HRA Agenda 11-01-2006
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, November 1, 2006 - 6:00 p.m.
Bridge Room - Community Center
Couunissioners:
Chair Brad Barger, Vice Chair Steve Andrews, Dan Frie, Darrin Lahr, and Bill
Fair.
Council Liaison:
Wayne Mayer.
Council:
Mayor Clint Herbst, Council Members Brian Stumpf, Glen Posusta, and Tom Perrault.
Staff: Executive Director Ollie Koropchak, Treasurer Rick Wolfsteller, and Recorder Angela
Schumann.
Guests: Mike Maher, Karlsburger Foods, Inc.; Shibani Bisson, WSB, Inc.
Mark Ruff, Ehlers & Associates
I. Call to Order.
2. Consideration to approve the October 4,2006 HRA minutes.
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3.
Consideratiou of adding or removing items from the agenda.
4.
Consent Agenda.
A. Tabled - Consideration to ratifY the execution of the second Certificate of Completion
related to the Purchase and Development Contract between the HRA and Vector Tool
& Manufacturing, Inc.
5. Tabled - Consideration of a request from Karlsburger Foods, Inc. for compensation of over-run
costs associated with earthwork on Lot I, Block I, Otter Creek Crossing 2nd Addition. (Purchase
and Redevelopment Contract between HRA and SL Real Estate Holdings, LLC)
6. Presentation by Mark Ruff: "What is Tax Abatement and is it a viable economic development
tool for the City of Monticello?"
7. Consideration to hear a negotiation progress report from Steve Conroy.
8. Consideration to authorize payment ofHRA bills.
9. Consideration ofHRA Executive Report.
10.
Committee Reports:
Marketing
Fiber Optics
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II.
Next regular HRA meeting - Wednesday, December 6,2006.
12. Adjourmnent.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Wednesday, October 4, 2006 - 6:00 p.m.
Bridge Room - Community Center
Commissioners:
Chair Brad Barger, Dan Frie, and Bill Fair
Commissioners Absent:
Damn Lahr, Vice Chair Steve Andrews
Council Liaison:
Wayne Mayer
Staff:
Guest:
1.
2.
HRA Treasurer Rick Wolfsteller, Executive Director Ollie
Koropchak, and Recorder Angela Shumann.
Mike Maher, Karlsburger Foods, Inc.; Paul Cserpes, Karlsburger
Foods, Inc.; Dave Panek, Keystone Builders, Bill Trout, Keystone
Builders; Shibani Bisson, WSB & Associates
Call to Order.
Chairman Barger called the meeting to order at 6:00 PM, declaring a quorum and noting
the absence of Commissioners Lahr and Andrews.
Consideration to approve the September 6. 2006 HRA minutes.
MOTION TO APPROVE THE MINUTES OF SEPTEMBER 6th, 2006 BY
COMMISSIONER FAIR.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0.
3. Consideration of adding or removing items from the agenda.
Barger added re-consideration of criteria for incentive pricing in industrial park as item
number 8.
4. Consent Agenda.
A. Consideration to ratify the execution of the second Certificate of Completion related
to the Purchase and Development Contract between the HRA and Vector Tool &
Manufacturing, Inc.
MOTION BY COMMISSIONER FAIR TO TABLE ACTION ON THIS ITEM DUE TO
LACK OF ELIGIBLE VOTING QUORUM.
MOTION SECONDED BY COMMISSIONER BARGER. MOTION CARRIED, 3-0.
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5.
Consideration of a request from Karlsburger Foods. Inc. for compensation of over-run
costs associated with earthwork on Lot 1. Block 1. Otter Creek Crossing 2nd Addition.
(Purchase and Redevelopment Contract between HRA and SL Real Estate Holdings.
LLC)
Koropchak reviewed her report, stating that representatives from the City, Karlsburger,
and the Karlsburger contractor had met on site to discuss the earthwork that was
completed and the cost of that work. A large deposit of black dirt had been excavated
from the site, which was an unplanned cost for the company. Karlsburger is requesting
that the HRA pay for a portion ofthe cost overrun.
Koropchak referred to the contract between the HRA and Karlsburger, which authorizes
reimbursement to Karlsburger for up to $.12 per square foot for general site grading.
General grading was defined within the contract. Koropchak also indicated that the
contract did allow the developer the right to perform soil testing, with no warranty to the
condition of the soil.
Barger asked if the amount allotted for general grading, was to be paid to the developer
after the work was completed. Koropchak stated that after providing evidence of total
costs, they would be reimbursed. Barger asked if the invoice had come less, would the
HRA just pay the lesser amount. Koropchak confirmed. She stated that the current
invoice was for $29,000+. Keystone also had indicated that there was another invoice for
general grading.
