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HomeMy WebLinkAbout2014 05-12 EDAPEDA MEETING City of Brooklyn Center May 12, 2014 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. April 28, 2014 — Regular Session 4.Commission Consideration Items a. Resolution Approving Continuation of ReNew Buyer Incentive Program and Reauthorizing the Use of Funds form Tax Increment District No. 3 Housing Account Requested Commission Action: —Motion to adopt resolution. 5. Adjournment [The EDA may elect to adjourn to closed City Council Executive Session under the attorney-client privilege to discuss pending litigation regarding North Valley, Inc. — Minn. Stat. § 13D.05, subd. 3 (b)] EPA Agenda Item No. 32 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 APRIL 28, 2014 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, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were Executive Director Curt Boganey, Finance Director Nate Reinhardt, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Planning and Zoning Specialist Tim Benetti, City Attorney Charlie LeFevere, and Mary Mullen, TimeSaver Off Site Secretarial, Inc. 3.APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Ryan moved and Commissioner Myszkowski seconded approval of the Agenda and Consent Agenda, as amended, with amendments to the March 24, 2014, EDA Regular Session minutes, and the following item was approved: 3a. APPROVAL OF MINUTES 1. March 24, 2014 — Regular Session Motion passed unanimously. 4.COMMISSION CONSIDERATION ITEMS 4a. CONSIDERATION OF APPROVAL OF GRANT APPLICATIONS FOR CONTAMINATION CLEANUP OF THE FORMER HOWE CHEMICAL SITE LOCATED AT 4821 XERXES AVENUE NORTH IN BROOKLYN CENTER Director of Business and Development Gary Eitel introduced the item, discussed the history, and stated the purpose of the proposed grant applications. 04/28/14 -1- DRAFT Mr. Eitel stated the perimeter and depth of contaminated soils on the site was identified and a mitigation plan was submitted to the USDA following their prescribed method. He added the site should be cleaned and ready for occupancy by October 2014. Commissioner Ryan thanked Mr. Eitel for his report. 1.RESOLUTION NO. 2014-05 AUTHORIZING THE ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA TO APPLY FOR A CONTAMINATION CLEANUP GRANT FROM THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT Commissioner Myszkowski moved and Commissioner Ryan seconded to adopt RESOLUTION NO. 2014-05, Authorizing the Economic Development Authority of Brooklyn Center, Minnesota to apply for a Contamination Cleanup Grant from the Minnesota Department of Employment and Economic Development. Motion passed unanimously. 2.RESOLUTION NO. 2014-06 AUTHORIZING THE SUBMISSION OF A GRANT APPLICATION TO THE METROPOLITAN COUNCIL FOR THE TAX BASE REVITALIZATION ACCOUNT Commissioner Ryan moved and Commissioner Myszkowski seconded to adopt RESOLUTION NO. 2014-06, Authorizing the Submission of a Grant Application to the Metropolitan Council for the Tax Base Revitalization Account. Motion passed unanimously. 3. RESOLUTION NO. 2014-07 APPROVING AN APPLICATIION FOR A HENNEPIN COUNTY ENVIRONMENTAL FINANCIAL GRANT Commissioner Ryan moved and Commissioner Myszkowski seconded to adopt RESOLUTION NO. 2014-07, approving an Application for a Hennepin County Environmental Financial Grant. Motion passed unanimously. 4b. RESOLUTION NO. 2014-08, AUTHORIZING THE EXECUTION OF A LETTER OF INTENT AND EXCLUSIVE NEGOTIATING AGREEMENT WITH RIDGECREST INVESTORS, LLC FOR THE COMMERCIAL DEVELOPMENT OF LOT 1, BLOCK 1, NORTHBROOK CENTER 2 ND ADDITION (TOLD DEVELOPMENT — 57 TH AND LOGAN) Mr. Eitel gave a brief overview of the potential commercial development of a neighborhood retail center, comparable to The Shops at Wedgewood in Maple Grove. He stated the purpose of 04/28/14 -2- DRAFT the Letter of Intent and related negotiating agreement is to find a suitable tenant, and to provide a schedule timeline for the proposed development. Commissioner Ryan moved and Commissioner Myszkowski seconded to adopt RESOLUTION NO. 2014-08, Authorizing the Execution of a Letter of Intent and Exclusive Negotiating Agreement With Ridgecrest Investors, LLC, for the Commercial Development of Lot 1, Block 1, Northbrook Center 2 hd Addition (Told Development — 57 th and Logan). Motion passed unanimously. 