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HomeMy WebLinkAbout12-12-2011 CITY OF MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA MOUNDS VIEW CITY HALL Monday, December 12, 2011 6:30 PM 1. CALL TO ORDER 2. ROLL CALL President Flaherty, Vice President Stigney, Commissioner Hull, Commissioner Mueller, Commissioner Gunn 3. APPROVAL OF AGENDA 4. PUBLIC INPUT Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. 5. APPROVAL OF MINUTES A. November 14, 2011 − EDA Minutes 6. CONSENT AGENDA 7. EDA BUSINESS A. Consider Amendments to Mounds View Business Toolbox B. Consider Amending the Mounds View Home Improvement Loan Program Loan-to-Value Criteria and Extending the Program Through 2012 8. REPORTS 9. NEXT EDA MEETING: Monday, January 9, 2012, at 6:30pm 10. ADJOURNMENT PROCEEDINGS OF THE MOUNDS VIEW EDA 1 CITY OF MOUNDS VIEW 2 RAMSEY COUNTY, MINNESOTA 3 4 Regular Meeting 5 November 14, 2011 6 Mounds View City Hall 7 2401 Highway 10, Mounds View, MN 55112 8 6:29 P.M. 9 10 11 1. CALL MEETING TO ORDER 12 13 2. ROLL CALL: President Flaherty, Vice President Stigney, Commissioner Hull, 14 Commissioner Mueller, Commissioner Gunn, and Executive Director Ericson. 15 16 NOT PRESENT: None. 17 18 3. APPROVAL OF AGENDA 19 20 MOTION/SECOND: Mueller/Hull. To Approve the November 14, 2011, Agenda as presented. 21 22 Ayes – 5 Nays – 0 Motion carried. 23 24 4. PUBLIC INPUT 25 26 None. 27 28 5. APPROVAL OF MINUTES 29 30 A. January 10, 2011, EDA Minutes. 31 32 MOTION/SECOND: Gunn/Hull. To Approve the January 10, 2011, Minutes as presented. 33 34 Ayes – 5 Nays – 0 Motion carried. 35 36 6. CONSENT AGENDA 37 38 None. 39 40 7. EDA BUSINESS 41 42 A. Resolution 11-EDA-267, Appointing Members to the Economic Development 43 Commission (EDC). 44 45 Mounds View EDA November 14, 2011 Regular Meeting Page 2 Assistant City Administrator Crane noted two seats on the EDC would be expiring on December 46 31st. Dr. Gregory Belting held a business seat and James Paron held the seat of a resident. Staff 47 requested applications from those interested in holding the position and received applications 48 from Dr. Belting and Mr. Paron. Staff recommended the EDA appoint these members to the 49 EDC with the terms expiring December 31, 2013. 50 51 Commissioner Mueller indicated both Dr. Belting and James Paron had reapplied for the 52 positions. Assistant City Administrator Crane stated this was the case, and no other applications 53 were received from the public. 54 55 Vice President Stigney questioned how the criteria within City Code was evaluated with each 56 application. Assistant City Administrator Crane stated Staff only received the two applications 57 and indicated it was the EDA’s responsibility to review the applicants prior to appointment. 58 59 President Flaherty stated the City Code language could be reviewed further in the future. 60 61 MOTION/SECOND: Mueller/Hull. To Approve the Resolution 11-EDA-267 Appointing 62 Members to the Economic Development Commission (EDC). 63 64 Ayes – 5 Nays – 0 Motion carried. 65 66 8. REPORTS 67 68 Economic Development Specialist Steinmetz provided an update on an indoor trampoline park 69 that would be coming to the City of Mounds View. The park would be called Zero Gravity and 70 open in December. 71 72 Economic Development Specialist Steinmetz explained another new business to the City, El 73 Loro Mexican Restaurant, would be locating in the former Totino’s building. The business 74 owner hoped to open yet this week. A ribbon cutting ceremony would be planned in the near 75 future. She encouraged the members to keep an eye open for this new entity. 76 77 Economic Development Specialist Steinmetz stated the vacant office building in the parking lot 78 of the Wynnsong Theater was being renovated. She indicated the space was now wide open with 79 10,000 square feet of space available. The property owner was looking to sell the space. 80 81 President Flaherty requested an update on the PAK Building. Economic Development Specialist 82 Steinmetz noted a sign was posted on the property indicating the site was for sale or for lease. 83 This information was also available on the City’s website. She indicated the legal issues on the 84 property were not completely settled, but the parties were working to resolve the matters. 85 86 President Flaherty requested the property owner paint the exterior of the building to increase the 87 Mounds View EDA November 14, 2011 Regular Meeting Page 3 curb appeal while the property was for sale. Economic Development Specialist Steinmetz stated 88 she would contact the owner. 89 90 Commissioner Gunn stated there has been activity around this building with lights on and taking 91 pictures. Economic Development Specialist Steinmetz stated there have been showings and staff 92 receives a large number of inquiries on this building. 93 94 Commissioner Mueller asked for the zoning of the Pack Building. Economic Development 95 Specialist Steinmetz indicated it zoned for Highway Business. 96 97 Commissioner Mueller asked if the estimated traffic flow along the Highway 10 corridor was 98 still 10,000 vehicles twice per day. Economic Development Specialist Steinmetz indicated these 99 were 2007 numbers. In the spring of 2012, MnDOT would be coming out with an updated traffic 100 count. This information would be posted on the City’s website once available. 101 102 9. NEXT EDA MEETING: Monday, November 28, 2011, at 6:30 p.m. 103 104 10. ADJOURNMENT 105 106 President Flaherty adjourned the meeting at 6:44 p.m. 107 108 Respectfully submitted, 109 110 Recorded and transcribed by: 111 Heidi Guenther 112 TimeSaver Off Site Secretarial, Inc. 113 Item No. 7A Meeting Date: December 12, 2011 Type of Business: EDA Administrator Review: _____ City of Mounds View Staff Report To: Mounds View Economic Development Authority From: Heidi Steinmetz, Economic Development Specialist Item Title/Subject: Consider Amendments to Mounds View Business Toolbox Background: The Mounds View Business Toolbox is a list of financial and technical resources available to existing and prospective Mounds View businesses. It is not a policy document. Former Economic Development Specialist Backman and the EDA created the Toolbox over a series of EDA meetings in 2007. The EDA approved the document in March 2008 via Resolution 11-EDA-244. Discussion: Some of the resources listed in the Toolbox are outdated. On November 18, 2011, the EDC suggested updates to the Chamber and SBA sections. Staff has provided additional updates, such as additional Web addresses, program name changes and contact information changes. A copy showing all of the amendments is attached in addition to a “clean” copy of the Toolbox. Recommendation: Staff recommends that the EDA review and approve the attached Mounds View Business Toolbox dated December 12, 2011. Respectfully submitted, ____________________________ Heidi Steinmetz Economic Development Specialist Attachments:  Mounds View Business Toolbox - December 12, 2011 (amendments noted)  Mounds View Business Toolbox - December 12, 2011 (clean copy) Business Toolbox Adopted by the Mounds View EDA on March 10, 2008 Amended on December 12, 2011 Economic Development Authority (EDA) March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 2 of 10 Appendices Appendix A Business Subsidy Policy Appendix B Business Improvement Partnership Loan Program Appendix C Tax Rebate Financing (TRF) Policy Appendix D Tax Increment Financing (TIF) Policy Business Toolbox Table of Contents Site Location Assistance Page 3 Development Review Services Page 3 Business Development Programs Pages 3-5 Workforce Development Programs Pages 5-6 Business Finance Loans & Grants Pages 6-10 March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 3 of 10 Business Toolbox Overview The Mounds View Business Toolbox is an internal document to the City of Mounds View Community Development Department. The Toolbox is intended to serve as a summary document listing the financial and technical resources available to existing and prospective Mounds View businesses. Any financial assistance available by the City of Mounds View is at the discretion of the Mounds View Economic Development Authority (EDA) and must coincide with the EDA’s priorities and objectives. A. Site Location Assistance The City of Mounds View maintains information on development opportunities within the community. These include vacant parcels, available building spaces, and redevelopment properties. Comprehensive plan, zoning, street, water, sewer, utility, and other maps are available for businesses, developers, realtors, engineering and architectural firms. B. Development Review Services Businesses considering Mounds View as an expansion or relocation are encouraged to contact staff at the Mounds View City Hall for various services, including construction and building services, licenses, and zoning reviews. The Community Development staff evaluates developer proposals and reviews project plans that are presented by businesses and/or architectural/engineering firms. As such, staff does consider setbacks, permits, and rezoning that may facilitate projects. C. Business Development Programs The City of Mounds View collaborates with several other entities that provide services to our local businesses. These include the Twin Cities North Chamber of Commerce (located in Mounds View) and programs offered through the State of Minnesota’s Department of Employment and Economic Development (DEED), such as DEED’s Small Business Development Center and DEED’s Business Services. 