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Home My WebLink About2019-08-21 EDA PacketCITY OF CENTERVILLE ECONOMIC DEVELOPMENT AUTHORITY 77,7777eT,T, I. CALL TO ORDER II. ROLL CALL III. APPROVAL OF AGENDA 1. Call for Changes to the Agenda IV. APPROVAL OF MINUTES 1. April 17, 2019 Meeting Minutes 2. June 19, 2019 Meeting Minutes V. BILLS AND COMMUNICATIONS 1. Bills a. Northland Securities VI. REPORTS MEETING AGENDA 1. Administrator's Report a. Block 7 TIF District Update b. Revolving Loan and Grant Program Review C. Downtown Zoning Changes Update d. City Owned Property Transfer to EDA Update VIL OLD BUSINESS 1. None VIIL NEW BUSINESS 1. None IX. ADJOURNMENT *INFORMATIONAL MATERIALS** *REMINDERS** iii;,m F�i ��:pgpgqpF�i�� F�i 'jl,r �"��",q"�I�;bV��_Pq",�.,�r �",�`� �� 4r'.,�m�`� q� q"!�➢., � �,ul,r ��:� II ii�_u b.��:° � ��,��:�°b.uu �.��r��✓V�II��:r��✓u� ��nu ��°„� `7['�.�� ,�� CITY OF CENTERVILLE ECONOMIC DEVELOPMENT AUTHORITY/PLANNING & ZONING COMMISSION JOINT MEETING MINUTES April 2, 2019 6:30 p.m. Pursuant to due call and notice thereof, the City of Centerville held a regularly scheduled Planning and Zoning Commission Meeting at which, the Economic Development Authority was invited to attend and hold a parallel meeting on April 2, 2019 at City Hall, 1880 Main Street. The minutes below, reflect only the actions of the Economic Development Authority. For further detail on the discussion at the Planning and Zoning Commission Meeting, please refer to the minutes of that meeting. L CALL TO ORDER President Hanzal called the meeting of the EDA to order at 6:30 p.m. II. ROLL CALL PRESENT: President Jeff Hanzal Vice -President Jim Weatherhead Treasurer Michael Giovinazzo Council Member D. Love ABSENT: Council Member Michelle Lakso STAFF: City Administrator Mark Statz III. APPROVAL OF AGENDA No changes to the agenda were made. IV. APPROVAL OF MINUTES No minutes were submitted for approval at this meeting. V. BILLS AND COMMUNICATIONS 1. Bills (a) None VI. REPORTS 1. None City of Centerville EDA/P&Z Meeting Minutes April 2, 2019 VIL OLD BUSINESS 1. None VIIL NEW BUSINESS 1. Recommendation of Block 7 Developer Presentations from Apollo Development and Trident Development were made regarding their concept plans for a potential Downtown Redevelopment project on Block 7. Motion by Commission Member Weatherhead, seconded by Commission Member Giovinazzo to recommend that the City Council authorize staff to begin negotiations with Trident Development. All in favor. Motion carried. IX. ADJOURNMENT Motion by Commission Member Hanzal, seconded by Commission Member Weatherhead to Adiourn the EDA meeting of April 2, 2019 at 9:25 p.m. All in favor. Motion carried. Respectfully submitted by EDA Secretary, Teresa Bender Page 2 of 2 CITY OF CENTERVILLE ECONOMIC DEVELOPMENT AUTHORITY MEETING MINUTES June 19, 2019 6:30 p.m. Pursuant to due call and notice thereof, the City of Centerville held a regularly scheduled Economic Development Authority Meeting. L CALL TO ORDER President Hanzal called the meeting of the EDA to order at 6:32 p.m. II. ROLL CALL PRESENT: President Jeff Hanzal Vice -President Jim Weatherhead Treasurer Michael Giovinazzo Council Member D. Love ABSENT: Council Member Michelle Lakso STAFF: City Administrator Mark Statz III. APPROVAL OF AGENDA No changes to the agenda were made. Motion by Commission Member Love, seconded by Commission Member Weatherhead to approve the agenda. All in favor. Motion carried. IV. APPROVAL OF MINUTES No minutes were submitted for approval at this meeting. V. BILLS AND COMMUNICATIONS 1. Bills (a) None VI. REPORTS 1. Administrator's Report Administrator Statz gave a brief, verbal update on various developments around the city. City of Centerville EDA Meeting Minutes June 19, 2019 VIL OLD BUSINESS 1. None VIII. NEW BUSINESS 1. Resolution #EDA19-05 — Establishing EDA Revolving Loan and Grant Program Administrator Statz reviewed the basic tenants of the revolving loan/grant program and its associated guidance documents. Commission members debated various changes to the documents, including which items would be eligible for funding. Changes included: • Pg. 1 — Reword Code Compliance language • Pg. 1 — Clarify the City's responsibility for determining eligible costs • Throughout document, replace City of Centerville with EDA to be more clear about what role the EDA has vs. City Council • In Section IV, move Roof repairs and replacement from being eligible for public or private funding to being an eligible cost under only private funding. • Pg. 3 — Replace Savings and Loan with Credit Unions • Pg. 11 — Replace the words "rehabilitation of building systems, eligible interior work and/or facade improvement" with "expenses" to avoid confusion as to what is eligible. • Pg. 7 — Simplify language regarding grants. Current language is confusing. Motion by Commission Member Weatherhead, seconded by Commission Member Giovinazzo to adopt resolution #EDA 19-05, Establishing the EDA's Revolving Loan and Grant Program, with changes to the guiding documents as noted in the discussion. All in favor. Motion carried. 2. Rescheduling July 17, 2019 Regular Meeting Administrator Statz asked if the EDA would like to change the date of the regularly scheduled EDA meeting since it falls during the week of the city's festival (Fete des Lacs). The consensus was that the Wednesday night activities planned for Fete des Lacs, which involved public safety night, did not interfere with the business of the board, and therefore, there was not a strong desire to reschedule. Since the consensus was to leave the meeting date as is, there was no formal action taken. 