122021 Complete AgendaECONOMIC DEVELOPMENT AUTHORITY MEETING
VIRTUAL MEETING VIA WEBEX
DECEMBER 20, 2021
7:15 PM (IMMEDIATELY FOLLOWING THE HRA MEETING)
Call to Order
Attendance Roll Call
Open Forum: To participate live in the open forum to address the EDA on items not on the current agenda; dial
612-861-0651.
Appr oval of t he M inut es
Approval of the minutes of the regular Economic Development Authority meeting of August 16, 2021.
AGENDA APPROVAL
1.Approval of the Agenda
2.Consent Calendar contains several separate items which are acted upon by the EDA in one motion.
Once the Consent Calendar has been approved, the individual items and recommended actions have
also been approved. No further EDA action on these items is necessary. However, any EDA
Commissioner may request that an item be removed from the Consent Calendar and placed on the
regular agenda for EDA discussion and action. All items listed on the Consent Calendar are
recommended for approval.
A.Consideration of the approval of an extension and minor revisions to Transformation Home Loan
Accessory Dwelling Unit Pilot Project.
Staff Report No. 7
3.Consideration of items, if any, removed from Consent Calendar
RESOLUTIONS
4.Consideration of a resolution granting a 6-month extension to the repayment obligation and interest accruals
related to the COVID-19 Small Business Assistance Forgivable Loan.
Staff Report No. 8
OTHER BUSINESS
5.Consideration of the designation of Melissa Poehlman as Interim Executive Director of the Economic
Development Authority.
Staff Report No. 9
EDA DISCUSSION ITEMS
6.EDA Discussion Items
EXECUTIVE DIRECTOR REPORT
7.Executive Director's Report
CLAIMS
8.Claims
9.Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the City Clerk at 612-861-9739.
ECONOMIC DEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
August 16, 2021
CALL TO ORDER
The meeting was called to order by President Supple at 8:09 p.m. via Webex.
EDA Members Mary Supple, President; Sue Sandahl and Lee Ohnesorge
EDA Members
Absent Maria Regan Gonzalez and Erin Vrieze Daniels
Staff Present: John Stark, Executive Director; Kari Sinning, City Clerk and LaTonia DuBois,
Administrative Assistant.
OATH OF OFFICE OF RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
COMMISSIONER, LEE OHNESORGE
City Clerk Sinning administered the Oath of Office for Commissioner Ohnesorge.
EDA BUDGET PRESENTATION
Executive Director Stark presented the EDA Budget.
OPEN FORUM
There were no speakers or callers for the open forum.
APPROVAL OF THE MINUTES
M/Sandahl, S/Ohnesorge to approve the regular Economic Development Authority meeting minutes of April 19, 2021. Motion carried 3-0
Item #1 APPROVAL OF THE AGENDA M/Sandahl, S/Ohnesorge, to approve the agenda.
EDA Meeting Minutes -2- August 16, 2021
Motion carried 3-0 Item #2
CONSIDER RESOLUTIONS APPROVING PROPOSED PROPERTY TAX LEVY
FOR PAYABLE 2022 FOR CERTIFICATION TO HENNEPIN COUNTY. (S.R. NO. 6)
Executive Director Stark Presented Staff Report No. 6 M/Sandahl, S/Ohnesorge to adopt resolutions approving the 2022 Proposed Economic Development Authority Budget and Tax Levy and 2021 Revised Economic Development Authority Budget. Motion carried 3-0
Item #3 EDA DISCUSSION ITEMS
President Supple inquired about no Kids@Home claims for a previous month. Executive Director Stark explained that some claims may have fallen on another month’s payments and that he would look into it. Executive Director Stark explained that Kids@Home applications for new families will be opening in September and information can be found on the Richfield website and schools would be notified. Item #4 EXECUTIVE DIRECTOR REPORT
None.
Item #5 CLAIMS AND PAYROLLS M/Sandahl, S/Ohnesorge that the following claims and payroll be approved:
U.S. BANK 5/17/2021
EDA Checks: 20647-20663 $29,008.00
TOTAL $29,008.00
U.S. BANK 6/21/2021
EDA Checks: 20664-20665 $3,796.17
TOTAL $3,796.17
EDA Meeting Minutes -3-August 16, 2021
U.S. BANK 7/19/2021
EDA Checks: 20666-20683 $8,724.00
TOTAL $8,724.00
U.S. BANK 8/16/2021
EDA Checks: 20690-20702 $11,876.88
TOTAL $11,876.88
Motion carried 3-0
Item #8 ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:22 p.m.