1) Twin Cities North Chamber of Commerce – www.twincitiesnorth.org The Twin Cities North Chamber serves the cities of Columbia Heights, Fridley, Blaine, New Brighton, Shoreview, Arden Hills, Mounds View, Roseville and Spring Lake Park. The Chamber’s mission is to advocate for business interests, to provide targeted networking opportunities, to encourage economic development and to build strong community partnerships. In addition to several annual events, the Chamber hosts these monthly business education and networking events, including the Mounds View Business Council. The Business Council meets the second Wednesday of each month at 7:30am March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 4 of 10 the Mounds View Community Center. For details on Chamber events, please call the Chamber at 763-571-9781. A. Breakfast Club This activity occurs twice monthly and is held at the Mounds View Community Center. The Chamber hosts a formal morning breakfast networking event attended by area member businesses. The event attracts traditionally 30 participants interested in marketing their organization and exchanging best practice ideas. The group meets the second and forth Thursday at 7:30 a.m. The cost is $5 per person. B. Business Smartz The Chamber provides a practical business education forum in its guaranteed Business Smartz Seminar series. The Business Smartz program takes place the first Tuesday of the month, traditionally in the morning. This hour and a half long seminar is focused on educational topics that are practical and beneficial to business owners and key management in small to mid-sized organizations. Topics vary. The cost per event is $15. C. Evening Exchange Evening Exchange is a monthly afternoon networking event-taking place at an area business. Evening Exchange is designed to create a relaxed networking environment where business professionals from all company sizes can discuss partnership opportunities and exchange ideas. The event generally occurs the second Wednesday of the month. Location varies. No cost except for beverages. D. Monthly Educational Luncheon The TCN Chamber hosts a monthly networking and educational luncheon. The event includes an average of 50 participants and is intended to connect with both new area businesses as well as those with deep roots in the community. A featured presenter discusses issues pertinent to members in the northern Twin Cities suburbs. Location varies. Cost is $16 per person. E. north yp network As an offering geared toward early stage business professionals, the north yp network serves as the Chamber’s young professionals networking and education group (ages from 21 to 35+/-). The north yp network holds events twice a month: one social/networking; one educational. The group self directs its agenda and is run by an active committee. Location and cost varies. 2) DEED Small Business Development Center − www.positivelyminnesota.com DEED’s Small Business Development Center (SBDC) offers individual advice and guidance concerning the formation, management, financing and operation of businesses. Counseling is provided at no charge to qualified businesses, although there may be a fee for certain out-of-pocket costs incurred by the SBDC. To qualify for counseling, the business must be “small” as defined by the U.S. Small Business Administration. Individuals who are considering starting a business are also eligible for counseling. How does the program work? The client must sign a “Request for Counseling” form and must agree to participate in surveys designed to measure the effectiveness of the SBDC program. To maximize the value of the counseling, clients should prepare a draft business plan before meeting with the counselor. SBDC counselors have March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 5 of 10 significant experience in the private sector, and many have extensive management and financial consulting backgrounds. To learn more about the services, Mounds View businesses can contact the local SBDC office located in at the University of St. Thomas (Minneapolis campus) You can contact Michael Ryan at 651-962-4500. 3) DEED Business Services − www.positivelyminnesota.com DEED’s Business Services staff (Business Services Specialists) serve the businesses community in Ramsey County, and around the state, with business development and workforce-related services. Services include helping startup and expanding businesses, coordinating specialized business development products and services to employers, brownfield redevelopment assistance and labor market information. Local businesses can contact Cheryl Beaumier, Business Services at 651-779-5645. Mounds View local businesses should contact the Business Services Specialist in the Ramsey County North St. Paul office at 651-779-5666. D. Workforce Development Programs − www.positivelyminnesota.com DEED’s Minnesota WorkForce Centers provide the tools, resources and services needed for a job search, career planning and training needs. WorkForce Centers are a collaboration of partners. People seeking work, businesses seeking employees, students and those looking for a first job or returning to the workforce will find services to meet their needs. Most of these services are offered at no cost. Each WorkForce Center houses a Resource Area that operates similar to a library. The Ramsey County WorkForce Center that services businesses in Mounds View is located at 2098 11th Avenue East in North St. Paul. The Center provides a variety of services to employers to meet their employee recruitment and retention needs. Some services provided include training seminars, training grants, job fairs and wage subsidies to name a few. Businesses may contact Cheryl Beaumier, the Minnesota Department of Employment & Economic Development at 651-779-5645. Businesses can visit the Department’s website at www.deed.state.mn.us. Some of the workforce programs available to employers include: 1) Minnesota’s Job Bank MinnesotaWorks.net − www.minnesotaworks.net The Minnesota Department of Employment and Economic Development (DEED is responsible for administering various state and federal programs that provide workforce development services. Minnesota’s Job Bank MinnesotaWorks.net is DEED’s Internet-based self-service system where member employers and job seekers can find each other. Employer members can post job openings to be searched by job seekers. Employer members can also search for job candidates and contact them by email. Job seeker members can post a resume to be searched by employers. Members can also search for job openings, contact employers by email and apply online. March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 6 of 10 2) Work Opportunity Tax Credit (WOTC) − www.positivelyminnesota.com/wotc The WOTC allows employers to take a federal income tax credit when they hire persons from certain targeted groups. The tax credit allows employers to reduce their federal tax liability by up to $9,000 per new hire. For most groups, the maximum credit is 40% of the first $6,000 in qualified wages for a savings of $2,400. To contact Minnesota WOTC, call 651-259-7507 or email deed.wotc@state.mn.us. 3) Customized Training Programs – www.macce.net The Metro Consortium for Customized Training Metro Alliance for Customized & Continuing Education (MACCE) is an association of the Customized Training divisions of the 10 metropolitan area community and technical colleges and Metropolitan State University. It facilitates customized training for Minnesota employers using the expertise and resources of the 10 institutions. For example, Anoka-Ramsey Community College has collaborated with the Consortium Alliance and customized training programs for various occupations pertaining to the medical device industry. To contact MACCE, call 651-747-4096. 