Economic Development Authority EDA

City of South St. Paul Economic Development Authority Agenda FLEMING FIELD AIRPORT 1725 HENRY AVE SOUTH ST. PAUL, MN 55075 Monday, August 1, 2022 IMMEDIATELY FOLLOWING THE CONCLUSION OF THE 7:00 P.M. MEETING OF THE CITY COUNCIL 1. CALL TO ORDER: 2. ROLL CALL: 3. AGENDA: A. Approval of Agenda Action – Motion to Approve Action – Motion to Approve as Amended 4. CONSENT AGENDA: All items listed on the Consent Agenda are items, which are considered to be routine by the Economic Development Authority and will be approved by one motion. There will be no separate discussion of these items unless a Commissioner or citizen so requests, in which event the item will be removed from the consent agenda and considered at the end of the Consent Agenda. A. EDA Meeting Minutes of July 5, 2022 B. Approval of Amendment #1 to Development Agreement with Blue River Holdings, LLC (400 Block Concord Exchange South) C. Authorize Application to the Livable Communities Demonstration Account – Development Grant Program, Resolution 2022 – 6 5. ITEMS FOR FUTURE FOLLOW-UP: General communications of the President and Commissioners are provided and may be considered for inclusion on a future agenda. There will be no discussion or decisions made related to these items at this meeting. 6. ADJOURNMENT: Respectfully Submitted, Ryan Garcia, EDA Executive Director This meeting is being taped by Town Square Television (NDC4). Replays can be viewed on Government Channel 19. Replay Times – Friday following Meeting at 1:00 p.m. & 7:00 p.m. 651-451-7834  MINUTES OF THE ECONOMIC DEVELOPMENT AUTHORITY CITY OF SOUTH ST. PAUL DAKOTA COUNTY, MINNESOTA Regular Meeting July 5, 2022 Fleming Field Airport, 1725 Henry Avenue, South St. Paul, MN 55075 1. CALL TO ORDER The Regular Meeting of the South St. Paul Economic Development Authority was held on 7/5/2022 in the Conference Room at Fleming Field Airport. President Francis called the meeting to order at 7:22 p.m. 2. ROLL CALL Members Present: President Francis, Commissioners Bakken, Dewey, Hansen, Kaliszewski, Podgorski, and Seaberg, Members Absent: None Staff Present: EDA Executive Director Ryan Garcia, City Clerk Deanna Werner and Legal Counsel Amanda Johnson. 3. AGENDA Motion/Second: Commissioner Kaliszewski moved and Commissioner Bakken seconded approval of the agenda. Motion carried 7 ayes / 0 nays 4. CONSENT A. EDA Meeting Minutes of June 6, 2022 B. Approval of Amendment #2 to Development Agreement (285 Hardman Avenue South) C. Approval of Satisfaction of Mortgage #1026, Resolution 2022-7 Commissioner Bakken moved and Commissioner Hansen seconded approval of the consent agenda. Motion carried 7 ayes / 0 nays EDA Minutes 7-5-2022  1. PUBLIC HEARINGS: A. Approval of Development Agreement with and Public Hearing for the Conveyance of Property to Watson Trading, LLC, Resolution 2022 – 5 Motion: Hansen/Dewey Motion carried 7 ayes / 0 nays B. Public Hearing for the Conveyance of Property to the City of South St. Paul, Resolution 2022 – 6 Motion: Seaberg/ Kaliszewski Motion carried 7 ayes / 0 nays 6. ADJOURNMENT Motion/ Second: Commissioner Bakken moved and Commissioner Hansen seconded the motion to adjourn the meeting at 7:42 p.m. Motion carried 7 ayes / 0 nays Approved: Deanna Werner, City Clerk EDA Minutes 7-5-2022  EDA Agenda Item Report Date: August 1, 2022 EDA Executive Director: _________ 4-B Agenda Item: Approval of Amendment #1 to Development Agreement with Blue River Holdings, LLC (400 Block Concord Exchange South) Action to be considered: Through Consent, motion to approve the First Amendment to Development Agreement with Blue River Holdings, LLC. Summary: On November 1, 2021 the EDA approved a Purchase and Development Agreement with Blue River Holdings, LLC for the construction of a 12,000 square foot commercial building at the EDA-owned property on the west side of Concord Exchange South, immediately north of Al’s Corral. The Agreement identified a relatively long contingency and closing window, to afford the developer – the owner/operator of the proposed primary tenant for the new development (South St. Paul Animal Hospital) – sufficient time to work through their planning, permitting, and financing process. Continued progress has been made throughout the past 9 months, with all City Approvals being completed earlier this summer. In working with his SBA Lender and development team, the Developer has identified a January 2023 bid opening for the construction project, and their lender requires closing to happen within 14 days of that event. Thus, the Developer is requesting an adjustment to the closing date as found in the purchase agreement, to “On or before January 31, 2023”. In addition, the Developer continues to finalize soil testing at the site and has requested an extension to that Contingency Date to “September 30, 2022”. Staff is recommending approval of Amendment #1 as presented.  