Exterior Improvement Loan

4.A.
General Business
TO:
Economic Development Authority
FROM:
Samantha DiMaggio, Economic Development Coordinator
DATE:
10/04/2016
SUBJECT: Consideration of Modifications to the Commercial Exterior Improvement

Loan Program
Background
Due to program underutilization, the Facade Improvement Program was modified in
October 2013 to create the Commercial Exterior Improvement Program. Council has
asked that this program be modified to insure that the improvements being financed are
truly facade improvements and not deferred maintenance. Based on their
recommendations, staff is now suggesting the following changes:
Current Program:
Name of the program - Commercial Exterior Improvement Program
50% of the project costs to be eligible as a forgivable loan by the city with a
maximum award of $25,000
Eligible expenses are limited to improvements which are visible from the street(s).
Examples include roofs (flat or pitched), windows, doors, siding, brick, removal of
blight from property, planting of trees, painting, lighting, awnings, restoration of
historic details, etc.
Recommended Modifications:
New Name Commercial Facade Improvement Program (FIP)
50% of the project costs to be eligible as a forgivable loan by the city with a
maximum award of $30,000. Projects with significant community impact may be
eligible for a larger award.
Building renovations in the Downtown should adhere to the extent practicable to the
City of Shakopee Downtown Design Guidelines, 1999, to have the maximum
impact.
Eligible improvements include those items visible from the street, including: exterior
building improvements (cosmetic and/or structural); signage; lighting and

landscaping. Examples include, but are not limited to: exterior painting or surface
treatment; decorative awnings; window and/or door replacements or entrance
modifications; storefront replacements or enhancements; streetscape; outdoor patios
and decks; exterior wall lighting; restoration of architectural features. Landscaping
expenses, when part of a larger project, may be included in the total costs. Fees for
architects, engineers or other design professionals may also be considered as part of
the project costs.
Improvements or repairs that are required as a result of a violation or citation are not
eligible for funding through the FIP. However, improvements that are the result of
voluntary compliance and the applicants desire to bring a property into conformance
with the Citys current design standards will be considered.
Improvements will be considered as part of a total project. For instance, if the
applicant proposes to replace the windows, the City may recommend that sills also
be repaired or replaced.
Site furnishings, amenities, non-permanent structures or improvements or movable
equipment are not eligible for funding through the FIP.
All improvements must obtain any required approvals and/or permits.
Any renovations that are solely the result of ordinary repair and maintenance are not
eligible for funding through the FIP. Ordinary repair and maintenance is defined as
any work, the purpose and effect of which is to correct or prevent any deterioration
or decay, or damage to, a structure, site or any part thereof and to restore the
structure or site, as nearly practicable, to its condition prior to such deterioration,
decay, or damage using materials that are of a design, color and outer appearance as
close as practicable to the original.
Modifications to the marketing materials, application and repayment agreements would be
made to reflect these changes.
Action Sought
If the EDA concurs, it should, by motion, approve these modifications to the current
Commercial Exterior Improvement Program, so as to create a new
Commercial Facade Improvement Program.
Attachments
Previous Policy
2016 Recommended Policy
Revised Policy
City of Shakopee, Minnesota

