Memo-HBCA Local Business Survey
e PLANNING &
ECONONfiCDEVELOPMENT
Memorandum
To: City Council ~ "I
From: Jim Hartshorn, Economic Development Coordinator ,\ ,
Date: September 20, 2000
Subject: HBCA Local Business Survey
Attached is a copy of an HBCA Local Business Survey. The results will be discussed at the
Council Work Session, September 26. Herman Strauch, Vice President of the HBCA, will be on
hand to discuss the survey results and what the HBCA plans to do with the information.
.
.
memofonn
Hopkins Business & Civic Association
Local Business Survey
I .lrvl'Y i~: t1c,~lglll:d ru ,tddrt,~s or'ccific [oLa[ business umcc:'IIS to h<~ne: lIndersumd lucal mmkeL ,]~sues, The,:;urvey is cClnfidt'nti~d and
I:" , ,II11J(lrnl;lI.It'n I:; \\nly asked ro ensure cOlllplcre mfOrmal.lon In formlllg:1 collecllve d~ltab~lse, [hank you tor yuur time and mu:ntlr)n
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_unL__.. j'lIhllc Sf'rvices __,i')';:J Crc()graphic I()cmion __/!i2....... T!elTlllgraphics
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_,_,__L2._.., III n"SIIlH'nt:, -1..1:__,. LaW\lUlIT/Lmdscaping ___3_,_ l\'k,1 i~lticm S\:T\-in's
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&"",_ /\tt"'lTl<:'\'/L<:,~~ll (\'ll1l::l.j )~? Banking ,____5r> .. Cltc'ring
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&'::'- -- M",]ic:d (.; Lr )V[ute Is/Hote I 0 _,Jf1_~.. Office Surplil'~
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OG/27/2000 08:48 5129389272 PAGE 02
-1 HRve yQll had any specific clifHcull:y with any of the following services? (Check all that afJPly)
,_.-L3~~ Electric .;{ Gas /.) Police
_n_.2.~,-ic-- Street ,.~-~~_ Zoning 0 Fire
....1.'--1 .~ Permits Rnd Licenses _..L-~ Sewer 3 Water
--~ Odwl' '7) '-.. . .
If other, please explain: facLJlqJ~:1S5fr:S I /); pUmIT"::> s;.,.j IIV ('PS ,~ .(;.' 'Pi ,:;> s i-T{. ([-~E.'i'LLl[S._l_~,1/(;s.:.LJf!JJ
~bU11 fumiPDl-"':'i~:'?.vt~~,>~r~<-!""dCi('/~~P,!.:k::f,.d)lf'1'Sj/ll:tl~:r:> 0) ,~ Sl~l(,,':l ~!{-(' ptk, d/i.JI~t:.1 iI),,'r-(.'(;~cI,'.M'.)-f~
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I 5J; U {loa ,71<M '1 (C' (Ltili Ie' -(--I-) / dJ;.) ;r f-'\) 0/((:: r () f <, . 5 'J h,,- ,',re ~ (,7 CeA.; Ala If.. o6u:.'''' s.- /?
f" ~\~c YOl.l3W3l'e that thc City oC Hopkins offers 8 low interest commercifll rehabilitation progrmn for qualified sJmH businesr.er.?
__HI. yes.-._k::l.L_ no I'Jo dtJSu...: r:: (" _.!:I~
G, In g'cneral, how is yOllr business outlook for the next one to two years? (CirciR 1I resl}onse)
A, Excellent W B. Guml 1,,~ C. F8ir I J D. Poor Z /J () ? J.) ) I.V~ r If
7, At YDur faCility, what do you plan to do in the next two years? (Cirde one for each resj)ome)
A- Change your mix of gooch and service~ Yes 31 t.j. . -- ) 1"\
No :;.; N/A (!\
r/
15, Add pwduction or product line Yes 2~ No 5? N/A tl
c. Inctease productioll or prodllc:t capabillty Yes if I No23 N/A Jq
D, Mok other capitClI i.tnprovements to building ete. Yes 30 No61", N/A i~
E. Expand research and devdopmcnl spending Yes f.p No6~ N/A z 5
f Increase empk'yment Yes 'i f) No3! N/A I
\,3, DCCJ.l~a:;e employment Yes! Noq" N/A 7
1. EX[18nd elsewhere Yes / () No 4> ( N/A 0
J, RdoCfllC 811 or pan of your operation elsewhere Yf.S (1 No/P?; NfA '5
. Cd: () f-I fU :. ~~I f'.k: 8
\/h31: hqsiness aSSlSiance would you hke to see Lhe city or the USll1ess COltllIlllniLy provide!
