091393 EDA Official File Copy
CiTY OF NEW HOPE
EDA AGENDA
EDA Regular M~ting//12 September 13, 1993
Agenda//12
President Edward J. Erickson
Commissioner W. Peter Enck
Commissioner Gerald Otten
Commissioner Terri Wehling
Commissioner Marky W~lliamson
1. Call to Order
2. Roll Call
3. Approval of Minutes of August 9, 1993
4. Resolution Approving Multi-Family Housing Policies (Project//510)
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes August 9, 1993
Meeting //11
CALL TO ORDER President Pro tem Enck called the meeting of the Economic Development
Authority to order at 7:07 p.m.
ROLL CALL Present: Enck, Otten, Williamson, Wehling
Absent: Erickson
APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner
Williamson, to approve the EDA minutes of July 26, 1993. Voting in
favor: Enck, Otten, Williamson; Abstained: Wehling; Absent: Erickson.
Motion carried.
BROADWAY LANEL President Pro rem Enck introduced for discussion Item 4, Resolution
Item 4 Relating to a Redevelopment Agreement with Broadway LaNel, a Limited
Partnership; Waiving the HRA Lien Maturity Under the Redevelopment
Agreement in Connection with the Issuance of Refunding Bonds by the
City and Authorizing Execution of Various Documents in Connection with
Such Refunding Bonds.
EDA RESOLUTION Commissioner Williamson introduced the following resolution and moved
93-12 its adoption: "RESOLUTION RELATING TO A REDEVELOPMENT
Item 4 AGREEMENT WITH BROADWAY LANEL, A LIMITED PARTNERSHIP;
WAIVING THE HRA LIEN MATURITY UNDER THE REDEVELOPMENT
AGREEMENT IN CONNECTION WITH THE ISSUANCE OF REFUNDING
BONDS BY THE CITY AND AUTHORIZING EXECUTION OF VARIOUS
DOCUMENTS IN CONNECTION WITH SUCH REFUNDING BONDS". The
motion for the adoption of the foregoing resolution was seconded by
Commissioner Wehling and upon vote being taken thereon, the following
voted in favor: Enck, Otten, Wehling and Williamson; and the following
voted against: None; Absent: Erickson; whereupon the resolul~ion was
duly oassed and adooted, signed by the president which was attested to
by the executive director.
ADJOURNMENT Motion was made by Commissioner Wehling, seconded by Commissioner
Otten, to adjourn the meeting. All present voted in favor. The New Hope
EDA adjourned at 7:09 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA August 9, 1993
Page 1
~ REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
City Manager 9-13-93 rna
Kirk McDonald
Item
No.
By: Management Assistant By:Jy/ 4
RESOLUTION APPROVING MULTI-FAMI~~
HOUSING POLICIES (PROJECT #510)
At the July 26th EDA Meeting a consultant agreement was approved with Public-
Private Ventures, Inc. to assist the staff in formulating policies to address
requests for funding assi stance for bui 1 ding rehabil i tation/renovati on work from
owners of multi-family buildings in the City.
The enclosed resolution is a draft of the policies which have been developed and
staff requests to discuss/review said policies with the EDA.
TO: _. /
Review: Administration: Finance:
RFA-O01
EDA RESOLUTION NO. 93-
RESOLUTION APPROVING MULTI-FAMILY
HOUSING POLICIES
{PROJECT #510)
WHEREAS, the City of New Hope contains over 3,839 units of rental multiple unit housing; and
WHEREAS, many of those units have been constructed during the period from 1960 to 1979; and
WHEREAS, many of those units have begun to show signs of aging and obsolescence; and
WHEREAS, many private owners are having difficulty obtaining private capital necessary to rehabilitate and
properly maintain their units; and
WHEREAS, many of these rental housing projects have been subjected to the real estate recession that has
involved most of the United States as well as the metropolitan area; and
WHEREAS, this housing stock, if maintained, can provide a decent, safe, and desirable source of affordable
housing for the current and future residents of New Hope; and
WHEREAS, the City of New Hope Economic Development Authority (EDA) has a desire to provide assistance
where that assistance is clearly needed and warranted; and
WHEREAS, the purpose of that assistance would be to.' stem physical property deterioration, improve public
safety, improve values, enhance neighborhood cohesiveness, and assist in the provision of modern
rental amenities; and
WHEREAS, the City of New Hope must target its limited resources, reflecting the reality that it can provide
only limited funding, compared to the funding that might potentially be required to renovate a
significant percentage of the 3,839 multi-family rental units in the City; and
WHEREAS, the goal of the EDA's involvement would be to meet public policy needs in the housing and human
services area~ rather than to resolve project financial problems and issues that private owners and
lenders may have, and
WHEREAS, the EDA recognizes that financial assistance to real estate projects involve some risk.
NOW THEREFORE BE IT RESOLVED that the following policy shall be used by the EDA to evaluate potential
future requests for assistance by rental unit owners:
1. The minimum amount of public funding required shall be provided in each case.
2. Funding priority will be given to basic needs (such as roof replacement, wiring, heating,
etc.) as opposed to provision of amenities (such as washers and dryers in each unit, new
office and lobby furniture, etc.)
3. No funding will be provided which, directly or indirectly, is used for fees by the owner or
related parties (including construction management fees, developer fees, use of
"contingency funds", fee sharing, etc.)
4. At least two bona fide bids, from non-related parties, will be required for each item that is
a part of an overall program of rehabilitation funded partially or completely with City funds.
Normally, "in house" contracting and/or related party contracting will be prohibited.
5. No funds will be provided to bring defaulted mortgages current.
6. No funds will be provided to bring taxes current.
7. Public funds will be used to leverage private funding wherever possible. Normally a 50/50
matching of funds for eligible activities would be required.
8. Wherever possible, loans shall be used as the preferred financing vehicle, rather than grants
or equity investments.
9. In the case in which a project has substantial private financial stress, appropriate
participation by the lender and the equity owner will be a requirement for City investment.
The private investment may take the form of additional equity, debt forgiveness, interest
rate reduction, loan term extension, payment deferrals, management fee reduction, reduced
cash flow distribution, etc.
In no case will tax funds be used to solve financial problems that would otherwise be
solved privately in the absence of public participation.
10. Public funds will only be provided in those instances in which the public funds are essential
to the rehabilitation of the project. Public funds will not be provided when the primary
result of that provision would be to merely raise the profitability of a building.
11. Public funds will not be substituted for private funds that could reasonably be raised in the
private market. For example, if a private loan could be obtained, and/or if Iow income tax
credits would be available, EDA funds will not be used to displace these other potential
resources.
12. Each financial assistance agreement will contain an accelerated repayment provision in the
event of property sale, or other significant changes in circumstances.
13. Funds will not be provided that will allow the owner to displace moderate income residents
and attract higher income tenants. Nothing in this statement shall be construed to preclude
the attraction of desirable tenants to a project, and the displacement of undesirable tenants.
14. Funds would not be provided for projects that would result in lower property tax payments,
unless such projects meet other City objectives.
15. EDA Rehabilitation funds shall not be provided for use in such a way that Relocation statues
and payments are triggered.
16. No funding will be considered for approval without a prior objective financial analysis of the
project, and an independent recommendation as to the amount and type of proposed
funding.
Adopted by the C-Fef-C-ooncll of the City of New Hope, Hennepin County, Minnesota, this 13th day of September,
1993.
Edward J. Erickson, President
Attest:
Daniel J. Donahue, Executive Director