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HomeMy WebLinkAbout2005.11.21 EDA Packet 0rI im AGENDA CITY OF HUGO JOINT EDA/CITY COUNCIL MEETING MONDAY, NOVEMBER 21, 2005 - 8:30 AM HUGO CITY HALL 8:30 am 1. Call to Order 8:31 am 2. Roll Call 8:32 am 3. Approval of Minutes • EDA Meeting of September 19, 2005 • EDA Meeting of October 17, 2005 8:35 am 4. Update on the TIF District/Downtown Redevelopment Project Implementation Plan • Update of the November 16, 2005, Meeting of the TIF Subcommittee with Local Business and Property Owners • Review Draft TIF/Downtown Redevelopment Project Press Release and Q & A Newsletter • Review Marketing Plan/Schedule Open House • Authorize Staff to begin the TIF District Establishment Process 9:50 am 5. Update on Twin Cities Community Capital Fund Program 10:10 am 6. Update on City Purchase of Carpenters Restaurant and the Antique Store from Mike and Catherine Anderson 10:20 am 7. Update on Advertisement for EDA Position 10:30 am 8. Adjournment BACKGROUND MEMO FOR THE EDA MEETING OF O , 2005 nPVc-Y-Ab-'( fO 3. SEPTEMBER 19, 2005 AND OCTOBER 17, 2005 EDA MEETING MINUTES City staff recommends that the EDA approve the minutes for the September 19, 2005 EDA meeting and the October 17, 2005 EDA meeting as presented. 4. UPDATE ON THE TIF DISTRICT/DOWNTOWN REDEVELOPMENT PROJECT IMPLEMENTATION PLAN City staff, Paul Steinman of Springsted, and subcommittee member Phil Klein met with groups of local downtown area business and property owners on November 16, 2005 to discuss the downtown plan and methods of implementing the plan. Subcommittee members Nick Skarich, Mike Granger, and Frank Puleo were unable to attend. The meetings are part of the marketing plan for the implementation of the downtown plan and the establishment of a TIF district. City Staff and Paul Steinman will present an overview of the outcomes of the meetings,the marketing plan, and the proposed schedule of activities at the meeting. City staff recommends that the Council and EDA authorize and schedule a public open house to inform downtown area property owners of the downtown redevelopment process and the potential impacts. The subcommittee has also prepared a draft press release and Q&A newsletter about TIF and the downtown redevelopment plan for review by the Council and the EDA at the meeting. Staff recommends that the Council and the EDA review the draft Q&A newsletter and press release and become familiar with the materials. Staff recommends that the Council and the EDA approve the materials for immediate distribution to downtown residents and property owners if the Council and the EDA are comfortable with the content of the documents. Staff further recommends that the EDA and the Council authorize staff to begin the necessary procedures in order to establish the TIF District, which includes conducting inspections of buildings within the proposed district. 5. UPDATE ON TWIN CITIES COMMUNITY CAPITAL FUND PROGRAM At the September 19, 2005,joint EDA/Council meeting Scott Martin from the Twin Cites Community Capital Fund (TCCCF) gave a presentation about the organization and the benefits members receive from participating in the fund to the EDA and Council. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. The EDA and Council thanked Scott Martin for coming to the meeting and suggested that the EDA and the Council evaluate the materials in order and make a recommendation at the next EDA meeting on whether or not to participate in the program. Springsted, the City's financial advising firm, has prepared some background information on the fiend. Staff suggests that the EDA and the Council decide whether or not the City should consider becoming a member of the TCCCF at this time. 6. UPDATE ON CITY PURCHASE OF CARPENTERS RESTAURANT AND THE ANTIQUE STORE FROM MIKE AND CATHERINE ANDERSON Mike and Catherine Anderson are still reviewing the purchase agreement that the City Council approved at their September 6, 2005 meeting. City staff will provide the Council and the EDA an update on recent discussions with the Andersons. 7. UPDATE ON ADVERTISEMENT FOR EDA POSITION At its September 19, 2005 meeting, the EDA discussed the request from Commissioner Theresa Charpentier to seek a replacement for her on the TIF Subcommittee due to a change in her work schedule. At their October 17, 2005 meeting, Council accepted the resignation of Theresa Charpentier from the EDA and publicly thank her for her service to the City of Hugo. The Council directed staff to advertise for this vacancy and contact the remaining applicants who originally interviewed for the position in order to determine their interest in serving out Theresa's term on the EDA. Staff has sent letters to the remaining original applicants and has advertised the opening in the local news papers, the City newsletter, and the City website. The Deadline for receiving applications is December 2, 2005. After the deadline, City staff will schedule the applicants for interviews with the City Council. MINUTES FOR THE ECONOMIC DEVELOPMENT AUTHORITY MEETING OF OCTOBER 17,2005 pit! K 1 Pl;4 The meeting was called to order by Nw"*W at 8:30 am. Present: Arcand, Klein, Bever Absent: Miron, Granger, Skarich, Charpentier (The EDA did not have a quorum) Community Development Director, Bryan Bear Community Development Intern,Andrew Gitzlaff 2. EDA MEETING OF SEPTEMBER 19,2005 Klein,Arcand, and Bever agreed to table the minutes until the next regularly scheduled meeting. 3. SITE PLAN REVIEW FOR PEARSON MECHANICAL INC. At the July 18, 2005 EDA meeting the EDA recommended that the City sell the 3.3 acre property located in the Bald Eagle Industrial Park to Pearson Mechanical Inc., owned by Ronald A. Pearson. Pearson Mechanical Inc. was one of two businesses that were selected to acquire the City property in the park through the Request for Proposal (RFP) process initiated by the EDA. Pearson Mechanical Inc. has since submitted a preliminary site plan for review by the EDA as part of the conditions of approving the final purchase agreement. City staff presented an overview of the proposed site plan to the EDA and that the EDA reviewed and commented on the proposed site plan. Commissioner Arcand, Klein, and Bever recommended approval of the proposed site plan to the City Council. 4. UPDATE OF OCTOBER 13, 2005 MEETING OF THE TIF SUBCOMMITTEE City staff, Paul Steinman of Springsted, and the subcommittee,consisting of Mike Granger, Frank Puleo, and Phil Klein, met on October 13, 2005. Subcommittee member Nick Skarich was unable to attend. At the last EDA meeting, the subcommittee was directed to work on creating a marketing plan for the implementation phase of the downtown redevelopment plan and establishment of the TIF district. The following items were discussed at the subcommittee meeting: 1.) The proposed timeline and work items to be completed for the marketing plan. 2.) The content of the draft TIF/downtown redevelopment project Q &A newsletter. 