Date Approved: December 20, 2020
Mary B. Supple President
LaTonia DuBois Administrative Assistant Melissa Poehlman Interim Executive Director
AGENDA SECTION:Consent Calendar
AGENDA ITEM #2.A.
STAFF REPORT NO. 7
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
12/20/2021
REPORT PREPARED BY: Kate Aitchison/Celeste McDermott, Housing Specialists
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
12/14/2021
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the approval of an extension and minor revisions to Transformation Home Loan
Accessory Dwelling Unit Pilot Project.
EXECUTIVE SUMMARY:
The Transformation Home Loan Accessory Dwelling Unit Pilot Project (Pilot Project) was approved
by the Economic Development Authority (EDA) in November of 2019. The Pilot Project was created
to encourage the development of Accessory Dwelling Units (ADU's) in Richfield. ADU's offer
homeowners the opportunity to either add rental income or provide housing for family members such
as elderly parents, adult children or those with disabilities needing extra care. In addition, ADU's
provide the community with more variety in housing stock and affordable rental options.
The Pilot Project was originally intended to run through December 2021. During this time staff has
received interest in the Pilot Project, but due to rising construction prices and overall slow downs
due to the pandemic many homeowners have decided to postpone larger projects like ADU's. Two
applications for the Pilot Project have been received: one was approved in Fall 2021 and is currently
under construction; and the second one withdrew from the Pilot Project due to design challenges.
Staff would like to take the opportunity to extend the Pilot Project with some minor revisions in order
to reach more homeowners that are interested in building ADU's. The Pilot Project would be
extended through December 31, 2022, at which time staff can revisit the Pilot Project and determine
next steps.
The following changes would be made to the Pilot Project guidelines:
1. An architectural consultation with an architect familiar with ADU's would be required. This can be
through the Richfield Architectural Consultation Program or with an architect of their choosing.
2. Applicant's would be required to meet with Planning and Inspections staff before submitting their
application in order to clarify zoning and building code requirements.
3. Loan amount would be raised to 20% of the total project cost up to $35,000. Raising the loan
percentage would ensure that smaller ADU projects would be incentivized and raising the overall loan
amount would help to offset rising construction costs.
Constructing an ADU can be both complicated and cost-prohibitive. Providing more funding and resources
will offer the homeowner added incentive to complete their ADU project, while also giving staff a mechanism
for outreach and education to the broader community.
RECOMMENDED ACTION:
By motion: Approve an extension and minor revisions to the Transformation Home Loan Accessory
Dwelling Unit Pilot Project.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
The Transformation Home Loan Accessory Dwelling Unit Pilot Project was originally approved by
the EDA in November of 2019.
Two applications for the Pilot Project were received. One was approved and is currently under
construction and the other has withdrawn from the Pilot Project due to design challenges.
Over the past few years, Community Development staff have explored the role of ADU's within the
community, from both a Planning and Zoning and Building Inspections perspective. The City
currently has an ordinance in place that allows for the development of ADU's but has had no
official applicants to date.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
The promotion of ADU’s is consistent with the Housing Vision Statement (Statement) that was
accepted by the City Council and Housing and Redevelopment Authority (HRA) in June 2013.
The Statement calls for a full range and balance of housing types in the community that match the
choices of residents at every stage of their lives.
The proposed ADU Pilot Project is also consistent with the Comprehensive Plan update which
calls for the rehabilitation and upgrade of the City's housing stock and specifically encourages use
of the City's ADU ordinance to increase the number of housing units and expand housing options
for extended families.
Transformation Home Loan
The Transformation Home Loan is available for transformative home remodeling projects with a
cost of $50,000 or more.
The loan amount is calculated at 15% of the project cost, with a maximum loan amount of $25,000.
The loan has no payments and accrues no interest.
Accessory Dwelling Units - Planning & Zoning (512.05 Subd 8(R), 518.05 Subd.8 (R-1).
