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HomeMy WebLinkAbout03.03.2025 EDA Meeting ECONOMIC DEVELOPMENT AUTHORITY City Hall—Shared Vision Room, 3989 Central Ave NE Monday, March 03, 2025 5:00 PM MINUTES Voight mentioned that President James would be observing the meeting remotely via interactive technology (Microsoft Teams) but would not be participating nor counted present for the purposes of a quorum, discussion, or voting. The meeting was called to order at 5:00 pm by Vice President Dibba. CALL TO ORDER/ROLL CALL Members present: Connie Buesgens; Laurel Deneen; Lamin Dibba; Amáda Márquez-Simula; Justice Spriggs; Marlaine Szurek Members absent: Rachel James Staff present: Aaron Chirpich, City Manager; Mitchell Forney, Community Development Director; Emilie Voight, Community Development Coordinator PLEDGE OF ALLEGIANCE CONSENT AGENDA 1. Approve the minutes of the regular EDA Meeting of February 03, 2025. Motion by Deneen, seconded by Márquez-Simula, to approve the minutes of the regular EDA Meeting of February 03, 2025. All ayes of present. MOTION PASSED. 2. Approve financial reports and payment of bills for January 2025 – Resolution No. 2025-06. Motion by Spriggs, seconded by Deneen, to approve Resolution No. 2025-06, a Resolution of the Economic Development Authority of Columbia Heights, Minnesota, approving the financial statements for the month of January 2025 and the payment of the bills for the month of January 2025. All ayes of present. MOTION PASSED. RESOLUTION NO. 2025-06 RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FINANCIAL STATEMENTS FOR THE MONTH OF JANUARY 2025 AND THE PAYMENT OF THE BILLS FOR THE MONTH OF JANUARY 2025. 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 City of Columbia Heights MINUTES March 03, 2025 EDA Meeting 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 month of January 2025 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, financial 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 as part of the permanent records of the Columbia Heights Economic Development Authority. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY Passed this 3rd day of March, 2025 Offered by: Spriggs Seconded by: Deneen Roll Call: All ayes of present. MOTION PASSED. Vice President Attest: Acting Secretary BUSINESS ITEMS 3. ACRED Presentation. Forney introduced Greg Frahm-Gilles from Anoka County Regional Economic Development (ACRED). City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 3 As Director of Economic Development for ACRED, Frahm-Gilles explained that economic development is programs, policies, or activities that seek to improve the economic well-being and quality of life for a community. It creates conditions for economic growth and improved quality of life by expanding the capacity of individuals, businesses, and communities to maximize the use of their talents and skills to support innovation, job creation, and private investment. The three main goals and initiatives for ACRED include regionalism, marketing, and readiness. He explained that the cities within Anoka County have different needs and economic opportunities. He noted the importance of working as a region in order to make decisions together and not make decisions that are in contrast with each other. ACRED wants to ensure that they are putting Anoka County in the north metro at the front and center, and to take advantage of marketing for business growth. The timeline of when businesses are making a decision to relocate or expand is getting shorter. He explained that the County wants to be ready if businesses decide to leave so that they can fill vacancies quickly. Mr. Frahm-Gilles reviewed the business support services, which include business advisory services, and financial services. The business advisory services include Anoka County and Open to Business – MCCD, CareerForce, get business “broker ready” – site selection, and navigating government. The financial services include CDFIs, and MN DEED. 17 businesses have been supported year to date. He quoted David Campbell, saying, “Economic development is about properly identifying the roadblocks to business investment and clearing those roadblocks.” He noted some roadblocks include workforce shortages, remote working, rising construction costs, realigning supply chains, and strain on the electric grid. Mr. Frahm-Grilles noted the unemployment rate in Minnesota is 2.7% and Anoka County is at 2.6%. Skilled labor, ample energy, and speed to market are continued priorities. The top three issues are labor costs, quality-of-life, and availability of skilled labor. He mentioned that if the talent of people is in place in a city and there is a quality of life, then businesses will come and make investment decisions. Safe streets, schools, parks, and walkable neighborhoods attract people to certain neighborhoods and develop a talent pool in the community. The top challenges with the workforce are labor shortages, affordable housing, upskilling, childcare, lack of soft skills, global competition, labor management relations, rising income inequality, remote work, and STEM education. Mr. Frahm-Grilles explained that the US-born working age population is shrinking. It is important that immigration policy is supporting businesses since it is a 1 to 1 ratio of US-born workers leaving and immigrants coming into the workforce. He reviewed the Anoka County employment trends and pointed out that manufacturing is the top industry. A large generation in the manufacturing industry is about to retire. He noted that transit is a huge player for goods and services, and being able to get the