget is relatively straightforward due to the size of the department. EDA Minutes Page 3 August 1, 2016 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 recommends approval of the Levies as presented. Questions/comments from members: Kloiber stated that the Resolutions are approving a 2017 Budget amount of $297,018 and a Levy amount of $84,000. Kloiber said this is the best time to bring up concerns, although the City Council members may also do so during the Budget Review this fall. Nawrocki asked how many people are currently employed in the Dept. now. Hogeboom stated that the staff consists of 6 people, plus one Intern at the present time. This returns staff to the same level it was at in 2009 before the recession. He explained that the Community Development Secretary is currently working ½ time in this Dept. and ½ time for Elections. By approving the proposed budget, this position would become a full time Community Development position beginning in January 2017. Nawrocki was opposed to making this position full time. He felt it should be kept part time as originally proposed and approved. Schmitt asked if a Building Inspection Intern would be needed next summer also, as that would impact the proposed budget decision. Hogeboom stated that would depend on the work load next summer. He explained that construction is busier in the summer months and planning tends to be busier in the winter months. Hogeboom told members that there are a significant amount of projects in the horizon. He said Hyvee officially made application for their Site Plan approval, the developer of the Stinson Blvd site is bringing revised plans to consider, White Castle is under construction, and the developer is th still working on a plan for the 47 and Central Avenue site. These projects in addition to the Dominium project will keep staff busy for the next few years at least. EDA Minutes Page 4 August 1, 2016 Members were very excited that Hyvee has finally submitted plans. Hogeboom said the initial plan indicates the grocery store, a restaurant with a bar, and possibly a medical clinic. The gas station component will be placed further up Central Avenue as this site will not accommodate it. He said they plan on terracing down the slope along Central Avenue to make it more gradual and more visible. The Site Plan will go before the Planning & Zoning Commission in September and the site work will start this fall. Motion by Williams, seconded by Szurek , to waive the reading of Resolutions 2016-19 and 2016- 20, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Szurek, 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 by Nawrocki, to amend the proposed budget to take out the Secretary II position. The motion died for lack of a second. Roll Call vote on the original motion: All ayes. MOTION PASSED. Motion by Williams, seconded by Szurek , 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. Roll Call: All ayes. MOTION PASSED. 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 EDA Minutes Page 5 August 1, 2016 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 Minutes Page 6 August 1, 2016 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. st APPROVED THIS 1 day of August 2016. MOTION BY: Williams SECONDED BY: Szurek Attest by: ___________________________ ____________________________ Walter R. Fehst, Executive Director Gary L. Peterson, President EDA Minutes Page 7 August 1, 2016 3.Revised Single Family Home Lot Sales Program- Resolution 2016-21 Dahl stated that 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. The revised Single Family Home Lot Sales Program and the Purchase and Redevelopment Agreement documents were enclosed in the agenda packets. Changes are noted on both documents by a strikethrough 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 deposit being non-refundable to cover the cost of professional service fees for drafting lot specific Purchase and Redevelopment Agreements and closing cost preparation. Staff recommends adopting Resolution 2016-21, a resolution revising the guidelines for conveyance. Questions/Comments: Williams asked if the Demolition Contractor had been contacted to see if we can back charge him for failing to do the proper compaction. Dahl said he had located the contracts and that several contractors were hired to do the demolitions. He stated that the sites were supposed to be compacted to a certain level and they evidently were not. He said the question now is whether it is economically feasible to go after them, and staff will have a discussion with the City Attorney regarding this. EDA Minutes Page 8 August 1, 2016 Schmitt asked if the lots were large enough to warrant compacting the soils since some of them were less than the 50 