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HomeMy WebLinkAbout09-08-2020 EDA PacketCOLUMBIA HEIGHTS EDA NOTICE OF CONDUCTING MEETING BY A COMBINATION OF IN-PERSON AND ELECTRONIC MEANS Following a determination by City Manager Kelli Bourgeois, and emergencies declared by the United States, The State of Minnesota, and the Columbia Heights Mayor & Cit y Council, the Columbia Heights Special EDA Meeting Scheduled for Tuesday September 8, 2020 at 6 pm will, pursuant to Minn. Stat. § 13D.021, occur by a combination of in-person and electronic means. Members of the public who wish to attend may do so by attending in-person in the Council Chambers at the Columbia Heights City Hall or by calling 1-312-626-6799 and entering meeting ID 798 821 7248 at the scheduled meeting time. Comments can be submitted ahead of the meeting to achirpich@columbiaheightsmn.gov or by calling (763) 706-3672. If there are any questions about this notice or attending/calling in to the meeting, please contact the Community Development Department at (763) 706-3670. The meeting location for this meeting is the Council Chambers at Columbia Heights City Hall located at 590 40th Ave NE, Columbia Heights, MN 55421. ECONOMIC DEVELOPMENT AUTHORITY AGENDA September 8, 2020 6:00 pm City Hall Council Chambers 590 40th Avenue NE Columbia Heights, MN 55421 1. Call to Order 2. Roll Call 3. Pledge of Allegiance CONSENT AGENDA 4. Approve special meeting minutes of July 13, 2020 . 5. Approve Financial Report and Payment of Bills for June and July, 2020 – Resolution 2020-09 Motion: Move to approve Consent Agenda as presented. BUSINESS ITEMS 6. Façade Improvement Grant Award Recommendation for VFW Post 230 – Resolution 2020-10 Motion: Move to waive the reading of Resolution 2020-10, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-10, a resolution approving the form and substance of the Façade Improvement Grant agreement, and approving authority staff and officials to take all actions necessary to enter the autho rity into a Facade Improvement Grant agreement with VFW Post 230. 7. Decertification of Tax Increment Financing District T4 – Resolution 2020-11 Motion: Move to waive the reading of Resolution 2020-11, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-11, a Resolution decertifying tax increment financing district Kmart-Central Ave (County No. T4) of the City of Columbia Heights. 8. Economic Development Authority Budget and Tax Levy – Resolution 2020-12 Motion: Move to waive the reading of Resolution 2020-12, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-12, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2021 and setting the 2020 tax levy, payable in 2021. 9. Housing and Redevelopment Authority Tax Levy – Resolution 2020-13 Motion: Move to waive the reading of Resolution 2020-13, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-13, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2021 and authorizing a special benefit tax levy, payable in 2021. OTHER BUSINESS 10. Adjourn The next scheduled EDA meeting will be on September 14, 2020 @ 5:30 p.m. ECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF July 13, 2020 The meeting was called to order at 5:33pm by Chair Szurek. Members Present: Novitsky, Buesgens, Schmitt, Herringer, Williams, Murzyn and Szurek. Staff Present: Aaron Chirpich (Community Development Director), Kelly Bourgeois (City Manager) and Christy Bennett (Recording Secretary). CONSENT AGENDA 1. Approve the minutes from the meeting of June 22, 2020. 2. Approve Financial Report and Payment of Bills for April and May 2020, Resolution 2020-08. Questions from Members: Herringer asked about Anoka County payment of $50k on page 12 of May financials. Chirpich said that this is the first half of taxes for 3989 Central Ave. Herringer asked what the $121k payment for Northeast Bank on page 12 of the April financials was for. Chirpich said it was for the purchase of 4441 Central Ave as part of the commercial revitalization program. It is labeled incorrectly in the financials, but it came from the same fund the 3989 Central Ave redevelopment project. Herringer asked about Pro-Tec Design Inc payment of $12k on page 12 of the April Financials. Chirpich said this payment was for the cameras that are installed as part of the façade improvement grant. Motion by Buesgens, seconded by Murzyn to approve the consent agenda as presented. All ayes. MOTION PASSED. RESOLUTION NO. 2020-08 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THE MONTHS OF APRIL AND MAY 2020, AND THE PAYMENT OF THE BILLS FOR THE MONTHS OF APRIL AND MAY 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 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 April and May, 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 13th day of July, 2020 Offered by: Buesgens Seconded by: Murzyn Roll Call: All Ayes BUSINESS ITEMS 6. Designate the City of Columbia Heights to Act as Agent for EDA for Demolition of 3989 Central Avenue NE. Chirpich explained that since the last EDA meeting held on June 22, staff has continued to work toward preparing the 3989 Central Avenue redevelopment project for closing. One of the primary barriers to closing on the land sale to Alatus is clearing title of the rooftop cell antenna lease encumbrances. To clear title to the property, the City has filed a petition with the courts to remove the lease hold interests by eminent domain. Due to delays in the court system primarily related to the COVID-19 pandemic, the initial eminent domain hearing has been