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HomeMy WebLinkAbout05-12-1997 EDA • Max i2, 1997 .. . ........ EykormgjormiTHonmin,INE A � EN � a 1. CALL TO ORDER 2. ROLL CALL - President McCarty Vice President Koopmeiners Secretary Trude Commissioner Quick Commissioner Stigney 3. APPROVAL OF AGENDA • EDA ACTION: ATD Comments: 4. APPROVAL OF MINUTES: April 28, 1997 Meeting No. 35 EDA ACTION: ATD Comments: S. CONSENT AGENDA 6. PUBLIC HEARING No public hearing scheduled for this meeting. 7. EDA BUSINESS A. Consideration of Resolution No. 97-EDA-66 Approving Amendments to the Housing Replacement Program. Staff Report No. EDA-97-71 C (Staff Presenter: Cathy Bennett, Director of Economic Development) • EDA ACTION:C ION. ATD Comments: EDA PAGE TWO • MAY 12, 1997 B. Consideration of Approving a Tax Increment Policy. Staff Report No. EDA-97-72C (Staff Presenter: CathyBennett, Director of Economic Development) EDA ACTION: ATD Comments: C. Consideration of Resolution No. 97-EDA-67, Approving and Authorizing the Execution of a Development Assistance Agreement with the Everest Group for Building N. Staff Report No. EDA-97-73C (Staff Presenter: CathyBennett, Director of Economic Development) EDA ACTION: ATD Comments: D. Consideration of Resolution No. 97-EDA-68, Resolution Granting Final Approval for Expenditure of Tax Increment Funds to Finance the City's Cost in Connection with the Bel Rae Community Center Project and Authorizing the EDA to Enter into a TIF • Loan Agreement with the City to Provide TIF Financing Assistance. Staff Report No. EDA-97-74C (Presented by:Bob Long, City Attorney) EDA ACTION: ATD Comments: 8. REPORTS: Report of EDA Board Members: 1. Report of President McCarty: 2. Report of Vice President Koopmeiners 3. Report of Secretary Trude 4. Report of Commissioners: • a. Commissioner Quick: b. Commissioner Stigney: • 5. Report of Clerk-Administrator Whiting: 6. Report of Executive Director Bennett: 7. Report of Treasurer Kessel: 110 • UNAPPROVED 1 PROCEEDINGS OF THE MOUNDS VIEW . 23 ECONOMIC DEVELOPMENT AUTHORITY 4 Meeting No.35 5 April28, 1997 6 Mounds View City Hall 7 2401 Hwy. 10,Mounds View MN 55112 8 *********************************************************************************** 9 10 CALL TO ORDER 11 12 The Economic Development Authority was called to order by President McCarty on April 28, 1997 at 6:49 13 p.m. 14 15 ROLL CALL 16 17 MEMBERS PRESENT: Duane McCarty,Julie Trude,Gary Quick,Roger Stigney,Roger Koopmeiners, 18 Director of Economic Development Cathy Bennett,Clerk Administrator Chuck Whiting and City Attorney Bob 19 Long. 20 21 OTHERS PRESENT: None 22 23 APPROVAL OF AGENDA: 24 25 MOTION/SECOND: Trude/Koopmeiners to Approve the Agenda as presented. 26 27 VOTE: 5 ayes 0 nays Motion Carried O28 29 APPROVAL OF MINUTES: 30 31 MOTION/SECOND: Koopmeiners/Quick to approve the minutes of the EDA Meeting on March 10, 1997 as 32 presented. 33 34 VOTE: 5 ayes 0 nays Motion Carried 35 36 CONSENT AGENDA: 37 38 There were no items on the Consent Agenda. 39 40 PUBLIC HEARINGS: 41 42 There were no Public Hearings scheduled for this meeting. 43 44 EDA BUSINESS: 45 46 A. Consideration of Resolution No.97-EDA-65,Approving Modification of the Project Plan for the 47 Mounds View Economic Development Project and Approving the Tax Increment Financing Plan for 48 Tax Increment Financing District No.4. 49 50 Ms.Bennett explained that this resolution would approve a modification to the city's existing tax increment 51 plan and approve the tax increment plan for a new district which would be located for the Bel Rae Ballroom 52 project. 53 t uNApp ovED EDA Meeting#32 • March 10, 1997 Page 2 1 MOTION/SECOND: Trude/Quick to Approve Resolution No.97-EDA-65,Approving Modification of the 2 Project Plan for the Mounds View Economic Development Project and Approving the Tax Increment 3 Financing Plan for Tax Increment Financing District No.4. 4 5 VOTE: 5 ayes 0 nays Motion Carried 6 7 REPORTS: 8 9 Report of EDA Board Members: 10 11 Report of President McCarty: No report. 12 13 Report of Vice President Koopmeiners: No report. 14 15 Report of Secretary Trude: No report. 16 17 Report of Commissioners: 18 19 Commissioner Quick: No report. 20 21 Commissioner Stigney: No report. 22 23 Report of Executive Director: No report. 24 25 Report of Treasurer: No report. 26 27 Report of Attorney: No report. 28 29 President McCarty declared the meeting of the Economic Development Authority adjourned at 6:55 p.m. • 30 31 Respectfully submitted, 32 33 34 35 Tamara D. Saefke 36 Recording Secretary 37 38 39 40 41 42 S Item No. Staff Report No. Vi¢— 7—71G Meeting Date: 5/12/97 • Type of Business: EDA Business WK: Work Session;PH:Public Hearing; CA:Consent Agenda;CB:Council Business City of Mounds View Staff Report To: EDA President and Board Members From: Jennifer Bergman, Housing Inspector Item Title/Subject: Consideration of Resolution No. 97-EDA66 approving amendments to the Housing Replacement Program Date of Report: May 12, 1997 Summary: This request is for approval of revisions to the guidelines for the Housing Replacement Program which would allow two program options. Staff introduced these changes to the Economic Development Authority (EDA) at the March Work Session. The revisions would add an option where funds could be used for demolition of dilapidated houses, without the City buying the underlying lot. The property owner would maintain ownership of the lot while using the funds to remove the house if the owner entered into an agreement to redevelop the lot within a certain period of time and within EDA guidelines. This option was suggested by Bob Long, after staff received a request from a property owner who wanted demolition funds but wanted to keep the • lot and rebuild. Currently, the Housing Replacement Program allows for demolition only when the EDA acquires a property. By adding this option, we would comply with the Program Objectives of the Housing Replacement Program and supply another alternative for improving the housing stock and comply with the three program objectives. 1. Replace deteriorating lower value housing on scattered sites throughout the City with larger, higher value housing designed for families. 2. Eliminate the blighting influence of substandard housing, thus improving residential neighborhoods. 