HRA Minutes 01-17-2005 Special
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MINUTES - SPECIAL MEETING
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, January 17,2005 - 7:00 p.m.
505 Walnut Street - Academy Room
Commissioners Present:
Chair Bill Fair, Vice Chair Darrin Lahr, Dan Frie, and Brad Barger.
Commissioners Absent:
Steve Andrews.
Council Liaison Present:
Wayne Mayer
Staff Present: Ollie Koropchak.
Guests: Bill and Barb Tapper, Westlund Distributing
1. Call to Order.
Chair Fair called the HRA meeting to order at 7:00 p.m. declaring a quorum. The HRA
. welcomed newly appointed Council Liaison Wayne Mayer.
2.
Consideration to approve the January 5. 2005 HRA minutes.
No action, minutes not available.
3.
Consideration of adding or removing items from the agenda.
None.
4. Consent Agenda.
Not applicable.
5.
Consideration to approve authorization to enter into a Preliminary Development
Agreement between the HRA and William R. and Barbara R. Tapper.
Koropchak noted Bill Tapper had executed the Preliminary Development Agreement and
deposited $7,500; therefore, the HRA is asked to enter into the Agreement authorizing
preparation of a TIF District. Bill and Barb Tapper, the applicant, explained they had
purchased the property located at 1324 Edmondson Avenue NE for Westlund
Distributing. Westlund will occupy 42,000 sq ft of warehouse space and 3,000 sq ft of
office space. In order to accommodate the needs of a proposed tenant, Strategic
Equipment and Supply Corporation; Tapper plans to construct a 25,000 sq ft warehouse
addition to the northerly end of the existing 60,000 sqft facility. Strategic will also
lease I 0,000 sq ft of existing warehouse space and 5,000 sq ft of existing office space for
a total of 40,000 sq ft. The restaurant equipment and supply company (the lessee) was
formed in 2000 and within the past few years has purchased a number of smaller
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HRA Minutes ~ 01/17/05
restaurant supply companies. The national company will retain sales and distribution
centers in St. Cloud and Minneapolis. The company plans to bring 50-55 full~time jobs
to Monticello within two years. Tapper continued stating the company plans to make
Monticello its headquarters and control center, they like the central and 1-94 location.
Tapper stated the company sees the higher-skilled positions remaining and perhaps, some
turn~over of the lesser skilled positions due to travel distance and retirement. The
minimum average wage per hour wlo benefits is $17.90 and the median wage per hour
wlo benefits is $19.00. Tapper was unaware of the proposed truck traffic.
Koropchak noted Bill Tapper, Strategic, HRA Attorney Steve Bubul, and herself had met
to discuss if the project met the Minnesota Statutory requirements for TIF and how to
structure the Contract for Private Development. It appears the Contract will be among the
HRA, Tapper's, and Strategic. The pay-as-you-go finance payments would cease if the
tenant does not re-new its five-year lease and the owner would have the option to solicit a
new tenant. According to the one construction bid received, the amount of eligible TIF
expenditures totaled $199 ,950 (demo of existing building, asphalt, curb, and earthwork).
The TIF Cashflow estimates using 5.5% interest rate, over 9 years, and a $750,000
estimated market value for the addition generated $112,000 NPV oftax increment. Using
6.2% interest rate over 8 years generated $98,000 NPV oftax increment. Tapper had
presented a building rental analysis using a rent of$5.00 per sq ft which included taxes
and acceptable to the tenant. The project is very, very tight with very little margin, said
Tapper, who will benefit long term. Ehlers will compare the proposed rate to industry
standards as part of the "but for" findings.
Koropchak continued explaining that when the HRA enters into the Preliminary
Development Agreement, this means the HRA agrees to use tax increment financing to
assist with the proposed project and authorizes the BRA attorney and financial consultant
to begin preparation of the process.