3. Set date for Business Open House and Revolving Loan/Grant Program Roll- out Administrator Statz asked the Commission to consider a date to host an open house in order to roll out the Business Loan/Grant program. Consensus was to have the open house on the same night as the regular EDA meeting (July 17). Page 2 of 3 City of Centerville EDA Meeting Minutes June 19, 2019 Motion by Commission Member Hanzal, seconded by Commission Member Love to set the date for the Business Open House as July 17, 2019. All in favor. Motion carried. IX. ADJOURNMENT Motion by Commission Member Hanzal, seconded by Commission Member Weatherhead to Adiourn the EDA meeting of June 19, 2019 at 8:15 p.m. All in favor. Motion carried. Respectfully submitted by EDA Secretary, Teresa Bender Page 3 of 3 5701 5701 11003 274311' 1:07390 L 23311:413135331's CITY OF CENTERVILLE CENTERVILLE, MN 55038 $2,677.50 CITY OF CENTERVILLE CENTERVILLE, MN 55038 150 SOUTH s H FORMA NO.451 032743 w�oicvranl�rc l nL.r�ry .7tLrlJ1"CI 1 1 �, IiVI+. � ;rr L� E 101-46500-300 TIFDISTRICT#1-8 $O.QO $2477.50 Northland Securities, Inc 150 South Fifth Street Suite 3300 Minneapolis, MN 55402 USA Voice: 612-851-5900 Fax: 612-851-5951 Sold To: City of Centerville Bruce DeJong 1880 Main Street Centerville, MN SS038 NORTHLAND N..P10*.r SECURITIES Invoice Invoice Number: 5701 Invoice Date: 6/6/19 Page: 1 Customer PO Payment Terms Sales Rep ID Due Date TIF District No. 1-8 Net 30 Days 1 7/6/19 Description Amount For services related to TIF District No. 1-8. Please see enclosed detail. 2,677.50 V' Subtotal 2,677.50 Sales Tax Total Invoice Amount 2,677.50 Check No: Payment Received TOTAL Main 612-851-5900 1 Toll -Free 800-851-2920 1 Fax 612-851-5987 150 South Fifth Street, Suite 3300 1 Minneapolis, MN 55402 NorthlandSecurifies.com Member FINRA and SIPC, Registered with SEC and MSRB NORTHLAND STRATEGIES Speciol Projects Group INVOICE SUPPLEMENT Client: City of Centerville Project: TIF District No. 1-8 Contact: Bruce DeJong Finance Director City of Centerville 1880 Main Street Centerville, MN 55038 651-429-3232 Billing Period: May 2019 Services Performed • Collect data for the TIF District to evaluate and advise City on type of district and estimated cash flow • Provide advise to city staff on findings for establishment of redevelopment district • Meeting with city staff and developer • Discuss project with attorney at request of city staff • Conference call with city staff and attorney to city • Review and provide comment on city staff communication with developer Staff Time Position Hours Rate Billable Senior Professional 12.75 $210 $2,677.50 Professional - $140 $0.00 Support - $105 $0.00 Total Staff 12.75 $2,677.50 Expenses Mileage $0.00 Printing $0.00 Other $0.00 Total Expenses $0.00 This Period Rh Project Summary Total Budget Billed This Period Billed Previous Budget Remaining $ 11,000.00 ($2,677.50) $0.00 $ 8,322.50 Northland Securities, Inc. Page 2 of 2 II'03282611' 1:07390L23311:4L3853311' isW S[Ji1TH 5Tl-1 TRFFTMIAINF,4Pr E 101-46500-300 TIF DIST. NO. 1-8 $0.00 $598.50 +ck Total $598,50 Northland Securities, Inc. 150 South Fifth Street Suite 3300 Minneapolis, MN 55402 USA Voice: 612-851-5900 Fax: 612-851-5951 Sold To: City of Centerville Bruce DeJong 1880 Main Street Centerville, MN 55038 NORTHLAND 4' SECURITIES Invoice Invoice Number: 5735 Invoice Date: 7/9/19 Page: 1 Customer PO Payment Terms Sales Rep ID Due Date TIF District No. 1-8 Net 30 Days 8/8/19 Description Amount For services related to TIF District No. 1-8. Please see enclosed detail. I 598.50 go�-00,.'300 �0 Subtotal 598.50 Sales Tax Total Invoice Amount 598.50 Check No: Payment Received TOTAL Main 612-851-5900 1 Toll -Free 800-851-2920 I Fax 612-851-5987 150 South Fifth Street, Suite 3300 1 Minneapolis, MN 55402 NorthlandSecurities.com Member FINRA and SIPC, Registered with SEC and MSRB NORTHLAND PUBLIC FINANCE INVOICE SUPPLEMENT Client: City of Centerville Project: TIF District No. 1-8 Contact: Bruce DeJong Finance Director City of Centerville 1880 Main Street Centerville, MN 55038 651-429-3232 Billing Period: June 2019 Services Performed • Conference call with developer • Preliminary review of developer pro forma and source/use of funds Staff Time Position Hours Rate Billable Senior Professional 2.85 $210 $598.50 Professional - $140 $0.00 Support - $105 $0.00 Total Staff 2.85 $598.50 Expenses Mileage $0.00 Printing $0.00 Other $0.00 Total Expenses $0.00 Tcit�►�'eriard` $598:5i1 °. Project Summary Total Budget $ 11,000.00 Billed This Period ($598.50) Billed Previous ($2,677.50) Budget Remaining $ 7,724.00 Northland Securities, Inc. Page 2 of 2 Centerville EDA Revolving Loan and Grant Program Low Interest Loan Program Parameters: Loan Term 10 Years Low Interest Loan Rate 2.0 % Market Rate Loan Rate Variable Low Interest Loan Max $20,000 Market Rate Loan Max No Max Loan Match Requirement (Low Interest : Market Rate) 100 % (1:1) Low Interest Loan Fund Source HRA Funds Market Rate Loan Fund Source Private Bank Low Interest Loan Fund Is'Year Max $50,000 Program Boundaries City Limits Eligible Costs The followine are eliEible expenses for either the public or private sector portion of the loan. • Generally, all work on front and sides of business buildings facing public streets • Cleaning, painting and staining of exterior surfaces • Facade masonry repairs • Repairing, replacing and installing of cornices, entrances, exterior doors and windows, decorative details, awnings and exterior lighting • New signage • Sign removal, repairing and replacement • Building identification • Streetscape costs on private property • Landscaping visible from the street • Decks or patios used for business purposes • Parking lot improvements • Handicapped accessibility improvements • Health and safety improvements The following may be funded with the private sector (matching) loan portion only: • Generally, all interior fixed improvements including the repair and/or construction of walls, ceilings, floors, lighting, windows, doors and entrances • Heating, ventilating and air conditioning improvements • Wall and floor finishes and tenant business fixtures • Roof repairs and replacement Ineligible Costs The followine costs are ineligible: • Refinancing of existing debts • Non -fixed improvements • Working