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HomeMy WebLinkAbout02-25-2013 EDA Packet AGENDA ECONOMIC DEVELOPMENT AUTHORITY MEETING MONDAY, FEBRUARY 25, 2013 6:15 P.M. City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of January 14, 2013 3. Consideration of Resolution No. 13-02 Authorizing a Letter of Intent Regarding Conveyance of a Parcel in the Legacy of Woods Edge Development, Mary Alice Divine 4. Consideration of Resolution No. 13-01 Approving Proposed Special Legislation for Tax Forfeited Property in the City of Lino Lakes, Mary Alice Divine 5. Adjourn EDA MINUTES January 14, 2013 DRAFT DATE : January 14, 2013 TIME STARTED : 6:55 p.m. TIME ENDED : 7:02 p.m. MEMBERS PRESENT Commissioners O'Donnell,Roeser, Reinert, Rafferty, Stoesz MEMBERS ABSENT : None OTHERS PRESENT: : Mary Divine, Mike Grochala The meeting was called to order at 6:55 p.m. by President Rafferty. CONSIDERATION OF THE MINUTES OF DECEMBER 10, 2012 EDA Member Stoesz moved to approve the December 10, 2012 minutes. EDA Member O'Donnell seconded the motion. Motion carried with President Rafferty abstaining. CONSIDERATION OF ANNUAL APPOINTMENTS Mary Divine, Economic Development Coordinator, informed the members that each year the EDA is required to hold an annual meeting and make a number of appointments; the list was before the authority for consideration. EDA member Reinert moved the appoint EDA Member Roeser as president, EDA Member O'Donnell as vice president and EDA Member Stoesz as treasurer. EDA member O'Donnell seconded the motion. Motion carried unanimously. EDA member O'Donnell moved to approve other appointments as outlined in the staff report, with the substitution of Deck, Duea and Olson for Sweeny, Borer& Sweeney. EDA Member Roeser seconded the motion. Motion carried unanimously. ADJOURNMENT There being no further business, EDA Member Reinert moved to adjourn. EDA Member Roeser seconded the motion. Motion carried unanimously. Meeting adjourned at 7:02 p.m. 1 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3 STAFF ORIGINATOR: Mary Alice Divine MEETING DATE: February 25, 2013 TOPIC: Consideration of Resolution No. 13-02 Authorizing Letter of Intent for, and Acquisition of, a Tax Forfeited Parcel Within Legacy at Woods Edge VOTE REQUIRED: 3/5 BACKGROUND Lino Lakes Assisted Living (LLAL) has made an offer to purchase the parcel adjacent to its existing facility for expansion. This parcel is tax forfeit. State statute allows the EDA to purchase the parcel through Anoka County and resell it to a developer. This Resolution authorizes the city administer to notify Anoka County of the EDA's intent to acquire the parcel for a purchase price of $321,474. The County will distribute the proceeds from the sale back to the City, less $30,974 which will be withheld for county administration costs. The net proceeds in the amount of $290,500 are equal to the amount of outstanding special assessments on the parcel. This Letter of Intent is not a binding commitment. Before the actual purchase of the property is made, LLAL will submit payment to the City in the amount of$321,474. The EDA will later approve a purchase/development agreement at a public hearing. RECOMMENDATION Approve Resolution No. 13-02 ATTACHMENTS 1. Resolution No. 13-02 2. Exhibit A—Letter of Intent 3. Legacy Parcel Map AGENDA ITEM 3 STAFF MEMBER Mary Alice Divine DATE February 25, 2013 SUBJECT Consideration of Letter of Intent Regarding Conveyance of a Parcel in the Legacy at Woods Edge Development VOTE REQUIRED Simple Majority BACKGROUND Lino Lakes Assisted Living (LLAL) has made an offer to purchase the parcel adjacent to its existing facility for expansion. This parcel is in tax forfeit. State statute allows the EDA to purchase the property and resell it to a private developer. This Letter of Intent is from the Lino Lakes Economic Development Authority (EDA) to Anoka County, explaining that once the EDA has finalized a purchase agreement with LLAL, the EDA will acquire the parcel from the County for a purchase price of$321,474. The County will distribute the proceeds from the sale back to the City, less $30,974 which will be withheld for County administration costs. The net proceeds in the amount of$290,500 equal the