HomeMy WebLinkAbout2011 05-23 EDAP Regular Session ® EDA MEETING
City of Brooklyn Center
May 23, 2011 AGENDA
1. Call to Order
—The EDA requests that attendees turn off cell phones and pagers during the meeting. A
copy of the full City Council packet, including EDA (Economic Development Authority),
is available to the public. The packet ring binder is located at the front of the Council
Chambers by the Secretary.
2. Roll Call
3. Approval of Agenda and Consent Agenda
—The following items are considered to be routine by the Economic Development
Authority (EDA) and will be enacted by one motion. There will be no separate
discussion of these items unless a Commissioner so requests, in which event the item will
be removed from the consent agenda and considered at the end of Commission
Consideration Items.
a. Approval of Minutes
1. May 9, 2011 — Regular Session
4. Commission Consideration Items
a. Resolution Confirming the Acquisition of Property in Connection with the
Remove and Rebuild Program (5649 Brooklyn Boulevard)
Requested Council Action:
— Motion to approve resolution.
b. Resolution Approving Development Agreement (Shingle Creek Crossing)
Requested Council Action:
— Motion to approve resolution.
5. Adjournment
EDA Agenda Item No. 3a
r
MINUTES OF THE PROCEEDINGS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
MAY 9, 2011
CITY HALL — COUNCIL CHAMBERS
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to
order by President Tim Willson at 8:09 p.m.
2. ROLL CALL
President Tim Willson and Commissioners Carol Kleven, Kay Lasman, Tim Roche, and Dan
Ryan. Also present were Executive Director Curt Boganey, Director of Business and
Development Gary Eitel, Assistant City Manager /Director of Building and Community
Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off
Site Secretarial, Inc.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
Commissioner Ryan moved and Commissioner Lasman seconded approval of the Agenda and
Consent Agenda, and the following item was approved:
3a. APPROVAL OF MINUTES
1. April 25, 2011 — Regular Session
Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. TEMPORARY LICENSE AGREEMENT FOR THE PLACEMENT OF A REAL
ESTATE SIGN FOR THE SHINGLE CREEK DEVELOPMENT ON THE EDA
PARCEL (FORMER BOULEVARD BAR & GRILL RESTAURANT SITE)
Executive Director Curt Boganey introduced the item and stated the purpose of the temporary
license agreement to allow the placement of a 4 -foot by 8 -foot real estate sign on the EDA's
parcel (former Boulevard Bar & Grill Restaurant site) for the Shingle Creek Development.
Commissioner Lasman moved and Commissioner Kleven seconded approving a temporary
license agreement for the placement of a real estate sign for the Shingle Creek Development on
05/09/11 -1- DRAFT
the EDA parcel (former Boulevard Bar & Grill Restaurant site) subject to completion of the tax
increment agreement, conveyance of the property, and a fee of $100 per month. •
Motion passed unanimously.
5. ADJOURNMENT
Commissioner Roche moved and Commissioner Ryan seconded adjournment of the Economic
Development Authority meeting at 8:12 p.m.
Motion passed unanimously.
05/09/11 -2- DRAFT
EDA Agenda Item No. 4a
•
EDA ITEM MEMORANDUM
DATE: May 17, 2011
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business and Development
SUBJECT: Resolution Confirming the Acquisition of Property in Connection with the
Remove and Rebuild Program (5649 Brooklyn Boulevard)
RECOMMENDATION:
It is recommended that the City Council adopt the Resolution Confirming the Acquisition of
Property in Connection with the Remove and Rebuild Program (5549 Brooklyn Boulevard).
BACKGROUND:
On January 12, 2009, the EDA adopted Resolution No. 2009 -02, A Resolution Establishing
Housing Programs and Approving the Use of Funds from Tax Increment District No. 3 Housing
Account, which authorized the Remove and Rebuild Program.
On October 26, 2009, the EDA adopted Resolution No. 2009 -17, A Resolution Authorizing Staff
to Acquire Certain Foreclosed Homes Within the City and to Execute All Instruments and
Contracts Relating Thereto.
The EDA's guidelines for acquisition of foreclosed properties include the following:
• Properties must be registered as vacant.
• Properties would be purchased either with TIF funds or federal Neighborhood
Stabilization Program (NSP) funds.
• The property would be determined to be blighted as defined by the Minnesota Housing
Finance Agency in its application to the Department of Housing and Urban Development
(HUD) for NSP funding.