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(), Would y{)u he int~reSled in meeting with ;l replesemarive nom (he city or business cumrn)c!pity concerning some o[ the issues laised in ,
,
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Ihis ~urvey? 'H,.L__.L:.::._ es y', 0 I'~,_ r ,'. -," .,'-' ',_ _ ~."__
I (1, How long h<l\.-e yOll been in bushl ess i 11 H ol,kl11s? (J -7- I t'J f.c':'U:) 2:; I' /<iLj 'I I ..,1
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II, Do you uv:t\ a commercial building or rent! (Cirde one) I:) () I tl(~. ,:J ,L; (J " ,u::-' c., (,_
[~:, What do you like ClhoLlt the City of Hopkins? .~~ .--.- rr.'....._...
-- -- ..--,-- _._ u_____
i 1 Wha, don't ynu liJ,(~ about the C:ity of Hopkins?___ - .n ~~~._
c _~~_._._._,.~. ..-..- _.- . O'C__ ,~. -~,._.. - ---.---....
l/,}. Are yO~l ;J member uf n Civic or Busilless Organization? Yes No Which oncs?.11}3C i~ - 3:2 7;"",,,I,,_}(,,J- 72. (", I
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1). Do you feel that I he City ha~ 'Ill ow'rall positive bmincRs c1imarc?__..__.._n_ If !lot, how could it hE' improved 1
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Thank You
Hopkins Business & Civic Association
Local Business Survey
III i; 'il.lrVq i~' lk,;ignu 1 r,) JHrc~~s specific: locClI lousiness CU\1cerns tu hener understand lc)cal market issues, The survey i:; c, 'nfic1enti,J! ell_
!,:c'lwlal inJ('rm;lli'\I\ j~ \)nly ;1-kc,J to enSul'l' cumplete in(ornl(ltl('ll j,n forming a collective dmab,loc', Thank Y"ll Jur y()u\' time ~m,l anenti'-
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\\ hid, t:I,,'I', ',"' il1l1lll'l1lcil YUlIr decisi(1J1 In lUG1l(' yuur businos in [Iurkin,7 (Check nU ,hilt ajllJ1y)
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';, \\lLi,'ll "I ,];i,C h>!ll',"\ing d" :':<'11 nill i1~e in I1(Ij'killS) (U"'11/ rl1ornt'llh'! ~
~-S-J- A':I.'IIUill'IIl,C: c,:5-_1~ i\.-JnTtisll1L;" m_ 'l ?J ~ Architects
_ (';' "~I __ /\il,-'rnr-'v/L('g.d Cuunscl,? 2_ B;mking ~~ C;1tering
_,J..:' Z~_n_ 1".'I(~:iI'liTl:Jl:lI1it('ri"l _JJ~ Clerical 7?-1 Cmllllwnk'llic'n Equipment
_..L_L~,... (:(1'111'111(:1' St'J'\'ice:' ~f.r.Y_ C\IIISLr\lcli(1n &0~_ Dellt~d
,__,..1,(..'_ EnLClT,Jmil,('1lt ~'Z,2- F\(!li,r, ~ Freight: .
