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HomeMy WebLinkAbout01-26-17 MINUTES ECONOMIC DEVELOPMENT AUTHORITY Regular Meeting January 26, 2017 1. CALL TO ORDER The meeting was called to order by Chair Larson at 6:30 p.m. Members Present: Larson,Pitcher, Cordes, Jolley, Simmons, Wilson Members Absent: Corraro Also Present: Adam Kienberger, Community Development Director Audience: Councilmember Craig 2. PLEDGE OFALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA Community Development Director Kienberger added: 8d) Update on Riste Lot 8e) Update on Farmington Business Park Land Discussion MOTION by Simmons, second by Jolley to approve the Agenda. APIF,MOTION CARRIED. 5. CITIZEN COMMENTS/PRESENTATIONS 6. CONSENT AGENDA MOTION by Cordes, second by Pitcher to approve the Consent Agenda as follows: a) Monthly Financial Statements b) Approved Meeting Minutes(12/1/16 Special Meeting) APIF,MOTION CARRIED. 7. PUBLIC HEARINGS 8. DISCUSSION ITEMS a) 2017 Community Development Block Grant Allocation Each year the city receives CDBG dollars through the Dakota County CDA. This year we will receive$31,633 for program year 2017. The year runs from July 1, 2017,to June 30, 2018. Last year we received $41,016. This change is due to how HUD calculates population and poverty rates. Staff is proposing allocating the funds between: - Residential Rehabilitation Program$19,133 - Comprehensive Plan Update$10,000 - Senior Services Financial Support Program$2,500 The Commercial Rehabilitation Program still has a balance of$46,000. We need to spend these dollars or they could be re-allocated away. We average$12,000 - EDA Minutes(Regular) January 26,2017 Page 2 $15,000 per project so we have enough for three more projects. We are finishing The Cakery project. So this is a good time to shift to the residential program. The Comprehensive Plan needs to be updated every ten years,which will take place this year. The Senior Services Financial Support Program is used by the Rambling River Center to underwrite the cost for some seniors to participate in membership and programs. This amount has been reduced from previous years due to the overall reduction in CDBG funds to be received. Member Wilson asked if we have a maximum award for home improvements. The CDA loan amounts go from$15,000 to $25,000. In addition to the$19,133 staff is proposing to allocate to the home improvement program,the CDA contributes additional dollars to make the improvements. Member Wilson was in favor of the program, but wanted to spread out the dollar awards to as many people as possible. Staff stated the program is administered and marketed by the CDA. They have a wait list for it and administer the amounts. Member Wilson also agreed with the senior support, but asked if the EDA should be allocating to that and if it should come through park and recreation? Staff explained Farmington receives the CDBG dollars and the EDA is tasked with how those dollars are utilized. We collaborate internally as to how they can be used. Member Simmons asked how staff arrived at the amounts,when are they due and what is the total cost. Staff looked at the senior program amounts last year of $5,000, but with a 25%reduction overall, a 50%reduction for senior services would still work. The comp plan is funded now through a variety of sources;Met Council of$32,000, planning budget of$14,000 and doing research the cost is typically$50,000 to$70,000. We have one planner so it makes sense to look for more outside assistance. That is how we arrived at$10,000. The$19,133 is what is left of the total allocation and was assigned to residential rehabilitation. Because the$31,633 is an estimated amount,we may need to reduce activities if it changes and would be done in the home improvement program. Councilmember Pitcher asked about the type of residential properties that can use these funds. The funding is for single family homes and the owner needs to meet a certain income level. Member Jolley noted last year we allocated$5,000 to senior services and was the full amount used. Staff stated last year the EDA recommended a smaller amount based on what they had in their pool, and then made an administrative change based on the demand. There is a small amount left now. Member Jolley wondered if some requests would be denied because of the 50%reduction. Staff has tried to balance the amount based on past demand. Member Jolley asked about the comp plan update and if it is an annual fee. Staff stated the comp plan is updated every ten years. Right now we are operating under the 2030 comp plan and we will update it to the 2040 comp plan. So we will not have this cost next year. Staff explained we have a consulting budget of$50,000 to$60,000. We EDA Minutes(Regular) January 26,2017 Page 3 received a Met Council grant of$32,000,we will use planning budget and the CDBG dollars for the rest. It is a one-time expense. Member Cordes asked if there was any concern that with a new federal administration that this program will continue. Staff was not too concerned with any changes. The