08-08-2007 Community Redevelopment Authority Regular Meeting Packet
Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting Packet
Board Members:
Lee Elliott
Tom Gdowski
Barry Sandstrom
Sue Pirnie
Glen Murray
4:00 PM
Grand Island City Hall
100 E 1st Street
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Call to Order
Roll Call
A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS
Individuals who have appropriate items for City Council consideration should complete the Request for
Future Agenda Items form located at the Information Booth. If the issue can be handled administratively
without Council action, notification will be provided. If the item is scheduled for a meeting or study
session, notification of the date will be given.
B - RESERVE TIME TO SPEAK ON AGENDA ITEMS
This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve
time to speak. Please come forward, state your name and address, and the Agenda topic on which you will
be speaking.
DIRECTOR COMMUNICATION
This is an opportunity for the Director to comment on current events, activities, and issues of interest to
the commission.
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Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting
Item -1
Revolving Loan Fund
Staff Contact: Chad Nabity
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INTRODUCTION
Purpose of Program
The Community Redevelopment Authority of the City of Grand Island, Nebraska (the
"Authority"), is a municipal corporation organized by the City of Grand Island pursuant to
the Nebraska Community Development Law, Neb.Rev.Stat. §18-210I et seq. (the "Law")
for the purpose of developing improvement programs for areas of the community which
have been designated as "substandard" and "blighted" under the Law. The Nebraska
Legislature has declared that there exists in cities of all classes and villages of the state
areas which have deteriorated and become substandard and blighted and has found that
the prevention and elimination of such conditions is a matter of state policy, public interest,
and statewide concern. In an effort to revitalize and redevelop the areas of the City of
Grand Island which the Grand Island City Council has designated as substandard and
blighted under the Law, the Authority has developed a the Community Redevelopment
Authority Revolving Loan Fund (the "RLF") to provide the maximum assistance to
property owners and private developers, consistent with the sound needs of the City as a
whole, with the redevelopment of designated community development areas.
The Authority shall be responsible for the management, and administration of the RLF as set
forth herein and as the City Council of the City of Grand Island may designate from time-
to-time. The RLF Program shall at all times be managed and administered in accordance
with the current provisions of the Law and other applicable provisions of the Nebraska
Statutes. Nothing contained herein shall limit the use of the RLF, so long as uses are
consistent with the Law.
The Revolving Loan Fund program (RLF) is a redevelopment program that allows initial
funds and loan repayment moneys to be "revolved" or recycled and made available for
future redevelopment projects. No project shall be approved by the Authority unless or
until the area or property where the project is located shall have been designated as
substandard and blighted.
o Substandard areas shall mean an area in which there is a predominance of
buildings or improvements, whether nonresidential or residential in character,
which, by reason of dilapidation, deterioration, age or obsolescence,
inadequate provision for ventilation, light, air, sanitation, or open spaces,
high density of population and overcrowding, or the existence of
conditions which endanger life or property by fire and other causes, or any
combination of such factors, is conducive to ill health, transmission of
disease, infant mortality, juvenile delinquency, and crime, (which cannot
be remedied through construction of prisons), and is detrimental to the public
health, safety, morals, or welfare;
o Blighted area shall mean art area, which (a) by reason of the presence of a
substantial number of deteriorated or deteriorating structures, existence of
defective or inadequate street layout, faulty lot layout in relation to size,
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adequacy, accessibility, or usefulness, unsanitary or unsafe conditions,
deterioration of site or other improvements, diversity of ownership, tax or
special assessment delinquency exceeding the fair value of the land,
defective or unusual conditions of title, improper subdivision or obsolete
platting, or the existence of conditions which endanger life or property by
fire and other causes, or any combination of such factors, substantially
impairs or arrests the sound growth of the community, retards the
provision of housing accommodations, or constitutes an economic or
social liability and is detrimental to the public health, safety, morals, or
welfare in its present condition and use and (b) in which there is at least
one of the following conditions: (i) Unemployment in the designated area
is at least one hundred twenty percent of the state or national average; (ii)
the average age of the residential or commercial units in the area is at least
forty years; (iii) more than half of the plotted and subdivided property in an
area is unimproved land that has been within the city for forty years and has
remained unimproved during that time; (iv) the per capita income of the area
is lower than the average per capital income of the city of village in which
the area is designated; or (v) the area has had either stable or decreasing
population based on the last two decennial censuses. In no event shall a city
of the metropolitan, primary, or first class designate more than thirty-five
percent of the city as blighted, a city of the second class shall not
designate an area larger than fifty percent of the city as blighted, and a
village shall not designate an area larger than one hundred percent of the
village as blighted.
I.PROGRAM DESIGN
The Community’s Needs and Goals
There is hereby declared to be a need for attractive long and short term financing to assist in
the redevelopment of substandard and blighted areas. The purposes of the RLF shall be to
meet or assist in meeting the credit needs of prospective redevelopers in the community.
Loans made from the RLF shall be structured to address the specific needs of each
qualified redeveloper.
