HRA 02/01/2007 - 6207CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
Thursday, February 1, 2007, 7 :30 P.M.
AGENDA
LOCATION: Council Chambers (upper level)
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
1. Approval of December 7, 2006, Meeting Minutes
ACTION:
2. Approval of expenses
3. Approval of Resolution to Create TIF District #19
4. Approval of Resolution to Adopt Development Agreement between HRA & Industrial Equities
5. Approval of City's Planning Division request to fund a Housing Condition Survey
6. Approval of Purchase Agreements for GWNE
INFORMATIONAL ITEMS:
7. Corridor Housing Initiative — Presentation by Gretchen Nicholls
8. Monthly Housing Report
ADJOURNMENT:
ri ACTION ITEM
HRA MEETING - FEBRUARY 1, 2007
MY OF
FROXEY
Date: January 25, 2007
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Resolution Creatinq TIF DISTRICT #19
Mr. John Allen of Industrial Equities purchased the former Guardian Building Products
site at 5110 Main Street in the spring of 2006. Mr. Allen anticipated a high cost for
demolition, soil corrections, and site preparation necessary for him to proceed with the
construction of 202,800 square feet of new office /warehouse space on the site and
requested $1.5M in TIF "pay as you go" assistance from the HRA.
The developer anticipates total development costs of at least $12.8M dependent upon
final design. The HRA's $1.5M in assistance, to be used for soil corrections and
demolition, will account for 10% of the total development costs. The amount of TIF
assistance that is being requested simply makes this site competitive with undeveloped
land in outer ring suburbs. But for the HRA providing assistance with the high cost of
demolition, soil corrections, and various site improvements this site would not be
redeveloped.
In order to provide the TIF assistance, the HRA and City Council must first adopt a
resolution modifying the redevelopment plan for the City and the tax increment financing
plans for the existing TIF districts. These modifications reflect the increased project
costs and the increased bonding authority within the City's redevelopment area, creates
TIF District #19 and adopts the TIF plan relating thereto. Approval of the attached
ordinance will allow the creation of the district to move forward.
Anoka County Commissioner Kordiak has asked me to attend the County Board
meeting on February 13th to give the County Board a brief update on this exciting
redevelopment. The City Council will hold a public hearing for the District's creation on
February 26th.
Recommendation:
Staff recommends that the Authority adopt the attached resolution, modifying the City's
TIF plans, and creating TIF District #19.
RESOLUTION NO.
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT
FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS
NOS. 1 -3, 6 -7, 9,11-14 AND 16 -18 TO REFLECT INCREASED PROJECT
COSTS AND INCREASED BONDING AUTHORITY WITHIN
REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT
FINANCING DISTRICT NO. 19 AND ADOPTING A TAX INCREMENT
FINANCING PLAN RELATING THERETO
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the Housing
and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority "), as
follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority approve and adopt the proposed
modifications to its Redevelopment Plan for Redevelopment Project No. 1 (the "Project
Area ") reflecting increased project costs and increased bonding authority, pursuant to and
in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive, as
amended and supplemented from time to time.
1.02. It has been further proposed that the Authority approve and adopt the proposed
modifications to the Tax Increment Financing Plans (the "Existing Plans ") for Tax
Increment Financing Districts Nos. 1 -3, 6 -7, 9, 11 -14 and 16 -18 (the "Existing Districts ")
reflecting increased project costs and increased bonding authority within the Project Area,
pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended
and supplemented from time to time.
1.03. It has been further proposed that the Authority approve the creation of proposed Tax
Increment Financing District No. 19 (the "Proposed District') within the Project Area and
approve and adopt the proposed Tax Increment Financing Plan (the "Proposed Plan ")
relating thereto, pursuant to and in accordance with Minnesota Statutes, Sections 469.174
to 469.1799, inclusive, as amended and supplemented from time to time.
1.04. The Authority has investigated the facts and has caused to be prepared with respect
thereto, a modified Redevelopment Plan for the Project Area and modified Existing Plans
for the Existing Districts reflecting increased project costs and increased bonding authority
within the Project Area and a Proposed Plan for the Proposed District, defining more
precisely the property to be included the public costs to be incurred, and other matters
relating thereto.
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e
Page 2 - Resolution No.
1.05. The Authority has performed all actions required by law to be performed prior to the
approval and adoption of the modifications to the Redevelopment Plan and Existing Plans
and the approval and adoption of the Proposed Plan.
1.06. The Authority hereby determines that it is necessary and in the best interests of the
City and the Authority at this time to approve and adopt the modifications to the
Redevelopment Plan and Existing Plans, to create the Proposed District and to approve
and adopt the Proposed Plan relating thereto.
Section 2. Findings.
2.01. The Authority hereby finds, determines and declares that the assistance to be
provided through the adoption and implementation of the modified Redevelopment Plan,
modified Plans and Proposed Plan (collectively, the Plans ") are necessary to assure the
development and redevelopment of the Project Area.
2.02. The Authority hereby finds, determines and declares that the Plans conform to the
general plan for the development and redevelopment of the City as a whole in that they are
consistent with the City's comprehensive plan.
2.03. The Authority finds, determines and declares that the Plans afford maximum
opportunity consistent with the sound needs of the City as a whole for the development
and redevelopment of the Project Area by private enterprise and it is contemplated that the
development and redevelopment thereof will be carried out pursuant to redevelopment
contracts with private developers.
Section 3. Approvals and Adoptions.
3.01. The modifications to the Redevelopment Plan reflecting increased project costs and
increased bonding authority within the Project Area are hereby approved and adopted by
the Commissioners of the Authority and are forwarded to the Fridley City Council for public
hearing, review and approval.
3.02. The modifications to the Existing Plans reflecting increased project costs and
increased bonding authority within the Project Area are hereby approved and adopted by
the Commissioners of the Authority and are forwarded to the Fridley City Council for public
hearing, review and approval.
3.03. The creation of the Proposed District within the Project Area and the adoption of the
proposed TIF Plan relating thereto are hereby approved and adopted by the
Commissioners of the Authority and are forwarded to the Fridley City Council for public
hearing, review and approval.
R
Page 3 - Resolution No.
Section 4. Filing of Plans.
4.01. Upon approval and adoption of the Plans, the Authority shall cause said Plans to
be filed with the Minnesota Department of Revenue, the Office of the State Auditor and
Anoka County.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF , 2007.
LAWRENCE R. COMMERS - CHAIRPERSON
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
CERTIFICATION
I, William W. Bums, Executive Director of the Housing and Redevelopment Authority in and
for the City of Fridley, County of Anoka, Minnesota, hereby certify that the foregoing is a
true and correct copy of Resolution No. adopted by the Authority on the
day of , 2007.
WILLIAM W. BURNS- EXECUTIVE DIRECTOR
G: \WPDATA \F \FRIDLEY \70 \TIF \HRA RESOLUTION.DOC
a
s
ACTION ITEM
ri HRA MEETING - FEBRUARY 1, 2007
CRY OF
FRIDLEY
Date: January 25, 2007
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subiect: Development Agreement for TIF DISTRICT #19 — Industrial Equities
Attached is the draft development agreement between the Authority and Industrial
Equities for the redevelopment of 5110 Main Street. Attorney Casserly modeled this
agreement after the previous (1996) development agreement with Industrial Equities for
their development along 73rd Avenue. A copy has also been provided to John Allen of
Industrial Equities for his review.
Please review the attached development agreement, and resolution approving the
agreement, prior to Thursday night's meeting. Attorney Casserly will be attending the
meeting to address any questions or concerns you may have with the agreement. If
there are not any major changes to the development agreement, we will ask that you
adopt the attached resolution. If the agreement needs major revisions based on the
Authority's or Mr. Allen's comments, the changes will be made prior to your March
meeting and the agreement can be brought back for approval at that time.
Recommendation:
Staff recommends that the Authority adopt the attached resolution approving the
attached development agreement between the Authority and Industrial Equities for the
redevelopment of 5110 Main Street.
Page 2 - Resolution No.
Section 3. Authorization for Execution and Delivery.
3.01 The Chairman and the Executive Director of the Authority are hereby
authorized to execute and deliver the Contract when the following conditions are met:
(a) Substantial conformity of the Contract to the form of Contract
presented to the Authority as of this date, with such additions and
modifications as the Officers may deem desirable or necessary as
evidenced by their execution of the Contract.
(b) Approval by the City Council of Tax Increment Financing District No.
19 and adoption of the Tax Increment Financing Plan relating thereto.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF , 2007.
Lawrence R. Commers, Chairman
ATTEST:
William W. Burns, Executive Director
G: \WPDATA\FIFRIDLEY�70\DOC\RESOL AUTHG REDEV AGREE.DOC
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of March, 2007 by and
between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota
(the "Authority "), a political subdivision of the State of Minnesota organized under the
Constitution and laws of the State of Minnesota and Industrial Equities, LLP, a Minnesota
limited liability partnership organized under the laws of the state of Minnesota (the
"Redeveloper "),
WITNESSETH:
WHEREAS, the Board of Commissioners (the "Board ") of the Authority has
determined that there is a need for development and redevelopment within the corporate
limits of the City to provide employment opportunities, to provide adequate housing in the
City, including low and moderate income housing and housing for the elderly, to improve
the tax base and to improve the general economy of the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority has adopted, pursuant
to Minnesota Statutes, Sections 469.001 et sea. (the "Act "), a development program known
as the Modified Redevelopment Plan (the "Redevelopment Plan ") and established
Redevelopment Project No. 1 (the "Project Area ") in the City to encourage and provide
maximum opportunity for private development and redevelopment of certain property in the
City which is not now in its highest and best use;
WHEREAS, in connection with the Project Area, Tax Increment Financing District
No. 19 (the "Tax Increment District ") has been approved by the Authority and the City and
the Tax Increment Financing Plan will be forwarded to Anoka County for certification and to
the State for filing, pursuant to the Minnesota Tax Increment Financing Act contained in
Minnesota Statutes, Sections 469.174 to 469.1799; and
WHEREAS, major objectives in establishing the Project Area are to:
1. Promote and secure the prompt redevelopment of certain property in the
Project Area, which property is not now in its highest and best use in a manner consistent
with the City's Comprehensive Plan and with a minimum adverse impact on the
environment, and thereby promote and secure the redevelopment of other land in the City.
2. Provide additional employment opportunities within the Project Area and the
City for residents of the City and the surrounding area, thereby improving living standards,
reducing unemployment and the loss of skilled and unskilled labor and other human
resources in the City.
3. Prevent the deterioration and secure the increase of commercial /industrial
property subject to taxation by the City, the Independent School Districts, Anoka County,
and the other taxing jurisdictions in order to better enable such entities to pay for
governmental services and programs required to be provided by them.
4. Provide for the financing and construction for public improvements in and
adjacent to the Project Area necessary for the orderly and beneficial redevelopment of the
Project Area and adjacent areas of the City.
5. Promote the concentration of new desirable industrial, office, and other
appropriate redevelopment in the Project Area so as to maintain the area in a manner
compatible with its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and redevelopment,
whenever possible.
7. Create a desirable and unique character within the Project Area through
quality land use alternatives and design quality in new or remodeled buildings.
B. Encourage and provide maximum opportunity for private redevelopment of
existing areas and structures which are compatible with the Project Area; and
WHEREAS, in order to achieve the objectives of the Authority and City in creating
the Project Area and adopting the Redevelopment Plan, the Authority is prepared to assist
the Redeveloper with the costs of the Site Improvements in accordance with this
Agreement; and
WHEREAS, the Authority believes that the development and redevelopment of the
Redevelopment Property pursuant to this Agreement, and fulfillment generally of the terms
of this Agreement, are in the vital and best interests of the Authority and the health, safety,
morals and welfare of its residents, and in accord with the public purposes and provisions
of applicable federal, state and local laws under which the development and redevelopment
are being undertaken and assisted;
NOW, THEREFORE, in consideration of the premises and the mutual obligations of
the parties hereto, each of them does hereby covenant and agree with the other as follows:
2
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a different meaning clearly
appears from the context:
"Act" means Minnesota Statutes, Section 469.001 et se g.
"Agreement" means this Agreement, as the same may be from time to time
modified, amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota.
"Available Tax Increment" means 90% of the Tax Increment from the Tax Increment
District.
"Certificate of Completion" means the certification, in the form of the certificate
contained in Schedule C attached to and made a part of this Agreement, provided to the
Redeveloper, pursuant to Section 4.3 of this Agreement.
"City" means the City of Fridley, Minnesota.
