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HomeMy WebLinkAbout2011 09-12 EDAP Regular Session EDA MEETING • City of Brooklyn Center September 12, 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. August 8, 2011— Regular Session • 4. Commission Consideration Items a. Resolution Approving Continuation of Certain Housing Programs and Reauthorizing the Use of Funds from Tax Increment District No. 3 Housing Account Requested Council Action: — Motion to approve resolution. 5. Adjournment • EDA Agenda Item No. 3a • • 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 AUGUST 8, 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 7:38 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, Police Chief Kevin Benner, EDA/HRA Specialist Tom Bublitz, Police Commander Brian Peters, Fire Chief Lee Gatlin, 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 Roche seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. July 25, 2011— Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2011 -18 APPROVING MODIFICATION OF TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 2 AND MODIFICATION OF THE REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO.1 Director of Business and Development Gary Eitel introduced the item, discussed the history, and stated the purpose of the proposed resolution to approve a modification of the Tax Increment Financing (TIF) Plan for District No. 2 and the Redevelopment Plan for Housing Development • and Redevelopment Project No. 1. He displayed a map of the subject location and described the 08/08/11 -1- DRAFT budget amendment that will enable the use of the 2011 tax increment to fund eligible activities • including the Brooklyn Boulevard Corridor Transportation study, property acquisitions, public improvements to intersections, street lighting, streetscaping, and other transportation/land use studies. He noted this amendment would allow the EDA to reinvest in future public improvements. Commissioner Roche moved and Commissioner Lasman seconded adoption of RESOLUTION NO. 2011 -18 Approving Modification Of Tax Increment Financing Plan For Tax Increment Financing District No. 2 And Modification Of The Redevelopment Plan For Housing Development And Redevelopment Project No. 1. Motion passed unanimously. 4b. RESOLUTION NO. 2011 -19 AUTHORIZING THE ACQUISITION OF SIX UNDEVELOPED PARCELS WITHIN THE PRELIMINARY PLAT OF EASTBROOK ESTATES 2 ND ADDITION TO PRESERVE FUTURE RESIDENTIAL HOUSING DEVELOPMENT OPPORTUNITIES Executive Director Curt Boganey introduced the item, discussed the history, and stated the purpose of the proposed resolution to authorize the City Attorney to draft a purchase agreement to acquire six undeveloped parcels in the area of the Eastbrook Estates 2 Addition. Mr. Eitel displayed the map of Eastbrook Estates 2nd Addition and described policy issues related to a proposal by David Evanson to sell the EDA five parcels of land, comprising 5.7 acres, for $210,000 and b Rod Construction for one f for 000. It was noted the EDA had 0 0 o parcel o land o 40 Y p asked staff to consider the status of any remaining parcels. Mr. Eitel displayed a map that identified remaining parcels and noted Parcels B and C will require further negotiation and are not part of tonight's consideration. Mr. Eitel advised of the amount of unpaid taxes on the Evanson and Rod Construction parcels and that standard purchase agreement language would require the owner to provide clean marketable title to the property, which would include satisfaction of any outstanding liens, mortgages, and taxes. Current year taxes would be prorated based on the closing date. Mr. Eitel explained the purchases, if approved, would be funded through the Tax Increment Financing District No. 3 Housing Fund and preserve the creation of approximately 20 single - family lots for future residential development. Commissioner Kleven asked if Mr. Evanson would agree with the purchase price and provide a marketable title with taxes being paid. Mr. Boganey stated Mr. Evanson would have to speak to that issue and the EDA is not offering to pay delinquent taxes. Mr. Eitel stated the purchase agreements will include these amounts and noted the taxes are owed to Hennepin County so the EDA is not in a position to "forgive" payment. David Evanson, 7206 Camden Avenue North, stated he had asked Mr. Eitel if the EDA would consider paying all or a portion of the back real estate taxes owed to Hennepin County. No • 08/08/11 -2- DRAFT . specific dollar amount or percentage had been proposed. Mr. Evanson stated he wants to sell the property to satisfy creditors that have invested in the development. Commissioner