Internal (basement), attached or detached ADU's are allowed.
Detached ADU's are only permitted as part of a detached garage structure.
The owner of the property must occupy at least one dwelling unit.
C.CRITICAL TIMING ISSUES:
The current Pilot Project is set to expire on December 31, 2021. Staff is seeking additional time
for the Pilot Project to determine the best way to encourage ADU's through the Pilot Project.
D.FINANCIAL IMPACT:
The EDA currently budgets $130,000 annually for Transformation Home Loans.
This ADU Pilot Project would allow for a maximum loan of $35,000 rather than $25,000.
The $350 application fee for the Transformation Home Loan would be waived.
A free Architectural Consultation would be available to the homeowner ($250 value)
Design and construction of ADU's can be cost-prohibitive, and these expanded allowances will
help to offset the financial barriers.
E.LEGAL CONSIDERATION:
The terms and conditions of the loan would remain the same, and a mortgage and promissory note
would be filed with Hennepin County to secure the lien.
ALTERNATIVE RECOMMENDATION(S):
Do not approve the extension or revisions to the Transformation Home Loan ADU Pilot Project.
PRINCIPAL PARTIES EXPECTED AT MEETING:
None
ATTACHMENTS:
Description Type
Guidelines Backup Material
Richfield’s Transformation Home Loans
ACCESSORY DWELLING UNIT PILOT PROJECT
Adopted: November 18, 2019Updated: December 20, 2021
The objective of the Accessory Dwelling Unit (ADU) Pilot Project is to ascertain the demand and function
of a Transformation Home Loan within the construction of an ADU on a Richfield residential parcel.
The pilot project would allow for up to 3 loans to be made under the Transformation Home Loan
guidelines through the end of calendar year 20221.
The following expansions would be included within the guidelines of the Transformation Home Loan:
1) The application fee of $350 would be waived
2) A free architectural consultation will be offered to the applicant
3) The loan would still be calculated at 2015% of project cost, but the maximum loan amount
raised from $25,000 to $350,000.
4) Homeowners would be asked to agree to spotlight their projects on either the Richfield
Remodeled Home Tour or through a Case Study narrative for the city of Richfield.
To be approved for the ADU Pilot Project, an applicant must contact a Housing Specialist and begin an
application for the Transformation Home Loan.
The EDA Executive Director may approve additional ADU Pilot Projects through December 31, 2021, not
to exceed three loans.
Criteria for Project Eligibility:
1. Must be constructing an ADU that meets Richfield’s zoning code requirements.
2. Applicant and their contractor must meet with the Planning and Inspections staff prior to
submitting an application.
2.3. Must be an owner-occupied housing unit (main residence)
3.4. Project must have a minimum cost of $50,000
5. Project must have guidance from an experienced builder or architect familiar with urban ADU
construction.
Questions about the Transformation Home Loan or the ADU Pilot Program can be directed to the
Richfield Housing Specialists, Kate Aitchison & Celeste McDermott. (612) 861-9778 or
housespecialist@richfieldmn.gov
AGENDA SECTION:RESOLUTIONS
AGENDA ITEM #4.
STAFF REPORT NO. 8
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
12/20/2021
REPORT PREPARED BY: John Stark, Executive Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
12/14/2021
ITEM FOR COUNCIL CONSIDERATION:
Consideration of a resolution granting a 6-month extension to the repayment obligation and interest
accruals related to the COVID-19 Small Business Assistance Forgivable Loan.
EXECUTIVE SUMMARY:
On April 20, 2020 the Richfield Economic Development Authority (EDA) created the COVID-19 Small
Business Assistance Forgivable Loan to assist businesses negatively impacted by the pandemic. On
September 21, 2020 a second round of funding was approved. There were 63 of these forgivable loans
issued in 2020. The maximum funding available for each loan was $7,500. In accordance with the program
guidelines established by the EDA, the Loan Agreements with each business allow their loan to be forgiven if
they provide evidence of expenditure on the following uses by December 31, 2021:
COVID Expenses (PPE’s, cleaning supplies, etc.)
Payroll Expenses for employees other than owner
Capital Improvements visible from a public street
Business-related license fees paid to the City of Richfield
Rent or property taxes paid for commercial real estate
The Loan Agreements further state that any loans which are unforgiven by December 31, 2021 must be paid
off in 12.5% semi-annual increments with a 2.25% interest rate.