3. Increase the availability of quality housing for families. In order to use the demolition funds under this program, the EDA would require the property owner to execute a development agreement stipulating that the replacement home be built within a certain period of time and meet EDA specifications. We would anticipate that the new house would add to the City's tax base because of its higher value, which would eventually repay the City's investment through higher property tax revenues. The Housing Replacement Program is funded from money generated by the City's tax increment financing districts. In addition, Staff has amended a number of items to improve the readability of the guidelines. The changes have been indicated by underlining the new information and crossing out the old City of Mounds View Staff Report Revisions to Housing Replacement Program May 8, 1997 Page 2 information. Recommendation: Staff is recommending that the EDA adopt Resolution No. 97-EDA66 approving amendments to the Housing Replacement Program. (These changes will allow property owners to apply for funding for demolition of substandard houses, without the EDA acquiring the underlying lot.) Jef i er Berman, Housiig Inspector Fc;,/ Cathy Bennett, Economic Development Director N:\DATA\USERSUENNIFER\SHARE\MVHRP\STF HRP.512 • • City of Mounds View Housing Replacement Program (Revised 5/12/97) A. Statement of Purpose The City of Mounds View Housing Replacement Program ("Program") is established fto reduce the social costs of blight, improve residential neighborhoods making-better-use-of • : .• . • • and increase redistributing the tax base. to areas of the . 1 . 1 • ••• . 1' - • . .. - . B. Program Objectives • Replace small deteriorating lower value housing on scattered sites throughout the City with larger, higher value housing designed for families. • Eliminate the blighting influence of substandard housing. , • • . . : '• •.. • Increase the availability for quality housing for families. C. Program Funding The Program is funded through Tax Increment Financing and administered by the Mounds View Economic Development Authority(EDA). D. Data Privacy All files and information which identifies property and persons is private and cannot be released. All information secured through the Program is subject to the Data Privacy Act. E. Program Options The Program offers two options for participation. Option 1: This option involves the sale of substandard single family homes and land to the. EDA. The EDA's goal is to offer the property for sale for the redevelopment of new, standard housing. Option 2: This option involves the property owner retaining the property where a substandard single family house is located, and receiving funding from the EDA for demolition of the house with an agreement that it will be replaced with standard housing • meeting certain EDA guidelines and time frame. 1 RESOLUTION NO. 97-EDA66 - EXHIBIT 1 RESOLUTION NO. 97-EDA66 • CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING AMENDMENTS TO THE HOUSING REPLACEMENT PROGRAM It is hereby resolved by the Board of Commissioners (the"Board") of the Mounds View Economic Development Authority (the "Authority") as follows: 1. Recitals. (a) Pursuant to Minnesota Statues, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively,the "Act"), the Authority (i) has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and is engaged in carrying out the Mounds View Economic Development Project (the "Project) within the City; (ii)has approved a Project Plan for the Project; and (iii) has approved and adopted a Housing Replacement Program under and as an aspect of the Project Plan. (b) The redevelopment of property within the Project is a stated objective of the Project Plan and the Housing Replacement Program. (c) The Housing Replacement Program's objectives include replacing lower-value housing on scattered sites throughout the City with larger, new and higher-value housing designed for families, 40 the elimination of blighting influences and the increase of available quality housing for families within the City. (d) Including an option to provide funds for demolition and adding and replacing language for a more consistent and clear document is being presented as amendments to the Housing Replacement Program. 2. The Board hereby determines that including an option to provide funds for demolition to the Housing Replacement Program are consistent with and would be in furtherance of the Project Plan and hereby approves amendments as presented in exhibit 1. 3. The Board hereby determines that the implementation of these amendments will help realize the public purposes of the Act and would be in furtherance of the Project Plan. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority on May 12, 1997. BY: Duane McCarty, President • ATTEST: Cathy Bennett, Executive Director City of Mounds View May 12, 1997 iHousing Replacement Program Page 2 F. Publicizing the Program; Making Application 1. EDA staff, or their appointee(s) ("Program Staff'), will solicit participants-for-sellers by direct mail, advertisement, or other method. The number of applications accepted for participation in the Program piopeities purchased will be determined by the availability of personnel and financial resources-and-properties. 2. Participation in the Program must be on a voluntary basis. Interested participants sellers must be able to furnish proof of ownership of the property, and are required to respond to the EDA solicitation in writing, with a letter an olTei indicating: a. For Option 1: (Sale of Property to EDA): (1) a: An interest in selling their property to the EDA. (2) h A willingness to waive relocation benefits. . (3) c- Statement of tenant interest in the property at the time of offer. (4) tl- Consent to the release of relevant information to potential developers and end buyers. b. For Option 2 (Funding for Demolition): (1) An interest in obtaining funding for demolition from the EDA to replace existing housing with standard housing meeting EDA guidelines. (2) Willingness to hold the EDA harmless for demolition activities (3) Willingness to enter into a legal development agreement with the EDA regarding redevelopment of the property 3. Individuals who have indicated an interest in participating shall • • • • be contacted by Program Staff to inform them of the estimated project time line and to obtain complete information on the items noted under F.2. above • • •• .• 2 City of Mounds View May 12, 1997 Housing Replacement Program Page 3 Property-Selfectioir Criteria G. Property Eligibility Criteria Program Staff shall evaluate each property for which an application is received to determine its eligibility for the Program based on the criteria in this section. EBA-stator tlmir appointee(s), Program Staff shall will prepare a property fact sheets for each property properties for which owners have expressed an interest in participating in the Program selling, and shall make a drive by inspection. Properties will be evaluated based on the following criteria outlined below. To be eligible for participation acquisition, the house on the property properties must have at least one of the characteristics noted in 1, 2, 3 or 4 below. • •• • •,•, • •, •• • - 1 ••: - 1.The-property is` 1.—a7 Substandard as to condition, size or usage. 