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HomeMy WebLinkAbout06-25-1998 ECONOMIC DEVELOPMENT COMMISSION AGENDA JUNE 25, 1998 7:30 A.M. MOUNDS VIEW CITY HALL CONFERENCE ROOM C 7. I. CALL TO ORDER :35 A.M. 2. ROLL CALL (Present = P,Absent = A) Carlson Nelson Goff Stigney(EDA liaison) Field Whiting(Staff) Sjoberg Jopke(Staff) L/ Schmidt t/ Carroll(Staff) �e,U ) 3. APPROVE EDC MINUTES May 28, 1998 Mo9 gi.,it,( Action: Motion �' Second Vote 4. SPECIAL BUSINESS(none anticipated) 606,..raliv'S 5. EDC BUSINESS A. Discussion of Home Improvement Loan Subsidy Program Action: Motion ccr 0 Second / --161-1) Vote -- 0 Comments: (/` Iwt.4C18. Consideration of Business Impr•vement Partnership Loan Program rte( , /. Action: Motion / e'21/(: /' J �J Second ; J Vote — Comments: 6. Report of Commissioners,Staff and EDA Liaison 7. ADJOURN A.M. Next Meeting Jul tv1998 NaAATA\GAODPAECONDEAEDA-EDgEDCVDCAGEMAGEN0625.EDC Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting May 28, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Rosemary Goff, Tom Field, and Brian Sjoberg. Members absent: Dan Nelson. EDA Liaison present: Roger Stigney. Staff present: City Administrator Chuck Whiting, Community Development Director Rick Jopke, Housing Inspector Steve Dorgan, and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Field/Goff to approve the minutes from April 24, 1998. Motion Carried 5 Ayes 0 Nays 4. SPECIAL BUSINESS Chairperson Carlson introduced Mr. David Piggott, Executive Director of Metro East Development Partnership. Mr. Piggott distributed copies of his organization's Annual Report, outlined Metro East's ongoing programs and activities, and responded to questions from EDC members and city staff members. 5. EDC BUSINESS A,. Discussion of Home Improvement Loan Subsidy Program. Housing Inspector Dorgan reviewed highlights of the drafts of the program outlines for the market rate home improvement program and the MHFA home improvement loan program. With regard to the former, it was suggested that"Target Properties" be changed to "Eligible Properties" or "Eligible Properties/Owners". A question was posed regarding how the participating lender could verify or ensure compliance with Program Guideline #11 (loan proceeds must first be used to abate outstanding orders or code violations). Communication between the lender and the city would be needed to determine the existence of any such orders or violations. With respect to the MHFA program, it was suggested that Program Guideline N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 #3 be revised to indicate that MHFA will be solely responsible for servicing the loans, and that the paragraphs be renumbered due to the absence of a Paragraph #4, and that the word "dispersed" in Paragraph #8 be changed to "disbursed." Questions were asked and clarifications were provided regarding eligible improvements, particularly with regard to waterproofing of basements, drain tiling, room additions, and repair work related to sewer back-ups, other types of water damage, and storm damage. Under"Scope of Services", it was suggested that more specific information be provided regarding the city's responsibilities, i.e., monitoring the issuance of building permits and using city staff to verify that improvements (for which loan proceeds have been provided) are actually being made. It was also suggested that staff determine whether the loan documentation includes provisions obligating the borrowers to use the loan proceeds for the intended purpose(s). The consensus was that Housing Inspector Dorgan should continue to refine the two program outlines in accordance with the EDC's discussion, so that final drafts could be reviewed and approved at a future EDC meeting. B. Discussion of the Mermaid Project (Hotel/Conference Center) Community Development Director Jopke reviewed his 5-22-98 Memorandum to the EDA. The primary obstacle to the hotel project continues to be the projected cost of acquiring the land needed for the project, including relocation costs, and the related issue of the amount of city financial assistance requested by the project's proponents (which continues to be well in excess of the amount of assistance that the anticipated tax increment could support). City staff members will continue to work with the city's consultants, and others, to explore options and alternatives that might help to "narrow the gap." C. Update on Development Proposals Community Development Director Jopke reviewed recent developments with regard to the proposed Walgreen's proposal (dead, largely due to neighborhood opposition) and the movie theater project (which appears likely to proceed as planned if roadway access issues can be successfully resolved). D. Consideration of EDC Vacancy Staff will continue to receive and review applications for the opening created by Steve Larson's resignation. EDC members were encouraged to notify staff of potential candidates and/or to encourage those candidates to submit applications. E. Consideration of Business Improvement Partnership Loan Program Discussion of this agenda item was deferred to the next meeting due to lack of time. 6. REPORTS FROM CHAIR, COMMISSIONERS, AND STAFF: None other than as noted above. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at ap.roximately 9:10 a.m. Res,: dully Sub itted, // / I - i arroll onomic De lopment Coordinate r • N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 1 To: Economic Development Commission Members From: Steve Dorgan, Housing Inspector H{NORAIiDUM Subject: Interest Subsidy Home Improvement Loan Program 5141- Date: June 25, 1998 BACKGROUND At the EDC meeting in May, the commission directed staff to prepare a final draft of guidelines for the proposed Interest Subsidy Home Improvement Loan Program. Attached are interest subsidy program guidelines for both Market Rate Home Improvement Loans and MHFA Home Improvement Loans. Since the last meeting, the city received notification from the Minnesota Housing Finance Agency that the city's application for participation in the Community Fix-up Fund was approved. Participation in this program will allow more homeowners within the city to access low interest rate home improvement loans. RECOMMENDATION Approve Resolution 98-EDC-25 recommending the Economic Development Authority consider the approval of a city sponsored Interest Subsidy Home Improvement Loan program approving the proposed"Loan Guidelines"and by allocating $75,000 in tax increment funds for the program. Steve Dorgan, Hou Inspector 717-4023 Attachments: Exhibit A- Market Rate Interest Subsidy Program Outline Exhibit B - MHFA Interest Subsidy Program Outline Exhibit C -Resolution No. 98-EDC-25 NADATA\GROUPSWOMDE1AHOUSING\HOMELOAMEDC6 25.98 Exhibit A City of Mounds View Interest Subsidy Program Terms for Market Rate Home Improvement Loans PROGRAM OVERVIEW The Mounds View Economic Development Authority (EDA) is making available $35,000 in Tax Increment Financing (TIF) funds that will provide a 3% annual interest rate subsidy for new market rate home improvement loans which meet the program's criteria. The loans originated under this program will be for a term of up to 10 years. The maximum city subsidy for all loans and associated administrative costs issued in the first two years is $20,000. Aggregate subsidies for future years will decline each year as loan balances decrease. Aggregate subsidies will be paid by the city over the life of the loan. The loans will be provided through Western Bank and subsidized µ(PG.(p by the City of Mounds View. Maximum loan amounts through this program will be $35,000. V The program expects to provide subsidized loans for a period of at least two years. The City of Mounds View will provide funds in an account at Western Bank for the purpose of subsidizing qualifying market rate home improvement loans. Subsidy funds will be provided incrementally to an account at Western Bank as needed. All loan proceeds provided by Western Bank will be subsidized by amortization payments over a maximum 10 year period (i.e. a$10,000 loan at a market rate of 11%, subsidized to an 8%rate will require a 3% interest subsidy payment of $1,587.20 by the city over a period of 10 years. The city's subsidy will be amortized over a 10-year payment.) ELIGIBLE PROPERTIES/OWNERS All owner occupied residential properties having 1-4 units. No eligibility requirements for household income or age of housing will be required for this program. A4;401;490 G PROGRAM GUIDELINES 1. The City of Mounds View will subsidize 3%of the market interest rate for home improvement loans within the city. 2. Western Bank will utilize City of Mounds View TIF funds to write down market rate home improvement loans not to exceed$200,000 in loan amounts for the program's first two years. 3. Loans will be approved and originated under Western Banks underwriting criteria. 4. Western Bank will be responsible for servicing the loans. 5. Eligible improvements and eligible properties are determined by criteria adopted by the city (see Eligible Improvements). 6. Borrowers' must provide proof of income, a property tax statement, bid for work, and contractor warranties. 7. The property owner has nine months from the date of closing to complete the Market Rate Interest Subsidy Program Page 2 improvement(s). 8. Loan proceeds will be disbursed by having checks issued to the applicant and contractor. 9. The city will offer a remodeling counselor for any property owner desiring assistance in evaluating and prioritizing improvements to their property. Remodeling counselors will also be available to assist property owners in evaluating bids. Fees for these services will be paid by the City of Mounds View and payment administrated by the lender. 10. Sweat equity projects are permitted. However, labor is not eligible for compensation. Sweat equity refers to an arrangement where the property owner(not a contractor)performs the home improvement. 11. Funds must first be used to abate any outstanding orders or code violations from the City of Mounds View. ELIGIBILITY REQUIREMENTS Owner-Occupied/Permanent Residence The property shall be occupied year round as a permanent residence and shall be occupied by the borrower as their principal place of residence within 60 days of the date of loan closing. A residence is not eligible if now used, or can reasonably be expected to be used, as a recreational home. Business Use of Home If 49% or less of the square footage of a property, including any basement areas, is now regularly and exclusively used in trade or business (or can reasonably be expected to be so used) then the property is eligible. Improvements must be made to the residential portion of the property only. Completed Property Properties must be completed. A completed property is either: 1. A property that has been occupied as a year-round permanent residence for at least five continuous years; or 2. A single-unit property that has been occupied for at least 90 days by the borrower or previous tenants, and had in place all of the following permanent items at least 90 days prior to the date of credit application: a. Foundation b. Completed utility connections, including water, electric and sanitary facilities. c. Whole house heating system. d. Electrical wiring to all rooms of the house. e. Finished exterior including, but not limited to, siding, windows, doors, roofing, and basic landscaping. f. At least one bathroom with a sink, toilet, and bathtub or shower. g. A kitchen, with a sink. h. Standard plumbing to the bathroom and kitchen. Market Rate Interest Subsidy Program Page 3 i. An interior that is finished in a manner common to the locality for properties of the same general type as the property to be improved. Multi-Unit Properties For all properties which now contain or will contain upon completion of improvements, more than one dwelling unit: 1. The property must contain no more than four(4) dwelling units. 2. The borrower must occupy one of the dwelling units as borrower's principal place of residence. Manufactured or Factory-Made Houses A manufactured or factory-made dwelling unit is eligible to be improved with a loan only if the following requirements are met: 1. The dwelling unit has been placed on property owned by the borrower or being purchased under a real-estate contract. 2. The wheels of the dwelling unit have been removed and the dwelling unit has been placed on a permanent foundation. 3. The security for the loan to purchase the dwelling unit is in the form of a mortgage covering the property. 4. All utility connections including water and sanitary facilities are operable so that the dwelling unit is complete and habitable. 5. The dwelling unit is carried on the tax rolls of Ramsey County as real property. 6. The property to be improved meets all other eligibility standards set forth in this policy. Eligible/Ineligible Improvements Type of Improvement Eligible Ineligible Handicapped accessibility bathroom modifications • any improvement which is improvements which are permanent • installation of grab bars and no a permanent fixture to fixtures handrails the property. • lifting devices • main level bathroom addition • main level bedroom addition • ramp addition • sidewalk addition or repair • widening doorways • widening hallways Market Rate Interest Subsidy Program Page 4 Energy Conservation Improvements • awnings • fireplace construction • caulking ▪ any improvement which is • door and window repair or not a permanent fixture to replacement the Property • fireplace modifications • fireplace repairs • ground water heat pumps • insulation • solar domestic hot water heaters • storm doors and windows • ventilation • water heater replacement • weather stripping Exterior Improvements brick repair or replacement • Improvements which are • decks not permanent fixtures such • gutters and down spouts as: saunas,decks,patios, • driveway replacement or gazebos,hot tubs, resurfacing nonpermanent landscaping • fences fixtures. • health and safety repairs to recreational improvements • landscaping(retaining walls,tree planting,tree removal) • lead or asbestos abatement • painting • roof repair or replacement • sidewalks • siding repair or replacement • soffit/fascia • steps and landings • waterproofing Market Rate Interest Subsidy Program Page 5 Heating and Cooling Systems • air cleaners • room air conditioners • air to air heat exchanger • freestanding space heaters • air to air heat pump • new built-in gas fireplace • central air conditioning • chimney modifications or repairs • furnace repair or replacement • geothermal heat pumps • ground water heat pumps • heating systems located outside the property which are connected to the property by ducts or plumbing • off-peak heating system • solar space heating system • wall/baseboard heaters • wood burning attachment to furnace which utilize Property's existing duct work • wood burning furnaces • wood burning stoves Interior Improvements built-in appliances ▪ construction of new • electric garage door fireplace openers • recreational improvements • electrical work (sauna,swimming pool,hot • floor covering tub,etc.) • fire sprinkler system • repairs to any portion of the • hard wired fire/smoke Property used exclusively alarms in a trade or business • kitchen cabinets and • battery operated fire/smoke countertops repair or alarms replacement • intercom systems • lead or asbestos abatement • water purification systems • security systems/security which are not a permanent bars on window fixture • wall and ceiling repair and • personal property items, replacement including furniture • plumbing fixtures and connections • sewer/septic systems • water service hookup • water softeners and/or filtration system Market Rate Interest Subsidy Program Page 6 Structural Additions and Alterations • carports • construction of or • foundation work improving garage space • garage construction or which will result in repair(new or improved personal use garage space garage space must not per property exceeding 800 exceed 800 sq.ft.and must sq.ft and 3 stalls be use for personal use • repairs to or construction of only) out buildings • health and safety repairs to • conversion of a recreational improvements nonresidential structure to a • remodeling residential structure • room additions • costs associated with moving a house • greenhouse Scope of Services City of Mounds View Responsibilities: 1. Develop program guidelines and supervise implementation. 