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Home My WebLink About2006.07.17 EDA Packet AGENDA CITY OF HUGO ECONOMIC DEVELOPMENT AUTHORITY MEETING MONDAY, July 17, 2006- 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 June 19,2006 8:35 am 4. Introduction of Brian Thistle, recommended for appointment to the EDA 9:00 am 5. Update on Schoeller Property 9:15 am 6. Update on Proposed Text Amendments • To Allow Meat Processing as an Accessory Use to a Meat Market with a Conditional Use Permit • To Allow The Expansion of Commercial/Industrial legal Non-conforming Uses with a Conditional Use Permit 9:40 am 7. Update on Downtown Redevelopment 10:00 am 8. Update on the End Zone Property 10:30 am 9. Adjournment BACKGROUND MEMO FOR THE EDA MEETING OF Monday, July 17, 2006 3. Approval of Minutes EDA meeting of June 19, 2006 City staff recommends that the EDA approve the minutes for the June 19, 2006 EDA meeting as presented. 4. Introduction of Brian Thistle, recommended for appointment to the EDA At its June 19`h, 2006 meeting, the City Council accepted the letter of resignation from EDA Commissioner Nick Skarich who resigned his position due to a change in his employment and relocation. City staff advertised for the position and with the concurrence of Mayor Fran Miron the Staff conducted an interview with Brian Thistle. City Staff is comfortable with Mr. Thistle and will recommend approval of his appointment to the EDA at the July 17, 2006 City Council meeting. Staff will introduce Mr. Thistle to the EDA, and encourages the EDA members to ask any questions they might have for him 5. Update on Scholler Property At its June 19, 2006 meeting the Council directed staff to negotiate with the Schoeller Family for the purchase of the property, with terms and conditions flexible. Staff has met with Lois Mahlberg and Paul Schoeller, the estate holders of the property located at 5399 145th Street and successfully negotiated the purchase of the property. Staff drafted a purchase agreement for $150, 000 and the property owner would be responsible for the costs of the demolition that would be subtracted from the purchase price. The purchase agreement was approved by the City Council and has been signed by the estate holders with a closing date set for August 1, 2006. 6. Update on Proposed Text Amendments At its July 13, 2006 meeting, the Planning Commission reviewed two ordinance text amendments that were initiated by the EDA. Rick Burr has sent the City a letter stating that he would like to expand his existing business, Gusset Design Inc. at 15587 Forest Blvd. The property is zoned Commercial but the building use is Industrial. The structure was built before the zoning changed to a Commercial District so it is allowed to remain. According to the City Municipal Code, it states that the business is not allowed to expand because the use is nonconforming to the current zoning. This issue was brought to the EDA and the City Council and both suggested having a meeting with the surrounding property owners to determine what their thoughts were on rezoning the properties back to industrial. Almost all property owners stated that they wanted to keep the current commercial zoning. Staff brought this subject back to the Council on its June 5, 2006 meeting reporting on what the outcome was of the meeting with the surrounding property owners. The Council directed staff to draft an ordinance text amendment to allow the expansion of legal non-conforming commercial/industrial uses for consideration by the Planning Commission at a public hearing. Staff drafted an ordinance text amendment and recommended approval. It was unanimously approved by the Planning Commission to the City Council. Klan Jalali and Spencer Grundhoffer have proposed a concept plan for a meat market and meat processing business located at 15449 Forest Boulevard. They plan to keep the existing building located directly in front of Just Two Bikes and plan to renovate the inside for the meat market and processing facility. The property is currently zoned General Business (C-2) and a meat market is a permitted use in the ordinance, but the meat processing portion is not allowed. At the June 19, 2006 City Council meeting the Council reviewed this issue and directed staff to draft an amendment to the ordinance to allow meat processing as an accessory use to a meat market with a Conditional Use Permit. Staff drafted a text amendment and recommended approval. It was unanimously approved by the Planning Commission,with conditions, to the City Council. Staff will provide the EDA with the details of the text amendments. The EDA should review the text amendments and provide a recommendation to the City Council on each amendment. 7. Update on Downtown Redevelopment Staff will provide the EDA with an update of ongoing related to downtown redevelopment efforts. 8. Update on End Zone Property Staff will provide the EDA with an update of the End Zone property. MINUTES FOR THE EDA MEETING OF JUNE 19,2006 EDA President Fran Miron called the meeting to order at 8:30 am. PRESENT: Jan Arcand, Mike Granger, Fran Miron, Jim Bever, Phil Klein, and Tom Denaway City Administrator Mike Ericson, CD Director Bryan Bear, CD Intern Rachel Simone APPROVAL OF MINUTES Arcand made motion, Klein seconded, to approve the minutes for the EDA meeting of May 15, 2006 as presented. All ayes. Motion Carried. DISCUSSION ON PROPOSED MEAT MARKET—KIAN JALALI Kian Jalah has proposed a concept plan for a meat market and meat processing business located at 15449 Forest Boulevard. He plans to keep the existing building located directly in front of Just Two Bikes and plans renovating the inside for the meat market. The property is currently zoned General Business (C-2) and a meat market is a permitted use in the ordinance,but the meat processing portion is not allowed. Community Development Intern Rachel Simone gave an overview of the proposed concept plan submitted for the meat market. The EDA discussed the issues with a meat processing portion of the meat market. Overall the EDA liked the idea of a meat market service in the community. Miron suggested having the meat locker portion of the meat market be allowed under a Conditional Use Permit as a secondary use to the meat market. The EDA discussed whether the zoning ordinance should be amended to allow the meat processing portion of the business on the property. Granger made a motion, Klein seconded, to bring the zoning text amendment to the City Council to allow the processing of meat as a secondary use to the meat market with a CUP. All ayes. Motion Carried. PRESENTATION OF FLEISCHHACKER OFFICE CONDOMINIUM At its June 8, 2006 meeting, the Hugo Planning Commission reviewed the site plan and variance request for Fleischhacker Office Condominium located at 5448 140th Street, within the proposed TIF District. The applicant is requesting a site plan approval of two proposed office condominium buildings and a variance from the parking regulations, located immediately north of Rick's Liquor and the Hugo American Legion. Part of the property currently has a metal pole barn on it that is rented out by the owner, Mike Fleischhacker, as an automobile repair shop. In March, Mr. Fleischhacker demolished a blighted duplex that was on the front part of the property, and came to the City stating that he wanted to redevelop the property. Mr. Fleischhacker is in the process of demolishing the existing building for redevelopment. The Planning Commission voted to approve the site plan and variance subject to the conditions outlined in the resolution. CD Intern Rachel Simone gave a presentation of the site plan and variance request by Mike Fleischhacker for the redevelopment of his property to Office Condominiums. The EDA liked the redevelopment idea of the property and suggested that the back of the buildings that abut another property to look like the front elevation. CD Director Bryan Bear stated that the redevelopment project would be good for the city and that staff will work with the applicant on the back side of the buildings. The EDA suggested to the applicant to work with the other abutting property owner for redevelopment. RESIGNATION LETTER FROM NICK SKARICH Nick Skarich sent Mike Ericson, City Administrator, a letter stating he has resigned from the EDA. CD Intern Rachel Simone informed the EDA of Nick Skarich's letter of resignation. Staff had the EDA discuss how staff should go about advertising for the position. Granger stated that we should have an order for invitations and appointments and extending invitations to business owners of the community. DISCUSSION OF ENGINEERING FOR THE EXTENSION OF FINALE Staff was directed at the April 17, 2006 EDA meeting to look into purchasing the Scholler property at 5399 145th Street because we may need the property when CSAH 8 and Finale are realigned. Staff did look into whether the City would need the property when the roads are realigned. The EDA recommended to Council that City Engineer Jay Kennedy provide some engineering analysis of whether or not the property would be required for the extension of the road. The City Council reviewed this issue at its June 5, 2006 meeting and voted to refer this matter back to the EDA for their recommendation, without any direction from the City Engineer. CD Director Bryan Bear prepared a rough sketch for further review by the EDA of the alignment of Finale. The EDA suggested thinking seriously about the City purchasing the Scholler property. Granger made a motion, Bever seconded, to recommend to the City Council to purchase the Scholler property and to have staff look into the next steps to purchase the property. All ayes. Motion Carried. UPDATE ON TIF BUILDING INSPECTIONS Over the past months the City has been working on establishing a TIF district for downtown redevelopment. City staff has been conducting building inspections on properties in the proposed TIF district. CD Intern Rachel Simone provided the EDA with an update of this process of establishing the TIF district and the build inspection process staff has to go through. The EDA was favorable to the way staff was doing to make sure the City qualifies to the TIF district. REMINDER OF WASHINGTON COUNTY WORKFORCE INVESTMENT BOARD FORUM ON JUNE 21, 2006 AT THE PROM CENTER The Washington County Workforce Investment Board and its partners are sponsoring a forum called "Connecting Business, Education and Workforce/Economic Development" on June 21, 2006. EDA members were invited to attend. CD Intern Rachel Simone reminded the EDA of the Forum and let them know they could still sign up. ADJOURNMENT Bever made a motion, Denaway seconded, to adjourn at 10:10 am. All ayes. Motion Carried. CITY OF HUGO COMMUNICATIONS LIST JULY 2006 Economic Development Authority Name Term Expires Fax Number Home Phone Address (six year terms) E-Mail Address Office Phone Fran`Miron, President f' 15250 Homestead Ave 3 � �� 6 � �� (651)4Z9,-5961 Hugo, MN 55038 . a Michael E. Granger (651)426-8171(home) 12715 Ethan Ave. N 12-31-2008 (651)653-4631 (651)653-4648(work) White Bear Lake, MN 55110 megranger(cr)_usinternet.com (612)805-5751 (cell) Jan Arcand, Treasurer 1850 Cedar Avenue, 12-31-2006 (651)653-6402 (651)429-2930 White Bear Lake, MN 55110 Jim Bever (651)426-2240(home) 7131 132nd St. N 12-31-2008 (651)426-5809 (651)307-3578(cell) White Bear Lake, MN 55110 Phil Klein, Vice President `hShilklein7(aao1com6760 165 - - (651)653-7152 Hugo, MN 55038 " Brian Thistle 45 4624 Fable Hill Pkwy 12-31-2010 brianthistle@edinarealty.com ( 39 Hugo, MN 55038 (6122)30)30 6--4949 93(cell) �-' � _ fdenaivaVCcwahoo.com (763)218-4338(cell) CITY STAFF: Community Development Director Bryan Bear— Executive Director City Administrator Mike Ericson — Secretary Finance Director Ron Otkin —Assistant Treasurer \Documents and Settings\intem\Local Settings\Temporary Internet Fi1es\0LK6F\071806.doc City of Hugo 5524 Upper 146th Street North Hugo, MN 55038-9367 PHONE: (651)429-6676 FAX.