Memo- Consideration of Changes to the Commercial Rehab Loan & Facade Grant Programs
PLANNING &
ECONOMIC DEVELOPMENT
Memorandum
To:
Copy:
From:
Date:
Subject:
Honorable Mayor and City Council
Steve Mielke, City Manager
Jim Hartshorn, Economic Development Coordinator
April 4, 1997
Consideration of Changes to the Commercial Rehab Loan & Facade
Grant Programs
I. PURPOSE OF MEMO
To review possible changes to the Commercial Rehab Loan and Facade Grant
programs.
II. OVERVIEW
At the Council work session on January 14, 1997, staff was directed to revise the
Commercial Rehab Loan and Facade Grant Programs.
III. PRIMARY ISSUES TO CONSIDER
Why are changes being considered to the current programs?
What are the changes that staff is considering?
What is the historical analysis of the Commercial Rehab Loan and Facade
Grant programs?
What is the source of funding for these programs?
. What future actions are required?
PRIMARY ISSUES TO CONSIDER
o Why are changes being considered to the current programs?
The primary reason for considering changes to the Commercial Rehab Loan
Program is due to reduction of the 1997 budget. The budget was reduced from
$100,000 in 1996 to $50,000 in 1997.
The reason for changing the Facade Grant Program is due to a reduction of
applicants in 1996 and the first quarter of 1997.
Memo to the Mayor and City Council Board, April 4, 1997 - Page 2
o What are the changes that staff is considering?
Staff feels that the funds budgeted for these programs should be combined into
one new program to better serve the purpose of redevelopment of the
downtown district. Facade improvements and signage would still be eligible
criteria for the new, combined program. The total fund amount would be
$75,000. The following revisions would also be made:
. Maximum loan amount changed to $25,000 from $50,000
Minimum loan amount changed to $5,000 from $2,500
Term changed to a maximum of 10 years from 15 years
Additions to the application form to include a "Sources and Uses" form
o What is the historical analysis of Commercial Rehab Loan and Facade
Grant programs?
Facade grants approved in 1996 & 1995 include:
1996
1996
1995
1995
1995
1995
1995
Bosten Garder.
Stempel & SchmidUCreative Lan
Old Republic National Title
Apparel Master Cleaners/Hoffers
Hopkins Best Steak House
Metro Elevator, Inc.
Abe's Restaurant & Deli
$ 5,000
$ 4,074
$ 5,000
$ 5,000
$ 5,000
$ 5,000
$ 5,000
. Commercial Rehab Loans approved in 1996 & 1995 include:
1996
1996
1995
Lommen Partnership
Ed Hanlon
Dale Feste
$200,000
$ 67,539
$ 15,000
o What is the source of funding for these programs?
Tax increment is used to fund the Commercial Rehab Loan. The Facade Grant is
funded through either the Economic Development Fund, or Tax Increment
reserves.
o What future actions are required?
The HRA Board needs to review staff considerations at the work session on April
8, 1997, and schedule a future meeting for action.
Memo to the Mayor and City Council Board, April 4, 1997 - Page 3
IV. ALTERNATIVES
1. Cumbine the programs with revisions as recommended by staff.
2. Use Commercial Rehab Loan funds for last-resort funding only.
3. Limit the use of the Comme~cial Rehab Loan to facade improvements.
4. Make no changes to current program with $50,000 total funding and $25
administrative fee. With this action there would possibly be funding for
only one loan. Also, the $25 fee would not cover Developers Service
Corporation's monitoring fee.
5. Continue moratorium on the programs and schedule discussion of the
issue for a future meeting.
V.
ATTACHMENTS
/
Proposed new Commercial Rehab Loan Program application
Proposed Process Summary for the Commercial Rehab Loan Program
Proposed Commercial Rehab Loan Guidelines and Procedures form
Current Commercial Rehab Loan Guidelines and application form
PROCESS SUMMARY FOR
THE HOUSING AND REDEVELOPMENT AUTHORITY
COMMERCIAL REHABILITATION LOAN PROGRAM
*****************************************************************
Thank you for your inquiry into the City of Hopkin'S Commercial
Rehabilitation Loan program. This program is designed to provide
incentives to businesses to upgrade and improve their commercial
properties in the City of Hopkins. Summarized below is a list of
steps which are to be completed in order to process the
Commercial Rehabilitation Loan program application. Attached is
a copy 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 and provided to City
staff.
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 discuss the project and
arrange for preliminary financing approval. The Bank
is to work in cooperation with City staff throughout
the approval process.
4) Applicant submits Commercial Rehabilitation Loan
Application to City staff in order to conduct an
analysis of the applicants 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 Inspect~ons Department.
Written comments will be provided to the applicant
based upon this inspection.
7) Private financing must contribute no less than 50% 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
10) Document preparation'- If matching funds are being
provided by a lending institution, a commitment letter
is to be provided to the HRA indicating amount of loan,
interest rate, security and collateral, and repayment
term.
11) Applicant is to secure necessary building and any other
applicable permits.
12) Closing - City will deposit check in the amount of the
loan, along with matching funds from any other funding
source, in an escrow account, which shall require the
signature of appropriate City staff to release funds as
improvements are completed.