"Construction Plans" means the plans, specifications, drawings and related
documents on the construction work to be performed by the Redeveloper on the
Redevelopment Property which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the building inspector or the City,
and (b) shall include at least the following for each building: (1) site plan; (2) foundation
plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length
and width); (6) elevations (all sides, except as to a side of existing structure where no
construction is to take place); (7) facade and landscape plan; and (8) such other plans of
supplements to the foregoing plans as the City may reasonably request.
"Council" means the Council of the City.
"County" means the County of Anoka, Minnesota.
"Event of Default" means an action by the Redeveloper described in Section 5.1. of
this Agreement.
"Holder" means the owner of a Mortgage
"Minimum Improvements" means the construction of an office /warehouse building of
approximately 202,880 square feet on the Redevelopment Property with a total project cost
of approximately $15,000,000.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, Sections 116D.01 et seg., as amended.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Sub.
Sect. 4331 et seq., as amended.
"Permitted Encumbrances" mean the encumbrances described on Schedule D to
this Agreement.
"Note" means the,Limited Revenue Tax Increment Note in the principal amount of
One Million Five Hundred Thousand and no /hundredths Dollars ($1,500,000.00),
substantially in the form of Schedule D attached to this Agreement, and to be made by the
Authority payable to the order of the Redeveloper in accordance with the terms of this
Agreement.
"Project Area" means Redevelopment Project No. 1, as amended, as established in
accordance with the Act.
"Redeveloper" means Industrial Equities, LLP, a limited liability partnership
organized under the laws of the State of Minnesota.
"Redevelopment Plan" means the modified redevelopment plan adopted by the
Authority for its Redevelopment Project No. 1, as amended.
"Redevelopment Project" means the Redevelopment Property and the Minimum
Improvements.
"Redevelopment Property" means the real property described in Schedule A of this
Agreement.
"Site Improvements" means those costs described on Schedule B as qualified
improvements of the Redevelopment Property.
"State" means the State of Minnesota.
"Tax Increment" means only that portion of the real estate taxes paid with respect to
the Redevelopment Property which is remitted to the Authority as tax increment pursuant to
the Tax Increment Act.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1799, as amended and as it may be amended.
"Tax Increment District" means Tax Increment Financing District No. 19 which is
located within the Project Area and has been approved by the Authority and the City and
the Tax Increment Plan will be forwarded to the County for certification and to the State for
filing as soon as the County provides a parcel identification number for one of the parcels
included in the Tax Increment District.
"Tax Increment Plan" means the tax increment financing plan adopted by the
Authority for its Tax Increment Financing District No. 19.
"Termination Date" means the date on which the Note is paid in full or this
Agreement is terminated in accordance with the provisions of Article V.
"Unavoidable Delays" means delays which are the result of strikes, unforeseeable
and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or
the equipment used to construct the Minimum Improvements, delays which are the result of
governmental actions, delays which are the result of judicial action commenced by third
parties, citizen opposition or action affecting this Agreement or adverse weather conditions
or acts of God.
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority. The Authority makes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a public body duly organized and existing under the laws of
the State. Under the provisions of the Act, the Authority has the power to enter into this
Agreement and carry out its obligations hereunder.
(b) The Authority has approved the Redevelopment Plan in accordance with the
terms of the Act.
(c) The Authority has approved the Tax Increment District and will forward the
Tax Increment Plan to the County for certification and the State for filing as soon as the
County provides a parcel identification number for one of the parcels included in the Tax
Increment District, pursuant to the Tax Increment Act.
(d) The Authority proposes to assist the Redeveloper for the Site Improvements
in accordance with the Tax Increment Plan, Redevelopment Plan and this Agreement.
(e) The Authority proposed to make the Note payable to the Redeveloper in
accordance with the provisions of this Agreement and to pledge Tax Increment generated
by the Tax Increment District to the payment of the Note according to its terms.
(f) The Authority will cooperate with the Redeveloper with respect to any
litigation commenced by third parties in connection with this Agreement.
Section 2.2 Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper will construct, operate and maintain the Minimum
Improvements in accordance with the terms of this Agreement, the Redevelopment Plan
and all local, state and federal laws and regulations (including, but not limited to,
environmental, zoning, building code and public health laws and regulations).
(b) The Minimum Improvements will be an allowed use under the zoning
ordinance of the City.
(c) As of the date of execution of this Agreement, the Redeveloper has received
no notice or communication from any local, state or federal official that the activities of the
Redeveloper or the Authority in the Project Area may be or will be in violation of any
environmental law or regulation.
As of the date of execution of this Agreement, the Redeveloper is aware of no facts,
the existence of which would cause it to be in violation of any local, state or federal
environmental law, regulation or review procedure or which would give any person a valid
claim under the Minnesota Environmental Rights Act.
(d) The Redeveloper will use its best efforts to obtain, in a timely manner, all
required permits, licenses and approvals, and will meet, in a timely manner, all
requirements of all applicable local, state and federal laws and regulations which must be
obtained or met before the Minimum Improvements may be lawfully constructed.
(e) The Redeveloper is a limited liability partnership organized under the laws of
the State.
(f) The Redeveloper agrees that it will cooperate with the Authority and shall
indemnify the Authority against all costs, including the costs of defense incurred by the
Authority through an attorney reasonably acceptable to the Authority and Redeveloper, with
respect to any litigation commenced by third parties in connection with Redeveloper's
failure to perform according to the terms and conditions of this Agreement.
(g) The financing arrangements which the Redeveloper has obtained or will obtain,
to finance acquisition or construction of the Minimum Improvements, together with financing
provided by the Authority pursuant to this Agreement, will be sufficient to enable the
Redeveloper to successfully complete the Minimum Improvements as contemplated in this
Agreement.
(h) The construction of the Minimum Improvements, in the opinion of the
Redeveloper, would not reasonably be expected to occur solely through private investment
within the reasonably foreseeable future without the use of tax increment financing provided
by the City pursuant to this Agreement.
(i) For the construction of the Minimum Improvements the Redeveloper will pay
wages in accordance with the prevailing wage rate as that term is defined in Minnesota
Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 1990. The
City's Public Works Department shall be responsible for monitoring Redeveloper's
compliance of this requirement.
0) The Redeveloper shall not allow any use or occupancy of the Redevelopment
Property or Minimum Improvements by a "Sexually Orientated Business" as defined in
Ordinance No. 965 of the City's Code.
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Note to Redeveloper for Site Improvements. As consideration for the
execution of this Agreement, the construction of the Minimum Improvements by the
Redeveloper and subject to the further provisions of this Agreement, the Authority agrees
to provide the Note to the Redeveloper for Site Improvements as provided in Section 3.3.
Section 3.2 Limitations on Undertaking of the City.
(a) The Authority shall have no obligation under this Agreement to provide the
Note to the Redeveloper for the Site Improvements if the Authority, at the time the Note is
made, is entitled under Section 5.2 to exercise any of the remedies set forth therein as a
result of an Event of Default which has not been cured. If the Authority has not exercised
its remedies under Section 5.2(b) and if the Note is withheld due to an Event of Default
which is later cured, such Note shall be made after such Event of Default has been cured.
(b) The Authority shall have no obligation to provide the Note to the Redeveloper
for the Site Improvements unless the Redeveloper has submitted to the Authority the
original purchase agreement whereby it acquired the Redevelopment Property and invoices
for the Site Improvements along with a certification signed by the Redeveloper's project
architect to the effect that the costs for which payment was made have been incurred in
connection with construction documents previously reviewed by the Authority. The
Redeveloper shall also provide lien waivers from the contractors, subcontractors and /or
construction managers for the Site Improvements. The Authority shall indicate its
acceptance of the amounts for the Note, assuming the conditions of this section have been
complied with and there is no Event of Default, when it issues a Certificate of Completion in
accordance with Section 4.3.
Section 3.3 Conditions Precedent to Authority Note. The Authority's obligation to
provide the Note in accordance with Section 3.1 shall be contingent upon the satisfaction
by the Redeveloper of the following conditions precedent:
(a) The Redeveloper shall be in material compliance with all of the terms and
provisions of this Agreement.
(b) The Redeveloper shall have received a Certificate of Completion from the
Authority, pursuant to Section 4.3 of this Agreement.
(c) The Redeveloper shall have delivered to the Authority the documents
required by Section 3.2 (b) above.
(d) There shall have been obtained from the City all special -use permits and
zoning approvals necessary for the construction of the Minimum Improvements.
(e) The Redeveloper shall be in compliance with all ordinances of the City.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements. The Redeveloper agrees that
it will construct the Minimum Improvements on the Redevelopment Property in accordance
with the Construction Plans approved by the City.
Section 4.2 Completion of Construction. Subject to Unavoidable Delays, the
Redeveloper shall achieve substantial completion of the construction of the Minimum
Improvements by December 31, 2008. All work with respect to the Minimum Improvements
to be constructed or provided by the Redeveloper on the Redevelopment Property shall be
in conformity with the Construction Plans.
The Redeveloper agrees for itself, its successors and assigns, and every successor
in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and
such successors and assigns, shall diligently prosecute to completion the development of
the Redevelopment Property through the construction of the Minimum Improvements
thereon, and that such construction shall in any event be completed within the period
specified in this Section 4.2 of this Agreement.
Section 4.3 Certificate of Completion.
(a) Promptly after substantial completion of the Minimum Improvements in
accordance with those provisions of the Agreement relating to the obligations of the
Redeveloper to construct the Minimum Improvements (including the date for completion
thereof), the Authority will furnish the Redeveloper with an appropriate instrument so
certifying. Such certification by the Authority shall be (and it shall be so provided in the
certification itself) a conclusive determination of satisfaction and termination of the
agreements and covenants in the Agreement with respect to the obligations of the
Redeveloper, and its successors and assigns, to construct the Minimum Improvements and
the date for the completion thereof.
(b) If the Authority shall refuse or fail to provide any certification in accordance
with the provisions of this Section 4.3 of this Agreement, the Authority shall, within ten (10)
days after written request by the Redeveloper, provide the Redeveloper with a written
statement, indicating in adequate detail in what respects the Redeveloper has failed to
complete the Minimum Improvements in accordance with the provisions of the Agreement,
or is otherwise in default, and what measures or acts it will be necessary, in the opinion of
the Authority, for the Redeveloper to take or perform in order to obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be
substantially completed when the Redeveloper has received an occupancy permit from the
City's building inspector, which permit shall not be unreasonably withheld.
10
ARTICLE V
Events of Default
Section 5.1 Events of Default Defined. The following shall be "Events of Default"
under this Agreement and the term "Event of Default" shall mean whenever it is used in this
Agreement any one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem real property taxes
assessed with respect.to the Redevelopment Property.
(b) Failure by the Redeveloper to complete the Minimum Improvements pursuant
to the terms, conditions and limitations of this Agreement.
(c) Failure by the Redeveloper to submit to the Authority the documents required
by Section 3.2(b) of this Agreement prior to the issuance by the Authority of a Certificate of
Completion or December 31, 2008, whichever occurs earlier.
(d) Failure by the Redeveloper to substantially observe or perform any other
covenant, condition, obligation or agreement on its part to be observed or performed under
this Agreement.
(e) If the Redeveloper shall
(A) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act of 1978, as amended or under any similar federal or state
law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they become
due; or
(D) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Redeveloper, as bankrupt or its reorganization
under any present or future federal bankruptcy act or any similar federal or state law
shall be filed in any court and such petition or answer shall not be discharged or
denied within ninety (90) days after the filing thereof; or a receiver, trustee or
liquidator of the Redeveloper, or of the Minimum Improvements, or part thereof,
shall be appointed in any proceeding brought against the Redeveloper, and shall not
be discharged within ninety (90) days after such appointment, or if the Redeveloper
shall consent to or acquiesce in such appointment.
11
Section 5.2 Remedies on Default. Whenever any Event of Default referred to in
Section 5.1 occurs and is continuing, the Authority, as specified below, may take any one or
more of the following actions after providing thirty (30) days' written notice to the
Redeveloper, but only if the Event of Default has not been cured within said thirty (30)
days.
(a) The Authority may suspend its performance under this Agreement until it
receives assurances from the Redeveloper, deemed adequate by the Authority, that the
Redeveloper has cured its default and will continue its performance under this Agreement.
(b) The Authority may cancel and rescind the Agreement.
(c) Withhold the Certificate of Completion.
Section 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to
the Authority is intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be deemed
expedient.
Section 5.4 No Implied Waiver. In the event any agreement contained in this
Agreement should be breached by any party and thereafter waived by any other party,
such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other concurrent, previous or subsequent breach hereunder.
Section 5.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event
of Default occurs and the Authority shall employ attorneys or incur other expenses for the
collection of payments due or to become due or for the enforcement or performance or
observance of any obligation or agreement on the part of the Redeveloper herein
contained, the Redeveloper agrees that it shall, on demand therefor, pay to the Authority
the reasonable fees of such attorneys and such other expenses so incurred by the
Authority.
