121018 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, December 10, 2018
President Kathi Hemken
Commissioner John Elder
Commissioner Cedrick Frazier
Commissioner Andy Hoffe
Commissioner Jonathan London
1. Call to order – EDA Meeting of December 10, 2018
2. Roll call
3. Approval of Minutes:
November 13, 2018
4. Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota
Statutes, Section 469.033, subdivision 6 and approval of a final budget for fiscal year
2019
5. Resolution approving Purchase Agreement for the acquisition of 3924 Utah Avenue
North (improvement project no. 1020)
6. Adjournment
EDA Meeting
Page 1 November 13, 2018
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes November 13, 2018
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 7:48 p.m.
ROLL CALL Present:
Kathi Hemken, President
John Elder, Commissioner
Cedrick Frazier, Commissioner
Andy Hoffe, Commissioner
Jonathan London, Commissioner
Staff Present:
Kirk McDonald, City Manager
Aaron Chirpich, Community Development Specialist
Tim Fournier, Police Chief
Valerie Leone, City Clerk
Jeff Sargent, Director of Community Development
Steve Sondrall, City Attorney
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Hoffe, seconded by Commissioner Frazier, to
approve the minutes of October 22, 2018. All present voted in favor. Motion
carried.
5355 OREGON AVE N,
IMP. PROJECT 1018
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution approving
contract with Leadens Excavating, Inc. for demolition of site improvements, tree
removal, and site grading of 5355 Oregon Avenue North (Improvement Project
No. 1018).
Mr. Aaron Chirpich, community development specialist, stated the EDA recently
acquired the property at 5355 Oregon Avenue North as part of the scattered site
housing program. He reported on the need to prepare the site for redevelopment
including site demolition, tree removal, and site grading. He stated three bids
were received for the work, and staff recommends awarding the bid to Leadens
Excavating, Inc. for $8,275. Mr. Chirpich noted the contractor has worked for the
city in the past, and staff has been pleased with their performance.
Mr. Chirpich explained the low bid was submitted by All Metro Excavating, Inc.
but staff does not consider the company to be a responsible bidder and the city
attorney concurs.
Mr. Chirpich stated the expenditure will be funded by the EDA budget.
Commissioner Elder commended staff for conducting background checks on
prospective contractors.
EDA Meeting
Page 2 November 13, 2018
RESOLUTION 2018-20
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION APPROVING CONTRACT WITH LEADENS EXCAVATING,
INC. FOR DEMOLITION OF SITE IMPROVEMENTS, TREE REMOVAL,
AND SITE GRADING OF 5355 OREGON AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1018)”. The motion for the adoption of the
foregoing resolution was seconded by Commissioner Hoffe, and upon vote being
taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe,
London; and the following voted against the same: None; Abstained: None;
Absent: None; whereupon the resolution was declared duly passed and adopted ,
signed by the president which was attested to by the executive director.
7227 62ND AVENUE N
IMP. PROJECT 1028
Item 5
President Hemken introduced for discussion EDA Item 4, Resolution approving
purchase agreement for the acquisition of 7227 62nd Avenue North (Improvement
Project No. 1028).
Mr. Aaron Chirpich, community development specialist, stated staff recommends
the acquisition of 7227 62nd Avenue North for $150,000. He pointed out the
property is located in one of the city’s priority redevelopment areas, and due to
the home’s condition, staff recommends the house be demolished to facilitate
construction of a new single-family home.
Mr. Chirpich illustrated photographs of the property. He reviewed the proposed
budget and stated the cost for acquisition and demolition will be funded by EDA
reserves.
RESOLUTION 2018-21
Item 5
Commissioner Frazier introduced the following resolution and moved its
adoption “RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE
ACQUISITION OF 7227 62ND AVENUE NORTH (IMPROVEMENT PROJECT
NO. 1028)”. The motion for the adoption of the foregoing resolution was seconded
by Commissioner Elder, and upon vote being taken thereon, the following voted
in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted
against the same: None; Abstained: None; Absent: None; whereupon the
resolution was declared duly passed and adopted , signed by the president which
was attested to by the executive director.
7215 62ND AVE N,
IMP. PROJECT 1023
Item 6
President Hemken introduced for discussion EDA Item 4, Resolution approving
purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale
of 7215 62nd Avenue North (Improvement Project No. 1023).
Mr. Aaron Chirpich, community development specialist, stated this item involves
a public hearing to consider the sale of the lot at 7215 62nd Avenue North to Great
Buy Homes for $61,000. Mr. Chirpich explained the city received proposals from
three builders (Tollberg Homes, Novak-Fleck, and Great Buy Homes).
