Loading...
HomeMy WebLinkAbout2020 05-11 EDAPE conomic Development Authority V I RT UA L meeting being conducted by electronic means in accordance with Minnesota S tatutes, section 13D.021 P ublic portion available for connection via telephone Dial: 1-312-535- 8110 Access Code: 281244297 May 11, 2020 AGE NDA 1.Call to Order The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full C ity Counc il packet, including E D A (E conomic Development Authority ), is available to the public. The packet ring binder is located at the entrance of the council chambers. 2.Roll Call 3.Approval of Consent Agenda The following items are considered to be routine by the Economic Development Authority (E D A) and will been acted by one motion. There will be no separate disc ussion of these items unless a Commissioner so requests, in whic h event the item will be removed from the c onsent agenda and considered at the end of Commission Consideration I tems. a.Approval of Minutes -Motion to approve the minutes for: March 9, 2020 4.Commission Consideration Items a.Resolution A pproving the A cquisition of Certain P roperty L ocated at: 7015 Kyle Avenue N - Motion to approve the resolution approving the acquisition of certain property located at 7015 Kyle Avenue N, Brooklyn Center, MN. b.Resolution A dopting a Small B usiness E mergency F orgivable L oan P rogram - Motion to Approve a resolution adopting a Small Business Emergency Forgivable Loan Program 5.Adjournment Economic Development Authority DAT E:5/11/2020 TO :C ity C ouncil F R O M:C urt Boganey, City Manager T H R O U G H :D r. Reggie Edwards, D eputy C ity M anager BY:Barb S uciu, C ity C lerk S U B J E C T:A pproval of Minutes B ackground: I n accordance with M innesota S tate S tatute 15.17, the official records of all mee3ngs must be documented and approved by the governing body. S trategic Priories and Values: O pera3onal Excellence AT TA C H M E N TS : D escrip3on U pload D ate Type M arch 9 E DA 5/5/2020 Backup M aterial 03/09/20 -1- 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 MARCH 9, 2020 CITY HALL – COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Mike Elliott at 8:55 p.m. 2. ROLL CALL President Mike Elliott and Commissioners Marquita Butler, April Graves, Kris Lawrence- Anderson. Commissioner Dan Ryan was absent and excused. Also present were Executive Director Curt Boganey, Deputy City Manager Reggie Edwards, Community Development Director Meg Beekman, City Attorney Troy Gilchrist, and City Clerk Barb Suciu. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Executive Director Boganey stated Agenda Item 4b, included on the final agenda, has been removed. He added the individual who was selling the property has withdrawn their interest in selling the property at this time. He noted no action is required, and Item 4b has been removed from the amended Agenda. Commissioner Graves moved and Commissioner Lawrence-Anderson seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES • February 24, 2020 Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2020-07 APPROVING THE BUSINESS SUBSIDY PROGRAM Mr. Boganey stated approval of amended language for the EDA Business Subsidy Policy is recommended. He added this is the same language amendment that was adopted by the City Council. He noted it is necessary to add the amendment to the EDA’s policy as well. 03/09/20 -2- City Attorney Gilchrist confirmed the language amendment falls under EDA Business Subsidy Policy Section 4.2C5D. Commissioner Graves stated the substance of the change was that the terms “market rate” and “luxury” were replaced with “high quality”. She added that she and Commissioners Lawrence- Anderson and Ryan voted to support the amendment. President Elliott and Commissioner Butler voted against the amendment as President Elliott wanted to add “affordable” and “accessible” to the amended language. Commissioner Graves stated the language that was approved was “high-quality amenities”, and President Elliott and Commissioner Butler voted against the amendment. Mr. Boganey stated the amended language that was approved, included in the meeting packet, in a motion made by Commissioner Ryan and seconded by Commissioner Lawrence-Anderson, states, “… to amend Section 4.2, Item D, Business Subsidy Policy to read “multi-family housing with high-quality amenities.” Commissioner Graves moved and Commissioner Lawrence-Anderson seconded to adopt RESOLUTION NO. 2020-07 Approving an Amendment to the Business Subsidy Program. Motion passed unanimously. 5. ADJOURNMENT Commissioner Graves moved and Commissioner Lawrence-Anderson seconded adjournment of the Economic Development Authority meeting at 9:00 p.m. Motion passed unanimously. 03/09/20 -3- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed Secretary of the Economic Development Authority (EDA) of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Regular Session of the Economic Development Authority (EDA) of the City of Brooklyn Center held on March 9, 2020. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the Economic Development Authority (EDA) adopted said minutes at its May 11, 2020 Regular Session. Secretary President Economic Development Authority DAT E:5/11/2020 TO :C ity C ouncil F R O M:C urt Boganey, City Manager T H R O U G H :N/A BY:M eg Beekman, C ommunity D evelopment D irector S U B J E C T:Res olu+on A pproving the A cquisi+on of Certain P roperty L ocated at: 7015 Kyle Avenue N B ackground: The property, 7015 Kyle Avenue N, is a res iden+al property with a total size of 0.65 acres . I t is acces s ed off of 70th Avenue by a public roadw ay w hich func+ons as the drivew ay to the property. The property is currently z oned R-5: M ul+ple Family Residence, and is guided under the 2040 Comprehensive P lan with a F uture Land Use of Neighborhood Mixed-Use. A lthough z oned as an R-5 property, the property has been u+lized as a s ingle-family residence with the primary home being constructed in 1965. The property had a 2019 asses s ed market value of $240,000 and a 2020 as s ess market value of $258,000. The property is currently owned by M arcella H agen. C onversa+ons with the property ow ner and the City regarding a poten+al s ale have been happening for the past 5-10 years, though no terms w ere discussed as Mrs . H agen had indicated s he was not ready to s ell her property. Early in 2020, Mrs H agen and her family had a repres enta+ve reach out to the C ity to inquire about a poten+al purchas e. The C ity provided a draA purchas e agreement to indicate the terms of a sale. Mrs . H agen and her family met to discuss the terms and decided to proceed with the s ale. A purchase price based on the then current as s essed market value of $240,000 plus $5,000 for reloca+on was agreed to. The purchase agreement was s igned by M rs H agen, how ever before it could be pres ented to the E DA , Mrs . H agen changed her mind and asked that it be w ithdraw n. Recently, M rs. H agen and her family decided that selling the property w ould be the best op+on and once again reached out the E DA . The s ame terms w ere agreed to w ith the excep+on of a delayed closing date to S eptember 1 to allow +me for Mrs . H agen to move out of the home. The total cos t to the E DA as s ociated w ith the acquis i+on of the property is $245,000. This amount includes the purchase price of the property of $240,000 and moving expens es to the homeow ner of $5,000. The purchas e agreement allows for the property owner to remove any fixtures w ithin the home under the condi+on it does not affect the s afety or s ecurity of the s tructure. The purchase agreement allow s the C ity to ins pect the property, w hich w ould occur to determine the cost of demoli+on. U pon clos ing on the property, the C ity would demolish the s tructure on the property, w hich is es+mated to cost around $20,000. The E DA currently owns the tw o proper+es directly to the wes t and south this property. The E DA -ow ned property has a total size of 0.8 acres . Staff has also been in communica+on with the staff and board of St. Alphonsus church, which has indicated a possible interest in leveraging excess land they own that is adjacent to Mrs. Hagen's property. Staff will con+nue these conversa+ons with the church. The E DA has had a policy of acquiring and as s embling single family proper+es along Brooklyn Boulevard for many years. W ith the reconstruc+on of Brooklyn Boulevard and the upcoming land use s tudy and crea+on of an overlay dis trict it is an+cipated that the corridor w ill trans i+on to higher intensity land uses over +me. A cquiring proper+es as they become available is a strategy for targeted redevelopment. B udget I ssues: T I F #3 F unds w ill be used for the acquisi+on of the property. S trategic Priories and Values: Targeted Redevelopment AT TA C H M E N TS : D escrip+on U pload D ate Type L oca+on Map 3/2/2020 Backup M aterial A erial Map 3/2/2020 Backup M aterial P urchas e A greement 5/4/2020 Backup M aterial Res olu+on 5/4/2020 Resolu+on LeHer Location Map: 7015 Kyle Avenue N. Aerial Map: 7015 Kyle Avenue N 1 564933v1 BR305-157 PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement (“Purchase Agreement”) is entered into this ___ day of _______________, 2020, by and between Marcella Hagen (“Seller”) and the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota (“Buyer”). 