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HRA Minutes 12-09-1998 ./~ -. - .- MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY WEDNESDAY, DECEMBER 9, 1998 Members Present: Chair Steve Andrews, Vice Chair Bob Murray, Dan Fric and Darrin Lahr. Members Absent: Brad Barger Council Liaison Absent: Brian Stumpf Staff Present: City Administrator Rick Wolfsteller, Deputy City Administrator JefT O'Neill, Executive Director Ollie Koropchak. 1. Call to order. Chair Steve Andrews called the meeting to order at 7:00 p.m. 2. Consideration to approve the November 23. 1998 HRA minutes. A MOTION WAS MADE BY BOB MURRA Y AND SECONDED BY DAN FRIE TO APPROVE TIlE MINUTES, AS WRITTEN, OF THE HRA MEETING OF NOVEMBER 23,1998. Motion carried unanimously. 3. Consideration of adding agenda items. No additional items. 4. Consent aRenda. Bob Murray requested that item 4A be removed from the consent agenda for discussion. A. Consideration to recommend to Citv Council a commissioner for annual appointment. Removed from the consent agenda to allow for a question. B. Consideration to approve the Certificate of Completion for BBF Properties. Inc. Recommendation: Motion to approve the said Certificate of Completion. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY DAN FRIE TO APPROVE ITEM 4B OF THE CONSENT AGENDA AS RECOMMENDED. Motion carried unanimously. -1- . . . HRA Minutes - ] 2/9/98 5. Consideration of items removed from the consent agenda for discussion. 4A. Consideration to recommend to City Council a commissioner for annual appointment. Bob Murray requested that thc above consent item be pulled from the consent agenda to allow for a question. He wanted to know if the rccommendation to the City Council had to be in the form of a resolution. Executive Director Ollie Koropchak stated that it did not need to be in the resolution form. A MOTION WAS MADE BY STEVE ANDREWS AND SECONDED BY BOB MURRA Y TO RECOMMEND APPOINTMENT OF DAN FRIE TO SERVE ANOTHER FIVE-YEAR TERM ON THE lIRA. Motion carried unanimously. 6. Consideration to hear a concept plan for redevelopment of the Klukas propertv into a two-phased townhouse development and request for TIP assistancc. Executive Director Ollie Koropchak introduced Attorney and Developer Brad Larson to present the concept plan for redevelopment of the Klukas property. Mr. Larson intends to make application to the Minnesota Housing Financc Agency for developmcnt of townhomes on the Klukas property. He felt there was a need in Monticello for moderately priced rental properties. His intent is to build and rent the townhomes for $525 to $750 pcr month. The town homes will have garages and washer/dryer hook-ups. The project will be multi-phased ovcr a two to three year period. He further stated that sewer and water are in. Applications to the Minnesota Housing Finance Agency are leveragcd with public dollars receiving higher points which in turn places the application at a higher ranking for the award ofthc competitive dollars. In order to be competitive for dollars from the Minnesota Housing Finance Agency, it is essential for municipal involvement. Mr. Larson estimated the cost of removing the two remaining mobile homes, capping the wells and removal of the septic systems at not more than $10,000. He stated that he was not seeking a commitment from the HRA at this meeting; however, he would like a Letter of 1 ntent from the HRA to present with his application to the Minnesota Housing Finance Agency. lfhe receives the dollars from the MN Housing Finance Agency, he would then return to the HRA and go through the process for TIF assistance. It would be on a pay as you go basis for short term. The money would be used for rent reduction for tenants. M2- . HRA Minutes - 12/9/98 Steve Andrews wanted to know what Mr. Larson considered short term. Mr. Larson stated three to seven years. Bob Murray asked if there werc restrictions for tenants. Mr. Larson stated that there are eligibility requirements. It is not low income assisted housing but moderate income housing with income caps. Steve Andrews inquired as to how Mr. Larson had arrived at a need for moderate income rental properties in Monticello. Mr. Larson stated that an articlc in the IDA Ncwsletter identified Monticello as an area that was in need for additional moderately priced rental units. Also, Mr. Larson stated that the application to the Minnesota Housing Finance Agency is due on February 12, 1999. Therefore, it would be necessary to receive a Letter ofIntent from the HRA of Monticello prior to that date. . Ollic Koropchak asked if the Letter ofIntent would have a dollar amount. Mr. Larson stated that he would want perimeters and that he was confident it would not exceed $10,000. He also stated that he