091321 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, September 13, 2021
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Michael Isenberg
Commissioner Jonathan London
1. Call to order – EDA Meeting of September 13, 2021
2. Roll call
3. Approval of Minutes:
June 28, 2021
4. Resolution authorizing the proposed HRA levy pursuant to Minnesota Statutes,
Section 469.033, subdivision 6 and approval of a preliminary budget for fiscal year
2022
5. Adjournment
EDA Meeting
Page 1 June 28, 2021
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes June 28, 2021
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 8:50 p.m.
ROLL CALL Present:
Kathi Hemken, President
John Elder, Commissioner
Andy Hoffe, Commissioner
Michael Isenberg, Commissioner
Jonathan London, Commissioner
Staff Present:
Kirk McDonald, City Manager
Jeff Alger, Community Development Specialist
Dan Boyum, City Engineer
Valerie Leone, City Clerk
Susan Rader, Director of Parks and Recreation
Jeff Sargent, Director of Community Development
Bernie Weber, Director of Public Works
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Isenberg, seconded by Commissioner Elder,
to approve the minutes of April 26, 2021. All present voted in favor. Motion
carried.
5213 PENNSYLVANIA
AVE N
(IMPROVEMENT
PROJECT NO. 1062)
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution approving
purchase and redevelopment agreement with Donnay Homes, Inc. for the sale of
5213 Pennsylvania Avenue North (improvement project no. 1062).
Mr. Jeff Alger, community development specialist, stated a public hearing is
required to approve the sale of the scattered site lot located at 5213 Pennsylvania
Avenue North. He explained the EDA acquired the property for $170,000 in
February, 2021, and the lot has been prepared for construction of a new home. Mr.
Alger reviewed the five proposals received from Donnay Homes, Great Buy
Homes, Hoffman Homes, Novak‐Fleck, and SVK. He stated staff reviewed the
proposals with the city manager and Donnay Homes was selected as the preferred
proposal. He stated the proposal includes a lot purchase price of $72,000 and
construction of a two‐story design home with a projected sales price of $485,000
or $535,000 with a finished basement. Mr. Alger noted Donnay Homes completed
a project at 3856 Maryland Avenue North and staff was pleased with their work.
Mr. Alger stated the estimated expenses for the project are $205,172, and the lot
would be sold for $72,000 resulting in a net loss of $133,172. He also reviewed the
30‐year return on investment, and 30‐year internal rate of return.
EDA Meeting
Page 2 June 28, 2021
Mr. Paul Donnay of Donnay Homes was recognized. President Hemken
complimented the builder on the house construction at 3856 Maryland Avenue
North.
Commissioner Isenberg inquired how the determination is made on whether the
basement is finished or not. Mr. Donnay stated the home buyer will decide
whether they want the builder to finish the basement as it will impact the home
price.
President Hemken opened the floor for the public hearing.
Mr. Glenn Hammer of Great Buy Homes was recognized. He stated he believes
the proposal submitted by Great Buy Homes would be a better choice for the city
as Great Buy Homes is willing to pay $9,000 more for the lot resulting in a lower
cost. He stated a split‐entry style home would fit the neighborhood well, and they
could include add‐ons to increase the sales price. He distributed a spreadsheet
outlining the projected taxes over a 30‐year period.
Mr. Jeff Sargent, director of community development, stated the proposals can be
very close. He commented that Great Buy Homes was selected as the preferred
builder of the Aquila property (the next agenda item).
Mr. Sargent acknowledged the higher lot price offered by Great Buy Homes. He
noted the value the neighborhood will see is a two‐story home, not the lot price
difference. Mr. Sargent stated the two‐story home design, curb appeal, and recent
construction of the house on Maryland Avenue were factors that led to the
recommendation to select Donnay Homes’ proposal.
CLOSE HEARING
Item 4
Motion was made by Commissioner Elder, seconded by Commissioner Isenberg,
to close the public hearing. All present voted in favor. Motion carried.
RESOLUTION 2021‐06
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
AGREEMENT WITH DONNAY HOMES, INC. FOR THE SALE OF 5213
PENNSYLVANIA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1062).”
The motion for the adoption of the foregoing resolution was seconded by
Commissioner Isenberg, and upon vote being taken thereon, the following voted
in favor thereof: Hemken, Elder, Hoffe, Isenberg, 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.
4637 AQUILA AVE N
(IMPROVEMENT
PROJECT NO. 1052)
Item 5
President Hemken introduced for discussion EDA Item 5, Resolution approving
purchase and redevelopment agreement with Great Buy Homes, Inc. for the sale
of 4637 Aquila Avenue North (improvement project no. 1052).
Mr. Jeff Alger, community development specialist, stated a public hearing is
required to approve the sale of the scattered site lot located at 4637 Aquila Avenue
North to Great Buy Homes, Inc. He stated the EDA acquired the fire‐damaged
property for $73,000 in March, 2021, and the lot has been prepared for construction
of a new home. Three proposals were received and staff is recommending the
EDA Meeting
Page 3 June 28, 2021
proposal submitted by Great Buy Homes, Inc. The proposal includes a lot
purchase price of $81,000 and construction of a split‐level design home with a
projected sales price of $445,000. He stated the design is the same as the home
constructed at 4215 Louisiana Avenue North. He noted the EDA has sold seven
lots to Great Buy Homes over the past five years, and all of them sold for higher
than the projected sales price. Mr. Alger stated the estimated expenses for the
project are $127,292, and the lot would be sold for $81,000 resulting in a net loss of
$46,292. He also reviewed the 30‐year return on investment, and 30‐year internal
rate of return. Mr. Alger stated the positive ROI is due to the low acquisition price
of the fire‐damaged property.
Mr. Alger stated the closing would occur within 60 days and the home must be
completed within a year of the closing date.
Commissioner London expressed his interest in future redevelopments that are
undertaken entirely without city assistance.
President Hemken opened the floor for the public hearing.
Mr. Glenn Hammer of Great Buy Homes was recognized. President Hemken
thanked him for the recent home construction undertaken in the city.
CLOSE HEARING
Item 5
Motion was made by Commissioner Elder, seconded by Commissioner Isenberg,
to close the public hearing. All present voted in favor. Motion carried.
RESOLUTION 2021‐07
Item 5
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 4637
AQUILA AVENUE NORTH (IMPROVEMENT PROJECT NO. 1052).” The
motion for the adoption of the foregoing resolution was seconded by
Commissioner Isenberg, and upon vote being taken thereon, the following voted
in favor thereof: Hemken, Elder, Hoffe, Isenberg, 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 Isenberg, seconded by Commissioner Elder,
to adjourn the meeting. All present voted in favor. Motion carried. The New Hope
EDA adjourned at 9:17 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
I:\RFA\City Manager\2021\Budget 2022\EDA 091321\EDA4 Q ‐ EDA property tax levy 9.13.21.docx
Request for Action
September 13, 2021
Approved by: Kirk McDonald, City Manager
Originating Department: City Manager
By: Kirk McDonald, City Manager
Agenda Title
Resolution authorizing the proposed HRA levy pursuant to Minnesota Statutes, Section 469.033, subdivision
6 and approval of a preliminary budget for fiscal year 2022
Requested Action
Staff requests the EDA to adopt the attached resolution establishing the HRA levy of $417,000 for the 2022
budget.
Background
The city is adopting an EDA levy and an HRA levy. The preliminary budget presented at the August work
session included a $420,000 EDA levy and a new $150,000 HRA levy for a total of $570,000 for redevelopment
activities, etc). Per the city attorney, with the addition of the new HRA levy, the EDA levy must be included
in the city tax rate and the HRA levy established as a special taxing district. It is beneficial to lower the EDA
tax levy and increase the HRA levy to lessen the impact to property owners. Therefore, staff recommends
setting the EDA levy at $153,000 and setting the HRA levy at $417,000 to achieve the same total of $570,000.
The city attorney has confirmed the EDA has authority to approve an HRA levy (a special taxing district
levy).
Attachments
EDA Resolution
Hennepin County Levy Limitation
Agenda Section
EDA
Item Number
4
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2021‐
RESOLUTION AUTHORIZING THE PROPOSED HRA LEVY
PURSUANT TO MINNESOTA STATUTES,
SECTION 469.033, SUBDIVISION 6 AND APPROVAL
OF A PRELIMINARY BUDGET FOR FISCAL YEAR 2022
WHEREAS, pursuant to Minnesota Statutes, Section 469.001 to 469.047 (the “HRA Act”), the City Council
of the City of New Hope created the City of New Hope Housing Redevelopment Authority (HRA); and
WHEREAS, in 1989 the City Council of the City of New Hope established the Economic Development
Authority (“Authority”) to replace the HRA; and Section 469.033, subdivision 6, permits the Authority to
levy and collect a special benefit levy of up to .0185 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 .0185 percent
estimated market value of the City; and
WHEREAS, pursuant to Minnesota Statues, 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 the amount of the proposed HRA levy for collection in 2022,
subject to any adjustments in the final levy.
NOW THEREFORE BE IT RESOLVED by the New Hope Economic Development Authority:
1. The proposed budget of $417,000 for the operations of the HRA in fiscal year 2022, 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 Statues, Section 469.033, Subdivision 6.
3. The proposed special benefit levy pursuant to Minnesota Statutes, Section 469.033, Subdivision 6, is
hereby approved in maximum amount equal to .0185 percent of estimated market value in the City of
New Hope, currently estimated to be $2,257,016,100 subject to final approval by the Authority before
certification of the special benefit levy pursuant to Minnesota Statues, Section 275.07.
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 2022 and to take such other actions as are
necessary to bring before the Board the preliminary budget and levy to be sent to the county auditor
by September 30, 2021.
Adopted by the Economic Development Authority on September 13, 2021.
______________________________________
President
Attest:
Executive Director