capital • Inventory • Sweat equity (payment for the applicant's own labor and performance for construction of improvements) • Internal improvements to mixed use buildings that involve the residential portion of the structure Grant Program Grant Min Grant Max Grant Match Requirements (Private Funds : Grant Funds) Grant Fund Source Grant Program Annual Max Program Boundaries Eligible Costs Repairing, replacing and installing of: • siding • brickwork • mansards • cornices • entrances • exterior doors and windows • decorative details • awnings • exterior lighting • signage • building identification $2,000 $5,000 300% (3:1) HRA Funds $10,000 City Limits CITY OF CENTERVILLE ECONOMIC DEVELOPMENT AUTHORITY REVOLVING LOAN AND GRANT PROGRAM (RLGP) GUIDELINES AND REGULATIONS HANDBOOK August 2019 REVOLVING LOAN/GRANT PROGRAM DOCUMENTS CITY OF CENTERVILLE EDA 1. Title Page/Guidelines and Regulations Handbook (13 pages) -------------------------------- Pages 1-13 2. Application Form (2 pages) _Pages 14-15 3. Scope of Work (1 page) ------------------------------------------------------------------------------------------------ Page 16 4. Owner Agreement (2 pages) ---------------------------------------------------------------------------------- Pages 17-18 5. 2% Revolving Loan Fund Agreement (3 pages) 6. Certificate of Participation (4 pages) -Pages 19-21 Pages 22-25 7. Grant Authorization (1 page)-------------------------------------------------------------------------------------- Page 26 CENTERVILLE ECONOMIC DEVELOPMENT AUTHORITY REVOLVING LOAN AND GRANT PROGRAM (RLGP) I. BACKGROUND The Centerville Economic Development Authority (the "CVEDA") endeavors to support a program of city revitalization. This effort is aimed at strengthening the city's vitality in terms of market share and physical appearance. Working with the City, the CDEVA has designed a Revolving Loan and Grant Program (RLGP). The RLGP is aimed at improving the utility and appearance of downtown businesses while encouraging the leveraging of private investment which would otherwise not occur. The program provides front-end financing for small loans at below market interest rates for up to a 10-year term. The Centerville RLGP established a public/private partnership where an initial $50,000 public loan/grant pool was made available by the CVEDA to assist businesses to make eligible physical improvements. The program is designed to address redevelopment needs throughout the city. The program provides loans up to $20,000 for a term of up to 10 years at two percent interest. Revolving loan program participation requires a 100 percent match by the business, through an authorized participating financial institution. To be eligible, a financial institution must be willing to lend to businesses within the corporate limits of the City of Centerville. Financial institutions have agreed to service the loans and to provide their match at a competitive market interest rate. The Centerville RLGP is operated with the following program goals: • Provide affordable financing to small businesses for program eligible real estate improvements. • Target downtown businesses along Centerville Road and Main Street with other businesses located in the City also being eligible. • Serve as a catalyst to leverage private resources. • Require that improvements be consistent with city code. For businesses within the M-1 & M-2 zoning districts, this includes the design guidelines referenced in city code. • Require businesses receiving funds to be compliant with existing city code or to come into compliance in the course of the improvements proposed. This includes code related to signage, parking, screening and other exterior regulations. Whether the interior of the building needs to come into compliance with the building code shall be governed by the building code and related city code. Structures which qualify as legal nonconformities may remain. The program is administered by the EDA under the guidance of policies set by the City Council and EDA. The City of Centerville EDA is responsible for: • Determining individual applicant's eligibility based on: - Location of property to be improved; - Improvement scope; - Compliance with City Codes and Ordinances. • Determining schedule for submission of competitive funding applications and scoring criteria for the award of loans and grants when there are more applications than funds. • Distribution of program information to area businesses. • Referral of applicants to local banks. • Participation agreements with local banks. Financial institutions are responsible for: • Receipt and processing of applications. • Provision of matching loan funds at least equal to funds to be provided from the City's RLGP. • Underwriting to determine applicant's credit risk and required collateral. • Determining loan amortization period. • Approval or disapproval of loan subject to City certification as to program eligibility. • Collection of lien waivers and other documents deemed necessary for loan disbursements. • Distribution of loan funds subject to final approval by the CVEDA. • Distribution of principal and interest payments to the CVEDA RLGP. On default, the claims of the CVEDA are subordinate to the financial institution. II. PROGRAM OBJECTIVE The purpose of the RLGP is to provide businesses with an incentive to increase their investment in the community by making structural and beautification improvements to existing buildings. The RLGP will not provide working capital loans nor fund operating expenses. III. PHYSICAL BOUNDARIES OF PROGRAM AREA To be eligible for the RLGP, the property must be located within the City limits IV. ELIGIBLE COSTS (LOAN) The following are eligible expenses for either the public or private sector portion of the loan. • Generally, all work on front and sides of business buildings facing public streets • Cleaning, painting and staining of exterior surfaces • Facade masonry repairs • Repairing, replacing and installing of cornices, entrances, exterior doors and windows, decorative details, awnings and exterior lighting • New signage • Sign removal, repairing and replacement • Building identification 4 • Streetscape costs on private property • Landscaping visible from the street • Decks or patios used for business purposes • Parking lot improvements • Handicapped accessibility improvements • Health and safety improvements The following may be funded with the private sector (matching) loan portion only; • Generally, all interior fixed improvements including the repair and/or construction of walls, ceilings, floors, lighting, windows, doors and entrances • Heating, ventilating and air conditioning improvements • Wall and floor finishes and tenant business fixtures • Roof repairs and replacement V. INELIGIBLE COSTS The following costs are ineligible: • Refinancing of existing debts • Non -fixed improvements • Working capital • Inventory • Sweat equity (payment for the applicant's own labor and performance for construction of improvements) • Internal improvements to mixed use buildings that involve the residential portion of the structure VL PROGRAM ADMINISTRATION AND STRUCTURE Administration will be shared by the EDA and participating financial institutions. The EDA, as the program's administrator, will maintain and update program guidelines and monitor their compliance. Administration of the EDA's responsibility will be under the direction of the EDA's Executive Director and Assistant Treasurer. Servicing of RLGP loans shall be administered by local banks and savings and loans which make application to the EDA. All such institutions must be within 15 miles of the corporate limits of the City. 3 VII. PARTICIPATION AND FUNDING The RLGP will continue to operate as a public/private sector partnership. The financial base of the public share of RLGP funds will be interest and principal repayments resulting from the initial $50,000 of loans. The fund will continue to provide one-half of each small business loan up to a maximum of $20,000 (from the fund) at an interest rate of two percent, provided that funds are available. Multiple loans may be made to businesses, provided that the principal balance does not exceed $20,000 (from the fund) at any time, and also provided that all payments of principal and interest are current. Local banks will execute participation agreements with the EDA to carry out their participation in accord with these guidelines. VIIL LOAN STRUCTURE A. The RLGP shall provide a 100% match to private loans up to a maximum amount of $20,000 RLGP participation. B. The interest rate of the RLGP loan shall be two percent per annum. C. The RLGP loan shall be amortized over a term not to exceed 10 years but shall, at the option of either the lending institution or the business, be renegotiable at the end of each three-year period, but no loan including extensions shall exceed 10 years. In no event shall the interest rate on the RLGP loan change from two percent per annum. D. RLGP loans in the amount of $8,000 or greater must be fully secured with a perfected security interest as determined by the lender. E. The City subordinates its position on the RLGP loan to that of the lending institution. IX. UNDERWRITING STANDARDS A. Small and medium sized commercial buildings are defined as those buildings whose gross square footage does not exceed 30,000 square feet. B. Businesses receiving RLGP loans shall not have more than five (5) or more locations, franchises, or chains. C. Types of businesses receiving RLGP loans shall be legal permitted or legal conditional uses within their respective zoning districts. D. RLGP loans shall be made to fee owners or recorded contract for deed vendees. X. FINANCIAL GUIDELINES A. Applicants shall demonstrate a ratio of net operating income (NOI) to debt service of 1.1:1. NOI = Gross property income less operating expenses and real estate taxes, but not including mortgage payments, income tax depreciation or non -operating expenses. B. Participating financial institutions shall use customary lending practices in determining eligibility for RLGP loans so as to ensure repayment of principal. M C. The property shall not be delinquent in the payment of property taxes and special assessments, and shall not become delinquent during the term of the loan. If taxes shall become delinquent, the loan may be called at the option of the financial institution if the delinquency is not remedied in a reasonable time frame. D. The structure shall be fully insured during the term of the loan with the lending institution and City named as mortgagor or covered under a loss payee clause endorsement. E. No loan shall exceed 80 percent of the estimated market value of the property to be rehabilitated upon completion of the rehabilitation, less the principal balance of any prior mortgage existing on the property at the time the loan is made; as required by MSA 469.184, Subd. 4(3). F. All out-of-pocket loan application expenses shall be the responsibility of the applicant. No other fees shall be charged. XI. ANNUAL REPORTING Within 90 days of filing federal tax statements, businesses receiving loans shall annually submit to the lending institution the following three items: A. Proof of non -delinquency of property tax payments; B. Profit/loss statement from Schedule C of federal tax statements; and C. Personal financial statement satisfactory to the lender. Participating lending institutions shall annually report to the EDA by March 1 of each year the status of the RLGP loan. The annual report shall include the status and balance of each loan as of December 31 of the previous year. XIL IMPROVEMENT REVIEW PROCESS Prior to being granted loan approval, the applicant shall receive a positive recommendation from the CVEDA. The EDA shall review proposed plans and the existing exterior condition of the property being improved. The Subcommittee shall base