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HRA Minutes 06-27-2005 . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Monday, June 27th, 2005 505 Walnut Street - Boom Room Commissioners Present: Steve Andrews, Brad Barger, Bill Fair, Darrin Lahr Commissioners Absent: Dan Frie Council Liaison Absent: Wayne Mayer Staff Present: Rick Wolfstellcr, Ollie Koropchak, and Angela Schumann. I . Call to Order Chairman Lahr called the meeting to order at 5:30 PM and declared a quorum. 2. Consideration to approve the June 1, 2005 liRA minutes. . MOTION BY COMMISSIONER fAIR TO APPROVE THE MINUTES OF ./LINE 1 ST, 2005. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED WITH LAHR ABSTAINING 3. Consideration of adding or removing items from the agenda. NONE. 4. Consent Agenda. a. Consideration for information only: HRA requested to issue a tax exempt bond for expenditure associated with the Monticello Ice Arena. b. Consideration to review final draft of the Mission Statement for the Housing and redevelopment Authority. e. Consideration to review revised 2004 year-end HRA Fund and TIF RCp0l1s including interest income. MOTION TO APPROVE THE CONSENT AGENDA BY COMMISSIONER ANDREWS. MOTION SECONDED BY COMMISSIONER FAIR. . MOTION CARRIED. BARGER ABSTAINED FROM THE MOTION DUE '1'0 POTENTIAL CONFLICT OF INTEREST DUE TO INVOLVEMENT WITH MON'fICELLO HOCKEY ASSOCIATION. HRA Minutes 6/27/2005 . 5. Tabled - Consideration to approve a resolution adopting a modification to the Redevelopment Plan and geographic boundaries for Central Minnesota Redevelopment Proieet Plan No.1 and establishing TIF District No. 1-34 (a Renewal and Renovation District) and adopting the '{'IF Plan therefore. Koropehak eXplained that this item had been tabled in order to receive the findings for the establishment of the district. Previously, when published in the paper, parcels 4A and 4B were not included. Koropehak noted that those parcels needed to be included, as the majority of the SuperTarget lies on those parcels, and would generate the most tax increment. As such, the notification had to be republished. Koropchak also stated that Fischer did not have multiple parcels included in his analysis. As one parcel, the area didn't meet the coverage requirements. Koropchak noted that although the area will still qualify, the coverage test would be revised based on the new parcel division. Koropehak provided the Commissioners with a current TIF inf'(mnation spreadsheet, noting that the parcels were split only for the purposes of TIf, not for platting. . Lahr clarified that the Project No. I boundary expansion was meant to provide increment specific to the individual area or TIF districts when applicable. Koropchak reported that Chadwick agreed to be included within the boundary expansion. Koropchak stated that his parcel needed to be included so that it was contiguous to the current boundary. Koropchak noted that the Planning Commission had approved the districts for consistency with the comprehensive plan and also that the judge has ruled for public purpose on the A VR site. Koropchak stated that Council will open and continue the public hearing to extend the 30-day extension and notification period for comments. The Council can approve the resolution on July 25th. MOTION BY COMMISSIONER ANDREWS TO APPROVE THE MODIFICATION OF THE REDEVELOPMENT PLAN AND THE GEOGRAPHIC BOUNDARIES FOR CENTRAL MONTICELLO REDEVELOPMETN PROJECT PLAN NO. I AND ESTABLISHING TIF DISTRICT NO. 1-34 AND ADOPTING TIlE 'fIF PLAN THEREFOR. MOTION SECONDED BY BARGER. MOTION CARRIED. Koropchak clarified that the 'fIF dollars generated in this district are only to be used for the City's portion of the expenses related to the interchange, not t'()r expenses related to Ryan's development. . 2 HRA Minutes 6/27/2005 . 6. Consideration to adopt a resolution requesting the City Council call for a public hearing date for modification of the Redevelopment Plan for Central Monticello Redevelopment Proiect Plan No. ] and establishing TIF District No. 1-35 (a Redevelopment District) and TIF Plan. This item held for discussion until the arrival of the applicant. Koropchak provided an updated schedule for the final approval scheduled ror August 221ll. Fluth had asked Koropchak to run some basic increment estimates. Koropchak stated that the market value or the existing buildings had increased beyond what had been estimated a few years before. Lahr asked for total current City tax on the homes. Koropchak indicated that was not provided. It is estimated that the new project will generate $15,056 in total new annual taxes, using a $60.00 per square flJot value. The local available annual tax increment is approximately $9,900. Upon arrival, Fluth reported that they are ready proceed, and that prospects arc good with tenants. He stated that they