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01-10-12 HRA Agenda Packet AGENDA Regular Meeting of the Housing and Redevelopment Authority Golden Valley City Hall 7800 Golden Valley Road Council Chamber January 10, 2012 6:30 pm Pages 1. Roll Call 2. Election of Officers 2 3. Approval of Agenda 4. Approval of Minutes - October 11, 2011 3 5. Approval of Bills: Reimbursement of City Expenditures City of Golden Valley $15,531.36 4 TOTAL 15 531.36 Bill Summarv: General Fund $1,046.25 North Wirth Capital Project Fund 1,088.75 Golden Hills Capital Project Fund 13,163.86 Tax Increment Fund 232.50 TOTAL 1 531.36 6. Receipt of December 2011 Financial Reports 5-8 7. Adoption of 2012 General Fund Budget 12-1 9-10 8. Designation of Depositories 12-2 11-23 9. Set 2012 Meeting Schedule 13 10. Report on GVEC LLC Development Agreement 14-15 11. Adjournment F �"h�s��m�i�t is ai�ai��le i��ernafe f�rtn�ts u��r�a 72-�i�ur r�qu�st.Pl�as�c�l! .°7f�:��=8�1�6�'T"iY: 7`fi3-5��-�9��k�?m��e�r�c�u�s�. ��pt�s�f alt�rn��fi�rtnat� ; �.'r�r�y iri�lu��I�r�i� p�ir��„e��r��ic,Br�alle,�udivc�sset�e,e��. ��i �� i� h � �.. �� `" Housing & Redevelopment o �� __ - a e - Authority 763-593-8002/763-593-8109 (fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 2. Election of Officers Prepared By Thomas D. Burt, HRA Director Summary The Housing and Redevelopment Authority (HRA) by-laws provide for the election of two officers to the HRA, Chairperson and Vice Chairperson. The by-laws state these positions are to be elected for a one-year term. The officers in 2011 were: Chairperson, Paula Pentel; Vice Chairperson, Mike Freiberg. Recommended Action Motion to approve a Chairperson and Vice Chairperson for 2012. HOUSING AND REDEVELOPMENT AUTHORITY October 11, 2011 Pursuant to due call and notice thereof, a regular meeting of the Housing and Redevelopment Authority of the City of Golden Valley, Hennepin County, Minnesota, was held at 7800 Golden Valley Road in said City on October 11, 2011 at 6:30 pm, in the City Council Chambers. The following members were present: Chair Paula Pentel and Commissioners Mike Freiberg, Linda Loomis, DeDe Scanlon and Robert Shaffer. Also present were HRA Director Thomas Burt, Finance Director Sue Virnig and Administrative Assistant Lisa Wittman. Approval of Aqenda MOVED by Scanlon, seconded by Freiberg and motion carried unanimously to approve the October 11, 2011 HRA agenda. Approval of Minutes -Julv 12, 2011 Reqular HRA Meetinq MOVED by Loomis, seconded by Shaffer and motion carried unanimously to approve the July 12, 2011 Regular HRA minutes as submitted. Reimbursement of Citv Expenditures MOVED by Shaffer, seconded by Loomis and motion carried unanimously to authorize reimbursing the City of Golden Valley $1,793,514.39 for expenditures incurred. Receipt of September 2011 Financial Reports Commissioner Loomis questioned the market value homestead exclusion impact on TIF Districts. Virnig explained the impact to TIF district financing. MOVED by Loomis, seconded by Freiberg and motion carried unanimously to receive and file the September 2011 Financial Reports. The meeting was adjourned at 6:36pm. Paula Pentel, Chair ATTEST: Lisa Wittman, Administrative Assistant �� -'....�.. , � �� /� Finance � �� N+ � 763-593-8013/763-593-8109 (fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 5. Reimbursement of City Expenditures Prepared By Sue Virnig, Finance Director Summary As of December 31, 2011 the following expenditures were paid by the City on various check registers and need to be reimbursed by the HRA: City Expenditures: Amount Check # 1000 SEH, Inc. $2,327.86 108371 1000 Best & Flanagan (September Legal) 4,046.85 108424 1000 Best & Flanagan (October Legal) 4,135.40 108846 1000 Best & Flanagan (November Legal) 5,021.25 109047 $15,531.36 HRA Expenditures: 9000 General Fund $1,046.25 9160 Golden Hills Tax Increment Fund 232.50 9250 North Wirth #3* 1,088.75 9280 Golden Hills Capital Projects� 13,163.86 $15,531.36 �Asterisk items are reimbursed by deposits held for developers. Recommended Action Motion to approve reimbursing the City of Golden Valley $15,531.36 for expenditures incurred. �� .'