Economic Development Authority for the City of Shakopee
COMMERCIAL EXTERIOR IMPROVEMENT PROGAM POLICY
1) POLICY PURPOSE
For the purposes of this document, the term City includes the Shakopee City Council, staff, the
Economic Development Authority, advisory boards and commissions, financial consultants and legal
counsel.
The City of Shakopee is proud of its historic downtown and other commercial areas and would like
to encourage property owners to maintain and invest in their properties in order to preserve them
as profitable businesses and attractive destinations for years to come.
The Economic Development Authority for the City of Shakopee, using its housing and
redevelopment authority powers, may create programs like this Commercial Exterior Improvement
Program in order to eliminate or prevent blight.
The Commercial Exterior Improvement Program, formerly known as the Faade Improvement
Program, allows businesses to apply for a deferred loan from the City for exterior improvements.
This document sets forth the specific criteria the City uses to evaluate requests for Commercial
Exterior Improvement Loans.
The City reserves the right to approve or reject projects on a case-by-case basis, taking into
consideration established policies, project criteria, and demand of City services in relation to the
projects potential benefits. Meeting policy criteria does not guarantee the award of business
assistance to the project. Approval or denial of one project is not intended to set precedent for
approval or denial of another project.
The City can deviate from this policy for projects that supersede the objectives identified herein.
2) PROGRAM REQUIREMENTS
The Commercial Exterior Improvement Program has the following requirements:
(1) Eligible expenses include improvements that are visible from the exterior, some of which
may include but are not limited to: roofs (flat or pitched), windows and doors, siding and
brick, removal of blight from the property, exterior painting, lighting, signage and awnings,
and restoration of historic detail.
(2) The intent of the Commercial Exterior Improvement Program is to maintain and revitalize
older commercial buildings within the City that are built prior to 1980.
(3) The City will pay up to a maximum amount of 50 percent of a projects cost for eligible
exterior-building improvements.
2014
Page 1
(4) The term of the loan shall not exceed 20 years. Payments on the loan will be deferred and
will be forgiven if the applicant satisfies the terms of the loan agreement.
(5) Loan forgiveness takes place over a five-year period with 20 percent of the award forgiven
annually. The City may extend or reduce the repayment period based on the dollar amount
of the award. The table below should be used as a guideline:
Amount of Award
Up to $25,000
$25,001-$35,000
$35,001-$50,000
$50,001-$75,000
$75,001-$100,000
Repayment Period
5 years
7 years
10 years
15 years
20 years
(6) If the benefiting building is sold within the period of the loan, the loan must repaid. The
EDA Board may consider alternatives to immediate repayment, including but not limited to
transfer of the loan to a new owner or a mutually agreeable loan repayment schedule.
(7) The applicant has one year from the award date of the loan to complete the project and
request payment of loan funds. All loan funds will be paid to an applicant upon receipt of
evidence of paid invoices for the project.
3) APPLICATION PROCESS
(1) Applications must be submitted by the property owner(s) or the building tenant in
conjunction with the owner(s). The application shall become the property of the City
and/or EDA and is subject to Minnesota Statutes, Chapter 13 (the Government Data
Practices Statute).
(2) Loan recipients are required to seek at least two bids for all projects. It is assumed that the
contractor who submits lowest bid will be hired to complete the improvements unless
mitigating circumstances exist.
(3) Funds for this program are limited and will be awarded to qualifying applicants on a firstcome, first-served basis.
(4) City staff shall review the application materials and make a preliminary recommendation
regarding the completeness of the application and whether the application meets the
criteria outlined in this policy.
(5) In the event that the EDA Board concurs with the recommendation above, the EDA Board
will grant final approval or denial of the loan.
2014
Page 2
4) REPORTING REQUIREMENTS
Loans that are less than $75,000 are not subject to reporting under Regulating Local and
State Business Subsidies, Minnesota Statute 116J.994.
2014
Loan amounts above $75,000 are considered financial assistance under Regulating Local
and State Business Subsidies, Minnesota Statute 116J.994, and should be reported on the
Minnesota Financial Assistance Form for Non-JOBZ Projects.
Page 3