its recommendation upon the projects consistency with the Design Guidelines. The applicant may appeal any recommendation of the EDA to the City Council. In the event of limited funds, priority will be given to projects which score the highest on the program's application scoring worksheet. XIIL CONTRACTING AND CONSTRUCTION The applicant shall prepare and have prepared a detailed Scope of Work, which will also be the project's bidding document. The Scope of Work will be submitted to the City and the participating financial institution. The Scope of Work shall include: • A detailed description of the work to be undertaken; • Estimates of the quantity and materials to be used in the project; 0 Qualified licensed contractor(s) The cost of having the Scope of Work prepared shall be reimbursable to the applicant from the loan proceeds. No RLGP loan will be approved until an adequate Scope of Work/Bidding Document is submitted and approved by designated EDA staff. The applicant must receive and submit at least two itemized competitive bids for all work to be completed and materials to be purchased with the loan funds. The bids will be reviewed and filed by the financial institution to establish that they are competitive and address the work identified in the Scope of Work. The EDA, through the City Building Inspector, shall monitor the quality and progress of all work funded through the Program. Request(s) for payment (up to three partial payments and one final payment) by the applicant for completed work and supplied materials shall be in writing to the financial institution. Partial payments shall not exceed 90 percent of the total loan amount. The final payment shall be held until a certificate of completion is obtained from the City and submitted to the financial institution. Upon submission and approval of a written request for the release of loan funds, designated EDA staff will, in writing, authorize the financial institution to release the requested funds. All work must be inspected by the City Building Inspector to ensure conformance with code and must be verified for proper completion by City staff to ensure compliance with specifications prior to final payment. The final inspection cannot be scheduled until all permits taken out have been signed off by field inspectors. Upon satisfactory completion, a certificate of completion will be granted. All work must be completed within 12 months of issuance of a building permit unless written permission of an extension is granted by designated EDA staff and financial institution. This action does not constitute an extension to any other deadlines imposed by permits or other regulation. All eligible improvement work performed pursuant to an approved RLGP loan must provide a 12-month warranty from the date of accepted completion by the loan recipient and the EDA. This warranty must cover the quality of materials used and workmanship in performing the work. This warranty is the responsibility of the recipient. XIV. LOAN DISBURSEMENTS Loan funds shall be released by the financial institution, but not before written approval from the EDA is provided, and an RLGP check is issued. A minimum of 10 percent of the total loan will be retained until all work is completed, inspected, and approved, as evidenced by current certificate of completion. XV. IMPROVEMENTS COMPLETED PRIOR TO LOAN CLOSING Such improvements are not eligible unless the applicant's structure requires immediate attention (hazardous code deficiencies, etc.) and the following steps are taken: • Applicant must fill out a loan application with the financial institution. • Applicant must submit a written request to the financial institution describing the need. • Applicant must receive written permission from both the EDA and the financial institution. on If the above conditions have been met, the applicant may proceed using his own funds or interim financing from a financial institution. However, this is done at the applicant's and/or financial institution's own risk until the total Scope of Work has been approved by the EDA and the loan has been closed. XVL BUILDING FACADE GRANTS In order to encourage building facade improvements that are more aesthetic in nature, grants between $2,000 and $5,000 are available provided there is a 3:1 match of private investment. For example, to qualify for a grant of $2,000, a total of $8,000 must be spent. For a $20,000 project, the maximum of $5,000 in grant money may be awarded. Multiple grants are permitted consistent with the above outlined formula, but shall not exceed $5,000 per project, or a total of $5,000 per property, in a 10-year period. Eligible grant expenditures include repairing, replacing and installing of • siding • brickwork • mansards • cornices • entrances • exterior doors and windows • decorative details • awnings • exterior lighting • signage • building identification Prior to incurring expenses for which a grant is sought, applicants must have the proposed work approved in writing by the City EDA staff. Grant monies are not available for "sweat equity". Grants will be distributed upon final inspection by the City and submittal of a paid invoice. 