2. SALE OF PROPERTY. Seller is the owner of that certain real estate (“Property”) located at 7015 Kyle Avenue N, Brooklyn Center, MN 55429, Hennepin County, Minnesota and legally described as follows: 3. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and all buildings, improvements, and fixtures thereon, together with all appurtenances, including, but not limited to, plant, shrubs, trees, and grass. 4. NO PERSONAL PROPERTY INCLUDED IN SALE: There are no items of personal property or fixtures owned by Seller and currently located on the Property included in the Purchase Price for purposes of this sale. 5. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE: The total Purchase Price (“Purchase Price”) for the Property is Two Hundred Forty Thousand and No/100ths Dollars ($240,000.00). B. MOVING EXPENSES: The sum of Five Thousand Dollars ($5,000.00) to reimburse Seller for Seller’s moving expenses (“Moving Expenses”) shall be paid by Buyer to Seller at Closing. C. TERMS: (1) BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price to Seller by check or wire transfer on the Closing Date (“Closing”). (2) DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, and state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. 2 564933v1 BR305-157 c. Public utility and drainage easements of record which will not interfere with Buyer’s intended use of the Property. d. Title defects waived by Buyer pursuant to paragraph 6 below. 6. CONTINGENCIES. A. Notwithstanding any other provision in this Agreement to the contrary, the parties agree that the purchase of the Property is subject to the following contingencies, which must be accepted or waived before the expiration of the Due Diligence Period hereafter defined, unless a shorter period is expressly provided herein: (1) Title to the Property shall be acceptable to Buyer, in its sole discretion. (2) The Property’s environmental condition must be acceptable to Buyer, in its sole discretion. (3) Buyer shall have the right during the Due Diligence Period to conduct such soil tests/geotechnical analyses, inspections, reviews, examinations, storm water/drainage requirement analyses, pre-demolition assessments, and surveys, if any, as Buyer deems necessary at Buyer’s expense. The results of the same shall be satisfactory to Buyer in its sole discretion. B. Buyer shall satisfy or waive the above contingencies on or before the expiration of the Due Diligence Period. On or before the expiration of the Due Diligence Period, Buyer shall, by giving written notice to Seller, either: (1) Terminate this Agreement if any one or more of the contingencies above have not been satisfied to the satisfaction of Buyer; or (2) Waive the contingencies listed above and proceed to closing. If Buyer elects to terminate this Agreement under paragraph (B)(1) above, then upon, Seller’s receipt of Buyer’s written notice of termination, this Purchase Agreement shall be null and void and neither party shall have any further obligation to the other. If Buyer elects to waive the contingencies and proceed under paragraph (B)(2) above, the parties shall proceed to closing as provided in this Purchase Agreement. 7. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. A. Warranty Deed free and clear of encumbrances subject only to the exceptions stated in paragraphs 5 (C) (2) (a), (b), (c), and (d) of this Purchase Agreement. 3 564933v1 BR305-157 B. Standard form Affidavit of Seller. C. Well disclosure certificate, if required. D. Waiver of Relocation Benefits in the form attached hereto as Exhibit A. E. Escrow and Occupancy Agreement in the form attached hereto as Exhibit B. F. Such other documents as may be reasonably required by Buyer’s title examiner or title insurance company. 8. CLOSING DATE/DUE DILIGENCE PERIOD. For a maximum of 90 days after the mutual execution of the Purchase Agreement (the “Due Diligence Period”), Buyer shall have the right, but not the obligation, to conduct an investigation of the Property as described in paragraph 6 (A) of this Purchase Agreement. The closing of the sale of the Property shall take place September 1, 2020. The closing shall take place at the offices of Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430 (or at such other location as the parties shall agree, including a remote closing, with documents to be delivered in escrow to the title company). 9. DELIVERY OF DOCUMENTS. Within seven business days of signing the Purchase Agreement, Seller shall have provided Buyer with copies of all relevant material in Seller’s possession relating to the Property, including but not limited to, title reports, soil reports, environmental studies, surveys, environmental reports, agreements with governmental authorities, or other records of the Property that Seller has in Seller’s possession (collectively, the “Documents”). 10. INSPECTION OF PROPERTY. During the Due Diligence Period, Seller shall allow Buyer and Buyer’s agents access to the Property without charge and at all reasonable times for Buyer’s inspection of the Property. This includes the right of Buyer and its agents to take soil borings of the Property. Buyer shall pay all costs and expenses of such inspections and any testing carried out in connection therewith, and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer’s activities. Buyer shall not damage, encumber, or permit a lien or claim to result from its activities, or alter the Property in any way. Buyer shall not have the right to do any intrusive testing without the prior written authorization of Seller. Buyer shall repair and restore any damage to the Property caused by or occurring during Buyer’s inspection and testing and return the Property to substantially the same condition as existed prior to such entry. Buyer’s obligations under this paragraph shall survive termination of this Agreement. 11. ENVIRONMENTAL INSPECTION. Seller, prior to vacation of the Property, shall remove all substances that, under state or federal law, must be disposed of at an approved disposal facility. This requirement does not apply to hazardous substances integrated into the building improvements (e.g., asbestos) or soil but applies only to movable equipment, supplies and materials that are located or stored on the Property. Buyer and Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to closing for the purpose of identifying materials that must be removed by Seller. 4 564933v1 BR305-157 12. LEAD. If the dwelling structure on the Property was constructed prior to 1978, a lead paint disclosure accompanies this Agreement. 13. REAL ESTATE TAXES. A. Seller will pay at or prior to closing all real estate taxes due and payable in 2019 and prior years on the Property, including any delinquent real estate taxes. B. Real estate taxes due and payable in 2020 shall be prorated as of the date of closing between Buyer and Seller. If the amount of real estate taxes due and payable in 2020 is not available on the date of closing, the pro-rated taxes will be based on the amount of real estate taxes due and payable in 2019. 14. SPECIAL ASSESSMENTS. A. Seller shall pay on or prior to closing the balance of all special assessments levied for payment in 2019 and prior years. Buyer shall pay all special assessments pending or levied for payment with real estate taxes payable in 2020. B. Seller shall pay any deferred real estate taxes or special assessments, payment of which is required as a result of the Closing of this sale. C. As of the date of this Purchase Agreement, Seller has not received a notice of hearing for a new public improvement project from any governmental assessing authority, the costs of which project may be assessed against the Property. D. Notwithstanding any other provision of this Agreement, Seller shall at all times be responsible to pay special assessments, if any, for delinquent sewer or water bills, removal of diseased trees prior to the date of this Purchase Agreement, snow removal, or other current services provided to the Property by the assessing authority while Seller is in possession of the Property. 