2. –b- Obsolete and having of a faulty design for block and area in which it is located. 3. -c- Deterioration which has caused blight to other adjoining • properties. 4. -d- Detrimental to the safety or health of abutting properties in the block. If it is determined that the property is eligible for participation based on the condition of the house, it must also meet the following criteria as outlined in 5-8 below.. 5. ' . . • . . . ••• A geographic mix of properties is achieved. 6. The site can be developed with a single family home within city code requirements, including zoning and conformance with the Comprehensive Plan. The property may be considered if a variance can be obtained (see Section I.2.). 7. The property must be owner-occupied or vacant before the owner makes application to the Program. should consider offering it to the EDA Tenant occupied properties will not be considered for purchase or funding for demolition. Non-homesteaded vacant property will be considered for acquisition. 8. Prior to approval acquisition by the EDA for participation in the Program, properties over 50 years old must be evaluated for historical significance. This will be accomplished by forwarding general property information and a property photo to the Minnesota Historical Society for review. •• • • . , • • •• • I • •• _ - . The 3 City of Mounds View May 12, 1997 isHousing Replacement Program Page 4 EDA will not enter into a purchase agreement purchase-property or award funding for demolition on a property which qualifies for the National Registry of Historical Structures. H. Program Priorities • 1- If more than one application for acquisition or demolition funding has been received during a given month, the Program Staff shall rank the applications to determine the best candidates for Program participation based on the information and criteria noted below: Based on the abuvo information,EDA stair, or their appointee(s), will identify the best L a: Properties must be able to meet the EDA development tune fanre that can meet EDA established guidelines and time frame will be considered first. 2. b: Properties with the lowest values and poorest visible conditions une or more of the . • ' _ . will be considered first. • .. • •• • .' •• 3. C Properties purchased should be equally distributed by location and value throughout the City districts when possible, and provide a viable financial mix of properties to support Program financial requirements. I. Option 1: Acquisition of Property by EDA 2 L Blight Qualification: Once an offering letter is received from the interested participant, EDA Program Sta', . ' . •• , ••• shall of the-properties-and arrange, by appointment, an inspection of the interior of the home to establish for blight qualification as outlined in Section G. The following information will also be obtained during the inspection: a. Demolition information for estimating demolition credit to builder. b. A determination as to the existence of any hazardous materials on the property. This includes: • 4 City of Mounds View May 12, 1997 • Housing Replacement Program Page 5 (1) a visual inspection (2) a statement from the interested participant seller regarding any knowledge of the property's use for production, storage, deposit, or disposal of any toxic or hazardous wastes or substances or asbestos products whatsoever, during the time the interested participant seller owned the property and prior to the date of interested participant seller purchased property. Properties with environmental problems or hazards may be considered if the purchase price is reduced sufficiently to cover increased site clearance and preparation costs. 3- If a property meets the blight test, acquisition procedures can continue. If the blight test cannot be met, the interested participant will be notified in writing indicating the reasons why the property cannot be considered for acquisition. 4. 2. Need for Variances: If a variance is required to redevelop the property, the EDA may, at its sole discretion, choose not to acquire the property. This determination will be made based on the project time lines, available resources, and availability of other more-desireable properties which do not require a variance. If the EDA chooses to pursue a variance to enable the acquisition of the property, an application shall be filed following the usual procedures. If a variance is not approved, the property cannot be considered for acquisition. 5- 3. Appraisal:Determining Purchase Price: If the EDA chooses to continue with the acquisition, a fee appraisal shall will be ordered at the EDA's expense and the result shall be used in determining the amount of the purchase price to offer to the interested participant. The independent fee appraiser shall be carefully instructed to document in specific terms the conditions of the property including details regarding structural condition and floor plan. The acceptance of these conditions in the market place should be discussed in the report. The appraiser's value judgement should reflect these conditions. A negotiated price considerably below the assessor's market value, may be accepted without an appraisal on a case by case basis if the interested participant concurs. .. • - • •• . - • • • . •• . _ - • .• • • • • • • _. • • • • • 1 • - •. .. • . • • • • .I • III ••. - • - . •• - •. 7. Sellers will be asked to provide the Abstract or RPA(as applicable) to the EDA, to • ' • • • • • • 1• . • • . •l . • - • • • '.• - ••'1 5 City of Mounds View May 12, 1997 Housing Replacement Program Page 6 ' . . • . . [MOVED TO I.4.E.(1)] ;. _ .. .•• . - - ••. '• • . •• -.• • • •II• . .•. -• • • •• • . • . • I • . •• . •• .1 • • •, 1• • -. - •• - • . I• • . [MOVED TO I.4.e.(2)] -. ' •.' I I .' • • •• • . • . • , •• • . • - • • •• . • • • . - - - •..' 1• .• • • • - • • . . - -, - W " . • • • • •• , . • •• • • . 011.- • ••- •. - W " •• • - - 1 •• • . •. . . - .. - • • • , .• .•• • • - • • - •- - • . • •'• . . • . . • • • . [MOVED TO I.4.e.(3)] .. .' 11 from an independent environmental engineering firm or other firm performing such [MOVED TO I.4.e.(4)] *equisitioir Procedures 4. Purchase Agreement; Closing Procedures '17 a. When a purchase price has been determined verbally agreed upon by both parties, Program Staff and Legal Counsel shall prepare a Purchase Agreement to be presented to the interested participant. The purchase price contained in the Purchase Agreement shall be within the range authorized by the EDA. The purchase agreement shall be contingent on the completion of an environmental evaluation suggesting no evidence of hazardous waste on the property. The interested participant seller shall receive a copy of the purchase agreement including the following information: (1) a- The purchase price (2) b: How the purchase price was determined. (3) The amount of earnest money (4) A date to sign the Purchase Agreement (5) A closing date • - • ' - ' • . - • - ., • . Praeltr b. • ••• • • • 55 • _ - .. 