Panek stated that soil borings had been taken, and in those borings, nothing out of order
was found. However, the subcontractor found a vein of black dirt during excavation,
which needed to be taken out. Panek indicated that Schluender, the subcontractor, made
the statement that someone knew it was there by the way it had been buried. Bisson
clarified that Schluender had commented that perhaps it had been done with the road, or
with the mining. Maher stated that Schluender believed that someone had filled in a
ravine with the black dirt
Bisson stated that it should be noted that the contractor did not obtain soil borings in the
area in question or the building site. The black dirt was found at the eastern portion of
the site.
Barger asked if the number of borings taken was sufficient. Trout stated that as all the
borings were consistent, it appeared to be that the whole area was similar. Bisson stated
that if they had taken borings at each comer of the building, they would have picked up
the unsuitable soils.
Fair remarked that when the first portion of Chelsea Road was graded, black dirt had
been stockpiled on the Dahlheimer site, and the HRA had to pay for the cost of moving
that pile. Bisson stated that the pile was then moved to the Chadwick site, with
perrmsslOn.
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Barger stated that the circumstances with Dahlheimer were a bit different. Koropchak
pointed out that the contract with Dahlheimers was the same for general grading. Fair
noted that in that situation, the City paid for moving the pile, as it was not known that
Dahlheimer's would choose that lot.
Trout stated that their grading estimates had been based on grading a pad ready site.
Koropchak stated that the $.12 per square foot is not a guarantee of what would be
required on site for general grading. Trout indicated that when Maher bought the
property, he took for granted that the $.12 would be sufficient. Barger stated that the $.12
number is consistent for general grading for the whole park, which was based on an
estimate. Koropchak clarified again that the per square foot number was for general
grading, not for development of pad ready sites.
Barger pointed out that the $.12 per square foot amount was just an allowance. Fair
noted that the City couldn't go back to the previous site owner and ask for compensation
for the irregular soil conditions. Fair stated that the HRA enters into these contracts
knowing that every issue can't be addressed.
Barger stated that if it had been the City that had filled in the ravine, it would be a
different circumstance.
Frie clarified that the City had not done any grading ofthis site. Bisson confirmed.
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Maher referred to pile of dirt that was removed, and excavation ofland within the
easement land. Trout explained that they had been asked by the City's engineer to
remove the hill to tie in with other site. Bisson stated that she had asked Panek to remove
the hill to match into the balance of the City's property. Bisson indicated that the
material from the hill was used to make the site pad ready. Bisson stated that Panek had
agreed to that. Fair asked where the black dirt was going to go. Bisson stated that it is
now on the City's property. Fair asked if we needed it. Bisson stated that the City
currently had no desiguated use for it.
Again, Fair asked what would be done with the pile that is now on the City's property.
Panek stated that Schluender indicated that he would take it. .
Koropchak stated that in the financing statement, the bids indicated that the grading was
estimated at $29,000, plus the $6,000 for utilities. Koropchak stated that it appears that
they are close to being within the budget. Trout corrected that amount is the original bid,
assuming that the site didn't have the vein of black material. He stated that the actual bill
will be $29,000 plus the additional earthwork. Koropchak stated that she hadn't received
the general grading invoice. Bisson inquired if then Karlsburger would be closer to
$60,000 for site grading. Koropchak stated that without the supplementary invoice, she
wouldn't recommend payment. Trout stated that as they still have some grading to finish,
they haven't received it yet.
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Bisson clarified that Karlsburger is asking for the $29,000 for overrun, plus the $10,000
allowed at $.12 per square foot. Trout stated that they are asking for the $29,700. Maher
stated that the other amount is in the contract.
Barger stated that if the City was responsible for the dirt, he could see making this
payment. Fair noted that the City will grade the balance of the plat.
Again, Panek commented that Schluender had stated that someone had put it there and
covered it up.
Barger asked what would have happened ifthe soil borings had found this. Wolfsteller
stated that then there would have been a discussion about how to address the issue before
the site was graded.
Fair stated that he doesn't know that the City can be held responsible, especially given
the contract. Fair pointed out there may be value in the pile of topsoiL He stated that he
can't vote for a reimbursement. Barger stated that he could see that if we had asked them
to do something outside of normal grading requirements. Trout stated that the one thing
that was changed was moving the hill at the rear of the building site. Bisson pointed out
that if they hadn't moved the dirt, they would have had to haul in dirt to fill the ravine
resulting from the black dirt removaL Fair referred to the contract, which outlined the
specific grading process; Koropchak read from the contract.