Roche stated Brooklyn Center, in the past few years, has been very successful with the purchase and banking of property for future development and this action presented another such opportunity. He advocated for the staff to research the availability of other undeveloped parcels within this general area and immediately to the west and southwest. Commissioner Roche moved and Commissioner Lasman seconded adoption of RESOLUTION NO. 2011 -19 Authorizing the Acquisition of Six Undeveloped Parcels within the Preliminary Plat of Eastbrook Estates 2 nd Addition to Preserve Future Residential Housing Development Opportunities. Commissioner Kleven asked questions of Mr. Evanson and noted that without additional parcels, 67 Avenue could not be extended. She stated her support for this opportunity. President Willson agreed with Commissioner Roche that this is an opportunity and strategy the EDA has used successfully along Brooklyn Boulevard to combine parcels for development. He noted that over time the City will benefit by having control of this property for redevelopment. Commissioner Ryan stated he supported the requested action based on the information outlined by Mr. Eitel. • Motion passed unanimously. 5. ADJOURNMENT Commissioner Roche moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 8:04 p.m. Motion passed unanimously. 08/08/11 -3- DRAFT EDA Agenda Item No. 4a EDA ITEM MEMORANDUM • DATE: September b, 2011 TO: Curt Boganey, City Manager FROM: Tom Bublitz, EDA/HRA Specialist t THROUGH: Gary Eitel, Director of Business and Development SUBJECT: Resolution Approving Continuation of Certain Housing Programs And Reauthorizing the Use of Funds from Tax Increment District No. 3 Housing Account Recommendation: It is recommended that the Economic Development Authority Board (EDA) consider approval /adoption of the Resolution Approving Continuation of Certain Housing Programs And Reauthorizing the Use of Funds from Tax Increment District No. 3 Housing Account. Background: On January 12, 2009, the Economic Development Authority of Brooklyn Center, Minnesota (EDA) approved Resolution 2009 -02 (copy attached), which established and authorized funding • for housing programs to address the high number of foreclosures and vacant properties in the City. Foreclosure data from Hennepin County between 2007 and 2009 ranked Brooklyn Center only below Brooklyn Park in terms of number of foreclosures for Hennepin County suburban cities. The County anticipates foreclosures to remain at historically high levels for the next two to three years. Presently, foreclosures in Brooklyn Center are at 180 for the first seven months of 2011, which is at a pace that could approach the 2010 total of 315. Renew Loan Program: On the positive side of the foreclosure equation, Brooklyn Center's Renew Loan Program (aka Buyer Incentive Program) resulted in 92 down payment and closing cost loans closed as of the end of August 2011. The Renew Loan Program provided down payment and closing cost assistance to help rebuild the housing market in Brooklyn Center by offering a $10,000, zero percent interest free loan that is forgivable after five years residency in the home. The loans are available to income eligible persons purchasing a home in Brooklyn Center. Mission. Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust EDA ITEM MEMORANDUM The following table provides a summary of the Renew Buyer Incentive Program from March 2009 through August 2011. • ReNew Buyer Incentive Program Loan Pool: $1,000,000 Applications received to date: 139 Loans closed to date: 92 Applications Pending Closing 1 Applications Pending Reservation 1 Properties not registered or are incomplete: 0 Applications denied or withdrawn to date: 45 Total Reserved Funds: $10,000 Total Closed Loans: $915,000 Program funds remaining in pool (Uncommitted funds): $75 NOTE: When GMHC administrative expenses of $500 per loan ($26,000) are deducted from the $75,000 remaining program funds, there is $29,000 remaining in uncommitted funds. Renew Grant Program: This program provides down payment and closing cost assistance to help increase home ownership and encourage rehabilitation of foreclosed and vacant homes. The ro ram offers a p g • 3 %2 percent grant for down payment costs associated with the use of an FHA 203K loan. The FHA 203K loan folds housing rehab costs into the permanent mortgage financing. Up to $35,000 can be borrowed with a 203K loan for home repairs and improvements. To date, no renew grants have been issued under this (203K) buyer incentive program in the city. The 203K loan is an important tool and information from realtors indicates it is a