032414 EDACITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes March 24, 2014
Regular Meeting City Hall
CALL TO ORDER President Pro tem Stauner called the meeting of the Economic Development
Authority to order at 7:25 p.m.
ROLL CALL Present: Daniel Stauner, Commissioner
John Elder, Commissioner
Andy Hoffe, Commissioner
Eric Lammle, Commissioner
Absent: Kathi Hemken, President
Staff Present: Kirk McDonald, City Manager
Curtis Jacobsen, Director of Community Development
Valerie Leone, City Clerk
Bob Paschke, Director of Public Works
Jeff Sargent, Community Development Specialist
Steve Sondrall, City Attorney
APPROVE MINUTES Motion was made by Commissioner Elder, seconded by Commissioner Hoffe,
to approve the Regular Meeting Minutes of March 10, 2014. All present
voted in favor. Motion carried.
ANDERSON President Pro tem Stauner introduced for discussion EDA Item 4, Resolution
COMPANIES
approving the preliminary development agreement with Anderson
Item 4
Companies, LLC.
Mr. Jeff Sargent, community development specialist, reported on January 22,
the Council learned that Hy-Vee, a large grocery store chain, was looking to
expand into the Twin Cities market and was potentially looking at New
Hope. He stated the Council had the opportunity on February 24to meet with
representatives of Hy-Vee and the developer, Anderson Companies regarding
a site plan concept and what they would offer the community with their
operation. He explained before either the developer or the grocer is willing to
expend large sums of money putting together plans for the city’s
consideration they would request that the EDA enter into a preliminary
development agreement. This would assure both the developer and the grocer
that they would not be in competition with another potential project during
this process. It would allow exclusive negotiation with the developer until
October 1, 2014. If an agreement is not reached by that time, the agreement
would terminate. Mr. Sargent stated the developer would be required to
deposit $10,000 with the city to cover the city’s costs during the negotiation
process. The city’s development attorney, Robert Deike, has drafted a
preliminary development agreement for the EDA’s consideration.
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Page 1March 24, 2014
President Pro tem Stauner pointed out the agreement only means the city will
negotiate exclusively with Anderson Companies. He emphasized the city has
not made any decision regarding the development.
RESOLUTION 2014-05 Commissioner Elder introduced the following resolution and moved its
Item 4 adoption “RESOLUTION APPROVING THE PRELIMINARY
DEVELOPMENT AGREEMENT WITH ANDERSON COMPANIES, LLC.”
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: Stauner, Elder, Hoffe, Lammle; and the following voted
against the same: None; Abstained: None; Absent: Hemken, whereupon the
resolution was declared duly passed and adopted, signed by the president
which was attested to by the executive director.
IMP. PROJECT 897 President Pro tem Stauner introduced for discussion EDA Item 5, Resolution
Item 5
approving the purchase and development agreement with Compass Pointe
Limited Partnership (improvement project 897).
Mr. Jeff Sargent, community development specialist, stated at the February 24,
2014, City Council meeting, the City Council approved the Preliminary and
Final Plats, along with the Final Development Stage Planned Unit
Development (Site Plan Review) for the Compass Pointe Development. He
stated the EDA owns four of the five lots of the construction site. He noted the
City Council authorized the City’s redevelopment attorney to draft a purchase
and development agreement for the project, and the Council reviewed the
document at its work session of March 17, 2014.
RESOLUTION 2014-06 Commissioner Lammle introduced the following resolution and moved its
Item 5 adoption “RESOLUTION APPROVING THE PURCHASE AND
DEVELOPMENT AGREEMENT WITH COMPASS POINTE LIMITED
PARTNERSHIP (IMPROVEMENT PROJECT 897).” 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:
Stauner, Elder, Hoffe, Lammle; and the following voted against the same:
None; Abstained: None; Absent: Hemken, whereupon the resolution was
declared duly passed and adopted, signed by the president which was
attested to by the executive director.
IMP. PROJECT 897 President Pro tem Stauner introduced for discussion EDA Item 6, Resolution
Item 6
authorizing an interfund loan for advance of certain costs in connection with
the Compass Pointe housing tax increment financing district (improvement
project #897).
Mr. Curtis Jacobsen, director of community development, stated the EDA is
being requested to authorize an interfund loan to cover the costs associated
with the development at 6113 West Broadway. He noted the city/EDA has
expended $453,281 for the site, and the city has agreed to sell the property for
$304,000. Therefore, the city is writing the land price down by $149,300. He
stated the EDA may approve an interfund loan for this amount to be repaid
from TIF generated from the district. State Statute requires the city approve a
resolution authorizing the internal loan and set the terms for reimbursement
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of qualified TIF costs to be repaid with tax increments from the newly created
TIF district. The interest rate is set at 4%. He stated the city can be reimbursed
for costs associated with the development, including land/building
acquisition, site improvements, administrative costs, etc.
Mr. Jacobsen noted the construction will start by September 1, 2014, and be
completed by December 31, 2015.
President Pro tem Stauner asked whether the TIF generated from the project
can be used anywhere in the city once the project is repaid. Mr. Jacobsen
confirmed the funds would revert back to the EDA for future redevelopment
efforts.