• The purchase price could not be more than 65 percent of Hennepin County's latest
Estimated Market Value for the property and could not exceed $80,000.
• Prior to the acquisition of property, staff would conduct a due diligence investigation to
protect the EDA's interest with regard to purchase of the property.
• The authority to acquire property under the terms of the resolution would expire in 12
months from the date of its passage.
On March 14, 2011, the EDA adopted Resolution No. 2011 -05, A Resolution Reauthorizing
EDA Resolution 2009 -17 Providing Authority to Staff to Acquire Certain Foreclosed Home
Within the City and to Execute All Instruments and Contracts Related Thereto.
REMOVE AND REBUILD PROGRAM:
The program was created to remove blighted, distressed, and unmarketable properties and to
return theses properties to an enhanced and compatible use with the neighborhood and consistent
with zoning regulations and the City's Comprehensive Plan.
Additionally, the program recognized that if an appropriate use for the land is not imminent, the
property will be land banked until such time an appropriate use becomes available.
Proposed Acquisition:
The subject property is a vacant home that was first foreclosed in 2006 and a second foreclosure
in 2010. The City's records indicate that the home was registered as a vacant property in 2008.
The property was listed for $35,000 based on the current condition of the home which included
the following factors:
- The main floor living area, kitchen, and bathroom has been demolished as part of the
previous owner's plans to rehab the property.
- The rehab on the basement level was started with egress windows and sheetrock for
two bedrooms installed
- The garage is partially off of its foundation.
The property is a corner lot, with 80' of frontage on Brooklyn Boulevard (service road) and 120'
of depth. The tax records indicate that the residence was built in 1954.
The 2011 property tax value is shown at $125,500.
Bldg. Value $83,200
Lot Value $42,300
A special assessment search indicates the following levied assessments which were paid by the
seller:
$4,019.40 2010 Street and Drainage Improvements
$ 1,017.3 2009 Tree Removal
Staff had requested GMHC to consider this home as a potential NSP rehab project; however, it
was determined that the condition of the structure warranted the use of the City's Remove and
Rebuild Program.
BUDGET ISSUES:
The acquisition and closing costs for this property of $36,066.18 was funded from the Tax
Increment District No. 3 Housing Account.
The estimated cost of demolition and site restoration is approximately $15,000.
Council Goals:
Strategic:
1. We will stabilize and improve residential neighborhoods
i
Commissioner introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO.
EDA RESOLUTION CONFIRMING THE ACQUISITION OF PROPERTY TO
FACILITATE NEIGHBORHOOD IMPROVEMENTS AND REDEVELOPMENT
OPPORTUNITIES WITHIN THE BROOKLYN BOULEVARD CORRIDOR
(5649 BROOKLYN BOULEVARD)
WHEREAS, on January 12, 2009, the Economic Development Authority in and for
the City of Brooklyn Center, Minnesota (the "EDA ") adopted Resolution No. 2009 -02 establishing
housing programs and approving the use of funds from the Tax Increment District No. 3 housing
account; and
WHEREAS, pursuant to EDA Resolution 2009 -02, one of the housing programs so
established was the FDA's Remove and Rebuild Program (the "Program ") to acquire demolished,
blighted, distressed, and unmarketable properties to be returned to uses compatible with the
neighborhood; and
WHEREAS, real property located at 5649 Brooklyn Boulevard. (the "Subject
Property") is a vacant and foreclosed property offered to the EDA through HUD's First Look
Program for a price of $35;000 and
WHEREAS, the subject property met the guidelines established by EDA Resolution
No. 2011 -05 and has acquired the property as a candidate for the City's Remove and Rebuild
Program.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center, Minnesota, as follows:
1. The purchase of the Subject Property is hereby confirmed and staff is directed to
proceed with the demolition of the residence at 5649 Brooklyn Boulevard.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
and upon vote being taken thereon, the following voted in favor thereof:
And the following voted against the same:
Whereupon said resolution was declared passed and adopted.
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Commissioner Carol Kleven introduced the following resolution and moved
its adoption:
EDA RESOLUTION NO. 2011 -05
RESOLUTION REAUTHORIZING EDA RESOLUTION 2009 -17 PROVIDING
AUTHORITY TO STAFF TO ACQUIRE CERTAIN FORECLOSED HOMES
WITHIN THE CITY AND TO EXECUTE ALL INSTRUMENTS AND
CONTRACTS RELATED THERETO
WHEREAS, Economic Development Authority (EDA) Resolution 2009 -17
established certain standards and conditions which authorized EDA staff to acquire certain
foreclosed homes; and
WHEREAS, the EDA Board wishes to continue the standards and conditions
established by Resolution 2009 -17 for the acquisition of foreclosed homes. .
