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Home My WebLink About07-31-2002 ECONOMIC DEVELOPMENT COMMISSION AGENDA July 31, 2002 7:30 A.M. MOUNDS VIEW CITY HALL - CITY COUNCIL CHAMBERS 1. CALL TO ORDER A.M. 2. ROLL CALL (Present = P, Absent = A) Belting Fox Field Helgemoe Johnson Open McDonald Backman (Staff) Ericson (Staff) 3. APPROVE EDC MINUTES June 21, 2002 Motion: Second: Vote: 4. SPECIAL BUSINESS No Special Business Scheduled 5. REPORT OF COMMISSIONERS, STAFF AND EDA LIAISON A. Report of Commissioners -No Materials Attached B. Report of EDA Liaison -No Materials Attached C. Chamber of Commerce Update D. Report of Staff 1. Twin Cities North Chamber Merger Activities 2. Mermaid Retention Pond Redevelopment Grant Activities 3. Met Council Livable Community Grant Application 4. Six Month Report to City Council 5. EDAM Summer Conference 6. Manufactured Home Park Revitalization Public Meeting 6. EDC BUSINESS A. City Council Action re Everest Request for Revised C.G. Hill Development Agreement \\Ntserver\CityHal l\DATA\GROUPS\ECONDE V\EDC\Agendas\Agenda02\7-31-02.doc • B. Abbey Carpet—City Council Approval of TIF Assistance C. Colonial Craft—Prospect Activities D. Culvers Restaurant—Prospect Activities E. Herbst & Sons Expansion F. Other 7. ADJOURN at A.M. Next Regularly Scheduled Meeting: August 16, 2002 • S \\Ntserver\CityHall\DATA\GROUPS\ECONDEV\EDC\Agendas\Agenda02\7-31-02.doc ECONOMIC DEVELOPMENT COMMISSION AGENDA S July 31, 2002 7:30 A.M. MOUNDS VIEW CITY HALL - CITY COUNCIL CHAMBERS 1. CALL TO ORDER 4C A.M. 2. ROLL CALL (Present = P, Absent = A) Belting ✓ Fox ✓ Field ✓ Helgemoe Johnson Open McDonald ✓ Backman (Staff) Ericson (Staff) Rids 3. APPROVE EDC MINUTES June 21, 2002 Motion: A ✓t Second: a.. vote: y -0 4. SPECIAL BUSINESS No Special Business Scheduled 5. REPORT OF COMMISSIONERS, STAFF AND EDA LIAISON A. Report of Commissioners -No Materials Attached B. Report of EDA Liaison -No Materials Attached C. Chamber of Commerce Update D. Report of Staff 1. Twin Cities North Chamber Merger Activities 2. Mermaid Retention Pond Redevelopment Grant Activities 3. Met Council Livable Community Grant Application 4. Six Month Report to City Council TA 4 ) + C44 �• 5. EDAM Summer Conference 6. Manufactured Home Park Revitalization Public Meeting 6. EDC BUSINESS A. City Council Action re Everest Request for Revised C.G. Hill Development Agreement \\Ntserver\CityHall\DATA\GROUPS\ECONDE V\EDC\Agendas\Agenda02\7-31-02.doc B. Abbey Carpet—City Council Approval of TIF Assistance C. Colonial Craft—Prospect Activities D. Culvers Restaurant—Prospect Activities E. Herbst & Sons Expansion F. Other 7. ADJOURN at n A.M. Next Regularly Scheduled Meeting: August 16, 2002 \\Ntserver\CityHall\DATA\GROUPS\ECONDEV\EDC\Agendas\Agenda02\7-31-02.doc Not Approved Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting June 21, 2002 City of Mounds View, Council Chambers 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: Chairperson Greg Belting called the meeting to order at 7:40 a.m. 2. ROLL CALL: Members Present: Dr. Greg Belting, Dave Fox, Jason Helgemoe, Toni Johnson, and Stan McDonald Members Absent: Tom Field • Staff Present: Others Present: Economic Development Coordinator Aaron Backman None 3. APPROVAL OF EDC MINUTES: Motion/Second: McDonald moved and Helgemoe seconded the approval of the May 17, 2002 EDC minutes. Motion Carried: 5 Ayes 0 Nays 4. SPECIAL BUSINESS No Special Business Scheduled. 5. REPORT OF COMMISSIONERS, STAFF AND EDA LIAISON A. Commissioner Reports: There were no reports. B. Report of EDA Liaison: Backman noted that Mayor Rich Sonterre would not be attending today's meeting. He and City Administrator Kathleen Miller were attending the League of Minnesota Cities conference in Rochester, MN. Johnson mentioned that she had participated in Minneapolis Chamber • Leadership Development Program. She described it as a wonderful program and would highly recommend it. The cost is $2,000 (grants are available). Fox expressed his appreciation to Liberty Enterprises for arranging the tour for the EDC last month. McDonald asked that a thankyou be sent to Liberty. Backman will follow-up. EDC Minutes ,ter June 21, 2002 Not Approved, Page 2 • C. NB-MV Chamber of Commerce Update: Backman discussed developments regarding the merger of the New Brighton-Mounds View Chamber and the Southern Anoka County (SAC) Chamber. He mentioned that several documents have been reviewed and approved by both Boards of Directors (Plan of Merger, Articles of Incorporation and the Bylaws) on June 13th. Backman thanked the attorney, Gary Dahle, for his help in drafting and reviewing the legal documents. The general membership of the Chamber will vote on June 25th whether to approve the merger documents. Also,on June 4th the Transition Team selected a new name for the Chamber—Twin Cities North (a total of 88 names were considered). D. Report of Staff: 1. Chamber Merger Activities/Business of the Year Luncheon: During June the NB-MV Chamber Business of the Year Luncheon on June 6th was held at the New Brighton Family Service Center. Tim Pawlenty was the main speaker and attendance was good. Backman