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HomeMy WebLinkAbout20170103_EDA_PacketCH COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AGENDA January 3, 2017 6:30 pm I. Call to Order 2. Roll Call 3. Pledge of Allegiance City Hall Conference Room 1 590 401h Avenue NE Columbia Heights, MN 55421 CONSENT AGENDA 4. Approve minutes of November 7, 2016 S. Approve Financial Report and Payment of Bills for October and November 2017 - Resolution 2017 -01 Motion: Move to approve Consent Agenda as presented. BUSINESS ITEMS 6. Right -of- Reverter Execution Discussion for 4647 Polk Street NE, Columbia Heights, MN OTHER BUSINESS 7. Adjourn The next regular EDA meeting will be February 6th 2017 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE SPECIAL MEETING OF NOVEMBER 7, 2016 The meeting was called to order at 630 pm by Chair Gary Peterson Members Present: Donna Schmitt, John Muuzyn, Bruce Nawrocki , Gerry Herruuger, Bobby Williams, and Gary Peterson. Members Absent: Marlaine Szurek Staff Present: Walt Fehst and Joseph Hogeboom PLEDGE OF ALLEGIANCE- RECITED CONSENT ITEMS I. Approve the Minutes from October 24, 2016— Motion by Nawrocki, seconded by Williams, to approve the Minutes from October 24, 2016 as presented. All ayes. MOTION PASSED. BUSINESS ITEM 1. Second Amendment -ACCAP Purchase Agreement for City Acquisition of 4641 -43 Polk St- Resolution 2016 -32 Hogeboom explained that the Columbia Heights Economic Development Authority (EDA) Previously approved a First Amendment to the Purchase Agreement on September 6, 2016 to extend the closing date to October 31, 2016. However, due to unanticipated delays, ACCAP is requesting the closing date be extended again. For the EDA consideration tonight is a Second Amendment to the Purchase Agreement, which extends the closing for the sale of the Property to take place on or before December 30, 2016. ACCAP intends to close on the Property this year with the EDA and is confident that the closing will happen before 2017. Staff recommends the approval of Resolution 2016 -32, a resolution approving the Second Amendment of a Purchase Agreement that will extend the closing date of the Property to take place on or before December 30, 2016. Questions from Members Nawrocki inquired about what type of development staff anticipates going onto the property once the property is acquired. Hogeboom indicated that the decision will be up to the EDA, but that staff will likely reconm nd incorporating the property into the Single Family Residential Lot Sales Program and demolishing the existing structure. EDA Minutes Page 2 Nov. 7, 2016 Motion by Nawrocki, seconded by Muczyn, to waive the reading of Resolution 2016 -32, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Williams, seconded by Murzyn, to adopt Resolution 2016 -32, a resolution approving a Second Amendment of a Purchase Agreement between the Columbia Heights Economic Development Authority and Anoka County Con mwnity Action Program All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 2016-32 RESOLUTION APPROVING A SECOND AMENDMENT TO A PURCHASE AGREEMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC. BE IT RESOLVED BY the Board of Commissioners (`Board ') of the Cohunbia Heights Economic Development Authority (the "Authority') as follows: Section I. Recitals. 1.01. The Authority currently administers the Downtown CBD Redevelopment Project (the "Project') within the City of Columbia Heights (the "City ), pursuant to Minnesota Statutes, Sections 469.090 to 469.1082, as amended. 1.02. The Authority and Anoka County Comnnity Action Program, Inc. (the 'Seller) executed a Purchase Agreement, dated as of May 26, 2016 (the "Agreement'), providing for the conveyance by the Seller to the Authority of certain property within the Project and City legally described as follows: That part of Lot 23 lying north of the South 20 feet of the SD Lot 23 and Lot 24, Block 1, Sheffields 2nd Subdivision, County of Anoka, State of Minnesota (the "Property). 1.03. On August 31, 2016, the parties entered into a First Amendment to the Purchase Agreement (the "First Amendment') to extend the deadline for conveyance of the Property. 1.04. The parties have negotiated and propose to execute a Second Amendment to the Agreement (the "Second Amendment') to further extend the deadline for the conveyance of the Property. 