5. PUBLIC HEARINGS 5a. MINNESOTA INVESTMENT FUND (MIF) GRANT AUTHORIZATION Mr. Boganey introduced the item, discussed the history, and stated the purpose of the MIF grant application. He invited Planning and Zoning Specialist Tim Benetti to address the EDA. Mr. Benetti gave an overview of a grant application on behalf of Sign Zone, Inc., who wishes to consolidate their business at Palmer Lake Plaza. He stated the funding can be used for improvements, modifications, and preparation of the facilities for occupation. Commissioner Ryan thanked Mr. Benetti for his presentation. He asked whether the MIF grant funding comes to the City at no risk for obligation. Mr. Benetti confirmed this. Commissioner Myszkowski expressed her appreciation of Sign Zone, Inc., and their relocation to Brooklyn Center. Mr. Benetti stated that Sign Zone, Inc. continues to work diligently to find suitable alternative business locations for the current tenants of Palmer Lake Plaza. He added they intend to occupy the entire facility. Commissioner Ryan moved and Commissioner Myszkowski seconded to open the public hearing. Motion passed unanimously. There were no comments. Commissioner Kleven moved and Commissioner Ryan seconded to close the public hearing. Motion passed unanimously. 1. RESOLUTION NO. 2014-09 AUTHORIZING THE CITY OF BROOKLYN CENTER'S ECONOMIC DEVELOPMENT AUTHORITY TO SUBMIT A BUSINESS AND COMMUNITY DEVELOPMENT APPLICATION TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND 04/28/14 -3- DRAFT ECONOMIC DEVELOPMENT FOR A MINNESOTA INVESTMENT FUND (MIF) GRANT FOR THE BENEFIT OF PALMER LAKE BC, LLC (SIGN ZONE, INC.) AND THE PALMER LAKE PLAZA PROPERTY LOCATED AT 6850 SHINGLE CREEK PARKWAY Commissioner Myszkowski moved and Commissioner Ryan seconded to adopt RESOLUTION NO. 2014-09 Authorizing the City of Brooklyn Center's Economic Development Authority to Submit a Business and Community Development Application to the Minnesota Department of Employment and Economic Development for a Minnesota Investment Fund (MIF) Grant for the Benefit of Palmer Lake BC, LLC (Sign Zone, Inc.) and the Palmer Lake Plaza Property Located at 6850 Shingle Creek Parkway. Motion passed unanimously. 6. ADJOURNMENT Commissioner Ryan moved and Commissioner Myszkowski seconded adjournment of the Economic Development Authority meeting at 8:06 p.m. 04/28/14 -4- DRAFT EDA Agend Item N©0 4a Foreclosures (Sheriff's Sales) Vacant Properties (Occurred throughout the year) Active Vacant as of 12/31 N/A 274392287—400 394 289 387 N/A 614 511101394438847884 124246197418298287 EDA ITEM MEMORANDUM DATE: May 12, 2014 TO: Curt Boganey, Executive Director FROM: Vickie Schleuning, Assistant City Manager/Director of Building & Community Standards SUBJECT: Resolution Approving Continuation of ReNew Buyer Incentive Program and Reauthorizing the Use of Funds from Tax Increment District No. 3 Housing Account Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of resolution approving continuation of ReNew Buyer Incentive Program and reauthorizing the use of $100,000 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. On September 12, 2011, an additional $262,500 was allocated by Resolution 2011-20 (copy attached). Foreclosure data from Hennepin County ranked Brooklyn Center one of the highest number of foreclosures for Hennepin County suburban cities. Foreclosures are anticipated to remain at historically high levels for the next two to three years. Status of ReNew Buyer Incentive Program The ReNew Buyer Incentive Program consists of a forgiveable loan and a grant option. Brooklyn Center's Buyer Incentive Program (aka ReNew Home Purchase Program) has been a Mission: Ensuring an attractive, clean, safe, inclusive conununhy that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM successful tool in addressing foreclosure related issues in Brooklyn Center. As of April 2014, 124 down payment and closing cost loans have closed as a result of this program. Most homebuyers have chosen the forgivable loan option. 1.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. 2.The ReNew Grant Program provides down payment and closing cost assistance to help increase home ownership and encourage rehabilitation of foreclosed and vacant homes. The program offers a 3 1/2 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. 