7 CENTERVILLE REVOLVING LOAN PROGRAM APPLICATION FORM L APPLICANT INFORMATION Business Owner's Name(s): Home Address: Phone: E-Mail Address: Name of Business: Business Address: Phone: Business Structure: Sole Proprietorship Partnership (all partners must sign this application) Corporation (list officers on separate sheet) Type of Business (describe): IL PROPERTY INFORMATION Property Owner: Address: Phone: E-Mail Address: Does the applicant business occupy the total building? Yes No If NO, what percentage does the applicant business occupy and what occupies the balance of space? III. REHABILITATION PROPOSED Briefly describe the proposed work and purpose. Exterior: Interior: *Note: A detailed Scope of Work document is required prior to approval. IV. BUILDING INSPECTION Building owner grants permission for the city inspector to inspect all work to be performed as outlined in Scope of Work. Signature of Owner Date V. FINANCIAL INSTITUTION INFORMATION Name: Address: Loan Officer: Business Owner's Signature Business Owner's Signature Phone: Date Date I 2% REVOLVING LOAN PROGAM SCOPE OF WORK See pages 3 and 4 of the Guidelines and Regulations Handbook for information on eligible expenses. PROGRAM ELIGIBLE EXPENSES Item 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. TOTAL AMOUNT REQUESTED FROM EDA AMOUNT REQUESTED FROM BANK Amount Note: Wall and floor finishes and tenant business fixtures may be funded with the private sector (matching) loan portion only. 10 CITY OF CENTERVILLE EDA REVOLVING LOAN PROGRAM OWNER AGREEMENT Owner Certification DATE: ADDRESS: PROPERTY ADDRESS TO BE REHABILITATED: BUSINESS NAME(S): As owner of the above property, I hereby agree that I will adhere to the following conditions of the City of Centerville EDA Revolving Loan Program (the "Program"): 1. Each loan from the Program will be requested on an individual property and will not exceed one-half the cost of the eligible building improvement or $20,000, which is less. 2. It is understood that the loan from the Program is for contract construction and is only for eligible expenses. No refinancing and no acquisition will be done utilizing the City of Centerville EDA loan. 3. Hazard insurance will be maintained on the property at all times in an amount sufficient to cover the full amount of the loan and will be paid by myself and will not be paid out of the loan proceeds. 4. At least two detailed and legible competitive bids based upon a work specification prepared by the owner and approved by a participating financial institution prior to approval will be submitted. II 5. Change orders will be issued only with the written approval of the City of Centerville EDA staff. No change order will be issued decreasing the private loans such that the private loan is less than the loan from the CVEDA Revolving Loan Fund. 6. I agree to abide by the regulations as listed, and the City of Centerville EDA Revolving Loan Program Handbook. Upon failure to comply with any or part of the above, the City of Centerville EDA may enforce the Revolving Loan Program and note/lien through any lawful suit or action as permitted under the laws of the State of Minnesota. 7. I understand that any inspection made by the City of Centerville under this program is for purposes of determining the applicant's eligibility under this program, and it is not intended to represent or warrant the condition of the premises. 8. I further understand that making application in no way insures approval of loans or guarantees funding. 9. I understand that "approval" means specific, written approval from both the City and my financial institution. 10. I understand any work performed prior to specific written approval from both the financial institution and the City will be considered ineligible unless otherwise waived in writing by the City EDA and the financial institution according to the guidelines. Witness Date Fee Owner/Contract Purchaser: Signature Print Name 12 TWO PERCENT REVOLVING LOAN FUND AGREEMENT BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CENTERVILLE AND PARTICIPATING BANKS THIS AGREEMENT, entered into this day of , 20 by and between THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CENTERVILLE (hereinafter referred to as the "Authority") And (hereinafter referred to as the "Bank") WHEREAS, the Authority has established a Two Percent Revolving Loan Fund (2% RLF) for the purpose of making loans to neighborhood small business firms; and WHEREAS, the establishment of the 2% RLF requires that loan monies advanced from the 2% RLF be matched by an equal amount from a local bank; NOW THEREFORE, in consideration of the above premises, the parties hereto agree as follows: 1. That the document dated June, 2019, entitled "Loan and Grant Program Guidelines and Regulations Handbook," which has been given to the bank as part of the revolving loan/grant program document, governs this Agreement. 2. That the Bank in conjunction with the Authority will make eligible loans for rehabilitation at a ratio of 1:1, not to exceed a program maximum limit of $40,000. Any additional loan monies exceeding the program maximum limit shall not be the responsibility of the Lending Institution. 3. That, for each loan made, half the funds will come out of the 2% RLF, up to a maximum of $20,000, and at least half the funds will be made available by the Bank. 4. That interest will be computed in the following manner: At the annual rate of two percent on the Authority's portion and no more than three percent above prime rate for the monies loaned from the Bank. 5. That the term of the loan shall not exceed 10 years. The Bank shall make the determination of the appropriate term. 6. That prior to approving or rejecting a loan request, the Bank shall process the request in the same manner as any other commercial improvement loan request. 7. That the Bank shall then approve or reject the loan based on the program requirements, provided that no application can be rejected for any unlawful reason; provided further that the Authority shall not have the authority to approve or reject a loan on behalf of the Bank. 13 8. That if the Bank approves the loan, the Authority shall tender its check drawn on the 2% RLF for half of the principal amount of the loan, up to a maximum of $20,000, at the time of the loan closing. 9. That for each loan, the Bank shall have the loan recipient execute a mortgage or promissory note, or both, to the Bank. The Authority's interest in the mortgage or promissory note or both shall be subordinate to that of the Bank. The mortgage or promissory note, or both shall, along with other documents, state the interest rate and schedule for payment. 