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HomeMy WebLinkAboutAug 7, 2017 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF AUGUST 7, 2017 The meeting was called to order at 6:40 pm by President Marlaine Szurek. Members Present: Murzyn, Herringer, Schmitt, Novitsky, Buesgens, and Szurek Members Absent: Bobby Williams Staff Present: Keith Dahl, Joseph Hogeboom, and Shelley Hanson (Assistant Secretary) Also present: Martha Ingram--Attorney, and James Lehnhoff--Financial Consultant PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA 1. Approve minutes of July 10, 2017 2. Approve Financial Report and Payment of Bills for June, 2017 – Resolution 2017-22 Questions from members: Herringer again asked staff about the payment on last month’s report to Aisling Fitness. Dahl said he confirmed that it was a refund of the escrow funds they had deposited with the City for the Planet Fitness Project. Dahl was asked what the payment to Carlson McCain Inc was for. Dahl said it was for ground water testing for Huset Park area. He explained that the City has had to monitor the ground water for a period of time due to some contamination in the area. He said the levels are the same as they were in 2005. We have turned over the testing results to the State as required and they will determine if any further action is necessary. Motion by Schmitt, seconded by Herringer, to approve the Minutes of July 10, 2017, and the Financial Report and Payment of Bills for June, 2017 as presented. All ayes. MOTION PASSED. EDA Minutes Page 2 August 7, 2017 RESOLUTIONNO.2017-22 AResolution of theEconomic Development Authorityof Columbia Heights, Minnesota,Approving the Financial Statements for Month ofJune 2017and the Payment of the Bills for the Month of June 2017. 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 resolutionand enter the resolution in its records; and WHEREAS,the financial statement for themonthofJune 2017has 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 RESOLVEDby 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 RESOLVEDthe financial statements are acknowledged and received and the check historyas presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVEDthis resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. ORDER OFECONOMIC DEVELOPMENT AUTHORITY Passed this __7th____ dayof ___August_____________, 2017 Offered by: Schmitt Seconded by: Herringer Roll Call: All ayes VicePresident Attest: EDA Minutes Page 3 August 7, 2017 BUSINESS ITEMS 1. Approve 47th and Grand Ave Contract for Private Redevelopment Dahl reminded members that on July 10, 2017, the Columbia Heights Economic Development Authority (the “EDA”), as well as the City Council (the “Council”) of the City of Columbia Heights (the “City”) approved the establishment of the 47th and Grand tax increment financing (“commonly referred to as TIF”) district, and adopted the TIF plan for said TIF district. Therefore, pursuant to State Statute, Sections 469.174 to 469.1794 the EDA is authorized to undertake and provide TIF assistance to facilitate redevelopment within the 47th and Grand TIF district. Originally, Dominium requested TIF assistance in the amount of $2.977 million over 20 years to offset qualified costs related to the development of a proposed affordable multi-family, workforce housing project (the “Proposed Development”) on the corner of 47th and Grand Avenue. However, neither staff nor Ehlers determined that that amount of TIF assistance would be necessary for the Proposed Development to become financially feasible. Based on analyses conducted by Ehlers, TIF assistance in the principal amount of $1,482,000 over 12 years would be substantially sufficient for the Proposed Development to become financially feasible. Attached for consideration is the proposed Contract for Private Redevelopment (the “Agreement”) in which TIF assistance would be provided to Dominium for the Proposed Development. If approved, the Agreement does not in any way constitute an action taken by the City in regards to the conformity of the Proposed Development to the zoning code of the City. Rather, the Agreement constitutes a financial obligation of the EDA to reimburse Dominium for a portion of qualified costs related to land acquisition, soil correction, site preparation, and public improvements of the Proposed Development. Thus, the Proposed Development will still be subject to the Site Plan Review approval process set forth by the zoning code of the City. EDA Attorney Martha Ingram and Financial Consultant James Lehnhoff were present at the meeting to address any questions or concerns EDA Commission Members had regarding the proposed Agreement. Staff recommends approval of Resolution 2017-23 as presented. Hogeboom reported that Dominium submitted plans today for consideration at the September Planning & Zoning/City Council meetings. Questions from Members: Szurek asked if the twelve year timeframe was firm