would like a tax reduction of 50% over five years. This would reduce the rent by $25 per month. Darrin Lahr wanted to know how this project differed from the Liberty project from last year. Jeff O'Neill stated that when they actually got down to figuring the exact amount ofTIF monies that Liberty would receive, it turned out to be a larger amount than anticipated and it died under its own weight. Mr. Larson stated that he would likc tax reduction of 50% over five years. This would reduee rent by $25 per month. Ms. Koropchak asked if Phase I would be complete in one year. Mr. Larson stated that with the application deadline on February 12, 1999; he should know by mid-March ifhe is successful. Ifhe is, the first round of construetion could be completed by late Spring or early Fall. . -3- . HRA Minutes - 12/9/98 Darrin Lahr asked if there were any other uses for the property. Mr. Larson stated that the property is zoncd R-2 and meets the required level of density. He also stated that no variances should be needed. Jeff O'Neill asked about maintenance standards and what was planned for thc long-term carc. Mr. Larson stated the units would have vinyl siding with zcro maintenance. Also, an annual reserve will be built in for larger maintcnance items. Jeff O'Neill asked if the garages would be attached or detached. Mr. Larson stated that attached garages scored highcr as did air conditioning. The units would have both. . Mr. Larson stated that he should have the results soon of a study on the need for moderately priced rental property in Monticello. It is his beliefthe study will show a demand for this type of housing in Monticello. Jeff O'Neill also wanted to know if land would be dcdicated for use as a park. Mr. Larson stated that he would provide a Tot Lot and also, the units could hook-up to the trail system. Bob Murray asked Mr. Larson what exactly he wanted from the HRA. Mr. Larson stated he wanted a Letter of Intent from the HRA stating the property is TIF qualified for soil correction and not to exceed five years tax abatement. Dan Frie statcd that he liked the site location but would like direction from the Council. Bob Murray would also like Council input. He would like it put on the Council agenda subject to the HRA reviewing the market study. Darri 11 Lahr stated that he had no doubt thcre was a need for this housing, but wondered if we were weighted heavily on one side or another. Steve Andrews stated that the HRA could either approve the Letter of Intent at this meeting without seeing the study or wait for the study and then pass on to the Council. At this point, he was uncomfortable passing it on to the Council without seeing the study. . A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DARRIN LAIIR TO TABLE ANY ACTION AND REQUESTED A COpy Of THE MARKET STUDY ALLOWING TIME TO FURTHER EXPLORE TIIE USE AND LEVEL OF -4- . lIRA Minutes - 12/9/98 TIF ASSISTANCE. ALSO, SET THE JANUARY HRA MEETING FOR JANUARY 6, 1999, AS TO ENABLE THE HRA'S RECOMMENDArIONS TO BE PASSED ON TIlE CITY COUNCIL AT THEIR MEETING OF JANUARY 11, 1999. Motion carried unanimously. 7. Consideration to hear a concept plan for redeve10nment and request to enter into an agrcement for development rights to Block 54 and 64 and Wcst Bridge Park. Executive Director Ollie Koropchak introduced Brad Johnson who had been scheduled to make a presentation at the Novcmber 9, 1998 HRA meeting but because of the length of the meeting this item was tabled. Mr. Johnson asked Jeff O'Neill to give a brief background on how we had gotten to this point. . Mr. O'Neill stated that in 1996, the HRA wanted a plan for redevelopment and from that the MCP evolved. From March of 1996 to September 1997, a study was done of the downtown arca. From this study, the Bridge Park concept with anchors on both sides with the Community Center in the middle developed. The Parks Commission had originally targeted Bridge Park as a area for improvement. However with the costs of improvements high, they decided to have Brad Johnson revisit the Parks Commission with a preliminary sketch. The Parks Commission felt there was enough in the sketch to warrant their holding off improvements to the park until a decision has been made. Currently the park has 2 'li acres in that area. Under the new plan, there would be a 4 Yz acre park. Mr. Johnson also showed his concept to the City Council. Mr. Johnson stated there are three things in the redcvelopment process: 1. Time Line 2. 