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ECONOMIC DEVELOPMENT AUTHORITY AGENDA
May 1, 2017
6:30 pm
City Hall
Conference Room 1
th
590 40 Avenue NE
Columbia Heights, MN 55421
1.Call to Order
2.Roll Call
3.Pledge of Allegiance
CONSENT AGENDA
4.Approve minutes of April 3, 2017
5.Approve Financial Report and Payment of Bills for March 2017 - Resolution 2017-10
Motion: Move to approve Consent Agenda as presented.
OTHER BUSINESS
6.Northeast Business Center Building Remodel Update
7.Central Avenue - Single Family Homes Acquisition Discussion
8.Grand Central Lofts Development Update
9.Columbia Heights Economic Development Authority 2017 Levy Discussion
10.Adjourn
The next regular EDA meeting will be Wĵ■ś ƷĊ╙ẽ ƴƲƳƹ at City Hall.
ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE MEETINGOF
APRIL 3, 2017
The meeting was called to order at 6:30pm by Vice-PresidentSchmitt
Members Present:Williams, Buesgens, Murzyn, Herringer, and Schmitt
Members Absent:Szurek
Staff Present:Walt Fehst,JoeHogeboom, Keith Dahl, Joe Kloiber, Kelli Bourgeois
PLEDGE OF ALLEGIANCE-
RECITED
CONSENT ITEMS
1.Approve the Minutes from March 6,2017
2.Approve the Financial Report and Payment of Bills for February2017on Resolution
2017-07.
Questions by Members:
Commissioner Herringer requested more details concerning a payment to Xcel Energy on
February 2, 2017 and a payment to CenterPoint Energy onFebruary 8, 2017. Commissioner
Herringer also requested more information regarding a credit card payment made.
Hogeboom and Dahl will research the matter, and provide follow-up information to the
EDA.
Motion byWilliams,seconded byHerringer,to waive the reading of Resolution 2017-
there being an ample amount of copies available to the public. All ayes. MOTION
PASSED.
Motion byWilliams, seconded byHerringer, to approve the Minutes ofMarch6, 2017,
andtheFinancial Report and Payment of Bills forFebruary, 2017as presented. All ayes.
MOTION PASSED.
RESOLUTION NO. 2017-07
A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving
the Financial Statements for the Month ofFebruary, 2017and the Payment of the Bills for the
Month of February, 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
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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 statementsfor the month ofFebruary, 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,
NOW, THEREFOREBE 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.
rd
Passed this 3day ofApril, 2017.
Motion by: Williams
Seconded by:Herringer
BUSINESS ITEM
1.SINGLE FAMILY HOME LOT SALES PROGRAM-FINAL SALE APPROVEAL
OF 4647 POLK ST-RESOLUTION 2017-08
Dahl reminded members that on March 6, 2017, the Columbia Heights Economic Development
to purchase the property located at 4647 Polk Street NE (the
Property is approximately 0.23 acres and is part of the Single Family Home Lot Sales Program,
which was established by the EDA in 2015 to stabilize and increase property values in the
Heritage Heights Neighborhood.
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The progra
property. However, the EDA has the right to review and adjust lot prices periodically provided
that sufficient evidence supports the lots price reduction.
The 2017 Estimated Market Land Value for the Property is $51,300. However, in speaking with
various home builders and realtors, staff received comments that the lots located in the Heritage
Heights neighborhood, are generally lower in value than other properties throughoutthe City.
Staff requests consideration of the EDA for final sale approval of the Property. The Purchase
and Redevelopment Agreement for the sale of the Property, which was drafted by Kennedy &
Graven was included in the agenda packets, as well as the specific house plans.The proposed
house plan submitted by Tollberg Homes meets the building requirements set forth by the Single
Family Home Lot Sales Program Guidelines.
Staff received the earnest money in the amount of $2,000 and a partially executed Purchase and
Redevelopment Agreement. If the EDA approves the final sale tonight, the earnest money will
become non-refundable and staff will obtain the necessary signatures at the EDA meeting to
fully execute the Purchase and Redevelopment Agreement. If the EDA denies the final sale
approval, staff will reimburse the earnest money to Tollberg Homes. A representative from
Tollberg Homes will be present at the EDA meeting to discuss their proposal, as well as answer
any questions EDA commission members have regarding their proposal.