4) Minnesota Vocational Rehabilitation Services (VR) Program This program, offered by DEED, helps Minnesotans with significant disabilities get ready for, find and keep their chosen jobs and careers. To contact Vocational Rehabilitation Services, please call 1-800-328-9095 or email VRS.CustomerService@state.mn.us. E. Business Finance Loans & Grants For existing businesses desiring to expand and for businesses new to the City there are federal, state and local financial assistance programs. All local financial assistance is at the discretion of the Mounds View EDA and is governed by the City’s overarching Business Subsidy Policy, which is attached as Appendix A. 1) U.S. Small Business Administration (SBA) Loans – www.sba.gov The U.S. SBA provides a wide array of programs to help small businesses, including financial and federal contract procurement assistance, management assistance and specialized outreach to women, minorities and veterans. SBA 504 Loan Program This program provides long-term, fixed-rate financing to assist small businesses expand by acquiring land, buildings, machinery and equipment. The loans are administered by Certified Development Companies, such as SPEDCO (www.spedco.com) located in Arden Hills, in conjunction with commercial lending institutions. SPEDCO can handle SBA loan financing for businesses wishing to expand or locate in Mounds View. SPEDCO is the liaison with the SBA, helping lenders and borrowers through the paperwork and approval process. They structure the project, prepare loan documentation and monitor the whole project through closing. They also service all aspects of the SBA 504 loan for the entire term of the loan. SPEDCO works with the SBA to provide up to 40% of the total March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 7 of 10 project cost. The participating lender normally finances at least 50% of the cost. The borrower typically puts down as little as 10% of the total project cost. For more information, call SPEDCO at 651-631-4900. SBA 7(a) Loan Program The 7(a) program includes financial help for businesses with special requirements. For example, funds are available for loans to businesses that handle exports to foreign countries, businesses that operate in rural areas and for other very specific purposes. SPEDCO offers loan packaging consulting services to banks and their customers for the 7(a) program. The SBA 504 Loan program provides fixed-rate, long-term financing for land, buildings and manufacturing equipment or machinery. SBA 504 Loans feature a 10 to 20 amortization, fixed-loan payments, below market interest rates, and a low downpayment. The deal structure is 50% bank loan (1st position), 40% SBA 504 (2nd position), and 10% equity injection. (A new business and a special purposed building require 20% equity injection.) The program’s minimum and maximum loan amounts are $50,000 and $750,000 respectively. How does the program work? Businesses should contact the certified development company authorized by SBA to originate and service SBA 504 loans in their geographic area. SPEDCO is a non-profit certified development company located in New Brighton whose mission is to help small businesses obtain financing for job creation, to fund business expansion and to promote economic development in Minnesota. SPEDCO can handle SBA Loan financing for businesses wishing to expand or locate in Mounds View. They provide long-term, fixed rate loans through the SBA 504 Loan program and also provide 7(a) loan packaging consulting services to banks and their customers. For more information call 651-631-4900. 2) State of Minnesota Business Financing Programs The Department of Employment and Economic Development encourages the creation of high quality jobs through business growth, expansion and retention. Business Development Services help companies expand or relocate in Minnesota, find and train employees, promote international trade and finance business expansions. The most likely funding program applicable to Mounds View businesses would be the Minnesota Investment Fund (MIF). It’s designed for businesses acquiring “fixed assets” (such as equipment, buildings, and land) and adding new employees as a result. This program provides companies below-market financing. Virtually all types of businesses are eligible, except retail. The maximum award is $500,000. The applicant is the city. Terms are negotiated. 3) Ramsey County Business Loan Program The Ramsey County Business Loan Program provides gap financing that can be used in conjunction with other private and public funds. March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 8 of 10 Who can apply? In general, loans are restricted to commercial, industrial, or service oriented businesses located in or moving to Ramsey County. In addition, businesses must be registered to do business in the State of Minnesota and demonstrate a need for public financing. How does the program work? Loans are typically made for the purchase of capital equipment, land and building acquisition, and building rehabilitation or new construction. Application fees are low, and rates and terms are more flexible than the market. Loans of up to $250,000 are provided. To request an application, or to obtain more information, you can contact Denise Beigbeder at the Ramsey County Community and Economic Development office at 651-266-8005. 4) Bonds used for Development Per State law, cities can issue bonds. These debt instruments can be taxable or tax-exempt. Not all bonds are general obligation. Pure revenue bonds are also common, especially for development. Bonds can be used to pay project costs and for the first two or three years of interest payments. This reduces the need for short-term revenue. There are several types of bonds the City could consider for development projects: a) Revenue Bonds – These are used to finance industrial, commercial and medical facilities, multifamily rental housing, nursing homes and some nonprofit activities. b) Industrial Revenue Bonds – These allow cities to issue tax-exempt bonds to finance fixed assets. In the typical transaction, the city issues the bonds and becomes the legal owner of the asset (e.g. building). The City then leases back or sells the asset to the company. The firm’s repayment coincides with bond payback. c) Essential Function Bonds − Certain types of economic development are considered by the state to be “essential functions” of a city. Sometimes called “housing revenue bonds”, these bonds are not general obligation bonds backed by the full faith and credit of the City. Revenues generated by the project pay the bond and can be used for a variety of housing options (market and nonmarket rate). d) Common Bond Revenue Bonds − State and local governments may issue tax-exempt or taxable revenue bonds on behalf of private borrowers to provide lower interest rates on long-term financing. In general, manufacturing, medical facility, nonprofit or nursing home projects are eligible for tax-exempt revenue bonds and those issued for commercial projects are taxable. Bonds issued through the Common Bond Fund are investment-grade instruments with a rating based on the security provided by the fund. e) Bank Qualified Bank Direct Tax-Exempt Loans − These are cost- effective tax-exempt financing for capital projects for small manufacturing companies and nonprofit organizations. March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 9 of 10 5) Business Improvement Partnership Loan Program Purpose: The City’s Economic Development Authority has a vested interest in helping Mounds View businesses thrive and prosper while improving the aesthetics of the commercial, industrial and retail sectors of the community. Accordingly, the Mounds View Business Improvement Partnership Loan Program has been established to partner with local businesses by providing 2% interest loans for exterior and interior building improvements. Details regarding this program are attached as Appendix B. Who can apply? Any business owner who has operated a facility or property located in Mounds View for a minimum of two years. How does the program work? The City’s Economic Development Authority, in partnership with local banks, will provide improvement loans to existing Mounds View businesses at a minimum of $10,000 and a maximum of $50,000. The City participates by providing only half of the loan amount at a 2% interest rate. 6) Tax Rebate Financing (TRF) The City of Mounds View has adopted the attached policy (see Appendix C) pertaining to Tax Rebate Financing (also known as Tax Abatement). An abatement is a property tax repayment rather than an exemption