_ _,,"J H:1n]\';,IIT ~_G 1::, __ Indusrrial Eq, & :-;\lpjJlies _n~__ Insurance
_d :::'___ ~ll\'(',mll'll\:; ~ Cr~ l.:1wllc~n:i[_:11IJ,c:lping ---1:12...,.-- ~1cdjat:(m 5'"1'\'IC<:';
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'~r..':'... r ',IID,jn::;1 e"rin~~ICI_") Lng ____i..2... 1 rinlin!1 ~J.._ Recd\(m;
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_,_I>2_J.... \V:lr"h'lIl;C ~ C:i.... OdH:r
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. PLANNING &
ECONOMIC DEVELOPMENT
Memorandum
To: City Council 9 7 '
From: Jim Hartshorn, Economic Development Coordinator ( ,
Date: September 20, 2000 ,
Subject: Commercial Rehabilitation Loan Program Update
As previously requested, staff was asked to provide an update on the activity of the Commercial
Rehabilitation Loan Program.
So far this year, there have been no commercial rehabilitation loans processed, Two applications
were sent out but not returned. The first applicant commented that he felt the legal fees were too
high, and the second applicant stated that the bank was willing to provide all the funding and he
no longer needed the loan. Attached is a copy of the program. The HBCA will also review this
program at the next HBCA Economic Development Committee meeting and make
recommendations at a later date.
. Possible reasons for the low number of applicants include:
. Interest rates through private lending institutions have been favorable all year
. The facades of many of the commercial buildings have now been upgraded and there may
not be a need
. The program needs additional marketing (brochures were sent to all banks and real estate
professionals and advertised in the HBCA newsletter several times throughout the year)
Possible alternatives for the program:
. Extend the boundaries. Staff would not recommend this alternative based on the fact that
there is limited dollars and the oldest commercial buildings are located in the immediate
caD
. Possibly tie the Commercial Rehabilitation Program to the Property Owner's CBD
Inspections Program as a matching grant program, which would still be used only for
facades
. Leave the program as is. There will probably be more need for this program once interest
rates increase. This program is funded through the economic development fund, which
has limited dollars. If there is a willingness as has been demonstrated over the last few
years, for property owners to upgrade there buildings with private financing this would
seem to be a logical approach to continue.
. Drop the program.
.
memofonn
PROCESS SUMMARY FOR
THE HOUSING AND REDEVELOPMENT AUTHORITY
. COMMERCIAL REHABILITATION LOAN PROGRAM
*****************************************************************
This program is designed to provide low interest financial
assistance to businesses to upgrade and improve the exteriors of
commercial properties in the city of Hopkins. Summarized below
is a list of steps to be completed to process the Commercial
Rehabilitation Loan Program application, Attached are copies of
the guidelines and application forms,
1) Applicant meets with City staff to discuss the proposed
project.
2) Applicant submits preliminary draft plans and sketch
drawings, which are to be completed by a registered
architect or design professional.
3) If a lending institution is to be the primary lender,
during the review of plans the applicant is to meet
with the lending institution to arrange for preliminary
financing approval. The bank is to work in cooperation
with City staff throughout the approval process.
. 4 ) Applicant submits completed application along with
$150.00 to City staff to conduct an analysis of the
applicant's ability to repay the loan.
5) Drawings, plans, and specifications will be reviewed by
the City of Hopkins Building Inspections department,
planner, and other City staff. If necessary, written
recommendations will be made by City staff for
modification of the proposed plans.
6) An inspection of the building will be completed by the
City of Hopkins Building Inspections department,
Written comments will be provided to the applicant
based upon this inspection.
7 ) Private financing must contribute no less than 50
percent of the total project cost, Proof of private
funding approval is to be obtained before approval of
Commercial Rehab Loan.
8 ) Applications will be evaluated and considered by City
staff for final approval,
. 9) Upon receipt of necessary approvals, staff will provide
a letter to bank and applicant.
- 1 -
,IHI REHI\Bg ~ A
10 ) Document Preparation - If matching funds are being
. provided by a lending institution, a commitment letter
is to be provided to the BRA indicating amount of loan,
interest rate, security and collateral, and repayment
term.
11 ) Applicant is to secure necessary building permits and
any other applicable permits.
12) Closing Costs - Applicant is required to pay all
closing costs along with an up-front origination fee,
which is due at the time the application is submitted.