The primary goal of the RLF is to leverage private sector dollars in order to expand the
amount of capital available to redevelopers. A successful RLF loan requires a
public/private partnership to provide community leadership, direction and control. The use
of the RLF should be made to strive to complement rather than compete with existing
private sector financing. Local private sector lenders are declared to be the RLF's most
valuable partner in the program. Specific goals of the RLF shall be as follows:
To further the redevelopment of substandard and blighted conditions
existing in the City of Grand Island, Nebraska.
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To make adequate and affordable credit available to qualified
redevelopers which will further redevelopment of substandard and
blighted areas.
To promote and assist the growth and development of business,
industrial, and residential concerns within designated substandard and
blighted areas.
To stimulate opportunity and redevelopment in substandard and
blighted areas.
The goals of the RLF shall be achieved by pursuit of the following objectives:
o To encourage and maximize, through public-private partnerships, the
participation of local commercial banks and other private sector lenders
and investors by providing financing alternatives.
o Participate to the extent necessary in providing long-term and short-
term capital for qualified redevelopers which might otherwise be
denied access to capital.
o Leverage private and public funds for redevelopment of substandard
and blighted areas by start-ups companies or enterprises, expansion of
existing companies or enterprises, and remodeling or existing
companies, enterprises, or properties.
o Work to increase the tax base of the substandard and blighted areas.
o Utilize, when necessary, other federal, state and local programs in loan
packages.
Use of the RLF
The Authority is authorized to receive applications and provide financial assistance to
prospective redevelopers contemplating projects within substandard and blighted areas of
the community. Specific assistance to the redevelopers may be in the following forms:
1.Interest Buv-Down. The Authority may provide a financial incentive to a primary
private sector lender to lower the interest rate the primary lender charges the
redeveloper involved in the project, The redeveloper would work with a primary
lender to secure financing for the proposed project and the Authority would then
make a deposit with the lender which would allow for a reduction in interest the
lender charges the redeveloper. Upon repayment of the indebtedness, the funds
would return to the RLF.
2.Loan Guarantees. The RLF can also be used to guarantee loans. The RLF dollars
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are pledged to secure loans made by a private sector lender. The amount of
guarantee should be determined by an analysis of the risk to the lender. The
advantages of the loan guarantees include: minimal capitalization, maximum
leveraging of funds, and risk sharing.
3.Loan Participations. Participation in a private sector's loan is a third way the RLF
can leverage its dollars, Under a loan participation, a bank or other lender makes
the loan, services the loan and does all of the related paperwork. The RLF
participates by providing dollars to the bank for the loan or, in essence, "buying"
a piece of their loan. The RLF is repaid by the bank as payments are made to the
lender. Using the participation structure is often easier because it requires minimal
staff and reduces risk, because the private sector lender does the work and acts as
the underwriter. This disadvantage is reduced involvement and, hence, control
over such things as project structuring and underwriting, and program marketing.
4.Direct Loans. The direct loan can range from a small portion of the total project
cost to 100 percent of the project, provided that 100 percent financing would only
occur in the rare case. The most popular structure is where the RLF only provides a
portion of the total loan and private sector financing and equity provide the greater
share. This is called a companion loan. Usually the RLF will take a subordinate
collateral position to the private lender. The advantage of the companion loan
structure is that the RLF loan is leveraged and credit risk is shared. Direct loans
generally require more staff resources to originate and service than do the loan
guarantees or participations described below. Such services may be contracted to
third parties; i.e. the private sector lender involved in the project.
II.IMPLEMENTING THE RLF
Funding the RLF
The Authority shall, at least annually, designate funds out of its annual operating budget
for placement in the RLF. Funds from the RLF shall be accounted for separately from other
funds of the Authority. Upon the return of funds to the RLF after providing financial
assistance to redevelopers, such funds shall be deposited with other RLF funds and not co-
mingled with other funds of the Authority. The Authority shall provide an annual accounting
of all funds designated for use in the RLF to the City Council of the City of Grand Island,
Nebraska, together with its annual report as set forth hereinafter.
Staffing the Program
The Authority will be responsible for marketing the program; building relationships;
screening, structuring, packaging, closing, and servicing loans; and disbursing funds.
Current staff consists of only the Executive Director, but the hiring of additional staff, both
professional and/or administrative is foreseeable. In-house or outside training maybe
considered for otherwise qualified individuals. Continual training should occur to improve the
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skill level and motivation of staff. The Authority may contract with federally insured banking
institutions and other entities as the Authority deems appropriate for the structuring, closing,
and servicing of loans or other functions necessitated by the program.
Maximum Private Sector Participation
The RLF is not a substitute for or competitor to your local banks. The RLF is in partnership
with local banks and private investors to collaboratively make credit more readily available
to businesses in the community. The RLF will make loans to viable businesses which may
not be bankable conventionally, and it will structure its financing in a manner which
encourages expanded lender participation.
Technical Assistance
The Authority should identify the technical assistance needs of small businesses and provide
linkages to technical assistance providers, when possible. After a review of a company's
financial condition, the applicant should be referred to the appropriate technical assistance
program, such a small business development corporation.
Eligible Borrowers
The businesses, entities, and individuals assisted should at minimum meet the following
criteria:
Location within or expanding to the substandard and blighted
area.
It can demonstrate a high potential for success.
The project requires RLF participation to go forward as
determined by the redeveloper’s private sector lender and as
required by statute.