Staff recommends final sale approval of 4647 Polk Street NE, Columbia Heights, MN 55421.
Wade Tollefson, representing Tollberg Homes, thanked the Economic Development Authority
for the opportunity to purchase this property, and discussed the other homes that the company
recently built in Columbia Heights
Questions from members:
None.
Motion by Herringer, seconded byBuesgens, to open the public hearing regarding the proposed
sale of certain EDA owned property located at 4647 Polk Street NE, Columbia Heights,
Minnesota to Tollberg Homes, LLC for purposes of construction of a single-family home.
All ayes. MOTION PASSED.
PublicHearing Opened.
Seeing and hearing no one wishing to speak, Vice President Schmitt closed the public hearing.
Public Hearing Closed.
Motion byWilliams, seconded byHerringer, towaive the reading of Resolution 2017-08, there
being ample copies available to the public. All ayes. MOTION PASSED.
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Motion byWilliams, seconded by Herringer,to adopt Resolution 2017-08, Resolution Approving
the Purchase and Redevelopment Agreements with Tollberg Homes, LLC for the acquisition of
4647 Polk Street NE, Columbia Heights, MN 55421.All ayes. MOTION PASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2017-08
RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
AGREEMENT WITH TOLLBERG HOMES, LLC.
BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights
Economic Development Authority (the "Authority") as follows:
Section 1.Recitals.
1.01.The Authority has previously adopted a program called theSingle Family Home Lot
1.02.The
as Exhibit A, and the parties have negotiated a Purchase and Redevelopment Agreement (the
construction by the Buyer of a single-family home on the Property, all pursuant to the
Guidelines.
1.03.On October 21, 2015, the Planning Commission of the City reviewed the
proposed Program and found that the conveyance of property pursuant to the Program is
1.04.On the date hereof, the Authority conducted a duly noticed public hearing regarding
the conveyance of the Property to the Buyer, at which all interested parties were given an
opportunity to be heard.
1.05.The Board has reviewed the Agreement in the form on file at the office of the
Executive Director and finds that the execution thereof and performance of the Authority's
obligations thereunder, including the conveyance of the Property to the Buyer,areconsistent with
the Guidelines andin the best interest of the City and its residents.
Section 2.Approval and Authorization of Agreement and Conveyance
2.01.TheAgreement as presented to the Board and the conveyance of the Property
provided for therein are 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.
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2.02.Authority staff and officials are authorized to take all actions necessary to perform
Agreementas a whole, including without limitation execution
of any documents to which the Authority is a party referenced in or attached to the Agreement, and
any deedsor other documents necessary to convey theProperty to the Buyer, all as described inthe
Agreement.
Section 3.Effective Date. This resolution shall be effective upon approval.
Approved by the Board of Commissioners of the Columbia Heights Economic Development
Authority this 3rd day of April, 2017.
President
ATTEST:
Secretary
EXHIBIT A
Property
Lot twenty-five (25) and Lot Twenty-
shown by the plat now on file and of record in the office of the Register of Deeds at Anoka,
Anoka County, Minnesota.
BUSINESS ITEM
1.FOURTH AMENDMENT-ACCAP PURCHASE AGREEMENT FOR CITY
ACQUISITION OF 4641-43 POLK ST-RESOLUTION 2017-09
Dahl explained that the Columbia Heights Economic Development Authority (EDA) previously
approved a Third Amendment to the Purchase Agreement on February 6, 2017, which extended
the closing date to March 31, 2017. However, due to more unanticipated delays, ACCAP is
requesting the closing date be extended again. For the EDA consideration tonight is a Fourth
Amendment to the Purchase Agreement, which extends the closing for the sale of the Property to
take place on or before May 31, 2017. ACCAP needs to obtain another MHFA approval, which
will take at least three weeks. ACCAP intends to close at the end of April or beginning of May.
Staff recommends the approval of Resolution 2017-09, a resolution approving the Fourth
Amendment of a Purchase Agreement that will extend the closing date of the Property to take
place on or before May 31, 2017.
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Questions from Members:
none
Motion by Williams, seconded byBuesgens,to waive the reading of Resolution 2017-09, there
being ample copies available to the public.All ayes. MOTION PASSED.