Commissioner Barger made a motion to approve authorization to enter into a
Preliminary Development Agreement between the HRA and William R. and Barbara R.
Tapper for the property located at 1324 Edmondson Avenue NE. Commissioner Frie
seconded the motion and with no further discussion, the motion passed unanimously.
6.
Consideration of callin~ for a public hearing date for proposed business subsidv to
William R. and Barbara R. Tapper and Strate~ic Equipment and Supply Corporation.
As the HRA prepares to award a business subsidy for the proposed Tapper project, a
public hearing is necessary to satisfy the Minnesota Statutes. The HRA public hearing
date is scheduled for February 2, 2005, at which time the HRA will also approve the
amount of business subsidy and the job and wage level goals as defined in the Contract
for Private Development. The Council approves the Business Subsidy Agreement within
the Contract on
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HRA Minutes - 01/17/05
February 28. It was noted to change the name from William R. and Barbara R. Tapper to
Tapper's Holdings LLC.
Commissioner Lahr made a motion callingfor a public hearing of February 2, 2005,
6:00 p.m., associated with the proposed business subsidyfor Tapper's Holdings LLC and
Strategic Equipment and Supply Corporation. Commissioner Barger seconded the
motion and with no further discussion, the motion passed unanimously.
7.
Consideration to approve a resolution requesting the Citv Council of the City of
Monticello call for a public hearing on a modification to the Redevelopment Plan for
Central Monticello Redevelopment Proiect No. 1 and the establishment of a TIF Plan for
TIF District No. 1-33 (an Economic Development District) therein and the adoption of a
TIF Plan therefor.
The HRA was asked to approve a resolution requesting the City Council on the 24th of
January, 2005, call for a public hearing date of February 28,2005, to consider modifying
the Redevelopment Plan for Central Monticello Redevelopment Project No.1 and to
establish TIF District No. 1-33. The resolution also states that the county and school
districts must receive a copy ofthe Plan by no later than January 28, 2005 and the
Council and Planning Commission prior to February 28,2005.
Commissioner Frie made a motion to approve the resolution requesting the City Council
of the City of Monticello calif or a public hearing on a mod{fication to the Redevelopment
Plan for Central Monticello Redevelopment Project No. 1 and the establishment of a TIF
Plan for TIF District No. 1-13 (an Economic District) therein and the adoption of the TIF
Plan therefor. Commissioner Lahr seconded the motion and with no further questions,
the motion passed unanimously.
8. Committee Reports.
a) Marketing Committee - Committee Members Barger and Lahr recommended the
domain name of MonticelloLand.com for the Otter Creek Business Campus.
9.
Other Business.
a) Next HRA meeting February 2, 2005.
b) Ad Hoc Committee for Open and Outdoor Storage Ordinance - The HRA is requested
to send a representative to this Ad Hoc Committee. Some time ago, the City via the
Planning Commission had requested an amendment to the Open and Outdoor Storage
Ordinance relating to industrial zoned areas. The committee of industrial business
owners; IDC, HRA, Planning Commission members; and staff is scheduled to meet
Wednesday, January 19,2005,3:00 p.m. in the Academy Room to review the current
ordinance and outline current concerns and issues. Lahr volunteered and would check his
calendar. Alternates: Dan Frie and Brad Barger.
c) Transformation Home Loan Program - Koropchak reported the City Council on
January 10,2005, voted to support the program. Invitation cards were mailed the next
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HRA Minutes - 01/17/05
day to lenders, builders, title companies, and real estate agents for a breakfast to promote
the program. Koropchak will post the breakfast to allow a quorum of the commissioners
to attend the breakfast scheduled for January 26,2005, at 7:30 a.m. in the North
Mississippi Room.
10. Adjournment.
Commissioner Lahr made a motion to adjourn the HRA meeting. Seconded by Commissioner Frie
and with no further business, the meeting aqjourned at 7:45 p. m.
v~iZ'
HRA Chair
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