It will create public benefit through redevelopment of properties
within designed substandard and blighted areas of the
community.
The owners have committed or will commit time and capital to
the project.
There is reasonable possibility that the RLF will recapture its
investment.
Will alleviate substandard and blighted conditions in
compliance with the Law.
Eligible Use of Proceeds
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RLF funds can be used for the following:
Land costs, including engineering, legal, grading, testing, site,
mapping and related costs associated with the acquisition and
preparation of land.
Building costs, including real estate, engineering, architectural,
legal and related costs associated with acquisitions, construction
and rehabilitation of buildings including leasehold improvements.
Working capital, inventory, furniture, fixtures, machinery and
equipment.
Public Infrastructure costs associated with the project, i.e. streets,
sewer, water, utilities, etc.
Ineligible Use of Proceeds
Loan proceeds may not be used for the following:
Product development costs.
Investments in real estate held for speculative or investment
purposes.
Distributions or payments to owners or shareholders.
Finder’s fees for securing financing.
Payment of Delinquent taxes.
Loan Amounts
The Authority may make loans of any size subject to the availability of funds. Ultimately,
the size of a particular loan is limited by the amount of public benefit that is projected by
the business at the time assistance is provided.
Leveraging
The Authority should strive to maximize the RLF's leveraging of its capital through the
participation of other lenders and other investors, but the participation of the other lenders is
not necessarily a requirement. However, equity is a farm of leverage and should be present
in every project.
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Equity
Almost all projects require some equity from the applicant business. The Authority should
remain focused on the reason for requiring equity in a project -- to ensure the borrower's
financial commitment to the success of the project. When evaluating equity, the Authority
should ask the fundamental and very important question: "What does the borrower stand to
lose if this project is not successful?"
Rates of Interest
Interest rates for RLF direct or participation loans are typically at or below the rates charged
by commercial lenders for similar loans; the lower interest rate is required to make the project
viable. Bank loans typically have interest rates which are variable or adjustable. The
interest rate for the RLF loan should be determined by the need of the particular applicant
and the gap analysis. The Authority should consider fixed rate loans as a means of protecting
the affordability of the RLF loan.
Terms of Loans
Typical RLF loans may extend terms from 1 to 30 years, based on the life of the asset being
financed. Working capital loans generally have a term of three to seven years, the typical
loan for machinery and equipment is five to ten years, and real estate loans range in term
from ten to 30 years. Most loans are structured with a self-amortizing, fixed repayment
schedule. Where the term of the loan exceeds the useful life of the asset being financed, the
RLF will need to document the "appropriateness" for the extended term.
Collateral and Personal Guarantees
As a general policy, if possible, each loan should be secured by collateral adequate to
safeguard the Authority and the RLF. When the Authority is the sole lender in a project,
the Authority should require a first security interest in the assets being financed and any
related collateral. When the Authority is participating with a bank or other lending
institution, the Authority may take a shared first position on the assets being financed or it
may subordinate its lien position (take an inferior lien position) to the bank. In addition, the
Authority should normally file a general security agreement and/or financing statement on all
assets of the company. Liens on other borrower assets should be required where appropriate
to safeguard the RLF and/or the Authority. When real property is taken as collateral, the
Authority would, in most cases, require an appraisal.
The Authority should consider requiring personal guarantees for each loan. The personal
guarantee maybe collateralized with personal assets where available. When deemed prudent
by the Authority hazard insurance on the business being financed and life insurance
assigned to the Authority on the principals of closely held corporations or sole proprietors
should be considered.
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The CRA should endeavor to secure each and every loan with adequate collateral, but the
lack or hard collateral, by itself, should not be a reason to decline a loan. Many small
businesses tend not to have hard collateral on their balance sheets. Their primary assets are
their human resources and their receivables. In situations where company operations are
healthy and cash flow is relatively strong, collateral is of secondary importance.
Application Procedures and Approval Process
Applicant borrowers may be referred by a local lender or be originated directly through
Authority marketing efforts. The Authority should assist each borrower to complete the
application package. The Authority should review the application for overall policy and
eligibility compliance, as well as general.
All approvals should be in writing and should outline the terms and conditions of the loan
and establish a closing deadline. Turnaround time from the point at which an application is
complete to closing should not exceed six to eight weeks.
Conflict of Interest
No member of the Authority, their immediate family or employer, should have any
financial interest in businesses receiving loans from the RLF. Any project which creates
a conflict of interest is ineligible.
Loan Commitments
Upon approval, the Authority should notify each applicant in writing, listing the terms
and conditions of the approval. Loan commitments should be issued within 72 hours of
Board approval. Loan commitment letters should be reviewed by legal counsel and
signed by the Chairperson and Ex Officio Secretary of the Authority.
Loan Closings and Standardized Documents
To be a cost-efficient program, the use of standardized documents and closing
procedures is recommended. Exceptions should be made as appropriate. Prior to
closing, all completed documents should be reviewed for the jurisdiction by legal
counsel.
Disbursement of RLF Funds,
RLF funds should be disbursed on an "as needed" basis and not in a lump sum
disbursement unless business will expend the funds within 30 to 60 days. The Authority
needs to insure that funds are being expended on a timely basis and for the intended
costs. For example, loans used to purchase machinery and equipment or to fund
leasehold improvements should be disbursed as two-party checks, issued to the vendor
and the business.