13) Draws from the escrow account can be made on a monthly
basis. Request for payment is to be made to City staff
and upon verification of work completed, authorization
will be made to release funds.
14) Work begun prior to final approval will be ineligible
for financing under the guidelines of this Commercial
Rehabilitation Loan program.
15) Repayment of principal and interest is to begin on a
month and date agreed upon by applicant, City, and
Bank, at the time of closing, but not longer than one
month after completion of the improvements. Interest
is due and payable on a monthly basis throughout the
interim construction period.
Please fill out entire application and send to:
City of Hopkins
Economic Development Department
1010 1st street South
Hopkins, MN 55343
612-939-1359
For further information please call the phone number listed above.
2
COMMERCIAL REHABILITATION LOAN
PROGRAM APPLICATION
Applicants Name:
Applicants Address:
Applicants Phone:
Business Name:
Street Address:
Mailing Address:
Business Phone:
Tax lD. #
Form of business organization:
Description of Business:
Date Established:
Current number of employees:
Number of employees after expansion:
Name of bank providing matching funds:
Name of Loan Officer:
Phone #
Name of other resources providing funding:
Name of contact:
Phone #
Name ofInsurance Company:
Name ofInsurance Representative:
Phone #
Name of Attorney:
Phone #
Name of Accountant:
Phone #
3
Comm. Rehab. Loan Application Continued
1. 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 se,Jarate exhibit.
2. Are you or your business involved in any pending lawsuits? Yes _ No
please provide the details as a separate exhibit.
If yes,
3. 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 of the person and what department employed.
Employee Name:
Dept:
Employee Address:
4. Are any of the individuals listed under "Management" on Parole or probation? Yes
No If yes, please provide details as a separate exhibit.
5. Have any of the individuals listed under "Management" been convicted ofa crime? Yes
No If yes, please provide details as a separate exhibit.
IIWE CERTIFY that all information in this application is true and complete to the best of my/our
knowledge and are submitted to the HRA so that the HRA can decide whether or not to grant the
loan. I/we 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 I/we have given my/our
consent.
Signature
Date
Signature
Date
Signature
Date
Signature
Date
4
COMMERCIAL REHABILITATION LOAN PROGRAM
GUIDELINES AND PROCEDURES
Planning and Economic Development Department
. 1010 First Street South
Hopkins, MN 55343
(612) 935-8474
The purpose of this program is to provide low interest financial assistance to commercial/retail
bnsinesses through private and pnblic sector participation to stimulate private investment, expand
the tax base, and promote new job opportunities into Hopkins' Downtown Commercial District.
The program will assist with the following:
*
Provide building owners and businesses the capability and incentive to upgrade the
appearance, structural condition, and operating efficiency of their place of business.
Improve the market and service of businesses in the community.
Retain and expand job opportunities in the City of Hopkins.
*
*
L Loan Tenus and Conditions:
A. The Housing and Redevelopment Authority (lIRA) loan (maximum $25,000) will be
matched by orivate funds on a dollar for dollar basis
Example:
HRA Commercial Rehab. Loan
Private funds
$ 25,000
$ 25.000
Total improvements
po 000
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 outstanding balance of any prior encumbrances. The maximum amount of any loan
will not exceed $25,000.
C. Loan Minimum - The minimum amount of any loan will be $5,000.
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 will be 10 years. The HRA will determine the appropriate
term based upon the amount of the loan and a pro-forma analysis of the project.
F. Collateral - The HRA will determine the appropriate collateral based upon the following
parameters:
*
*
*
The BRA 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 HRA loan. Otherwise, tenants are
required to provide collateral in an amount and type which is deemed acceptable to
the HRA.
G. Approval Process - All loan requests up to and including $25,000 will be evaluated and
considered for approval by City of Hopkins staff, unless special circumstances dictate
otherwise.
H. Environmental Assessments:
Environmental assessments are required to be submitted to the HRA prior to final
approval. The HRA reserves the sole right to determine whether or not Phase I and II
environmental assessments are required.
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 in Exhibit A attached to
this document.
2) Building must contain small 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
City's Zoning Ordinance. 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 with all applicable code, permit, and license
requirements.
5) An eligible applicant must either be a building owner or tenant within the approved
program boundaries.
6) Applicants must be an acceptable credit risk as determined by the BRA and be able
to demonstrate the ability to repay the loan. The following information must be
provided by the applicant:
*
*
*
*
*
*
*
*
Sources and Uses Schedule--Exhibit B
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
Income projections for three years
Cash flow projections for three years
Projected salary of Officer( s)
Proof of insurance for full replacement value throughout the term of the
loan
Resumes for all individuals listed under "Management"
Commitment letter and credit analysis from lending institution
Environmental review when applicable
If loan proceeds are to be used for new construction, attach plans and
specifications along with a proposed construction contract
*
*
*
*
7) Applicants must certify that the building is insured for fu!1 replacement value
throughout the term of the loarl.
8) Applicants are required to wait a period of 3 years prier to submitting a second
Commercial Rehab. Loan application.