introduced and presented awards to two Mounds View businesses: George Winiecki, WIN Insurance Agency (Business Longevity), and Cindy Carlson, Western Bank (Leadership & Innovation). A New Brighton businessman, John Ordway, Stony Lake Properties, was recognized as Business of the Year. Backman introduced Jim Witkowski, President of the NB-MV Chamber of Commerce, to discuss the merger. Mr. Witkowski noted an upcoming event being put on by the Southern Anoka Co. Chamber—a Ronnie Milsap Charity Concert, Saturday, June 29th in Columbia Heights. He mentioned that the appropriate documents • have been taken to the Attorney General's office for approval, and will be taken to the Secretary of State. Even though SAC is the larger entity, legally the SAC will merge into the NB-MV Chamber and then the new Chamber will change its name. This is being done due to state gaming rules governing organizations. Witkowski sees enhanced services for members as a result of the merger. He looks forward to continued involvement by the Cities of New Brighton and Mounds View in the new Chamber. 2. Met Council Livable Community Grant Application Submittal: The Metropolitan Council administers two types of grants from its Livable Communities Fund—Opportunity Grants and Development Grants. The Opportunity Grants fund early planning or predevelopment costs to develop project-specific and site-specific land use plans. At the May meeting Backman indicated that due to the labor dispute at the City, the application was not submitted by the May 15th deadline. Backman requested and received an additional week to submit the application. He intends to apply for funds ($32,500 out of a total budget of$65,000)to do a market analysis and land use evaluation of the Aggregating Amoco Area (or Triple A) adjacent to Hwy 10 and Silver Lake Road. There are seven parcels in the 5 acre site, several of which are vacant. 3. Development of Second Remodeling Planbook for Split-Level Homes: A consortium of communities is focusing on the development of the second Planbook for remodeling Split- Entry/Split Level homes. Backman suggested, and the City's EDA approved on May 13, 2002,the commitment of$2,500 for the second remodeling Planbook. (The commitment for the first Planbook was$5,000. The smaller financial commitment is commensurate with the size of the community.) Jenni Tovar, Planner with Burnsville, indicated that nine cities and 3 • counties have committed $60,000 for the project and that$10,000 is left to raise. Backman has also been dealing with the surplus of Planbook #1 that Mounds View has—he encouraged the City of Circle Pines to purchase 85 books for$850,and he is in discussions with the City of Burnsville. EDC Minutes r June 21, 2002 Not Approved Page 3 • 4. I-35W Corridor Coalition—Economic Development Activities: Backman distributed a sample of the marketing insert that the City of Blaine used for the Twin Cities Business Monthly magazine. The Economic Development & Marketing Committee would like to develop a similar marketing piece for the I-35W Corridor Coalition. Backman indicated that he would be talking to potential business regarding potential sponsorships for the insert. 5. Metro North CVB Board Meeting: Backman attended the CVB Board meeting on June 12th John Connelly, Executive Director, discussed the changes in the tourism/convention sector post-September 11th. The full-service and business traveler markets have been affected more. On average the Minneapolis Metro North CVB communities have seen an 8-10% reduction in room occupancy. Metro-area CVB's are drawing down their reserves. Connelly indicated that it would be prudent to review operational expenses in relation to revenues. The Board directed Mr. Connelly to reduce the 2002 budget by $35,000 (or 2.7%). 6. EDC BUSINESS A. Manufactured Home Park Revitalization Public Meeting: Since the April 10th meeting of Ramsey County, Durand&Associates, and City staff several milestones have been met. Ramsey County sent a letter on April 29th delineating its expectations. Ramsey Co.wanted a commitment on the part of the park owners to invest in needed infrastructure(eg.water line replacements). Durand &Assoc. provided this commitment letter to the City on June 5th. Backman has drafted a letter 1111 inviting all Moundsview MHC residents to a public meeting at the Community Center on July 10th to discuss the program. After some input from the other entities, this will be mailed out to residents shortly. B. Meeting w/Everest & Request for Revised C.G. Hill Development Agreement: Backman distributed four handouts to the members—letters from Backman to Everest re C.G. Hill and Building N,a summary of developer payments for all TIF projects with the City, and a letter from Everest requesting an extension of the TIF note for the C.G. Hill project. Backman reviewed the handouts with members. He met with Tim Nelson and Jim Knight on May 30th to discuss the revised TIF developer payment calculations. At the meeting, for the first time, they agreed that there were overpayments over six years regarding C.G. Hill(totaling$12,073.76). Subsequently, the developer