HomeMy WebLinkAboutEDA MIN 06-03-2013ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE MEETING OF
JUNE 3, 2013 IN CONFERENCE ROOM I
The meeting was called to order at 6.30 pn-i by Chair Peterson.
Members, Present: Bruce Nawrocki, Gary Peterson, Donna Schmitt, Marlaine Szurek, Bobby
Williams, and Tangy nera Dichm (arrived at 6-34 pm).
Members Absent: Gerry Herringer
Staff Present: Wait Felist, Scott Clark, Sheila Cartney, and Shelley Hanson.
2. PLEDGE OF ALLEGIANCE- RECITED
3. CONSENT ITEMS
1. Approve the Minutes from May 6, 2013 and from May 13, 2013.
2. Approve the Financial Report and Payment of Bills for April 2013 on Resolution 2013-06.
Questions by Members:
Nawrokci asked what the payments to Kennedy and Graven on page 3 were for. Clark
explained 90% of the amount was for the Mady's acquisition and about $400 of the amount
was for the Huset Park Amendment.
Motion hySchnfitt, seconded by Williams, to ivaii�e the reading of Resolution 2013-06, there
being an ample aniount cif copies available to the public. All Cayes. MOTIONPASSED.
Motion ley Schmitt; seconded ley Williams, to approve the consent agenda items as presented.
Ali aye s, MOTION PASSED.
EDA RESOLUTION 2013-06
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
(FDA) APPROVING THE FINANCIAL STATEMENT FOR APRIL 2013 AND PAYMENT OF BILLS
FOR THE MONTH OF APRIL 2013.
WHEREAS, the Columbia Heights Econornic 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 treaSLII-Cr'S vouchers or bills and
if correct, to approve them by resolution and enter the resolution in its records; and
EDA Minutes
Page 2
June 3, 2013
WHEREAS, the financial statement for the month of April 2013 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
Econornic, Development Authority that it has examined the referenced financial statements including the check
history, and they are found to be correct, as to form and content; and
BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check
history as presented in writing is approved for payment out of proper funds; and
BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia
Heights Economic Development Authority.
Passed this 3'-d day of June 2013
MOT.10N BY: Schmitt
SECONDED BY: Williams
AYES: All ayes
President
Attest By:
Shelley Hanson, Secretary
PUBLIC HEARING
4. Consider Sale of `Scattered Site Lots-
At the May 1. 3, 2013 ) Special Meeting the EDA approved a listing agreement with Remax Synergy to
fist the 12 scattered site lots for sale, approved a purchase and redevelopment agreement with
Timbercraft Homes to build on said lots and approved two model homes which can be built on the lots
with the exception of 4303 Reservoir Blvd.
FDA Minutes
Page 3
June 3, 2013
A public hearing is required when theEDA sells property; the public hearing has been advertised for
June 3, 2013. This Public I learing lists all 12 properties being approved for sale that way the E,DA does
not have to hold a Public Hearing every time there is a sale. The Resolution authorizes the sale of the
lots and the Purchase and Redevelopment Agreement that will accompany each sale. The property at
4303 Reservoir Blvd will still need EDA approval before it can be built on. At the public hearing the
FDA can discuss this item further and anyone from the public is able to speak to the item.
Staff recornmends approval of the sale as presented.
Questions/✓omn-ients ftom Members:
Nawrocki indicated for the record that he thought the price being paid for the lots is too low. Peterson
agreed it is low, but the decision has already been made to move forward with getting houses built on
these lots.
Public Hearin- Opened:
No one was present to speak on this natter.
Public Hearing Qgs,e�d,
Motion by Szurek, seconded by Schmitt, to ivaive Resolulion 2013'' -07, there being,any)le copies
available to the Public. All ayes. A40TION PASSED.
Motion by,Schinitt, seconded by&zirek, to aclopt Resolution 2013-07 qlal)roving a Planfir conveyance
of certain scatlerM site lots owned by the Econoinic Development Authority. All ayes. MOTION
PA&�E,D.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2013-07
RESOLUTION APPROVING PLAN FOR CONVEYANCE OF CERTAIN SCATTER-ED
SITE LOTS OWNED BY THE ECONONOMIC DEVELOPMENT AUT14ORITY
BE IT RESOLVED By the Board of Commissioners ("Board") of the Columbia fleights Economic
Development Authority ("Authority") as follows:
Section 1. Recitals,
1.01., The Authority lias determined a need to exercise the powers of a housing and redevelopment
authority, pursuant to Minnesota Statutes, Sections. 469.090 to 469.108 ("EDA Act"), and is currently
adt'ninistering the Downtown CBD Redevelopment Project ("Redevelopnient ProJect") pursuant to Minnesota
Statutes, Sections 469,001 to 469.047 ("I-IRA Act"),
1.02. 'Within the Redevelopment Project, the Authority and City have created the City-Wide Scattered
Site HOLISirlg 'Fax Increment Financing District (the "TIF District"), and the Authority leas acquired parcels
within tbeTIF District described in ExIiibit A hereto (tbe "Subject Parcels").
