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HomeMy WebLinkAbout2009 01-12 EDAP• EDA MEETING City of Brooklyn Center January 12, 2009 AGENDA 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. December 8, 2008 - Regular Session 4. Commission Consideration Items a. Resolution Electing Officers for the Economic Development Authority in and for the City of Brooklyn Center Requested Commission Action: -Motion to adopt resolution. b. Resolution Establishing Housing Programs and Approving the Use of Funds from the Tax Increment District No. 3 Housing Account Requested Commission Action: -Motion to adopt resolution. 5. Adjournment 0 enda item N°• 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 DECEMBER 8, 2008 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 7:23 p.m. 2. ROLL CALL President Tim Willson and Commissioners Kay Lasman, Mary O'Connor, Dan Ryan, and Mark Yelich. Also present were Executive Director/City Manager Curt Boganey, Assistant to the City Manager Vickie Schleuning, Director of Fiscal & Support Services Dan Jordet, Public Works Director/City Engineer Steve Lillehaug, Community Development Director Gary Eitel, Planning and Zoning Specialist Ron Warren, Police Chief Scott BechtHold, City Attorney Charlie • LeFevere, and Carol Hamer, TimeSaver Off Site Secretarial, Inc. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Lasman moved and Commissioner Ryan seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. November 10, 2008 - Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2008-12 APPROVING THE FINAL BUDGET FOR THE CITY OF BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY FOR FISCAL YEAR 2009 Commissioner Lasman moved and Commissioner Ryan seconded adoption of EDA RESOLUTION NO. 2008-12 Approving the Final Budget for the City of Brooklyn Center Economic Development Authority for Fiscal Year 2009. • Commissioner O'Connor voted against the same. Motion passed. 12/08/08 -1- DRAFT 4b. RESOLUTION NO. 2008-13 ACCEPTING BID AND AWARDING CONTRACT, PROJECT 218034, 2008, PARTIAL REROOFING AT EARLE BROWN • HERITAGE CENTER Commissioner Lasman moved and Commissioner Ryan seconded adoption of EDA RESOLUTION NO. 2008-13 Accepting Bid and Awarding Contract, Project 218034, 2008, Partial, Reroofing at Earle Brown Heritage Center. Mr. Boganey introduced the item, discussed the history, stated the purpose of the proposed resolution, and answered questions of the EDA. There was discussion on the $2,500 deductable. Mr. Boganey stated the funding source of the $2,500 deductable will be the Earle Brown Heritage Center Capital Fund. Motion passed unanimously. 4c. RESOLUTION NO. 2008-14 TRANSFERRING $235,000 INTO THE EARLE BROWN HERITAGE CENTER CAPITAL FUND Mr. Boganey introduced the item, discussed the history, and stated the purpose of the proposed resolution. Commissioner Lasman moved and Commissioner Ryan seconded adoption of EDA RESOLUTION NO. 2008-14 Transferring $235,000 Into the Earle Brown Heritage Center • Capital Fund. There was discussion on the transfer of funds from the Earle Brown Heritage Center Operations Fund to the Earle Brown Heritage Center Capital Fund. Mr. Boganey clarified if the EDA approves the transfer, the Earle Brown Heritage Center Operations Fund will retain a balance of $893,240 for operations. Motion passed unanimously. 5. ADJOURNMENT Commissioner Lasman moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 7:32 p.m. Motion passed unanimously. • 12/08/08 -2- DRAFT EDA Agenda Item -NO., 4a • 0 0 COUNCIL ITEM MEMORANDUM TO: Curt Boganey, City Manager FROM: Sharon Knutson, City Clerk J ~ DATE: January 6, 2009 SUBJECT: EDA Resolution Electing Officers for the Economic Development Authority in and for the City of Brooklyn Center Recommendation: It is recommended that the Economic Development Authority consider adoption of EDA Resolution Electing Officers for the Economic Development Authority in and for the City of Brooklyn Center. Background: Minn. Stat. 469.096 provides that an Economic Development Authority shall elect a president, treasurer, and secretary on an annual basis. EDA Resolution No. 87-06 also states in Article II, Section 7, that the president, vice-president, secretary, treasurer, and assistant treasurer shall be • elected at the annual meeting of the Authority and shall hold office for one year or until successors are elected and qualified. The attached EDA resolution elects such positions for the Economic Development Authority. Budget Issues: There are no budget issues to consider. Attachments • Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION ELECTING OFFICERS FOR THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER WHEREAS, Minnesota Statutes Section 469.096 provides that an economic development authority shall elect a president, treasurer, and secretary on an annual basis. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City Council of the City of Brooklyn Center, Minnesota, that the Authority hereby elects the following officers to serve through December 31, 2008, or such later date as their successors are elected and qualified: President/Treasurer Tim Willson Vice-President. Kay Lasman Assistant Treasurer Daniel Jordet Secretary Gary Eitel • Januarv 12, 2009 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. I MINNESOTA STATUTES 2008 469.096 • 469.096 OFFICERS; DUTIES; ORGANIZATIONAL MATTERS. Subdivision 1. Bylaws, rules, seal. An authority may adopt bylaws and rules of procedure and shall adopt an official seal. Subd. 2. Officers. An authority shall elect a president, a vice-president, a treasurer, a secretary, and an assistant treasurer. The authority shall elect the president, treasurer, and secretary annually. A commissioner must not serve as president and vice-president at the same time. The other offices may be held by the same commissioner. The offices of secretary and assistant treasurer need not be held by a commissioner. Subd. 3. Duties and powers. The officers have the usual duties and powers of their offices. They may be given other duties and powers by the authority. Subd. 4. Treasurer's duties. The treasurer: (1) shall receive and is responsible for authority money; (2) is responsible for the acts of the assistant treasurer; (3) shall