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HomeMy WebLinkAbout20190923_EDA_minutesECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE SPECIAL MEETING OF SEPTEMBER 23, 2019 The meeting was called to order at 5:30 pm by President Szurek. Members Present: Murzyn, Schmitt, Novitsky, Williams, and Szurek. Members Absent: Herringer and Buesgens Staff Present: Kelli Bourgeois (City Manager), Aaron Chirpich (Community Development Director), Mitch Forney (Community Development Coordinator), and Shelley Hanson (Secretary). PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA 1. Approve the minutes from The Executive Sessions of June 24, 2019 and July 22, 2019 as well as the regular meeting of September 3, 2019. 2. Approve Financial Report and Payment of Bills for August 2019-Resolution 2019-18 Motion by Murzyn, seconded by Williams, to approve the consent agenda as presented. All ayes. MOTION PASSED. RESOLUTION NO. 2019-18 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THE MONTH OF AUGUST 2019, AND THE PAYMENT OF THE BILLS FOR THE MONTH OF AUGUST 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 credits and assets and its outstanding liabilities; and WHEREAS, said Statute also requires the EDA to examine the statement and treasurer's vouchers or bills and if correct, to approve them by resolution and enter the resolution in its records; and WHEREAS, the financial statement for the month of August 2019 has been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and EDA Minutes Page 2 Sept 23, 2019 WHEREAS, financials statements are held by the City’s Finance Department in a method outlined by the State of Minnesota’s Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights Economic Development Authority that it has examined the referenced financial statements including the check history, and they are found to be correct, as to form and content; and BE IT FURTHER RESOLVED the financial statements are acknowledged and received and the check history as presented in writing is approved for payment out of proper funds; and BE IT FURTHER RESOLVED this resolution is made a part of the permanent records of the Columbia Heights Economic Development Authority. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 23rd day of September, 2019  Offered by:  Murzyn  Seconded by:  Williams  Roll Call:  All ayes   President Attest: Recording Secretary   BUSINESS ITEMS 6. NE Business Center TIF District Establishment-Resolution 2019-19 and Resolution 2019-20. Chirpich explained that Alatus LLC has requested public financial assistance for the redevelopment of the property located at the corner of 40th and Central Avenue NE. There are several details still being discussed and reviewed between staff, Ehlers and Alatus to verify the full extent of assistance needed. The possible uses for which public financial assistance is being considered include; land/building acquisition, public improvements, utilities, future parking, and demolition. Within the City of Columbia Heights, the Economic Development Authority is authorized to exercise Tax Increment Financing powers; however the EDA may not exercise any TIF powers without approval of the City Council. Approval by the Council is scheduled for later this evening during a public hearing at the regular City Council meeting. Since the EDA is authorized to exercise TIF powers, the EDA must make certain findings of fact that are detailed in the TIF plan ahead of the Council’s consideration of the new district. Therefore, the review of the TIF Plan by the EDA is required prior to the Council’s public hearing. EDA Minutes Page 3 September 23, 2019 Previously, the EDA and the Council established a redevelopment project designated as the Downtown Central Business District Revitalization Plan. The revitalization plan has encouraged development and redevelopment along Central Avenue; however, modifications to the plan must be made to encompass the potential development being proposed by Alatus. Chirpich explained that the TIF Plan being reviewed tonight is merely a planning document that reflects the maximum potential of the proposed TIF district. The plan in no way constitutes the terms, length, or dollar amount of the proposed TIF district. The term, length, and dollar amount will be part of a separate document, called the Contract for Private Redevelopment. If the City Council approves the TIF Plan at the public hearing this evening, that Contract will be considered by the EDA at a subsequent meeting. The structure of the proposed TIF district, and the general outline of the project being contemplated by Alatus are detailed in the TIF Plan. The project includes the development of approximately 266 apartments, 3,500 sq/ft of retail, and 20,000 sq/ft of office. The maximum duration of the TIF District is 26 years, and the estimated annual tax increment is $1,052,419. Ehlers has completed the TIF Plan on behalf