•(651)426-2859 EMAIL: info @ci.hugo.mn.us Please have the following notice published in the White Bear Press on CITY OF HUGO The City of Hugo is seeking a member of the community to volunteer to serve on the Economic Development Authority (EDA). The EDA meets on the third Monday of each month at 8:30 A.M. Please contact Hugo City Hall for an application at 762-6300, or visit our website at ci.hugo.mn.us. Application deadline is , / ;z✓� 1 r - t CADocuments and Settings\andrew\My DocumentsTublic notice.doc ,PRINTER'S AFFIDAVIT OF PUBLICATION AFFIDAVIT OF PUBLICATION CITY OF HUGO F MINNESOTA) PUBLIC NOTICE The City of Hugo is seeking a member of the community to volunteer to serve on Ramsey) the Economic Development Authority(EDA). The EDA meets on the third Monday of each month at 8:30 A.M. Please contact Hugo City Hall for an application at 762-6300, or visit our website at ci.hugo.mn,us. Application deadline is D r2nd,2005:�— Published in the White Bear Press November 9,2005. 7isher, or the publisher's designated agent, being duly sworn, on oath state that I am the publisher, or the publisher's designated agent and an employee of the newspaper known as The White Bear Press, and that I have full knowledge of the facts which are stated below: (A) The newspaper has complied with all of the requirements constituting qualification as a qualified newspaper, as provided by Minnesota Statute 331A.02, 331A.07, and other applicable laws, and amended. (B) The printed CITY OF HUGO NOTTOF. VOTJTNTFFR NFFT)FD TO SFRVF ON F20NOMT0 PFV_ AUTHORITY ' which is attached was cut from the columns of said newspaper, and was printed and published once each week, for 1 successive weeks; it was first published on WEDNESDAY the 9 day of NOVEMBER , 20 05 , and was thereafter printed and published on every to and including the day of ,20 ;and printed below is a copy of the lower case alphabet from A to Z,both inclusive, which is hereby acknowledged as being the size and kind of type used in the composition and publication of the notice: abcdefglrijklmnopgrstuvwxyz / BY: fa-2f /✓4.-.� TITLE: Publisher Subscribed and sworn to before me on this 9 day of NOVEMBER. 2005 lic,Minn. !MARGARET TENNESSEN NOTARY PUBLIC-MINNESOTA My COMMISSION RATE INFORMATION ~` ' G EXPIRES JAN.31,2006 (1)Lowest classified rate paid by commercial users for $ comparable space. (Line,word or inch rate) (2)Maximum rate allowed $ by law for the above matter. (Line,word or inch rate) (3)Rate actually charged for $7.50/INCH the above matter. (Line,word or inch rate) c City of Hugo Commission Application 14669 Fitzgerald Avenue North Hugo, Minnesota 55038 Name Address �f� rc,b/G /1% k)�J Y 61, a Phone 7� 2' Interested in: Historical Commission Parks, Recreation,and Open Space Commission Planning Commission y Economic Development Authority Please tell why you are interesting in serving on the Commission. (2t? Gr Z, Lc�i?'I/�!SS��ti'1 CU✓l '�v �ce,� -Eo -�� Gv,�ls�Iyr1 �,n &74 Please tell what groups or organizations you have been a member of and in what capacity have you participated. C" /-tv Vie"I't hill l i 6,'1/r'l � , �Gi�C.�� w'� t✓� E l i'��LT�' L�✓l �� '�'1� ffJJ Ls 'ICS 01 �is'f �JG�� 1G) ��5� ry) Y7��✓� Please list any skills,experiences,or interests you have as they relate to serving on the Commission. Io `i?C 6 / C!�-��fS l� 6✓ J` G`s�t� /)Z S. CJ✓Ic � /: Z5Cd 76- 14 0i✓I "/V/7%��FI/� �( � !/il� Vr✓//�JIy� vJHt/L J�`S � �o5;;"J -O G✓�y / ✓��'tJ, Please feel free to include a letter of interest or any other information you think would be helpful to the City Council when considering your application. Sign Date BRIAN R. THISTLE 4624 Fable Hill Pkwy Hugo,MN 55038 612-3064993 brianthistle@edinarealty.com OBJECTIVE To contribute to a progressive organization that will use my leadership skills and business management experience in a challenging and rewarding position. EMPLOYMENT Edina Realty, St. Paul, Minnesota Realtor, Sept 2001—Current • Represent individuals and families with real estate and housing needs • Negotiated on behalf of clients to ensure best possible and desired result • Interpret real estate market knowledge to help educate and guide clients to make decisions • Small business management skills to use financial statements to drive marketing • Utilize self motivating skills to locate and obtain new clients and maintain existing client base • Presidents Circle Award for performance in 2003 and 2004 Miller Johnson Steichen Kinnard,Inc., Golden Valley, Minnesota Intern, Investment Banking, March 2001—May 2001 • Create and organize term sheets for official statements • Prepare marketing booklets and presentations for more than a dozen prospective clients • Run numbers and spreadsheets on tax-increment financing and related issues • Work with Munex program for sizing bond issues • Research bond markets using Bloomberg Lord Fleicher's, Spring Park, Minnesota Wharf and Restaurant Supervisor,April 1999-A ugest 2001 • Manage staff of 50 at lakeside restaurant • Train more than 30 new employees annually • Plan and organize weekly schedules • Reconcile cash registers at the close of each night • Guide staff in problem solving and efficiency • Develop personal skills through customer relations EDUCATION University of St.Thomas, St.Paul,Minnesota Bachelor of Arts in Business Administration,May 2001 Major: Business Management Minor: Communications University College London,London,England Concentration of Study: Business Management,June 2000 University of Cork,Cork,Ireland Concentration of Study: Business Management,June 2000 07/05/2006 07:50 FAX 6516381994 LAND TITLE NEW BRIGHTON li�002/011 06/28/2000 THU 16:03 FA% 0002/011 J PURCHASE AG. R EMENT THIS PURCHASE AGREEMENT ("Agroement'� is made as of this day of , 2006, betweW LOIS MAHL13ERG AND PAUL SCHOELLER, a, Personal Representatives of the Estate of Jean C. Sehoeller (collectively, "Sellcel, and THE Crry of Hurn,a Minnesota municipal corporation("Buyer'). In consideration,of this Agreement, Seller and Buyer agree as follows: 1. Sale of Property. Seller agrees to sell to Buycr, and Buyer agrees to buy from Seller,the following property(collectively,"Property"): 1.1 Real ProjzMy. The real property located is Washington County, Minnesota described on the attached Exhibit A ("Land'), together with (1) all buildings and improvements constructed or located on the Land (collectively, the "Buildings") and (2) all casements and rights benefiting or appurtenant to the Land (collectively the"Real Property'). 2. Purchase Price and Manner of Payment. The total purchase prim ("Purchase Prioe")to be paid for the Property shall be$150,000.00. The Purchase Price shall be payable as follows: 2.1 S 5,000.00 as earnczst money ("Earnest Money"), which Earnest Moncy shall be held in trust by Eekberg Lammers, Briggs, Wolff&Vierling, P.L.L_P. ("Buyer's Agcne). 2.2 S 145,000 in cash or by wire transfer of irrunediately available funds on the Closing Date less demolition costs incurred under Section 3.2 of this agrcement. 3. Contingencies. The obligations of Buyer under this Agreement are contingent upon each of the following: 3,1 Al2Qroval by the Hugo _City Council. All representations Made by Buyer contained in this Agrecmcal are subject to approval and/or modification by the Hugo City Council. The Hugo City Council will consider approval of the ugmement on July 5,2006. 3.2 Demolition. Seller shall be responsible for the cost of demolition of all of the existing buildings on the property. Buyer will contract for the demolition and will obtain bids prior to tho closing date. Scller may review the bids prior to closing and may terminate this contract if the lowest bid for demolition exceeds S44ssAer Demolition costs will include the cost to hire an Environmental Specialist to determine whether asbestos is present on the site- " ?A, 3.3 Rcprwentations and Warranties. The represcmtations and warranties of Seller conWncd in this Agreement must be true now and on the Closing Date (as hereinafter defined) ag if made on the Closing Date (as hereinafter defined) and A-1 07/05/2006 07 :50 FPX 6516381994 LAND TITLE NEW BRIGHTON 003/011 06/29/2006 THU 16:03 FAX 11003/011 Seller shall have delivered to Buyer on the Closing Date a certificate dated the Closing Date, signed by an authorized rcpresccitativC of Scllcr, certifying that such representations and warranties are true as of the Closing Datc. 3.4 `title. Title Shall havo been found acceptable, or been made acceptable, in accordant with the requirements and terms of Section 6 below_ 3.5 Access and Inspection_ Seller shall have allowed Buyer, and Buyer's agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing, shall restore the Real Property, and shall hold Seller and the Real Property harmless from all costs and liabilities relating to Buyer's at;livitie s. Buyer shall have been satisfied with the rtsults of all such tests and investigations performed by it or on its behalf on or before the Closing Dfito (as hereinafter defined), This Agreement shall automatically terminate on the Closing Date (as hereinafter defined), unless Buyer has given Seller notice on or before the Closing Date (as hereinafter defined) that the contingencies descn'bed in this Section required to be satisfied by the Closing Date (as hereinafter defined) are either satisfied or waived by Buyer. If this Agreement terminates pumuaut to this Section, then the Earnest Moncy shall be re;turri xl promptly to Buyer, and Buyer ,Y011 execute and deliver to Seller a cancellation of purchase agreement, and Seller and Buyer shall have no further liability or obligations with respect to this Agreement or the Properly. if Buyer gives Seller notice on or before the Closing Date (as hereinafter defined) that the contingencies described in this Section required to be satisfiod by the Closing Date (as hereinafter defined) are either satisfied or waived by Buyer,then the parties will proceed to close the transection contemplated hereby and, except ere specifically stet forth hurein, the P.arncst Money will be non-refundable to Buyer but applicable to the Purchase Price. 4. Closing. The closing of the purchase and sale contemplated by this Agreement (the"Closing") shall occur on August 1, 2006 (the"Closing Date,'), but Buyer may close on any business day prior to the Closing Date by giving Seller at least five, days' notice of such earlier date for the Closing. The Closing shall take place zit the of m of Attorney's Title of Stillwater("Citle Company') in Stillwater, Minnesota. Scllcr agrees to deliver possession of the Property to Buyer on the Closing Date, except as provided in Section 13 of this Agreement. Any party hereto may close via an escrow arrangement with the Title Company. 4.1 Seller's Closing Documents, On the Closing Date, Seller shall execute and dclivcr to Buyer'the following(collectively, "Seller's Closing Documents"), all in form and content reasonably satisfactory to Buyer: 4.1.1 Deed. A Warranty Deed conveying the Real Proporty to Buytx, free and clear of all enc=brances, except the Permitted Encuinbmnees (as hereafter defined). A-1 07/05/2006 07:50 FAX 6516381994 LAND TITLE NEW BRIGHTON li�004/011 UU/L8/LUUU '1'HU 16:03 FAX 191004/011 4.1.2 IRS Forms. A Designation Agreement designating the"reporting person" for purposes of completing Internal Rovenue Form 1099 and,if applicable, Internal Revalue Form 8594. 4.1.3 Well Certificate. A Certificate signed by Seller warranting that there are no "Wells" on the Property within the meaning of Minn. Stat. $ 103I or, if there are"Wells",a Well Certificate in the form required by law. 4.1.4 Stom a Tanks. If the Property contains or contained a storage tank, nn affidavit with respect thereto, as required by Mirui. Stat. § 116.48. 