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081417 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, August 14, 2017 President Kathi Hemken Commissioner John Elder Commissioner Andy Hoffe Commissioner Eric Lammle Commissioner Jonathan London 1. Call to order – EDA Meeting of August 14, 2017 2. Roll call 3. Approval of Minutes:  July 24, 2017 4. Resolution adopting a modification to the redevelopment plan for Redevelopment Project No. 1, establishing the Good Samaritan Tax Increment Financing District Therein, and adopting a tax increment financing plan therefor (project no. 1006) 5. Resolution authorizing an interfund loan for advance of certain costs in connection with the Good Samaritan Tax Increment Financing District (project no. 1006) 6. Resolution approving purchase and redevelopment agreement with Regal Homes, LLC for the Sale of 3751 Louisiana Avenue North (improvement project no. 993) 7. Adjournment EDA Meeting Page 1 July 24, 2017 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes July 24, 2017 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 7:51 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 Aaron Chirpich, Community Development Specialist Tim Fournier, Police Chief Valerie Leone, City Clerk Susan Rader, Director of Parks and Recreation Jeff Sargent, Director of Community Development Steve Sondrall, City Attorney 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 June 26, 2017. All present voted in favor. Motion carried. IMP. PROJECT 997 Item 4 President Hemken introduced for discussion EDA Item 4, Resolution approving the solicitation of rehabilitation quotes in association with the EDA owned property at 3984 Zealand Avenue North (improvement project no. 997). Mr. Aaron Chirpich, community development specialist, explained that on April 27, 2017, the EDA purchased the vacant and foreclosed single‐family home located at 3984 Zealand Avenue North for $165,000 with the intent to rehabilitate the house and maximize the value of the finished product. He reported there is substantial work needed for the exterior and interior of the home. He illustrated photographs of the property and explained the recommended rehabilitation efforts. He also reviewed alternate items that would be bid separate from the base bid. Mr. Chirpich stated staff has worked with a realtor to estimate the value of the completed home based upon the desired scope of work. He reported the estimated value of the completed home is $265,000 which would allow the EDA to utilize approximately $75,000 to complete the rehabilitation of the home. Mr. Chirpich asked the EDA for authorization to proceed with obtaining quotes from area contractors for the completion of the rehabilitation work. EDA Meeting Page 2 July 24, 2017 The EDA inquired of the property’s maintenance. Mr. Chirpich stated the city’s contractor currently mows the lawn. The EDA requested staff eradicate the weeds in the driveway as soon as possible. Commissioner London reported the property is in his neighborhood and he will abstain from the vote as the property could be considered a comparable sale to his property. Commissioner London commented on the likelihood that the property will sell for more than $265,000, and he encouraged staff to expend the funds necessary to produce a quality home. Director Sargent commented that the EDA does not need to make a profit on the home sale which enables a larger rehab budget. He stated the objective of the scattered site housing program is to make the home more aesthetically pleasing for the neighborhood and to bring a higher valued property onto the tax rolls. Director Sargent emphasized the need to obtain quotes for the work in order to finalize the budget. He thanked the EDA for their flexibility with the project. RESOLUTION 2017‐10 Item 4 Commissioner Elder introduced the following resolution and moved its adoption “RESOLUTION APPROVING THE SOLICITATION OF REHABILITATION QUOTES IN ASSOCIATION WITH THE EDA OWNED PROPERTY AT 3984 ZEALAND AVENUE NORTH (IMPROVEMENT PROJECT NO. 997)”. 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, Elder, Hoffe; and the following voted against the same: None; Abstained: London; Absent: Lammle; 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 8:10 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\Development\Q & R‐ TIF District Good Samaritan Public Hearing (EDA) 8‐14‐17.docx Request for Action August 14, 2017 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Sargent, Director Agenda Title Resolution adopting a modification to the redevelopment plan for Redevelopment Project No. 1, establishing the Good Samaritan Tax Increment Financing District therein, and adopting a tax increment financing plan therefor (project no. 1006). Requested Action The Economic Development Authority (EDA) is requested to pass a resolution adopting the modification and establishing the TIF district. This action by the EDA will give authority to the City Council to conduct a public hearing to consider the creation of the housing Tax Increment Financing (TIF) district. Policy/Past Practice It is a past practice of the EDA to consider/approve providing financial assistance such as TIF Districts for redevelopment projects in the city. Background It has been found necessary to create a TIF District in order to accommodate the redevelopment of the properties located at 2765 and 2773 Virginia Avenue, as defined in the TIF plan. In order to create a TIF District, the EDA must approve the findings as outlined in the attached resolution, approving the TIF Plan. The TIF District will facilitate the redevelopment of properties that were acquired and prepared for development by the Good Samaritan Society, and will aid in the construction of a 3‐story, 31‐unit assisted living facility. The TIF assistance will specifically be used for the construction of public improvements, utilities, administrative costs, and other qualifying expenses. It should be noted that the Planning Commission held a meeting on August 2, 