has requested that the TIF Note for C.G. Hill be extended for 101/2 years and that this request be considered at the next EDA meeting. Backman will bring the matter before the City Council at its July 1st Work Session. C. Abbey Carpet—Prospect Activities: Backman briefly discussed the status of Abbey Carpet. John Kopas was looking at relocating the business to a leased building in Arden Hills (across Lexington Ave. from the SuperTarget). Cub Foods, in turn, came in and bought the property. This caused Kopas to look at Mounds View again. On June 18th Backman met with Kopas,Tom Link(John's partner), Rob Carlson (his builder), and John Gearin (his attorney). The focus was on the old Perkins Restaurant site. Kopas asked what the City could do to help financially. He indicated that their intent is to put up a new 20,000 sq.ft. building on the 1.8 acre site. Backman, noting that Kopas and the Halls still needed to come to terms with the purchase price,discussed forms of assistance that the EDA could consider for this redevelopment project. At this point Dave Fox left the meeting for another appointment. McDonald noted that the City of Mounds View has made redevelopment along Hwy 10 a top priority and that this project would complement the recently expanded Mermaid complex. McDonald moved that Backman explore financial assistance for Abbey Carpet that would take the form of TIF funds allocated for • EDC Minutes June 21, 2002 Not Approved r�ov Page 4 • demolition of the existing building at 2214 Hwy 10 (the old Perkins Restaurant building),and/or a tax abatement for the new building with a graduated rate over five years. Seconded by Johnson. Motioned carried unanimously. D. Culver's Restaurant—Prospect Activities: Backman has been in contact with Steve Sparks,the owner of the Culver's Family Restaurant in Vadnais Heights. This is a fast growing franchise. Backman is meeting with Mr. Sparks next week to discuss locations for an additional location in Mounds View. Sparks is in discussion with St. Anthony regarding adding a restaurant there. E. Other Business Prospects: Tom Mart continues to work on his laundry business idea to be located in the Silver View Plaza. He has signed a lease with Kraus Anderson and is working on his financing. F. EDAM Summer Conference: Backman will be attending the Economic Development Association of Minnesota Summer Conference at Madden's Resort near Brainerd (6/26 —6/28). G. Other: Belting again thanked Liberty for conducting the tour for the EDC. He mentioned that Calvin Academy will be expanding north into the space currently occupied by Addie Lane Florists. Addie Lane will be moving to the north side of Silver View Plaza to where the M.V. Animal Hospital was located. 8. ADJOURNMENT • There being no further business before the Commission, Chair Belting adjourned the March 27th meeting of the Economic Development Commission at 9:10 a.m. Respectfully submitted, Aaron A. Backman Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDC\Minutes\Min02\6-21-02.doc • Tw h HArn, oekR Cities Hort 1 , • 1/4,„ Memorandum To: Mike Anderson,Bev Aplikowski,Aaron Backman,Bob Barmore, Shirley Barnes,Cindy Carlson,Maureen Cattell,Keith Cook, Scott Dahlberg,Bill Folkes, Catherine Gray,Donn Hagmann,Jill Johnson-Kizer,Kathy Klang, Shawn London, Doug McNurlin, Carole Miller, Julie Nelson-Gotham, Larry Pietrzak,John Slama,Christine Wierman From: Shannon Meyer Date: 7/30/2002 Re: Board Retreat—TUESDAY, JULY 23, 2002 Welcome to our new fiscal year! To those of you new board members,I welcome you and look forward to having you as part of our essential working Board of Directors. To my existing board • members,I am so happy to have you as part of our board. The merger is going well,and we are working through the final details. I just wanted to inform all of you about the upcoming Board Retreat. The board retreat is an extremely important strategic planning session for the chamber of commerce. This is a mandatory session for our board members. If you are not able to attend the retreat,please contact me immediately. I am enclosing a copy of the preliminary agenda. The retreat will be facilitated by Dennis Egan from the Rochester Chamber and David Olson,President of the Minnesota Chamber. We will begin the day with our first combined board meeting, which will last from 9:00 to 10:00,and then the retreat will continue until 3:00 p.m. Please keep in mind that we would like you to attempt to clear your schedule,but if you cannot please try to be there as much as possible. In addition, we ask that there are no cell phones or pagers on during the retreat. The location of the retreat will be in the Kuether Distributing Board Room, which is located at 6982 Highway 65 in Fridley. Westside of 65 by the railroad tracks. Go behind Target Distribution, look for the big sign that says,This Is Not Medtronic. Kuether's phone number is(763)571-4115. If you have any other questions,please give me a call at(763)571-9781. • 1 Twin Cities North Chamber of Commerce Board Planning Conference • July 23, 2002 1. Introductions/Breakfast 2. Chamber Trends—Overview A. Who are our customers? B. How do we benefit our community? 