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081015 EDACITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North August 10, 2015 EDA Meeting will commence upon adjournment of the City Council Meeting President Kathi Hemken Commissioner John Elder Commissioner Andy Hoffe Commissioner Eric Lammle Commissioner Jonathan London 1. Call to order — EDA Meeting of August 10, 2015 2, Roll call 3. Approval of Minutes: • June 22, 2015 4. Resolution authorizing an interfund loan for advance of certain costs in connection with Tax Increment Financing District 11-1 (improvement project no. 964) 5. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes June 22, 2015 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 9:18 p.m. ROLL CALL Present. Kathi Hemken, President Andy Hoffe, Commissioner Eric Lammle, Commissioner Jonathan London, Commissioner Absent: John Elder, Commissioner Staff Present: Kirk McDonald, City Manager Aaron Chirpich, Community Development Specialist Tim Fournier, Director of Police Valerie Leone, City Clerk Chris Long, City Engineer Jeff Sargent, Director of Community Development Steve Sondrall, City Attorney Stacy Woods, Assistant City Attorney APPROVAL OF Motion was made by Commissioner Hoffe, seconded by Commissioner MINUTES London, to approve the minutes of May 26, 2015, and June 8, 2015. All Item 3 present voted in favor. Motion carried. IMP. PROJECT 965 President Hemken introduced for discussion EDA Item 4, Resolution Item 4 approving purchase agreement for the acquisition of 4415 Nevada Avenue North (project no. 965). Mr. Aaron Chirpich, community development specialist, reported staff has been monitoring the foreclosure proceedings on the property at 4415 Nevada Avenue North and the home was recently listed for $67,600. He explained staff anticipates high interest in the property due to the low asking price. Mr. Chirpich noted in the past staff has discussed the potential to subdivide the property into two lots. He stated subdivision of the current lot would require rezoning of the property. Mr. Chirpich requested authorization to present the full asking price of $67,600 and authorization to increase the offer to $75,000 if necessary. He recommended the use of EDA funds for the acquisition and the use of CDBG funds for demolition -related activities. City Manager McDonald pointed out by using EDA funds, there would be no income restrictions on the resale of the property. EDA Meeting Page 1 June 22, 2015 President Hemken inquired of the proposed selling price of each home if the lot was subdivided allowing for construction of two homes. Mr. Chirpich stated it is anticipated the homes would sell for $250,000. Council Member Hoffe commented on the number of complaints regarding the current condition of the property. Council Member London stated his preference of two single-family homes rather than a twinhome. Council Member Lammle inquired whether the EDA should provide authorization to negotiate above $75,000. City Manager McDonald pointed out an offer by a city is usually viewed as the strongest offer. RESOLUTION 2015-08 Commissioner London introduced the following resolution and moved its Item 4 adoption "RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 4415 NEVADA AVENUE NORTH (PROJECT NO. 965)." 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, Hoffe, Lammle, London; and the following voted against the same: None, Abstained: None; Absent: Elder, 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 London, seconded by Commissioner Hoffe, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 9:32 p.m. Respectfully submitted, Valerie Leone, City Clerk EDA Meeting Page 2 June 22, 2015 EDA Request for Action Originating Department Approved for Agenda Agenda Section Community Development August 10, 2015 EDA Item No. By: Jeff Sargent, Director of CD By: Kirk McDonald, City Manager 4 Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection With Tax Increment Financing District 11-1 (improvement project no. 964) Requested Action Staff requests that the Economic Development Authority (EDA) approve a resolution authorizing an internal (interfund) loan to Tax Increment Financing District 11-1, located at 8400 Bass Lake Road. Policy/Past Practice It is the practice of the EDA to require the approval of resolutions authorizing internal loans. Background Ehlers is recommending that the City should approve an interfund loan resolution to cover the costs of the redevelopment associated with the city -owned redevelopment property located next to the golf course at 8400 Bass Lake Road. The EDA has been expending funds for soil borings, marketing and administration in preparation for future redevelopment of the site. State Statute requires that the City approve a resolution authorizing an internal (interfund) loan to a TIF district and set the terms for reimbursement of the qualified TIF costs to be repaid with tax increments from the TIF district. Bob Deike, the city's EDA attorney, has prepared the attached