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HomeMy WebLinkAbout09-25-2000PROCEEDINGS OF THE MOUNDS VIEW EDA CITY OF MOUNDS VIEW RAMSEY COUNTY, MINNESOTA Regular Meeting September 25, 2000 Mounds View City Hall 2401 Highway 10, Mounds View, MN 55112 8:12 P.M. CALL MEETING TO ORDER ROLL CALL: Coughlin, Stigney, Marty, Thomason and Quick. NOT PRESENT: None. 1. AGENDA ADDITIONS There were no additions or corrections to the agenda. MOTION/SECOND: Thomason/Marty. To approve the agenda as presented, dispensing with the reading of all ordinances and resolutions unless otherwise requested. Ayes – 5 Nays – 0 Motion carried. 2. APPROVAL OF EDA MINUTES A. Approve Minutes of September 11, 2000. MOTION/SECOND: Stigney/Marty. To approve the minutes of the EDA for September 11, 2000, as presented. Ayes – 4 Nays – 0 Abstain – 1 (Quick) Motion carried. Commission Member Quick abstained from voting as he was not present for the meeting on September 11, 2000. 3. SPECIAL ORDER OF BUSINESS None. Mounds View EDA September 25, 2000 Regular Meeting Page 2 4. CONSENT AGENDA None. 5. EDA BUSINESS A. Consider Approval of Resolution 00-EDA-134, a Resolution Approving and Authorizing the Expenditure of Tax Increment Funds for the Acquisition of 7861 Groveland Road for the Purpose of Future Redevelopment. Economic Development Coordinator Parrish addressed the EDA and said at the September 5, 2000 Work Session, Council directed staff to investigate the possibility of acquiring residential property currently for sale located at 7861 Groveland Road. This property is located adjacent to Simon’s Sport Shop, ABC Liquors, and the Park building. The possibility exists that the subject property could become part of a larger redevelopment of the area. Mounds View’s Comprehensive Plan, submitted to the Metropolitan Council for review, envisions a mixed-use planned unit development for the area. The property, and a majority of the adjacent parcels, are located within TIF District No.2. Currently, the house has three bedrooms and 1453 finished square feet. All appliances would be included in the sale. The lot is approximately .4 acres. Housing Inspector Jeremiah Anderson noted several improvements that could be made including the removal of a fuel oil tank in the basement, the addition of smoke detectors, and several other miscellaneous maintenance issues. Should the EDA purchase the property, it could be rented out until adjacent parcels become available. After an initial inquiry, the broker for the property indicated they had received an offer, and were considering a purchase agreement with another party. However, the buyer and seller could not come to mutually beneficial terms, and the sale fell through. As a result, the seller offered the City the opportunity to purchase the home. After examining the home, an offer of $125,000, contingent upon EDA approval, was made on September 18, 2000. Subsequently, the seller has accepted the offer and a purchase agreement was entered into. Of course, the purchase agreement is contingent upon approval of the Economic Development Authority. As previously stated, acquiring the house would cost approximately $125,000. A contingency of $5,000 has been incorporated to address any issues that may arise prior to closing should the EDA decide to purchase the property. Additionally, it might be suggested that pre-1997 TIF interest earnings be allocated for this particular project. By doing so, any rental income associated with the property would not be considered tax increment, and not subject to TIF specific requirements and reporting. Alternatively, funds could be taken from the 2000 EDA Mounds View EDA September 25, 2000 Regular Meeting Page 3 Special Revenue Fund budget allocation. More specifically, Account 7050: Capital, Real Estate. Staff recommends approval of Resolution 00-EDA-134 a resolution approving and authorizing the expenditure of tax increment funds for the acquisition of 7861 Groveland Road for the purpose of future redevelopment. MOTION/SECOND: Quick/Thomason. To Waive the Reading and Approve Resolution 00- EDA-134, a Resolution Approving and Authorizing the Expenditure of Tax Increment Funds for the Acquisition of 7861 Groveland Road for the Purpose of Future Redevelopment. Vice President Stigney inquired as to whether there is a specific plan in place for the future use of this property should the City acquire it. Economic Development Coordinator Parrish explained there is no specific plan but the Comprehensive Plan for the City calls for a mixed-use development in that location in the future. Vice President Stigney indicated he was hesitant to use City funds to purchase the property without a specific plan in place to use the property. He indicated he knows what his property and other properties in the City are valued at and believes a valuation of $125,000 for this property is too high. Economic Development Coordinator Parrish indicated he is somewhat familiar with real estate values in the area and believes $125,000 is a fair market price for the property. Mr. Parrish told the EDA another bid to purchase the property has been submitted which is higher than $125,000. He then told the EDA it may be possible to use pre-1997 interest earnings to purchase the property as they would not be subjected to strict TIF restrictions. Using