3.) The proposed meeting dates for a joint EDA/Council educational workshop regarding the marketing plan. At the meeting, City staff presented to the EDA an overview of the proposed marketing plan and the schedule of activities to be completed. The EDA reviewed the proposed timeline and the draft Q & A newsletter and provide staff with feedback on how to proceed. Staff recommended scheduling a joint Council/EDA workshop in order to review and make final decisions on the future direction of the proposed downtown TIF district. Arcand, Klein, and Bever agreed to have the joint EDA/Council workshop on Monday, November 21, 2005, at 8:30 am, at the EDA's next regularly scheduled meeting. 5. UPDATE ON TWIN CITIES COMMUNITY CAPITAL FUND PROGRAM At the September 19, 2005,joint EDA/Council meeting Scott Martin from the Twin Cites Community Capital Fund (TCCCF) gave a presentation about the organization and the benefits members receive from participating in the fund to the EDA and Council. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. The EDA and Council thanked Scott Martin for coming to the meeting and suggested that the EDA and the Council evaluate the materials and make a recommendation at the next EDA meeting on whether or not to participate in the program. Springsted,the City's financial advising firm, has prepared some background information on the fund. The EDA discussed whether or not the City should consider becoming a member of the TCCCF at this time. Arcand, Klein, and Bever agreed to table the item until the next regularly scheduled EDA meeting. 6. UPDATE ON "END ZONE PROPERTY" Terry Montpetit has entered into a contract to purchase the former `End Zone Property' located at 13891 Forest Blvd. He intends to remodel the existing building and open a restaurant/bar. The Staff gave an update to the EDA on the recent discussions with Terry Montpetit. 7. OPENING FOR HUGO RESIDENTS TO SERVE ON HRA BOARD IN 2006 Washington County Commissioner Dennis Hegberg requested that a public announcement be made that there will be a vacancy on the Washington County Housing and Redevelopment Authority Board in 2006. Any resident interested in serving on the Board, with the exception of Council members, should contact Washington County Commissioner Dennis Hegberg or the City of Hugo for an application. City Staff informed the EDA of the vacancy on the HRA Board. 8. ACCEPT RESIGNATION FROM EDA MEMBER THERESA CHARPENTIER At its September 19, 2005 meeting, the EDA discussed the request from Commissioner Theresa Charpentier to seek a replacement for her on the TIF Subcommittee due to a change in her work schedule. The EDA accepted her resignation and the City Council committee voted unanimously to select and appoint Phil Klein as her replacement. Since that time, staff has had the opportunity to discuss with Theresa her future on the EDA. Theresa has submitted a letter of resignation to the City for her service on the EDA, citing a change in her work schedule, which does not allow her the flexibility to attend regular meetings. City staff informed the EDA that at the next City Council meeting the staff will recommend Council accept the resignation of Theresa Charpentier from the EDA and publicly thank her for her service to the City of Hugo. City staff will further recommend that the Council direct staff to advertise for the vacancy on the EDA and contact the remaining applicants who originally interviewed for the position in order to determine their interest in serving out Theresa's term on the EDA. 9. ADJOURNMENT Klein, Arcand, and Bever agreed to adjourn the EDA meeting at 10:00 am MINUTES FOR THE JOINT EDA/CITY COUNCIL MEETING OF SEPTEMBER 19, 2005 The meeting was called to order by Mayor Fran Miron at 8:30 am. Present: Miron, Arcand, Klein, Granger, Skarich, Haas,Petryk, Puleo Absent: Charpentier City Administrator,Mike Ericson Community Development Director,Bryan Bear Community Development Intern,Andrew Gitzlaff 2. EDA MEETING OF AUGUST 15,2005 City staff recommended the EDA approve the minutes for the August 15, 2005 meeting as presented. Granger made motion, Klein seconded to approve the minutes for the August 15, 2005 meeting as presented. All aye. Motion carried 3. PRESENTATION FROM THE SCOTT MARTIN FROM THE TWIN CITES COMMUNITY CAPITAL FUND ON ECONOMIC DEVELOPMENT FINANCING SOURCES Scott Martin from the Twin Cites Community Capital Fund (TCCCF) gave a presentation about the organization and the benefits members receive from participating in the fund to the EDA and Council. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. The EDA and Council thanked Scott Martin for coming to the meeting and suggested that the EDA and the Council evaluate the materials in order and make a recommendation at the next EDA meeting on whether or not to participate in the program. 4. UPDATE OF AUGUST 23,2005 MEETING OF THE TIF SUBCOMMITTEE City staff, Mikaela Huot and Paul Steinman of Springsted, and the subcommittee met on August 23, 2005. Subcommittee member Theresa Charpentier was unable to attend. The following items were discussed at the subcommittee meeting: 1.) The procedural requirement that must be followed during the initial district testing phase in order to meet state qualifications for the establishment of a TIF redevelopment district. 2.) The proposed timeline for establishing the district and the creation of a financing plan. 3.) The different means by which the public can be informed about TIF and the important role TIF will play in the success of the downtown plan, and how the establishment of the district may affect residents and business owners within the district. At the meeting, Paul Steinman of Springsted, the City's Financial Advisor, and City staff presented an overview to the EDA and Council on tax increment financing and the procedural requirements that must be met and discussed strategies on how to market the TIF district and the next phase of the downtown plan to community members. The EDA and the Council directed the TIF subcommittee to work on finalizing a communication and marketing plan for the implementation phase of the downtown redevelopment project and the establishment of the TIF district. 