13) Work begun prior to final approval will be ineligible
for financing under the guidelines of this Commercial
Rehabilitation Loan Program.
14) Repayment of principal and interest 1S to begin on a
month and date agreed upon by applicant, City, and
bank, at the time of closing, but no longer than one
month after completion of the improvements.
Please fill out entire application and send to:
Jim Hartshorn, Economic Development Coordinator
. City of Hopkins
1010 First Street South
Hopkins, MN 55343
612-939-1359
..2-
.
,1HI REHAB9~A
----
COMMERCIAL REHABILITATION LOAN
. PROGRAM APPLICATION
Applicant's name:
Home address:
Home phone:
Business name:
Business address:
Business phone: Tax J.D. #
Form of business organization:
Description of business:
Date established:
. Current number of employees:
Number of employees after expansion:
Name of bank providing matching funds (if applicable):
Name of Loan Officer: Phone #
Name of other resources providing funding:
Name of contact: Phone #
Name of Insurance Company:
Name ofInsurance Representative: Phone #
Name of Attorney: Phone #
Name of Accountant: Phone #
.
JHfR,HI\B9QI\
Comm. Rehab. Loan Application - Page 2
. L Attach a document (scope of work) detailing the work to be completed, estimated costs, and
any other supplemental information necessary for adequate review of the project.
2. Have you or any officers of your company ever been involved in bankruptcy or insolvency
proceedings? Yes No , If so, please provide the details as a separate exhibit.
3. Are you or your business involved in any pending lawsuits? Yes _ No If yes,
please provide the details as a separate exhibit.
4. Do you or your spouse or any member of your household, or anyone who owns, manages, or
directs your business or their spouses or members of their households work for the
Community or hold an official position with the community? Yes _ No If so,
please provide the name and address ofthe person and what department employed,
Employee Name:
Department:
Employee Address:
I!WE CER TlFY that all information in this application is true and complete to the best of my/our
knowledge and are submitted to the lIRA so that the HRA can decide whether or not to grant the
. loan. Vwe agree to pay for or reimburse the HRA for the cost of surveys, title or mortgage
examinations, appraisals, etc., performed by non-City personnel provided Vwe have given my/our
consent.
Signature Date
Signature Date
Signature Date
Signature Date
.
JH/REHI\B94A
COMMERCIAL REHABILITATION LOAN PROGRAM
.
I. Loan Terms and Conditions:
A. The Housing and Redevelopment Authority (lIRA) loan (maximum $24,999) will be
matched by private funds on a dollar-far-dollar basis.
Example:
lIRA Commercial Rehab. Loan $ 24,999
Private funds $ 24.999
Total improvements $ 49 998
B. Loan Maximum - No loan shall exceed 80 percent of the market value of the property
upon completion of the rehabilitation (based upon proposed cost of improvements), less
the outstflnding balance of any prior encumbrances, The maximum amount of any loan
will not exceed $24,999.
C. Loan Minimum - The minimum amount of any loan will be $10,000,
D. Interest Rate - The interest rate on loans provided through this program will be 3 percent
. below prime rate compounded on an annual basis. Interest rate will be based upon the
prime rate on the day of closing as published in the Minneapolis Star Tribune.
E. Term - The maximum term cannot exceed 10 years, The City of Hopkins staff will
determine the appropriate term based upon the amount of the loan and a pro-forma
analysis of the project.
F. Collateral - The BRA will determine the appropriate collateral based upon the following
parameters:
* The HRA lien position will usually be subordinate to a bank.
* Liens will generally take the form of a mortgage on the improved property
* Building tenants are required to provide evidence that the building owner agrees to
provide a mortgage as collateral for the lIRA loan. Otherwise, tenants are
required to provide collateral in an amount and type which is deemed acceptable to
the HRA
G. Late fees will be imposed based on a percentage ofthe loan amount.
H Approval Process - All loan requests will be evaluated and considered for approval by City
of Hopkins staff, unless special circumstances dictate otherwise.