workforce around. Mr. Frahm-Grilles mentioned that the 2024 industrial lease rate average low is $6.79 and the average high is $11.07 in Anoka County. He explained that it impacts older buildings and how it impacts economic growth. He explained that they are having conversations on how to find opportunities for businesses to start and move into an affordable space, and how to expand the space. City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 4 Mr. Frahm-Grilles noted how many buildings are under construction. ACRED went through a strategic process and identified two main detriments as part of the process, which include the organizational structure to ACRED with the cost-share agreement and the financial structure. There was a memorandum of understanding that expired at the beginning of January that outlined all 21 municipalities contributing on a per capita basis. The County board decided to allow the agreement to expire and bring economic development in-house as an Anoka County-funded program. Typically, they would send out an invoice to all of the municipalities on a per capita basis, but this year the City will not receive the invoice. Mr. Frahm-Grilles explained that his job is to support the City and to take the goals and strategies that the City has identified and help bring them to fruition. ACRED has a new organizational structure. The cost-share agreement is expired and there is more of an emphasis on City participation. There is an expanded emphasis through new capacity. He explained that there is more communication and education with cities through presentations to government industry groups, regular economic development newsletters, and empowering City staff. There are working groups that focus on key challenges, and are flexible to meet current needs. Questions/Comments from Members: Márquez-Simula asked if a business should connect with Mr. Frahm-Grilles if they need resources. Mr. Frahm-Grilles replied that on the County side of things, he is the first person to contact. Spriggs asked if ACRED has had difficulty with grants due to what is happening in Washington D.C. Mr. Frahm-Grilles replied that they have not been affected since they do not receive federal funding, but they have a small budget. Dibba asked how businesses could get to know about ACRED. Mr. Frahm-Gilles replied that he has a strong relationship with the community development departments in all 21 cities and makes sure that he is available for the cities to educate and do presentations. He added that he tries to get himself out in the community so that the community knows about the services. Dibba asked Mr. Frahm-Gilles if he does presentations with businesses or just with the cities. Mr. Frahm-Gilles replied that it is typically done through an entity like a Chamber of Commerce, but is happy to do a presentation for community groups like a Rotary or a Lions Club. Deneen asked if Staff could include a link on the City’s website that includes some of the programs offered for prospective business owners or current business owners. Forney replied that the Anoka County Economic Development website is tagged on the City’s website. The Community Development intern is currently identifying ways to better advertise the programs. 4. Commitment of Matching Funds for MHFA Local Housing Trust Fund Grants Program. Voight reported that at the EDA’s February meeting, the Commission directed Staff to prepare an application for the Minnesota Housing Finance Agency (MHFA) Local Housing Trust Fund Grants Program. As explained by Staff during the meeting, this grant program requires the applicant to provide a match of new public revenue. New public revenue is defined as local income that is City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 5 committed to the Local Housing Trust Fund on or after June 29, 2021, from any source other than the state or federal government. The dollar amount of the applicant match determines the maximum potential grant award. Voight noted that per the EDA’s guidance, Staff have prepared a resolution to commit $300,000 from Economic Development Authority Redevelopment Fund 408 to the Local Housing Trust Fund for the match. Fund 408 currently holds $510,000. Based on the grant’s program guidelines, the $300K City match could potentially earn a $150K MHFA contribution, plus up to an additional $75K MHFA contribution, for a total MHFA contribution of $225K and a total grant program budget of $525K. In order to fulfill the financial requirements of the grant application, Staff recommend passing the attached Resolution 2025-07. This resolution provides for the commitment of $300,000 from EDA Fund 408 to the Columbia Heights Local Housing Trust Fund. The resolution specifies that this commitment of matching funds is conditioned on award of MHFA grant dollars. Questions/Comments from Members: Spriggs asked when the MHFA would announce which applicants were awarded grants. Voight replied that the tentative time would be between May and June 2025. Motion by Buesgens, seconded by Deneen, to waive the reading of Resolution No. 2025-07, there being ample copies available to the public. All ayes of present. MOTION PASSED. Motion by Buesgens, seconded by Deneen, to adopt Resolution No. 2025-07, a Resolution of the Columbia Heights Economic Development Authority approving the Local Housing Trust Fund match commitment. All ayes of present. MOTION PASSED. RESOLUTION NO. 2025-07 A RESOLUTION OF THE ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE LOCAL HOUSING TRUST FUND MATCH COMMITMENT 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 Minnesota