121216 EDA Meeting Packet
EDA MEETING
City Hall, 4401 Xylon Avenue North
Monday, December 12, 2016
Commences upon adjournment of the City Council Meeting
Agenda
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Eric Lammle
Commissioner Jonathan London
1. Call to order – EDA Meeting of December 12, 2016
2. Roll call
3. Approval of Minutes:
November 28, 2016
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 2017
5. Resolution approving purchase and redevelopment agreement with Great Buy
Homes, Inc. for the sale of 5400 Yukon Avenue North (improvement project no.
986)
6. Adjournment
EDA Meeting
Page 1 November 28, 2016
CITY OF NEW HOPE
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes November 28, 2016
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority
to order at 7:46 p.m.
ROLL CALL Present:
Absent:
Kathi Hemken, President
John Elder, Commissioner
Andy Hoffe, Commissioner
Jonathan London, Commissioner
Eric Lammle, Commissioner
Staff Present:
Kirk McDonald, City Manager
Tim Fournier, Police Chief
Vicki Holthaus, AEM
Chris Long, City Engineer
Jeff Sargent, Director of Community Development
Steve Sondrall, City Attorney
D. E. Walker‐Crawford, Admin Specialist
Stacy Woods, Assistant City Attorney
APPROVAL OF
MINUTES
Item 3
Motion was made by Commissioner Hoffe, seconded by Commissioner Elder,
to approve the minutes of September 12, 2016. All present voted in favor.
Motion carried.
IMP. PROJECT 964
Item 4
President Hemken introduced for discussion EDA Item 4, Resolution
authorizing the execution of a purchase and development agreement with
Alatus New Hope, LLC (project no. 964).
Jeff Sargent, director of community development, thanked the EDA
commissioners for their patience in anticipation of this being brought to the
agenda. He indicated there has been a great deal of communication ensuring
the city and Alatus are both satisfied with the terms and conditions. Mr. Sargent
said that the city’s redevelopment attorney, Bob Deike, and his team wrote the
resolution and development agreement, and Alatus had opportunity to review
it and provide input to come to the current agreement.
Mr. Sargent introduced Stacie Kvilvang of Ehlers, to review the agreement. Ms.
Kvilvang reminded Council that the last time they discussed this was at the
September 19, 2016, EDA meeting where updated terms were agreed upon to
bring forward. Ms. Kvilvang stated the two biggest of those were a TIF note
increase of approximately $1.9 million dollars due to poor soil condition
remediation, construction of a lift station on behalf of the city and burying of
power lines and that Alatus would pay for the land up front. She then reviewed
the major components of the development agreement as outlined in the Ehlers
EDA Meeting
Page 2 November 28, 2016
Memo provided in the agenda packet. Ms. Kvilvang shared additionally that
Atalus hopes to close well before the February 28th date, due to site planning
issues they may not be required to use the joint trash enclosure, the cost of the
lift station will be approximately $660,000, and the full cost of during lines will
be approximately $440,000.
Commissioner London asked Ms. Kvilvang to explain to the residents of New
Hope how the $6.5 million TIF note benefits the developer. Ms. Kvilvang stated
that if it were not for the TIF note the project would not be built. She shared
that approximately $4 million of that amount is going to improvements specific
to the site and the remaining assistance is going to lower the costs of
construction due to the fact that the rents you can charge are not enough to
cover the project costs to ensure that the project has a reasonable rate of return
to attract equity to get the deal done. She further clarified that only
approximately 30% of the $6.5 million in forgone tax revenues would have
come to the city. Commissioner London reviewed the comp sheets and felt
additional sites should have been included. He inquired of the reason for the
23‐year schedule. Ms. Kvilvang stated the term of the note is based on the sizing
needed to get the financing in place for the construction of the development
within a reasonable market return, those other properties are able to charge
higher rents and value propositions coming in along with grant sources that
New Hope does not have. She also stated that New Hope is gaining a luxury
rental product and putting land that has been sitting tax exempt into good use
for the community. Commissioner London says he sees a high subsidy and long
term note. He feels this development needs to be all‐star given the amount of
subsidy.
Commissioner Elder asked Ms. Kvilvang what the current income on the
property is. Ms. Kvilvang responded zero. Commissioner Elder asked for what
period has it been zero. Mr. McDonald said that it has been 8 years.