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III.LOAN PROCESS
Determine RLF Eligibility
The first step in the process of utilizing the RLF shall be to determine the eligibility of the
project under the Law.
The following questions must be answered:
Is the proposed project an eligible use of RLF assistance?
Does the project meet the RLF objectives of redeveloping
substandard and blighted areas of the community?
Is the amount of assistance requested “appropriate”?
Is the Proposed Project Eligible for RLF Assistance?
If the RLF loan is made to a business or individual to carry out a redevelopment project as defined by the Community Development Law, Neb.Rev.Stat.§18-2101 et seq., it is an eligible project.
Is the Amount of Assistance Requested "Appropriate"?
The Authority can determine whether the amount of assistance is appropriate by
following the guidelines:
that project costs are reasonable;
that all sources of project financing are committed;
that the project is financially feasible
that, to the extent practicable, RLF funds are disbursed on a pro
rata basis with other financing provided to the project; and
sufficient public benefit will be received from the expenditure
of RLF funds.
Loan Application Process
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Once an applicant has been identified and the initial screening of the applicant indicates
likely RLF eligibility, the loan application process should be initiated.
The Executive Director of the Authority should prepare a loan report for presentation to
the Authority's Board. The report shall provide the applicable financial information and
information regarding the removal of substandard and blight conditions as proposed by
the project. The loan report prepared should include at minimum the following
information:
borrower’s name, address, telephone number and legal structure;
principal’s or owner’s name, address, telephone number and
percentage of ownership;
brief summary of business and project;
description of financial condition of the business, historical
trends, ability to repay proposed loan, collateral offered and
the capabilities of management;
analysis of project under applicable underwriting guidelines and
determination of appropriateness of amount and terms of
assistance and of sufficient public benefit;
recommendation of the Director, if any;
amount, terms and conditions of the proposed assistance and/or
loan.
Additional attachments may include:
spread of historical financial statements;
financial statements of the business;
personal financial statements;
credit reports (business and personal), if deemed necessary;
appraisal or another form of collateral valuation; and
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other information determined to be necessary.
The Board should discuss the application candidly. Any potential conflicts of interest
between a member of the Authority and the applicant should be stated prior to the
beginning of any discussions regarding the application in questions. The Authority should
base its decision to approve or reject an application on its assessment of the adequacy of
cash flow, the sufficiency of collateral, the capability of management, the overall
soundness of the proposal, and the appropriateness of the assistance under applicable
guidelines, including the adequacy of the public benefit.
Members of the Authority may question the structure or terms of the proposed loan. They
may offer suggestions. Often these issues have already been considered prior to meeting
with the Authority. The Director should inform the Authority of the reasons why a
particular structure or term was rejected. On the other hand, the Board may propose
something which the staff has not considered. Members of the Board should be willing to
lend their credit and business experience to the process.
Notification of Applicant
Whether the Board approves the project as structured, recommends an alternative structure,
or declines the request, the applicant should be notified in writing of the decision. If the
request is approved, the terms and conditions of the loan should be included in a formal
commitment letter. If denied, the reason for the denial should be included in the letter.
Legal counsel shall review both commitment and denial letters to ensure compliance will
all applicable laws and regulations concerning administration of the program.
IV.CLOSING THE LOAN AND DISBURSING FUNDS
Closing an RLF loan consists of several steps:
Commitment letter review;
Document preparation;
Closing the loan; and
Disbursement of funds.
The process should be as streamlined as possible. This includes using standardized loan
documents when possible. Prior to use by the jurisdiction, all loan documents, including
those provided as examples in this manual, should be reviewed by an attorney familiar with
economic development lending.
Commitment Letter Review
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The commitment letter will detail the terms and conditions of the RLF loan. Terms may
include the commitment of other private sector lenders or private investors to the project.
Once all sources of funds have been formally committed to the project, a pre-closing
conference is often helpful. The closing conference (whether by phone or in person) should
cover the requirements and timing for closing each loan.
Document Preparation
Closing the private sector loan shall be primarily the responsibility of the private sector
lender. The Authority may assist by helping the applicant gather the information required by
the private sector lender. Closing the RLF loan is the responsibility of the Authority and its
attorney. A comprehensive checklist of closing documents and whose responsibility it is to
prepare or obtain these items should be drafted. Then lender and RLF closings may occur
separately or together.
An intercreditor agreement which clearly states the lien positions of each lender to the project
should be drafted prior to the scheduled closing. This should help prevent disagreements at
the closing table and provide for a timely closing. An intercreditor agreement commits each
lender to notify the others in the event of problems and outlines other special arrangements
between the lending parties.
Closing Documents
Prior to disbursement of funds for a direct loan, proper loan documentation should be
reviewed by the staff and their legal counsel.
