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Home My WebLink About4.A. Approval of Res. No. 2014-4, A res. authorizing the establishment of a policy and procedures for the Commerical Exterior Imprvmnt. Program 4• A. E I \,KOPEE TO: Economic Development Advisory Committee FROM: Samantha DiMaggio,Economic Development Coordinator DATE: 09/16/2014 SUBJECT: Approval of Resolution No. 2014-4,A Resolution Authorizing the Establishment of a Policy and Procedures for the Commercial Exterior Improvement Program. Introduction Staff is seeking to implement a formal policy for Commercial Exterior Improvement Program. City Staff has developed this policy in collaboration with the City Attorney's office,Kennedy&Graven. Background Due to lack of use,in August,2013,the Facade Program was recommended for modification and renaming by the EDAC. A new Commercial Exterior Improvement program was then adopted by the EDA on September 17,2013. Although program modifications were made,a formal written policy was not adopted. The EDAC reviewed and made revisions to the the attached formal policy. This policy is now being presented to the EDA for adoption and implementation. Action Required If the EDA concurs,it should,by motion,approve the following Resolution: Resolution No.2014-4,A Resolution Authorizing the Establishment of a Policy and Procedures for the Commercial Exterior Improvement Program. Attachments: Res.No. 2014-4 Commercial Exterior Policy ECONOMIC DEVELOPMENT AUTHORITY CITY OF SHAKOPEE,MINNESOTA RESOLUTION NO.2014-4 RESOLUTION AUTHORIZING THE ESTABLISHMENT OF A POLICY AND PROCEDURES FOR THE COMMERCIAL EXTERIOR IMPROVEMENT PROGRAM WHEREAS, on the date hereof, the Commercial Exterior Improvement Program Policy and Procedures were presented to the members of the Board of the Economic Development Authority for the City of Shakopee,Minnesota(the"EDA");and WHEREAS,the EDA, using its housing and redevelopment authority powers,may create programs like the Commercial Exterior Improvement Program in order to eliminate or prevent blight;and WHEREAS,the EDA and the City of Shakopee are proud of their historic downtown and other commercial areas and would like to encourage property owners to maintain and invest in their properties in order to preserve them as profitable businesses and attractive destinations for years to come,and WHEREAS,the EDA desires to be proactive in the avoidance of blight and the promotion and stimulation of economic growth,and WHEREAS,the EDA deems it advisable to adopt a policy and develop procedures for providing incentives to assist with the Commercial Exterior Improvement Program, NOW,THEREFORE,BE IT FURTHER RESOLVED BY THE ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF SHAKOPEE,MINNESOTA,that,the attached Commercial Exterior Improvement Program Policy and Procedures is hereby adopted,effective September 16,2014. Adopted in regular session of the Economic Development Authority for the City of Shakopee,Minnesota held this Day of ,2014. Matt Lehman,President ATTEST: Julie Linnihan,Secretary of EDA City of Shakopee,Minnesota Economic Development Authority for the City of Shakopee COMMERCIAL EXTERIOR IMPROVEMENT PROGAM POLICY 1) POLICY PURPOSE For the purposes of this document, the term "City"includes the Shakopee City Council,staff the Economic Development Authority,advisory boards and commissions,financial consultants and legal counsel. The City of Shakopee is proud of its historic downtown and other commercial areas and would like to encourage property owners to maintain and invest in their properties in order to preserve them as profitable businesses and attractive destinations for years to come. The Economic Development Authority for the City of Shakopee,using its housing and redevelopment authority powers,may create programs like this Commercial Exterior Improvement Program in order to eliminate or prevent blight. The Commercial Exterior Improvement Program,formerly known as the Facade Improvement Program,allows businesses to apply for a deferred loan from the City for exterior improvements. This document sets forth the specific criteria the City uses to evaluate requests for Commercial Exterior Improvement Loans. The City reserves the right to approve or reject projects on a case-by-case basis,taking into consideration established policies,project criteria,and demand of City services in relation to the projects potential benefits. Meeting policy criteria does not guarantee the award of business assistance to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. The City can deviate from this policy for projects that supersede the objectives identified herein. 2) PROGRAM REQUIREMENTS The Commercial Exterior Improvement Program has the following requirements: (1) Eligible expenses include improvements that are visible from the exterior,some of which may include but are not limited to: roofs (flat or pitched),windows and doors,siding and brick,removal of blight from the property,exterior painting,lighting,signage and awnings, and restoration of historic detail. (2) The intent of the Commercial Exterior Improvement Program is to maintain and revitalize older commercial buildings within the City that are built prior to 1980. (3) The City will pay up to a maximum amount of 50 percent of a project's cost for eligible exterior-building improvements. 2014 Page 1 (4) The term of the loan shall not exceed 20 years. Payments on the loan will be deferred and will be forgiven if the applicant satisfies the terms of the loan agreement. (5) Loan forgiveness takes place over a five-year period with 20 percent of the award forgiven annually. The City may extend or reduce the repayment period based on the dollar amount of the award. The table below should be used as a guideline: Amount of Award Repayment Period Up to$25,000 5 years $25,001-$35,000 7 years $35,001-$50,000 10 years $50,001-$75,000 15 years $75,001-$100,000 20 years (6) If the benefiting building is sold within the period of the loan,the loan must repaid. The EDA Board may consider alternatives to immediate repayment,including but not limited to transfer of the loan to a new owner or a mutually agreeable loan repayment schedule. (7) The applicant has one year from the award date of the loan to complete the project and request payment of loan funds. All loan funds will be paid to an applicant upon receipt of evidence of paid invoices for the project. 3) APPLICATION PROCESS (1) Applications must be submitted by the property owner(s) or the building tenant in conjunction with the owner(s). The application shall become the property of the City and/or EDA and is subject to Minnesota Statutes,Chapter 13 (the Government Data Practices Statute). (2) Loan recipients are required to seek at least two bids for all projects. It is assumed that the contractor who submits lowest bid will be hired to complete the improvements unless mitigating circumstances exist. (3) Funds for this program are limited and will be awarded to qualifying applicants on a first- come,first-served basis. (4) City staff shall review the application materials and make a preliminary recommendation regarding the completeness of the application and whether the application meets the criteria outlined in this policy. (5) In the event that the EDA Board concurs with the recommendation above,the EDA Board will grant final approval or denial of the loan. 2014 Page 2 4) REPORTING REQUIREMENTS • Loans that are less than$75,000 are not subject to reporting under Regulating Local and State Business Subsidies,Minnesota Statute 1161.994. • Loan amounts above$75,000 are considered financial assistance under Regulating Local and State Business Subsidies,Minnesota Statute 116J.994,and should be reported on the Minnesota Financial Assistance Form for Non-JOBZ Projects. 2014 Page 3