4.1.5 Other Document9. All other documents reasonably determined by Buyer or the Title Company to be necessary to transfer the Property to Buyer free and clear of all encumbrances,except the retmitted Encumbrances. 4.2 Buyer's Closing Doeument_4. On the Closing Date, Buyer will execute and deliver to Seller the following(collectively,"Buyer's Closing Documents"): 4.2.1xr�h�h� c Priec. Funds representing the Purchase Price,by cash or by wire transfer of immediately available funds. 4.2.2 IRS FRMI. A Designation Agreement designating the `reporting person" for purposes of completing Internal Revenue Form 1099 and,if applicable, Internal Revenue Form 8594. 5. Prorations. Seller and Buyer agree to the following pro-rations and allocation of costs regarding this Agrecmcnt: 5.1 Title Insurance and Closing, Fee. Seller will pay all costs of the Title Evidence_ Seller will pay the preniwn required for the issuance of the Titic Policy, if an updated abstract of title is not provided. if Seller provides Buyer an updated abstract of title, Buyer shall pay the premium for issuance of the Title Policy. Seller and Buyer will each pay ono-half of any closing fee or charge imposed by the Title Company. 5.2 Deed Tax, Seller shall pay all State Deed Tax payable in connection with this transfection. 5.3 Real Estate Taxes and Sl!eaial Assessments. Real Estate Taxes payable in the year in which Closing occurs shall be pro-rated based upon tbo Closing Date. On or before the Closing Date, Seller will pay all special assessments levied or pending against the Property. 5.4 Other Costs. All other operating costs of the Property shall bo allocated between Seller and Buyer as or this Closing Date, so that Seller pays that part of operating costs payable before the Closing Date, and Buyer pays that part of operating costs payable froin and after the Closing Date. A-1 07/05/2006 07:50 FAX 6516381994 LAND TITLE NEW BRIGHTON 005/011 Uni211i2000 TJdU 1tf:U4 FAA IM005/011 5.5 Attorneys' Eces. Each of the parties will pay its own attorneys' lees, except that a parry defaulting under this Agrcctrimt or any Closing Document will pay the reasonable attorneys' fres and court costs incurred by the nondefaulting party to enforce its rights hcreundcr. 6. Title Examination. Title Examination will be conducted as follows: 6.1 Scllcr's Title Evidence. Seller shall, within 10 days after the date of this Agreement, furnish the following (c ollective ly, "Title Evidence') to Buyer: (a) a commitinent("Title Commitment") for an ALTA Form B 1990 Owner's Policy of Title insurance insuring title to the Real Property, in the amount of the Purchase Price, issued by the Title Company; (b) if the Property is abstract property, Seller shall also deliver to the Title Company or to Buyer any Abstract of Title in Seller's possession, to the Real Property certified to a current date to include all appropriate judgment and bankruptcy searches;(c) UCC searches against Seller. 6.2 ftuYer's Objections. Within 15 days alter receiving the last of(lit:Title Evidenut; Buyer will make written objections ("Objections") to the form and/or contents of the Title Evidence. Any matter shown on such Title Evidence And not objected to by Buyer within the foregoing 15-d4y period, shall be a"Permitted Encumbrance" hereunder. Seller will have 60 days after receipt of the Objections to cure the Objections, during which period the Closing will be postponed, if necessary. Seller shall u.se its best efforts to correct any Objections. To the extent an Objection can be satisfied by the payment of money only, Buyer shall have the right to apply a portion of the cash payable to Seller at the Closing to the satisfaction of such Objection, cuid the amount so applied shall reduce the amount of cash payable to Seller at the Closing_ If the Objections are not cured within such 60-day period,Buyer will have the option to do any of the following: 6.2.1 Terminate this Agreement and receive a refund of the Earnest Money and the interest accrued and unpaid on the Earnest Money, if any; or 6.2.2 Withhold from the Purchase Price an amount which, in the rcasonuble judgment of the Titley Company, is sufficient to assure cure of the Objections. Any amount so withheld will be placed in escrow with the Title Company, pending such cure. If Seller does not cure such Objections within 60 days after such escrow is established, Buyer may then cure such Objections and charge the costs against the escrowed amount. The parties agree to executo and deliver such documents as may be reasonably required by the Title Company;or 6.2.3 Waive the Objections and proceed to close. 6.3 Title Policy. Buyer shall receive at Closing the title policy("Title Policy') issued by Title pursuant to the Title Commitment, or a suitably marked Title Commitment initialed by Title obligating Title to issue such a Title Policy in the form required by the Title Commitment as approved by Buyer. A-1 07/05/2006 07:50 FAX 6516381994 LAND TITLE NEW BRIGHTON [i�006/011 vvi tai tIPuu Ann io.04 r&& (0006/011 7. Operation Prior to Closing. During the period from the date of Seller's acceptance of thiF Agreement to the Closing Datc (the "Executory Period"), Seller shall operate and maintain the Property in the ordinary course of business in accordance with prudent, reasonable business standards, including the maintenance of adequate liability insurance and insurance against loss by fire, windstorm and other hazards, casualties and contingencies, including vandalism and malicious mischief. Seller shall execute no contract~, leasr-v or other agroementc regarding the Property during the Executory Period that are not terminable on or before the Closing Date, without the prior written consent of Buyer, which consent may be withheld by Buyer at its sole discretion_ 8, Representations and Warranties by Seller, Seller represents and warrants to Buycr as follows: 8.1 Existence; Authority. Seller(Lois Mahlberg and 'Paul Schoeller) has the requisite power and authority to enter into and perform this Agreement and Seller's Closing Documents; such documents arc valid and binding obligations of Seller, and are enforceable in accordance with their terms, 8.2 Ovemtions. Seller has received no notice of actual or threatenod cancellation or suspension of any utility services or certificate of occupancy for any portion of the Property. 8.3 Env Laws. No toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation., asbestos, urea formaldehyde, the getup of organic compounds known as polynhlorinated biphenyls, petroleum products including Moline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in any Environmental Law (collectively, "Hazardous Substances') have been generated, treated, stored, transferred from, released or disposed of, or otherwise placed, deposited in or located on the Property in violation of any Environmental law, nor hes any activity been undertaken on the Property that would cause or contribute to the Property becoming a treatment, storage or disposal facility within the meaning of any Envirunmeartal Law. TMC term "Environmental Law" shall mean any anti all fcdcral, state and local laws, statutes, codes, ordinances, regulations, rules, policies, consent decrees, judicial orders, administrative orders or other requirements relating to the environment or to human health or safety associated with Ihe; emvircmme nt, all as amended or modified from tine to time. Thcre has been no discharge,release or threatened release of Hazardous Substanc:ev from the Property, and there are no Hazardous Substances or conditions in or on the Property that may support a claim or cause of action under any Environmental Law, The Property is not now, and to the best of Sellerr'a knowledge nover has been, listed on any list of situ contaminated with Hazardous Substanue s,nor used as landfill, dump, disposal or storage site for Hazardous Substances. Seller has maintained all records rdquired to be kept concerning the presence, location and quantity of asbestos containing materials, and presumed asbestos containing materials,in the Property and will deliver the same to Buyer on orbcforc Closing. A-1 07/05/2006 07:51 FAX 6316381994 LAND TITLE NEW BRIGHTON 007/011 u.,. A,ai&vuu lnu rAA 2007/011 . 8.4 Sollcr's i2cfaults. Seller is riot in default concerning any of its obligations or liabilities rogarding the Property. 8.5 FIRPTA. Seller is not a"foreign person", "foreign partnership", "foreign trust" or"foreign estate", as tboae terms are deftned in Section 1445 of the Internal Revenue Code. 8.6 Proceedings. There is no action, litigation,investigation, condemnation or proceeding of any kind pending or threatened against Seller or any portion of the Property. 8.7 Condition. The buildings,structures and improvements included within the Property are structurally sound and in good repair and condition, and all mechanical, electrical,heating, air conditioning, drainage, sewer,water and plumbing sy9tems arc in proper working order. All iixturas, equipment and appliances included in the Property are in proper working order. 8.8 Wells_ The Sellar certifies and warrants that the Seller does not know of any "Wells"on the destxibed Property within the meaning of Minn.. Stat. § 103I. This representation is intended to satisfy the requirements of that statute. 8.9 Sewage Treatment System Disclosure_ For the purposes of satisfying any applicable requirements of Minn, Stat. § 115.55, Sel ter discloses and certifies that: a) Seller has no knowledge of the existence of an abandoned individual scwage treatment system on the Property. b) Sewage generated on the Property goes to a facility permitted by the Minnesota Pollution Control Agency. Seller will indenuufy Buyer, its successors and assigns, against, and will hold Buyer, its succc8sors and assigns,harmless front, any expenses or damages,including reasonable attorneys' fees, that Buyer incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Except as herein expressly stated, Buyer is purebasing the Property based upon its own investigation and inquiry and is not relying on any representation of Seller or other person and is agreeing to accept and purchase the Property "AS IS, WHERE IS" subject to the conditions of examination herein sct forth and the express warranties herein oontaincd. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller will not constitute a waiver or release by Buyer of any claims due to such breach. 9. Casualty, if all or any part of the Property is substantially damaged by fire, casualty, the elements or any other cause, Seller shall immediately give notice to Buyer, and Buyer shall have the right to terminate this Aliment and receive back all Earnest Money by giving notice within 30 days after Seller's notice. If Buyer shall fail to give the notice, then the parties shall proceed to Closing, and Seller shall assign to Buyer all rights to insurance proceeds resulting from such event and shall pay to Buyer the amount of any deductible or co-insurance. A-1 07/05/2006 07:51 FAX 6516381994 LAND TITLE NEW BRIGHTON fi�008/011 vni 2bi 4VV0 idu J-0:U4 r'AAL Q008/011 10.Broker's Commission. Seller and 13uyer represent to each other that they have dealt with no brokers, finders or the like in c:onnoction with this transaction, sad agree to indemnify and hold each other harmless from all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agroemcut, and will pay all costs of defending any action or lawsuit brought to recover any such foes or commissions incurred by the other party, including reasonable attorneys' fees. 11.Assignment. Neither party may assign its rights under this Agreement before or after the Closing. 12, Survival. All of the tams of this Agrement and warranties and representations herein contained shall survive and be enforceable eller the Closing. 