HRA Minutes 05-04-2005
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, May 4th, 2005
505 Walnut Street - Bridge Room
Commissioners Present: Chair Darrin Lahr, Brad Barger, Dan Frie
Commissioners Absent: Steve Andrews, Bill Fair
Council Liaison Present: Wayne Mayer
Staff Present: Rick Wolfsteller, Ollie Koropchak, and Angela Schumann.
Guests: Mayor Clint Herbst, property owner Craig Swiecichowksi
1. Call to Order.
Chairman Lahr called the meeting to order at 6:05 PM, and declared a quorum, noting the
absence of Commissioners Andrews and Fair.
2.
Consideration to approve April 6th, 2005 I-IRA minutes.
Koropchak noted an amendment to the minutes on page 2, Item 6., fourth line from bottom of
paragraph I: The liRA did not agree to a third position. MOTION BY COMMISSIONER FRIE
TO APPROVE THE MINUTES OF APRIL 6, 2005, AS AMENDED.
MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED.
3. Consideration of adding or removing items from the agenda.
Koropchak added as item number 9 an update on an application for the Transformation Home
Loan Program.
4. Consent Agenda.
NONE.
5. Consideration to approve authorization to negotiate for purchase the property located at 154 West
Broadway.
Koropchak provided the staff report, indicating that the Dino's Deli property is for sale and the
HRA is being asked to look at possible purchase ofthat site. Koropchak opened the item for
discussion.
Koropchak noted that Mayor Herbst, Council member Wayne Mayer and EDA member Susie
W ojchouski had met with staff members and some downtown property owners to discuss
redevelopment options. Specifically, the group had targeted the four blocks immediately adjacent
to Highway 25 and Broadway for redevelopment. Mark Ruff indicated that the best strategy for a
comprehensive redevelopment of a block is to start acquiring properties. Herbst noted that AI
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Loch had stated interest in a redevelopment project, and that Doug Schneider has also indicated a
readiness to work on this project. Herbst cited that there may also be other opportunities to
purchase downtown properties.
Barger asked ifthere would be relocation costs involved in acquiring the Dino's site. Koropchak
stated that she was checking on the relocation factor, but that the lIRA could make their motion
to proceed subject to vacancy ofthe property. Swiecichowski stated that they are currently
leasing on a month-to~month basis.
Lahr asked if the HRA needs to make formal inquiries to other property owners in the area in
terms of setting boundaries and interest for redevelopment. Lahr stated h is concern over
increasing prices as a concern. Mayor Herbst agreed that perhaps inquiring is appropriate at this
time. Mayor Herbst suggested that Block 35 would be the most cohesive unit for
redevelopment. He also noted that in whichever area the HRA targeted for redevelopment, there
may be hold-out property owners.
Mayer commented that ifthe HRA targets one of the blocks and redevelopment occurs, it could
set off a domino effect of redevelopment projects. The key is to start the project. Mayer noted
that with the Dino's site up for sale, this Block might be a prime redevelopment candidate.
Koropchak stated that a developer is currently looking at the Theatre block as part of a possible
redevelopment project. Lahr asked ifthat project was looking for any assistance. Koropchak
stated that because redevelopment is so costly, most projects would meet the assistance
requirements.
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Lahr asked how much land the City owns on Block 36. Mayor stated that the City owns the Fire
Hall, parking lot, and water-tower site.
Lahr stated that in the HRA's experience, encouraging private development has not succeeded so
far, due to the fact that they need too much profit to make it work, or there is not enough density
for the project to succeed. In this case, the public good may be the tipping point for the HRA's
involvement. .
Frie asked ifthe City still owns the vacant lot on I3lock 52. Koropchak confirmed that the City
owns the parking lots or a portion of the parking lots on Block 35, Block 36, and Block 52, and
the lIRA owns the one lot of Block 52.
Property owner Scott Douglas commented that some of the downtown property owners are
looking at their small business owners and stated that Monticello still needs spaces that the small
business owner can afford.
