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8. NEW Scandia Draft Facade Improvement Program1 City of Scandia Facade Improvement Loan Program Policy Guidelines Adopted: (EDA/Council Dates) I. PURPOSE: The City’s intent by establishing this loan fund is to encourage eligible business owners to undertake business facade improvements. By improving the exteriors of commercial buildings, the City will be able to help enhance the appearance of the of its commercial building stock and the community as a whole, and ultimately serve to assist in the retention and expansion of existing businesses. II. OBJECTIVES: The Building Facade Improvement Loan Program has the following objectives. A. To renovate or rehabilitate the exteriors of commercial properties so as to prevent or eliminate deteriorating conditions. B. To attract and retain businesses in the City’s existing commercial areas and potential vacant commercial units. C. To retain jobs and bring additional employment opportunities to the City. D. To make use of funds the City has set aside for the enhancement of the City’s commercial business base, which is deemed an asset of the City. E. To spur activity which will provide return to the City by way of physical improvements accomplished which may not otherwise have occurred. III. PROJECT & APPLICANT ELIGIBILITY: A. General and Designated Area of Eligibility: The Façade Renovation Loan Program only applies to the exterior facades, signs and architectural features for commercial properties on within the Village Historic Core Zoning District, the Hawkinson Business Park, rural commercial districts and businesses on Olinda Trl. N within 400 ft north of Olinda Trl. N’s intersection with Scandia Trail N (Hwy 97). (As Identified in formal map.) B. Minimum Requirements: 1. Projects shall occur within the established designated area. 2. Projects must commence within 120 days from the execution date of the loan and improvements must be completed within one (1) year of said 2 execution date. In rare cases, likely due to extenuating circumstances, the Scandia EDA may allow completion extensions upon request of the applicant. The City of Scandia and its EDA reserves the right to eliminate project funding if a project is not completed within the approved specified time period. The City of Scandia and its EDA are not obligated to granting time extensions but may do so under reasonable extenuating circumstances. 3. Projects shall comply with State Building Code, Scandia’s Unified Development Code and applicable architectural requirements. 4. Concurrent applications from the same applicant, unless for separate properties, shall not be allowed. An applicant may apply for another project after any existing project by the same applicant is completed to the satisfaction of the Scandia EDA. Applicants who are denied an application may reapply after a period of 1 year from the date of denial. C. Eligible Activities Included but not limited to: 1. Repair/replacement of the original building’s materials and decorative details. 2. Cleaning of exterior building surfaces. 3. Tuck pointing and masonry repair. 4. Sandblasting. 5. Painting of exterior building surfaces. 6. Repair/replacement or addition of entrances, doors, display windows, transoms, or windows. 7. Removal, repair/replacement of existing signs and awnings. 8. Permanent exterior lighting. 9. New signage and awnings. 10. Qualified professional design services. 11. Other activities as designated by the City Council. D. Non-Eligible Activities Included but not limited to: 1. Improvements that is not permanently affixed to property. 2. Interior improvements. 3. Purchase of property. 4. Building foundations, landscaping, off-street parking lots. 5. Construction of a new building or additions. 6. Fixtures and equipment. 7. Removal without replacement of architecturally significant features and design elements. 8. Sidewalk repairs or additions 9. Garages or storage buildings, playground equipment, or decks. 10. Correction of code violations. 11. Any roof repair or replacements, except in cases where a new roof “style” is a critical component of the façade restoration or replacement project. 3 12. Compensation for time and labor spent by applicant or members of applicant’s immediate family. (Note that one needn’t be the building owner to apply.) 13. Other activities as designated by the City of Scandia and its EDA. D. Design Assistance: Design Assistance allows applicants to apply for an additional $2,000 to procure a licensed design professional/architect to assist with creative design to ensure appropriate scale and scope of the desired revitalization project for the exterior of the building. Design assistance must be requested at the time of applying. If funds are given for design assistance, the design must be incorporated into the project in order to receive the funds. IV. PROGRAM TERMS & CONDITIONS: A. Submission Requirements 1. Applicants must include detailed drawings and specifications with application. The Applicant must submit either a digital drawings/design plan and application. The Zoning Administrator, EDA, or City Council may require drawings to be submitted by an architect. The plans must include: a. Detailed site plan using adequate scale to be easily and clearly understood. Ideally engineering scale, at 1 inch equals 50 feet or less. b. Elevations of any façade proposed to be altered, ideally drawn to scale at least 1/8”=1’; each elevation drawing should include notations of proposed materials, color, finishes and details. The drawing should clearly show proposed signage (if any). Perspective renderings of the proposed project and / or photos of similar structures may be submitted, but not in lieu of adequate drawings showing the actual intended appearance of the buildings. c. Current condition photos to provide adequate “before and after” shots. d. Construction and reconstruction time schedule, noting start and completion date. 2. Applicants must submit at least one contractor proposal or estimate from supplier; however, it is suggested that the applicant pursue multiple proposals for their own protection and peace of mind. The EDA and its staff retain the right to request additional proposals. The property owner is not required to utilize a contractor to have the work completed. The EDA and the City of Scandia do not assume any liability to the work of any work performed or purchased. 3. Applicants, if tenants, must have the written permission and approval from the respective property owner. 4. Applicants must take out the appropriate building or sign permits. 4 5. Loan fund proceeds are not permitted to be used to pay for permit fees. 6. Applicants who are delinquent with their property or personal tax, utility payments, other City arears or have outstanding municipal code violations are not eligible until said issues are resolved. 