13,Relocation Benefits. Seller hereby voluntarily waives any and all relocation assistance, services, payments and benefits pursuant to Minn. Stat. § 117.521 pursuant to the Waiver of Relocation Benefits attached hereto a3 Exhibit B. 14. Notices. Any notice required or permitted hereunder shall be in writing and given by pen,oval delivery upon an authorized representative of a party hereto; or if mailed by United States registered or certified mail, return receipt requested, postage prepaid; or if deposited cost paid with a nationally recognized, reputable ovemight courier,properly addressed as follows: If to Seiler; LOIS MAHLBERG 13265 Killdeer Street NW Coon Rapids,UN 55448 With Copy to: PAUL SCHOEI,t FR 6740 29th Shvc(North Oakdale,MN 55128 If to Buyer: Tim.CiTv or Woo 14669 Fitzgmld Avenue North Hugo, MN 55038 Attn: Mike Ericson With Copy to: EC"L'RC Law FiM 1835 Northwestem Avenue Stillwater,MN$5082 Ann: Timothy Paul Brausen Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit, a9 aforesaid; provided, however, that if notice is given by deposit, the time for response to any notice by the other party shall commence to run one business day after any such deposit. Any party may change its address for the service of notice by giving uoticc of such change 10 days prior to the effective date of such change. A-1 07/05/2006 07 :51 FAX 6516381994 LAND TITLE NEw BRIGHTON li�009/01i qui 4di LUVU inu 10:u4 VAA li]oo8/oll 15.Miscellaneous_ The paragraph headings or captions appearing in this Agreement are for convenience only, are not a pout of this Agreement, and arc not to be considered in interpreting this Agreement. This written Agreement constitutes the complete agreement between the parties and supersedes any prior oral or written agrecinents between the, parties regarding the Property. There are no verbal agreements that change this Agreement, and no waiver of any of its teens will be effective unless in a writing executed by the parties. Thie Agr=ncnt binds and benefits the parties and their successors and assigns. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 16.Remedies. 1f Buyer defaults under this Agm"ment, Seller shall have the right to terminate this Agreement in aceordancc with the applicable Minnesota statutes. If Buyer fails to cure such default within the statutory cure period, this Agreement will termi.natc, and upon such termination Seller will retain the Earnest Money as liquidated damages, time being of the essence of this Agreement. The termination of this Agreement and m-tention of the Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance, If Seller defaults under this Agreement,Buyer, as the sole remedy available to Buyer for such default by Scller, may seek specific performance of this Agreement. Seller and Buyer have cxccuted this Agreement as of the date fust written above. Date of Signature $ELLER 12006 LOIS MAHLBERG, a Personal Representative of the Estate of)can C. Schoellcr Date of Signature Lw" Aaz' ,2006 By PAUL SCHOSLL a Personal Representative of the.Estate of Jean C, Schoeller Datc of Signature BUYER THP-COF HUGO', it o municipal corporat 2006 l -- ItS: A--1 07/05/2006 07:51 FAX 6516381994 LAND TITLE NEW BRIGHTON 010/011 06%29/2006 TO 16:05 FAX 10010/011 EXHIBIT A Land PID#2003121320004 The Last half of Lot 22,except the East 50 feet of County Auditors Plat No.7. A-1 07/05/2006 07:51 FAX 6516381994 LAND TITLE NEW BRIGHTON �011/011 -... r. . rvvv yam.. yV VJ fnA 011/011 LAX MIT B Waiver of Relocation Benefits C-1 r � IIVdY11I1�dIR �. s 'sY si76i nx atl� �.!w:- ++BWI� � � �® Schoeller Property 4 ySchoeller Property ,c •x V. y - ,w 3 s: 61 I tea' � �� •tib � � �� F y4E , 1 inch equals 100 fee • ( n ORDINANCE NO. 2006- AN ORDINANCE AMENDING CHAPTER 320 (COMPREHENSIVE LAND USE REGULATIONS) OF THE CITY CODE AMENDING SECTIONS 1010 TO DEFINE A MEAT PROCESSING FACILITY, SECTION 1120 TO ALLOW A MEAT PROCESSING FACILITY AS A CONDITIONAL USE IN THE GENERAL BUSINESS DISTRICT(C-2), AND SECTION 1195, TO ESTABLISH PERFORMANCE STANDARDS FOR SUCH FACILITIES THE CITY OF 14UGO ORDAINS: Section 1. The City Council of the City of Hugo does hereby amend Sections 1010-100.1, 1120-020.1 1120-040.1, and 1195-050.1, of the Hugo City Comprehensive Land Use Regulations by allowing a Meat Processing Facility as an accessory use to a Meat Market with a Conditional Use Permit. Section 2. Severability. In the event that a court of competent jurisdiction adjudges any part of this Ordinance to be invalid, such judgment shall not affect any other provision of this Ordinance not specifically included with that judgment. Section 3. Effective Date. This amendment shall take effect upon its passage and publication. ADOPTED by the City Council on Fran Miron, Mayor ATTEST: Mary Ann Creager, City Clerk *MEAT PROCESSING FACILITY: A facility that allows for the processing of non-inspected USDA meats. T *1195465.1 MEAT PROCESSING FACILITY: It is unlawful for any person to establish a meat processing facility, in the City of Hugo, except in conformance with the following requirements: Subd. 1 Meat processing facilities may be allowed in the (C-2) General Business Zoning District by Conditional Use Permit only as an accessory use to a meat market. The meat processing facility must occupy less than 50 percent of the floor area of a meat market. Subd. 2 The applicant must submit a plan showing all staging areas for the temporary storage of carcasses and disposal of animal remains. Any staging area must be screened by an opaque fence, such that any animal remains are not visible from surrounding properties. Subd. 3 Animal remains from the meat processing must be disposed at least on a weekly basis. The City may require more frequent pickups of the remains if odors become detectable off of the premises. All animal remains must be kept in a sealed dumpster container with a lid at all times. *Amended by Ordinance2006- (date) HUGO ZONING ORDINANCE SECTION 1120- GENERAL BUSINESS DISTRICT (C-2) 1120-010.1 PURPOSE: The purpose of the C-2, General Business District is to provide for the establishment of service and free-standing commercial businesses, including retail sales, offices, and restaurants, which are oriented toward motorists and require high volumes of traffic and visibility from major roads 1120-020.1 PERMITTED USES: The following are permitted in the C-2 District: Subd. 1 All Permitted uses as allowed in the C-1, Central Business District. Subd. 2 Amusement centers. Subd. 3 Art and school supply sales. Subd. 4 Art gallery and sales. Subd. 5 Bicycle sales and repair. Subd. 6 Book and stationary stores. Subd. 7 Camera and photographic supplies, sales and film processing. Subd. 8 Delicatessen/coffee house. Subd. 9 Drug stores. Subd. 10 Florist shops. Subd. 11 *Frozen food retail,but not including a-'-er-plap . meat processing facility Subd. 12 Gift or novelty stores Subd. 13 Hardware stores. Subd. 14 Hobby and craft stores. Subd. 15 Hotels and Motels (refer to Sec 1195-350.1) Subd. 16 Liquor, off sale. Subd. 17 *Meat markets,but not including processing for a leeker-plant. meat processing faciltiy Subd. 18 Medical, dental, and chiropractic offices and clinics. 1120 - 1 7/6/200672006 HUGO ZONING ORDINANCE Subd. 19 Offices, Clinics, and Professional Services (refer to Sec. 1195-520.1) Subd. 20 Paint and wallpaper sales. Subd. 21 Pet sales, supplies and grooming. Subd. 22 Plumbing, television, radio, electrical sales and such repair as is accessory use to the retail establishment permitted within this district. Subd. 23 Recreation, personal fitness. Subd. 24 Sporting goods and recreational equipment sales, not including motorized vehicles or boats. Subd. 25 Studios - artist, music, photo, decorating, dance, etc. Subd. 26 Tobacco Shops. Subd. 27 Variety stores and stores of similar nature. Subd. 28 Veterinary clinic—small animal Subd. 29 Video rental and sales. 1120-030.1 ACCESSORY USES: The following are permitted accessory uses in a C-2 District. Subd. 1 Accessory Buildings (refer to Section 1195-030.1) Subd. 2 Garages, Commercial (refer to Sec. 1195-290.1) Subd. 3 Plant Nurseries, Retail (refer to Section 1195-550.1) Subd. 4 Seasonal Outdoor Retail Sales (refer to Section 1195-620.1) 1120-040.1 CONDITIONAL USES: The following are conditional uses allowed in the C-2 District and require a conditional use permit based upon procedures set forth in and regulated by Section 1015- 080 of this Chapter. Additionally, besides the specific standards and criteria, which may be cited below for respective conditional uses, each request for a conditional use permit shall be evaluated, based upon the standards and criteria in Section 1015-080 of this Chapter. Subd. 1 All conditional uses subject to the same conditions as allowed in the C-1 District, unless cited as a permitted use in this Section. Subd. 2 Commercial Recreation, outdoor (refer to Sec 1195-170.1) Subd. 3 Exterior Storage (refer to Sec 1195-240.1) 1120 - 2 7/6/2006715120 HUGO ZONING ORDINANCE Subd. 4 Liquor on-sale when accessory to a restaurant. Subd. 5 Meat processing facility when accessory to a meat market (refer to section 1195-465.1) Subd. 6-5 Motor Vehicle, Boat, and Trailer Sales (refer to Sec 1195-490.1) Subd. 76 Motor Vehicle Repair Business (refer to Sec 1195-500.1) Subd. 8-7 Plant Nurseries, Wholesale (refer to Sec 1195-550.1 and 1195-560.1) Subd. 98 Public garage/parking ramps provided that: (a) It is accessory to a use allowed in the C-2 District. Subd. 10-9 Recycling Center (refer to Section 1195-570.1) Subd. 1144 Religious worship facilities and related social events (refer to Sec 1195- 580.1) Subd. 124 Restaurants internal to a multi-tenant shopping center Subd. 1343 Shopping Center (refer to Sec 1195-650.1) Subd. 1443 Trade or vocational schools. Subd. 1544 Used Car, Farm Machinery, Marine, and Motor Home Sales and Display areas when not operated as a part of new item franchise dealership. Subd. 1644 Veterinary clinic—large animal *Amended by Ordinance2006- (date) 1120 - 3 7/6/20067/5,42896 HUGO ZONING ORDINANCE 1120-050.1 AREA REQUIREMENTS AND CONSTRUCTION LIMITATIONS: The following minimum requirements shall be observed in an C-2 District subject to additional requirements, exceptions and modifications set forth in this Chapter: Minimum lot or parcel size 20,000 sf Minimum lot width at front setback line 100 ft Minimum lot width for corner lots 130 ft Minimum lot depth 250 ft Minimum lot depth—double frontage lot 250 ft Minimum front yard building setback 30 ft Minimum side yard building setback 30 ft Minimum rear yard building setback 30 ft Maximum building height 35 ft Maximum lot area to be covered by buildings 35 % Maximum lot area to be covered by impervious surface 80 % Minimum building size of principal building 2,000 sf Maximum garage size 1,000 sf Maximum combined size and number of accessory buildings, Refer to Sec. excluding garages 1195-030.1 1120 - 4 7/6/2006806 �t1 ORDINANCE NO. 2006- AN ORDINANCE AMENDING CHAPTER 320 (COMPREHENSIVE LAND USE REGULATIONS) OF THE CITY CODE AMENDING SECTION 1025 NON- CONFORMING BUILDINGS, STRUCTURES, USES,AND LOTS TO ALLOW THE EXPANSION OF A LEGAL NON-CONFORMING COMMERCIAL/ INDUSTRIAL USE WITH A CONDITIONAL USE PERMIT AND WITH SPECIFIC FINDING BY THE CITY COUNCIL THAT THE PROPOSED EXPANSION WILL REDUCE THE IMPACTS OF THE LEGAL NON- CONFORMING COMMERCIAL/INDUSTRIAL USE ON THE SURROUNDING PROPERTIES THE CITY OF HUGO ORDAINS: Section 1. The City Council of the City of Hugo does hereby amend Section 1025-020.1 to allow the expansion of a legal nonconforming commercial/industrial use with a Conditional Use Permit and with specific finding by the City Council that the proposed expansion will reduce the impacts of the legal non-conforming commercial/industrial use on the surrounding properties in terms of activity, noise, traffic, light, appearance, outside storage of vehicles, equipment, or materials, or other issues pertinent to the specific property and use involved. Section 2. Severability. In the event that a court of competent jurisdiction adjudges any part of this Ordinance to be invalid, such judgment shall not affect any other provision of this Ordinance not specifically included with that judgment. Section 3. Effective Date. This amendment shall take effect upon its passage and publication. ADOPTED by the City Council on Fran Miron, Mayor ATTEST: Mary Ann Creager, City Clerk HUGO ZONING ORDINANCE ARTICLE III SECTION 1025 -NON-CONFORMING BUILDINGS, STRUCTURES, USES,AND LOTS 1025-010.1 PURPOSE: This section provides for the regulation of non-conforming buildings, structures, uses, and lots, and to specify those requirements, circumstances, and conditions under which non-conforming buildings, structures, uses, and lots will be operated, maintained, and regulated. Non- conforming buildings, structures, uses, and lots shall not be allowed to continue without restriction. Furthermore, it is the intent of this section that all non-conformities shall be eventually brought into conformity. 