and if it would be a “pay as you go” arrangement. Dahl said yes. Herringer asked if 100% of the residents would meet the work force income level. Could it be less than that percentage, for example, 60% work force and 40% market rate. Owen Metz from Dominium said you could have a mix but it wouldn’t be financially feasible for them to build. He explained that this is a Section 42 Affordable Housing Project. This means tax credits are provided up front to help build an affordable housing building. So the more units that qualify as work force income qualified, the more tax credits they are eligible for. To qualify for this type of housing the residents must meet 60% of the median income. Metz said this means the residents must have an income of $25,000-$38,000/year. He said these projects usually attract people who work in the service industry. The residents are responsible for paying their own rent. EDA Minutes Page 4 August 7, 2017 Metz went on to explain that this differs from the Section 8 program whereby residents only need to meet 30% of the median income to qualify. Under Section 8, the federal government subsidizes rent payments by giving housing vouchers to cover the rent payments for those on the program. Szurek asked if Section 8 vouchers could be used in this building. Metz said he didn’t think the one or two bedroom units would be covered by a Section 8 voucher, but vouchers for the 3 BR units could possibly be used. He said the rent levels would be such that Section 8 vouchers wouldn’t work for the 1-2 BR units. Metz said rents typically run $1,000/month for 1 BR, $1,200 for 2 BR, and $1,350 for 3 BR units. Therefore, they are for moderate income households. He assured members that anyone living in the building is also screened and subject to strict background checks. Szurek stated that Council members and residents who have attended the informational meetings were never told that Section 8 vouchers could possibly be used in these buildings. She asked how many of the units would be 3 BR. Metz told her that 30 units would be 3 bedroom units. Schmitt stated that the Schmitt Brewery was turned into this type of housing. She knows from personal experience that there are strict requirements in order to qualify to rent in a building such as this. Even those who meet the income requirement are sometimes turned down because they don’t meet the employment requirements. Residency is not automatic, even if they have enough income or just because they have a voucher. Herringer questioned the market values stated in the Development Agreement. Martha Ingram stated that one value was for a partial completion as of January 2nd, and the other figure was after the final completion for the following January 2nd. Since the start date and timeframe were fluid when the agreement was drafted it was an estimate arrived at based on a conversation with the County Assessor that could be used to establish the TIF funding. Szurek asked how they intended to meet the parking requirements. Dahl said that issue would be discussed at the Planning & Zoning meeting as part of the Site Plan approval process. He reminded members that the matter before the Board is the approval of the Contract for Development and financing so they can move forward with the rest of the approval process. Hogeboom asked Ingram if approval of this document was contingent upon the Site Plan and Construction Plans being approved at a later time. Ingram stated that even if the document being considered tonight is approved, it is contingent upon the rest being approved also, under Article 4, Section 2 of the Development Agreement. Schmitt asked Metz if he was aware that the City is not guaranteeing the environmental conditions regarding the site. She said a lot of street sweeping and plowing debris has been pushed onto the property over the years. He said he was aware of that and is not overly concerned. Schmitt then asked if he has been in contact with the Watershed District as it has changed. He said Dominium is aware of that also. Motion by Herringer, seconded by Buesgens, to waive the reading of Resolution 2017-23, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Buesgens, to adopt Resolution 2017-23, a resolution approving the Contract for Private Redevelopment with Columbia Heights Leased Housing Associates III, LLLP and awarding the sale of, and providing the form, terms, and covenants and directions for the issuance of its tax increment revenue note, series 20 __ pursuant to the Contract. All ayes. MOTION PASSED. EDA Minutes Page 5 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2017-23 RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH COLUMBIA HEIGHTS LEASED HOUSING ASSOCIATES III, LLLP AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 20__ PURSUANT TO THE CONTRACT BE IT RESOLVED BY the Board of Commissioners (“Board”) of the Columbia Heights Economic Development Authority, Columbia Heights, Minnesota (the “Authority”) as follows: Section 1. Authorization; Award of Sale. 1.01. Authorization. The Authority and the City of Columbia Heights have approved the establishment of its 47th and Grand Tax Increment Financing District (the “TIF District”) within the Downtown Central Business Redevelopment Project (“Project”), and have adopted a tax increment financing plan for the purpose of financing certain improvements within the Project. Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and sell its bonds for the purpose of financing a portion of the public redevelopment costs of the Project. Such bonds are payable from all or any portion of revenues derived from the TIF District and pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best interests of the Authority that it issue and sell its Tax Increment Revenue Note, Series 20__ (the “Note”) for the purpose of financing certain public redevelopment costs of the Project. 1.02. Approval of Agreement; Issuance, Sale, and Terms of the Note. (a) The Contract for Private Redevelopment (the “Agreement”) between the Authority and Columbia Heights Leased Housing Associates III, LLLP (the “Owner”), 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 Agreement by such officials shall be conclusive evidence of approval. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Agreement, all as described in the Agreement. (b) The Authority hereby authorizes the President and Executive Director to issue the Note in accordance with the Agreement. All capitalized terms in this resolution have the meaning provided in the Agreement unless the context requires otherwise. (c) The Note shall be issued in the maximum aggregate principal amount of $1,482,000 to the Owner in consideration of certain eligible costs incurred by the Owner under the Agreement, shall be dated the date of delivery thereof, and shall bear interest at the lesser of Owner’s actual mortgage financing rate or 5.0%, from the date of issue per annum to the earlier of maturity or prepayment. The Note will be issued in the principal amount of Public Redevelopment Costs submitted and approved in accordance with Section 3.3 of the Agreement. The Note is secured by Available Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates to the Executive Director the determination of the date on which the Note is to be delivered, in accordance with the Agreement. Section 2. Form of Note. The Note shall be in substantially the following form, with the blanks to be properly filled in and the principal and interest rate amounts adjusted as of the date of issue: (The remainder of this page is intentionally blank.) EDA Minutes Page 6 Aug 7, 2017 UNITED STATE OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $_____________ TAX INCREMENT REVENUE NOTE SERIES 20__ Date Rate of Original Issue __% ___________, 20__ The Columbia Heights Economic Development Authority (the “Authority”) for value received, certifies that it is indebted and hereby promises to pay to Columbia Heights Leased Housing Associates III, LLLP or registered assigns (the “Owner”), the principal sum of $__________ and to pay interest thereon at the rate of ____ percent (___%) per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Contract for Private Redevelopment between the Authority and the Owner, dated as of ____________, 2017 (the “Agreement”), unless the context requires otherwise. 1. Payments. Principal and interest (“Payments”) shall be paid on August 1, 20__ and each February 1 and August 1 thereafter (“Payment Dates”) to and including February 1, 20__ (the “Maturity Date”) in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the date of issue through and including February 1, 20__ shall be compounded semiannually on February 1 and August 1 of each year and added to principal. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon thirty (30) days written notice to the Authority. Payments on this Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. Interest shall be computed on the basis of a year of 360 days and charged for actual days principal is unpaid. 3. Available Tax Increment. (a) Payments on this Note are payable on each Payment Date solely from and in the amount of Available Tax Increment, which shall mean, on each Payment Date, Ninety percent (90%) of the Tax Increment attributable to the Minimum Improvements and Redevelopment Property that is paid to the Authority by Anoka County in the six months preceding the Payment Date. (b) The Authority shall have no obligation to pay principal of and interest on this Note on each Payment Date from any source other than Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final Payment on the Maturity Date. 4. Default. If on any Payment Date there has occurred and is continuing any Event of Default under the Agreement, the Authority may withhold from payments hereunder under all Available Tax Increment. If the Event of Default is thereafter