61• •• )' 6 City of Mounds View May 12, 1997 • Housing Replacement Program Page 7 . • . . ..• .• . • - • • . • • '. • .. this time, if not explained previously. To enable the acquisition process to continue, the interested participant must execute the purchase agreement and "waiver of relocation benefits" form. The waiver of relocation, must be clearly explained to the interested participant at this time, if not explained previously. e. The EDA Executive Director and President shall be signatories on the purchase agreement. 3- d. The acquisition and disposition of the property must be in conformance with the Mounds View Comprehensive Plan. 4 e. Following EDA authorization of these agreements, interested participants seller and/or Program Staff will be requested to assemble and supply all required documentation prior to closing as outlined below. (1) •- • . . ••. An Abstract or RPA(as applicable) must be furnished to the Program Staff to facilitate the rendering of a title opinion. The interested participant will bear the cost of updating the '• Abstract or RPA as part of the closing procedures. (2) EDA Legal Counsel will be responsible for having the Abstract or RPA updated and will provide Program Staff and interested participant with a written opinion of title. A wi itten opinion or title insurance poliL,y will • • •• • • - -. . EDA Legal Counsel will also secure title insurance. (3) If the title opinion indicates the property has marketable title, purchase procedures will continue. If the title opinion does not indicate a marketable title, the EDA, at its sole discretion, may choose not to acquire the property. The EDA may determine remedies and evaluate their resolution, including the additional time and expense to provide marketable title. The EDA may proceed to correct title deficiencies to continue the purchase of the property dependant upon the additional time and expense incurred. (4) Simultaneously with the title opinion, an environmental evaluation-Phase-I audit may be obtained from an independent environmental engineering firm or other firm performing such service. If environmental hazards are found on the site, the EDA may choose not to acquire the property. • 7 • City of Mounds View May 12, 1997 • Housing Replacement Program Page 8 5- f. The seller must be prepared to vacate the property on the day of closing unless other arrangements have been made with Program Staff. g_ If the interested participant decides not to sell the property after execution of the purchase agreement then the interested participant must provide the EDA with the following: (1) A letter expressing their desire not to proceed with selling the property. (2) The full amount of earnest money received upon execution of the purchase agreement. (3) Full payment of legal and consulting fees incurred by the EDA after the execution of the purchase agreement in preparation for the closing of the property. 5. Selection of Demolition Contractor and Procedures. After the property closing, Program Staff will select a demolition contractor by sending out Requests for Proposals (RFP) to at least three demolition contractors. The bid received with the lowest price will have priority. The demolition contractor must be able to meet project deadline as outlined in ithe RFP prior to awarding a contract. The demolition contractor will be required to obtain all necessary City permits and pay applicable fees. Overall demolition supervision will be provided by a designated Program Staff. 6. Marketing. Program Staff will advertise sale of the property by contacting the St. Paul Realtors Association, Residential Developers, interested buyers and posting signs on the property. 7. Selection of Developer. Program Staff will negotiate the purchase of the property by an acceptable buyer/developer team. If a buyer/developer team can not be obtained, the EDA may consider selling property to a developer for sale to the open market after completion. As part of the sale of the property, the buyer/developer team must sign a development agreement with the EDA which will stipulate housing design and time frame for completion. J. Option 2: Funding of Demolition 1. Blight Qualification: Properties being considered for demolition funding must meet blight qualifications as outlined in Section G. and Section I.1. 2. Need for Variances: If a variance is required to redevelop the property, the homeowner must obtain the variance prior to the award of demolition funds. If a variance is not 8 City of Mounds View May 12, 1997 • Housing Replacement Program Page 9 granted, demolition funds shall not be awarded. 3. Comprehensive Plan/Zoning: The Comprehensive Plan designation and the zoning on the property must allow for its redevelopment by construction of a replacement single family residence. 4. Development Agreement: The interested participant must enter into a Development Agreement with the EDA which will stipulate housing design and site development criteria and time frame for completion. The development agreement will include estimate of new taxes generated based on the construction of replacement cost. 5. Demolition Contract: The interested participant must obtain three estimates for demolition which will assist in determining the amount of demolition funds to award for the project. The chosen demolition contractor must be able to meet project deadlines as outline by Program Staff. The demolition contractor will be required to obtain all necessary City permits and pay applicable fees. Overall demolition supervision will be provided by a designated Program Staff in conjunction with the interested participant. o - • , • I ••i ' • Bei ' i . • 1 i • - o . • • "iii o . .- '. • •• - • . . . •. • •• •- . '. . • • '. . (Moved to G.7) b. Tenant ok.cupied property cannot be acquired. (See G.7.) • • . . • . • . . . . , . - , . . . • •. . • II . . . . ' ..- • - - . • - • I - • ••- •. • • • O. -.• - •• • h• • • • - • • •- •• . - -:.• • • . - • • - . - •. • price. (Moved to I.3) . :• . -• . - .• . - • •. • •- • •• • • • •. . , • .