EDSR MEMORANDUM 03-13-1995 ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: ECONOMIC DEVELOPMENT AUTHORITY
FROM: WILLIAM RUBIN, EXECUTIVE DIRECTO�I a__
Y V
DATE: MARCH 13, 1995
SUBJECT: AGENDA MEMO FOR MARCH 13, 1995
MEETING
5. February and March Financial Update
Finance Director Lori Johnson has provided summaries on the
following topics:
Micro-Loan Fund - The Micro-Loan fund had a cash balance of
$139,117.79 on January 31, 1995, and $147,675.29 on February
• 28, 1995. This does not include 1994 interest income. All loans
are current as of March 8 with the exception of Roma Tool,
Designing Women, and Water Laboratories.
DTED Loan Fund The DTED Loan fund had a cash balance of
$23,600.07 on January 31,1995,and $26,191.05 on February 28,
1995. This does not include 1994 interest income.
Action Requested
These are informational items only and no action is requested.
6. Fairgrounds Rezoning/Comp Plan Amendment
At a recent City Council meeting, a discussion on rezoning the
Sherburne County Fairgrounds was introduced. This property, lying
immediately east of the recently-rezoned business park area, is
currently zoned R3, Townhouse/Multiple Family Residential. The
City's comp plan designates this area as HR, High Density Residential.
Copies of the Fairground's current zoning and land use designation are
included in the agenda packet.
P.O. Box 490 • 13065 Orono Parkway • Elk River,MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment
It is proposed that this area be rezoned to B-P, Business Park. The
• County does not object to this proposal. The matter of rezoning this
property and amending the City's land use plan will be considered by
the Planning Commission at its meeting in late March, and by the City
Council at a meeting in mid-April.
As with other recent rezoning and land use matters involving the
business park designation, it may be appropriate for the EDA to
forward a recommendation to the Planning Commission and the City
Council.
Action Requested
The EDA is asked to recommend to the Elk River Planning
Commission and the Elk River City Council that the County
Fairground property be rezoned from R3 to B-P, and, that the
Comprehensive Land Use Plan be amended to reflect an LI, Light
Industrial designation.
7. Loan Request from T.J. Properties
Commissioners should refer to a copy of a memo that was sent to the
• EDA Finance Committee on this matter. The Finance Committee met
on March 8, 1995, to review this request. Committee members Jim
Simpson, Bud Houlton, Tom McNair, and Lloyd Brutlag were present
for this meeting. Following a presentation by Tim and Jerry Smith of
T.J. Properties, the Finance Committee voted 4-0 to recommend that
the EDA approve this loan subject to:
• the completion of an appraisal to ensure that the loan-to-
value ratio does not exceed 90 percent; and,
• Jerry Smith agreeing to apply proceeds from the sale of his
property at 907 Main Street to pay down or pay off the EDA
loan on the Freeport Avenue/Main Street office project.
Action Requested
The EDA is asked to approve a $48,000 loan to T.J. Properties subject
to the conditions listed above.
•
8. TIF Legislative Restrictions
House File 147 has been introduced as proposed legislation which
would further restrict the use of Tax Increment Financing (TIF). The
bill contains several provisions that will affect future TIF projects as
well as existing districts. The restrictions on existing districts may
have an adverse effect on TIF Districts No. 1 and No. 3. Further, HF
147 may affect the City's ability to access funds from a TIF district
that has already been decertified. For example, TIF District No. 4, the
Refuse Derived Fuel (RDF) District, was decertified in December,
1990. Some consultants/advisors at the Capitol have suggested that
the City may not be able to access these funds unless a specific
commitment is made prior to the effective date of the legislation. The
rub, however, is that HF 147 has a retroactive date. HF 147 requires
that commitments be in place by February 1, 1995. City staff believes
that this date may be pushed ahead to May 1, 1995.
Another section of HF 147 applies to all TIF districts created before
May 1, 1990. HF 147 would limit the expenditure of revenues derived
from tax increment to: 1) pay outstanding bonds issued before
February 1, 1995, or bonds issued to refund the principal of bonds
• issued before February 1, 1995;2) pay for contracts executed before
January 15, 1995; 3) fund an escrow account to make payments for the
contracts; 4) pay for school referendum levies; or 5) pay reasonable
administrative expenses, subject to other limitations.
When all bonds as described in one (1) have been paid or defeased and
all contractual obligations as described in two (2) have been paid or
escrowed as described in three(3), the district must be decertified.
As stated, some have suggested that this would adversely affect the
City's ability to access excess funds currently in District No. 1 and No.
3 - including the decertified District No. 4 (RDF District). City staff is
currently evaluating these matters and will provide additional
information at the EDA meeting. Aside from the chilling effect this
legislation may have on No. 1 and No. 3 and the RDF decertified
district, the intent of this legislation is clear. It is to bring pre-1990
districts under some standards to prevent, say, neighboring
communities from perpetuating the existence of its pre-1990 TIF
districts. EDA Commissioners will recall that pre-1990 districts are
exempt from the LGA or HACA loss. One way to curtail the arbitrary
extension of these districts is to place restrictions on how TIF revenues
• can be expended. A mechanism to do that is to require that the TIF
revenues be used only for bond payments or for contractual obligations
• that are in place before a specified date. Thereafter,the districts must
be decertified.
Action Requested
Should city staff and the EDA conclude that HF 147 has an adverse
impact on current or decertified districts in Elk River, the EDA and
City Council will be asked to forward these objections to its State
Senator and Representative.
9. State of the City Presentation
The Elk River Area Chamber of Commerce will be hosting a "State of
the City" presentation at a membership meeting on March 21, 1995.
EDA Commissioners should refer to a letter from the Chamber's
Executive Vice President which is included in the agenda packet. Non-
elected EDA Commissioners should be prepared to address the
membership for three to five minutes on a topic of interest. These
topics may include: business park, East Main redevelopment
initiatives,recent industrial expansions, All-Star City designation,
new Commissioner perspective (Commissioner Bender), etc.
Commissloners can finalize theirrespective topic at the EDA meeting
on March 13, 1995.
eda:meetings/agmm213