5. SITE PLAN REVIEW FOR ONEKA PET RESORT At the July 18, 2005 EDA meeting the EDA recommended that the City sell the 1.1 acre "Rink-Tec"property located in the Bald Eagle Industrial Park to Oneka Pet Resort, owned by Guy and Cindy LaBarre. Oneka Pet Resorts was one of two businesses that were selected to acquire the City property in the park through the Request for Proposal (RFP) process initiated by the EDA. Oneka Pet Resort submitted a preliminary site plan for review by the EDA at the meeting as part of the conditions of approving the final purchase agreement. City staff presented an overview of the proposed site plan to the EDA and the City Council and recommended that the EDA and the Council review and comment on the proposed site plan. Granger made motion, Klein seconded to recommend approval of the proposed site plan to the City Council. All aye. Motion Carried 6. UPDATE ON CITY PURCHASE OF CARPENTERS RESTAURANT AND THE ANTIQUE STORE FROM MIKE AND CATHERINE ANDERSON Staff informed the EDA and Council that recent negotiations have been successful and that Andersons have agreed to sell to the City,both Carpenters restaurant and the antique store. At the September 6, 2005, City Council meeting the Council approved the purchase of both properties in the amount of$687,000. This includes a price of$347,000 for the antique store and$340,000 for the Carpenters restaurant,which is consistent with evaluations of City Assessor Frank Langer. There will be a two-year lease back to the Andersons at no cost, and they would continue to operate the restaurant on a month-to- month basis,in order to allow the flexibility of the City to continue negotiations with the developers on the Egg Lake development project. Granger made motion, Klein seconded to direct staff to meet with the other property owners along the western edge of Egg Lake to find out if they would be interested in selling their properties to the City. All aye. Motion carried. 7. APPOINTMENT OF REPLACEMENT MEMBER TO THE TIF SUBCOMMITTEE City staff informed the EDA and the Council that Theresa Charpentier will be vacating her position on the TIF subcommittee. Mrs. Charpentier has recently started a new job and does not have enough available time to participate in the subcommittee. City staff recommended the City Council and the EDA appoint a replacement member to the TIF subcommittee. Arcand made motion, Bever seconded to appoint Phil Klein to the TIF Subcommittee All aye. Motion carried. 8. ADJOURNMENT Granger made motion,Bever seconded to adjourn the EDA meeting at 10:20 All aye. Motion carried. Haas mane motion, Granger seconded to adjourn the City Council meeting at 10:22 All aye. Motion carried. MINUTES FOR THE JOINT EDA/CITY COUNCIL MEETING OF SEPTEMBER 19,2005 The meeting was called to order by Mayor Fran Miron at 8:30 am. Present: Miron, Arcand, Klein, Granger, Skarich, Haas, Petryk, Puleo Absent: Charpentier City Administrator,Mike Ericson Community Development Director, Bryan Bear Community Development Intern, Andrew Gitzlaff 2. EDA MEETING OF AUGUST 15, 2005 City staff recommended the EDA approve the minutes for the August 15, 2005 meeting as presented. Granger made motion, Klein seconded to approve the minutes for the August 15, 2005 meeting as presented. All aye. Motion carried 3. PRESENTATION FROM THE SCOTT MARTIN FROM THE TWIN CITES COMMUNITY CAPITAL FUND ON ECONOMIC DEVELOPMENT FINANCING SOURCES Scott Martin from the Twin Cites Community Capital Fund(TCCCF) gave a presentation about the organization and the benefits members receive from participating in the fund to the EDA and Council. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. The EDA and Council thanked Scott Martin for coming to the meeting and suggested that the EDA and the Council evaluate the materials in order and make a recommendation at the next EDA meeting on whether or not to participate in the program. 4. UPDATE OF AUGUST 23, 2005 MEETING OF THE TIF SUBCOMMITTEE City staff, Mikaela Huot and Paul Steinman of Springsted, and the subcommittee met on August 23, 2005. Subcommittee member Theresa Charpentier was unable to attend. The following items were discussed at the subcommittee meeting: 1.) The procedural requirement that must be followed during the initial district testing phase in order to meet state qualifications for the establishment of a TIF redevelopment district. 2.) The proposed timeline for establishing the district and the creation of a financing plan. 3.) The different means by which the public can be informed about TIF and the important role TIF will play in the success of the downtown plan, and how the establishment of the district may affect residents and business owners within the district. At the meeting, Paul Steinman of Springsted, the City's Financial Advisor, and City staff presented an overview to the EDA and Council on tax increment financing and the procedural requirements that must be met and discussed strategies on how to market the TIF district and the next phase of the downtown plan to community members. The EDA and the Council directed the TIF subcommittee to work on finalizing a communication and marketing plan for the implementation phase of the downtown redevelopment project and the establishment of the TIF district. 5. SITE PLAN REVIEW FOR ONEKA PET RESORT At the July 18, 2005 EDA meeting the EDA recommended that the City sell the 1.1 acre "Rink-Tec"property located in the Bald Eagle Industrial Park to Oneka Pet Resort, owned by Guy and Cindy LaBarre. Oneka Pet Resorts was one of two businesses that were selected to acquire the City property in the park through the Request for Proposal (RFP) process initiated by the EDA. Oneka Pet Resort submitted a preliminary site plan for review by the EDA at the meeting as part of the conditions of approving the final purchase agreement. City staff presented an overview of the proposed site plan to the EDA and the City Council and recommended that the EDA and the Council review and comment on the proposed site plan. Granger made motion, Klein seconded to recommend approval of the proposed site plan to the City Council. All aye. Motion Carried 6. UPDATE ON CITY PURCHASE OF CARPENTERS RESTAURANT AND THE ANTIQUE STORE FROM MIKE AND CATHERINE ANDERSON Staff informed the EDA and Council that recent negotiations have been successful and that Andersons have agreed to sell to the City,both Carpenters restaurant and the antique store. At the September 6, 2005, City Council meeting the Council approved the purchase of both properties in the amount of$687,000. This includes a price of$347,000 for the antique store and$340,000 for the Carpenters restaurant, which is consistent with evaluations of City Assessor Frank Langer. There will be a two-year lease back to the Andersons at no cost, and they would continue to operate the restaurant on a month-to- month basis,in order to allow the flexibility of the City to continue negotiations with the developers on the Egg Lake development project. Granger made motion, Klein seconded to direct staff to meet with the other property owners along the western edge of Egg Lake to find out if they would be interested in selling their properties to the City. All aye. Motion carried. 7. APPOINTMENT OF REPLACEMENT MEMBER TO THE TIF SUBCOMMITTEE City staff informed the EDA and the Council that Theresa Charpentier will be vacating her position on the TIF subcommittee. Mrs. Charpentier has recently started a new job and does not have enough available time to participate in the subcommittee. City staff recommended the City Council and the EDA appoint a replacement member to the TIF subcommittee. Arcand made motion, Bever seconded to appoint Phil Klein to the TIF Subcommittee All aye. Motion carried. 