from paying property taxes. It is a method to finance up-front costs and provide additional equity to a development or to finance a public improvement. For eligible redevelopment and development projects, all or a portion of City real estate taxes can be rebated for up to 15 or 20 years. Ramsey County and the Mounds View School District can also rebate all or a portion of their share of real estate taxes. If all three taxing jurisdictions participate, taxes may be rebated up to 20 years. Purpose: The fundamental purpose of Tax Rebate Financing in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. Who can apply? Any developer or business owner with a facility or property located in Mounds View, or any developer or business owner intending to construct a facility in Mounds View. How does the program work? The developer or business owner completes a Tax Rebate Financing (TRF) application and submits the application and the required $1,000 application fee to the City’s Community Development Department. Economic Development staff reviews and analyzes the information and presents it to the City’s Economic Development Authority. The maximum applicants may abate is $200,000 per year or up to 10% of the City’s levy. There is no minimum abatement or rebate. March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 10 of 10 7) Tax Increment Financing (TIF) The City of Mounds View has adopted the attached policy (see Appendix D) pertaining to Tax Increment Financing (TIF). TIF is considered the premier tool for economic development in Minnesota. Since 1986 the biggest single development program in the City of Mounds View’s Toolbox has been the use of Tax Increment Financing (TIF). TIF, in brief, is the ability to capture and use all increased local property tax revenues from new development within a defined geographic area. TIF payments to developers can be used for eligible uses, such as land acquisition, demolition, utilities, parking, relocation, administration, etc. There are different types of TIF districts, including redevelopment, economic development, housing, and soils condition districts. Mounds View currently has four tax increment financing districts—three redevelopment districts and one economic development district. Purpose: It is the policy of the City of Mounds View to consider the judicious use of Tax Increment Financing (TIF) for those projects which demonstrate a public benefit by constructing public improvements in support of developments that will: create new jobs, retain existing employment, eliminate blight, strengthen the economic base of the City, increase property values and tax revenues, create economic stability, and/or expansion of business and housing options in the City. Who can apply? Any developer or business owner with a facility or property located in Mounds View, or any developer or business owner intending to construct a facility in Mounds View. How does the program work? The developer or business owner completes a Tax Increment Financing (TIF) application and submits the application and the required $5,000 application fee to the City’s Community Development Department. Economic Development staff reviews and analyzes the information and presents it to the City’s Economic Development Authority. The EDA gives preference to the use of “pay as you go” assistance to finance development or redevelopment projects. Business Toolbox Adopted by the Mounds View EDA on March 10, 2008 Amended on December 12, 2011 Economic Development Authority (EDA) December 12, 2011 Mounds View Business Toolbox Page 2 of 9 Appendices Appendix A Business Subsidy Policy Appendix B Business Improvement Partnership Loan Program Appendix C Tax Rebate Financing (TRF) Policy Appendix D Tax Increment Financing (TIF) Policy Business Toolbox Table of Contents Site Location Assistance Page 3 Development Review Services Page 3 Business Development Programs Pages 3-5 Workforce Development Programs Pages 5-6 Business Finance Loans & Grants Pages 6-10 December 12, 2011 Mounds View Business Toolbox Page 3 of 9 Business Toolbox Overview The Mounds View Business Toolbox is intended to serve as a summary document listing the financial and technical resources available to existing and prospective Mounds View businesses. Any financial assistance available by the City of Mounds View is at the discretion of the Mounds View Economic Development Authority (EDA) and must coincide with the EDA’s priorities and objectives. A. Site Location Assistance The City of Mounds View maintains information on development opportunities within the community. These include vacant parcels, available building spaces, and redevelopment properties. Comprehensive plan, zoning, street, water, sewer, utility, and other maps are available for businesses, developers, realtors, engineering and architectural firms. B. Development Review Services Businesses considering Mounds View as an expansion or relocation are encouraged to contact staff at the Mounds View City Hall for various services, including construction and building services, licenses, and zoning reviews. The Community Development staff evaluates developer proposals and reviews project plans that are presented by businesses and/or architectural/engineering firms. As such, staff does consider setbacks, permits, and rezoning that may facilitate projects. C. Business Development Programs The City of Mounds View collaborates with several other entities that provide services to our local businesses. These include the Twin Cities North Chamber of Commerce and programs offered through the State of Minnesota’s Department of Employment and Economic Development (DEED), such as DEED’s Small Business Development Center and DEED’s Business Services. 1) Twin Cities North Chamber of Commerce – www.twincitiesnorth.org The Twin Cities North Chamber serves the cities of Columbia Heights, Fridley, Blaine, New Brighton, Shoreview, Arden Hills, Mounds View, Roseville and Spring Lake Park. The Chamber’s mission is to advocate for business interests, to provide targeted networking opportunities, to encourage economic development and to build strong community partnerships. In addition to several annual events, the Chamber hosts monthly business education and networking events, including the Mounds View Business Council. The Business Council meets the second Wednesday of each month at 7:30am the Mounds View Community Center. For details on Chamber events, please call the Chamber at 763-571-9781. December 12, 2011 Mounds View Business Toolbox Page 4 of 9 2) DEED Small Business Development Center − www.positivelyminnesota.com DEED’s Small Business Development Center (SBDC) offers individual advice and guidance concerning the formation, management, financing and operation of businesses. Counseling is provided at no charge to qualified businesses, although there may be a fee for certain out-of-pocket costs incurred by the SBDC. To qualify for counseling, the business must be “small” as defined by the U.S. Small Business Administration. Individuals who are considering starting a business are also eligible for counseling. How does the program work? The client must sign a “Request for Counseling” form and must agree to participate in surveys designed to measure the effectiveness of the SBDC program. To maximize the value of the counseling, clients should prepare a draft business plan before meeting with the counselor. SBDC counselors have significant experience in the private sector, and many have extensive management and financial consulting backgrounds. To learn more about the services, Mounds View businesses can contact the local SBDC office located in at the University of St. Thomas (Minneapolis campus) at 651-962-4500. 