HRA Agenda 09-06-2006
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, September 6, 2006 - 6:00 p.m.
Bridge Room - Community Center
Commissioners:
Chair Brad Barger, Vice Chair Steve Andrews, Dan Frie, Darrin Lahr, and Bill
Fair.
Council Liaison:
Staff:
1.
2.
3.
4.
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5.
Wayne Mayer.
Rick W olfsteller, Ollie Koropchak, and Angela Shumann.
Call to Order.
Consideration to approve the August 2,2006 HRA minutes.
Consideration of adding or removing items from the agenda.
Consent Agenda.
A. Consideration to approve ratification of the Subordination of Redevelopment
Agreement between the HRA, SL Real Estate Holdings LLC, and First Federal
Savings Bank.
Consideration of follow-up by Commissioner Frie as to discussion with business property
owners.
6. Consideration to authorize payment ofHRA bills.
7. Consideration ofHRA Executive Report.
8. Committee Reports: Marketing
Fiber Optics
9. Next regular HRA meeting - Wednesday, October 4,2006.
10. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, August 2,2006 - 6:00 p.m.
Bridge Room - Community Center
Commissioners:
Chair Brad Barger, Dan Frie, Darrin Lahr, and Bill Fair
Commissioners Absent:
Steve Andrews
Council Liaison:
Wayne Mayer
Staff:
Ollie Koropchak, and Angela Schumann.
1. Call to Order.
Chairman Barger called the meeting to order, noting absence of Commissioner Andrews
and Rick Wolfsteller.
2.
Consideration to approve the June 7. 2006 HRA minutes.
MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES OF JUNE 7th,
2006.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
3. Consideration of adding or removing items from the agenda.
Koropchak noted that Michael Van Heel was present to discuss item 6A.
4. Consent Agenda.
A. Consideration to ratify the Amendment to the Contract for Private Development
between the HRA and Master's Fifth Avenue, Inc.
Koropchak noted the changes made the Master's Fifth Avenue contract regarding
the project's commencement, completion and reimbursement date.
B.
Consideration to approve the Amendment to the Contract for Private
Development between the HRA and SL Real Estate Holdings LLC.
Koropchak reported that Karlsburger would like to close on either the 10th or 11th
of August and start grading on the 14th. The recommendation is to amend the
closing date from June 30th, 2006 to August 15th, 2006.
MOTION BY COMMISSIONER FAIR TO RATIFY THE AMENDMENT TO
THE CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA
AND MASTER'S FIFTH AVENUE, INC. AND TO APPROVE THE
AMENDMENT TO THE CONTRACT FOR PRIVATE REDEVELOPMENT
HRA Minutes - 08/02/06
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BETWEEN THE HRA AND SL REAL ESTATE HOLDINGS, LLC.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
5. Consideration to approve entering into a Preliminary Development Agreement with
Walker Instore. Inc.
Koropchak stated that in discussing the results of the last HRA meeting, Walker Instore
didn't understand why the HRA didn't proceed. Their representatives indicated that they
felt like the proposal had changed. Koropchak stated that she had informed Walker that it
was important to be here to discuss the project.
Koropchak stated that as the original proposal expired and their project parameters had
changed in tenns of employment, the HRA may want to present a new offer. Walker
wants to buy 1112 acre at $1 per square foot under their new parameters. Barger asked if
Walker is willing to work within the criteria. Koropchak stated that the original offer was
1 acre at the criteria rate, with the other 1f2 acre at market rate. Walker is stating that they
are creating more jobs, so they may fit criteria for the other acreage, once they re-apply.
6.
Consideration to discuss follow-up items from HRA Workshop.
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A. Block 53 - Korpochak noted that Michael Van Neel was present to discuss the
project that had been proposed for the block. The property owners had emailed
that they are not moving forward with the proposal at this time.
Barger indicated that the HRA had previously worked on Block 51 for some time.
Barger stated that perhaps by working together with the property owner, they
could accomplish something downtown. Barger stated that he felt it important to
have VanHeel discuss opportunities with the HRA.
Michael VanHeel addressed the HRA, noting that he had attended a seminar on
mixed-use project. VanHeel stated that mixed-use seems to work in the inner-
ring cities and suburbs. The question for his site is whether it works outside of
that environment. Based on the discussion that he had with the consultants they
were working with, no one could give them a clear answer. VanHeel stated that
as such, the risk outweighed the possible outcome.
VanHeel noted that Block 51 and 53 are great entrance points, but there was
concern about the housing and retail mix. When they had talked with retailers for
the mixed use project, all the interest was on the south Highway 25 corridor or at
the interchange location. Retailers want a prototype store in Monticello and
indicated that they wouldn't be willing to do the downtown concept here. In terms .
of the office portion that had been proposed above the retail, the Workforce
Center had been the primary focus for that area. VanHeel stated that they wanted
to grow, but the 2nd floor space wasn't going to work for them.
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HRA Minutes - 08/02/06
Additionally, Van Heel stated that as they didn't have first-hand expertise in the
townhome and condo market, with the market slowing down, the concept
presented yet another risk. For the proposed project, they weren't convinced the
timing today was right.
Koropchak asked if Van Heel had further discussions with Muller. Van Heel
stated that they had not and weren't sure they had a lot of interest in the project.