3. Review Past Year A. Priorities B. Accomplishments C. Challenges 4. Current Status of Chamber Committees and Activities A. Revitalizing Important Committees—public policy, ambassadors 5. Issues facing the Chamber A. Ask Board Members to list most important issues B. Marketing the Chamber • C. Recruiting New Members 6. Role of Board Members A. Responsibilities B. Involvement in Growing and Advancing the Chamber 7. Performance Measures 8. Plans for Upcoming Year Small Groups A. Top Three Priorities B. Impact on Budget 9. Action Plan to Achieve Top Three Priorities Small Groups 10. Merger Issues A. New Board Members B. Recruiting and Retaining Members C. Gaming D. Developing an Enhanced Strategy • 11. Adjourn with a concrete plan for moving ahead which includes specific responsibilities and performance measures. • Priorities for 2001-2002 Public Policy To represent business interest in matters of public policy at the local and state level. • Revitalize the Government Relations Committee • Determine priorities. Focus on priorities.Gain insight on priorities. • Communicate with and educate the membership. Visibility Actively and visibly promote and support businesses in Columbia Heights, Fridley, Hilltop and Spring Lake Park • Be the"Chamber of Choice"for the Southern Anoka County area. • Participate in and/or hold special events in each community served. • Increase publicity for all Chamber activities. • Use broadcast faxes and e-mails for communication on issues/events. • Use website to publicize chamber events as well as member information. • Maintain personal contact with each individual member. • Publish an effective monthly newsletter. Membership Broaden our membership base in order to provide better resources, expanded services and more networking opportunities for our members. • • Increase membership and retention rates. • Provide education for members on current issues. • Provide members support for their concerns/needs. • Increase communication through newsletter,e-mail and faxing. • Conduct at least three drives during the year. One drive in each community. • Increased Board involvement in membership drives. • Staff will visit every new member. Financial • Continue fiscal responsibility to decrease negative fund balance. • Revise dues schedule to stay competitive in the industry. Volunteers • More volunteers will become involved as the chamber becomes more visible. 111/ • Major Accomplishments: 2001-2002 GOVERNMENT RELATIONS: • Revitalized the Public Policy Task Force to focus on 3 main state issues and several local issues. • Volunteers actively participated in Business Day at the Capitol,where we met with all of our legislators to • discuss the chamber issues. • Focused on the main issues of Transportation,Rising Health Care Costs and Education Reform • Held 3 open forum meetings with Education representatives and business members to discuss education reform • Held a Legislative Session Review with all local legislators in attendance. At this meeting we re-emphasized our priorities and focused on the next session. • Actively promoted for a few businesses on the electronic signage issue in the City of Fridley and are still in negotiations with them. • Held numerous legislative issues forums to better educate the members of the chamber with topics of property tax reform,health care reform,joint and several liability and education MEMBERSHIP: • Actively pursued and obtained a merger with the New Brighton Mounds View Chamber of Commerce • Expanded our membership base to now cover 6 communities with over 425 total members. • Recruited 32 new members for the year. • Maintained a retention rate of 88%,which is higher than the state average of 85%. • Increased our volunteer base by an additional 41 active volunteers • Revised dues schedule to remain competitive with other chambers • Established focus groups to meet with chamber members regarding their issues and needs. • Increased our communication by broadening our mailing list for newsletters,email and broadcast faxes. • • All Board members participated in membership drive. • All new members were contacted either by staff or by the membership services committee. VISIBILITY • Effectively used the slogan"Chamber of Choice"on all marketing publications • Created a marketing coupon book to use as a recruitment and retention tool. • Held luncheons at 5 different locations in all different communities. • Changed the format of the newsletter to increase readership and readability. • Formed a very successful networking group that has brought in over 30 prospective members to the chamber. STAFF • Conducted staff retreats to train and motivate staff. FINANCIAL • Maintained fiscal responsibility and limited spending • Eliminated$6500 from our negative fund balance • Revised dues structure to compete with the surrounding 5 chambers of commerce. • Obtained$3800 of non-dues revenue from the county for our Career Jam • ECONOMIC DEVELOPMENT COORDINATOR REPORT • June 24, 2002 8:00 P.M. MOUNDS VIEW CITY HALL - CITY COUNCIL CHAMBERS 1. BUSINESS VISITS (Dec. 2001 to Present): A total of 30 businesses have been visited in the course of 42 meetings. They are in order: Multi-Tech (3)'' Dynex (2), FedTech (6), AccuStream, Mermaid (2), Silver View Chiropractic, Medtronic, C.G. Hill, Disetronic Medical, SYSCO Minnesota, Minnesota Institute of Public Health, Liberty Enterprises (2), Jonco Die, KinderCare,Jake's Café, Bauer Welding, USGS, aturn of St. Paul, Saturn Transportation, Midwest Motor Express,.Vitran, BioClean, Zep Manufacturing, Midwest Medical Services TitleSource Glacier Sales, Creative Kids (2), Rave Sports, Simon's Sports, Tyson Companies (2). 