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Frie asked Cerpes and Maher if they understand that the site wasn't "pad-ready".
Cserpes responded that he just knew that there was earthwork to be done. Frie asked if as
a contractor, Keystone is responsible for the overruns. Bisson inquired why the building
wasn't staked. Panek stated that it was gauged off the road. Maher stated that the rights
to the property prevented that. Koropchak stated that the HRA had given permission to
enter the property. Maher stated that the title company wouldn't let them on the land.
Barger asked if the HRA can just take the dirt and WSB can spread it around the site.
Fair inquired whose property the dirt actually is. Frie asked if the HRA has recourse to
take the issue to the CounciL Korpochak stated that the contract is between the HRA and
Karlsburger.
Panek commented that he had talked with Dahlheimers and the City had paid for their
stockpile removal. Barger stated that in that case the City put the soil there prior to
selling the lot.
Maher asked what was purely just the removal of black dirt within the current invoice.
Trout stated that the $29,000 includes the removal of unsuitable soils, taking granular
material from hill and then re-spread. Essentially, he reported that the bill covered all of
the soil corrections.
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Trout stated that Maher had previously come to the City and indicated that he was unsure
about committing to the $.12. Maher stated that he would like to just come to an
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agreement. He stated that he understands where the HRA is coming from, but he would
like to keep moving forward. Maher requested that the HRA consider paying a portion.
Frie stated that he understands that the HRA was sold an unimproved site, and the HRA
has never been fortunate enough to be reimbursed. However, being on Karlsburger's
end, he stated that he would have like to be reimbursed. As the HRA, we have invited
them to come Monticello, and he indicated that he doesn't want to leave a bad first
impression. On the other hand, Frie noted that if further soil borings had been done, or
better estimates, perhaps this wouldn't have happened. Frie requested further verification
from site inspectors and on the numbers presented.
Fair stated that he is willing to table and ask for more itemization, respecting Frie's
comments. Fair stated that while it is not our intent to get off on the wrong foot, the
HRA still has a responsibility to the public and public funds.
MOTION BY COMMISSIONER FAIR TO TABLE ACTION ON COMPENSATION
OF OVER-RUN COSTS ASSOCIATED WITH EARTHWORK ON LOT I, BLOCK 1,
OTTER CREEK CROSSING 2ND ADDITION. (PURCHASE AND
REDEVELOPMENT CONTRACT BETWEEN HRA AND SL REAL ESTATE
HOLDINGS, LLC).
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0.
Bisson asked for the original and then yardage calculations to go to grading plan. Bisson
asked if they can provide the information on how they calculated.
Barger asked how the project has been going outside of the grading issues. Trout stated
that they expected to be completed by February 27th.
Barger asked for a snapshot ofthe City process, outside of the grading issue. Trout
responded that this is the first time he's worked in Monticello. Maher stated that the
process took longer than expected, most likely due to determining lot configurations.
Panek stated that he has been involved since the project's inception. He indicated that
although the city rates high, the process took a month longer than in other communities.
He complimented Koropchak, Bisson and Schumann. Maher added that in talking with
all surrounding communities, he got best information from Monticello and Koropchak.
Fair pointed out that it is the City's goal to be flexible, which can be an obstacle as well.
Maher commented that Monticello was the only community who visited their existing
location.
6.
Consideration to hear follow-up of meeting between Frie, Conrov. and Koropchak.
Koropchak reported that Conroy had accepted the role of acting on the HRA' s behalf.
Frie had made contact with Heartland Appraisal. Koropchak reported that she had
received a letter of interest from Heartland Appraisal regarding the potential for appraisal
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on the properties the HRA had expressed interest in. Koropchak stated that offers
haven't been presented to property owners.
5.
Consideration to authorize payment ofHRA bills.
MOTION BY COMMISSIONER FAIR TO AUTHORIZE PAYMENT OF HRA BILLS.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0.
7. Consideration ofHRA Executive Report.
Koropchak referred to her report and inquired if the Commissioners had any questions.
The Commissioners had no comment on the report.
8.
Consideration to re-evaluate the incentive pricing for Otter Creek Industrial Park.
Koropchak discussed the results of the last meeting, at which the HRA Commissioners
indicated that if interested companies meet all the guidelines they are eligible to buy land
at the incentive rate. If they only meet a portion, or a percentage, they are eligible to buy
land at market rate. The HRA was asked by a representative of the IDC if perhaps they
should reconsider for larger companies who may be a long term player in the community.
Barger asked if wage levels include or exclude benefits. Koropchak stated that it is
calculated excluding benefits.
