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CR 93-122 Hennepin Providers Program ~ .... t t ,- I \, July 26,1993 \ "( y 0 ~. o P K \ ~ Council Report 93-122 HENNEPIN COUNTY COMMUNITY PROVIDERS PROGRAM ProDosed Action. Staff recommends adoption of the fOllowing resolution: Move to approve Resolution No. 93~79'approving the implementation of the Hennepin County Community Providers Financinq Program for Open Circle Inc. Overview The Hennepin Coun~y Housing and Redevelopment Authority has recently developed a program to provide funds for acquisition and/or rehabilitation to community service provider agencies. This program, which is entitled the Community Providers Program, makes monies available to these organizations through the sale of . tax exempt revenue bonds issued by the Hennepin County HRA. This program combines a number of bond sales into one issue and therefore reduces the issuance; administrative costs. Recently the Hennepin County HRA informed the City that Open Circle Inc. was interested in utilizing this program for acquisition of the Knights of Columbus Hall building on Tenth Avenue South. Open Circle Inc. provides senior day care programs. As a result of their interest in this program the City Council, acting as the HRA, approved a resolution in June authorizing Hennepin County to provide technical assistance to Open Circle as relates to the utilization of this program.' Over the last month Hennepin County has been working with Open Circle to explore in more detail the feasibility of utilizing the Communi ty Providers program. . As a result of this review , it has been determined that both groups would like to proceed forward with actual implementation 'of the purchase of the K.C. Hall. pr ior to proceeding' with the bond sale.. the city must first pass a resolution approving this action. . primarv Issues'to Consider o What is the impact of this action? o What is the benefit'of participation in the Community Providers Program for both the City and applicant? o What are other consequences related to this action? Supportinq Documents o Alternatives o Letter from Hennepin County HRA o Reso ~ion No. 93-79 .~ Development Director . CR 93-122 Hennepin County Community Providers Program PrimarvIssues to Consider o What is the impact of this action? The resolution as proposed authorizes Hennepin County to include the request by Open Circle Inc. within the overall bond sale under the Community Providers Program. Open circle's funding request would be included with other community Provider Organizations within Hennepin County requesting assistance. A single bond would be sold and the funds then distributed in accordance with the specific request. o What is the benefit of participation in the community Providers program for both the City and applicant? . For the City such participation assures that Open circle Inc. will probably be a long term resident of the City of Hopkins and continue to provide its services.'. Also, it allows for a tenant of a building which may become vacant. For Open Circle the program offers them an opportunity to own their own building and undertake the necessary improvements to ,that structure and potentially reduce their overall monthly cost. o What are other consequences related to this action? When this item was originally discussed before the HRA, staff detailed a concern as relates to loss of property tax. It appears in talking with Open Circle that they 'are a tax exempt entity, therefore the property taxes on the K.C. Hall would be exempted if they purchase this structure. For 1993 the taxes payable are $9,675. Of these taxes approximately 20%, or $2,000, is revenue that the city presently receives on an annual basis from this property that would no longer be available after 1994. . As part of the previous resolution approved by the HRA regarding this matter, there was a condition that stated that the County and Open Circle should explore the option of a payment in lieu of taxes agreement. Under this alternative a payment would be made by Open Circle Inc. to offset potentially all or a portion of the property taxes that would normally be received by the City for this property. This in essence helps to pay for City services which are provided in conjunction with their operation. Open Circle staff recently proposed to their Board the option of executing a payment in lieu of taxes agreement with the city. The .Board unanimously took action to not support entering into such an agreement. The basic " . . . CR 93-122 Hennepin County Community Providers Program conclusion was that they felt their organizatIon has more of a need for funds to operate their program than the city. The general conclusion of staff is that the amount of revenue that would be lost to the city as a result of this action is fairly minimal and is not worth potentially jeopardizing the loss of Open Circle to the city. Also, it is important to note that Open Circle will be occupying a building that otherwise potentially could be vacant for a period of time. Alternatives: o Approve the action as recommended by staff. o Do not approve the action as recommended by staff. This will essentially disallow Open Circle from using the County's program. ~ HRA -e HENNEPIN COUNTY HOUSING ANDREOEVELOPMENT AUTHORITY A.2308 Government Center Minneapolis, Minnesota 55487 6121348-4466 July 7, 1993 Mr. Steve Mie1kie. City Manager_ City of Hopkins 1010 First Street South Hopkins. Minnesota 55343 Dear Mr. Mielkie: As authori%ed by the Hopkins Housing and Redevelopment Authority, the Hennepi.n County HRA has been working with Open Circle, a County contract community service provider with a facility in Hopkins, to determine their capacity to participate in the initial County