1025-020.1 GENERAL PROVISIONS: Subd. 1 Conditional Uses. Any established use, building or lot legally existing prior to November 22, 1978 and which is herein classified by this Chapter as requiring a conditional use permit may be continued in like fashion and activity and shall automatically be considered as having received conditional use permit approval. Any change to such a use or building shall however require a new conditional use permit to be processed according to this Chapter. *Subd. 2 Non-Conforming Uses. (A) Effective Date. The lawful use of buildings or land existing at the effective date of this Chapter which does not conform to the provisions of this Chapter may be continued; provided, however, that no such non-conforming use of building or land shall be enlarged or increased, nor shall any such non-conforming use be expanded to occupy a greater area of building or land than that occupied by such use at the time of the adoption of this Chapter, except as provided under subsection (D), nor shall any such non- conforming use be moved to any other part of the parcel of land upon which the same was conducted at the time of the adoption of this Chapter. (B) Continued Use. A lawful, non-conforming use shall not be enlarged, but may be continued at the same size and in the same manner of operation as it existed on the date it became legally non-conforming except as hereinafter specified. (C) Changes to Non-Conforming Uses. (1) When a lawful non-conforming use of any structure or land in any district has been changed to a conforming use, it shall not thereafter be changed to any non-conforming use. (2) A lawful non-conforming use of a structure or parcel of land may be changed to lessen the non-conformity of use. Once a non-conforming structure or parcel of land has been changed, it shall not thereafter be so altered to increase the non-conformity. 1025 - 1 7/7/2006 ' 3 HUGO ZONING ORDINANCE (D) Expansions of Non-Conforming Uses. A legal non-conforining commercial/industrial use may be expanded with a Conditional Use Permit and with specific finding by the City Council that the proposed expansion will reduce the impacts of the legal non-conforming commercial/industrial use on the surrounding properties in terms of activity, noise, traffic, light, appearance, outside storage of vehicles, equipment or materials, or other issues pertinent to the specific property and use involved. (EP) Discontinuance. In the event that a non-conforming use of any building or premises is discontinued for a period of one (1) year, the use of the same shall thereafter conform to the regulations of the district in which it is located. (FE) Normal Maintenance. Maintenance of a building or other structure containing or used by a non-conforming use will be permitted when it includes necessary non-structural repair and incidental alterations which do not extend or intensify the non-conforming building or use. Subd. 3 Non-Conforming Buildings and Structures. (A) Restoration. No lawful non-conforming building or structure which has been damaged by fire, explosion, act of God, or other peril, to the extent of greater than fifty (50) percent of its market value, as determined by the City Building Official, shall be restored, except in conformity with the regulations of this Chapter. (B) Alterations. Alteration and normal maintenance to a lawful non-conforming building or structure may be made provided: (1) The alterations do not expand the building size. (2) The alterations do not change the building occupancy capacity or parking demand. (3) The alteration does not increase the non-conformity of the building or the use. (C) Expansion of Non-Conforming Buildings or Structures. (1) Administrative Approvals. The following expansions of lawful non- conforming building and structures may be approved. The Community Development Director shall make a determination that the building expansion will have not external negative impacts upon adjacent properties or public rights-of- way. (a) Expansion of buildings found to be non-conforming only by reason of height, yard setback, or lot coverage area may be permitted provided the structural non-conformity is not increased and the expansion complies with the performance standards of this Chapter. 1025 - 2 7 7/?0067!6Q006 HUGO ZONING ORDINANCE (2) Conditional Use Permit. Lawful non-conforming commercial, industrial, public, semi-public, and multiple-family or townhome structures may be expanded on the same lot by conditional use permit provided: (a) Expansion of buildings found to be non-conforming only by reason of height, yard and setback or lot areas are exempt from requiring a conditional use permit. (b) Except for the above, the expansion will not increase the non- conformity of the building or site. (c) The new building expansion will conform with all the applicable performance standards of this Chapter. A conditional use permit shall not be issued under this section for a deviation from other requirements of this Chapter unless variances are also approved. (d) The request for conditional use permit shall be evaluated based on standards and criteria set forth in this Chapter. Subd. 4 Non-Conforming Lots. (A) Vacant or Redeveloped Lots. (1) Lot Combination. If an owner has an interest in more than one (1) lot of record contiguous to other lots of record, all such lots shall be combined to meet the requirements of this section or the applicable zoning district standards. If sufficient contiguous property is held in one ownership to comply with the standard of the applicable zoning district, then those more restrictive provisions will apply. In no circumstances will there be approval of any proposal for multiple lot developments based upon lots of record, and not conforming with the provisions of the existing zoning district. (2) Single Family Detached Dwellings. Legal non-conforming, vacant, substandard sized lots of record may be developed for single family detached dwellings upon approval by the Community Development Director or designee, provided that: (a) The lot in question was legally established in accordance with Chapter requirements existing at the time of its creation and is a separate, distinct tax parcel. (b) The lot is properly zoned for single family land uses. (c) Minimum Lot Size. 1025 - 3 7/7/20067i"612006 HUGO ZONING ORDINANCE 1. Sewered Lots. A lot of record having direct access to municipal sewer and water may be developed in accordance with this Chapter provided measurements for lot area and width are within seventy-five (75) percent of the requirements of the base zoning district. 2. Unsewered Lots. A lot of record not having access to municipal sewer and water may be developed provided it complies with Washington County regulations. (d) The lot in question has frontage on a public street. (e) Public health concerns (potable water and sanitary sewer) can be adequately provided. (f) The setback and yard requirements of the applicable zoning district can be achieved while simultaneously resulting in development that complies with the character and quality of the immediate area and the objectives of the City's Comprehensive Plan and Zoning Ordinance. (B) Developed Lots. An existing conforming use on a lot of substandard size and width may be expanded or enlarged if such expansion or enlargement meets all other provisions of this Chapter. *Amended by Ordinance2006- (date) 1030-010.1 RESERVED 1025 - 4 717/20067 ,12006 4 TO: Mike Ericson, City Administrator FROM: Tom Denaway, Administrative Intern SUBJECT: Handbook for newly appointed members of the Hugo EDA DATE: August 12, 2004 Overview: The purpose of this handbook is to provide a guide to the newly appointed members of the Economic Development Authority for the City of Hugo. This handbook will first look at what we are seeking to achieve when we do economic development, it will lay out the tools available to the EDA to fulfill its goals, and finally it will provide a potential course of action for discussion by the board members. What is Economic Development? Economic Development, as defined by the Federal Economic Development Administration of the Commerce Department, is fundamentally about enhancing the factors of productive capacity—land, labor, capital, and technology—of a national, state, or local economy. By using its resources and powers to reduce the risks and costs which could prohibit investment, the public sector often has been responsible for setting the stage for employment—generating investment by the private sector. The public sector generally seeks to increase incomes, the number of jobs, and the productivity of resources in regions, states, counties, cities, towns and neighborhoods. Its tools and strategies have often been effective in enhancing a community's: • labor force (workforce preparation, accessibility, cost); • infrastructure (accessibility, capacity, and service of basic utilities, as well as transportation and telecommunications); • business and community facilities (access, capacity, and service to business incubators, industrial/technology/science parks, schools/community colleges/universities, sports/tourist facilities); • environment (physical,psychological, cultural, and entrepreneurial); • economic structure (composition); and • institutional capacity (leadership, knowledge, skills) to support economic development and growth. Essentially what the Economic Development Administration is trying to say is that economic development is the growth of community, through the growth of economy. At its root economic development is a coordinated effort at growing a city's tax base through the growth of its job base,ultimately leading to a better community with greater amenities. Economic development is a systematic planned approach at bringing business and development into the city. Everything we do as a city springs from our tax base which is bolstered by increased development and investment, all of the quality of life services and facilities provided by the city come from its tax base. Therefore anything which is designed to expand this base has to be of the utmost importance. What are we doing when we do economic development? Economic development consists of two primary functions. The first function is the marketing of a city as a place for business to locate, and the second being the assistance of a business in their effort to locate in your city. These two functions work hand in hand, and are almost codependent in their existence. When a city engages in active economic development it is attempting to foster business growth. There are a wide variety of forms and tools that this takes but in the end,they can be divided into marketing activities and financing activities. The purpose of these actions is to be an enabler, to