Motion byWilliams, seconded byHerringer,to adopt Resolution 2017-09, a resolution
approving a Fourth Amendment of a Purchase Agreement between the Columbia Heights
Economic Development Authority and Anoka County Community Action Program.All ayes.
MOTION PASSED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 2017-09
RESOLUTION APPROVING A FOURTH 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 Commi) of the Columbia Heights
) as follows:
Section 1.Recitals.
1.01.The Authority currently administers the Downtown CBD Redevelopment Project
, pursuant to Minnesota Statutes,
Sections 469.090 to 469.1082, as amended.
1.02.The Authority and Anoka County Community Action Program, Inc.
executed a Purchase Agreement, dated as of May26, 2016 (the providing for the
conveyance by the Seller to the Authority of certainproperty within the Project and City legally
describedas follows:
That part of Lot 23 lying north of the South 20 feet of the SD Lot 23 and Lot 24, Block 1,
nd
Sheffields 2Subdivision, County of Anoka, State of Minnesota
1.03.On August 31, 2016, the parties entered into a First Amendment to the Purchase
ty.
1.04.On October 28, 2016, the parties entered into a Second Amendment to the Purchase
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1.05.On February 6, 2017, the parties entered into a Third Amendment to the Purchase
1.06.The parties have negotiated and propose to execute a Fourth Amendment to the
rther extend the deadline for the
conveyance of the Property.
Section 2.FourthAmendmentApproved.
2.01.The FourthAmendment as presented to the Boardis hereby in all respects
approved, subject to modifications that do not alter the substance of thetransaction and that are
approved by the Presidentand Executive Director, provided that execution of the Fourth
Amendmentby such officials shall be conclusive evidence of approval.
2.02.The Presidentand Executive Directorare hereby authorized to execute on behalf
of the Authoritythe FourthAmendment and any documents referenced therein requiring
execution by the Authority, and to carry out, on behalf of the Authority, its obligations
thereunder.
2.03.Authoritystaff 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 Columbia HeightsEconomic
Development Authority this3rdday of April, 2017.
VicePresident
ATTEST:
Secretary
OTHERBUSINESS:
th
Redevelopment Discussion of 828 40Ave-
sbeen sentto the City for the
th
purchase of the vacant lot located at 828 40Avenue. Mulata Associates has offered $35,000
for the site. Dahl told members that certain criteria must be met in order for this sale to be
approved since the site was purchased using CDBG funds. Some of the criteria that must be met
are that it be developed as a commercial use and that at least 3 Full Time positions must be
created for that business. Dahlsaid he believes they plan on constructing an office building that
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would be two or three stories with parking in the rear. If the EDA is interested in entertaining
criteria can be met.
Commissioner Buesgens inquired about whether or not there are any requirements that exist for
the property, due to federal funding being used to acquire the property and demolish the former
building. Dahl stated that there is a requirement that a commercial entity be developed on the site
that creates jobs. If this does not occur, Dahl explained that the City/EDA may need to reimburse
the County for a portion of the land value.
Commissioner Murzyn reminded the EDA that the City, at one point, had desired to construct a
parking lot on the site to accommodate a need from the former Library building. Vice President
Schmitt stated that, although that was an initial plan, the City later realized that there were
certain development requirements associated with the federal funding used for the project.
The EDA directed staff to receive more information from the party interested in purchasing the
property before any offer can be entertained.
Columbia Heights Economic Development Authority 2017 Levy Discussion-
Keith Dahl explained that, to date, the Columbia Heights Economic Development Authority
(EDA) has been discussing several projects, programs, and objectives commissioners have
desired to see initiated, implemented and/or completed in 2017. Many of these projects and
programs, specifically acquisition of Single-Family Homes along Central Avenue;
implementation of a low-to no-interest loan program for home renovation improvements; and
initiation of a Business Retention & Expansion Program, will require a revenue source to achieve
the results EDA commission members envision. Staff has identified one possible revenue source
that has two opposite outcomes; one outcome would increase the tax rate in the City as the other
outcome would decrease the tax rate in the City.
Dahl further explained that currently, the statutory levy limit is .0185% of the Market Land
Value in the City or for 2016 the maximum amount the EDA could levy was $209,468. The 2016
EDA levy, payable in 2017, was .0074188% of the Market Land Value in the City or $84,000.