. 1. Environmental Assessments - The HRA reserves the sole right to deterine whether Phase I
and Phase n environmetnal assessments are required,
- 1 -
A mortgage document will contain an indemnification provision to protect the HRA
. against any potential undiscovered environmental and/or hazardous waste contamination
of the property.
II. Elieibilitv Criteria:
A. Building/Applicant:
1) Building must be located within the boundaries identified on the map attached to
this document Exhibit A.
2) Building must contain sman or medium sized commercial or retail businesses, and
have a principal commercial or retail character.
3) Building must not be one that is identified by the HRNCity for possible acquisition
as part of a pending or proposed redevelopment project.
4) Building and businesses within the building must be "conforming uses" under the
Citis Zoning Ordinance.
5) Plans and specifications submitted must be in conformance with the Uniform
Building Code, all Hopkins City codes, and subject to review and approval by the
Hopkins Chief Building Inspector, Improvements to the building must comply
e with all applicable code, permit, and license requirements.
6) An eligible applicant must either be a building owner or tenant within the approved
program boundaries,
7) Applicants must be an acceptable credit risk as determined by the City of Hopkins
staff and be able to demonstrate the ability to repay the loan, The following
information must be provided by the applicant:
* Balance sheets and profit and loss statements for the last three fiscal years
* Past three years of business and personal tax returns
'" Personal financial statements on all borrowers
* Commitment letter and credit analysis from lending institution when
applicable
'" Environmental review when applicable
8) Applicants must certify that the building is insured for full replacement value
throughout the term of the loan.
9) Applicants are required to wait a period of 3 years prior to submitting a second
Commercial Rehab, Loan application.
.
- 2 -
R Costs:
. 1) Exterior Improvements:
>I< Improvements to the front, rear or sides of a commercial building.
>I< Cleaning, painting and staining of exterior surfaces.
>I< Masonry repairs.
>I< Repairing or replacing of cornices, entrances, doors, windows, decorative
details and awnings.
>I< Sign removal, repairing or replacement,
>I< Building identification,
>I< Other items that are viewed necessary to complement exterior.
* Repair of parking lots, including lighting, surfacing and landscaping. (no
new construction)
>I< Other miscellaneous improvements to the exterior as determined
appropriate.
2) Miscellaneous (to be paid by applicant):
'" Attorney fees related to proposed project
>I< Appraisal fees
>I< Credit reports
* Abstract and filing fees
. >I< Mortgage registration fees
* Title insurance premiums
>I< Service charges
>I< Fees for credit approval
>I< Building permit fees and inspections
* Environmental surveys
* Architectural and engineering
* Enerb1J' audits
* Architectural design services for plans and specifications
Staff will provide approval of exterior design plans.
3) Ineligible Items:
The following are ineligible costs under the City's Commercial Rehabilitation Loan
Program:
* Roof improvements
* Interior improvements
* Additions and expansions
>I< Refinancing
>I< Non-fixed improvements
>I< Working capital
. >I< Inventory
* Sweat equity (applicant's own labor and performance in completing
construction or improvements)
'" Improvements completed prior to loan closing
- 3 -
------
ill" Contractin!!: and Construction:
. A. Staff and the HRA may request additional supplemental information necessary for
adequate review of the loan request. In addition, the applicant will also grant permission
for City staff to conduct a complete inspection of the property to which the improvements
are to be made,
B. Contractors and all sub-contractors providing work under this program are to be licensed,
and must meet the insurance and bonding requirements of the City of Hopkins. The
contractor and/or sub-contractors are to be responsible for quality and workmanship,
proper conduction of business practices, and financially capable of completing the required
work items,
C. The quality and progress of the work is to be monitored throughout the term of the
contract by the loan recipient, general contractor, and City staffwhen appropriate.
D, Payment requests (partial or full) cannot be made by the contractor until a written request
for payment is made by the loan recipient and City staff has accepted the eligible
improvements in writing, Periodic draws will only be allowed on a monthly basis, and will
be limited in amounts to the value of materials furnished and/or services performed up to
the time of request. All payments may be subject to 10 percent retainage which will be
used to correct unsatisfactory work and/or defray costs to obtain a replacement contractor
. to complete the required improvements.
