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HomeMy WebLinkAbout20190304_EDA_Packet ECONOMIC DEVELOPMENT AUTHORITY AGENDA March 4, 2019 6:00 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 February 4, 2019 5.Approve Financial Report and Payment of Bills for January 2019 Resolution 2019-02 Motion: Move to approve Consent Agenda as presented. PUBLIC HEARING 6.Business Subsidy Policy and Criteria Motion: Move to close the Public Hearing and waive the reading of Resolution 2019-03, there being ample copies available to the public. Motion: Move to adopt Resolution 2019-03, a resolution adopting a Business Subsidy Policy. BUSINESS ITEMS 7.Exclusive Right For Representation Agreement Motion: Move to waive the reading of Resolution 2019-04, there being ample copies available to the public. Motion: Move to adopt Resolution 2019-04, a resolution approving the buyer representation contract with Re/MAX Synergy. OTHER BUSINESS 8.Review and Discuss a Conceptual Proposal from Lupe Development Partners 9.Home Energy Audit Program Discussion 10.Adjourn The next regular EDA meeting will be April 1st, 2019 at City Hall. ECONOMIC DEVELOPMENT AUTHORITY(EDA) MINUTES OFTHE MEETING OF FEBRUARY 4, 2019 Themeeting wascalled toorderat7:02pmbySecretary Keith Dahl. MembersPresent:Murzyn,Schmitt,Buesgens,Williams,Novitsky,and Szurek. Members absent:Herringer StaffPresent:Keith Dahl,Mitch Forney,Elizabeth Hammond, Kevin Hansen,andShelley Hanson PLEDGE OFALLEGIANCE-RECITED OATH OF OFFICE-DonnaSchmitt, John Murzyn, and Nick Novitsky were sworn in for their new terms. ELECTION OF OFFICERS: Schmitt stated that it is important for either the President or Vice-Presidenttobe a council person so that someone is always available to sign documents. Williams nominated Szurek for President. There were no other nominations. Williams nominated Murzyn for Vice-President. There were no other nominations. Williams nominated Buesgens for Treasurer. There were no other nominations. Motion byWilliams, to electSzurekPresident of the Economic Development Authority.Ayes-Murzyn, Buesgens, Williams, Novitsky, Szurek. Nays-Schmitt Motion byWilliams,to electMurzynVice President of the Economic Development Authority.All ayes. Motion byWilliams, to electBuesgensTreasurer of the Economic Development Authority.All ayes. Motion bySzurek, seconded byMurzyn, to appoint Keith Dahl as Secretary of the Economic Development Authority.All ayes. Motion bySzurek, seconded byMurzyn, to appoint Shelley Hanson as the Assistant Secretary of the Economic Development authority. Motion bySzurek, seconded byMurzyn,to appoint Joseph Kloiber as the Assistant Treasurer of the Economic Development Authority. The meeting resumed under the leadership of PresidentSzurek. CONSENTAGENDA 1.ApproveminutesofNovember 5, 2018. 2.Approve FinancialReport&PaymentofBillsforOctober-December, 2018–Resolution2019-01 20190204_EDA_Minutes 11 EDA Minutes Page 2 Feb 4, 2019 QuestionsfromMembers: Schmitt questioned the payment to HyVee on page 12 of the report. Dahl stated that was the balance remaining for the escrow deposit they made to the City to cover legal fees associated with the TIF financing. Szurekasked staff if they were aware of semis parking in the HyVee lot over the weekend. Dahl said HyVee has given a company permission to use the lot for those working on their CDL licensing. Motion byBuesgens,seconded byWilliams,to approve theConsent Agenda as presented. All ayes. MOTION PASSED. RESOLUTIONNO.2019-01 AResolution of theEconomic DevelopmentAuthorityof Columbia Heights, Minnesota,Approvingthe Financial Statements forthe MonthsofOctober, November, and December2018and the Payment of the Bills for theMonthsofOctober, November, and December2018. WHEREAS,the Columbia Heights EconomicDevelopment Authority (EDA)is requiredby Minnesota Statutes Section469.096, Subd. 9, to prepare a detailed financial statementwhichshows all receipts and disbursements,their nature,the money on hand, thepurposes towhich the money on hand is tobe applied, the EDA's credits and assets andits outstanding liabilities; and WHEREAS,saidStatute also requires the EDA to examine the statement and treasurer's vouchers or bills andif correct,to approve them byResolutionand enter theResolution in its records; and WHEREAS,the financial statement forthe monthsofOctober-December2018has beenreviewed by the EDA Commission;and WHEREAS,the EDA has examinedthe financialstatements andfinds them to be acceptable as to both form andaccuracy; and WHEREAS,the EDA Commission has other means to verify the intent of Section 469.096,Subd. 9, includingbut not limited to Comprehensive Annual FinancialReports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS,financials statements are held by the City’s Finance Departmentin a method outlined by the State ofMinnesota’s Records Retention Schedule, 20190204_EDA_Minutes 22 EDA Minutes Page 3 February 4, 2019 NOW, THEREFOREBE IT RESOLVEDby the Board ofCommissioners of the Columbia Heights Economic Development Authority that it has examined the referencedfinancial statementsincluding the check history, andthey are found to be correct, as to form and content; and BEIT FURTHER RESOLVEDthe financial statements are acknowledged and received and the check historyas presentedin writing is approved forpayment out of properfunds; and BEIT FURTHER RESOLVEDthis resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. ORDER OFECONOMIC DEVELOPMENT AUTHORITY Passed this __4th____ dayof___February_____, 2019 Offered by:Buesgens Seconded by:Williams Roll Call:All ayes BUSINESS ITEMS 1.Updates from 2018 and Project Discussions for 2019 Throughout 2018, the Economic Development Authority (the “EDA”)has accomplished several projects and objectives. The purpose of this report is to review and discuss the EDA’s accomplishments in 2018, but also to determine the projects and objectives that the EDA would like staff to focus on in 2019.Dahl reviewed the highlights of 2018 accomplishmentsthatincluded, butwerenot limited to the following: 2018EDA Accomplishments Obtained an Opportunity Zone designation for census tract 51501. An Opportunity Zone is an economically- distressed community where newinvestments, under certain conditions, may be eligible for preferential tax treatment. Sold allof theremaining lots in the Single Family Home Lot Sales Program.Over the course of the program, a total of 23 lots were acquired, demolished, and conveyed for new construction of single-family homes, which effectively increased Columbia Heights’ property value by $1,954,188. Purchased the property located at 4827 University Avenue NE for commercial redevelopment.Dahl reminded members that we also own the neighboring property at 4833 University Ave. Initiateda business retention and expansion program togather information about local businesses in an effort to establish relationships, but also to anticipate the changing needs of the businesscommunity.Dahl told members that surveys were distributed to businessesby the Fire Dept. and that we received about 30back. Created the Façade Improvement Grant Program and leveraged $70,960 in private reinvestment.The leverage ratio equatedto 1:2.03; for every $1.00 of public investment, there was$2.03 of private reinvestment. Installed 5 security surveillance systems along Central Avenue NEto reduce the incident rate of criminal activity, as well as increase business vitality and economic performance. A total of 11 security cameras were installed. 