10. That for each loan entered into under the Agreement, the loan recipient shall be required to file a "Loan Application Form" and to sign an "Owner Agreement" which has been given to the bank as part of the revolving loan/grant program document. 11. That, in conjunction with the Authority's tendering of its check for half the loan, the Bank shall execute a "Certificate of Participation" for each loan whereby the Bank sells one-half of the loan to the Authority 2% RLF at the rate of two percent per annum. A blank copy of said "Certificate of Participation" has been given to the bank as part of the revolving loan/grant program document. 12. That the schedule for loan payments by the recipients shall be determined by the Bank and said payments shall be made to the Bank on a monthly basis in accordance with the mortgage or promissory note or both. 13. That the Bank shall provide to the loan recipient a truth -in -lending disclosure when applicable. 14. That the Bank shall remit loan payments to the Authority on a monthly basis. On a monthly basis, the Bank shall pay to the Authority that portion of the loan recipient's payments for the prior month, which represents a two percent payment of interest on the outstanding principal balance with the Authority's share of the loan, and that portion of the monthly payment which represents a repayment of the principal amount of the loan. 15. That this Agreement shall expire when the 2% RLF monies available to the Authority are exhausted provided, however, either party may terminate this Agreement at any time for any reason by written notice to the other of its intention to do so. Such termination shall be effective upon the effective date set forth in such notice, or, if no date is set forth, upon giving of the notice. If this Agreement is terminated in accordance with the procedures set forth above, said termination shall not affect the rights and obligations of the Bank and the Authority with respect to loans outstanding on the effective date of such termination. 16. That the Bank will retain 10 percent of the loan until it has received a certificate of completion from the CVEDA for the improvements financed by the loan. 14 IN WITNESS WHEREOF, the parties hereto have set their hands as of the day and year first above written. THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CENTERVILLE It's Executive Director PARTICIPATING BANK By It's By It's 15 NEIGHBORHOOD SMALL BUSINESS REVOLVING LOAN FUND CERTIFICATE OF PARTICIPATION WHEREAS, ON 1 20 , the "Financial Institution") has loaned the sum of for financing improvements to an existing business located at (the "Project") in the City Of Centerville (the "City"); and Dollars ($ WHEREAS, on even date herewith the Economic Development Authority in and for the City of Centerville (the "Authority") has acquired a participation in the Loan for the sum of Dollars ($ ), bearing interest at the rate of two percent (2%) per annum, evidenced by Note, dated , due , until paid (the Financial Institution and the Authority being hereafter referred to as the "Participants"); and WHEREAS, the Financial Institution agrees, during the term of this Participation Agreement (the "Agreement"), to act as servicer on behalf of itself and the Authority in the receipt and disbursement of all payments to and from the Borrower and in exercising any remedies available against the Borrower with respect to security for the payment of all amounts due under the Loan. NOW THEREFORE, in consideration of the premises and the mutual benefits to be derived therefrom, it is hereby agreed as follows: 1. The Financial Institution shall have a percent( %) interest in the Loan and the Authority shall have a percent ( %) interest in the Loan, provided that the Authority's interest in the Loan shall be, as provided herein, subordinate to the Financial Institution's interest in the Loan. 2. The right of the Authority to any and all security for the repayment of the Loan shall be subordinate to the right of the Financial Institution to receive any amounts due to it from any security for the repayment of the Loan to the extent of the Financial Institution's interest in the Loan. 16 3. The right of the Authority to receive any repayments from the monthly payments made by the Borrower shall be subordinate to the right of the Financial Institution to receive all such monthly payments made by the Borrower. 4. So long as the Borrower shall not be in default of its obligation to repay the loan, or of any of its obligations under any documents or instruments incidental thereto (any such default referred to herein as an "Event of Default"), the Financial Institution, upon receipt of any monthly payment or any prepayment by the Borrower, shall remit to the Authority that portion of said monthly payment or prepayment which represents the Authority's pro rata share of the principal amount loaned by the Financial Institution. In no event shall the Financial Institution withhold from the Authority any amount less than the Authority's pro rata share of monthly payments or prepayments received by the Financial Institution, except as provided in the Event of Default as described herein. In receipt and disbursement of any sums covered by this section, the Financial Institution will exercise the same care as would be exercised in the handling of loans for its own account. After an Event of Default shall have occurred and after the required notice of period of said default and Borrower's failure to cure said default, then, upon receipt of any monthly payments from the Borrower, or upon receipt of any other payment from any source by or on behalf of the Borrower, the Financial Institution shall apply the entire amount of such payment first to pay all costs and expenses incurred by the Financial Institution in connection with the enforcement or foreclosure of any note, mortgage or other document securing the repayment of the Loan, second to pay interest then due on the Financial Institution's interest in the Loan, and then shall apply the remaining amount of such payment as a payment or prepayment of the outstanding principal amount of the Financial Institution's interest in the Loan, until all interest due to the Financial Institution and the entire principal amount of the Financial Institution's interest in the Loan have been paid in full, and shall thereafter remit to the Authority the remainder of such amounts as a payment or prepayment of the principal amount of and interest on the Authority's interest in the Loan. 5. Any Loan repayment received directly from the Borrower by the Authority shall be remitted to the Financial Institution. 