3) DEED Business Services − www.positivelyminnesota.com DEED’s Business Services staff (Business Services Specialists) serve the businesses around the state, with business development and workforce-related services. Services include helping startup and expanding businesses, coordinating specialized business development products and services to employers, brownfield redevelopment assistance and labor market information. Mounds View businesses should contact the Business Services Specialist in the Ramsey County North St. Paul office at 651-779-5666. D. Workforce Development Programs − www.positivelyminnesota.com DEED’s Minnesota WorkForce Centers provide the tools, resources and services needed for a job search, career planning and training needs. WorkForce Centers are a collaboration of partners. People seeking work, businesses seeking employees, students and those looking for a first job or returning to the workforce will find services to meet their needs. Most of these services are offered at no cost. Each WorkForce Center houses a Resource Area that operates similar to a library. The Ramsey County WorkForce Center that services businesses in Mounds View is located at 2098 11th Avenue East in North St. Paul. The Center provides a variety of services to employers to meet their employee recruitment and retention needs. Some services provided include training seminars, training grants, job fairs and wage subsidies to name a few. Some of the workforce programs available to employers include: December 12, 2011 Mounds View Business Toolbox Page 5 of 9 1) MinnesotaWorks.net − www.minnesotaworks.net MinnesotaWorks.net is DEED’s Internet-based self-service system where member employers and job seekers can find each other. Employer members can post job openings to be searched by job seekers. Employer members can also search for job candidates and contact them by email. Job seeker members can post a resume to be searched by employers. Members can also search for job openings, contact employers by email and apply online. 2) Work Opportunity Tax Credit (WOTC) − www.positivelyminnesota.com/wotc The WOTC allows employers to take a federal income tax credit when they hire persons from certain targeted groups. The tax credit allows employers to reduce their federal tax liability by up to $9,000 per new hire. To contact Minnesota WOTC, call 651-259-7507 or email deed.wotc@state.mn.us. 3) Customized Training Programs – www.macce.net The Metro Alliance for Customized & Continuing Education (MACCE) is an association of the Customized Training divisions of the 10 metropolitan area community and technical colleges. It facilitates customized training for Minnesota employers using the expertise and resources of the 10 institutions. For example, Anoka-Ramsey Community College has collaborated with the Alliance and customized training programs for various occupations pertaining to the medical device industry. To contact MACCE, call 651-747-4096. 5) Vocational Rehabilitation Services This program, offered by DEED, helps Minnesotans with significant disabilities get ready for, find and keep their chosen jobs and careers. To contact Vocational Rehabilitation Services, please call 1-800-328-9095 or email VRS.CustomerService@state.mn.us. E. Business Finance Loans & Grants For existing businesses desiring to expand and for businesses new to the City there are federal, state and local financial assistance programs. All local financial assistance is at the discretion of the Mounds View EDA and is governed by the City’s overarching Business Subsidy Policy, which is attached as Appendix A. 1) U.S. Small Business Administration (SBA) Loans – www.sba.gov The U.S. SBA provides a wide array of programs to help small businesses, including financial and federal contract procurement assistance, management assistance and specialized outreach to women, minorities and veterans. SBA 504 Loan Program This program provides long-term, fixed-rate financing to assist small businesses expand by acquiring land, buildings, machinery and equipment. The loans are administered by Certified Development Companies, such as SPEDCO (www.spedco.com) located in Arden Hills, in conjunction with commercial lending December 12, 2011 Mounds View Business Toolbox Page 6 of 9 institutions. SPEDCO can handle SBA loan financing for businesses wishing to expand or locate in Mounds View. SPEDCO is the liaison with the SBA, helping lenders and borrowers through the paperwork and approval process. They structure the project, prepare loan documentation and monitor the whole project through closing. They also service all aspects of the SBA 504 loan for the entire term of the loan. SPEDCO works with the SBA to provide up to 40% of the total project cost. The participating lender normally finances at least 50% of the cost. The borrower typically puts down as little as 10% of the total project cost. For more information, call SPEDCO at 651-631-4900. SBA 7(a) Loan Program The 7(a) program includes financial help for businesses with special requirements. For example, funds are available for loans to businesses that handle exports to foreign countries, businesses that operate in rural areas and for other very specific purposes. SPEDCO offers loan packaging consulting services to banks and their customers for the 7(a) program. 2) State of Minnesota Business Financing Programs The Department of Employment and Economic Development encourages the creation of high quality jobs through business growth, expansion and retention. Business Development Services help companies expand or relocate in Minnesota, find and train employees, promote international trade and finance business expansions. The most likely funding program applicable to Mounds View businesses would be the Minnesota Investment Fund (MIF). It’s designed for businesses acquiring “fixed assets” (such as equipment, buildings, and land) and adding new employees as a result. This program provides companies below-market financing. Virtually all types of businesses are eligible, except retail. The maximum award is $500,000. The applicant is the city. Terms are negotiated. 3) Ramsey County Business Loan Program The Ramsey County Business Loan Program provides gap financing that can be used in conjunction with other private and public funds. Who can apply? In general, loans are restricted to commercial, industrial, or service oriented businesses located in or moving to Ramsey County. In addition, businesses must be registered to do business in the State of Minnesota and demonstrate a need for public financing. How does the program work? Loans are typically made for the purchase of capital equipment, land and building acquisition, and building rehabilitation or new construction. Application fees are low, and rates and terms are more flexible than the market. Loans of up to $250,000 are provided. To request an application, or to obtain more information, you can contact the Ramsey County Community and Economic Development office at 651-266-8005. December 12, 2011 Mounds View Business Toolbox Page 7 of 9 4) Bonds used for Development Per State law, cities can issue bonds. These debt instruments can be taxable or tax-exempt. Not all bonds are general obligation. Pure revenue bonds are also common, especially for development. Bonds can be used to pay project costs and for the first two or three years of interest payments. This reduces the need for short-term revenue. There are several types of bonds the City could consider for development projects: a) Revenue Bonds – These are used to finance industrial, commercial and medical facilities, multifamily rental housing, nursing homes and some nonprofit activities. b) Industrial Revenue Bonds – These allow cities to issue tax-exempt bonds to finance fixed assets. In the typical transaction, the city issues the bonds and becomes the legal owner of the asset (e.g. building). The City then leases back or sells the asset to the company. The firm’s repayment coincides with bond payback. c) Essential Function Bonds − Certain types of economic development are considered by the state to be “essential functions” of a city. Sometimes called “housing revenue bonds”, these bonds are not general obligation bonds backed by the full faith and credit of the City. Revenues generated by the project pay the bond and can be used for a variety of housing options (market and nonmarket rate). d) Common Bond Revenue Bonds − State and local governments may issue tax-exempt or taxable revenue bonds on behalf of private borrowers to provide lower interest rates on long-term financing. In general, manufacturing, medical facility, nonprofit or nursing home projects are eligible for tax-exempt revenue bonds and those issued for commercial projects are taxable. Bonds issued through the Common Bond Fund are investment-grade instruments with a rating based on the security provided by the fund. e) Bank Qualified Bank Direct Tax-Exempt Loans − These are cost- effective tax-exempt financing for capital projects for small manufacturing companies and nonprofit organizations. 