'riming - Has to be the right time. 3. Development curves - Development goes in cycles. Mr. Johnson distributed a sketch of the proposed redevelopment area. He stated that images usually never happen the way it is initially sketched. Hc stated the plan had three parts: 1. Restaurant 2. Inn/Hotel 3. Rental Housing The housing would be oriented to baby boomers, empty nesters. . -5- . . . HRA Minutes - l2/9/98 Mr. Johnson distributed information on potential sources and uses of revenue from the proposed projects. He stated that the housing is part of the project that can currently be done. The housing market and financial market make it a good time for new housing. Mr. Johnson also statcd that some HRA members werc conccrned about thc quality of the housing. He stated the units would be upscale rentals that would rent for around $l.OO sq. ft. Mr. Larson stressed that the proposed plli1 is only a starting point. A MOTION WAS MADE BY STEVE ANDREWS AND SECONDED BY DARRIN LAHR TO CALL FOR A SPECIAL MEETING ON MONDAY, JANUARY 4, 1999, AT 6:00 P.M., OF THE COUNCILlCOMMISSIONS/MCP BOARD TO DISCUSS THE DEVELOPMENT OF THE NORTH ANCHOR. Motion carried unanimously. 8. Considcration to accept or deny a countv-offer for purchase of the property located at 218 Front Street. Discussion was held on the above item. It was felt that at this time, it was not advantageous to purchase the property before the joint meeting on January 4, 1999. The HRA wanted to makc surc that they kept the door open for future negotiations. A MOTION WAS MADE BY DAN FRIE AND SECONDED BY DARRIN LAHR TO WITHDRA W THE TERMS OF PACKAGE "A" WITH A LETTER STATING THE HRA'S INTEREST IN THE PROPERTY BUT AT THIS TIME THE I-IRA DOES NOT HAVE THE ASSETS TO PURCHASE THE PROPERTY. ALSO, EXTEND AN INVITATION TO DEB OTTEN TO ATTEND THE JOINT MEETING TO BE I.-IELD ON JANUARY 4,1999. Motion carried unanimously. 9. Consideration of a request to discuss the use/rental of the HRA garage located at 220 Front Street. Discussion was held on the above item. HRA members felt that after checking with the lawyer regarding the wordage ofthe storage agreement to make sure that it includes a Hold Harmless Agreement and Extended Liability Coverage they had no problem with renting out the garage on an as-is basis. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE TO ENTER INTO A STORAGE AGREEMENT WITH RICH AND MARIAN CARLSON TO RENT THE GARAGE LOCATED AT 220 FRONT STREET AT A MONTHLY FEE OF $5.00 PER MONTH AFTER MAKING CERTAIN THAT THE AGREEMENT INCLUDED A HOLD HARMLESS CLAUSE AND EXTENDED LIABILITY COVERAGE. Motion carried unanimously. -6- . . . HRA Minutes - 12/9/98 10. Consideration of a request to extend the deadline for execution of documents relating to proposed Proiect No II within Redevelopment District No. 1-22. Darrin Lahr asked what the benefit would be to extending the deadline versus letting it drop. He also asked why therc was a time limit set. Ollie Koropchak stated that the HRA committed up front money to help get tenants. If the HRA elects not to extend the deadline, then it opens the door for other developers. She also stated that the time limit was set to allow the liRA to reassess the project. Dan Frie stated that he felt it was going nowhere. Steve Andrews agreed and stated that they always had the option to bring it back to the HRA for consideration. A MOTION WAS MADE BY DARRIN LAHR AND SECONDED BY STEVE ANDREWS TO DENY THE REQUEST FOR AN EXTENSION OF TI-IE DEADLINE DATE OF DECEMBER 31,1998. Motion carried unanimously. 11. Consideration of a request to re-schedule the date of the Januarv HRA meeting. Meeting rescheduled for January 6, 1999. 12. Consideration to authorize pavment of monthly HRA bills. A MOTION WAS MADE BY BOB MURRAY AND SECONDED BY DAN FRIE TO AUTHORIZE PAYMENT OF MONTHLY HRA BILLS. Motion carried unanimously. 13. Consideration of executive director's report. 14. Ollie Koropchak briefly reviewed the cxecutive director's report. She reviewed her discussion with Wendy's regarding TIF assistance. The lawyer felt the project qualified because the building was obsolete. TIF was not encouraged but Ms. Koropchak told him he had the opportunity to make a presentation to the HRA. He asked to speak to the City's attorney. Steve Andrew's asked ifhe was angry. Ms. Koropchak stated that she did not think so only that he wanted further clarification. Othcr business Bob Murray asked if a TIF District was set-up for the Shingobee property and a portion of the cost was obtained through other private funding would that ncgate or reduce the -7- "r>,j'i!.'; . . . lIRA Minutes - 12/9/98 TIF dollars. Executive Director Ollie Koropchak stated that the greater the private dollars up ffont, the gap becomes narrower or reduces the amount of 'I' IF necessary. It was felt that it did not matter where the private dollars came from; however, Ms. Koropchak will verify this. 15. Adiournment. A MOTION WAS MADE BY DAN FRIE AND SECONDED BY BOB MURRAY TO ADJOURN THE HRA MEETING AT 9:05 P.M. Motion carried unanimously. -8-