Commissioner Elder asked if there were other development offerings to
consider and Ms. Kvilvang indicated no, that from the RFP sent out this was
the one selected by the EDA to move forward with. Commissioner Elder shared
that he was a member of the council that took a tour of other Alatus properties
and he has full confidence that they will build an all‐star property and that the
money put towards this project will not be wasted.
Mark Stenglein, director of government relations for Alatus, was invited by
Mayor Hemken to speak. He spoke of Bob Lux’s reputation. Alatus feels that
the city will get nothing but the best and this will be jewel of the community.
RESOLUTION 2016‐21
Item 4
Commissioner Elder introduced the following resolution and moved its
adoption “RESOLUTION AUTHORIZING THE EXECUTION OF A
PURCHASE AND DEVELOPMENT AGREEMENT WITH ALATUS NEW
HOPE, LLC (PROJECT NO. 964)”. The motion for the adoption of the
foregoing resolution was seconded by Commissioner Hoffe and upon the vote
being taken thereon, the following voted in favor thereof: Hemken, Elder,
Hoffe, London; and the following voted against the same: None; Abstained:
None; Absent: Lammle; whereupon the resolution was declared duly passed
and adopted, signed by the president which was attested to by the executive
director.
EDA Meeting
Page 3 November 28, 2016
Mayor Hemken shared that she had spoken with Commissioner Lammle and
he was in full support of the project. She also thanked Ms. Kvilvang and Mr.
Stenglein for their participation.
ADJOURNMENT Motion was made by Commissioner London, seconded by Commissioner
Elder, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 8:05 p.m.
Respectfully submitted,
D. E. Walker‐Crawford, Admin. Specialist
I:\RFA\FINANCE\Budget\2017\q‐EDA final levy 12.12.16.docx
Request for Action
December 12, 2016
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 2017
Requested Action
Staff requests the EDA adopt the attached resolution relating to the EDA levy for 2017.
Background
The resolution supports the $200,000 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 2017. The
EDA levy was $150,000 in years 2014 through 2016. It is recommended the levy be set at $200,000 for 2017 as
increased funding is necessary for the scattered site housing program.
Attachment
Resolution
Agenda Section
EDA
Item Number
4
EDA RESOLUTION 2016‐___
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 2017
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
ʺAuthorityʺ); 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 ʺHRA Actʺ); 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 .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 of estimated market value in the City for taxes payable in 2017; 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 15;
and
WHEREAS, the Authority has before it for its consideration a copy of a proposed budget for its
operations for the fiscal year 2017 and the amount of the proposed levy for collection in 2017 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 Board of Commissioners of the New Hope Economic
Development Authority:
1. The proposed budget for the operations of the Authority in fiscal year 2017, 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 $200,000. The maximum amount that can be levied is an
amount equal to .0185 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 2017 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, 2016.
Adopted by the New Hope EDA on December 12, 2016.
_________________________
President
Attest: ___________________________
Executive Director
I:\RFA\COMM DEV\Development\Q & R ‐ Sale of Lot at 5400 Yukon 12‐12‐16 Project 986.docx
Request for Action
December 12, 2016
Approved by: Kirk McDonald, City Manager
Originating Department: Community Development
By: Aaron Chirpich, CD Specialist
Agenda Title
Resolution approving purchase and redevelopment agreement with Great Buy Homes, Inc for the sale of 5400
Yukon Avenue North (improvement project no. 986)
Requested Action
Staff requests that the EDA approve a resolution approving the purchase and redevelopment agreement for
the sale of the EDA‐owned property located at 5400 Yukon Avenue North. Staff recommends that the EDA
receive the staff presentation, open the public hearing for comments, pass a motion closing the public hearing
and then pass a motion approving the resolution.
Policy/Past Practice
Proposals for the redevelopment of EDA‐owned scattered site lots are reviewed by the EDA prior to
executing a contract with the preferred buyer/builder. Once a builder has been selected, it is a common
practice for staff to seek approval of purchase and redevelopment agreements to complete the sale of EDA‐
owned lots.
Background
RFPs were sent to 20 builders marketing the lot located at 5400 Yukon Avenue. The non‐negotiable sales price
was set at $55,000. The EDA received four proposals from the following builders:
Great Buy Homes Inc.
Novak‐Fleck Incorporated
Tollberg Homes, LLC
Twin Cities Habitat for Humanity
The Council reviewed all of the proposals at the 11/21/16 Work Session meeting, and selected Great Buy
Homes as the preferred builder for the property. Great Buy Homes is a custom home builder based out of
Anoka. The EDA recently sold two lots to Great Buy Homes. Although, construction is not complete on those
properties, staff have been impressed by the quality of work thus far. Additionally, staff called community
development staff in Coon Rapids to discuss their experience working with the builder. Staff from Coon
Rapids gave a positive reference for Great Buy Homes.