In general, the closing documents may include, but are not limited to, the following:
a.Articles of incorporation and bylaws, or partnership agreement.
b.Corporate resolution to borrow, or partnership agreement and authorization for
borrowing
c.Borrower’s opinion of counsel (that business is a legal entity entitled to borrow
and has no pending litigation)
d.Bank commitment letter
e.Loan agreement
f.Subordination agreement (if needed)
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g.Closing statement
h.Promissory note
i.Security agreement for personal property such as machinery, equipment,
inventory and accounts receivable. This must be perfected with the secretary
with the secretary of state and/or county court, if applicable.
j.Uniform Commercial Code (UCC) statements and UCC lien search
k.Mortgage and deed of trust, if applicable. This must be filed with county
recorder.
l.Personal guarantee(s)
m.Corporate guarantee(s) (where appropriate due to common ownership,
management or control)
n.Appropriate hazard insurance (fire, theft, hazard) and life insurance payable to
lender
o.Title insurance, insuring the RLF in the amount of the loan against liens which
have not been accepted
p.Intercreditor agreement (if needed)
q.Certificate of good standing
r.Evidence of equity commitment
s.Seller’s note (if needed)
t.Lien waivers (if construction is involved)
u.Employment agreement
The loan closing process is not complete until the borrower has submitted all the required
documents as determined necessary by the Authority and/or its legal counsel. Public funds
should not be disbursed until all documentation has been submitted and reviewed. The
loan closing checklist should be used to confirm that all the required documents are in hand.
The completed documents should be reviewed by an attorney representing the RLF prior to
execution. Although the documentation process may have been standardized, changes made
to a document to facilitate a particular borrower's needs may affect the legality or intent of
the document. The attorney should be made aware of any such changes prior to closing.
Filing Documents,
Once all documents have been executed, careful follow-up is necessary to confirm that all
the required filings were completed and are accurate (e.g., deed of trust filings in the county
real estate records and UCC filings).
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Disbursing Funds
The CRA should develop a formal loan disbursement process to ensure that funds are
disbursed in accordance with the loan agreement. Key components of a disbursement process
include:
Pro rate disbursement;
Safeguards for ensuring funds are disbursed when needed for intended purpose;
Accurate and complete recordkeeping; and
Retention policy.
Disbursements should be supported by appropriate documentation to ensure that funds are used
for their intended purpose and that costs were actually incurred and are valid. For example, a
co-payment check to a contractor will protect the lender and the borrower, as well as the
contractor. Costs should also be verified to ensure that costs have not been inflated and that
the collateral is worth its stated value.
It is recommended that the disbursement process include a policy of retention for
construction projects. The policy should establish a percentage of each draw which will be
withheld until completion of the project and until other terms and conditions have been met.
Release of the retention may be conditioned on such things as: sign off of the punch list items
by the project architect and local inspector; clearance of permits; recording of notice of
completion; and title insurance policy endorsements evidencing lien-free completion.
V.SERVICING AND REPORTING
When a loan or other assistance is closed, the Authority enters into a long-term relationship
with the borrower and must make a commitment to protecting that relationship. In order to keep
that relationship in good standing, the Authority should develop a servicing system that allows
staff to anticipate problems and to help solve them. Prudent loan servicing should be one of the
Authority's top priorities. Servicing of the loan or assistance may be contracted with the private
sector lender or other third party.
Reporting Results
The Authority shall provide an annual status report to the City Council and. Mayor, at least
annually as a part of its budget submissions. The report should include loan repayment history,
loan covenant compliance, and other relevant facts.
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Section 18-2107
Authority; powers and duties.
An authority shall constitute a public body corporate and politic, exercising public and essential
governmental functions and having all the powers necessary or convenient to carry out and effectuate the
purposes and provisions of the Community Development Law and sections 18-2147 to 18-2151, including
the power:
(1) To sue and to be sued; to have a seal and to alter the same at pleasure; to have perpetual succession; to
make and execute contracts and other instruments necessary or convenient to the exercise of the powers of
the authority; and to make and from time to time amend and repeal bylaws, rules, and regulations not
inconsistent with the Community Development Law;
(2) To prepare or cause to be prepared and recommend redevelopment plans to the governing body of the
city and to undertake and carry out redevelopment projects within its area of operation;
(3) To arrange or contract for the furnishing or repair, by any person or agency, public or private, of
services, privileges, works, streets, roads, public utilities, or other facilities for or in connection with a
redevelopment project; and, notwithstanding anything to the contrary contained in the Community
Development Law or any other provision of law, to agree to any conditions that it may deem reasonable
and appropriate attached to federal financial assistance and imposed pursuant to federal law relating to the
determination of prevailing salaries or wages or compliance with labor standards, in the undertaking or
carrying out of a redevelopment project, and to include in any contract let in connection with such a project
provisions to fulfill such federally imposed conditions as it may deem reasonable and appropriate;
(4) Within its area of operation, to purchase, lease, obtain options upon, or acquire by gift, grant, bequest,
devise, eminent domain, or otherwise any real or personal property or any interest therein, together with
any improvements thereon, necessary or incidental to a redevelopment project; to hold, improve, clear, or
prepare for redevelopment any such property; to sell, lease for a term not exceeding ninety-nine years,
exchange, transfer, assign, subdivide, retain for its own use, mortgage, pledge, hypothecate, or otherwise
