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HomeMy WebLinkAbout2005.04.18 EDA Packet AGENDA CITY OF HUGO ECONOMIC DEVELOPMENT AUTHORITY JOINT MEETING WITH HUGO CITY COUNCIL MONDAY APRIL 18, 2005 HUGO CITY HALL 8:30 AM 8:30am A. CALL TO ORDER B. ROLL CALL 8:35am C. APPROVAL OF MINUTES 1. EDA Meeting of March 21, 2005 8:402m D. UNFINISHED BUSINESS 1. Update on meeting of BEIP Subcommittee. 2. Update on CDBG Subcommittee meeting with Commissioner Hegberg and Bo Boggoty. 3. Presentation from Springsted Inc. on Tax Increment Financing 10:15am F. ADJOURNMENT BACKGROUND MEMO FOR THE JOINT EDA/CITY COUNCIL MEETING OF APRIL 18,2005 C.1 EDA MEETING OF MARCH 21,2005 City Staff recommends the Board approve the March 21, 2005 EDA meeting minutes as presented. D.1 UPDATE ON MEETING OF BEIP SUBCOMMITTEE At its last meeting the EDA directed the BEIP Subcommittee to prepare and distribute Requests for Proposals for the development of Lot 1, Block 1 of the Bald Eagle Industrial Park. The RFP has been posted on the Minnesota Commercial Realtors Property Database and the League of Minnesota's webpage, additionally the RFP was mailed to a list of approximately 50 developers. CD Director Bear will provide the board with an update on this project. D.2 CDBG SUBCOMMITTEE MEETING WITH COMMISSIONER HEGBERG At its last meeting the EDA directed staff to schedule a meeting with the CDBG subcommittee, Washington County Commissioner Hegberg, and Citizen Advisory committee member Bogotty. This meeting has been scheduled for 2:30 on April 14, 2005. The subcommittee members and CD Director Bear will proved the board with an update on this project. D.3 PRESENTATION FROM SPRINGSTED INC. ON TAX INCREMENT FINANCING At its last meeting the EDA directed staff to schedule a joint City Council/EDA workshop with the City's Financial Advisor Springsted Inc. and the City's Bond Council Briggs and Morgan to discuss the use of Tax Increment Financing(TIF). Paul Steinman and Mikaela Hout of Springsted and Mary Ippel of Briggs and Morgon will present the Council and EDA with a powerpoint presentation explaining TIF and will answer any questions. City Staff is seeking Council and EDA direction regarding the use of TIF. MINUTES FROM THE HUGO ECONOMIC DEVELOPMENT AUTHOIRTY MEETING HELD ON MARCH 21, 2005 The meeting was called to order by Mayor Fran Miron at 8:35 am. Present: Miron, Arcand, Granger,Klein, Charpentier, and Skarich; Bever arrived at 9:07am City Administrator, Mike Ericson Community Development Director, Bryan Bear Administrative Intern, Tom Denaway C.1 EDA MEETING OF FEBRUARY 22, 2005 Granger made motion, seconded by Klein to approve the February 22, 2005 meeting minutes with changes. All aye. Motion Carried. E.2 DISCUSSION REGARDING HUGO DENTAL CARE CD Director Bryan Bear recently met with Kris Eklund, the owner of Hugo Dental Care. Hugo Dental Care currently leases the space they occupy, but they are considering building a site of their own. Kris stated their desire to stay within Hugo, and to work with the City to incorporate their potential new building into the redevelopment of downtown. Miron made motion, seconded by Granger to move agenda item E.2 to front of agenda. All aye. Motion Carried. Kris Eklund of Hugo Dental Care met with the EDA to discuss Hugo Dental Care's desire to relocate to a bigger location in the downtown area. They are currently planning on moving within Hugo within the next 2-3 years. President Miron, stated that Business Retention and Expansion are two of the main goals of the Hugo EDA. No formal action was taken. D.1 UPDATE ON MEETING OF BEIP SUBCOMMITTEE The BEIP subcommittee met on Friday March 18, 2005 to begin discussing the marketing and development of Lot 1, Block I in the Bald Eagle Industrial Park 5`" Addition. The subcommittee consists of Board members, Granger, Bever, and Skarich; however, Skarich was unable to attend the meeting. CD Director Bear stated that the subcommittee had decided it was time to move forward with the preparation of a Request for Proposals (RFP). Board member Granger agreed that the RFP format was best. EDA President Miron stated that he was comfortable with the subcommittee preparing the RFP and bringing back a short list of developers for final interviews. No formal action was taken. D.2 UPDATE ON CDBG APPLICATION CD Director Bryan Bear has received three letters from Washington County, regarding the three portions of the City's CDBG application. These letters informed the City that Washington County's Citizen Advisory Committee did not recommend approval of the City's grant application. The advisory committee recommendations have been released for a public comment period from March 8, 2005 to April 26, 2005, when the County Board will vote whether to approve the 2005 plan. Additionally, Jim Powell of 14625 Forest Blvd approached City Staff regarding the sale of his house, which is located in the Egg Lake Redevelopment Area. Staff has scheduled a meeting with Mr. Powell for Friday March 18, 2005. CD Director Bear