disburse authority money by check only; (4) shall keep an account of the source of all receipts, and the nature, purpose, and authority of all disbursements; and (5) shall file the authority's detailed financial statement with its secretary at least once a year at times set by the authority. Subd. 5. Assistant treasurer. The assistant treasurer has the powers and duties of the treasurer if the treasurer is absent or disabled. Subd. 6. Treasurer's bond. The treasurer shall give bond to the state conditioned for the faithful discharge of official duties. The bond must be approved as to form and surety by the authority and filed with the secretary. The bond must be for twice the amount of money likely to be on hand at any one time, as determined at least annually by the authority provided that the bond must not exceed $300,000. Subd. 7. Public money. Authority money is public money. Subd. 8. Checks. An authority check must be signed by the treasurer and one other officer named by the authority in a resolution. The check must state the name of the payee and the nature of the claim that the check is issued for. Subd. 9. Financial statement. The authority's detailed financial statement must show all receipts and disbursements, their nature, the money on hand, the purposes to which the money on Copyright Q 2008 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. 2 MINNESOTA STATUTES 2008 469.096 hand is to be applied, the authority's credits and assets, and its outstanding liabilities in a form required for the city's financial statements. The authority shall examine the statement together with the treasurer's vouchers. If the authority finds that the statement and vouchers are correct, it shall approve them by resolution and enter the resolution in its records. . History: 1987 c 291 s 97 • Copyright 0 2008 by the Revisor of Statutes, State of Minnesota. All Rights Reserved. Member Gene Lhotka • resolution and moved its adoption: introduced the following EDA RESOLUTION NO. 87-06 RESOLUTION ADOPTING BYLAWS OF THE BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota is organized and operates pursuant to Minn. Stat., Chapter 458C. NOW, THEREFORE, BE IT RESOLVED that the Economic Development Authority of Brooklyn Center, Minnesota, hereby adopts and approves the following bylaws: ARTICLE I - THE AUTHORITY Section 1. Name of Authoritv. The name of the Authority is the "Economic Development Authority of Brooklyn Center, Minnesota." Section 2. Seal of Authoritv. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority. . Section 3. Office of Authoritv. The offices of the Authority are at City Hall in the City of Brooklyn Center, State of Minnesota, or at such other place, as the Authority may designate by resolution. ARTICLE II - OFFICERS Section 1. Officers. The officers of the Authority are the President, Vice-President, Secretary, Treasurer, and Assistant Treasurer. Section 2. President. At the annual meeting, the President shall submit to the Authority a report summarizing-the activities and programs of the Authority for the past year and containing - the President's recommendation for Authority activities for the ensuing year. Section 3. Vice-President. The Vice-President shall perform the duties of the President in the absence or incapacity of the President; and in case of the resignation or death of the President, the Vice-President shall perform such duties as are imposed on the President until such time as the Authority shall select a new President. Section 4. Secretary and Treasurer. The Secretary and Treasurer shall perform the duties of a Secretary and Treasurer, respectively, for the Authority. The Treasurer shall sign all orders and checks for the payment of money and shall pay out and EDA RESOLUTION NO. 87-06 disburse such monies under the direction of the Authority. Except as otherwise authorized by resolution of the Authority, all such orders and checks shall also be counter-signed by the President. The Treasurer shall be responsible for the care and custody of all funds of the Authority, and he shall be responsible for the keeping of accounts showing receipts and expenditures of the Authority. The Treasurer shall render to the Authority an account-of €inancial condition of the Authority as may be requested by the Authority. Once each year on or before the last day of June, the Treasurer shall submit an audited detailed financial statement to the Authority covering the entire financial operations of the Authority for the preceding fiscal year hereby defined as the calendar year. The Secretary shall keep in safe custody the seal of the Authority and shall have the power to affix such seal to all contracts and instruments authorized to be executed by the Authority. Section 5. Executive Director. The Brooklyn Center city manager shall serve as Executive Director of the Authority and shall have general supervision over the administration and management of its business and affairs subject to the direction of the Authority. The Executive Director shall keep a record of the proceedings of the Authority. The Executive Director shall cosign all contracts, deeds, and similar instruments to which the Authority is a party. Section 6. Additional Duties. The officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the bylaws or rules and regulations of the Authority. Section 7. Election or Appointment. The President, Vice-President, Secretary, Treasurer, and Assistant Treasurer shall be elected at the annual meeting of the Authority and shall hold office for one year or until successors are elected and qualified. Section B. Vacancies. Should the office of the President, Vice-President, Secretary, Treasurer, or Assistant Treasurer become vacant, pursuant to Minn. Stat. Section 351.02 or by other provisions of law, the Authority shall elect a successor from its membership at the next regular meeting, and such election shall be for the unexpired term of the office. Section 9. Additional Personnel. The Authority may from time to time employ or contract for such personnel as it .deems necessary to exercise its powers, duties, and functions as prescribed by Minn. Stat., Chapter 458C, applicable thereto. Such personnel may be employees of the