NOW THEREFORE, BE IT RESOLVED. by the Economic Development Authority
of Brooklyn Center, Minnesota:
1. That the Executive Director, with the assistance of EDA's legal counsel, is
hereby authorized to enter into chase agreements and acquire in the name
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of the EDA up to ten (10) single family, vacant, foreclosed -homes (the
"Properties ") on the conditions that:
a.. All. properties. are registered ' as vacant properties with the. City of
Brooklyn Center; and
b. The Properties are each acquired with Neighborhood Stabilization
Program Stabilization Program. ( "NSP ") Funds or TIF Funds, and are
eligible for use of such funding; and
C. Each property is a foreclosed property acquired from a lender or a
lender's designee; and
d. The Properties have been vacant for at least 30 days prior to entering
into a purchase agreement; and.
e.. The ' Property is determined to be blighted as defined by the
Minnesota Housing Finance Agency in its application to the US
Department of Housing and Urban Development (HUD) for NSP
funding as follows:
A blighted structure is one which,.by reasonof dilapidation,
obsolescence, overcrowding, faulty arrangement or design,
lack of ventilation, light, and sanitary facilities, excessive
land coverage, deleterious land use, or obsolete layout, or
any combination of these or other factors, is.detrimental
to the safety, health, morals, or welfare of the community: and
EDA RESOLUTION NO. 2011 -05
f. The purchase price is not more than'65 percent of Hennepin County's
latest Estimated Market Value for the Property and does not exceed
$80,000; and
g. Prior to the acquisition of each property, staff conducts appropriate
due diligence to protect the EDA's interest.
2. That for purposes of this resolution; "single family" includes - any property
with fewer than three units.
3. That the Executive Director is authorized to execute such documents as shall
be required in order to carry out the delegation provided in paragraph 1
hereof.
4. That the Executive Director shall report the' acquisition of any Property
.pursuant to this Resolution at the next regular EDA meeting. .
5. That disposition of acquired Properties shall be only by action of the EDA:
6. That the authority to enter into new purchase agreements granted hereby shall
expire twelve (12) months from the date of this Resolution.
March 14 2011 C /_
Date President
The motion for.the adoption of the foregoing resolution was duly seconded by Commissioner
Tim.' Roche
and upon vote being taken thereon, the following voted in favor thereof
Tim Willson, Carol Kleven, and Tim Roche;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
EDA Agenda Item No. 4b
•
•
EDA ITEM MEMORANDUM
DATE: May 17, 2011
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business and Development /JCL
SUBJECT: Resolution Approving Development Agreement (Shingle Creek Crossing)
Recommendation:
It is recommended that the Economic Development Authority consider approval /adoption of the
Resolution Approving Development Agreement (Shingle Creek Crossing).
Background:
At the January 24, 2011 Work Session, the City Council received the following updates and
information on the proposed redevelopment of the Brookdale properties:
• Developer Frank Gatlin re- introduced the development concept and vision of
Shingle Creek Crossings to re- establish the commercial presence of this property
through the development of a Town Center development that would include a major
anchor, two or three junior retail boxes, the renovation of a portion of the mall,
several smaller retail buildings and restaurants, and streetscaping that creates the
Town Center look.
The proposal includes day - lighting of Shingle Creek and is expected to be a catalyst
for the rebrandin of the city and spurring n development o
s o f neighboring
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properties. He indicated that costs associated with the demolition, soil corrections,
environmental issues, and the current market conditions required him to seek
economic assistance for the portions of the project that were not related to the
proposed major anchor, Wa1Mart.
• The city's financial consultant provided a presentation on their financial gap
analysis and conclusion that the proposed project would need some level of public
assistance to proceed given the speculative nature of the retail market and marginal
return without assistance.
• City staff presented the three components making up a potential financial assistance
proj ect:
1. $3.3 million for public purpose costs, exclusive of WalMart related costs, to
ensure the timely redevelopment of the site and completion of the features
prioritized by the EDA.
2. A collateralized $1 million forgivable loan having a term of five years with
an interest rate of six percent to provide an incentive for the full project
completion in a reasonable time period. The loan amount would be
Alission: Ensurhkq an attractive, clean, .4* cont1nuniti that enhances the f(Zti lkV of Lift: andpreserves th public trust
EDA ITEM MEMORANDUM
available upon the execution of the Tax Increment Development Agreement
and would limit the use of these funds to eligible public purpose costs and
acquisitions, exclusive of WalMart related costs.