Legislature appropriated funds for the Local Housing Trust Fund Grants Program (the “Program”), which Program is administered through the Minnesota Housing Finance Agency (“Minnesota Housing”), to incentivize local governments to create or fund local housing trust funds by providing a portion of matching state funds to encourage investment in affordable housing across Minnesota. Entities, including but not limited to cities, who have an existing local housing trust fund are eligible to apply for a grant under the Program. Under the Program, eligible cities may request matching funds for local income that is committed to the local housing trust fund on or after June 29, 2021 from any source other than the state or federal government (“New Public Revenue”). An eligible city may receive matching funds up to 100% of the New Public Revenue committed to the local housing trust fund, up to $150,000, and depending on funding availability, the Program will also match an City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 6 amount up to 50% of the New Public Revenue above $150,000 but not more than $300,000. Grant proceeds from the Program may be used for: administrative expenses, up to 10% of the Program grant; grants, loans, and loan guarantees for the development, rehabilitation, or financing of housing; match for other funds from federal, state, or private resources for housing projects; or down payment assistance, rental assistance, and home buyer counseling services. All Program grant proceeds must be used for households at or below 115% of the State Median Income (as defined in the Program Guide for the Program prepared by Minnesota Housing). 1.02. Pursuant to Ordinance 1698, adopted by the City Council of the City of Columbia Heights, Minnesota (the “City”) on May 28, 2024 (the “Ordinance”), the City established a local housing trust fund (the “Housing Trust Fund”) under Minnesota Statues, Section 462C.16, as amended, and designated the Authority as the administrator of such fund. The Ordinance requires the Housing Trust Fund to be funded, in part, by an annual allocation of funds from the local affordable housing aid received from the Metropolitan Region Sales and Use Tax established pursuant to Minnesota Statutes, Section 297A.9925, as amended, and permits the Housing Trust Fund to be funded by other sources, including but not limited to: donations, bond proceeds; grants and loans from a state, federal, or private source, including the Program; appropriations by a local government; investment earnings of the Housing Trust Fund; and housing and redevelopment authority levies. 1.03. The City has determined to apply to Minnesota Housing for a grant from the Program, and to that end, the Authority has determined that it is in the best interest of the public to commit $300,000 from Economic Development Authority Redevelopment Fund 408 (the “Fund 408”) to the Housing Trust Fund, subject to an award of Program grant proceeds. 1.04. If awarded, Program grant proceeds will be used for projects and programs intended to create, maintain, and support affordable housing in the City for households at or below 115% of the State Median Income, in accordance with the requirements of the Program. SECTION 2. LOCAL HOUSING TRUST FUND MATCH COMMITMENT APPROVED. 2.01. The Board of the Authority hereby approves a commitment of $300,000 from Fund 408 to the Housing Trust Fund. The commitment approved pursuant to this resolution is conditioned on an award by Minnesota Housing to the City of Program grant proceeds. 2.02. Program grant proceeds shall be used for projects and programs intended to create, maintain, and support affordable housing in the City, and other authorized purposes under the Program. 2.03 The officers, employees and other agents of the Authority are hereby authorized to do all acts and things required of them by or in connection with this resolution and the application for Program grant proceeds, for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in this resolution. ORDER OF ECONOMIC DEVELOPMENT AUTHORITY City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 7 Passed this 3rd day of March, 2025 Offered by: Buesgens Seconded by: Deneen Roll Call: All ayes of present. MOTION PASSED. Vice President Attest: Acting Secretary 5. 4647 Polk Deed Restriction Discussion. Forney stated that earlier this month, Community Development staff were contacted by the owner of 4647 Polk St about removing a deed restriction on their property. The deed restriction was established by the purchase and redevelopment agreement that was executed with the sale of the lot within the EDA’s Single-Family Home Lot Sales Program. The owner is looking to establish a group home on the premises, which is not currently allowed due to the restriction. The 10-year restriction expires on 05/23/2027. Staff let the property owner know that the City has not removed restrictions in the past and that Staff would recommend against removal of the restriction. The owner still wanted to speak before the Council, and as such Staff told them about the community forum and how to contact members of the Council if they wanted to explore addressing the item. The owner submitted the attached email regarding the situation and has worked with Staff to bring this item forward. Forney explained that in 2015 the EDA created the Single-Family Home Lot Sales Program to sell residential lots the EDA had purchased during the 2008-2009 recession. This program sought to redevelop the empty lots the EDA had purchased into single-family homes. Throughout the life of the program, the City purchased 22 