growing share of the market. Staff is recommending that this piece of the buyer incentive package remain as an offering and staff will evaluate how to include the use of the 203K loan product into the buyer incentive programs. Remove and Rebuild Program: This is a program providing for acquisition and demolition of blighted, distressed and unmarketable properties to return the properties to an enhanced compatible use to the neighborhood. To date, Seven (7) properties, including one 11 unit Apartment, have been purchased under this program. Tax Increment No. 3 Housing Account: Tax Increment No. 3 Housing Account is a redevelopment district created in 1994 by special legislation that requires the city to set aside 15 percent of the annual TIF 3 tax increment into a housing development account. Eligible housing activities include the following: Rehabilitation, Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust EDA ITEM MEMORANDUM acquisition, construction, demolition and financing of existing single family or multi - family • housing. Consultant Services Agreement: The EDA has contracted with the Greater Metropolitan Housing Corporation (GMHC) since 1998 to provide technical, and rehabilitation advisory services, loan origination and administration for a variety of loan programs primarily through the Minnesota Housing Finance Agency. The services are offered free to Brooklyn Center residents. In March 2009, the Consultant Services Agreement with GMHC was amended to include administration of the Renew Loan/Grant and Remove and Rebuild Programs. This agreement runs through December 31, 2011. The Cost for GMHC to administer each Renew Loan/Grant is $500 p er closing, the fee for the acquisition under the Remove and Rebuild program is $2,000 per property and the fee for administering the demolition of single family properties purchased under Remove and Rebuild is $3,000 per property. Budget Issues: The TIF 3 Housing Account currently has approximately $1,800,000, with a projected revenue stream of an additional $355,000 for 2012. Of the $1,800,000 in current funds, $1,050,000 is available for new or ongoing housing initiatives. • Staff is estimating that 25 Renew Loans will be closed within the next 6 to 8 months for a total of $262,500, which includes administrative expenses. Remove and Rebuild projects require EDA Board approval so those projects will be presented on a case by case basis. All expenses related to the housing programs will be funded from the TIF 3 Housing Account. Council Goals: Strategic: We will stabilize and improve residential neighborhoods 4 • Mission: Ensuring an attractive, clean, safe community that enhances the quality of life and preserves the public trust i Commissioner Kay Lasman introduced the following resolution and.. moved its adoption: EDA RESOLUTION NO. 2009 -02 RESOLUTION ESTABLISHING HOUSING PROGRAMS AND APPROVING THE USE OF FUNDS FROM THE TAX INCREMENT DISTRICT NO. 3 HOUSING ACCOUNT I WHEREAS, the increase in mortgage foreclosures and vacant properties in the City Of Brooklyn Center (the "City ") has resulted in significant problems, including blight and deterioration, health and safety hazards, decreasing property values, and- disincentives to reinvestment, among others; and WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center, Minnesota (the "EDA') has determined that it is in the public interest to address these problems by encouraging occupancy and home ownership of such vacant buildings; and WHEREAS, the .EDA has reviewed and considered a number of programs as. hereinafter established to ' promote :home ownership of foreclosed and vacant properties and to remove blighted, distressed, and unmarketable properties from the City; and WHEREAS, the EDA has determined that it is reasonable and appropriate to use • available funds from Tax Increment District No. 3 Housing Account to finance such programs; and WHEREAS, the EDA has determined that it is in the best interests of the public and the public health, safety and welfare of the citizens of the City that the EDA establish such programs and make funds available therefor, all as hereinafter provided; NOW, THEREFORE, BE IT RESOLVED by the Economic . Development f Authority in and for the City of Brooklyn Center, Minnesota, as follows: l . The EDA hereby establishes its loan assistance programs. to promote home ownership . of foreclosed and vacant properties. The loan . assistance programs include ihe'ReNew Loan Program to provide loans for downpayment and closing cost assistanee'and the ReNew Grant Program to provide grants for down payment and closing cost assistance. 