12
ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment. The Redeveloper represents and
agrees that its purchase of the. Redevelopment Property, and its other undertakings
pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the
Redevelopment Property and not for speculation in land holding. The Redeveloper further
recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment
Property to the general welfare of the Authority, and (b) the substantial financing that has
been made available by the Authority for the purpose of making such redevelopment
possible, the qualifications and identity of the Redeveloper are of particular concern to the
Authority. The Redeveloper further recognizes that it is because of such qualifications and
identity that the Authority is entering into this Agreement with the Redeveloper, and, in so
doing, is further willing to accept and rely on the obligations of the Redeveloper for the
faithful performance of all undertakings and covenants hereby by it to be performed.
Section 6.2 Prohibition Against Transfer of Property and Assignment of Agreement.
Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the
date of the issuance of the Certificate of completion., except for the purpose of obtaining
financing necessary to enable the Redeveloper or any successor in interest to the
Redevelopment Property, or any part thereof, to perform its obligations with respect to
making the Minimum Improvements under this Agreement, and any other purpose
authorized by this Agreement, the Redeveloper has not made or created and will not make
or create or suffer to be made or created any total or partial sale, assignment, conveyance,
or lease, or any trust or power, or transfer in any other mode or form of or with respect to
this Agreement or the Redevelopment Property or any part thereof or any interest therein,
or any contract or agreement to do any of the same, without the prior written approval of
the Authority which shall not be unreasonably withheld, unless the Redeveloper remains
liable and bound by this Redevelopment Agreement in which event the Authority's approval
is not required. Any such transfer shall be subject to the provisions of this Agreement.
Notwithstanding the foregoing, the Redeveloper may transfer the Redevelopment Property
to any corporation, partnership or entity controlling, controlled by, or under common control
with the Redeveloper.
Section 6.3 Assignment of Note. The Redeveloper may assign and pledge the Note
to secure any construction loan and may transfer the Note to any entity controlling,
controlled by or under common control with the Redeveloper. Otherwise, no Note shall be
assignable nor transferable without the prior written consent of the Authority; provided,
however, that such consent shall not be unreasonably withheld or delayed if: (a) the
assignee or transferee delivers to the Authority a written instrument acknowledging the
limited nature of the Authority's payment obligations under the Note, and (b) the assignee
or transferee executes and delivers to the Authority a certificate, in form and substance
satisfactory to the Authority, pursuant to which, among other things, such assignee or
13
transferee represents that (i) the Note is being acquired for investment for such assignee's
or transferee's own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, (ii) the assignee or transferee has no present intention of
selling, granting any participation in, or otherwise distributing the same, (iii) the assignee or
transferee is an "accredited investor" within the meaning of Rule 501 of Regulation D under
the Securities Act of 1933, as amended, (iv) the assignee or transferee, either alone or with
such assignee's or transferee's representatives, has knowledge and experience in financial
and business matters and is capable of evaluating the merits and risks of the prospective
investment in the Note and the assignee or transferee is able to bear the economic
consequences thereof, (v) in making its decision to acquire the Note, the assignee or
transferee has relied upon independent investigations and, to the extent believed by such
assignee or transferee to be appropriate, the assignee's or transferee's representatives,
including its own professional, tax and other advisors, and has not relied upon any
representation or warranty from the Authority or the City, or any of their officers,
employees, agents, affiliates or representatives with respect to the value of the Note, (vi)
neither the Authority nor the City has made any warranty, acknowledgment or covenant, in
writing or otherwise, to the assignee or transferee regarding the tax consequences, if any,
of the acquisition and investment in the Note, (vii) the assignee or transferee or its
representatives have been given a full opportunity to examine all documents and to ask
questions of, and to receive answers from, the Authority and its representatives concerning
the terms of the Note and such other information as the assignee or transferee desires in
order to evaluate the acquisition of and investment in the Note, and all such questions have
been answered to the full satisfaction of the assignee or transferee, (viii) the assignee or
transferee has evaluated the merits and risks of investment in the Note and has determined
that the Note is a suitable investment for the assignee or transferee in light of such party's
overall financial condition and prospects, (ix) the Note will be characterized as a "restricted
security" under the federal securities laws because the Note is being acquired in a
transaction not involving a public offering and that under such laws and applicable
regulations such security may not be resold without registration under the Securities Act of
1933, as amended, except in certain limited circumstances, and (x) no market for the Note
exists or is intended to be developed.
14
ARTICLE VII
Additional Provisions
Section 7.1 Conflict of Interests. No member, official, or employee of the Authority
shall have any personal interest, direct or indirect, in the Agreement, nor shall any such
member, official or employee participate in any decision relating to the Agreement which
affects his personal interests or the interests of any corporation, partnership, or association
in which he is, directly or indirectly, interested.
Section 7.2 Restrictions on Use. The Redeveloper shall not discriminate upon the
basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or
occupancy of the Redevelopment Property or any improvements erected or to be erected
thereon, or any part thereof.
Section 7.3 Titles of Articles and Sections. Any titles of the several parts, Articles
and Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under this Agreement by either
party to the other shall be sufficiently given or delivered if it is dispatched by registered or
certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered
by a recognized overnight courier or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
mailing or delivery address the Redeveloper will, from time to time, furnish to the Authority.
The Redeveloper's current address is as follows:
Industrial Equities, LLP
321 First Avenue North
Minneapolis, Minnesota 55401
Attn: John N. Allen
15
(b) in the case of the Authority, is addressed to or delivered personally to:
Housing and Redevelopment Authority
in and for the City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
Attention: Executive Director
Section 7.5 Indemnification of Authority.
(1) The Redeveloper releases from and covenants and agrees that the Authority,
the City and its governing body members, officers, agents, including the independent
contractors, consultants and legal counsel, servants and employees thereof (hereinafter,
for purposes of this Section, collectively the Indemnified Parties) shall not be liable for and
agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage
to property or any injury to or death of any person occurring at or about or resulting from
any defect in the Minimum Improvements or the Redevelopment Property.
(2) Except for any willful misrepresentation or any willful or wanton misconduct of
the Indemnified Parties, the Redeveloper agrees to protect and defend the Indemnified
Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim,
demand, suit, action or other proceeding whatsoever by any person or entity whatsoever
arising or purportedly arising from the actions or inactions of the Redeveloper (or of other
persons acting on its behalf or under its direction or control) under this Agreement, or the
acquisition, construction, installation, ownership, and operation of the Minimum
Improvements or the Redevelopment Property; provided, that this indemnification shall not
apply to the warranties made or obligations undertaken by the Authority in this Agreement.
(3) All covenants, stipulations, promises, agreements and obligations of the
Authority contained herein shall be deemed to be the covenants, stipulations, promises,
agreements and obligations of the Authority and not of any governing body member,
officer, agent, servant or employee of the Authority.
Section 7.6 Counterparts. This Agreement is executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 7.7 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
Section 7.8 Expiration. This Agreement shall expire when the Note is paid in full.
Section 7.9 Provisions Surviving Rescission or Expiration. Sections 5.5 and 7.5
shall survive any rescission, termination or expiration of this Agreement with respect to or
arising out of any event, occurrence or circumstance existing prior to the date thereof.
16
Section 7.10 Real Property Taxes. (a) Prior to the Termination Date, the
Redeveloper shall pay when due, prior to the attachment of penalty, all real property taxes
payable with respect to the Redevelopment Project.
17
ARTICLE VIII
Insurance
Section 8.1 Insurance. (a) The Redeveloper will provide and maintain at all times
during the process of constructing the Minimum Improvements and, from time to time at the
request of the Authority, furnish the Authority with proof of payment of premiums on:
(i) builder's risk insurance, written on the so- called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100 %) of the
insurable value of the Minimum Improvements at the date of completion, and with
coverage available in nonreporting form on the so- called "all risk" form of policy.
The interest of the Authority shall be protected in accordance with a clause in form
and content reasonably satisfactory to the Authority;
(ii) comprehensive general liability insurance together with an Owner's
Contractor's Policy with limits against bodily injury and property damage of not less
than $2,000,000 for each occurrence (to accomplish the above - required limits, an
umbrella excess liability policy may be used); and
(iii) workers' compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to
the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost
and expense, and from time to time at the request of the Authority shall furnish proof of the
payment of premiums on, insurance as follows:
(i) Insurance against loss and /or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar
businesses, including (without limiting the generality of the foregoing) fire, extended
coverage, vandalism and malicious mischief, boiler explosion, water damage,
demolition cost, debris removal, and collapse in an amount not less than the full
insurable replacement value of such improvements, but any such policy may have a
deductible amount of not more than $25,000.00. No policy of insurance shall be so
written that the proceeds thereof will produce less than the minimum coverage required
by the preceding sentence, by reason of co- insurance provisions or otherwise, without
the prior consent thereto in writing by the Authority. The term "full insurable
replacement value" shall mean the actual replacement cost of the Minimum
Improvements (excluding foundation and excavation costs and costs of underground
flues, pipes, drains and other uninsurable items) and equipment, and may be
determined from time to time at the request of the Authority, but not more frequently
than once every five years, by an insurance consultant or insurer, selected and paid for
and approved by the Authority. All policies evidencing insurance required by this
subparagraph (i) with respect to the Minimum Improvements shall be carried in the
18
names of the Redeveloper, the Redeveloper's Mortgagee and the Authority as their
respective interests may appear and shall contain standard clauses which provide for
net proceeds (the amount remaining after the deduction of expenses incurred in the
collection of such proceeds, the "Net Proceeds ") of insurance resulting from claims per
casualty thereunder to the Minimum Improvements which are equal to or less than
$750,000.00 for loss or damage covered thereby to be made payable directly to the
Redeveloper and /or its Mortgagee, and Net Proceeds from such claims in excess of
$750,000.00 to be made payable jointly to the Redeveloper, its Mortgagee and the
Authority. The Authority, the Redeveloper and its mortgagee shall jointly agree on the
amount of settlement.
(ii) Comprehensive general pubic liability insurance, including personal
injury liability, against liability for injuries to persons and /or property, in the minimum
amount for each occurrence and for each year of $2,000,000.00, and shall be
endorsed to show the Authority as additional insured.
(c) All insurance required in Article IX of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Redeveloper which are
authorized under the laws of the State to assume the risks covered thereby. The
Redeveloper will deposit annually with the Authority policies evidencing all such insurance,
or a certificate or certificates or binders of the respective insurers stating that such
insurance is in force and effect. Unless otherwise provided in this Article IX of this
Agreement each policy shall contain a provision that the insurer shall not cancel nor modify
it without giving written notice to the Redeveloper and the Authority at least thirty (30) days
before the cancellation or modification becomes effective. Not less than fifteen (15) days
prior to the expiration of any policy, the Redeveloper shall furnish the Authority evidence
satisfactory to the Authority that the policy has been renewed or replaced by another policy
conforming to the provisions of this Article IX of this Agreement, or that there is no
necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper
may maintain a single policy, blanket or umbrella policies, or a combination thereof, having
the coverage required herein, in which event the Redeveloper shall deposit* with the
Authority a certificate or certificates of the respective insurers as to the amount of coverage
in force upon the Minimum Improvements.
(d) The Redeveloper agrees to notify the Authority immediately in the case of
damage exceeding $100,000.00 in amount to, or destruction of, the Minimum
Improvements or any portion thereof resulting from fire or other casualty. In the event that
any such damage does not exceed $750,000.00, the Redeveloper will forthwith repair,
reconstruct and restore the Minimum Improvements to substantially the same or an
improved condition or value as it existed prior to the event causing such damage and, to
the extent necessary to accomplish such repair, insurance relating to such damage
received by the Redeveloper shall be applied to the payment or reimbursement of the costs
thereof. Net Proceeds of any insurance relating to such damage up to $750,000.00 shall
be paid directly to the Redeveloper.
19
In the event the Minimum Improvements or any portion thereof are destroyed by fire
or other casualty and the damage or destruction is estimated to equal or exceed
$750,000.00, then the Redeveloper within one hundred and twenty (120) days after such
damage or destruction, shall proceed forthwith to repair, reconstruct and restore the
damaged Minimum Improvements to substantially the same condition or utility value as
existed prior to the event causing such damage or destruction and, to the extent necessary
to accomplish such repair, reconstruction and restoration, the Redeveloper, its Mortgagee
and the Authority will apply the Net Proceeds of any insurance relating to such damage or
destruction received by its Mortgagee and the Authority to the payment or reimbursement
of the costs thereof. Any Net Proceeds remaining after completion of construction shall be
disbursed to the Redeveloper.
