HomeMy WebLinkAboutEDA MIN 11-24-09ECONOMIC DEVELOPMENT AUTHORITY (EDA)
MINUTES OF THE REGULAR MEETING
November 24, 2009
The ineetinIg was called to order at 7:0,0 pin by President-Gary Peterson.
Members Present: Bruce Nawrocki, Marlaine Szurek, Gerry Herringer, Gary Peterson, Bruce
Kelzenber-, Tarru-nera Diehin (arrived at 7:15 prn) and Bobby Williams (arrived at
7: 3 0 pin).
Staff Present: Walt Fehst., Scott Clark, Sheila Cartney, and Shelley flanson.
2. PLEDGE OF ALLEGIANCE- RECITED
3, CONSENT AGENDA
1. Approve the Minutes of September 22, 2009,
2. Approve the Financial Report and Payment of Bills for September and October 2009 per
Resolution 2009-28
Nawrocki again. asked about the annual budget for funds 408, 410, and 420 and is still waiting for
an answer. Clark responded that he thought this was resolved since Mr. Nawrocki had met with
the finance Director regarding this issue, and if he wants a formal budget established for those
capital expenditures within the report then this is a Finance Department item,
Nawrocki questioned the Bank Checking Account disbursements of $1,526.79, Fie wanted to
know if this was a separate account. Clark explained that amount is the total ofall the checks
written during October from our department accounts. Nawrocki then questioned the line iterns
for the Multiple Dwelling and Abandoned Inspections categories. fie felt the report should have
been revised and updated to show an accurate reflection of the revenue of these two categories.
Clark stated that these two programs were created in 2009 and the budget numbers were set in
2008.
Clark suggested that a meeting be set up with Mr. Nawrocki, the City Manager, the Finance
Director and himself to get this straightened out so there is a better understanding of the reports
and how the system is set up.
Mr. flerringer commented on the minutes from the September meeting. He was thankful the
minutes were written in a manner that allowed him to be brought Ul) to speed regarding the B
presentation for the K-Mart site,
Motion by Szttrek seconded by Kelzenberg, to it,aive the Reading qf'Resoltaion 2009-28, there
h'cliiig(itnl?lec,ol)ie,yct,i,,aila,blc,loth,epiiblic,. XlQye,s�, Aj,07'10,(Vj-1A&5L,D.
Motion kvSzurek, seconded by Kelzenbe'rg, to, qj.)l,?roie the Minutes and Resolution 2009-28,
a])13roving, the Financial Re])ori andpayinent of billy
M07YON PARV, D. fi- & (1weinber and
October 2009. All qve,y.
Economic Development Authority Minutes
Page 2
November 24, 2009
EDA RESOLUTION 2009-28
RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY (EDA)
APPROVING THE FINANCIAL STATEMENT FOR SEPTEMBER AND OCTOBER 2009 AND, PAYMENT
OF BILLS FOR THE MONTHS OF SEPTEMBER AND OCTOBFR OF 2009.
WHEREAS, the COIL[Inbia Heights Economic Development Authority (EDA) is required by Minnesota Statutes
Section 469.096, SUM. 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 arid 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 months of September and October 2009 and the list of bills for the months
of September and October 2009 are attached hereto and made a part of this resolution; and
WHEREAS, the EDA has examined the financial statement and the fist of bills and finds there to be acceptable as to
both form and accuracy.
NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia heights If
')evelopment Authority that it has examined the attached financial statements and list of bills, which are attached
were to and made a part hereof, and they .are found to be correct, as to fon-n and content; and
BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the list of bills as
presented in writing are approved for payment out Of Proper funds; and
BE IT FURTHER RESOLVED this resolution and attachments are to be made a part of the permanent records of the
Columbia Heights Economic Development Authority.
zn
Passed this 24th day of November, 2009,
MOTION BY: Szurek
SECONDED BY: Kelzenber-
All ayes.
Attest by: President
Shelley 11anson, Recording Sec—r-c—tary
Economic Developnicia Authority Minutes
Page 3
Noveniber 24, 2009
BUSINESS ITEMS
4. MAKE REIGHTS YOUR HOME-
Cartney explained that the " Make Heights Your Home" program was approved in April 2009 and
provides a 3.5% down payment assistance for the purchase of foreclosed homes that are bought with
a 203)K F14A loan (which guarantees rehabilitation for that property).
She explained that we have only received one application to date and it is scheduled to close on
November 25th. The down payment assistance for this property is $4,669.50 and the estimated rehab
on this property is $28,000.
Cartney explained that several cities have adopted this type of program. It seems to be workin,, well
t,
in cities in Hennepin County, but not in Anoka County for some reason. Staff has had discussions
with the North Metro Realtor's Association regarding the lack of' participation in the program. As a
result, Staff suggested extending the prograrn into 2010 with the following modifications:
1) Allow other similar financing to FIJA 2031 (those loans that also require rehab)
2) That the property doesn't have to be a foreclosed home sale.