2. Market the program to city homeowners. 3. Dictate change in program guidelines as funds or conditions demand or indicate necessary. 4. Periodically review scope of work appeals and loan denial appeals. 5. Review periodic status reports provided by the Western Bank. 6. Monitor and evaluate Western Bank performance and loan program guidelines. 7. City will establish a list of qualified remodeling counselors to be made available to Western Bank. 8. Facilitate an information meeting of participating remodeling counselors to provide expectations of services for the program(i.e. Loan preapproval requirement for services, etc.). 9. Verify work is completed according to contract application. 10. Provide an administrative fee of$75 per subsidized loan payable to the lender. Western Bank Responsibilities: 1. Process loan applications. Western Bank will first attempt to place a borrower in the MHFA Fix-up Fund, Community Fix-up Fund or Home Energy loan programs. 2. Verify that eligible applicants live in Mounds View and that the proposed property lies entirely within the city's boundary. 3. As part of the application process, Western Bank will provide borrowers a Market Rate Interest Subsidy Program Page 7 remodeling counselor through a rehabilitation remodeling counseling service after pre approval of a loan. If borrowers choose to use the remodeling service, the lender will administer payment of the service through city funds. 4. Manage loan fund and provide the City of Mounds View periodic reports as agreed. 5. Assist in marketing the program to city homeowners. 6. Ensure borrower complete a guarantee form to ensure completion of work. City of Mounds View will provide a form to Western Bank to be completed by each borrower. Exhibit B City of Mounds View Interest Subsidy Program Terms for MHFA Home Improvement Loans PROGRAM OVERVIEW The Mounds View Economic Development Authority(EDA) is making available $40,000 in tax increment financing (TIF) funds for the purpose of subsidizing the interest rate of home improvement loans under this program. The loans will be Minnesota Housing Finance Agency (MHFA) originated by participating lenders and subsidized by the City of Mounds View. The city will provide interest subsidies for MHFA loans. Maximum loan amounts through this program will be$35,000. The loans will be originated by the participating lenders of Western Bank and Center for Energy and the Environment(CEE). The program expects to provide subsidized loans for a period of at least two years. The City of Mounds View will provide funds in an account at participating lenders for the purpose of subsidizing qualifying home improvement loans. Loans provided by MHFA and originated by the lender will be subsidized in a lump sum payment from the city account(i.e. a$10,000 loan for a term of 10 years at 8% subsidized to a 5%rate will require a 3% interest payment of$1,587.20 by the city. TARGET PROPERTIES All owner occupied residential properties having 1-4 units. For MHFA loans received through the Community Fix-up Fund program, the city has identified homes built before 1965 as the need/objective for the use of these funds. Homeowners qualifying for the Community Fix-up Fund program must have an adjusted household income of$69,900 or less. Homeowners with homes built after 1965 may qualify for other MHFA Fix-up Fund loans offered at a reduced interest rate. PROGRAM GUIDELINES The program will follow the following MHFA eligibility guidelines: 1. Underwriting of these loans will follow the MHFA procedural manuals and normal and prudent underwriting criteria. 2. Participating lenders will utilize City of Mounds View TIF funds to write down the interest rate on MHFA loans. MHFA loans will be written down to a maximum effective rate of 5%. Loan interest differentials will be paid by the City of Mounds View. 3. MHFA will be solely responsible for servicing the loans. 4. Eligible improvements and eligible properties are determined by the MHFA for the individual programs and are stated in the procedural manuals for each program. MHFA Interest Subsidy Loan Program Page 2 5. Borrower's must provide proof of income, property tax statement, bid for work, and contractor warranty. 6. The property owner has 9 months from the date of closing to complete the improvement(s). 7. Loan proceeds will be disbursed to the borrower. 8. Loan proceeds over$2,500 may be secured with a mortgage. 9. Lenders will offer a remodeling counselor to property owners desiring assistance in evaluating and prioritizing improvements to their property. Remodeling counselors will also be available to assist property owners in evaluating bids. Fees for these services will be paid by the City of Mounds View. 10. Sweat equity projects are permitted. However, labor is not eligible for compensation. Sweat equity refers to an arrangement where the property owner(not a contractor)performs the home improvement. 11. Funds must first be used to abate any outstanding orders or code violations from the City of Mounds View. Use of funds is limited to eligible improvements allowable under MHFA's Fix-up Fund Loan Programs specified as Eligibility/Ineligible Requirements of this policy. ELIGIBILITY REQUIREMENTS Owner-Occupied/Permanent Residence The property shall be occupied year round as a permanent residence and shall be occupied by the borrower as his or her principle place of residence within 60 days of the date of Loan closing. A residence is not eligible if now used, or can reasonably be expected to be used, as a recreational home. Business Use of Home If 49% or less of the square footage of a Property, including any basement areas, is now regularly and exclusively used in trade or business (or can reasonably be expected to be so used)then the property is eligible. Improvements must be made to the residential portion of the property only. Completed Property Properties must be completed. A completed property is either: 1. A property that has been occupied as a year-round permanent residence for at least five continuous years; or 2. A single-unit Property that has been occupied for at least 90 days by the Borrower or previous tenants, and had in place all of the following permanent items at least 90 days prior to the date of Credit Application: a. Foundation b. Completed utility connections, including water, electric and sanitary facilities. c. Whole house heating system. d. Electrical wiring to all rooms of the house. e. Finished exterior including, but not limited to, siding, windows, doors, MHFA Interest Subsidy Loan Program Page 3 roofing, and basic landscaping. f. At least one bathroom with a sink, toilet, and bathtub or shower. g. A kitchen, with sink. h. Standard plumbing to the bathroom and kitchen. I. An interior that is finished in a manner common to the locality for properties of the same general type as the Property to be improved. Multi-Unit Properties For all properties which now contain or will contain upon completion of improvements,more than one dwelling unit: 1. The property must contain no more than four(4) dwelling units. 2. The borrower must occupy one of the dwelling units as Borrower's principal place of residence. 3. The borrower shall enter into an Occupancy Agreement providing for occupancy of some of the rental units by tenants who are persons or families of low or moderate income. Manufactured or Factory-Made Houses A manufactured or factory-made dwelling unit is eligible to be improved with a loan only if the following requirements are met: 1. The dwelling unit has been placed on property owned by the borrower or being purchased under a real-estate contract. 2. The wheels of the dwelling unit have been removed and the dwelling unit has been placed on a permanent foundation. 3. The security for the loan to purchase the dwelling unit is in the form of a mortgage covering the property. 4. All utility connections including water and sanitary facilities are operable so that the dwelling unit is complete and habitable. 5. The dwelling unit is carried on the tax rolls of Ramsey County as real property. 6. The property to be improved meets all other eligibility standards set forth in this policy. MHFA Interest Subsidy Loan Program Page 4 Eligible/Ineligible Improvements Type of Improvement Eligible Ineligible Handicapped accessibility • bathroom modifications • any improvement which is improvements which are permanent • installation of grab bars and no a permanent fixture to fixtures handrails the property. • lifting devices • main level bathroom addition • main level bedroom addition • ramp addition • sidewalk addition or repair • widening doorways • widening hallways Energy Conservation Improvements • awnings • fireplace construction • caulking • any improvement which is • door and window repair or not a permanent fixture to replacement the Property • fireplace modifications • fireplace repairs • ground water heat pumps • insulation • solar domestic hot water heaters • storm doors and windows • ventilation • water heater replacement • weather stripping Exterior Improvements • brick repair or replacement • Improvements which are • decks not permanent fixtures such • gutters and down spouts as: saunas,decks,patios, • driveway replacement or gazebos,hot tubs, resurfacing nonpermanent landscaping • fences fixtures. • health and safety repairs to recreational improvements • landscaping(retaining walls,tree planting,tree removal) • lead or asbestos abatement • painting • roof repair or replacement • sidewalks • siding repair or replacement • soffit/fascia • steps and landings • waterproofing MHFA Interest Subsidy Loan Program Page 5 Heating and Cooling Systems • air cleaners • room air conditioners • air to air heat exchanger • freestanding space heaters • air to air heat pump • new built-in gas fireplace • central air conditioning • chimney modifications or repairs • furnace repair or replacement • geothermal heat pumps • ground water heat pumps • heating systems located outside the property which are connected to the property by ducts or plumbing • off-peak heating system • solar space heating system • wall/baseboard heaters • wood burning attachment to furnace which utilize Property's existing duct work • wood burning furnaces • wood burning stoves Interior Improvements • built-in appliances construction of new • electric garage door fireplace openers ▪ recreational improvements • electrical work (sauna,swimming pool,hot • floor covering tub,etc.) • fire sprinkler system • repairs to any portion of the • hard wired fire/smoke Property used exclusively alarms in a trade or business • kitchen cabinets and • battery operated fire/smoke countertops repair or alarms replacement • intercom systems • lead or asbestos abatement • water purification systems • security systems/security which are not a permanent bars on window fixture • wall and ceiling repair and • personal property items, replacement including furniture • plumbing fixtures and connections • sewer/septic systems • water service hookup • water softeners and/or filtration system MHFA Interest Subsidy Loan Program Page 6 Structural Additions and Alterations • carports construction of or • foundation work improving garage space • garage construction or which will result in repair(new or improved personal use garage space garage space must not per property exceeding 800 exceed 800 sq.ft.and must sq. ft and 3 stalls be use for personal use repairs to or construction of only) out buildings • health and safety repairs to • conversion of a recreational improvements nonresidential structure to a • remodeling residential structure • room additions costs associated with moving a house • greenhouse SCOPE OF SERVICES City of Mounds View Responsibilities: 1. Develop program guidelines and supervise implementation. 2. Market the program to city homeowners. 3. Dictate change in program guidelines as funds or conditions demand or indicate necessary. 4. Periodically review scope of work appeals and loan denial appeals. 5. Review periodic status reports provided by participating lenders. 6. Monitor and evaluate participating lenders performance and loan program guidelines. 7. City will establish a list of qualified remodeling counselors to be made available to the lender(s). 8. Facilitate an information meeting of participating remodeling counselors to provide expectations of services for the program(i.e. Loan pre-approval requirement for services, etc.). 9. Verify work is completed according to contract application. 10. Provide an administrative fee of$75 per subsidized loan payable to the lender. Participating Lenders Responsibilities: 1. Process loan applications. Lenders will first attempt to place a borrower in either the MHFA Fix-up Fund, Community Fix-up Fund or Home Energy loan programs. 2. Evaluate loan requests using MHFA underwriting guidelines. 3. Verify that eligible applicants live in Mounds View and that the proposed property lies entirely within the city's boundary. 4. As part of the application process, lenders will provide borrower a list of remodeling MHFA Interest Subsidy Loan Program Page 7 counselors after pre approval of a loan. If borrower chooses to use a remodeling counselor, the lender will administer payment of the city funds for the service. 5. Manage loan fund and provide the City of Mounds View periodic reports as agreed. 6. Assist in marketing the program to city homeowners. 7. Ensure borrower complete a guarantee form to ensure completion of work. City of Mounds View will provide a form to each lender to be completed by the borrower. N:\DATA\GROUPS\COMDEV\HOUSING\HOMELOAN\GUIDLINE.WPD Exhibit C MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-25 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING THE ECONOMIC DEVELOPMENT AUTHORITY's CONSIDERATION OF LOAN GUIDELINES AND TAX INCREMENT FINANCING FOR THE PROPOSED INTEREST SUBSIDY HOME IMPROVEMENT LOAN PROGRAM WHEREAS, due to the age and condition of the city's housing stock it is important to encourage reinvestment in the community to avoid blight and to upgrade the quality, livability and marketability of the housing stock; and WHEREAS, as part of an Interest Subsidy Home Improvement Loan Program the EDA approved //G application to the Minnesota Housing Finance Agency for the Community Fix-up Fund Program and was ultimately approved by the MHFA which will allow more homeowners within the city to access 7 low interest rates for home improvement loans; and WHEREAS, the EDC has reviewed the proposed guidelines for the Rterest bsidy Pogram and P 1 has determined that the guidelines meet the objectives needed to provide Mounds View homeowners incentives to perform needed rehabilitation and home improvements to theirhomes; 414 and • C� WHEREAS, the Economic Development Commission finds that by approving tax increment funds for subsidizing home improvement loans, more Mounds View homeowners may access home improvement loans at a reduced interest rate; and WHEREAS, the Economic Development Commission has determined that approving tax increment funds for subsidizing home improvement loans, the entire community of Mounds View will benefit by improving the quality and livability of the city's housing. a� NOW THEREFORE, BE IT RESOLVED THAT the Economic Development Commission hereby recommends approval to the Economic Development Authority for the allocation of$75,000 in tax increment funds to administer and subsidize home improvement loans for Mounds View homeowners and to approve the Interest subsidy guidelines for MHFA and Market Rate loans in conjunction with participating lenders. Adopted this 32 h day of June 1998. P cAP ATTEST: Chair i0v (SEAL) City Administrator E To: Economic Development Commission Members From: Kevin Carroll, Economic Development Coordinator MEMORANDUM Subject: Business Improvement Partnership Loan Program Date: May 22, 1998 INTRODUCTION Given the limited number(and the relatively small size) of parcels in Mounds View that are available for new commercial or industrial development, it is important that sufficient attention be devoted to making certain that we retain existing businesses and help them to expand or improve their operations. I believe that the "Business Improvement Partnership Loan Program" (hereinafter"the Program") that was started in 1995 was an important step in that direction. However, it appears that the Program has been largely inactive for over a year and a half, for reasons that presumably include limited public awareness of the Program, financial constraints, staff turnovers, and/or new or different EDC/EDA/City Council priorities. Rather than continuing to leave the Program"in limbo," it seems appropriate to determine whether the Program should be reactivated or officially discontinued. If it is to be reactivated,thought should be given to whether any changes should be made in the structure or eligibility requirements of the Program. This Memo has been prepared to provide some historical perspective, and to outline a proposed course of action for the EDC's consideration. HISTORY/CHRONOLOGY February 13, 1995: Resolution No. 95-EDA-23 adopted: "Resolution Supporting the Pursuit of a Small Business Loan Program for Mounds View Businesses." (After this date, the following presumably occurred: drafting and approval of generic "Participation Agreement"; drafting and approval of"Application for Business Loan Program" form; preparation of informational trifold brochure; preparation of one page "Low Interest Loans" flyer.) May 25, 1995: Resolution No. 95-EDC-9 adopted: "Resolution Recommending Amounts to Fund the Business Loan Program for 1995 and 1996." [$100,000 for 1995 and$300,000 for 1996] May 25, 1995: Resolution No. 95-EDC-10 adopted: "Resolution Recommending Approval of Small Business Loan for Dynex Industries." [Applicant requested ■ maximum loan of$50,000.00 to supplement an SBA 504 Loan of$1, 013,000...