FIRST AMENDMENT TO DEVELOPMENT AGREEMENT THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this “First Amendment”) is entered into as of , 2022 (the “Effective Date”), by and between the South St. Paul Economic Development Authority, a public body corporate and politic organized under the laws of Minnesota (“EDA”), and Blue River Holdings LLC, a Minnesota limited liability company (“Developer”). RECITALS Recital No. 1. EDA and Developer entered into a Contract for Private Development dated November 1, 2021 and recorded as Document No. _______________ on ____________________________ in the Dakota County Recorder’s Office (“Development Agreement”) for the purchase and sale of the Property identified in the Development Agreement. Recital No. 2. Developer has requested the Development Agreement be amended to extend the Contingency Date and Closing Date. Recital No. 3. EDA does not object to the extension. NOW, THEREFORE, in consideration of the mutual promises and covenants of each to the other contained in this First Amendment and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do covenant and agree as follows: 1. Section 1(F) of the Development Agreement shall be removed and replaced in its entirety as follows: F. “Closing” or “Closing Date” means on or before January 31, 2023, unless otherwise agreed to by the parties. 2. Section 1(I) of the Development Agreement shall be removed and replaced in its entirety as follows: I. “Contingency Date” means September 30, 2022. 3. Except as provided for above, the terms and provisions of the Development Agreement shall remain in full force and effect. 4. This First Amendment and all disputes or controversies arising out of or relating to this First Amendment or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Minnesota, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Minnesota. 5. Nothing contained herein shall be deemed a waiver by the EDA of any governmental immunity defenses, statutory or otherwise, or of the maximum liability limits provided by Minnesota Statutes, Chapter 466. 6. This First Amendment may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by the parties and delivered to the other parties. 7. This First Amendment shall not be amended, modified or supplemented, except by a written instrument signed by an authorized representative of each party. [remainder of page intentionally blank]  IN AGREEMENT, the parties hereto have hereunto set their hands as of the Effective Date. SOUTH ST. PAUL ECONOMIC DEVELOPMENT AUTHORITY By ________________________________ James P. Francis Its President By ________________________________ Ryan Garcia Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ____ day of ____________, 2022 by James P. Francis and Ryan Garcia, the President and Executive Director respectively, of the South St. Paul Economic Development Authority, a public body corporate and politic organized and existing under the Constitution and laws of Minnesota, on behalf of the EDA. Notary Public  DEVELOPER: BLUE RIVER HOLDINGS LLC By: David Abramowicz Its Manager STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this ____ day of __________________, 2022 by David Abramowicz, the Manager of Blue River Holdings LLC, a Minnesota limited liability company, on behalf of said limited liability company. Notary Public THIS INSTRUMENT WAS DRAFTED BY AND AFTER RECORDING RETURN TO: LeVander, Gillen & Miller, P.A. 1305 Corporate Center Drive, Suite 300 Eagan, MN 55121 651-451-1831  EDA Agenda Item Report Date: August 1, 2022 EDA Executive Director: _________ 4-C Agenda Item: Authorize Application to the Livable Communities Demonstration Account – Development Grant Program, Resolution 2022 – 6 Action to be considered: Through consent, motion to approve Resolution 2022-6 Identifying the Need for Livable Communities Demonstration Account (“LCDA”) Funding and Authorizing an Application for Grant Funds. Overview: The Metropolitan Council, through its Livable Communities Program, administers Livable Communities Demonstration Account (LCDA) funding to assist cities with the implementation of their community livability goals (such as employment, attainable housing, linking jobs with housing, and more). This year there is $9 million in funding available. No local match is required. Eligible applicants include cities, counties, port authorities, housing and redevelopment authorities, and economic development authorities. A City may apply for grants to support up to three different projects. Development grants are intended for applicants that have a development or redevelopment project ready to get underway and begin construction within the 36-month grant period. Grant-funded activities may include stormwater management, public realm improvements, renewable energy systems, site acquisition, and site preparation. Staff is applying for grant funding for activities associated with a proposed 4-acre redevelopment located at the south side of Grand Avenue, adjacent to “The Drover”. The existing parking lots, currently utilized by residents and visitors of “the Drover” would be redeveloped with an approximately 170-unit market-rate and workforce