Barger noted that without parking, the value of that property goes down.
Fair clarified that Van Heel owned the parking for the theater area, and that Van
Heel didn't own anything east of the theater. Van Heel confirmed. Barger asked
if they needed the whole block to do a project. Van Heel stated that to make a
project work comprehensively and get the parking, they really need the whole
block. Barger asked if they had looked at other areas or blocks. Van Heel stated
that he had not. He noted that if they were to have an anchor, that would help.
Koropchak asked if they were willing to partner with residential developers. Van
Heel stated that if and when they moved forward, they would absolutely partner
with a residential real estate partner to capture market.
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Fair stated that he thought Elk River's HRA was involved in the Jackson Place
project and that from a governmental point of view, the HRA can't go into a
project to generate revenue. He stated that the HRA may need to be willing to
spend some money up front to get a payoff. Barger asked if Van Heel sees
potential in downtown with the growth south of the interstate. Van Heel stated
that the momentum is at that location, from a retail perspective.
Lahr stated that in looking at risk and gap, the HRA's philosophy has been that it
wants developers to pick the projects. The HRA is supportive of the development
community. Where a gap exists, the HRA can perhaps reduce some of that risk.
Lahr stated that the HRA is interested in helping, but doesn't have the expertise to
take the project from the start.
VanHeel stated that until the Highway 25 and interchange commercial areas
mature, it may not make sense for retailers to compete downtown. Fair asked if it
makes sense to get government involvement at the beginning in perhaps acquiring
the land. Lahr stated that he thinks the amenities will sell the downtown -
community environment. The commissioners indicated that they had been
working on Block 51 and recognize that the City needs to make an investment.
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Van Heel asked if there are specific strategies for acquiring properties. Fair stated
that if the HRA approaches the owners, the price seems goes up. Lahr noted that
one issue in acquiring property is that there are too many parties involved. Fair
posed the question if it makes sense to acquire the property, demo the buildings
and have vacant land.
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HRA Minutes - 08/02/06
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Barger asked Van Heel if the HRA owned the rest of the block, would they be
more willing to undertake a project. Van Heel stated that they would be more
willing to put money into marketing studies and look at residential opportunities.
Koropchak asked about the Van Heel's property along east 7th. Van Heel stated
that they are marketing the property.
Fair asked Van Heel about the closing of River Street at 25. Van Heel stated that
the key factors driving retail are access and parking.
The Commissioners thanked VanHeel for his input.
B. Other properties - Dan Frie.
Frie reported that there are 5 additional properties downtown that are for sale. Frie
noted that he had spoken with various property owners downtown, who had given
him various responses to selling.
Fair stated that HRA needs to make a decision on how to proceed. Frie stated that
the asking price for the Muller Theatre property is $750,000; although there is a
difference between market value and their price. Fair suggested making an offer. .
Mayer asked if the HRA would be opening up a "City will buy" mentality. Lahr
stated that with southward population flow, the picture has changed. The idea is
to now completely change downtown. Mayer asked about how to calculate fair
market value. Fair stated that the property owners probably think it is prices at
market. Mayer recommended that Frie develop a price.
Fair recommended setting parameters so that approach to each property owner is
consistent. The Commissioners discussed possible purchasing parameters.
MOTION BY COMMISSIONER FAIR TO AUTHORIZE COMMISSIONER
FRIE TO ACT AS THE HRA'S PURCHASING REPRESENTATIVE ON
THREE PROSPECTIVE DOWNTOWN PARCELS, SUBJECT TO THE
PARAMETERS AS FOLLOWS.
1. The HRA is interested in value of the land, not the building.
2. Start with 3 properties on Block 53 that are currently for sale
3. Offer will be based on market value ofland, plus incentive of 15%
4. The HRA is looking at long-terms holding of land
5. The offer will include a provision that the current tenants/owners can stay for
minimum of3 years rent free (not including utilities)
6. The offer will expire and be re-evaluated at 2 months
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MOTION SECONDED BY COMMISSIONER LARR. MOTION CARRIED, 4-
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HRA Minutes - 08/02/06
7.
Consideration to authorize pavment ofHRA bills.
MOTION BY COMMISSIONER LAHR TO AUTHORIZE PAYMENT OF THE HRA
BILLS.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 4-0.
8. Consideration ofHRA Executive Report.
Koropchak referred to the report, stating that unless there were questions, the HRA could
move on to the next item.
9. Committee Reports: Marketing - Koropchak reported that the group would be meeting
the following day.
Fiber Optics - Mayer reported that the preliminary survey
information has come back on the four possible models. Currently,
the consultants are reviewing the numbers for revenues in terms of
bond payoff. If the desired model works, it will be service to the
whole community with no home left behind.
10.
Next regular HRA meeting - Wednesday, September 6,2006.
11. Adiournment.
MOTION BY COMMISSIONER BARGER TO ADJOURN.
MOTION SECONDED BY COMMISSIONER FAIR. MOTION CARRIED, 4-0.
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BRA Agenda ~ 09/06/06
4.
Consideration to approve ratification of the Subordination of Redevelopment
Aereement between the BRA. SL Real Estate Boldin2s LLC. and First Federal
Savin2:S Bank.