Community Providers Common Bond Program. Open Circle is proposing to acquire a permanent program facility at 34 Tench Avenue South, in Hopkins. . At chis time, the Hennepin County Housing and Redevelopment Authority has enacted the preliminary bond resolution for the Coun~! Community Providers Common Bond Funds and directed staff to proceedwich implementation of the proposed program.. In accord wieh the enabling legislation for the Hennepin County HRA. prior to the provision of funds through the County Community Provider Common Bond Fund for t.he identified activity in the city of Hopkins. the City Council muse approve implemen~ ca.tion of the Community Providers Program. wnile the Hopkins lIRA also authorized che Hennepin HRA co work with Vail Place, anocher County contracc community service provider, Vail Place elecced eo disconcinue par~icipation in the County Community Provider Program. To faci1ieat:e and coordinate the City Council's consideration of t.he required approval of the County C9mmunit:y Providers Common Bond Fund. the accompanying resolucion is provided. > Should there be any questions concerning the County Community Providers Program or the resolution lease, conta.ct me at 348-4474 or Larry Blackst:ad at 348-5859. Sincerely, -fk:s" C) k - ._~.... 0'{1UvJ~ Du~( Acting Executive Direccor Enclosure . cc: Open Circle BOARD OF COMMISSIONERS Mike Opal Sandra ljilary Mark Andrew Peter McLaughlin Randy JOhnson John Keefe . Emily Anne Staples 07129/1'3'33 10: 48 9358143 OPEN CIRCLE PAGE 02 ...... July 26, 1993 Jim Canigan City of Hopkins Hopkins. MN Thank you for your timely response to out request. We have presented your request to the Board membets and while we are aware there will be a loss of funds for the City of Hopkin$.. we cannot at this time, absorb the loss of funds which was described in your letter of July 15, 1993. Our ex.pansion and relocation costs as well as the renovation expense will exhaust the budgeted amount that the Board has approved for 1993 and 1994. We will continue working diligently with the City and business community regarding easement and licensure. With the cooperation of some fortune SOO companies, the public's awareness of Open Circle and its partner, tbe City of Hopkins, will be greatly highlighted by . the City's involvement as well as the Board's involvement. We appreciate the cooperation and assistance you have given us. and we hope to continue to work toward a better community involvement, a better life for our participants and an excellent working relationship with the City, the Council members and Hopkins Rotary and Knights of Columbus members. Sin~ly , jw~ fVl~1'h.- ~~~t Pamela Blixt Executive Director, Open Circle Suzanne M. Aragon President, Board of Directors . 500 South Blake Road · Hopkins. Minnesota 55343 · (612) 935.8143 . ;: , , CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION: 93-79 RESOLUTION APPROVING THE IMPLEMENTATION OF THE HENNEPIN COUNTY COMMUNITY PROVIDERS FINANCING PROGRAM WHEREAS, the Hennepin County Hous:;i.ng and Redevelopment Authority has adopted a financing progr~m known as the County community Providers Program designed to provide financial assistance to qualified providers of community services under contract to Hennepin county by making available low-cost loans from a County community Providers Program Common Bond Fund for the following purposes related to physical plant and facilities: 1. Refinancing of existing debt; 2. Funds for acquisition of facilities for county authorized new or expansion programs; 3. Acquisition of facilities currently being leased by the qualified service provider; or . ,4. Acquisition of facilities to replace leased facilities. WHEREAS, West Suburban Adult Day Care Inc. - D.B.A. Open Circle (nService Provider") is a provider of community services under contract with Hennepin County with a facility located in the City of Hopkins; and WHEREAS, Service Provider wishes to participate in the Program; and WHEREAS, Minnesota statutes Chapter 383B.77, Subd. 3, requires that this City Council must approve a project undertaken by the Hennepin county Housing and Redevelopment Authority before such a project may be undertaken within this City; and WHEREAS, The County community Providers Program is a project, the implementation of which in this city is subject to the approval of this city council; and WHEREAS, it is deemed in the best interest of this community to approve the Hennepin County Housing and Redevelopment Authority's implementation of the County community Providers Program in this community as an approved project. , j ~ "'... Resolution 93-79 Page 2 . NOW, THEREFORE, be it resolved by the city Council of Hopkins as follows: Pursuant to Minnesota statutes Chapter 383B~77, Subd. 3, the city Council approves the County community Providers Program as a project and approves of the issuance of county Community Providers Program common revenue "bonds by the Hennepin county Housing and Redevelopment Authority to facilitate the implementation of the Hennepin County community Providers Program in this city, subject to the following requirements: A. That this City retain its jurisdiction over all issues of local concern relating to zoning, land usage, building code requirements and compliance with all applicable city codes and ordinances. B. That repayment of the obligations represented by the common revenue bonds will be made solely from revenues derived from the project. c. That the full faith and credit of this city will not be pledged in any fashion as a source of repayment of said obligation represented by county Providers Program common revenue bonds. . Adopted this 3rd day of August, 1993. Charles D. Redepenning, Mayor ATTEST: James A..Genellie, city Clerk .