cured in accordance with the Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid, without interest thereon, within thirty (30) days after the Event of Default is cured. If the Event of Default is not cured in a timely manner, the Authority may terminate this Note by written notice to the Owner in accordance with the Agreement. EDA Minutes Page 7 Aug 7, 2017 5. Prepayment. The principal sum and all accrued interest payable under this Note is prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular Payment otherwise required to be made under this Note. 6. Nature of Obligation. This Note is one of an issue in the total principal amount of $_________, issued to aid in financing certain public redevelopment costs and administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.090 through 469.1081, and is issued pursuant to an authorizing resolution (the “Resolution”) duly adopted by the Authority on ________, 2017, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority which is payable solely from Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Note or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Note or other costs incident hereto. 7. Registration and Transfer. This Note is issuable only as a fully registered note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this Note is transferable upon the books of the Authority kept for that purpose at the principal office of the City Finance Director, by the Owner hereof in person or by such Owner’s attorney duly authorized in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates, within 15 days after the delivery by the Owner of its request and approval of such request by the Authority if required under the Agreement. Except as otherwise provided in Section 3.3(d) of the Agreement, this Note shall not be transferred to any person or entity, unless the Authority has provided written consent to such transfer. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the Columbia Heights Economic Development Authority have caused this Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY Executive Director President EDA Minutes Page 8 Aug 7, 2017 REGISTRATION PROVISIONS The ownership of the unpaid balance of the within Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Registration   Registered Owner  Signature of City Finance Director        _________, 20__  Columbia Heights Leased Housing Associates III, LLLP Federal Tax I.D No_____________     Section 3. Terms, Execution and Delivery. 3.01. Denomination, Payment. The Note shall be issued as a single typewritten note numbered R-1. The Note shall be issuable only in fully registered form. Principal of and interest on the Note shall be payable by check or draft issued by the Registrar described herein. 3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. 3.03. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. (b) Transfer of Note. Subject to Section 3.03(d) hereof, within 15 days after surrender for transfer of the Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, and consent to such transfer by the Authority if required pursuant to the Agreement, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is reasonably satisfied that the endorsement on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. EDA Minutes Page 9 Aug 7, 2017 (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the Note is at any time registered in the bond register as the absolute owner of the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner’s order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, Termination Dates and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. 3.04. Preparation and Delivery. The Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Note has been so executed, it shall be delivered by the Executive Director to the Owner thereof in accordance with the Agreement. Section 4. Security Provisions. 4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the Note all Available Tax Increment as defined in the Note. Available Tax Increment shall be applied to payment of the principal of and interest on the Note in accordance with the terms of the form of Note set forth in Section 2 of this resolution. 4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the Authority shall maintain a separate and special “Bond Fund” to be used for no purpose other than the payment of the principal of and interest on the Note. The Authority irrevocably agrees to appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less. Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority’s account for the TIF District upon the termination of the Note in accordance with its terms. 4.03. Additional Obligations. The Authority will issue no other obligations secured in whole or in part by Available Tax Increment unless such pledge is on a subordinate basis to the pledge on the Note. EDA Minutes Page 10 Aug 7, 2017 Section 5. Certification of Proceedings. 