allow projects come to fruition which would not without assistance from the city. The Economic Development Administrations phrases it as the city using its resources and powers to help reduce risks and costs which would prohibit investment, the public sector often has been responsible for setting the stage for employment-generating investment by the private sector. It is the city stepping forward and closing a financial gap enabling business to develop and grow within the city. A significant motivation for a city's involvement in economic development is selfish; it is the city seeking to beat other cities and states. Cities will take an active role in closing a financial gap,because if they don't another likely will, and they will reap the benefits. Therefore cities need to be proactive, and competitive in their effort to court business. There are a wide variety of organizations available to a city and a community that seek to become involved in economic development activities. These organizations include: business organizations, development corporations, and various government organizations. The Minnesota Department of Trade and Economic Development (DTED) groups these organizations into three categories: Business Organizations: • Commercial Club: Usually an incorporate 501(c)(4)or (6) organization whose purpose is to promote community and retail events. The membership is usually made up of retail business owners or owners of businesses in the central or downtown business district. The organization is typically made up of volunteers with no staff. • Chamber of Commerce: A Chamber of Commerce is an incorporated,non- profit 501(c)(4) or(6) that is usually affiliated with the state and national chamber of commerce. Its primary purpose is to promote local businesses and the community. Development Corporations: • For-Profit: A corporation formed to develop and sell industrial land and/or provide financing for business development within the community. Shares are sold to local investors who can be paid dividends for profits made on projects. Also, money invested in corporations can be repaid to the stockholders. The board is made up of shareholders and may or may not have staff. The corporation is subject to federal and state income tax. • Non-Profit: A corporation formed to develop and sell industrial land and/or provide financing for business development in the community. Shares are sold or funds may be raised in other ways. No dividends are paid on shares. The non-profit corporation must obtain either 501 (c)(3) or 501 (c)(4)status from the IRS. Donations made to a 501(c)(3) by both individuals and businesses is tax deductible. Obtaining 501(c)(3) status can be difficult, expensive and time- consuming and many communities are not willing to go through the lengthy process. Also, organizations with 501(c)(3) status are usually not politically active due to IRS regulations limiting budget expenditures on political activities to 20 percent of its budget. Governmental Organizations: • Development Commission: An advisory board, appointed by the Mayor with City Council approval. It has limited or no decision-making authority and usually serves as a sounding board or as a first point-of-contact for the City council for development projects. It is often responsible for drafting strategies and policies for ratification and implementation by the City. The commission may be active in implementation of local plans on a volunteer basis. • Housing Redevelopment Authority (HRA): An HRA is a legal entity created by a City Council to provide a sufficient supply of adequate housing for low-to-moderate income families and individuals. They are also charged with clearing and redeveloping blighted areas throughout community. The board may be a citizen's panel, the City Council or a combination thereof. HRAs also have limited powers that may be used for business development. • Port Authority: This is a legal entity created by the State Legislature to promote the general welfare of a city's port district, increase the volume of commerce in the port, provide facilities for handling, storage, and shipment of freight. The powers of a Port Authority are more expansive then those of an HRA or an EDA in one significant respect, Port Authorities have the ability to issue General Obligation Bonds with the City Council approval. • Economic Development Authority (EDA): EDAs were created to facilitate a well-rounded development program by taking advantage of some of the Port Authority powers and all of the HRA powers. By combining and utilizing HRA,EDA, and City powers, community leaders are able to create flexible business assistance and development programs. EDAs for example, are allowed, to buy and sell property; make loans and grants to businesses; provide guarantees or other credit enhancements; and to sell bonds. These agencies are important players in the business of economic development. While they may seem irrelevant because Hugo decided to go with an EDA, they are still important and must be noted. An important task for the EDA to complete will be partnering with these other organizations in order to work in collaboration towards economic development. A close relationship with these other agencies will provide the EDA with access to tools and networks that it would not have on its own, making it essential that EDA seek out their involvement Why an Economic Development Authority? The Hugo City Council on July 19, 2004 passed the Enabling Resolution Modifying the Hugo EDA. The City, technically already had formed an EDA that was composed of City Council. However, this EDA was only utilized in a few specific instances. The reformation of the EDA is a result of the renewed interest in the City Council for fostering development in Hugo, along with the desire to have more public involvement in the process, thus a seven member board was formed with two Council members serving on the EDA. Mary Ippel, of Briggs and Morgan, describes the forming of an EDA as a way to provide a great deal of flexibility to a City to pursue economic development. Economic development authorities may exercise their own powers,the powers of housing and redevelopment authorities, the powers of cities in connection with city development districts and the powers of municipalities or redevelopment agencies in connection with municipal industrial development. The purpose for which these powers may be exercised is expanded to embrace economic development throughout a City and not just in areas deemed blighted. The concentration of various economic development powers and purposes in one Authority therefore provides a valuable tool to a City for the promotion and financing of economic development. An EDA is provided, by State Statute, the greatest level of power and freedom to participate in economic development. An EDA possesses the most ability and the widest variety of tools to work towards closing financing gaps. Simply put, an EDA is the most effective tool at solving problems of economic development. Tools of the EDA There are two categories of tools utilized by EDA to foster business growth in Cities. These tools can be broken down into marketing tools and financial assistance tools. The marketing tools exist as a means for the City to sell itself as a quality location for business to locate or expand in. The financial assistance tools exist to assist business in closing financial gaps, which would otherwise cause them not to locate in your city. Because these two categories represent the backbone of the activities of the EDA, they will be examined in greater length to better understand; the philosophy behind their use; the specific tools available to fulfill the philosophy; and a potential course of action for the City of Hugo. Marketing Philosophy The philosophy behind marketing a City is a simple one,you have to sell your City, especially in a large urban area like the Twin Cities. It is very difficult to differentiate between what two neighboring communities have to offer, and it can be something as simple as a economic development newsletter for example that can cause a business to locate in one city as opposed to another. Therefore the marketing of a City can be an essential service of the EDA, and can and will be the tool which initiates business growth and expansion in a City. The marketing efforts of an EDA need to focus on two key areas,what your City has to offer and what opportunities are currently available. You have to provide reasons why a business should locate in your City, but equally important is the marketing of the opportunities that currently exist in your community. You want to tell potential business why they should be there at what is available to them. Selling a community is an essential function. You really need to highlight why your City is unique and attractive. This can be a result of its location. Oakdale for example plays to the fact that it is located at the intersection of I-94 and 694 making it easily accessible. You can highlight the fact that there is tremendous growth taking place in a City. Here in Hugo we can play on all of the new development, and the fact that these new residents are going to need services and places to work. You can highlight the level of education in a City, in Hugo the soon to be constructed elementary school is an extremely attractive feature, and something that differentiates us from other communities. Cities can market things that may be unique to them, such as a new school or their location, but the marketing of the amenities a City has to offer maybe the most important aspect. All Cities provide amenities to their residents, it is one of the core reasons for their existence, but not all Cities provide the same level of amenities; which is why it is essential that Cities demonstrate exactly what they have to offer. The City of Hugo may have a lot of growth and a new elementary school, but it also has a rapidly expanding parks program, with one new park currently being built and another in the works. It has a newly formed public works department that is now providing local control and responsibility for maintaining the City's roadways. It has a very active Lions club, which sponsors many annual events with the highlight being Hugo Good Neighbor Days. All of these things are amenities that the City has to offer. The amenities that residents want to see in their communities are the same thing business want to see when they examine a community. Therefore the most effective marketing tool a City possesses is its amenities, and the continued creation and development of these will not only create a better residential community, but a better business community as well. These points of emphasis, which suggest a City is an attractive location for business to locate usually speak for themselves and need little explanation and elaboration. What has to be marketed is the current opportunities available for the location of a business in your City. For example, the City of Hugo, in its marketing efforts needs to highlight both the amenities that the City possess, but also the recently developed space in the Bald Eagle Industrial Park, or the Pelequin Industrial Park, or any of the other available space for the location of a business, be it raw land, or new office space. Potential businesses need to be aware of what Hugo has to offer as a community, in terms of amenities and opportunity. Marketing Tools There are a variety of tools available to an EDA that can be utilized to fulfill the goal of marketing the City. These tools range from; Economic Development Newsletters, Marketing Videos, Business Retention Visits, as well as a number of simple steps, that can be used to spread information about business opportunities in a City. The tools that will be examined represent a portion of what is