20190204_EDA_Minutes 33 EDA Minutes Page 4 February 4, 2019 Now, as the EDA looks ahead to 2019, staff seeks to facilitate discussion about what projects, programs, and objectives commissionmembers desire to see initiated and/ or completed in 2019. First, staff would like to review the cash balances of several accounts that the EDA utilizes to accomplish its initiatives. The figures below are estimations and subject to change as the year-endfund balances have not been finalized for all of the accounts. Fund 226: Special Projects Revenue:$ 537,000 Fund 371: TIF T4 Kmart/ Central Ave:$ 480,000 Fund 376: TIF A3,C7,C8 Scattered Site District:$ 206,000 Fund 408: EDA Redevelopment Project Fund$ 730,000 Fund 420: CAP Improvement Development:$ 1,557,000 Anoka County HRA Levy:$ 668,000 Schmitt asked if any of these funds could be used towards a new City Hall. Dahl said approximately $400,000 could be taken from Fund 226 and another $400,000 or so, from fund 420. Nothing from Funds 371 or 376 can be used for a new City Hall. Kevin Hansen concurred that he believes almost one million dollars are earmarked from these funds that Dahl noted per his conversationswith the Finance Director. The list below provides a starting point for the discussion tonight. Staff highly encourages the EDA commission members to provide feedback and propose changes to the following 2019 proposed projects, programs, and objectives: 2019Proposed Projects, Programsand Objectives Acquireandremediatethe Root Property located on the corner of 40th AvenueNEand University Avenue NE.Forney told members thatstaff applied for CDBG funds to remediate the Root property and that the Countyis working with the City to sell the propertyat a reduced price. The use of CDBG funds to rid cities of blighted properties is a priority in the award of funds. Dahl explained that the City will initially expend $80,000 to purchase the property, but will get most of it back (est. $53,600 or 67%) as the dollars will be spread between the School District, County and the City. Murzyn asked how much it would cost to do the soil remediation. Dahl said approximately $120,000 and that the CDBG funds will cover that. Continue the developmentofand initiation ofa business retention and expansion program to assist the Columbia Heights business community.Buesgens asked what typeof feedback staff got from the returned surveys. Dahl stated that staff will re-evaluate the questions asked on future surveys, but that some would like help in order to remodel the interior space of their business. Evaluate the possibility of expanding the Façade Improvement Grant Program to incorporate more eligible thththth applicants, specifically between 37-47Ave along Central and along 39Ave and 40Ave. Create and implement a subsidized interest loan program for commercial property owners to encourage further reinvestment within Columbia Heights’ commercial corridors.Addressed below(A). Determine a fund source and create a housing rehabilitation grant or low to no interest loan program for exterior remodels and/ or interior renovations.Addressed below(B). Create and offer an energy audit program that would subsidize home energy audits for residential structures throughout Columbia Heights.Addressed below(C). Subdivide the remnant parcel located to the north of the Public Safety Building and identify a redevelopment opportunity.Dahl also mentioned subdividing the remaining Library parcel for future use as parking or a small development that would complement the area. 20190204_EDA_Minutes 44 EDA Minutes Page 5 Feb. 4, 2019 A.Subsidized Interest LoanProgram This memo is in regards to the possible creation of a subsidized interest loan program. Staff continues to seek ways in which the Columbia Heights Economic Development Authority (the “EDA”) may establish a public-private partnership/relationshipthat would increase the amount of funds reinvested into commercial properties throughout the City of Columbia Heights (the “City”), specifically for businesses or commercial property owners to renovate, retrofit, modernize, or remodel their current space.One concept previously discussed was in regards to a subsidized interest loan program where the EDA would agree to pay a portion of a borrower’s accrued interest over a specified period of time. For instance, the following examples were prepared to depict a subsidized interest loan program, and to determine what the true cost of the program would be to the EDA if a program such as this was offered. Furthermore, the examples were calculated based on an amortization schedule for a loan amount of $5,000, $15,000, and $30,000 over a three-year repayment period at a traditional interest rate of 5.50%, and the EDA would subsidize 2.75% over the specified repayment period. Commercial Loan of $5,000.00: The totalthree-year cost to the EDA would be a subsidy inthe amount of $217.50 with a monthly payment of $6.04. Monthly PaymentTotal Interest PaidTotal Repayment Borrower$ 144.96$ 217.50$ 5,217.50 Columbia Heights EDA$ 6.04$ 217.50$ 217.50 TOTAL$151.00$ 435.00$ 5,435.00 Commercial Loan of $15,000.00: The total three-year cost to the EDA would be a subsidyin the amountof $653.00with a monthly payment of $18.14. Monthly PaymentTotal Interest PaidTotal Repayment Borrower$ 434.86$ 653.00$ 15,653.00 Columbia Heights EDA$18.14$653.00$653.00 TOTAL$ 453.00$ 1,306.00$ 16,306.00 Commercial Loan of $30,000.00: The total three-year cost to the EDA would be a subsidyin the amountof $1,306.00with a monthly payment of $36.28. Monthly PaymentTotal Interest PaidTotal Repayment Borrower$ 869.72$ 1,306.00$ 31,306.00 Columbia Heights EDA$36.28$1,306.00$1,306.00 TOTAL$ 906.00$ 2,612.00$ 32,612.00 20190204_EDA_Minutes 55 EDA Minutes Page 6 Feb. 4, 2019 Ultimately, a subsidized interest loan program would be a relatively inexpensive way for the EDA to encourage reinvestment ofcommercial properties throughout the City, and may have a combined use with the Façade Improvement Grant Program to encourage more substantial improvement, renovation, and remodel projects. Staff seeks to facilitate a discussion with theEDA Commissioners to determine if further pursuit should be given to develop a subsidized interest loan program or a comparable program with the same concept. Members were interested in helping businesses invest in their properties depending on the dollars available. They feel it best to prioritize their options, but were open to this idea, and wanted staff to further investigate the possibility of this program. B.Creation of a Home Rehabilitation Loan Program This memo is in regards to the possibleestablishment of a housing rehabilitation loan program, specifically a presentation of research on available options. Other cities located throughout the metro offer their citizen’s home rehabilitation loans. Some cities take it upon themselves to financeand administer these loans, while the majority of cities either; utilize a third party for administering the loans, or; advertise county and state programs rather than use their own money. Cities that utilize a third party to administer loans often use the Center for Energy and Environment (CEE) to administer the loans. CEE is a nonprofit organization that seeks to promote energy efficiency and economic development along with offering two separate options in terms of loan administration. As a city we can either fund, set interest rates, and create our own criteria for the loans; or buy down interest rates on one of CEE’s loan programs. As you can see in the table below there is a wide variety of loan amounts, lengths and interest rates. Depending on the goals of our program and available money the city can decide which variables fit our program goals. CityMin Loan AmountMax Loan amountInterest Rateterm Roseville$ $ 40,000.004.0%<10 Fridley $ 1,000.00$ 50,000.004.5%<20 Richfield $ 50,000.00$0.0%<30 Minneapolis $ 2,000.00$ 30,000.002.0% 0 MHFA FIX UP FUND $ 2,000.00$ 50,000.005.7% <20 Dakota County Development Agency$ 15,000.00$ 25,000.000.0% 0 CEE Home Improvement$ 1,000.00<10 $ 20,000.006.0% 20190204_EDA_Minutes 66 EDA Minutes Page 7 Feb. 4, 2019 There are many variables that the City of Columbia Heights can alter to tailor the loan program to fit the cities goals. Minneapolis and the MHFA loanprogramare the only two programs that establish income limits with both limits exceeding $100,000.Columbia Heights has the ability to tailor its income restrictions to affect certain populations. Columbia Heights has the opportunity to restrict the maximum value a house can have to enter the program along with setting a minimum age of a house. These variables allow the city to affect houses that have lower property values along with updating our aging housing stock. Another aspect of which the City of Columbia Heights has to consider is the type of projects our loan program will allow. Projects such as general maintenance tasks do not add value to our community, in terms of market value to our homes. It is the goal of the Community Development Department to add value to our housing stock by funding projects with a high return on investment. Located below is achart that highlights the average value of home improvement projects and their average return on investment. The projects selected for the chart were highlighted by the county assessor as projects that increase the value of the home. As you can see, majorremodels provide the highest average return on investment. ProjectAverage CostAverage ROI Kitchen Remodel$ 19,92080% Bathroom Remodel$ 9,27460% Bathroom Addition$ 10,000-25,00067% Build a Deck$ 6,91970% Basement Remodel$10,000-30,00070% Basement Finishing$ 6,500-18,50069% Garage Addition$ 7,500-27,04081% Windows$ 3,000-7,00085% SidingDepends