�: =:�,. x a�_ � '� �� Finance � �� , � � 763-593-8010/763-593-8109(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 6. Receipt of December 2011 Financial Reports Prepared By Sue Virnig, Finance Director Summary Attached is the December 2011 Financial Reports for Housing and Redevelopment Authority (HRA) review. Staff will address questions from the HRA before or at the meeting. Attachments HRA General Fund December 2011 Budget Report (1 page) HRA Tax Increment District Projections for Golden Hills Tax Increment Funds (1 page) HRA 2011 Capital Project Funds Report (1 page) Recommended Action Motion to receive and file the December 2011 HRA Financial Reports. HRA of Golden Valley General Fund December 2011 Budget Report Percentage Of Year Completed 100% Over % Of 2011 Oct-Dec YTD (Under) Budget Revenue Budget Actual Actual Budget Received Transfer from TIF Funds: Golden Hills 159,000 0.00 159,000.00 0.00 100.00% Interest Earnings (3) 0 0.00 0.00 0.00 Fund Balance 0 0.00 0.00 0.00 #DIV/0! Totals $159,000 0.00 159,000.00 0.00 100.00% Over % Of 2011 Oct-Dec YTD (Under) Budget Expenditures Budget Actual Actual Budget Expended Legal Services (1) $6,000 1,046.25 3,188.20 (2,811.80) 53.14% Audit 12,000 0.00 12,000.00 0.00 100.00% City Overhead (2) 140,000 0.00 140,000.00 0.00 100.00% Miscellaneous 1,000 0.00 0.00 (1,000.00) 0.00% Totals $159,000 1,046.25 155,188.20 (3,811.80) 97.60% Notes: (1) Includes November to date billings from Best & Flanagan. (2) Transfers were made in July 2011. 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Increment on Deposit 14,173.49 Less: Expenditures: City of Golden Valley (1) (1,088.75) Transfer to TIF Cash Balance @ 12/31/11 $286,121.65 $12,446.45 (1) Breakdown on City Expenditures Memo � �� :, _ �_: ,� �:_ O :� _ : d (� Finance v 763-593-8013/763-593-8109 (fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 7. Adoption of 2012 General Fund Budget Prepared By Sue Virnig, Finance Director Summary Attached is the 2012 Housing and Redevelopment Authority (HRA) General Fund Budget. Narth Wirth fees such as fiscal disparities are taken from the Tax Increment payment (Option B) to the developer. Attachments Resolution Adopting 2012 General Fund Budget (2 pages) Recommended Action Motion to adopt Resolution Adopting 2012 HRA General Fund Budget. Resolution 12-1 January 10, 2012 Commissioner introduced the following resolution and moved its adoption: RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) ADOPTING THE 2012 GENERAL FUND BUDGET BE IT RESOLVED by the HRA that the appropriations for the General Fund Program for the calendar year 2012 as follows: GENERALFUND Proposed Expenditures Budqet Legal Services $6,000 Audit Services 12,000 Permanent Transfer 140,000 Miscellaneous 1,000 159 000 BE IT FURTHER RESOLVED by the HRA that the sources of financing the sums appropriated shall be GENERALFUND Revenue Golden Hills - Tax Increment fund 159,000 1 9 000 Chair ATTEST: Thomas D. Burt, Executive Director The motion for the adoption of the foregoing resolution was seconded by Commissioner upon a 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, signed by the Chair and the signature attested by the Executive Director. • �.,..�t��C�_�:.. Finance O s� �, e/ 763-593-8013/763-593-8109 (faxj � Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 8. Designation of Depositories Prepared By Sue Virnig, Finance Director Summary State Law requires cities to have depositories for Housing and Redevelopment Authority funds approved annually. The attached resolution states the depositories, accounts, and signature requirements for each account. Attachments Resolution Designating Depositories for HRA Funds (1 pages) Recommended Action Motion to adopt Resolution Designating Depositories for HRA Funds. Resolution 12-2 January 10, 2012 Commissioner introduced the following and moved its adoption: RESOLUTION DESIGNATING DEPOSITORIES FOR HRA FUNDS BE IT RESOLVED by the Housing and Redevelopment Authority (HRA) of Golden Valley that the following are named as depositories for HRA funds, subject to the furnishing of collateral for funds on deposit as provided in the Laws of the State of Minnesota: BNC National Bank Central Bank Piper Jaffray Companies RBGDain Rauscher US Bank Wells Fargo 4M Fund BE IT FURTHER RESOLVED that the following signatories or alternates are authorized to be signatories on checks drawn on funds deposited to the general checking account: the HRA Chair or Vice Chair and the HRA Director or Assistant Director; and that each check shall require two signatures. BE IT FURTHER RESOLVED that the following shall be authorized to make investments of HRA funds and shall be authorized to deposit the principal of said investments in the above named depositories as necessary and beneficial