Peterson asked how much the buyer has to put into the purchase and rehab in order to get the down
payment assistance, Cartney said that varies, but there is a requirement that they do a minfinUrn of
$10,000 ofrehab and then they can receive 3.5% down payment assistance.
Nawrocki questioned Nvhy we would continue to spend money to promote and administer the
program, when there's been so little interest in it. Peterson said the reason we started the prograrn
was to assist new owners in making improvements to the housing stock. He said he still supports, the
various programs that have been established to make positive changes, even if they are just for a few
houses at a time.
Herringer asked how our program differs firom, the ones used in Hennepin County. Clark said they
are basically the same program. Ile went on to say that it is possible that the buyers purchasing in
Columbia Heights aren*t doing significant rehab of the properties they are purchasing, which is a
requirement to get the assistance.
Szurek stated she thinks people are just hesitant about being forced to do a certain amount of rehab.
and therefore, are hesitant to commit to the requirements.
rocyrarn like others already in
Dielmi asked if we change some of the criteria, if it would make the p 11
place. Cartney said it wouldn't, and explained the differences. One of the rnaJor differences, is this
program is not income based.
Motion bi, Herringer, seconc-lecl by Szurek, to qpi rove the extension q1''JIoke Heighis Your Iloine "
1)rogrtim to the enrol (?f 2010 . width mw mod0calions., (1) Allow other sin fil(,irfinancing to the FH11
203K tnorlgcige (rehttb require) and (-7) remove previous requi . renient qfihe property being in
)reclosure stalus. All aj,,es, W)TION I';2G5X11 r,
Economic Development Authority Minutes
Page 4
November 24, 2009
S. MADYS SITE-
Clark explained that Mr. Nawrocki had asked him to: contact Gene Mady regarding the sale of his
property. He reviewed the previous discussions that had taken place between the owners of the
site and the City. Clark also stated that over the past three years, two different private developers
have approached the owners, but no deal was struck.
It is staff's understanding that changes may be occurring with the property owners that may allow
the City (EDA) to negotiate a true market purchase, but staff needs to know whether the EDA
wishes to start the process for obtaining this property for redevelopment, or to let the present
owners deal with private developers. Before any negotiations can take place one of two options
must take place.
1) The partnership must come to an agreement to sell at a market price that is acceptable to all
parties.
2) If they don't come to an agreement, then Mr, Mady may take legal action to get a court
ordered referee to facilitate the sale of the property. Mr. Mady has obtained the legal services
of Jolm Berglund to move forward with negotiating a resolution with his partner, Mr. Foss.
Nawrocki wonders where the rnw.iey Would come from to purchase this property, and if we did
purchase it, is it better to demolish the site or to try and keep the current tenants leasing the space
until such time a redevelopment package is in place. He said by doing this, it would keep the
property on the tax rolls.
Peterson thought we should keep all options open at this point since Are already own the Burger
King site. He said another consideration would be the Heights Rental site on the corner. Clark
said that would be a crucial piece for any redevelopment to occur, and lie questioned whether the
City could afford both, and that this could be a private side transaction when full development
occurs.
The general consensus was to move forward with discussions regarding the site, but to keep Our
options open, and not commit to anything until we have more information relating to the costs
involved.
Clark "rill come back to the Commission with information on what price point they are looking
at, possible funding sources, information on relocation obligations, and whether it would be
advantageous to continue renting space in the building if we obtain ownership of the property.
6. PURCHASE OF 4648 POLK ST — RESOLUTION 2009-29
Clark reminded members that in May of 2009, the City and EDA modified the Tax. Increment Plan
for the Kinart/Central Avenue Tax Increment Financing District to include 55 parcels of the
"Sheffield Neighborhood", which have been identified as a renovation and renewal area. 'F he key.
elerr— ' of the Plan is to use un-obligated tax increment from the original district as a revenue
source nor redevelopment in the Sheffield neighborhood, and to capitalize revenue strearn through
a bond sale. Additionally the City was awarded a CDBG grant in the amount of 51 70,000 for
demolition of properties located in the Sheffield neighborhood.
Economic Development Authority Mimites
Pa-c 5
Noveniber 24, 2009
To date the City has purchased 4 properties and have demolished all the buildings. As part of this
project. the City currently is in negotiations to purchase a 4-plex at 4648 Polk St. for a maximum
price of $199,900 plus closing costs. The listing agent presented our offer of $1.85,000, but the
bank rejected that offer. Since this is the last meeting in 2009, staff is seeking authorization to
continue negotiations and approve an offer up to $199,90➢ plus, closing costs so that we do not
lose the opportunity to purchase this property due to our process.
