HomeMy WebLinkAbout4.A. Consideration of modifications to Facade Impovement Deferred Loan Program General Business
4. A.
SHAKOPEE
TO: Economic Development Authority
FROM: Samantha DiMaggio,Economic Development Coordinator
DATE: 09/17/2013
SUBJECT: Consideration of modifications to the Facade Improvement Deferred Loan Program
Background
The current Facade Improvement Deferred Loan Program has been underutilized in recent years. On August 14,
2013,the EDAC invited local businesses to come discuss this program and suggest modifications to make it more
attractive.
The current program requires the following:
•Name of the program-Facade Improvement Program
•40%of the costs of restoration or enhancement projects are covered for up to a maximum of$15,000
•The loans are forgiven on a sliding-scale over a 5 year period if the property owner does not sell the property
during that time.
The EDAC is recommending the following:
•New Name—Commercial Exterior Improvement Program
•50%of the project costs to be eligible as a forgivable loan by the city.
•Forgiveness of the loan would take place over a three year period(year one 1/3,year two another 1/3,year 3
another 1/3). For example,with a$15,000 maximum match,$5,000 would be forgiven each year for 3 years.
•If the funds are going to improve a vacant building,there must be a tenant in the building within 6 months of
issuance of the certificate of occupancy.If that doesn't happen,the EDA can review the loan on a case by
case basis to determine if any funds should be forgiven, if any or the funds should be paid back,and how
much time will be allowed for repayment.
•The benefiting building may be sold without an impact on the loan,as long as there is a building tenant. If the
building is sold and no tenant remains or is found within 6 months,the EDA may then review the loan on a
case by case basis to determine if any or all of the funds should be forgiven,if the funds should be paid back,
and how much time will be allowed for repayment.
•Eligible expenses are limited to improvements which are visible from the fronting street(s). Examples
include roofs(flat or pitched),windows,doors, siding,brick,removal of blight from property,planting of
trees,painting,lighting, awnings,restoration of historic details,etc.
Modifications to the marketing materials,application and repayment agreements would be made to reflect these
changes.
Action Sought
If the EDA concurs, it should,by motion,approve these modifications to the current Facade Improvement Program,
so as to create a new Commercial Exterior Improvement Program.
Attachments: Brochure
Facade agreement
Application
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Repayment Agreement
Shakopee Fagade Improvement Program
THIS AGREEMENT, made and entered into this day of 20_by and
between (hereinafter referred to as"Owner"), and the Economic
Development Authority for the City of Shakopee, having its principal office at 129 Holmes St.
South, Shakopee, Minnesota 55379 (hereinafter referred to as"Lender').
WHEREAS, on the day of January, 20_, hereinafter referred to as the"effective date", The
Lender agreed to grant to the Owner a Deferred Payment Loan, hereinafter referred as"Deferred
Loan," relating to the real estate hereinafter described, in the amount of$
NOW THEREFORE, in consideration of the said Deferred Loan, the parties do hereby agree as
follows:
1. That the Owner promises to use the proceeds of the Deferred Loan for the purposes of
installing
(all consistent with the design and materials
submitted to and approved by the city), for the building located at
in the City of Shakopee, Minnesota.
2. That if the Owner sells, transfers or otherwise conveys the real estate hereinafter
described, within a period of five (5)years from the effective date of the Deferred Loan (to
wit, , 20_), the Owners will pay to Lender a pro-rated share of the
Deferred Loan equal to twenty percent(20%) of the amount of the Deferred Loan for
each year prior to , 20_that the sale occurs. For example, if the
Owner sells the real estate hereinafter described in , 20_, the Owner
must pay Lender fifty percent(50%) of the amount of the Deferred Loan.
That any such repayment shall be made to the Lender no later than the 30th day following
such sale, transfer or other conveyance, or on such later date or dates as the Lender, in
its sole discretion, may designate.
3. That as security for the Owner's obligation of repayment, and subject to the terms and
conditions of this Agreement, the Owner hereby grants, and Lender shall and hereby
does have, a lien on the real estate hereinafter described as the full amount necessary to
satisfy said repayment obligation and the cost including reasonable attorney's fees, of
collecting the same. The real estate subject to said lien is situated in Scott County,
Minnesota, is located at Shakopee, MN and is legally described as:
1
i
, Scott County, Minnesota, according to the plat on file
and of record in the Office of the Register of Deeds in and for said county and state
4. Promptly after the date of any sale, transfer or other conveyance of the above-described
real estate (or, in the event of a sale by contract for deed at least ten (10)days prior to
such date of sale), the Owner or the heirs, executors, or representatives shall give the
Lender notice thereof.
5. In the event the Owner or the heirs, executors or representatives shall fail or refuse to
make a required repayment within said limited period, the Lender may, with or without
notice to the Owner, foreclose said lien in the same manner as an action for the
foreclosure of mortgages upon said real estate, as by statute provided.
6. Said lien shall terminate and shall be of no further force or effect in the event the Lender
has not, on or before , 20_, commenced an action in the aforesaid
manner to foreclose the same.
7. This Agreement shall run with the aforesaid real estate and shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors,
representatives, successors and assigns.
8. If this agreement is executed by a contract for deed vendor or a mortgagee of the
property, as the Owner, such execution shall be deemed for the purpose of establishing
and continuing the existence of the indebtedness described herein and the lien granted
herein. However, in the event of default of the terms hereof, neither the Lender nor its
assignees shall take any action against such contract for deed vendor except such as
may be necessary in order to subject to the satisfaction of said indebtedness the property
described herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written above.
Economic Development Authority for the City of
Shakopee
By By
President
Its
By
Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of
20_, by of the
Notary Public
My Commission Expires:
2
STATE OF MINNESOTA )
) ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of
20_, by , President of the Economic Development
Authority of the City of Shakopee, Minnesota, on behalf of the Economic Development Authority.