to the City: HRA Director, City Treasurer, City's Accounting Coordinator. The HRA Director and City Clerk are authorized and directed to furnish each of the depositories with certified copies of this resolution along with such signature documentation as is required by the depository and the authorizations set forth under 1 and 2 above. Chair ATTEST: Thomas D. Burt, Executive Director The motion for the adoption of the foregoing resolution was seconded by Commissioner upon a 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, signed by the Chair and the signature attested by the Executive Director. C. �� Housing & Redevelopment o :� a e Authority 763-593-8002/763-593-8109(fax) Executive Summary For Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 9. Set 2012 Meeting Schedule Prepared By Thomas D. Burt, HRA Director Summary Under its by-laws, the HRA has regular meetings quarterly on the second Tuesday in January, April, July and October. The 2012 HRA regular quarterly meeting dates would therefore be January 10, April 10, July 10 and October 9. Recommended Action Motion to set the regular meeting dates for January 10, April 10, July 10 and October 9 at 6:30 pm. Hq�i, �... :s 1��rf��„.:. �� "� (� Housing & Redevelopment O � �:� � v Au h rit � t o y 763-593-8014/763-593-8109 (fax) Executive Summary for Action Golden Valley Housing and Redevelopment Authority Meeting January 10, 2012 Agenda Item 10. Report on GVEC LLC Development Agreement Prepared By Jeanne Andre, Assistant Director Summary In 2006 the Housing and Redevelopment Authority (HRA) signed a development agreement with GVEC, LLC for redevelopment in the North Wirth Redevelopment Area. The main terms of the agreement were as follows: • The HRA would sell land to the developer to construct up to 31,000 square feet of office condominiums in three stages (with a fourth optional stage). • The developer would remediate contaminated soil at the site and the HRA would repay the remediation costs with pay-as-you go Tax Increment Financing (TIF). The land was sold and the developer remediated the soils and constructed 10,500 square feet of office space. Most of the units were sold and the remaining unsold spaces have been leased. A Note securing the agreement to pay TIF for the soil corrections was executed. The developer met the Phase 1 construction schedule and TIF payments on the Note commenced. However the office condo market plummeted and the developer did not meet the Phase 2 construction requirement, putting the project in default. The developer also did not pay taxes on some of the unsold property, which also placed the project in default. In 2009 the developer and the HRA negotiated and executed an Amendment to the GVEC LLC Private Development Agreement that extended the deadline for construction of the remainder of the project by combining Phases 2 and 3 to have a common deadline of December 31, 2011, and stopped payment of interest on the Note until December 31, 2011 and if the project is in default. When real estate taxes were in arrears the HRA did not make payments on the Note. Bank Mutual took a first mortgage on the property. The developer stopped making payment on the mortgage, so the bank is in a position to take possession of the property. The bank has taken an active role in managing the property and paid taxes payable through May, 2011, allowing TIF payments to be made in August. The bank also paid second half 2011 taxes. However neither the developer nor bank has been actively marketing the property to assure that additional offices will be constructed by the December 31, 2011, deadline for the new Phase 2/3, so the project will once again be in default. The bank has approached staff suggesting that it might seek a deed in lieu of foreclosure to take possession of the property and start to actively market it. However with the December 31 deadline the bank would immediately be in default, without a reasonable amount of time to market the property. The bank would therefore like to work with staff on a second amendment to the agreement that would provide them more time to market the property without being in default. Staff would like to work with the bank on a possible extension, enhancing the chances that the project will be completed. If the bank opts not to get involved and keep paying the taxes, the project might go tax forfeit, which would be a detriment to the City and could jeopardize the existing office condo owners.