available to Cities and present a variety of costs. Business Retention Visits The City of Oakdale has found that one of the easiest tools for marketing the City is Business Retention Visits. This tool is unique in the fact that its target audience is not businesses outside of the community seeking to locate in Oakdale, but businesses already located within the City. A business retention visit is a fairly simple idea, it is simply an effort by City Staff and Elected Officials to get out into the community and speak with business owners. The notion behind this tool is the fact that future business growth in a city has a higher likelihood of coming from a business that is already located in the city then from an outside business coming in. As a result, the City of Oakdale decided they needed to get staff and elected officials out in the Oakdale Business Community to start speaking with the businesses already located there and to start forming relationships with these businesses so that when it becomes time to expand they look inward at opportunity in Oakdale, as apposed to opportunities elsewhere. By conducting these visits Oakdale has found that a number of business where simply unaware of the opportunities for growth that was present in their community, as well as some of the financial assistance tools the City had to offer. Business Retention Visits are an essential tool for the Hugo EDA to utilize, made particularly important by their dual nature. With the reformation of the EDA, and its intended goal of creating business development and growth in the City of Hugo, has come trepidation from the local business community and the fear that they will be forgotten or wiped out. Business retention visits will go along way to relieving this fear by allowing the local business community to be heard, but more importantly to know that they come first. The goal of the EDA is to see growth in business in Hugo, this does not simply mean new business growth, but more importantly the growth of business already located in the City. Business retention visits have a dual nature because not only do they seek to create awareness of growth opportunity in Hugo, but they do it by putting existing business owners first. Economic Development Newsletters Cities can very successfully advertise business growth opportunities through the use of newsletters. These newsletters can be distributed not only to existing community members, but to people outside the community as well. By utilizing existing mailing lists from the community itself and neighboring Business Associations and Chambers of Commerce, Cities are more equipped to advertise the opportunities available in their communities. These newsletters are able to highlight the growth opportunity available to business already located in a community, but they are also able to extend beyond the boundaries of the City, and can truly work to attract business from outside the community. These newsletters are able to not only showcase the potential for development in a community, but they are excellent forums for marketing the recent successes of a community. Nothing is as powerful as a strong success story, which makes it essential for newsletters to illustrate future growth as well as past successes. Community Marketing Video Communities in the past have prepared short videos, which highlight exactly what the City has to offer. The philosophy behind these videos is the same as all of the other marketing tools, i.e. spread the word about the great benefits of locating in City X. These videos are then provided to businesses who inquire about possibly locating in the City. Typically these videos will highlight City amenities, as well as previous and ongoing projects. The goal with these videos is to paint a picture of what your City has to offer, and why it should be chosen over another City. In addition to providing copies to people who inquire about the City, they can also be aired on local public access stations. By airing them both internally in a community and in external markets the City is hoping to draw attention to itself and what it has to offer. The downside to these videos is they can be somewhat expensive to produce, and can become outdated rather quickly. Marketing Conclusions The above-mentioned tools represent specific actions the Hugo EDA can take towards marketing the opportunities that are currently available. The goal of all three of these tools is simply to spread the word, both about what the City has to provide to its residents, but also what business opportunities exist. The three tools presented are also unique in that they represent three points on the spectrum in terms of sophistication and cost. In the case of the Hugo EDA, it would probably not be necessary to jump right into the creation of a marketing video. The Hugo EDA will most likely progress along the spectrum by starting with Business Retention Visits, followed by a Newsletter,with the Marketing video being on the horizon farther down the line. Probably the most vital of these tools is the Business Retention Visits, especially during the first formative stage of the EDA. As previously stated the visits should go a long way to reassure local business owners by reminding them that the goal of the EDA is business development, which does not simply mean outside business moving into the City. If Business Retention Visits are the first step in the marketing plan for the Hugo EDA, then an E.D. Newsletter would be the logical follow-up. The benefit of the newsletter would be the increased exposure it would provide, which would far surpass the reach of the business retention visits. The newsletter would probably be implemented a short while after the formation of the EDA, essentially the EDA needs to set some groundwork and framework for itself before it would begin using a newsletter. The benefit to this is that the newsletter would be able to spread the word of the EDA, basically as it is formed and evolves. The use of the newsletter would be beneficial to the purpose of the EDA for reasons beyond simple marketing. By employing a newsletter the EDA would have a means of communicating with the residents of Hugo about what, its intentions, goals, policies etc...are. The flow of this information from City Hall to the residents of Hugo will provide the EDA with the buy-in it needs to be successful and grow in its role. Additionally the newsletter would be relatively inexpensive and would probably be circulated quarterly to begin with, with the eventual evolution to a bi-monthly publication. I imagine that it would be a while before the EDA would be willing to cover the cost of a marketing video. A marketing video would be the final step used by the EDA to market opportunities in Hugo, and would really only be beneficial if there was a number of business making inquiries about locating in Hugo, otherwise the video would go relatively unused and would not reach an audience much larger than the newsletters. Additionally,Marketing Videos are prone to becoming obsolete and need semi-frequent investment to keep things updated. The above-mentioned tools represent the hard and fast marketing tools that the Hugo EDA has available to it. However they do not encompass all of the tools available to the EDA. The tool that will likely be the most effective is simply networking. The EDA needs to utilize City Staff to become actively involved with the other development related community and area-wide agencies. By being active in an area chamber of commerce the City will be better equipped to market the opportunities for growth that it posses, while reaching a wider audience in the process. As the old adage states, "Its not what you know, but who you know!" Basic straightforward networking and involvement in area agencies is possibly the best marketing tool an EDA possess. Financial Assistance Tools As previously mentioned the functions of an EDA is two-fold, its goals are to market the City as a place for businesses to develop, and it can also act to assist business meet financial gaps in their efforts to locate within the City. Essentially what this means is that EDA's and Cities have the power to remove portions of the financial burden placed on businesses in their efforts to move into your City, EDA's can work to close financial gaps that may exist. There are instances where business would like to develop in a City,but the cost of doing so prevents it. In these circumstances Cities and EDA can use their power to provide money or cover certain costs in order to close these gaps, provided a certain test has been passed. This test is what is known as the "but-for" test. The DTED Economic Development Handbook provides this definition of the But for Test; "A statutory requirement that a municipality, in approving creation of a tax increment district, must find that the "proposed development or redevelopment, in the opinion of the municipality, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future." The municipality must also find that the use of TIF will increase the market value of the site over that which would occur without tax increment financing." What the "But For Test" seeks to is create a level of responsibility to the use of public assistance. By meeting the burden of proof set forth in the "But For Test" Cities are able to demonstrate the fact that they are not in the business of giving money to private industry without receiving something in return. The burden of proof in the "But For Test" is whether or not the project would be possible if the assistance was not provided. If a business could make it work without the assistance, it would fail to meet the test and would not be eligible for assistance. While the DTED definition of the "But for Test" specifically mentions the use of the test in regards to Tax Increment, it is sound policy to require the test to be met in all aspects of local government financial assistance. The notion of government using tax dollars to assist private business is a difficult one for residents to comprehend. In seeking to answer why this is done,three key items need to be elaborated on; the increased tax base this development will provide, the fact that the development would not happen without assistance (but for test), and the fact that in most instances of assistance the money is either loaned or will be recouped in captured tax revenue. By illustrating these three points the City is able to illustrate the fact that the assistance will ultimately provide great reward to the City with little cost being burdened by the City. Three of the most popular forms of assistance, and the ones that will be examined in greater detail here, are Tax Increment Financing,Tax Abatement, and Revolving Loan Funds. These three tools are going to be looked at in detail because they are indeed three of the most popular forms of assistance, and they represent different points on the spectrum of assistance in terms of complexity and cost. Revolving Loan Funds Revolving Loan Funds will be examined first because they are the relatively easiest of the three in terms of complexity and monetary amounts involved. These types of funds are used provide assistance to businesses through the use of small low interest loans, which can be used to close small financial gaps. Programs like these can be used to provide funds to local business seeking to expand, or to help small start up businesses get going. The philosophy behind this type of program is the notion that the City can appropriate a portion of its funds for use in loans, which will then be repaid with interest over time. These loans provide relief to businesses and allow them to meet financing needs without having to provide the large amounts of personal capital most private sources require before providing financing. These loans are only