2 EDA Minutes Page 3 Nov 7, 2016 Section 2. Second Amendment Approved. 2.01. The Second Amendment 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 Second Amendment 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 Second Amendment and any documents referenced therein requiring execution by the Authority, and to carry out, on behalf of the Authority, its obligations thereunder. 2.03. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution Approved by the Board of Commissioners of the Col unbia Heights Economic Development Authority this 7th day of November, 2016. ATTEST: President Secretary 3 EDA Minutes Page 4 Nov 7, 2016 SECOND AMENDMENT TO PURCHASE AGREEMENT This Second Amendment to Purchase Agreement ( "Amendment') is made this _ day of 2016 by and between Anoka County Community Action Program, Inc., a Minnesota nonprofit corporation (the "Seller') and the Columbia Heights Economic Development Authority, a Minnesota public body corporate and politic (the Buyer'). WHEREAS, the Seller and the Buyer entered into that certain Purchase Agreement dated as of May 26, 2016 (the "Agreement') providing for the conveyance by the Seller to the Buyer of certain property at 4641/4643 Polk Street located in the City of Columbia Heights Anoka County, Minnesota and legally described as follows: That part of Lot 23 lying north of the South 20 feet of the SD Lot 23 and Lot 24 Block 1 Sheffields 2nd Subdivision, County of Anoka, State of Minnesota (the "Property); and WHEREAS, on August 31, 2016, the parties entered into the Fast Amendrent to Purchase Agreement in order to extend the closing date to October 31, 2016 (the "First Amendment "); and WHEREAS, due to unanticipated delays, the parties have deternvned to fiuther extend the deadline for closing on the conveyance of the Property. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 1. Amendment to Paragraph 7 of the Agreement. Paragraph 7 of the Agreement is amended as follows: CLOSING DATE. The closing of the sale of the Property shall take place on or before December 30, 2016 unless otherwise mutwily agreed by the parties. The closing shall take place at Columbia Heights City Hall, located at: 590 401" Avenue NE in Columbia Heights, Minnesota or such other location as numlly agreed upon by the parties. 2. Miscellaneouus. Except as amended by this Amendment, the Agreement shall remain in full force and effect. (Remainder of this page intentionally left blank.) rd EDA Minutes Page 5 Nov 7, 2016 IN WITNESS WHEREOF, the parties have executed this Second Amendment to Purchase Agreement as of the date written above. SELLER ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC. By- Its: BUYER COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By: Its: President OTHER BUSINESS The meeting was adjourned at 635 pm Respectfully submitted, Joseph Hogeboom Secretary Its: Executive Director 5 RESOLUTION NO. 2017 -01 A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the Financial Statements for Month of October and November 2016 and the Payment of the Bills for the Month of October and November 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 WHEREAS, the financial statement for the month of October and November 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. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this day of 2017 Offered by: Seconded by: Roll Call: Gary L. Peterson, President Attest: Shelley Hanson, Secretary Resolution 2017 -01 6 m 0 0 0 v CD CD 0 CD r� D rot" O n room O h 0 O f3 v_ CD Ch mn O 0 � rollL O n c�D V CD O 0 T� rMPL m 0 0 0 v CD CD 0 CD r� D rot" O n room O h 0 O f3 v_ CD Ch —I m O 1l C7 O z m z X X m m m m M m 0 Z z z � v v c m C c C o M m c c r v v z m m m r r z z m m r p z m m D m � ic 3 m z M U) CA m m m m n n n n O O O O z z z z —I m O 1l C7 O z m z Gz 110 �m0 aG 0011 x'000 �r G2 'O m 4p m MWco H 4z mGGGm 0n rt 10 O aY ammx'OOO� 0 H11 H0 ar Y. O s % r b'H rtG Ha 7•• p'Y-Om k'7 G 0 PV C O DUI mN Um .N H: m0ko aam P.M rivm [sJ a m, K zHH 0 Y7C n% a0: : 0. b'a mam (0w z H » mczi zoo (D 10 rta• H m+rtm O.. m m % M H zmrt H\ mrt. a• HHHN. G 'd O % % Ok0 Mm •(D ry... •KK• 0 O �r 7 YC : HC)• :Y OmH . . . . . . . . . . O'O Ra0 . . . . . . . . �Y- N . . . . . . . . . . . m0Y ........ ... m % N3 N 00 .... 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R fD H F� xr (D o 0m C G1 x z 0 c w 0 N O a � 1ro � 1n io I y a 1 I I .I CH COLUMBIA HEIGHTS AGENDA SECTION I BUSINESS ITEMS ITEM NO. 6 MEETING DATE I JANUARY 3, 2017 CITY OF COLUMBIA HEIGHTS - ECONOMIC DEVELOPMENT AUTHORITY ITEM: Right -of- Reverter Execution Discussionfor4647 Polk Street NE DEPARTMENT: Economic Development Authority CITY MANAGER'S APPROVAL: BY /DATE: Keith M Dahl, December 8, 2017 1 BY /DATE: BACKGROUND: On August 28, 2014, the Columbia Heights Economic Development Authority (the "EDA ") entered into a Purchase and Redevelopment Agreement (the "Agreement ") between Steve and Katherine Pepple (the "Pepple's ") for a single - family, owner - occupied home to be constructed on 4647 Polk Street NE (the "Property"). The Agreement obligated the Pepple's to substantially complete construction by January 30, 2016 or the EDA would have the right to re -enter and take possession of the Property. At the time the EDA sold the Property to the Pepple's for $7,500, they indicated that their intentions were to ultimately sell their existing home and construct a new home on the Property. To date, the Pepple's have not substantiallyconstructed a single - family home on the Property. The City Building Official has reviewed two different sets of plans for the Pepple's proposed home; however no permits have been issued for construction and no plan review fees have been paid. Since construction has not been substantially completed, the EDA may retake the Property and pay the Pepple's the remaining balance of the purchase price after the EDA has reimbursed itself for all costs and expenses incurred in connection with the recapture, management, and resale of the Property. Staff sent out a letter to the Pepple's informing them of their default to the Agreement and the pending actions that may be taken by the EDA. On November 28, 2016, staff received the attached letter form the Pepple's requesting the EDA consider purchasing the Property back due to a financial hardship. For discussion tonight, Staff is seeking direction from the EDA on whether or not to proceed with the right -of- reverter to re -enter and take possession of the Property. And if the EDA does decide to re -enter and take possession of the Property, Tollberg Homes has communicated to Staff that they would be interested in purchasing the Property to build a single - family home specific tothe requirements of the Single Family Home Lot Sales Program. A copy of Tollberg Home's letter of interest is attached. STAFF RECOMMENDATION: Staff recommends excursing the EDA's legal right -of- reverter to reacquire the Property so that it may be added to the Single Family Home Lot Sales Program for sale to a developer. RECOMMENDED MOTION(S): Motion: Move to direct staff to proceed with excursing the right -of- reverter, pursuant to the Purchase and Redevelopment dated August 28, 2014 between the EDA and the Pepple's for the construction of a single - family, owner - occupied home at 4647 Polk Street NE. ATTACHMENTS: 1. Letter from Steve and Katherine Pepple (2 Pages) 2. Letter of Interest from Tollberg Homes (2 Pages) City of Columbia Heights - EDA Letter I November 28, 2016 City Of Columbia Heights 59040`^ Avenue NE Columbia Heights, Minnesota 55421 Re: 4647 Polk Street Dear Community Development Committee, I am writing this letter in regards to the property we purchased from you on August 28, 2014. At this time we bought the lot with good intentions to build anew home on this lot. We wanted to keep this lot in the family because it was my husband's Grandparents lot where they lived until they passed so we had an emotional tie to this property. We had all the intentions to build this home with us being the general contractor. We invested in a set of blueprints that cost us $2500.00 to have drawn and once we had the plans and we got rough estimates on costs for us to do this as we were looking at not going over $150.000. We had the lot surveyed for our plans at the cost of $1200.00 and we had a tree removed from the lot that was in the way of the build which was another $500.00. We started to explore financing and we paid $500.00 to the bank for