Authority, employees of other governmental organizations, or independent contractors. The selection and compensation of such personnel shall be determined by the Authority subject to the laws of the State of Minnesota. EDA RESOLUTION NO. 87-06 0- 0 ARTICLE III - MEETINGS Section 1. Annual Meetina. The annual meeting of the Authority shall be held on the first business day of January.. Section 2. Meetina Schedule. The meeting schedule of the Authority shall be developed by the Executive Director. Section 3. Special Meetinas. Special meetings of the Authority may be called by the President, or two members of the Authority for the. purpose of transacting any business designated in the call. The call for a special meeting may be delivered at any time prior to the time of the proposed meeting to each member of the Authority or may be mailed to the business or home address of each member of the Authority at least two days prior to the date of such special meeting. At such special meeting no business shall be considered other than as designated in the call, but if all of the members of the Authority are present at a special meeting, any and all business may be transacted at such special meeting by unanimous vote. Section 4. Ouorum. Three members of the Authority shall constitute a quorum to do business, but a smaller number may adjourn from time to time. When a quorum is in attendance, action may be taken by the Authority upon a vote of a majority of the members present. Section 5. Manner of Votina. The voting on all questions coming before the Authority shall be by roll call and the yeas and nays shall be entered upon the minutes of such meetings. ARTICLE IV - AMENDMENTS Section 1. Amendments to Bvlaws. The bylaws of the Authority may be amended only with the approval of at least three members of the Authority. November 9, 1987 Date ~Chairmah" The motion for the adoption of the foregoing resolution was duly seconded by member Bill Hawes , and upon vote being taken thereon, the following voted in favor thereof: Dean Nyquist, Gene Lhotka, Celia Scott, Bill Hawes, and Rich Theis; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted. 0 EDA Agenda Item No. 4b • 0 • 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. • 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. v . 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. Bud et 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. 0 • Commissioner introduced the following resolution and moved its adoption: -EDA~RES.OLI =TTION NO. 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 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. 1 . 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. 4. The EDA hereby approves the proposed CONSULTANT SERVICES AGREEMENT between the Brooklyn Center EDA and the Greater Metropolitan Dousing -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. Date: By: Tim Willson, President ATTEST: Secretary 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. • 2 • Foreclosure Strategy- Step 4. Reinvestment Options Updated 12-29-08 Program Options for Mortgage Foreclosed and Vacant Properties Summary of Program Criteria and Guidelines- DRAFT The following programs are possible options to address the high number of mortgage foreclosed homes and associated vacant properties in the City of Brooklyn Center. These programs or variations thereof are being implemented in other cities to address the foreclosure aftermath. A brief explanation of the program, criteria and guidelines. are provided. Three basic program types are indicated- loan assistance, demolition of substandard properties, and city-executed housing rehabilitation. 1. ReNew Buver Incentive Program " ReNew Loan . 1. Program Summary' y. The Brooklyn Cui nter..ReNew loan pram is a downpayment and closing cost assistance program to help rebuild the housing market Sri" Brooldyn 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 over five years to anyone. i yring a home in whichfihey;.; e. 2. Lean Terms a. Zero percent interest b. No monthly payment. c. The loan willbe forgiven after a five year time period from the date of closing where th6~property is owner-occupied by the mortgagee. No part of the loan will be forgiven for any time period less than five years. d. The 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 City's Subordination Policy in effect at the time of the request for subordination. e. These loans are 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. f. A home inspection must be completed by a certified housing inspector to determine condition of home, needed repairs and costs. 3. Maximum and Minimum Loan Amounts: a. Minimum: none b. Maximum $10,000 4. Use of Funds The funds may be used to go toward either of the following uses: a. The payment of down payment and/or for the-payment of normal and usual closing costs. The borrower may not receive any portion of these funds as cash. b. If the homebuyer will complete repairs and improvements to the home as part of their home purchase transaction, ut 10,000 of the loan maybe forgiven to cover any gap between the value.` = e property and tthe total cost of purchase price plus the cost of the home and improvements. c. Any portion of the loan that is nofa plied to the, payment of downpayment, closing costs, or construction costs must be rvraid to the City of B ooklyn Center and the loan balance wil 3e~educed aceordi4gly. d. The Loan to Value debt-'may riat:exceed 100 percent. 5. Eligible Properties a. A siRA 'f:amiiy duelling ors a faanuly atuwheproperty that was mortgage foredo'" , and is currently re as a vacant property by the City of Brooklyn -dhter b : - erects no sale price 1 e a t established by other programs such as FHA of appro ately $2 A e MFHA First Time Homebuyer of approxi~~ $298 0. c. The home buj rrnust o . y the home within 60 days following the home purchase closing: bxcept5r'in the case of a home purchase and repair transaction, construction must start with 30 days of the purchase closing and the homeowner must oe.cupy the home within 60 days of the completion of the construction work and no longer than 180 days after purchase closing. 