Over the course of the past eight years, the EDA levy has remained relatively constantwith
minimal fluctuation up or down. If the EDA raised the levy to the statutory levy limit, the
revenue realized would provide the EDA with the funds necessary to acquire properties for
redevelopment when they become available, offer a low-to no-interest loan program for home
renovations, but also to provide assistance programs to local businesses.
Dahl explained that if the EDA raised the levy to the statutory levy limit, taxes would increase
for businesses and residents. The amount taxes would increase per property is variable to several
factors; however, staff has calculated that the tax increase for a resident who owns a property at
an estimated market value of $200,000 would be about $20 -$25 annually. In the event EDA
commissioners are unfavorable to raising taxes, the other possible outcome, explained below,
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would still increase the EDA levy to the statutory levy limit, but decrease taxes through the
elimination of a different levy.
Dahl discussed that for the past ten years, the City Council has elected to participate in Anoka
Cities within Anoka County are required to adopt a resolution electing toparticipate or withdraw
participation every five years. City Council will need to determine later this year if participation
for another five years from 2018-2023 is beneficial to the City. If City Council elects to
participate, the city will have access to an additional source of revenue for economic
development activities, but will also agrees to the following four conditions: (1) to participate for
a minimum of five years, (2) the ACHRA may levy an additional property tax within the city, (3)
the ACHRA may deduct a 15% administration fee from the levied property tax, and (4) the
ACHRA would retain absolute authority and discretion in determining whether or not a fund
reimbursement request meets the statutory objectives.
Over the past ten years, the ACHRA levy has collected an estimated $1.5 million dollars, of
which $1.245 million has been made available to the City for economic development activities as
the remaining $255,000 has deducted by the ACHRA for administration fees. These funds have
provided the City with essential gap financing assistance for land acquisition, site investigation,
remediation, and building demolition within the City. The most notable project being the land
re the ACHRA levy
provided over $750,000.
On average, the ACHRA levy collects about $170,000 annually, of which the City has access to
about $140,000. In 2016, the City realized a net value of $137,977.10 from the ACHRA levy.
The current total balance available to the City as of December 31, 2016 was $373,458.30, which
does not include the levied taxes from this year.
economic development activities this year, the EDA could raise its levy to the statutory levy limit
without increasing City taxes because the ACHRA levy is greater than the amount the EDA levy
may increase. The amount taxes would decrease per property is variable to several factors;
however, staff has calculated that the tax decrease for a resident who owns a property at an
estimated market value of $200,000 would be about $7 -$10 annually.
Dahl summarized that the EDA will need to locate a revenue source if projects, programs, and
objectives are goingto be successful. The one possible revenue source identified would be to
increase the 2017 EDA levy (Payable in 2018) to the statutory levy limit. There are pros and
cons to both options, but staff seeks to facilitate discussion from the EDA to determine the
course of action commission members desire to see taken. Dahl concluded that no action is
needed at this time, but levy discussion tonight will help facilitate budget discussion later this
year.
Commissioner Buesgens stated that she would be in favor of increasing redevelopment funds to
maximize project output of the EDA.
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Vice President Schmitt stated that she would be in favor of a mechanism that did not require
Assistant Treasurer Kloiber stated that the EDA must consider other potential increases to the
general tax levy for the City when discussing changes to EDA and HRA levies.
Assistant Director Hogeboom stated that staff will bring back illustrations of possible taxing
scenariosto the EDA at a future meeting.
The meeting was adjourned at 7:35 pm.
Respectfully submitted,
Joe Hogeboom
Assistant Director/ Acting Assistant Secretary
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RESOLUTION NO. 2017-10
A Resolution of the Economic Development Authority of Columbia Heights, Minnesota, Approving the
Financial Statements for Month of March 2017 and the Payment of the Bills for the Month of
March 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 resolution and enter the resolution in its records; and
WHEREAS, the financial statement for the month of March 2017 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,
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:
President
Attest:
Secretary
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Resolution 2017-10
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AGENDA SECTION OTHER BUSINESS ITEMS
ITEM NO. 9
MEETING DATE MAY 1, 2017
CITY OF COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
ITEM:Columbia Heights Economic Development Authority 2017 Levy Discussion
DEPARTMENT: Community Development
BY/DATE: Keith M. Dahl, April 27, 2017 BY/DATE:
BACKGROUND:
On April 3, 2017, the Columbia Heights Economic Development Authority (EDA) discussed the 2017 EDA levy
due to the increased capital that will be required to fund planned projects and programs in 2018. The three
main projects and programs that commission members desire to see initiated in 2018 are as followed:
acquisition of single-family homes and residential structures that used to be single-family homes along Central
Avenue; implementation of a low- to no- interest loan program for home renovation improvements; and
business retention & expansion program. At the end of the previous discussion, the EDA requested that staff
prepare a scenario analysis to formulate different options of fund sources available. Therefore, a scenario
analysis has been prepared to explain the three alternative funding options available for consideration. Please
note: 2016 levies (Payable in 2017) have been used as a constant variable throughout the analysis to show
similarities and differences between the three alternative funding scenarios.