8. ADJOURNMENT Granger made motion, Bever seconded to adjourn the EDA meeting at 10:20 All aye. Motion carried. Haas mane motion, Granger seconded to adjourn the City Council meeting at 10:22 All aye. Motion carried. MINUTES FOR THE ECONOMIC DEVELOPMENT AUTHORITY MEETING OF OCTOBER 17, 2005 The meeting was called to order by Mayor Fran Miron at 8:30 am. Present: Arcand, Klein, Bever Absent: Miron, Granger, Skarich, Charpentier (The EDA did not have a quorum) Community Development Director, Bryan Bear Community Development Intern,Andrew Gitzlaff 2. EDA MEETING OF SEPTEMBER 19,2005 Klein, Arcand, and Bever agreed to table the minutes until the next regularly scheduled meeting. 3. SITE PLAN REVIEW FOR PEARSON MECHANICAL INC. At the July 18, 2005 EDA meeting the EDA recommended that the City sell the 3.3 acre property located in the Bald Eagle Industrial Park to Pearson Mechanical Inc., owned by Ronald A. Pearson. Pearson Mechanical Inc. was one of two businesses that were selected to acquire the City property in the park through the Request for Proposal (RFP) process initiated by the EDA. Pearson Mechanical Inc. has since submitted a preliminary site plan for review by the EDA as part of the conditions of approving the final purchase agreement. City staff presented an overview of the proposed site plan to the EDA and that the EDA reviewed and commented on the proposed site plan. Commissioner Arcand, Klein, and Bever recommended approval of the proposed site plan to the City Council. 4. UPDATE OF OCTOBER 13,2005 MEETING OF THE TIF SUBCOMMITTEE City staff, Paul Steinman of Springsted, and the subcommittee, consisting of Mike Granger, Frank Puleo, and Phil Klein, met on October 13, 2005. Subcommittee member Nick Skarich was unable to attend. At the last EDA meeting, the subcommittee was directed to work on creating a marketing plan for the implementation phase of the downtown redevelopment plan and establishment of the TIF district. The following items were discussed at the subcommittee meeting: 1.) The proposed timeline and work items to be completed for the marketing plan. 2.) The content of the draft TIF/downtown redevelopment project Q &A newsletter. 3.) The proposed meeting dates for a joint EDA/Council educational workshop regarding the marketing plan. At the meeting, City staff presented to the EDA an overview of the proposed marketing plan and the schedule of activities to be completed. The EDA reviewed the proposed timeline and the draft Q & A newsletter and provide staff with feedback on how to proceed. Staff recommended scheduling a joint Council/EDA workshop in order to review and make final decisions on the future direction of the proposed downtown TIF district. Arcand, Klein, and Bever agreed to have the joint EDA/Council workshop on Monday, November 21, 2005, at 8:30 am, at the EDA's next regularly scheduled meeting. 5. UPDATE ON TWIN CITIES COMMUNITY CAPITAL FUND PROGRAM At the September 19, 2005,joint EDA/Council meeting Scott Martin from the Twin Cites Community Capital Fund (TCCCF) gave a presentation about the organization and the benefits members receive from participating in the fund to the EDA and Council. The TCCCF is a nonprofit economic development loan fund. Communities that join the fund are eligible for low interest loans, gap financing, and other financial incentives. The EDA and Council thanked Scott Martin for coming to the meeting and suggested that the EDA and the Council evaluate the materials and make a recommendation at the next EDA meeting on whether or not to participate in the program. Springsted,the City's financial advising firm, has prepared some background information on the fund. The EDA discussed whether or not the City should consider becoming a member of the TCCCF at this time. Arcand, Klein, and Bever agreed to table the item until the next regularly scheduled EDA meeting. 6. UPDATE ON"END ZONE PROPERTY" Terry Montpetit has entered into a contract to purchase the former `End Zone Property' located at 13891 Forest Blvd. He intends to remodel the existing building and open a restaurant/bar. The Staff gave an update to the EDA on the recent discussions with Terry Montpetit. 7. OPENING FOR HUGO RESIDENTS TO SERVE ON HRA BOARD IN 2006 Washington County Commissioner Dennis Hegberg requested that a public announcement be made that there will be a vacancy on the Washington County Housing and Redevelopment Authority Board in 2006. Any resident interested in serving on the Board, with the exception of Council members, should contact Washington County Commissioner Dennis Hegberg or the City of Hugo for an application. City Staff informed the EDA of the vacancy on the HRA Board. 8. ACCEPT RESIGNATION FROM EDA MEMBER THERESA CHARPENTIER At its September 19, 2005 meeting, the EDA discussed the request from Commissioner Theresa Charpentier to seek a replacement for her on the TIF Subcommittee due to a change in her work schedule. The EDA accepted her resignation and the City Council committee voted unanimously to select and appoint Phil Klein as her replacement. Since that time, staff has had the opportunity to discuss with Theresa her future on the EDA. Theresa has submitted a letter of resignation to the City for her service on the EDA, citing a change in her work schedule, which does not allow her the flexibility to attend regular meetings. City staff informed the EDA that at the next City Council meeting the staff will recommend Council accept the resignation of Theresa Charpentier from the EDA and publicly thank her for her service to the City of Hugo. City staff will further recommend that the Council direct staff to advertise for the vacancy on the EDA and contact the remaining applicants who originally interviewed for the position in order to determine their interest in serving out Theresa's term on the EDA. 9. ADJOURNMENT Klein, Arcand, and Bever agreed to adjourn the EDA meeting at 10:00 am ' � T City of Hugo Downtown Redevelopment Project Q & A Newsletter This Q&A newsletter responds to some of the recent questions about the Downtown Hugo Redevelopment Project. Q. What is happening with the Downtown Redevelopment Project? A. The Planning Commission and the City Council recently held a joint meeting to discuss and begin to finalize the new design guidelines for the downtown area. The design guidelines are the result of a collaborative effort from businesses, residents, City staff and officials, and are intended to provide direction and shape plans for anticipated development in downtown Hugo. The City has also retained the services of Maxfield Research, through a grant from Metropolitan Council, to conduct a market study of the downtown area. The market study is needed to know if there is a market for the proposed uses and to understand what rates people will potentially pay for those uses. The Economic Development Authority (EDA) has