on material77% adding a shed$ 1,000-5,00050-80% As stated in the 2040 Comprehensive plan, it is a goal of the city to “adopt a sustainable policy for home construction and renovation.” (4-67) It is the recommendation of staff that the City of Columbia Heights begin the preliminary production of a home Rehabilitation Program. Forney explained that we used to administer a loan program and can do so again. The other option is tosubsidize a loan program thatgoesthrough MHFA or CEE and tailor the program the way we want. We can buy down interest rates,or restrict it to projects that add value to a home such as additions, and kitchen remodels, rather than maintenance items. Buesgens asked what fund the assistance would come from. Dahl stated Fund Reserves in Account 408 would be used to finance this.Forney told members that Columbia Heights’residents canpresently access loan programs through MHFA andCEE, and that 7 have done so in 2018. Schmitt asked if staff had reached out to local banks and credit unions to see if they can compete with theinterest rates. Dahl said they hadn’t yet, but thought that was a good idea. Schmitt thought the 6% interest rate from CEE was high. Members were open to this program in some capacity depending on more information gathered. In the meantime, they thought it would be a good idea to promote/marketthe fact that MHFA and CEE have loan programs available to our residentsthat could help them to improve their properties. 20190204_EDA_Minutes 77 EDA Minutes Page 8 Feb. 4, 2019 C.Creation of an Energy Audit Subsidy Program This memo is in regards to a possible energy audit program, specifically whether or not the City of Columbia Heights should produce a program that subsidizes home energy audits for its residents. The Center for Energy and Environment (CEE) is a nonprofitorganization that seeks to promote energy efficiency and economic development. CEE often partners with local municipalities to offer energy audit services to their residents. CEE’s energy audit service, without city input, costs $100 per audit. Each auditinspects each house for air leaks, insulation issues, attic space, and the safety of heating systems. The home energy audit also installs door weather stripping,awater heater blanket, a programmable thermostathigh-efficiency water fixtures, andpipe wrap , if needed. The majority of cities that partner with CEE buy down the rate of the energy audit for their citizens, many times limiting the number of home owners eligible for their program. Located in the chart below is an example of how much other citiesreduce CEE’s energy audit rate. Cityamount paid by cityresident total Roseville$ 60.00$ 40.00 Fridley$ 50.00$ 50.00 St. Louis Park$ 50.00$ 50.00 Bloomington$ 50.00$ 50.00 Brooklyn Park$ 50.00$ 50.00 Eden Prairie$ 100.00$0 Plymouth$ 70.00$ 30.00 Richfield$ 50.00$ 50.00 It is the recommendation of staff thatthe City of Columbia Heights pursue preliminary actions in producing a program to initiate energy audit subsidies for the residents of Columbia Heights. Moving forward the City will have to discuss the amount of money the city would like to finance and thenumber of home owners the program will influence. These variables can be discussed after the initial program is formed and research has been completed. Forney told members that28 households took advantage of CEE’s audit program in 2018 and9more are scheduled in 2019 so far, without our City subsidizing it yet.He explained that Fridley puts so much money into an account with CEE and that way it is limited to a certain number of audits each year. The resident pays $50 and $50 comes out of the City account set up.It is on a first come, first served basis.Schmitt asked which fund monieswould come from to pay for this. Dahl stated that Fund 408 would be used. If we served 50 residents a year it would cost the City $2,500.The EDA can determine how much to allow for this if they are interested. However, this is the same fund usedto purchase properties, and if the EDA chooses to, subsidize loan programs. Buesgens andNovitskyliked this program. He said there is a minimal investment by the Cityand encourages people to make their homes more energy efficient. Szurek also liked the program and asked how we would let residents know that CEE offers this service. Dahl stated we can put inserts in utility bills, pass out information at the City Expocoming up in March, put on social media, and in the City Newsletter. Novitskyasked if renters would be able to take advantage of this audit since so many pay for their own utilities. Dahl will check with CEE to see if owners have to order the audit, or if renters also could. 20190204_EDA_Minutes 88 EDA Minutes Page 9 Feb. 4, 2019 The discussion then turnedto the façade improvement program. Dahl said there was a lot of interest from businesses wanting to participate in the program. Since the funds were limited, a certain number of businesses were selected thth primarily in the area targeted by Police along Central Avenue (37Ave–45Ave). Dahl told the businesses not selected to re-apply this year. Heexplained that some of the businesses only spent the minimum amount, while th others invested a great deal more. Dahl asked membersif they wished to expand the area, maybe up to 47Avenue, thth and possibly include 39Ave and 40Ave from Central to Jefferson. If so, does the EDA want to put additional money towards this program. He said we could also reach out to businesses we want to target if the program is expanded. However, since this isalsofunded out of Fund 408 it isn’t sustainableto do all the programs. rd 2.Acquisition Discussion-3909 3St NE Forney explained that the City hasan opportunity to acquirethepropertyat3909 3rd StNE. It isa single family home parcel located just west of University Ave NEand South of 40th Ave. The parcel maintains a taxable market value of about $171,400. From 2010 to 2014 the property owner had troubles paying in full their property taxes. According to the county to pay back the taxes owed from these years the current property owner has been entered into the Confession of Judgement program. This program allows the property owner to pay back their taxes over a set amount of years.The owner of 3909 is entered into a contract for 10 years with a 5% interest rate. If the owner misses a payment the property will go into tax forfeiture. On December 31st, 2018 the Department of Community Development received a letter from the owner of 3909 3rd StNE. The letter, which is attached, states that the current owner would like to sell the property and more specifically is looking to sell to the city. The letter clearly states that the home owner would like to consider an offer from the city before entertaining any other offers. Located on the eastern border of 3909 3rd StNE is a property called the Root Property. This property entered tax forfeiture and is currently owned by the state. On the southern border of the root property, two parcelsdown from 3909, is 3853 3rd StNE. 3853 3rd StNE is currently owned by the city. This combination of properties gives the city a great opportunity for the redevelopment or the restructuring of the block. STAFF RECOMMENDATION: The Community Developmentstaff recommendsthat the EDA proceed in purchasing the property. This property adds to the parcel distortion found on this block. This distortion limits redevelopment of nearby sites. This property is also perfectly located, being attached to city ownedproperties, to allow the city to redevelop the whole block. Redevelopment would not only Increase the city’s tax base and the livability in the neighborhood. Questions/comments from members: Szurek asked if the property is worth $171,400. Dahl responded that the City’s Real Estate Attorney said thatprice is probably on the high end. The actual value would probably be closerto$165,000.The City can’t reach out to owners to acquire properties as it makes us responsible for relocation costs, so the fact they have approached us, makes this more attractive in creating a larger site for future redevelopment. Murzyn asked if this site could also be contaminated and require environmental clean-up. He finds it hard to believe that some of the contamination on the Root property adjacent to this parcel wouldn’t have leached onto this site. If so, this would lower the value of the property considerably. Dahl said staff has been working with an environmental consultant and he would check with him to see whatthey think the possibility is that this piece is contaminated also. 20190204_EDA_Minutes 99 EDA Minutes Page 