3. The conditions for sale of the EDA's 1.06 acre lot (former Ground Round
Restaurant site) and inclusion to the Shingle Creek Crossing PUD.
The consensus of the City Council was to move forward with the framework as presented.
On March 28, 2011, the City Council conducted a public hearing on the creation of Tax Increment
District No 5, a 16 year Renewal and Renovation District, for 8 Brookdale Mall parcels associated
with the demolition and redevelopment plans for the Shingle Creek Crossing PUD. Following a
presentation from the City's financial consultant and receiving public comments, the City Council
adopted Resolution No 2011 -51, Approving a Modification to the Redevelopment Plan for
Housing Development and Redevelopment Project 1 and Establishing Tax Increment Financing
District No. 5 Therein and Approving a Tax Increment Financing Plan Therefor.
Also at the March 28 Council Work Session, the City Attorney, Jenny Boulton, reviewed the
structuring of the TIF Development Agreement for Shingle Creek Crossing. The Council was also
informed of the following changes to the PUD and project financing:
- The developer has entered into a purchase agreement to acquire the Midas Site and is
revising the PUD plans to incorporate this site into the PUD.
- The developer has agreed to the use of a Pay -As- You -Go Note in lieu of the City issuing a
G.O. Tax Increment Bond associated with the completion of the minimum improvements
of the lst phase, which includes the internal streetscaping and daylighting of Shingle Creek.
The Financing Plan involves the use of the 2010 Minnesota Jobs Bill which would enable
an inter -fund loan of $2.4M from TIF District 2 to TIF District 5 and a $2.3 M Pay As You
Go Note from the tax increment generated by this development.
On April 12, 2011, the City Council and EDA approved a Spending Plan for Tax Increment
District 2 which enables the EDA to provide the proposed $2.4M inter -fund loan to Tax Increment
District 5.
Proposed Tax Increment Development Agreement.
The major components of this Tax Increment Agreement include the following:
Article III, Conveyance of the EDA Parcel. The conveyance of the EDA's 46,000 sq.ft. vacant lot
(formerly Boulevard Bar & Grill) is subject to the EDA approving a site plan and use for the
property and holding a public hearing on the sale of EDA owned property.
Attached for your reference is a copy of the purchase agreement which includes the provision that
the promissory note shall be deemed paid in full if the Developer has acquired the Midas property,
Tract C, RLS 1469.
Article IV, Construction of Minimum Improvements, provides for the FDA's approval of the
construction p lans which are defined as:
•
Mission: Ensuring an attractive, elean, sgfi? conununit , that enhances the (pull& of tz}e and preserves es the public trust
EDA ITEM MEMORANDUM
(i) the demolition of the existing Brookdale Mall, excluding the Sears department store and
the Food Court Building, the "reskinning" of the Food Court Building,
- (ii)the partial day-lighting of Shingle Creek;
(iii)the construction by the Developer of the Phase I Streets and Streetscaping; and
(iv) the construction of the storm water detention and/or retention areas by the Developer
on the Development Property, all consistent with the PUD and any approved development
plans.
Section 4.8 includes that in connection with the renovation and construction of Minimum
Improvements and Additional Improvements, defined as the development of the balance of the
PUD ( 15 lots), the developer will either comply with Minnesota Prevailing Wage or contract with
construction companies headquartered in Minnesota and provide in any such contract a Workface
Plan to employ Brooklyn Center residents and unemployed and under employed citizens of north
area of Hennepin County.
Article V, Tax Increment Assistance, provides that the developer will provide Lots 15 and 16,
Block 1, (approx. 4 acres in size) as collateral for the $1.4M Forgivable Loan to the developer for
commencing the construction before July 1, 2011 and completing the Minimum Improvements on
or before December 31, 2012.
Section 5.3 addresses the issuance of a$2.3M TIF Note as part of the Pay As You Go finance plan
which is exclusively repaid by the tax increment generated from portions of this PUD that are
included within TIF 5. These funds will be used to reimburse the developer for eligible
redevelopment costs as defined in the Tax Increment District No. 5 Finance Plan.
Section 5.4 addresses the $1M Forgivable Loan, which is collateralized by a second mortgage on
the Kohl's lot. This loan, identified as the Additional Improvements Forgivable Loan, includes a
promissory note that is proportionately forgiven to the percentage of the phase II development that
are completed within 5 years as outlined in Exhibit E of the TIF Agreement.