become very involved in guiding the redevelopment process. The EDA have been meeting with developers interested in implementing the downtown plan, and non-profit public sector financing organizations, at their regularly scheduled meetings. The EDA has also established a subcommittee responsible for formulating a plan to create a Tax Increment Financing (TIF) Redevelopment District for the downtown area. Q. What type of development is proposed for the Downtown Area? A. The redevelopment project reflects the community's vision for a pedestrian friendly town center with unique mixtures of housing, retail, office space, trails, and public amenities such as a new City park across from City Hall and a boardwalk along Egg Lake. Other proposed uses include a senior housing facility, a new Carpenter's Restaurant along the shore of Egg Lake, and specialty retail and gift shops. Q. Which part of downtown will be developed first? A. The most likely part of downtown to develop first will be the properties along Egg Lake across from City Hall. Over the past few years, the City has been acquiring properties along the western edge of Egg Lake as they become available on the market. The City now owns a substantial amount of downtown real estate. Retaining ownership of the properties allows the City a considerable amount of control over the future uses of the site. It is possible, however, that separate redevelopment projects could happen in different parts of the downtown simultaneously. Q. What is the typical time frame for a redevelopment project? A. The planning process for a typical redevelopment project can take up to two years. Construction then begins and that could take two years depending on the size of the project. For a redevelopment project to work, it must not only meet community goals, but also make sense from both a market and financial perspective. Hugo's project is unique due to the complexities of redeveloping many different parcels and to assure the public's involvement in the planning and design stage. Q. How will the project be funded? A. The City received funding through a Livable Communities Grant form the Metropolitan Council to conduct preliminary planning and concept refinement for the downtown area. The City will continue to look for other grant sources but the project will be funded primarily by private developers. The City will provide additional assistance through Tax Increment Financing (TIF) as necessary for public improvements and the City has retained independent financial consultants to ensure that any assistance provided to the developer is only the amount that is justifiable and reasonable. Q. What is Tax Increment Financing (TIF)? A. TIF is a financing tool created by the Minnesota State Legislature in the 1970s to help encourage development and redevelopment of underutilized properties that ordinarily would not be revitalized without some financial assistance. Under TIF, property tax revenue equivalent to what the current property generates continues to go to all taxing jurisdictions. The portion of the tax revenue that results from the increased value of the new development, also called the "tax increment," is used to pay site costs such as acquisition, demolition, water, sewer and street improvements. Once the site costs have been paid, the tax increment goes to the taxing jurisdictions. Q. Why does the City need to establish a TIF District? A. Minnesota State Statute permits cities to establish TIF Districts as a method to assist with redevelopment. Establishing a TIF District allows the City to capture the tax increment created by the new development; then the City may use portions or all of the increment to provide financial assistance to the developer. The amount of the actual assistance provided is determined by an analysis by the City's independent financial advisor. The financial performance submitted by the developer will be analyzed to determine the gap or amount that would be necessary to make the development financially feasible. Q. Will providing TIF assistance to the developer impact my property taxes? A. The tax increment comes from only the increased value of the improved property within the district and the pre-existing level of taxes still continues to be paid to local governments (city, county, and school district). Increment is only provided to the extent it is determined necessary for the project to proceed. Therefore, there is no impact on your property taxes resulting from TIF. Q. Does the City own all the property included in the project? A. The City owns many of the properties along the western edge of Egg Lake; however, the City is not actively negotiating sales with the property owners but rather has been slowly acquiring the parcels over time through tax forfeitures or when the owner decides to sell for various reasons. After the City enters into a development agreement, it will primarily be the private developer who will be responsible for negotiating with downtown property owners. The City may assist in the process to ensure that the ensuing relocation process is as smooth as possible for local businesses and residents who wish to remain in Hugo. Q. What happens if the property owners cannot reach an agreement with the private developer? A. The City will encourage the developer to reach a voluntary agreement with property owners. If the developer and the property owner are unable to reach agreement, a mediator will be used to assist with the process. At this time the City Council has not decided from a policy standpoint whether or not pursuing the process of condemnation will be considered during the property acquisition stage of the downtown redevelopment project. Q. If my property is in the TIF district what are the implications? Is my home or business going to be redeveloped? A. No. The TIF district overlays the entire redevelopment project area. Tax Increment revenue from property valuation will be captured from all parcels within the district but inclusion in the district does not mean that every parcel will be redeveloped. The property within the district that does not get developed or redeveloped may be removed from the district at a later date. Q. Once the City begins working with a developer or development team, is the redevelopment a "sure thing"? A. No. There will still be land use and other regulatory approvals, environmental impact studies, securing of financing, and acquisition of property that must occur before the development is a "sure thing". Residents and business owners will also have several more opportunities through public hearings and City-sponsored open houses to give input and share their opinions before any development plans are finalized. Q. How can I stay informed? A. There are several ways you can stay informed: • Attend regular EDA meetings, which are held on the third Monday of each month at 8:00 a.m. at Hugo City Hall, 14669 Fitzgerald Avenue. In addition, regular