5) Business Improvement Partnership Loan Program Purpose: The City’s Economic Development Authority has a vested interest in helping Mounds View businesses thrive and prosper while improving the aesthetics of the commercial, industrial and retail sectors of the community. Accordingly, the Mounds View Business Improvement Partnership Loan Program has been established to partner with local businesses by providing 2% interest loans for exterior and interior building improvements. Details regarding this program are attached as Appendix B. Who can apply? Any business owner who has operated a facility or property located in Mounds View for a minimum of two years. December 12, 2011 Mounds View Business Toolbox Page 8 of 9 How does the program work? The City’s Economic Development Authority, in partnership with local banks, will provide improvement loans to existing Mounds View businesses at a minimum of $10,000 and a maximum of $50,000. The City participates by providing only half of the loan amount at a 2% interest rate. 6) Tax Rebate Financing (TRF) The City of Mounds View has adopted the attached policy (see Appendix C) pertaining to Tax Rebate Financing (also known as Tax Abatement). An abatement is a property tax repayment rather than an exemption from paying property taxes. It is a method to finance up-front costs and provide additional equity to a development or to finance a public improvement. For eligible redevelopment and development projects, all or a portion of City real estate taxes can be rebated for up to 15 or 20 years. Ramsey County and the Mounds View School District can also rebate all or a portion of their share of real estate taxes. If all three taxing jurisdictions participate, taxes may be rebated up to 20 years. Purpose: The fundamental purpose of Tax Rebate Financing in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. Who can apply? Any developer or business owner with a facility or property located in Mounds View, or any developer or business owner intending to construct a facility in Mounds View. How does the program work? The developer or business owner completes a Tax Rebate Financing (TRF) application and submits the application and the required $1,000 application fee to the City’s Community Development Department. Economic Development staff reviews and analyzes the information and presents it to the City’s Economic Development Authority. The maximum applicants may abate is $200,000 per year or up to 10% of the City’s levy. There is no minimum abatement or rebate. 7) Tax Increment Financing (TIF) The City of Mounds View has adopted the attached policy (see Appendix D) pertaining to Tax Increment Financing (TIF). TIF is considered the premier tool for economic development in Minnesota. Since 1986 the biggest single development program in the City of Mounds View’s Toolbox has been the use of Tax Increment Financing (TIF). TIF, in brief, is the ability to capture and use all increased local property tax revenues from new development within a defined geographic area. TIF payments to developers can be used for eligible uses, such as land acquisition, demolition, utilities, parking, relocation, administration, etc. There are different types of TIF districts, including redevelopment, economic development, housing, and soils condition districts. Mounds View currently has four tax increment financing districts—three redevelopment districts and one economic development district. December 12, 2011 Mounds View Business Toolbox Page 9 of 9 Purpose: It is the policy of the City of Mounds View to consider the judicious use of Tax Increment Financing (TIF) for those projects which demonstrate a public benefit by constructing public improvements in support of developments that will: create new jobs, retain existing employment, eliminate blight, strengthen the economic base of the City, increase property values and tax revenues, create economic stability, and/or expansion of business and housing options in the City. Who can apply? Any developer or business owner with a facility or property located in Mounds View, or any developer or business owner intending to construct a facility in Mounds View. How does the program work? The developer or business owner completes a Tax Increment Financing (TIF) application and submits the application and the required $5,000 application fee to the City’s Community Development Department. Economic Development staff reviews and analyzes the information and presents it to the City’s Economic Development Authority. The EDA gives preference to the use of “pay as you go” assistance to finance development or redevelopment projects. Item No: 7B Meeting Date: December 12, 2011 Type of Business: EDA Administrator Review: ____ City of Mounds View Staff Report To: Economic Development Authority From: Heidi Steinmetz, Economic Development Specialist Item Title/Subject: Consider Amending the Mounds View Home Improvement Loan Program Loan-to-Value Criteria and Extending the Program Through 2012 Background On November 22, 2010, the EDA approved the Mounds View Home Improvement Loan Program, which consists of the following four loan programs available to Mounds View residents: Loan Name Amount Interest Payment Type 1. Home Demolition Loan Up to $10,000 3% Fixed 2. Code Enforcement Home Loan Up to $7,000 0% Fixed 3. General Home Repair Loan Up to $10,000 3% Fixed 4. Emergency Deferred Home Loan Up to $7,000 0% Deferred The EDA approved the program as a one-year pilot program. Discussion City Administrator Jim Ericson recently met with the Greater Metropolitan Housing Corporation (GMHC) staff to discuss the status of the program. GMHC staff administers the program for the Mounds View EDA. To date, one $6,260 General Home Repair Loan was provided by the program for a bathroom remodel. There were several applicants that did not qualify for the program due to the EDA’s loan-to-value criteria of 90% for the General Home Repair Loan and the 100% loan-to-value criteria for the Code Enforcement and Emergency Loans. Prior to the EDA’s approval of the program, staff suggested a loan-to-value criteria of 110%. This is because loan applicants may not have 10% or more equity in their homes. When home values decline, so do equity levels. The lack of home equity has much to do with decreasing home values. The chart below shows loan-to-value ratios for other city loan programs: Source: GMHC City Loan Program Loan-to-Value Criteria Columbia Heights 100% Minneapolis 100−120% Roseville 115% St. Anthony 100% St. Paul 110% Shoreview no loan to value Woodbury 90% 12-12-2011 EDA Meeting Item 7B – Home Improvement Loan Program Page 2 of 2 By increasing the EDA’s loan-to-value criteria to 110%, more Mounds View residents will qualify for loans. Changing the loan-to-value criteria does not change whether loan applicants are able to pay back their loans, which is why staff is not suggesting a change to the debt-to-income criteria of 50%. Recommendation Staff recommends that the EDA amend the Home Improvement Loan Program’s loan-to- value criteria to 110% and that the EDA extend the Home Improvement Loan Program through 2012. Respectfully submitted, ____________________________ Heidi Steinmetz, Economic Development Specialist Attachment: Mounds View Home Improvement Loan Program Criteria Economic Development Authority (EDA) Demolition Home Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide loans to demolish blighted single-family or duplex properties in Mounds View. Blight Qualification (for Demolition Loan Only) Once a loan application is received, Mounds View’s Code Enforcement/Housing Inspector will arrange, by appointment, an inspection of the interior of the home to establish blight qualification. In addition, the inspector will make a determination as to the potential presence of hazardous materials on the property and will obtain a statement from the interested participant about 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 owned the property and before the date of interested participant purchased property. If a property satisfies the blight conditions as outlined herein, demolition procedures can continue. If the blight test cannot be met, the city will notify the interested person in writing indicating the reasons why the property cannot be considered as blighted. Loan Amount Up to $10,000 secured by a note & mortgage Loan Security All loans will be secured by a mortgage in favor of the City. The loan may be secured in a subordinate lien position behind the borrower’s existing prime/A-rated fixed rate mortgage. Interest Rate The interest rate is fixed at 3%. The monthly payment is fixed. Loan Term The maximum loan term is 10 years, however, the loan shall become due upon sale, transfer of title or refinancing of the property, whichever occurs first. Eligible Properties Mounds View single-family or duplex properties that qualify as blighted. See the Blight Qualification standard below. Demolition Bids Applicants are encouraged to first consider the Spring Lake Park/Blaine/Mounds View Fire Department’s house burning/training program demolition option. If that option is not feasible, applicants must obtain three demolition bids. The demolition contractor will be required to