encumber or dispose of any real or personal property or any interest therein; to enter into contracts with
redevelopers of property containing covenants, restrictions, and conditions regarding the use of such
property for residential, commercial, industrial, or recreational purposes or for public purposes in
accordance with the redevelopment plan and such other covenants, restrictions, and conditions as the
authority may deem necessary to prevent a recurrence of substandard and blighted areas or to effectuate the
purposes of the Community Development Law; to make any of the covenants, restrictions, or conditions of
the foregoing contracts covenants running with the land and to provide appropriate remedies for any breach
of any such covenants or conditions, including the right in the authority to terminate such contracts and any
interest in the property created pursuant thereto; to borrow money, issue bonds, and provide security for
loans or bonds; to establish a revolving loan fund; to insure or provide for the insurance of any real or
personal property or the operation of the authority against any risks or hazards, including the power to pay
premiums on any such insurance; to enter into any contracts necessary to effectuate the purposes of the
Community Development Law; and to provide grants, loans, or other means of financing to public or
private parties in order to accomplish the rehabilitation or redevelopment in accordance with a
redevelopment plan. No statutory provision with respect to the acquisition, clearance, or disposition of
property by other public bodies shall restrict an authority exercising powers hereunder, in such functions,
unless the Legislature shall specifically so state;
(5) To invest any funds held in reserves or sinking funds or any funds not required for immediate
disbursement in property or securities in which savings banks or other banks may legally invest funds
subject to their control; and to redeem its bonds at the redemption price established therein or to purchase
its bonds at less than redemption price, and such bonds redeemed or purchased shall be canceled;
Grand Island Regular Meeting - 8/8/2007 Page 19 / 31
(6) To borrow money and to apply for and accept advances, loans, grants, contributions, and any other form
of financial assistance from the federal government, from the state, county, municipality, or other public
body, or from any sources, public or private, including charitable funds, foundations, corporations, trusts,
or bequests, for purposes of the Community Development Law, to give such security as may be required,
and to enter into and carry out contracts in connection therewith; and notwithstanding any other provision
of law, to include in any contract for financial assistance with the federal government for a redevelopment
project such conditions imposed pursuant to federal law as the authority may deem reasonable and
appropriate and which are not inconsistent with the purposes of the Community Development Law;
(7) Acting through one or more members of an authority or other persons designated by the authority, to
conduct examinations and investigations and to hear testimony and take proof under oath at public or
private hearings on any matter material for its information; to administer oaths and to issue commissions
for the examination of witnesses who are outside of the state or unable to attend before the authority or
excused from attendance; and to make available to appropriate agencies or public officials, including those
charged with the duty of abating or requiring the correction of nuisances or like conditions, demolishing
unsafe or insanitary structures, or eliminating conditions of blight within its area of operation, its findings
and recommendations with regard to any building or property where conditions exist which are dangerous
to the public health, safety, morals, or welfare;
(8) Within its area of operation, to make or have made all surveys, appraisals, studies, and plans, but not
including the preparation of a general plan for the community, necessary to the carrying out of the purposes
of the Community Development Law and to contract or cooperate with any and all persons or agencies,
public or private, in the making and carrying out of such surveys, appraisals, studies, and plans;
(9) To prepare plans and provide reasonable assistance for the relocation of families, business concerns,
and others displaced from a redevelopment project area to permit the carrying out of the redevelopment
project to the extent essential for acquiring possession of and clearing such area or parts thereof; and to
make relocation payments to or with respect to such persons for moving expenses and losses of property for
which reimbursement or compensation is not otherwise made, including the making of such payments
financed by the federal government;
(10) To make such expenditures as may be necessary to carry out the purposes of the Community
Development Law; and to make expenditures from funds obtained from the federal government without
regard to any other laws pertaining to the making and approval of appropriations and expenditures;
(11) To certify on or before September 20 of each year to the governing body of the city the amount of tax
to be levied for the succeeding fiscal year for community redevelopment purposes, not to exceed two and
six-tenths cents on each one hundred dollars upon the taxable value of the taxable property in such city,
which levy is subject to allocation under section 77-3443 on and after July 1, 1998. The governing body
shall levy and collect the taxes so certified at the same time and in the same manner as other city taxes are
levied and collected, and the proceeds of such taxes, when due and as collected, shall be set aside and
deposited in the special account or accounts in which other revenue of the authority is deposited. Such
proceeds shall be employed to assist in the defraying of any expenses of redevelopment plans and projects,
including the payment of principal and interest on any bonds issued to pay the costs of any such plans and
projects;
(12) To exercise all or any part or combination of powers granted in this section;
(13) To plan, undertake, and carry out neighborhood development programs consisting of redevelopment
project undertakings and activities in one or more community redevelopment areas which are planned and
carried out on the basis of annual increments in accordance with the Community Development Law and
sections 18-2145 and 18-2146 for planning and carrying out redevelopment projects; and
Grand Island Regular Meeting - 8/8/2007 Page 20 / 31
(14) To agree with the governing body of the city for the imposition of an occupation tax for an enhanced
employment area.
