HRA Minutes 02-15-2005 Special
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MINUTES - SPECIAL MEETING
MONTICELLO HOUSING AND REDEVELOPMENT A1JTHORITY
Tuesday, February 15,2005 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present:
Chair Bill Fair, Viee Chair Darrin Lahr, Brad Barger, and Steve
Andrews.
Commissioner AbsentDan Frie.
Council Liaison Absent:
Wayne Mayer.
Staff Present: Ollie Koropchak.
Guests: Bill and Barb Tapper, Tapper's Holdings, LLC
1. Call to Order.
Chair Fair called the] IRA special meeting to order at 6:00 p.m. declaring a quorum.
2.
Consideration to approve the February 2. 2005 HRA minutes.
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IN LIEU OF RECEIVING THE MINUTES AT THE MEETING, BRAD BARGER MADE
A MOTION TO TABLE APPROVAL OF THE FEBRUARY 2, 2005 lIRA MINUTES TO
THE NEXT REGULAR MEETING OF THE HRA. SECONDED BY DARRIN LAHR
AND WIT}--l NO FURTHER DISCUSSION, THE MOTION CARRIED.
3. Consideration of adding or removing items from the agenda.
None.
4. Consent Agenda.
Not applicable.
5.
Tabled _ Consideration to a rove a resolution ado tin a modification to the Redevelo ment
Plan for Central Monticello Redevelopment Proiect No.1 and establishing TIF District No. 1-
33 therein and adopting, a TIF Plan therefor.
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On February 2,2005, the BRA tabled this item requesting a clarification of the February 2,
2005, "but for" analysis prepared by Mark Rutf, Ehlers & Associates. The February 10,
2005, "but for" analysis increased the expansion costs to $1,479,365 requiring a greater
mortgage and equity amount. With a lease rate of $5 per square foot TNL which is typical for
the size building and proximity of the metro, the return on equity is 2% without 'I'll' and 8% with
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HRA Minutes - 02/15/05
TIF. In this case, Tapper is paying thc taxes so this is not a TNL. The return on cquity was
7% without TIF and 14% with TfF per the February 2, 2005, analysis. Given the rental rate is
within industry standards, Ehler's suggested thc term of assistance be tied to the term of the
lease (five years). If the rental rates increase, the HRA would have the opportunity to again,
review the need for TIF.
The resolution to be adopted states the proposed plan will provide employment opportunities
and enhance the tax base ofthc city and statc becausc it will discourage industry from moving
to another state. Thc intent is to provide only the public assistance necessary to make the
private development financially feasible and if approved hy the City Council, authorizes the
Executive Director to complete certain tasks.
Provided to the commissioners was a copy of a letter from Stearns Bank supporting the need
for TIF, the resolution for adoption, a summary ofthe TIF Plan, and job and wages goals ofthe
tenant.
STEVE ANDREWS MADE A MOTION TO APPROVE THE RESOLUTION
ADOPTING THE MODIFlCA TION TO THE REDEVELOPMENT PLAN FOR
CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1; AND
EST ABLlSHlNG TIF DISTRICT NO. 1-33 THEREIN AND ADOPTING THE TIF PLAN
THEREFOR. BRAD BARGER SECONDED THE MOTION AND WITH NO FURTHER
DISCUSSION, THE MOTION CARRIED.
6.
The public hearing for granting a business suhsidy was opened on February 2, 2005, and
continued to February 15,2005, to allow the HRA to clarify the "but for" analysis prcpared by
Mark Ruff, Ehlers & Associates (Sce explanation is previous agenda item). A public hearing is
held if a local government grantor is granting a subsidy that exceeds $100,000. Because of the
uncertainty as to the amount ofTIF assistance, it was advised to publish and hold a public
hearing. Under the proposed Contract, the maximum amount of 'III" assistance the developer
can receive is $100,000 NPV and at least 40 new jobs will be created at wage levels so
defined in the Business Subsidy Agreement.
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HRA Minutes - 02/15/05
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I Iearing no public comments, Chair Fair closed the public hearing. BRAD BARGER MADE
A MOTION TO APPROVE, THE BUSINESS SUBSIDY AGREEMENT, A PROVISION
OF THE CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA,
TAPPER'S HOLDINGS LLC, AND STRATEGIC EQUIPMENT AND SUPPLY
CORPORATION. DARRIN LAHR SECONDED THE MOTION AND WITH NO
FURTHER DISCUSSION, THE MOTION CARRIED.
The commissioners received a revised copy of the Contract for Private Redevelopment which
is consistent with the clarified "but for" analysis and as suggestion by Ehlers. Koropchak noted
these major changes: The initial principal amount of the Note is $67,000, at 6.2% interest rate,
provided the site improvement costs paid by the developer equal the principal. The Note will
be delivered to the redeveloper upon receiving the Lease Agreement and evidence satist~lctory
to the HRA that the site improvement costs are complete and paid. If prior to February, 2012,
the lease with the tenant has been renewed or a lease with a different tenant has been entered
into with a termination date no earlier than February 1,2015 and at a rental rate per square
foot that is at market levels as analyzed by the HRA's financial consultant, and the site
improvement costs paid by the developer were at least $100,000; the Note may be increased
by $33,000 to a total principal amount 01'$100,000 at the discretion of the HRA.
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Koropchak further noted that the redeveloper must provide a copy of the lease agreement,
evidence of construction financing, proof of insurances, and approved construction plans prior
to issuance of a building permit.
DARRIN LAHR MADE A MOTION TO ADOPT A RESOLUTION APPROVING
CONTRACT FOR PRIV ATE REDEVELOPMENT WITH TAPPER'S HOLDINGS LLC
AND AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS,
COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF ITS $67,000 TAX
INCREMENT REVENUE NOTE, SERIES 2005. STEVE ANDREWS SECONDED THE
MOl'ION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED.
7. Consideration to authorize payment of I IRA bills.
No bills, not applicable.
8. Consideration of Executive Director's Report.
Accepted as written.
9.
Committee Reports.
a) Marketine. Committee No report.
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HRA Minutes - 02/15/05
10.
Other Business.
a) Consideration to cancel the March 2. 2005 HRA meeting with the next regular meeting,
April 6. 2005 (annual meeting).
BRAD BARGER MADE A MOTION TO CANCEL THE MARCH 2, 2005, HRA
MEETING, WITH THE NEXT REGULAR MEETING, APRIL 6, 2005. DARRIN LA1IR
SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION
CARRIED.
11. Adjournment.
BRAD BARGER MADE A MOTION TO ADJOURN THE HRA MEETING. SECONDED BY
DARRIN LAHR AND WITH NO FURTHER BUSINESS, THE HRA MEETING ADJOURNED
AT 7:10 P.M.
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liRA Executive Director
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