pushed to August 18. Subsequently, the delays with the eminent domain process have pushed the anticipated lease removal and land sale closing to mid-October. To keep the project moving forward and create the space necessary for the eminent domain proceedings to conclude, demolition and removal of all site improvements in the project area need to be completed before closing. In the case of this project, the redevelopment site includes six separate parcels with ownership that is shared between the City and the EDA. In order to consolidate the demolition contract into one agreement, staff recommends the EDA designate the City of Columbia Heights as agent on behalf of the EDA for all demolition related work associated with the project. To complete the demolition work, staff is working with Doran Construction on the preparation of a bid package that will be processed through the typical public bidding process. The City will act as owner and Doran will provide construction management services for the work. Under the current timeline, bids for the demolition work will be due and opened on August 4, and the subsequent contract award will take place at the August 10 City Council meeting. Demolition work is expected to start by August 14, and conclude by mid-October. The costs incurred by the City for demolition will be recaptured with the sale of the redevelopment parcels to Alatus. Questions/comments from members: Szurek asked if there would be money involved in getting Crown to vacate. Chirpich said that with eminent domain, we would deposit the fair market appraisal value of $335 k in escrow with the court. Upon completion of the hearing on August 18th that determines public purpose, where the judge rules that there is a public purpose for the project, we deposit the appraised amount in escrow and then wait for a hearing at a later date to figure out who gets what. Chirpich stated that the important part is to clear the title and to create the space necessary for this to conclude. Schmitt asked why we have to deposit $325k in escrow, questioning why the City isn’t just paying for the tower space, rather than the building. Chirpich explained that the $335k appraisal is for the tower space/lease area. Chirpich further explained that the appraisal is looking at the business interest that Crown Castle has in our property, in other words, the present day value is considered the amount that Crown Castle could sell the lease space to another theoretical company that is interested using that space in a similar way on the open market. It doesn’t account for future revenue, because that would be the benefit of the new owner. Szurek asked if the EDA could lose that $335k and Chirpich replied that the EDA could. This has been the framework of eminent domain from the beginning that this was an expected outcome. Szurek asked where this money is coming from. Chirpich said that staff are planning to have that money come from the Anoka Count HRA Levy fund for special projects. The council will have to pass a resolution to use the funds, but staff has already checked with Anoka County that this would indeed be an eligible use of the funds. We have about $900,000 in the account right now, with a little more going into it with this year’s first half taxes payment still going into it. Buesgens asked if we were basically buying out the contract, since the building is being torn down. Chirpich responded that more or less, that is how the courts would view it. That is the prescriptive route of eminent domain; you have to appraise it and give them fair market value. What Crown Castle is contesting is our fair market value determination, and thus they are reluctant to accept the offer. Herringer commented that you have to keep in mind that you are dealing with a New York Stock Exchange company with assets of $7 billion dollars who is going to hold out for the max that they can get. Herringer asked when we did our due diligence on buying 3989 Central Ave, when did we realize that the previous owner has sold his interest in the cell tower lease. Chirpich responded that Stadium Village sold the lease for a lump sum of $460,000 to Crown Castle in 2011-12. Crown Castle already had the lease interest on the building when we purchased 3989 Central Ave, and he did disclose the lease hold interest in our negotiation process. They overpaid in 2011 and now the asset that their interest sits on has depreciated. The appraisal tries to take that into consideration; they monetize an expected annual rental income from this leasable space, which is where the $335k is derived. Chirpich commented that Crown Castle knew the property was distressed, which is why they approached the City about getting off it. Szurek asked if we offered Crown Castle the $335,000 to vacate the lease, since that is the fair market value. Buesgens confirmed we did. Szurek asked if they could get more than the $335,000. Chirpich explained that the courts are our outlet, because we have the framework of a deal that we have been working together on in good faith and we have eminent domain powers. This is a viable plan, considering that we need the demolition done either way and we have a viable economic development resource to pay for it, we have no reason to believe the project is in jeopardy. We have to try to exercise our authority, as they have not been reasonable. Buesgens commented that she was glad the title company decided not to move forward without the lease being cleared up, so that Crown Castle