6. Eligible Borrower: Anyone who meets both conditions as follows: a. Qualifies for and is receiving a traditional (prime or A-rated) fixed-rate first mortgage loan or is purchasing using cash, and b. Income meets the TIF Housing Account: 100% median income for families of 2 or less, or 115% median income for families of 3 or more (2008 rate is $80,900) 0 7. Homeownership Counseling: Borrower must complete homeownership counseling through the Homestretch counseling program sponsored by the Minnesota Home Ownership Center (telephone 651-659-9336 or online at www. hocmn.org) or a comparable approved counseling program prior to closing of the loan. 8. Eligible Primary Financing a. The 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. This loan may not be used with sub-prime lendina>broducts. 9. Loan Security- Specific to Program Loan a. The City loan funds and any neighb®thood loan funds will be separately secured by a Promissory Note and Mortg b. The loan(s) may be secured in a iordinate lien position behind other program funds. c. No mortgagee clause is required in the awneeslazard insurance yt licy. 10. Program Evaluation and Renewal The Brooklyn Center loan assistance pilot :program NNI II be reviewed on an on-going basis. Six months after the program starts City staff and key partners will conduct an evaluation of the program's-performance, assess market conditions in Brooklyn Center, and make recoininendations regarding. a. Possible„ modifications to the program; b. Whether the Program should be expanded; c. Whether the Program should be -continued for another 6 month period; and d. Whether funding continues to be available. 11. Catastrophic Language In the event the Mortgage holder and the servicer, in their sole and absolute discretion, after a loss mitigation analysis, find that a catastrophic event, including but not limited to Borrower's death or extended illness, or the extended illness of a close family member who depends primarily on the borrower for support, has occurred which substantially and permanently impairs their ability to repay this Promissory Note and Mortgage and requires them to sell the Property for an amount less than the existing balance on the Promissory Note and Mortgage, that portion of the lien of Promissory Note and Mortgage that cannot be satisfied from the proceeds of such sale shall be released. . ReNew Grant 1. Program Summary: 3 The Brooklyn Center ReNew Grant is a down payment and closing cost assistance • program to help increase home ownership and encourage reinvestment. The program offers a3.5% grant with the use of an FHA 203K loan. Up to $35,000 can be borrowed with a 203K loan for home repairs, maintenance and improvements. 2. Grant Terms a. Must be-use4 in-conjunction with an FHA 203K streamline loan.. b. All requirements of the 203K loan must be adhered to. c. A minimum $15,000 in home improvements must be made to the property. d. A home inspection must be completed by a certi=fied home inspector to determine condition of home, needed repairs and costs. e. Construction work must be completed by a licensed contractor, with applicable permits and inspections completed,, f. A grant agreement must be signe y! y-the owner-occupant. g. The use of local contractors is a": , uraged. 3. Maximum and Minimum Loan Amounts: N a. Minimum: none b. Maximum 3.5%, and no more $7,000 4. Use of Funds` s • M:. The funds may be used to go toward ~U~~ f the follQwin uses: a. The pay-ment of down", paymenr forthe payment of normal and usual closing costs. The borrower ma.:lut receive any portion of these funds as cash. 17- r" S. Eligible Properties: a. A single family dwelfing or singlliF'Ry attached property that was mortgage foreclosed, and, is curfidregistered as a vacant property by the City of p Brooklyn Center; and wh ax least $15,000 in home repairs or improvements will be made. I b. There is a sale pr16e limit as established by FHA of approximately $200,000. c. The homebuyer must occupy the home within 60 days following the home purchase cloQpg, except that in the case of a home purchase and repair transaction, construction must start with 30 days of the purchase closing and 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. 6. Eligible Borrower: Anyone who meets all the following conditions: . a. Qualifies for and is receiving an FHA 203K streamline loan from an accredited lender; and 4 b. Income meets the TIF Housing Account: 100% median income for families of 2 or less, or 115% median income for families of 3 or more (2008 rate is $80,900) c. The borrower may not own other residential property or homes. d. The borrower must be an individual person or persons. The borrower may not be a business entity. 3. -Homeownership-Counseling: r. 4_ rr_ _ z.s n~ Borrower must complete homeownership counseling through the Homestretch counseling program sponsored by the Minnesota Home Ownership Center (telephone 651-659-9336 or online at www. hocmn.org) or a comparable approved counseling program prior to closing of the loan. 8. Eligible Primary Financing a. The grant may be offered in connection with any FHA 20,3K streamline loan K41 considered a "prime" lending product. b. This grant may not be used with sulrime lending products.. 9. Program Evaluation and Renewal The Brooklyn Center grant pilot program will be reviewed on an on-going basis. Six months after the program starts (34, staff=and-key partners will conduct an evaluation of the program's perforri~ance, assess .:market conditzbns in Brooklyn Center, and make • recommendations regarding., a. Possible nodificafions to the ptggxam; b. Whether the'Program should be 6 anded; c. 'Whether the Program' should be continued for another 6 month period; and d. Whether funding continues to, e ail,a e. U. Remove and. ReBuild Program 1. Program Summary: The Brooklyn Center Remove and ReBuild demolition program is a program to help remove blighted, distressed, and unmarketable properties and return the properties to an enhanced, compatible use with the neighborhood. 2. Eligible Properties Mortgage foreclosed properties registered with the city as a vacant property will be eligible. Properties will be acquired and demolished for improved uses of the land in accordance with the City's ReBuild Demolition Policy. 