FACADE IMPROVEMENT PROGRAM
For the purposes of this document, the term City includes the Shakopee City Council, staff, the Economic
Development Authority, advisory boards and commissions, financial consultants, and legal counsel.
PURPOSE
The City of Shakopees Commercial Faade Improvement Program (FIP) provides financial
support through a deferred loan to commercial property owners and business owners in the
historic Downtown area and along Shakopees commercial corridors. The purpose of the FIP is
to support the revitalization of historic Downtown Shakopee and the Citys commercial areas by
stimulating private investment in high-quality improvements that enhance the appearance of
buildings and proprieties and eliminate blight and buildings that dont meet current design
standards.
redevelopment authority powers, created the Faade Improvement Program (FIP) in order to
eliminate or prevent blight.
The City can deviate from this policy for projects that supersede the objectives identified herein.
PROGRAM ELIGIBILTY
The Commercial Facade Improvement Program provides a one-time forgivable loan for eligible
faade improvements. Eligible applicants are owners of commercial properties or purchasers of
properties that have a contract on an eligible property that they will be renovating upon closing
on the property.
The intent of the FIP is to revitalize older commercial buildings within the City that are built prior
to 1980. Building renovations in the Downtown should adhere to the extent practicable to the
City of Shakopee Downtown Design Guidelines, 1999, to have the maximum impact.
2016
Page 1
ELIGIBLE EXPENSES
For the purposes of this program, eligible expenditures shall include expenses related solely to
those exterior improvements that are eligible for the program, as outline in the program
guidelines and as determined by the City. Expenditures excluded are those related to interior
improvements; ordinary repair and maintenance; improvements as a required as a result of a
code violation; or other expenses deemed ineligible by the City.
Eligible improvements include those items visible from the street, including: exterior
building improvements (cosmetic and/or structural); signage; lighting and landscaping.
Examples include, but are not limited to: exterior painting or surface treatment;
decorative awnings; window and/or door replacements or entrance modifications;
storefront replacements or enhancements; streetscape; outdoor patios and decks;
exterior wall lighting; restoration of architectural features. Landscaping expenses, when
part of a larger project, may be included in the total costs. Fees for architects,
engineers or other design professionals may also be considered as part of the project
costs.
Improvements or repairs that are required as a result of a violation or citation are not
eligible for funding through the FIP. However, improvements that are the result of
voluntary compliance and the applicants desire to bring a property into conformance
with the Citys current design standards will be considered.
Improvements will be considered as part of a total project. For instance, if the applicant
proposes to replace the windows, the City may recommend that sills also be repaired or
replaced.
Site furnishings, amenities, non-permanent structures or improvements or movable

equipment are not eligible for funding through the FIP.
Any renovations that are solely the result of ordinary repair and maintenance are not
eligible for funding through the FIP. Ordinary repair and maintenance is defined as any
work, the purpose and effect of which is to correct or prevent any deterioration or decay,
or damage to, a structure, site or any part thereof and to restore the structure or site, as
nearly practicable, to its condition prior to such deterioration, decay, or damage using
materials that are of a design, color and outer appearance as close as practicable to the
original.
Exclusions to this clause may be made when a new owner purchases a structure and is
renovating the structure and the deterioration has not been caused by the new owner or any
affiliate or agent.
2016
Page 2
FUNDING
(1) The program provides a one-time forgivable loan for eligible expenses. These
improvements must be visible from the exterior and meet the eligible expense
requirements.
(2) The City may fund up to a maximum amount of 50 % eligible projects cost. Loans
typically will not exceed $30,000. Larger amounts may be considered for critical or
keystone projects that have a larger impact on the community.,
(3) The term of the loan shall not exceed 20 years. Payments on the loan will be deferred
and will be forgiven if the applicant satisfies the terms of the loan agreement.
(4) Loan forgiveness takes place over a five-year period with 20 percent of the award
forgiven annually. The City may extend or reduce the repayment period based on the
dollar amount of the award. The table below should be used as a guideline:
Amount of Award
Up to $30,000
$30,001-$47,500
$47,501-$65,000
$65,001-$85,500
$85,501-$100,000
Repayment Period
5 years
7 years
10 years
15 years
20 years
(5) If the benefiting building is sold within the period of the loan, the loan must be repaid.
The City may consider alternatives to immediate repayment, including but not limited to
transfer of the loan to a new owner or a mutually agreeable loan repayment schedule.
evidence of paid invoices for the project along with a release of any and all mechanics or
contractors liens.
(7) The applicant must maintain the property during the repayment period. Failure to do so
may cause the loan to become payable in full.
2016
Page 3
APPLICATION PROCESS
Practices Statute).
(2) Loan recipients are required to seek at least two bids for all projects. It is assumed that
the contractor who submits lowest bid will be hired to complete the improvements unless
(5) In the event that the EDA Board concurs with the recommendation above, the EDA
Board will grant final approval or denial of the loan.
REPORTING REQUIREMENTS
Loan amounts above $75,000 are considered financial assistance under Regulating
Local and State Business Subsidies, Minnesota Statute 116J.994, and should be
reported on the Minnesota Financial Assistance Form for Non-JOBZ Projects.
2016
Page 4