5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 6. Effective Date. This resolution shall be effective upon approval. Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority on _____________, 2017. __________________________________ President ATTEST: ________________________________ Executive Director A copy of the Contract between the EDA and Columbia Heights Leased Housing Assoc III, LLLP was included in the packet for the commissioners to review, and once executed will be on file at City Hall. 2. Authorize Appropriation of Certain EDA Funds Dahl explained that the Housing and Redevelopment Authority in and for Columbia Heights (the “HRA”) previously owned Parkview Villa, a senior housing facility. And, after conveying said senior housing facility to a private operator in 2015, the HRA effectively ceased all senior housing operations. Therefore, the City Council of the City of Columbia Heights (the “City”) determined to reclassify the committed fund balance of the Parkview Villa South Fund 213 (the “PVV Fund”) from senior housing to redevelopment, and recommended that the HRA transfer the entire PVV Fund balance to a Columbia Heights Economic Development Authority (the “EDA”) fund for economic redevelopment activities. On August 7, 2017, the HRA authorized an interfund transfer of the entire PVV Fund balance in the amount of $1,025,445 to the EDA Redevelopment Project Fund 408 with the intent for these funds to be used in connection with the Commercial Revitalization Project, more specifically acquisition of nonconforming properties in commercial corridors throughout the City. However, in order for the EDA to be able to use these transferred funds for their intended purpose, a resolution is required to authorize the appropriation of said funds to the Commercial Revitalization Project. Therefore, the resolution before the EDA for consideration would effectively accept the interfund transfer of the entire PVV Fund balance and appropriate said funds in the EDA Redevelopment Project Fund 408 to the Commercial Revitalization Project budget for economic redevelopment activities. EDA Minutes Page 11 Aug 7, 2017 Staff recommends approval of Resolution 2017-24 as presented. Questions from Members: There were no questions. Motion by Schmitt, seconded by Murzyn, to waive the reading of Resolution 2017-24, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Herringer, seconded by Buesgens, to adopt Resolution 2017-24, a resolution authorizing the appropriation of certain funds for economic redevelopment purposes. All ayes. MOTION PASSED. RESOLUTION NO. 2017-24 A RESOLUTION AUTHORIZING THE APPROPRIATION OF CERTAIN FUNDS FOR ECONOMIC REDEVELOPMENT PURPOSES BE IT RESOLVED, By the Columbia Heights Economic Development Authority (the “EDA”) as follows: WHEREAS, the Housing and Redevelopment Authority in and for the City of Columbia Heights (the “HRA”) on this date has considered Resolution No. 2017-03, a resolution authorizing an interfund transfer of the entire Parkview Villa South Fund 213 (the “PVV Fund”) balance in the amount of $1,025,445 to the EDA Redevelopment Project Fund 408 (the “Redevelopment Project Fund”); and WHEREAS, the EDA is authorized to accept an interfund transfer and appropriate such transferred funds to a project budget by resolution, provided that the resolution states the purpose of the expenditure and corresponding amount to be appropriated; and WHEREAS, the EDA has determined that the transferred funds into the Redevelopment Project Fund should be appropriated for economic redevelopment expenditures in connection to the Commercial Revitalization Project. NOW, THEREFORE BE IT RESOLVED, that the Columbia Heights Economic Development Authority is hereby authorized to accept and appropriate $1,025,445 of the PVV Fund transfer from the HRA into the Redevelopment Project Fund for economic redevelopment purposes, subject to approval of HRA Resolution No. 2017-03; and BE IT FURTHER RESOLVED, this resolution shall be effective immediately upon its enactment by the Columbia Heights Economic Development Authority. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this _7th____ day of ____August___________, 2017  Offered by:  Herringer  Seconded by:  Buesgens  Roll Call:  All ayes   President Attest: Secretary   EDA Minutes Page 12 Aug 7, 2017 Dahl then provided members with a Budget Overview for the Commercial Revitalization Project as follows: COMMERCIAL REVITALIZATION PROJECT – BUDGET OVERVIEW USES STATEMENT The Columbia Heights Economic Development Authority (the “EDA”) has identified a need to revitalize the commercial corridors throughout the City of Columbia Heights (the “City”). Several properties located within commercial districts are nonconforming under the current zoning code of the City, and therefore the EDA desires to purchase such properties to eliminate these nonconformities. As of July 21, 2017, the total project cost has been estimated to be $4,510,439.00. This