amount of outstanding special assessments on the parcel. This Letter of Intent is not a binding commitment. Before the actual purchase of the property is made, LLAL will submit payment to the City in the amount of$321,474. The EDA will then pass a resolution which will be submitted to the Anoka County Board of Commissioners to finalize the sale. RECOMMENDATION: Staff is recommending Approval of the Letter of Intent ATTACHMENTS 1. Letter of Intent 2. Map of Parcel A bill for an act relating to the County of Anoka and the City of Lino Lakes Economic Development Authority; authorizing conveyance of certain tax- forfeited land BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. [Conveyance of property.] Notwithstanding the provisions of Minnesota Statutes, section 282.01, subdivision la, Anoka County shall convey to the city of Lino Lakes Economic Development Authority all of the following tax-forfeited parcels: 17-31-22-11-0002, 17-31-22-12-0051, 17-31-22-12-0053, 17-31-22-12-0059, 17-31-22-12-0060, 17-31-22-12-0063, 17-31-22-13-0049, 17-31-22-13-0053, 17-31-22- 13-0054, 17-31-22-13-0055, 17-31-22-13-0056, 17-31-22-13-0057, 17-31-22-24-0062, 17-31-22-24-0063, 17-31-22-24-0064. No monetary compensation or consideration is required for, and no conditions attach to, the conveyance except as provided in section 2. The commissioner of revenue must convey the property on behalf of the state by quit claim deed. Sec. 2 [Condition of conveyance.] The deed for the parcels described in section 1 must contain a restrictive covenant providing that upon resale by the City of all or any portion of those parcels to a non-governmental entity, the Lino Lakes Economic Development Authority shall pay to the County ten percent of the gross sale proceeds from such sale. The term "gross sale proceeds" means the purchase price negotiated between the Lino Lakes Economic Development Authority and buyer, excluding the amount of special assessments reinstated by the City of Lino Lakes and payable by buyer upon or after closing, and excluding any other closing costs payable by buyer. The County shall apply such proceeds received from the Lino Lakes Economic Development Authority in accordance with section 282.08. The restrictive covenant for any parcel shall expire 30 years after the date of the deed. Sec. 3 [Timing.] The deed for conveyance of the property described in section 1 shall be delivered by the Minnesota Department of Revenue to the County of Anoka for recording by no later than 90 days after the effective date of this act. Sec. 4. [EFFECTIVE DATE]. This act is effective upon compliance by the respective governing bodies of the county of Anoka and the Lino Lakes Economic Development Authority with the requirements of Minnesota Statutes, 645.021, subdivision 3. 417810v5 SJB LN140-80 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 4 STAFF ORIGINATOR: Mary Alice Divine MEETING DATE: February 25, 2013 TOPIC: Consideration of Resolution No. 13-01 Approving Efforts to Seek Special Legislation Authorizing Conveyance of Certain Tax- Forfeited Land from Anoka County to the City of Lino Lakes VOTE REQUIRED: 3/5 INTRODUCTION A resolution by the City of Lino Lakes City Council is required when seeking special legislative authority to allow Anoka County to convey the tax forfeited properties within the Legacy at Woods Edge development without monetary consideration. BACKGROUND In 2004 the City and the EDA entered into a Contract for Private Development with Hartford Development for the development of Legacy at Woods Edge. In support of that project, the City issued GO bonds in the amount of$5,550,000 to finance public improvements necessary for the development. Assessments against the properties were proposed to pay the debt service on the bonds. In 2009, 16 of the parcels in the development went into foreclosure and are now tax forfeit. Sale of tax forfeited properties is under Anoka County's authority. Minnesota Statutes require that any proceeds to Anoka County from the sale of these properties be returned to the City to pay outstanding assessments. If the assessments are less than the market value, the remaining proceeds are distributed to all taxing jurisdictions. Total outstanding