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2004 CDBG FUNDS AND ACQUISITION OF 14040 AZURITE ST NW <br /> <br />By: Sean M. Sullivan, Economic Development / TIF Specialist <br /> William Goodrich, City Attorney <br /> <br />Background: <br /> <br />The City of Ramscy received $220,000 in Community Development Block Grant (CDBG) funds for 2003. <br />These l'unds were used to assist in redeveloping the older areas of Gateway North Industrial Park Plat 2 (See <br />Map) of Ramscy, specifically regarding activities to the acquisition of the Morrell property. Demolition and <br />additional redevelopment activities in this area are being funded through Tax Increment Financing (TIF) <br />District No. 2 and grants that are applied for and received. <br /> <br />The fimding cycle for 2004 CDBG fund has passed and the City was awarded $150,000 for acquisition ofB & <br />A Cylinder, KIH Erecting or the Debee Property (See Map). Staff has been negotiating with Gary Hanson of <br />Bakestar and has determined that it would be prudent to utilize CDBG funds for this purchase instead of the <br />above mentioned parcels. It makes sense to focus greater attention to the area in the most need of work as a <br />whole and to take advantage of willing sellers when opportunities arise. Shifting the funds to this area will help <br />keep the redevelopment on track and further enhance an area in need of enhancement. This by no means <br />discounts the redevelopment that still needs to take place on the abovementioned properties but it does lead to a <br />policy that would try to concentrate on a specific area to make a greater immediate impact. <br /> <br />Observations: <br /> <br />Staff met with the EDA on August 9, 2004 and the discussion lead to a recommendation by the EDA for the <br />City Council to re-allocate its CDBG funding to the Hanson property within TIF District No. 2. Due to the fact <br />that we already received CDBG funds for properties in this area previously it is not necessary to re-apply to the <br />county to re-allocate our awarded funds. It would be necessary for Council to acknowledge the change and to <br />have staff make thc proper notification to the Anoka County. The CDBG funds will not be enough to purchase <br />the parcel but will again supplement TIF District No. 2 Funds. It is important to note that the negotiations are <br />nearly complete and final approval of the purchase is needed by City Council to approve the transaction. It is <br />important to note that the B & A Cylinder, Debee and KIH properties are in need of redevelopment and that <br />they should still be considered for future funding cycles. Staff also feels that this project is consistent with the <br />goals and direction that the EDA has expressed currently and in the past. Staff is seeking a recommendation <br />fi'on] the City Council to shift the 2004 CDBG funds to be utilized within redevelopment TIF District No. 2, <br />specifically to the Hanson property. <br /> <br />Recommendation: <br /> <br />Staff to continue property acquisition negotiations with Gary Hanson, and to bring back an executed purchase <br />agreement to City Council contingent on City Council approval. <br /> <br />Council to direct staff to re-allocate 2004 CDBG funds of $150,000 to be used on the 14040 Azurite St NW <br />(Hanson Property). <br /> <br />Review Checklist: <br /> <br />City Administrator, ,lira Norman <br /> <br />CC: 08.24.04 <br /> <br /> <br />