EDA Minutes
Page 4
June 3, 2013
1.03. The Authority intends to convey the Subject Parcels to contractors that will construct homes for
sale to incorne-qualified buyers (or to qUafified buyers for construction of their own homes), and to that end has
engaged the services, of Re/Max Synergy (the "Broker") to assist ill that process as more fully described in tile
Exclusive Right to Sell Listing Contract (the "Listing Agreement").
1.04, On this date, the Board held a duly noticed public hearing regarding the plan for sale of the
Subject Parcels.
1.05. The Board has determined that sale of the Subject Parcels as described in this resolution is in the
best interest of the City and its residents.
Section 2....Sale of Subject Parcels Approved: Further Proceed jW , s,
2.01. The Board approves the plan to sell the Subject Parcels in accordance Nvitli the Listing
Agreement.
4n
2.02. The Board hereby ratifies approval and execution of the Listing Agreement.
2.03. Authority staff and consultants are authorized and directed to cooperate with the Broker in
seeking sales of the Subject Parcels, subject to the condition that before the EDA is obligated to sell of any Sulaject
Parcel, the Board shall approve a purchase and redevelopment agreement with the buyer of that parcel (,as
described in the Listing Agreement),
Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority
this 3rd day of Jurie, 2013,
President
ATTEST:
Secretary
EXHBIT B
Subject Parcels
4011 5th Street NE
4108 7th Street NE
4448 Quincy Street NE
4235 Washington Street NE
4110 6th Street NE
4303 Reservoir Blvd NE
4039 5th Street NE
4421 5th Street NE
3 842 Tyler Street NE
3 846 Tyler Street NE
1309 Circle Terrace NE
4 133 2nd Street NE
EDA Minutes
Page 5
June 3, 2013
NEW BUSINESS
5. Sale of 44215"" St
At the May 13, 2013 meeting the EDA approved the following documents 1) a listing agreement with
Remax Synergy to list the Scattered site lots for sale, 2) a Purchase and Redevelopment Agreement with
Timbercraft Homes that will also be filled out with every sale, and 3) two model homes for buyers to
choose from excluding the Reservoir Blvd lot.
Tonight before you is the first purchase of one of the scattered site lots, 4421 5'h street, by 'rinibercraft
Homes. As agreed the sales price is ,$7,500 and they propose to put model #1 on this property. This lot
already has an existing two-car garage and the correct water connections, They intend to finish
construction by the end of September. As agreed upon at the previous EDA meetings the city has
applied for a variance to the minimum floor area of 960 square feet on the main floor requirement for
this model, as proposed the main floor area will be 581 square feet. At the same Planning and Zoning
meeting staff is requesting an ordinance amendment to this requirement.
Staff recommends approving the sale.
Quest i on s/Co mme tits from, Members:
Nawrocki asked if this construction would be any different froze the others since they are re -using the
existing garage. Cartney said it would be relatively the same since the plan for the new construction on
the other lots is to construct a detached garage similar to the one already on this site.
Motion by Williams, seconded by Schmitt, to ivaive the readin�;, qfResolution 2013-08,, there being
ample coj)ie�y available to the public. All ajyes. M077ON PA&VD,
Motion by Williams, seconded byS'ehnnll, to adol)t Resolution 2013-08 apl.)roving a Pureh aye and
Redevelopment ( I ontract between the Colzonbia Heil hl,� Pconowic.Develoj)inent Authority and
ThnbercrqftRemo&,ling. All ayes. MOTIONPA&SE'l).
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHO1;UTY
RESOLUTION NO. 2013-08
RESOLUTION APPROVING A PURCHASE AND REDEVELOPMENT CONTRACT
BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUT140RITY
AND TIMBERCRAFT REMODELING
BE 11' RESOLVED By the Board of Commissioners ("Board") of the COILInibia V16-41ts Ecollonlic
Developinent ALIthority (" "Authority ") as follows:
EDA Minutes
Page 6
June 3, 2013
Section 1. Recitals.
I .O 1. The Authority has the powers of a housing and redevelopment authority, pursuant to Minnesota
Statutes, Sections, 469.090 to 469.108 ("EDA Act"), and is currently administering the Downtown CBD
Redevelopment Project ("Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.00 1 to 469,047
("HRA Act").
