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HomeMy WebLinkAbout03-23-2020 EDA Minutes ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF MARCH 23, 2020 The meeting was called to order at 6:05 pm by Chair Szurek. Members Present: Novitsky, Buesgens, Schmitt, Herringer, Murzyn, Williams and Szurek. Staff Present: Aaron Chirpich (Community Development Director), Kelly Bourgeois (City Manager) and Christy Bennett (Recording Secretary). PLEDGE OF ALLEGIANCE- RECITED CONSENT AGENDA 1.Approve the minutes from the meeting of February 3, 2020. 2. Approve Financial Report and Payment of Bills for January-February-Resolution 2020-03 Questions/comments from members: Herringer asked about Fairview Health services on pages 7 & 8 of January’s Financials. Chirpich explained th that it was an annual reimbursement payment for operations and upkeep of the ramp at 40 & Central. Kloiber added that page 7 lists individual payments (which there happened to only be one, but if there was more than one, they would individually be listed on this page), while page 8 is a summary page of all the payments on page 7. Herringer asked about Latin Kitchen and Jacon on page 10 of January. Chirpich explained that Jacon was payment for the site cleanup after the controlled burn the fire department conducted, while Latin Kitchen was a façade grant payment for El Tequila. Herringer asked about Anoka County on page 3 of February. Chirpich explained it is our portion for the agreement for Anoka County Development Services. The costs will be reimbursed by the HRA levy fund. Herringer asked about Pro-Tec Design on page 10 of February. Chirpich explained that this was the company we partner with for cameras for the façade improvement program. Motion by Buesgens, seconded by Novitsky, to approve the consent agenda as presented. All ayes MOTION PASSED. RESOLUTION NO. 2020-03 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THE MONTHS OF JANUARY, AND FEBRUARY 2020, AND THE PAYMENT OF THE BILLS FOR THE MONTHS OF JANUARY, AND FEBRUARY 2020. 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 Page 2 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 statements for the months of January, and February 2020 have been reviewed by the EDA Commission; and WHEREAS, the EDA has examined the financial statements and finds them to be acceptable as to both form and accuracy; and WHEREAS, the EDA Commission has other means to verify the intent of Section 469.096, Subd. 9, including but not limited to Comprehensive Annual Financial Reports, Annual City approved Budgets, Audits and similar documentation; and WHEREAS, financials statements are held by the City’s Finance Department in a method outlined by the State of Minnesota’s Records Retention Schedule, NOW, THEREFORE BE IT RESOLVED by the Board of Commissioners of the Columbia Heights 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 March, 2020 Offered by: Buesgens Seconded by: Novitsky Roll Call: All ayes BUSINESS ITEMS 1.Interfund Loan, and Acquisition of 4441 Central Avenue NE – Resolution 2020-04, and Resolution 2020-05 BACKGROUND: Inter-fund borrowing is a routine method of managing cash-flow for large redevelopment projects. With the recent purchases of 3989 Central Avenue, and 230 40th Avenue, the EDA’s redevelopment project fund, Fund 408 has been depleted, and currently has a negative balance of $290,500. In addition to the negative balance, staff anticipates additional development costs for these projects in the coming months totaling $65,000. To create a positive balance in Fund 408, and continue to pay for development costs associated with these two projects, an interfund loan in the amount of $355,500 will be necessary. Following the sale of 3989 Central Avenue, the EDA will be able to replenish Fund 408 and repay the interfund loan. The sale of 3989 Central is scheduled to be completed by the end of June 2020. Staff recommends that the EDA’s administration fund, Fund 204 be the source of the interfund loan. Page 3 In addition to the primary redevelopment projects listed above, Staff is seeking authorization to purchase additional property as part of the EDA’s Commercial Revitalization program. The Commercial Revitalization program was created to rejuvenate commercial corridors throughout the city by purchasing nonconforming residential structures in commercial zoning districts. The primary goal of the program is to eliminate the nonconformities and make room for new commercial development. Within this context, the vacant and foreclosed single-family home located at 4441 Central Avenue NE is available for purchase. 4441 Central was offered for sale on 2-23-20 with a list price of $90,250. Staff submitted a full price offer on 2- 26-20. The seller received multiple offers for the home, and requested best and final offers from all potential buyers. Staff responded by increasing the EDA’s offer to $125,250, and the offer was accepted. The assessed value of the property is $121,500. Staff considers this potential acquisition to be a priority within the program given its location and therefore wanted to be aggressive in the pursuit of the property. In addition to the base acquisition costs, the EDA will have to account for demolition and clean-up of the property. The total project budget is estimated at $150,000. To accommodate the potential acquisition of 4441 Central Avenue NE, the interfund loan amount would need to increase by $150,000 for a total loan of $505,500. In addition to this base amount, staff would like to provide a buffer to ensure that the cash-flow needs of the EDA are met over the next 6 months without additional board approval. Therefore, staff would like to round the loan to $600,000. Currently, Fund 204 has sufficient resources to cover the loan and pay for the ongoing staffing needs of the EDA. A breakdown of the proposed loan uses is listed in the table below: Use Amount Negative Balance Coverage $290,500 Upcoming Development Costs