2. BUSINESS PROSPECTS: Meetings have been held with the following businesses: Abbey Carpet (New Brighton) Laundry Business (Eagan), Now Bikes (Arden Hills), Culver's Restaurant(Vadnais sleights). In addition, information has been provided to the following companies: CPU Options; Kewaydin Real Estate Advisors (high tech manuf.facility); Lynk Systems; Voom Technologies; Minuteman Press; Spring Brook Realty (investor); CRESA Partners (Bldg. Products & Service Co. HQS); Caribou Coffee; and others. ID 3. MEETINGS WITH DEVELOPERS/PROPERTY MANAGERS: A total of 10 such entities over the course of 14 meetings have occurred in the past six months. These include: Everest Group, C.B. Richard Ellis, Paster Enterprises, Noecker Development Hamilton Creek Companies, Colliers Towle, Kraus Anderson, Griffin Companies, I�REEF, Coldwell Banker Burnet. 4. TIF MEETINGS: A total of 15 meetings have been held regarding a variety of TIF issues. These have primarily occurred with Ehlers & Associates and the Everest Group principally in February and March. Action items have included TIF District Cash Flow Analysis, Developer Payment Calculations, and the Revised 2000 TIF Report. 5. CHAMBER OF COMMERCE ACTIVITIES: The Coordinator has participated in a total of 30 meetings pertaining to Chamber activities. These can be broken down as follows: Business Development Committee (5)• Government Affairs Committee (5); Transition/Merger/Other Meetings (12); Board of Director Meetings (6); and the Business of the Year and other luncheons (2). The transition and merger meetings occurred during April, May and June. The New Brighton-Mounds View Chamber is in the process of merging with the Southern Anoka-County Chamber. 6. I-35W CORRIDOR COALITION MEETINGS: The Coordinator has participated in 8 meetings pertaining to this Coalition. These principally have been related to the Economic Development& Marketing Committee. To a lesser extent he participated in the Community Development Committee and Housing Committee meetings. \\Ntserver\CityHall\DATA\GROUPS\ECONDEV\EDC\Miscellaneous\6.24.02 Staff Report.doc I • 7. Other ED Coordinator Activities: A. Manufactured Home Park Revitalization Program/Public Meeting (July 10th) B. Minneapolis Metro North CVB Board Meetings (Quarterly) C. Hwy 10 Redevelopment Study Activities D. Mermaid Hotel & Banquet Center Project/Edgewood Stormwater Pond E. Opportunity Grant Application Submittal to Metropolitan Council F. Development of second remodeling Planbook for Split-Level Homes G. Mounds View Business List Updates H. Ehlers TIF Seminar (2/7 —2/8), EDAM Housing Workshop (3/21) and Summer Conference (6/26 — 6/28) S \\Ntserver\CityHall\DATA\GROUPS\ECONDEV\EDC\Miscellaneous\6.24.02 Staff Report.doc • Manufactured Home Park Revitalization Program Moundsview Manufactured Home Community Meeting 6:00 p.m. at Mounds View Community Center July 10, 2002 1. Opening Remarks/Introductions 2. Aaron Backman, M.V. Economic Development Coordinator—Overview of Program Jim Ericson, M.V. Community Development Director 3. Jeremiah Anderson,M.V Housing Inspector—Life& Safety Code 4. Mary Lou Egan, Ramsey County, Community&Econ. Development—Intent of Pilot Program Denise Beigbeder,Ramsey County, Community&Econ. Development 5. Perry Hansen,Durand&Associates,Property Manager—Planned Infrastructure Improvements 6. Questions&Answers 7. Meeting Wrapup • Item No. 5 Meeting Date: July 1, 2002 Type of Business: WS • WS: Work Session; PH: Public Hearing; CA: Consent Agenda; EDA: EDA Business City of Mounds View Staff Report To: Mounds View City Council From: Aaron Backman, Economic Development Coordinator Item Title/Subject: Everest Group request to Revise C.G. Hill TIF Development Agreement Date of Report: July 1, 2002 Background In June of 1994, the Mounds View Economic Development Authority (EDA) and the Everest Group, Ltd. (Developer)signed a Development Agreement. The purpose was to encourage the development of a 30,000 sq. ft. manufacturing facility for C.G. Hill & Sons, Inc. to be located in the Mounds View Business Park. As part of the Agreement, the EDA agreed to defray$196,000 of the development costs by issuing an EDA Note to the Developer. Specifically, this was a "Pay-as-you-go" Tax Increment Financing (TIF) Revenue Note with Michael Investments, and since 7/24/00 with Red Cent Management, the assigned owner. It is a limited revenue obligation by the EDA but not a general obligation of the EDA and is payable only from tax increments received on the respective parcels from Ramsey County. The terms of the Note are: principal • $196,000, interest