'this property has been identified by the Police Department as a problem property in the past.
The building has been abandoned and vandalized. It currently is a 4 -plea on a small lot with no
garages.
Clark stated that this would be the fourth property on this block to be purchased. This purchase
would rnean a large chunk of this block would be able to be redeveloped into single family homes
at a later time and would decrease the density of the housing units in the neighborhood, which is
the overall goal of the program. Cartney stated that we have the CDBG funds to cover the
demolition of the property which is estimated to be between $20,000425,000.
Nawrocki asked how much it Would take to rehab this property since lie didn't think it looked that
bad. Clark stated he would estimate a bare minimum of $,50,000. Nawrocki asked if a contractor
had looked at the property. Clark said he had not contacted anyone to do so. fie went on to
explain that is not the intent of the funding being spent in this area. The program was set up to
reduce the density of the properties in this particular neighborhood, not to save buildings. He said
staff has been working closely with the Police Dept. to target certain properties as they become
available, in addition to working with homeowners and landlords in the area. He said our
secondary goal is to get other people who own property in the area to reinvest in their property as
they see progress being made and the density going down.
Nawrocki stated he thought the money Could be better spent on other properties that were in
worse condition. It was pointed out that we don*t always (yet a chance to purchase the properties
we want. We have to take advantage of the ones we do find out about, at a price that is fair. We
are in constant competition with other investors who are out to pick up properties and rent them
out again with minimal renovations taking place.
Nawrocki stated the Commission should keep this in mind when they consider the rental
buildings being proposed :for the Kniart site. He doesn't feel adding rental units on that site is
advantageous to the city as a whole when wCre trying to reduce density in the neighborhood
adjacent to that site.
Peterson moving thought we should keep movi forward and obtain as many properties as we can while
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market prices are still low,
,4 Galion lay Diehin, seconded by Kelzenberg, to i,jwive the remling qfRe,.w1ution. 2009-29, there being
ainl)le col3ies aiwilable to the 1)ublic, -411 ayes. MOTION PAX�ER
Economic Development Authority Minutes
Page 6
November 24, 2009
Motion by Dielim, seconded by Kelzenberg,, to adol)t Resolution 2009-2 , al.yw-oving acquisition of
prol)e•ty located (it 4648 Polk ,St A7E,, a I I z I
fitriherinore to it ho,i, e he Executive Director to enter into an
agreement fin- the same,
Roll Call: Ayes-KelzenbeiW, Diehin, kurek, Ilerringer, 11,71liams, Peterson
Nays-Nowt-ocki
MOTION PAR�E✓.
COLUMBIA HEIGHTS
ECONO IC DEVELOPMENTALITHORITY
RESOLUTION NO. 2009-29
RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE AGREEMENT FOR CERTAIN
REAL PROPERTY LOCATED AT 4,648 POLKSTREET NORTHEAST
BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COLUM131A HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY (THE "AUTHORITY") AS FOLLOWS:
Section 1. Recitals.
1.01. The Authority and City OFCOILlrnbia 11eights ("City") have established tile K-Mart/Central Avenue Tax
Increment Financing District (tile "TIF District") within the Central Business District Redevelopment Project (tile
"Project"), and have adopted a Tax Increment Financing plan (,,,ri,F Plan") for the purpose of financing certain
improvements within the Project.
1.02. The Authority has undertaken a prog-rarn to acquire homes in the project in order to address blighting
issues and reduce density and provide future redevelopment opportunities.
1.03. The Authority or City may incur certain costs related to the TIF District or Project, which costs may
be financed on a temporary basis from available Authority or City funds,
1.04. 'File City, using available TIF District funds, intends to acquire certain property in the City located at
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4648 Polk Street (the "Property") within the Project, all or a portion of which Property the Authority or City may use to
further redevelopment within the Project.
1.05, City staff have negotiated a Real Estate Purchase Agreement with GMAC Mortgage (tire '=Seller " ") dated
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November 19, 2009, including all related addenda and disclosures thereto (Collectively, the ".Purchase Agreement"), for
real property located at 4648 Polk Street Northeast and legally described as follows: the S '/2 of Lot 2 and all of Lot 3,
Block 2, Sheffields 2nd Subdivision (tile *'property"'), which Purchase Agreement is contingent upon approval of the
Authority.
1.06. The Purchase Agreement has been prepared and submitted to the Authority and is on file Nvith the
Executive Director,
Section 2. A.aprqvaland AsqgflLl n
2.01. The Purchase Agreement for the Property is hereby approved, and tile CX.CCLIti011 of the Purchase
Agreement by the Authority is hereby ratified, Pursuant to the Purchase Agreement, the Authority will purchase the
Property for up to $199,900. Authority staff and officials are authorized and directed to take all such other actions to
complete the purchase of the Property, including without limitation execution of all documents and agreements related to
Such transaction,
c-'assed this 24"' day of November 2009.