estimate, however, is subject to change based on several dependent variables. Thus, the total project cost should be reevaluated annually to account for any substantive changes. The following table below provides a detailed use breakdown of the anticipated expenses for project completion: USES EXPENSES  Property Acquisition 3,512,125.00  Title Insurance  5,390.00  Legal Closing Costs 11,330.00  Recording of Deeds 12,712.00  Broker Compensation 110,632.00  Pre Demolition Surveys 44,000.00  Utility Disconnects 117,950.00  Demolition 550,000.00  Cost Contingencies 146,300.00   TOTAL USE FUNDS: 4,510,439.00   Property Acquisition – these expenses include the acquisition of properties within the City that are nonconforming (legal and illegal) pursuant to the current City zoning code. These expenses were estimated to be 25% above the 2017 Estimated Market Land Value subtotal. Title Insurance – these expenses include costs realized while obtaining ‘ALTA’ Owner Policies for properties acquired. Typical expenses in this category include insurance premiums and other general administrative costs. Legal Closing Costs – these expenses are incurred by having the representation of Kennedy & Graven at time of closings. Typical expenses include preparation of closing documents, correspondences, attendance at closing, and travel reimbursement. Recording of Deeds – these expenses include the costs of recording Warranty Deeds, State Deed Taxes, and Conservation Fees. These costs were estimated based on the 2017 fee schedule released by Anoka County. Broker Compensation – these expenses relate to the compensation agreed upon in the Buyer Representation Contract by and between the EDA and RE/MAX Synergy. The EDA shall compensate RE/MAX Synergy 3.15% of the purchase price per property. Pre-Demolition Surveys – these costs represent the demolition inspection required by the MPCA under the NESHAP Regulations, 40 CFR Part 61 and by Minnesota – OSHA under 29 CFR 1926.1101. Theses inspections inventory asbestos-containing materials and hazardous materials prior to demolition. These costs were averaged based on previous pre-demolition surveys conducted. Utility Disconnects – these costs include the disconnection of sewer and water lines, replacement of any existing 3/4” line with a new 1” line, and other work deemed necessary by the Sewer & Water Foreman of the City. These costs were averaged based on previous utility disconnects conducted. Demolition – these costs were estimated based on demolition contractor and abatement contractor rates of 2017. These costs include demolition of primary and accessory structures; abatement of asbestos, lead-based paint, and other hazardous materials; removal of bituminous and concrete paving; backfill and grading; and any additional requirements deemed necessary by Public Works. EDA Minutes Page 13 Aug. 7, 2017 Cost Contingencies – these costs are known-unknowns based on previous property acquisition, and include allowance for higher than expected costs in connection to property acquisition, utility disconnects, and demolition. These expenses were estimated at 3.5% of the aforementioned expenses subtotal. SOURCES STATEMENT The aforementioned expenses in connection with the Commercial Revitalization Project will be paid through two source funds: (1) EDA Redevelopment Project Fund 408 and (2) Anoka County HRA Levy. Each source fund has its own specific purpose for expenses realized throughout the term length of the project. The EDA Redevelopment Project Fund 408 will fund the majority of expenses related to property acquisition and cost contingences, as well as all expenses realized for title insurance, legal closing costs, recording of deeds, and broker compensation. Whereas, the Anoka County HRA Levy will fund a portion of property acquisition and cost contingences, but also all expenses realized in connection to pre-demolition surveys, utility disconnects, and demolition costs. When and if project expenses exceed the remaining balance of a source fund, the Capital Improvement - Development Fund 420 will provide an interfund loan to the respective source fund. The following table provides a breakdown of the amount of funds that will be used from its respective source for project completion: SOURCES TOTAL BALANCE  EDA Redevelopment Project Fund 408 3,245,776.00  Anoka County HRA Levy 1,264,663.00   TOTAL SOURCE FUNDS: 4,510,439.00   3. Ratification of 3841 Central Avenue NE Purchase Agreement Dahl told members that on July 10, 2017, the Columbia Heights Economic Development Authority (the “EDA”) approved Resolution 2017-18, a resolution which effectively entered the EDA into a Broker Representation Agreement with RE/MAX Synergy. Furthermore, the resolution authorized RE/MAX Synergy to respond to active listings within the City of Columbia Heights (the “City”), and to make fair market value offers of up to $200,000 on properties identified to be nonconforming