2. Sale and Redevelopment 5 The property will be available for re-sale for a use approved by the city, and in accordance with zoning regulations and the Comprehensive Plan. Eligible buyers include developers, licensed contractors, and homeowners who have contracted with licensed contractors consistent with the City's Policy for sale of real property. - 3. LandBank If an appropriate use for the land is not imminent, the property will -be land banked until ---s such time an appropriate use becomes available. H. ReHab Program 1. Program Summary: The Brooklyn Center ReHab program i gram to help rehabilitate blighted, distressed, and unmarketable properties el ifitationis economically feasible versus demolition:2. Eligible Properties Mortgage foreclosed propertie . g with the'eity as a vacant property will be ilitated in accordance with the City's eligible. Properties will be acquuan ReHab Policy. 4 q • 6 0 CONSULTANT SERVICES AGREEMENT THIS IS AN AGREEMENT entered into the day of , 2009, by and between the BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY, a Minnesota Municipal Economic Development Authority ("EDA" and GREATER METROPOLITAN HOUSING CORPORATION; _ =-a= Minnesota non-profit .corporation ("Consultant"). RECITALS A. The Consultant has a division called The Housing Resource Center ("HRC"). GMHC has agreed to provide certain Services through HRC (as defined below) in connection with the FDA's housing program. B. The EDA desires to hire the Consultant to render this technical, professional, and marketing assistance in connection with housing programs in the EDA for the term as set forth in this Agreement. C. Consultant is willing to provide such services on the terms and conditions set forth herein. • In consideration of the foregoing recitals and following terms, conditions and mutual promises contained herein, the parties agree as follows: 1. Scone of Services. The Consultant shadl provide services as follows (the "Services"): a. Administer the following home improvement programs for residents of the City of Brooklyn Center (the "City"): Minnesota Housing Financing Agency ("MHFA") Fix Up Fund, Community Fix Up Fund, the MHFA Rental Rehab Program (collectively the "MHFA Programs") and the Brooklyn Center EDA programs to address mortgage foreclosed and vacant properties: ReNew Loan Program and ReNew Grant Program : 1. Providing information to residents and potential residents about the programs, upon request; 2. Assist the EDA in developing marketing materials and procedures for the programs; 3. Receipt of applications; 4. Processing applications; 5. Closing loans to qualified applicants in accordance with the applicable program; 6. Overseeing the draw process for the funds, including, as necessary, • reviewing draws, reviewing the progress of the work and collecting lien fb:us.3166730.05 1 waivers and certificates of occupancy. Consultant may, for this purpose, rely on third-party representations and certifications. 7. Provide monthly reports about the number of loans closed and the balance in each loan program. b. Service loans made to City residents under the ReNew Loan Program: 1. Collect payments made pursuant to the Deferred Loan Program including satisfactions for any prepayments; 2. Take appropriate action under the loan documents when there is an uncured default by a borrower under a loan pursuant to a Deferred Loan Program; 3. Disburse all payments received by Consultant as directed, in writing, by the EDA not more often than quarterly which may include disbursing the funds pursuant to one of the loan programs described in this Agreement. C. Administer the Brooklyn Center Remove and ReBuild Program: 1. Work with EDA staff to identify and prioritize eligible properties for the Program; 2. Acquire and demolish improvements on the properties on behalf of the EDA to meet the City's goals for improved uses of the land in accordance with the City's ReBuild Demolition Policy. d. Assist City residents considering rehabilitation, including property visits, meet with homeowners and potential contractors, suggest alternatives for rehabilitation to homeowners, educate homeowners on the construction bid process, assist homeowners to evaluate bids and work completed and construction progress. e. Provide HRC housing information to City residents upon request, including information on emergency assistance, housing rehabilitation, first time homebuyers and limited rental information; f. Assist the EDA in developing programs to purchase and rehabilitate homes; g. Coordinate these services out of Consultant's Northwest office located at 2148 Penn Avenue, Minneapolis and h. Have Consultant's staff visit residences as determined necessary by Consultant. 2. Term. This Agreement shall be in full force and effect from Januarv 1. 2009 and shall continue through December 31. 2009. unless otherwise terminated as set forth below. • fb.us.3166730.05 2 3. Compensation. a. HRC Core Services and Loan Administration: For services provided under this Agreement, the EDA shall pay to the Consultant Twenty Five Thousand Dollars ($25,000.00) within thirty (30) days after execution of this Agreement, and the balance according to the following schedule: FDA ReNew Loan Program: $500.00.. payable upon the closing of each loan. EDA ReNew Grant Program: $500.00 payable following the closing of each grant. b. Acquisition and Demolition: The EDA shall reimburse the Consultant for all direct costs of the acquisition and demolition activities provided under this Agreement, and pay the Consultant Two Thousand Dollars ($2,000.00) for services provided for each property acquired and cleared. The Consultant shall receive compensation for administering the MHFA Programs directly from the Minnesota Housing Finance Agency and not from the EDA. b. Loan Servicin.R. The Consultant shall receive the following fees: $25.00 one-time set-up fee for each loan serviced pursuant to a Deferred Loan Program. • $6.00 per payment received from a borrower under the Deferred Loan Program. $25.00 for each satisfaction issued under the Deferred Loan Program. 