are on verge of signing construction contracts and would like to move forward with establishing the district. . Koropchak reported that Fluth had asked some good questions regarding the appraisal. Mike Fischer was asked to do a proposal for the appraisal. Lahr asked when the change was made to require a walk through. Koropchak stated that the laws after 1997, by which the I IRA is required to do an inspection and report for all redevelopment and renovation districts. Koropchak stated that her research indicated that it was the HRA who hires the inspector. Part ofthe inspection involves coverage tests and part is the interior inspection to find if the building is structurally substandard. Fluth wants to know why this is necessary and then who the appraiser needs to be. Fair asked if the report goes to the Auditor f<Jr review. Koropchak stated that it goes to liRA and Council. Lahr clarified that in terms of the two purposes noted above, that whomever the HRA's attorney is comfortable with, the II RA would be comfortable with. Koropchak reported that the attorney stated that he does not suggest using the City's Building Official. Koropchak also explained that the HRA will note that the change means that this isjust part of the redevelopment process. Andrews clarified that both the lIRA's financial representative and attorney have told the HRA to complete the required inspector. Andrews asked if Fluth is asking HRA to depart from this recommendation. Fluth stated that he is not; he disagrees with the cost to the appl icant. Lahr stated that the reality is that someone will build the City's case for the creation or this TTF district. Lahr stated that while he agrees perhaps the HRA can't dictate who completes the report, he does understand attorney's advice to seck an impartial inspector. Koropchak reported that prior to the law change, the City worked with the developer on these items. . '"' -, I IRA Minutes 6/27/2005 . Fluth reviewed requirements outlined by the statute. Wolfsteller stated that the attorney made it clear that they did not want the City to do the inspection; it doesn't necessarily mean there aren't others who are qualified. Fair stated that his preference is to allow Fluth to find an inspector and provide documentation that they are qualified and can complete the appropriate report. Lahr recommended calling Bubul to ask if this is acceptable. The II RA recommended that Koropchak call Bubul to find out who they will accept. Fluth agreed. MOTION BY COMMISSIONER FAIR ADOPT A RESOLUTION REQUESTING THL~ CITY COUNCIL CALL FOR A PUBLIC HE':ARING DATE FOR MODIFICATION OF THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT PLAN NO.1 AND ESTABLlSIIING TIF DISTRICT NO. 1-35 (A REDEVELOPMENI' DISTRICT) AND TIF PLAN. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED. . 7. Consideration to review the Appraisal for 154 West Broadwav and authorization to make an oiler to acquire. Koropchak reviewed the results of the appraisal, stating that the value ranged between $295,000 and $400,000. Lahr asked if the Mayor was aware of the results ot' the appraisal. Koropchak stated that she had not spoken with him yet on the matter. Fair asked about the results of the Block 35 survey. Koropchak provided a summary and then referred back to the appraisal. Koropchak stated that she was surprised by the amount of tenants. If the tenants arc still in the building at the time of the ofTer, the HRA will have to pay relocation and she noted that business relocation costs are also high. Fair stated that he doesn't think this is something the HRA should proceed with at this time, as there is not a lot of interest by other properties on the block to sell at this time. Mayer stated that the original intent to purchase this property was because of the strategic location. At that time, the tenant issue was an unknown quantity. Mayer suggested that perhaps the HRA start at a different block. lIe noted that the Pret'erred Title and Johnson block may be a more likely candidate. . Koropchak stated that she had spoken to Ruff: who believed the appraisal was high. Koropchak and Wolfsteller did not suggest the purchase at the appraisal price 4 HRA Minutes 6/27/2005 . Lahr stated that as other retail opens in other parts of the community, the HRA needs to think about retail space or redevelopment occurring in the downtown areas. Barger stated that what is really needed is the part of the block along 25 to start a viable redevelopment project. Koropchak reported that City staff would be meeting with a potential developer of the theater block about their concept. They are making progress. MOTION BY COMMISSIONER HARGER TO EXPRESS NO INTEREST TO PURCHASE TIlE PROPERTY AT 154 WEST BROADW A Y. MOTION SECONDED BY COMMISSIONER FAIR Lahr added that it should be conveyed to the property owner that based on the perceived cost of relocation, and the lack of interest by other patiies on the block in redevelopment, there is no interest at this point. Koropchak also noted demolition costs and possible asbestos remediation. MOTION CARRIED UNANIMOUSLY. . 