Planning Commission and City Council meetings are broadcast live and replayed on cable channel 16. • Visit the City's Website for project updates located at www.ci.hugo.mn.us • Read the Neighborhood News & Report and the Hugonian, the City's two local newspapers, and the Hugo City Report, the City's bi-monthly newsletter. Articles on the project and information about upcoming meetings frequently appear in the local papers and in the City's newsletter. • Contact the Director of Community Development Bryan Bear or other community development staff members at anytime. The City Hall phone number is (651) 762-6300. For Immediate Release Date: From: The Office of the City Administrator City of Hugo, Minnesota Contact: Mr. Mike Ericson City Administrator mericson@ci.hugo.mn.us 651.762.6312 Regarding: The City begins implementation of the downtown plan THE CITY OF HUGO, MINNESOTA BEGINS IMPLEMENTATION OF DOWNTOWN PLAN Hugo, Minnesota- In 1998 the City of Hugo, Minnesota, established a downtown plan and preliminary design guidelines to address redevelopment of the downtown commercial core. The original plan needed to be revisited to consider the impact of the future realigned County Rd 8 and Hwy 61 intersection. After a series of events to engage public input, the updated plan was finalized in July, 2004. The City Council and Economic Development Authority (EDA) are in unanimous support of moving forward with implementation of the plan. Mayor Fran Miron stated "it would be a waste of taxpayer dollars for this plan to just sit on the shelf and collect dust—now is the time for implementation of the downtown plan". EDA chair, Phil Klein, echoed the Mayor's statement and added that"implementation is a challenging phase of any downtown plan, but Council and EDA leadership have helped to put in place the proper mechanisms to gain public input into this process". As with any downtown redevelopment plan implementation, there are a number of costs involved including property acquisition, relocation, demolition and possible environmental remediation. To address the issue of these costs, the City will be utilizing tools available to it such as tax increment financing (TIF). A significant part of the public input process includes discussions centered on the mechanics of this tool and how it may be used for the benefit of property owners in the downtown core to facilitate redevelopment. EDA members agree that sometimes TIF can be controversial, but as EDA member Nick Skarich states "it is one of the only tools remaining today that can provide significant enough resources to address the specific issues of downtown redevelopment". The downtown plan implementation public input process will begin with a series of meetings with key property owners in the downtown area. The process will also include informational meetings of the public, Council, and EDA, and several planned neighborhood and downtown business/property owner meetings. Throughout this input gathering and implementation phase the public can stay informed by going to the City website and reading the newsletter, as each will contain regularly updated information on implementation of the plan. Currently the website contains an introductory question/answer page describing TIF and the implementation plan in greater detail. City of Hugo Downtown Redevelopment Plan/TIF District Establishment Marketing Plan Proposed Time Schedule October 17,2005 EDA Meeting • Discuss draft press release with the EDA • EDA reviews proposed marketing plan • Schedule meeting date for joint council/EDA workshop October/November The City arranges meetings with groups of key property owners and individuals in the downtown Late-October Hugo City Report Newsletter(November Edition) • Include the following updates on the downtown redevelopment plan • Downtown Design Guideline Adoption • Maxfield Research Market Study • Present Downtown Framework map • Notification of upcoming meetings November 21,2005 Joint Council/EDA workshop (hosted by Springsted) • Informative meeting about TIF • Discuss implementation/marketing strategy Nov/Early Dec First Three Press Releases sent to downtown neighbors (upload (After Joint Workshop) onto City website for view by the general public) ■ Background, goals, objectives of plan ■ Intro Q&A about TIF/downtown plan ■ Notification of upcoming neighborhood meetings/open house Nov/Dec City staff arranges meetings with groups of neighborhood (After Joint Workshop) residents and downtown business owners • Egg Lake residents and business owners • Residents on old CASH 8 • Residents along Hwy 61 by `End Zone Property' Mid December Downtown Redevelopment Plan Open House Meeting December Fourth Press Release (After Open House) ■ Notification of TIF District Qualification procedures (need for inspections) ■ Accompanied by letters sent to property owners requesting voluntary inspections(by this time most property owners will already be aware of reasons for inspections) Nam Mavmw 9 9 Hugo City Council Deve*. � Econonl' ic �men� Authority i November 21 , 2005 8 :30 A.M. Downtown Redevelopment Plan • Progress to Date • Calendar — Next Steps • Requested Actions of Council/EDA Public Sector Advisors TIF Subcommittee • TIF Members: — Nick Skarich - EDA — Mike Granger - Council — Frank Puleo (sp) — Council — Phil Klien - EDA — City Staff — Springsted Team • Responsibilities — review preliminary qualification information — recommend TIF boundary — Implement communications plan Public Sector Advisors Springsted Approved Communication Plan • Objectives — Successful project implementation — Community buy-in — General education of community/stakeholders — Ensure clarity, understanding of process — Communicate City's role/private sector's role — Explain potential impacts to property owners Public Sector Advisors s Springsted Communication Plan • Create Plan — Consistent w/ objectives — Determine schedule — corresponding with TIF plan / proposed redevelopment — Determine channels of communication • Written — newsletters, newspaper • In person — open houses, and town hall meetings • Electronic — website, community billboard, or cable channel 16 • Implement Plan Public Sector Advisors a Springs'ted Overview Process To Date 1 . Create Q & Aon downtown redevelopment 2. Write and publish newsletter article 3. Prepare press releases 4. Hold meetings with identified business/property owners Public Sector Advisors s Sprirrgsted Next Steps • Hold an open house for all property owners in proposed boundary • Begin building analysis utilizing building inspector — Construct request letter L'11� — Identify multiple sectors within proposed boundary — Send letters requesting internal inspections • Information session with city building inspector and staff on procedures for conducting inspections Public Sector Advisors s Calendar • September 19 — City Council/EDA joint worksession Review progress to date • Discuss communication and education