(e) If the Redeveloper is in compliance with the terms and conditions of this
Agreement, then any Net Proceeds of insurance relating to such damage or destruction
received by the Authority shall be released from time to time by the Authority to the
Redeveloper upon the receipt of:
(i) A certificate of an authorized representative of the Redeveloper
specifying the expenditures made or to be made or the indebtedness incurred in
connection with such repair, reconstruction and restoration and stating that such Net
Proceeds, together with any other moneys legally available for such purposes, will
be sufficient to complete such repair, construction and restoration; and
(ii) If Net Proceeds equal or exceed $750,000.00 in amount, the written
approval of such certificate by an independent engineer.
The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum
Improvements, whether or not the Net Proceeds of insurance received by the Redeveloper
for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after
completion of such repairs, construction and restoration shall be remitted to the
Redeveloper.
Section 8.2 Subordination. Notwithstanding anything to the contrary contained
herein, the rights of the Authority with respect to the receipt and application of the proceeds
of insurance shall be subject to and subordinate to the rights of any holder of any Mortgage
with respect to the Redevelopment Property as of the date hereof or any Mortgage which is
permitted by this Agreement.
20
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly
executed in its name and behalf and the Redeveloper has caused this Agreement to be
duly executed as of the date first above written.
21
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
And by
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
Its Chairman
Its Executive Director
On this day of , 20_ before me, a notary public within and
for Anoka County, personally appeared and
to me personally known who by me duly sworn, did say that
they are the Chairman and Executive Director of the Housing and Redevelopment Authority
in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota,
and acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page - Redevelopment Contract
22
Dated:
INDUSTRIAL EQUITIES, LLP
STATE OF MINNESOTA )
ss
COUNTY OF )
Its
On this day of , 20_ before me, a notary public within and
for County, personally appeared
the of Industrial Equities,
LLP, a Minnesota limited liability partnership, and acknowledged the foregoing instrument
on behalf of said partnership.
Notary Public
Redeveloper Signature Page - Redevelopment Contract
SCHEDULE A
23
DESCRIPTION OF REDEVELOPMENT PROPERTY
PIN 27- 30 -24 -14 -0003 and a portion of PIN 34- 30 -24 -43 -0018
and all easements, rights -of -way and adjacent roads and streets
24
SCHEDULE B
SITE IMPROVEMENTS
Land acquisition of parcel containing the railroad spur
Building demolition and removal
Removal of railroad spur
Removal of old tornado debris buried on site
Import of clean fill to level site
Removal of asbestos pipe
Environmental studies, analysis and remediation not reimbursed by grants
Administration costs related to the above
Any interest costs paid for Site Improvements to unrelated parties
Fees paid to the Authority
25
SCHEDULE C
CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota, a Minnesota municipal corporation (the "Authority ") and Industrial
Equities, LLP, a Minnesota limited liability partnership (the "Redeveloper ") have entered
into a Contract for Private Redevelopment (the "Agreement ") dated as of March , 20_,
regarding certain real property located in Tax Increment Financing District No. 19 in the City
(hereinafter referred to and referred to in the Agreement as the "Redevelopment Property ");
and
WHEREAS, the Agreement contains certain conditions and provisions
requiring the Redeveloper to construct improvements upon the Redevelopment Property
(hereinafter referred to and referred to in the Agreement as the "Minimum Improvements ");
and
WHEREAS, Section 4.3 of the Agreement requires the Authority to provide an
appropriate instrument promptly after the substantial completion (as defined in the
Agreement) of the Minimum Improvements so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.3 of the Agreement,
this is to certify that the Redeveloper has substantially completed the Minimum
Improvements in accordance with the conditions and provisions of the Agreement relating
solely to the obligations of the Redeveloper to construct the Minimum Improvements
(including the dates for beginning and completion thereof), and this certification shall be a
conclusive determination of satisfaction and termination of the agreements and covenants
in the Agreement with respect to the obligations of the Redeveloper, and its successors and
assigns, to construct the Minimum Improvements and the dates for the beginning and
completion thereof.
Dated: , 20
26
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
On this day of , 20_ before me, a notary public
within and for Anoka County, personally appeared and
to me personally known who by me duly sworn, did say that
they are the Chairman and Executive Director of the Housing and Redevelopment Authority
in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota,
and acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page C Certificate of Completion
SCHEDULE D
27
NOTE
US $1,500,000.00
Fridley, Minnesota
, 20_
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF FRIDLEY, MINNESOTA
LIMITED REVENUE TAX INCREMENT NOTE
The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota
(the "Authority "), hereby acknowledges itself to be indebted and, for value received,
promises to pay to the order of Industrial Equities, LLC, a limited liability company (the
"Owner "), solely from the source, to the extent and in the manner hereinafter provided, the
principal amount of this Note, being One Million Five Hundred Thousand Dollars and
00/100 ($1,500,000.00) (the "Principal Amount "), together with interest of seven percent
(7.00 %) commencing from the date of issuance of the Note and payable on the dates
described below (the "Scheduled Payment Dates ") and in the amounts as hereinafter
defined (the "Scheduled Payments ").
The Scheduled Payment Dates are August 1, 2009, and on the 1 st day of February
and August thereafter until and including February 1, 2025, unless earlier paid, in
accordance with the terms of this Note.
Upon 30 days' prior written notice from the Authority to the Owner, the Principal
Amount is subject to prepayment at the option of the Authority in whole or in part at any
time.
Any payments on this Note shall be applied first to accrued interest and the balance
to the reduction of principal.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and
shall be made by check or draft made payable to the Owner and mailed to the Owner at its
postal address within the United States which shall be designated from time to time by the
Owner.
28
The Note is a special and limited obligation and not a general obligation of the
Authority, which has been issued by the Authority pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section
469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority
consisting generally of defraying certain public redevelopment costs incurred and to be
incurred by the Authority within and for the benefit of its Redevelopment Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY, THE CITY
OF FRIDLEY (THE "CITY ") OR THE STATE OF MINNESOTA (THE "STATE "), AND
NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL
SUBDIVISION THEREOF SHALL DS OR PROPERTIES OTHER THAN AVAILABLE
PAYABLE OUT OF ANY FUN L TAX
INCREMENT, AS DEFINED BELOW.
The Scheduled Payment of this Note due on any Scheduled Payment Date is
payable solely from and only to the extent that the Authority shall have received as of such
Scheduled Payment Date the Available Tax Increment which is defined in the Contract for
Private Redevelopment By and Between the Authority and the Owner dated as of February
_, 2007.
The Authority shall pay on each Scheduled Payment Date to the Owner the
Available Tax Increment. On February 1, 2025, the maturity date of this Note, any unpaid
portion shall be deemed to have been paid in full.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to
have obligated itself to pay hereon from any funds except the available Tax Increments,
and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise
of any taxing power of the Authority or of any other public body, and neither the Authority
nor any director, commissioner, council member, board member, officer, employee or agent
of the Authority, nor any person executing or registering this Note shall be liable personally
hereon by reason of the issuance or registration hereof or otherwise.
The Authority makes no representation or covenant, express or implied, that the
revenues described herein will be sufficient to pay, in whole or in part, the amounts which
are or may otherwise become due and payable hereunder.
The Authority's payment obligations hereunder shall be further conditioned on the
fact that there shall not at the time have occurred and be continuing an Event of Default
under the Agreement, and, further, if pursuant to the occurrence of an Event of Default
under the Agreement the Authority elects to terminate the Agreement, the Authority shall
have no further debt or obligation under this Note whatsoever. Reference is hereby made
to the provisions of the Agreement for a fuller statement of the obligations of the
29
Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby
incorporated by reference into this Note to the same extent as though set out in full herein.
The execution and delivery of this Note by the Authority, and the acceptance thereof by the
Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note
as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to
issue and deliver the same to the Redeveloper) under the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have
happened, and to be performed precedent to and in the issuance of this Note have been
done, have happened, and have been performed in regular and due form, time, and
manner as required by law; and that this Note, together with all other indebtedness of the
Authority outstanding on the date hereof and on the date of its actual issuance and
delivery, does not cause the indebtedness of the Authority to exceed any constitutional or
statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, by its Commission
Members, has caused this Note to be executed by the manual signatures of the President
and the Treasurer of the Authority and has caused this Note to be dated
, 200_.
By
Its President
ATTEST:
Secretary
30
By
Its
Treasurer
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued as of the day
of , 200_, was on said date registered in the name of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate
and politic and that, at the request of said Registered Owner of this Note, the undersigned
has this day registered this Note as to principal and interest on the Note in the name of
such Registered Owner, as indicated in the registration blank below, on the books kept by
the undersigned for such purposes.
Name of Date of
Registered Owner Registration
Industrial Equities, LLC, , 200_,
a limited liability company
G . \WPDATA\F\FRIDLEY\70\DOC\CLEAN 1 -24-07 CONTRACf.DOC
31
Signature of
Secretary
Page 1
'dog 1000 Sf.r
-0 6141FIAIV�-4
OF FRIDLEY
ACSI
I
+
-
i I
i
I
Area
of Parcel
2005 EMV I Pay 2006
Original Market Values jPIN
#
Owner
(Acres)
(Sq. Feet))
Landj
Building'
Total ':
{27-
j
1 i 51101 Main Street NE
2 JBNS F railroad (
30-24- 14-0003
API Supply Co.
Railroad BNSF
10.33
2.08
449,849
90,593
1,034,700
208,373
1,215,300
2,250,000
208,373
0
4 Totals
j
12.41
540,442
$ 1,243,073
$1,215,300
$ 2,458,373
2.30
per sq. ft
i
*
Pay 2806 MV based on new Tax Petition Settlement
Original Tax Capacity j
% of new ETC
I
Class Rate
49,167
Commercial/ Retail
100.0%
2,458,373
@
2.00% =
49,167
{
Rental
0.0%
0
@
1.25% =
0
I OtvnerOccupied
0.0 %j
0
@
1.00% =
0
100.0%
2,458,373
iPhase 1 , j
YEAR
Estimated Market Value
Built - 2007
202,880
sq. ft. @
$50.00
per sq. ft. _
$10,144,000
jEstimated Tax Capacity
jEstimated Taxes
1 Estimated Tax Increment j
2008
2009 j
j
j
202,880
202,880
sq. ft @
sq. ft @
$1.51
$0.69
per sq. ft =
per sq. ft. =
202,880
306,416
139,471
1 45.5%
of total taxes
3
I
?Phase 2 (combined)
Estimated Market Value
Built - 2008
202,880
sq. ft @
50.00
persq. ft. =
10,144,000
jEstimated Tax Capacity 1
2009
202,880
Estimated Taxes
'Estimated Tax Increment
2010 1
202,880
202,880
sq. ft @
sq. ft @
1.51
0.69 I
1per sq. R =
per sq. ft =
306,416
139,471
45.5%
of Total taxes
I
j
1 i Phase 3 (combined)
Estimated Market Value
Built - 2009
(
202,880
sq. ft @
50.00
1
per sq. ft =
10,144,000
4.1
times incr. in MV';
L {Estimated Tax Capacity
Estimated Taxes
2010
2011
j 202,880 Isq.
ft. @
1.51
per sq. ft =
202,880
306,416
Estimated Tax Increment
202,880
sq. ft @
0.69
per sq. ft. =
139,471
45.5%
of total taxes
jBulidable Area
j
540,442.0
sq. ft
(Coverage
37.5%
F.A.R.
`
Local Tax Rate -
jPay 2006
ISD #13; 6 City WS
I 0.91063
jState Tax Rate - jPay 2006
E_ ff. Incr, on local tax rate for taxes at F.D. rate
0.50827
i 0.09143
(C /I only)
j
Combined Tax Rate - C/I Property Only
1.51033
*
used for tax increment calculations
FLI-
;Adman Fees
10.00%
j
;State Auditor Fee
j 0.360%
� nflation , (after 2 yrs of full value)
+Present Value Rate 12/1/20061
2.50 %�
7.00%
I I
I
Industrial Equities 3.xis Prepared by Kress Monroe, P.A. 10/3/2006
CITY OF FRIDLEY
eAAn 1111 min S4 KIP i
p CASH FLOW AND PRESENT
VALUE
ANALYSIS
<
(a)
ANNUAL
(b) I (c)
Original Estimated
Tax Tax 1
Capacity Capacity
see assum bons
2.5% Inflation (prev.