- . - . - . .. . • . v. . . - . P . (Moved to I.3) f. Number of acquisitions is determined by availablt resoui ces (fui,ding and staff). (See F.1.) N:\DATA\USERSUENNIFER\S HARE\M VHRP\HRPB.W PD 10 9 Item No. 7B f _ Staff Report No. EDA-97-73C Meeting Date 5-12-97 111/ Type of Business EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Staff Report To: Mounds View Economic Development Authority From: Cathy Bennett, Director of Economic Development Item Title/Subject: Consideration of Approving a Tax Increment Policy Date of Report: May 8, 1997 Attached is a Tax Increment Policy that was developed by the Economic Development Commission to guide staff and interested applicants in the use and evaluation of the City's tax increment funds (TIF). The policy explains Mounds View's legal powers as an Economic Development Authority (EDA) under State Statute for use of TIF and states the general concepts relating to the use of TIF to encourage development and redevelopment that would not otherwise occur. The policy addresses eligible uses and costs associated with TIF and explains the general procedure to determine the amount of assistance and types of assistance funded through TIF. • The policy requires that an applicant complete an application form and sign a deposit agreement prior to EDA staff or consultants evaluating the project's eligibility or negotiating a TIF Agreement. The policy will provide developers with a general understanding of how TIF works and will give staff a tool to gather information when evaluating a project. In addition, the EDA will be able to offset consulting fees generated in the evaluation of assistance with the signature of the deposit agreement. If the evaluation results in a development agreement, the deposit will be reimbursed to the applicant and the EDA can recoup the consulting fees through increment generated from the project or existing increment set aside for administration. If the project fails, the EDA will keep the deposit to cover the consulting fees. Recommendation: Staff is recommending the approval of the attached Tax Increment Policy to be effective immediately and applied to all pending tax increment projects. Cathy Benn-I, hir. of Economic Development Tax Increment Policy i Mounds View Economic Development Authority Mounds View, Minnesota GENERAL POLICY: The Mounds View Economic Development Authority has the powers under the Minnesota Statute Sections 469.124 through 469.137 and Sections 469.001 through 469.047 to govern and monitor the use of tax increment financing for Mounds View's tax increment districts and the Mounds View development district which encompasses the entire boundaries of the City of Mounds View. It is the responsibility of the Mounds View Economic Development Authority to use tax increment financing as a tool to accomplish the City's economic development and redevelopment goals and objectives. The Mounds View Economic Development Authority understands and abides by the fundamental principal which makes tax increment financing viable to encourage development and redevelopment which would not otherwise occur. The Mounds View Economic Development Authority shall consider tax increment financing in cases that serve to accomplish the City's development goals and activities as hereby defined in projects eligible for tax increment financing. PROJECT ELIGIBLE FOR TAX INCREMENT FINANCING: Projects eligible for consideration of Tax Increment Financing assistance per the Mounds View Economic • Development Project Plan dated May 9, 1994 include, but are not limited to (1) the attraction, retention, rehabilitation and preservation of commercial, industrial, retail, residential, recreational and public service facilities; (2) new and rehabilitated public infrastructure; (3) community and other public service centers; (4) senior/mature adult and/or other housing development partnerships or other multi-use housing projects and facilities; (5) other public utilities (including telecommunications); (6) business incubator loan and other business programs; and (7) transportation systems. More emphasis will be placed on those items which increase the tax base, eliminate blight and meet the City's economic and redevelopment goals. COSTS ELIGIBLE FOR TAX INCREMENT FINANCING: Project costs qualifying for Tax Increment Financing assistance, as defined under the TIF Act, include utilities design, landscape design, architectural and engineering fees directly attributable to site work, site related permits, earthwork/excavation, soils correction, landscaping, utilities (sanitary sewer, storm sewer, and water), streets and roads, street/parking lot paving, street/parking lot lights, curb and gutter, sidewalks, land acquisition, special assessment, legal (relating to acquisition, financing, and closing fees), soils tests and environmental studies, surveys, park dedication fee, SAC, WAC charges, titles insurance and TIF application deposit. i 1 IkETERMINATION OF AMOUNT OF ASSISTANCE TO APPLICANT: Within TIF Districts The amount of Tax Increment Financing provided to an applicant will be based, in part, on the analysis of information provided on the application for Tax Increment Financing assistance (Attachment"A"), amount of increment generated by the project as evaluated by the City's Financial and/or Bond Counsel and the City's economic and redevelopment goals. The level of assistance provided will be evaluated on a case by case basis and may reflect an increase or decrease in assistance dependant upon the level of increase in the tax base, amount of elimination of blight and/or a number of variables that may substantiate the need for assistance. An adjustment in the amount of assistance that can be provided is at the sole discretion of the Board of the Economic Development Authority as long as the requested uses are legal under the Minnesota State Statues for use of tax increment financing. Within the Development District(herein referred to as the "City" limits) but outside of TIF Districts The evaluation of Tax Increment Financing assistance that could be provided to an applicant will be based in part on (A) the analysis of information provided on the application for Tax Increment Financing assistance (Attachment"A"), (B) square footage cost of the project, (C) balance available in the Economic test for use of tax increment financing. TYPES OF ASSISTANCE Within TIF Districts Tax Increment Financing can be provided in either"pay as you go" or"up front"payments. "Pay as you go" is wherein the Mounds View Economic Development Authority compensates the applicant for a predetermined amount for a predetermined number of years. The applicant pays for(re)development up front and then annual payments are issued to the applicant based on the need for assistance and increment generated from the project. "Up front' payments is wherein the Mounds View Economic Development Authority must issue revenue or general obligation bonds to pay for the (re)development prior to completion of the project. The increment generated from the project is then used for repayment of the bonds. The Mounds View Economic Development Authority gives preference to the use of"pay as you go" assistance to finance private development projects due to the reduced risk to the community. The EDA will consider"up front" payment projects that would benefit the entire community and are not possible to be funded under a "pay-as-you-go" basis. • 2 1Y Within the City but outside of TIF Districts • Financing