15. MARKETABILITY OF TITLE. Buyer shall, within a reasonable time after execution of this Purchase Agreement by both parties, obtain a commitment for title insurance or other evidence satisfactory to Buyer (“Title Evidence”) for the Property. Buyer shall have ten (10) business days after receipt of a fully executed purchase agreement and the Title Evidence to examine the same and to deliver written objections to title, if any, to Seller. Seller shall have until the expiration of the Due Diligence Period (or such later date as the parties may agree upon) to make title marketable, at Seller’s expense. In the event that title to the Property cannot be made marketable or is not made marketable by Seller by the expiration of the Due Diligence Period, then, at the option of Buyer, Buyer may terminate this Purchase Agreement in accordance with paragraph 6 (B)(1) of this Purchase Agreement. 16. CLOSING COSTS AND RELATED ITEMS. Seller will pay: (a) any deed transfer taxes and conservation fees and recording fees for all instruments required to establish marketable title in Seller; (b) any deed transfer taxes and conservation fees required to enable 5 564933v1 BR305-157 Buyer to record its deed from Seller under this Purchase Agreement; (c) the cost of the title commitment, title search, name searches, and exam fees; and (d) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Buyer shall be responsible for the payment of the following costs: (a) recording fees for deed from Seller under this Purchase Agreement; (b) the title insurance premium, and endorsements, if any; and (c) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Each party shall be responsible for its own attorneys’ fees and costs. 17. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there is not an individual sewage treatment system on or serving the Property. If there is an individual sewage treatment system on or serving the Property, Seller discloses that the system is not in use. In the event there is a sewage treatment system, a map of said location of the system is attached. 18. WELL DISCLOSURE. Seller discloses that the status and number of wells on the Property has not changed since the last previously filed Well Disclosure Certificate No. 1017287. 19. SELLER’S WARRANTIES. Seller warrants that buildings, if any, are entirely within the boundary lines of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. Seller warrants that there has been no labor or materials furnished to the Property for which payment has not been made. Seller warrants that there are no present violations of any restrictions relating to the use or improvement of the Property. Seller represents that Seller has good and marketable simple title interest to the Property and no consents or approvals from any third parties are required. Seller represents that there are no third parties in possession of the Property, or any part thereof; and that there are no leases, oral, or written, affecting the Property or any part thereof. Seller agrees that Seller will not enter into a lease for the Property after the date of this Purchase Agreement. Seller agrees to pay all charges for sewer, water, electric, gas, rubbish removal, Internet, cable/satellite television, and any other utility charges incurred prior to closing and during Seller’s occupancy of the Property pursuant to the Escrow and Occupancy Agreement. These warranties shall survive the Closing of this transaction. 20. RELOCATION BENEFITS. Seller acknowledges that Seller initiated negotiations with Buyer for the transaction contemplated by this Purchase Agreement, and that this transaction is not made under threat of condemnation by Buyer. Seller agrees to waive any and all relocation benefits, assistance and services to which Seller might otherwise be eligible. Seller agrees to provide to Buyer at closing an executed waiver of relocation benefits in substantially the form of the attached Exhibit A. 21. NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations and warranties contained in this Purchas Agreement shall not be merged into any instruments or conveyance delivered at closing, and the parties shall be bound accordingly. 6 564933v1 BR305-157 22. ENTIRE AGREEMENT; AMENDMENTS. This Purchase Agreement constitutes the entire agreement between the parties, and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment to this Purchase Agreement shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 23. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns. Buyer shall not assign its rights and interest hereunder without notice to Seller. 24. NOTICE. Any notice, demand, request or other communication which may or shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed as follows: SELLER: Marcella Hagen 7015 Kyle Avenue N Brooklyn Center, MN 55430 BUYER: Economic Development Authority of Brooklyn Center Attn: Meg Beekman 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2113 AGENT: Kennedy & Graven, Chartered Attn: Troy Gilchrist 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 25. BROKER COMMISSIONS. Buyer and Seller each represent and warrant to the other that there is no broker involved in this transaction with whom either has negotiated or to whom the representing party has agreed to pay a broker commission or finder’s fee in connection with negotiations for purchase or sale of the Property. Buyer and Seller agree to indemnify, defend, and hold the other party harmless against any and all claims of brokers, finders, or the like, and against the claims of all third parties, claiming any right to commission or compensation by or through acts of the indemnifying party or its partners, agents, or affiliates in connection with this Purchase Agreement. The indemnifying party’s indemnity obligations shall include all damages, losses, costs, liabilities, and expenses, including reasonable attorneys’ fees and litigation costs, which may be incurred by the other party. 26. METHAMPHETAMINE DISCLOSURE. To the best of Seller’s knowledge, methamphetamine production has not occurred on the Property. 7 564933v1 BR305-157 27. SPECIFIC PERFORMANCE. This Purchase Agreement may be specifically enforced by the parties, provided that any action for specific enforcement is brought within six months after the date of the alleged breach. This paragraph is not intended to create an exclusive remedy for breach of this agreement; the parties reserve all other remedies available at law or in equity. 28. REMOVAL OF FIXTURES AND MATERIALS. The Seller shall have the opportunity to salvage any fixtures or materials from the buildings on the Property provided that the buildings are left secure and provided that removal does not create any hazardous conditions. Removal must be complete as of closing. Any fixtures or materials which remain on the Property after Seller’s occupancy has been terminated shall be deemed to have been abandoned and shall become the exclusive property of Buyer. Seller assumes all risk in undertaking any salvage operations. Seller shall not permit the attachment of any lien or encumbrance on the Property as a result of this or other work thereof. 8 564933v1 BR305-157 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER By: Marcella Hagen BUYER Economic Development Authority of Brooklyn Center, Minnesota By: Its: President By: Its: Executive Director 9 564933v1 BR305-157 EXHIBIT A FORM OF WAIVER OF RELOCATION BENEFITS The undersigned, acknowledges that I met with a representative of the Economic Development Authority of Brooklyn Center, Minnesota (EDA) on _______________, 2020. The representative, _____________________________, explained that in the event that the EDA acquires my property located at 7015 Kyle Avenue North, Brooklyn Center, Minnesota, I may be entitled to certain relocation benefits, in addition to the amount of money being paid to me to acquire my property. These benefits may include: 1. Moving Expenses: a. A payment for actual reasonable moving expenses; or b. A fixed payment determined in accordance with the applicable schedule approved by the Federal Highway Administration. 2. Replacement Housing Payment: A 180-day homeowner is eligible to receive a replacement housing payment to cover the following costs: a. If the homeowner must pay more to buy a comparable replacement home than homeowner receives for the property, then homeowner may be compensated for the difference. b. Homeowners may be entitled to compensation for incidental and closing expenses related to the purchase of a decent, safe, and sanitary replacement home, such as recording fees, title insurance, appraisal, and inspection fees. c. If a homeowner must pay a higher interest rate on a mortgage to finance the purchase of a replacement home than the rate on the mortgage of the property, then homeowner may be entitled to compensation for increased mortgage interest costs. 3. Other Relocation Assistance: This includes referrals and other assistance to help the owner(s) relocate to a comparable decent, safe, and sanitary dwelling. These payments and services are required under the regulations of the Department of Housing and Urban Development (HUD). The owner(s) cannot be required to move from his/her home unless he/she is given reasonable opportunities to relocate to a comparable decent, safe and sanitary dwelling unit that he/she can afford. 10 564933v1 BR305-157 Finally, it was explained to me that the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, entitles me to these relocation benefits; and if I sign this waiver, I will be waiving those relocation benefits. After having these benefits explained to me, I agree to waive them. In signing this waiver, I acknowledge that no threats have been made to me, either expressly or by implication that my property will be taken from me through condemnation. If after signing this waiver, I attempt to collect relocation benefits, I will have to prove that, contrary to what I am agreeing to in this waiver, my waiver of relocation benefits was not entered into voluntarily. This wavier is conditioned upon the Economic Development Authority of Brooklyn Center, Minnesota purchasing my property for the gross purchase price of $240,000.00 and payment of $5,000.00 in moving expenses. If this commitment to me is not fulfilled, this waiver is null and void. _________________ Date By WITNESS: 1 564933v1 BR305-157 PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement (“Purchase Agreement”) is entered into this ___ day of _______________, 2020, by and between Marcella Hagen (“Seller”) and the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota (“Buyer”). 2. SALE OF PROPERTY. Seller is the owner of that certain real estate (“Property”) located at 7015 Kyle Avenue N, Brooklyn Center, MN 55429, Hennepin County, Minnesota and legally described as follows: 3. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and all buildings, improvements, and fixtures thereon, together with all appurtenances, including, but not limited to, plant, shrubs, trees, and grass. 4. NO PERSONAL PROPERTY INCLUDED IN SALE: There are no items of personal property or fixtures owned by Seller and currently located on the Property included in the Purchase Price for purposes of this sale. 5. PURCHASE PRICE AND TERMS: A. PURCHASE PRICE: The total Purchase Price (“Purchase Price”) for the Property is Two Hundred Forty Thousand and No/100ths Dollars ($240,000.00). B. MOVING EXPENSES: The sum of Five Thousand Dollars ($5,000.00) to reimburse Seller for Seller’s moving expenses (“Moving Expenses”) shall be paid by Buyer to Seller at Closing. C. TERMS: (1) BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price to Seller by check or wire transfer on the Closing Date (“Closing”). (2) DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, and state and federal regulations. b. Reservation of minerals or mineral rights to the State of Minnesota, if any. 2 564933v1 BR305-157 c. Public utility and drainage easements of record which will not interfere with Buyer’s intended use of the Property. d. Title defects waived by Buyer pursuant to paragraph 6 below. 6. CONTINGENCIES. A. Notwithstanding any other provision in this Agreement to the contrary, the parties agree that the purchase of the Property is subject to the following contingencies, which must be accepted or waived before the expiration of the Due Diligence Period hereafter defined, unless a shorter period is expressly provided herein: (1) Title to the Property shall be acceptable to Buyer, in its sole discretion. (2) The Property’s environmental condition must be acceptable to Buyer, in its sole discretion. (3) Buyer shall have the right during the Due Diligence Period to conduct such soil tests/geotechnical analyses, inspections, reviews, examinations, storm water/drainage requirement analyses, pre-demolition assessments, and surveys, if any, as Buyer deems necessary at Buyer’s expense. The results of the same shall be satisfactory to Buyer in its sole discretion. B. Buyer shall satisfy or waive the above contingencies on or before the expiration of the Due Diligence Period. On or before the expiration of the Due Diligence Period, Buyer shall, by giving written notice to Seller, either: (1) Terminate this Agreement if any one or more of the contingencies above have not been satisfied to the satisfaction of Buyer; or (2) Waive the contingencies listed above and proceed to closing. If Buyer elects to terminate this Agreement under paragraph (B)(1) above, then upon, Seller’s receipt of Buyer’s written notice of termination, this Purchase Agreement shall be null and void and neither party shall have any further obligation to the other. If Buyer elects to waive the contingencies and proceed under paragraph (B)(2) above, the parties shall proceed to closing as provided in this Purchase Agreement. 7. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. A. Warranty Deed free and clear of encumbrances subject only to the exceptions stated in paragraphs 5 (C) (2) (a), (b), (c), and (d) of this Purchase Agreement. 3 564933v1 BR305-157 B. Standard form Affidavit of Seller. C. Well disclosure certificate, if required. D. Waiver of Relocation Benefits in the form attached hereto as Exhibit A. E. Escrow and Occupancy Agreement in the form attached hereto as Exhibit B. F. Such other documents as may be reasonably required by Buyer’s title examiner or title insurance company. 8. CLOSING DATE/DUE DILIGENCE PERIOD. For a maximum of 90 days after the mutual execution of the Purchase Agreement (the “Due Diligence Period”), Buyer shall have the right, but not the obligation, to conduct an investigation of the Property as described in paragraph 6 (A) of this Purchase Agreement. The closing of the sale of the Property shall take place September 1, 2020. The closing shall take place at the offices of Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430 (or at such other location as the parties shall agree). 9. DELIVERY OF DOCUMENTS. Within seven business days of signing the Purchase Agreement, Seller shall have provided Buyer with copies of all relevant material in Seller’s possession relating to the Property, including but not limited to, title reports, soil reports, environmental studies, surveys, environmental reports, agreements with governmental authorities, or other records of the Property that Seller has in Seller’s possession (collectively, the “Documents”). 10. INSPECTION OF PROPERTY. During the Due Diligence Period, Seller shall allow Buyer and Buyer’s agents access to the Property without charge and at all reasonable times for Buyer’s inspection of the Property. This includes the right of Buyer and its agents to take soil borings of the Property. Buyer shall pay all costs and expenses of such inspections and any testing carried out in connection therewith, and shall hold Seller and the Property harmless from all costs and liabilities relating to Buyer’s activities. Buyer shall not damage, encumber, or permit a lien or claim to result from its activities, or alter the Property in any way. Buyer shall not have the right to do any intrusive testing without the prior written authorization of Seller. Buyer shall repair and restore any damage to the Property caused by or occurring during Buyer’s inspection and testing and return the Property to substantially the same condition as existed prior to such entry. Buyer’s obligations under this paragraph shall survive termination of this Agreement. 11. ENVIRONMENTAL INSPECTION. Seller, prior to vacation of the Property, shall remove all substances that, under state or federal law, must be disposed of at an approved disposal facility. This requirement does not apply to hazardous substances integrated into the building improvements (e.g., asbestos) or soil but applies only to movable equipment, supplies and materials that are located or stored on the Property. Buyer and Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to closing for the purpose of identifying materials that must be removed by Seller. 4 564933v1 BR305-157 12. LEAD. If the dwelling structure on the Property was constructed prior to 1978, a lead paint disclosure accompanies this Agreement. 13. REAL ESTATE TAXES. A. Seller will pay at or prior to closing all real estate taxes due and payable in 2019 and prior years on the Property, including any delinquent real estate taxes. B. Real estate taxes due and payable in 2020 shall be prorated as of the date of closing between Buyer and Seller. If the amount of real estate taxes due and payable in 2020 is not available on the date of closing, the pro-rated taxes will be based on the amount of real estate taxes due and payable in 2019. 14. SPECIAL ASSESSMENTS. A. Seller shall pay on or prior to closing the balance of all special assessments levied for payment in 2019 and prior years. Buyer shall pay all special assessments pending or levied for payment with real estate taxes payable in 2020. B. Seller shall pay any deferred real estate taxes or special assessments, payment of which is required as a result of the Closing of this sale. C. As of the date of this Purchase Agreement, Seller has not received a notice of hearing for a new public improvement project from any governmental assessing authority, the costs of which project may be assessed against the Property. D. Notwithstanding any other provision of this Agreement, Seller shall at all times be responsible to pay special assessments, if any, for delinquent sewer or water bills, removal of diseased trees prior to the date of this Purchase Agreement, snow removal, or other current services provided to the Property by the assessing authority while Seller is in possession of the Property. 15. MARKETABILITY OF TITLE. Buyer shall, within a reasonable time after execution of this Purchase Agreement by both parties, obtain a commitment for title insurance or other evidence satisfactory to Buyer (“Title Evidence”) for the Property. Buyer shall have ten (10) business days after receipt of a fully executed purchase agreement and the Title Evidence to examine the same and to deliver written objections to title, if any, to Seller. Seller shall have until the expiration of the Due Diligence Period (or such later date as the parties may agree upon) to make title marketable, at Seller’s expense. In the event that title to the Property cannot be made marketable or is not made marketable by Seller by the expiration of the Due Diligence Period, then, at the option of Buyer, Buyer may terminate this Purchase Agreement in accordance with paragraph 6 (B)(1) of this Purchase Agreement. 16. CLOSING COSTS AND RELATED ITEMS. Seller will pay: (a) any deed transfer taxes and conservation fees and recording fees for all instruments required to establish marketable title in Seller; (b) any deed transfer taxes and conservation fees required to enable 5 564933v1 BR305-157 Buyer to record its deed from Seller under this Purchase Agreement; (c) the cost of the title commitment, title search, name searches, and exam fees; and (d) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Buyer shall be responsible for the payment of the following costs: (a) recording fees for deed from Seller under this Purchase Agreement; (b) the title insurance premium, and endorsements, if any; and (c) one-half of the closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Purchase Agreement. Each party shall be responsible for its own attorneys’ fees and costs. 17. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there is not an individual sewage treatment system on or serving the Property. If there is an individual sewage treatment system on or serving the Property, Seller discloses that the system is not in use. In the event there is a sewage treatment system, a map of said location of the system is attached. 18. WELL DISCLOSURE. Seller discloses that the status and number of wells on the Property has not changed since the last previously filed Well Disclosure Certificate No. 1017287. 19. SELLER’S WARRANTIES. Seller warrants that buildings, if any, are entirely within the boundary lines of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. Seller warrants that there has been no labor or materials furnished to the Property for which payment has not been made. Seller warrants that there are no present violations of any restrictions relating to the use or improvement of the Property. Seller represents that Seller has good and marketable simple title interest to the Property and no consents or approvals from any third parties are required. Seller represents that there are no third parties in possession of the Property, or any part thereof; and that there are no leases, oral, or written, affecting the Property or any part thereof. Seller agrees that Seller will not enter into a lease for the Property after the date of this Purchase Agreement. Seller agrees to pay all charges for sewer, water, electric, gas, rubbish removal, Internet, cable/satellite television, and any other utility charges incurred prior to closing and during Seller’s occupancy of the Property pursuant to the Escrow and Occupancy Agreement. These warranties shall survive the Closing of this transaction. 20. RELOCATION BENEFITS. Seller acknowledges that Seller initiated negotiations with Buyer for the transaction contemplated by this Purchase Agreement, and that this transaction is not made under threat of condemnation by Buyer. Seller agrees to waive any and all relocation benefits, assistance and services to which Seller might otherwise be eligible. Seller agrees to provide to Buyer at closing an executed waiver of relocation benefits in substantially the form of the attached Exhibit A. 21. NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations and warranties contained in this Purchas Agreement shall not be merged into any instruments or conveyance delivered at closing, and the parties shall be bound accordingly. 6 564933v1 BR305-157 22. ENTIRE AGREEMENT; AMENDMENTS. This Purchase Agreement constitutes the entire agreement between the parties, and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment to this Purchase Agreement shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 23. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns. Buyer shall not assign its rights and interest hereunder without notice to Seller. 24. NOTICE. Any notice, demand, request or other communication which may or shall be given or served by the parties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed as follows: SELLER: BUYER: Economic Development Authority of Brooklyn Center Attn: Brett Angell 6301 Shingle Creek Parkway Brooklyn Center, MN 55430-2113 AGENT: Kennedy & Graven, Chartered Attn: Troy Gilchrist 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 25. BROKER COMMISSIONS. Buyer and Seller each represent and warrant to the other that there is no broker involved in this transaction with whom either has negotiated or to whom the representing party has agreed to pay a broker commission or finder’s fee in connection with negotiations for purchase or sale of the Property. Buyer and Seller agree to indemnify, defend, and hold the other party harmless against any and all claims of brokers, finders, or the like, and against the claims of all third parties, claiming any right to commission or compensation by or through acts of the indemnifying party or its partners, agents, or affiliates in connection with this Purchase Agreement. The indemnifying party’s indemnity obligations shall include all damages, losses, costs, liabilities, and expenses, including reasonable attorneys’ fees and litigation costs, which may be incurred by the other party. 26. METHAMPHETAMINE DISCLOSURE. To the best of Seller’s knowledge, methamphetamine production has not occurred on the Property. 7 564933v1 BR305-157 27. SPECIFIC PERFORMANCE. This Purchase Agreement may be specifically enforced by the parties, provided that any action for specific enforcement is brought within six months after the date of the alleged breach. This paragraph is not intended to create an exclusive remedy for breach of this agreement; the parties reserve all other remedies available at law or in equity. 28. REMOVAL OF FIXTURES AND MATERIALS. The Seller shall have the opportunity to salvage any fixtures or materials from the buildings on the Property provided that the buildings are left secure and provided that removal does not create any hazardous conditions. Any fixtures or materials which remain on the Property after Seller’s occupancy has been terminated shall be deemed to have been abandoned and shall become the exclusive property of Buyer. Seller assumes all risk in undertaking any salvage operations. Seller shall not permit the attachment of any lien or encumbrance on the Property as a result of this or other work thereof. 8 564933v1 BR305-157 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. SELLER By: Its: BUYER Economic Development Authority of Brooklyn Center, Minnesota By: Its: President By: Its: Executive Director 9 564933v1 BR305-157 EXHIBIT A FORM OF WAIVER OF RELOCATION BENEFITS The undersigned, acknowledges that I met with a representative of the Economic Development Authority of Brooklyn Center, Minnesota (EDA) on _______________, 2020. The representative, _____________________________, explained that in the event that the EDA acquires my property located at 7015 Kyle Avenue North, Brooklyn Center, Minnesota, I may be entitled to certain relocation benefits, in addition to the amount of money being paid to me to acquire my property. These benefits may include: 1. Moving Expenses: a. A payment for actual reasonable moving expenses; or b. A fixed payment determined in accordance with the applicable schedule approved by the Federal Highway Administration. 2. Replacement Housing Payment: A 180-day homeowner is eligible to receive a replacement housing payment to cover the following costs: a. If the homeowner must pay more to buy a comparable replacement home than homeowner receives for the property, then homeowner may be compensated for the difference. b. Homeowners may be entitled to compensation for incidental and closing expenses related to the purchase of a decent, safe, and sanitary replacement home, such as recording fees, title insurance, appraisal, and inspection fees. c. If a homeowner must pay a higher interest rate on a mortgage to finance the purchase of a replacement home than the rate on the mortgage of the property, then homeowner may be entitled to compensation for increased mortgage interest costs. 3. Other Relocation Assistance: This includes referrals and other assistance to help the owner(s) relocate to a comparable decent, safe, and sanitary dwelling. These payments and services are required under the regulations of the Department of Housing and Urban Development (HUD). The owner(s) cannot be required to move from his/her home unless he/she is given reasonable opportunities to relocate to a comparable decent, safe and sanitary dwelling unit that he/she can afford. 10 564933v1 BR305-157 Finally, it was explained to me that the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, entitles me to these relocation benefits; and if I sign this waiver, I will be waiving those relocation benefits. After having these benefits explained to me, I agree to waive them. In signing this waiver, I acknowledge that no threats have been made to me, either expressly or by implication that my property will be taken from me through condemnation. If after signing this waiver, I attempt to collect relocation benefits, I will have to prove that, contrary to what I am agreeing to in this waiver, my waiver of relocation benefits was not entered into voluntarily. This wavier is conditioned upon the Economic Development Authority of Brooklyn Center, Minnesota purchasing my property for the gross purchase price of $240,000.00 and payment of $5,000.00 in moving expenses. If this commitment to me is not fulfilled, this waiver is null and void. _________________ Date By WITNESS: Economic Development Authority DAT E:5/11/2020 TO :C ity C ouncil F R O M:C urt Boganey, City Manager T H R O U G H :N/A BY:M eg Beekman, C ommunity D evelopment D irector S U B J E C T:Res olu+on A dop+ng a S mall Busines s Emergency Forgivable Loan P rogram B ackground: O n March 13, 2020, G overnor Walz is s ued Execu+ve O rder 20-01 declaring a state of peace+me emergency to addres s the C O V I D -19 pandemic in M innesota. O n M arch 16, G overnor Walz is s ued Execu+ve O rder 20-04 ordering the clos ure of bars , restaurants , and other places of public accommoda+on offering food and/or beverage for on-premis e consump+on. The O rder also included the closure of spas , beauty shops, nail salons , ta>oo s hops , health clubs, indoor fitnes s centers, art and mus ic s tudios , and recrea+onal or entertainment facili+es. Restaurants w ere allow ed to con+nue to provide delivery, drive- thru, and take-out accommoda+ons . O n March 25, G overnor Walz issued Execu+ve O rders 20-18, extending and clarifying Execu+ve O rder 20- 04, and also issued Execu+ve O rder 20-20 issuing a S tay-at-H ome order to all Minnes otan's except to engage in exempt ac+vi+es and cri+cal sector work as described in the O rder and further clarified by D E E D through their Cri+cal S ector Clarifica+on and D efini+ons document: h>ps ://mn.gov/deed/as s ets/cri+cal- w orker-defini+ons -A C C _tcm1045-425195.pdf. The G overnor has since extended the S tay-at-H ome order tw ice and is s ued several amendments and clarifica+ons to the defini+on of C ri+cal S ector Workers. W hile it is es +mated by D E E D that 82% of w orking M innesotan's fall within a cri+cal sector and can therefore con+nue to work, the Execu+ve O rder's have had a drama+c affect on the s tate's unemployment rate. The affect of the S tay-at-H ome order has been most es pecially felt by small busines s es, w hich have had to adapt to changing opera+ng requirements with limited resources while facing barriers to accessing s tate and federal s+mulus programs to provide much needed as s is tance. Recently the Na+onal Federa+on of I ndependent Busines s es (N F I B) releas ed the res ults of a survey of its bus inesses . The N F I B which represents thous ands of small busines s acros s the na+on reports that busines s op+mis m, uns urpris ingly, decreas ed drama+cally in March. O f the 627 busines s es surveyed, 35% expressed they w eren’t s ure they ’d be able to operate their bus iness for more than one to two months in the current economic climate. S tate and Federal Programs Both the Federal S mall Bus iness A dminis tra+on (S B A ) and the Minnes ota D epartment of Employment and Economic D evelopment (D E E D ) have rolled out financial aid programs des igned to assist busines s es affected by the C O V I D -19 cris is . A side from the regular s mall bus iness support programs offered by these agencies , there are three new programs that are the primary focus of the state and federal s +mulus funds : T he Paycheck Protec+on Program (P P P): an S B A program available to small businesses including sole proprietors, self-employed individuals and independent contractors meant to cover payroll, rent/mortgage, u+li+es, and other immediate payments. L oans are applied for and disbursed through private lenders and backed by the S B A. T he loan is forgivable, less the 1% interest rate, if a business can demonstrate that 75% of the loan proceeds were used to cover eligible expenses over an 8-week period. T he Economic I njury D isaster L oan (E I D L ): an S B A program available to small business that including sole proprietors, self-employed individuals, and independent contractors that can demonstrate economic loss as a result of the C OV I D -19 outbreak. L oans are available directly through the S B A for up to $2 million and payments are deferred up to one year and can be paid back over a term up to 30 years. B usinesses that apply for E I D L can also request an advance of funds up to $10,000 which will not have to be paid back. T he Small B usiness E mergency L oan Fund: a D E E D program available to businesses specifically impacted by the Governor E xecu+ve O rder 20-04 and 20-18, which closed restaurants, bars, beauty salons, health clubs, entertainment venues, and other places of public accommoda+on. E ligible businesses can apply for an up to $35,000 loan at 0% interest that may be par+ally forgiven. B usinesses considered non-essen+al under E xecu+ve O rder 20-20, but not iden+fied under E xecu+ve O rder 20-04 or 20-18 are not eligible. The P P P and E I D L programs were depleted of funds aLer just 13 days. O n A pril 24 the P resident s igned a bill authoriz ing an addi+onal $320 billion of funding for thes e programs , which reopened on A pril 27. Brooklyn C enter S mall Business E mergency Forgivable L oan P rogram D espite the available State and Federal programs aimed at assis+ng businesses there will likely s+ll be businesses that are not able to access assistance. T here are several reasons for the barriers that exist to accessing state and federal programs for small and micro businesses, par+cularly female and minority-owned businesses, which make up a large percentage of B rooklyn C enter small businesses. T he first round of federal funds were depleted within 13 days of being released. B anks and the S B A were overwhelmed with applica+ons. As a result, businesses that already had strong rela+onships with their banks and had their documents in order were first in line to receive funding. F urther S B A funds are jus t now beginning to be releas ed, and some applica+ons con+nue to remain pending. I n the mean+me, bus iness owners are faced w ith immediate expenses and a high degree of uncertainty as to whether their applica+ons will be approved or when. At their M ay 5 w ork s ession, the C ity C ouncil cons idered a proposed program to support s mall bus inesses in Brooklyn Center designed to help thos e busines s es facing the greatest barriers to acces s ing state and federal funds . The program would provide emergency deferred forgivable loans up to $3,000 at 0% interest w ith payments deferred for one year. This program is intended to provide immediate emergency relief to assist with short term expenses . A llowable uses for funds would include rent/mortgage payments, payroll and employee benefits , accounts payable, and vendor payments. E ligibility for forgiveness would be based upon demonstra+on that the funds were used on eligible expenses and that the business owner received technical assistance from a local or regional business resource center. Part of the purpose of the program is to get needed technical assistance to business owners in order to ensure they have the resources they need to be successful through this period of +me and into the future. Staff will work with loan recipients to iden+fy their needs and direct them to resources that will ensure they get the capacity building and technical assistance they may need. Staff is proposing $150,000 to fund the program. T his would allow approximately 50 businesses to be served. I f demand far outpaces funding, the E DA could consider addi+onal funding to the program at a later date. T he funds for this program would come from the B rooklyn C enter Economic D evelopment Authority fund. As these are not budgeted funds, they would come directly out of cash reserves. T he current unreserved fund balance of the E DA fund is $1.597 million. A full descrip+on of the program including eligibility is a>ached to this memo. T he C ouncil directed staff to move forward with the program. Staff met internally to discuss in detail the logis+cs of rolling out and administering the program, as well as the C ouncil's comments, and is proposing a few minor changes. A $30 annual fee w as added to loans that do not receive forgiveness and enter repayment. This equates to a 1% interest rate. The fee w ould be in lieu of interest but would provide both an incen+ve for repayment and also a cons idera+on for staff +me to adminis ter the repayment schedule. O pera+ng cas h w as removed from the list of allow ed uses for funds to make tracking eas ier and s implify repor+ng. The process for receiving loan forgiveness was s implified to eliminate the need for loan recipients to fill out an addi+onal form to apply for loan forgiveness. The end date for the program was amended to "un+l funds are expended, or the E DA terminates the program, w hichever comes first". Applicaon Process A pplica+ons w ill be submi>ed electronically. A n inter-departmental commi>ee will review the applica+ons on a rolling bas is for eligibility and to ens ure they are complete. I f informa+on is missing or unclear, applica+ons will be contacted to have an opportunity to provide addi+onal informa+on. Loan recipients will be asked to enter into a loan agreement, which will be provided for electronic signature. Checks will be s ent out within a w eek upon receipt of an executed loan agreement. Staff will then work with loan recipients to iden+fy what other needs they may have to seek out addi+onal support resources and technical assistance. Outreach and Engagement Given the demographics of B rooklyn C enter, and in par+cular the small business community, it is cri+cally important that women and minority-owned businesses be engaged and made aware of resources available to them. Demographic informa+on will be tracked as part of the applica+on process, and inten+onal efforts will be made to ensure broad outreach and engagement. T he C ity has entered into contracts with L iB A and J ude N nadi to provide technical assistance and small business support. T hese contracts include dissemina+ng informa+on to small business owners and assis+ng with filling out applica+ons for funding. Staff has already been in communica+on about this program and will work with these groups to deepen outreach about the program to the community. I n addi+on, staff is in discussions with A C E R to enter into a similar contract to seek their assistance with outreach and engagement of small business owners as well as providing technical support to businesses with loan applica+ons. I nforma+on about the program w ill also be s hared with other community partners and organiz a+ons . N ext S teps I f the Council chooses to approve the program, the applica+on period will open May 15 and remain open un+l funds are expended or the E DA terminates the program. S taff will provide regular updates to the E DA as well as a final report on the recipients of the funding. B udget I ssues: $150,000 from the E DA . This is not a budgeted expenditure. S trategic Priori#es and Values: Resident Economic S tability AT TA C H M E N TS : D escrip+on U pload D ate Type S mall Bus iness Forgivable L oan P rogram 5/5/2020 Backup M aterial P roposed Emergency S mall Busines s Loan A pplica+on 4/27/2020 Backup M aterial Res olu+on 5/7/2020 Resolu+on Le>er Brooklyn Center Economic Development Authority Small Business Emergency Forgivable Loan Program Brooklyn Center is home to a high number of micro businesses, many owned by immigrants and people of color. Small businesses are integral and vital to the economic, social, and religious fabric of the Brooklyn Center community. Accordingly, the Brooklyn Center Economic Development Authority (EDA) has determined to offer locally owned and operated businesses within the community a forgivable loan opportunity to address working capital needs upon the declaration of a state of emergency by the State of Minnesota (State) and the City of Brooklyn Center (City). The purpose of this program is to ensure the viability of the community’s small businesses faced with the current COVID-19 health emergency, which is adversely affecting the City’s economy. The goal of this program is to provide businesses small loans with deferred payment and forgiveness options to allow for access to working capital and to encourage businesses to seek out technical assistance and other resources which may help them weather this difficult time. Loan funds are available on a first-come, first-served basis for eligible applicants. The program is subject to funding availability from the EDA. The EDA retains the authority and discretion to approve or deny an application, and reserves the right to subsequently add further priorities, change eligibility criteria, or discontinue the program in response to changing circumstances. Maximum Loan Amount: $3,000 Interest Rate: Loan interest rate is fixed at 0% Loan Terms: • Loan recipients shall enter into a Loan Agreement with the Brooklyn Center EDA. Funds will not be distributed for any loan award until a Loan Agreement has been executed by all required parties. • Loan payments will be deferred with no interest for one (1) year from the date of award • Loans may be eligible for forgiveness within the first 12 months from the date of award • If a business does not meet the terms for forgiveness the loan will be paid back monthly for 3 years with an annual fee of $30 and no pre-payment penalty Eligible Business Criteria: • Business must have a physical address within the City of Brooklyn Center • Business must have been in operation prior to February 20th 2020 • Employ 10 or fewer full time or part time employees prior to the issuance of the State of Emergency Executive Order 20-04 (March 16, 2020). Sole proprietors and individual contractors are eligible. • Business must have annual gross revenue of less than $200,000 • Be able to demonstrate that its revenues have been directly and adversely affected by the COVID-19 Health Pandemic and/or that it operates in a category adversely affected by Executive Orders 20-04 and 20-08, or other locally owned and operated business deemed non-essential under Executive Order 20-20 • Business must serve the general public and be a conforming or legally non-conforming use under the current zoning regulations of the City, and have no adverse actions or open violations with the City • A business owners’ immigration status does not affect eligibility • Applicants are strongly encouraged to claim all applicable private insurance and utilize all other sources of applicable assistance available from other private and public sources. Applicants are also strongly encouraged to apply for an Economic Injury Disaster Loan through the Small Business Administration (SBA) and Small Business Emergency Loan through the Minnesota Department of Employment and Economic Development (DEED) prior to applying for this grant. For more information, visit: Guide to financial resources for Minnesota small businesses Assistance cannot be provided to businesses that: • Do not have a physical address within the City of Brooklyn Center • Derive income from passive investments without operational ties to operating businesses or whose primary source of revenue is from business-to-business transactions • Primarily generate income from gambling activities, adult entertainment, tobacco/vaping- related activities, registered lobbying, multi-level marketing, billboards, or renting commercial or residential property • Have no current or historical financial statements Allowable Uses: • Rent/mortgage payments • Payroll, employee benefits and leave • Accounts payable • Vendor payments Forgiveness: Loans are forgiven if the recipients demonstrate that they have met the terms of forgiveness within the 12-month deferral period. A portion or the remaining loan balance may be forgiven after the 12-month deferral period. The conditions for loan forgiveness are as follows: • Submission of receipts, paid invoices, statements, or similar documents demonstrating loan funds were used on eligible expenses. • Business owner has met with an area business resource center and received technical assistance. City staff will be available to work with the business owner to assist with connecting them with a business resource center that can provide resources specific to their needs. Application Process: • Application Period Opens: May 15 • Applications are available on the City’s website: • Applications will be accepted on a first come first served basis until funds are expended or the EDA determines to terminate the program, whichever comes first. • Applications will be reviewed and approved by City staff on a rolling basis, based on eligibility, and submission of a complete application. • Upon submission of application, applicants will receive an email confirming receipt of application. • A staff committee will review application for eligibility and completeness. If additional information or documentation is necessary, EDA staff will contact the applicant. Due to an expected high volume of applications, please consider your application complete if staff does not request additional information within 10 business days after application acceptance. Funding Process: • Businesses will be notified within 10 business days if their application has been approved. • Loan agreements will be provided via email for signatures. • Loan funds shall be distributed by check within two weeks after a loan agreement has been executed by all required parties. • Brooklyn Center City staff will provide a report to the Brooklyn Center EDA of all businesses funded through the program. Questions: Any questions related to the application process should be directed to: Jimmy Loyd, Economic Development Coordinator mjloyd@ci.brooklyn-center.mn.us Brookly n Center Sm all Busines s As sista nc e Applic ation 1 . App lic an t C on ta ct Fi rst N ame Last N ame Ti tle Company N ame Street A ddress Apt/Sui te/Offi ce City State Zip Email Address Primary Phone 2 . Busin ess T yp e R etai l Servi ce Manufacturi ng C onstructi on Other - Write In 3 . Number of F TE 1-5 6-10 More than 10 4 . S upp orting do c ume nta tio n fo r proo f of b us ines s res iden c y in B roo k lyn C e nte r. E x amples in clu de: s tate men t of le a se, mortga ge s tate me n t, p rop e rty tax s tate men t, or oth er doc ume nt to sh ow p ro o f o f occ upa ncy within B roo k lyn C e nte r. Brows e... 5 . 201 9 Gro s s Rev e nu e 6 . E s tima ted 2 0 20 Gros s R e ven ue 7 . Gra nt a mou nt req u este d (u p to $####) 8 . Briefly de s c rib e h o w yo ur b us ines s has bee n imp a cte d b y the C O VID- 1 9 p a nd e mic a nd /or relate d Exec utiv e Ord e rs. 9 . Curren t sta tus o f yo ur bu s ines s : Ful l y open for busi ness and/or operating onl i ne Open but with reduced hours R educed operati ons and/or operati ng onl i ne C losed to publ i c but sti ll operati ng onsite, onli ne, or remotel y C losed compl etely Other - Write In 1 0. If a wa rd e d g ra n t fu nd ing , h ow wo uld y ou us e the fun ds? Elig ible e xp e ns e s inc lud e c urren t p a y ro ll ob ligatio ns (i.e. ma y no t in c lud e e mp loy e e s wh o h a v e b e e n la id o ff), le a s e o r mo rtg ag e pa y men ts, utilitie s , ac c ou nts p aya ble, p ro p erty ta x e s an d o the r critic al b usin e ss e xp e ns e s . P le a se b e d e taile d with use s a nd a ss o ciate d c o sts . 1 1. Is there an y th in g e ls e th a t we s ho u ld b e awa re o f in re latio n to y o u r a pp lic atio n o r b usin e ss? Commissioner _______________________ introduced the following resolution and moved its adoption: EDA RESOLUTION NO. ______ RESOLUTION APPROVING ESTABLISHMENT OF THE SMALL BUSINESS EMERGENCY FORGIVABLE LOAN PROGRAM WHEREAS, the Economic Development Authority of Brooklyn Center, Minnesota (the “EDA”) was created pursuant to Minnesota Statutes, sections 469.090 through 469.1082 to exercise its powers to promote and protect economic development within the City of Brooklyn Center (“City”); and WHEREAS, the spread of COVID-19 and the resulting emergency declarations and emergency orders issued by the Governor have created a great deal of uncertainty and has dramatically impacted local businesses, particularly small businesses; and WHEREAS, the City has a large number of micro businesses, many owned by immigrants and people of color, that are a critical part of the economic vitality of the City and, as the EDA discussed at its May 4, 2020 work session, are the businesses that have been hit particularly hard by this emergency; and WHEREAS, EDA staff prepared and presented a memo, which is incorporated herein by reference, (“Staff Memo”) at the EDA’s May 11, 2020 meeting that set out the details of a proposed Small Business Emergency Forgivable Loan Program (“Loan Program”); and WHEREAS, it is consistent with the goals of the EDA, and is within its powers, to establish the proposed Loan Program in this extraordinary time to assist small businesses to remain in operation and maintain its employees to help protect the City’s economy and reduce unemployment. NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority of Brooklyn Center, Minnesota Board of Commissioners as follows: 1. The EDA hereby establishes the “Small Business Emergency Forgivable Loan Program” as provided in this Resolution. The EDA authorizes a total of $150,000 to be used for the Loan Program, with individual loans of up to $3,000. 2. The Loan Program shall be structured in accordance with the provisions proposed in the Staff Memo. 3. The Executive Director and EDA staff are hereby authorized and directed to do each of the following regarding the Loan Program: a. Prepare an application, forgivable loan agreement, policy and guidelines, and such other documents as may be needed; b. Receive applications and determine eligibility; c. Enter into such agreements on behalf of the EDA as may be needed; d. Distribute loans to eligible small businesses; e. Communicate with the loan recipients as needed to determine if they are eligible to have the loan forgiven and, if not, to collect the unforgiven portion of the loan with interest; and f. Take all other actions, and execute such other documents, as may be needed to implement and carry out the Loan Program and the intent of this Resolution. Date 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 duly passed and adopted.