> <
(d)
Captured
Tax
Capacity
c - b
year)
- SEMI -ANNUAL
(9)
Available Cumulative
Tax
Increment
e -
(h)
Avail. Tax
Increment
Total of (g
>
(i) Q)
<-- Present Value ->
Semi Annual Cumulative
Balance Balance
P.V. of (g) Total of i
7.00% 12101106
(e)
Est. T.I. I
d x
0.91063 1
St. Aud. Fe
0.360%
M
Less:
Admin
Fees
e x
10.00%
I
Date
j
1
49,167 49,167 0 1 0 0 0 0
49,167 49,167 0 0 0 0 0
49,167 49,167 1 0 0 0 0 0 Q
49,1671 49,167 0 0 0 I 0 0 0
49,167 202,880 0 0; O 1 0 0 0
49,167 202,880 ` 0 0 1 0 0 0 0
49,167 202,880 1 153,713 69,736 6,974 62,762 62,762 52,$44
49,167 ' 202,880 153,713 69,736 6,974 62,762 125,524 51,057
49,167 { 202,880 153,713 69,736 6,974 62,762 188,286 1 49,330
49,167 202,880 1 153,713 69,736 6,974 62,762 251,048 47,662
49,1671 207,952 153,713 69,736 6,974 62,762 313,810 46,050
49,1671 207,952 153,713 69,736 6,974 62,762 376,573 44,493
49,167 j 213,151 158,785 72,037 7,204 64,833 441,406 44,407 j
49,167 213,151 158,785 72,037 7,204 64,833 506,239 42,905
49,167 218,4801 163,983 74,395 7,440 66,956 1 573,194 42,812
49,167 , 218,4801 163,983 74,395 7,440 66,956 640,150 41,364
49,167 i 223,942 169,312 76,813 7,681 69,132 709,282 41,264
49,167 1 223,942 169,312 76,813 7,681 69,132 778,413 39,869
49,167 1 229,540 1 174,774 79,291 7,929 71,362 849,775 39,763
49,167 1 229,540 174,774 79,291 7,929 71,362 921,137 38,418
49,167 j 235,279 180,373 81,831 8,183 73,648 994,784 38,308
49,1671 235,2791 180,373 81,831 8,183 73,648 1,068,432 37,013
49,167 , 241,161 1 186,111 84,434 8,443 75,991 1,144,423 36,899
49,167 241,161 186,111 84,434 8,443 75,991 1,220,413 35,651
49,167 247,190 . 191,993 87,103 8,710 78,392 1,298,806 35,534
49,167 247,190 1 191,993 87,103 8,710 78,392 1,377,198 34,332
49,167 253,3691 198,022 d%ts 8,984 80,854 1,458,052 34,213
49,167 253,369 198,022 89,838 8,984 80,854 1,538,906 33,056
49,167 259,704 204,202 92,641 9,264 83,377 1,622,284 32,935
49,167 259,704 204,202 92,641 9,264 83,377 1,705,661 31,821
49,167 266,196 • 210,536 95,515 9,552 85,964 1,791,624 31,699
49,167 266,196 210,536 95,515 9,552 85,964 1,877,588 30,627
49,167 1 272,851 ' 217,029 98,461 9,846 88,615 1,966,203 30,504
49,167 272,851 217,029 98,461 9,846 88,615 2,054,817 29,472
49,167 1 279,672 223,684 101,480 10,148 91,332 2,146,149 29,349
49,167 279,672 223,684 101,480 10,148 91,332 2,237,481 28,356
49,167 ' 286,664 1 230,505 104,574 10,457 94,117 2,331,598 28,233
49,167 286,664 1 230,505 104,574 10,457 94,117 2,425,715 27,278
49,167 293,831 237,497 107,747 10,775 96,972 2,522,687 27,155
' 49,167 293,831 237,497 107,747 10,775 96,972 2,619,659 26,237
49,167 301,177 244,663 110,998 11,100 99,898 2,719,557 26,115
49,167 301,1771 244,663 110,998 11,100 99,898 2,819,455 25,231
49,167 308,706 252,009 114,330 11,433 102,897 2,922,352 25,11Q
49,167 308,706 252,009 114,330 11,433 102,897 3,025,250 24,261
49,167 316,424 259,538 117,746 11,775 105,972 3,131,221 24,141
49,167 316,424 259,538 117,746 11,775 105,972 3,237,1931 23,325
491167 324,334 267,256 121,248 12,125 109;123 3,346,316 23,206
49,167 324,334 267,256 121,248 12,125 109,123 3,455,439 22,421
49,167 332,443 275,167 124,836 12,484 112,353 3,567,792 22,304
49,167 , 332,443 275,167 124,836 12,484 112,353 1 3,680,144 21,550
49,1671 340,754 283,275 128,515 12,852 115,664 3,795,808 21,435
49,167 340,754 283,275 128,515 12,852 115,664 3,911,472 20,710
49,167 349,272 291,586 132,286 13,229 119,057 4,030,529 i 20,597
49,167 349,272 1 291,586 1 132,286 13,229 119,057 4,149,586 19,900
49,167 358,004 300,105 136,150 I 13,615 I 122,535 4,272,121 19,789
49,167 358,004 300,105 136,150 13,6151 122,535 4,394,656 19,120
of
01
0
01
0
1
M
378,750
421,562
462,926
504,190
544,058
583,821
622,240
660,548
697,561
734,460 f
770,111 {
805,645 !
839,977
874,191
907,247
940,182
972,003
1 1,003,702
1,034,329
1,064,833
1,094,305
1,123,654 1
1,152,010
1,180,243
1,207,521
1,234,677
1 1,260,914
1,287,028
1,312,260
1,337,370
1,361,631
1,385,772
1,409,096
1,432,3 02
1,454,724
1,477,028
1,498,578
1,520,013!
1,540,723
1,561,319
1,581,220
1,601,008
1,620,128
06/01/06 ;
12101!06
1
06/01/07 {
12/01/07
1
06/01/08
12/01106 i
2 r
115 111,
12/01/09
3 (06/01/10
12/01/10
41
06!01!11
12/01/11 1
5
06/01/12
12/01/12
61
06/01/131
12/01/13 1
7
06!01/14
12!01!14 {
8
1 06/01/15
12/01/15
-9
06/01/16
i 10
12/01/16
; 06/01/17
12/01/17
11
06/01/18
12/01/18
121
06/01/191
12/01!19
13
06/01/20
12/01!20
.141
06/01/21
1 12101/21
15 • 06/01122
12/01/22
16 i 06!01123
i 12!01!23
17 ' 06!01124
(12!01124
181 06/01/25
12!01!25
191 06/01126
12!01/26
20 06/01127
12!01!27
211 06/01/28
12/01/28
22 1 06/01/29
12!01/29
23 06/01/30
12/01/30
24 06/01131
12/01/31
25 i 06/01/32
12/01/32
26 06!01/33
1 12/01!33
"
1,620,1281
1
4,882,951
1488,295
14,394,656
4,394,656
1,620,128
Industrial Equities 3.xis Prepared by Krass Monroe, P.A.
Memorandum
Planning Division
DATE: January 26, 2007
TO: Fridley Housing and Redevelopment Authority
FROM: Scott Hickok, Community Development Director
Paul Bolin, Asst. Director to the HRA
Julie Jones, Planning Manager
SUBJECT: Hiring a summer intern to conduct a housing condition assessment
Background
As we have begun gathering data to update Fridley's Comprehensive Plan, we have discovered that 95%
of Fridley's housing stock will be 30 years old or older by 2009. Knowing that many major components
(roof, siding, and windows) of a home need to be replaced before a home is 30 years old, this statistic
raises concern. In addition, the debate about whether or not the City Council should implement a housing
maintenance code in Fridley is expected to arise again this year. It is very possible, however, that Fridley
homeowners are doing a good job of maintaining their homes. Although homes are regularly assessed by
the City, no database exists regarding exterior home condition.
During the last comprehensive planning process, a consultant was hired to complete a housing condition
survey. Staff proposes that the best way to gather data on current housing conditions in Fridley is to
complete this process again. However, this time, staff recommends that we hire a summer intern as a
temporary summer City employee. This would allow staff to more closely monitor the work in progress
and offer a college student some valuable summer training.
Staff anticipates the cost of a summer intern to be $9,000. This cost would include salary and mileage (or
fuel and maintenance costs using a retired police vehicle if one becomes available). No additional
equipment beyond what we have already budgeted is expected.
Very little funding is available in the City's 2007 budget to finance the cost of creating the City's 2030
Comprehensive Plan. A housing condition survey was not planned or budgeted. No funds dedicated for
other work in the plan are expected to remain unused.
Recommendation
Staff requests that the Fridley Housing and Redevelopment Authority consider financing the cost of a
housing condition survey over the 2007 summer as the HRA could use the information from the survey to
evaluate the focus of future housing programs in the City and as a measure to gauge the success of
housing programs since the 1996 housing condition survey was completed.
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MY OF
FRIDLEY
ACTION ITEM
HRA MEETING OF FEBRUARY 11 2007
Date: January 25, 2007
To: William Burns, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Gateway Northeast Property Purchases
In November 2006, staff received permission from the Authority to negotiate the
purchases of 6005 and 6041 University Avenue. Appraisals were completed by Lake
States Realty, offers were made based on the fair market values determined by the
appraisers and accepted by the two property owners. The HRA officially took
possession of 6005 University (Old Carquest Bldg) on January 18th , for the sum of
$395,000. The HRA is set to close on 6041 University (old Van -o -lite /Unplugged Cities)
on February 28th. Wilson Development Services is working with Unplugged Cities on
their relocation benefit package.
The HRA also authorized staff to investigate the purchase of the Tae Kwan Do Center
(to have control of the entire block), and to examine purchasing any other vacant
buildings in the area between Gateway West and 61St Avenue. Staff spoke with Master
Kim at the Tae Kwan Do Center who indicated that he would be a very willing seller, as
Fridley's aging population no longer provides the numbers of younger people that it did
when he first started. The owners of the vacant properties (Citgo, Oriental House, new
Van- o -lite) all indicated an interest in selling. The owner of the Sinclair station stated
that he wasn't interested in a sale at this time.
Lake States Realty conducted appraisals for the Tae Kwon Do Center and the three
vacant properties. Today they provided me with the market values they had determined
for these properties and will have the full appraisal reports to me prior to Thursday
night's meeting. The values for the properties are as follows:
Address / Building
Owner / Rep
FMV
Lake States Realty
City Assessor
Value
6061 Tae Kwon Do
Kim II Kuen
$275,000
$268,400
5865 Oriental House
Mei Lan
$300,000
$256,200
5945 Van- o -lite
Jason Sell
$615,000
$600,900
6101 Cit o
MDW Equity
$392,000
1 $279,300
The value for the Tae Kwon Do Center, Oriental House, and Van -o -lite closely mirror
the City Assessors' values for 2007. The appraisers' preliminary value for the Citgo
Station is somewhat higher, as there have been a rash of comparable older, run down,
vacant gas stations that have been selling in the $300 /sq. ft. (building) range.
Recommendation
Staff recommends that the Authority authorize staff to negotiate the purchase of the Tae
Kwon Do property in order to control the block between 60th & 61 st . Staff further
recommends that the HRA present offers to the Oriental House and Van -o -lite, while the
properties are vacant and require no relocation benefits be paid. Any negotiated terms
and agreements would be subject to Authority approval. Staff also recommends that
Chairman Commers be given the authority to execute any purchase agreements
matching the appraised values prior to the Authority's March meeting.
At this time, Staff recommends that we further investigate the feasibility of a purchase of
the Citgo site, as it may or may not play a role in the future development. Though it has
an impact on image, it is separated from the other properties by 61St Street and may not
be necessary for any future redevelopment.
INFORMATIONAL ITEM
ri HRA MEETING - FEBRUARY 1, 2007
CITY OF
FRUXEY
Date: January 25, 2007
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Corridor Housing Initiative
At the Authority's December meeting I gave a brief overview of an interesting planning
process known as the "Corridor Housing Initiative ". This Corridor Housing Initiative is a
proactive planning process that has the neighborhood working with the City, supported
by a team of technical experts. Gretchen Nicholls, of the Center for Neighborhoods, will
give a presentation on the Corridor Housing Initiative next Thursday night and provide
an opportunity for the Authority to gain an understanding of the process and ask
questions.
A brief flier about the Corridor Housing Initiative has been attached to this
memorandum. Staff has asked Gretchen Nicholls to discuss the initiative because it
may be a unique opportunity to plan for the Gateway Northeast area, or other future
redevelopment projects. Staff is not asking that you take any action at this time.
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INFORMATIONAL ITEM
ri HRA MEETING - FEBRUARY 1, 2007
CITY OF
FRIDLEY
Date: January 25, 2007
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Monthly Housing Update
The Center for Energy and Environment was not able to provide the monthly housing
report in time for inclusion in your packet. The information will be distributed prior to
next Thursday's meeting.