A. Reference and backeround:
The day prior to the closing of August 14, 2006, First Federal Savings Bank requested a
subordination from the HRA. The HRA Attorney had inquired earlier to the need of such
document but heard no response. Anyway, the document was prepared by the HRA Attorney,
executed by the HRA Executive Director, and faxed for the closing. For your information, the
HRA received a Letter of Commitment for permanent financing from the lender, sworn
construction statement, estimated cost of project, and letter of insurances. The HRA received
a check for the land which was deposited in the HRA General Fund less the amount transferred
to the Trunk Reserve Funds for trunk fees associated with the $1.00 per square price. TIP is
used to reimburse construction of public improvements in Otter Creek Crossing. A ground
breaking was held by Karlsburger/Keystone Design Builders on August 23 with the anticipation
of building construction completion by February 27,2007.
The HRA Attorney requested the HRA ratify the action already executed. Housekeeping
item.
B. Alternative Action:
1. Motion to approve ratification of the Subordination of Redevelopment Agreement
between the HRA, SL Real Estate Holdings LLC, and First Federal Savings Bank.
C. SuPportin~ Data.
Copy ofthe agreement. Fully executed will be forwarded to HRA.
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CO,oy
SUBORDINATION
OF REDEVELOPMENT AGREEMENT
THIS SUBORDINATION OF REDEVELOPMENT AGREEMENT (this "Agreement"),
is made and entered into as of the _ day of August, 2006, by and among the HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, a public
body corporate and politic organized and existing under the laws of the State of Minnesota (the
"Authority") and SL REAL ESTATE HOLDINGS LLC, a Minnesota limited liability company
(the "Redeveloper"), and First Federal Savings Bank, a national banking association (the
"Lender").
WIT N E SSE T H:
WHEREAS, the Authority and the Redeveloper have entered into that certain Purchase
and Redevelopment Contract dated as of April 12, 2006, as amended by the Amendment to
Purchase and Redevelopment Contract dated as of August -' 2006 (together, the
"Redevelopment Contract"), pertaining to the development by the Redeveloper of l').n
approximately 20,000 square foot production and warehouse facility, including office space
necessary for and related to such activities (the "Minimum Improvements") on the property
located in Monticello, Minnesota, legally described as Lot 1, Block 1, Otter Creek Crossing 2nd
Addition (the "Redevelopment Property"); and
WHEREAS, the Redevelopment Property has been conveyed by the Authority to the
Redeveloper pursuant to that certain Quit Claim Deed dated as of August 14, 2006 (the
"Authority Deed"), filed of record in the office of the Wright County Recorder on
, as Document No. ; and
WHEREAS, in order to provide funds for the acquisition of the Redevelopment Property
by the Redeveloper, the Lender is providing a $1,070,000.00 loan and a $818,649.00 loan
(collectively the "Loans"); and
WHEREAS, the Loans are secured by, among other things, those certain Mortgages
encumbering the Redevelopment Property dated as of August 14, 2006 (collectively the
295490v2 MNtMN190-123
295490vl MNI MN I 90-123
"Mortgages"), executed by the Redeveloper in favor of the Lender and filed of record in the .
office of the Wright County Recorder on as Document Nos.
and ;md
WHEREAS, the Lender has required, as an express condition to disbursement of the
Loans, (a) that the rights of the Authority with respect to the Redevelopment Property under the
Redevelopment Contract and the Authority Deed be subordinated to the Mortgages, and (b) that
the Authority agrees to certain other matters, all as more fully stated herein.
NOW THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt md sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. The Authority hereby consents to the Lender's making of the Loans and the
encumbering of the Redevelopment Property with the Mortgages.
2. The Authority agrees that all of its right, title and interest in and to the
Redevelopment Property under the Redevelopment Agreement and the Authority
Deed are hereby subordinated to the lien of the Mortgages. Without limiting the
foregoing, the Authority agrees that its rights under the Redevelopment Contract and
the Authority Deed to revest title to the Redevelopment Property shall be subject and
subordinate to the Mortgages in all respects. In the event that the Lender shall
acquire title to the Redevelopment Property through foreclosure of the Mortgages or .
pursuant to a deed in lieu of foreclosure, Lender shall acquire such title free and clear
of all of the terms and provisions of the Redevelopment Agreement and Authority
Deed.
3. The Authority acknowledges that the rights of the Authority with respect to the
receipt and application of any proceeds of insurance or condemnation awards shall,
in all respects, be subject and subordinate to the rights of the Lender under the
Mortgages.
4. In the event that there occurs a default under the Mortgages, the Lender agrees that it
will provide to the Authority a copy of any notice of default given by Lender to
Redeveloper. Thereafter, the Authority shall have the right, but not the obligation, to
cure any such default on behalf of the Redeveloper within such cure periods as are
available to the Redeveloper under the Mortgages. The Authority agrees to provide
the Lender with copies of any notice of default given under the Redevelopment
Contract, and that the Lender shall have the right, but not the obligation, to cure any
such default within such cure periods as are available to the Redeveloper under the
Redevelopment Contract.
5. For purposes of this Agreement, the term "Mortgages" shall include the Mortgages
and any and all amendments, supplements, modifications, renewals, extensions or
replacements thereto, thereof or therefore.