$25,000 from MV EDA at 2% and$25,000 from North Star Bank at 9 5/8%for 5 years, then adjusted annually to prime rate at that time....monthly payments of$238.81 and$310.00, respectively, from 10-1-85 to 9-1-2005.] June 5, 1995: Resolution No. 95-EDA-28 adopted: "Resolution Approving Business Loan for Dynex Industries." [Both loans are current in all respects,per telephone conversation with Jeff Neisen at North Star Bank on May 6, 1998.] September 28, 1995: Resolution No. 95-EDC-11 adopted: "Resolution Recommending Approval of Small Business Loan to Forcia Inc." [d/b/a Mister Donut...later, "Donut Connection"....applicant requested maximum loan of$50,000.00 $25,000 from MV EDA at 2%and$25,000 from Western Bank at 11.25 floating interest rate for 5 years...monthly payments of approximately$548.64 and $438.50, respectively, from 11/12/95 to 10/12/2000.] September 28, 1995: Resolution No. 95-EDC-12 adopted: "Resolution Approving the Establishment of a Loan Committee." October 9, 1995: Resolution No. 95-EDA-32 adopted: "Resolution Approving Business Improvement Loan for Forcia,Inc." [Both loans are current in all respects,per telephone conversation with Cindy Carlson of Western Bank on May 7, 1998; contact loan supervisor Beth Munroe at 290-8136 for more information.] January 23, 1996: Apparent date of informational letter to local businesses regarding the Business Improvement Partnership loan program. August 12, 1996: Resolution No. 96-EDC-15 adopted: "Resolution Recommending Approval of a Business Improvement Partnership Loan to Mounds View FINA." [Applicant requested maximum loan of$50,000.00....$25,000 from MV EDA at 2%and $25,000.00 from Western State Bank of St. Paul at 11% fixed for 10 years... monthly payments of$230.36 and $346.63, respectively, 9/21/96 through 8/21/2006.] August 12, 1996: Resolution 96-EDA-50 adopted: "Resolution Approving Business Improvement Partnership Loan for Mounds View FINA." [Both loans are current in all respects, per telephone conversation with Cindy Carlson of Western Bank on May 7, 1998; contact loan supervisor Beth Munroe at 290-8136 for more information.] (It is possible that another mailing to local businesses may have occurred between August 12, 1996 and the present, but I have not yet been able to verify that fact, or the actual date of any such mailing.) ■ ISSUES/ANALYSIS 1. Should the Business Improvement Partnership Program be "reactivated"? Recommendation: Yes. Rationale: The three loans that have been made under the Program thus far seem to have been complete successes. If there are funds available, we should build on those successes by making additional loans. The Program is, or could be, one of the most visible manifestations of the City's commitment to improving the local business climate. If handled properly, the Program could engender good will and generate favorable publicity for the businesses that we assist and for the City itself. 2. How much money is available for the Program? Answer: The 1998 Budget allocates $45,000.00 for"Business improvement partnership loans,"none of which has apparently been loaned,to date. This is 45%of the amount($100,000)that was budgeted or approved for the first year of the Program, but I have been told that funds that might otherwise be available for the Program are now being devoted to the Community Center. 3. To what extent should the Program be marketed or publicized? Suggestion: The Program should first be specifically targeted to conforming businesses that are located in buildings that are structurally sound, but that are unattractive, inefficient, outdated, or in need of improvement or renovation for other valid reasons. If loan funds then remain,press releases to the local media and/or feature stories in local publications should be used to publicize the Program in the least expensive manner. An effort should be made to avoid generating more interest than the City has the financial means to accommodate, in order to minimize ill will and/or claims of favoritism with respect to those who do receive loans. Reason: City money should not be used to improve non-conforming uses that the City may eventually want to eliminate or relocate,nor should City money be used for"patchwork"on structures that are in fundamentally poor condition. Ideally, loan funds would be used in a manner that would (literally)produce visible results, thereby improving not only the business in question but also the overall appearance of the City's business district. 4. What changes, if any, should be made in the Program? Suggestion: Eliminate the requirement that a business be in operation in Mounds View for two years before becoming eligible for the Program. Longevity could, however, be considered as a factor if the total loan proceeds requested by all ■ applicants exceeded available funds. Reason: The two year eligibility requirement was presumably imposed due to concerns about assisting a business that might be"here today and gone tomorrow." However, given the fact that loan proceeds will generally be used for interior and exterior structural and cosmetic improvements that will"stay" in the City, the City will benefit from any such improvements even if other businesses eventually occupy the"improved"business sites. Even if the two year requirement is eliminated, a request from a longstanding member of the local business community should be entitled to priority over a relative"newcomer," all other things being equal. CONCLUSION The EDC should adopt a Resolution recommending the immediate reactivation of the Business Improvement Partnership Loan Program. Given the length of time that has passed since the Program was active, a Resolution would enable the EDC to "officially"reaffirm its commitment to the Program, and provide a formal action that could be publicized in order to generate new interest in the Program. 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R H ;'�" U C =• 0 V. k 4 'S7 F. n.. .r ,, [sem r 'n = .... _r.,' Y , MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-24 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA 11 if‘iciy ivco tel( 0.6 RESOLUTION - -- ' • : - - • AN#-eF THE BUSINESS IMPROVEMENT PARTNERSHIP LOAN PROGRAM WHEREAS, on February 13, 1995 the Economic Development Commission adopted a Resolution supporting the pursuit of a business loan program ; and WHEREAS, on May 25, 1995 the Economic Development Commission adopted a Resolution approving funding for the business loan program for 1995 and 1996; and WHEREAS, on June 25, 1995 the Economic Development Authority adopted a Resolution approving the business loan program; and WHEREAS, the stated purpose of the business loan program was to "[help] Mounds View businesses thrive and prosper while improving the aesthetics of the commercial, industrial and retail sectors of the community;" and WHEREAS, the types of improvements eligible for the loan program included: repairing storefronts, windows, doors, etc.; upgrading interior design and configuration; painting, cleaning or staining the interior or exterior of a building; upgrading or replacing an existing business sign; new or upgraded landscaping; parking lot redesign or repair; stormwater discharge improvements; and ADA compliance upgrades; and WHEREAS, during 1995 and 1996 a total of three loans of$25,000.00 each were approved pursuant to the business loan program, each of which resulted in significant improvements to the visual aesthetics and/or operational efficiency of the businesses receiving the loans; and WHEREAS, each of the three loan recipients has made all of the required loan payments in full and on time; and tHEREAS, no business loans have been sought or granted since August of 1996, nor has the r /I usiness loan program been actively marketed or publicized since that time, despite the fact t t funds have been ann ally budgeted for the program; and WHEREAS, th xailability of low interest loan funds could prompt some businesses in Mounds View to make improvements that might not otherwise be made, and that said improvements could improve the appearance of Mounds View's commercial district and enhance its tax base; and WHEREAS, the reactivation of the business loan program would demonstrate to Mounds View's businesses and residents the City's commitment to improving the local business climate; { NOW THEREFORE, BE IT RESOLVED that the Economic Development Commission of the City of ounds View hereby recommends that the Economic Development Authority: a. approve the reactivation of the Business Improvement Loan Program, andhee- A) B. authorize the funding of business improvement loans in a total amount not to( exceed the $45,000.00 that was budgeted for such loans for 1998. Adopted this day of/11;1,61998. 1998. 7( 411Ltti ei ATTEST: Chair (SEAL) City Administrator 1/641A1(4/1 iti;v 7tlf— -711/,,i_76 ‘ frA f' 1° ' - r £ � 7Ov J 6,0v>r Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting July 20, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 [NOTE: The EDC meeting that would ordina have `' � 0 a eco= on Thursday, July 23, 1998 was rescheduled kg, my so than members could attend a City Council work s 6:00 p.m. on fi I ate. The EDC members participated in a discussio ermaid Hotel/Banquet Facility Project in the Council chambers fro �''� til approximately 7:00 p.m., after which the EDC members co ened '1a ence Room C for the regular monthly EDC meeting.] 1. CALL TO ORDER: The meeting was called to order :05 p.m k Chair4ot ,indy Carlson. 2. ROLL CALL: €' Members present: Ci } son, Ro i >04mk m Field, and Rosemary Goff. Me. s absent: B 010'4 B erg, ED' ;,=1113t.4.ger Stigney. � �t: Ec® �� 14,� � -lopmen e���� .orator Kevin Carroll. 3. AP 4' MIN b Defer4 t1 ^ eting time constraints. 4. 7i CIAL BUSS' None. . EDC BUSIN ` " e: of the City Council, the EDC members interviewed the following five applicants °'"rent vacancies on the EDC: Wendy Marty, William Laube, Sean Walther, Richard , and Gregory Johnson. After considering factors including (but not limited to) the personal and professional experience of the candidates, their enthusiasm for and attitude about the position in question, their availability for regular and special EDC meetings, actual or potential conflicts of interest, and their perceived commitment to public service, the Commissioners agreed to recommend Sean Walther for the remainder of the term of Steven N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN07.98 Larson (term ending December 31, 1998) and Wendy Marty for the remainder of the term of Dan Nelson (term ending December 31, 199 8). The Commissioners also agreed to recommend William Laube as an alternate, in the event that either of the other two recommended candidates accepts an appointment to another City commission or is otherwise unable or unwilling to serve on the EDC. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: EDC members and staff commented briefly on the prior discussion of the Mer `g project. Commissioners asked whether the Halls' "equity investment" of$1. ,illio a " 50,000 + $850,000) consisted of cash, or cash and land/buildmg(s) or land o � � g(s) alone. It was also suggested that the projected 10%interest rate on of .nqu r z '(€' ancing may be significantly higher that the actual rate that could pre�, be obta` I. H,,ia.at the stated year amortization period may be significantly short �an the tie "pie e90 sually -rg for projects of this kind, thereby artificially inflati e annu. •erating 4 `^g' regard to the "Americlnn Hotel Investment Analy a..wa <',ggested that "average daily rates" ranging from $62 to $70 for sugh 5 were on th- ide, and that rates ranging from $75 to $85 would probably . � � urate. Commissioners commented that it might be useful to get some adv ;• hese and other related matters from an objective third party (consultant, alyst, _ „ s- more familiar with revenue projections, anticipated operating expe and finab';< �,ments for projects of this type. � vQJ The Commissioners indicated that ppreci �� 3 i ;..? •rt �'y to learn more about project, and that they are looking fe +ard to .661,w-114' m, the project periodically, as it progresses. 7. ADJOURNMENT a3. h 3 Thi= ing no fur-614'''4"'I' ess befo p, fission, this meeting of the Economic Co e � ournedroximately 7:50 p.m. ectfully Submitted, (evin Carroll Economic Development Coordinator y S N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN07.98 1 • facsimile TRANSMITTAL to: P k 0// a---( S fax 4: 9 — T' P7 tf re: date: Pages: �, including this cover sheet 74f—F- Gj M / �� �- 7-7=2"&i/(-,M1( lelc.. / -, z 41V 4- 4s� Fr- it_ /1"t /1---e 6/474- 6 / fcp r 17 7 / V2Z= C// latot 1 Cfv of Mounds View • 2401 High way 10 Mounds View,MN 55UZ Adminis=ion:717-1000 Community Development 717-.020 Parks and Recdoa:717-4040 07/21/98 10:17 FAX 612 784 3462 CITY OF MV fJ001 *************************** *** ACTIVITY REPORT *** *************************** TRANSMISSION OK TX/RX NO. 3347 CONNECTION TEL 2907878 CONNECTION ID START TIME 07/21 10:15 USAGE TIME 01'39 PAGES 3 RESULT OK facsimile TRANSMITTAL to: l P g 0,14-s� fax , 2-- cs re: -7— Lr— date; p9e5; iarludiug this cava sn.= • ,,,-z •� 1)77--rfr-- m e / /0 c4-t/4_, ll MEMORANDUM DATE: July 20, 1998 TO: Cindy Carlson, EDC Chair FROM: Kevin Carroll,Economic Development Coordinator RE: 6/25/98 EDC Meeting It is beginning to appear that we may not have a quorum for the EDC meeting tonight, but I thought that I would still give you a copy of the draft of the minutes from the last EDC meeting for your review. I have also enclosed a revised version of the Resolution Modifying The Business Improvement Partnership Loan Program, which reflects the changes that were discussed at the meeting on June 25th. If the revised version is acceptable to you, please sign it and get it back to me at your earliest convenience. Thank you. Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting June 25, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Tom Field, and Brian Sjoberg. Members absent: Dan Nelson, Rosemary Goff, EDA Liaison Roger Stigney. Staff present: Housing Inspector Steve Dorgan and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Sjoberg/Field to approve the minutes from May 28, 1998. Motion Carried 4 Ayes 0 Nays 4. SPECIAL BUSINESS None. 5. EDC BUSINESS A. Discussion of Home Improvement Loan Subsidy Program. EDC members reviewed and discussed Housing Inspector Dorgan's proposed final drafts of the guidelines for the two interest subsidy programs. It was noted that although both programs refer to a maximum loan amount, neither program refers to a minimum loan amount. Staff was directed to insert a reference to the fact that the minimum loan amount would be $3000.00 for each of the two programs. Chair Carlson had some additional minor changes of a "housekeeping"nature that she discussed with Mr. Dorgan prior to the meeting. With respect to the proposed Resolution, it was suggested that additional language be inserted to emphasize the fact that there are TWO separate loan subsidy programs, and to explain the rationale or need for two such programs, and to clarify the distinctions between them. That additional explanatory language could also be added to the "Program Overview" for each program. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN06.98 MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-24 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION MODIFYING THE BUSINESS IMPROVEMENT PARTNERSHIP LOAN PROGRAM WHEREAS, on February 13, 1995 the Economic Development Commission adopted a Resolution supporting the pursuit of a business loan program ; and WHEREAS, on May 25, 1995 the Economic Development Commission adopted a Resolution approving funding for the business loan program for 1995 and 1996; and WHEREAS, on June 25, 1995 the Economic Development Authority adopted a Resolution approving the business loan program; and WHEREAS, the stated purpose of the business loan program was to "[help] Mounds View businesses thrive and prosper while improving the aesthetics of the commercial, industrial and retail sectors of the community;" and WHEREAS, the types of improvements eligible for the loan program included: repairing storefronts, windows, doors, etc.; upgrading interior design and configuration; painting, cleaning or staining the interior or exterior of a building; upgrading or replacing an existing business sign; new or upgraded landscaping; parking lot redesign or repair; stormwater discharge improvements; and ADA compliance upgrades; and WHEREAS, during 1995 and 1996 a total of three loans of$25,000.00 each were approved pursuant to the business loan program, each of which resulted in significant improvements to the visual aesthetics and/or operational efficiency of the businesses receiving the loans; and WHEREAS, each of the three loan recipients has made all of the required loan payments in full and on time; and WHEREAS, the continued and or improved availability of low interest loan funds could prompt some businesses in Mounds View to make improvements that might not otherwise be made, and that said improvements could improve the appearance of Mounds View's commercial district and enhance its tax base; and WHEREAS, the continuation and refinement of the business loan program would demonstrate to Mounds View's businesses and residents the City's commitment to improving the local business climate; and WHEREAS, it has been suggested to the EDC that the scope and efficiency of the business loan program could be improved by eliminating the "two year residency requirement" and by making certain other changes in the application and approval process(es) for the loans; • NOW THEREFORE, BE IT RESOLVED that the Economic Development Commission of the City of Mounds View hereby recommends that the Economic Development Authority: a. Approve the elimination of the current requirement that a business be located in Mounds View for at least two years before being eligible for the program. b. Authorize City staff to review and approve proposed loans in an manner consistent with guidelines to be developed regarding confidentiality of applicants' financial information, intended use of loan proceeds, and other relevant aspects of the loan application and approval process. Adopted this 25th day of June, 1998. ATTEST: Chair (SEAL) City Administrator C CITY OF MOUNDS VIEW WORK SESSION AGENDA July 20f 1998 6:00 p.m. Items Discussed Per Consensus 1. Discussion of Mermaid Economic Development Project. 2. Discussion of 1999 Budget. Item No. Staff Report No. Meeting Date: 7/20/98 Type of Business: WK WK: Work Session;PH:Public Hearing; CA: Consent Agenda;EDAB:EDA Business City of Mounds View Staff Report To: Mayor and City Council Members From: Rick Jopke, Community Development Director Item Title/Subject: Discussion of the Mermaid Hotel/Banquet Facility Project Date of Report: July 17, 1998 BACKGROUND: At the July 6, 1998 work session staff discussed the current status of the Mermaid hotel/banquet facility and the proposed$1,700,000 TIF assistance request. Staff estimated that there could potentially be a need for an additional $1,000,000 of assistance needed by the developer over and above the original $1,700,000 to cover land acquisition costs. The City Council directed staff to continue to work with the developers to see if the estimated$1,000,000 gap could be reduced such that the City's assistance could be paid back by the increment generated by the project. The City Council scheduled an additional work session on July 20, 1998 to discuss this matter further. FINANCIAL ANALYSIS City staff, the City's financial consultant, and the developer have completed additional financial analysis and have come up with an alternative which reduces the gap substantially. The attached sheets and the following summarize this scenerio: • The City would issue $2,000,000 of taxable bonds. The developer would receive $1,700,000 of the proceeds upfront. Staff will explore ways to issue a portion of the bonds as tax exempt to reduce the interest rate. • The City would acquire the RentAll site and pays for acquisition and demolition costs from the TIF pool. The City will apply for state funds from the DTED Redevelopment grant program to help offset some of these costs. • The developer would be responsible for the acquisition costs of the rest of the land needed for the project within the $1,700,000. • 100% of the increment generated will be allocated to debt service. • The project as proposed(not including the second phase of the hotel)would generate approximately $218,500 of annual tax increment. • Because of the delay in the start of the project and a recent State Auditor's interpretation on the length of tax increment districts,the developer may have to make a payment-in- lieu-taxes (pilot) in the year 2000. City of Mounds View Staff Report July 17, 1998 Page 2 REQUESTED ACTION At the work session on Monday, staff and the developer will present the details of the project and the new alternative to make this project work. Staff will be looking for specific direction from the City Council concerning the project and the proposed financing scenario. Rick Jopke, mmunity Development Director N:\DATA\USERS\RICKJO\SHARE\072098.RPT • SUBJECT: Hotel Project/John Seibert DATE: July 15, 1998 • Pilot-Year 2000-$218,500(under consideration). • Tax shortfall agreement(proposed). • TIF -2001 through 2013 inclusive. • 100% of project tax increment allocated to debt service. • Hotel operational in the Summer of 1999. • City acquires Rent-All and finances relocation and demolition from TIF Pool. • Of the$1,700,000 request for tax increment assistance, exclusive of Rent-All costs, no dollar limit will be set for acquisition. However, acquisition expenses must be determined mutually by the parties to be both"reasonable and prudent" investments of bond proceeds. • Annual tax increment estimate of$218,500 is expected to increase over time. • Preliminary Bond Details. Sale Date 12-1-98 Amount $2,000,000 Taxable G.O. $1,700,000 Project Proceeds $ 300,000 Issuance Costs Estimated Rate 6.5% -6.75% First Interest Payment 8-1-99; semi-annually thereafter First Maturity 8-1-01 • Pursue tax-exempt bond financing to the degree possible given the details of the project. o0 0 0 0 000000 N_M vf.O—of 0...0,,M,0-.0T000.00 .. 4 -N en fl N b Q\ O-C N M 00 M Or v1 N N N t V v) 8 ^N N N r r 0 0 0 0 0 0 0 0 F 66]] vt N N N N N N N N N NNN N-N 0� N 4 d 0 Q 0 0.0 0 0.0 0-0 0--0.0 N M er,A-0 7 O O.M N N V \' -MOr M-O00- N 7-r vl b: e 0,,,,,..r.,0,-.r.140'0M enN--N- N- 0 v1 8 O V o O 4 C 0 h O00- N' 0. O O O 0 H N 0 O `d mgl1 00000000'000:0.00---------- ---00 R N-N CI R N?R' Y N N N N N N-N N N N N N N N N N N N' ,a p - O O O O-O O O O O O O N O NN N N-N N N N N N N N N- Z ON-N N N:N N-N N N N N N-N- U gpg 00000 h eei.WI'WNi'WNi-h-h en•h h r h:h.O'O. 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S _. N C 0 0 0.000 0 0 0 0 0.0 0 0 O Q .a �hao�aa�-a 0 0 0 N0, _-- ,0 N O c. N z 0000000000.000.000000 •114 i M L O m7)- E 0 as °N a " €4 . F2 a O N0O,ONMeVl,ON0O,ONMpN0000•-.NMV0O o0O,0'00T0OpOO 0, 0OO,TT0, 0000000000.0000000 •D N N NN N N N N NN NNN N N N 00 W O, (-..-.A n 0 U n 0 MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-25 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING THE ECONOMIC DEVELOPMENT AUTHORITY'S APPROVAL OF TAX INCREMENT FINANCING AND PROGRAM GUIDELINES FOR THE PROPOSED HOME IMPROVEMENT LOAN INTEREST SUBSIDY PROGRAM WHEREAS, due to the age and condition of the city's housing stock it is important to encourage reinvestment in the community to avoid blight and to upgrade the quality, livability and marketability of the housing stock; and WHEREAS, the EDC has determined that by implementing a program which subsidizes (reduces) the interest rate for home improvement loans for all qualifying homeowners within the city, an incentive will be provided to rehabilitate and improve the city's housing stock; and WHEREAS, the EDC has determined that any such Home Improvement Loan Interest Subsidy Program should have the following two components in order to accommodate all homeowners within the City : A. An MHFA Home Improvement Loan Interest Subsidy which will take advantage of(and further reduce the interest rate for) existing MHFA loan programs with below-market interest rates for qualifying low to moderate income households; and B. A Market Rate Home Improvement Loan Interest Subsidy for all other qualifying homeowners within the city who would not otherwise qualify for MHFA home improvement loans; and WHEREAS, as part of the proposed Home Improvement Loan Interest Subsidy Program, the EDA approved an application to the MHFA for the Community Fix-up Fund Program, which was ultimately approved by the MHFA, and which will allow more homeowners within the City to access low interest rate home improvement loans under the MHFA Home Improvement Loan Interest Subsidy component of the overall Home Improvement Loan Interest Subsidy Program; and WHEREAS, the EDC has reviewed the attached Program Guidelines for each of the two components of the Home Improvement Loan Interest Subsidy Program and has determined that the guidelines are consistent with the objective of providing Mounds View homeowners with economic incentives to rehabilitate and improve their homes; and WHEREAS, the EDC has concluded that using tax increment funds is a necessary and appropriate means of subsidizing the two types of loans that are envisioned under the Home Improvement Loan Interest Subsidy Program, thereby ensuring that more Mounds View homeowners will have access to home improvement loans at a reduced interest rate and that . PAGE TWO OF TWO EDC RESOLUTION NO. 98-EDC-25 there will be corresponding improvements in the quality, livability and marketability of the City's housing stock; NOW, THEREFORE, BE IT RESOLVED that the Economic Development Commission hereby recommends that the Economic Development Authority: 1. Approve the allocation of a total of$75,000 in tax increment funds to administer the two components of the Home Improvement Loan Interest Subsidy Program; i.e., $40,000.00 for the MHFA Home Improvement Loan Interest Subsidy component and $35,000.00 for the Market Rate Home Improvement Loan Interest Subsidy component. 2. Approve the Program Guidelines for the MHFA Home Improvement Loan Interest Subsidy component and the Market Rate Home Improvement Loan Interest Subsidy component of the overall Home Improvement Loan Interest Subsidy Program. Adopted this 25th day of June, 1998. ATTEST: Chair (SEAL) City Administrator MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-25 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING THE ECONOMIC DEVELOPMENT AUTHORITY 7-`) CONSIDERATION OF LOAN GUIDELINES AND TAX INCREMENT FINANCING FOR THE PROPOSED INTEREST SUBSIDY HOME IMPROVEMENT LOAN PROGRAM WHEREAS, due to the age and condition of the city's housing stock it is important to encourage reinvestment in the community to avoid blight and to upgrade the quality, livability and marketability of the housing stock; and WHEREAS, the EDC has determined that by implementing a program which provides an interest subsidy to home improvement loans for all qualifying homeowners within the city, an incentive will be provided to rehabilitate and imgro a the city's housing stock; and WHEREAS, the EDC has determined that4wo interest subsidy programs would be necessary to accommodate all homeowners within the CityPv ; nn I. An interest subsidy o existing MHFA housing loan programs which will take advantage of existing loan ograms with below market interest rates for qualifying low to moderate income house Ids; and II. A market rate subsidy progra fill other qualifying homeowners within the city who would not qualify for MHFA home improvement loans; and S -r4s /1-16“7-7- WHEREAS, 1-16“7-r-WHEREAS, as part of an interest subsidy home improvement loan program the EDA approved application to the Minnesota Housing Finance Agency for the Community Fix-up Fund Program and was ultimately approved by the MHFA which will allow more homeowners within the city to access low interest rate home improvement loans; and WHEREAS, the EDC has reviewed the proposed guidelines for the interest subsidy program and has determined that the guidelines meet the objectives needed to provide Mounds View homeowners incentives to perform needed rehabilitation and home improvements to their homes; and WHEREAS, the Economic Development Commission finds that by approving tax increment funds for subsidizing home improvement loans, more Mounds View homeowners may access home improvement loans at a reduced interest rate; and WHEREAS, the Economic Development Commission has determined that approving tax increment funds for subsidizing home improvement loans, the entire community of Mounds View will benefit by improving the quality and livability of the city's housing. PAGE TWO OF TWO EDC RESOLUTION NO. 98-EDC-25 NOW THEREFORE, BE IT RESOLVED THAT the Economic Development Commission hereby recommends approval to the Economic Development Authority for the allocation of$75,000 in tax increment funds to administer and subsidize home improvement loans for Mounds View homeowners and to approve the Home Improvement Loan Program Guidelines for MHFA and market rate loans in conjunction with participating lenders. Adopted this 22th day of June 1998. ATTEST: Chair (SEAL) City Administrator Minutes of the Economic Development Commission j City of Mounds View (J Ramsey County, Minnesota t f. tiv + Regular Meeting June 25, 1998 J/ U City of Mounds View, Conference Room C ' 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt,Tom Field, and Brian Sjoberg. Members absent: Dan Nelson, Rosemary Goff, EDA Liaison Roger Stigney. Staff present: Housing Inspector Steve Dorgan and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Sjoberg/Field to approve the minutes from May 28, 1998. Motion Carried 4 Ayes 0 Nays 4. SPECIAL BUSINESS None. 5. EDC BUSINESS Acm Discussion of Home Improvement Loan Subsidy Program. EDC members reviewed and discussed Housing Inspector Dorgan's proposed final drafts of the guidelines for the two interest subsidy programs. It was noted that although both programs refer to a maximum loan amount, neither program refers to a minimum loan amount. Staff was directed to insert a reference to the fact that the minimum loan amount would be $3000.00 for each of the two programs. Chair Carlson had some additional minor changes of a "housekeeping" nature that she discussed with Mr. Dorgan prior to the meeting. With respect to the proposed Resolution, it was suggested th/a d 'tional language be inserted to emphasize the fact that there are TWO,separate l{o ubsid programs, and P P Y to explain the rationale or need for two such programs, and to clarify the distinctions between them. That additional explanatory language could also be added to the "Program Overview" for each program. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN06.98 • Motion/Second: Schmidt/Field to approve Resolution No. 98-EDC-25,with the understanding that staff will amend the Resolution in a manner consistent with the EDC's discussion of desired revisions. Motion Carried 4 Ayes 0 Nays B. Consideration of Business Improvement Partnership Loan Program EDC members reviewed and discussed Economic Development Coordinator Carroll's Memo and additional background information. It was suggested that a Resolution "reactivating" the loan program may not be required, but that a Resolution modifying the program in certain respects might be appropriate. It was decided that paragraph "a" on page two of the Resolution would be revised to delete the "reactivation" language, and to insert language regarding the elimination of the two year "residency �, - -' - - - • " that was one of the original eligibility criteria. It was further agreed that h � paragraph "b" o -.e .roposed Resolution would be revised to eliminate references to ' the 1998 fundin: .mou New language will be inserted, emphasizing the fact that i order to ensure an.'or increase participation in the Program, loans will be revie• a and approved in a manner consistent with staff guidelines regarding matters s - as confidentiality of applicants' financial information, intended use of 1. : proceeds, etc. The caption of the Resolution will also be changed to "Resolutio• odifying The Business Improvement Partnership Loan Program", and the eighth"Whereas" clause will be deleted, and the two subsequent clauses will b-e-ch ziged to refer to "the continued ay.•4 bility" of low interest loan funds and the "continuation of the business loan progra Motion/Second: Sjoberg/Schmidt to approve Resolution No. 98-EDC-24, with the understanding that staff will amend the Resolution in a manner consistent with the EDC's discussion of desired revisions. Motion Carried 4 Ayes 0 Nays 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: Economic Development Coordinator Carroll provided a brief update regarding the Mermaid Hotel/Conference project. 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at approximately 8:35 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN06.98 Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting August 27, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:30 a.m. by Chairperson Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt,Tom Field, Rosemary Goff, Brian Sjoberg, Wendy Marty, Sean Walther, EDA Liason Roger Stigney Members absent: none Staff present: Economic Development Coordinator Kevin Carroll, Community Development Director Rick Jopke 3. APPROVAL OF MINUTES: Motion/Second: Goff/Schmidt to approve the minutes from June 25, 1998 and July 20, 1998. Motion carried unanimously. 4. SPECIAL BUSINESS The EDC and City staff extended a welcome to Wendy Marty and Sean Walther,the newest members of the EDC. 5. EDC BUSINESS --Update on Mermaid Hotel &Banquet Center Economic Development Coordinator Kevin Carroll and Community Development Director Rick Jopke provided the EDC members with a progress report regarding the Mermaid project. EDC discussion ensued. EDC members indicated that they generally supported the concept of a hotel and a banquet facility on the Mermaid property,because of the various benefits such facilities would provide to the community. However, some members expressed an interest in seeing more hard data or updated estimates regarding hotel room rates,hotel occupancy rates, and interest rates on the financing that will be required. EDC members encouraged City staff to actively seek the advice and input of experienced financial consultants in order to properly evaluate the reasonableness of the Developer's projections regarding hotel and banquet center revenue, operating expenses,and financing costs. In addition, several EDC members mentioned that they would like to learn more about what the Developer plans to do with the existing bowling alley and restaurant,particularly with regard to the exterior. It was suggested that an N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN08.98 effort should be made to upgrade the appearance of the existing structure so that it is consistent with, and as attractive as,the exterior of the new hotel and banquet facility. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: Economic Development Coordinator Kevin Carroll reported that Donatelle's Restaurant has expressed an interest in applying for a Business Improvement Partnership loan,to help finance parking lot improvements and interior/exterior remodeling. Donatelle's has been provided with the required application form,but it has not yet been completed or submitted to date. Mr. Carroll also reported that at its 7-27-98 meeting,the EDA adopted a revised version of the EDC's proposed Resolution regarding the Business Improvement Partnership Loan program. The EDA deleted the language that the EDC had suggested regarding the elimination of the current requirement that a business be located in Mounds View for at least two years before being eligible for the program. Mr. Carroll speculated that the EDA's concern may not be with "residency" per se,but with the possibility that a business less than two years old may not have a long enough financial "track record"to make it a suitable candidate for a loan under this program. 7. ADJOURNMENT There being no further business before the Commission,this meeting of the Economic Development Commission adjourned at approximately 8:40 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDA EDC\EDC\EDCMIN98\EDCMIN08.98 1 City of Mounds View 1 Moun2n: 40ds View, MN 5510 1 12 (612)Highway 717-4000 From: EY// C4Z6'-L f Ci � ,.... , f g _,, .woir:s.a.‘..iiiv ,__ . ..,..„:„.. .. -4:„-,,,,,, To: CwA C4/2&('oJ' Regarding::,:,:.„:„,, ,..,:ii.z,-,. •-., -.7.:,,.4.4iti,A-,44:::., : Company: a.... 2 �— 9 Dept: Tel: 4.-.:°:""b C"'"Fax: zo - 7gg , M / ^/i1 7ES _, ,,, , ,..,J..4,,,,:i.;74.: Notes: ��y/s�� /,4--7-t. yolk /L. Su � GS� �NS . 09/14/98 17:31 FAX 612 784 3462 CITY OF MV tJ001 *************************** *** ACTIVITY REPORT *** *************************** TRANSMISSION OK TX/RX NO. 4748 CONNECTION TEL 2907878 CONNECTION ID START TIME 09/14 17:29 USAGE TIME 01'36 PAGES 3 RESULT OK ! Minutes of the Economic Developm4 5 ' City of Mounds Vievv �l Ramsey County, Minnesi ( Regular Meeting August 27, 1998 ,47 City of Mounds View, Conference Room C , f 1 t 2401 Highway 10, Mounds View, MN 55112 / C'� ---( ('"Z 1111111111 L L 2 1. CALL TO ORDER: i/v The meeting was called to order at 7:30 a.m. by Chairperson Ci _,... 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Tom Field, Rosemary Goff, Brian Sjoberg, Wendy Marty, Sean Walther, EDA Liason Roger Stigney Members absent: none Staff present: Economic Development Coordinator Kevin Carroll, Community Development Director Rick Jopke 3. APPROVAL OF MINUTES: Motion/Second: Goff/Schmidt to approve the minutes from June 25, 1998 and July 20, 1998. Motion carried unanimously. 4. SPECIAL BUSINESS The EDC and City staff extended a welcome to Wendy Marty and Sean Walther,the newest members of the EDC. 5. EDC BUSINESS --Update on Mermaid Hotel &Banquet Center Economic Development Coordinator Kevin Carroll and Community Development Director Rick Jopke provided the EDC members with a progress report regarding the Mermaid project. EDC discussion ensued. EDC members indicated that they generally supported the concept of a hotel and a banquet facility on the Mermaid property,because of the various benefits such facilities would provide to the community. However, some members expressed an interest in seeing more hard data or updated estimates regarding hotel room rates,hotel occupancy rates, and interest rates on the financing that will be required. EDC members encouraged City staff to actively seek the advice and input of experienced financial consultants in order to properly evaluate the reasonableness of the Developer's projections regarding hotel and banquet center revenue, operating expenses, and financing costs. In addition, several EDC members mentioned that they would like to learn more about what the Developer plans to do with the existing bowling alley and restaurant, particularly with regard to the exterior. It was suggested that an N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN08.98 effort should be made to upgrade the appearance of the existing structure so that it is consistent with, and as attractive as,the exterior of the new hotel and banquet facility. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: Economic Development Coordinator Kevin Carroll reported that Donatelle's Restaurant has expressed an interest in applying for a Business Improvement Partnership loan, to help finance parking lot improvements and interior/exterior remodeling. Donatelle's has been provided with the required application form,but it has not yet been completed or submitted to date. Mr. Carroll also reported that at its 7-27-98 meeting,the EDA adopted a revised version of the EDC's proposed Resolution regarding the Business Improvement Partnership Loan program. W4t out-diseassief he EDA deleted the language that the EDC had suggested regarding the elimination of the current requirement that a business be located in Mounds View for at least two years before being eligible for the program. Mr. Carroll speculated that the EDA's concern may not be with "residency"per se, but with the possibility that a business less than two years old may not have a long enough financial "track record"to make it a suitable candidate for a loan under this program. 7. ADJOURNMENT There being no further business before the Commission,this meeting of the Economic Development Commission adjourned at approximately 8:40 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator r , �lr N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN08.98 1 are F IIa1©w1 2410 Highway 10 ♦ Mounds View, MN 55112-1499 � -1't s ` Parta t5 `� FAX COVER SHEET DELIVER TO: We l G My, 110111W DATE � /O 7Z7 FAX#: 1 FROM: /4 / e410/LOi.tm.. SUBJECT: W PAGES: 3 (Including Cover Sheet) If you have any questions and/or concerns, please call 717-4000. Our fax number is 784-3462. Thank you! C:-1/1iI i1 � P 6 j �k /AO& *ivy 4-b 4110 c4 ,24tec '% . I%1cc . c:\faxes\mvfaxcover.p65 Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting August 27, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:30 a.m. by Chairperson Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Tom Field, Rosemary Goff, Brian Sjoberg, Wendy Marty, Sean Walther, EDA Liason Roger Stigney Members absent: none Staff present: Economic Development Coordinator Kevin Carroll, Community Development Director Rick Jopke 3. APPROVAL OF MINUTES: Motion/Second: Goff/Schmidt to approve the minutes from June 25, 1998 and July 20, 1998. Motion carried unanimously. 4. SPECIAL BUSINESS None. 5. EDC BUSINESS -- Update on Mermaid Hotel &Banquet Center Economic Development Coordinator Kevin Carroll and Community Development Director Rick Jopke provided the EDC members with a progress report regarding the Mermaid project. EDC discussion ensued. EDC members indicated that they generally supported the concept of a hotel and a banquet facility on the Mermaid property, because of the various benefits such facilities would provide to the community. However, some members expressed an interest in seeing more hard data or updated estimates regarding hotel room rates, hotel occupancy rates, and interest rates on the financing that will be required. EDC members encouraged City staff to actively seek the advice and input of experienced financial consultants in order to properly evaluate the reasonableness of the Developer's projections regarding hotel and banquet center revenue, operating expenses, and financing costs. In addition, several EDC members mentioned that they would like to learn more about what the Developer plans to do with the existing bowling alley and restaurant, particularly with regard to the exterior. It was suggested that an effort should be made to upgrade the appearance of the existing structure so that it is consistent with, and as attractive as, the exterior of the new hotel and banquet facility. N:\DATA\GROUPS\ECONDE V\ED A-EDC\EDC\EDCMIN98\EDCMIN08.98 6. REPORTS FROM CHAIR, COMMISSIONERS, AND STAFF: Economic Development Coordinator Kevin Carroll reported that Donatelle's Restaurant has expressed an interest in applying for a Business Improvement Partnership loan, to help finance parking lot improvements and interior/exterior remodeling. Donatelle's has been provided with the required application form, but it has not yet been completed or submitted to date. 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development.Commission adjourned at approximately 8:40 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator N:\DATA\GROUPS\ECONDE VEDA-EDC\EDC\EDCMIN9 8\EDCMIN08.98 1 09/08/98 15:26 FAX 612 784 3462 CITY OF MV U001 *************************** *** ACTIVITY REPORT *** *************************** TRANSMISSION OK TX/RX NO. 4574 CONNECTION TEL 2907878 CONNECTION ID START TIME 09/08 15:24 USAGE TIME 01'26 PAGES 3 RESULT OK Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting May 28, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Rosemary Goff, Tom Field, and Brian Sjoberg. Members absent: Dan Nelson. EDA Liaison present: Roger Stigney. Staff present: City Administrator Chuck Whiting, Community Development Director Rick Jopke, Housing Inspector Steve Dorgan, and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Field/Goff to approve the minutes from April 24, 1998. Motion Carried 5 Ayes 0 Nays 4. SPECIAL BUSINESS Chairperson Carlson introduced Mr. David Piggott, Executive Director of Metro East Development Partnership. Mr. Piggott distributed copies of his organization's Annual Report, outlined Metro East's ongoing programs and activities, and responded to questions from EDC members and city staff members. 5. EDC BUSINESS A. Discussion of Home Improvement Loan Subsidy Program. Housing Inspector Dorgan reviewed highlights of the drafts of the program outlines for the market rate home improvement program and the MHFA home improvement loan program. With regard to the former, it was suggested that"Target Properties"be changed to "Eligible Properties" or "Eligible Properties/Owners". A question was posed regarding how the participating lender could verify or ensure compliance with Program Guideline #11 (loan proceeds must first be used to abate outstanding orders or code violations). Communication between the lender and the city would be needed to determine the existence of any such orders or violations. With respect to the MHFA program, it was suggested that Program Guideline N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 #3 be revised to indicate that MHFA will be solely responsible for servicing the loans, and that the paragraphs be renumbered due to the absence of a Paragraph #4, and that the word "dispersed" in Paragraph#8 be changed to "disbursed." Questions were asked and clarifications were provided regarding eligible improvements, particularly with regard to waterproofing of basements, drain tiling, room additions, and repair work related to sewer back-ups, other types of water damage, and storm damage. Under "Scope of Services", it was suggested that more specific information be provided regarding the city's responsibilities, i.e., monitoring the issuance of building permits and using city staff to verify that improvements (for which loan proceeds have been provided) are actually being made. It was also suggested that staff determine whether the loan documentation includes provisions obligating the borrowers to use the loan proceeds for the intended purpose(s). The consensus was that Housing Inspector Dorgan should continue to refine the two program outlines in accordance with the EDC's discussion, so that final drafts could be reviewed and approved at a future EDC meeting. B. Discussion of the Mermaid Project (Hotel/Conference Center) Community Development Director Jopke reviewed his 5-22-98 Memorandum to the EDA. The primary obstacle to the hotel project continues to be the projected cost of acquiring the land needed for the project, including relocation costs, and the related issue of the amount of city financial assistance requested by the project's proponents (which continues to be well in excess of the amount of assistance that the anticipated tax increment could support). City staff members will continue to work with the city's consultants, and others, to explore options and alternatives that might help to "narrow the gap." C. Update on Development Proposals Community Development Director Jopke reviewed recent developments with regard to the proposed Walgreen's proposal (dead, largely due to neighborhood opposition) and the movie theater project (which appears likely to proceed as planned if roadway access issues can be successfully resolved). D. Consideration of EDC Vacancy Staff will continue to receive and review applications for the opening created by Steve Larson's resignation. EDC members were encouraged to notify staff of potential candidates and/or to encourage those candidates to submit applications. E. Consideration of Business Improvement Partnership Loan Program Discussion of this agenda item was deferred to the next meeting due to lack of time. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: None other than as noted above. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 w 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at ap.roximately 9:10 a.m. Res!: dully Stted, 0 u // Ii arroll ionomic De lopment oordinatir N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 1 5A- ITo: Economic Development Commission Members From: Steve Dorgan, Housing Inspector MEMORANDUM Subject: Interest Subsidy Home Improvement Loan Program Date: June 25, 1998 BACKGROUND At the EDC meeting in May,the commission directed staff to prepare a final draft of guidelines for the proposed Interest Subsidy Home Improvement Loan Program. Attached are interest subsidy program guidelines for both Market Rate Home Improvement Loans and MHFA Home Improvement Loans. Since the last meeting,the city received notification from the Minnesota Housing Finance Agency that the city's application for participation in the Community Fix-up Fund was approved. Participation in this program will allow more homeowners within the city to access low interest rate home improvement loans. RECOMMENDATION Approve Resolution 98-EDC-25 recommending the Economic Development Authority consider the approval of a city sponsored Interest Subsidy Home Improvement Loan program approving the proposed"Loan Guidelines" and by allocating $75,000 in tax increment funds for the program. _SII__Si ____ Steve Dorgan, Ho Inspector 717-4023 Attachments: Exhibit A- Market Rate Interest Subsidy Program Outline Exhibit B -MHFA Interest Subsidy Program Outline Exhibit C - Resolution No. 98-EDC-25 N:\DATA\GROUPS\COMDEAHOUSING\HOMELOAMEDC6 25.98 Exhibit A City of Mounds View Interest Subsidy Program Terms for Market Rate Home Improvement Loans PROGRAM OVERVIEW The Mounds View Economic Development Authority(EDA) is making available $35,000 in Tax Increment Financing (TIF) funds that will provide a 3%annual interest rate subsidy for new market rate home improvement loans which meet the program's criteria. The loans originated under this program will be for a term of up to 10 years. The maximum city subsidy for all loans and associated administrative costs issued in the first two years is $20,000. Aggregate subsidies for future years will decline each year as loan balances decrease. Aggregate subsidies will be paid by the city over the life of the loan. The loans will be provided through Western Bank and subsidized by the City of Mounds View. Maximum loan amounts through this program will be $35,000. The program expects to provide subsidized loans for a period of at least two years. The City of Mounds View will provide funds in an account at Western Bank for the purpose of subsidizing qualifying market rate home improvement loans. Subsidy funds will be provided incrementally to an account at Western Bank as needed. All loan proceeds provided by Western Bank will be subsidized by amortization payments over a maximum 10 year period (i.e. a$10,000 loan at a market rate of 11%, subsidized to an 8%rate will require a 3% interest subsidy payment of $1,587.20 by the city over a period of 10 years. The city's subsidy will be amortized over a 10-year payment.) ELIGIBLE PROPERTIES/OWNERS All owner occupied residential properties having 1-4 units. No eligibility requirements for household income or age of housing will be required for this program. PROGRAM GUIDELINES 1. The City of Mounds View will subsidize 3% of the market interest rate for home improvement loans within the city. 2. Western Bank will utilize City of Mounds View TIF funds to write down market rate home improvement loans not to exceed $200,000 in loan amounts for the program's first two years. 3. Loans will be approved and originated under Western Banks underwriting criteria. 4. Western Bank will be responsible for servicing the loans. 5. Eligible improvements and eligible properties are determined by criteria adopted by the city (see Eligible Improvements). 6. Borrowers' must provide proof of income, a property tax statement, bid for work, and contractor warranties. 7. The property owner has nine months from the date of closing to complete the Market Rate Interest Subsidy Program Page 2 improvement(s). 8. Loan proceeds will be disbursed by having checks issued to the applicant and contractor. 9. The city will offer a remodeling counselor for any property owner desiring assistance in evaluating and prioritizing improvements to their property. Remodeling counselors will also be available to assist property owners in evaluating bids. Fees for these services will be paid by the City of Mounds View and payment administrated by the lender. 10. Sweat equity projects are permitted. However, labor is not eligible for compensation. Sweat equity refers to an arrangement where the property owner(not a contractor)performs the home improvement. 11. Funds must first be used to abate any outstanding orders or code violations from the City of Mounds View. ELIGIBILITY REQUIREMENTS Owner-Occupied/Permanent Residence The property shall be occupied year round as a permanent residence and shall be occupied by the borrower as their principal place of residence within 60 days of the date of loan closing. A residence is not eligible if now used, or can reasonably be expected to be used, as a recreational home. Business Use of Home If 49% or less of the square footage of a property, including any basement areas, is now regularly and exclusively used in trade or business (or can reasonably be expected to be so used)then the property is eligible. Improvements must be made to the residential portion of the property only. Completed Property Properties must be completed. A completed property is either: 1. A property that has been occupied as a year-round permanent residence for at least five continuous years; or 2. A single-unit property that has been occupied for at least 90 days by the borrower or previous tenants, and had in place all of the following permanent items at least 90 days prior to the date of credit application: a. Foundation b. Completed utility connections, including water, electric and sanitary facilities. c. Whole house heating system. d. Electrical wiring to all rooms of the house. e. Finished exterior including, but not limited to, siding, windows, doors, roofing, and basic landscaping. f. At least one bathroom with a sink,toilet, and bathtub or shower. g. A kitchen, with a sink. h. Standard plumbing to the bathroom and kitchen. Market Rate Interest Subsidy Program Page 3 i. An interior that is finished in a manner common to the locality for properties of the same general type as the property to be improved. Multi-Unit Properties For all properties which now contain or will contain upon completion of improvements, more than one dwelling unit: 1. The property must contain no more than four(4) dwelling units. 2. The borrower must occupy one of the dwelling units as borrower's principal place of residence. Manufactured or Factory-Made Houses A manufactured or factory-made dwelling unit is eligible to be improved with a loan only if the following requirements are met: 1. The dwelling unit has been placed on property owned by the borrower or being purchased under a real-estate contract. 2. The wheels of the dwelling unit have been removed and the dwelling unit has been placed on a permanent foundation. 3. The security for the loan to purchase the dwelling unit is in the form of a mortgage covering the property. 4. All utility connections including water and sanitary facilities are operable so that the dwelling unit is complete and habitable. 5. The dwelling unit is carried on the tax rolls of Ramsey County as real property. 6. The property to be improved meets all other eligibility standards set forth in this policy. Eligible/Ineligible Improvements Type of Improvement Eligible Ineligible Handicapped accessibility • bathroom modifications • any improvement which is improvements which are permanent • installation of grab bars and no a permanent fixture to fixtures handrails the property. • lifting devices • main level bathroom addition • main level bedroom addition • ramp addition • sidewalk addition or repair • widening doorways • widening hallways Market Rate Interest Subsidy Program Page 4 Energy Conservation Improvements • awnings • fireplace construction • caulking • any improvement which is • door and window repair or not a permanent fixture to replacement the Property • fireplace modifications • fireplace repairs • ground water heat pumps • insulation • solar domestic hot water heaters • storm doors and windows • ventilation • water heater replacement • weather stripping Exterior Improvements • brick repair or replacement • Improvements which are • decks not permanent fixtures such • gutters and down spouts as: saunas,decks,patios, • driveway replacement or gazebos,hot tubs, resurfacing nonpermanent landscaping • fences fixtures. • health and safety repairs to recreational improvements • landscaping(retaining walls,tree planting,tree removal) • lead or asbestos abatement • painting • roof repair or replacement • sidewalks • siding repair or replacement • soffit/fascia • steps and landings • waterproofmg Market Rate Interest Subsidy Program Page 5 Heating and Cooling Systems • air cleaners • room air conditioners • air to air heat exchanger • freestanding space heaters • air to air heat pump • new built-in gas fireplace • central air conditioning • chimney modifications or repairs • furnace repair or replacement • geothermal heat pumps • ground water heat pumps • heating systems located outside the property which are connected to the property by ducts or plumbing • off-peak heating system • solar space heating system • wall/baseboard heaters • wood burning attachment to furnace which utilize Property's existing duct work • wood burning furnaces • wood burning stoves Interior Improvements built-in appliances • construction of new • electric garage door fireplace openers • recreational improvements • electrical work (sauna,swimming pool,hot • floor covering tub,etc.) • fire sprinkler system • repairs to any portion of the • hard wired fire/smoke Property used exclusively alarms in a trade or business • kitchen cabinets and • battery operated fire/smoke countertops repair or alarms replacement • intercom systems • lead or asbestos abatement • water purification systems • security systems/security which are not a permanent bars on window fixture • wall and ceiling repair and • personal property items, replacement including furniture • plumbing fixtures and connections • sewer/septic systems • water service hookup • water softeners and/or filtration system Market Rate Interest Subsidy Program Page 6 Structural Additions and Alterations • carports • construction of or • foundation work improving garage space • garage construction or which will result in repair(new or improved personal use garage space garage space must not per property exceeding 800 exceed 800 sq.ft.and must sq.ft and 3 stalls be use for personal use • repairs to or construction of only) out buildings • health and safety repairs to • conversion of a recreational improvements nonresidential structure to a • remodeling residential structure • room additions • costs associated with moving a house • greenhouse Scope of Services City of Mounds View Responsibilities: 1. Develop program guidelines and supervise implementation. 2. Market the program to city homeowners. 3. Dictate change in program guidelines as funds or conditions demand or indicate necessary. 4. Periodically review scope of work appeals and loan denial appeals. 5. Review periodic status reports provided by the Western Bank. 6. Monitor and evaluate Western Bank performance and loan program guidelines. 7. City will establish a list of qualified remodeling counselors to be made available to Western Bank. 8. Facilitate an information meeting of participating remodeling counselors to provide expectations of services for the program(i.e. Loan preapproval requirement for services, etc.). 9. Verify work is completed according to contract application. 10. Provide an administrative fee of$75 per subsidized loan payable to the lender. Western Bank Responsibilities: 1. Process loan applications. Western Bank will first attempt to place a borrower in the MHFA Fix-up Fund, Community Fix-up Fund or Home Energy loan programs. 2. Verify that eligible applicants live in Mounds View and that the proposed property lies entirely within the city's boundary. 3. As part of the application process, Western Bank will provide borrowers a Market Rate Interest Subsidy Program Page 7 remodeling counselor through a rehabilitation remodeling counseling service after pre approval of a loan. If borrowers choose to use the remodeling service,the lender will administer payment of the service through city funds. 4. Manage loan fund and provide the City of Mounds View periodic reports as agreed. 5. Assist in marketing the program to city homeowners. 6. Ensure borrower complete a guarantee form to ensure completion of work. City of Mounds View will provide a form to Western Bank to be completed by each borrower. Exhibit B City of Mounds View Interest Subsidy Program Terms for MHFA Home Improvement Loans PROGRAM OVERVIEW The Mounds View Economic Development Authority(EDA) is making available $40,000 in tax increment financing (TIF) funds for the purpose of subsidizing the interest rate of home improvement loans under this program. The loans will be Minnesota Housing Finance Agency (MHFA) originated by participating lenders and subsidized by the City of Mounds View. The city will provide interest subsidies for MHFA loans. Maximum loan amounts through this program will be $35,000. The loans will be originated by the participating lenders of Western Bank and Center for Energy and the Environment(CEE). The program expects to provide subsidized loans for a period of at least two years. The City of Mounds View will provide funds in an account at participating lenders for the purpose of subsidizing qualifying home improvement loans. Loans provided by MHFA and originated by the lender will be subsidized in a lump sum payment from the city account(i.e. a$10,000 loan for a term of 10 years at 8% subsidized to a 5%rate will require a 3% interest payment of$1,587.20 by the city. TARGET PROPERTIES All owner occupied residential properties having 1-4 units. For MHFA loans received through the Community Fix-up Fund program,the city has identified homes built before 1965 as the need/objective for the use of these funds. Homeowners qualifying for the Community Fix-up Fund program must have an adjusted household income of$69,900 or less. Homeowners with homes built after 1965 may qualify for other MHFA Fix-up Fund loans offered at a reduced interest rate. PROGRAM GUIDELINES The program will follow the following MHFA eligibility guidelines: 1. Underwriting of these loans will follow the MHFA procedural manuals and normal and prudent underwriting criteria. 2. Participating lenders will utilize City of Mounds View TIF funds to write down the interest rate on MHFA loans. MHFA loans will be written down to a maximum effective rate of 5%. Loan interest differentials will be paid by the City of Mounds View. 3. MHFA will be solely responsible for servicing the loans. 