amount is approved in April or May. We cannot spend any dollars until it is approved and the program year starts July 1,2017. MOTION by Simmons, second by Wilson to approve the CDBG allocations for PY2017 to the Home Improvement Loan Program ($19,133), Comprehensive Plan Update($10,000) and Senior Services Financial Support Program($2,500) funding categories. APIF,MOTION CARRIED. b) Downtown Facade Improvement Program Application—BlackFire Creative Staff received a grant application from BlackFire Creative for improvements to their building at 308 Elm Street. The improvements include paint, gutters and signage with a total project cost of$8,500, including the$2,500 grant amount. BlackFire will be contributing$6,000 to the project. They would like to start early spring of 2017. Member Simmons asked when the policy was proposed she thought the owner would come to the EDA meeting to ask questions. Based on the description it sounds good, but do we feel it is important whether the Downtown Redevelopment plan had any recommendations and we as a group not mandate design, but have simple recommendations. The purpose of meeting with the business wouldn't be to mandate a design,but to asked questions about what we are visualizing. Mayor Larson asked if by doing something like that,would we have to create an overlay zone to take precedence over our sign ordinance. Staff stated the bigger policy question is where do you see ease of access to a program versus requirements or strings attached with that. Member Simmons explained a situation with a business owner who wants to do some signage, but the building owner does not cooperate. How do we find that balance? Mayor Larson understood,but the owner has to be willing to make an investment. Staff stated the baseline for the program is using EDA dollars to leverage any additional investment with a minimum threshold is good for the community. This group chose to start with this baseline. Member Wilson recalled the overall consensus of the downtown group was we don't want to be too prescriptive to limit development. At the same time,the EDA talked about do we have some type of design standards to go by. Mayor Larson recalled the EDA decided to leave it to staff to review the plans submitted and if the plans fit the program, it would be brought to the EDA. Staff agreed, we do the review and if the plans do not make sense, staff would discuss it with the business. If you are going to be prescriptive you need to have something to go by. The EDA did not want to take the review out of staffs hands. Member Wilson suggested saying the EDA would like to meet the applicant and see what their plans are for Farmington. If someone is willing to invest here,they must have a reason. Member Simmons agreed her thought was to meet people and build a relationship. The investment of improving the buildings is so important. EDA Minutes(Regular) January 26,2017 Page 4 Staff will encourage the applicants to come to EDA meetings to meet them, but as far as covenants and colors, etc.that may be best handled through the comp plan update. Member Jolley stated the spirit of the program was to encourage the fixing up of properties so they would be attractive,but most important because it would be a downtown project it would be the rear entrances identified as the most needy. Neither of these applications have addressed that. That is important if we want to follow what the downtown committee wanted which was to make a green space next to the senior center. Mayor Larson felt once the park goes through that will come. Member Jolley stated because of the location of this applicant,he could be a role model for that area. She recalled we would stick with this program for a year and maybe next year push for rear building improvements. It is important that stays in the plan. Member Cordes agreed it would be nice to extend an invitation to the applicants to meet with the EDA about their plans. Member Simmons agreed to not put anything restrictive in the policy, but have an informal discussion and guide them. MOTION by Cordes, second by Wilson to approve the Downtown Façade Improvement Grant application and contract for BlackFire Creative. APIF, MOTION CARRIED. c) Downtown Facade Improvement Program Guidelines Discussion Staff wanted to discuss the award amounts. Currently it is a flat$2,500 grant with at least a one to one match, so it is a minimum $5,000 project. There was some discussion about do want to allow for smaller projects. The other question that has come up is an individual who owns two properties downtown, can he combine projects for both buildings to make a$5,000 project. Mayor Larson asked if we should start with a$1,500 minimum up to$2,500. He would agree with that. Member Jolley noted$1,500 does not buy much and would not change the grant amount. Member Jolley agreed with combining the amounts between two buildings with the same owner. Staff cautioned if someone owns numerous buildings,the individual building improvements could be very small. Staff recommended not making any