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HomeMy WebLinkAboutNov 6, 2017 ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF NOVEMBER 6, 2017 The meeting was called to order at 6:30 pm by President Marlaine Szurek. Members Present: Murzyn, Schmitt, Buesgens, Szurek, and Novitsky (arrived 6:40 pm) Members Absent: Herringer and Williams Staff Present: Walt Fehst, Keith Dahl, Joseph Hogeboom , and Shelley Hanson PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA 1. Approve minutes of October 9, 2017 2. Approve Financial Report & Payment of Bills for September, 2017–Resolution 2017-30 Questions from members: Schmitt questioned the income listed on page 24 of the report which indicated an internal transfer of $12,817 from another account. Buesgens questioned the amount of $7,985 listed on page 34 of the report. Dahl said he would look into these items and get back to the members with the details. Later, staff informed members that the amount of $12,817.82 was a reclassification of revenue funds from the sale of the old Library that was posted in January 2017. This was a YTD figure. The expenditure amount of $7,985.50 was for groundwater monitoring expenses in Huset Park and the review done by the MPCA to release the City from the responsibility of remediation. Motion by Schmitt, seconded by Murzyn, to approve the Minutes of October 9, 2017, and the Financial Report and Payment of Bills for September, 2017 as presented. All ayes. MOTION PASSED. RESOLUTIONNO.2017-30 AResolution of theEconomic Development Authorityof Columbia Heights, Minnesota, Approving the Financial Statements for Month ofSeptember 2017and the Payment of the Bills for the Month of September, 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 EDA Minutes Page 2 November 6, 2017 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 themonthofSeptember 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 __6th____ dayof ___November_____________, 2017 Offered by: Schmitt Seconded by: Murzyn Roll Call: All ayes BUSINESS ITEMS 1. Single Family Home Program-Approve Concept Application for 4641 Tyler St NE Dahl told the Columbia Heights Economic Development Authority (the “EDA”) that staff has received a concept application from Tollberg Homes, a licensed home builder in the State of Minnesota offering $22,500 for the construction of a single family home located at 4641 Tyler Street NE (the “Subject Property”), a property located within the Heritage Heights neighborhood. The Subject Property is part of the Single Family Home Lot Sales Program (the “Program”), which was established in 2015 to stabilize and increase property values throughout the EDA Minutes Page 3 November 6, 2017 City of Columbia Heights (the “City”), but more specifically within the Heritage Heights Neighborhood. Lot prices for every property within the Program are based upon the most recent Estimated Market Land Value assessed by Anoka County. However, the EDA has reserved the right to review and adjust lot prices periodically provided that sufficient evidence supports the price reduction of the lot. The Subject Property was assessed by Anoka County to have a 2018 estimated market land value of $38,600. However, after staff reached out to various local real estate agents, it was determine that the market value of the Subject Property still remains lower than the estimated market land value, but it has drastically increased since the construction of several new single family homes in the Heritage Heights Neighborhood. Therefore, staff estimates that the Subject Property would have a market value between $4.00 to $4.50 per square foot or approximately $29,620 to $33,320 based on the square footage of the lot. Earlier this year, the Public Works Department confirmed that there was a water main break at the Subject Property. This resulted in the sewer and water lines being disconnected at the main underneath the public right-of-way in the street. In order for a single-family home to be constructed on the Subject Property, sewer and water connection to the main will be required, and it will cost approximately $4,000. Thus, based on the market value of the Subject Property and the additional costs that will be incurred to connect sewer and water lines, staff estimates that a reasonable offer price for this particular property would be between $25,620 and $29,320. STAFF RECOMMENDATION: Staff recommends approval of the concept application submitted by Tollberg Homes only if the offer price, at a minimum, is increased to $27,500. Questions from Members: Dahl told members this home would be similar to the one next door that was just finished by Tollberg at 4647 Tyler Street. Szurek asked why the plan didn’t show a front porch. Dahl said the action tonight is to approve the concept plan only. The final plan and approval of the sale would be considered at the next meeting. He told members they could deny the plan and ask for a new one or they could approve the concept and ask them to include a porch on the final plan they submit next month. Schmitt stated that she thought they had decided at the last meeting that they preferred other designs rather than the split entry depicted on this concept plan and that they wanted front porches added to any new proposals. Fehst said the EDA decided that the two specific properties that were discussed at the last meeting should be something other than a split entry design. He said it was not decided that split entries could never be built. He said some people still prefer that type of design and we need to consider what fits into the existing