obtain all necessary City permits, pay applicable fees and provide for appropriate handling and abatement of any hazardous materials encountered. All contractors must be licensed and insured. Demolition Home Loan Page 2 of 3 Application & Loan Disbursement Process The Housing Resource Center’s (HRC) North & East Metro office is the program administrator. Please call the HRC’s construction and loan consultants at 651-486- 7401 to answer any questions about Mounds View’s loan program and/or your project. GMHC Housing Resource Center − North & East Metro 1170 Lepak Court Shoreview, MN 55126 Phone: 651-486-7401 Fax: 651-486-7424 DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. Application Process: Completed applications will be processed by the HRC’s North & East Metro office on a first-come, first-served basis, as funds are available until all program funds are committed. After loan approval you will be notified to come to the HRC for a loan closing to sign a Note and Mortgage. Rehabilitation Consulting: HRC consultants will be available to advise borrowers about proposed projects and conduct an optional initial home inspection. HRC will review bid(s) for reasonableness. Loan Costs: A credit report fee paid by applicant at time of application; mortgage registration tax and filing fee and title policy paid by borrower at closing. The title policy may be financed through the loan. Contractors & Permits: Contractors must be properly licensed by the state of Minnesota when required. Permits must be obtained when required by city code. Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. Borrower’s contribution to project cost must be paid prior to release of loan funds. HRC can direct borrowers to additional financing sources. Work Completion: Weather permitting, work must be completed within 120 days of loan closing. Demolition Home Loan Page 3 of 3 Disbursement Process: Loan funds will remain in escrow at GMHC until payment for completed work. The following items must be received before the funds can be released: 1. Final Invoice from each contractor showing all amounts paid and due. 2. Lien Waiver. Original from each contractor. 4. Completion Certificate signed by each contractor and the borrower. 5. Permits Closed. Have the inspector sign the permit card, or have the inspector leave a message at the HRC at 651-486-7401. 6. Final Inspection and approval by the HRC. It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors must be countersigned by the borrower. Lien waivers must be provided before the funds will be released. Economic Development Authority (EDA) General Home Repair Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide loans for general home repairs to owner-occupied single-family or duplex homes in Mounds View. Loan Amount From $1,000 to $10,000 Loan Security All loans will be secured by a mortgage in favor of the City. The loan may be secured in a subordinate lien position behind the borrower’s existing prime/A-rated fixed rate mortgage. Interest Rate The interest rate is fixed at 3%. The monthly payment is fixed. Loan Term The maximum loan term is 10 years, however, the loan shall become due upon sale, transfer of title or refinancing of the property, whichever occurs first. Income Limit The applicant’s total gross annual household income shall not exceed 80% of the current year area median household income as defined by HUD per household size, as follows (FY 2011): Household Size Income Limit 1 $44,950 2 $51,400 3 $57,800 4 $64,200 5 $69,350 6 $74,500 7 $79,650 8 $84,750 Loan to Value The borrower’s combined mortgage debt including the Mounds View loan cannot exceed 90% of the property value based on the taxable market value as determined by Ramsey County for the current year. Applicants may also submit a third party appraisal that has been completed within the last 6 months. Such an appraisal is to be obtained by the applicant at their expense. Debt to Income 50% Eligible Properties Mounds View owner-occupied single-family & duplex properties General Home Repair Page 2 of 3 Application & Loan Disbursement Process The Housing Resource Center’s (HRC) North & East Metro office is the program administrator. Please call the HRC’s construction and loan consultants at 651-486- 7401 to answer any questions about Mounds View’s loan program and/or your project. GMHC Housing Resource Center North & East Metro 1170 Lepak Court Shoreview, MN 55126 Phone: 651-486-7401 Fax: 651-486-7424 DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. Eligible Repairs Exterior repairs:  Exterior painting  Siding repairs/replacement  Rafters, soffit and fascia repair  Energy efficient window glass and screens  Railings and stairs  Landings and porches Interior repairs:  Energy efficiency improvements (insulation and heating/cooling systems)  Accessibility improvements for people with disabilities  Failure of electrical, ventilation, or plumbing/septic system  Roof leaks that have led to significant damage to the interior  A structural failure of the foundation, walls, or roof that could cause collapse;  Removing lead paint or the cause of a confirmed concentration of lead in the resident’s whole blood (Environmental Intervention Blood Lead Level) Ineligible Improvements  Exterior repairs to condos and townhomes  New construction (additions)  Luxury items, such as swimming pools or saunas  Working capital, debt service or refinancing of existing debts Contractor Bids Applicants must provide the Housing Resource Center’s Construction Manager with three bids for each improvement project. All contractors must be licensed and insured. General Home Repair Page 3 of 3 Application Process: Completed applications will be processed by the HRC’s North & East Metro office on a first-come, first-served basis, as funds are available until all program funds are committed. After loan approval you will be notified to come to the HRC for a loan closing to sign a Note and Mortgage. Rehabilitation Consulting: HRC consultants will be available to advise borrowers about proposed projects and conduct an optional initial home inspection. HRC will review bid(s) for reasonableness. Loan Costs: A credit report fee paid by applicant at time of application; mortgage registration tax and filing fee and title policy paid by borrower at closing. The title policy may be financed through the loan. Contractors & Permits: Contractors must be properly licensed by the state of Minnesota when required. Permits must be obtained when required by city code. Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. Borrower’s contribution to project cost must be paid prior to release of loan funds. HRC can direct borrowers to additional financing sources. Work Completion: Weather permitting, work must be completed within 120 days of loan closing. Disbursement Process: Loan funds will remain in escrow at GMHC until payment for completed work. The following items must be received before the funds can be released: 1. Final Invoice from each contractor showing all amounts paid and due. 2. Lien Waiver. Original from each contractor. 4. Completion Certificate signed by each contractor and the borrower. 5. Permits Closed. Have the inspector sign the permit card, or have the inspector leave a message at the HRC at 651-486-7401. 6. Final Inspection and approval by the HRC. It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors must be countersigned by the borrower. Lien waivers must be provided before the funds will be released. Economic Development Authority (EDA) Code Enforcement Home Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide loans for owner-occupied single-family or duplex properties in Mounds View that have been required by the City of Mounds View to bring their properties into compliance with the City Code. Loan Amount From $1,000 to $7,000 Loan Security All loans will be secured by a mortgage in favor of the City. The loan may be secured in a subordinate lien position behind the borrower’s existing prime/A-rated fixed rate mortgage. Interest Rate The interest rate is 0%. The monthly payment is fixed. Loan Term The maximum loan term is 10 years, however the loan shall become due upon sale, transfer of title, refinancing of the property, whichever occurs first. Loan to Value The borrower’s combined mortgage debt including the Mounds View loan cannot exceed 100% of the property value based on the taxable market value as determined by Ramsey County for the current year. Applicants may also submit a third party appraisal that has been completed within the last 6 months. Such an appraisal is to be obtained by the applicant at their expense. Debt to Income 50% Income Limit The applicant’s