apartment building with structured and surface parking, swimming pool, community rooftop amenities, and more. Staff is requesting LCDA funding to help with certain costs associated with the proposed development. The developer’s anticipated Total Development Cost is in excess of $36,000,000 for the project, with a stabilized value (in Year 4) of approximately $31.6 Million. Project elements for which the project is seeking LCDA assistance include the following: • Construction of underground parking, which will include shared/public parking • Construction of workforce housing Funding Sources and other fiscal considerations: LCDA is a grant program that assists with redevelopment projects meeting the Met Council’s Livable Communities goals. The EDA’s intention in applying for LCDA is to close a financing gap in the Vaquero project’s feasibility and reduce the necessity for direct public assistance via Tax Increment Financing and land write-down. Attachements: Resolution 2022 – 6 Draft Site Plan Elevations Page 1 of 5  South St. Paul Economic Development Authority Dakota County, Minnesota RESOLUTION NO. 2022 – 6 RESOLUTION IDENTIFYING THE NEED FOR LIVABLE COMMUNITIES DEMONSTRATION ACCOUNT ("LCDA”) FUNDING AND AUTHORIZING AN APPLICATION FOR GRANT FUNDS WHEREAS the City of South St. Paul is a participant in the Metropolitan Livable Communities Act (“LCA”) Local Housing Incentives Program for 2022 as determined by the Metropolitan Council, and is therefore eligible to apply for LCA Livable Communities Demonstration Account funds; and WHEREAS the City has identified a proposed project within the City that meets LCDA purposes and criteria and is consistent with and promotes the purposes of the Metropolitan Livable Communities Act and the policies of the Metropolitan Council’s adopted metropolitan development guide; and WHEREAS the City has the institutional, managerial and financial capability to adequately manage an LCDA grant; and WHEREAS the City certifies that it will comply with all applicable laws and regulations as stated in the grant agreement; and WHEREAS the City acknowledges LCDA grants are intended to fund projects or project components that can serve as models, examples or prototypes for LCDA development or redevelopment elsewhere in the Region, and therefore represents that the proposed project or key components of the proposed project can be replicated in other metropolitan-area communities; and WHEREAS only a limited amount of grant funding is available through the Metropolitan Council’s Livable Communities LCDA initiative during each funding cycle and the Metropolitan Council has determined it is appropriate to allocate those scarce grant funds only to eligible projects that would not occur without the availability of LCDA grant funding. NOW THEREFORE BE IT RESOLVED, the City Council of South St. Paul: 1. Finds that it is in the best interests of the City’s development goals and priorities for the proposed project or projects to occur at these particular sites and at this particular time. 2. Finds that the project components for which Livable Communities Demonstration Account funding is sought will not occur solely through private or other public investment within the reasonably foreseeable future; and will occur within three years after a grant award only if Livable Communities Demonstration Account funding is made available for this project at this time. 3. Represents that the City has undertaken reasonable and good faith efforts to procure funding for the project components for which Livable Communities Demonstration Account funding is sought but was not able to find or secure from other sources funding that is necessary for project component completion within three years and states that this representation is based on the following reasons and supporting facts: Page 2 of 5  a. The City anticipates utilizing Tax Increment Financing (TIF) in accordance with local policy and state statute to help offset certain project costs, including land write-down and infrastructure costs. Thus, there is not capacity for TIF to assume the entire cost of the project elements defined in the LCDA application. b. The City has applied for Redevelopment Grant funding through the Minnesota Department of Employment and Economic Development (DEED) to further offset development costs at the property, and developer match funds will need to be a component of these project costs. Without LCDA assistance, the project as envisioned is not financially feasible. 4. Authorizes Staff to submit on behalf of the City an application or applications for Metropolitan Council Livable Communities Demonstration Account grant funds for the project component(s) identified in the application(s), and to execute such agreements as may be necessary to implement the project(s) on behalf of the EDA. Adopted this 1st day of August, 2022. ___________________________________ __________________________________ President, James P. Francis Executive Director, Ryan Garcia Page 3 of 5 Page 4 of 5 Page 5 of 5