doesn’t try to sue them. Williams expressed concern that there is not an executed contract in place with Alatus and that they could back out at any time or even collapse as a company, while we, as a small city, have millions of dollars into this project. He stated he was against this from the beginning. Buesgens asked if we had a pre-development agreement in place with them. Chirpich said yes, but it’s a small escrow deposit. Chirpich said when the EDA went into this decision; it was made based on the importance of redeveloping 3989 Central Ave, regardless of the Alatus project. Alatus is a qualified, capable partner that, despite a pandemic, has secured equity and has a bank lined up. The vision from the Council and the EDA was that this was a priority site and if the EDA did not step in to take the lead, the City would continue to have a vacant 6 story office building with no clear future. Buesgens pointed out that if the EDA hadn’t bought the building, the City would have no control over what happened to it. If by chance this deal falls apart, the City still owns the lot(s) and has control over what happens on the site. Chirpich said that the City was also facing the prospect of handing over a $2 million ramp to Ned Abdul at 500 LLC, which was a motivating factor in the urgency to purchase the building. According to Chirpich, Alatus has invested hundreds of thousands of dollars into this project already. They have submitted their building plans to the City and they are ready to go. Chirpich said that in staff’s opinion, it isn’t really an option to back out at this juncture. Schmitt commented that the city has a history of buying distressed properties. The City bought the Burger King and the bowling alley with no developer in sight, as well as purchasing multiple homes in the city. We took the risk, because we knew they needed to be replaced. This is another risk. In most cases, the risks have panned out in good ways. We need this site re-developed, whether by Alatus or someone else. She said Alatus is proving to be patient. She also said that the pandemic isn’t helping the situation. Chirpich said that it set us back at least 2 months, but is grateful that we are able to check off the big boxes still and be in a positive position, despite the pandemic. Schmitt thanked staff for all their hard work on this project. Motion by Buesgens, seconded by Herringer, to designate the City of Columbia Heights as agent on behalf of the Economic Development Authority for demolition of all site improvements located at the 3989 Central Avenue NE redevelopment site. All Ayes. MOTION PASSED. PUBLIC HEARING 7. Approve Land Sale to Alatus LLC for Redevelopment of EDA Owned Property and Approval of TIF Agreement for Same Chirpich shared that the EDA opened a public hearing on June 8, 2020 to consider the sale of EDA owned property and final approval of the tax increment financing agreement for the EDA’s redevelopment site located at 3989 Central Avenue. At the time of the hearing, the final purchase, redevelopment, and TIF agreements were not ready for review and approval. Therefore, the hearing was continued to June 22 at 6:00 p.m. At the time of the June 22 public hearing, the land sale agreements and final TIF agreement remained unfinished. Therefore, the public hearing was continued to July 13, at 5:30 p.m. Since the June 22 public hearing, staff has continued to work toward preparing the project for closing. One of the primary barriers to closing on the land sale to Alatus is clearing title of the rooftop cell antenna lease encumbrances. To clear title to the property, the City has filed a petition with the courts to remove the lease hold interests by eminent domain. Due to delays in the court system primarily related to the COVID -19 pandemic, the initial eminent domain hearing has been pushed to August 18. Subsequently, the delays with the eminent domain process have pushed the anticipated lease removal and land sale closing to mid-October. Therefore, staff recommends that the Council close the public hearing to consider the purchase, redevelopment, and TIF agreements without taking action. Staff will re-publish for a new hearing date once a final closing date has been established. Questions/comments from members: Williams expressed his concern again that there is not a formal/legal agreement to guarantee that Alatus will buy 3989 Central Ave, as agreed upon. Novitsky said we haven’t overpaid for the property, purchased at the market value of $2.8 million, so worst case scenario, if this deal falls through, we aren’t losing money selling it to another development company at market value. On top of that, it is worth more to a developer once the demolition has happened. Novitsky and Buesgens shared that they are still in favor of this project. Williams stated he is still concerned about spending more money on the project. Herringer said that Alatus does have money involved in the project that they will not want to lose, too. Chirpich agreed, sharing that Alatus has spent hundreds of thousands of dollars on this project in architectural and design work, soil borings and environmental testing. If this project doesn’t happen, Alatus is out all that money, while the City still has a property to sell. Chirpich said he would argue that it is a bigger risk for Alatus at this point, than for the City. Chirpich said we have a preliminary development agreement in place, which is on par for how these projects work in many cities. We have a history of doing