Mr. Chirpich reviewed the home proposed by Great Buy Homes and
recommended the company as the preferred builder for the property at 7215 62nd
Avenue North. He stated staff has worked with the city attorney on drafting the
purchase and redevelopment agreement for the sale of the lot, and some minor
revisions may be required after it is reviewed by the buyer. If there are substantial
changes requested, staff will present them to the EDA for approval.
EDA Meeting
Page 3 November 13, 2018
Mr. Chirpich stated it is anticipated that the closing will occur by the end of
November. Director Sargent and I recommend approval.
President Hemken thanked staff for considering all options. Mr. McDonald
commented that all three builders submitted good proposals.
President Hemken opened the floor for comments by the audience. There was no
one in the audience desirous of addressing the Council for the public hearing.
CLOSE HEARING
Item 6
Motion was made by Commissioner Frazier, seconded by Council Member Elder,
to close the public hearing. All present voted in favor. Motion carried.
RESOLUTION 2018-22
Item 6
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
AGREEMENT WITH GREAT BUY HOMES, INC. FOR THE SALE OF 7215
62ND AVENUE NORTH (IMPROVEMENT PROJECT NO. 1023)”. The motion
for the adoption of the foregoing resolution was seconded by Commissioner
Frazier, and upon vote being taken thereon, the following voted in favor thereof:
Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same:
None; Abstained: None; Absent: None; whereupon the resolution was declared
duly passed and adopted, signed by the president which was attested to by the
executive director.
ADJOURNMENT Motion was made by Commissioner Frazier, seconded by Commissioner Elder, to
adjourn the meeting. All present voted in favor. Motion carried. The New Hope
EDA adjourned at 8:10 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
I:\RFA\City Manager\2018\2019 Budget\12.10.18 Budget adoption\EDA 4 q-EDA final levy 12.10.18.docx
Request for Action
December 10, 2018
Approved by: Kirk McDonald, City Manager
Originating Department: City Manager
By: Kirk McDonald, City Manager
Agenda Title
Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota Statutes, Section 469.033,
subdivision 6 and approval of a final budget for fiscal year 2019
Requested Action
Staff requests the EDA adopt the attached resolution relating to the EDA levy for 2019.
Background
The resolution supports the $300,000 EDA levy. The EDA must adopt the EDA levy separate from the city’s
base levy. The EDA may levy up to .0185 percent of the estimated market value for taxes payable in 2019. The
EDA levy was $150,000 in years 2014 through 2016, and increased to $200,000 in years 2017 and 2018 to fund
the scattered site housing program. It is recommended the levy increase to $300,000 for 2019.
Attachment
Resolution
Agenda Section
EDA
Item Number
4
City of New Hope
EDA RESOLUTION 2018 -
RESOLUTION AUTHORIZING THE FINAL LEVY OF A SPECIAL BENEFIT LEVY
PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND
APPROVAL OF A FINAL BUDGET FOR FISCAL YEAR 2019
WHEREAS, pursuant to Minnesota Statutes, Section 469.090 to 469.108 (the “EDA Act”), the
City Council of the City of New Hope created the New Hope Economic Development Authority (the
"Authority"); and
WHEREAS, pursuant to the EDA Act, the City Council granted to the Authority all of the
powers and duties of a housing and redevelopment authority under the provisions of the Minnesota
Statutes, sections 469.001 to 469.047 (the "HRA Act"); and
WHEREAS, Section 469.033, Subdivision 6, of the HRA Act permits the Authority to levy and
collect a special benefit levy of up to .01813 percent of estimated market value in the City upon all
taxable real property within the City; and
WHEREAS, the Authority desires to levy a special benefit levy in the amount of up to
.01813 percent of estimated market value in the City for taxes payable in 2019; and
WHEREAS, pursuant to Minnesota Statutes, Section 275.065, the Authority is required to adopt a
proposed budget and a proposed tax levy and submit the same to the County Auditor by September 30;
and
WHEREAS, the Authority has before it for its consideration a copy of a proposed budget for its
operations for the fiscal year 2019 and the amount of the proposed levy for collection in 2019 shall be
based on this budget and the long range financial management plan, subject to any adjustments in the
budget as finally approved prior to certification of the final special benefit levy.
NOW THEREFORE, be it resolved by the New Hope Economic Development Authority:
1. The proposed budget for the operations of the Authority in fiscal year 2019, as presented for
consideration by the City Council, is hereby in all respects approved, subject to final approval
by the Authority before certification of the tax levy under Minnesota Statutes, Section 275.07.