of the city and EDA. A full copy of the plan was included in the agenda packet as part of the report, as well as a summary memo that outlines the basic parameters of the plan. Chirpich told members that before the NE Business Center TIF district is established, the EDA will incur certain administrative costs related to the creation of the district. These costs are eligible to be paid (reimbursed) with tax increments generated by the district. To ensure repayment of these costs, the EDA must approve an interfund loan as part of the project. This interfund loan will allow the EDA to temporarily finance upfront administrative costs with current EDA fund reserves. Ehlers has recommended setting this loan amount at $50,000. Before the EDA tonight is consideration of two (2) resolutions. Resolution 2019-19, a resolution modifying the downtown revitalization plan, establishing the NE Business Center district, and adopting the TIF plan; and Resolution 2019-20, a resolution authorizing an interfund loan for the EDA to be reimbursed for qualified costs from the TIF District. Staff recommends approval of Resolution 2019-19, and Resolution 2019-20. These must be approved in order for the proposed project to move forward. Questions/comments from members: Schmitt stated it is an acceptable practice that Cities use for redevelopment projects such as this one, and that it seems like it has worked well in the past. Chirpich was asked if the antenna situation has been resolved. He told members that progress is being made. He can’t speak about the details at this time since the issue is still being negotiated. He will keep the members updated. EDA Minutes Page 4 September 23, 2019 Motion by Schmitt, seconded by Novitsky, to waive the reading of Resolution 2019-19, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Novitsky, to adopt Resolution 2019-19, a resolution adopting a modification to the downtown CBD revitalization plan for the downtown central district redevelopment project, establishing the NE Business Center tax increment financing district therein, and adopting a tax increment financing plan therefor. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Novitsky, to waive the reading of Resolution 2019-20, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Novitsky, to adopt Resolution 2019-20, a resolution authorizing an interfund loan for advance of certain costs in connection with the NE Business Center TIF District. All ayes. MOTION PASSED. COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2019-19 RESOLUTION ADOPTING A MODIFICATION TO THE DOWNTOWN CBD REVITALIZATION PLAN FOR THE DOWNTOWN CENTRAL DISTRICT REDEVELOPMENT PROJECT, ESTABLISHING THE NE BUSINESS CENTER TAX INCREMENT FINANCING DISTRICT THEREIN, AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Columbia Heights Economic Development Authority (the “Authority”) as follows: Section 1. Recitals. 1.01. The City of Columbia Heights, Minnesota (the “City”) and the Authority have previously approved a Downtown CBD Revitalization Plan (the “Revitalization Plan”) for the Downtown Central Business District Redevelopment Project (the “Redevelopment Project”) within the City, pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended, and Minnesota Statutes, Sections 469.090 through 469.1081, as amended. 1.02. The City and the Authority have determined to modify the Revitalization Plan for the Redevelopment Project and approve a tax increment financing plan (the “TIF Plan”) for the NE Business Center Tax Increment Financing District (the “TIF District”), a redevelopment district, pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), all as described in a plan document presented to the Board on the date hereof. 1.03. Pursuant to Section 469.175, subdivision 2a of the TIF Act, notice of the proposed TIF Plan was presented to the commissioner of Anoka County, Minnesota (the “County”) representing the area to be included in the TIF District at least thirty (30) days before the publication of the notice of public hearing. 1.04. Pursuant to Section 469.174, subdivision 2 of the TIF Act, the proposed TIF Plan and the estimates of the fiscal and economic implications of the TIF Plan were presented to the Board of Education of the Columbia Heights Public Schools and to the Board of Commissioners of the County on or about August 8, 2019. EDA Minutes Page 5 Sept. 23, 2019 1.05. On this date the City Council of the City will conduct a duly noticed public hearing on the adoption of the modified Revitalization Plan and the TIF Plan. Section 2. Approvals; Further Actions. 2.01. The modified Revitalization Plan is hereby approved in substantially the form now on file with the Board, subject to approval thereof by the City Council. 2.02. The creation of the TIF District and the TIF Plan therefor are hereby approved, subject to approval thereof by the City Council. 