for Current Projects $65,000 Acquisition and Demolition Costs for 4441 Central $150,000 Buffer Funds $94,500 Total = $600,000 Staff recommends that the EDA Board approve an interfund loan in the amount of $600,000 from EDA Fund 204 to EDA Fund 408 to support the current redevelopment activities of the authority. Staff also recommends that the Board approve acquisition of 4441 Central Avenue NE as part of the Commercial Revitalization program. Questions/comments from members: Buesgens had no questions. Szurek wanted to know why the offer went up so much (from $90,500 to $125, 500) – did the bank or the seller want more from the city? Chirpich explained that the site received a lot of attention from buyers during the 10 days it was open for offers and that they did receive multiple offers. The bank sent out a request for best and final offers after the 10 day period. Staff worked with the realtor to determine the ballpark they thought they needed to be at in order to be competitive with their final offer. The final offer was near the tax value ($121, 500). The site is a little larger (80ft across) and multiple people had made inquiries about it, including as a rental property. It wasn’t vacant long enough to remove its non-conforming status, so there was a strong desire to be competitive. Szurek expressed that she is in favor of acquiring the property. Page 4 Herringer expressed that he was in favor of acquiring the property at that price. Motion by Buesgens , seconded by Murzyn, to waive the reading of Resolution 2020-04, there being ample copies available to the public. All ayes MOTION PASSED. Motion by Buesgens , seconded by Murzyn, to adopt Resolution 2020-04, a resolution approving an interfund loan in the amount of $600,000 from EDA Fund 204 to EDA Fund 408. All ayes. MOTION PASSED Motion by Buesgens, seconded by Novitsky, to waive the reading of Resolution 2020-05, there being ample copies available to the public. All ayes. MOTION PASSED. Motion by Buesgens, seconded by Novitsky, to adopt Resolution 2020-05, a resolution approving the purchase agreement between the Columbia Heights Economic Development Authority and Deutsche Bank for the acquisition of 4441 Central Avenue NE. All ayes. MOTION PASSED COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2020-04 A RESOLUTION APPROVING AN INTERFUND LOAN FROM ECONOMIC DEVELOPMENT AUTHORITY ADMINISTRATION FUND 204 TO ECONOMIC DEVELOPMENT AUTHORITY REDEVELOPMENT FUND 408 Whereas the Economic Development Authority (EDA), under its Commercial Revitalization Program within EDA Redevelopment Fund 408, acquires and sells various real property parcels; and Whereas, due to the timing of these transactions, continuing this activity within EDA Redevelopment Fund 408 requires certain temporary financing during 2020; and Whereas, the EDA seeks to continue this activity within EDA Redevelopment Fund 408; and Whereas, EDA Administration Fund 204 has sufficient cash available in 2020 to provide such temporary financing; and Whereas, one of the several purposes of the EDA Administration Fund 204 is to extend temporary internal financing to other EDA funds; and Whereas, the EDA estimates the term of this financing will be less than nine months; NOW, THEREFORE, IT IS HEREBY RESOLVED, that the City of Columbia Heights approves an interfund loan of $600,000 at zero percent interest, from EDA Administration Fund 204 to EDA Redevelopment Fund 408, effective upon the date of approval. Page 5 Passed this _23rd________ day of ___March___________________, 2020 Offered by: Buesgens Seconded by: Murzyn Roll Call: All ayes COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2020-05 RESOLUTION APPROVING PURCHASE AGREEMENT BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, ON BEHALF OF THE HOLDERS OF THE J.P. MORGAN MORTGAGE ACQUISTION TRUST 2007-CH5 ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2007-CHS. BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: Section 1.Recitals. 1.01. The Authority and Deutsche Bank National Trust Company, as Trustee, on behalf of the holders of the J.P. Morgan Mortgage Acquisition Trust 2007-CH5 Asset Backed Pass-Through Certificates, Series 2007-CH5 (“Seller”) desire to enter into a purchase agreement (the “Purchase Agreement”) pursuant to which the Authority will acquire certain property in the City located at 4441 Central Avenue NE (the “Property”) from the Seller for economic redevelopment purposes. The Property is described in Exhibit A attached hereto. 1.02. Pursuant to the Purchase Agreement, the Authority will purchase the Property from the Seller for a purchase price of $125,250 plus related closing costs. 1.03. The Authority finds that acquisition of the Property is consistent with the City’s Comprehensive Plan and will result in redevelopment of a nonconforming property, and that such acquisition will facilitate the economic redevelopment and revitalization of this area of the City. Section 2. Purchase Agreement Approved. 2.01. The Authority hereby ratifies and approves the actions of Authority staff and of Re/Max Synergy acting as the Authority’s real estate broker (“Broker”) in researching the Property and preparing and presenting the Purchase Agreement. The Authority approves the Purchase Agreement in the form presented to the Authority and on file at City Hall, 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 Purchase Agreement by those officials shall be conclusive evidence of their approval. Page 6 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority’s obligations under the Purchase Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Purchase Agreement, and any deed or other documents necessary to acquire the Property from the Seller, all as described in the Purchase Agreement. Approved this 23rd day of March, 2020, by the Board of Commissioners of the Columbia Heights Economic Development Authority. The meeting was adjourned at 6:43 pm. Respectfully submitted, Christy Bennett Secretary