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295490v2 MNI MN 190-123
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6 Notwithstanding any of the foregoing, in no event will the Authority subordinate its
rights under the Assessment Agreement described in Section 6.3 of the
Redevelopment Contract.
7. This Agreement can be waived, modified, amended, terminated or discharged only
eXplicitly in a writing signed by the Lender. A waiver by the Lender shall be
effective only in a specific instance and for the specific purpose given. Mere delay
or failure to act shall not preclude the exercise or enforcement of any of the Lender's
rights or remedies hereunder. All rights and remedies of the Lender shall be
cumulative and shall be exercised singularly or concurrently, at the Lender's option,
and any exercise or enforcement of anyone such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other.
8. Any notice, request, demand or other communication hereunder shall be deemed
duly given if delivered or postage prepaid, certified or registered, addressed to the
party as set forth below:
If to the Authority:
Housing and Redevelopment Authority in and for the City of Monticello
505 Walnut Street, Suite I
Monticello, MN 55337
Attention: Executive Director
If to the Redeveloper:
SL Real Estate Holdings LLC
I 2450Fernbrook Lane
Dayton, MN 55327
Attention: Michael H. Maher
If to the Lender:
First Federal Savings Bank
Attention:
9. This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have made and entered into this Agreement
as of the day and year first above written.
295490v2 MNI MN 190-123
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Signature Page to Subordination
of Redevelopment Agreement
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HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
MONTICELLO
~:: E~t~cto~ ~ "0J)~
8T A TE OF MINNESOTA)
) 55
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this ~day of August, 2006, by
l)\ \ ;_~. \Lc)\o~~ \.-v:x.V.... , the Executive Director of the Housing and Redevelopment
Authority in and for the City of Monticello, a public body corporate and politic, for and n
behalf of said public body.
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........................'..--
e, DEBRAA.WARD
" ,,' NOTARY PUBLIC. MINNESOTA
""'i1"';" My Commission Expires Jan, 31, 2010
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29549Qv2 MN! MN19Q.123
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Signature Page to Subordination
of Development Agreement
8L REAL ESTATE HOLDINGS LLC
By:
Its:
STATE OF MINNESOTA)
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of August, 2006, by
, the of 8L Real Estate Holdings LLC, a Minnesota limited
liability company, on behalf of the company.
Notary Public
295490v2 MNI MN190-123
- 5 -
Signature Page to Subordination
of Development Agreement
STATE OF MINNESOTA )
) ss
COUNTY OF )
First Federal Savings Bank
By:
Its:
The foregoing instrument was acknowledged before me this _ day of , 2006, by
, the of First Federal Savings Bank, N.A., a national
banking association, for and on behalf of said association.
THIS INSTRUMENT WAS DRAFTED BY:
KENNEDY & GRAVEN, CHARTERED
470 U.S. Bank Plaza
200 S. 6th Street
Minneapolis, MN 55402
295490v2 MNI MNl90-l23
Notary Public
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HRA Agenda - 09/06/06
5.
Consideration of follow-up by Commissioner Frie as to discussion with business
property owners.
A. Reference and back2round.
At the last meeting, it was requested that Commissioner Frie inquire with certain property
owners as to their interest in selling with a three-year option, market value of land plus 15%.
The three-year option appears to be more or less a first-right of refusal. With that
understanding, the attorney had no concerns. However, moving/relocation benefits, need for a
redevelopment assessment study, and decision when to demolish substandard buildings needs
to be assessed.
Attached is a copy of the Fund Balance Analysis prepared earlier by Ehlers & Associates. The
numbers are in today's dollars, not net present value.
In addition to Dan's report, the HRA should hear some comments from the Comp Plan
neighborhood meetings.
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6.
Consideration to authorize payment of HRA bills.
Recommendation is to pay monthly bills attached.
HRA Agenda - 09/06/06
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
.
Financial Advisory Services Invoice
City of Monticello
505 Walnut Street, Suite 1
Monticello. MN 55362~8822
Invoice #:
Invoice Date:
333266
August 10, 2006
Project: General
Date Worked k Description of Services
Hours
Amount
05-11-2006
ED
Various Conversations: Discussion with staff regarding
TIF issues/disclosure and tax capacity
PAYG calculations for Ollie
Prepared: Mise QT program help
Prepared: Misc TIF reporting help-forms and disclosure
1.00
no charge
07-10-2006 MTR
07 -20-2006 ED
07-20-2006 ED
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(Detach at perforati nd return 10WiDP rtion to Ehlers & Associates, Inc.)
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.75
225.00
no charge
112.50
3.75
$337.50
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Amount Due This Invoice
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$337.50
OK TO PAY?
Code:
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City of Monticello
Invoice #: 333266
Invoice Date: August 10, 2006
[Amount DueTh'i~_'~~~~=~--"----~---$337.5Ol
.
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Please remit payment to: Ehlers & Associates, Inc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
_..__..~,~.,_.,,~.______.__~'....,._,.J,...~_____"'~.~_'____
Due Upon Receipt
.
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Financial Advisory Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
333268
August 10, 2006
Project: 2006 Modification of District 1-2 and 1 ~24
Date Worked k Description of Services
Hours
Amount
07 -28-2006
NS Prepared Filing Correspondence
1_00
155.00
1.00 $155.00
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(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Invoice #:
Invoice Date:
333268
August 10, 2006
[' Amount Due This Invoice
n_ .---_m_----------J
$155.00
.