2. The EDA hereby establishes its Remove and Rebuild - Program. to acquire . and demolish blighted distressed and unmarketable properties and return the properties to an enhanced, compatible use with the neighborhood. 3. The EDA hereby approves the use of Tax Increment District No.. 3 Housing Account funds.. to fund the ReNew Loan Program, the ReNew Grant Program, and the Remove and Rebuild Program. RESOLUTION NO. 2009 -02 4. The EDA hereby approves the proposed CONSULTANT SERVICES AGREEMENT between the Brooklyn Center EDA and the Greater Metropolitan Housing Corporation for the administration of the ReNew Loan Program, The ReNew Grant Program, and the Remove and Rebuild Program. . 5. The President and Executive Director of The Economic Development Authority in and for the City of Brooklyn Center are authorized and directed to execute the CONSULTANT SERVICES AGREEMENT with the Greater Metropolitan Housing Corporation for the administration.. of the. above named programs, and to take all such. other and further steps as are reasonable and necessary to effect the programs established by this resolution. January 12.2009 Date President i The motion for adoption of the resolution was duly seconded by commissioner Tim Roche and upon vote being taken thereon, the following voted in favor thereof: Tim Willson, Kay Lasman, Tim Roche, Dan Ryan, and Mark Yelich; and the following voted against same: none; whereupon said resolution was declared duly passed and adopted. i i Commissioner introduced the following resolution and . moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING CONTINUATION OF CERTAIN HOUSING PROGRAMS AND REAUTHORIZING THE USE OF FUNDS FROM TAX INCREMENT DISTRICT NO.3 HOUSING ACCOUNT WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (EDA) approved Resolution 2009 -02, which established certain housing programs in the City of Brooklyn Center, including the Renew Loan Program, Renew Grant Program and Remove and Rebuild Program (the Housing Programs); and WHEREAS, Resolution 2009 -02 authorized the use of Tax Increment Finance District No. 3 Housing Account Funds to fund the Housing Programs; and WHEREAS, mortgage foreclosures and vacant properties continue to be significant problems in the City, resulting in neighborhood blight, deterioration, health and safety hazards, resulting in decreasing property values and disincentives to reinvestment in City neighborhoods, among others; and WHEREAS, the EDA has determined that it is in the public interest to address these • problems by encouraging occupancy and home ownership of such vacant and foreclosed buildings; and WHEREAS, the EDA has reviewed the results of the performance of the Housing Programs established to promote home ownership of foreclosed and vacant properties and to remove blighted, distressed and unmarketable properties from the City; and WHEREAS, the EDA has determined that it is reasonable and appropriate to continue to operate the Housing Programs and fund their operation from available funds from the Tax Increment District No. 3 Housing Account; and WHEREAS, the EDA has determined that it is in the best interest of the public and the public health, safety and welfare of the residents of the City that the EDA continue operation of the Housing Programs and make funds available, therefore, all as hereinafter provided. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of Brooklyn Center, Minnesota as follows: 1. The EDA hereby approves the continuation of its loan assistance programs to promote homeownership of foreclosed and vacant properties.. The loan assistance programs, including the Renew Loan Program to provide loans for down payment and closing cost assistance and the Renew Grant Program to . • provide grants for down payment and closing costs assistance, are hereby authorized for funding in the amount of $262,500 which includes administrative expenses. 2. The EDA hereby approves the continuation of its Remove and Rebuild program to acquire and demolish blighted and distressed and unmarketable properties and return the properties to an enhanced, compatible use with the neighborhood. 3. The EDA hereby approves the use of Tax Increment District No. 3 housing account funds to fund the continuation of the Renew Loan Program, the Renew Grant Program, and the Remove and Rebuild Program 4. The President and Executive Director of the Economic Development Authority of Brooklyn Center, Minnesota are hereby authorized and directed to take all such other further steps as are reasonable and necessary to effect the Housing Programs described by this resolution. September 12 2011 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. •