032524 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, March 25, 2024
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Michael Isenberg
Commissioner Jonathan London
1. Call to order – EDA Meeting of March 25, 2024
2. Roll call
3. Approval of Minutes:
January 22, 2024
4. Resolution approving the release of declaration of restrictive covenants – 7300 42nd
Avenue North
5. Adjournment
EDA Meeting
Page 1 January 22, 2024
City of New Hope
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes January 22, 2024
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to
order at 7:26 p.m.
ROLL CALL Present:
Absent:
Kathi Hemken, President
John Elder, Commissioner
Michael Isenberg, Commissioner
Jonathan London, Commissioner
Andy Hoffe, Commissioner
Staff Present:
Recce Bertholf, City Manager
Jeff Alger, Community Development Specialist
Tim Hoyt, Director of Police
Beth Kramer, Communications Coordinator
Valerie Leone, City Clerk
Jeff Sargent, Director of Community Development
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Elder, seconded by Commissioner London,
to approve the minutes of January 8, 2024. All present voted in favor. Motion
carried.
5802 BOONE AVE N
(IMPROVEMENT
PROJECT NO. 1088)
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution approving
extension of deadline for closing on sale of property to Great Buy Homes, Inc. at
5802 Boone Avenue North (improvement project no. 1088).
Mr. Jeff Alger, community development specialist, was recognized. He stated the
EDA approved the sale of the scattered site lot at 5802 Boone Avenue North last
August. The deadline for closing on the sale of the lot was December 26, 2023. The
builder has asked that the deadline be extended to April 1, 2024. The request was
most recently discussed at the January 16 work session, and staff was directed to
present the request at the next EDA meeting.
Mr. Alger stated Great Buy Homes currently owns three scattered site lots, two of
which are currently under construction. They have constructed and sold eight
homes in New Hope since 2017. When the lot at 5802 Boone was marketed, Great
Buy Homes was the only builder that submitted a proposal. Staff recommends
extending the deadline as requested by Great Buy Homes and to require them to
be responsible for attorney fees related to amending the development agreement.
He stated Shawn Rodgers, realtor representing Great Buy Homes, is in the
audience if the EDA has questions.
EDA Meeting
Page 2 January 22, 2024
Chair Hemken inquired of the process if the EDA extends the deadline to April 1
and the builder is unable to close on the sale of the lot.
Ms. Stacy Woods, city attorney, stated the city could add a “time is of the essence”
provision in the contract so that if a closing does not occur a cancellation would
be signed by the builder. She stated another option would be for the EDA to
approve a subsequent extension.
Mr. Rodgers was recognized. He stated Great Buy Homes remains interested in
the lot and has asked for the extension due to new lending practices for new
construction.
Chair Hemken inquired of the new address for the property. Mr. Alger stated the
new home will be configured to face the north, and the address will be 5692 Boone
Place.
RESOLUTION 2024‐02
Item 4
Commissioner Elder introduced the following resolution and moved its adoption
“RESOLUTION APPROVING EXTENSION OF DEADLINE FOR CLOSING
ON SALE OF PROPERTY TO GREAT BUY HOMES, INC. AT 5802 BOONE
AVENUE NORTH (IMPROVEMENT PROJECT NO. 1088).” 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, Isenberg; and the following voted against the same: London; Abstained:
None; Absent: Hoffe; whereupon the resolution was declared duly passed and
adopted, signed by the president which was attested to by the executive director.
CEE AGREEMENT
Item 5
President Hemken introduced for discussion EDA Item 5, Motion approving
three‐month extension of agreement with Center for Energy and Environment to
perform Home Energy Squad visits in the city of New Hope.
Mr. Jeff Alger, community development specialist, stated this item authorizes the
city to extend the city’s existing agreement with the Center for Energy and
Environmental for three months to continue the Home Energy Squad Visits
program. The Center for Energy and Environment (CEE) performs visits to help
homeowners identify and implement energy savings opportunities in their
homes, and the program includes the direct install of energy saving materials. The
city buys down the cost of the visits paying half of the $100 cost. The city has been
participating in the program since 2013. The program is provided by Xcel Energy
and CenterPoint Energy and delivered by CEE. The city’s contract expired on
December 31, 2023. Due to cost increases, the two utility companies sent out a
Request for Proposal and are in the process of evaluating the program. They
recommend the city extend the existing agreement for three months until a new
contract can be reached.
MOTION
Item 5
Motion was made by Commissioner Isenberg, seconded by Commissioner
London, approving three‐month extension of agreement with Center for Energy
and Environment to perform Home Energy Squad visits in the city of New
Hope. All present voted in favor. Motion carried.