-=-upon R~:~t _ ___.l
Please remit payment to: Ehlers & Associates, Inc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
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BRA Agenda - 09/06/06
7.
Economic Development Report:
a. Leads:
- Karlsburger Foods, Inc. - Closing and conveyance ofthe land took place on August 14,
2006 and groundbreaking was held on August 23 at the site. Anticipated completion date
February 27,2007. EDA has targeted September 5 to consider machinery & equipment loan.
- Custom manufacturer of die cut and thermo-formed components looking to expand - Lead
from web site. Verified zoning and business use are compatible with Grittman. Move-in 2007,
will call week of August 25 on building size requirement, and I requested to visit existing site in
NE Mpls.
- Medical Treatment Facility - 160,000 sq ft (2-story) facility. Forwarded from NAHRO via
State.. City responded and forwarded to Chadwick and Pfeffer. Chadwick also responded.
Their criteria could assist in shaping goals to achieve the Monticello Comp Plan Update if
consistent with citizen and council direction.
- Precision Technologies scheduled to move in September 7 and 8.
- Washburn Computer Group installing new roof on Clow Stamping building. They hope to
confirm architectural plans on August 23 for submission for renovation to the building
department. Goal is to move in late October.
- Out-state aluminum & glass company - was in Monticello August 23 and called from site
signage. Original lead from County Partnership for glass company, 1-2 Zone. 60,000 sq ft
building, 6-8 acres. 50-80 employees. National company expanding to MN. Verified zoning
with Grittman, mailed application, covenants, and other info. They returned to CO the same
day.
b. BRE:
- Talking with existing businesses about needs and future plans. Also called Charlie Pfeffer to
talk about plans after interchange opens.
- Attended Open House by TDS Telecom and 1-94 Interchange/Cty Rd 18 Ribbon cutting.
- Dahlheimer Tour - Thanks for attending. Photo booklet mailed to Greg along with a note of
thanks.
- Attended John Bondhus funeral on August 25.
c. Marketing: Fliers mailed to about 50 precision manufacturers in metro area plus Graco
Rogers and Minneapolis. Billboard up along 1-94 starting September. Committee requested
$33,000 for budget year 2007, first request since 2001.
- Requested DEED to complete a Labor Market Profile for City of Monticello, Monticello and
Big Lake Township comparing to Wright County and State.
- Inquired into cost for pull-out section in Minneapolis/St. Paul Business Journal similar to St.
Cloud.
- Been invited to participate in a roundtable discussion on the topic ofNW Corridor from
Rogers, Albertville, and Monticello on industrial, office, and retail development. The results will
be published in the September 29 Business Journal issue. Pending.
I
HRA Agenda - 09/06/06
- In collaboration with WSB will market industrial park at Wright County Partnership Golf
outing September 7, Wild Marsh, Buffalo.
d. A VR: The closing on the 53 acres between the city and Chadwick took place on August
23. Council will award the bids for grading the 53 acres on August 28. The Council will also
approve plans and specs and authorize for bids for extension of Dalton Avenue, Dalton Court,
and Dalton Way (option) on the 28th. A VR and city have executed the agreement with closing
anticipated for mid October. Infrastructure for access to 14-acre site completed by end of
November. I've requested the covenants be approved and recorded on the 53 acres less
A VR site. Simola is working on lighting along Chelsea West and Dalton Avenue. Forestation
also part of plan.
2
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~",(L
Monticello Area
Labor Market Profile
Prepared with:
Cameron Macht
Regional Analyst, Central Bt Southwest
Minnesota Dept. of Employment Bt Economic Development
320-231-5174 ext. 7535
cameron.macht@!state.mn.us
For the purposes of this profile, we have gathered data from a variety of
sources, most notably DEED's Salary Survey and Quarterly Census of
Employment & Wages (QCEW) program, the US Census Bureau, and a
Regional Labor Force Assessment, among other sources. To that end,
different data is available for different geographies.
Monticello Lebor Market Profile
DEED Regional Analysis & Outreach Unit
Page 1 of 7
Executive Summary
Located between the Twin Cities Metro Area and the St. Cloud area, the Monticello-Big Lake
area in Wright and Sherburne Counties is among the largest and fastest growing areas in the
state of Minnesota. According to the 2005 population estimates from the U.S. Census Bureau,
the city of Monticello has more than doubled in the last 15 years, and is expected to grow
another 20 percent in the next 15 years. Wright County was the in the top 5 fastest and largest
growing counties in Minnesota between 2000 and 2005, with the population increasing 23.1 %,
or 20,744 people.
.
Wright and Sherburne, when combined with Stearns and Benton counties, comprise Economic
Development Region 7W, where the population neared 375,000 people in 2005 and is growing
rapidly both through a healthy, aging population and increased in-migration. This growth trend is
expected to continue, as the state demographer projects the regional population will be closing
in on 485,000 people by the year 2030 - a growth rate of just over 50%. Wright County is
projected to grow 38.7% to 139,020 people by 2030, while Sherburne County is projected to
expand 60.7% to 121,920 people over the next 25 years.
DEED research has shown that Central Minnesota cities and townships - like Monticello and
Big Lake -located on four-lane highways that are connected to metropolitan areas added
people three times as fast as those on two-lane highways; and created jobs four times as fast.