B. Costs:
1) Miscellaneous:
*
*
*
*
*
*
*
Attorney fees related to proposed project
Appraisal fees
Credit reports
Abstract and filing fees
Mortgage registration fees
Title insurance premiums
Service charges
Fees for credit approval
Building permit fees and inspections
Environmental surveys
Architectural and engineering
Energy audits
Architectural design services for plans and specifications
*
*
*
*
*
*
Staff will provide approval of interior and exterior design plans. Staff may request the
help of an outside consultant as determined appropriate to complete this review.
2) Improvements:
a. exterior improvements:
* Improvements to the front, rear or sides of a commercial building.
* Cleaning, painting and staining of exterior surfaces.
* Masonry repairs.
* Repairing or replacing of cornices, entrances, doors, windows, decorative
details and awnings.
* Sign removal, repairing or replacement.
* Building identification.
* Other items that are viewed necessary to complement exterior.
* Repair of parking lots, including lighting, surfacing and landscaping. (no
new construction)
* Roofing is an eligible expenditure under this program, but loans for roof
improvements are required to be accompanied by fixed exterior
improvements equaling a minimum of 100% of the cost of the roof
improvements.
* Other miscellaneous improvements to the exterior as detennined
appropriate.
b. interior improvements:
*
Fixed improvements including the repair and/or upgrading of walls,
ceilings, floors, lighting, windows, doors, entrances, electrical, plumbing,
mechanical, air-conditioning, architectural change, energy improvements,
etc.--Ioans for electrical, plumbing, mechanical and heating/ventilation an.d
air-conditioning are required to be accompanied by fixed eyterior
improvements equaling a minimum of 100 percent of the cost of these
improvements
3) Addition/Expansion:
A building expansion will be considered for eligibility based upon the following
factors:
*
Exterior improvements and applicable health and safety code deficiencies
are required to be corrected as part of the loan
Expansion or addition will not detract from the appearance of either
existing structure or surrounding area.
Proposed expansion or addition will meet all zoning, parking, pennit,
license requirements, etc.
Expansion or addition is required to be in conjunction with improving the
main building.
*
*
*
4) Ineligible Items:
The following are ineligible costs under the City's Commercial Rehabilitation Loan
program:
*
*
*
*
Refinancing
Non-fixed improvements
Working capital
Inventory
*
Sweat equity (applicant's own labor and performance III completing
construction or improvements)
Improvements comoleted orior to loan closing
*
III. Contractinl!: and Construction:
A. Staff and the lIRA may request additional supplemental information necessary for
adequate review of the loan request. In addition, the applicant will also !!rant permission
for City staff to conduct a complete inspection of the property to which the improvements
are to be made.
B. A document (scope of work) is to be submitted to City staff detailing the work to be
performed, estimated costs, and any other requested supplemental information necessary
for adequate review of the loan request.
C. 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.
D. 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 staff when appropriate.
E. 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. Verification of these items is required to be obtained from an
inspecting architect. Periodic draws will only be allowed on a montWy 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.
F. Contractor is required to furnish lien wavers at the time a payment is made by the lIRA.
G. Change orders are required to be approved by the bank, lIRA, and owner.
H. All necessary permits and approvals of appropriate agencies are required to be fulfilled.
1. 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 lIRA is not a guarantor of the proiect and. as such. is
not resoonsible for complaints of unfinished or defective workmanshio or products.
IV. Loan Closing:
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
shall be prepared by legal counsel for the HRA and shall contain such terms, conditions,
and provisions as are required by the lIRA and its counsel. The borrower shall pav all
attorneys' fees incurred bv the lIRA 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 shall contain an
environmental warranty and indemnification agreement whereby the borrower
indemnifies the lIRA 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 lIRA's.
5. Guaranty Agreement. A Guaranty Agreement from each required Guarantor of
the Commercial Rehabilitation Loan.
6. Escrow Agreement. The borrower shall execute an Escrow Agreement whereby
the full amount of the loan proceeds will be escrowed with the title insurer
providing the mortgagee's title insurance. The Escrow Agreement shall contain
such terms and conditions as are acceptable to the lIRA and the title insurer and
shall provide that loan proceeds are to be released only upon evidence of
completion of improvements satisfactory to the lIRA and title insurer.
7. Intercreditor Agreement. If the Commercial Rehabilitation Loan is to be
subordinated to any prior mortgages, the borrower, prior mortgage holder and the
HRA 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.
8. UCC Financial Statements. Uniform Commercial 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.
9. 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.
10. 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
property owner acknowledging the HRA'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.
11. Other Documents. Other documents may be requested as the HRA feels
necessary.
B) Origination Fee:
The applicant is required to pay an Origination Fee to the City of Hopkins at the time of
closing in the amount of 1 percent to cover program administration.
For more information and an application, please contact Jim Hartshorn, Program
. Coordinator, at 612-939-1359.