plan — Authorize plan • September/October/November — Implement communication plan — EDA continues discussion on redevelopment plan • December — Begin notification and perform building inspections — EDA discusses redevelopment approach Master developer? • RFP? • Phasing plan? Public Sector Advisors Springsted Calendar • January 2006 — Inspections completed • January/February 2006 — Third party inspections, if necessary — Senior housing project moving forward — EDA/Council worksession , discuss redevelopm nt approach • March 2006 — Final determination of boundaries — EDA final redevelopment approach • March/April 2006 — s a ish downtown I IF u1strict Public Sector Advisors 8 SpCIhgSie - Recommendations 1 . Authorize open house , set date 2 . Authorize mailing inspection letters • Inspection letters to be sent after open house Public Sector Advisors 9 Springsted Contacts Paul Steinman - Ph. (651 ) 223-3066 E-mail: psteinman(a�springsted.com Craig Rapp — Ph. (651) 223-3072 E-mail: craig.rapp6a springsted.com Mikaela Huot - Ph. (651) 223-3036 E-mail: mhuot lspringsted.com Pudic Sector Advisors 10 Springsted : RQQFIELD ,t I mighborh�: 'plan U Public Open House Invitation The City of Brookfield is in the midst of the planning process for a long- range vision for the Village Area Part of the process includes requesting input from property owners, business owners and other interested neighbors and citizens. As an owner of property and/or a business within the planning area, you are invited to attend a second Public Open House on: Wednesday, April 20, 2005 5:30-7:00 p.m. Council Chambers C Like Brookfield City Hall z 2000 North Calhoun Road (d (Please enter through the clock tower entrance.) The format of the public open house is informal conversation. No formal presentation will occur. As illustrated below, the study area is generally bound by Burleigh Road (north), Milwaukee Avenue/North Hills Drive (south), McCoy Lane (west) and the end of Hoffman Avenue/180th Street (east). Burleigh Road c J u E 0 v m oHoftm nn Avc n u c e Nareh Hills Drive Milwaukee Awnm Preliminary plan alternatives, photos and other information will be on display. Please attend to provide feedback on the displays so that the information may be utilized as part of the neighborhood plan process. If you have any questions, please contact Carrie Johnson, Neighborhood Planner/Designer at 262-796-6695 or village@ci.brookfield.wi.us. City of Brookfield Department of Community Development 2000 North Calhoun Road,Brookfield,Wisconsin 53005 Phone:262-796-6695 Daniel F.Ertl,AICP,Director J-s Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul,MN 55101-2887 S p r i n g s t e d Tel: 651-223-3000 Fax: 651-223-3002 www.spdngsted.com EXTERNAL MEMORANDUM TO: Joe Huss, Finance Director City of Blaine FROM: Bob Thistle, Executive Vice President Paul Steinman,Vice President Jenny Wolfe, Project Manager DATE: September 19,2005 SUBJECT: Twin Cities Community Capital Fund We have been asked by the City to provide information about the Twin Cities Community Capital Fund (TCCCF), a non-profit corporation in the business of brokering commercial loans to the secondary market, including the Community Reinvestment Fund(CRF). TCCCF was modeled after the Minnesota Community Capital Fund (MCCF), active since early 2003 in out-state Minnesota (outside the seven county metro area). MCCF has closed 24 loans totaling $7,377,050 dollars through July 31, 2005, and have an additional $2,233,125 dollars in process. Since inception, the MCCF has raised more than $3.1 million in total member capitalization and currently has 65 members representing more than 400 cities, counties,utilities and economic development organizations in Minnesota. The TCCCF is available to City's within the 7 county metro area and allows a City such as Blaine, to deposit a minimum of $50,000 and a maximum of $200,000 (member capitalization) to an escrow account that will enable Blaine to provide as many loans as they desire, each having a principal amount no greater than 10 times their deposited amount(less any encumbered amounts such as a credit reserve identified later in this memo). There is a $5,000 operating fee required for membership which is non-refundable, included within the deposited amount. The requirements other than underwriting include the participation of a bank, for which the TCCCF loan is subordinate, and a minimum of 10%equity(which could be financed). After three years time, the City could withdraw their money from TCCCF and be repaid their available deposit as defined below. Or after the three years the City could reduce their level of participation if they joined at an amount greater than$50,000. Each executed loan is purchased by the secondary market(CRF or other lenders) immediately at closing,and the City bears minimal risk for repayment of the funds. TCCCF will handle all documents for the loan, and the responsibility for closing the loan. Public Sector Advisors City of Blaine September 19,2005 Page 2 Current TCCCF Membership/Capital Contributions The TCCCF current membership includes five Class A members ($200,000), seven Class B members ($100,000-$199,999), and twelve Class C members ($50,000-$99,999). Class A members consist of Burnsville, Eagan, Minnetonka, Oakdale and Woodbury; Class B members consist of Cottage Grove, Dakota County Capital Fund, Hastings, Norwood Young America, Rosemount, St. Paul Park and Shoreview; Class C members consist of Belle Blaine, Brooklyn Park, Carver County HRA, Centerville, Cologne, Coon Rapids, Jordan, Maplewood, Newport, Richfield, St. Louis Park and Waconia. The total member capitalization available to loan against is $2,400,000. TCCCF began its operation with $227,500 of working capital ($215,000 in the form of a 0% loan). The revenues to support TCCCF activities include a 1.75% loan origination fee and interest earnings on the capital reserve accounts. The TCCCF projected operating proforma indicates an estimated level of loan activity over a three year period. This level of activity is based on an average of twenty-two loans per year averaging $400,000 per loan. Based on these projections and the operating costs that accompany this type of loan activity, TCCCF will attain a cash balance at the end of three years of$240,000 (July, 2008). They indicate the working capital will be repaid beginning on October 1, 2010, in four equal annual installments. The repayment of the working capital loans could occur earlier as determined by the TCCCF Board of Directors. TCCCF relies solely on the origination of loans by the members to become self-sufficient. However, a majority of the expenditures are directly related to the activity of loan origination, which provides a level of cash flow coverage to the extent the loan activity is less than that projected. The original members of TCCCF bear risk on the repayment of working capital. Contrary, the City of Blaine bears no risk regarding