Scenario A Maintain Current Fund Sources:
Participate in the
development activities for another five (5) years
Preserve
would not alter, but maintain the current status of fund sources used by the EDA for housing
and economic development activates. Currently, all EDA fund sources are used to cover operating expenses
except the levy administered by the ACHRA. Thus, $137,977.10 was made available to the EDA for
redevelopment projects. The EDA is able to access these funds through application to Anoka County
requesting reimbursement for a project that qualifies as an economic development activity. The table
below shows the current funds sources used by the EDA.
HRA Levy EDA Levy ACHRA Levy
Levy Percentage .0185 % .0074188 % N/A
Levy Amount $ 209,468.00 $ 84,000.00 $ 137,977.10
Scenario B Maximize Fund Sources:
Participate in the ACHRA economic development activities for another five (5) years
Increase the 2017 EDA levy to the statutory levy limit
EDA funds available for housing and economic development
activates. The EDA would be able to maximize its fund sources by participating in the ACHRA for another
five (5) years and increasing the EDA levy from .0074188% to the statutory levy limit of .0185%. Based on
the numbers in the table below, the EDA would realize a fund increase in the amount of $125,468. Thus,
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City of Columbia Heights EDA Letter
City of Columbia Heights - Council Letter Page 2
bringing the total of annual funds available to the EDA for housing and economic development activates to
$263,445.10. The impact to tax payers would account for a property tax increase of $20 - $25 annually for a
resident who owns a property at an estimated market value of $200,000.
HRA Levy EDA Levy ACHRA Levy
Levy Percentage .0185 % .0185 % N/A
Levy Amount $ 209,468.00 $ 209,468.00 $ 137,977.10
Amount of Change N/A $ 125,468.00 N/A
Scenario C Optimize Fund Sources:
Discontinue ACHRA economic development activities participation
Increase the 2017 EDA levy to the statutory levy limit
optimizes the amount of fund sources to provide relief to tax payers, but decreases the overall
total funds available to the EDA for housing and economic development activates. If the EDA determines to
discontinue participation in the ACHRA economic development activities, the decreased amount realized by
the absence of the ACHRA levy would be greater than the amount of an EDA levy increase to the statutory
levy limit. Thus, the EDA would realize a fund source decrease in the amount of $12,509.10. The impact to
the tax payers would account for a property tax decrease in the amount of $7 - $10 annually for a resident
who owns a property at an estimated market value of $200,000. (Please note: the property tax decrease
accounts for the 15% administration fee deducted by ACHRA from its levy. The ACHRA levy collected
$162,326 from its 2016 levy payable in 2017, of which $137,977.10 was available to the EDA.)
HRA Levy EDA Levy ACHRA Levy
Levy Percentage .0185 % .0185 % N/A
Levy Amount $ 209,468.00 $ 209,468.00 N/A
Amount of Change N/A $ 125,468.00 ($ 137,977.10)
STAFF RECOMMENDATION:
No recommendation; however, staff would like to mention that the City will need to adopt a resolution stating
the intentions to either participate for another five years or withdraw participation from the ACHRA. If the City
decides to withdraw participation, a resolution will need to be adopted prior to the anniversary date of
Resolution 2012-142, as well as provide notice to the ACHRA neither less than 90 days nor more than 180 days
prior to November 13, 2012 (May 17, 2017 August 15, 2017).
RECOMMENDED MOTION(S):
No motions at this time, but staff would like direction from the EDA on which fund source scenario to pursue.
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