rate 7.0%, note duration 6/27/94 to 8/1/03 with semi-annual payments on February 1st and August 1st, and the available tax increment is 85% of the tax increments generated by the portion of the tax capacity of the Development Property which exceeds$6,249. A total of 11 payments have been made by the City of Mounds View for the C.G. Hill project. Of the $220,939,97 paid to date, $142,476.81 is principal and $78,463.16 represents interest. In preparation for the February 1, 2002 developer payment, calculation methods were reviewed. Some discrepancies in what was paid and what should have been paid were discovered. Following meetings in March, April and May with representatives of the Developer and Ehlers & Associates, it was determined that the City of Mounds View had overpaid the Developer by $12,073.76. Due to the overpayment on the C.G. Hill project, no payment occurred on 2/1/02,or will occur on 8/1/02. The overpayment is eliminated when a partial payment occurs on 2/1/03, and a full (and final) payment would occur on 8/1/03. In 2001 the Minnesota Legislature approved major property tax changes that affect commercial class rates. Class rate compression has affected the revenue expectations for the duration of all three TIF districts in Mounds View. With no increase in market value, it is forecasted that MV TIF District increment revenue went down 35%from 2001 to 2002. TIF District#1 alone will be experiencing a $500,000+ reduction in increment. This also translates into reductions in available increments for developers. For the C.G. Hill project, developer payments decline from $36,395.34 (Pay 2001) to $19,299.63 (Pay 2002), or a 47% reduction. • a Based on current assumptions of projected tax increments for the C.G. Hill property, it is • projected that a remaining principal balance of $40,739.26 would remain on the Red Cent Management Note. It would not be paid off under the terms of the present Development Agreement. TIF Payment Considerations In a 6/13/02 letter to the City of Mounds View, the Everest Group has requested that the Development Agreement be amended to lengthen the time of payment. They have asked that the term be extended by 101/2 years—from 8/1/03 to 2/1/14. (The proposed date coincides with the expiration date for TIF District#1.) They have not requested a change in interest rate or in the percentage of tax increment available. It should be noted that with all "Pay-as-you-go"TIF Notes, developers are reimbursed for eligible development costs over time. They do so with the knowledge that they are "at risk" if increment does not materialize as expected. In Article III, Section 3.2 (c), of the Development Agreement, it is clearly stated that: "...All amounts of Tax Increments which are not Available Tax Increments are not subject to this Agreement, and the Authority retains full discretion as to any authorized application thereof, regardless of whether the Available Tax Increments are sufficient to reimburse the Developer in full for the above-described costs. To the extent that the Available • Tax Increments are insufficient,through the final Payment Date(August 1,2003),to pay all accrued and unpaid interest on and the principal of the EDA Note, said unpaid amounts shall cease to be any debt or obligation of the Authority whatsoever." (emphasis added) The Everest Group is making the argument that it should be made whole, and that it was the intent of the City to encourage this development by agreeing to defray $196,000 in costs (land acquisition, excavation, site utilities, paving, etc.). Possible Courses of Action The following are options that could be considered by the City Council relative to the Everest Group's request. Option 1: Approve the Everest request—Extend the length of the TIF Note by 10.5 years. The positives are that the principal on the TIF Note is paid off, the Developer is satisfied, and payments cease when the principal is paid off (most likely years before 2/1/14). The negatives include paying out an additional $44,814.71+ than what is required from a valid Development Agreement, an excessive extension that is longer than the original 9-year term (Should the City have 20-year notes?), and, by making the Developer whole for this project, may increase the likelihood that Everest will request similar treatment for Building N. 1110 2 Option 2: Make lump sum payment on principal balance at end of the TIF Note (8/1/03). • The positives are that the principal on the TIF Note is paid off,the Developer is satisfied,the City saves at least $4,075 in interest on the Note, and it would be possible to decertify two parcels, thereby fulfilling the desire of the EDA to return revenue to the respective taxing jurisdictions. The negatives include paying out an additional $40,739.26 than what is required from a valid Development Agreement, the City is paying ahead of tax increment from the respective parcels, the accelerated payment on principal would slowdown (modestly)the interfund loan repayments, and, by making the Developer whole for this project, may increase the likelihood that Everest will request similar treatment for Building