resolution for approval. The amount recommended for the loan is $100,000. Recommendation Staff recommends approval of the Resolution. Attachments • Resolution for Interfund Loan • Ehlers Memo 6(4'Llt�� Second by To: RDA Jw 15-- - O t,bt.lt !1 D7 i I:\RFA\COMM DEV\Devela ment\Q &R- Interfimd Loan Resolution -8400 Bass Lake Road 8-10-15.doc Commissioner adoption: NEW HOPE ECONONOMIC DEVELOPMENT AUTHORITY CITY OF NEW HOPE HENNEPIN COUNTY STATE OF MINNESOTA introduced the following resolution and moved its RESOLUTION NO. RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH A TAX INCREMENT FINANCING DISTRICT CREATED BY THE CITY OF NEW HOPE AND THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY. BE IT RESOLVED by the Board of Commissioners (the 'Board") of the New Hope Economic Development Authority (the "Authority"), as follows: Section 1. Background. 1.01. The Authority and the City of New Hope (the "City") have created Tax Increment Financing District No. 11-1 (the "TIF District") in order to provide a funding source to assist in the redevelopment of certain real property in the City (the "Property"), 1.02. The Authority has determined to pay for certain costs identified in the TIF Plan consisting of administrative and pre -development expenses, including but not limited to, fees of attorneys, financial advisors and other consultants, and interest (collectively, the "Qualified Costs"), which costs may be financed on a temporary basis from Authority funds available for such purposes. 1.03. Under Minnesota Statutes, Section 469.178, Subd. 7, the Authority is authorized to advance money from the Authority's general fund or any other fund from which such advances may be legally authorized, in order to finance the Qualified Costs. 1.04. The Authority intends to reimburse itself for the funds advanced for Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "Interfund Loan"). Section 2. Terms of Interfund Loan. 2.01. The Authority hereby authorizes the advance of up to $ UU,UUU from the EDA Fund or other funds or so much thereof as may be paid as Qualified Costs. The Authority shall be reimbursed for such advances together with interest at the rate stated below. Interest accrues on the principal amount from the date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The interest rate shall be 4% and will not fluctuate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the Authority's Executive Director, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, tax increment available after other obligations have been paid, or as determined by the Executive Director, generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the Authority by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on parity with any other outstanding or future interfund loans secured in whole or in part with Available Tax Increment. 2.04. The principal sum and all accrued interest payable under this Interfund Loan are pre -payable in whole or in part at any time without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this Interfund Loan. 2.05. This Interfund Loan is evidence of an internal borrowing by the Authority in accordance with Minnesota Statutes, Section 469.17$, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the City and Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident hereto. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may amend the terms of this Interfund Loan at any time by resolution of the Board of Commissioners, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date. This resolution is effective upon the date of its approval. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Dated: August 10, 2015 ATTEST: Kat -Li Hemken, President Kirk McDonald, Executive Director Memo To: Kirk McDonald — EDA Executive Director From: Stacie Kvilvang Date: August 10, 2015 Subject: interfund Loan Resolution —TiF District 11-1 (BLRApartments) The EDA will be expending funds for the soil borings and various administrative costs for legal and financial advisors for the above referenced property. Since the TIF district is not currently generating any funds (property is still tax exempt), the EDA will need to "front" these costs. If the City and EDA want to be reimbursed for these costs at a future date from TIF funds, then an interfund loan is required before the expenditures are made. Attached is a resolution authorizing an interfund loan of up to $100,000 from the EDA's Development Fund. The EDA will reimburse this Fund for the above referenced costs (as they are advanced) in the current principal amount, together with interest at the rate of 4% per annum, as TIF funds become available. The interest rate is set at the statutory maximum and will not be adjusted annually. Please contact me at 651-697-8506 with any questions. r` EHLERS ,t LEADERS IN PUBLIC FlNANU www,ehiers-inc.com Minnesota phone 651 7-6500 3060 Centre Pointe Drive Offices also In Wisconsin and Illinois fax 651-697-8555 RowAllie, MN 55113-1122 toll free 100-552-1171