4. Termination. Notwithstanding any other provision hereof to the contrary, this Agreement may be terminated as follows: a. The parties, by mutual written agreement, may terminate this Agreement at any time. Upon termination of this agreement there shall be no other compensation paid to Contractor for work in progress or services performed other than payments already made under the provisions of paragraph 3 herein. b. EDA may terminate this Agreement upon the breach by Consultant of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by Consultant of a written notice from EDA, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that Consultant cannot reasonably cure same in the thirty (30) day period, Consultant shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by Consultant of such written notice. In the event of termination by HRA hereunder, Consultant shall be entitled to fees due to the date the notice of breach is sent by the EDA. fb.us.3166730.05 3 C. If Consultant or EDA (as applicable) (i) files a voluntary petition in bankruptcy (ii) files a voluntary petition for reorganization under any bankruptcy law, statute or regulation or other similar statute or regulation, (iii) is adjudicated a bankrupt, (iv) makes an assignment for the benefit of creditors or applies for or consents to the appointment of a receiver or trustee as part of or in conjunction with a "creditor plan" with respect to any substantial part of its assets, or (v) a receiver or 4 trustee is appointed, or -an =-attachment or -execution levied -with respect to--any substantial part of its assets, and said appointment is not _vacated, or the attachment or execution not released, within sixty (60) days, then this Agreement shall, effective as of such date, without notice or further action by either party, immediately terminate. d. Consultant may terminate this Agreement upon the breach by EDA of any of its material covenants contained herein, where such breach shall have continued for a period of thirty (30) days following the receipt by EDA of a written notice from Consultant, specifying the alleged breach; provided, however, if the nature of a non-monetary breach is such that EDA cannot reasonably cure same in the thirty (30) day period, EDA shall not be deemed to be in breach if it commences to cure within the thirty (30) day period, and diligently pursues same to completion within ninety (90) days following receipt by EDA of such written notice. In the event of termination by Consultant hereunder, Consultant shall be entitled to retain the entire fee under this Agreement. 5. Insurance. a. Contractor further agrees that in order to protect itself as well as the City under the indemnity provision set forth above, it will at all times during the term of this contract keep in force: 1. A single limit or combined limit or excess umbrella general liability insurance policy of an amount of not less than $300,000 for property damage arising from one occurrence and $1,000,000 for total bodily or personal injuries or death and/or damages arising from one occurrence.. Such policy shall also include contractual liability coverage by specific endorsement or certificate acknowledging the contract between the Consultant and the City. 2. A single limit or combined limit or excess umbrella automobile liability insurance policy, if applicable, covering owned, non-owned and hired vehicles used regularly in the provision of services under this Agreement, in an amount of not less than $300,000 per accident for property damage, $1,000,000 for bodily injuries and/or damages to any one person, and $1,000,00 for total bodily injuries and/or damages arising from any one accident. fb.us.3166730.05 4 • 3. Workers Compensation Insurance and employers liability as required by law including all states endorsement in an amount of $100,000 for each occurrence. Prior to the effective date of this contract, and as a condition precedent to this contract, the Contractor will furnish the City with Certificates of Insurance listing the City as a certificate holder. b. - Such- insurance secured by-the Contractor-shall-be issued by insurance companies-. -T. licensed in Minnesota. The insurance specified may be in a policy or policies of insurance, primary or excess. Failure to maintain such insurance shall be a condition of default under this agreement. C. Such insurance shall be in force on the date of execution of an Agreement and shall remain continuously in force for the duration of the Agreement. 6. Indemnification. a. Notwithstanding anything to the contrary in this Agreement, the EDA, its officers, agents, and employees shall not be liable or responsible in any manner to the Consultant, the Consultant's successors or assigns, the Consultant's subcontractors, or to any other person or persons for any third party claim, demand, damage, or cause of action of any kind, nature, or character, including intentional acts, arising . out of or by reason of the performance of this Agreement by Consultant. The Consultant, and the Consultant's successors or assigns, agree to protect, defend and save the EDA, and its officers, agents, and employees, harmless from all third party claims, demands, damages, and causes of action, to the extent caused by the negligence or wrongful acts of Consultant, and the costs, disbursements, and expenses of defending the same, including but not limited to, attorneys fees, consulting services, and other technical, administrative or professional assistance. b. Nothing in this Agreement shall constitute a waiver or limitation of any immunity or limitation of any immunity or limitation on liability to which the EDA is entitled under Minnesota Statutes, Chapter 466, or otherwise. 7. Independent Contractor. Nothing contained in this Agreement is intended or should be construed as creating the relationship of copartners of joint ventures within the City. No tenure or any rights or benefits, including Workers' Compensation, Unemployment Insurance, medical care, sick leave, vacation leave, severance pay, PERA, or other benefits available to City employees, shall accrue to the Contractor or employees of the Contractor performing services under this Agreement. 