total gross annual household income shall not exceed 80% of the current year area median household income as defined by HUD per household size, as follows (FY 2011): Household Size Income Limit 1 $44,950 2 $51,400 3 $57,800 4 $64,200 5 $69,350 6 $74,500 7 $79,650 8 $84,750 Eligible Properties Mounds View owner-occupied single-family or duplex properties Code Enforcement Page 2 of 3 Application & Loan Disbursement Process The Housing Resource Center’s (HRC) North & East Metro office is the program administrator. Please call the HRC’s construction and loan consultants at 651-486-7401 to answer any questions about Mounds View’s loan program and/or your project. GMHC Housing Resource Center − North & East Metro 1170 Lepak Court Shoreview, MN 55126 Phone: 651-486-7401 Fax: 651-486-7424 DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. Application Process: Completed applications will be processed by the HRC’s North & East Metro office on a first-come, first-served basis, as funds are available until all program funds are committed. After loan approval you will be notified to come to the HRC for a loan closing to sign a Note and Mortgage. Rehabilitation Consulting: HRC consultants will be available to advise borrowers about proposed projects and conduct an optional initial home inspection. HRC will review bid(s) for reasonableness. Eligible Repairs Exterior repairs required by Mounds View’s Code Enforcement Officer such as:  Exterior painting  Siding repairs/replacement  Rafters, soffit and fascia repair  Energy efficient window glass and screens  Railings and stairs  Landings and porches Interior repairs are allowed only if they are related to life safety of the residents and required by Mounds View’s Code Enforcement Officer. This may include a structural failure of the foundation, walls, or roof that could cause collapse. Ineligible Improvements  Exterior repairs to condos and townhomes  Any repairs to mobile homes  Driveways, sidewalks and paved areas  “Junk” or debris removal, removal of inoperable vehicles, etc. Contractor Bids Applicants must provide the Housing Resource Center’s Construction Manager with three bids for each improvement project. All contractors must be licensed and insured. Code Enforcement Page 3 of 3 Loan Costs: A credit report fee paid by applicant at time of application; mortgage registration tax and filing fee and title policy paid by borrower at closing. The title policy may be financed through the loan. Contractors & Permits: Contractors must be properly licensed by the state of Minnesota when required. Permits must be obtained when required by city code. Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. Borrower’s contribution to project cost must be paid prior to release of loan funds. HRC can direct borrowers to additional financing sources. Work Completion: Weather permitting, work must be completed within 120 days of loan closing. Disbursement Process: Loan funds will remain in escrow at GMHC until payment for completed work. The following items must be received before the funds can be released: 1. Final Invoice from each contractor showing all amounts paid and due. 2. Lien Waiver. Original from each contractor. 4. Completion Certificate signed by each contractor and the borrower. 5. Permits Closed. Have the inspector sign the permit card, or have the inspector leave a message at the HRC at 651-486-7401. 6. Final Inspection and approval by the HRC. It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors must be countersigned by the borrower. Lien waivers must be provided before the funds will be released. Economic Development Authority (EDA) Emergency Deferred Loan Criteria EDA Approved November 22, 2010 The purpose of this loan is to provide financial assistance to owner-occupied single-family, duplex and manufactured home properties that are in hardship financial circumstances, are unable to get money from other sources and have a serious health and safety home repair situation that poses a threat to residents if not addressed immediately. Loan Amount Up to $7,000 Loan Security All loans will be secured by a mortgage in favor of the City. The loan may be secured in a subordinate lien position behind other loans. This criteria does not apply to manufactured home owners. Interest Rate The interest rate will be 0% deferred. Loan Term The loan shall become due upon sale, transfer of title or refinancing of the property, whichever occurs first. Income Limit The applicant’s total gross annual household income shall not exceed 50% of the current year area median household income as defined by HUD per household size, as follows (FY 2011): Household Size Income Limit 1 $28,950 2 $33,100 3 $37,250 4 $41,350 5 $44,700 6 $48,000 7 $51,300 8 $54,600 Loan to Value The borrower’s combined mortgage debt including the Mounds View loan cannot exceed 100% of the property value based on the taxable market value as determined by Ramsey County for the current year. Applicants may also submit a third party appraisal that has been completed within the last 6 months. Such an appraisal is to be obtained by the applicant at their expense. Asset Limit The maximum gross assets of the borrower, excluding the residential property to be improved and a retirement account that is or was subject to penalty for early withdrawals before age 59 ½, shall not exceed $25,000. Emergency Deferred Page 2 of 3 Application & Loan Disbursement Process The Housing Resource Center’s (HRC) North & East Metro office is the program administrator. Please call the HRC’s construction and loan consultants at 651-486- 7401 to answer any questions about Mounds View’s loan program and/or your project. GMHC Housing Resource Center − North & East Metro 1170 Lepak Court Shoreview, MN 55126 Phone: 651-486-7401 Fax: 651-486-7424 DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. Application Process: Completed applications will be processed by the HRC’s North & East Metro office on a first-come, first-served basis, as funds are available until all program funds are committed. After loan approval you will be notified to come to the HRC for a loan closing to sign a Note and Mortgage. Rehabilitation Consulting: HRC consultants will be available to advise borrowers about proposed projects and conduct an optional initial home inspection. HRC will review bid(s) for reasonableness. Debt to Income 50% Eligible Properties Mounds View owner-occupied single-family, duplex or manufactured home properties Eligible Improvements  Failure of the heating, electrical, ventilation, or plumbing/septic system;  Roof leaks that have led to significant damage to the interior  A structural failure of the foundation, walls, or roof that could cause collapse;  Removing lead paint or the cause of a confirmed concentration of lead in the resident’s whole blood (Environmental Intervention Blood Lead Level)  Other emergency conditions that could cause the home to be or become uninhabitable will be considered by on a case-by-case basis Contractor Bid Applicants must provide the Housing Resource Center’s Construction Manager with one bid for each improvement project in an emergency situation if the construction manager deems the bid reasonable. All contractors must be licensed and insured. Emergency Deferred Page 3 of 3 Loan Costs: A credit report fee paid by applicant at time of application; mortgage registration tax and filing fee and title policy paid by borrower at closing. The title policy may be financed through the loan. Contractors & Permits: Contractors must be properly licensed by the state of Minnesota when required. Permits must be obtained when required by city code. Total Project Cost: It is the borrower’s responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. Borrower’s contribution to project cost must be paid prior to release of loan funds. HRC can direct borrowers to additional financing sources. Work Completion: Weather permitting, work must be completed within 120 days of loan closing. Disbursement Process: Loan funds will remain in escrow at GMHC until payment for completed work. The following items must be received before the funds can be released: 1. Final Invoice from each contractor showing all amounts paid and due. 2. Lien Waiver. Original from each contractor. 4. Completion Certificate signed by each contractor and the borrower. 5. Permits Closed. Have the inspector sign the permit card, or have the inspector leave a message at the HRC at 651-486-7401. 6. Final Inspection and approval by the HRC. It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors must be countersigned by the borrower. Lien waivers must be provided before the funds will be released.