Economic Development Authority Minutes
Page 7
November 24, 2009
mill
A. 47th & Central verbal Update-
i. Commercial Project-
Clark updated the Commission on the Met Council Grant Extens i on. He stated the CDC is
recommending to the full Met Council that they extend the grant until 3/31/2010. The
developer has until that date to get his financing package in place or the grant will be
withdrawn. The Developer and Bruce Carlson from United Properties are working hard to get
the leases in place and the financing package together. They need to have commitments Jor
26,000 sf of the space out of the 35,000 total square feet in order to get the financing.
ii. Rental Project-
Clark said he arranged meetings between B and the two cornmission members who were
absent frorn the last meeting so they could be brought up to speed on the proposal to construct
two apartment buildings in lieu of the original condo buildings at the Kmart site. Clark stated
the developer would like to proceed with the project and the next step is to take members on a
tour of other facilities the), have built and then to hold a public neighborhood meeting to
gather feedback be-fore finalizing a plan to bring to the City.
4:11
Nawrocki stated he is generally opposed to the plan and wants to see more concrete
information. Irle thinks this is a downgraded solution from the original plan.
Diehm is interested in seeing some of their other projects, She wants some assurances and to
see what they have planned to make this work at this particular location. She would like staff
to check with staff from other cities where neighborhoods may be more of challenge to see
C,
how the projects have worked there, and if they have had any problems or things they would
do diff'erent. She stated this is not the same as St. Anthony whereby they redeveloped the
whole area and there are shops and dining places nearby, This is a unique development
mostly because ofthe adjacent neighborhoods.
William stated lie was against this change in the project at first. But after meeting with the
developer, lie is now in. favor. Ile said firnes have changed due to the downturn in the
economy, the drop in property values, and the mortgage crisis. Ile thinks, the site looks awful
the Wray it is and we need to be flexible and adapt to new ideas. Otherwise, this property
could sit as is for several more years.
Herringer also met with B and is keeping an open mind until after the neighborhood
meetings are held. He was opposed at first, but is willing, to look at the other projects and to
listen to public input before making his final decision.
Peterson agreed this plan is a drastic change and thinks it will be interesting to see what the
4-1
public says.
Economic Development Authority Minutes
Page 8
November 24, 2009
B. Root Property
Clark reported progress is being made in determining the kind of clean up that will be needed
for the site. They are in the process of Phase I investigating how much contamination there is
investigating
and what type of remediation will have to take place.
C. Lialithouse Pro*ect-
Clark reported that several people from the City Staff/Council went to the open house and
thought the facility was very nice. Thus far, there: are 6 people moved in and 47 units are
reserved. He stated there will be another open house open to the public on Saturday,
November 28"' from 11 am to 3 Pin for anyone who missed the first one.
D. Senior I'miect-Huset Park
Clark reported that Mike f3jerkasett made his 202 application to HUD for the Senior
Cooperative building on 39"' and. Huset Pkxvy. fie will keep the Commission informed of any
developments.
E. Foreclosure Map
Clark reviewed the updated foreclosure map and numbers with the members.
Clark then gave an update on the Jimmy John's project. The prqject was delayed due to indecision on which
contractor would be doing the work.
8. OTHER BUSINESS
A. Cancellation of December 22, 2009 i'Meetirr
Motion bySzurek seconded by Diehn?, to cancel the Regwlarly sehedule(l meeting, qf
December 27 200.9. All ayes. 1110TION I)ASSED.
B. BKV Tour of their Rental Projects- Members discussed the best date to schedule the tour
from the following options:
December 2, 3, 4, 16, and 17
It was decided to set up the tour for December 2`� from 1:30 to 4:30 pin
The meeting was adjourned at 9,:55 pin
Respectfully submitted,
Shelley Hanson
Secretary
ECONOMIC DEVELOPMENT AUTHORITY (ELBA)
MINUTES O THE SPECIAL MEETING
December 2, 2009
`rhe meeting was called to order at 1:20pm by Vice President — Marlaine Szurek
Members Present: Marlaine Szurek, Bruce Kelzenberg, Gerry Herringer and Bruce
Nawrock],Tammera Diehrn (met on site).
Members Absent: Gary Peterson and Bobby William
Staff Present: Wait Fehst, Scott Clark, Sheila Cartney, and Jell` Sargent
Tour
Heritage Landing Apartments 415 North I" Street
Eitel Building City Apartments 1367 Willow Street
Blue Apartments 2922 Aldrich Avenue South
Scott Clark. explained that an open house will be held in January and staff will send out
"save the date" post cards to surrounding property owners, as well as advertise on the city
webpag,e and newspaper.
The meeting was adjourned at 4: 1 Opm