neighborhood. Dahl said the EDA has the right to deny the concept plan, but this style was chosen as it meets the other requirements established by the EDA. Buesgens said this style house is a good house for small lots and for families as it allows for four bedroom construction. Schmitt thought we should make a counter offer to the price and ask them to come back with two alternative plans for the EDA to consider. Murzyn asked if they had an interested buyer for the home. Dahl said they did, friends of the people who just purchased the new home next door. Murzyn said the potential buyer may have a preference for a split entry design and if it meets the rest of the requirements established by the EDA then we shouldn’t necessarily dictate a certain style. EDA Minutes Page 4 November 6, 2017 Hogeboom agreed that we should see what the preference of the interested buyer is and that we should consider the topography of the site, since this lot is hilly and what will fit in with the rest of the neighborhood. Szurek stated that it would be nice to have a variety of home designs within the neighborhood so they don’t all look the same. Motion by Buesgens, seconded by Murzyn, to table the concept application as submitted by Tollberg Homes for the property located at 4641 Tyler Street NE, Columbia Heights, MN 55421 and to counter-offer a price of no less than $27,500. All ayes. MOTION PASSED. 2. Single Family Home Program-Approve House Plan for 4201 Jefferson St NE On October 9, 2017, the Columbia Heights Economic Development Authority (the “EDA”) approved the concept application submitted by Home Detail, Inc. for the construction of a single family home on the property located at 4201 Jefferson Street NE (the “Subject Property”). At that time, the EDA authorized staff to work with Home Detail to determine specific house plans and to prepare a Purchased and Redevelopment Agreement for consideration at the next EDA meeting on November 6, 2017. Unfortunately, staff continues to work with Home Detail to develop specific house plans that conform to all proposal guidelines outlined in the Single Family Home Lot Sales Program (the “Program”), specifically the section pertaining to building standards. Therefore, at the request of Home Detail, staff agreed to present the draft house plans to the EDA for review tonight, and delay the final sale consideration until which time specific house plans are finalized. Attached for review by commission members of the EDA are the draft house plans for the Subject Property, as well as the proposal guidelines of the Program itself. Based on the draft house plans submitted by Home Detail and pursuant to Subsection (f), (g) and (h), Section 5: Building Standards of the Proposal Guidelines, staff recommends that the garage should be rear-loaded, and a front porch extend the full width of the single-family home. An alternative would be to have a garage on the side of the home with a driveway off 42nd Avenue. Public Works would prefer either of these two options to the garage being off Jefferson as shown on the plans submitted. Questions from members: Jeff Magdik was present. To support his reason for submitting a plan with a front garage, he passed out a survey indicating the number of homes that have front driveways off Jefferson and also those on Madison and Washington. He stated that a garage in the backyard would take up too much yard space and the topography makes this a difficult option on this lot. The buyers want to have a walkout basement that will be finished off for additional bedrooms and they do not want a garage on the alley. He said if the EDA enforces a rear garage than his buyers will walk on this house. There was a discussion on the options the builder has, but the consensus was the EDA does not want a garage in the front. Novitsky said if the EDA has decided that the garage cannot be placed in the front, then it’s up to the builder to bring back plans that will meet our requirements. It is not the job of the EDA to help him design something that may work. EDA Minutes Page 5 November 6, 2017 Motion by Novitsky, seconded by Murzyn, to deny the design showing the garage on the front and to have the builder bring back plans with the garage located off 42nd Ave or in the rear before a Purchase and Redevelopment Agreement will be recommended at the next available EDA meeting on December 4, 2017. All ayes. MOTION PASSED. 3. Single Family Home Program- Approve House Plan for 4641 Polk St NE On October 9, 2017, the Columbia Heights Economic Development Authority (the “EDA”) approved the concept application submitted by Home Detail, Inc. for the construction of a single family home on the property located at 4641 Polk Street NE (the “Subject Property”). At that time, the EDA authorized staff to work with Home Detail to determine specific house plans and to prepare a Purchased and Redevelopment Agreement for consideration at the next EDA meeting on November 6, 2017. Unfortunately, staff continues to work with Home Detail to develop specific house plans that conform to all proposal guidelines outlined in the Single Family Home Lot Sales Program (the “Program”), specifically the section pertaining to building standards. Therefore, at the request of Home Detail, staff agreed to present the draft house plans to the EDA for review tonight, and delay the final sale consideration until which time specific house plans are finalized. Attached for review by commission members of the EDA are the draft house plans for the Subject Property, as well as the proposal guidelines of the Program itself. Based on the draft house