8. Assienment. This Agreement shall not be assigned, sublet, or transferred, in whole or in part without the prior written approval of the EDA. • 9. Conflict of Interest. The Independent Contractor shall use best efforts to meet all professional obligations to avoid conflicts of interest and appearances of impropriety in fb.us.3166730.05 5 representation of the EDA. In the event of a conflict, the Independent Contractor, with the prior written consent of the EDA, shall arrange for suitable alternative services. 10. Compliance with Laws. The Consultant shall comply with all applicable Federal, State, and local laws, rules, ordinances, and regulations at all times and in the performance of the services pursuant to this Agreement. 11. Notices. Any notices permitted or required by this Agreement shall be deemed given when personally delivered or upon deposit in the United States mail, postage fully prepaid, certified, return receipt requested, addressed to: Consultant: Greater Metropolitan Housing Corporation 15 South 5 h Street, Suite 710 Minneapolis, MN 55402 ATTN: Suzanne Snyder EDA: Brooklyn Center Economic Development Authority 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2199 Or such other address as either party may provide to the other by notice given in accordance with this provision. • 12. Entire Agreement. This Agreement, any attached exhibits and any addenda or amendments signed by the parties shall constitute the entire agreement between the EDA and the Consultant, and supersedes any other written or oral agreements between the EDA and the Consultant. This Agreement can only be modified in writing signed by the EDA and the Consultant. 13. Third Partv Rights. The parties to this Agreement do not intend to confer on any third party any rights under this Agreement. 14. Counterparts. This Agreement may be signed in one or more counterparts but all of which taken together shall constitute one instrument. . 15. Choice of Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. 16. Agreement Not Exclusive. The EDA retains the right to hire other housing program consultants, in the EDA's sole discretion. • tb.us.3166730.05 6 17. Data Practices Act Compliance. Data provided to the Consultant or created by the Consultant under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, as amended. 18. Records - Availabilitv and Retention. The Contractor agrees that the City or any of their duly authorized representatives at any time during the normal business hours and as often as they may reasonably deem necessary, shall have access to and the right- to examine, audit, excerpt, and transcribe any books, documents, papers, records, etc., which are pertinent to _ the accounting practices and procedures of the Contractor and invoice transactions relating to this Agreement. Contractor agrees to maintain these records for a period of three (3) years from the date of termination of this Agreement. The EDA can, at the City's expense obtain copies of any of the Contractor's records relevant to this Agreement. 19. Mercer and. Modification. A. It is understood and agreed that the entire Agreement between the parties in contained here and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matters. All items referred to in this Agreement are incorporated or attached and are deemed to be part of this Agreement. B. Any material alterations, variations, modifications, or waivers of provisions of this Agreement shall be valid only when they have been reduced to writing as an amendment and signed by the parties. 20. Nondiscrimination. During the performance of this Agreement, the Contractor agrees to the following: No person shall, on the grounds of race, color religion, age, sex, disability, marital status, public assistance status, criminal record, creed or national origin be excluded from full employment rights in, participation in, be denied the benefits of or be otherwise subjected to discrimination under any and all applicable federal and state laws against discrimination. 21. Possession of Firearms on Citv of Brooklvn Center Premises. Unless specifically required by the terms of this contract, no provider of services pursuant to this contract, including but not limited to employees, agents or subcontractors of the Vendor or Contractor shall carry or possess a firearm on City of Brooklyn Center premises or while acting on behalf of the City of Brooklyn Center pursuant to the terms of this agreement. Violation of this provision shall be considered a substantial breach of the Agreement; and, in addition to any other remedy available to the City of Brooklyn Center under law or equity is grounds for immediate suspension or termination of this contract. [Signature Page Follows] • fb.us.3166730.05 7 IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials, this Agreement on the respective dates indicated below. EDA: BROOKLYN CENTER ECONOMIC DEVELOPMENT AUTHORITY By: Its: Executive Director Date: , 2009. CONSULTANT: GREATER METROPOLITAN HOUSING CORPORATION • By: Its: President Date: , 2009. • fb.us.3166730.05 8 copy CONSULTANT SERVICES AGREEMENT • THIS IS AN AGREEMENT entered into the_ day of_?G~r , 2008, by and between the Brooklyn Center Economic Development Authority hereinafter referred to as the EDA, and the Greater Metropolitan Housing Corporation (GMHC), a nonprofit corporation organized and existing under the laws of the State of Minnesota, hereinafter referred to as the Consultant. WITNESSETH: WHEREAS, the Brooklyn Center Economic Development Authority desires to hire the Consultant to render certain technical, professional, and marketing assistance in connection with such undertakings of the EDA. NOW THEREFORE, the parties hereto do mutually agree as follows: Scone of Services. The Consultant shall provide technical rehabilitation advisory services, loan administration and fundraising for the Programs as follows: A. Provide HousingResource Center services, as directed by the EDA, to residents of the City of Brooklyn Center out of its Northwest office with scheduled visits to residences when needed and providing staff at City Hall as needed. These services include the fallowing: • 1. Administer home improvement programs including the MHFA Fix Up Fund-, Community Fix Up Fund, the MHFA Rental Rehab program and the MHFA Rehabilitation Loan Program; 2. Provide construction management services including home inspections to homeowners considering