10 Feb. 4, 2019 th Dahl told members that the owners of 230 40Avenue have expressed some interest in selling their property in the next couple of years also. This would create a large enough site to possibly attract some developers. rd Williams thinks the small parcel located at 3861 3Street could present a problem as it is wedged into the rest of the surrounding property at the southwest side of the proposed redevelopment area being discussed. Therefore, he is not in favor of moving forward with the purchase of this property since we don’t own the Root property yet. Dahl again explained that the Countyis working on an agreementto sell the Root property to the City at the reduced price.The CDBG funds will cover the cost of the remediation since Phase 1 &2 have already been completed, so by rd purchasing the property at 3909 3St it moves the City closer in achieving its long term goal of redeveloping that corner as planned in the 2040 Comp Plan that was just submitted.Dahl explained that if the motion is approved to move forward with negotiating an offer it will come back to the EDA for ratification and that the funds would come out of Fund 408 which had budgeted $200,000 last year for purchase of properties. Motion byBuesgens, seconded bySchmitt,to authorize staff to respond to the Letter of Sale Intent from Andrew A. Gustafson, Personal Representative of Marianne Terlouw, owner of 3909 3rd Street NE, Columbia Heights, MN; and make a fair market value offer of up to $171,400, subject to the full ratification of the Columbia Heights Economic Development Authority at the March 4th, 2019 meeting.Ayes-Murzyn, Schmitt,Buesgens, Novitsky, and Szurek.Nay-Williams.MOTION PASSED. 3.Optional Redemption Discussion-Taxable GO Tax Increment Bonds, Series 2009B In 2004, the Columbia Heights Economic Development Authority (the “EDA”) and the City of Columbia Heights (the “City”) established the Kmart/Central Avenue Tax Increment Financing District (commonly referred to as the “T4 District”) within theDowntown CBD Redevelopment Project. In 2009, the EDA and City authorized an expansion of the T4 District to include the Heritage Heights Neighborhood in order to facilitate acquisition and redevelopment of foreclosed properties, such as single-family homes, duplexes, and fourplexes. At that time, the City authorized an issuance of a Taxable General Obligation Tax Increment Bond in the amount of $580,000 (the “Bond”) to provide for financing of the redevelopment activity. The Bond was agreed to be repaidover nine years with the first installment date of February 1, 2013. Currently, the City has two installments remaining on the Bond in the years and amounts as follows: Installment DatePrincipal Amount February 1, 2020$ 75,000 February 1, 2021$ 75,000 On February 1, 2019, and on any date thereafter the City may elect to prepay the installments due on or after February 1, 2020. If the EDA Commissioners and City Council members desire to prepay the outstanding principal amounts remaining on the Bond, theCity would need to approve a resolution electing for an optional redemption. Staff would like to facilitate a discussion in regards to the optional redemption of the Taxable General Obligation Tax Increment Bond, Series 2009B to obtain direction fromthe EDA Commissioners. 20190204_EDA_Minutes 1010 EDA Minutes Page11 Feb. 4, 2019 Questions/comments from members: Dahl told members that we are still recapping increment into the account till 2020 at approximately $10,000/yr. These monies are then used to buy properties whichis what the TIF Plan was approved for.He said by paying it off we would save about $6,000 in interest. Novitsky and Schmitt thought we should pay it off if we have enough funding to do so. Dahl explained this item will go to the City Council for formal approval. 4.Business Subsidy Policy & Criteria Discussion Forney told members that in 1999 the State of Minnesota adopted Statutes 16J.993 and 16J.994 to define and create universal regulations for local and state business subsidies. The Policy attached below is the Community Development Departments recommended policy to bring the City of Columbia Heights and the Columbia Heights Economic Development Authority into compliance with state law. Minnesota statute considers grants, contributions of property, infrastructure, and any reduction of taxes or deferrals as business subsidies. In general, Minnesota Statute 116J.994 develops the regulations by which a local government or agency must comply. This includes but is not limited to: (1) requiring citiesto develop universal criteria, (2) establishing Subsidy agreements and reporting requirements, and (3) Presenting public hearing and failure to comply regulations. The Community Development Department sought to create a policy which brought the City andEDA into compliance with State Statute and allowed the City and EDA to utilize subsidies to accomplish its economic and community development goals. This policy was drafted by referencing 9 other cities policies and tailoring their ideas to best fit the needs of our community. The three most important pieces of the policy are the Public Purpose, Criteria, and Wage and Job growth requirements. These sections shape the future economic development of the community, and were composed consulting the 2040 Comprehensive Plan. In accordance with State Statute, all business subsidies must be used to assist a public purpose. The public purpose section details objectives in which the City or EDA would consider using subsidies. This section contains specific objectives along with statements that give the City and EDA flexibility in approaching unforeseen objectives in the future. The minimum criteria section combines criteria established in Minnesota Statute along with local criteria meant to maximize the success of asubsidy agreement. Last, the wage and job requirements are variable but mandated by state law. The City and EDA have the choice of setting these criteria but is required to apply them consistently to all subsidy agreements. Forney reviewed the policy withthe members and stated he used State Law in developing the document. He also looked at nine other cities to add detail that is pertinent to our City. Forney stated it provides for a base agreement between the City and businesses. He said he establisheda wage requirement of 120%, but the City can deviate from this as long as the reason is detailed.There are thresholds established by the legislation. Financial assistance of $25,000 and more have to be reported, but are not classified as business subsidies. Financial assistance of more than $150,000 are considered subsidies, and agreements must be in place as per our policy.A copy is as follows: 20190204_EDA_Minutes 1111 City of Columbia Heights And Columbia Heights Economic Development Authority Business SubsidyPolicy Adopted: City of Columbia Heights Community Development Department 590 40th Avenue NE Columbia Heights, MN 55421 (763) 706-3670 Table of Contents I.Purpose II.Authority III.Definitions IV.Public Purpose V.Minimum Criteria VI.Joband Wage Requirements VII.Subsidy Agreement and Reporting 20190204_EDA_Minutes 1212 Purpose The purpose of this policy is to establish criteria in regards to the use of business subsidies by the City of Columbia Heights (the “City”) and the Columbia HeightsEconomic Development Authority(the “EDA”) under the general Business Subsidy Act pursuant to Minnesota Statute, Sections 116J.993 to 116J.995 (the “Business Subsidy Act”). This policy shall be used as a guide in processing, evaluating and reviewing business subsidy requests. Authority The City and EDA’sability to grant business subsidies is subject to the limitations established in the Business Subsidy Act. Unless specifically excluded by the Business Subsidy Act, a business subsidy may include grants by a state or local government agency, loans, forgivable loans, contributions of property or infrastructure, tax increment financing, tax abatement, or any preferential use of government facilitates given to a business. The Cityand EDA retain absolute authority and discretion, and reserve the right toamend or waivesections of this policy when necessary or appropriate. MinnesotaStatute, Section116J.994, Subd. 2, allows theCityor EDAto deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to theDepartment of Employment and Economic Development (the “Department”). Minnesota Statute, Section116J.993,Subd. 3 exemptscertain forms of financial assistance from the requirements of the Business Subsidy Act. Incentiveswill be offered based on the nature of the