from the dedicated tax increment fund can be provided in annual installments to the applicant based on the positive cash flow balance in the Economic Development Authority's dedicated tax increment fund and need for assistance based on analysis of the "but for" test for the project. The dedicated tax increment fund includes a value based on the use and is adjusted along with the budget process and goals and objectives for economic and redevelopment on an annual basis. APPLICATION FOR TAX INCREMENT FINANCING ASSISTANCE: The Mounds View Economic Development Authority requires that an Application for Tax Increment Financing Assistance (Attachment A) be completed and a deposit be collected from the applicant for the EDA's consultants to investigate the feasibility and need for providing Tax Increment Financing assistance (Attachment B). SUBMITTAL OF APPLICATION FORMS: Applicants requesting Tax Increment Financing assistance within an existing district or in the creation of a new district, shall be required to complete and submit the following: 1. Application for Tax Increment Financing Assistance 2. Deposit for Review of Tax Increment Financing Assistance • 3 CITY OF MOUNDS VIEW APPLICATION FOR TAX INCREMENT FINANCING ROJECT: 1. Business Name: Address: Telephone #: Contact: 2. Brief Description of the Business. (Please provide# of years in business under current ownership and # of years in Mounds View) 3. Present Ownership of the Site: •4. Present Project: Building square footage, location of project, size of property, description of buildings -materials, etc. Attach site plan, if available 5. If Property is to be Subdivided, Show Division Planned. • (Attachment"A" Cont.) • 6. Estimated Project Costs: (please enclose construction performa,if available.) a. Land Acquisition $ b. Site Preperation $ c. Utilities $ d. Public Improvements $ e. Landscaping $ f. Hard Building Costs $ g. Construction Management Fee $ h. Architectural & Engineering Fees $ i. Legal Fees $ j. Financing Costs $ k. Broker Costs $ 1. Contingencies $ m. Equipment $ n. Other(please specify) $ Total $ 7. Total Estimate Market Value at Completion $ (Explain Calculation) • 8. Submit an Itemized List of Eligible Costs Qualifying for Assistance (see page 1 of Tax Increment Policy). 9. Sources of Financing a. Equity $ b. Bank Loan $ c. Tax Increment Assistance $ d. Industrial Revenue Bonds $ e. Other (please specify source) $ 10. Form of Tax Increment Financing Assistance Requested. Pay As You Go Bond Issuance Excess Increment 11. Name&Address of Architect, Engineer, and General Contractor. (Attachment "A" Cont.) 12. Estimated Real Estate Taxes on Project Site upon Completion of Project. (please show calculations.) • 13. Project Construction Schedule: a. Construction start date b. Construction completion date c. If phased project: Year % Complete Year % Complete 14. Estimated Number of Jobs: Created (within 2 yrs) Retained 15. Average Annual Wage Level of Jobs Created (within 2 yrs) Retained .16. Is Job Training Assistance Needed? TAX INCREMENT FINANCING REQUEST: 1. Describe amount, term and purpose for which tax increment financing is required and how the project fits into the City's economic development and redevelopment goals and objectives_ 2. Statement of necessity for use of tax increment financing for project. i 3. Describe the Potential for Growth. s 4. What is the Return on Equity Invested that you or investors need to make the project feasible_ 5. If Rental Space, What is the Range of Targeted Rental Rates 6. If Rental Space, Who are the tenants and what is the length of their leases. • • Attachment B • Deposit Agreement for Evaluation of Tax Increment Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the day of , 1997 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota(the "EDA") and (The Applicant). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.124 to 469.134 and 469.090 to 469.108(collectively,the "Act"); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project as detailed in EDA document dated 5/9/94 (the "Project") within the City; and • WHEREAS, the redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan. NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant) agrees to provide the EDA with a deposit of$1,000 for the EDA's consultants to investigate the feasibility of providing Tax Increment Financing assistance to (The Applicant) for the redevelopment of the (the"Property"). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Increment Assistance to (The Applicant) beyond the $1,000, prior to the execution of the Developer's Agreement,the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. If the project is approved and (The Applicant) proceeds with the project,the EDA shall reimburse (The Applicant)' deposit to the extent permissible under the TIF Act. If (The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. Attachment B • Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF,the parties have executed this Agreement as of the day and year first above written. MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: DUANE MCCARTY ITS PRESIDENT • BY: CATHY BENNETT ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 1997, by Duane McCarty and Cathy Bennett, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public • w • Attachment B (The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of , 1996,by ,the of (The Applicant)named in the foregoing instrument. i Notary Public • • Item No. 7C ,-1 -- Staff Report No. EDA-97-72C Meeting Date 5-12-97 • Type of Business EDAB WK: Work Session;PH:Public Hearing; CA:Consent Agenda;EDAB:EDA Business Mounds View Economic Development Authority Staff Report To: Mounds View Economic Development Authority From: Cathy Bennett, Director of Economic Development Item Title/Subject: Consideration of Resolution No. 97-EDA67 Approving and Authorizing the Execution of a Development Assistance Agreement with The Everest Group for Building N Date of Report: May 9, 1997 Overview: At the April TIF Workshop, Tim Nelson of the Everest Group spoke to the EDA with regards to their proposal to build the 103,000 square foot Building N in the Mounds View Business Park. (See attached map for location of building). Staff was directed to bring a recommendation for the EDA's consideration regarding a TIF agreement with the Everest Group. • History: In 1993, Everest requested $900,000 of TIF assistance over 13 years at 9% interest with a 90\l0 split. This was in response to a company that was willing to lease 70 percent of the facility from Everest. There was no information provided to the EDA with regards to the proposed tenant. At that time Everest was willing to reduce the duration of the agreement from 13 to 10 years. The EDA decided to offer Everest with$450,192 of assistance for 5-7 years at 7% interest with an 