assessments in the Legacy development are $5.8 million, greater than the market value; therefore the proceeds of a sale will be returned to the City. This legislation is for the purpose of obtaining all the properties without monetary consideration based on the reasoning that the proceeds of a sale would be returned to the City, there is no net benefit to any taxing jurisdiction through reconveyance of the properties, and this eliminates the need for a parcel by parcel purchase from the County for the purposes of development. The parcel that is proposed to be purchased by Lino Lakes Assisted Living will be exempt from this legislation. If the City is able to convey parcels to private parties for more than the amount of the assessments, the bill provides that the City would return 10 percent of the gross sale proceeds to the County, for redistribution to taxing jurisdictions. This language provides a potential recovery of a portion of the delinquent taxes if market conditions permit. In the proposed legislation Anoka County has specified that the land be conveyed all at once rather than parcel by parcel as development occurs. Minnesota Statute 272.02, Subd. 39 says property held by a city for economic development is tax exempt for nine years, with two exceptions: land purchased and held for housing or land held for redevelopment purposes which meets the redevelopment criteria. Therefore, the City holds some risk if properties determined to be for commercial uses do not develop within that time. The City's bond counsel recommends proceeding with the acquisition of the properties, as City ownership will make the properties more easily marketable. RECOMMENDATION Approve Resolution No. 13-01 ATTACHMENTS 1. Resolution No. 13-01 2. Proposed Special Legislation LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 13-01 APPROVING EFFORTS TO SEEK SPECIAL LEGISLATION AUTHORIZING CONVEYANCE OF CERTAIN TAX-FORFEITED LAND TO THE LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY BE IT RESOLVED By the board of commissioners of the Lino Lakes Economic Development Authority(the"EDA") as follows: Section 1. Background. 1.01. In 2004, the City of Lino Lakes (the "City"), EDA and Hartford Development Inc. entered into a Contract for Private Development for the development of the Legacy at Woods Edge development, which was proposed to include commercial development, rental housing, and owner- occupied housing(the"Legacy at Woods Edge Development"). 1.02. In support of the Legacy at Woods Edge Development, the City issued its Taxable General Obligation Improvement Bonds, Series 2005A (the "Series 2005A Bonds") in the amount of$5,550,000, to finance the costs of various public improvements necessary for the development. Assessments against certain properties within the Legacy at Woods Edge Development were proposed to pay all of the principal of and interest on the Series 2005A Bonds. 1.03. In 2006, in furtherance of a cooperative program entered into under the Minnesota Statutes, Sections 471.15 to 471.191 (the "Recreation Act"), the City and the YMCA of Greater St. Paul ("YMCA") entered into an Amended and Restated Development Agreement (the "Development Agreement") relating to the construction and operation of an approximately 45,000 square foot recreational facility in the City (the "Facility") to be located on property within the Legacy at Woods Edge Development. Under the Development Agreement, the City agreed to contribute $2,350,000 toward construction of the Facility. The City subsequently issued its General Obligation Tax Abatement Bonds, Series 2006C (the "Series 2006C Bonds"), in the principal amount of $2,460,000, to finance the City's contribution for the costs of constructing the Facility. Abatements of certain properties within and adjacent to the Legacy at Woods Edge Development were proposed to pay the principal amount of and a portion of the interest on the Series 2006C Bonds. 