plans submitted by Home Detail; and pursuant to Subsection (g) and (h), Section 5: Building Standards of the Proposal Guidelines, staff recommends that a front porch should extend the full width of the single-family home. Questions from members: Magdik stated he has a buyer for this home also. He told members that all 3 levels would be finished. He said the original plan had a porch across the entire front of the house but it was downsized since the basement window in front will be an egress window for a bedroom and the buyer doesn’t want to cover it up and have it under a deck. Magdik defended his plan by saying that the guidelines were changed and that homes that have been built by Tollberg prior to that change have had smaller porch areas. Magdik was asked if the egress window could be relocated to the side of the house. He said he could possibly re-design it but the topography of the lot allows for a larger window if located in the front. Murzyn asked him if he tells his potential buyers what our requirements are and that they may not get certain things they want approved. He said he does share the information with them and tries to come up with a design to accommodate all parties. Schmitt suggested he could increase the size of the front porch by removing the accent window on the left and to add more porch area to the right also, and it would meet the minimum requirement. Motion by Buesgens, seconded by Novitsky, to authorize staff to continue working with Home Detail to determine specific house plans showing a change to increase the porch size to 11 foot minimum width for the front entry and to prepare a Purchase and Redevelopment Agreement for consideration at the next available EDA meeting on December 4, 2017. All ayes. MOTION PASSED. EDA Minutes Page 6 November 6, 2017 4. Consideration of 3841 Central Avenue Relocation On September 5, 2017, the Columbia Height Economic Development Authority (the “EDA”) authorized staff to work with the Greater Metropolitan Housing Corporation (the “GMHC”) to determine the feasibility of relocating the residential structure of 3841 Central Avenue NE, Columbia Heights, MN 55421 (the “Residential Structure”) to the vacant lot owned by GMHC located at 3805 2nd Street NE, Columbia Heights, MN 55421 (the “Subject Property”). As previously indicated by the City Building Official, when a structure is relocated on to a different property, the Minnesota State Building Code (the “Building Code”) requires that any structural non-conformity be corrected to comply with the standards of the Building Code, specifically Fuel Gas Code, Mechanical Code, Plumbing Code, Energy Conservation Code, Residential Code, and Electrical Code. Therefore, on September 20, 2017, staff and representatives from GMHC inspected the Subject Property to determine the non-conformities present in the Residential Structure. After the initial walkthrough, the City Building Official prepared a detailed report explaining the applicable provisions of the Building Code that would be enforced if the Residential Structure is relocated to the Subject Property, and provided said report to the GMHC for them to prepare a Pro Forma. The following table breaks down the Pro Forma in order for the GMHC to relocate the Residential Structure onto the Subject Property. PROJECT EXPENSES COST  Property Acquisition  1.00  House Relocation  30,000.00  Auxiliary Costs of Utility Work  40,000.00  Demolition/Removal  16,000.00  House Rehab/Renovation  55,000.00  Tree Removal  3,500.00  New Foundation  50,000.00  Double Stall Garage/Driveway  25,000.00  Lands caping/Flatwork  4,500.00  Sewer & Water  8,500.00  Soft Costs (Plans, Testing, Survey, etc.)  4,500.00  Closing Costs (Realtor Fee, Appraisal, Tax, etc.)  47,453.00  Holding Costs (Utilities, Insurance, Interest, etc.)  15,991.00  Contingency  7,000.00   TOTAL EXPENSES FUNDS: 307,445.00   PROJECTED RESALE PRICE: 250,000.00   GROSS PROFIT (LOSS): (57,445.00)   EDA Minutes Page 7 November 6, 2017 Based on the table above, the GMHC projects a loss of profit in the amount of $57,445.00, and have therefore requested that on top of the EDA selling the Residential Structure to them for one dollar ($1.00), they would like the EDA to also consider providing gap funding in the amount of $60,000.00. STAFF RECOMMENDATION: Staff recommends offering the residential structure located at 3841 Central Avenue NE to the Greater Metropolitan Housing Corporation for one dollar ($1.00); however, staff does not recommend offering gap funding to the Greater Metropolitan Housing Corporation. Questions from members: Schmitt asked what we have spent on this so far. Dahl stated $200,000. She said she is not in favor of spending anymore. Schmitt then asked how much it would be to demo the property. Dahl said approximately $25,000. Dahl said if GMHC doesn’t want it for $1 then we could possibly offer it to someone else on the open market for them to move. He said another option would be to move it to 666 40th Ave which would cost less due to the closer proximity, or to sell that lot to someone interested in moving the house onto it. Motion by Schmitt, seconded by Murzyn, to offer the residential structure located at 3841 Central Avenue NE to the Greater Metropolitan Housing Corporation for one dollar ($1.00), and if accepted, authorize staff to prepare a Bill of Sale, Wavier of Trespass, and Wavier of Liability for consideration at the next EDA meeting on December 4, 2017. All ayes. MOTION PASSED. OTHER BUSINESS No other new business. The meeting was adjourned at 7:50 pm. Respectfully submitted, Shelley Hanson Secretary