4. Eligible improvements and eligible properties are determined by the MHFA for the individual programs and are stated in the procedural manuals for each program. MHFA Interest Subsidy Loan Program Page 2 5. Borrower's must provide proof of income,property tax statement, bid for work, and contractor warranty. 6. The property owner has 9 months from the date of closing to complete the improvement(s). 7. Loan proceeds will be disbursed to the borrower. 8. Loan proceeds over$2,500 may be secured with a mortgage. 9. Lenders will offer a remodeling counselor to property owners desiring assistance in evaluating and prioritizing improvements to their property. Remodeling counselors will also be available to assist property owners in evaluating bids. Fees for these services will be paid by the City of Mounds View. 10. Sweat equity projects are permitted. However, labor is not eligible for compensation. Sweat equity refers to an arrangement where the property owner(not a contractor)performs the home improvement. 11. Funds must first be used to abate any outstanding orders or code violations from the City of Mounds View. Use of funds is limited to eligible improvements allowable under MHFA's Fix-up Fund Loan Programs specified as Eligibility/Ineligible Requirements of this policy. ELIGIBILITY REQUIREMENTS Owner-Occupied/Permanent Residence The property shall be occupied year round as a permanent residence and shall be occupied by the borrower as his or her principle place of residence within 60 days of the date of Loan closing. A residence is not eligible if now used, or can reasonably be expected to be used, as a recreational home. Business Use of Home If 49%or less of the square footage of a Property, including any basement areas, is now regularly and exclusively used in trade or business (or can reasonably be expected to be so used)then the property is eligible. Improvements must be made to the residential portion of the property only. Completed Property Properties must be completed. A completed property is either: 1. A property that has been occupied as a year-round permanent residence for at least five continuous years; or 2. A single-unit Property that has been occupied for at least 90 days by the Borrower or previous tenants, and had in place all of the following permanent items at least 90 days prior to the date of Credit Application: a. Foundation b. Completed utility connections, including water, electric and sanitary facilities. c. Whole house heating system. d. Electrical wiring to all rooms of the house. e. Finished exterior including, but not limited to, siding, windows, doors, MHFA Interest Subsidy Loan Program Page 3 roofing, and basic landscaping. f. At least one bathroom with a sink,toilet, and bathtub or shower. g. A kitchen, with sink. h. Standard plumbing to the bathroom and kitchen. I. An interior that is finished in a manner common to the locality for properties of the same general type as the Property to be improved. Multi-Unit Properties For all properties which now contain or will contain upon completion of improvements, more than one dwelling unit: 1. The property must contain no more than four(4) dwelling units. 2. The borrower must occupy one of the dwelling units as Borrower's principal place of residence. 3. The borrower shall enter into an Occupancy Agreement providing for occupancy of some of the rental units by tenants who are persons or families of low or moderate income. Manufactured or Factory-Made Houses A manufactured or factory-made dwelling unit is eligible to be improved with a loan only if the following requirements are met: 1. The dwelling unit has been placed on property owned by the borrower or being purchased under a real-estate contract. 2. The wheels of the dwelling unit have been removed and the dwelling unit has been placed on a permanent foundation. 3. The security for the loan to purchase the dwelling unit is in the form of a mortgage covering the property. 4. All utility connections including water and sanitary facilities are operable so that the dwelling unit is complete and habitable. 5. The dwelling unit is carried on the tax rolls of Ramsey County as real property. 6. The property to be improved meets all other eligibility standards set forth in this policy. MHFA Interest Subsidy Loan Program Page 4 Eligible/Ineligible Improvements Type of Improvement Eligible Ineligible Handicapped accessibility • bathroom modifications any improvement which is improvements which are permanent • installation of grab bars and no a permanent fixture to fixtures handrails the property. • lifting devices • main level bathroom addition • main level bedroom addition • ramp addition • sidewalk addition or repair • widening doorways • widening hallways Energy Conservation Improvements • awnings • fireplace construction • caulking • any improvement which is • door and window repair or not a permanent fixture to replacement the Property • fireplace modifications • fireplace repairs • ground water heat pumps • insulation • solar domestic hot water heaters • storm doors and windows • ventilation • water heater replacement • weather stripping Exterior Improvements • brick repair or replacement • Improvements which are • decks not permanent fixtures such • gutters and down spouts as: saunas,decks,patios, • driveway replacement or gazebos,hot tubs, resurfacing nonpermanent landscaping • fences fixtures. • health and safety repairs to recreational improvements • landscaping(retaining walls,tree planting,tree removal) • lead or asbestos abatement • painting • roof repair or replacement • sidewalks • siding repair or replacement • soffit/fascia • steps and landings • waterproofing MHFA Interest Subsidy Loan Program Page 5 Heating and Cooling Systems • air cleaners • room air conditioners • air to air heat exchanger • freestanding space heaters • air to air heat pump • new built-in gas fireplace • central air conditioning • chimney modifications or repairs • furnace repair or replacement • geothermal heat pumps • ground water heat pumps • heating systems located outside the property which are connected to the property by ducts or plumbing • off-peak heating system • solar space heating system • wall/baseboard heaters • wood burning attachment to furnace which utilize Property's existing duct work • wood burning furnaces • wood burning stoves Interior Improvements built-in appliances • construction of new • electric garage door fireplace openers recreational improvements • electrical work (sauna,swimming pool,hot • floor covering tub,etc.) • fire sprinkler system • repairs to any portion of the • hard wired fire/smoke Property used exclusively alarms in a trade or business • kitchen cabinets and battery operated fire/smoke countertops repair or alarms replacement intercom systems • lead or asbestos abatement • water purification systems • security systems/security which are not a permanent bars on window fixture • wall and ceiling repair and • personal property items, replacement including furniture • plumbing fixtures and connections • sewer/septic systems • water service hookup • water softeners and/or filtration system MHFA Interest Subsidy Loan Program Page 6 Structural Additions and Alterations • carports • construction of or • foundation work improving garage space • garage construction or which will result in repair(new or improved personal use garage space garage space must not per property exceeding 800 exceed 800 sq.ft.and must sq.ft and 3 stalls be use for personal use • repairs to or construction of only) out buildings • health and safety repairs to • conversion of a recreational improvements nonresidential structure to a • remodeling residential structure • room additions • costs associated with moving a house • greenhouse SCOPE OF SERVICES City of Mounds View Responsibilities: 1. Develop program guidelines and supervise implementation. 2. Market the program to city homeowners. 3. Dictate change in program guidelines as funds or conditions demand or indicate necessary. 4. Periodically review scope of work appeals and loan denial appeals. 5. Review periodic status reports provided by participating lenders. 6. Monitor and evaluate participating lenders performance and loan program guidelines. 7. City will establish a list of qualified remodeling counselors to be made available to the lender(s). 8. Facilitate an information meeting of participating remodeling counselors to provide expectations of services for the program(i.e. Loan pre-approval requirement for services, etc.). 9. Verify work is completed according to contract application. 10. Provide an administrative fee of$75 per subsidized loan payable to the lender. Participating Lenders Responsibilities: 1. Process loan applications. Lenders will first attempt to place a borrower in either the MHFA Fix-up Fund, Community Fix-up Fund or Home Energy loan programs. 2. Evaluate loan requests using MHFA underwriting guidelines. 3. Verify that eligible applicants live in Mounds View and that the proposed property lies entirely within the city's boundary. 4. As part of the application process, lenders will provide borrower a list of remodeling MHFA Interest Subsidy Loan Program Page 7 counselors after pre approval of a loan. If borrower chooses to use a remodeling counselor,the lender will administer payment of the city funds for the service. 5. Manage loan fund and provide the City of Mounds View periodic reports as agreed. 6. Assist in marketing the program to city homeowners. 7. Ensure borrower complete a guarantee form to ensure completion of work. City of Mounds View will provide a form to each lender to be completed by the borrower. N:\DATA\GROUPS\COMDEV\HOUSING\HOMELOAN\GUIDLINE.W PD Exhibit C MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-25 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING THE ECONOMIC DEVELOPMENT AUTHORITY's CONSIDERATION OF LOAN GUIDELINES AND TAX INCREMENT FINANCING FOR THE PROPOSED INTEREST SUBSIDY HOME IMPROVEMENT LOAN PROGRAM WHEREAS, due to the age and condition of the city's housing stock it is important to encourage reinvestment in the community to avoid blight and to upgrade the quality, livability and marketability of the housing stock; and WHEREAS, as part of an Interest Subsidy Home Improvement Loan Program the EDA approved application to the Minnesota Housing Finance Agency for the Community Fix-up Fund Program and was ultimately approved by the MHFA which will allow more homeowners within the city to access low interest rates for home improvement loans; and WHEREAS, the EDC has reviewed the proposed guidelines for the interest subsidy program and has determined that the guidelines meet the objectives needed to provide Mounds View homeowners incentives to perform needed rehabilitation and home improvements to their homes; and WHEREAS, the Economic Development Commission finds that by approving tax increment funds for subsidizing home improvement loans, more Mounds View homeowners may access home improvement loans at a reduced interest rate; and WHEREAS, the Economic Development Commission has determined that approving tax increment funds for subsidizing home improvement loans, the entire community of Mounds View will benefit by improving the quality and livability of the city's housing. NOW THEREFORE, BE IT RESOLVED THAT the Economic Development Commission hereby recommends approval to the Economic Development Authority for the allocation of$75,000 in tax increment funds to administer and subsidize home improvement loans for Mounds View homeowners and to approve the Interest subsidy guidelines for MHFA and Market Rate loans in conjunction with participating lenders. Adopted this 22th day of June 1998. ATTEST: Chair (SEAL) City Administrator L B • e b To: Economic Development Commission Members From: Kevin Carroll, Economic Development Coordinator MEMORANDUM Subject: Business Improvement Partnership Loan Program Date: May 22, 1998 INTRODUCTION Given the limited number(and the relatively small size) of parcels in Mounds View that are available for new commercial or industrial development, it is important that sufficient attention be devoted to making certain that we retain existing businesses and help them to expand or improve their operations. I believe that the"Business Improvement Partnership Loan Program"(hereinafter"the Program")that was started in 1995 was an important step in that direction. However, it appears that the Program has been largely inactive for over a year and a half, for reasons that presumably include limited public awareness of the Program, financial constraints, staff turnovers, and/or new or different EDC/EDA/City Council priorities. Rather than continuing to leave the Program"in limbo,"it seems appropriate to determine whether the Program should be reactivated or officially discontinued. If it is to be reactivated,thought should be given to whether any changes should be made in the structure or eligibility requirements of the Program. This Memo has been prepared to provide some historical perspective, and to outline a proposed course of action for the EDC's consideration. HISTORY/CHRONOLOGY February 13, 1995: Resolution No. 95-EDA-23 adopted : "Resolution Supporting the Pursuit of a Small Business Loan Program for Mounds View Businesses." (After this date,the following presumably occurred: drafting and approval of generic "Participation Agreement"; drafting and approval of"Application for Business Loan Program" form; preparation of informational trifold brochure; preparation of one page "Low Interest Loans" flyer.) May 25, 1995: Resolution No. 95-EDC-9 adopted: "Resolution Recommending Amounts to Fund the Business Loan Program for 1995 and 1996." [$100,000 for 1995 and$300,000 for 1996] May 25, 1995: Resolution No. 95-EDC-10 adopted: "Resolution Recommending Approval of Small Business Loan for Dynex Industries." [Applicant requested ■ maximum loan of$50,000.00 to supplement an SBA 504 Loan of$1, 013,000...$25,000 from MV EDA at 2% and$25,000 from North Star Bank at 9 5/8%for 5 years,then adjusted annually to prime rate at that time....monthly payments of$238.81 and$310.00, respectively, from 10-1-85 to 9-1-2005.] June 5, 1995: Resolution No. 95-EDA-28 adopted: "Resolution Approving Business Loan for Dynex Industries." [Both loans are current in all respects,per telephone conversation with Jeff Neisen at North Star Bank on May 6, 1998.] September 28, 1995: Resolution No. 95-EDC-11 adopted: "Resolution Recommending Approval of Small Business Loan to Forcia Inc." [d/b/a Mister Donut...later, "Donut Connection"....applicant requested maximum loan of$50,000.00 $25,000 from MV EDA at 2% and $25,000 from Western Bank at 11.25 floating interest rate for 5 years...monthly payments of approximately $548.64 and$438.50,respectively, from 11/12/95 to 10/12/2000.] September 28, 1995: Resolution No. 95-EDC-12 adopted: "Resolution Approving the Establishment of a Loan Committee." October 9, 1995: Resolution No. 95-EDA-32 adopted: "Resolution Approving Business Improvement Loan for Forcia,Inc." [Both loans are current in all respects, per telephone conversation with Cindy Carlson of Western Bank on May 7, 1998; contact loan supervisor Beth Munroe at 290-8136 for more information.] January 23, 1996: Apparent date of informational letter to local businesses regarding the Business Improvement Partnership loan program. August 12, 1996: Resolution No. 96-EDC-15 adopted: "Resolution Recommending Approval of a Business Improvement Partnership Loan to Mounds View FINA." [Applicant requested maximum loan of$50,000.00....$25,000 from MV EDA at 2% and$25,000.00 from Western State Bank of St. Paul at 11% fixed for 10 years... monthly payments of$230.36 and $346.63, respectively, 9/21/96 through 8/21/2006.] August 12, 1996: Resolution 96-EDA-50 adopted: "Resolution Approving Business Improvement Partnership Loan for Mounds View FINA." [Both loans are current in all respects, per telephone conversation with Cindy Carlson of Western Bank on May 7, 1998; contact loan supervisor Beth Munroe at 290-8136 for more information.] (It is possible that another mailing to local businesses may have occurred between August 12, 1996 and the present, but I have not yet been able to verify that fact, or the actual date of any such mailing.) ■ ISSUES/ANALYSIS 1. Should the Business Improvement Partnership Program be "reactivated"? Recommendation: Yes. Rationale: The three loans that have been made under the Program thus far seem to have been complete successes. If there are funds available, we should build on those successes by making additional loans. The Program is, or could be, one of the most visible manifestations of the City's commitment to improving the local business climate. If handled properly,the Program could engender good will and generate favorable publicity for the businesses that we assist and for the City itself. 