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COMMERCIAL EXTERIOR IMPROVEMENT PROGAM POLICYFAADE IMPROVEMENT

PROGRAM
1) POLICY PURPOSE
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For the purposes of this document, the term City includes the Shakopee City Council, staff, the Economic
Development Authority, advisory boards and commissions, financial consultants and legal counsel.
PURPOSE
Formatted: Font: Bold, Underline
The City of Shakopee is proud of its historic downtown and other commercial areas and would
like to encourage property owners to maintain andre- invest in their properties in order to
preserve them as profitable businesses and attractive destinations for years to come.The City of
Shakopees Commercial Faade Improvement Program (FIP) provides financial support through
a deferred loan to commercial property owners and business owners in the historic Downtown
area and along Shakopees commercial corridors. The purpose of the FIP is to support the
revitalization of historic Downtown Shakopee and the Citys commercial areas by stimulating
private investment in high-quality improvements that enhance the appearance of buildings and
proprieties and eliminate blight and buildings that dont meet current design standards.
redevelopment authority powers, created the Faade Improvement Program (FCIP) in order to
eliminate or prevent blight.
redevelopment authority powers, may create programs like this Commercial Exterior
Improvement Program (CEIP) in order to eliminate or prevent blight.
The purpose of CEIP is to support the revitalization with high-quality improvements that
enhance the appearance of buildings and properties and eliminate blight and non-conforming
design standards. The CEIP also provide technical assistance to owners to ensure that
improvements are impactful for the business and the city.
2014
Page 2016
Page 1
This document sets forth the specific criteria the City uses to evaluate requests for Commercial
Exterior Improvement Loans.
2) The City can deviate from this policy for projects that supersede the objectives identified
herein.
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0.19", Left
3) PROGRAM PROGRAM REQUIREMENTS ELIGIBILTY
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The Commercial Exterior Facade Improvement Program provides a one-time forgivable loan for
eligible faade improvements. Eligible applicants are owners of commercial properties or
purchasers of properties that have a contract on an eligible property that they will be renovating
upon closing on the property.has the following requirements
:The intent of the FIP is to revitalize older commercial buildings within the City that are built prior
to 1980. Building renovations in the Downtown should adhere to the extent pPracticable to the
City of Shakopee Downtown Design Guidelines, 1999, to have the maximum impact.
ELIGIBLE EXPENSES
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0.19", Left
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For the purposes of this program, eligible expenditures shall include expenses related solely to
those exterior improvements that are eligible for the program, as outline in the program
guidelines and as determined by the City. Expenditures excluded are those related to interior
improvements; ordinary repair and maintenance; improvements as a required as a result of a
code violation; or other expenses deemed ineligible by the City.
2014
Eligible improvements include those items visible from the street, including:
exterior building improvements (cosmetic and/or structural); signage; lighting and
landscaping. Examples include, but are not limited to: exterior painting or
surface treatment; decorative awnings; window and/or door replacements or
entrance modifications; storefront replacements or enhancements; landscaping;
streetscape; outdoor patios and decks; exterior wall lighting; restoration of
architectural features. Landscaping expenses, when part of a larger project, may
be included in the total costs.Fees for architects, engineers or other design
professionals may also be considered as part of the project costs.
Page 2016
Page 2

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0.25" + Indent at: 0.5"
Improvements or repairs that are required as a result of a violation or citation are

not eligible for funding through the FIP. However, improvements that are the
result of voluntary compliance and the applicants desire to bring a property into
conformance with the Citys current design standards will be considered.
Formatted: List Paragraph

0.25" + Indent at: 0.5"
Improvements will be considered as part of a total project. For instance, if the

applicant proposes to replace the windows, the City may recommend that sills
also be repaired or replaced.
Site furnishings, amenities, non-permanent structures or improvements or
movable equipment are not eligible for funding through the FIP.

0.25" + Indent at: 0.5"
0.25" + Indent at: 0.5"
Any renovations that are solely the result of ordinary repair and maintenance
are not eligible for funding through the FIP. Ordinary repair and maintenance is
defined as any work, the purpose and effect of which is to correct or prevent any
deterioration or decay, or damage to, a structure, site or any part thereof and to
restore the structure or site, as nearly practicable, to its condition prior to such
deterioration, decay, or damage using materials that are of a design, color and
outer appearance as close as practicable to the original.