an inspection of our plans and the lot for financing. Then we got a call from the bank that we were not expecting. The bank informed us that they would no longer let home owners be their own General Contractors and we would need to hire a licensed general contractor /home builder. We were quite surprised about this and found that this would add anywhere from $30,000 to $40,000. So now were looking at almost $200,000 to build the home that we had planned. So we stopped and thought about it and we decided that we could still do this build if we could keep it at $200,000 and we thought why not? The lot itself is the expensive part of the build and we already had that. So we found a builder and we hired him and gave him a deposit of $2000.00 to start getting contractors, materials and etc for this build. We paid $1000.00 for the lot taxes and continued to work with Tom the builder to get things in place. Then Tom called us and informed us that we could not use the existing sewer system and that we were looking at another $15,000 to $20,000 for this new system. Our hearts sank into our stomachs and at the same time we received a letter from my Steve's union that stated his company that he worked for had not paid our healthcare and other benefits and they were behind 2 months and we were responsible for the cost which was over $5000.00. The very next day Steve's paycheck got sent back insufficient funds and his work had cut his hours back to 2 days a week. At this moment Steve got physically sick and we were forced to make a decision that we had to stop the process. We emailed Tom and the bank and let them know of the circumstances and that we could not move forward with the build. We have not moved forward with the build and have decided f that we just can't at this time move forward in building a house that originally was going to be $150,000 and now could cost us well over $250.000. Steve's job is still very day to day. We would like to ask the city to purchase the land back from us and in hopes they could sell it to a builder that could build a home on it. We have invested close to $5700.00 in this lot and that is not including the purchase of the lot. We all the intentions of building a home but with our current situation we do not have the means to invest $250,000 into a new home. Thank you for considering our request and we look forward to working with you. Sincerely, Steve and Katherine Pepple IN J'y ,I TOLL ..Y November 30, 2016 Community Development Department 590 40th Avenue NE Columbia Heights, MNB 55421 RE: Proposal for Economic Development Administration 1 Lot on Polk St. NE 4647 Polk St. NE Tollberg Homes LLC is an Anoka builder specializing in the construction of homes from $189,000 to $499,000. Tollberg Homes is located at 1428 5,h Avenue, Anoka, MN 55303. Tollberg Homes builds approximately 50 homes each year. Tollberg Homes LLC is an award winning builder. Tollberg Homes has not only won the Peoples Choice Award in North Dakota in 2014, but has recently won a 2015 Reggie Award in Minnesota. We currently have models and are building in Blaine, Anoka, Crystal, Coon Rapids and Lino Lakes. If you would like to visit our models we certainly can provide addresses and lock box numbers. We have financial strength to close quickly. We could close within 30 days upon agreeing to terms and price. Tollberg Homes LLC is a specialist in building in inner communities. We would refer you to Mr. Erik Thorvig, Economic Development Manager in Anoka as a reference. Tollberg Homes also has just completed and sold 4 new homes this year on Polk Street. It is our intent to construct the home in Columbia Heights as quickly as possible. We already have a pipeline of buyers interested in this area and most likely will have the home sold prior to breaking ground. Ell It is Tollberg's intention to finish the complete upper and level levels to make compliance with the EDA guidelines. This would make it a 4 bedroom 2 bath home with 2 car garage. An estimated 1850 finished square feet. We thank you for the opportunity to offer a proposal on these lots and would request that if you have any questions , please feel free to contact the undersigned. Very truly yours, Wade Tollefson President Tollberg Homes LLC 763 - 205 -2037 A