Staff gave a brief overview of the HRA's activities at the City Council's January 8th
meeting. Since that time, I've received 4 calls from residents requesting information
based on the brief presentation.
ri INFORMATIONAL ITEM
HRA MEETING - FEBRUARY 1, 2007
CrYOF
FRIDLEY
Date: January 25, 2007
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Sub'ect: Monthly Housing Update
The Center for Energy and Environment was not able to provide the monthly housing
report in time for inclusion in your packet. The information will be distributed prior to
next Thursday's meeting.
Staff gave a brief overview of the HRH's activities at the City Council's January 8th
meeting. Since that time, I've received 4 calls from residents requesting information
based on the brief presentation.
vokffm
FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY
February 1, 2007
P'\
1. Islands of Peace Update
What a difference 2 months can make. In your December update I had mentioned that Mr. Rudolph was
moving forward with his transformation of these apartment buildings. Since that time, Mr. Rudolph has
failed to meet the terms of his purchase for 151 Island Park Drive, 190 & 191 Island Park Drive, and
ownership has reverted to the previous owners. According to the Fire & Building Departments the
building at 151 Island Park Drive is "torn apart" and uninhabitable.
I will continue to keep you updated as things move (or don't) forward.
2. North Star Rail Station Site / JLT (Tim Industries)
The following update was taken from an article drafted by Dr. Burns for the upcoming City Newsletter.
The bulk of the information came from Jill Brown, spokesperson for the NCDA.
Although the design for the Fridley station has been put on hold pending the identification of
a funding source for the $10,000,000 Fridley station site, about 98% of the design work for
other portions of the project has been completed. This design work includes environmental
research that was required by the Federal Transit Administration (FTA). The design has
been submitted to the FTA for review. Upon completion of the FTA review in May, a funding
request will be submitted to Congress this summer. NCDA staff expects Congressional
approval and the issuance of a Full Funding Grant Agreement during the month of August.
The Fridley station site is not currently included in this funding request.
While there are still some unresolved details, negotiations between NCDA and BNSF are
mostly complete. The agreement with BNSF calls for twelve easements that allow
permanent access for twelve daily trains between Big Lake and Minneapolis during specific
rush hour time slots. It also calls for six trains each weekend day and allows for the future
negotiation of special event trains. The cost of these easements to NCDA is $107.5 million.
Although the agreement does not provide for a third rail to support Northstar traffic, there is
provision for the construction of a third rail in the future that would allow for the creation of
additional commuter rail trips. The project design incorporates this future possibility.
One of the unresolved issues between NCDA and BNSF concerns the Fridley station site.
We are told that BNSF would like to build the tunnel and the elevator shaft that supports the
station site at the same time that other Norhstar construction is undertaken. We've also been
told that BNSF wants to do the construction and is willing to finance at least part of the
construction costs. Since the eventual source of funding for these improvements remains
unknown, however, the inclusion of this construction in the final project plans is problematic.
Whether the exclusion of the tunnel and elevator shaft would permanently eliminate the
future construction of the Fridley station site is uncertain.
Although the future of the Fridley station site is uncertain, NCDA has begun the land
acquisition process for the site. The land along the East River Road portion of the site has
been acquired. While there have been some negotiations with the owner of land needed for
I
the station site on the east side of the BNSF tracks, NCDA has been unable to convince the
owner to sign a purchase agreement. NCDA has suspended efforts to acquire this land
pending the identification of a funding source for the Fridley station site. As the land
acquisition on the east side of the tracks has been suspended, so also has any further
consideration of the construction of a parking ramp and other transit related developments
on the east side of the tracks.
Although issues related to the Fridley station site have absorbed a lot of NCDA time, other
issues related to the Minneapolis end of the commuter rail system have also been
challenging for those working on the project. The complexity of these issues has been
increased by the need to coordinate Northstar development with the Hiawatha Light Rail
System and the construction of the new Minnesota Twins baseball stadium north of the
Target Center in downtown Minneapolis. Current areas of focus include relocation of existing
BNSF track, reconstruction of a bridge, and the construction of a commuter rail platform. The
details of these items must be coordinated with the construction of a Hiawatha Light Rail
track extension and the construction of a light rail station. The light rail and the commuter rail
facilities, which include elevators to the new Twins Stadium, must be built at the same time
as the new Twins stadium is under construction. The construction of rail facilities and the
stadium must also be coordinated with other private development that is being planned in
conjunction with the stadium.
One other aspect of the Northstar project is their 2007 legislative program. Here's what we
know. Northstar, in conjunction with the Metro Transit Development Board will be seeking
$750,000 that would enable preliminary engineering for Big Lake to St Cloud phase of the
Norhstar project. We also understand that the Metro Transit Development Board will be
seeking $5 million in funding for the Fridley station site. Additionally, they will be seeking
between $6 million and $7 million in sales tax exemptions for equipment and construction
costs associated with the Northstar project.
3. Home & Garden Show
Things have really fallen into place for this years show, now less than 1 month away. We are hopeful that
the weather cooperates to give us a record setting attendance. We have over 80 vendors and a number of
informative seminars planned.
The show is on Saturday February 24' from 9AM -2PM at the Schwann Center in Blaine. Come visit
Fridley staff in the "Resources Room ".
9th Annual North Metro
Home and Garden Show
Sponsored by the Cities of Fridley, Blaine, Mounds View & New Brighton
Saturday, February 24, 2007 - 9 am - 2 pm
National Sports Center's Schwan Center
1750 105th Avenue NE, Blaine, Minnesota
Silver Sponsor. CEE Financial Resources
Billboard advertising provided by Clear Channel Outdoor
E
Featuring informative seminars starting at 9:30, 11:00 and 12:30.
See web pages of sponsoring cities for specific topics and times.
New this year! Resource Center with "Ask the Pro" booths
staffed by Architects, Landscape Architects, Interior Designers
and Master Gardeners, plus a retaining wall demonstration!
Free Admission! Great Door Prizesi Resource Center!
4. Anoka County EDA
The minutes from the County Board's December 19' meeting recently became available on-line.
Commissioner Billings has officially been appointed to the exploratory committee. The following, taken
from the minutes, lists all of those appointed to the committee.
WHEREAS. the committee will be charged with making recommendations to the Anoka
County Board of Commissioners regarding the establishment of a county economic
development
authority within 90 days of its initial meeting:
NOW, THEREFORE, BE IT RESOLVED that the Anoka County Board of Commissioners
appoints the following persons to the Economic Development Authority Committee:
Greg Hunter, Mayor, East Bethel
Jim Scheffler, Town Supervisor, Burns
Steve Billings, Fridley Housing and Redevelopment Authority
Ron Wood, City Manager, Blaine
Marc Nevinski, Community Development Manager, Coon Rapids
Nancy Braastad, President, Ham Lake Development Company
Patricia Preiner, Citizen, Columbus
Dan Erhart, Anoka County Commissioner
Dennis Berg, Anoka County Commissioner
Paul McCarron, Chair, Anoka County Housing and Redevelopment Authority
Don Findell, Anoka County Housing and Redevelopment Authority
Alternate:
Larry Peterson, Connexus Energy
Motion carried unanimously. Resolution declared adopted.
The appointment of Commissioner Billings to this group is a real benefit to the HRA, as he will be
able to keep us updated on the process and also pass along any concerns to the County group.
5. Gateway West
Blueprint Homes continues to move forward with constructing homes, while staff continues to push to
get the Gateway West 2' Addition Plat approved and filed. Since August we have been told repeatedly
that the recording of the plat will take place "very soon ". I am optimistic that "very soon ", might be
within the next 2 -3 weeks, as the Anoka County Surveyor's office recently contacted Kurth Surveying and
asked for some minor modifications /clarifications on the Plat drawing. If "very soon" doesn't happen
IV
before the HRA's March meeting, we may need to make some adjustments to the dates in our
development agreement.with Blueprint Homes.
On a more positive note, I'm happy to report that MN DOT is providing us with $17,000 to reimburse
us for a portion of our costs on our new fence. The $17,000 is the amount that they would have spent
for new chain link along that stretch of University Avenue.
6. Upcoming Meetings / Miscellaneous / Legislative Updates
March will also have a full agenda. Mike, Rick, & I will be bringing some resolutions forward to decertify
certain TIF districts that are expiring or no longer producing useable increment.
Attorney Casserly and I will also bring forward some possible changes to the existing TIF guidelines for
your review and discussion. We did not have enough of an opportunityto put together anysort of draft
or discussion for the February meeting.
Minnesota Solutions and the MN Chapter of NAHRO (National Association of Housing &
Redevelopment Organizations) do an excellent job of tracking legislation on our behalf. Though not
much has yet happened in this years session, I have attached the most recent updates from each group.
If there are any items you would like covered in upcoming issues of the Non - Agenda Update please send
me an e -mail. bolirWci.fridleymn.us
Page 1 of 10
Bolin, Paul
From: Minnesota NAHRO [info @mnnahro.org]
Sent: Thursday, January 25, 2007 5:29 PM
Subject: Legislative Email Network
To: Minnesota NAHRO
Subject: Legislative Email Network
LEGISLATIVE EMAIL NETWORK
info@mnnahro.org
Minnesota NAHRO
2007 Legislation
SESSION REVIEW
Week of. 1/25/07
MEMBERSHIP NOTATIONS
Patricia A. Gustafson, Executive Director
This is your weekly edition of the Minnesota NAHRO Legislative Email Network Updates. This
information was compiled by our consultant, Kevin Walli of Fryberger, Buchanan, Smith & Frederick,
P.A. As a member of Minnesota NAHRO, we will be providing you a weekly update of the 2007
Legislative Session relevant to the Minnesota NAHRO Legislative Policies. If you have any questions
or comments, please don't hesitate to contact me at 651- 675 -4490 or 800 - 242 -6804.
Reminder:
Minnesota NAHRO membership renewals are due January 31, 2007. If you have not sent in your
renewal form and dues, please do so as soon as possible. Effective February 7, 2007, only current 2007
members will receive weekly legislative updates. We look forward to a productive and beneficial 2007
Minnesota Legislative Session. Comments have been received on the circulated Minnesota NAHRO
Legislative Policies and a revised copy will be emailed to you after the January 23, 2007 Board Meeting.
Mark Your Calendar:
1/26/2007
Page 2 of 10
a
Day at the Capitol Breakfast and Briefing is March 6, 2007. Watch for registration brochure and online
information at www.mnnahro.org. We are encouraging attendees to set up meetings with their
Legislators for the afternoon and to let us know of the meetings they have set up and if you would like
anyone to accompany you from Minnesota NAHRO to your meeting.
2007 Legislative Session Review
Week of January 26, 2007
Kevin Walli, Legislative Consultant
Fryberger, Buchanan, Smith & Frederick, P.A.
The Legislature has completed its first week of business. For the most part, the early going in the
Session has involved ceremonial events and orientation for members. Approximately 25% of the
legislators are newly elected. Virtually every House Member has changed offices and most members in
both bodies find themselves with new Committee assignments or working with new Committee Chairs.
Minnesota NAHRO has initiated action on several of its 2007 agenda items. At the close of this week of
Session, this is where we stand.
1. SEEK REPEAL OF CURRENT MFIP PENALTY
Issue: Minnesota NAHRO seeks to repeal the current MFIP penalty ($50 /month) which is imposed on
MFIP recipients who reside in public housing or receive Section 8 rental assistance.
Minnesota is the only state which imposes such a penalty. Minnesota NAHRO has consistently sought
to have the penalty provision repealed and has strongly opposed proposals to increase the penalty
provision.
Position: Minnesota NAHRO will draft legislation seeking the repeal of the current MFIP penalty
provision. The Association will secure bill authors and provide witnesses to testify in support of the
repeal of the MFIP penalty. Minnesota NAHRO will actively oppose any proposal that would increase
the MFIP penalty.
1125107 Update: Minnesota NAHRO's bill has been introduced in both the House and Senate — S.F.
591H.F. 88. Our chief author in the House Representative Paul Thissen held and overview hearing
today (January 25) on the MFIP program. Minnesota NAHRO arranged for testimony by Al
Hester, St. Paul Public Housing to outline the consequence of the MFIP penalty provision. The
presentation is intended to inform members about the importance of proceeding with the repeal of the
penalty provision.
1/26/2007
Page 3 of 10
2. HOUSING SOLUTIONS ACT — MORTGAGE DEED TAX
Issue: A coalition of housing advocacy housing organizations, including Minnesota NAHRO have
prepared legislation referred to as the Housing Solutions Act which increases the mortgage deed tax to
generate revenue dedicated to meet affordable housing needs. The proceeds of the mortgage deed tax
increase will be divided between the MHFA Housing Trust Fund (for rental assistance, the MHFA
Challenge Program and a new Housing Account for Leverage Opportunity (HALO) which has been the
primary focus of Minnesota NAHRO's efforts relating to the Housing Solutions Act. The HALO
account will provide state matching funds for local affordable housing projects which may involve the
construction, rehabilitation or preservation of rental units or homeownership units or other affordable
housing activities. The income standards outlined in the HALO provisions require that rental units be
developed for persons at 60% or less of the area or statewide median income and home ownership units
for persons at 115% of the area or statewide median income.