Section 5.5, Midas property assistance identifies that the developer would receive financial
assistance of$190,000 for the acquisition of the Midas lot. The amount of financial assistance Tvnma
provides for the EDA and Developer equally sharing in the cost difference between the EDA
parcel and the Midas Site, a difference of$380,000 based on the following;
$825,000 the negotiated price of the Midas Business & Site
$445,000 an agreed value of the EDA parcel (current value of$9.67 per sq.ft.)
Section 5.7 identifies that the EDA's ability to use the Available Tax Increment, which is defined
as the 30% of TIF 5 Increment after 2-1-15 that is not pledged for repayment of the TIF Pay-As-
You-Go Note.
Section 5.8 identifies that the costs of site acquisition and site preparation of$13,060,454 exceeds
70% of the Assessor's current year's estimated market value identified as $16,980,000 and
therefore the EDA's assistance for the Development does not constitute a"business subsidy".
That before April 1, 2012, the developer is required to provide invoices for acquisition and site
preparation costs in an amount not less than$11,886,000.
Alission:bisttritiy an altrQCIIVe,dean,safe conuntudy-that enhances the quali(j,of fif` and preserves tf7epublie trust
EDA ITEM MEMORANDUM
A copy of the Development Agreement and referenced EDA Parcel urchase agreement are
p �
included with City Council Item No. 10 (d), Resolution Approving Development Agreement
(Shingle Creek Crossing).
Budget Issues:
The Development Agreement is consistent with the EDA's approved Tax Increment District No. 5
Finance Plan and the Tax Increment District No. 2 Spending Plan (Minnesota Jobs Bill).
Council Goals:
Strategic:
2. We will aggressively proceed with implementation of City's redevelopment plans
Ongoing
5. We will improve the image of the City with citizens and others
;Mission: Ensuring an attractive, dean, :safe community that enhances the quali& ref Irfe rrncl prrsen es the public trust �U"
Commissioner introduced the following resolution
and moved its adoption:
EDA RESOLUTION NO.
EDA RESOLUTION APPROVING DEVELOPMENT AGREEMENT
(SHINGLE CREEK CROSSING)
BE IT RESOLVED By the Board of Commissioners (the "Board ") of the Economic
Development Authority of the City of Brooklyn Center ( "Authority") as follows:
Section 1. Recitals
1.01. The Authority has created Housing Development and Redevelopment Project No.
1 (the "Development District ") pursuant to Minnesota Statutes, Sections 469.090 through
469.1081 and Sections 469.001 to 469.047, as amended, and Tax Increment Financing District
No. 5 (A Renewal and Renovation District) (the "TIF District "), therein, pursuant to Minnesota
Statutes, Sections 469.174 to 469.1799, as amended within the Development District.
1.02. Gatlin Development Company, Inc. (the "Developer ") has requested that the
Authority assist the Developer with the financing of certain costs of the development and the
renovation of a portion of the existing Brookdale Mall, excluding the Sears department store,
demolishing the three anchors and all but 123,242 square feet of the mall space. Once complete
the development is expected to include a Walmart Supercenter three junior anchors
(approximately 120,735 square feet), four restaurants (approximately 36,065 square feet), six
retail stores (approximately 93,645 square feet), plus 123,242 square feet of renovated mall space
to be located in the TIF District (the "Project ") pursuant to a Development Agreement by and
among the City of Brooklyn Center (the "City"), the Authority and the Developer (the
"Agreement').
1.03. The Authority believes that the development of the Project pursuant to the
Agreement, and fulfillment generally of the 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 the applicable State and local laws and requirements under
which the development has been undertaken and is being assisted.
1.04 In connection with the sale of land for the Project, the Developer has requested
that the Authority enter into an Agreement of Purchase and Sale (the "Purchase Agreement').
Section 2. Authority pproval; Further Proceedings
2.01. The Agreement as presented to the Board is hereby in all respects approved, subject
to modifications that do not alter the substance of the transaction and that are approved by the City
Attorney and the Executive Director of the Authority; provided that execution of the Agreement and
the Purchase Agreement by the President and the Authority Executive. Director shall be conclusive
evidence of approval.
2.02. The President and the Authority Executive Director are hereby authorized to execute
the Agreement and the Purchase Agreement on behalf of the Authority and to carry out on behalf of
the Authority's obligations thereunder.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
and upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
•