This past, present, and future growth provides area employers with a hard-working, available
work force and a steady consumer base. However, close proximity to the job markets of the
Twin Cities and St. Cloud means that despite local job growth, many of the area communities .
are sending their residents to work in other counties. Well over half (57.2%) of Wright County
residents worked outside their county of residence, and more than 2 out of every 3 workers
(67.7%) in Sherburne County worked outside their home county. Compare that to the State of
Minnesota, where only 33.6% of residents worked outside their county; or Stearns County,
where just 19.4% worked outside their county of residence.
This is a significant export of jobs, as the Monticello area has extremely high labor force
participation rates, especially for females. For those working in Wright and Sherburne Counties,
the area has a healthy economic base with employment spread across several diverse industry
sectors, including Retail Trade, Construction, Manufacturing, Health Care and Social
Assistance, Educational Services, Accommodation & Food Services, Wholesale Trade,
Administrative & Waste Services, Transportation & Warehousing, Finance & Insurance, Other
Services, and Public Administration.
Employment in Region 7W has been growing steadily, becoming the fastest growing region in
the state. Many industry sectors actually added jobs in the region despite statewide trends to
the contrary. As the Twin Cities continues to expand outward. the Monticello area in Wright and
Sherburne Counties has a lot to offer businesses. Demographic statistics show that Region 7W
provides available workers in a wide variety of industries at less cost than the Twin Cities Metro
Area. Since labor is a major cost of doing business, these savings translate directly to the
bottom line.
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Monticello Labor Market Profile
Page 2 of 7
DEED Regional Analysis & Outreach Unit
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Population Growth & Demographic Changes
The population in the city of Monticello increased 59.2%, or 2,927 people, from 1990 to 2000;
and was estimated to have reached 10,882 people in 2005, more than double its size just 15
years earlier. The Minnesota State Demographer expects the city of Monticello to surpass
13,150 people by 2025, nearly triple its size in 1990.
Monticello was not alone, either, with
nearly every city and township in the
area expanding quickly. The city of Big
Lake gained 5,691 new people from
1995 to 2000, a 183% increase; and Big
Lake Township added 3,314 people. In
contrast, Monticello Township saw a
slight decline in population, likely due to
changing boundaries and annexations.
(See Table 1.)
Wri ht Coun
Minnesota
Source: U.S. Census Bureau, * Minnesota State Demo ra hie Center
Wright County was among the fastest growing counties in the state, jumping 61.2% from 1990
to 2005, as compared to a 17.3% statewide growth rate. The county population is expected to
soar another 20% and hit 135,000 people by 2025, which might even be conservative based on
actual growth the last five years. The total population in Minnesota is also expected to grow
about 19% from 2005 to 2025, led by counties like Wright and Sherburne.
Wright County is expected to outgrow
the state of Minnesota in every age
group between now and 2025, most
notably in the youngest and oldest age
groups. Unlike some areas of the state,
Wright County and Monticello are still
seeing growth in the school-age
population as young, married couples
continue to move into the area to start
their families. At the same time, people
are living longer than ever, and the
sheer size of the Baby Boom
generation will have a large impact on
the region as they begin to reach
retirement age in 2011 and beyond. In
fact, the number of people aged 55
years and over will more than double
between 2005 and 2025 in Wright
County. (See Figure 1.)
140%
120%
100%
80%
60%
Figure 1: Population Projections
by Age Group, 2005-2025
160%
40%
20%
0%
-20%
E!? ~ E!? ~ E!? E!? E!? ~ ill Kl
m m ~ ~ m m m :> l6'
Q) Q) Q) 0
>. >. >. >. >. >. '0
6 ;:!: .... ry .... ;:p; ;g ;! c: "ffj
":' "'i m "ffj
.;, '!1 '" '" .;, t2 .;, '" <5
"" M .... <0 ,.... t-
Source: Minnesota State Demographic Center
Although minorities still make up less than 1.5% of the total population, the Monticello area saw
positive changes in all race and origin categories, including rapid growth in persons of Hispanic
origin, Black or African American residents, and Asian or Pacific Islanders. This growth helps
the Monticello area continue to provide a diverse group of available consumers to local
businesses, as well as an available labor force to local employers. Growing diversity is valuable
to employers in filling open positions, meeting changing customer demands, and creating
innovative ideas.
Monticello Labor Market Profile
Page 3 of 7
DEED Regional Analysis & Outreach Unit
.
Labor Force Availability
Because workers are less mobile than other factors of production, availability of workers is
important to firm location. The Monticello area's past, present, and future demographic growth
provides employers with a hard-working, available work force and a steady consumer base.
However, close proximity to the job markets of the Twin Cities and St. Cloud means that despite
local job growth, many of the area communities are sending their residents to work in other
counties. Three out of every five (57.2%) Wright County workers drove outside their home
county for employment, compared to the State of Minnesota, where only one in three (33.6%)
residents worked outside their county; or Stearns County, where just 19.4% worked outside
their county of residence.
This is a significant export of jobs, as the Monticello area
and Wright County both have extremely high labor force
participation rates, especially for females. In fact, Big Lake
and Monticello Township are both nearly 20% higher than
the U.S. labor force participation rate, and each city and
township in the area has a higher overall and female labor
force participation rate than the state, which is ranked
number one in the nation. The data also demonstrates that
the area is home to a high number of dual-income families.