to be used as an enabler and in situations where the but for test is met. Revolving loan programs are attractive to cities because they are relatively simple, usually only require a one-time investment, which can be recouped and used again. The fact that these loans are relatively small in amount, and the fact that they are loans, means they will inherently be less complicated that a tax increment financing deal or a tax abatement deal. Additionally, cities typically only need to make one budget appropriation to get a program of this type started. This appropriation will eventually be repaid by the business, plus interest, and will be able to be used again. Because of these factors revolving loan funds are attractive programs to cities and EDAs and are a good first step program for these agencies to utilize as they enter the economic development game. In the case of Hugo, it is my opinion that a budget appropriation to start a revolving loan program would be a very prudent investment, which would provide the newly formed EDA with a strong foundation as it moves forward. Ultimately the most appealing aspect of these programs is their revolving nature, i.e. the fact that they will be repaid and used to fund other future projects. The City has the option to leave money sitting in reserve, for a rainy day, or it can use a small portion of that money to fund a revolving loan fund, all the while knowing that if worse comes to worse once the loan is repaid it can be used to cover a deficit. Tax Increment Financing If Revolving Loans represent one end of the spectrum of complexity and investment, then Tax Increment Financing (TIF) is on the other. TIF provides cities and EDAs with the greatest potential in regards to the amount of financial assistance that can be provided. This type of financing is used to fund huge public improvement ventures and is a key tool that cities possess in order to make development happen. TIF is based on a relatively simple concept, though its actual application is infinitely more complicated. TIF is based on the notion that a new development will create a larger tax base then what was previously being provided. Development on a particular parcel will add value to that property thus creating increased revenue. The amount of tax revenue being generated before development is designated as the Original Tax Capacity. The amount of tax revenue being generated after development will undoubtedly be greater than the original tax capacity; the difference between the pre- development revenue and the post-development revenue is defined as Increment or captured tax capacity. The basic philosophy behind TIF is that cities can capture this increment and use it as a tool to pay off financial assistance that was provided to create the development. In laymen's terms because the City will receive increased income from a project it will provide funding for the project; all the while knowing that it would recoup this investment in the newly captured increment. What truly makes TIF unique and able to fund expensive projects is the fact that the City not only captures its share of the increment, but it is able to capture the amount which would under normal circumstances go to the county and school district. Therefore the City is able to leverage great amounts of money knowing they will be able to recoup their investment through the captured increment. According to Ehlers &Associates "TIF Basics" increment may be used to assist development with; land acquisition; site improvements; public and on-site utilities; demolition; relocation; and to some extent administration. This allows the City to, for example, provide land to a business to develop on. By removing such a large cost the City is able to financially assist businesses in developing in the City. The key element that dictates all TIF funding is the but for test, if a project does not meet the requirements of a but for test, it is therefore ineligible for funding through TIF, and as previously explained should truly be ineligible for all City funding. The ability to pass the test, ensures that any assistance that is contributed is done in the publics interest and not just as a private industry subsidy. What appeals to Cities with TIF is the ability to provide substantial assistance to development, which will ultimately grow the tax base of the City. Additionally, the City ultimately is repaid for their assistance, and does not have to shoulder any financial burden. For example the City of New Brighton is seeking to use TIF financing to provide a site for the new Medtronic corporate headquarters. In doing so they will pay for the cost of the development of the site, thus significantly reducing the cost to Medtronic, which allows them to relocate to New Brighton; something that would not happen without the use of TIF. In return for their investment the City will have a new piece of property with significantly higher than it previously was. The City will be reimbursed the money it invested through captured tax increment, in the end the development will come at little to no cost to the city once the repayment is created, and instead of having a piece of property providing tax revenue of$1 million it will have a property producing a tax revenue of$5 million. The theory behind TIF as explained is relatively simple; TIF in actual practice is extremely complicated and extremely closely monitored. TIF can only be used in specific situations and for specific reasons, with each instance having its own criteria. Entire 20 page papers can be written about single details of TIF laws, what is important here is the philosophy, and how it applies to the EDA of the City of Hugo. In the case of the Hugo EDA providing financial assistance through TIF would only happen with Council Consent, and would be provided for a project that would truly reshape the landscape of Hugo. For example the City may decide to assist a developer seeking to redevelop a portion of downtown Hugo. In the instance where substantial financial assistance is required the City would use TIF to allow the development to proceed. In such a case the revenue to be gained by the development would have to be great enough to justify assistance, and would truly be a landmark development in the City. Not all TIF deals are on the magnitude of New Brighton's, but they all must cover the cost of doing business. TIF is an extremely valuable tool for the EDA, in conjunction with the Hugo City Council, as it provides the EDA with the necessary tool to hit the proverbial homerun. TIF is the tool that is used when all others fail to foot the bill. Tax Abatement aka. "TIF-Lite" Tax Abatement operates under a similar concept as TIF, is less complex, but is limited in its financial contribution. Abatement operates under the same concept of TIF in the fact that it captures revenue that is generated by development, and other properties located in the "abatement district." Simply put the City defines a geographic region whose tax revenue is going to be captured to provide financial assistance to a project. The reason Tax Abatement generates a lesser amount of money is two-fold. First, only the City's portion of the revenue can be captured, as opposed to city, county, and school portion that TIF provides. Secondly, Cities are limited by MN State Statutes in the fact that they can only capture $200,000 or 10% of the Cities tax levy whichever is greater. Therefore any funding which tax abatement is used for is inherently going to be of a lesser amount than TIF would provide. The benefits of abatement arise from its relative simplicity in comparison to TIF. It is not as highly regulated as TIF, and does not have to meet the criteria that usually accompany a TIF project. Tax Abatement provides cities with an option that still allows for a substantial amount of funding to be provided to a project, without the complexity of TIF. Financial Assistance Conclusions All of the above mentioned tools are presented in terms of the theory of their use. The implementation of any of these tools has to be on the basis strong public policy that regulates their use. It is essential that anytime a City or EDA uses public funds to provide assistance to private industry, it has to be done for the right reasons, which is why the policy is so important. It is my opinion that before any of these tools are utilized, the prospective project must meet the but for test, if not it simply does not warrant City involvement; save the occasional exception. In addition to the but for test the prospective development must significantly better the City's tax revenue, because if it does not there is little reason to put forth the effort. Finally I would like to see the EDA operate with the philosophy that any potential assistance provided by the City be in a form where the City is able to recoup their investment. The City is not in a position where it has to provide straight grants to businesses to foster development. Conclusions I would like to see the Hugo EDA take the "If we advertise it, they will come approach." The first two priorities of the Hugo EDA should be to set a policy specifically laying out the requirements for providing financial assistance. This is simply the most important aspect of the EDA, without a clearly defined policy to rely on there is no control/reason over what gets assistance and what does not. Without this policy the EDA will simply not be able to justify its actions. The three elements that are necessary for the policy are; that every project should provide significant benefit to the residents of the City; that every project should pass the but for test; and that all financial assistance should be of a renewable form. In addition, to setting a policy in regards to providing funding, is the fact that the EDA needs to define a course of action. I would like to see the EDA act under a notion of, "If we market it, they will come." I feel that the EDA can take the position that its most important priority is to advertise the opportunity that is available in Hugo, and what Hugo has to offer. The marketing of the City is what will lead to business development in Hugo, and if some of the prospective businesses need assistance in locating here, and they meet the funding policy requirements; they will be eligible to potentially receive funding from the EDA and the City. What is important to note is that the EDA and the City are not in the business of providing money and subsidy to private industry, they are only willing to provide assistance when the results substantially benefit the citizens of Hugo. The single most important job the EDA possesses and therefore its goal is the marketing of what Hugo has to offer, the financial assistance is only ancillary. By taking this approach the City will take the necessary first steps towards fostering development and growth in Hugo. An effective marketing campaign will attract business, which will create a greater tax revenue for the City, and will provide greater amenities to the citizens of Hugo. The people who serve as commissioners on the board of the Hugo EDA will be provided with the power to shape the future of Hugo, but more importantly they will posses the power to create the future Hugo. If you advertise it, they will come References Economic Development Authorities, Mary Ippel, J.D. Briggs and Morgan, P.A. Sept. 25, 1992. Economic Development Handbook, Department of Trade and Economic Development; in conjunction with Springstead Inc. The Handbook for Minnesota Cities, The League of Minnesota's Website, www.Imnc.org, Mary Ippel,J.D. Briggs and Morgan P.A., Personal Interview,April 07, 2004 Paul Steinman,Financial Advisor, Springstead Inc., April 08,2004 What is Economic Development, Economic Development Administration, U. S. Department of Commerce,Website: www.eda.,og_v,