The guiding principles which the housing advocates have agreed upon with respect to the Housing
Solutions Act include the following:
1. Funds must be dedicated for affordable housing.
2. These must be new state funds for affordable housing — and must not replace any existing
state program funding.
3. Funds must be made available on a flexible basis to address a variety of affordable
housing needs.
4. Funds must be made available on a state -wide basis.
Position: Minnesota NAHRO has taken a leading role in drafting the HALO portion of the Housing
Solutions Act. The Association will meet with key legislators and Administration officials to make the
case for the Housing Solution Act and the HALO provisions. Minnesota NAHRO members need to
provide examples of projects for which they would seek HALO matching funds.
1125107 Update: Governor Pawlenty released his 2008 -09 biennial budget on January 22. Funding
four housing programs was provided on several fronts. The total increase for housing programs from
the 2006 -07 to the 2008 -09 biennium is $43,906, 000. A significant portion of new money is "one- time"
money. The total increase by accounts at MHFA is as follows:
Challenge Program
$15 million*
Affordable Rental Preservation
$2.5 million*
Housing Trust Fund
*
$9.5 million"
Family Homelessness Prevention
$7.5 million
Rehab Loans
$4,636,000
Bridges
$2 million
Home Ownership Education
Counseling $ 820,000
Capacity Building $ 180,000
HAF $1,770,000
*One -time money
1/26/2007
Page 4 of 10
* *$4.5 million in the base and $5 million one -time money
In addition, the Department of Human Services budget includes a $4 million base increase for
supportive housing services grants, transitional housing and program infrastructure.
In light of this rather significant commitment to increase funding for affordable housing, the
organizations which are working on the Housing Solutions Act are considering how best to secure the
proposed increase in funding in 2007 and continue to build the case for sustained funding for affordable
housing in future years.
Minnesota NAHRO supports the Governor's budget. There has been a strong response to the
demonstrated need for additional state resources. Minnesota NAHRO, in cooperation with a coalition
of housing advocacy organizations, will be reshaping our strategic focus for the 2007 Session and will
be determining how best to proceed with the Housing Solutions Act and the mortgage deed tax in
coming weeks.
One issue that Minnesota NAHRO will be pursuing is a request for a higher level of funding for the
Challenge Program -- $25 million rather than $15 million — with the objective of having some of the
resources made available on more flexible terms while leveraging local resources. The focus will be on
providing flexibility and the opportunity to leverage non -state resources to meet affordable housing
needs — much as had been proposed in the HALO Program. In addition, Minnesota NAHRO will
support an increase beyond that proposed by the Governor for preservation of public housing. The
additional request in that category offunding would be an additional $10 million.
3. MHFA AFFORDABLE HOUSING FUNDING REQUEST - 2007
Issue: MHFA may propose an additional general fund appropriation, or draw down agency resources,
to provide gap financing for public housing. The objective would be to supplement federal capital and
operating subsidies to preserve public housing units that would otherwise be lost to the State's, stock of
affordable housing units.
Position: MHFA will take a lead role in advocating for increased state resources to preserve
public housing units and support their operation to meet housing needs documented by the public
housing survey completed by MHFA and Minnesota NAHRO in 2006.
1/26/2007
N
Page 5 of 10
1125107 Update: As noted above, Governor Pawlenty has requested a budget increase of $2.5 million
for preservation of affordable housing. Minnesota NAHRO, in cooperation with other housing
advocacy organizations, will be seeking to increase this state appropriation by an additional $10 million
for the biennium.
4. IMPROVED CONDITIONS FOR ISSUANCE OF MORTGAGE REVENUE
BONDS FOR SINGLE FAMILY DEVELOPMENT
There is strong interest in amending the statutes which govern the allocation of federal tax exempt bonds
to enhance the opportunity for issuance of bonds for single family housing development. It has been
noted that the single family bond market is in a better economic position with the increase of short-term
interest rates. This increase in short-term rates helps issuers avoid negative arbitrage.
A number of statutory changes must be made to modify the allocation formula to improve prospects for
the issuance of single family bonds. Changes to be made would be determined in consultation with
other housing partners including the Minnesota Housing Finance Agency. Changes which may be
considered include the percent allocation from the housing pool which would be available for single
family housing bonds versus multi - family development. There would also likely be discussion
regarding the income limits for units built using single family bonds.
1/250/07 Update: Minnesota NAHRO members and staff will schedule follow -up meetings with MHFA
officials and representatives of other housing organizations to discuss statutory changes to be made to
improve prospects for issuance of mortgage revenue bonds for single family development.
5. PROPERTY TAX VALUATION FOR RENT- RESTRICTED PROPERTIES (AND
FOR HOMEOWNERS FACING HIGH PROPERTY TAXES RELATIVE TO
THE RESALE VALUE OF THEIR HOMES)
Issue: When the Legislature reinstated the 4d tax classification for rent - restricted properties, they did
not adopt a method for reducing the taxable value of qualifying properties. Minnesota NAHRO will
support the development of an alternative evaluation approach. A Department of Revenue study which
addresses the assessment of various property tax classes is scheduled for presentation to the 2007
Legislature.
Position: Minnesota NAHRO will support the establishment of a mechanism for reducing the taxable
value of rent restricted properties and certain sale - price - restricted properties for income - qualified
homeowners and will assist in the development of proposals to reduce the taxable value of these
properties.
1/25/07 Update: The Department of Revenue has included a recommendation for changing the current
4(d) tax classification to apply to buildings where 25% of the units meet income or rent restriction
standards. The previous threshold was 75% of units meeting income or rent restriction standards.
It has been noted that approximately 10, 000 housing units would qualify for 4(d) tax treatment with this
statutory change.
Minnesota NAHRO will also continue to explore longer term solutions to address a valuation approach
to advantageous tax treatment for income or rent restricted units.
6. CHARITABLE TAX CREDIT
1/26/2007
Page 6 of 10
Issue: Minnesota NAHRO supports the establishment of a Minnesota tax credit for charitable donations
directed to develop affordable housing. In particular, the tax credit would be available to
persons /entities making cash or in kind donations for workforce housing.
Position: Minnesota NAHRO will support the charitable tax credit for workforce housing. The tax
credit should be applicable to donations made to develop housing for households earning 80% or less of
area median income. The credit should apply when donations are made to develop affordable housing
which may be funded in part by the Minnesota Housing Finance Agency or by local units of
government, including HRAs, PHAs or CDAs.
1125107 Update: Housing Minnesota has provided an overview of the proposed implementation of the
charitable tax credit. The tax credit applies to 50% of an amount contributed to an affordable housing
development.
MHFA and other organizations have cautioned that the charitable tax credit may distract from the
efforts to secure the budget increases proposed for affordable housing in the Governor's budget.
7. HISTORICAL PRESERVATION TAX CREDIT
Issue: The Minnesota Historical Society has taken a lead role in support of the enactment of a state
Historic Preservation Tax Credit. The provision was included in the 2005 and .2006 Senate Tax Bill —
but was not adopted by the Tax Conference Committees.
Position: Minnesota NAHRO will support legislative efforts to establish the Historical Preservation Tax
Credit for investments in projects which preserve historic buildings for commercial or housing
purposes. Members will be advised of progress on the measure and on opportunities to provide input in
the legislative process.
1125107 Update: A coalition of advocates for the State Historic Preservation Tax Credit are
proceeding with legislation. Minnesota NAHRO will support this effort and will seek to have members
or staff participate in meetings of the coalition.
1/26/2007
Page 7 of 10
8. APPROPRIATION FOR DEPARTMENT OF EMPLOYMENT AND ECONOMIC
DEVELOPMENT (DEED) — MINNESOTA INVESTMENT FUND
Issue: The Minnesota Investment Fund, administered by DEED, provides state matching funds to
finance various improvements required for business development/job creation projects. This fund is
capitalized by general fund appropriations. In recent years, general fund dollars for this purpose have
been very limited. DEED is expected to have a funding request in the Governor's '08 -'09 budget
proposal.
Position: Minnesota NAHRO will support efforts to provide a state general fund appropriation for the
Minnesota Investment Fund.
1125107 Update: Governor Pawlenty's 2008 -09 budget includes and appropriation request in the
amount of $7 million.
9. APPROPRIATION FOR DEED REDEVELOPMENT ACCOUNT
Issue: The Redevelopment Account administered by DEED provides to assist in preparing sites for
redevelopment. The object of the program is to leverage private and federal dollars to improve
Brownfield sites.
The Redevelopment Account has been financed by general fund appropriations and bond proceeds in the
past. It is expected that DEED will include a general fund appropriations request in the Governor's '08-
'09 budget proposal.
Position: Minnesota NAHRO will support efforts to provide a state general fund appropriation for the
Redevelopment Account.
1125107 Update. Governor Pawlenty's 2008 -09 budget includes and appropriation request in the
amount of $2 million.
10. ADMINISTRATIVE AND OPERATING SUPPORT FOR HOUSING TO
ADDRESS HOMELESSNESS
Issue: The Governor and the Legislature have authorized the issuance of state bonds to pay for housing
units for very low income persons in order to address long -term homelessness. The public agencies that
would develop these housing units have neither the administrative nor operating financial base to
proceed with the development of these housing units. They cannot bear the expense of proceeding
through the legal requirements to take advantage of the state bond proceeds and they do not have the
stream of revenue to provide for the operation of these units once they are developed.
1/26/2007
Page 8 of 10
Position: Minnesota NAHRO would support legislative proposals which would provide state funds to
ensure that public agencies can assemble proposals which would utilize state bond proceeds to develop
housing units for persons who have faced long -term homelessness. Minnesota NAHRO would also
support legislative proposals to provide appropriations to ensure that these housing units have adequate
operating support.
1125107 Update: As noted above, Governor Pawlenty's 2008 -09 budget includes and appropriation
increase of $4 million for supportive housing service grants and transitional housing.
11. HOUSING OPTIONS FOR CHRONIC INEBRIATES
Issue: Local agencies are developing housing options to serve chronic inebriates. This specialized
housing saves resources by serving this challenging population in the most cost effective setting. In
order for these housing facilities to succeed, the local agencies secure supplemental payment rates from
the group residential housing program. Legislative proposals to authorize increased supplemental rates
to serve this particular population will be advanced during the 2007 Legislative Session.
Position: Minnesota NAHRO supports the efforts of local agencies to secure group residential housing
rate increases to serve chronic inebriates in a specialized housing setting.
1125107 Update: Legislation seeking an enhanced group residential housing rate for facilities in St.
Cloud and Duluth has been introduced. The enhanced rate will allow these facilities to serve chronic
inebriates in specialized housing settings with supportive services.
12. MULTI - COUNTY HRA LEVIES
Issue: Certain multi - county HRAs have had difficulty securing approval of their operating levy from
certain counties, resulting in an inequitable contribution of resources to sustain the HRA program.
Position: Minnesota NAHRO supports proposed legislation from the Southeast and Northwest Multi -
Housing HRAs which will allow multi - county HRAs to approve 25% of their annual levy by affirmative
vote of the HRA board. Approval of the HRA levy would continue to be subject to approval by
participating counties.
13. ABANDONED PERSONAL PROPERTY
Issue: Minnesota NAHRO members are concerned that the timeframe required for holding ex- tenants'
personal property is excessively long. There are considerable costs involved in holding property for the
required period of time. Minnesota NAHRO would support efforts to shorten the required timeframe for
landlords to hold abandoned personal property.
Position: Minnesota NAHRO would support efforts to shorten the timeframe required for holding
abandoned personal property. These efforts would be coordinated with organizations such as Minnesota
Multi - Housing Association. Minnesota NAHRO's consultant is directed to contact the Minnesota
Multi- Housing Association to coordinate legislative efforts.
1/25/07 Update: Minnesota NAHRO's staff has contacted the Minnesota Multi- Housing Association to
determine their interest in supporting legislation which would shorten the timeframe for holding
abandoned personal property. MMHA would be willing to support such an initiative and staff will
1/26/2007
Page 9 of 10
follow -up on these discussions with the goal of drafting legislation for the 2007 Session.
14. HRA EMPLOYEE ELIGIBILITY FOR PUBLIC EMPLOYEE RETIREMENT
ASSOCIATION BENEFITS
Issue: HRA employees are not currently eligible for participation in PERA. There is considerable
interest in determining whether HRA employees might be included in the PERA Defined Benefit Plan.