RESOLUTION 2014-07 Commissioner Lammle introduced the following resolution and moved its
Item 6 adoption “RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS IN CONNECTION WITH THE
COMPASS POINTE HOUSING TAX INCREMENT FINANCING
DISTRICT (IMPROVEMENT PROJECT #897).” 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: Stauner, Elder,
Hoffe, Lammle; and the following voted against the same: None; Abstained:
None; Absent: Hemken, whereupon the resolution was declared duly passed
and adopted, signed by the president which was attested to by the executive
director.
COMPASS POINTE President Pro tem Stauner introduced for discussion EDA Item 7, Resolution
TIF DISTRICT
adopting a modification to the redevelopment plan for redevelopment project
Item 7
no. 1, establishing Compass Pointe housing tax increment financing district
therein, and adopting a tax increment financing plan therefor.
Mr. Curtis Jacobsen, director of community development, stated the City
Council will be conducting a public hearing on the establishment of housing
tax increment financing district for the Compass Pointe redevelopment project
at the April 14 Council Meeting. He stated it is recommended that prior to the
public hearing the EDA adopt a resolution recommending the Council
establish the TIF district at that public hearing. He stated the resolution
adopts a modification to the redevelopment plan, establishes the Compass
Pointe TIF district and adopts the TIF plan, as outlined in the Tax Increment
Financing District Overview prepared by Ehlers. He noted the duration of the
district is 25 years and is being created to facilitate the construction of a 68-
unit apartment project. He asked Stacie Kvilvang from Ehlers to respond to
any questions.
Ms. Stacie Kvilvang, Ehlers, Inc., was recognized. She stated the action relates
to creation of the Compass Pointe housing tax increment financing district for
the 68-unit rental project on the five parcels listed in the TIF plan. She pointed
out the maximum plan budget is slightly inflated due to the uncertainty of the
property values and the city’s overall tax rate. She stated the anticipated
annual increment to be generated is $60,000, and the majority will be used for
the “pay-as-you-go” note for Compass Pointe Limited Partnership for
building construction costs. She indicated the remaining 10% is available for
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the city to repay its interfund loan or to utilize for other affordable housing
districts. She stated construction will begin in 2014 and the first tax increment
will be received in year 2016. The district will terminate in 2041 (25 years)
although the obligation could be paid off as early as 21 years.
President Pro tem Stauner indicated a question raised during the public
meeting was how the project would affect taxes.
Ms. Kvilvang stated some tax revenue is diverted to pay for the cost of the
project, but there is still revenue that will come back to the city. She stated the
project is changing some tax exempt land into taxable property, and the city
will receive its portion of taxes going forward. She noted regarding the one
parcel that is currently taxable, the city will continue to receive the base value.
She explained what is not captured by the city during the TIF district is the
new value (difference between current value and new value).
President Pro tem Stauner noted after the district is decertified (21 to 25 years)
the funds would be available for the city’s general fund.
RESOLUTION 2014-08 Commissioner Elder introduced the following resolution and moved its
Item 7 adoption “RESOLUTION ADOPTING A MODIFICATION TO THE
REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1,
ESTABLISHING COMPASS POINTE HOUSING TAX INCREMENT
FINANCING DISTRICT THEREIN, AND ADOPTING A TAX INCREMENT
FINANCING PLAN THEREFOR.” 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: Stauner, Elder, Hoffe,
Lammle; and the following voted against the same: None; Abstained: None;
Absent: Hemken, whereupon the resolution was declared duly passed and
adopted, signed by the president which was attested to by the executive
director.
CENTRA HOMES TIF President Pro tem Stauner introduced for discussion EDA Item 8, Resolution
DISTRICT
adopting a modification to the redevelopment plan for redevelopment project
Item 8
no. 1, establishing Centra Homes tax increment financing district therein and
adopting a tax increment financing plan therefor.
Ms. Stacie Kvilvang, Ehlers, Inc., stated the tax increment financing district is
for establishment of the Centra Homes project (34 single family homes and 27
townhomes) at the former Winnetka Learning Center site. She noted the city
previously took action to consolidate parcels into one parcel.
Ms. Kvilvang stated the EDA authorized an interfund loan for up to $2.4
million in May 13, 2013 to allow the city reimbursement of land acquisition,
demolition, and administrative costs. She stated creation of the district will
allow the city to repay itself. She stated the city’s interfund loan is anticipated
to be $600,000 to $700,000. She stated the duration of the district will be 25 years
from the date of the first increment. She recommended receiving the first
increment in year 2018 when the full value is available. She stated the annual
estimated tax increment is estimated at $220,000, and the obligation is
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anticipated to be repaid in five to seven years, and can be decertified after that
time. She explained the city can elect to take up to 10% annual increment to use
for other affordable housing projects.
Commissioner Hoffe noted the property is currently tax exempt property.
President Pro tem Stauner commented the project will generate some tax
revenue for the city’s general fund. He reported the project is unusual as the
developer has not asked for tax increment financing assistance. He noted he
originally questioned the reasoning for creation of a TIF district and finds it to
be acceptable especially due to the district’s short duration.
RESOLUTION 2014-09 Commissioner Elder introduced the following resolution and moved its
Item 8 adoption “RESOLUTION ADOPTING A MODIFICATION TO THE
REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1,
ESTABLISHING CENTRA HOMES TAX INCREMENT FINANCING
DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING
PLAN THEREFOR.” 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: Stauner, Elder, Hoffe, Lammle; and the
following voted against the same: None; Abstained: None; Absent: Hemken,
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 Lammle, seconded by Commissioner
Elder, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 7:57 p.m.
Respectfully submitted,
Valerie Leone, City Clerk
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