properties, demolished the existing homes, and sold the vacant lots to developers. All 22 properties were redeveloped with single-family homes. At the end of the program, the City had spent $2,150,459.61 on the purchase and demolition of the properties, recouping $373,000 from the sales of the lots, resulting in a total program cost of $1,777,459.61. To maintain the EDA’s investment in the properties, the EDA included a deed restriction on the properties. The restriction prohibits the use of the properties as anything other than a single- family, owner-occupied home for 10 years after the property is sold to the developer. This deed restriction travels with all subsequent owners of the property and is recorded in the purchase and redevelopment agreement alongside the deed to the property. Forney mentioned the property in question was previously a single-family home and was purchased by the EDA on 10/23/2008. The EDA expended $81,220 total on the purchase and demolition of the structure. In 2017, the EDA sold the property to Tollberg Homes for $25,000. The developer then worked to build the current single-family home on the lot. The current owner is the original owner of the home and purchased it directly from Tollberg Homes. Regarding next steps, if the EDA decides against the request, the deed restriction will remain in place and will expire on 05/23/2027. At that time, the property owner can utilize the property in accordance with the City’s City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 8 current zoning and building code. If the EDA would like to remove the deed restriction, Staff will need to enlist the assistance of the EDA’s legal counsel to review and develop documents, agreements, and a resolution to strike the restriction from the previous agreements and recorded documents. Forney stated that Staff recommend not removing the deed restriction for a variety of reasons. First, Staff have been involved in multiple similar cases in which a homeowner wanted to obtain a rental license but was not allowed. These previous situations have resulted in the owner living in the property until the restriction expires or the owner selling the property. Approving a conditional removal of the restriction would result in unequitable enforcement of the program and its guidelines. The removal process would also cost the EDA staff time and legal fees, diverting resources from current projects. Last, Staff do not recommend removing the restriction as it would act contrary to the previous EDA’s decision and goals set out for the program. Questions/Comments from Members: Szurek asked if the owners had a discussion with the Council yet. Forney replied that the owners prefaced the discussion but had not had a full discussion with the Council yet. Márquez-Simula agreed with the Staff’s recommendation of keeping the restriction on until 2027. Spriggs agreed. He asked if it would be a permitted use in the area. Forney replied that during the 2024 legislative session, the State legislature removed many group homes from requiring a rental license. Szurek asked if the City would get into a situation of people wanting rental licenses for the properties once the restrictions are released in 2027. She added that the previous EDA and Council had wanted to establish residential housing instead of rentals. Forney explained that the restrictions are included in a ten-year contract, so either way in 2027 the restrictions will go away. He added that people would then have the right to rent out the properties, subject to City rental regulations. Szurek stated she was not in favor of that happening to residential homes since there are enough rental homes. Forney noted that the City does not have the ability to stop a group home of six or fewer residents from coming in. The State legislature removed the ability for the City to regulate small group homes. Deneen noted that the City needs to rely on the policies in place. She agreed that the program was put into place for a specific purpose and wants to regain as much as possible through property taxes. She added that there was no family need nor an extenuating circumstance that was indicated by the property owner. She agreed that the deed should remain as-is until 2027. Spriggs asked if there was a specific business that the property owners currently operate, like an assisted living business. Forney replied that they have an established group home business. Spriggs asked if there would be any restrictions if the deed was released. Forney replied that if the deed was released it would be treated like any other single-family home. BUSINESS UPDATES City of Columbia Heights MINUTES March 03, 2025 EDA Meeting Page 9 Voight stated the EDA’s St. Paul Area Association of Realtors® grant application received $1,500 from the local chapter. Staff have also been informed that they have been awarded $3,000 more from the national chapter. Community Development staff will be working with the Communications team to use grant funds for multilingual homeowner and renter resources. The City has not yet sent out an official announcement to let people know that the grant has been received. Forney mentioned there is a Columbia Heights and Fridley Business Council meeting that will be held at Fridley’s City Hall on Friday, March 7th, at 8 am. He added that he would send an invite to all of the EDA commissioners. ADJOURNMENT Motion by Spriggs, seconded by Buesgens, to adjourn the meeting at 5:57 pm. All ayes of present. MOTION PASSED. Respectfully submitted, Emilie R. Voight _______________________________ Emilie Voight, CD Coordinator, Acting Secretary