working capital sine they would be joining TCCCF after activation of the program. The MCCF recently achieved a level of self-sufficiency, one year ahead of projections. The working capital for MCCF was provided directly by the Blandin Foundation in the amount of $200,000, and was not granted or loaned from the members as is the case with the TCCCF. The MCCF currently has$207,000 of net unrestricted assets. If the performance of the MCCF is any indication, the TCCCF should have a greater chance of self- sufficiency since larger individual loans can be originated. Another indication of performance is that the members themselves have committed the working capital for TCCCF, and have implied a high likelihood of loan origination. What should Blaine consider before deciding whether to participate in this program? To the extent there is a need for gap financing for businesses within Blaine, or wanting to relocate/expand in Blaine, the loans could finance acquisition, building construction, leasehold improvements, renovation, working capital, etc., with a minimum loan size of$50,000 and a maximum of$2,000,000. The terms of the loan will be determined based on the collateral and will typically match the terms of the participating bank. Required underwriting will match the secondary market's requirements, and will be typical for the commercial lending area. There is a loan origination fee of 1.75% charged for all loans, and also a 0.5% underwriting fee charged by the secondary lender(CRF),which can both be rolled into the financing. The TCCCF loan officer will also work with the business to establish the most advantageous overall financing package. Public Sector Advisors City of Blaine September 19,2005 Page 3 What level of participation is appropriate? The City can initially join at the $50,000 level, and originate a maximum loan of $500,000, or if a larger loan principal amount is necessary, the city could increase their level of participation to as high as $200,000. The participation level should be set based upon the City's best estimate as to the most likely maximum loan request. What are the risks? A requirement for participation in a loan is the funding of a credit reserve. This requirement is placed upon the program by CRF (the current secondary lender), as a method to share the risk. This reserve ranges from 5% of the principal amount for existing businesses, and up to 20%of the principal amount for start-up businesses. The actual amount is determined by CRF. The reserve needs to be funded by the city(member)or the borrower or a combination of these two. The reserve can be funded by the city via their capital contribution contained in escrow. If the reserve is financed in this way, the maximum loan size is reduced by this amount encumbered from the capital account (10 times only applies to unencumbered funds). Furthermore, if the City were to withdraw their membership from TCCCF, the amount returned to them would be less any amount classified as a reserve (until the reserve is released). The reserve is released to whoever provided the funds, after twelve consecutive on-time monthly payments. This reserve amount, to the extent covered by the city, is the total amount of funds at risk. If a default were to occur prior to the release of the reserve,the reserve would be tapped to cure the default. Further, if the city were to approve a loan at an interest rate below market, the total amount of the loan would be discounted by the amount of the interest rate differential, and the city would be responsible for separately funding the discounted amount prior to the closing. These funds would be not be recovered through this program. An additional risk applies to the City's capital contribution held in escrow against which they lend. Wells Fargo Bank is the current escrow agent and has an agreement to manage the account and to invest the funds in allowable securities.Any earnings from this account will be channeled to TCCCF for operations, but as with any investments, the principal is subject to the risks associated with those underlying investments, which might, under extreme circumstances, include a loss or diminution in principal. This agreement with Wells Fargo is for three years from the initial capital investments. What are the benefits? The city would benefit from more flexible gap financing for local development projects, the ability to offer larger loans than would be possible with limited existing local resources, reduce at least 80% of repayment risk and gain professional staff support at no additional cost to the City. Except as discussed above regarding the credit reserve and below market rate discounts, the City would not incur any expenses, costs, or obligations with respect to loans they originate through TCCCF. All fees and out- of-pocket expenses in connection with the origination of a TCCCF loan shall be the responsibility of the borrower. Public Sector Advisors City of Blaine September 19,2005 Page 4 What are the limitations? As stated above, the city could originate a loan 10 times the unencumbered amount in their capital account. If the city were to originate a $1 Million loan that required a reserve of 20% ($200,000), and they used the capital account for the reserve requirement,another loan could not be originated until the loan reserve was released. The city's role will be to market the program with businesses and lenders in Blaine. All loans need to be approved by the city's identified authorized representative. However, the final approval of every loan will be contingent on a sale of that loan to the secondary market. The loans will initially be closed in the name of TCCCF,and immediately assigned to the secondary lender(CRF). The City should adopt a policy for the originating of this type of a loan, to cover specific goals and outcomes. This policy could address the amount of risk the City is willing to incur, such as covering the credit reserve requirement, or requiring the borrower to do so. A requirement of TCCCF does include community impact criteria. Specifically, each loan will need to meet a minimum of one criteria identified by TCCCF. Included in the criteria categories are job creation, revitalization of low-moderate income communities, projects in targeted business development areas (based on prior use or current conditions within the area), serving disadvantaged populations or non-profits as business owners, or other community impacts identified by local, regional or state initiatives. The above information is contained within TCCCF membership documents, including Member Disclosure Statement, Participation Agreement,and Loan Fund Escrow Agreement and further is based on conversations with Scott Martin, President of TCCCF. Please feel free to contact us if you have any follow-up questions or need clarification.We appreciate the opportunity to provide this feedback to the City of Blaine. ell,-� Public Sector Advisors