Ninety-two percent of these loans have met the criteria for forgiveness. There are still five outstanding loans,
however, that have yet to be forgiven and would need to be repaid with interest without further EDA action.
Staff has had continued conversations with these businesses and believe that the majority of them have
expended the funds in accordance with the loan guidelines, but have not submitted documents to verify these
expenses.
Staff is recommending a 6-month extension to the provisions in the program guidelines and loan documents
for repayment and accrual of interest to June 30, 2022.
RECOMMENDED ACTION:
By motion: Approve a resolution granting a 6-month extension to the repayment obligation and
interest accruals related to the COVID-19 Small Business Assistance Forgivable Loan.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
In recognition of the extreme economic impact on Richfield's small businesses, the EDA created
the COVID-19 Small Business Assistance Forgivable Loan on April 20, 2020 (with an additional
round authorized on September 21, 2020). This loan was to be forgiven at the end of 2021 if
certain criteria were met. When the December 31,2021 deadline was established, staff (and
perhaps policy makers) were under the belief that the pandemic might have ended by this date.
Given the ongoing negative impacts of the pandemic, staff believes that extending the loan terms is
appropriate.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
The program guidelines, as approved by the EDA, state that any loans which are unforgiven by
December 31, 2021 must be paid off in 12.5% semi-annual increments with a 2.25% interest rate.
The EDA, however, has the authority to alter these guidelines (and the related loan documents).
C.CRITICAL TIMING ISSUES:
If the EDA does not take action on this item in December, 12.5% of each loan's principal must be
repaid every 6-months with a 2.25% interest payment.
D.FINANCIAL IMPACT:
It is likely that any loan repayment proceeds would have to be repaid to the Federal government
(as the funds originated with Cares Act money); but that assumption has not been fully analyzed.
E.LEGAL CONSIDERATION:
EDA Legal Counsel Julie Eddington drafted the attached resolution.
ALTERNATIVE RECOMMENDATION(S):
Do not provide an extension with the expectation that the five remaining recipients of COVID loans will
begin making payments of principal and interest in January 2022.
PRINCIPAL PARTIES EXPECTED AT MEETING:
None.
ATTACHMENTS:
Description Type
Resolution Resolution Letter
RICHFIELD ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. ______
RESOLUTION GRANTING AN EXTENSION TO REPAYMENT OBLIGATIONS AND
INTEREST ACCRUALS RELATED TO COVID-19 SMALL BUSINESS ASSISTANCE
FORGIVABLE LOAN PROGRAM
WHEREAS, the spread of COVID-19 in the United States and Minnesota has raised serious public
health concerns and resulted in a great deal of uncertainty, and much remains unknown about the virus and
how it spreads; and
WHEREAS, on March 11, 2020, the World Health Organization determined that the COVID-19
outbreak constitutes a pandemic, and on March 13, 2020, a national state of emergency was declared as a
result of the pandemic; and
WHEREAS, on March 13, 2020, Governor Tim Walz issued Emergency Executive Order 20-01
declaring a state of peacetime emergency to address the COVID-19 pandemic in Minnesota, which triggered
activation of the emergency management plan of the City of Richfield, Minnesota (the “City”) and enabled
the City to exercise its emergency powers; and
WHEREAS, the Governor subsequently issued additional Executive Orders to combat the impacts of
COVID-19 within the State of Minnesota, which include closures of schools, bars, restaurants, and other
places of public accommodation, and directing Minnesotans to stay at home (with exceptions for obtaining
necessary supplies, healthcare and similar needs) unless they are engaged in critical sector work; and
WHEREAS, on March 16, 2020, the Mayor of the City issued a proclamation declaring a local
emergency invoking the City’s emergency plan and authorizing other appropriate community containment
and mitigation strategies and authorizing city staff to take actions deemed necessary to protect the public
health and safety; and
WHEREAS, the Richfield Economic Development Authority (the “Authority”) has the power of a
housing and redevelopment authority and an economic development authority and may provide forgivable
loans to businesses for purposes of preventing blight and preventing substantial and persistent
unemployment; and
WHEREAS, on April 20, 2020, the Authority approved the COVID-19 Small Business Assistance
Forgivable Loan Program (the “COVID-19 Loan Program”) to assist area businesses with the expenses
incurred and specifically caused by the impact of the pandemic and the Governor’s Emergency Executive
Orders; and
WHEREAS, in order to continue to retain small businesses in the City, on September 21, 2020, the
Authority created a second round of the COVID-19 Loan Program to assist area businesses with the expenses
incurred and specifically caused by the impact of the pandemic and the Governor’s Emergency Executive
Orders; and
WHEREAS, in accordance with the terms of the COVID-19 Loan Program, the loans provided
under the program shall be forgiven if recipients of such loans provide evidence of authorized expenditures
by December 31, 2021; and
2
Error! Unknown document property name.