Notary Public
My Commission Expires:
STATE OF MINNESOTA )
ss
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of
20_, by , Executive Director of the Economic Development
Authority of the City of Shakopee, Minnesota, on behalf of the Economic Development Authority.
Notary Public
My Commission Expires:
This instrument is exempt from registration tax under Section 287.06 of Minnesota Statutes.
Drafted by:
City of Shakopee
129 South Holmes Street
Shakopee, MN 55379
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CITY OF SHAKOPEE
Fagade Improvement Program
Application for Deferred Loan
I. Applicant Information
Name of Applicant Date of Birth
Applicant's primary agent Date of Birth
Name of Co-Applicant/Property Owner
Date of Birth
Tax I D # (if applicable)
Address
Street City State Zip
Telephone # ( ) ( )
Home Work
II. Property Information
Address of Building to be Rehabbed
Property Identification Number (PIN)
Contact Person
Work Phone Number
Cell Phone Number
E-mail address
Age of Building Number of Stories
Date of Last Exterior Renovation (if applicable)
Estimated Market Value Current Annual Property Taxes
Gross area of building sq. ft. (exclude non-habitable space such as attics,
basements, etc.)
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Gross area of non-residential space (include commercial, office, etc.)
Existing building use(s):
Proposed building use(s):
Ill. Ownership Information
Ownership Interest in property to be improved:
❑ Contract for Deed ❑ Title "Free and Clear" ❑ Mortgage
❑ Other: Specify:
Name(s) on Title: Specify ownership interest of each individual named on the title (joint,
tenants-in-common, life estate, partnerships, corporations, etc):
Amount of outstanding principal owed on building: $
Please attach a copy of the most recent Property Tax Statement from the County
Assessor's Office and Proof of Insurance on the building.
IV. Estimated Rehabilitation Costs and Requested Loan Information
Please describe proposed improvements: (please attach additional pages,
including: any photos of the existing building prior to planned improvements; renderings
and/or plan drawings showing proposed improvements; contractors' bids or proposals
obtained by the applicant. Please itemize costs when possible.)
Describe the expected impact of the proposed improvements on adjacent or
nearby businesses. (In other words, do you have reason to know or believe that
other business owners are likely to improve their properties if the outcome of
your improvements is positive.)
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Estimated Total Cost of Proposed Rehabilitation Work: $
Requested Loan Amount from the Fagade Improvement Program — Loan amount
may be up to 40% of the total construction costs, with a maximum of$15,000.
Source of Remaining Funds
❑ Personal Savings ❑ Private-Sector Loan (Institution: )
❑ Other submittals: (e.g., pro forma, profit and loss statement, personal guarantees)
Building Permits & Inspections
Applicant is responsible for obtaining appropriate building permits, per the Shakopee
City Code. In the case of improvements that do not require a city-issued building
permit, the applicant must submit the name and state license number of the contractor
completing the work and agree to an inspection of the work by a city building official.
Loan Disbursement
Awarded loan funds will be dispersed to the applicant upon submittal of receipts or
invoices for supplies purchased and work completed, and verification by the City that
the receipts and invoices are bona fide.
V. Certification
City staff or other authorized representatives of the City shall have the right to inspect
the property to be improved at any time from the date of application upon giving notice
to the property/building owner and to the occupants.
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I/We certify that all statements on this application are true and correct to the best of
my/our knowledge. I/We understand that any intentional misstatements will be grounds
for disqualification.
I/We authorize program representatives the right to access the property to be improved
for the purpose of the deferred loan program and to take photographs of the structure
before and after rehabilitation.
I/We further understand that I/we will make the final selection of the improvements to be
made with the loan funds and that the contract for improvements will be solely between
me and the contractor(s). The administering agency will not be liable for the inadequate
performance of the contractor(s).
Applicant Date
Co-Applicant Date
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DATA PRACTICES ACT
The following notice is provided for those applicants for the Shakopee Downtown Fagade
Improvement Program that are individuals. The following does not apply in cases where the
applicant is a non-individual,such as a corporation.
(TENNESSEN WARNING)
In accordance with the Minnesota Government Practices Act,the City of Shakopee is required to inform you
of your rights as they pertain to the private information collected from you. Private data is that information which is
available to you, but not to the public. The personal information we collect about you is private; however,your name
address, and the amount or value of the approved loan funds are public
The information collected from you or from other agencies or individuals authorized by you is used to
determine your eligibility for the Facade Improvement Program.
The dissemination and use of the private data we collect is limited to that necessary for the administration
and management of the Facade Improvement Program. Persons or agencies with whom this information may be
shared include:
1.City of Shakopee personnel administering the Facade Improvement Program.
2. Individuals charged by the city with reviewing applications and making recommendations to the Shakopee EDA.
3.Members of the Shakopee Economic Development Authority(only that information needed to approve the
application for loan funds and/or payments to contractors).
4. Federal, State, County, local and contracted auditors.
5.The contract for deed holder(only that you are a loan recipient and the amount of the loan).
6. Law enforcement personnel in the cases of suspected fraud.
7.Those individuals or agencies to which you give your express written permission.
Unless otherwise authorized by State statute or Federal law, other government agencies utilizing the reported private
data must also treat the information as private.
You may wish to exercise your rights as contained in the Minnesota Government Data Practices ACT. The rights
include:
1. The rights to see and obtain copies of the data maintained on you,
2. To be told the contents and meaning of the data and,
3. To contest the accuracy and completeness of the data.
To exercise these rights contact: Mark Noble, City of Shakopee, (952)233-9348.
1 have read and understood the above information regarding my rights as a subject of government data.
Date Applicant Co-Applicant
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