2. How much money is available for the Program? Answer: The 1998 Budget allocates $45,000.00 for"Business improvement partnership loans,"none of which has apparently been loaned, to date. This is 45% of the amount($100,000)that was budgeted or approved for the first year of the Program, but I have been told that funds that might otherwise be available for the Program are now being devoted to the Community Center. 3. To what extent should the Program be marketed or publicized? Suggestion: The Program should first be specifically targeted to conforming businesses that are located in buildings that are structurally sound, but that are unattractive, inefficient, outdated, or in need of improvement or renovation for other valid reasons. If loan funds then remain,press releases to the local media and/or feature stories in local publications should be used to publicize the Program in the least expensive manner. An effort should be made to avoid generating more interest than the City has the financial means to accommodate, in order to minimize ill will and/or claims of favoritism with respect to those who do receive loans. Reason: City money should not be used to improve non-conforming uses that the City may eventually want to eliminate or relocate, nor should City money be used for"patchwork" on structures that are in fundamentally poor condition. Ideally, loan funds would be used in a manner that would (literally)produce visible results, thereby improving not only the business in question but also the overall appearance of the City's business district. 4. What changes,if any, should be made in the Program? Suggestion: Eliminate the requirement that a business be in operation in Mounds View for two years before becoming eligible for the Program. Longevity could, however, be considered as a factor if the total loan proceeds requested by all ■ y , applicants exceeded available funds. Reason: The two year eligibility requirement was presumably imposed due to concerns about assisting a business that might be"here today and gone tomorrow." However, given the fact that loan proceeds will generally be used for interior and exterior structural and cosmetic improvements that will "stay"in the City, the City will benefit from any such improvements even if other businesses eventually occupy the "improved"business sites. Even if the two year requirement is eliminated, a request from a longstanding member of the local business community should be entitled to priority over a relative"newcomer,"all other things being equal. CONCLUSION The EDC should adopt a Resolution recommending the immediate reactivation of the Business Improvement Partnership Loan Program. Given the length of time that has passed since the Program was active, a Resolution would enable the EDC to "officially"reaffirm its commitment to the Program, and provide a formal action that could be publicized in order to generate new interest in the Program. At the meeting on May 28th, the EDC's input and guidance will be sought with respect to the specific businesses that staff should target for the Program, with the understanding that special emphasis will be being given to proposed improvements that would enhance the visual aesthetics of the commercial, industrial and retail sectors of the community. ■ LKI . . . _ ,----*J., (..,fiD . 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'CL,� a� = s � �• .r ... ., —ti _ 'Qy a .. goo �, _` ,41 • ›' i "' = o = 5 o 4) w -4 I _7 = y _2 4 3'6 � 5 2 ` 1: _ Nit: O : 0 yi. r r_-'� 'Q :' o cu p w C •.. u ° 0 0) v ^ tC W 5a. 0 to. .0 c4 . _ _ W 4 - 0 1 N • MOUNDS VIEW ECONOMIC DEVELOPMENT COMMISSION RESOLUTION NO. 98-EDC-24 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING THE REACTIVATION OF THE BUSINESS IMPROVEMENT PARTNERSHIP LOAN PROGRAM WHEREAS, on February 13, 1995 the Economic Development Commission adopted a Resolution supporting the pursuit of a business loan program ; and WHEREAS, on May 25, 1995 the Economic Development Commission adopted a Resolution approving funding for the business loan program for 1995 and 1996; and WHEREAS, on June 25, 1995 the Economic Development Authority adopted a Resolution approving the business loan program; and WHEREAS, the stated purpose of the business loan program was to "[help] Mounds View businesses thrive and prosper while improving the aesthetics of the commercial, industrial and retail sectors of the community;" and WHEREAS, the types of improvements eligible for the loan program included: repairing storefronts, windows, doors, etc.; upgrading interior design and configuration; painting, cleaning or staining the interior or exterior of a building; upgrading or replacing an existing business sign; new or upgraded landscaping; parking lot redesign or repair; stormwater discharge improvements; and ADA compliance upgrades; and WHEREAS, during 1995 and 1996 a total of three loans of$25,000.00 each were approved pursuant to the business loan program, each of which resulted in significant improvements to the visual aesthetics and/or operational efficiency of the businesses receiving the loans; and WHEREAS, each of the three loan recipients has made all of the required loan payments in full and on time; and WHEREAS, no business loans have been sought or granted since August of 1996, nor has the business loan program been actively marketed or publicized since that time, despite the fact that funds have been annually budgeted for the program; and WHEREAS, the availability of low interest loan funds could prompt some businesses in Mounds View to make improvements that might not otherwise be made, and that said improvements could improve the appearance of Mounds View's commercial district and enhance its tax base; and WHEREAS, the reactivation of the business loan program would demonstrate to Mounds View's businesses and residents the City's commitment to improving the local business climate; ►. NOW THEREFORE, BE IT RESOLVED that the Economic Development Commission of the City of Mounds View hereby recommends that the Economic Development Authority: a. approve the reactivation of the Business Improvement Loan Program, and B. authorize the funding of business improvement loans in a total amount not to exceed the $45,000.00 that was budgeted for such loans for 1998. Adopted this 28th day of May, 1998. ATTEST: Chair (SEAL) City Administrator Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota e 1,C 41) Regular Meeting May 28, 1998 i `^(7c/c, t; City of Mounds View, Conference Room C �' )) 2 � 1 f a 2401 Highway 10, Mounds View, MN 55112 16/r 1. CALL TO ORDER: f The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. " 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Rosemary Goff,Tom Field, and Brian Sjoberg. Members absent: Dan Nelson. EDA Liaison present: Roger Stigney. Staff present: City Administrator Chuck Whiting, Community Development Director Rick Jopke, Housing Inspector Steve Dorgan, and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Field/Goff to approve the minutes from April 24, 1998. Motion Carried 5 Ayes 0 Nays • 4. SPECIAL BUSINESS Chairperson Carlson introduced Mr. David Piggott, Executive Director of Metro East Development Partnership. Mr. Piggott distributed copies of his organization's Annual Report, outlined Metro East's ongoing programs and activities, and responded to questions from EDC members and city staff members. 5. EDC BUSINESS A, Discussion of Home Improvement Loan Subsidy Program. Housing Inspector Dorgan reviewed highlights of the drafts of the program outlines for the market rate home improvement program and the MHFA home improvement loan program. With regard to the former,it was suggested that"Target Properties" be changed to "Eligible Properties"or"Eligible Properties/Owners". A question was posed regarding how the participating lender could verify or ensure compliance with Program Guideline #11 (loan proceeds must first be used to abate outstanding orders or code violations). Communication between the lender and the city would be needed to determine the existence of any such orders or violations. With respect to the MHFA program, it was suggested that Program Guideline N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 #3 be revised to indicate that MHFA will be solely responsible for servicing the loans, and that the paragraphs be renumbered due to the absence of a Paragraph #4, and that the word "dispersed" in Paragraph #8 be changed to "disbursed." Questions were asked and clarifications were provided regarding eligible improvements, particularly with regard to waterproofing of basements, drain tiling, room additions, and repair work related to sewer back-ups, other types of water damage, and storm damage. Under "Scope of Services", it was suggested that more specific information be provided regarding the city's responsibilities, i.e., monitoring the issuance of building permits and using city staff to verify that improvements (for which loan proceeds have been provided) are actually being made. It was also suggested that staff determine whether the loan documentation includes provisions obligating the borrowers to use the loan proceeds for the intended purpose(s). The consensus was that Housing Inspector Dorgan should continue to refine the two program outlines in accordance with the EDC's discussion, so that final drafts could be reviewed and approved at a future EDC meeting. B. Discussion of the Mermaid Project (Hotel/Conference Cen er) Community Development Director Jopke reviewed his 5-22-98 Memorandum to the EDA. The primary obstacle to the hotel project continues to be the projected cost of acquiring the land needed for the project, including relocation costs, and the related issue of the amount of city financial assistance requested by the project's proponents (which continues to be well in excess of the amount of assistance that the anticipated tax increment could support). City staff members will continue to work with the city's consultants, and others, to explore options and alternatives that might help to "narrow the gap." C. Update on Development Proposals Community Development Director Jopke reviewed recent developments with regard to the proposed Walgreen's proposal (dead,largely due to neighborhood opposition) and the movie theater project(which appears likely to proceed as planned if roadway access issues can be successfully resolved). D. Consideration of EDC Vacancy Staff will continue to receive and review applications for the opening created by Steve Larson's resignation. EDC members were encouraged to notify staff of potential candidates and/or to encourage those candidates to submit applications. E. Consideration of Business Improvement Partnership Loan Program Discussion of this agenda item was deferred to the next meeting due to lack of time. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: None other than as noted above. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at approximately 9:10 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 1 Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting May 28, 1998 City of Mounds View, Conference Room C 2401 Highway 10, Mounds View, MN 55112 1. CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson, Cindy Carlson. 2. ROLL CALL: Members present: Cindy Carlson, Ron Schmidt, Rosemary Goff, Tom Field, and Brian Sjoberg. Members absent: Dan Nelson. EDA Liaison present: Roger Stigney. Staff present: City Administrator Chuck Whiting, Community Development Director Rick Jopke, Housing Inspector Steve Dorgan, and Economic Development Coordinator Kevin Carroll. 3. APPROVAL OF MINUTES: Motion/Second: Field/Goff to approve the minutes from April 24, 1998. Motion Carried 5 Ayes 0 Nays 4. SPECIAL BUSINESS Chairperson Carlson introduced Mr. David Piggott, Executive Director of Metro East Development Partnership. Mr. Piggott distributed copies of his organization's Annual Report, outlined Metro East's ongoing programs and activities, and responded to questions from EDC members and city staff members. 5. EDC BUSINESS A. Discussion of Home Improvement Loan Subsidy Program. Housing Inspector Dorgan reviewed highlights of the drafts of the program outlines for the market rate home improvement program and the MHFA home improvement loan program. With regard to the former, it was suggested that"Target Properties" be changed to "Eligible Properties" or "Eligible Properties/Owners". A question was posed regarding how the participating lender could verify or ensure compliance with Program Guideline #11 (loan proceeds must first be used to abate outstanding orders or code violations). Communication between the lender and the city would be needed to determine the existence of any such orders or violations. With respect to the MHFA program, it was suggested that Program Guideline N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 #3 be revised to indicate that MHFA will be solely responsible for servicing the loans, and that the paragraphs be renumbered due to the absence of a Paragraph #4, and that the word "dispersed" in Paragraph#8 be changed to "disbursed." Questions were asked and clarifications were provided regarding eligible improvements, particularly with regard to waterproofing of basements, drain tiling, room additions, and repair work related to sewer back-ups, other types of water damage, and storm damage. Under"Scope of Services", it was suggested that more specific information be provided regarding the city's responsibilities, i.e., monitoring the issuance of building permits and using city staff to verify that improvements (for which loan proceeds have been provided) are actually being made. It was also suggested that staff determine whether the loan documentation includes provisions obligating the borrowers to use the loan proceeds for the intended purpose(s). The consensus was that Housing Inspector Dorgan should continue to refine the two program outlines in accordance with the EDC's discussion, so that final drafts could be reviewed and approved at a future EDC meeting. B. Discussion of the Mermaid Project (Hotel/Conference Center) Community Development Director Jopke reviewed his 5-22-98 Memorandum to the EDA. The primary obstacle to the hotel project continues to be the projected cost of acquiring the land needed for the project, including relocation costs, and the related issue of the amount of city financial assistance requested by the project's proponents (which continues to be well in excess of the amount of assistance that the anticipated tax increment could support). City staff members will continue to work with the city's consultants, and others, to explore options and alternatives that might help to "narrow the gap." C. Update on Development Proposals Community Development Director Jopke reviewed recent developments with regard to the proposed Walgreen's proposal (dead, largely due to neighborhood opposition) and the movie theater project (which appears likely to proceed as planned if roadway access issues can be successfully resolved). D. Consideration of EDC Vacancy Staff will continue to receive and review applications for the opening created by Steve Larson's resignation. EDC members were encouraged to notify staff of potential candidates and/or to encourage those candidates to submit applications. E. Consideration of Business Improvement Partnership Loan Program Discussion of this agenda item was deferred to the next meeting due to lack of time. 6. REPORTS FROM CHAIR, COMMISSIONERS,AND STAFF: None other than as noted above. N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 7. ADJOURNMENT There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at approximately 9:10 a.m. Respectfully Submitted, Kevin Carroll Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDA-EDC\EDC\EDCMIN98\EDCMIN05.98 1