1.04. In 2009, sixteen parcels of property within the Legacy at Woods Edge Development (not including the YMCA property) were foreclosed on by the Developer's lenders. Of the foreclosed property, five of the parcels are located within the City's Tax Increment Financing District No. 1-I I (the "TIF District") and ten of the parcels are subject to the abatement described in Section 1.03 above. Tax increments from the TIF District are pledged to the payment of the City's General Obligation Tax Increment Bonds, Series 2007A (the "Series 2007A Bonds") issued in the amount of$4,215,000, to finance improvements to the I-35W/Lake Drive Interchange. 1.05. In 2010, following the foreclosure of the sixteen parcels of property within the Legacy at Woods Edge Development, the lenders determined that the outstanding special assessments and delinquent taxes on the sixteen parcels exceeded the market value of the properties, and those properties were tax forfeited. 1.06. The City and EDA continue to market the property within the Legacy at Woods Edge Development to private developers in order to get the properties back into the hands of private owners and to complete the redevelopment process originally commenced in 2004. Returning these properties to private ownership will result in special assessments being paid and property taxes being collected. In turn, the special assessments, abatements, and tax increments derived from the properties can be used by the City to pay debt service on the Series 2005A Bonds, the Series 2006C Bonds, and the Series 2007A Bonds. 1.07. Minnesota Statutes, Section 282.01, Subd. la allows the EDA to purchase tax- forfeited properties for fair market value, and proceeds received by the County are applied first to pay county administrative costs and second to pay special assessments that were outstanding at the time of forfeiture. However, that process is time-consuming and cumbersome, and the amount the of county administrative costs is not determined until the end of each year, creating uncertainty in the amounts developers will be required to pay. 1.08. The City and EDA have therefore determined to seek special legislation in the 2013 legislative session that would direct conveyance of the tax-forfeited properties within the Legacy at Woods Edge Development to the EDA without monetary consideration. 1.09. The proposed special legislation would require that, when the EDA sells a parcel to private party, it must return to the County 10% of the gross proceeds from sale of the parcel. This would occur only if the EDA is able to sell for a price in excess of the special assessments that were in place at forfeiture. 1.10. The EDA is in the process of negotiating a letter of intent with owners of the existing assisted living facility within the Legacy at Woods Edge Development, and with Anoka County, regarding an adjacent tax-forfeited parcel (Outlot A) to be acquired by that entity for expansion of its facility; and that parcel will be excluded from the special legislation. 1.11. The EDA has determined that enactment of the special legislation described above is necessary to complete the ongoing redevelopment of the Legacy at Woods Edge Development. Section 2. Approval of Special Legislation. 2.01. The EDA board hereby approves efforts to obtain special legislation in the 2013 legislative session that would authorize the EDA to acquire all the tax-forfeited properties in the Legacy at Woods Edge Development(except Outlot A) for no consideration,as described above. 2.02. EDA officials, staff and consultants are hereby authorized and directed to take any and all other steps necessary or convenient in order to obtain approval of the special legislation 419362v1 SJB LN140-80 2 described in this resolution. Adopted by the board of commissioners of the Lino Lakes Economic Development Authority this 25h day of February, 2013. Jeff Reinert President ATTEST: Julie Bartell Secretary 419362v1 SJB LN140-80 3 City of Lino Lakes y Legacy y v4 �- at Woods Edge -4- 000"0 RN AffUS W m A 17-31-22 12 0059 a21 B 17-31-22 12 0062 1.23 C 17-31-22 12 0060 0.41 r. O D 17-31-22 12 0053 5.44 y.% c E 17-31-2211-0002 5.72 F 17-31-22 12 0051 0.93 _ ® ( �' G 17-31-22 12 0063 0.55 H 17-31-2213-0049 1.14 IF '`� "am 1 17-31-2213-0053 2-76 • Village Dr 1 17-31-2213-0054 0.29 K 17-31-2213-0055 0.2B At. - T L 17-31-2213-0056 0.97 M 17-31-2213-0057 0.17 Dr N 17-31-22 24-0062 0.74 e O 17-31-22 24-0063 1.01 Q - P 17-31-22 24-0064 0..35 TOTAL 22-2 r s Vc Cant CITY OF pkw - y ? . I N KE r