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. The following table provides a summary of the ReNew Buyer Incentive Program from March 2009 through April 31, 2014. ReNew Buyer Incentive Program Loan Pool:$1,250,000 Original allocation si,o0o,o00 2012 Allocation $250,000 Applications received to date:179 Loans closed to date:124 Applications Pending Closing 0 Applications Pending Reservation 0 Applications denied or withdrawn to date 55 Total Loan Funds Reserved $0 Total Set Up Fees Reserved ($25 per loan began 2013)$0 $1,228,750Total Loans Closed Total Set Up Fees Closed ($25 per loan began 2013)$225 Program funds remaining in pool (Uncommitted funds):$21,025 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 qualified rehabilitation, Mission: Ensuring an attractive, clean, safe, inclusive comnumity that enhances the quality of life for all people 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 was renewed on February 5, 2014 and is effective through December 31, 2014. The Cost for GMHC to administer each ReNew Loan/Grant is $500 per closing. Budget Issues: The TIF 3 Housing Account has approximately $480,000 available with a projected revenue stream of an additional $440,798 for 2014. Strategic Priorities: • Vibrant Neighborhoods Attachments: Attachment I: Renew Home Guidelines Attachment II: EDA Council Memo 01-09-2009 Attachment III: EDA Council Resolution 2009-02 Attachment IV: Council Resolution 2011-20 Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING CONTINUATION OF RENEW HOME BUYER INCENTIVE PROGRAM 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 Home Buyer Incentive Program including the ReNew Loan Program and ReNew Grant Program; and WHEREAS, Resolution 2009-02 authorized the use of Tax Increment Finance District No. 3 Housing Account Funds to fund the ReNew Home Buyer Incentive 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 WHEREAS, the EDA has determined that it is reasonable and appropriate to continue to operate the Housing Program and fund its 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 Program 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 Home Buyer Incentive 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 $100,000 which includes administrative expenses. 2. The EDA hereby approves the use of Tax Increment District No. 3 housing account funds to fund the continuation of the ReNew Home Buyer Assistance Programs including the Loan Program and Grant 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 affect the Housing Programs described by this resolution. May 12, 2014 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. EDA ITEM MEMORANDUM Attachment I: Renew Home Guidelines I01 City 0 1 Brooklyn CenterBROOKLYN CENTER ReNew Buyer Incentive Program Greater Metropolitan Housing Corporation Program Summary The Economic Development Authority (EDA) of Brooklyn Center, Minnesota (EDA) has partnered with the Greater Metropolitan Housing Corporation to provide a down payment and closing cost assistance program to help rebuild the housing market in Brooklyn Center. The ReNew Buyer Incentive Program features two products. An eligible home buyer may apply for either of the following: ReNew Grant offers a grant of 3.5% of the acquisition cost (purchase price plus rehab costs) up to $7,000 to be used for the payment of down payment with an FHA 203 K Purchase/Rehab Loan, or other approved purchase/rehab loan. ReNew Loan provides a $10,000 no-interest deferred loan that is forgivable at the end five years if the borrower resides in the home during that time. The ReNew Loan may be used for payment of down payment, closing costs or home repairs when used in connection with any prime "A" fixed-rate first mortgage loan program. ReNew Grant Guidelines The ReNew Grant is a down payment program to help increase home ownership and encourage reinvestment. This program offers a grant of 3.5% of the acquisition cost (purchase price plus rehab costs) up to $7,000 when used with a FHA 203K Purchase/Rehab Loan, or other approved purchase/rehab loan. ReNewGrant Terms a)Must be used with an FHA 203K loan, or other approved purchase/rehab loan. b)A minimum of $15,000 in home improvements is required by the EDA to qualify for the ReNew Grant funds. c)Construction work must be completed by a licensed contractor, with applicable permits and inspections completed. d)A ReNew Grant agreement must be signed by the home buyer who certifies they will be an owner-occupant. e) Use of local contractors is encouraged. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for nil people and preserves the public trust EDA ITEM MEMORANDUM Use of Funds The ReNew Grant funds must be used for down payment. The borrower may not receive any portion of these funds as cash. Eligible Properties a)The property must be a single family detached dwelling or townhome. b)The property must be in a foreclosed status with the ReNew Grant recipient as the first occupant after the foreclosure; the property must be registered as a vacant property by the City of Brooklyn Center. Information on how to register a property can be found at www.citvofbrooklyncenterom. c)There is no sale price limit. d)A home inspection must be completed by a certified/licensed home inspector to determine condition of home, needed repairs and cost. e)The borrower's combined mortgage debt cannot exceed 100% of the appraised value. f)Construction must start within 30 days of the purchase closing. The homeowner must occupy the home within 60 days of the completion of the construction work and no longer than 180 days after purchase closing. Eligible Borrower a)Anyone who meets all the following conditions: b)Qualifies for and is receiving an FHA 203K loan, or other approved purchase/rehab loan, from an accredited lender; borrower does not need a co-signer to qualify. c)Household income to housing expense ratio does not exceed 31% or a total debt ratio of 43%. d)Household income may not exceed the following TIF Housing Account median income e) which is adjusted annually: -Households of 1or 2 may not exceed 100% of the median income. -Households of 3 or more may not exceed 115% of the median income. -Borrower may not own other residential property or homes. f) The borrower must be an individual person or persons. The borrower may not be a business entity. Homeownership Education Borrower must complete a homeownership education class through the Homestretch program sponsored by the Minnesota Home Ownership Center (telephone 651-659- 9336 or online at vvww.hocmn.orq) or a comparable approved program prior to closing on the loan. Eligible Primary Financing and Combining of Funds . . Mission: Ensuring an attractive, clean, soft, inclusive comnutniO , that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM a)The ReNew Grant maybe offered in connection with any FHA 203K loan, or other approved purchase/rehab loan, that is generally considered in the lending industry to be an "A" or "prime" lending product. b)The ReNew Grant may not be used with sub-prime lending products. c)Cash buyers are not eligible for the ReNew Grant. d)Applicants may not receive both the ReNew Loan and the ReNew Grant. However, an applicant receiving an FHA 203K, or other approved purchase/rehab loan, can choose to apply for the Renew Loan instead of the Renew Grant. Guidelines for the Renew Loan follow on the next page. e) ReNew Buyer Incentive Program funds may be combined with other assistance programs to provide greater opportunity for the borrower to secure the purchase of a home. ReNew Loan Guidelines The ReNew Loan program offers a $10,000 no-interest deferred loan that is forgiven at the end of five years to anyone buying a foreclosed home in which they will live throughout the term of the ReNew Loan. ReNew Loan Terms a)Zero percent interest. b)No monthly payment. c)The ReNew Loan will be forgiven at the end of a five-year time period from the date of closing if the property is owner-occupied for the full ReNew Loan term. Relative homestead properties* do not qualify for the ReNew Loan. No part of the loan will be forgiven for any time period less than five years. d)The ReNew Loan is due on sale, transfer of title, when the primary mortgage is paid off, or when the property ceases to be the owner's primary place of residence, except that in the case of a refinance, the loan may be subordinated subject to the EDA's Subordination Policy in effect at the time of the request for subordination. . e) The ReNew Loan is considered a "Special Mortgage" under the terms of Minnesota Statute 58.13. The mortgage may be subordinated as part of a refinance of the primary loan; however, the owner must receive counseling regarding their refinance transaction. Proof of the completion of the counseling will be required prior to approval of the subordination. * "Relative homestead" is a property tax classification that allows the homeowner to retain homestead status on his or her property if a relative occupies it. ReNew Loan Amount Borrowers will receive