0.25" + Indent at: 0.5"
0.25" + Indent at: 0.5"
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Exclusions to this clause may be made when a new owner purchases a structure
and is renovating the structure and the deterioration has not been caused by the
new owner or any affiliate or agent.
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FUNDING
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(1) The program provides a one-time forgivable loan for Eeligible expenses. These
include improvements that aremust be visible from the exterior, and meet the
eligible expense requirements.. Ssome of the eligible improvementswhich may
include but are not limited to: roofs (flat or pitched), windows and doors, siding
and brick, removal of blight from the property, exterior painting, lighting, signage
and awnings, and restoration of historic detail.
(1)
(2) The intent of the Commercial Exterior Improvement Program is to maintain and
revitalize older commercial buildings within the City that are built prior to 1980.
2014
Page 2016
Page 3

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3, + Start at: 1 + Alignment: Left + Aligned at: 0.25" +
Indent at: 0.5"
Buildings in the Downtown should try to adhere to the City of Shakopee

Downtown Design Guidelines, 1999 to have the maximum impact.
(2) The City will may pay fund up to a maximum amount of 50 percent of an 50 % percent
eligible projectss cost. Loans typically will not exceed $30,000. Larger amounts may
be considered for critical or keystone projects that have a larger impact on the
community.

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3, + Start at: 1 + Alignment: Left + Aligned at: 0.25" +
Indent at: 0.5"
(3)
for eligible exterior-building improvements.

(4)(3)
The term of the loan shall not exceed 20 years. Payments on the loan will be
deferred and will be forgiven if the applicant satisfies the terms of the loan agreement.

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(5)(4)
Loan forgiveness takes place over a five-year period with 20 percent of the
award forgiven annually. The City may extend or reduce the repayment period based on
the dollar amount of the award. The table below should be used as a guideline:
Amount of Award
Up to $2530,000
$2530,001-$35,00047,500
$35,00147,501$50,00065,000
$5065,001-$7585,5000
$75,00182,501-$100,000
Repayment Period
5 years
7 years
10 years

15 years
20 years

(6)(5)
If the benefiting building is sold within the period of the loan, the loan must
repaidbe repaid. The EDA BoardCity may consider alternatives to immediate
repayment, including but not limited to transfer of the loan to a new owner or a mutually
agreeable loan repayment schedule.

evidence of paid invoices for the project along with a release of any and all mechanics or
contractors liens.

(7) The applicant must maintain the property during the repayment period. Failure to do so
may cause the loan to become payable in full.
(7)
.

4)
APPLICATION PROCESS

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2014
Page 2016
Page 4
Practices Statute).
(1)
(2) Loan recipients are required to seek at least two bids for all projects. It is assumed that
the contractor who submits lowest bid will be hired to complete the improvements unless
(3)
(4)
(5) In the event that the EDA Board concurs with the recommendation above, the EDA
BBoard will grant final approval or denial of the loan.
(5)
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REPORTING REQUIREMENTS
5)
Loan amounts above $75,000 are considered financial assistance under Regulating
Local and State Business Subsidies, Minnesota Statute 116J.994, and should be
reported on the Minnesota Financial Assistance Form for Non-JOBZ Projects.
2014
Page 2016
Page 5
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4.A.

Economic Development Authority

Samantha DiMaggio, Economic Development Coordinator

SUBJECT: Consideration of Modifications to the Commercial Exterior Improvement

building improvements (cosmetic and/or structural); signage; lighting and

City of Shakopee, Minnesota

City of Shakopee, Minnesota

Site furnishings, amenities, non-permanent structures or improvements or movable

All improvements must obtain any required approvals and/or permits.

City of Shakopee, Minnesota

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COMMERCIAL EXTERIOR IMPROVEMENT PROGAM POLICYFAADE IMPROVEMENT

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3) PROGRAM PROGRAM REQUIREMENTS ELIGIBILTY

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Improvements or repairs that are required as a result of a violation or citation are

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Improvements will be considered as part of a total project. For instance, if the

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All improvements must obtain any required approvals and/or permits.

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Buildings in the Downtown should try to adhere to the City of Shakopee

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for eligible exterior-building improvements.

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