project and the benefits to thecommunity. Meeting all or a majority of the criteria does not mean that a business subsidy will beapprovedby the Cityor EDA. The Cityand EDAmaintaintheability to approve ordenya business subsidy at their discretion, based onthemerits of the project and the overall benefit to the community, using the criteria as a means of measuringtheoverall benefit. Furthermore, the approval or denial of one project is not intended to set precedent for approval or denial of another project. Definitions The Cityand EDAhereby adopt the definitionspursuant to MinnesotaStatute, Section116J.993. Public PurposeObjectives In accordance withtheBusiness SubsidyAct,all business subsidies shall meet a public purpose, and have a measurable benefit to the community as awhole. The City or EDA will consider the following public purpose objectives: Diversification of the local economy; Create highquality and diverse jobs; Retention oflocal jobs, provided thatthejob retentionisonly used as a public purpose in cases where job loss is specificand demonstrable; Removal ofblight and/or encouraging redevelopmentwithin thecommunitytoobtainhigh levels of property maintenance and private reinvestment; Encourage additional unsubsidized private developmentwithin thecommunity, either directly, orindirectly; Facilitateand promotedevelopment onpropertythat could not be developed without assistance; 20190204_EDA_Minutes 1313 Meet other uses of public policy, as adopted by the Cityor EDAfrom time to time, including but not limited tothe promotion of quality urban design, quality architectural design, energy conservation, sustainable building practices, and decreasing the capital and operating costs of local government. Minimum Criteria In order to be eligible for a business subsidy, allbusiness subsidy requestsshallmeet the following minimum criteria. The business subsidy request shall be in compliance with the Business Subsidy Act. The project must beconsistent with the applicable provisions of theComprehensive Plan,ZoningOrdinances, Design Guidelines, and any other land use document applicable to the project. All projects must contribute to one or more of the City’s goals and policies outlined in the Comprehensive Plan. A business, non-profit, or developer requesting a businesssubsidy shall complete and submit a Business Subsidy Application, along with an application fee and escrow deposit determined by the City or EDA. For the purposes of evaluating the request, the applicant shall provide all requested market and financial feasibility studies, appraisals, environmental data, private lender commitment and information provided to private lenders regarding the project, and other information requested by the City, EDAor its consultants,in order for the City or EDA toevaluatethe proposal and determine whether the request is consistent withthispolicy. Theapplicantshall proactively attempt to minimize the amount of public assistance needed through the pursuit of grants, innovative solutions in structuring the deal, and otherfunding mechanisms. The applicant shall provide adequate financial guarantees to ensure completion of the project and repayment of any business subsidy (if repayment is required), unless an exception is granted by the Cityor EDA. These may include, but are not limited to, assessment agreements, letters of credit, personal deficiency guarantees, and mortgages. Job and WageGoals Specificjobandwagegoalsshallbe determined by the Cityor EDA, and shall begivenconsiderationbased upon the particular form of thebusinesssubsidyrequested, nature of the development, purpose of thebusinesssubsidy, local economic conditions andothersimilar factors. The minimum wage for a job to be considered a new or retained job shall not be less than120% of the State of Minnesota’sMinimum Wage, exclusive of benefits. Wage goals may be set to enhance existing jobs through increased wages, which increase shall result in wages higher than the minimum under this Section. In cases where the objective isthe retention of existing jobs, the applicant of the business subsidyrequest shall provide evidence that demonstrates the loss of jobs is imminent. The jobs to be created or retainedby the applicant shallresult in job creation or retentionwithin theCity. In addition to other specific time frames, thejobandwagegoals shall contain specificrequirementsto be attained within two(2)years of the benefit date, unless an exception is granted by the Cityor EDA. The project shall result in a minimum ofsix (6)Full Time, or Full Time Equivalent (FTE) jobscreated or retained. For purposes of thispolicy, FTEjobsmust be permanent positions with set hours, and eligible for benefits. Part-TimeEquivalentjobsmay be counted towardthejob goals. 20190204_EDA_Minutes 1414 Aftera public hearing, if the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set at zero(0). Subsidy Agreement and Reporting In accordance withthe Business Subsidy Act,a recipientshallenter into a subsidy agreement with the Cityor EDA. The subsidy agreement shallinclude, but is not limited to, the following: A description of the subsidy, including the amount and type of subsidy, and the type of district if the subsidy is tax increment financing; A statement of the public purpose(s) of the subsidy; Measurable, specific and tangible goals for the subsidy; A description of the financial obligation of the recipient if the goals are not met; A statement of why the subsidy is needed; A commitment to continue operations in the jurisdiction where the subsidy is used for at least five(5)years after the benefit date; The name and address of the parent corporation of the recipient, if any; A list of all financial assistanceby all grantors for the project. A recipient that fails to meet the terms of a subsidy agreement: Must repay the assistance provided with interest, which is set at no less than the implicit price deflator as defined in the Business SubsidyAct, MinnesotaStatute, Sections§ 116J.993to116J.995. Repayment may be prorated to reflect partial fulfillment of goals. May not receive a business subsidy from any grantor for a period of five(5)years from the date of failure or until a recipient satisfies its repayment obligation, whichever comes first. A recipient may be authorized to move from theCitywithin five(5)years of the benefit date (as defined in the Business Subsidy Act) only if, after a public hearing, the City or EDA approves the request to move. The Cityor EDAreserves the right todiscontinue thebusinesssubsidy if the recipient moves from theCity. The applicant and Cityor EDAshall comply with the reporting requirements set forth in Section 116J.994, Subd. 7 and 8 of the Business Subsidy Act. The Cityor EDAshall file a report by April 1 of each year with theDepartment regardless of whether or not they have awarded any business subsidies. 20190204_EDA_Minutes 1515 EDA Minutes Page 16 Feb. 4, 2019 Questions/Comments from members: Buesgens asked why it took so long to establish a policy if it has been required since 1999. Dahl said it was passed into legislation in 1999, but not enforced. The State turned it over to DEED in 2017, and since they are in charge of distributing grantmoney, they are now requiring cities to have this in place in order to be eligible for any DEED funds. Schmitt asked how many projects above $100,000 have received a subsidy from the City. Dahl responded that just one, HyVee. This policy must be approved at the EDA level and by the City Council at a Public Hearing. So if the policy is acceptable to the EDA, these hearings will be scheduled. Members thought it seemed complete and would meet the requirement. OTHER BUSINESS Szurek asked a question of the Council members and Acting City Manager Hansen regardingobtaining a copy of a previously approved Resolution that is needed by the Library Board. Staff will get the copy to her. The next meeting is scheduled forMarch 4, 2019. Motion byNovitsky,seconded byBuesgens, to adjourn the meeting at8:40pm. Respectfullysubmitted, Shelley Hanson Secretary 20190204_EDA_Minutes 1616 RESOLUTIONNO.2019-02 ARESOLUTION OF THEECONOMICDEVELOPMENTAUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THEMONTH OFJANUARY2019,AND THEPAYMENT OF THE BILLS FOR THE MONTH OFJANUARY 2019. WHEREAS,the Columbia Heights Economic Development Authority (the “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 creditsand 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 themonthofJanuary 2019has 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 financialstatements 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 