rehabilitation, preparing scopes of work, educating homeowners on the construction bid process, evaluating bids and work completed to ensure quality and cost effective renovations and monitoring the construction process; 3. Provide housing information to residents including information on emergency assistance, housing rehabilitation, first time homebuyers and limited rental information; 4. Assist the EDA in developing programs to purchase and rehabilitate homes. II. Term. This Agreement shall be effective from January 1, 2008 and shall continue through December 31, 2008. This Agreement can be terminated by either party with a 30-day notice. III. Compensation. The fee for service by the Consultant will be $15,000. Payment of such fee shall be made by invoice from GMHC. IV. Insurance. During the term of this Agreement, the Consultant shall obtain and-maintain workers compensation, comprehensive general liability, and automobile liability insurance. Comprehensive general liability insurance shall have an aggregate limit of $2,000,000. Upon request by the EDA, the Consultant shall provide a certificate or certificates of insurance relating to the insurance required. V. Indemnification. Each party shall indemnify and hold harmless the other party and it's officials, agents, and employees from any loss, claim, liability, and expense (including reasonable attorney's fees and expenses of litigation) arising out of any action of such parties in the performance of this Contract. VI. Assianment. This Agreement shall not be assigned, sublet, or transferred - without the written consent of the EDA. VII. Conflict of Interest. The Consultant agrees to immediately alert the Executive Director of the EDA of possible contractual conflicts of interest in representing the EDA, as well as property owners or developers on the same project. Conflicts of interest may be grounds for termination of this Agreement. Brooklyn Center Economic Development Authority Its Ex tive Wector THIS AGREEMENT was accepted by Greater Metropolitan Housing Corporation on the day of 11. )9 1 2008. GREATER METROPOLITAN HOUSING CORPORATION, a nonprofit Minnesota corporation Its President • • MEMORANDUM - COUNCIL WORK SESSION DATE: December 8, 2008 TO: Curt Boganey, City Manager FROM: Gary Eitel, Community Development Director Tom Bublitz, Community Development Specialist Vickie Schleuning kssistant to the City Manager SUBJECT: Foreclosure Strategy Step 4- Reinvestment Program Options Recommendation: Staff is seeking feedback from the City Council in regard to program options to address reinvestment initiatives associated with the mortgage foreclosures and vacant properties m the city, Background As the city continues to make progress in implementing the city's four-step foreclosure strategy, some suggested options to address Step 4- Reinvestment are presented for Council discussion and feedback. Based on activities and actions implemented to address Steps 1-3 of the Foreclosure Strategy and input from mortgage companies, realtors, Greater Metropolitan Housing Corporation (GMHC), and citizens, some possible options to encourage reinvestment in the community have been drafted. A Four Step Foreclosure Strategy Step 1. Data Collection Identifying the scope and depth of foreclosures and its impact on the community in order to develop effective action plans. Although initial analysis is already complete, monitoring changes in the housing. market as it fluctuates and evolves is an ongoing process. Step. 2. Neighborhood Stabilization Evaluating and monitoring the condition of properties, eliminating imminent health and life. safety hazards, securing buildings, and minimizing nuisances. Step 3. Prevention and Intervention Preventing or assisting individuals facing . foreclosure through education and referral activities. Step 4: Reinvestment Promoting re-occupancy of vacant properties, with a focus on safe and decent housing and owner- explanation of the program, criteria and guidelines occupancy. are provided in the Attachment. The Programs in the Attachment are possible options to address the high number of mortgage foreclosed homes and associated vacant properties in the City of Brooklyn Center. These programs or variations thereof are being implemented in other cities to address the foreclosure aftermath. A brief Three basic program types are indicated- loan assistance, demolition of substandard properties, and city-executed housing rehabilitation. Some common themes are reflected in the programs, which also take into account Council goals, including: 0 • • Promote home ownership. • Promote re-investment in properties and the community, including home improvements. • Eliminate unsafe structures and public nuisances. _ • Apply income eligibility requirements due to funding source criteria. • Focus on mortgage foreclosed and vacant properties, linking these programs with-the Vacant Building Registration Program. Budget Issues Funding sources for these programs as laid out include Tax Increment Financing (I F) funds and Community Development Block Grant (CDBG). Federal Neighborhood Stabilization Plan (NSP) funding may be available for use through pass-through grants from Hennepin County and the State of Minnesota. The amounts and use of these funds through the county and state have not yet been determined. However, the stipulations of these funding sources have also been considered as the program criteria were developed. The TIF housing fund contains $3.2 million dollars available for use for low to moderate income and blighted housing initiatives. An additional $300,600 annually is anticipated through the life of TIF District #3, which is scheduled to terminate April 19, 2021. The recommended plan would be to allocate the funding as follows: . • $1 million dollars for the buyer incentive program for down payment and closing costs. • $600,000 for the demolition program.. $0 for the rehabilitation program. At this point, staff recommends sparing use of the rehabilitation program since it is more costly and time consuming. However, it is good to have this option available if it could be an effective tool for a specific situation. Attached Attachment I- Foreclosure Strategy- Reinvestment Options 0