preliminary development agreements in this city. Public Hearing Opened There were no comments Public Hearing Closed Motion by Schmitt, seconded by Novitsky, to close the public hearing without taking action. Ayes- Schmitt, Notivsky, Buesgens, Murzyn. Abstained- Williams. MOTION PASSED. Other Updates Chirpich brought up the property 960 40th Ave, located to the east of the ramp, which has been a priority acquisition throughout the planning for this project. Staff had always thought the EDA would entertain the acquisition at a later date, after closing on the Alatus deal. Alatus has approached the owners and has the framework of a deal to acquire the property. They have a purchase agreement in place with some contingencies. Alatus has asked the City if they have interest in the property in a similar fashion as the scattered site redevelopment program. Staff is open to this, but needs to understand what the use would be first. Chirpich stated that the “EDA would need to be able to use it in a way that is consistent with the EDA’s expectations and to not just give it to the project. Staff thinks that it would be a priority acquisition under any measure, given the house’s condition. Houses that have access to their garages along that alley have been placed in a category for future re-development when the owners are ready to sell, so that the City can close the alley and not have to maintain it. It is problematic from a maintenance perspective for the City, as for snow removal; there is nowhere to push it. Chirpich told members that Staff would get more information, understand the nature of the deal, and see if it would be a good project for the City at a later date. This could be used to develop a new home or it could be acquired and held until contiguous sites are acquired to do a bigger project. Kevin Hansen, the City Engineer, has also drawn up storm water improvements for the site he would like to see through that would provide treatment for the lake to the north. Chirpich said he was just putting this on the radar and that Staff may potentially bring this back to the EDA for consideration after further review. Buesgens asked to confirm that Alatus has currently made an offer and has a purchase agreement for the house and that at some future date, Alatus and the City may talk about the City taking over the lot. Chirpich this is the idea, though he needs to review the agreements a little more thoroughly, as it would need to make sense for the City to acquire the property. Herringer asked what the asked what the offer on the house was. Chirpich said he didn’t recall the exact amount, but that the offer was over $200,000 and that the property is tax assessed for just under that. Novitsky commented once the new development goes up, it would be worth over $200,000. Murzyn said there have been cars junked in the backyard for years and that the soil is probably bad, along with the water table being high in that area. This makes him a bit leery of purchasing the property, as there may be cleanup to deal with and/or limitations on what can be built there. Buesgens said that there is the previously mentioned option of using it for the storm water improvements. Chirpich agreed that it could be used similarly to the storm water retention basin on Gould. Szurek said that it would be a lot of money to build something like that. Chirpich said the City could likely secure grant funding, as it would be an improvement that would help the impaired waterway. Looking at it from a global perspective, it’s not a need, but there would be support for that type of improvement. Szurek said this has been the EDA’s plan, to remove questionable housing and replace it with things to improve the city. With the new development at 3989 Central Ave, keeping the deteriorating housing right next to it will bode poorly for the image of the project. Szurek said she thinks this should be taken into consideration and agrees that something needs to be done with those properties. Buesgens said that it could be a good deal for Alatus, creating green space near the development, if we don’t purchase the property from them because of the condition and price. Chirpich said that option is probably not palatable to Alatus. Szurek said the EDA should let Staff look into this more and come back to this discussion at a future meeting, when Staff has a better understanding of whether or not it makes sense for the City to look at purchasing the property. Motion by Herringer, seconded by Buesgens, to adjourn the meeting at 6:26pm. All Ayes. MOTION PASSED. Respectfully submitted, Christy Bennett Secretary Resolution 2020-09 RESOLUTION NO. 2020-09 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THE MONTHS OF JUNE AND JULY 2020, AND THE PAYMENT OF THE BILLS FOR THE MONTHS OF JUNE AND JULY 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 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 June and July, 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 Height s Economic Development Authority. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 8th day of September, 2020 Offered by: Seconded by: Roll Call: President Attest: Assistant Secretary 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 AGENDA SECTION BUSINESS ITEMS ITEM NO. 6 MEETING DATE 9-8-2020 CITY OF COLUMBIA HEIGHTS – ECONOMIC DEVELOPMENT AUTHORITY Façade Improvement Grant Report VFW ITEM: Façade Improvement Grant Report VFW 230, 4446 Central DEPARTMENT: Community Development CITY MANAGER’S APPROVAL: BY/DATE: Mitchell Forney, 8/27/20 20 BY/DATE: BACKGROUND: This report is in regards to the 2020 Façade improvement Grant application for VFW post 230 located at 4446 Central Ave NE. Due to the emergence of the COVID-19 Pandemic Community development staff, at the request of the EDA, has continued to offer the Façade improvement grant program to the businesses of Columbia Heights. With regards to the extenuating circumstances the 2020 Façade Improvement Grant program is being offered throughout the year on a first come first serve basis, with applications being accepted until the end of October. The application from VFW Post 230 is the first façade improvement application received by the Community Development Department. The community development department continues to advertise the program and will be including the program in the efforts to advertise the Business Relief Grant Program. VFW Post 230 is requesting the full $5,000 grant amount to assist with their proje ct. Their proposal includes the installation of new windows and siding along the Eastern side of the building, along with a new window on the eastern side of the entrance. The bids submitted with the application estimate the total project cost to be $11,500.00. After speaking with the Columbia Heights Police Department the VFW location will remain in consideration for the Camera aspect of the Façade Improvement Grant Program. The Camera aspect of the program will be executed at the end of the grant cycle in order to include all projects in one Camera instillation agreement. STAFF RECOMMENDATION: Staff Recommends that the EDA approve Resolution 2020-10 approving VFW Post 230’s application in full and allowing staff to enter into agreements to execute Grant funding. RECOMMENDED MOTION(S): Motion: Move to waive the reading of Resolution 2020-10, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-10, resolution approving the form and substance of the façade improvement grant agreement, and approving authority staff and officials to take all actions necessary to enter the authority into a façade improvement grant agreement with VFW post 230. ATTACHMENTS: 1. Resolution 2020-10 2. Sample Façade Improvement Grant Agreement 3. VFW Project scope Resolution 2020-10 RESOLUTION NO. 2020-10 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FORM AND SUBSTANCE OF THE FAÇADE IMPROVEMENT GRANT AGREEMENT, AND APPROVING AUTHORITY STAFF AND OFFICIALS TO TAKE ALL ACTIONS NECESSARY TO ENTER THE AUTHORITY INTO A FAÇADE IMPROVEMENT GRANT AGREEMENT WITH VFW POST 230. BE IT RESOLVED BY the Board of Commissioners ("Board") of the Columbia Heights Economic Development Authority (the "Authority") as follows: WHEREAS, the City of Columbia Heights (the “City”) and the Authority have collaborated to create a certain Façade Improvement Grant Program (the “Program”); and WHEREAS, pursuant to guidelines established for the Program, the Authority is to award and administer a series of grants to eligible commercial property owners and/or tenants for the purposes of revitalizing existing store fronts, increasing business vitality and economic performance, and decreasing criminal activity along Central Avenue Northeast, 40th Ave NE, and 38th Ave NE, pursuant to a Façade Improvement Grant Agreement with VFW Post 230 (the “Grant Agreement”); and WHEREAS, the Authority has reviewed copies of the proposed form of the Grant Agreement. NOW, THEREFORE BE IT RESOLVED that the Authority hereby approves the form and substance of the Grant Agreement, and approves the Authority entering into the Grant Agreement with VFW Post 230, as recommended b y the Community Development Department of the City, in accordance with the Program guidelines. BE IT FURTHER RESOLVED, that Marlaine Szurek, as the President of the Authority, is hereby authorized, empowered and directed for and on behalf of the Authority to enter into the Grant Agreement. BE IT FURTHER RESOLVED, that Marlaine Szurek, as the President of the Authority, is hereby authorized and directed to execute and take such action as he/she deems necessary and appropriate to carry out the purpose of the foregoing resolution. BE IT FURTHER RESOLVED, that these actions shall be effective as of September 8th, 2020 ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 8th day of September, 2020 Offered by: Seconded by: Roll Call: Marlaine Szurek, President Attest: Shelley Hanson, Secretary FAÇADE IMPROVEMENT GRANT AGREEMENT THIS FAÇADE IMPROVEMENT GRANT AGREEMENT (“Agreement”), dated this _____ day of ______________, 2020 (the “Effective Date”), is entered into by and between [PROPERTY OWNER] a Minnesota [ENTITY TYPE] (the “Grantee”), and the Columbia Heights Economic Development Authority (the “EDA”). RECITALS WHEREAS, Grantee is [the owner of] [a tenant at] certain Property located at __________________ in the City of Columbia Heights (the “City”), Anoka County, Minnesota, and legally described in Exhibit A hereto (the “Property”); WHEREAS, the EDA, in cooperation with the City and its police department, has instituted a Façade Improvement Grant Program (the “Program”) for the purpose of revitalizing existing store fronts, increasing business vitality and economic performance, and decreasing criminal activity; WHEREAS, as part of the Program, the EDA has proposed to make grants of money in the maximum amount of $5,000.00 per parcel of real property, to property owners, tenants, or nonprofit organizations, in order to revitalize, rehabilitate, and restore exterior store fronts within the