history as presented in writing is approved for payment outof 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 this4thdayofMarch, 2019 Offered by: Seconded by: Roll Call: President Attest: AssistantSecretary 1717 Resolution2019-02 1818 1919 2020 2121 2222 2323 2424 2525 2626 2727 2828 2929 3030 3131 3232 3333 3434 3535 3636 3737 3838 3939 4040 4141 4242 4343 AGENDA SECTIONPUBLIC HEARING ITEM NO.6 MEETING DATEMARCH 4, 2019 CITYOF COLUMBIA HEIGHTS–EDA LETTER ITEM:Business Subsidy Policy Approval DEPARTMENT:Community DevelopmentCITY MANAGER’S APPROVAL: BY/DATE:Mitchell Forney, February 19, 2019BY/DATE: BACKGROUND: In 1999 the State of Minnesota adopted Statutes 16J.993 and 16J.994 to define and create universal regulations for local and state business subsidies. The Policy attached below is the Community Development Departments recommended policy to bring the Columbia HeightsEconomic Development Authority(EDA)into compliance with state law. Minnesota statute considers grants, contributions of property, infrastructure, and any reduction of taxes or deferrals as business subsidies. In general, Minnesota Statute 116J.994 develops the regulations by which a local government or agency must comply. This includes but is not limited to: (1) requiring cities to develop universal criteria, (2) establishing Subsidy agreements and reporting requirements, and (3) Presenting public hearing and failure to comply regulations. The Community Development Department sought to create a policy which brought theEDAinto compliance with State Statute and allowed theEDAto utilize subsidies to accomplish its economic and community development goals. This policy was drafted by referencing 9 other cities policies and tailoring their ideas to best fit the cities goals. The three most important pieces of the policy are the Public Purpose, Criteria, and Wage and Job growth requirements. These sections shape the future economic development of the City, and were composed consulting the comprehensive plan. In accordance with State Statute, all business subsidies must be used to assist a public purpose. The public purpose section details objectives in which theEDAwill consider using subsidies. This section contains specific objectives along with statements that givecommissionersflexibility in approaching unforeseen objectives in the future. Theminimum criteria section combines criteria established in Minnesota Statute along with local criteria meant to maximize the success of a subsidy agreement. Last, the wage and job requirements are variable but mandated by state law. TheEDAhas the choice of setting these criteria but is required to apply them consistently to all subsidy agreements. If theEDAwants to alter any criteria in a certain situation the EDAhas to report the variation within the yearly reporting process. RECOMMENDED MOTION(S): Motion:Move to waive the reading of Resolution2019-03,there being ample copies available to the public. Motion:Move toadopt Resolution2019-03,a resolution adopting the Business Subsidy Policy. ATTACHMENTS: 1.Resolution 2019-03(7 Pages) 4444 02192019_EDA_Business_Subsidy_Approval RESOLUTIONNO.2019-03 RESOLUTIONOF THECOLUMBIA HEIGHTSECONOMIC DEVELOPMENT AUTHORITYADOPTING THE BUSINESS SUBSIDYPOLICY. BE IT RESOLVED BYtheColumbia HeightsEconomic Development Authority (EDA)that itis in the interest of the EDAto provide business subsidies to increase the tax base, create orretain jobs, enhance economic diversity, stimulate economic development, encourage investment in redevelopmentareas or to facilitate the reuse of substandard buildings or blight, environmental clean-up or the relocation of uses that are not in conformitywith the City’s Comprehensive Plan or Zoning Ordinances; and BE IT FURTHER RESOLVEDthat prior to granting business subsidies, the State of Minnesota requires cities to adopt a Business Subsidy Policy after a public hearing has been held; and BE IT FURTHER RESOLVEDa public hearing, for which proper notice was published in theCity’s Newspaper of record ten days in advance of thehearing, was held on March 4, 2019; and BE IT FURTHER RESOLVEDthe Business Subsidy Policy will serve as a guide in processingand reviewing applications requesting business subsidies. NOW, THEREFORE BE ITFINALLYRESOLVEDthattheColumbia HeightsEconomic Development Authority herebyapproves and adopts the Business Subsidy Policy as shown in EXHIBIT A. ORDER OF ECONOMICDEVELOPMENT AUTHORITY Passed this _________ dayof ______________________, 2019 Offered by: Seconded by: Roll Call: President Attest: Assistant Secretary 4545 Resolution 2019-03 City of Columbia Heights–EDAResolutionPage2 EXHIBIT A City of Columbia Heights And Columbia Heights Economic Development Authority Business Subsidy Policy Adopted: City of Columbia Heights Community Development Department 590 40th Avenue NE Columbia Heights, MN 55421 (763) 706-3670 4646 City of Columbia Heights–EDAResolutionPage3 Table of Contents I.Purpose II.Authority III.Definitions IV.Public Purpose V.Minimum Criteria VI.Job and Wage Requirements VII.Subsidy Agreement and Reporting 4747 City of Columbia Heights–EDAResolutionPage4 I.Purpose A.The purpose of this policy is to establish criteria in regards to the use of business subsidies by the City of Columbia Heights (the “City”) and the Columbia HeightsEconomic Development Authority(the “EDA”) under the general Business Subsidy Act pursuantto Minnesota Statute, Sections 116J.993 to 116J.995 (the “Business Subsidy Act”). This policy shall be used as a guide in processing, evaluating and reviewing business subsidy requests. II.Authority A.The City and EDA’sability to grant business subsidies issubject to the limitations established in the Business Subsidy Act. B.Unless specifically excluded by the Business Subsidy Act, a business subsidy may include grants by a state or local government agency, loans, forgivable loans, contributions of property or infrastructure, tax increment financing, tax abatement, or any preferential use of government facilitates given to a business. C.The Cityand EDA retain absolute authority and discretion, and reserve the right toamend or waivesections of this policy when necessary or appropriate. MinnesotaStatute, Section116J.994, Subd. 2, allows theCityor EDAto deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to theDepartment of Employment and Economic Development (the “Department”). D.Minnesota Statute, Section116J.993,Subd. 3 exemptscertain forms of financial assistance from the requirements of the Business Subsidy Act. E.Incentiveswill beoffered based on the nature of the project and the benefits to thecommunity. Meeting all or a majority of the criteria does not mean that a business subsidy will beapprovedby the Cityor EDA. The Cityand EDAmaintaintheability to approve ordenya business subsidy at their discretion, based onthemerits of the project and the overall benefit to the community, using the criteria as a means of measuringtheoverall benefit. Furthermore, the approval or denial of one project is not intended to set precedent for approval or denial of another project. III.Definitions A.The Cityand EDAhereby adopt the definitionspursuant to MinnesotaStatute, Section116J.993. IV.Public PurposeObjectives A.In accordance withtheBusiness SubsidyAct,all business subsidies shallmeet a public purpose, and have a measurable benefit to the community as a whole. The City or EDA will consider the following public purpose objectives: 4848 City of Columbia Heights–EDAResolutionPage5 1.Diversification of the local economy; 2.Create highquality and diverse jobs; 3.Retention oflocal jobs, provided thatthejob retentionisonly used as a public purpose in cases where job loss is specificand demonstrable; 4.Removal ofblight and/or encouraging redevelopmentwithin thecommunitytoobtain high levels of property maintenance and private reinvestment; 5.Encourage additional unsubsidized private developmentwithin thecommunity, either directly, orindirectly; 6.Facilitateand promotedevelopment onpropertythat could not be developed without assistance; 7.Meet other uses of public policy, as adopted by the Cityor EDAfrom time to time, including but not limited tothepromotion of quality urban design, quality architectural design, energy conservation, sustainable building practices, and decreasing the capital and operating costs of local government. V.Minimum Criteria A.In order to be eligible for a business subsidy, allbusiness subsidy requestsshallmeet the following minimum criteria. 1.The business subsidy request shall be in compliance with theBusiness Subsidy Act. 2.The project must beconsistent with the applicable provisions of theComprehensive Plan, ZoningOrdinances, Design Guidelines, and any other land use document applicable to the project. 3.All projects must contribute to one or more ofthe City’s goals and policies outlined in the Comprehensive Plan. 4.A business, non-profit, or developer requesting a business subsidy shall complete and submit a Business Subsidy Application, along with an application fee and escrow deposit determined by the City or EDA. 5.For the purposes of evaluating the request, the applicant shall provide all requested market and financial feasibility studies, appraisals, environmental data, private lender commitment and information provided to private lenders regardingthe project, and other information requested by the City, EDAor its consultants,in order for the City or EDA to evaluatethe proposal and determine whether the request is consistent withthispolicy. 4949 City of Columbia Heights–EDAResolutionPage6 6.Theapplicantshall proactively attempt to minimize the amount of public assistance needed through the pursuit of grants, innovative solutions in structuring the deal, and other funding mechanisms. 7.The applicant shall provide adequate financial guarantees to ensure completion of the project and repayment ofany business subsidy (if repayment is required), unless an exception is granted by the Cityor EDA. These may include, but are not limited to, assessment agreements, letters of credit, personal deficiency guarantees, and mortgages. VI.Job and WageGoals A.Specificjobandwagegoalsshallbe determined by the Cityor EDA, and shall begiven considerationbased uponthe particular form of thebusinesssubsidyrequested, nature of the development, purpose of thebusinesssubsidy, local economic conditions andothersimilar factors. B.The minimum wage for a job to be considered a new or retained job shall not be less than 120% of the State of Minnesota’sMinimum Wage, exclusive of benefits. C.Wage goals may be set to enhance existing jobs through increased wages, which increase shall result in wages higher than the minimum under this Section. D.In cases where the objective is the retention of existing jobs, the applicant of the business subsidyrequest shallprovide evidence that demonstrates the loss of jobs is imminent. E.The jobs to be created or retainedby the applicant shallresult in job creation or retentionwithin theCity. F.In addition to other specific time frames, thejobandwagegoals shall contain specific requirementsto be attained within two(2)years ofthe benefit date, unless an exception is granted by the Cityor EDA. G.The project shall result in a minimum of six (6)Full Time, or Full Time Equivalent (FTE) jobs created or retained.For purposes of thispolicy, FTEjobsmust be permanent positions with set hours, and eligible for benefits. H.Part-TimeEquivalentjobsmay be counted towardthejob goals. I.After a public hearing, if the creation or retention of jobs is determined not to be a goal, the wage and job goals maybe set at zero(0). VII.Subsidy Agreement and Reporting A.In accordance withthe Business Subsidy Act,a recipientshallenter into a subsidy agreement with the Cityor EDA. The subsidy agreement shallinclude, but is not limited to, the following: 5050 City of Columbia Heights–EDAResolutionPage7 1.Adescription of the subsidy, including the amount and type of subsidy, and the type of district if the subsidy is tax increment financing; 2.A statement of the public purpose(s) of the subsidy; 3.Measurable, specific and tangible goals for the subsidy; 4.A description of the financial obligation of the recipient if the goals are not met; 5.A statement of why the subsidy is needed; 6.A commitment to continue operations in the jurisdiction where the subsidy is used for at least five(5)years after the benefit date; 7.Thename and address of the parent corporation of the recipient, if any; 8.A list of all financial assistanceby all grantors for the project. B.A recipient that fails to meet the terms of a subsidy agreement: 1.Must repay the assistance provided with interest, which is set at no less than the implicit price deflator as defined in the Business SubsidyAct, MinnesotaStatute, Sections§ 116J.993to 116J.995. Repayment may be prorated to reflect partial fulfillment of goals. 2.May not receive a business subsidy from anygrantor for a period of five(5)years from the date of failure or until a recipient satisfies its repayment obligation, whichever comes first. 3. A recipient may be authorized to move from theCitywithin five(5)years of the benefit date (as defined in the Business Subsidy Act) only if, after a public hearing, the City or EDA approves the request to move. The Cityor EDAreserves the right todiscontinue thebusiness . subsidy if the recipient moves from theCity C.The applicant and Cityor EDAshall comply with the reporting requirements set forth in Section 116J.994, Subd. 7 and 8 of the Business Subsidy Act. The Cityor EDAshall file a report by April 1 of each year with theDepartmentregardless of whether or not they have awarded any business subsidies. 5151 AGENDA SECTIONBUSINESS ITEMS ITEM NO.7 MEETING DATEMARCH 4, 2019 CITYOF COLUMBIA HEIGHTS–ECONOMIC DEVELOPMENTAUTHORITY ITEM:Exclusive Right For RepresentationContract DEPARTMENT:Community DevelopmentCITY MANAGER’S APPROVAL: BY/DATE:Mitchell T. Forney, February 19, 2019BY/DATE: BACKGROUND: This memo is in regards to restoring the Exclusive Buyer RepresentationContractwithJohn M. Rockwellof RE/MAX Synergy, who hasbeenrepresentingtheEDAsince the initialcontractwasapproved back inJuly 2017. The EDA has historically utilized realtors to purchase property for multitudes of reasons and for various programs like theSingleFamilyHomeLotSalesProgram, Scattered Site TIF District Program, and now the Commercial Revitalization Program.In the updatedContract,the only things that have changed are the dates and contact information. STAFF RECOMMENDATION: Staff recommends approval of theBuyerRepresentationContractwith John M. Rockwell from RE/MAX Synergyas presented. RECOMMENDED MOTION(S): Motion:Move to waive the reading of Resolution2019-04, there being ample copies available to the public. Motion:Move to adopt Resolution2019-04, a resolution approving the buyer representation contract with Re/MAX Synergy. ATTACHMENTS: 1.Resolution2019-04(2 Pages) 2.Buyer Representation Contract (7Pages) 5252 02192019_Buyer_Representation_Letter COLUMBIA HEIGHTSECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO.2019-04 RESOLUTIONAPPROVINGBUYER REPRESENTATION CONTRACT WITH RE/MAX SYNERGY Section 1.Recitals. 1.01.TheBoard ofCommissioners(“Board”)of theColumbia HeightsEconomic Development Authority (the “Authority”)is authorized under Minnesota Statutes, Sections 469.090 to 469.1081 (the “EDA Act”) to purchase and convey property within its area of operation for economic development purposes. 1.02.The Board has determined that it is necessary and desirable to retain the services of a real estate broker for purposes of monitoring properties within the City of Columbia Heights (the “City”) that are nonconforming underthecurrent City zoningcodeand that may become available for sale from time to time, in orderto potentially make offers for such property based on then- current market values. 1.03.The Board has determined to enter into the Buyer’s Representation Contract (the “Broker’s Agreement”)withRe/Max Synergy (the “Broker”). 1.04.The Boardexpressly finds and determines that authorizing the Broker to respond to active listings and develop offerspursuant to the Broker’s Agreementdoes not imply any exercise any power of eminent domain that may be available to the Authority pursuant to the EDA Act, and that the EDA will notexercise such power in pursuing the acquisition of any nonconforming property under the Broker’s Agreement. Section 2.Approval ofBroker’s Agreement. 2.01.TheAuthorityhereby approves theBroker’s Agreement in substantially the form presented, 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 Broker’s Agreement by such officials shallbe conclusive evidence of approval. 2.02.Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under theBroker’s Agreementas a whole, including without limitation execution ofany documents to which the Authority is a party referenced in or attached to the Broker’s Agreement. 2.03.The Board hereby authorizes the Broker to respond to active listings within the City, and to make fair market value offers of up to $200,000 on the Authority’s behalf without prior formal approvalof such offersby the Board, subject to ratification of such offers by the Authority if accepted by the seller of the property. 