(See Table 2.)
Table 2: Labor Forcs.Partic:i ationRates
Overall Female
Clt. of Monticello 72.6%
78.6%
.75.7%
69.6%
.;..71.3%
66.0%
57.5%
United States
Source: U.S. Census Bureau
However, many of these workers travel to the Twin Cities metro area for their jobs. By
comparing the number of jobs with the number of employed residents in a given area, import .
and export of workers can be estimated. Wright County had a net export of 15,445 employed
residents to jobs in other counties, followed closely by Sherburne County, which exported a net
of 13,065 residents. These were the two biggest deficits in Central Minnesota.
Just over 20,000 residents both lived and worked in Wright County, while just under 20,000
commuted to Hennepin County. Another 1,550 residents traveled to Sherburne County; 1,263
drove to Anoka County; 1,125 commuted to Ramsey County; and 994 worked in Stearns
County. This has led to increased commute times for
workers, with average one-way commute times closing in
on a half hour.
Mean Travel Time to Work
(in minutes)
30
25
20
15
10
5
o
Sherburne Wight SEams Slale of
County County County Minnesoia
SoulCe: U. S. Census B/Jf88U 2000
Monticello Labor Market Profile
The mean travel time for Wright County workers reached
29.1 minutes in 2000, mirrored closely by Sherburne
County at 29.9 minutes. Compare that to Stearns County,
where the average travel time was still under 20 minutes,
and the state of Minnesota, where the travel time held at
21.9 minutes. (See Chart.)
Travel time increased 10.2% for workers in Wright County
since 1990, when the mean travel time was 26.4 minutes.
This data shows that workers are displaying an increased
willingness to spend more time in the car on the way to
work. However, a labor force assessment completed in
late 2001 showed that about half of Monticello area
workers would be willing to accept less pay to have a
shorter commute.
Page 4 of 7
.
DEED Regional Analysis & Outreach Unit
Despite a statewide and national recession in
2001, the Monticello area and Wright County
economy never stopped growing. Employment in Wright County has expanded by at least 1,000
jobs annually since 2000; up to 35,897 jobs from 28,851 jobs just five years earlier. The largest
year-over-year increase was from 2004 to 2005, when 2,153 net new jobs were added.
.
With the rapid population growth, there are now
nearly 63,000 workers living in Wright County,
and the unemployment rate had dropped to
3.3% in the summer of 2006. Combined with
Sherburne, Stearns, and Benton Counties,
Region 7W has more than 210,000 available
workers, including the many highly-skilled
people who currently commute out of the area
for work. (See Table 3.)
Table 3: Local Area Unem 10
Labor
Force
62,927
46.483
22,208
81,111
212,729
2,983,722
United States 153,208,000
Source: DEED LAUS ro ram data
ent Statistics
Em 10 ent
Unemp.
Rate
3.3%
3.3%
3.4%
3.5%
3.4%
3.6%
5.0%
60,827
44,972
21.456
78,311
205 566
2,876,311
145,606 000
For those working in Wright County, the area has a healthy economic base with employment
spread across several diverse industry sectors, including retail trade, manufacturing, healthcare
and social assistance, construction, educational services, accommodation & food services,
public administration, wholesale trade, other services, and transportation & warehousing. (See
Table 4.)
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Change
in Jobs,
2000-
2005
24.4%
30.3%
.:'{3.1"10
35.3%
67.9%
30.4%
...........49.7%
11.0%
... .'23.4%
15.4%
.X:.;10.9%
0.7%
..".:28.4%
40.5%
Construction was the fastest growing industry from 2000 to 2005, not surprising because of the
area's demographic growth. Retail trade and accommodation & food services followed suit as
well, adding nearly 2,500 jobS combined. After a slowdown, manufacturing employment and
payroll were up again in 2005, as were utilities and wholesale trade.
.
Monticello Labor Market Profile
Page 5 of 7
DEED Regional Analysis & Outreach Unit
There were 368 firms and 6,338 jobs reported for the city of Monticello in 2005, with retail trade
(1,112 jobs), healthcare & social assistance (851 jobs), and manufacturing (823 jobs) being the
largest employing industries. Thanks to the area's population growth, educational services and
accommodation & food TableS: Clt of Monticello Indust Em 10 ent Statistics, 2005
services were also large
employing industries. (See
Table 5.)
Monticello added 776 net
new jobs from 2000 to
2005, a 14% growth rate.
Monticello Township had
61 firms and 382 jobs,
adding 51 jobs since 2000.
The city of Big Lake had
191 firms and 2,136 jobs
in 2005, an increase of
420 jobs; and Big Lake
Township had 128 firms
and 726 jobs, more than
double the number of jobs
(342) in 2000.