changes to the application. If we are looking at leveraging private investment in a property because we are looking at aesthetic improvements to a building,the ownership shouldn't matter. The program has been in place for two months during the winter. We should give it six months to grow some legs and not be a disservice to previous applicants. Mayor Larson noted if we lower the amount to $,1500 that could take care of the second question. MOTION by Simmons, second by Pitcher to lower the minimum grant amount to $1,500 resulting in a$3,000 minimum project. The new language would read a minimum of$1,500 up to $2,500. APIF,MOTION CARRIED. EDA Minutes(Regular) January 26,2017 Page 5 d) Update on Riste Lot The EDA owns the lot at 209 Oak Street(the Riste lot). In 2007 the EDA used CDBG dollars and CDA grant fund dollars to demolish a building in conjunction with recommendations of the downtown plan to look for ways to redevelop downtown sites. Mr. Leon Orr has expressed interest in purchasing the lot. The fair market value is $25,000. Staff has received an offer letter for$25,000 and a $5,000 deposit from Mr. Orr. Because CDBG dollars were used to demolish the building, anytime it transitions into private use there are some provisions that HUD invokes on whatever dollars are recuperated. If sold, 76.9%of the market value/sales price needs to be repaid to the CDBG program which is administered by the CDA. Staff has confirmed with the CDA that any dollars that would come back to us in our CDBG program would remain in the Farmington CDBG allocation. Member Jolley asked if we are approving a business for animal rescue. Staff confirmed that is the business. They plan to have final purchase completed by May 20,2017. The final payment of$20,000 will be made at the time of final purchase. The offer is contingent upon Last Hope, Inc. developing a building plan that is suitable for the organization's operations and approved by their Board of Directors. Staff stated it would not be unreasonable for us to impose some conditions such as a start date for construction. The use does meet zoning requirements. The EDA discussed the type of business. There is no overnight stay for the animals. The animal is brought to the business and the owner picks it up. Member Simmons asked about the financing and that if it is sold for$25,000, 76.9%has to be paid back to the CDBG fund which is$22,762.40, so less than $3,000 comes to the EDA. Staff confirmed that is correct. Member Simmons asked about an appropriate construction start date. Staff suggested having construction start by December 31,2017. Otherwise it would revert back to the EDA. Staff will have the city attorney prepare an agreement. Member Wilson suggested having a start date of September or October. Staff stated Mr.Orr is proposing a closing date of May 30, 2017, so construction could be soon after. Member Wilson would like to move construction start up to September 30, 2017. Mayor Larson noted they do have construction plans already and suggested leaving it at December 31, 2017. MOTION by Simmons, second by Cordes to direct staff to work with the city attorney to draft a purchase agreement to be authorized by the EDA. APIF, MOTION CARRIED. e) Update on Farmington Business Park Land Discussion This is off of hwy 50 on the east side of Farmington by the golf course. There are five vacant lots in the business park. These were foreclosed on several years ago by Sterling State Bank. The bank would like to give the lots to the EDA to market them for new business growth.According to the city attorney,the EDA is eligible to receive these lots as a donation. The lots are shovel ready for development. EDA Minutes(Regular) January 26,2017 Page 6 Member Wilson asked if there is any remediation that the EDA needs to take care of before we can sell them. Staff noted it would not be unreasonable to do a phase 1 study and will research the issue. That discussion can come later. EDA members agreed staff should move forward with accepting the lots. 9. DIRECTOR'S REPORT a) January Director's Report Staff welcomed Councilmember Pitcher to the EDA and School Board Member Cordes was re-appointed to the EDA. Staff continues to promote ribbon cuttings for businesses. The next EDA meeting is February 23, 2017. This will be the annual organizational meeting. As several members will be absent,the next meeting will be held February 16,2017. Member Wilson sees tremendous value in getting city groups together that work with planning,zoning and economic development. There was a lot of time and effort put into the downtown redevelopment plan and he wants to make sure every effort coincides with that plan. Member Jolley noted Trident has posted a sign that they are accepting calls for occupancy. Member Simmons asked about the contact with the owner of the strip mall. Mayor Larson has seen concept drawings of the improvements and it will look very nice. 10. ADJOURN MOTION by Simmons, second by Wilson to adjourn at 7:59 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Administrative Assistant