1.0)2. "I'lie Authority administers a scattered site housing program, under which the Authority acquires
residential property for resale to builders or individuals for construction of new single family homes.
1.03. The Authority and Timbercraft Remodeling (tile "Redeveloper") have proposed to enter into a
Purchase and Redevelopment (the "Contract"), setting forth the terms and conditions for sale of certain property
within the Redevelopaicrit Project located at 4421 5'u' St. NE Street and described as Lot 21, Block 18, Columbia
Heights Annex to Minneapolis (the "Subject Property").
1.04. Oil June 3, 20613, the Authority held a public hearing regarding conveyance of various parcel's
owned by the Authority as part of the scattered site housing program--including the Subject Property--at which all
interested pet-sons were given an opportunity to be heard.
1.05. The Board has reviewed the Contract and finds that the execution thereof and performance of the
Authority's obligations thereunder further the goals of the Redevelopment Project and are in the best interests of
the City and its residents.
Section 2. Authority Approval; Further Proceedin.gs,
2.01. The Contract 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 documents by SUCII officials shall be conclusive evidence of
approval.
2.02, The Authority approves conveyance of the Subject Property to the Redeveloper, subject to
satisfaction of all terms and conditions of the Contract, and authorizes and directs the President and Executive
Director to execute the deed and any other documents necessary to carry out such real estate transaction.
103. Authority and City staff are authorized and directed to take all actions to implement the Contract.
Approved by the Board of Commissioners of the Columbia Heights Economic Development Authority
this 3rd day of J u ne, 200 3.
President
ATTEST:
Secretary
EDA Minutes
Page 7
Julie 3, 2013
6. Mady's Blight Determination
In July or August of this year .staff will be initiating the demolition of the Mady's building at 3919 -
27 Central Ave. NE. An important consideration in this demolition is for the Economic Development
Authority (EDA) to make, by resolution, a blight deters-nination regarding the condition of the existing
building. By doing this, the EDA preserves the right to include the building for up to three years, as part
of the calculations for the establishment of a tax increment redevelopment district. If the determination is
not made prior to the demolition, the EDA loses the ability to consider making this a redevelopment
district as no structures would exist oil the property. The test for the blight determination was done
based on State statute and existing policies, and has been reviewed by the EDA Attomey.
Staff recommends the motion as written. Clark told members this preserves our options for three
years from the date of this action (June 3, 2013).
Questions/Comments from Members:
There were no other questions.
Motion hyS'zurek1 seconded by Williams, to iv Give the reading ofResolution 20" 13-09 there being, ample
copies available to the public. All ayes. 2`1110TIONI�,4S'VD,
Motion by S` 7urek, seconded by TIVillicons, to Approve Resolution 2013-09, Des4i rating the building (it
3927(,'c,nircilAi,,enueci,ssirticlui,,(illysub,s-taiidard. Allay,es. AIOTIONPA& ED.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2013-09
DESIGNATING BUILDING AT 3927 CENTAL AVENUE
AS STRUCTURALLY SUBSTANDARD
BE IT RESOLVED By the Board of Commissioners ("Board"') of the COlUrnbia. Heights Economic
Development Authority ("Authority") as follows:
Section 1. Recitals.
1.01. Under Minnesota Statutes, Section 469.174, subd. 10(d), the Authority is authorized to deeill
parcels as occupied by structurally substandard buildings despite prior demolition or removal of the buildings,
subject to certain terms and conditions as described ill this resolution.
1.02. The Authority previously acquired the property at 3927 Central Avenue in the City (tile
"Designated Property") and intends to cause demolition of the building located on that property,
03 The Authority inay in the future include the Designated Property in a rede,,,elopment or renewal
and renovation tax increment financing district as defined in Minnesota Statutes. Sections 469.174, SUbd. 10 and
Subd. 10a, and to that end has determined to designate the existing building on the Designated Property to be
substandard prior to demolition.
EDA Minutes
Page 8
June 3, 2013
Section 2. Building Qesigil4ted Substandard-, Other _REqce
L�edin Ys.
2.01. The Authority finds that the building on the Designated Property is Structurally substandard to a
degree requiring substantial renovation or clearance, based upon the following:
(a) "Report of Inspection Procedures and Results for Determining Qualifications of a Tax increment
1=
Financing District as a Redevelopment District," dated October 17, 2005, prepared by LIJB, Inc.
(b) "Tax Increment Financing Eligibility Assessment, 3927 Central. Avenue, Columbia Heights, MN,"
dated May 22, 2013, prepared by City Community Development Director, Assistant Community Development
Director, and Building Official (which updated the 2005 study prepared by LHB).