Total Pa roll
$229,116,310
$3,971,456
$34,930;108
$28,215,108
$5,247,678
$2,410,858
, $4,632,383"
$799,996
$10,723,835
$18,922,586
$29,915,389
$946,980
$5,391,753
$2,730,133
$3,098,902
Emplo,yment Tenure and Employee Loyalty
Research shows that Americans are changing jobs and careers more frequently, regardless of
the economy. The median number of years that wage and salary workers across the United
States had been with their current employer was 3.7 years in January 2002, according to the
Bureau of Labor Statistics. Despite these trends to the contrary, workers in the Monticello area
continue to display a remarkable amount of loyalty to their employers. According to recent Labor
Force Assessments conducted in Wright County, the median employee tenure was 6 years,
nearly twice the national average. Plain and simple, the data shows that workers in Central
Minnesota are more likely to stay with their employers for the long term.
Labor Force AffoFdabUity and Oc.cupations. of Workers
The availability measure that is most consistently and strongly related to firm location is the
presence of workers in occupations needed for particular industries. For example, the number of
engineers available is strongly related to manufacturing growth in an area.
Although businesses will pay more for higher quality workers, they would rather have
equivalently skilled workers at less cost. The Monticello area in Region 7W offers highly-skilled,
available workers at competitive costs, notably lower than the Twin Cities metro area. Since
labor is a major cost of business, these savings translate directly to the bottom line.
The largest employment group in the area is office & administrative support occupations,
followed by production occupations, sales & related occupations, food preparation & serving
related occupations, transportation & material moving occupations, and education, training &
library occupations. The highest paying groups are in management occupations; healthcare
practitioners; life, physical, & social science occupations; legal occupations; computer &
mathematical occupations; architecture & engineering occupations; business & financial
operations occupations; construction & extraction occupations; and education, training, & library
occupations. (See Table 6.)
Monticello Labor Market Profile
Page 6 of 7
DEED Regional Analysis & Outreach Unit
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Table 6: Salary Survey Information for Realon 7W,.2nd Quarter2006 ".
""'. ... ..' ...
Median Avg. Estimated
SOC Hourly Hourly Regional
Code SOC Occupational Group WaQe WaQe Employment
0 Total, All Occupations .... ,. ...... '" $14.11 $16.92 .,. ........ ..146, 640
',. .... '.' .... ....
110000 ManaQement Occupations $34.00 $37.91 5.890
130000 Business and Financial Operations Occupations ..... $2t.92 $23.87 ..' ..................5,480.
150000 Computer and Mathematical Occupations $25.09 $26.58 1,880
170000 Architecture and EnQineerinQ' OCcupations .... "', ..... . ..,...,.......'.. $22.90 $24.91 .....'...,. .1.520'
190000 Life. Physical. and Social Science Occupations $25.51 $26.02 740
210000 Communitv and Social Services OCClJpatiClns .'....,/ $16.87 $17.55 i 2.320
230000 Legal Occupations $25.30 $30.05 650
250000 Education, Training, and Library OcclJPatiOns', $20.00 $20.42 ';10,190
270000 Arts, Design, Entertainment, Sports, and Media Occ $15.29 $16.35 1,310
290000 Healthcare Practitioners and Technical Occupations'" '$25.95 $32.64 ' .....,.,'........,7,020
310000 Healthcare Support Occupations $11.87 $12.51 4,150
330000 Protective Service Occupations ".' , "'."'.' .... " '" $18.28 . $18.75 ',,2,020
350000 Food Preparation and Serving Related Occupations $8.05 $8.64 14,680
370000 BuildinQ&Grounds CleaninQ & Maintenance OccuP.... $10.36 $11.13 .' '.',.4,290
390000 Personal Care and Service Occupations $9.77 $10.38 3,680
410000 Sales and Related Occupations .....; ,..",'...",'.: $10.59 " $14.02 '. ..' .'. ..'.....16,240
430000 Office and Administrative Support Occupations $13.05 $13.75 21,570
450000 FarminQ," FishinQ, and Forestry Occupations $tO.87" $10.87 """"",';,"""'190
470000 Construction and Extraction Occupations $20.24 $20.92 7,570
490000 Installation, Maintenance, and Repair Occupations. ' $17.29 $17.29 .....';;.....i5,570
510000 Production Occupations $14.40 $15.40 17,350
530000 Transportation and Material'Movino Occupations:" ,$13;35 $14.17 .......,....../12,320
Source: DEED Minnesota Salary Survey program data
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Labor Force Quality
Although the importance of labor quality is a recurring theme in survey results and site selection
consultants' judgments, the research faces difficulties quantifying "quality." The most common
labor quality indicator is the education of the workforce.
Minnesota is well known for its high-quality
education and high graduation rates.
Nearly 88 percent of Minnesota residents
aged 25 years and over are high school
graduates, and more than one out of every
four people (27.4%) have a bachelor's
degree or higher. In comparison, only
80.4% of United States residents are high
school graduates and 24.4% have a
bachelor's degree or higher.
CI" 'ofMontic:ellO'
Table 7 :.. Educatiolll'llAttainment Rates, 2SYears&Over' ,," .,
"';""..,,13.5o/~""
18.8%
""""1T9%
27.4%
24.4%
.
Even higher than the state, workers in the Source: u.s. Census Bureau
Monticello area have good educational attainment, most notably in the percent of residents with
an associate degree. The area also has a high number of people who have attended some
college, but do not have a degree, which can include post-secondary vocational awards and
certificates. This technical training provides tangible skills to businesses. (See Table 7.)
Monticello Labor Market Profile
Page 7 of 7
DEED Regional Analysis & Outreach Unit