2.03. The Board hereby transmits the modified Revitalization Plan and the TIF Plan to the City Council and recommends that the City Council approve the modification to the Revitalization Plan, the creation of the TIF District, and the TIF Plan. 2.04. Upon approval of the TIF Plan by the City Council, Authority staff is hereby authorized and directed to file a request for certification of the TIF District with the County Auditor of the County (the “County Auditor”) and to file a copy of the TIF Plan with the Minnesota Commissioner of Revenue and the Office of the State Auditor as required by the TIF Act. 2.05. Upon approval of the TIF Plan by the City Council, the County Auditor is requested to certify the original net tax capacity of the TIF District, as described in the TIF Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased. Authority staff is hereby authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the County Auditor may specify, together with a list of all properties within the TIF District for which building permits have been issued during the eighteen (18) months immediately preceding the adoption of this resolution. 2.06. Authority staff, consultants, and legal counsel are authorized to take all actions necessary to implement the modified Revitalization Plan and the TIF Plan and to negotiate, draft, prepare and present to the Board for its consideration all further plans, resolutions, documents, and contracts necessary for this purpose. Approval of the modified Revitalization Plan and the TIF Plan does not constitute approval of any project or a development agreement with any developer. Approved this 23rd day of September, 2019, by the Board of Commissioners of the Columbia Heights Economic Development Authority. President ATTEST: Secretary EDA Minutes Page 6 Sept. 23, 2019 COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2019-20 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE NE BUSINESS CENTER TIF DISTRICT BE IT RESOLVED by the Board of Commissioners (the “Board”) of the Columbia Heights Economic Development Authority (the “Authority”) as follows: Section 1. Recitals. 1.01. On the date hereof, the Authority approved, contingent upon the approval by the City of Columbia Heights, Minnesota (the “City”), the establishment of the NE Business Center Tax Increment Financing District (the “TIF District”), a redevelopment district, within the Downtown Central Business District Redevelopment Project (the “Redevelopment Project”), pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended, Minnesota Statutes, Sections 469.090 through 469.1081, as amended, and Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the “TIF Act”), and adopted a modification to the Downtown CBD Revitalization Plan (the “Revitalization Plan”) and a Tax Increment Financing Plan for the purpose of financing certain improvements within the Redevelopment Project (the “TIF Plan”). On the date hereof, the City Council of the City will conduct a public hearing on the modification to the Revitalization Plan and the TIF Plan. 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from legally available funds of the Authority or the City. 1.03. Under Section 469.178, subdivision of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority expects to incur costs related to administrative costs of the TIF District (the “Qualified Costs”) using Authority or City funds legally authorized for such purpose, and to reimburse such funds from tax increments from the TIF District when received. 1.05. The Authority intends to designate such advances as an interfund loan in accordance with the terms of this resolution and the TIF Act. Section 2. Interfund Loan. 2.01. The Authority hereby authorizes the advance of up to $50,000 in legally available Authority or City funds, including but not limited to the Economic Development Fund, to pay the Qualified Costs, together with interest at the rate of 5% per annum (the “Interfund Loan”). Interest shall accrue on the principal amount of each advance from the date of such advance. The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270C.40 and Section 549.09, both in effect for calendar year 2019, and will not be adjusted. 2.02. Principal and interest (the “Payments”) on the Interfund Loan shall be paid semiannually on each August 1 and February 1 (each a “Payment Date”), commencing on the first Payment Date on which the Authority receives Available Tax Increment (defined below), or on any other dates determined by the Executive Director, through the date of last receipt of tax increment from the TIF District. EDA Minutes Page 7 Sept. 23, 2019 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TIF District received by the Authority from Anoka County, Minnesota in the sixmonth period before any Payment Date. Payments shall be applied first to accrued interest, and then to unpaid principal. Payments on the Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on a parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under this Interfund Loan are prepayable in whole or in part at any time by the Authority without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2.07. The Authority may from time to time amend the terms of this resolution to the extent permitted by law, including without limitation amendment to the payment schedule and the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. subdivision 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon the date of its approval. Approved this 23rd day of September, 2019, by the Board of Commissioners of the Columbia Heights Economic Development Authority. President ATTEST: Secretary 7. Approval of Hazardous Material Abatement Contracts for 4827 University Avenue. Forney explained the EDA must approve bids received for the removal of hazardous material from 4827 University Ave NE. In 2018 the EDA purchased the property located at 4827 University Ave NE through the commercial revitalization program. It was the ultimate goal of the EDA to demolish the single family residential house on the property, and prepare the site for redevelopment. With this intent in mind, Community Development staff reached out to the new fire chief to see if the fire department would like to utilize the single family home for a training burn, and the chief was excited to pursue the opportunity. EDA Minutes Page 8 September 23, 2019 The first step in preparing for a training burn is to remove any hazardous materials and to cut off all utilities. With all utilities cut or in the process of being cut, Community development staff began the bidding process for the task of removing hazardous materials from the property. The scope of work submitted in the RFQ included the removal of asbestos containing materials, any appliances or accessories containing hazardous materials, and two large fuel tanks under the house. In response to the RFQ, the EDA received 2 bids, and both contractors stated that they could complete the removal of asbestos and hazardous materials but could not remove the fuel tanks. Both contractors recommended Deans Tank Inc. for that aspect of the project, therefore, Community Development staff reached out to Dean’s Tank Inc. to receive a quote for the removal of the tanks. Forney said the quote submitted by Robinson Environmental Inc. was determined to be the low bid for the base abatement work at $2,720, while Dean’s Tank Inc. submitted a quote of $1,200 for the removal of the fuel tanks. Robinson Environmental Inc. and Dean’s Tank Inc. shall furnish the services and necessary equipment to complete all work specified in the scope of work. All work will be performed in accordance with OSHA regulations, Minnesota Department of Health Asbestos Abatement Rules, and other applicable Federal and State regulations. Both contractors shall insure proper clean up, transport, and disposal of hazardous and asbestos contained materials. Staff recommends awarding the low bid for asbestos abatement at 4827 University Ave NE to Robinson Environmental Inc. Staff also recommends the approval of the Dean’s Tank Inc. quote for the removal of the fuel tanks. Forney reminded members that the City purchased 4833 University Avenue in 2003, which is now a vacant lot. The title of this property has been moved to the EDA so combined with the 4827 University Avenue site it will create a larger parcel for future development. Questions/Comments from members: Chirpich told members that the hazardous materials must be removed before the Fire Dept can do their burn. Forney said staff hasn’t gone out for bids to remove the remnants left after the burn. He said they have to wait to see how much debris is actually left to get accurate bids. Staff will move quickly on this once it is burned down. The Fire Dept. is looking to do this in mid-late October. Nieghbors will be notified and the Fire Chief will get the necessary permits. Szurek clarified that there are two separate motions for approval. Forney said that is correct. One approval is for the contractor to abate the hazardous materials prior to the burn and the other one is to approve a contractor to remove and dispose of the fuel tanks. Motion by Schmitt, seconded by Novitsky, to accept the low bid of Robinson Environmental Inc. for the removal of all asbestos and contaminated material located at 4827 University Ave NE; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. MOTION PASSED. Motion by Schmitt, seconded by Novitsky, to accept the quote from Dean’s Tank Inc. for the removal of two fuel tanks located at 4827 University Ave NE; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. MOTION PASSED. EDA Minutes Page 9 Sept. 23, 2019 The next regular meeting is scheduled for Monday, October 7, 2019. Motion by Schmitt, seconded by Murzyn, to adjourn the meeting at 6:00 pm. All ayes. Respectfully submitted, Shelley Hanson Secretary