provided the Board with a recap of his meetings with Jim Powell and Augustana Senior Development Company who is interested in developing the senior housing project of the CDBG grant application. Additionally, Bear provided the board with a recap of the citizens advisory committee's recommendations, and sought from the board their interest in making a public comment, and direction towards proceeding with this project. Arcand made motion, seconded by Granger directing staff to schedule a meeting with the City's financial advisor Springsted Inc. and the City's bond council Briggs and Morgan, to discuss Tax Increment Financing at the next regular EDA meeting. All aye. Motion Carried. Klein made motion, seconded by Bever to recommend to Council that they investigate and move forward towards the potential purchase of available property within the project area. All aye. Motion Carried. Miron made motion, seconded by Granger, directing Staff to prepare a meeting with the CDBG subcommittee, County Commissioner Hegberg, and Citizen Advisory Committee member Boggoty. All aye. Motion Carried. D.3 UPDATE ON MEETING WITH ROY MOLITOR At its February 22, 2005 meeting the City Council indicated it would not pursue the purchase of the Roy Molitor property; additionally, Council directed Staff to work with the potential purchaser of the property to assist in any way possible. City Staff facilitated a meeting with John and Joel Schweiters and Roy Molitor to further discuss the potential sale of the property. City Administrator Ericson provided Council with a recap of this meeting and stated that the City is working with the parties towards potentially acquiring a portion of the property for City parkland. No formal action was taken. DA UPDATE ON FESTIVAL FOODSNICTOR GARDENS NORTH DEVELOPMENT The Victor Gardens North development received preliminary plat approval at the February 22, 2005 City Council meeting. Staff invited Marie Aarthun, owner of Festival Foods and her sister Laurie Youngquist, Chief Financial Officer to attend the March 21, 2005 EDA meeting,but they are unable to attend. However, they did extend the EDA an invitation to tour, and meet with them at their Vadnais Heights store at a later date. CD Director Bear provided the board with an update on the preliminary plat approval of the Victor Gardens North Development. He also provided the EDA with an invitation from the owners of Festival Foods to meet with them and tour one of their other sites. Granger made motion, seconded by Charpentier directing Staff to schedule a meeting for the EDA to meet with the owners of Festival and tour one of their facilities. All aye. Motion Carried. D.1 UPDATE ON APRIL 17TH HBA KIDZ `N BIZ FAMILY FUN EXPO AT THE HUGO AMERICAN LEGION City Administrator Mike Ericson reported that the planning efforts with the committee are going well and Hugo families are encouraged to attend the Kidz `n Biz Fest. No formal action was taken. E.1 DISCUSSION REGARDING THE END ZONE PROPERTY Staff recently met with Len Minick, owner of the End Zone, to discuss the future of the property. Mr. Minick indicated that he is currently in the process of receiving bids on the property. Staff informed him of the concerns of the Washington County Department of Public Health and the immediate need for cleanup of the site, which Mr. Minick promised were underway. Mr. Minick stated he has received a variety of bids on the site and that he will continue to meet with the City regarding the future use of the property. Paul Kelliher a co-developer of Pineview Meadows, which abuts the End Zone property was present to discuss his companies proposal to develop the End Zone property and adjoining parcels. Miron made motion, seconded by Granger directing staff to continue dialogue with Len Minick regarding development of his property. All aye. Motion Carried. E.3 INVITATION TO ATTEND THE EAST METRO ECONOMIC DEVELOPMENT FORUM The Washington County Investment Board has invited the Hugo City Council and EDA to attend the East Metro Economic Development Forum Luncheon to be held at the Machine Shed in Lake Elmo, MN on June 16, 2005. Speaking at the meeting will be Matt Kramer, Commissioner of the Department of Employment and Economic Development, and Jim Schug, Washington County Administrator. Charpentier made motion, seconded by Arcand directing staff to schedule June 16, 2005 luncheon as an official EDA meeting. All aye. Motion Carried. ADJOURNMENT Skarich made motion, seconded by Bever to adjourn the meeting at 10:50am. All aye. Motion Carried. i--, ublic Sector Advisor -'s a , aL Springsted F +ML •file � f —,.. Y ,r a ,µ A Public Sector Advisors PP a.. Springsted Hugo City Council and Economic Development Authority Meeting April 18,2005 Tax Increment Financing Downtown Redevelopment Tools ., he sects,Ads.noes Springsted 1 N _ `�.