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- -
COMMERCIAL REHABILITATION LOAN/GRANT PROGRAM
GUIDELINES AND PROCEDURES
FOR THE HOUSING & REDEVELOPMENT AUTHORITY
OF THE CITY OF HOPKINS
Planning and Economic Development Department
1010 First Street South
Hopkins, MN 55343
(612)935-8474
The purpose of this program is to provide low interest long term
loans, and/or facade grants, as incentives for tenants and building
owners to upgrade and improve the appearance of commercial/retail
properties.
I. Loan Terms and Conditions:
A. The Housing and Redevelopment Authority (HRA) loan (maximum
$50,000) will be matched by private funds on a dollar for
dollar basis.
Example:
HRA Commercial Rehab. Loan
Private funds
$ 50,000
$ 50,000
Total improvements
$100.000
B. Loan Maximum - No loan shall exceed 80% of the market value
of the property upon completion of the rehabilitation,
(based upon proposed cost of improvements) less the
outstanding balance of any prior encumbrances. The maximum
amount of any loan will not exceed $50,000 unless the
following issues justify an increase in the loan amount:
Substantial deterioration of the building.
The size of the building is larger than 30,000 sq. ft.
The building has been vacant for one year or longer.
If the applicant is able to show hardship because of any of
the above circumstances, or other unique situations, the
HRA may determine that the applicant is eligible for a loan
over and above the maximum amount of $50,000.
C.
Loan Minimum
$2,500.
The minimum amount of any loan will be
D. Interest Rate - The interest rate on loans provided through
this program will be 3% below prime rate compounded on an
1
annual basis. Interest rate will be based upon the prime
rate on the day of closing.
E. Term - The maximum teL.. will be 15 years. The HRA will
determine the appropriate term based upon the amount of the
loan and a pro-forma analysis of the project.
F. Collateral - The HRA will determine thp appropriate
collateral based upon the following parameters:
o The Bank will have senior lien position.
o The HRA lien position will be subordinate to the
Bank.
o Liens wil~ generally take the form of a mortgage
on the improved property.
o Building tenan~s are required to prov~de evidence
that the building owner agrees to ~rovide a
mortgage as collateral for the HRA loan.
Otherwise, ten~nts are required to provide
collateral in an amount and type which is ~3em8d
acceptable to HRA.
G. Approval Process - All loan requests up to and including
$25,000, will be evaluated and considered for approval by
City of Ho~kins 5~aff, unless special circumstances dictate
otherwise. All loan requests in the amount of $25,000 -
$50,000 will be presented to the HRA for final approval.
II. Eligibility Criteria:
A. Building/Applicant eligibility:
1) B~ilding must be located wi~hin the boundaries
identified in Exhibit A attached to this document.
2) Building must contain small or medium sized commercial
or retail businesses, and have a principle commercial
or retail character.
3) Building must not be one which is identified by the
HRA/City 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 City's Zoning Ordinance.
Plans and specifications submitted must be in
conformance with 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 with all applicable code, permit
and license requirements.
2
5) An eligible applicant must either be a building owner
or tenant within ~he approved program boundaries.
6) Applicant's must be an acceptable credit risk as
determined by t~e HRA and be able to demcnstrate the
ability to repay the loan. The following financial
information must be provided by the applicant:
o Past 3 years of businesses profit & loss
statements
o Past 3 years of business and personal tax
returns
7) Applicants must certify that the building is insured
for full replacement value throughout the term of the
loan.
8) Applicants are required to wait a period of 3 years
prior to submitting a second Commercial Rehab. Loan
application.
B. Eligible costs.
1) Miscellaneous:
o Attorney Fees related to proposed project
o Appraisal Fees
o Credit Reports
o Abstract and Filing Fees
o Mortgage Registration Fees
o Title Insurance Premiums
o Service Charges
o Fees for Credit Approval
o Building Permit Fees and Inspections
o Environmental Surveys
o Architectural and Engineering
o Energy Audits
o Architectural design services for plans and
specifications
Staff will provide approval of exterior design plans.
Staff may request the help of an outside professional or
consultant as determined appropriate to complete this
review. The plans must meet all applicable design
guidelines detailed in exhibit B.
2) Exterior Improvements:
o Improvements to the front, rear or sides of a
commercial building.
o Cleaning, painting and staining of exterior
surfaces.
3
o Masonry repair~.
o Repairing or replacing of r.ornices, entrances,
doors, windows, decorative details and awnings.
o Sign removal, repairing or replaceme~t. (Sign
Grant program cannot be used simultaneously with
the Commercial ~ehabilitation Loan/Grant program)
o BUildiLg identification.
o Other items that are viewed necessary to
complement exterior.
o Repair of parking lots, including lighting,
surfacing and landscaping. (no new construction)
o Roofing is an eligible expenditure under this
program, but loans for roof improvements are
required to be accompanied by fixed exterior
improvements equaling a minimum of 100% of the
cost of the roof improvements.
o Other miscellaneous improvements to the exterior
as determined appropriate.
3) Interior Improvements:
o Fixed improvements including the repair and/or
upgrading of walls, ceilings, floors, lighting,
windows, doors, entrances, electrical, plumbing,
mechanical, air-conditioning, architectural
change, energy improvements, etc. Loans for
electrical, plumbing, mechanical and
heating/ventilation & air-conditioning are
required to be accompanied by fixed exterior
improvements equaling a minimum of 100% of the
cost of these improvements.