under the current City zoning code. If these offers, in the form of a Purchase Agreement (the “Offer”), are accepted by the Seller, they are subject to ratification of the EDA prior to acquisition of the property. On July 12, 2017, the property located at 3841 Central Avenue NE (the “Subject Property”) went up for sale at a listing price of $209,000. Therefore, RE/MAX Synergy reacted to the active listing and worked with staff to place an Offer on the Subject Property in the amount of $200,000. On July 27, 2017, staff was notified that the Offer was accepted contingent upon the closing being on or before August 25, 2017. Thus, in order to accommodate for the closing on or before August 25, 2017, the EDA is required to review and consider the ratification of said Offer for the Subject Property at its August EDA meeting. If approved, this would be the first property acquired by the EDA in connection with the Commercial Revitalization Project. Dahl said this property recently sold for $102,000 and it was then renovated. He told members that staff would look into moving this house to another lot to recoup some of the funds spent on acquiring the property. Dahl said there are a couple of lots that he thinks would work—4641 Tyler Street and 4647 Polk Street which will have the existing house removed during the next month. Szurek told him the name of a house moving company that he could contact to see if they are still in the business of moving homes. Buesgens asked if the house is moved to another site and resold whether we are restricted for what we can sell it for. Dahl told her there are no restrictions, and we can sell the house for whatever price we think is appropriate. Staff recommends approval of Resolution 2017-25 as presented. EDA Minutes Page 14 Aug. 7, 2017 Questions from Members: There were no further questions. Motion by Novitsky, seconded by Schmitt, to waive the reading of Resolution 2017-25, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Buesgens, seconded by Novitsky, to adopt Resolution 2017-25, a resolution ratifying the purchase agreement between the Columbia Heights Economic Development Authority and Angel and Imelda Robles. All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2017-25 RESOLUTION RATIFYING PURCHASE AGREEMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND ANGEL AND IMELDA ROBLES BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: Recitals. 1.01. The Authority and Angel and Imelda Robles (together, the “Seller”) desire to enter into a purchase agreement (the “Purchase Agreement”) pursuant to which the Authority will acquire certain property in the City located at 3841 Central Avenue NE (the “Property”) from the Seller for economic redevelopment purposes. The Property is described in Exhibit A attached hereto. 1.02. Pursuant to the Purchase Agreement, the Authority will purchase the Property from the Seller for a purchase price of $200,000 plus related closing costs. 1.03. The Authority finds that acquisition of the Property is consistent with the City’s Comprehensive Plan and will result in redevelopment of a nonconforming property, and that such acquisition will facilitate the economic redevelopment and revitalization of this area of the City. Section 2. Purchase Agreement Approved. 2.01. The Authority hereby ratifies and approves the actions of Authority staff and of Re/Max Synergy acting as the Authority’s real estate broker (“Broker”) in researching the Property and preparing and presenting the Purchase Agreement. The Authority approves the Purchase Agreement in the form presented to the Authority and on file at City Hall, 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 Purchase Agreement by those officials shall be conclusive evidence of their approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Purchase Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Purchase Agreement, and any deed or other documents necessary to acquire the Property from the Seller, all as described in the Purchase Agreement. Approved this 7th day of August, 2017, by the Board of Commissioners of the Columbia Heights Economic Development Authority. EDA Minutes Page 15 Aug 7, 2017 EXHIBIT A PROPERTY Lot 14, Central Avenue Subdivision, Anoka County, Minnesota. OTHER BUSINESS: Hogeboom told members that a broker handling the sale of the commercial property at 4230 Central Avenue had met with him to see if the City was interested in purchasing the property. Hogeboom said the property does have some zoning issues, but is not classified as blighted, and has existing tenants which complicates the City’s ability to purchase it. Tenants cannot waive relocation fees, so it could increase the cost if the Board is interested in purchasing it. The general consensus was to concentrate on the single family homes at this time as previously decided. The meeting was adjourned at 7:15 pm. Respectfully submitted, Shelley Hanson Assistant Secretary