up to $10,000. Mission: Ensuring an attractive, clean, safe, inclusive conununi01 that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM Use of Funds a)The funds may be used towards the payment of down payment or for the payment of normal and usual closing costs. The borrower may not receive any portion of these funds as cash. b)The homebuyer may also use the funds to complete repairs and improvements to the home as part of their home purchase transaction. c) Any portion of the Re New Loan that is not applied to the payment of down payment, closing costs or construction costs must be repaid to the Economic Development Authority of Brooklyn Center, Minnesota and the ReNew Loan balance will be reduced accordingly. Eligible Properties a)The property must be a single family detached dwelling or townhome. b)The property must be in a foreclosed status with the ReNew Loan recipient as the first purchaser after the foreclosure, and the property must be registered as a vacant property by the City of Brooklyn Center. Information on how to register a property can be found at www.cityofbrooklyncenter.org . c)There is no sale price limit. d)A home inspection must be completed by a certified/licensed home inspector to determine condition of home, needed repairs and cost. e)The borrower's combined mortgage debt including the ReNew Loan cannot exceed 100% of the appraised value. f)If applicable, construction must start within 30 days of the purchase closing. The homeowner must occupy the home within 60 days of the completion of the construction work and no longer than 180 days after purchase closing. Eligible Borrowers a)Anyone who meets all the following conditions: b)Borrower must qualify for and receive a traditional (prime or A-rated) fixed-rate first mortgage loan; borrower does not need a co-signer to qualify. c)Household income to housing expense ratio does not exceed 31% or a total debt ratio of 43%. d)Household income may not exceed the following TIF Housing Account median income which is adjusted annually: a.Households of 1or 2 may not exceed 100% of the TIF Housing Account median income: $83,900. b.Households of 3 or more may not exceed 115% of the TIF Housing Account median income: $96,485. e) The borrower must be an individual person or persons. The borrower may not be an business entity. Homeownership Education Borrower must complete a homeownership education class through the Homestretch program sponsored by the Minnesota Home Ownership Center Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM (telephone 651-659-9336 or online at wvvw.hocmn.orq or a comparable approved program prior to closing on the ReNew Loan. Loan Security a)The ReNew Loan will be separately secured by a Promissory Note and Mortgage in b)favor of the EDA. c)The ReNew Loan may be secured in a subordinate lien position behind other loans. d)No title insurance is required. e) No mortgage clause is required in the owner's hazard insurance policy. Eligible Primary Financing and Combining of Funds a)The ReNew Loan may be offered in connection with any fixed-rate FHA, VA, Fannie Mae, or Freddie Mac insured or uninsured loan product that is generally considered in the lending industry to be an "A" or "prime" lending product. b)The ReNew Loan may not be used with sub-prime lending products. c)Cash buyers are not eligible for a ReNew loan. d)Applicants may not receive both the ReNew Deferred Loan and the ReNew Grant. e) The ReNew Buyer Incentive Program funds may be combined with other assistance programs to provide greater opportunity for the borrower to secure the purchase of a home. Loan Costs Mortgage registration tax and filing fees will be paid by the borrower(s). - - _ Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM Attachment II: EDA Council Memo 01-09-2009 EDA COUNCIL ITEM MEMORANDUM TO: Curt Boganey, City Manager FROM: Gary Eitel, Director of Dept of Business and Neighborhood Services Vickie Schleuning, Director of Dept of Buildings and Neighborhood Standards DATE: January 6, 2009 SUBJECT: Resolution Establishing Housing Programs and Approving the Use of Funds from the Tax Increment District No. 3 Housing Account Recommended Action: Motion to adopt the Resolution Establishing Housing Programs and Approving the Use of Funds from the Tax Increment District No, 3 Housing Account Background information: On December 8, 2008, the City Council reviewed the following housing