EDA Meeting
Page 3 January 22, 2024
ADJOURNMENT Motion was made by Commissioner Isenberg, seconded by Commissioner
London, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 7:34 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
https://newhopemn.sharepoint.com/sites/Files/All User Access/RFA/COMM DEV/2024/EDA/03‐25‐24 7300 42nd Ave Convenants/Q & R ‐ 7300 42nd Ave Covenants 03‐25‐
24.docx
Request for Action
March 25, 2024
Approved by: Reece Bertholf, City Manager
Originating Department: Community Development
By: Jeff Sargent, Director
Agenda Title
Resolution approving the release of declaration of restrictive covenants ‐ 7300 42nd Avenue North.
Requested Action
Staff was approached by representatives of the Somali Community Resettlement Services (SCRS) group with a
request to release restrictive covenants placed on the property located at 7300 42nd Avenue that prohibit the
sale of the property to a tax‐exempt organization.
Policy/Past Practice
The Economic Development Authority (EDA) routinely makes decisions that will impact the overall
development of the city. The release of the restrictive covenants would allow for the property to be sold to a
non‐profit entity that would provide needed services to a specific population within New Hope and the
surrounding area.
Background
In December of 1985, the Housing and Redevelopment Authority of New Hope established TIF District 85‐2, a
redevelopment TIF district that focused on the redevelopment of properties in proximity to the intersection of
Winnetka and 42nd avenues. On June 27, 1996, Gill Brothers Funeral Chapels entered into a Redevelopment
Agreement with the EDA to construct the funeral chapel which is currently located at 7300 42nd Avenue.
Because the property was in an active TIF district, the EDA required a declaration of restrictive covenants
(attached) be placed on the property to ensure that the proper amount of taxes would be generated. Specifically,
the covenants stated that the property shall not be sold, transferred, conveyed, or leased to any of the following
parties:
(a) An institution of purely public charity;
(b) A church or ancillary tax exempt housing;
(c) A public hospital;
(d) A public school district;
(e) An organization exempt from federal income taxes pursuant to Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended; or
(f) A Minnesota cooperative association organizes under Minnesota Statutes, Section 308.05 and
308.18 for the purpose of complying with the provisions of Minnesota Statutes, Section
273.133, subdivision 3, or any other party that would cause the Property to be valued and
assessed for real estate tax purposes at a lower percentage of its market value than the
Property is then being valued and assess for real estate tax purposes or would result in the
Property becoming exempt from real estate taxes.
Section 4 of the Declaration of Restrictive Covenants states that “the covenants and restrictions herein contained
shall run with the title to the Property and shall be binding upon all present and future owners and occupants
of the Property; provided, however, that the covenants and restrictions herein contained shall inure only to the
Agenda Section
EDA
Item Number
4
Request for Action, Page 2
benefit of the EDA, and may be released or waived in whole or in part at any time, and from time to time, by
the sole act of the EDA…”
Section 5 of the Declaration of Restrictive Covenants state that “the covenants and restrictions herein contained
shall remain in effect until June 1, 2026, and thereafter shall be null and void”.
It should be noted that the Declaration of Restrictive Covenants was established to protect the taxing power of
TIF District 85‐2. TIF District 85‐2 came to its legal end term on December 31, 2012, and has not been generating
TIF since then. Therefore, the need to perpetuate the covenants no longer involves protecting the taxing power
of the TIF district in question.
The attached letter from SCRS expresses their desire to purchase the property located at 7300 42nd Avenue,
with the intent to provide their services in New Hope. SCRS was formed in 1999 by a volunteer network of
Somali refugees to directly respond to the growing needs of refugees and immigrants resettling into Minnesota.
Services provided by SCRS include helping with specific documentation and navigating the immigration
system to Somalis, access to legal counsel, English language education, health care, workforce training, etc.
SCRS also provides suicide prevention services and workforce training services. As indicated in the letter, as
an “institution of purely public charity”, SCRS will seek property tax exemption after the purchase of the
building is complete.
The request made by SCRS to the EDA is to release the Declaration of Restrictive Covenants that are currently
in place, which prohibit the sale of the property to an institution of “purely public charity”. The only way SCRS
would be able to continue the process to purchase this property is if the covenants were released.
Property Taxes
The property at 7300 42nd Avenue North owes $32,908.90 in taxes for 2024. Of the taxes owed, $7,961.79 will
go to the city ($6,442.75 general revenue, $1,519.04 debt services). Assuming taxes payable to the city increase
by 5% in 2025 and in 2026, it is estimated that the city will collect the following prior to the property becoming
eligible for tax exempt status:
2024: $7,961.79
2025: $8,359.88
2026: $8,777.87
Total: $25,099.54
Options
Option 1 would be for the EDA to leave the covenants in place until they naturally expire on June 1, 2026. With
this option, the city would guarantee the receipt of all taxes the property would generate in the amount of
approximately $25,100. Not releasing the restrictive covenants would also disqualify SCRS from purchasing
the property, forcing them to either seek a different property or wait until June 1, 2026, to purchase. After June
1, 2026, the property would be available for any type of organization to purchase and could potentially be
converted to a tax‐exempt classification at that time.
Option 2 would be for the EDA to release the restrictive covenants that are currently in place. If the EDA choses
this option, and SCRS purchases the property prior to July 1, 2024, the city would only receive taxes owed on
Request for Action, Page 3
the property for 2024, or $7,961.79. SCRS would file for tax‐exempt status and would no longer have to pay
taxes on the property but would be able to provide its services in New Hope to New Hope residents and the
surrounding area.
Recommendation
Staff recommends approval of the resolution approving the release of declaration of restrictive covenants for
the property located at 7300 42nd Avenue North.
Attachments
Resolution
Termination and Release of Declaration of Restrictive Covenants
Declaration of Restrictive Covenants
Waiver request letter from SCRS
Owner consent for waiver of covenants
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 24-___
RESOLUTION APPROVING RELEASE OF DECLARATION OF RESTRICTIVE
COVENANTS - 7300 42ND AVENUE NORTH
BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope
(“EDA”) as follows:
WHEREAS, a Declaration of Restrictive Covenants was executed by Gill Brothers Funeral
Chapels, Inc., a Minnesota corporation on June 27, 1996 and recorded on the real property located at 7300
42nd Ave. N., New Hope, P.I.D. 17-118-21-21-0054 and legally described as “Lot 1, Block 1, City Center
Addition, Hennepin County, Minnesota” (“Property”) (“Restrictive Covenants”).
WHEREAS, the purpose of the Restrictive Covenants was to ensure that the Property remained
taxable for the duration of the Tax Increment Financing (TIF) District which has since been decertified.
WHEREAS, the current owner, Anchor Point Properties LLC, a Minnesota limited liability
company, has entered into a purchase agreement with the Somali Community Resettlement Services of
Olmsted County, a Minnesota non-profit corporation (“Somali Non-Profit”).
WHEREAS, the Somali Non-Profit requested that the EDA release the Restrictive Covenants prior
to the 30 year termination date as the Somali Non-Profit is unable to purchase the Property unless the
Restrictive Covenants are released from the Property.
WHEREAS, the EDA is authorized and amenable to releasing the Restrictive Covenants prior to
the 30 year termination date in the document, to enable the Somali Non-Profit to purchase the Property.
The EDA believes the services to be offered by the Somali Non-Profit would be beneficial for residents of
the City.
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. That the release of the Restrictive Covenants from the Property is hereby approved and the
City Attorney is directed to draft the Release of Restrictive Covenant document to be
recorded on the Property.
3. The President and Executive Director and the New Hope City staff are authorized and
directed to execute the Release of Restrictive Covenants on the Property.
Dated the 25th day of March, 2024.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Reece Bertholf, Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-10011(community development general)\EDA Resolution approving release of restrictive
covenants - 7300 42nd Ave N - Somali Non-Profit.docx
TERMINATION AND RELEASE OF DECLARATION OF RESTRICTIVE COVENANTS
WHEREAS, a Declaration of Restrictive Covenants was executed by Gill Brothers Funeral
Chapels, Inc., a Minnesota corporation on June 27, 1996 and recorded on and encumbering that
certain real property located at 7300 42nd Ave. N., New Hope, P.I.D. 17-118-21-21-0054 and
legally described as follows:
Lot 1, Block 1, City Center Addition, Hennepin County, Minnesota
(the “Property”);
WHEREAS, the Declaration of Restrictive Covenants provides in paragraph 4 that the
Economic Development Authority in and for the City of New Hope, Minnesota (“EDA”) is
authorized to release or waive in whole or in part at any time, and from time to time, the covenants
and restrictions contained therein.
WHEREAS, the TIF District associated with the Property has since been decertified.
WHEREAS, the EDA wishes to release the Declaration of Restrictive Covenants prior to
the stated 30 year termination date.
NOW, THEREFORE, this is to certify that the Declaration of Restrictive Covenants is
hereby terminated and released absolutely and forever, and the County Recorder in and for the
County of Hennepin, Minnesota is hereby authorized to accept the filing of this instrument to be a
conclusive determination of the termination and release of the Declaration of Restrictive
Covenants from the Property.
Dated: March 25, 2024
IN WITNESS WHEREOF, the Economic Development Authority in and for the City of
New Hope has executed this Termination and Release of Declaration of Restrictive Covenants as of
the date and year first written above.
The Economic Development Authority in
and for the City of New Hope, a public body
corporate and politic and created pursuant
to the laws of the State of Minnesota
By
Reece Bertholf
Its: Executive Director
Reviewed and approved by the City Attorney.
Stacy A. Woods
City Attorney, City of New Hope
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of March, 2024, by
Reece Bertholf, the Executive Director of the Economic Development Authority in and for the City
of New Hope, a public body corporate and politic created under the laws of the State of Minnesota,
on behalf of said Authority.
Notary Public
This document was drafted by:
Jensen Sondrall Persellin & Woods, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-10011(community development general)\Release of Declaration of Restrictive Covenants - 7300
42nd Ave N - Somali Non-Profit.docx