2017, and determined that the proposed development is consistent with the city’s Comprehensive Plan. The resolution approving this is attached. Stacie Kvilvang from Ehlers & Associates will be in attendance to answer any questions regarding the creation of this district. Attachments  EDA Resolution  TIF Plan  Planning Commission Resolution  Tax Increment Financing District Overview, prepared by Ehlers Agenda Section EDA Item Number 4 I:\RFA\COMM DEV\Development\Q & R‐ Interfund Loan Resolution Good Sam TIF District (EDA) 8‐14‐17.docx Request for Action August 14, 2017 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Sargent, Director Agenda Title Resolution authorizing an interfund loan for advance of certain costs in connection with the Good Samaritan Tax Increment Financing District (project no. 1006). Requested Action Staff requests that the Economic Development Authority (EDA) approves a resolution authorizing an internal (interfund) land to the Good Samaritan Tax Increment Financing District (TIF). Policy/Past Practice It is the practice of the EDA to require the approval of resolutions authorizing internal loans. Background In 2008, the EDA approved an interfund loan resolution to TIF Districts 3‐1 and 4‐1 in order to buy the Bass Lake Road apartment site for $4M. TIF District 3‐1 was the Winnetka Green Ryland Home project, and TIF District 4‐1 was the Frank’s Nursery site. In 2011, the EDA established a TIF District (11‐1) for the Bass Lake Road Apartment site through special legislation. Just recently, in August 2015, the EDA approved an interfund loan resolution for TIF District 11‐1 of $100,000 to cover administrative costs associated with the project. The attached resolution would allow the EDA to reimburse itself up to $20,000 for qualified costs associated with the establishment of the Good Samaritan Housing TIF District. Most commonly, these costs are administrative fees accrued through the creation of the district, but could also include costs associated with public utilities, streets and sidewalks, or other site preparations or improvements. Stacie Kvilvang from Ehlers & Associates will be in attendance to answer any questions regarding the creation of this district. Attachments  EDA Resolution  Ehlers Memo Agenda Section EDA Item Number 5 I:\RFA\COMM DEV\Development\Q & R ‐ Sale of Lot at 3751 Louisiana 8‐14‐17 Project 993.docx Request for Action August 14, 2017 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution approving purchase and redevelopment agreement with Regal Homes, LLC for the sale of 3751 Louisiana Avenue North (improvement project no. 993) 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 3751 Louisiana Avenue North. Staff request 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 selected builder. Background RFPs were sent to 20 builders marketing the lot located at 3751 Louisiana Avenue. The non‐negotiable sales price was set at $55,000. The EDA received three proposals from the following builders:  Regal Homes, LLC  Novak‐Fleck Incorporated  Tollberg Homes, LLC Staff reviewed the proposals with the City Manager, and designated Regal Homes as the “preferred by staff” builder, as they have put forward the proposal with the highest anticipated home value and staff are impressed with their recent work in New Hope. Regal Homes purchased two side‐by‐side scattered site lots from the EDA in June 2016, and they have completed and sold the first home for $364,000. Their second home is under construction with a contract price of $384,000. Regal has proposed the same home for 3751 Louisiana Avenue that was built on their first lot. To ensure that all proposals are reviewed by the EDA, staff will cover the primary attributes of each proposal during the EDA meeting. An overview of each proposal is given below. Regal Homes Proposal Overview  Two‐story home design over full basement  Above‐average curb appeal with prominent front porch  Mid/high‐end trim package, cabinets, flooring, doors and fixtures  Main floor fireplace  Master suite with soaker tub and tiled shower  Four finished bedrooms  Three finished bathrooms, two full, one half  Three‐car garage  2,326 finished square feet, 3,229 total (900 sq./ft. unfinished basement) Agenda Section EDA Item Number 6 Request for Action, Page 2  Typical exterior finishes, vinyl siding with cultured stone accents  Anticipated sales price $363,000 Novak‐Fleck Proposal Overview  Split‐entry home design over garden view basement  Above‐average curb appeal  Mid/high‐level trim package, cabinets, flooring, doors, and fixtures  Master suite  Five finished bedrooms  Three finished bathrooms, one full, two 3/4  Three‐car garage  2,430 finished square feet (both floors finished)  Typical exterior finishes, vinyl siding with cultured stone accents  Anticipated sales price $310,000 Tollberg Homes Proposal Overview  Four‐level home design  Above‐average curb appeal with prominent front porch  Mid‐level trim package, cabinets, flooring, doors, and fixtures  Master suite  Three finished bedrooms  Two finished bathrooms, one full, one 3/4  Three‐car garage  1,460 finished square feet, 2,900 total (1,460sq./ft. unfinished basement)  Typical exterior finishes, vinyl siding with cultured stone accents  Anticipated sales price $299,900 Development Agreement and Next Steps Staff has worked with the City Attorney 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. Soil Investigation The home that was torn down at 3751 Louisiana Avenue was built in 1960. Staff were able to review aerial photographs of the site dating back to 1956. The historical photographs show no sign of previous structures on the site. Therefore, staff have no reason to believe that unknown debris is buried on the site. Recommendation Staff recommends that the EDA approve the resolution approving the purchase and redevelopment agreement for the sale of 3751 Louisiana Avenue North to Regal Homes, LLC. Request for Action, Page 3 Attachments  Resolution  Builder Proposals  Draft Purchase and Redevelopment Agreement