4) Addition/expansion.
A building expansion will be considered for
eligibility based upon the following factors:
o Exterior improvements and applicable health and
safety code deficiencies are required to be
corrected as part of the loan/grant.
o Expansion or addition will not detract from the
appearance of either existing structure or
surrounding area.
4
~
o
Proposed expan8ion or addition will meet all
zoning, parking, permit, license requirements,
etc.
o Cost of proposed expansion or addition is
required to be less than 50% of the City's loan
amount.
o Expansion or addition is required to be for the
purpose of correcting a functionally obsolete
building.
C. Ineligible Improvements.
The following are ineligible costs under the city's
Commercial Rehabilitation Loan/Grant program:
o Refinancing
o Non-fixed improvements
o Working capital
o Inventory
o Sweat equity (applicant's own labor and
performance in completing construction or
improvements)
o Improvements completed prior to loan closing
E. Environmental Assessments:
Environmental assessments are required to be submitted to
the HRA prior to final approval. The HRA reserves the sole
right to determine whether or not Phase I and II
environmental assessments are required.
The mortgage document will contain an indemnification
provision to protect the HRA against any potential
undiscovered environmental and/or hazardous waste
contamination of the property.
III. Facade Grant:
A. Facade Grant - A grant of up to $5,000 is also available
from the HRA. The Facade Grant is encouraged to be
utilized with a Commercial Rehab. Loan. However, the grant
portion of this program can be used exclusive of a loan.
In order to qualify for a facade grant, the applicant must
meet the general requirements of the loan portion of the
Commercial Rehab. program. Grant funds will be matched
dollar for dollar with private funds:
5
Example:
city facade grant
Private funds
$ 5,000
$ 5,000
Total improvements
$10.000
B. Eligible Improvements - The facade grant is required to be
used for fixed exterior imp~ovements only. Applicant i~
i required to meet all eligibility criteria outlined in
section II, A (1), (2), (3), (4), (5), (7).
Facade improvements funded under this grant program are
required to add a strong visual enhancement to the exterior
appearance of a building. City Staff, in its sole
discretion, will determine if proposed improvements meet
this requirement. The following is a general list of
exterior improvements which may be considered for a facade
grant:
o Improvements to the front, rear or sides of a
commercial building. Improvements to the side of a
building will be allowed only if the side is fully
visible from a street, such as on a corner lot.
o Cleaning, painting and staining of exterior surfaces.
o Masonry repairs.
o Repairing or replacing of cornices, entrances, doors,
windows, decorative details and awnings.
o Sign removal, repairing or replacement. (The City's
Sign Grant program cannot be used simultaneously with
the Commercial Rehabilitation Loan/Grant program)
o Other miscellaneous improvements to the exterior as
recommended or determined appropriate by Staff to make
the necessary level of visual improvement to the
building.
C. Available funds - The HRA may elect to establish an annual
funding limit for' the Facade Grant portion of the
Commercial Rehabilitation Loan/Grant program. The funding
limit will be determined on an annual basis during the
normal City budgeting process.
D. Grant Minimum - The minimum amount of any grant will be
$2,500.
E. Applicants are required to wait a period of 5 years prior
to submitting a second Facade Grant application.
6
,
rv. Contracting and Constructio~:
A) All applicants will complete the attached application form.
Staff and HRA may request additional suppleme~tal
information necessary for adequate review of the
loan/grant. In addition to providing the necessary
information to process the loan/grant, the application will
also grant permission for City Staff to conduct a complete
inspection of the property to which the improvements are to
be made.
B) A document (scope of work) is to be submitted to the HRA
detailing the work to be performed, estimated costs, and
any other requested supplemental information necessary for
adequate review of the loan/grant request by staff and HRA.
C) Contractors and all sub-contractors providing work under
this program are to be licensed, and must meet the
insurance and bonding requirements cf the City of Hopki,lS.
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.
D) The quality and progress of the work is to be monitored
throughout the term of the contract by the loan/grant
recipient, general contractor, and City staff when
appropriate.
E) Payment requests (partial or full) cannot be made by the
contractor until a written request for payment is made by
the loan/grant recipient, and the HRA has accepted the
eligible improvements in writing. Verification of these
items is required to be obtained from an inspecting
architect. 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 a 10%
retainage which will be used to correct unsatisfactory
work, and/or defray costs to obtain a replacement
contractor to complete the required improvements.
F) Contractor is required to furnish lien waivers at the time
a payment is made by the HRA.
G) Change orders are required to be approved by the Bank, HRA,
and owner.
H) All necessary permits and approvals of appropriate agencies
are required to be fulfilled.
I) All improvements are required to be inspected by the City
of Hopkins Building Inspections Department in order to
7
insure conformance with appropriate codes, and must be
verified for proper comple~ion by HRA staff prior co final
payment. Final inspection cannot be scheduled until all
permits have been signed off by field inspectors. .
J) 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 HRA is ~ot a
guarantor of the project and as such is not responsible for
complaints of unfinished or defective workmanship or
products.
8
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Exhibit B
COMMERCIAL REHABILITATION LOAN/GRANT PROGRAM
DESIGN GUIDELINES
FACADE STANDARDS: The recommended general design standards for
structures and sites in downtown Hopkins are as follows:
1. Facade standards apply to building fronts and exposed
sides and rear walls.
2. The. distinguishing original qualities or character ot a
building and its site, where still in exib~ence, should
not be destroyed, removed or altered.
3. All building structures and sites should be recogr;.zed
as products of their own time and it is the intent of
these standards to preserve, as nearly as possible, the
architectural features of such time. However, changes
which are evidence of the history and development of a
buiLiing, structure or site and its environment, shall
be preserved, when possible, if those changes have
acquired a recognized and respected significance of
their own.
4. It is not the intent of these standards to exclude
modern design or to inhibit creative initiative. In
instances where faithful restoration or replication is
not practical, historically or economically justified,
remodeling may be done in a contemporary manner,
sympathetic with and complimentary to the general
character of Mainstreet. Such renovations or
alterations should not destroy significant historical,
architectural, or cultural material. Buildings should
be considered as total units from grade to cornice line
and should be designed in a way that the total facade
is a harmonious unit.
5.
Distinctive stylistic features of a building should be
preserved whenever possible in a condition or
appearance as near as possible to their original
appearance. Deteriorated architectural features should
be repaired and restored rather than replaced, whenever
possible. In the event replacement is necessary, the
new material should match the material being replaced
in composition, design, color, texture and other visual
qualities. Repair or replacement of missing
architectural features should be based on accurate
.
duplications of such features where possib~e and
appropriate. However, new show windows, lighting,
hardware, details, ornaments, doors, and other elements
may be designed in a way sympathetic dnd complimentary
with the spirit and character of the building.
6. Solid, permanently enclosed or covered facades will not
be approved. All upper level windows should be fully
exposed. Windows should be replaced or repaired as
necessary and maintained in a condition to give an
"occupied" look. A minimum of 40% of the area of the
Ground Floor shall be comprised as doors and/or
transparent material. Doors may be solid or opaque, or
a combination of both. Opaque or translucent windows
or material shall not be considered transparent.
FUNCTIONAL STANDARDS: The general functional standards for
structures and sites should be as follows:
1. All structural and decorative elements of building
fronts and sides exposed to view should be made
structurally sound. Deteriorate~ or missing portions
should be repaired or replaced in a workmanlike manner.
All facade elements and elements exposed to view should
be well maintained, cleaned and painted as required.
2. All lighting and electrical elements including wiring,
conduits, junction boxes and all elements of mechanical
equipment including pipes, ducts, air conditioning
units, should where possible, be concealed from view.
All non-functioning elements should be removed.
3. The surface cleaning of structures must be undertaken
with the least damaging method possible. Sandblasting
and other cleaning methods should not be used as these
methods can unalterably damage historic building
materials such as brick.
4. RoofS: Roofs and chimneys or other auxiliary
structures on the roof should be repaired and cleaned
as required. Any construction visible from the street
should be finished so as to harmonize with other
visible building walls. Television and radio antennae
should be located in an inconspicuous manner.
HOPKINS MAINSTREET SIGN DESIGN GUIDELINES
OBJECTIVES:
The end product, the preservation of the unique mood or
flavor of the Hopki~s Mainstreet and the maintenance of it
as a vital activity center, is an intangible and hard to
quantify entity. It is difficult, if not impossible, to
legislate good design or to codify a special character or
flavor of an area.
Therefore, instead of prescribing one special style or a
specific set of design elements, which would only result in
rigid, inflexible end products, hard to implement and
unsatisfactory to many, these Design Guidelines use a
two-part approach:
First, it outlines the objectives that define what
feelings the end products are supposed to reflect or
generate.
Second, it gives directions or guidelines on how to
approach the problem or how to proceed to realize
obj ecti ves .
By following the guidelines and keeping in mind the
recommended objectives as well as the character or mood
envisioned for the area, a satisfactory solution beneficial
to all can be achieved.
DEFINITIONS:
1. Sign: The word "sign" means an outdoor structure
either stationary or movable, containing any writing,
announcements, declaration, demonstration, display,
illustration, insignia or illuminated device used to
advertise, announce, direct attention to, identify or
promote the distribution of any merchandise or the sale
of other property or service to any person. The term
"sign" shall not be deemed to include the term
"building" or "landscaping" or any architectural
embellishment of a building not intended to communicate
information.
2. Area of a sign: The words "area of a sign" means total
dimensions enclosing the extreme limits of letters or
perimeters of backgrounds, borders, emblems, color or
frame or any device used to distinguish the sign from
the building surface on which it is placed. Except as
stated, structural supports shall be considered part of
the sign. Each surface utilized to display a message
or to attract attention shall be measured as a separate
sign. Symbols, flags, pictures, wording, figures or
other forms of graphics painted on or attached to
windows, walls, awnings, free standing structures,
suspended by balloons, or kites or on persons, animals,
or vehicles are considered a sign and are included in
calculating the overall square footage.