N. Option 3: Extend the term of the TIF Note by three years (8/1/06). The positives are that the principal on the TIF Note is paid off (most likely in two years), the Developer is probably satisfied, the City has approved a reasonable extension of the Note and is not paying ahead of increment, and may provide the City a better negotiating position relative to other projects (i.e. Bldg. N). The negatives include paying out an additional $44,814.71+ than what is required from a valid Development Agreement, and, by making the Developer whole for this project, may still increase the likelihood that Everest will request similar treatment for Building N. Option 4: Leave Agreement as-is—Expires on 8/1/03. The positives include not having to pay out any additional sums to the Developer than what is required from the current Development Agreement(approx. $17,228.43 due in 2003), the City's position does not affect the building's owner (C.G. Hill & Sons), does not set a precedent for • other TIF agreements, and, by not acquiescing to Everest, enforces a legal document that clearly places the risk on the Developer. The negatives of this include not paying off the principal of a Note for a publicly-supported project, may invite legal action, and the Developer will be dissatisfied and may choose not to do other development/redevelopment projects in the City. Recommendation: At this time Staff is requesting guidance and input from the City Council on what actions they prefer regarding this request. Aaron Backman, Economic Development Coordinator (763) 717-4029 • N:\DATA\GROUPS\ECONDEV\Eda\Staff Reports\Staff 02\7-1 WS Item#5.doc 3 Current Developer Agreement Sc.G. Hill Project Michael Investments Prinicpal Interest Balance Original 196000 Interest rate 7.00% Date 27-Jun-94 Through 08/01/03 Payments Feb&Aug 1 Avail increment 0.85 TIF District #1 Prinicpal Interest Total Pmt Balance 1991 1992 1993 1994 196,000.00 196,000.00 1995 196,000.00 196,000.00 1996 (5,921.96) 28,735.78 22,813.82 201,921.96 15,746.55 7,067.27 22,813.82 186,175.41 1997 16,193.32 6,516.14 22,709.46 169,982.09 16,760.09 5,949.37 22,709.46 153,222.00 1998 13,089.38 5,362.77 18,452.15 140,132.62 13,547.51 4,904.64 18,452.15 126,585.11 1999 14,190.58 4,430.48 18,621.06 112,394.53 14,687.25 3,933.81 18,621.06 97,707.28 2000 13,862.13 3,419.75 17,281.88 83,845.15 • 14,347.30 2,934.58 17,281.88 69,497.85 2001 18,750.81 2,432.42 21,183.23 50,747.04 (1,776.15) 1,776.15 0.00 52,523.19 2002 (1,838.31) 1,838.31 0.00 54,361.50 5,689.30 1,902.65 7,591.95 48,672.20 2003 7,932.95 1,703.53 9,636.48 40,739.26 40,739.26 2004 Last payment 8/1/03 40,739.26 40,739.26 2005 40,739.26 40,739.26 2006 40,739.26 40,739.26 2007 40,739.26 40,739.26 2008 40,739.26 40,739.26 2009 40,739.26 40,739.26 2010 40,739.26 40,739.26 2011 40,739.26 40,739.26 2012 40,739.26 40,739.26 2013 40,739.26 2014 • 155260.745 82907.65 238168.395 Three-Year Add.Developer Agreement • C.G. Hill Project Michael Investments Prinicpal Interest Balance Original 196000 Interest rate 7.00% Date 27-Jun-94 Through 08/01/06 Payments Feb&Aug 1 Avail increment 0.85 TIF District #1 Prinicpal Interest Total Pmt Balance 1991 1992 1993 1994 196,000.00 196,000.00 1995 196,000.00 196,000.00 1996 (5,921.96) 28,735.78 22,813.82 201,921.96 15,746.55 7,067.27 22,813.82 186,175.41 1997 16,193.32 6,516.14 22,709.46 169,982.09 16,760.09 5,949.37 22,709.46 153,222.00 1998 13,089.38 5,362.77 18,452.15 140,132.62 13,547.51 4,904.64 18,452.15 126,585.11 1999 14,190.58 4,430.48 18,621.06 112,394.53 14,687.25 3,933.81 18,621.06 97,707.28 • 2000 13,862.13 3,419.75 17,281.88 83,845.15 14,347.30 2,934.58 17,281.88 69,497.85 2001 18,750.81 2,432.42 21,183.23 50,747.04 (1,776.15) 1,776.15 0.00 52,523.19 2002 (1,838.31) 1,838.31 0.00 54,361.50 5,689.30 1,902.65 7,591.95 48,672.20 2003 7,932.95 1,703.53 9,636.48 40,739.26 8,374.13 1,425.87 9,800.00 32,365.13 2004 8,667.22 1,132.78 9,800.00 23,697.91 9,145.57 829.43 9,975.00 14,552.34 2005 9,465.62 509.33 9,974.95 5,086.71 5,086.71 178.04 5,264.75 0.00 2006 Last pymt 2/1/06(agreement to 8/1/06) 0.00 0.00 2007 0.00 0.00 2008 0.00 0.00 2009 0.00 0.00 2010 0.00 0.00 2011 0.00 0.00 2012 0.00 0.00 2013 0.00 2014 . 196000 86983.1 282983.1 • • Item No. 8A Meeting Date: July 18, 2002 Type of Business: EDA • WS: Work Session; PH: Public Hearing; CA: Consent Agenda; EDA: EDA Business City of Mounds View Staff Report To: Mounds View City Council From: Aaron Backman, Economic Development Coordinator Item Title/Subject: Expenditure of TIF for the Demolition of the Building at 2214 Co. Rd. 10 Date of Report: July 18, 2002 Background Over the past six months, Community Development staff has been interacting with Abbey Carpet, a floor covering business located in New Brighton. The business has to relocate its operations due to an ongoing redevelopment project in that community. The owner of the store, John Kopas, has been in business for 29 years and has been looking for a visible location for a 10,000 sq. ft. showroom/warehouse facility. The intent is to construct a 20,000 sq. ft. building, half of which would be occupied by Abbey Carpet. I have provided Mr. Kopas