Central Business District in the City (the “CBD”), increase business vitality and economic performance in the CBD, and in certain instances, to provide monitored surveillance within the CBD; and WHEREAS, Grantee desires to participate in the Program, on the terms and conditions set forth below. NOW, THEREFORE, in consideration of the premises and of the agreements hereinafter contained, the parties agree as follows: 1. Property Improvements: Grantee agrees to complete the improvements at the Property that are identified on Exhibit B attached hereto (the “Improvements”), subject to the following terms and conditions: a. If requested by the EDA, Grantee shall provide plans and specifications to the EDA, detailing the Improvements to be constructed (the “Plans”). If Grantee wishes to revise the Plans, Grantee must submit the revised Plans to the EDA at the address provided herein. The EDA shall give written notice of its approval or disapproval of the revisions to the Plans, and if the EDA does not give such written approval or disapproval within ten (10) business days after receipt of Grantee’s revised Plans, the EDA shall be deemed to have approved the revisions to the Plans. b. The Improvement shall be constructed consistently with the Plans, as the same may be revised pursuant to Section 1(a) herein. The cost to complete 2 construction of the Improvements shall be defined as the “Improvement Costs.” The Improvements shall be completed in a first-class manner, consistent with the Plans, if any, and in compliance with all applicable laws, rules, and regulations. Grantee shall obtain all required permits and approvals from the City and any other governing authority with jurisdiction over the Property related to the construction of the Improvements. The out-of-pocket costs for such permitting and approvals shall be the responsibility of Grantee, provided the same shall be included in the definition of “Improvement Costs,” and subject to the provisions of Section 2 of this Agreement. c. Grantee agrees to commence the Improvements within sixty (60) days following the Effective Date, and to complete the Improvements within six (6) months following the issuance of all necessary building permits, but in no event later than eight (8) months following the Effective Date. 2. Payment of Grant Funds: Grantee shall be responsible for making initial payment to all contractors involved in the construction of the Improvements. Upon final completion of the Improvements, Grantee shall make a written request to the EDA for reimbursement of one-half (1/2) of the actual Improvement Costs incurred by Grantee, but in no event shall the reimbursement exceed Five Thousand Dollars ($5,000.00). The written request shall include: a. Proof of final inspection of the Improvements by the City building inspector; b. Before and after photographs of the Property, reflecting the Improvements made (as well as follow-up transmission of electronic files of such photographs), and reflecting that the Improvements were completed consistently with any approved Plans; c. A copy of the final invoice(s) received from the contractor(s) who completed the Improvements; and d. Proof of payment of invoice(s) that comprised the Improvement Costs. Following Grantee’s written request for reimbursement, Grantee shall cooperate with the EDA in delivering to the EDA such follow-up information as is reasonably requested by the EDA in order to review the Improvements and Improvement Costs reimbursement request. Within twenty-one (21) days following receipt of Grantee’s written request for reimbursement of Improvement Costs, the EDA shall: (i) make payment of the reimbursement, (ii) send Grantee written explanation of such other items of information as are needed by the EDA to evaluate the reimbursement request, or (iii) send Grantee written explanation of the EDA’s reasons for denial of repayment of any of Grantee’s requested reimbursement. 3. Liability for Improvements: Neither the City nor the EDA shall in any event be liable to the Grantee, nor to any of its agents, employees, guests or invitees at the Property for, and the Grantee shall indemnify, save, defend, and hold harmless the City and the EDA from, any claims or causes of action, including attorney’s fees incurred by the City or the EDA, arising from defect or claimed defect of any of the Improvements, 3 or arising from any action of the City or the EDA under this Agreement. This section shall survive the termination or expiration of this Agreement. 4. Written Notice: Wherever any notice is required or permitted hereunder, such notice shall be in writing. Any notice or document required or permitted to be delivered hereunder shall be deemed to be delivered when actually received by the designated addressee or regardless of whether actually received or not, when deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the parties hereto at their respective addresses, as set forth below, or at such other address as they may subsequently specify by written notice. If to the EDA: Columbia Heights EDA Community Development Department 590 40th Avenue N.E. Columbia Heights, MN 55421 If to Grantee: ____________________ Attn: ________________ ____________________ ____________________ 5. Captions; Choice of Law; Etc. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. This Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agreements between the parties regarding the subject matter contained herein. There are no verbal agreements that change this Agreement. This Agreement binds and benefits the parties hereto and their successors and assigns. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. [Signatures to Appear on Following Page] 4 IN WITNESS WHEREOF, Grantee and the EDA have signed this Agreement as of the day and year first above written. GRANTEE: [_________________________] a [_______________________] By:____________________________ Name: _________________________ Its:____________________________ Date:__________________________ EDA: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY By: Name: _________________________ Its:____________________________ Date:__________________________ 5 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY 6 EXHIBIT B PROPERTY IMPROVEMENTS SUBJECT TO 50% REIMBURSEMENT AGENDA SECTION BUSINESS ITEM ITEM NO. 7 MEETING DATE SEPTEMBER 8, 2020 CITY OF COLUMBIA HEIGHTS – ECONOMIC DEVELOPMENT AUTHORITY ITEM: Decertification of the Kmart-Central Ave T4 Tax Increment Financing District DEPARTMENT: Community Development CITY MANAGER’S APPROVAL: BY/DATE: Aaron Chirpich, September 3, 2020 BY/DATE: BACKGROUND: In 2003, the Kmart-Central Avenue-T4 Tax Increment Financing (TIF) District was established to assist in the redevelopment of the former Kmart site located in the northeast quadrant of the intersection of 47th Avenue and Central Avenue. TIF was used to pay for eligible expenses incurred by the developer, including the demolition of the former Kmart building. The developer, New Heights Development, LLC received TIF assistance in the amount of $700,000 through the issuance of a tax increment revenue note by the EDA. The T4 district is set to expire on December 31, 2020 and the EDA must decertify the district in preparation of the pending expiration. All obligations made under the original TIF agreement have been satisfied, and the TIF note has been paid in full. This means that tax increment is no longer being collected, and taxes in the district will now flow back to the City, County, School District, and all other taxing jurisdictions. STAFF RECOMMENDATION: Staff recommends approval of Resolution 2020-11 as presented. RECOMMEDED MOTION(S): Motion: Move to waive the reading of Resolution 2020-11, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-11, a resolution of the Columbia Heights Economic Development Authority, decertifying tax increment financing district Kmart-Central Ave (County No. T4) of the City of Columbia Heights. ATTACHMENTS:  Resolution 2019-11 2003, the RESOLUTION NO. 2020-11 COLUMBIA HEIGHTS ECOMOMIC DEVELOPMENT AUTHORITY COUNTY OF ANOKA STATE OF MINNESOTA A RESOLUTION DECERTIFYING TAX INCREMENT FINANCING DISTRICT KMART-CENTRAL AVE (COUNTY NO. T4) OF THE CITY OF COLUMBIA HEIGHTS WHEREAS, on September 22, 2003, the City (the "City") and Economic Development Authority (the “Authority”) created its Tax Increment Financing District Kmart-Central Ave (County No.T4), (the "District") within its Central Business District Redevelopment Project (the "Project"); and WHEREAS, Minnesota Statutes, Section 469.174 to 469.179 authorizes the Authority to decertify a tax increment financing district on any date after all bonds and other obligations have been satisfied; and WHEREAS, as of the decertification date all bonds to which tax increment from the District have been pledged are paid in full; and WHEREAS, the Authority desires by this resolution to decertify the District effective September 8, 2020, by which all taxing jurisdictions will benefit from an increased tax base effective for taxes payable in 2020; and WHEREAS, the excess tax increment in the account for the District, if any, will be returned to the County Auditor for redistribution to the regular taxing jurisdictions; NOW THEREFORE, BE IT RESOLVED by the Board of Economic Development Authority of the City of Columbia Heights that it acknowledges such action was taken by the County Auditor of Anoka County to decertify the District as a tax increment district and to no longer remit tax increment from the District to the City. DATED: September 8, 2020 __________________________________ Chair ATTEST: ________________________________ (Seal) AGENDA SECTION BUSINESS ITEM ITEM NO. 8 & 9 MEETING DATE SEPTEMBER 8, 2020 CITY OF COLUMBIA HEIGHTS – ECONOMIC DEVELOPMENT AUTHORITY ITEM: Adoption of the 2021 Budget and Authorization of EDA and HRA Levies DEPARTMENT: Community Development CITY MANAGER’S APPROVAL: BY/DATE: Aaron Chirpich, September 1, 2020 BY/DATE: BACKGROUND: In late August, the proposed budget for the 2021 fiscal year was distributed to the City Council. Before the City Council completes their final review of the proposed budget later this fall, the Columbia Heights Economic Development Authority (the “EDA”) and the Housing and Redevelopment Authority in and for the City of Columbia Heights (the “HRA”) are required to adopt fund budgets for Fund 204: EDA Administration and Fund 408: EDA Redevelopment Projects; and to authorize their respective 2020 tax levies, payable in 2021. Overall, the proposed 2021 fund budgets are balanced, with funds specifically dedicated to maintain existing projects and initiatives, as well as allocating funds for programs that reflect the priorities of the EDA, such as the Commercial Revitalization Project and the Façade Improvement Grant Program. It is worth noting that the proposed 2021 budget for Fund 204 includes a 3.9% levy increase, which represents an increase of $15,425 from 2020. This increase can be attributed to three primary