GENERAL GUIDELINES:
It is not the intent of these standards to create uniformity
of signage or to inhibit creative initiative. Signage shall
be designed to enhance and compliment the historic character
of buildings within the district. This signage should also
be designed to be compatible with surrounding buildings and
services. While the guidelines do not attempt to inhibit
creativity, individuals should be encouraged to avoid the
"trendy" look. Signs/colors which are created to take
advantage of a current trend will run the risk of being
quickly dated.
The provisions of this document are supplementary to those
of the Hopkins Zoning Code. Prior to issuance of a sign
permit for a new sign or the replacement of an existing
sign, the applicant shall complete a sign permit
application. Upon completion of the sign permit
application, the Design Committee will review these
provisions to determine the appropriateness of a particular
type of sign for a specific property, including size, design
features, intended positioning and on-site location, and all
other elements affecting a sign's physical appearance.
The following guidelines shall be encouraged in the
Redevelopment District Project Boundaries which occur along
Mainstreet from Shady Oak to TH 169.
1. Compliance - All sign permits for property within the
Redevelopment District Project Boundaries which occur
along Mainstreet from Shady Oak to TH 169, shall comply
with Section 570 of the Hopkins City Code.
2. Size and Placement - Signs shall be positioned so that
they are an integral design feature of the building;
which means that signs shall help define and enhance
the architectural features of the building and shall be
placed so they do not destroy architectural details
such as but not limited to stone arches, glass transom
panels or decorative hrick work. Signs ~ay be placed
only in the horizontal lintel "sign space" above the
store front window~, on windows or attached to awnings.
3. Colors - Sign colors shall blend with the building
facade to which the sign is attached and be compatible
with the property's use. It is recommended that no
more than two colors be used for sign lettering.
However, a small amount of a third color for
highlighting is acceptable.
4. Message - The sign message shall be legible and relate
to the nature of the building's use. These
requirements may be accomplished through the use of
words, pictures, names, symbols and logos.
5. Lettering - Uniform lettering should be used throughout
the sign to avoid incoherent and otherwise incompatible
letter form combinations which may be determined as
inappropriate. However, a sign may contain two
lettering styles if they are compatible.
Light Iptterin0 against a dark background is easier to
read and more professional looking and is recommended.
Letters should be subordinate to the background area.
The letters should be of appropriate size depending on
the style of the building, size of building, location
and viewing distance.
6. Complex Center - Businesses sharing one principle
structure should coordinate signage for each business
located within the structure.
7. Cluster Signs - Businesses wishing to place their signs
within a common framework should utilize a common
display system. Each sign within the common framework
shall not exceed 2 square feet for each establishment.
The total area of a clustered sign shall not exceed 12
square feet.
8. Fabrication Materials - The following materials, when
properly used to compliment the architectural features
and character of a historic building, are considered
compatible for use provided the conditions as described
are adhered to:
a. Wood: Any wood utilized shall be painted,
stained, varnished or lacquered.
b. Metal, Plastic, Fiberglass, Glass and Masonry:
Each of these should be used with care to
compliment the ,arc~itecture of surrounding
buildings. Plastic is discouraged on buildings
with historic character.
9. window Signs - Primary signs may be painted directly on
the glass windows or entry doors. However, these
guidelines discou~age the use of temporary window
signs. These temporary signs are those which advertise
sales or products.
RECOMMENDED SIGNAGE:
1. Signs that are determined to be an original part of the
eXisting building facade should be retained and
maintained. A sign will be considered to be an
"original part," if it was included as a component of
the existing facade design and construction.
2. Primary Signs: Each ground floor occupant in a
building should have no more than one sign oriented to
each public right-of-way on which the premises has
frontage. This (these) sign(s) should identify the
predominant use of the occupant or identify the
building as a whole.
a. Primary signs may extend the entire length of the
facade but should have a total vertical dimension
of no more than two feet six inches (2'6").
Primary signs should not overlap horizontally.
b. Primary signs should be mounted no lower than
eight feet (8') above the elevation of the ground
floor and no higher than the elevation of the
second floor.
c. Primary signs may be painted directly on glass
show windows or entry doors, in which case they
may be located at any point below the elevation of
the second floor but must be painted directly on
the glass. Such signs should have a vertical
dimension no greater than one foot (1').
3. Secondary Signs: Each building may have one or more
secondary signs. These signs should identify occupants
on upper floors or occupants not considered the primary
building user.
a. Each occupant may have not more than one sign
painted directly on glass of upper windows. Upper
window signs should consist of individual letters
not over six inches (6") in height painted
vertically on glass. Total sign dimension should
not be greater than fourteen inches (14") in
heigh'.:.
b. In addition to upper window signs, each occupant
may have one ground floor entry sign located at
entryway with individual letters painted or
located directly on glass, door, plaque, or
directory. Total dimensions of entry signs,
regardless of number of occupants identified,
should not exceed two feet six inches wide and one
foot six inches high (2'6" x 1'6").
4. Projecting Signs: A projecting sign is a sign other
than a wall sign which projects from and is supported
by a wall or a building or structure.