2. Staff of the Authority are hereby authorized and directed to file the proposed budget with the
City in accordance with Minnesota Statutes, Section 469.033, Subdivision 6.
3. The proposed special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6,
is hereby approved in the amount of $300,000. The maximum amount that can be levied is an
amount equal to .01813 percent of estimated market value in the City of New Hope.
4. Staff of the Authority are hereby authorized and directed to seek the approval by resolution of the
City Council of the levy of special benefit taxes payable in 2019 and to take such other actions as
are necessary to bring before the Board the final budget and levy to be sent to the county auditor
on or before five working days after December 20, 2018.
Adopted by the New Hope EDA on December 10, 2018.
_________________________________
President
Attest: ________________________________
Executive Director
I:\RFA\COMM DEV\2018\EDA\12‐10‐18\Q & R 3924 Utah Acquistion 12‐10‐18.docx
Request for Action
December 10, 2018
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Aaron Chirpich, CD Specialist
Agenda Title
Resolution approving Purchase Agreement for the acquisition of 3924 Utah Ave N (project no. 1020)
Requested Action
Staff requests the Economic Development Authority (EDA) authorize entering into a Purchase Agreement for
the acquisition of 3924 Utah Avenue North, for $190,100 (purchase price) plus any associated fees.
Policy/Past Practice
In the past, the EDA has successfully acquired vacant and distressed properties as part of the city’s
scattered site housing program.
Background
The EDA has directed community development staff to pursue the acquisition of distressed single‐family
homes. For the past four years, the EDA has focused on homes that were candidates for demolition. During
this time, the EDA has purchased fourteen homes that have been razed to make room for the construction of
eighteen new homes. Staff remains committed to finding additional opportunities for demolition. However,
these properties have become more difficult to acquire for a variety of reasons. The primary barrier is lack of
inventory, as the EDA has purchased many of the worst single‐family nuisance properties available in the
city. Secondly, the acquisition price for distressed properties has increased steadily over the past four years,
as property values have risen citywide. These market forces have led staff to pursue opportunities within the
rehabilitation sector, where staff believes the EDA has an opportunity to make a substantial impact with its
neighborhood revitalization efforts.
The most recent rehabilitation project completed by the EDA was at 3984 Zealand Avenue, which is located
in the same neighborhood as the subject property. For the Zealand Avenue project, the EDA was able to
complete a broad scope of work that improved nearly every aspect of the home. In the end, the EDA was able
to cover all project costs with the proceeds received from selling the property. The same goal would be
pursued for 3924 Utah Avenue. However, staff would like to explore the option of completing a
demonstration project at 3924 Utah Avenue, and bid out key alternates for the home that would serve to
exhibit potential remodeling ideas for New Hope residents that have similar homes. It is likely that such
options would increase the project budget to a point where proceeds from the sale would not cover all costs.
The EDA may recall that single‐family remodeling demonstration projects are one of the activities identified
in the recent study completed by staff that identifies housing revitalization programs of neighboring cities.
The study identified two cities, Fridley and Coon Rapids, where moderately‐scaled demonstration projects
had been completed. In both cases, the cities purchased distressed properties and completed remodeling
improvements that were showcased to residents through open house events. If the EDA is interested in
pursuing such an option for 3924 Utah Avenue, staff would incorporate a plan that would invite residents
into the home during critical phases of the construction process.
Agenda Section
EDA
Item Number
5
Request for Action, Page 2
3924 Utah Avenue Scope of Work
3924 Utah Avenue is a vacant and distressed two‐story home that has received very few upgrades since it
was built in 1961, and the home has suffered from a lack of general maintenance for several years. Despite its
deficiencies, it remains a solid home with enough positive attributes to build off. At a minimum, staff would
like to complete the following work on the home:
New siding, windows, doors, gutters, and driveway
New kitchen with quartz counter‐tops, tile back‐splash, and new appliances
Re‐condition existing hardwood floors in select areas of the home
Install new interior doors and trim throughout the home
Replace all existing light fixtures, and add new lights to select areas
Completely redo all bathrooms (3)
Install new flooring throughout the entire home
Fresh paint throughout the home
The following options would be bid as demonstration project alternates:
Install cultured stone accent wall to front of home
Remodel kitchen and dining room to create an open concept layout
Convert 2nd floor bedroom into a walk‐in closet and master bath to create a modern master‐suite
Install egress window in basement to add bedroom
Offer Details
3924 Utah Avenue was offered for sale with a list price of $219,900. After viewing the property, staff
submitted an offer of $180,000. Staff was notified two days later that the seller had received multiple offers,
and was requesting the “best and final” offer from each interested buyer. Staff responded by increasing the
EDA’s offer to $190,100, and the seller accepted. The offer submitted is contingent upon EDA approval. A
full project budget including alternates is attached.