5353 Adopted by theColumbia HeightsEconomic Development Authoritythis4thofMarch, 2019. __________________________________ President ATTEST: ______________________________________ AssistantSecretary 5454 BHFODZ!SFMBUJPOTIJQT!JO!! 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Dahl, February 28, 2019BY/DATE: BACKGROUND: On January 28, 2019, staffmet with representatives from Lupe Development Partners(referred to as “Lupe”) in regards totheir interest inthe Northeast Business Center and partnering with 500, LLC (commonly referred to as “Swervo”)to constructa mixed use, workforce housingproject on the corner of 40thand Central.Lupe has submitted preliminary renderings of their proposed redevelopment project for review and discussion with the Columbia Heights Economic Development Authority (the “EDA”). The proposed redevelopment project would consist of 83 units of affordable workforce housing and approximately 16,000 square feet of commercialspace. Swervo would own and renovate the first floor commercial space, whereas Lupe would own andrenovate the remaining floors into new residential units made up of one, two and three bedroom units.Lupe has indicated that they would requestpublicfinancial assistance from the EDA as well as the City of Columbia Heights to finance the acquisition, rehab, and development of their proposed redevelopment project. Steve Minn and Jackie CherryhomesfromLupewill bepresentat themeeting to discuss their proposed redevelopment project in greater detail and further elaborate on their public financial assistance request. The goal of this discussionis toallow Lupe the opportunity tointroducethemselvesand gage theEDA’s interest in this type ofredevelopmentproject. ATTACHMENTS: 1.Executive Summary(2Pages) 2.Preliminary Renderings (8Pages) 6262 20190228_EDA_Letter_Lupe_Development_Partners 3989 Central Executive Summary 6363 Public Financial Participation: 1.Anoka County CDBG. We have applied for $300,000. We are adjusting our timing of the acquisition to coincide with their Program Year 2019. 2.Affordable Housing Tax Credits. Issued through MHFA. That application is subject to competitive application. The site is in a qualified census tract in an economic opportunity zone. As an acquisition/rehab, we should score well. 3.Tax Increment Financing. We will need Columbia Heights to provide tax increment for the project, but have negotiated a condition of sale with the current owner that the commercial first floor space will retain the majority of the existing tax base, leaving the housing to be completely new increment that but for this development would not occur. 4.Metropolitan Council & DEED: The project is an ideal demonstration on repurposing a mixed-use building in a transit corridor and as such should score well in May & October applications from Metropolitan Council and DEED for infrastructure, site improvements, utilities and demonstration enhancements. Qualifying Loan from Columbia Heights: A request for $ 200,000 to pay for municipal review, permitting and site improvement bonds is needed to establish a government loan connection to the project. Such a loan gives us an exception to the federal - year federal tax credits. 6464 CENTRAL AVE NE VACATE ALLEY CENTRAL AVE NE VACATE ALLEY CENTRAL AVE NE VACATE ALLEY CENTRAL AVE NE AGENDA SECTIONOTHERBUSINESS ITEM NO.9 MEETING DATEMARCH4, 2019 CITYOF COLUMBIA HEIGHTS–ECONOMIC DEVELOPMENTAUTHORITY ITEM:Home Energy Audit Program Discussion DEPARTMENT:Community DevelopmentCITY MANAGER’S APPROVAL: BY/DATE:KeithM. Dahl,February 28, 2019BY/DATE: BACKGROUND: OnFebruary4, 2019, the Columbia Heights Economic Development Authority (the “EDA”)directed staff to collaborate withCenter for Energy and Environment(referred to as “CEE”), a nonprofit organization to develop ahomeenergy audit program that would promote energy efficiency toresidents within the City of Columbia Heights, includinghome owners and renters.Therefore, staff worked withCEEto developthe Home Energy Squad Program(the “Program”).TheProgramwilloffer two types of home energy audits; an installation visitor anenhanced visit. Theinstillation visit simply includes the direct installation of energy-saving materials where possible, including high-efficiency showerheads, faucet aerators, door weatherstripping, a water heater blanket, programmable thermostats and LED light bulbs. Whereas, theenhanced visit includes everything in an installation visit, but alsoa blower door test to check for air leaks, visual inspection of insulation levels with the use of infrared cameras asweather permits, and heating system/hot water heater combustion safety tests. After the visit, CEE will provide the homeowner and/or tenanta reportwithrecommended energy upgrades. For discussion tonight, please find attacheda sources and uses statement which provides an overview of the Program itself, but also the recommend amount of funds to be appropriated to this Program. STAFF RECOMMENDATION: No recommendation. Staff desires to facilitate a discussion about theHome Energy Audit Program. RECOMMENDED MOTION(S): No motions required at this time. ATTACHMENTS: 1.Sources & Uses Statement (2 Pages) 73 20190228_EDA_Letter_Home_Energy_Audit_Program City of Columbia Heights|Community Development th 590 40Ave NE, Columbia Heights, MN 55421 Ph: 763-706-3670www.columbiaheightsmn.gov HOME ENERGY AUDIT PROGRAM: CEE HOME ENERGY SQUAD USES STATEMENT On February 4th, 2019the Columbia Heights Economic Development Authority (the “EDA”) directedstafftopursue a homeenergy audit program for the residents of Columbia Heights through the Center for Energy and Environment.The Center forEnergy and Environment (CEE) is a non-profit organization whose mission is to “promote energy efficiency to strengthen the economy while improving the environment.” CEE works towards their mission by conducting research, administering programs, maintaining a lending center, promoting engagement, education, and advocatingpolicy. One program that CEE administers is the Home Energy squad program.This program offers two types of home energy audits the installation visit and the enhanced visit. An instillationvisit simply includes the direct installation of energy-saving materials where possible, including high-efficiency showerheads, faucet aerators, door weather stripping, a water heater blanket, programmable thermostats and LED light bulbs.Whereasan enhancedvisit includeseverythingin an installationvisit while also conductinga blower door test to check for air leaks, visual inspection of insulation levels with the use of infrared cameras as weather permits, heating system and hot water heater combustion safety tests and a report to the homeowner on recommended energy upgrades.Through a partnership with CenterPoint Energy and Excel EnergyCEE provides allMinnesotanswith thesehomeenergy audit options. CEE also partners with cities to offer this program to their residents for a reduced price. If someonewants to complete a home energy audit in anon-partnercity they would pay $70 for an installation visit and $100 for an enhanced visit. For residents in partner cities the city buys down theprice tagaccordingtothecity’sneeds. The majority ofcities provideboth home energy auditsto residents foraround$50buying down the installation visit by $20 and the enhanced visit by $50.This promotes residents to utilize the full potential of the enhanced visit since you receive a more comprehensive service for the same price.When partnering with CEE cities also have the ability to limit thenumberof residents that receive discounted energy audits.In city’s similar to Columbia Heights about 50-150 residents utilize the program. CEE invoices the city quarterly for the amount of visits completed up to the yearly limit specified in the original agreement.An initial investment of $5,000 would provide 100 enhanced visits or250 installation visits, and any variation of visits in-between.Since there are no administration feesandthe amount of audits completed, up to the limit, would be the overall cost of the program. USESEXPENSES I.Buy Down Limit$5,000 TOTAL:$5,000 SOURCES STATEMENT The aforementioned expenses in connection with the home energy audit program will be paid through the EDA Redevelopment Project Fund 408. The following table provides a breakdown of the amount of funds that will be used from its respective source for project completion: 7474 Sources & Uses Statement Project Budget Overview February 25, 19 Page2 SOURCESTOTAL BALANCE I.EDA Redevelopment Project Fund 408$5,000 TOTAL SOURCE FUNDS:$5,000 7575