85\15 split. Everest was willing to accept a total of$450,000 for 11-12 years at 8.5% interest. There was no agreement on the negotiations and therefore the project did not proceed in 1993. Everest informed the City that due to the lack of TIF the proposed tenant had elected to locate elsewhere. In 1994, discussions were open again for the development of Building N due to Everest's negotiations with a"mystery company". The proposal,which was done by Casserly, Molzahn&Associates, requested $808,441 for 9 years at 7% interest at an 85\15 split. Through these negotiations,the EDA made informal decisions with regards to parameters for use of TIF. Those parameters included the EDA's desire to use TIF for an owner occupied building verses a leased facility. The EDA did note that they would consider a long term leased project(for at least the duration of the TIF agreement) if the EDA had prior knowledge of the company prior to signing an agreement. Again,this proposal did not proceed as the"mystery company" never materialized. Again in 1995, the Everest Group came to the EDA to reconsider the decision to have an owner • occupied building prior to signing a development agreement. They were ready to build the 'w • City of Mounds View Staff Report May 9, 1997 Page 2 • building but did not have a tenant at this time. The EDA held firm on their decision to wait until a strong tenant or owner was identified prior to entering into a development assistance agreement. More recently in July of 1996, Everest brought forward a request for$1.3 million pay-as-you-go agreement over 15 tax increment years with an interest rate of 7% and a 90/10 split. This proposal equals approximately $4.28 per sq.ft. of assistance. After reviewing the proposal with Chuck and bond attorney Jim O'Meara an offer was made for an 8-year pay-as-you-go agreement at 7% interest which equaled approximately $2.75 per sq. ft. of assistance plus the willingness to negotiation on a low interest loan with the company that was tied to the agreement rather than a grant which was originally requested by Everest. Our proposal was not accepted • by Everest. They said it was not economically feasible due to the competition and amount of dollars that were invested into the land. After analyzing financial information and through much discussion regarding this project it was decided that a 15 year pay-as-you-go agreement did not pose additional risk upon the City but allows for an equitable time frame to pay back the developer for costs incurred on the project. The most recent proposal included a 15 year, 90/10 split pay-as-you-go assistance package which equaled $1.1 million present value assistance to Everest. At that time staff felt that to make this project work this was a proposal that they could support and over the long run is a good development for the City. Therefore, staff was directed to put together the specifics of the • development agreement. What followed was discussions back and forth on how the development assistance agreement would be structured. Specifically the issues included the substantiation of reimbursable costs and putting a cap on the amount of increment collected. The final terms were not agreed upon by both parties therefore the negotiations once again failed. Development Assistance Agreement: Since Everest has once again opened up discussions regarding finalizing a development assistance agreement for building N, the following is staff recommendation regarding the terms. 1. The assistance package would provide The Everest Group with a maximum 15 year pay as you go note at 90/10 split. This would reimburse for the fair market value of the land and TIF eligible public and site improvements to be estimated and attached to the agreement. 2. Similar to the Zep manufacturing project the agreement would state that the developer will provide satisfactory written substantiation of the amount and nature of the Development Costs for which reimbursement is sought and that only Available Tax Increment shall be used to pay the amounts otherwise due on the EDA Note. Therefore, if the increment projected is not collected,the EDA is not obligated to pay the developer more than 90% of what is available for the 15 increment years up to a maximum of$1.2 • million. • RESOLUTION NO. 97-EDA67 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A DEVELOPMENT ASSISTANCE AGREEMENT WITH THE EVEREST GROUP, LTD., REGARDING THE BUILDING"N"PROJECT It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority(the "Authority") as follows: 1. Recitals. (a) Pursuant to Minnesota Statues, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the"Act") (b) Pursuant to and in furtherance of the objectives of the Act, the Authority has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in connection is engaged in carrying out the Mounds View Economic Development Project(the"Project)within the City. (c) There has been approved pursuant to the Act a Project Plan for the Project. (d) The redevelopment and development of property within the Project by private developers are stated objectives of the Project Plan (e) In order to achieve the objectives of the Project Plan, the Authority has determined to provide substantial aid and assistance through the financing of certain of the public costs of development (f) The Everest Group, Ltd. (the"Developer"), has presented the Authority with a proposal for the completion of certain improvements within the Project, consisting generally of the construction of an approximately 103,000 square foot building, and a certain Development Assistance Agreement between the Authority and the Developer (the "Development Agreement") stating the terms and conditions thereof and the Authority's responsibilities respecting the assistance thereof has been presented to the Board for its consideration. 2. The Board hereby determines that the Authority's execution and performance of the Development Agreement would be in furtherance of the Project Plan and hereby approves the • Development Agreement substantially in the form presented to the Board and hereby authorizes the officers of the Authority in their discretion and at such time, if any, as they may deem City of Mounds View Staff Report May 9, 1997 Page 3 • 3. The land value would be based upon an acceptable appraisal from one of the four appraisers previously submitted to Everest from the EDA. The appraisal would be paid for by Everest. 4. The increment will be pledged, as previously agreed to, subject to the EDA's district debt service or prior bonds. 5. Everest's development and contractor profit is not covered as a reimbursable expense. 6. Everest will have until Dec. 31, 1999 to construct the project with pay-as-you-go provisions applicable only after construction is complete. The final payment date can not exceed February 1, 2014. 