6. The Financial Institution shall promptly advise the Authority, in writing, of any default by the Borrower in repaying any amounts due under the terms of the Loan or under any mortgage, agreement, instrument or document securing repayment of the Loan. 7. Any mortgage, agreement, instrument or other document securing repayment of the Loan shall be foreclosed or enforced only upon the written consent of both the Authority and the Financial Institution, such consent not to be unreasonably withheld. In no case shall such consent from the Authority be withheld for more than two consecutive months after default. In foreclosing any mortgage or enforcing any remedy under any other agreement, instrument or document securing repayment of the Loan, the Financial Institution shall be entitled to receive all amounts derived from such foreclosure or enforcement until the Financial Institution has recovered all amounts due to it with respect to its interest in the Loan and its costs incurred in such foreclosure or enforcement. Thereafter, the Financial Institution shall remit to the Authority all remaining amounts derived from such foreclosure or enforcement. 8. So long as this Participation Agreement is in force and effect, the Financial Institution shall, within 60 days of the annual anniversary date of this Participation Agreement, furnish the Authority with an annual report summarizing the monthly payments or other payments with respect to the Loan received by the Financial Institution, the amounts paid as interest on the Loan, the payments and prepayments of the principal amount of the Loan, any foreclosure 17 actions or enforcement proceedings with respect to any security for the repayment of the Loan and any amounts derived therefrom, together with an accounting of the applications of such amounts. 9. This Participation Agreement incorporates the terms of all mortgages, agreements, instruments or documents securing the repayment of the Loan, if any, which are attached hereto as exhibits, and are incorporated by reference herein. 10. This Participation Agreement shall continue in full force and effect until all amounts payable under the Loan have been paid in full. 11. The Financial Institution shall not execute a satisfaction of any mortgage, agreement or document securing the repayment of the Loan without the prior written consent of the Authority. 12. The Financial Institution is hereby granted, subject to paragraphs 7 and 11, the power and authority to administer, manage and service the Loan; to waive the performance of obligations of the Borrower; to excuse the non-occurrence of conditions; to exercise collection rights with respect to any collateral; to foreclose against any collateral or to accept a transfer in lieu of foreclosure; to collect and receive any and all payments, collections and proceeds of collateral made or delivered by or for the account of the Borrower and at its sole discretion to release such payments, collections and proceeds to the Borrower or apply the same to the payment of indebtedness; to enforce rights against third parties; to manage and control proceedings in the Borrower's bankruptcy; and otherwise to do and refrain from doing any and all acts and things which the Financial Institution would be required or permitted to do or refrain from doing in connection with the Loan if it had retained its entire interest as lender in the loan, but acting on behalf of the Authority and all other participants, if any. 13. Neither the Financial Institution nor any of its directors, officers, employees or agents shall be liable for any action taken or omitted by the Financial Institution or any of them except in the case of gross negligence or willful misconduct. 14. Neither the Financial Institution nor the Authority (i) shall be liable or responsible for any representations or warranties made by, or for obligations binding upon or assumed by, the Borrower or anyone else; or (ii) make any representation or warranty as to the genuineness, legality, validity, perfection, priority, enforceability or sufficiency of the Loan; or of any securing interests, mortgage liens, guaranties, or other collateral rights and remedies securing the Loan; or of any of the documents evidencing the Loan or any other agreement made or instrument, document or writing issued thereunder, in connection therewith, or as a result thereof, or (iii) make any representation or warranty as to the Borrower, as to any financial statements or collateral reports submitted by or for the Borrower, as to any risk of loss with respect to the Loan, or as to any matter whatsoever; or (iv) shall have any right or recourse against the other party hereto. IV FINANCIAL INSTITUTION I:A An Authorized Official THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CENTERVILLE L'Im Its Executive Director 19 CITY OF CENTERVILLE REVOLVING LOAN PROGRAM GRANT APPLICATION Business Owner(s): Business Name: Business Address: Phone: Qualifying Rehabilitation: Cost of Rehabilitation: Facade Improvement(s): Facade Improvement Cost: Documentation on File: Grant Amount: I hereby acknowledge that the facade work and/or materials referenced above have been completed and paid for at the above address. Signature of Owner Date Signature of Executive Director EDA Authorizing Grant Date 20