EDSR MEMORANDUM 04-12-1993 / \�
liltyof TO: ECONOMIC DEVELOPMENT AUTHORITY
lkRiver FROM: WILLIAM RUBIN, ED COORDINATOR
DATE: APRIL 6, 1993
SUBJECT: AGENDA MEMO FOR APRIL 12, 1993
EDA MEETING
5. FINANCIAL UPDATE
The following is a summary from Finance Director, Lori
Johnson:
Economic Development Authority
As of March 31, 1993, the EDA had a cash balance of
$63,974 . 94 . However, the EDA owes the City $3,213.01
for 1992 expenses which will bring the balance down
to $60,761 .90. Attached is a Statement of Expenses
Payable detailing the reimbursement request. In
April, the EDA will once again be on schedule to
approve quarterly expense reimbursements to the City.
Action Requested: The EDA is asked to approve
payment to the City in the amount of $3,213 . 01.
Revolving Loan Fund
The Revolving Loan Fund had a cash balance of
$195,585 . 60 as of March 31, 1993; this balance
excludes 1993 interest income which has not yet been
allocated. All March payments are current, and as of
April 8, all April payments have been received except
for payments from Puresteam and Second Generation
Properties (NAPA) .
This is an informational item only and no action is
requested.
6 . MINNESOTA HOUSING FINANCE AGENCY (MHFA) HOME MORTGAGE
PROGRAM
At the March EDA meeting, Commissioners and staff
discussed the 1993 MHFA first time homebuyer program.
This program enables municipalities or Economic
Development Authorities to reserve an allocation of
mortgage funds through the MHFA. These funds are
110 ultimately used exclusively in the respective community
for first time homebuyers.
720 Dodge Avenue N.W., Elk River, Minnesota 55330 (612) 441-7420
Although a tax bill authorizing the issuance of mortgage
revenue bonds has not been passed by Congress and signed
by the President, MHFA is confident the bill will be
approved some time in 1993. As a result, MHFA desires to
go through the mortgage allocation process in lieu of its
ability to issue the revenue bonds.
It is anticipated that MHFA will issue approximately $43
million dollars in mortgage revenue bonds . These bonds
are used exclusively by first time homebuyers, and, enable
the buyers to obtain long term (30 years) , below market
(approx. 7 .5%) , financing on the purchase of existing
homes or the construction of new ones . Because it is a
first time homebuyer program, certain restrictions apply.
That is, an applicant' s income cannot exceed a certain
level. Staff believes the 1993 income threshold will be
$40,800 . In addition, homes purchased under this program
cannot exceed a certain level. In 1992, homes purchased
under this program for metropolitan communities could not
exceed $85,000 (existing homes) or $95,000 (new
construction) .
A draft of the 1993 Elk River EDA application to MHFA is
enclosed in the agenda packet. An allocation in the
• amount of $1,500,000 in mortgage revenue funds for Elk
River is requested. Most likely, MHFA will allocate less
than the requested amount.
ACTION REQUESTED
The EDA is asked to authorize the submission of an
application in the amount of $1,500,000 to the Minnesota
Housing Finance Agency for inclusion in its Minnesota City
Participation Program. Further, the EDA is asked to
authorize payment of a deposit equal to 1% ($15,000) of
its requested allocation. This deposit will be refunded
by MHFA upon the sale of mortgage revenue bonds .
7 . LOAN REQUEST FROM TESCOM CORPORATION
A separate memo has been prepared for this agenda item.
8 . UPDATE ON MULTI-COUNTY DEVELOPMENT COMPANY
The following public or quasi-public entities from
Sherburne County have passed resolutions of support for
the Coon Rapids Development Company to expand into
Sherburne County and have pledged $1,000 each towards the
• purchase of stock in the new multi-county entity: Becker
EDA, Elk River EDA, Elk River Municipal Utilities, Big
Lake EDA, Sherburne County EDC, Zimmerman EDA (decision at
future meeting) .
• In addition, entities such as the Bank of Elk River also
recognize the value of this organization and have pledged
to purchase stock in the multi-county organization.
Lastly, a luncheon seminar was sponsored by the County EDC
wherein a presentation was made to banks that are active
in the County. It is anticipated that the combined
pledges of all of these entities will exceed the $10,000
in new stock purchases for the expansion into Sherburne
County.
A final presentation to the Sherburne County Board is
expected on April 20 . Thereafter, the Coon Rapids
Development Company Board will likely authorize the
submission of an application to the SBA requesting this
territorial expansion. Final approval by the SBA may not
occur until mid to late 1993 .
At this writing, it is not known if additional counties,
such as Wright County, will also be requesting service
territory expansion to the Coon Rapids Development Company.
9 . MARKETING CONCEPTS
• Staff will present one or two novelty marketing concepts
for consideration by the EDA Commissioners at Monday's
meeting. In 1992, the EDA implemented a campaign that
involved mailable beverage coolers. Another unique
concept is planned for 1993.
10. EDA MAIN STREET SITE
A. Presentation
Mr. Chris Bulow has requested a spot on the EDA
agenda to discuss the R.E.P. Ltd. , concept for this
site. Staff understands that Mr. Bulow is interested
in a partnership with Gary Santwire to redevelop this
site.
B. Other Developer Interest
As EDA Commissioners are aware, John Weicht and Rob
VanValkenburg continue to express interest in the
site and may be in a position to introduce their
concepts to the EDA on Monday evening.
C. Park and Rec Concepts
At a recent Park and Recreation Commission meeting,
Commissioners expressed some interest in converting
the site to a park or open space use. Because the
EDA holds title to the property, protocol suggests
that the Park and Recreation Commission should be
conveying its ideas to the EDA Commissioners. As a
result, the Park and Recreation Commission has been
invited to attend the later part of the EDA meeting
to convey these thoughts . At the conclusion of the
EDA meeting, the Council will convene and conduct a
joint meeting with the Park and Recreation Commission.
11 . PROSPECT STATUS REPORT
The Prospect Status Report has been sent under separate
cover.
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