pre-1997 interest earnings would allow the City to benefit from rental income on the property. Vice President Stigney noted it would take 10 years of rental income to recover the purchase price of the property. Economic Development Coordinator Parrish said he had not priced it out but agreed it would be approximately 10 years before the City would recoup the initial investment. Commissioner Thomason noted she was in mortgage banking for 22 years and based on this experience and her knowledge of the local real estate market she believes $125,000 to be a fair price for the property. President Coughlin called for a vote on the motion. Ayes – 3 Nays – 2 (Marty, Stigney) Motion carried. Mounds View EDA September 25, 2000 Regular Meeting Page 4 President Coughlin asked if Economic Development Coordinator Parrish needed direction from the EDA and Mr. Parrish said he did. MOTION/SECOND: Coughlin/Quick. To direct Staff to use pre-1997 interest monies to purchase the property at 7861 Groveland Road. Ayes – 4 Nays – 1 (Stigney) Motion carried. B. EDA Direction to EDC. It was noted that for the last two years, the EDC has devoted a considerable amount of effort to updating the Economic Development Component of the Comprehensive Plan and examining several TIF related items. However, the Commission’s agendas are relatively open in the upcoming months. Accordingly, direction is being requested from the EDA for specific items for the EDC to address. The following two items are suggested. I. Use of Pre-1997 interest earnings. It was noted that the Office of the State Auditor has determined that interest earnings on TIF funds prior to July 1, 1997 are not subject to TIF restrictions. Mr. Jim O’ Meara, the EDA’s TIF attorney, has reaffirmed this position. Currently, there is approximately $1.7 million in interest earnings (This figure is an estimate that needs to be confirmed with the Finance Director). Minimally, the pre-1997 interest earnings should be transferred into a specific fund to distinguish it from existing TIF funds. If the EDA desires, the EDC could evaluate potential options. Some preliminary options include: • Establishing a Highway 10 Special Revenue Fund to provide revenue for any future safety improvements, infrastructure, and/or redevelopment associated with Highway 10 • Establishing an Economic Development Special Revenue Fund to fund a variety of economic development and housing projects / improvements throughout the City • Transferring revenue to existing funds • Other suggestions • A combination of any of the aforementioned options President Coughlin inquired as to if the City could utilize pre-1997 interest funds for general infrastructure redevelopment. Economic Development Coordinator Parrish indicated how the funds were used was up to the EDA as a policy decision. Mounds View EDA September 25, 2000 Regular Meeting Page 5 President Coughlin inquired as to if the funds could be used as “seed money” for the City’s street redevelopment project. The Economic Development Coordinator indicated how the funds are used is relatively unrestricted and is a policy decision. II. Economic Development Plan update including review of business loan program. It was noted that in 1986, Mounds View adopted an “Economic Development Plan” to plan future development. This plan included property inventories, fiscal analysis, the use of economic development incentives, a community inventory, and an economic development program. More recently, an Economic Development element was included in the Comprehensive Plan currently being reviewed by the Metropolitan Council. If the EDA desires, the EDC could develop an Economic Development Plan similar to the one adopted in 1986, but based on the principles contained within the Comprehensive Plan. Through previous staff and community planning initiatives, a substantial portion of the work has already been completed. At this point, it just needs to be integrated into one specific policy document. Additional areas that could be incorporated into an updated plan include site-specific redevelopment opportunities; business retention and expansion; marketing / image and identity; and economic development / redevelopment issues associated with Highway 10. An evaluation of the Business Improvement Partnership Loan Program could also be done based on Mounds View’s overall economic development strategy. Finally, evaluating the use of pre-1997 interest earnings and contemplating an Economic Development Plan are just two areas that the EDC could direct its efforts. A myriad of other possibilities exist. Vice President Stigney specifically recommended the EDC look at ways to redirect funds to the street redevelopment project as a way of reducing the franchise fee of 4% to the residents. Commissioner Thomason inquired as to if the EDC needed direction from the EDA at this meeting or if the matter could be brought to a work session for discussion. A consensus was reached to have the EDC bring more information on the items presented to a Work Session for further discussion. Mounds View EDA September 25, 2000 Regular Meeting Page 6 6. REPORTS No reports were considered. 7. ADJOURNMENT President Coughlin adjourned the meeting at 8:29 p.m. Respectfully submitted, Recorded and transcribed by: Joan Lenzmeier TimeSaver Off Site Secretarial, Inc.