7. Assessable public improvements will be done by the City and assessed against the property. 8. The EDA will not assume any risk should the State legislature reduce the commercial/industrial tax classification rates. 9. The EDA would agree to give Everest the right to transfer the property and/or assign the agreement to a third party, prior to the execution of a certificate of completion, subject to • a reasonable creditworthiness standards to be applied to the transferee and the transferee's assumption of the Development Assistance Agreement. These provisions were previously outlined to Everest in a letter dated January 9, 1997 by Chuck when I was on maternity leave. Staff would be willing to recommend increasing the interest rate on the bond from 7%to 7.5%to make the project a reality. If the EDA agrees to these provisions I will have Jim O'Meara complete the language on the Development Assistance Agreement once Everest agrees to these terms. The EDA may move forward on passing resolution No. 97-EDA67 which would approve a Development Assistance Agreement with Everest Group with the execution of the final agreement signed by myself and President McCarty. Otherwise, a motion can be made accepting these terms with passage of a resolution upon final draft of a development assistance agreement done at another meeting. • RESOLUTION NO. 97-EDA67 • PAGE TWO OF TWO appropriate to execute the same on behalf of the Authority, with such additions and modifications as those officers may deem desirable or necessary, as evidenced by their execution thereof. 3. Upon execution and delivery of the Development Assistance Agreement,the officers and employees of the Authority (including members of the City staff, acting in their capacity as staff to the Authority as well) are hereby authorized and directed to take or cause to be taken such actions as may be appropriate or necessary on behalf of the Authority to implement the Development Assistance Agreement, including without limitation issuance of the EDA Note and execution of the Certificate of Completion under the Development Assistance Agreement. 4. The Board hereby determines that the execution and performance of the Development Assistance Agreement will help realize the public purposes of the Act and are in furtherance of the Project. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority on May 12, 1997. • BY: Duane McCarty, President ATTEST: Cathy Bennett, Executive Director • ,..•..,.... . . . 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' RESOLUTION NO. 97-EDA68 MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION GRANTING FINAL APPROVAL FOR EXPENDITURE OF TAX INCREMENT FUNDS TO FINANCE THE CITY'S COSTS IN CONNECTION WITH THE BEL RAE COMMUNITY CENTER PROJECT AND AUTHORIZING THE EDA TO ENTER INTO A TIF LOAN AGREEMENT WITH THE CITY TO PROVIDE TIF FINANCING ASSISTANCE IN CONNECTION WITH THE PROJECT It is hereby resolved by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the "Authority) as follows: Section 1. Recitals. 1.01. The Authority has the powers provided in Minnesota Statues, Sections 469.124 to 469.134 and 469.090 to 469.108 (collectively, the "Act"). 1.02. Pursuant to and in furtherance of the objectives of the Act, the Authority has • undertaken a program to promote development and redevelopment of certain land within the City of Mounds View and in this connection is engaged in carrying out the Mounds View Economic Development Project (the "Project") within the City. 1.03. There has been approved pursuant to the Act a Project Plan for the Project. 1.04. The redevelopment and development of property within the Project by private developers and the creation of community and other public service centers are stated objectives of the Project Plan.. 1.05. In order to achieve the objectives of the Project Plan,the Authority has determined to provide substantial aid and assistance through the financing of certain of the public costs of development. 1.06. On May 9, 1994, the Authority amended and consolidated the development programs for Development Districts Nos. 1, 2 and 3 and amended the Tax Increment Financing Plans therefor establishing an additional $20,000,000 in budget authority for the three consolidated Development Districts. 1.07. The City Council ("Council") of the City of Mounds View ("City") has already given preliminary approval of the Bel Rae Community Center project and proposed • redevelopment plans for the remainder of the Bel Rae site as proposed by V.B. Digs to build a privately owned volleyball complex adjacent to the Bel Rae Community Center (collectively referred to hereafter as "the Bel Rae Project"). RC.122616 MOUS-4 1.08_ The City established Tax Increment Finance District No.4(Redevelopment District) ("TIF District No. 4") on April 28, 1997 in connection with the Bel Rae Project. 1.09. The City and the Authority have entered into an Exclusive Negotiations Agreement with V.B. Digs in which tax increment finance assistance would be provided to be V.B. Digs for certain qualified reimbursable costs relating to land acquisition and public improvements for the Bel Rae Project, including parking. 1.10_ The Council previously authorized the City to enter into a contract with WAI Continuum ("WAI") for architectural and design services related to the Bel Rae Project and the • architect has commenced work on the architectural design for the Bel Rae Project pursuant to the contract. 1.11. The Council has authorized the City to enter into a construction manager agreement with Flannery Construction, Inc. to serve as construction manager for the Bel Rae Project_ 1.12. The City has requested the Authority to provide the City with tax increment funds in an amount not to exceed 4.5 million dollars in the form of a loan to finance the City's costs in connection with the Bel Rae Project. 1.13. The City is currently in the process of negotiating leases with the Childrens Home Society of Minnesota and Independent School District No. 621 as tenants of certain leased • premises of the City's owned portion of the Bel Rae Project_ Section 2. Resolved. 2.01. That the Board of the Authority authorizes the President and Executive Director to enter into a loan agreement between the Authority and the City for a loan to the City of up to 4.5 million in tax increment funds to finance the City's costs in connection with the Bel Rae Project. 2.02. That the Board of the Authority hereby grants final approval for the expenditure of up to 4.5 million in tax increment funds loaned to the City by the Authority to finance the City's costs in connection with the Bel Rae Project. Adopted by the Board of Commissioners of the Mounds View Economic Development Authority this 12th day of May, 1997. Duane McCarty, President ATTEST: • Cathy Bennet, Executive Director RCL122616 MU205-4 2