Funding
Staff recommends using EDA funds for this project, and the primary goal would be recapture of the EDA’s
investment through the sale of the home. Once all bids are received, the EDA can decide if they would like to
pursue a full‐scale demonstration project with this home.
Recommendation
Staff is seeking approval of the acquisition of 3924 Utah Avenue. Staff recommends the EDA approve the
attached resolution prepared by the City Attorney and the terms of the attached purchase agreement.
Attachments
Resolution
Project budget
Location map
MLS listing for the property
Purchase agreement
Housing assistance programs summary memo
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 18-___
RESOLUTION APPROVING PURCHASE AGREEMENT
FOR THE ACQUISITION OF 3924 UTAH AVENUE NORTH
(IMPROVEMENT PROJECT NO. 1020)
BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope
(“EDA”) as follows:
WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City
Council meeting authorizing City community development staff to actively pursue the acquisition of
distressed single family homes for potential purchase by the EDA, as part of the City’s scattered site housing
program;
WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to
the City and EDA, and the execution of purchase agreements so as to secure purchase rights for these real
properties, contingent on the review and approval of the EDA to the terms of the purchase agreements;
WHEREAS, City staff have identified the opportunity to purchase certain real property located at
3924 Utah Avenue North, New Hope, MN, P.I.D. 18-118-21-41-0077, and legally described as Lot 23,
Block 6, Hopewood Hills, Hennepin County, Minnesota (the “Property”) from Rae D. Simonson
(“Seller”);
WHEREAS, the house located on the Property was built in 1961, and while suffering from a lack
of general maintenance and upgrades, is a solid home that City staff believes could be rehabilitated;
WHEREAS, it is in the best interest of the EDA to purchase the Property from Rae D. Simonson,
in order to substantially improve the Property in accordance with the City’s scattered site housing
program and policy;
WHEREAS, City staff believes that the best use of the Property is rehabilitation and renovation in
order to maximize the tax base by substantially improving the condition and marketability of the Property;
WHEREAS, the Property will be acquired with EDA funds;
WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to
rehabilitate the Property in accordance with the City’s scattered site housing program and policy;
WHEREAS, it is not necessary for the Planning Commission to review this acquisition as this
Property acquisition will have no effect on the comprehensive municipal plan pursuant to the terms of this
Resolution; and
WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement,
subject to the review and approval by the City Attorney of proper title evidence and other terms relating to
the closing on the sale of the Property.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for
the City of New Hope as follows:
1. That the above recitals are incorporated herein by reference.
2. It is in the best interest of the EDA to purchase the Property for rehabilitation and
renovation in accordance with the City’s scattered site housing program and policy.
3. That the purchase of the Property by EDA from Seller, for a sum of $190,100.00, with
other terms and conditions as set forth in the Purchase Agreement attached hereto as
Exhibit A, is approved subject to the review and approval by the City Attorney of proper
title evidence and other terms relating to the closing on the sale of the Property.
4. This property acquisition will not have any effect on the comprehensive municipal plan
and the Property’s zoning classification will remain as R-1, single-family residential
district.
5. The City and EDA shall use due diligence for rehabilitating the Property’s condition and
conducting any necessary renovations and cleanup of the Property to pursue this
rehabilitation purpose and return the Property to the tax rolls for the benefit of all taxing
jurisdictions
6. The President and Executive Director and the New Hope City staff are authorized and
directed to sign all appropriate documents, and to take whatever additional actions are
necessary or desirable, to complete the purchase of the Property in accordance with the
Purchase Agreement.
Dated the 10th day of December, 2018.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Kirk McDonald, Executive Director
Exhibit A
Purchase Agreement
See attached.
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution approving purchase of 3924 Utah Ave N.docx
City of New Hope Single-Family Acquisition and Rehab-- Scattered Site Housing Program
Total Project Cost and Total Funding Sources 3924 Utah Avenue
New Hope MN, 55427
USES
Amount
Acquisition 190,100
Base Improvements 87,000
Real Estate Taxes 2,800 Current Tax Value $202,000
Legal 1,600 Current Property Tax $2,842
Listing Fee/Broker Commission 12,000
Closing, Recording Fees 1,500 Estimated Tax Amount "after rehab" $4,900
Alternates 20,000 "based on a value of $300,000"
Contingency 5,000
Total 320,000
SOURCES
Amount
Proceeds from Sale 300,000
EDA Reserves 20,000
Total 320,000
Estimated Loss 20,000