Lahr asked what the HRA's funding options are. Koropchak suggested that if the HRA moves
forward in buying property contingent upon purchasing others, it can use dollars from
Redevelopment District Numbers 5 or 6, which include unrestricted redevelopment dollars. If
the HRA develops a project, it could do a TIF district.
Lahr noted that there would also potentially be infrastructure costs in any redevelopment project.
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Barger asked about how the HRA could determine a value, whether it would be based on the site
as a rental property. Frie stated that a lower rent would cause lower appraisal. Barger asked how
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long Dino's has been on the market. Swiecichowksi stated that it had been for sale for one year
and that he had an offer to buy the whole building and lease the restaurant back.
Frie stated that in downtown areas, $10 per square foot is high, while $7-8 is average. Lahr
asked Swiecichowksi if Dino's is interested in staying in the building. Swiecichowksi stated that
they were not.
Mayer asked if Wright County assessor's values are close to market values. Frie responded that
they are usually lower.
Lahr asked how a redevelopment project complies with the comprehensive plan. Koropchak
stated that although the comprehensive plan cites historic preservation, many ofthe blocks that
the HRA would target do not contain historic buildings.
Koropchak stated that ifthe HRA wanted to move forward, she suggested authorizing an
appraisal and making any offer contingent upon feedback from other property owners. Mayor
Herbst recommended a meeting with the other property owners and then discussing options with
Mark Ruff on how to proceed.
Barger asked if an offer would lock the HRA into relocation. Koropchak stated that the HRA is
required to notify when tenants are subject to relocation.
MOTION BY COMMISSIONER FRIE TO AUTHORIZE AN APPRAISAL AT 154 WEST
BROADWAY AND TO PROCEED TO ARRANGE A MEETING WITH OTHER PROPERTY
OWNERS ON THE BLOCK 35.
MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED.
Koropchak indicated that she would arrange the meeting prior to the next HRA meeting and
thanked Swiecichowski for attending.
Frie recommended finding an appraiser who specialized in commercial appraisal.
6 Consideration to authorize pavment of HRA bills.
MOTION BY COMMISSIONER BARGER TO AUTHORIZE PAYMENT OF HRA BILLS.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED.
7. Consideration of Executive Director's Report.
Koropehak briefed the HRA on attending the Expo at the Minneapolis Convention Center.
Koropchak noted that she had been gathering leads and input on Monticello as a business park
location. She noted that response has been mostly positive.
Lahr asked Herbst and Mayer to comment on HRA and EDA consolidation. Mayor Herbst stated
that the goal isn't to combine Council and HRA, but perhaps combine the HRA and EDA. The
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Mayor noted that the organizational consultant was surprised at the number of committees.
Mayer commented on duplicated information between the two committees.
Koropchak noted that Brad Johnson has indicated the restaurant lead for Landmark Square II had
backed out. The developer is now working on interest from local businesses.
Koropchak stated that the EDA's year-end report indicates that the EDA has assets and liability
of over 1.6 million and a cash balance of over $900,000. The balance due to the liquor store is
$92,000. The EDA has made a motion to address pay back to the Liquor Fund in October.
Barger asked if Dahlheimer had made a decision on relocation. Koropchak replied that she had
heard that the purchase agreement with Big Lake was not complete.
Wolfsteller noted that he had met with Mark Ruff on financing options for the City on a number
of upcoming projects. As a result of that conversation, it had been determined that it might be
feasible to do half of the Ryan project as TIF. Wolfsteller clarified that it would be a
redevelopment district.
8. Committee Reports.
NONE.
9.
Other Business.
Transportation Home Loan Program: Koropchak reported that Peterson had provided the HRA
with a new estimate in cost for the project. Koropchak explained that the HRA's original motion
is still valid, based on estimates and allowable up to $20,000.
10.
Adjournment.
MOTION BY COMMISSIONER LAHR TO ADJOURN.
MOTION SECONDED BY COMMISSIONER BARGER.
MOTION CARRIED.
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Chairman
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