E. Contractor is required to furnish lien wavers at the time a payment is made by the HRA.
F. Change orders are required to be approved by the bank, lIRA, and owner.
G. All necessary permits and approvals of appropriate agencies are required to be fulfilled,
H. All improvements are required to be inspected by the City of Hopkins Building Inspections
department in order to ensure conformance with appropriate codes, and must be verified
for proper completion by City staff prior to final payment. Final inspection cannot be
scheduled until all permits have been signed off by field inspectors,
1. Contractors and sub-contractors are required to provide a 12-month warranty from the
date of completion on all improvement work. Warranty is required to cover the quality of
materials and workmanship, The BRA is not a guarantor of the proiect and. as such. is
not responsible for complaints of unfinished or defective workmanship or products.
IV. Loan Closin!!:
A Documents:
. The following loan documents are to be executed by the borrower as a condition to
funding the Commercial Rehabilitation Loan, In appropriate instances, certain loan
documents may be waived, but at the sole discretion of the HRA. All loan documents
- 4 -
shall be prepared by legal counsel for the HRA and shall contain such terms, conditions,
. and provisions as are required by the HRA and its counsel. The borrower shall pay all
attorneys' fees incurred by the HRA in connection with the approval. processing and
closing of the Commercial Rehabilitation Loan:
1- Promissory Note. A Promissory Note in the full amount of the Commercial
Rehabilitation Loan.
2. Mortgage, Security Agreement and Fixture Financing Statement. The
Mortgage, Security Agreement and Fixture Financing statement shan contain an
environmental warranty and indemnification agreement whereby the borrower
indemnifies the HRA from any and all liabilities associated with hazardous
substances, contamination or environmental concerns affecting the secured
property,
3. Assignment of Leases. (optional) An Assignment of Leases assigning all leases
affecting the secured property as collateral for repayment of the Commercial
Rehabilitation Loan.
4. Estoppel Certificate, Subordination Agreement ( optional). Estoppel
Certificate(s) and Subordination and Attornment Agreement(s) from each tenant of
the subject property. These documents show that the lease is current and that
there are no other leases before the HRA's,
. 5. Guaranty Agreement. A Guaranty Agreement from each required Guarantor of
the Commercial Rehabilitation Loan.
6. lntercreditor Agreement. If the Commercial Rehabilitation Loan is to be
subordinated to any prior mortgages, the borrower, prior mortgage holder and the
lIRA shall execute an Intercreditor Agreement or Subordination Agreement
containing such terms and conditions as shall be required by the HRA including,
but not limited to, the prior mortgage holders' consent to the Commercial
Rehabilitation Loan and such other provisions as shall be requested by the HRA to
protect the security of the Commercial Rehabilitation Loan.
7. Dee Financial Statements. Uniform Conunercial Code Financing Statements
perfecting the security interest granted to the HRA in any personal property to be
pledged as collateral security for the Commercial Rehabilitation Loan,
8. Security Agreements. If the collateral for the Commercial Rehabilitation Loan is
personal property, a Security Agreement granting the HRA a valid first security
interest in such collateraL
9. Landlord's Agreement. If the collateral for the Commercial Rehabilitation Loan
. is personal property located on the premises owned by a party other than the
borrower, borrower shall be required to provide a Landlord's Agreement from the
- 5 -
property owner acknowledging the lIRA's rights in the collateral, including the
. right to enter the property on which the collateral is located for the purpose of
assembling and repossessing such collateral.
10. Other Documents. Other documents may be requested as the lIRA feels
necessary.
B) Origination Fee:
The applicant is required to pay an Origination Fee of $150.00 at the time the application
is submitted. This amount helps the City of Hopkins cover administration costs. The
applicant is required to pay all additional closing costs at the time of closing,
For more information and an application, please contact Jim Hartshorn, Program
Coordinator, at 612-939-1359,
.
. - 6 -
IH/REHAIJ97
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