Source:
Laws 1951, c. 224, § 5, p. 801;
R.R.S.1943, § 14-1607;
Laws 1957, c. 52, § 7, p. 253;
Laws 1961, c. 61, § 6, p. 232;
R.R.S.1943, § 19-2607;
Laws 1969, c. 106, § 3, p. 491;
Laws 1979, LB 158, § 3;
Laws 1979, LB 187, § 79;
Laws 1980, LB 986, § 3;
Laws 1985, LB 52, § 1;
Laws 1992, LB 1063, § 11;
Laws 1992, Second Spec. Sess., LB 1, § 11;
Laws 1993, LB 734, § 28;
Laws 1995, LB 452, § 5;
Laws 1997, LB 269, § 20;
Laws 1997, LB 875, § 7;
Laws 2007, LB562, § 3.
Annotations:
The taking of substandard or blighted areas by a city for redevelopment and resale in accordance
with an approved redevelopment plan which is in conformity with a general plan for the
municipality as a whole as provided for in these sections, is a proper public use for a municipality.
Monarch Chemical Works, Inc. v. City of Omaha, 203 Neb. 33, 277 N.W.2d 423 (1979).
~Revised Statutes Supplement, 2007
Grand Island Regular Meeting - 8/8/2007 Page 21 / 31
Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting
Item A1
Agenda
Staff Contact: Chad Nabity
Grand Island Regular Meeting - 8/8/2007 Page 22 / 31
AGENDA
Wednesday August 8, 2007
4:00 p.m.
Grand Island City Hall
Open Meetings Notifications
1.Call to Order Barry Sandstrom
This is a public meeting subject to the open meetings laws of the State of Nebraska. The
requirements for an open meeting are posted on the wall in this room and anyone that wants to find
out what those are is welcome to read through them.
2.Approval of Minutes of July 12, 2007 Meeting.
3.Approval of Financial Reports
4.Approval of Bills
5.Discussion of Revolving Loan Fund as submitted to Barry Sandstrom by KC Henke
6.Review of Committed Projects and CRA Properties
7.Discussion of Possible Purchase of Properties in CRA Designated Areas
8.Directors Report
Update on Redevelopment Plan for Railroad Horns
Update on Blight and Substandard Areas 6 and 7
Set Meeting Date for End of August Budget Meeting
9.Adjournment
Next Meeting End of August ?? For Final Budget Approvals
And September 12th, 2007
The CRA may go into closed session for any agenda item as allowed by state law.
Grand Island Regular Meeting - 8/8/2007 Page 23 / 31
Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting
Item B1
Meeting Minutes
Staff Contact: Chad Nabity
Grand Island Regular Meeting - 8/8/2007 Page 24 / 31
OFFICIAL PROCEEDINGS
MINUTES OF
COMMUNITY REDEVELOPMENT AUTHORITY
MEETING OF
August 8, 2007
Pursuant to due call and notice thereof, a Regular Meeting of the
Community Redevelopment Authority of the City of Grand Island,
Nebraska was conducted on August 8, 2007 at City Hall, 100 E First
Street. Notice of the meeting was given in the August 1, 2007 Grand
Island Independent.
1.CALL TO ORDER Chair Barry Sandstrom called the meeting to
order at 4:07 p.m. The following members were present: Tom
Gdowski, Lee Elliott, Sue Pirnie, Barry Sandstrom. Also present
were; Director, Chad Nabity; Secretary, Barb Quandt; Legal
Counsel, Duane Burns; Finance Director, Dave Springer; Council
Liaison, Peg Gilbert; KC Henke; Cindy Johnson; Steve Riehle,
Public Works Director, joined the meeting as a portion of Agenda
Item #6.
Chair Barry Sandstrom stated this was a public meeting subject
to the open meeting laws of the State of Nebraska. He noted
that the requirements for an open meeting were posted on the
wall easily accessible to anyone who would like to read through
them.
2. APPROVAL OF MINUTES. A correction was noted in Item #4 of
the July 12, 2007 CRA Meeting Minutes regarding the incorrect
spelling of Pirnie. A motion for approval of the Minutes for the
July 12, 2007, CRA Meeting, as corrected, was made by Gdowski
and seconded by Pirnie. Upon roll call vote, all present voted
aye. Motion carried unanimously.
3.APPROVAL OF FINANCIAL REPORTS. Dave Springer briefly
reviewed the financial reports for the period of July 1, 2007
through July 31, 2007. He noted revenue in the amount of
$111,093 and expenses of $107,389 for the month. The total
ending cash was $1,091,341. Sandstrom had questions
concerning property taxes and the Gili Trust bond principal and
interest. Springer will look into it and report back. Motion by
Pirnie, second by Elliott, to approve the financial reports. Upon
Grand Island Regular Meeting - 8/8/2007 Page 25 / 31
roll call vote, all present voted aye. Motion carried unanimously.
4.APPROVAL OF BILLS. The bills were reviewed by the Authority.
Motion by Elliott, second by Pirnie, to approve the bills in the
amount of $268,257.02. Upon roll call vote all present voted
aye. Motion carried unanimously to approve the payment of bills
in the amount of $268,257.02.
5.DISCUSSION OF REVOLVING LOAN FUND AS SUBMITTED TO
BARRY SANDSTROM BY KC HENKE. KC Henke spoke to the
Authority regarding a Revolving Loan Fund. He reported that
the use of a Revolving Loan Fund has been successful in
Hastings and that the Lied Main Street program supports this
program. Nabity reported on his conversations with Randy Chick
from Hastings regarding their experiences and means of funding
a Revolving Loan Fund. Henke stated that work has begun on a
pamphlet that would describe the various funding opportunities
available for prospective developers. A discussion was held to
determine ways for prospective developers to access funds that
would help them with infrastructure needs. It was determined
that another method, the interest buy-down option, could
accomplish the same goal of making funds available for the
infrastructure needs. This method would require a modification,
or amendment, to the Redevelopment Plan. Legal Counsel,
Duane Burns, will research the legal issues and report back to
the Authority.
