Subd. 1. Purpose. The Council finds that within the city there is a need for a city program for rehabilitation of small and medium-sized commercial buildings which are physically deteriorating and in need of rehabilitation and that the provision of affordable loans to effect the rehabilitation of small and medium-size commercial buildings will preserve and enhance the city's tax base and will assist in the implementation of the Redwood Falls Comprehensive Plan thereby protecting the health and safety and promoting the general welfare of the community and its residents.
Subd. 2. Findings. The Council further finds and determines:
A. The city has carried out a commercial rehabilitation loan program in conjunction with a grant received from the Department of Trade and Economic Development in 1995 through its Small Cities Development Program;
B. The terms of the grant obligated to the city to use the income received as a result of the program to address future commercial revitalization needs;
C. Within the incorporated areas of the city there exists small and medium-sized commercial buildings which are physically deteriorating, under-used, economically inefficient and in need of rehabilitation in order to meet applicable building codes;
D. Some owners of small and medium-sized commercial buildings are unable to obtain rehabilitation loans because the loans are not available on terms which the owners can afford or are not available to them on any terms from time to time because of restrictions in the private lending market;
E. In carrying out the commercial rehabilitation loan program referenced above, the city has learned that public participation with private lenders in commercial rehabilitation loans enhances the lenders' willingness to make loans to owners of or tenants in small and medium-sized commercial buildings and by reducing interest charged on the public share of the loans makes the combined loan affordable to the owners; and
F. The provisions of publicly assisted commercial rehabilitation loans throughout the entire city under authority of M.S. § 469.184, as amended from time to time, is essential to the physical rehabilitation of small and medium-sized buildings within, and the economic revitalization of, the city's neighborhood and downtown commercial areas on a comprehensive basis, in accordance with the objectives and policies of the Redwood Falls Comprehensive Plan, thereby stabilizing and increasing the municipal tax base and contributing to the health, safety and general welfare as well as the preservation of the quality of life of the residents of the city.
Subd. 3. Definitions. The following words and phrases, when used in this chapter, shall have the meanings respectfully ascribed to them in this section.
A. The term "acceptable security" means a chattel or real property mortgage on the property being rehabilitated and/or other area or personal property, personal guarantee or other security acceptable to the participating lender and the program administrator.
B. The term "participating lender" means a bank or other lending institution authorized to make commercial loans under applicable federal or state law, which is participating in program loans on a one-to-one matching basis.
C. The term "program regulations" shall be those regulations as are set forth in the document entitled City-Wide Commercial Area Rehabilitation Program Guidelines, dated 2-6-2007, adopted by the City Council of even date with the date of final adoption of the ordinance from which this section is derived, and any amendments or revisions thereto, as may from time to time be adopted by the City Council.
D. The term "small and medium-sized commercial buildings" means a commercial building located in the city in a business or industrial district, in the case of a small-sized building, shall be 60,000 square feet or less; and in the case of a medium-sized building shall be 200,000 square feet or less.
Subd. 4. Loan Program.
A. Program Established. Pursuant to the authority of M.S. § 469.184, as amended from time to time, there is hereby established a comprehensive commercial rehabilitation loan program having citywide application to provide secured loans to owners of small and medium-sized commercial buildings located within the city for the purpose of rehabilitation of the buildings. In making program loans, the following factors are to be considered:
1. The availability and affordability of private mortgage credit;
2. The availability and affordability of other governmental programs;
3. Whether the building is required, pursuant to any court order, statute or ordinance, to be repaired, improved or rehabilitated; and
4. Whether the proposed improvements will result in conformance with buildings and zoning codes and improvements of the aesthetic quality and economic viability and function of existing commercial areas.
B. Program Limitations.
1. The loan program shall be operated within the following statutory limitations:
a. The terms and conditions of all loans made under the program shall be fixed so that the sum of all repayments of principal and interest on them, not then delinquent, and all fees and charges collected, together with other sums to be contributed by the city, shall, over the duration of the program, be estimated to be equal to or greater than the sum of all estimated costs of the program, as determined by the program administrator and approved by the governing body of the city, including administrative costs, mortgage foreclosure costs and principal and interest payments on bonds issued to finance the program to the extent not paid from bond proceeds;
b. No loan shall be made for a period exceeding 20 years;
c. No loan shall exceed 80% of the estimated market value of the property to be rehabilitated upon completion of the rehabilitation, less the principal balance of any prior mortgage existing on the property at the time the loan is made; and
d. No loan shall be made in excess of $200,000 for the rehabilitation of any particular small or medium-sized commercial building.
2. The program regulations provided for in Subd. 4.C. hereof may apply stricter or additional program limitations to operation and administration of the loan program.
C. Program Regulations. The Department of Administration has prepared and submitted for Council consideration and adoption program regulations, as defined in Subd. 3. hereof, contemporaneously with the adoption of the ordinance from which this section is derived.
Subd. 5. Financing.
A. Loan Program Financing. The loan program shall be financed with the repaid funds received from 1995 Small Cities Development Program Commercial Rehabilitation Program, and may be financed by city revenue bonds or such other funds as may from time to time be appointed for such purpose.
B. Revenue Bond Financing. In order to assist in financing the loan program created by this chapter, the city may issue revenue bonds in accordance with the provisions of M.S. § 469.184(8), as amended from time to time, and secured in the manner provided in M.S. 469.184(10) and (11), as amended from time to time. Proceeds of any such bond issue may be applied in accordance with the provision of M.S. § 469.184(9), as amended from time to time.
(Ord. 111, Third Series, passed 2-6-2007)