Position: Minnesota NAHRO will initiate contacts with PERA to determine the state plan's interest in
and ability to accommodate additional public employees — specifically employees of housing and
redevelopment authorities.
1125107 Update. Minnesota NAHRO will be contacting the Pension Commission to determine how
significant the statutory change would be to allow for HRA employees to be covered under the PERA
benefits program.
15. EMINENT DOMAIN
Issue: In the aftermath of the Supreme Court's decision in the Kelo case, the Legislature has acted to
restrict Eminent Domain authority.
Minnesota NAHRO supported efforts to forestall the initiatives which severely and adversely curtailed
the use of Eminent Domain for important community development purposes.
Position: Minnesota NAHRO will monitor and respond to any '07 legislative proposal which will
further change Eminent Domain authority. The Association will work with other local government
interests to provide information to key legislators about the important and appropriate role of Eminent
Domain in community development efforts.
16. TAX INCREMENT FINANCING
Issue: Tax increment financing has been a very important tool for housing and community
redevelopment financing. In recent years, there has been an increasing reluctance on the part of
legislators to extend TIF financing authority. The narrowing of tax increment financing authority is
limiting the range of financing tools available to address housing and community development needs.
Position: Minnesota NAHRO will monitor and respond to tax increment financing proposals which
would work to the benefit or detriment of member agencies.
17. DATA PRIVACY
Issue: State policy with respect to data privacy affects agencies which manage /administer public
housing units. Housing officials have received requests for information about residents of the housing
units they administer. The status of certain data as private or public has significant implications for the
privacy rights of residents of public housing units.
Position: Minnesota NAHRO will closely monitor legislative proposals which would affect the status
of housing data as public or private. The Association will analyze proposals and seek input from
interested members in order to provide information to key legislators and legislative committees.
M:\DOCS11544T000OOI \MEMV046S6.DOC
1/26/2007
70 Grove Street
Mahtomei MN 55115
(651) 260 -8690
bbalach @com cast. net
January 16, 2007
TO: Minnesota Solutions' Participants
FR: Bonnie Balach
RE: Meeting Announcement and Legislative Update
Meeting Notice!!!!
February 5, 2007, Noon until 1:30 p.m.
University Club St. Paul
Lunch will be provided.
Session has begun. Following is a list of legislative objectives for Minnesota Solutions. We're
pretty informal about policy adoption, so let me know if you have concerns or amendments you
would like to have considered. Things could go a number of different ways this session, so time
commitments will vary accordingly.
It looks like there will be a slightly larger bonding bill this year than earlier thought. There might
be as much as $350M plus some cash. I'm not sure how this will affect some of the issues we are
interested in.
Redevelopment Account: We are seeking cash for the Redevelopment Account and restoration
of statewide jurisdiction. DEED will request a $20M general fund appropriation as well as
statewide access to the program. Given leadership in the House and Senate, we have reason to be
optimistic. However, there are some possible roadblocks. Senator Tomassoni and Representative
Rukavina chair the relevant finance committees. At this point, I don't know how they will react
to this proposal. Also, Commissioner McElroy has not been a fan of the Redevelopment
Account in the past and we need to figure out his current disposition in this regard. We may put
in our own bill requesting a $20M appropriation, restoration of statewide jurisdiction and the
language change outlined below for the Contamination Cleanup Grant Account. In addition, our
bill may request that the urban area gain access to the Greater Minnesota Business Infrastructure
Grant Program. I have a meeting scheduled with Senator Metzen for February 6, at 3:30 p.m. to
discus this issue. Anyone interested in joining me for that meeting should let me know. I also
have meetings with Senator Tomassoni and Representative Rukavina. I am trying to schedule an
appointment with Rep. Simons (DFL /St. Louis Park) to test his willingness to represent our
interests on this issue.
Greater Minnesota Business Infrastructure Development Fund. Since it looks like there might
be a larger bonding bill than we thought, the probability that there will be some funding for the
Greater Minnesota Business Infrastructure Grant Program is increased. We may want to include
metro access to this program in our bills, both for strategy and practical reasons. It would be very
helpful to have this kind of state assistance in the Metropolitan Area.
Contamination Cleanup Grant Program: DEED will pursue a n amendment to current statute
that would eliminate the criteria that requires a grantee to put forward evidence that remediation
costs exceed fair market value of the land. We support this. Property values have increased and
this is no longer an accurate measure of substantial cleanup costs.
Transit Improvement Program: Attached is a briefing paper that explains the proposed
Transit Improvement Program. There is also a proposal for a new Transit TIF District
attached. Let me know what you think. I have a meeting with Sen. Murphy next
Monday at 3:00 p.m. to discuss this. Let me know if you are interested in attending that
meeting. I also have a meeting with Senator Dibble on January 22, 9:00 a.m. to talk about
the Redevelopment Account and the Transit Improvement Program proposal.
Transit Tax Increment Financing District: I have attached the most recent draft of
transit TIF legislation that will be promoted this year. Let me know your comments.
Tax Increment Financing: We have a meeting with Senator Bakk at 9:30 a.m. on
January 23rd to talk about this issue in general. I would like to focus somewhat on the
issues of the "Marty" language and the Transit TIF district proposal. Let me know if you
would like to attend this meeting. At a minimum, I am hoping that Jenn O'Rourke will
accompany me.
Historic Preservation: We will support efforts by the Minnesota Historical Society and
the Preservation Alliance of Minnesota to authorize a state income tax program for
historic preservation that aligns with the federal program.
TRANSIT IMPROVEMENT PROGRAM
469.350 Definitions.
Subdivision 1. Generally. For purposes of sections 469.350 to 469._,
the following terms have the meanings given them herein, unless the context
indicates a different meaning.
Subd. 2. Applicant. "Applicant" means a local government unit or a joint
powers board, established under section 471.59, acting on behalf of two or more
local govemnent units applying for designation of an area as a transit
improvement center.
Subd. 3. City. "City" means the city in which the transit improvement
center is located.
Subd. 4. Commissioner. "Commissioner" means the commissioner of
employment and economic development.
Subd. 5. County. "County means the county in which the transit
improvement center is located.
Subd. 6. Local government unit. "Local government unit" means a
statutory or home rule charter city, county, town or school district.
Subd. 7. State. "State" means the state of Minnesota.
Subd. 8. Transit station. "Transit station" means a physical structure or
designated area which supports the interconnection of various up blic
transportation modes, including light rail, commuter rail and rapid bus transit, and
which promotes and achieves the loading, discharging and transporting of people.
Subd. 9. Transit district. "Transit district" means a type of tax increment
financing district as defined in section 469.174, subdivision 30. [Note: This
definition isn't used do delete?]
Subd. 10. Transit improvement program or transit program. "Transit
improvement program" or "transit program" means a statement of objectives
prepared by the applicant that contains the information set forth in section
469.352(b).
Subd. 11. Transit improvement center or transit center. "Transit
improvement center" or "transit center" means a geographic area designated by
the commissioner within a project as defined in section 469.174, subdivision 8.
469.351 Consullation. Before requesting designation of a transit center, the
tippl ic< nt must consult with its planning agency or department and must hold a
l)ublie hearing on the request. Notice of the hearing must be published in the
official newspaper of the applicant, or, if there is no official newspaper, in a
newspaper of general distribution within the City. The applicant must also
provide a 30 -day notice and a copy of the proposed transit improvement program
to the county auditor of the County, the Department of Employment and
Economic Development and the Department of Transportation and, if the
proposed transit center is within the seven count ny?etropolitan area as defined in
section 473F.02, subdivision 2, the Metropolitan Council, for review and
comiiient. The County, Department of Employment and Economic Development,
Went,
Department of Transportation and Metropolitan Cowicil may waive the 30 -day
reciuirement by submitting written comments on the program and any
modification of the program to the applicant after receipt of the information. The
plicant must also offer to meet and discuss the proposed transit center with each
entity listed above and shall solicit their comments with respect to the transit
center. [Note: Seems like this input should be solicited before the city actually
adopts its transit program so I moved it ups
469.352 Transit improvement program. (a) The applicant requesting
designation of a transit improvement center must adopt by resolution a written
transit improvement program for the transit center before submitting the
application to the commissioner.
(b) The transit improvement program must contain, at least, the
following:
(1) a map of the proposed transit center that indicates the geographic
boundaries of the transit center;
(2) a statement as to the present use and general condition of the land and
existing structures;
(3) a statement as to the facilities to be constructed;
(4) a statement as to the environmental controls to be applied;
(5) a statement as to the proposed reuse of property;
(6) a statement as to the proposed operations after the capital
improvements have been completed;
(7) a fording that the redevelopment or development of the transit
improvement center will increase ridership for the area served by a transit station;
(8) a finding that the redevelopment or development of the transit
center will promote higher density land uses; and
(9) any other information required by the commissioner.
469.353 Limitations.
Subdivision 1. Maximum size. A transit center Duay encompass any
parcel(s), any portion of which, is located within one -half mile of the nearest lot
line of the parcel containing a transit station.
469.354 Application for designation.
Subdivision 1. Who may apply. A local government unit or a joint
powers board under section 471.59 acting on behalf of two or more units, may
apply for the designation of an area as a transit improvement center.
Subd. 2. Application content. The application must include:
(1) a transit improvement program meeting the requirements of section
469.352; and
(2) a resolution adopted by the applicant.
469.355 Designation of transit center.
Subdivision 1. Commissioner to designate. (a) The commissioner, in
consultation with the County and the Department of Transportation and. if the
proposed transit center is within the seven county metropolitan area as defined in
section 473F.02, subdivision 2, the Metropolitan Council, may designate one or
more transit centers.
(b) The commissioner may consult with the applicant prior to the
designation of a transit center. The commissioner may modify the transit
program, including the boundaries of the transit center, if in the commissioner's
opinion a modified program would better meet the objectives of the transit
improvement program. The commissioner shall notify the applicant of the
modifications and provide a statement of the reasons for the modifications.
469.356 Reporting requirements. The commissioner shall report annually to
the relevant committees at the state legislature relating to the progress of activities
in the transit improvement centers.
TRANSIT TIF DISTRICT
To be inserted in Section 469.174.
Subd 30 Transit district (a) "Transit district" means a type of tax increment
financinq district which consists of any project or portions of a proiect and includes a
parcel(s) any portion of which is located within 250 feet of the nearest lot line of the
parcel containinq a transit station and which the authority finds to be in the public
interest because:
(1) it will increase ridership for the area served by a transfer station and
(2) it will promote higher density land uses.
(b) For purposes of this subdivision "transfer station" shall mean a physical
structure or designated area which supports the interconnection of various
transportation modes including light rail commuter rail and rapid bus transit, and which
promotes and achieves the loading discharging and transporting of people.
To be inserted in Section 469.176, Subdivision 1 b(a):
(5) after 25 years after receipt by the authority of the first increment for a transit
district.
To be inserted in 469.176, Subdivision 4:
Subd 4m Transit districts At least 90 percent of the revenues derived from tax
increments from a transit district must be used to finance the following:
(i) land acquisition;
(ii) demolition;
s
(iii) land clearance;
(iv) relocation costs;
(v) soil correction;
NO removal of hazardous substances or remediation necessary for the
development of the land; and
NO installation of utilities, roads, bridges, pedestrian walkways, bikeways and
parking facilities.
The allocated administrative expenses of the authority, including the cost of preparation
of a development action response plan, may be included in the qualifying costs.
To be inserted in Section 469.1763, Subdivision 2:
(f ) In the case of a transit district, as defined in section 469.174, subdivision 31,
tax increment derived from such a district may be expended outside of the district but
within the project and only for the expenditures permitted by section 469.176,
subdivision 4m as necessary to provide for the development or expanded use of a
transfer station.
Amend Section 469.1763, Subd. 3(a) to read:
(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), for public infrastructure purposes within a zone as permitted by
subdivision 2, paragraph (e) or for transit related purposes within a transit district as
permitted by subdivision 2, paragraph (f).
Amend Section 469.1763, Subd. 4 to read:
2
h �
(4) the annual amount provided by the tax increment financing plan to be paid
under subdivision 2, paragraphs (b), (d), (e) and .
(b) The district must be decertified and the pledge of tax increment discharged
when the outstanding bonds have been defeased and when sufficient money has been
set aside to pay, based on the increment to be collected through the end of the calendar
year, the following amounts:
(4) - -
(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3)
(2) the amount specified in the tax increment financing plan for activities
qualifying under subdivision 2, paragraph (b), that have not been funded with the
proceeds of bonds qualifying under paragraph (a), clause (1); and
(3) the additional expenditures permitted by the tax increment financing plan for
housing activities under an election under subdivision 2, paragraph (d), that have not
been funded with the proceeds of bonds qualifying under paragraph (a), clause (1)
3