VI.1. Hennepin County Agreement for Design Assistance and Façade Loan Program; Elverum (CR2015-073)June 10, 2015
Council Report 2Q15-073
HENN�P[N G(�UNTY AGREEMENT FOR DESIGN ASSISTANCE
AND FACADE LOAN PROGRAM
Proposed Action
�taff recammends adoptian of the following motion: Move to authorize staff to neqotiate and execute
an aqreement with Her�nepin County to provide f�nds for a Downtown Hopkins Facade Loan
Proqram, su�iect ta Citv Attorn�v re�iew.
With this motion, an Agreennent will be negotiated and executed and program guidelines bro�ght
back to the City Council.
O�erview
Hopkins Mainstreet has survived numerous retail cycles because the community has valued and
preserved it. This has not always been easy. Bui, through protective zoning and continued
investment, along with its natural charm, it l�as survived and in some spots has flourished.
Recent investment in a few properties points to a resurgence. But many of Mainstreet's small
�usinesses are still recovering fram the recession and ha�e limited funds to make similar
improvements. In some instances the buildings are tired and project an image of n�gleet. In order to
build on recer�t success, prepare for the SW LRT line, and create more pedestrian activity, many o�
t�e starefronts could use better transparency, signage, and overall aesthetic enhancements.
Thraugh a series of interventions, including a proposed Design Assistance and Facade Loan
Program, the goal is #o make sure that all businesses are able to survive this summer's construction,
stabilize their income, and flourish in a vibrant, diverse, and resilient business district. Hennepin
Country, through funding from McKnight Founctation, is fnterested in funding a pilot facade pragram
up to $100,000. The McKnight funds are intended to conr�ect transjt, jobs and workforce
development at pilot areas along the Southwest LRT kine. The City would need to provide local
support through the design assistance camponen�, with ar� es#imated cost of $5,OD0.
Primarv Issues ta Consider
• What are the program elernents af the Design Assistance and Facade Loan Program'?
• Wha# would be the pracess far implementing the Program?
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Kersten erum
Director f Planning & De�elopment
Financial Impact: $5,000 Budgeted: YIN N Source: Related Documents (CIP, ERP, etc.};
Econamic De�elopment Account
Council Rpt. 2015-D73
Hennepin Co. Agreement
Page 2
Analvsis of the Issues
• What are the program elements of the Desigr� Assistance and Facade Loan Program?
Desiqn Assistance
The purpose of the program is to encourage great design, make prop�rty owners aware of the
�aossibilities for thei� property and to incenti�ize improvements to building facades within the central
business district in order tQ preserve and grow existfng businesses, and enhance the pedestrian lure
and vibrancy af the downtown.
It is estimated that �p to ten praperties would receive design assistance at a cost of $5,OOD.
Loar� Prograrra
The program would offer a matching forgivable loan for 50 percent of the cost of construction. The
funds wauld be put in an escrow account and drawn down on a 50150 basis. The loan would be
forgiven at a rate of 10 percent per year. ff the prope�ty is sald within the 10-year loan te�m, the
balance of the loan would be required to be paid back. The funds would be secured with a mortgage
against the property. After 10 years, the loan would be forgiven in its en#irety.
The minimum loan amount is recommended to be $S,OQa (total project cost of $10,Q00); the
maximum loan $30,0�0. It is anticipated that for the pilot project, there would be five loans at an
average of $20,aoo, for a loan program cost of $100,000.
• What would be the process for implementing the Program?
The following is the proposed process for the program:
Mest with the property owner (and b�siness owner if applicable) to identify the desired
improvements and approximate budget. To help witf� the Design Assistance Program, staff
approac�+ed a new Hopkir�s business, Wilkus Architec�s, ►rvith the idea of providing their
expertise to Mains#reet businesses. As a corrimercial architectural firm, Wilkus is an ideal
partner and has offered a reduced rate for their s�rvices.
Develop design concepts for facad� and rear entrance improvements that meet the intent of
the Ci#y of Ho�kins Design Standards and Guidelines w�ile meeting the �wner's objectives.
Review the design concepts and preliminary budget with the propertylbusiness owner and the
City of Hopkins program managEr. If interested in pursuing the improvements, the owner
would be required ta deposit funds for the development of construction specifications. The
deposit would be applied to th� owner's shar�e of fihe project cost if the project moves forward.
Develop specifications, assist in obtainirtg bids for the work.
If the owner decides to move farward, they would secure funding fior the remaining 50 percent
of the work. Once secured, an escrow fund would be established and mortgage and
promissory note would be executed. The wark would be completed and funds drawn down as
needed.
Detailed program guidelines will be drafted and brought back to the Council for future action
Council Rpt. 2015-073
Henn�pin Co. Agreement
Page 3
Alternatives
The City Go�ncil has th� following alternati�es in regard to this item:
• Authorize �taff to negotiate an agreement wfth Hennepin County for the project funds and
authorize its execution upon City Attorney review.
• Authorize stafF to negotiate an agreemenf with the condition the agreement be brought back to
the �ity Council for appro�aL This may delay the availability of project fun��.
� Elect not to proceed at this time.