3.0 HRSR 12-07-2015 - Laserfiche WebLink

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FY 15 ELIGIBLE APPLICANTS "Development Authorities": Eligible applicants for this program are statutory or home rule charter cities, economic development authorities,housing and redevelopment authorities, counties, or port authorities. Note: Applicant must be the owner of the property at the time of the application or before disbursement of funds. ELIGIBLE PROGRAM COSTS: The Demolition Loan Program can pay up to 100 percent of the acquisition and demolition costs for a qualifying site. "Demolition costs"means the costs of demolition, destruction, removal, and clearance of all structures and other improvements on the project site, including interior remedial activities, and proper disposal thereof. As used in this subdivision, "structure"has the meaning given it in section 116G.03, subdivision 11. Costs incurred before the loan is awarded are not eligible for payment. TERMS: Loans for acquisition and demolition costs may be made subject to the following terms and conditions: 1. The agreement to repay the loan may be a general obligation of the development authority,payable primarily from a dedicated source of revenue, or other security subject to review and approval by the commissioner, and the development authority must deliver its bond or note to the commissioner, along with an attorney's opinion that security is binding and legal per bond counsel to secure the loan; 2. The term of the loan may not exceed 15 years; 3. The loan shall bear interest at a rate equal to two percent,but interest will not accrue during the first two years of the loan term. 4. The development authority shall make semiannual interest payments and annual principal payments beginning in the third year of the loan until the end of the term; 5. The principal amount of a loan may not exceed $1,000,000; 6. Loan proceeds shall be disbursed for eligible demolition costs as incurred or paid by the borrower and upon submission of invoices and other supporting documentation satisfactory to the commissioner; 7. An eligible borrower shall establish a dedicated source of revenue for repayment of the loan. FORGIVENESS: The commissioner may forgive principal of the loan and interest accrued but unpaid thereon, if any, up to 50 percent of the original loan amount, not to exceed the costs of demolition,upon completion of the redevelopment plan, if the project would otherwise have received grant funding in the most recent semiannual grant round,based on the priorities in section 116J.575. REQUIRED APPRAISALS OR ASSESSMENTS: Land appraisals of the current(as-is) and expected (pre-construction) value of the site are required so that DEED can determine the fair market value and any business subsidy. Both appraisals must be done by an independent appraiser using accepted appraisal methodology. In lieu of an appraisal, the applicant may use the current and projected assessed values as determined by the local assessor. Values cannot be determined in any other manner. The value of the property after the proposed development is completed is also requested. This estimate is generally based on similar development projects in the city. Redevelopment Page iii