and his builder, Rob Carlson Builders of Blaine, information regarding several sites along Highway 10. The site most attractive to him is the old Perkins Restaurant location. • Negotiations between Abbey Carpet and the Hall family proceeded during May and June. To accommodate the new larger building, the present 4,000 sq. ft. structure will need to be removed. Mr. Kopas asked if the City would be able to provide some financial assistance for this redevelopment project. The Economic Development Commission, at its June 21, 2002 meeting, unanimously approved a resolution directing Backman to explore financial assistance that would take the form of TIF funds allocated for demolition of the existing structure, and/or a tax abatement with a graduated rate over five years. On July 17, 2002 Mr. Kopas provided a written offer to Dan Hall of$700,000 for the purchase of the property(the purchase agreement has been provided to the City). The builder estimates that the new structure will involve an investment of approximately $1 million in Mounds View. Action to be Considered Per the recommendation of the EDC, staff discussed the provision of financial assistance with the business principal and the builder. Mr. Kopas indicated that the greatest need was for demolition assistance. This assistance would be capped at $25,000, that is, not to exceed that amount. It would be paid on a reimbursement basis and anything above that figure would be borne by the developer. The purpose of the assistance is to encourage the redevelopment of a property with a vacant building near the entrance to the City, and to facility the advent of a new business in the community. As part of the Agreement, the EDA agrees to defray up to $25,000 of the costs associated with demolition of the existing structure on the property. • 1 • Staff has drafted EDA Resolution 02-EDA-166, available on the proceeding page, which authorizes the expenditure of tax increment funds for the demolition of the building at 2214 County Road 10. Recommendation: Approve EDA Resolution 02-EDA-166, which approves and authorizes the expenditure of Tax Increment Funds for the demolition of the building at 2214 County Road 10. 47.0/747),_ g, Aaron Backman, Economic Development Coordinator (763) 717-4029 • \\Ntserver\CityHall\DATA\GROUPS\ECONDEV\Eda\Staff Reports\Staff 02\7-22 EDA Item #8A.doc • 2 -( , i r � N t H ______ .... _ N .\, .....,„.. N N 1 __ N:: N • N. N ........,, c47'‘..:40... N ,� N. �. \ N . N.t„ ` `� 2214c „„,,..,. .„.0,1) A° ``-......„, N \ N. N., • ��'k +�� „CMp BURiE� N ' \D \ N �`e910 N r1� t S o+ /— '� :9'9 1" S rN\I�a \'-') \ JuN . 8 \ it Y \ .4 . . , Ire ..,, 7 1 0` • 4 ��' 8e e'r tb o . OP .°11 ,..,;.' N . 444s4;0. ÷ a. o ASN' N �� •.4 °' Pt ° O ka. o • d �� , ` / •env w pG �y S 0°jry 6y Q �'� FFE3L g2.2 . +� '� 1 o w • ‘00601y.g3 9 �g,r3 �A1c� ' 1 0 \ ,s.';''''''\•\D'' �9� �\ • oti o ; k � 0 111111111" . 0; cp . , 010 Vit co IIII s? 4111011111141 ) , .. • • iC� Pc890 ? 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A6,it , 4 .,-,i, •' o , - � s • ,tie . . .0,,, ,...„ ,. ,T , tt- j.11\':: 8' . .e • RESOLUTION NO. 02-EDA-166 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING AND AUTHORIZING THE EXPENDITURE OF TAX INCREMENT FUNDS FOR THE DEMOLITION OF THE BUILDING AT 2214 COUNTY ROAD 10 It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the Authority) as follows: WHEREAS, the Authority has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the Act); and, WHEREAS, the Authority has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View, and in particular within the Tax Increment Financing District#1, and in this connection is engaged in carrying out the Mounds View Economic Development Project (the Project) within the City; and, WHEREAS, the proprietors of Abbey Carpet of New Brighton desire to establish their business in a new 20,000 sq. ft. building on a 1.8 acre parcel of land north of the recently expanded Mermaid and fronting County Road 10, and have proposed a Project Plan; and, • WHEREAS, the redevelopment of 2214 County Road 10, also known as the former Perkins restaurant property, would be a suitable redevelopment activity pursuant to the Project Plan; and, WHEREAS, the Board determines that the Authority's expenditure to effectuate demolition of the Property in order to prepare the lot for redevelopment would be in furtherance of the Project Plan. NOW THEREFORE BE IT RESOLVED,that the Mounds View Economic Development Authority hereby authorizes an amount not to exceed $25,000 in tax increment funds to demolish the Property; that the Developer of the property, Rob Carlson Builders of Blaine, obtain at least three bids for the demolition of said Property; and that any demolition/site cleanup costs in excess of $25,000 be borne by the Developer. Prior to reimbursement of funds, the Developer must submit any invoice for the work to the City of Mounds View. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority this 22nd day of July, 2002. 411 Rich Sonterre, President ATTEST: • (SEAL) Kathleen Miller, Executive Director Motion: Second: Sonterre: Stigney: Quick: Marty: Thomas: 1111 0