Projecting symbolic or business name signs are
permitted. Projecting signs which advertise a product
and include the name of a business are not permitted.
Projecting signs are permitted at horizontal intervals
alolig the front pro~erty lines of not less than fifteen
feet (15'0"). Projecting signs should be no greater
dimension than eighteen inches wide by sixteen inches
high (18" x 16"), shall extend no more than twenty-four
inches (24") from the building wall and shall be
mounted no lower than ten feet (10'0") from elevation
of ground floor.
SIGNAGE NOT RECOMMENDED:
1. No signs should be used other than those identifying a
property where they are installed or identifying the
use conducted therein. Advertising by material or
product is not permitted.
2. No sign or light should move, flash, or make noise.
(With the exception of signs displaying time,
temperature, and barber totems.)
3. Plastic and transparent "panel" signs will be reviewed
for appropriateness for the particular building on an
individual basis. They will be discouraged on
buildings with historic character.
ILLUMINATION:
'.
Any sign lighting shall be properly shielded or diffused so
as to eliminate glare. While these guidelines do permit the
use of neon and internally lit signs, caution should be used
in their use.
EXCEPTIONS TO THE SIGN RECOMMENDATIONS:
The fOllowing are appropriate in addition to those signs
listed above:
a. Names of buildings, dates of erection, monumental
citations, and commemorative tablets which do not
exceed 20 square feet in area when made a permanent
integral part of a building.
b. Educational signs not exceeding 10 square feet
providing bulletin or poster display space, identifying
or explaining local history or processes going on out
of sight within the building.
PROJECTIONS BEYOND PROPERTY LINE (awnings):
There should be no projections beyond the property line
other than as described below:
1. Sun protection/weather protection devices may be
permitted only in the form of awnings on existing
buildings. Awnings shall be operable or retractable,
and they shall be of canvas on metal frame. Awnings
should have a minimum slope of twenty degrees to the
horizontal. Awnings should be located no higher than
sixteen feet (16') and should extend no lower than
eight feet (8"). Awnings should be designed in a way
to appear an integral part of the building facade
design.
2. Fixed canopies or marquees are not recommended, but
will be considered on an individual basis.
3. Overhanging signs as described above may be used.
4. Individual wall lighting fixtures projecting beyond
property lines may be used providing that fixtures are
consistent with the period of the design of the
building facade; that the total wattage per fixture
does not emit glare or harsh bright spots; that the
fixture is mounted no lower than six feet six inches
(6'6") nor higher than nine feet (9'0") above the
elevation of the ground floor; and provided that the
fixture extends from the property line ~or more than
sixteen inches (16") nor have any dimension greater
than sixteen inches (16").
.
.
APPLICATION FORM
COMMERCIAL REHABILITATION LOAN/GRANT PROGRAM
***************~**********************************************************************************
$25.00 FEE
Applicant's Name
Home Address
Name of Business
Business Address
Description of Business
Home Phone
Business Phone
Number of Years Operating at Present Business Address
Owner of Building (if other than applicant)
Address
Phone
Expiration Date of Applicant's Current Lease (if applicable)
Current Number of Full Time Employees Pc1 Time Employees
Estimated Number of Full Time Jobs to be Created Over Next Year Part Time
- -
Is BUilding Currently Occupied? Yes _ No_
If No. How Long has it been Vacant? Months_ Years_
Does the Applicant's Business Occupy the Entire Building? Yes
If No. What Approximate Percentage does it occupy? _
What Occupies Balance of Space?
No
Will Proposed Project Replace any Housing Units? Yes
If Yes. How Many Units? _
No
Is Building Currently Under Orders from any Public Agency to Correct Code
Deficiencies? Yes No _ .
If Yes. Please Explain (attach seperate sheet if necessary)
Amount of Loan Being Requested?
Are You Seeking Other Loans in Conjunction with this Project? Yes No
If Yes, Please Explain
Name/Address/Phone and Contact Person at Bank With Whom You are Working:
1
.
Indicate Below how the Proceeds of the Rehabilitation Loan Will be Used:
.
1)
2)
3)
4)
5)
6)
Dernolition
Exterior Improvements
Interior Improvements
Code Deficiencies
Engineering and Architecture
Other Costs
$
$
$
$
$
$
TOTAL $
(Attach seperate sheet if necessary for further explanation of project.)
Principal Balance on Mortgage or Contract for Deed? $
Whom is the Mortgagee or CD Holder?
Other Liens on the Building? Yes _ No_
If Yes, Please Explain
Applicant's Bank Address (Business Account):
Commercial Loan Officer
Phone
CERTIFICATIONS
Applicant certifies all information in this application is true and complete to the best
of his/her knowledge. Applicant authorizes City to receive, review and examine all
information submitted to, and obtained by participating lender pursuant to this loan
request.
Applicant's Signature
Date
Building Owner grants City permission to enter property to make all necessary
inspections appropriate to process applicant's loan application.
Building Owners Signature
Date
Submit cpmpleted application to:
City of Hopkins
Economic Development Department
TOTO 1st Street S.
Hopkins, MN 55343
2