ft minimum. Hogeboom said the majority of the lots in the Sheffield area did meet the minimum width requirements. Peterson asked why the soil that was being excavated for the house/foundation couldn’t be used to compact the site. It needs to be dug out anyways, so he found it hard to believe that they would actually need more soil. Magdik told members that at 4618 Polk Street, Tollberg had to go much deeper than planned before hitting good soil so the foundation could be installed. And he said that at 4600 Polk St, they had to bring in extra soil in order to build on the site. Motion by Murzyn , seconded byWilliams, to waive the reading of Resolution 2016-21, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Murzyn, seconded by Williams, to adopt Resolution 2016-21, a resolution approving the revised guidelines for conveyance of certain lots owned by the Economic Development Authority. All ayes. MOTION PASSED. 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”). EDA Minutes Page 9 August 1, 2016 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; Further 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 1st day of August, 2016. President ATTEST: Secretary EXHBIT A Subject Parcels ADDRESS LEGAL DESCRIPTION PID 4606 Polk Street NE Lot 13, except the North ½, the North 30 feet of Lot 14, 25-30-24-33-0030 Block 2, Sheffield’s Second Subdivision, Anoka County, Minnesota [Torrens] 4636 Polk Street NE* Lot 5, except the North 35 feet thereof, all of Lot 6, and the 25-30-24-33-0025 North ½ of Lot 7, in Block 2, Sheffield’s Second Subdivision, Anoka County, Minnesota [Torrens] 4641 Tyler Street NE Lot 25 and the South 20 feet of Lot 26, Block 2, Sheffield’s 25-30-24-33-0038 Second Subdivision, Anoka County, Minnesota [Torrens] 4600 Polk Street NE* Lot 14, except the North 30 feet thereof, and Lot 15, Block 25-30-24-33-0031 2, Sheffield’s Second Subdivision, Anoka County, Minnesota [Torrens] 4648 Polk Street NE* South ½ of Lot 2, and all of Lot 3, Block 2, Sheffield’s 25-30-24-33-0023 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] * Sold to qualified contractor, no longer available. EDA Minutes Page 10 August 1, 2016 4.Single Family Home Lot Sales Program Concept Application Approval for 4606 Polk Street 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. EDA Minutes Page 11 August 1, 2016 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 is looking to the Columbia Heights Economic Development Authority to decide whether or not to approve Home Detail’s concept application. The decision tonight is not to actually approve the sale. That will be brought before the EDA at the September meeting once a Purchase & Redevelopment Agreement and earnest money check is actually submitted. Question/comments: Szurek asked if the new homeowners moved in prior to everything being completed at 4631 Pierce St. Dahl explained that they did move in under a “Temporary Certificate of Occupancy”, but that the outstanding items still have not been completed. Dahl said the City of Fridley also had similar issues with the houses he built in their City. Some exterior items have taken as long as two years to complete and that the City has had to take legal action before they were addressed. Peterson questioned why the property ownership was transferred prior to construction. Magdik explained that he prefers to do a one-time close process, that way the homeowner is the one on the hook from the beginning. The owner obtains his own construction loan and becomes the General Contractor. This way it is not in the builder’s name, and he is not responsible for the home. He told members he does this because the owners he has been working with have minimal down payments, and he doesn’t want to get stuck owning the home. Magdik also addressed the landscaping and exterior work that has been an issue in Fridley. He admitted that he still has work left on those properties and blamed it on his sider being too busy to finish the work. EDA Minutes Page 12 August 1, 2016 Dahl said that it has come to his attention that our Purchase and Redevelopment Agreement requires a Certificate of Completion from the City be filed with Anoka County, in addition to the Certificate of Occupancy being issued. He said staff will be seeing to it that this is done on all new homes going forward under this program. Motion by Williams , seconded by Szurek, to approve the concept application submitted by Home Detail for the property located at 4606 Polk Street NE, Columbia Heights, MN 55421. All ayes. MOTION PASSED. Motion by Williams, seconded by Szurek, 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. All ayes. MOTION PASSED. The meeting was adjourned at 7:18 pm. Respectfully submitted, Shelley Hanson Secretary