Summary of the Home Proposed by Great Buy Homes
The proposed home meets all criteria set forth in the RFP guidelines and will feature the following base
characteristics:
Split‐entry home design over garden view basement
Above‐average curb appeal
Mid‐to‐high‐end trim package, cabinets, flooring, doors and fixtures
Agenda Section
EDA
Item Number
5
Request for Action, Page 2
Four finished bedrooms
Two finished full bathrooms
Three‐car garage
2,310 square feet (2,088 finished)
Typical exterior finishes, vinyl siding with cultured stone accents
Development Agreement and Next Steps
Staff has worked with the City Attorney and the buyer to draft a purchase and redevelopment agreement for
the sale of the lot. The agreement ensures that the provisions set forth in the RFP will be met and sets the
purchase price of the lot at $55,000. The agreement included in the attachments is considered complete by
staff and the City Attorney. However, some minor revisions may be necessary once fully reviewed by the
buyer. Any substantial changes to the agreement would be brought to the EDA for approval. Great Buy
Homes would like to begin construction as soon as weather permits in the spring of 2017. As such, staff
anticipate closing on the sale of the property by the end of April.
Recommendation
Staff recommends that the EDA approve the resolution approving the purchase and redevelopment
agreement for the sale of 5400 Yukon Avenue North to Great Buy Homes Inc.
Attachments
Resolution
Draft Purchase and Redevelopment Agreement
CITY OF NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY
EDA RESOLUTION NO. 16-___
RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
AGREEMENT WITH GREAT BUY HOMES, INC FOR THE
SALE OF 5400 YUKON AVENUE NORTH
(IMPROVEMENT PROJECT 986)
BE IT RESOLVED by the Economic Development Authority in and for the City of New
Hope (“EDA”) as follows:
WHEREAS, the EDA purchased that certain real property located at 5400 Yukon
Avenue North, New Hope, MN, on June 16, 2016, with the intention of razing the existing house
and all site improvements in preparation of the sale of the lot for the construction of a new single
family home; and
WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff
to various contractors, the City received an offer from GREAT BUY HOMES, INC., a
Minnesota corporation (“Great Buy Homes”) regarding the sale and redevelopment of the real
property lot located at 5400 Yukon Avenue North, New Hope, MN, and legally described as:
Lot 9, Block 5, Begin Addition, Hennepin County, Minnesota.
(the “Property”).
WHEREAS, the EDA arrived at an agreement with Great Buy Homes, to sell the
Property for the purchase price of $55,000.00 upon all of the terms set forth in the RFP; and
WHEREAS, the EDA has accepted Great Buy Homes’ offer and has presented a draft of
the Purchase and Redevelopment Agreement to Great Buy Homes, for its review, a copy of
which is attached hereto as Exhibit A (“Purchase and Redevelopment Agreement”) and
incorporated herein by reference; and
WHEREAS, it is in the best interest of the EDA to sell the Property to Great Buy Homes
for the sum of $55,000.00, in order for Great Buy Homes to redevelop and build a new single
family home on the Property in accordance with the City’s scattered site housing program and
policy; and
WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase and
Redevelopment Agreement, subject to 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. That the sale of the Property by the EDA to Great Buy Homes, for the purchase
price of $55,000.00, with other terms and conditions as set forth in the Purchase
and Redevelopment Agreement attached hereto as Exhibit A, is approved subject
to the review and approval by the City Attorney of the final language and exhibits
to the Purchase and Redevelopment Agreement relating to the closing on the sale
of the Property, it being in the best interest of the EDA to sell the Property for
redevelopment and construction of a single-family home in accordance with the
City’s scattered site housing program and policy.
3. The EDA shall use due diligence for selling the Property to Great Buy Homes, for
the construction of a single-family home, so as to return the Property to the tax
rolls for the benefit of all taxing jurisdictions.
4. The President, Executive Director and 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 sale of the Property in accordance with
the Purchase and Redevelopment Agreement.
Dated the 6th day of December, 2016.
____________________________________
Kathi Hemken, President
Attest: _____________________________
Kirk McDonald, Executive Director
P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11403 Purchase of 5400 Yukon Ave. N\Resolution Approving Sale of 5400 Yukon Ave.
N..docx