initiatives to address housing issues resulting from foreclosed mortgages and vacant homes: ReNew Loan Program - a down payment and closing cost assistance program to help rebuild the housing market in Brooklyn Center where higher than normal levels of mortgage foreclosures and vacancies has occurred, decreasing home ownership. The program offers a $10,000 zero-percent interest loan that is forgivable after five years to anyone buying a home in which they live. ReNew Grant Program - a down payment and closing cost assistance program to help increase home ownership and encourage reinvestment. The program offers a 3.5% grant with the use of an FHA 203K loan. Up to $35,000 can be borrowed with a 203 K loan for home repairs, maintenance and improvements. Remove and Rebuild Program - an acquisition and demolition program to help remove blighted, distressed and unmarketable properties and return the properties to an enhanced, compatible use with the neighborhood. Attached for your reference is a copy of the December 8th staff memo and program descriptions. Tax Increment District #3 Housing Account Tax Increment District #3 is a redevelopment district created in 1994 which included special legislation that requires the City to set aside 15% of the annual tax increment into a housing development account. Eligible housing activities include the following: rehabilitation, acquisition, construction, demolition, and financing of existing single family or multi-family housing. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM The account has approximately $3.2 million with an annual revenue stream of approximately $300,000 during the duration of the district (2020). Consultant Services Agreement The City has contracted with the Greater Metropolitan Housing Corporation since 1998 to provide technical rehabilitation advisory services and loan administration for a variety of... Minnesota Finance Agency home improvement programs. Attached for you reference is a copy of the 2008 consultant service agreement which was funded by the HRA/EDA. An amended contract which expands the current services to include the administration of the above listed housing initiatives is presently being reviewed by the City Attorney. This proposed agreement includes the following additional fees which will be funded by the TIF #3 Housing Account: 1.An increase in the annual service fees from $15,000 to $25,000. 2.$500 fee per closing of each loan. 3.$2,000 fee per property acquisition and demolition. 4.Minor service fees associated with administering Minnesota Housing Finance Agency Programs. )3udget Issues: The goals of the Housing Programs is to facilitate homeownership assistance to 100 properties and acquisition/demolition of 8 to 10 properties with a total TIF #3 Housing Budget of $1.6 million. for all people and preserves the public trust EDA ITEM MEMORANDUM Attachment III: EDA Council Resolution 2009-02 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 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 Authority in and for the City of Brooklyn Center, Minnesota, as follows: 1.The EDA hereby establishes its loan assistance programs to promote home ownership of foreclosed and vacant properties. The loan assistance programs include the ReNew Loan Program to provide loans for down payment and closing cost assistance and the ReNew Grant Program to provide grants for down payrrient 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. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM 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 The motion for adoption of the forgoing 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. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust EDA ITEM MEMORANDUM Attachment IV: Council Resolution 2011-20 Commissioner Dan Ryan introduced the following resolution and moved its adoption: EDA RESOLUTION NO 2011-20 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: Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of Uje for all people and preserves the public trust EDA ITEM MEMORANDUM EDA RESOLUTION NO. 2011-20 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 CommissionerKay Lasman and upon vote being taken thereon, the following voted in favor thereof: Tim Willson, Carol Kleven, Kay Lasman, and Dan Ryan; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted. „.„ Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust