HomeMy WebLinkAbout2013-11-13 HEDC Packet
AGENDA
CITY OF MAPLEWOOD
HOUSING AND ECONOMIC DEVELOPMENT COMMISSION
Wednesday, November 13, 2013
7:00 P.M.
Council Chambers -Maplewood City Hall
1830 County Road B East
1.Call to Order
2.Roll Call
3.Approval of Agenda
4.Approval of Minutes:
a.October 9, 2013
5. New Business:
a.Review of Proposed Housing TIF District, 2501 Londin Lane
b.2013 Code Enforcement Report
6.Unfinished Business:
a.Review of Revolving Loan Fund Policy Guidelines
b.Update on Frost Avenue Tax Forfeit Properties
7.Visitor Presentations:
8.Commission Presentations:
a.Recognition of WR Medical Electronics Co.
9.Staff Presentations:
a.Development Summary (No Report)
10.Adjourn
MINUTES OF THE HOUSING AND ECONOMIC DEVELOPMENT COMMISSION
1830 COUNTY ROAD B EAST, MAPLEWOOD, MINNESOTA
7:00 P.M., WEDNESDAY,OCTOBER 9, 2013
1.CALL TO ORDER
A meeting of the Commissionwas held in the City Hall Council Chambers and was called to order
at 7:00p.m.byChairperson Ulrich.
2.ROLL CALL
Commissioners
Gary Kloncz, CommissionerPresent
Mark Jenkins, CommissionerPresentat 7:03 p.m.
Jennifer Lewis, CommissionerPresent
Joy Tkachuck, CommissionerPresent
Beth Ulrich, ChairpersonPresent
Dennis Unger, CommissionerPresent
Warren Wessel, CommissionerPresent
Staff
Michael Martin, Planner
Melinda Coleman, Assistant City Manager, Community Development Director
3.APPROVAL OF AGENDA
Commissioner Jenkins added 9.a. Draft RLF Guidelines and 9.b. Upcoming EDA Meetings
Commissioner Klonczmoved to approve the agenda as amended.
Seconded by CommissionerUnger..Ayes –All
The motion passed.
4.APPROVAL OF MINUTES
Commissioner Ungermoved to approve the minutesfor September 11,2013, as submitted.
Seconded by CommissionerWessel.Ayes –All
The motion passed.
5.NEW BUSINESS
a.Review and Update of Loan Program Application, Larkin Dance Studio
i.Assistant City Manager, Community Development Director, Melinda Coleman gave the
update on the application of the loan program for Larkin Dance Studio, 1400 East
Highway 36, Maplewoodand answered questions of the commission.
No action was necessary.
October 9, 2013 1
Housing and Economic Development CommissionMeetingMinutes
6.UNFINISHED BUSINESS
None.
7.VISITOR PRESENTATIONS
None.
8.COMMISSIONPRESENTATIONS
a.Commissioner Jenkins mentioned St. John’s Hospital and HealthEast’s upcoming Annual
Business breakfastOctober 28, 2013, at St. John’s Hospital breakfast goes from 7:00 a.m.
until 7:30 a.m. and speakers to speak from 7:30 a.m. -8:30 a.m. More information can be
found at Healtheast.org.
9.STAFF PRESENTATIONS
a.Draft RLF Guidelines
i.Assistant City Manager, Community Development Director, Melinda Coleman gave the
reporton the RLF (Draft Revolving Loan Fund)Guidelines.
b.Upcoming EDA Meetings
i.Assistant City Manager, Community Development Director, Melinda Coleman gave the
update on upcoming EDA meetings, times and topics.
c.Development Summary
i.Planner, Mike Martin gave thedevelopment summaryreporton projects in the City of
Maplewood.Planner Martin discussed the future CarMax dealership on Highway 61 and
Beam Avenue and the East Metro Burn Building by 3M south of the Wells Fargo Bank
building.
The commission appreciated the board and commission appreciation event and look forward to
having the event held again next year.
10.ADJOURNMENT
Chairperson Ulrichadjourned the meeting at 7:56p.m.
October 9, 2013 2
Housing and Economic Development CommissionMeetingMinutes
MEMORANDUM
TO:
Charles Ahl, City Manager
FROM:
Michael Martin, AICP, Planner
Melinda Coleman, Assistant City Manager
DATE:
November 7, 2013
SUBJECT:
Review of a Proposed Housing TIF District, 2501 Londin Lane
Introduction
Greg Johnson, ofBattle Creek LLC, is proposing to purchase the city-owned property at 2501
Londin Lane and redevelop the site into 148 senior housing units.Mr. Johnson has made an
application to the city requesting tax increment financing (TIF) assistance.
Discussion
Staff has been working with Mr. Johnson on the potential redevelopment of the former Londin
Lane fire station.Mr. Johnson has also submitted land use applications to build the 148 unit
senior living facility which would consist of a mix of independent living units, assisted-living units,
and memory care units. The land use applications are currently being reviewed by staff and will
be presented to the relevant commissions in November and be forwarded to the city council for
consideration of approval in December. The city had an appraisal conducted for this property
which determined the proposed purchase price of $1,990,000.
The applicant is seekingTIF assistance fromthe City to assist in the development of the site,
and the provision of a portion of the units as affordable housingoptions. A TIF plan for this
project iscurrently being drafted, along with a draft development agreementand will be reviewed
by the city council on December 9.Attached to this memo is a report from Tom Denaway of
Springsted, the city’s financial consultant, the outlines the proposed TIF district plan and terms.
Mr. Denaway will be present at the November 13 meeting to address the commission.
Recommendations
It is recommended the housing and economic developmentcommission make a positive
recommendation to the city council regarding the land sale and use of TIF for the redevelopment
of the city-owned property at 2501 Londin Lane.
Attachments
1.Location Map
2.Resolution Calling for Public Hearing
Attachment 1
2501
Londin Lane
Chad Bergo
Location Map
2501 Londin Lane
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101-2887
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
MEMORANDUM
TO: Maplewood Housing and Economic Development Commission
FROM: Tom Denaway, Analyst
DATE: November 6, 2013
SUBJECT: Overview of Proposed Londin Lane TIF District No. 1-13
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The City has been working with a Developer on the potential redevelopment of the former Londin Lane fire station.
The Developer is proposing to purchase the site from the City and develop a 148 unit senior living facility, containing
a mix of independent living units, assisted-living units, and memory care units. Additionally, the Developer would be
constructing amenities and common areas to service the residents. The Developer has sought TIF assistance from
the City to assist in the development of the site, and the provision of a portion of the units as affordable housing
options. A TIF plan for the new District is currently being drafted, along with a draft development agreement. The
purpose of this memorandum is to detail the terms of the proposed Housing TIF District, the development agreement,
and outline the revenue projections for the District.
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The Developer has requested the City consider the creation of a Housing TIF District to assist with the
redevelopment of the Londin Lane site. The criteria allowing for the creation of a Housing TIF District is that a
percentage of the newly constructed housing units be set-aside for persons of low to moderate income. In the case
of a rental property development the Developer will be required to meet one of the following set-aside requirements:
A.20% of the units (30 units) occupied by persons with incomes not greater than 50% of the county median
income. The income restriction is adjusted for family size, and for one person at 50% the income restriction
is currently $28,850.
Or
B.40% of the units (59 units) occupied by persons with incomes not greater than 60% of the county median
income. The income restriction is adjusted for family size, and for one person at 60% the income restriction
is currently $34,620.
City of Maplewood
November 6, 2013
Page 2
In addition to meeting the income set-aside requirement the development will also be limited in that no more than
20% of the square footage of the facility may consist of commercial, retail, or other nonresidential uses.
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City Staff and the Developer are in the process of negotiating the terms of the deal which will be outlined in the
development agreement. Outlined below are the points on which the City Staff and the Developer have been
negotiating in regards to the proposed TIF District 1-13:
Sale of Londin Lane site by the City: The Developer has indicated their intent to purchase the Londin Lane
development site from the City, with an anticipated closing on the purchase of the site in spring 2014, timed to
coincide with the initiation of project construction. The City had an appraisal analysis performed on the site to
determine its estimated market value, which was estimated at $1,990,000. The result of the appraisal was used to
determine the sale price of the property by the City.
Prior to the purchase of the site, the City will be undertaking the demolition and remediation of the existing building
on the site, and the extension of public utilities to the development site. The estimated cost of the demolition is
approximately $60,000, while the extension of utility services is estimated at $25,000. The City intends to undertake
these improvements in advance of the property sale, and fund the costs from the sale proceeds of a TIF bond
issuance.
The Developer has indicated their intent to purchase the cleared site for $1,990,000.
TIF Assistance:The Developer has requested the City provide assistance to the project to offset the cost of
developing the site, and the provision of affordable rental units in a total amount of $2,200,000. The requested
assistance would be provided in a mix of up-front financing and pay-as-you-go assistance. The Developer requested
up-front assistance in the amount of $1,000,000, and a secondary pay-as-you-go TIF assistance amount of
$1,200,000 to be repaid following the retirement of the initial bonded debt obligation.
The up-front assistance would be in the form of a Taxable General Obligation TIF Bond Issuance. The projected
total project cost to be funded by the bond issuance is $1,085,000; prior to cost of issuance and/or other related
transaction costs. The bond proceeds would be used to provide the requested up-front assistance to the Developer
of $1,000,000, and to fund the $85,000 of costs associated with the demolition and utility extension. The bond
issuance is projected to be repaid from available tax increment over an anticipated repayment term of 15-years.
In addition to the up-front funding, the Developer has requested assistance on a pay-as-you-go basis in the amount
of $1,200,000. The repayment of this obligation would be made following the payment of debt-service on the bond
issue. Repayment on this pay-as-you-go note would be from revenue available following the repayment of debt-
service on the bond issuance. In the event there is increment available on an annual basis after debt-service on the
City of Maplewood
November 6, 2013
Page 3
bond issuance and eligible administrative expenses, the remaining increment may be used to start reimbursement on
the pay-as-you-go note. At the latest, repayment of this obligation would start in 2031 following the retirement of the
bond issuance. For the purpose of estimating the repayment of the pay-as-you-go portion of the obligation we have
assumed all increment generated during the 15-year term of the bond debt-service will be used on debt-service and
administrative expenditures; and that repayment of the pay-as–you note will start in 2031.
Bond Security: The proposed bond issuance would be a General Obligation (G.O.) issuance of the City. As a
General Obligation issuance the bond would be backed by the full-faith and credit of the City. As a G.O. obligation in
the event the TIF revenue stream was incapable of fully paying debt-service the City would be obligated to fulfill the
total debt-service payment from other available revenue sources, including an obligation to levy if necessary. As a
result of this obligation by the City, additional mechanisms are proposed to be included in the Development
Agreement to help secure the repayment of the debt-service from TIF revenue as intended.
One mechanism being negotiated with the Developer, is the provision to the City of a Letter of Credit (LOC) for a
period of time, which the City could draw against to meet debt-service in the event TIF revenue was not being
generated. The final terms of this arraignment are still be negotiated, but in concept the Developer would provide a
LOC for the full amount of the bond issuance that would remain in place from the bond issuance until the project
receives Certificate of Occupancy (COP). Following the issuance of the COP, the value of the letter of credit will be
reduced to a lower amount for a period of years; and then after that term the value of the LOC would be reduced
even further for another period of years. The final terms of this proposed step-down in the amount of the letter of
credit and the number of years over which it would be in place are being negotiated. The LOC would provide an
additional measure of security in the event the project was to realize either significant delays in build-out, or reduced
TIF revenues in the initial years.
In addition to the Letter of Credit, as part of the development agreement the Developer would be entering into a
minimum assessment agreement. A minimum assessment agreement is statement signed by the Developer and
submitted to the County Assessor agreeing that the minimum value of the property will not decrease below a set pre-
determined amount. The market value of the property may increase above this minimum value amount, but will not
fall below it. This agreement provides an additional level of security on the stability of the projected TIF revenue
stream.
8-*(MWXVMGX(IZIPSTQIRX%WWYQTXMSRW
The assumptions outlined below were used in the creation of the TIF revenue projections for the proposed TIF
District 1-13. The revenue assumptions are based on development timing provided the Developer, and use the
Shores Project which was by the same Developer as a post-development market value comparison.
Base Value: The property is currently owned by the City and thus is tax-exempt. The base market value to be
applied to the property, per TIF statute, will be set by the Assessor at the time the property becomes taxable. It is our
assumption that the property will have a frozen taxable value of $1,990,000 based on the purchase price of the
City of Maplewood
November 6, 2013
Page 4
property. This will create additional taxable market value, on which additional property tax revenue will be generated,
for the local taxing jurisdictions.
Building Build-Out:
Value constructed 2014: $5,250,000 – 50 Units
Value constructed 2015: $10,290,000 – 98 Units
Total Value Constructed: $15,540,000 – 148 Units
Per Unit Value: $105,000 – this value assumption is based on the current per-unit market value of the comparable
Shores project in Maplewood, which was also constructed by the Developer.
Inflation: These revenue projections do not include a market value inflation assumption.
TIF Eligible Tax Rate Pay 2013:
City: 48.659%
County: 65.240%
School District: 32.202%
Miscellaneous: 11.520%
Total Tax Rate: 157.622%
City Admin and Pooling Percentage: - We have assumed a total City retainage of 10% for administrative purposes.
In the event increment is available after the payment of obligations and administrative expenses, additional pooling
opportunities may be available.
.
City of Maplewood
November 6, 2013
Page 6
Projected Pay-As-You-Go Note Report
City of Maplewood, Minnesota
Tax Increment Financing (Housing) District No. 1-13
Londin Lane Senior Housing Project
TIF Projections -Phase 1&2 - 148 Units - $105,000/Unit EMV + Base Value
Note Date:01/01/31
Note Rate:5.00%
Amount:$1,200,000
Semi-AnnualLoan
NetCapitalizedBalance
DatePrincipalInterestP & IRevenueInterestOutstanding
(1)(2)(3)(4)(5)(6)(7)
1,200,000.00
02/01/140.000.000.000.000.001,200,000.00
08/01/140.000.000.000.000.001,200,000.00
02/01/150.000.000.000.000.001,200,000.00
08/01/150.000.000.000.000.001,200,000.00
02/01/160.000.000.000.000.001,200,000.00
08/01/160.000.000.000.000.001,200,000.00
02/01/170.000.000.000.000.001,200,000.00
08/01/170.000.000.000.000.001,200,000.00
02/01/180.000.000.000.000.001,200,000.00
08/01/180.000.000.000.000.001,200,000.00
02/01/190.000.000.000.000.001,200,000.00
08/01/190.000.000.000.000.001,200,000.00
02/01/200.000.000.000.000.001,200,000.00
08/01/200.000.000.000.000.001,200,000.00
02/01/210.000.000.000.000.001,200,000.00
08/01/210.000.000.000.000.001,200,000.00
02/01/220.000.000.000.000.001,200,000.00
08/01/220.000.000.000.000.001,200,000.00
02/01/230.000.000.000.000.001,200,000.00
08/01/230.000.000.000.000.001,200,000.00
02/01/240.000.000.000.000.001,200,000.00
08/01/240.000.000.000.000.001,200,000.00
02/01/250.000.000.000.000.001,200,000.00
08/01/250.000.000.000.000.001,200,000.00
02/01/260.000.000.000.000.001,200,000.00
08/01/260.000.000.000.000.001,200,000.00
02/01/270.000.000.000.000.001,200,000.00
08/01/270.000.000.000.000.001,200,000.00
02/01/280.000.000.000.000.001,200,000.00
08/01/280.000.000.000.000.001,200,000.00
02/01/290.000.000.000.000.001,200,000.00
08/01/290.000.000.000.000.001,200,000.00
02/01/300.000.000.000.000.001,200,000.00
08/01/300.000.000.000.000.001,200,000.00
02/01/310.000.000.000.0030,000.001,230,000.00
08/01/31106,535.5030,750.00137,285.50137,285.500.001,123,464.50
02/01/32109,198.8928,086.61137,285.50137,285.500.001,014,265.61
08/01/32111,928.8625,356.64137,285.50137,285.500.00902,336.75
02/01/33114,727.0822,558.42137,285.50137,285.500.00787,609.67
08/01/33117,595.2619,690.24137,285.50137,285.500.00670,014.41
02/01/34120,535.1416,750.36137,285.50137,285.500.00549,479.27
08/01/34123,548.5213,736.98137,285.50137,285.500.00425,930.75
02/01/35126,637.2310,648.27137,285.50137,285.500.00299,293.52
08/01/35129,803.167,482.34137,285.50137,285.500.00169,490.36
02/01/36133,048.244,237.26137,285.50137,285.500.0036,442.12
08/01/3636,442.12911.0537,353.1737,353.170.000.00
02/01/370.000.000.000.000.000.00
08/01/370.000.000.000.000.000.00
02/01/380.000.000.000.000.000.00
08/01/380.000.000.000.000.000.00
02/01/390.000.000.000.000.000.00
08/01/390.000.000.000.000.000.00
02/01/400.000.000.000.000.000.00
08/01/400.000.000.000.000.000.00
02/01/410.000.000.000.000.000.00
$1,230,000$180,208.17$1,410,208.17$1,410,208.17$30,000.00
Surplus Tax Increment 1,335,501.83
Total Net Revenue $2,745,710.00
MEMORANDUM
TO:
Chuck Ahl, City Manager
FROM:
David Fisher, Building Official
DATE:
November 1, 2013
st
SUBJECT:
Code Enforcement Report January 1through November 1, 2013
Introduction
st
Attached is the 2013code enforcement report from January 1through November 1st
for review and discussion.
Attachment
st
2013January 1through November 1st Code Enforcement Report
CODE ENFORCEMENT REPORT
January 1 to November 1, 2013
Type of ComplaintNumber of Complaints Received Pending
Exterior Storage815
Unapproved Parking 572
Lawn Maintenance 1391
House / Property Maintenance 365
Junk Vehicles302
Trash / Garbage290
Trash Container Storage170
Commercial Vehicle / Equipment10
Home Occupation101
Miscellaneous Concerns830
Total Number of ComplaintsReceived48316
Enforcement Matters Resolved
Number of Complaints Resolved467
Enforcement Action in Progress14
Total Number of Sites ComplaintsWereReceived371
Citations/Abatements
Number of Citations Issued18
Number of Abatements29
Comments
The 2013complaintsand abatements have been consistentwith 2011 and 2012. The
number of foreclosures within the Cityof Maplewoodhas leveled off.In addition, the
abatements may even be higher from thequantity of rain this summerthat is increasing
the long grassand lawn maintenancecomplaints.
st
p:HRA\CE Staff Reports\Code Enforcement Report 2013January 1through November 1, 2013dgf
MEMORANDUM
TO:
Charles Ahl, City Manager
FROM:
Michael Martin, AICP, Planner
Melinda Coleman, Assistant City Manager
DATE:
November 7, 2013
SUBJECT:
Review of Revolving Loan Fund Policy Guidelines
Introduction
At the October housing and economic development commission (HEDC) meeting, staff gave the
commission examples of revolving loan fund policy guidelines from nearby and like cities. Staff
would like to continue working the HEDC on developing a policy document to assist the city with
future loan requests.
Discussion
The city recently had its first experiencewith reviewing and considering a low-interest loan
utilizing the funding from the EDA levy. Because of this, staff would like to work with the HEDC
and EDA on developinga policy document to guide future requests. Staff gave the HEDC
examples of other cities’policies and will continue this discussion at the November 13, 2013
meeting.
Recommendation
No action required.
MEMORANDUM
TO:
Charles Ahl, City Manager
FROM:
Michael Martin, AICP, Planner
Melinda Coleman, Assistant City Manager
DATE:
November 7, 2013
SUBJECT:
Update on Frost Avenue Tax Forfeit Properties
Introduction
Earlier this year,housing andeconomic development commission (HEDC) received information
regarding the properties at 1160 Frost Avenue which have gone into foreclosure. These
properties will be going to auction during the first week of December.
Discussion
The city was given the opportunities to acquire these properties at no cost for a public use –
such as parks or for storm water management. The city does not have a need for these
properties for what is termed a “public use.” However, the city has inquired about purchasing the
properties through its EDA for economic development purposes. The city has also had an
appraisal done on the properties to determine fair-market value.
Staff will update the HEDC at the November 13, 2013 meeting on how the auction process
works andwhat options the city has for getting involved and for just monitoring the process at
this point.
Recommendation
No action required.
Attachments
1.Location Map
Attachment 2
Flicek Park
Frost Avenue
Tax Forfeit
Gladstone
Properties
Savannah
Chad Bergo
Tax Forfeit Properties - 1160 Frost Avenue
LocationMap
MEMORANDUM
TO:
Charles Ahl, City Manager
FROM:
Michael Martin, AICP, Planner
Melinda Coleman, Assistant City Manager
DATE:
November 7, 2013
SUBJECT:
Recognition of WR Medical Electronics Co.
Introduction
Throughout the year members of the housing and economic development commission (HEDC)
and staff work to take note of local businesses which have been recognized in some matter.
Discussion
Attached to this memo is an article recently published highlighting WR Medical Electronic Co.
Recommendation
No action required.
Attachments
1. Article
WR Medical Electronic Co., Makers of
Therabath Paraffin Therapy, Acquires New
Business from Life-Tech
posted:10/23/2013
Maplewood, MN. WR Medical Electronics Co., makers of Therabath paraffin therapy and a
Maplewood, Minnesota-based medical device manufacturer, has announced the acquisition of the
physical medicine and dental business of Life-Tech International, a Texas-based medical device
manufacturer. This acquisition consists of the Iontophoresis medical devices, accessories and
Geltrodes™ used primarily in physical therapy for pain management, and in the dental market for
symptoms of temporomandibular joint (TMJ) and temporomandibular disorder (TMD).
WR Medical Electronics has sold Life-Tech's Iontophoresis device the Iontophor™ and
Geltrode™ return pads for many years in conjunction with their autonomic and neurologic
testing labs sold Internationally.
"The Life-Tech manufactured products have been the most comprehensive and consistent of any
competing brands we have used," says Peggy Skinner, vice president of sales at WR Medical
Electronics Co. "The Life-Tech physical medicine and dental products fit very well with our
other products for temporary pain relief."
Physicians and researchers worldwide rely on WR Medical Electronics Co. for scientifically
validated equipment and exceptional support. WR Medical Electronics is a privately held single-
location Minnesota-based FDA manufacturing facility comprised of two divisions in addition to
the new physical medicine and dental product line recently acquired from Life-Tech.
The Therabath Professional Thermotherapy division includes the Therabath Professional Paraffin
Wax Bath, Refill Paraffin wax and paraffin treatment accessories and is marketed primarily for
chronic arthritis joint pain management, rehabilitation and spa use. Since 1962, physicians,
physical therapists and arthritis specialists have recommended the Therabath Paraffin Therapy
Bath because warm paraffin therapy is one of the most effective methods for delivering heat to
aching, stiff joints.Paraffin wax has a high heat capacity, meaning it is able to absorb and retain
a great amount of heat.
The neurophysiology and ENT divisions consist of facial nerve monitoring, autonomic function
testing devices, sweat testing and cardiac testing equipment.
Visit www.wrmed.comor www.therabathpro.comto learn more about WR Medical Electronics
Co. products or service.