6. REVIEW OF COMMITTED PROJECTS AND CRA PROPERTIES.
Nabity briefly discussed the committed projects and CRA
properties. Central NE Humane Society has been paid. The
Housing Study is not expected for a few months. The JEO
Building is finishing up. There seems to be no activity with the
Romsa Real Estate Center. The work on the Harmony Building
continues. Hall County sent out a request for bids to tear down
their building once again. A few proposals have been sent out
for the Star Motel property, with none being returned at this
point.
7. DISCUSSION OF POSSIBLE PURCHASE OF PROPERTIES IN CRA
DESIGNATED AREAS. Nabity reported that he had not heard
anything new with the property located on Yund Street. He had
contacted the owner/representative and presented her with the
suggested offer, with no response. There is nothing new with
Grand Island Regular Meeting - 8/8/2007 Page 26 / 31
the property located at 211 E. First Street. The work on the
Harmony Building continues.
8. DIRECTOR’S REPORT. Nabity reported that the Area 6 Blight
Study will go to City Council for referral to the Regional Planning
Commission on August 14, 2007. It is anticipated that City
Council will refer the Study to the RPC. The RPC will hold a
hearing on the Study at the September 5, 2007 meeting. If
recommended by the RPC, it will go back to City Council at the
end of September for their approval. If approved, a generalized
redevelopment plan will be brought before the CRA in October.
The Regional Planning Commission recommended approval of
the Area 7 (EDC Study). This Study will go to City Council on
August 28, 2007.
A special CRA meeting will need to be set for either the last
week of August or the first week in September for the Budget
Public Hearing and a Resolution to set the levy. This will be a
very short meeting held at 8:00 a.m.
Nabity distributed a draft for the start of a Grand Island
Redevelopment Plan for the Railroad Corridor Noise Abatement
in CRA Areas Numbers 1 and 4. This draft contains some fairly
firm cost numbers. It is estimated that the cost will be around
$480,000 for this project, which includes six intersections. The
Plan will have a timeline and will include a couple of maps, as
required by State Statute. It is expected that this could
possibly come forward as soon as the September 12, 2007
meeting. This Plan would take place over two years, with the
City and CRA sharing equally in the cost. Steve Riehle
presented a video which demonstrated the comparison of the
wayside horns and the train horns.
9. ADJOURNMENT. The next meeting will be scheduled for the end
of August at 8:00 a.m. The next regularly scheduled meeting
will be held on September 12, 2007 at 4:00 p.m. Chair
Sandstrom adjourned the meeting at 5:35 p.m.
Respectfully submitted,
Chad Nabity
Director
Grand Island Regular Meeting - 8/8/2007 Page 27 / 31
Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting
Item D1
Bills
Staff Contact: Chad Nabity
Grand Island Regular Meeting - 8/8/2007 Page 28 / 31
8-Aug-07
TO: Community Redevelopment Authority Board Members
FROM: Chad Nabity, Planning Department Director
RE: Bills Submitted for Payment at August 8, 2007 CRA Meeting
The following bills have been submitted to the Community Redevelopment
Authority Treasurer for preparation of payment.
City of Grand Island
Administration $1,250.00
Accounting
Grand Island Independent $182.32
Monthly & Redevelopment Plan Notices
Mayer, Burns, Koenig & Janulewicz $350.00
RDG $8,124.70
Invoices #19538 & #19539
Central Nebraska Humane Society $258,000.00
Leggott Appraisal Services 350.00
Appraisal - 616 East Yund St.
Total:
$268,257.02
Grand Island Regular Meeting - 8/8/2007 Page 29 / 31
Community Redevelopment
Authority (CRA)
Wednesday, August 8, 2007
Regular Meeting
Item E1
Committed Projects
Staff Contact: Chad Nabity
Grand Island Regular Meeting - 8/8/2007 Page 30 / 31
COMMITTED PROJECTS AMOUNT ESTIMATED DUE DATE
Central NE Humane Soc.$258,000 September? 2007
Housing Study $8,250 December 2007
JEO Building $117,000 June 2007
Hall County $37,500 Fall 2007
Romsa Real Estate Center $75,000 Fall 2007
Harmony Bldg. 224 W 3rd
Street
$68,482 Fall 2007
211 E First Purchase $33,702 Fall 2007
Total Committed $597,934
CRA PROPERTIES
Address Purchase Price Purchase Date Demo Cost Status
203 E 1st St.$68,627 10-09-02 $23,300 Surplus
217 E 1st St $17,000 03-20-03 $6,500 Surplus
408 E 2nd St $6,000 11-11-05 $7,500 Surplus
2707 and 2709
S. Locust
$155,740 12-30-05 $15,339.23 Surplus
July 3, 2007
Grand Island Regular Meeting - 8/8/2007 Page 31 / 31