7. Payment shall be made on a reimbursement basis upon completion of construction and/or installation. 8. Minor changes to the project will require submittal and approval by the City Administrator. Significant project changes, as determined by City Administrator, will require approval of the EDA. 9. The EDA and the City of Scandia reserves the right to cancel any loan agreement if any of the conditions of the program guidelines and agreement are not met. 10. Applicants shall provide a Certificate of Insurance with their application showing proof of property insurance for fire and all hazards. The City shall be designated a loss payee up to the amount of the loan. B. Underwriting and Loan Review 1. Applicants are responsible for supplying a credit report from one of the three major credit bureaus with an issuance date of at least 30 days from the date of application submission. Additionally, the applicant may be asked to supply additional financial information under the course of review of an application. A failure to supply the EDA loan review working group with all requested information may result in a denial of your application. 2. All applicant supplied materials shall remain confidential and will not be shared publicly. The loan review, or underwriting, will be carried out by approved City staff and the Scandia EDA’s loan review working group. They will provide a recommendation to the based on financial information supplied. All recommendations will only indicate a denial or approval with conditions specified within the loan agreement. 3. The loan review working group may request collateral, personal guarantees or liens as conditions of recommended approval. 4. The loan review working group is tasked recommending loans that are of low risk of default which may be offset with collateral or other liens or guarantees. C. Approval Authority 1. The City Council, upon recommendation of the EDA, will have the ultimate authority to approve or deny applications on a case-by-case basis and may impose certain design conditions on approved projects including those recommended by the EDA and staff. D. Expiration of Program The façade loan improvement program will expire if one of the following occurs: 5 1. When the funds have been exhausted, unless additional funding has been authorized by EDA and the City Council. 2. When the City Council chooses to eliminate or amend the program. V. LOAN TERMS: All loans granted under this program shall be subject to the following terms and conditions: A. The minimum loan granted under this program shall be $1,000 and the maximum loan shall be $5,000 $10,000 per building. Applicants who having received a $10,000 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. B. The EDA reserves the right request the City Council authorize requests in excess of the maximum loan amount of $10,000 per building on a case-by-case basis when it is determined that the architectural value of said improvement is deemed significant be the EDA and City Council and said improvement would not be able to practically completed so as to create one cohesive visual impovement. C. The loan interest rate shall be no lower than 2 percentage points below WSJ Prime Interest Rate and shall be amortized over the maturity of the loan. D. The full balance of the loan shall be due immediately upon sale of the property or within seven (10) years of the approval date, whichever event happens first. The loan may not be assigned without the express written consent of both parties. The loan may be prepaid in whole or in part at any time without penalty. E. Project participation may be limited based on the availability of program funds. F. 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. G. Satisfaction of Mortgage: Upon request of the Owner receipt of final payment, the City will issue a Satisfaction of Mortgage and release any lien it has associated with the loan satisfied. H. The EDA reserves the right to require additional collateral to back a loan based on credit and loan risks. I. Applicants will be required to sign a note and a mortgage as a condition for receiving loan funds. The mortgage will be recorded against the property at the Office of the Register of Deeds. Should a lien be included in loan conditions, it shall be filed with the Minnesota Secretary of State. 6 VI. FAÇADE RENOVATION LOAN PROGRAM PROCEDURES: A. Applicant meets with City staff for initial project discussion and evaluation. B. Applicant submits loan application to EDA, and required contractor proposal/quote to staff (according to Sec. IV.A.2. in these guidelines), containing all of the requirements specified in these guidelines. Applications must include detailed drawings and specifications. Eight (8) copies of drawings and specifications must be submitted. The EDA may require drawings to be prepared by an architect. C. EDA reviews plans and approves or denies loan request. If approved, the EDA may place conditions on the proposed project. D. If denied, applicant may submit a revised application and repeat process after 1 year. E. Applicant submits building and/or sign permit with final design plans as required by the City’s Unified Development Code. F. The Building Official reviews and approves any required permits. G. A “loan document” is drafted by City staff that identifies the terms of the agreement. All parties execute said letter. A note and mortgage are drafted which the applicant signs. H. Construction/Installation begins. Applicant has 120 days from the execution date of the loan to begin implementation of approved improvements. Construction an installation is completed within one (1) year of loan agreement signed. Any plan changes would require approval according to Sec. IV.A.8 in these guidelines. I. Applicant contacts City to request project review to see if all code requirements have been met and assures all final inspections from the Building Official are completed. Verification of compliance confirmed with the City prior to any approval of a request for payment. J. Applicant provides itemized paid invoices for the project, and any outstanding bills which are also eligible for payment under the loan agreement, to City staff, along with the completed "Project Close-Out" section on the application form. While a construction lien waiver is not required, it is recommended that the applicant consider obtaining appropriate construction lien waiver(s) from the contractor(s) for the project. (Recommended protection for the applicant.) K. Applicants may request deferred payment for up to one year as part of their approved application. L. After EDA approves reimbursement claim, the City Clerk forwards payment directly to the applicant.