8. Consideration to authorize pavment of HRA bills. MOTIONBY COMMISSIONER ANDREWS TO AUfHORIZE PA YMENT OF HRA BILLS. MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED. 9. Consideration of the Executive Director's Report. . Koropchak noted that she had visited three leads for the new industrial park. Koropchak stated that one had stood out in terms of good paying jobs and the proposed type of building. All three companies had been looking at Elk River for relocation. Two of them indicated that if Elk River proceeds with their plans fl.)r industrial land, they will relocate there. Koropchak explained that Elk River will be doing pay-as-you-go and then writing down the land cost of $ 1.80 per square foot to zero. She noted that Sherburne County will allow tax abatement which is less costly and time consuming. If the County agrees, the County can collect for 13 years and the City 11 years. The extra years allow the City to write down the land. Koropchak stated that each individual jurisdiction abates their taxes. This is unlike II F, where the City decides. Fair clarified that both the Council and County would need to make that decision. Fair stated that if Council is interested in such a program, they should get a full pro and con analysis from Ehlers. 5 lIRA Minutes 6/27/2005 . Koropchak stated that she isn't sure how the County Commissioners would feel about that. fair asked if both County and City needed to abate. Koropehak stated they both do not have to, but without both, suffieient increment would not be collected. Barger asked if it was written down to $1 per square foot or to $1 total. Koropchak stated that they had a formula, but basically $1 per lot. The businesses Koropchak visited had commented that the reimbursement makes a big difference to the property owners. Koropchak noted that Elk River only has two or three parcels left. On June 1311\ Colliers had done a presentation on listing the City's industrial park. They had left Council a proposal. Lahr stated that his impression is that they are a networking real estate firm that gets 6-8% on every sale and that they would like exclusive rights to sell. Lahr stated that there is some truth that commercial agents may not come out unless they are making a commission. Koropchak reported that the City of Cambridge does pay a commission. Koropchak stated that currently, the marketing technique the City of Monticello is using doesn't mean that the City won't pay a commission. Barger stated that he doesn't have a problem offering a commission. 10. Committee Reports: ( fiber Optics - Andrews reported that the group will meet weekly until August 3rd. The group is an ad hoc committee which currently includes an expert in fiber optics projects. The Council has committed funds to facilitate her involvement. There may be a chance that the BRA will be asked to help defray the cost for planning. Andrews stated that he believed fiber optics would set the community apart in terms of competitive advantage and marketing. At this time, the group is uncertain of the extent of the infrastructure system. Andrews stated that it would be well worth the money to have the expert assist throughout the process. Barger asked if there are any communities that currently have fiber optics. Mayer stated that Albertville's Towne Lakes does have it. Koropchak reported that Elk River is looking at fiber optics, but not sure in what capacity. Fair asked why Council wouldn't fund more than 4 hours of consulting. Mayer stated that at the time that the consultant had presented a proposal, the Council wasn't certain ifthere was enough interest. Mayer stated that they would most likely come back and ask for the balance. Fair asked who would handle the product. Mayer stated that the City can handle it or source it out to suppliers. Fair asked about con1lict with Charter franchise. Wolfsteller explained that the contract with Charter does not eliminate competition, it just means they have to provide same services. Andrews stated ,- 6 I-IRA Minutes 6/27/2005 . that the task force will be charged with looking at all the current agreements in place and potential impacts. Koropchak reported that Dahlheimer's are now looking at the City's lot. Staff have a meeting with them this week. 11. Other Business Fair recommended looking at the potential purchase of the Preferred Title building to encourage redevelopment of that block. 12. Adiournment MOTION BY COMMISSIONER FAIR TO ADJOURN AT 6:45 PM. MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION CARRIED. r'\.. ____ . . 7