—...a .:� � *•' ; i " Q � v w Li IL ., a iwwm'wtl� r t kits kih_h z `� ' 41.. . d9� t 6 } F � r ti Overview • Planned re-route of CSAH 8/14 • Downtown top priority for policy makers • Completed downtown plan • Acquisition of parcels — Must complete interfund loan resolution to reimburse with TI • Application for CDBG funds • Interested developers — Senior Housing — Other components of downtown plan s springsted 3 Next Steps — Resources • Is redevelopment likely to require some form of public participation? — Acquisition, demolition, relocation • Redevelop substandard buildings — Infrastructure improvements • Street, storm sewer, signalization • Tax Increment Financing/Tax Abatement — TIF Redevelopment District — Create a source of funds Potrik secro,am:;s,, s s Springsted Redevelopment District • Identification of District Boundaries • Qualifications — Improved parcels make up at least 70%of the district. To be considered improved,at least 15%of the parcel's area must contain improvements. — More than 50%of the buildings(excluding outbuildings)are structurally substandard to a degree requiring substantial renovation or clearance. — A building is not considered substandard if it could be brought up to code at a cost of less than 15%of a comparable new building on that parcel. 7 Springsted 4 Redevelopment District (cont.) • Term — 25 years after the date of receipt of first increment(26 years maximum). • Restrictions O - - At least 90%of the increment must be used to finance the costs of correcting conditions that allow designation of redevelopment districts. These costs include but are not limited to: • Acquiring properties containing substandard improvements or hazardous substances; • Acquiring adjacent parcels necessary to provide a site of sufficient size to permit development; • Demolition and rehabilitation of structures,clearing of land; • Removal or remediation of hazardous substances;and • Installation of utilities,roads,sidewalks and parking facilities. 8 S p ri ng,te Eligible TIF Expenditures • Specified purposes permitted in the underlying development statutes for cities, HRAs, EDAs, and Port Authorities. • Administrative expenditures are limited to 10%of the expenditures authorized in the TIF Plan or 10%of actual increment expenditures, whichever is less. • Increment may not be used to finance buildings that are used "primarily and regularly for conducting the business"of any unit of government. s Springsted 5 Financing Bond Financing • Bonds may be issued without election if at least 20%of debt service is reasonably expected to be paid with increment. Pay-As-You-Go Financing • Developer finances TIF-eligible costs as they are incurred, and authority promises to reimburse the developer from tax increment over time, if and when it is generated. • Typically structured as a revenue note issued to the developer, with an interest component to compensate the developer for costs of upfront financing. ,o Springstec Adopting a TIF Plan • Notice to County Board and School District, at least 30 days prior to City Council public hearing. • For redevelopment districts, the individual county commissioner representing the site must also receive a notice at least 30 days before the publication of the hearing notice (40 days prior to public hearing). • Published notice, 10-30 days prior to public hearing. • Review by the Planning Commission. • Public hearing before City Council and EDA. • Request for Certification to County Auditor. Springstec 6 Time Limit #1: 3 Year Rule • Within three years of certification, one of three things must occur for district to remain alive: — Bonds are issued to aid the project, — Authority acquires property within the district, or — Authority causes public improvements to be constructed within the district. 12 Springsted Time Limit #2: 4 Year Rule (Knock Down) • Increment will not be collected from a particular parcel unless, within four years of certification, demolition, rehabilitation or renovation of property or other site improvements has occurred in accordance with TIF plan. • If a parcel is"knocked-down"and later improved, it can be reinstated in the district, but at the market value at the time of reinstatement. 13 5arin q,teQ 7 Time Limit #3: 5 Year Rule • For increment to be considered a spent expenditure within the TIF District, one of the following must occur within five years after certification of the district: — TI is paid to a 3rd party for a TIF eligible expenditure, — Bonds are sold to a 3rd party and proceeds expected to be spent within 5 years, — Binding contracts are entered into with a 3rd party for performance of an activity and increment is spent under the contract,or — Costs are incurred by a"party"and revenues are spent to reimburse that party. 14 Springsted Conclusions and Recommendations . Approve interfund loan resolution Appoint EDA subcommittee J " • Identify geographic boundary of District • Complete blight examination/substandard test • Utilize building official ,Q e� • Contract j • Create/certify redevelopment TIF District plan is Springsted 8 Questions? Paul Steinman-Ph.(651)223-3066 Mikaela Huot-Ph.(651)223-3036 E-mail: psteinman0sorinasted.com E-mail:mhuotOsOnosted.com 16 Springsted 9