changes within the Community Development department that are detailed in the comment section of the Fund 204 summary budget that is attached to this report. The EDA effectively has two separate tax levies after the City Council granted the EDA certain HRA powers in 1996. One tax levy is administered by the City under Minnesota Statutes, Section 469.107 on behalf of the EDA (the “EDA Levy”) and the other is a special benefit tax levy administered by the EDA under Minnesota Statutes, Section 469.033 on behalf of the HRA (the “HRA Levy”). The proposed fund budgets reflect total levy amounts that are within the statutory limits. For 2021, the EDA Levy would capture $254,625 from the City’s estimated market land value; whereas the HRA Levy would net $250,000. When combined, both levies result in total net revenue of $504,625. STAFF RECOMMENDATION: Staff recommends approval of Resolution 2020-12 and Resolution 2019-13 as presented. RECOMMEDED MOTION(S): Motion: Move to waive the reading of Resolution 2020-12, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-12, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2021 and setting the 2020 tax levy, payable in 2021 . Motion: Move to waive the reading of Resolution 2020-13, there being ample copies available to the public. Motion: Move to adopt Resolution 2020-13, a resolution of the Columbia Heights Economic Development Authority, adopting a budget for the fiscal year of 2021 and authorizing a special benefit tax levy, payable in 2021. City of Columbia Heights - EDA Letter Page 2 ATTACHMENTS:  Resolution 2019-12  Resolution 2019-13  Fund 204: EDA Administration Budget  Fund 408: EDA Redevelopment Project Budget Resolution 2020-12 RESOLUTION NO. 2020-12 A RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, ADOPTING A BUDGET FOR THE FISCAL YEAR OF 2021 AND SETTING THE 2020 TAX LEVY, PAYABLE IN 2021. BE IT RESOLVED, by the Columbia Heights Economic Development Authority (the “EDA”) as follows: WHEREAS, the City of Columbia Heights (the “City”) established the EDA by an enabling resolution adopted on January 8, 1996, pursuant to Minnesota Statutes 469.090 to 469.1081 (the “EDA Act”); and WHEREAS, the City Council of the City has given to the EDA the responsibility for all development and redevelopment projects and programs; and WHEREAS, under Section 469.107 of the EDA Act, the City is authorized to levy a tax for the benefit of the EDA on its area of operation for the purposes authorized under the EDA Act, subject to the approval of the City Council. NOW, THEREFORE BE IT RESOLVED, by the Board of Commissioners of the Columbia Heights Economic Development Authority, that the EDA adopts and requests the City Council’s approval of its budget in the amount of $504,625 for 2021; and BE IT FURTHER RESOLVED, that the EDA adopts and requests the City Council’s approval of its tax levy in the amount of $254,625 for taxes payable in 2021; and BE IT FURTHER RESOLVED, that the Executive Director is instructed to transmit a copy of this resolution to the City Manager, Finance Director, and City Clerk of the City of Columbia Heights, Minnesota. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 8th day of September, 2020 Offered by: Seconded by: Roll Call: President Attest: Secretary Resolution 2020-13 RESOLUTION NO. 2020-13 A RESOLUTION OF THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, ADOPTING A BUDGET FOR THE FISCAL YEAR OF 2021 AND AUTHORIZING A SPECIAL BENEFIT TAX LEVY, PAYABLE IN 2021. BE IT RESOLVED, by the Columbia Heights Economic Development Authority (the “EDA”) as follows: WHEREAS, the City of Columbia Heights (the “City”) established the EDA by an enabling resolution adopted on January 8, 1996, pursuant to Minnesota Statutes 469.090 to 469.1081 (the “EDA Act”); and WHEREAS, the City Council granted the EDA all powers and duties of a housing and redevelopment authority by an enabling resolution and ordinance adopted on October 22, 2001, pursuant to Minnesota Statutes 469.001 to 469.047 (the "HRA Act"), except certain powers that are allocated to the Housing and Redevelopment Authority in and for the City of Columbia Heights (the “HRA”); and WHEREAS, under Section 469.033 of the HRA Act, the EDA and HRA, are authorized to levy a special benefit tax, in an amount not to exceed .0185 percent of the City’s estimated market value (the “HRA Levy”); and WHEREAS, the EDA desires to maintain its HRA Levy at the amount of .0185 percent of the City’s estimated market value as authorized by the HRA Act; and WHEREAS, the EDA has before it for consideration a copy of its budget for the fiscal year of 2021, and the amount of the HRA Levy, payable in 2021, is based on said budget. NOW, THEREFORE BE IT RESOLVED, by the Board of Commissioners of the Columbia Heights Economic Development Authority, that the EDA hereby adopts and requests the City Council approve its budget in the amount of $504,625 for 2021, and such budget includes both the amount the EDA requests to be levied by the City under Section 469.107 of the EDA Act, and the amount levied by the EDA under Section 469.033 of the HRA Act; and BE IT FURTHER RESOLVED, that the EDA hereby directs staff to file its budget with the City in accordance to Section 469.033 of the HRA Act, and take such actions necessary to levy and certify the HRA Levy in the amount of $250,000 for taxes payable in 2021. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 8th day of September, 2020 Offered by: Seconded by: Roll Call: President Attest: Secretary