WHEREAS, the Authority has determined that it is in the best interests of the City to extend such
deadline to June 30, 2022, which would subsequently extend the interest accrual and repayment obligations
of all outstanding loans; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the Richfield
Economic Development Authority as follows:
1. The deadline for recipients of loans under the COVID-19 Loan Program to submit evidence
of authorized expenditures is hereby extended from December 31, 2021 to June 30, 2022, and all outstanding
loans shall not begin to accrue interest or require repayment until June 30, 2022.
2. The Executive Director of the Authority and the Authority’s legal counsel shall have the
discretion to make changes to the loan program guidelines and the loan program documents as needed to
conform with the most recent guidance for the use of CARES Act funds and to conform the COVID-19 Loan
Program to the needs of the small businesses in the City.
3. This resolution shall be in full force and effect as of the date hereof.
Adopted by the Richfield Economic Development Authority this 20th day of December, 2021.
Mary B. Supple, President
Melissa Poehlman, Interim Executive Director
AGENDA SECTION:OTHER BUSINESS
AGENDA ITEM #5.
STAFF REPORT NO. 9
ECONOMIC DEVELOPMENT AUTHORITY
MEETING
12/20/2021
REPORT PREPARED BY: Melissa Poehlman, Asst. Community Development Director
OTHER DEPARTMENT REVIEW:
EXECUTIVE DIRECTOR REVIEW: John Stark, Executive Director
12/14/2021
ITEM FOR COUNCIL CONSIDERATION:
Consideration of the designation of Melissa Poehlman as Interim Executive Director of the Economic
Development Authority.
EXECUTIVE SUMMARY:
Community Development Director John Stark has served as the Economic Development Authority's (EDA)
Executive Director since 2018. Director Stark has accepted the City Manager position with the City of North
St. Paul and his last day with the City of Richfield will be December 17, 2021. Melissa Poehlman has been
designated Interim Community Development Director by the City Manager and it is recommended that she be
appointed as Interim Executive Director of the EDA as well.
The Bylaws of the EDA state that the Executive Director "shall have such term as the Authority fixes." In this
case, it is recommend that Ms. Poehlman serve as the Interim Executive Director for a period of time that is
coterminous with her appointment as the Interim Community Development Director, but not to exceed six
months.
RECOMMENDED ACTION:
By motion: Designate Melissa Poehlman as the Interim Executive Director of the Economic
Development Authority coterminous with her appointment as the Interim Community Development
Director, but not to exceed six months.
BASIS OF RECOMMENDATION:
A.HISTORICAL CONTEXT
Past practice has been for the EDA to designate an Interim Executive Director for times of staff
departure.
B.POLICIES (resolutions, ordinances, regulations, statutes, etc):
Typically, designation of an Executive Director is made at the first meeting in January of each
year; however, given timing of Executive Director Stark's departure, staff recommends an
alternative schedule.
C.CRITICAL TIMING ISSUES:
It is necessary to designate a person to serve as Interim Executive Director to ensure
continuation of EDA operations.
D.FINANCIAL IMPACT:
There are financial obligations of the EDA that require an Interim Executive Director.
E.LEGAL CONSIDERATION:
An Executive Director is required to continue with normal business of the EDA.
ALTERNATIVE RECOMMENDATION(S):
Appoint someone else as Executive Director, Interim or otherwise.
Consider a different term of appointment.
PRINCIPAL PARTIES EXPECTED AT MEETING:
N/A