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8. Draft Facade Improvement Loan Program AmmendmentsPage 1 of 4 The Scandia EcomomicEconomic Development Authority 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com Scandia Economic Development Authority Facade Improvement Loan Program AddopedAdopted 2018? PURPOSE: The purpose of the Facade Improvement Loan Program is to offer low interest loans to commercial building owners in the Village Mixed Use and Rural Commercial zoning district to make exterior improvements that enhance the “curb appeal” of their property consistent with the City’s Architectural Design Guidelines or the original architecture of the building. FUNDING: The Scandia EDA is dedicating $20,000 to be made available for the program.Please check with City Staff for information funding availability. (Available funds may vary based on outstanding loans and interest revenues over-time.) Application Fee: (Yes or No) None. LOAN AMOUNTS: Minimum loans of $1,000 and maximum loans of $5,000 will be provided to match up to 50% of the improvement costs. LOAN TERMS: Up to 10 year10-year loans at 1% interest assessed to the property tax statement. DESIGN PLANS: The applicant is responsible for providing their designs. All designs must comply with the City’s Architectural Design Guidelines or the original architecture of the building. ELIGIBLE BUILDINGS REQUIREMENTS INCLUDE: All buildings must be located within in the Village Mixed Use Zoning District, the Village Historic Core District, the Village Core District and Rural Commercial districts except properties classified as residential or intuitionalists such as religious or public institutions, church or public in the Washington County property tax system. Real Estate taxes must be current and all outstanding arrears owed the City must be paid. Buildings may receive more than one loan. But, if a building has received a loan(s) from the City of Scandia in the past, future applications are only eligible for the difference between the maximum loan amount and the amount remaining to be paid on the previous loan(s). For example, if the previous loan(s) total issued at $2,500 with2,500 with a balance due and payable of principal of $1,000 – the applicant would be eligible for up to $4,000 in new moneyloan assistance. No loan or combination of loans in this program shall exceed $5,000 per loan receipentrecipient. Buildings Applicants who having received a $5,000 loan may only reapply for another loan after the previous loan is paid off or when principal balance is available. Non-profits are not eligible for financial assistance under this program. The City and EDA reserve the right to deny an applicant who fails to meet the conditions of this policy or when a loan request is outside of acceptable risks as determined by the EDA loan review subcommittee under policy set by the EDA and City Council. Commented [KC1]: If we actually get people to participate in this policy, there is no way the amount available for lending can be gurenteed to be at $20k. Commented [KC2]: Can be considered since there are costs associated but we may wish to subsize costs to encourage program use. Commented [KC3]: I see no issues with the core of what is being supplied in this subsidy. Commented [KC4]: These two districts will be established in the new Development Code and will be the eqivalent of the original intent of the policy. Commented [KC5]: The City provides sewer service in this area and should collect any late payments before processing this loan. This could also include non-payment of outstanding permit-related expenses other financial judgements. Commented [KC6]: Why wouldn’t we have a condition to deny based on lack of creditworthiness? The policy could be preserved to imply applicants are assured approval without financial review. Page 2 of 4 The Scandia EcomomicEconomic Development Authority 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com ELIGIBLE IMPROVEMENTS: Improvements that can be viewed from the public right-of-way including:  Windows and doors (Must be viewable from the public right of way)  Façade improvements including painting, sandblasting ,sandblasting, siding, soffits tuck pointing, trim, and stucco repair  Handicap accessibility  Exterior lighting  Awnings INELEGIBLE IMPROVEMENTS:  Roofs Scandia Economic Development Authority Facade Improvement Loan Program  Foundations  Landscaping  Private parking lots  Cement work such as private steps and sidewalks that does not provide handicap accessibility  Building Additions  Garages or storage buildings  Playground equipment  Decks  Signs  Anything not permanent or affixed to the property COMPETITIVE BIDDING: A minimum of two bids per project is required. Please provide a copy of the bids with your loan application. Contractors must be licensed by the State of Minnesota. APPLICATION PROCESSING: The Scandia EDA will accept applications to the loan program on a first come, first served basis starting April 1, 2018. The City will assign a number to each application as it comes in to the City. The application will be forwarded to the City of Scandia’s EDA loan review subcommittee for review and recommendation to the EDA Board, who may make a recommendation to the City Council for final approval. The EDA loan review subcommittee will review the application and if an application is deemed ineligible for any reason, and recommend to the EDA Board for denial. Only loans being considered for approval will require City Council consideration. thethe EDA loan review subcommittee will review and consider the next application in line. Ineligible applications will be returned to the applicant with an explanation of why the application was deemed ineligible, and every effort will be made to maintain confidentiality of financial information will be made. The ineligible applicantApplications deemed ineligible may reapply when the application is corrected but will be placed in line at the new date of application. Commented [KC7]: I have heard interest from some the business community who would like to use this loan for a sign, but in general most of our existing signage is in good condition. So, this is fine as is, but I wanted to bring this to your attention. Commented [KC8]: Changed to accomidate proper review procedures. Page 3 of 4 The Scandia EcomomicEconomic Development Authority 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com * Businesses who lease space must get written approval from the owner of the property. The property owner must sign the Application. BUILDING PERMITS: The property owner or their agent is responsible for obtaining all of the proper building permits for the project in question. WORK COMMENCEMENT/COMPLETION Work cannot commence until the EDA approves the loan and the property applicant and building owner have signed the Repayment Agreement. Weather permitting; all projects must be completed within 120 days of the date the loan is closed. PROCEEDS DISBURSEMENT PROCESS: The City’s building official will verify completion of the work. The City will only reimburse the final project cost validated through contractor materials and labor. The applicant shall submit all required paperwork to the City and a two-party check will be issued payable to both the loan recipient and the contractor or materials supplier. The EDA requires the following items to disburse loan funds: 1.) Final project cost verified through invoices from contractor; 2.) Completion certificate signed by the loan recipient and the contractor; 3.) Copies of all required City permits indicating final inspection by the City building official; 4.) Final inspection by the EDA or its representative. Timing of payment should be coordinated Thewith the Scandia City Council’s regular business meetings. It approves all expenditures onwill consider approval of the payment any loan proceeds on the 3rd Tuesday of each month for availability the following day.and invoices Invoices must be received at least one week prior to the council meeting for their this meeting date for consideration. Please advise your contractors of this schedule. REPAYMENT: There are no prepayment penalties for early payment. Subordination of City Lien: In the event that the Owner borrows money from a private institution to fulfill his/her obligations hereunder, or in the future, the City shall subordinate the repayment agreement lien to any mortgage given in furtherance of this agreement. Satisfaction of Mortgage: Upon request of the Owner, the City will issue a Satisfaction of Mortgage, to be recorded at the Owner’s expense. Other Collateral: Commented [KC9]: Commented [KC10R9]: If property owners are not the applicant, what do we have for collateral? I recommend to limiting the loan to the participation of landowners. Tenents would need to collateralize something to offset this. It could be personal property like equipment, machines, or appliances that are part of their business. Commented [KC11]: Its important the Council have a role in final approval given the Scandia EDA is subordinated. Just improvements to the wording suggested. Commented [KC12]: We can amortize the loan payoff or just have the lendee pay full principle and current outstanding interest. Commented [KC13]: Note that this policy only suggests that real estate liens will be applied, which can only be agreed to by the landowner. Page 4 of 4 The Scandia EcomomicEconomic Development Authority 14727 209th St. N., Scandia, Minnesota 55073 Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com The EDA reserves the right to require additional collateral to back a loan based on credit and loan risks. Commented [KC14]: Perhaps overkill but a possible addition