2.02. After the date of approval of this resolution, the building on the Designated Property may be
deinolished or removed by the Authority, or Such demolition or reinoval may be financed by the Authority, or may
be undertaken by a developer under a development agreement with the Authority.
2.03. The Authority intends to include Designated Property in a redevelopment or renewal and renovation
tax increment financing district, and to File the request for certification of such district with the Alloka County
auditor within three years after the date of building demolition oil the Designated Property.
2.04. Upon filing the request for certification of the new tax increment firiancing district, the Authority
Nvill notify the Anoka County auditor that the original tax capacity, of the Designated Property must be adjusted to
reflect the greater of (a) the current net tax capacity of the parcel, or (b) the estimated market value of the parcel
for the year in which the building was demolished or removed, but applying class rates for the current year, all in
accordance with Minnesota Statutes, Section 469.174, subd. 10(d).
2.05. 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 Columbia Heights Economic Development Authority
this 3rd day Of June, 2013
President
A'I"TEST:
Secretary
7. Subordination Agreement-4456 Monroe St
Oil July 23, 2008 Uenna Lewis, 4456 Monroe St. NE, received a $7,50 ^0 home improvement loan from the City's
Economic Development Authority (EDA). Tile program I-Liles defer any annual payment oil the loan and full
repayment occurs at the time of the sale of the subject property. ']'here area number of rules that apply to this
program that are important to this item, these are: 1) The EDA's loan is always Subordinate to the primary
mortgage 2) When the EDA's original loan is given, the combined loan -to -value (CLTV) can't exceed 100%
(CLTV is the value of the first mortgage plus the FDA's loan as a ratio to the assessed or appraised value of the
property), In other words, if a house has an appraised value of $150,000, the value of the combined loans can't
exceed $150,000.3) Staff has processed in the past a number of refinancing requests oil various home
improvement loans, which calls for a new subordination agreement based on the attached policies.
EDA Minutes
Page 9,
3 une 3, 2013
Clark explained the applicant has made a request to refinance her home using a Federal horne mortgage
prograill called Home Affordable Refinance Program (HARP) which lowers her interest rate and extends
terms. The purpose of HARP is to prevent foreclosures by significantly reducing Monthly house payments.
The problern with the subject application is that due: to the depreciation of the home the CLTV is now at
108%. This means that the value of the refinanced loan and the EDA loan is 8/"o higher than the appraised
value of the home (approximately $115,000), Based on EDA policy staff can't administratively approve the
refinancing since the CLTV must be 100% or lower.
Staff is recommending that the EDA authorize the subordination since I) The EDA's loan position is already
in jeopardy since the CLTV is already at 108% due to the downturn in the market. 2) The applicant is simply
trading the principal of the loan to a different loan and no cash equity is being taken Out of the transaction 3)
Allowing the transaction results in a significant monthly payment reduction which reduces the EDA's risk of
foreclosure on the property and the loss of the EDA loan. In other words, if a foreclosure occurs tile batik gets
paid first and it is doubtful if proceeds would cover any repayment to the EDA loan.
Staff recornmends granting a new Subordination agreement based on the aforementioned rationale. If the ED�A
approves the subordination request, a formal resolution will be forwarded to the City Council,
Questions/Cornments by Members!
Nawrocki asked when she obtained her first mortgage. Clark said it was prior to the loan she obtained froill us
in 2008. 1 le said she met the criteria in 2008, but with values dropping over the last five years, she now is
upside down with her mortgages.
Schmitt asked if we have approved others like this. Cartney replied that we have done other loans and approved
a re-financing, but none that have been over the 100% CUFV threshold. Cartney explained that this particular
loan was to replace the siding on the [louse and that she matched the loan arnount in order to qualify.
Clark told members that in order to qualify for the HARP re-firiancingn , the homeowner cannot be delinquent in
tier payments and by approving this we help reduce tier monthly payments, and thus, protect the pay back of our
loan as Much as we call. He went on to say that Columbia Heights is lagging behind other cities and has not yet
experienced ajunip in market values.
Motion by Schmitt, seconded by Diehin, to approve the suboi"dinwion request andsubmit 4ifirmal resolutionfior
consideration qflhe City Council. All ayes. MOTION PASSED.
S. Administrative Repot-t
Clark told members that Anoka County has determined that the City has met all CDBG requirements in
the final O'Reillys (37''' and Central) development and as such, the City has no further liabilities
regarding recaptures.
The next regular EDA meeting will be Monday, July 1, 2013 at City Hall at 6:30 pm.
The meeting was adjourned at 6:55 prn.
Respectfully submitted,
Shelley Hanson
Secretary