Koropchak noted that she had made the offer to Arch Aluminum and Glass, noting that
they did not meet wage level criteria. Koropchak reported that she would be meeting
with them, and will verify that they can park under the powerlines and that they will have
no outdoor storage. Koropchak stated that land purchase at market rate means they do
not need to have an assessment agreement, it will be a business subsidy agreement.
Koropchak indicated that the company representative stated that he recognizes that land
cost is the smaller investment compared to the building and did not seem to be offPut by
the offer.
Koropchak explained that the comment regarding incentive criteria didn't come from the
IDC as a whole. It had come from one member after the meeting. Barger stated that Bill
Tapper wants the HRA to consider that for larger companies, maybe there should be
some flexibility, as averages can be misleading. Fair pointed out that the HRA had this
discussion. Andrews had stated that he was not receptive to that idea. Fair pointed out
that the subsidy should have standards. Frie asked that if Koropchak gets feedback to get
lower rate, would you come back to the HRA. Koropchak stated that is the HRA's
decision. Fair stated that he would want to hear their rationale.
Barger asked if Pfeffer's property was eligible for TIF. Koropchak stated that would be a
question for the HRA. In the past, when doing TIF, wages weren't so defined. Barger
stated that he would hate to lose businesses due to inflexibility in criteria. Fair pointed
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9.
10.
11.
out that you are always competing. Fair stated that sometimes we don't want to be the
low bidder. Koropchak noted that Don Tomann did not agree with Tapper.
Committee Reports.
NONE.
Next regular BRA meeting - Wednesday, November 1,2006.
Adjournment.
MOTION BY COMMISSIONER FAIR TO ADJOURN.
MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0.
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4A.
HRA Agenda - 11/01/2006
Tabled - Consideration to ratifv the execution of the second Certificate of Completion
related to the Purchase and Development Contract between the HRA and Vector Tool
& Manufacturinl!'. Inc.
With three HRA commissioners present and to avoid a potential conflict of interest for
Commissioner Barger, a quorum did not exist; therefore, the commissioners tabled this item to
the November meeting.
A. Reference and backl!'round:
The Purchase and Development Contract between the HRA and Vector Tool &
Manufacturing, Inc. was executed on September 14, 1995. Vector Tool agreed to pay the
HRA $33,000 for Lot 5, Block 3, Oakwood Industrial Park, and to complete construction a
15,000 sq ft manufacturing facility by December 31, 1996. The Purchase and Development
Contract was recorded at Wright County on November 28,1995 (Doc. 583737) and the Quit
Claim Deed was recorded also on November 28, 1995 (Doc. 583739).
The original Certificate of Completion dated December 4, 1996, was recorded at Wright
County on December 19, 1996 (Doc. 609079); however, only the Quit Claim Deed (Doc.
583739) was noted referring to Sections 1 and 2 (Completion of Minimum Improvements) of
the Deed.
With the planned closing of the Blue Chip Development project on September 20, 2006,
associated with the construction of the 25,000 sq. ft. facility of which Precision Technology,
Inc. will occupy 10,000 sq. ft.; the developer's legal firm requested a replacement Certificate of
Completion be issued to include the Purchase and Development Contract (Doc. 583737)
which refers to ARTICLES IV AND VI (Completion of Minimum Improvements) of the
Contract. This to clear the title and is a housekeeping item.
In order to have the document ready for the closing date of September 20 and to avoid any
conflict of interest, current Vice Chair Andrews and myself executed the document. It is the
request of the legal firm to ratifY said execution.
B. Alternative Action:
I. To ratifY the execution of the second Certificate of Completion related to the Purchase
and Development Contract between the HRA and Vector Tool & Manufacturing, Inc.
I
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HRA Agenda -11/01/2006
c.
Recommendation:
HRA Treasurer and Executive Director recommend Alternative No.1, as this is a
housekeeping item and clears the title for the developer.
D. Supportinl! Data:
Copy of the September 19, 2006 and December 4, 1996, Certificate of Completions.
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\ (;'\)~~
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CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello,
Minnesota,ja public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of
the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota,
as Deed Document Number (s) 583737 and 583739 ,respectively, has conveyed to Vector
Tool & Manufacturing, Inc., a Minnesota general partnership (the "Grantee") the following described
land in County of Wright and State of Minnesota, to-wit:
Lot 5; Block 3, Oakwood Industrial Park, according to the recorded plat thereof in Wright County,
Minnesota.
and
WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of
said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a
manner deemed sufficient by the Grantor to permit the execution and recording of this certificate;
NOW, THEREFORE, this is to certifY that all building construction and other physical
improvements specified to be done and made by the Grantee have been completed and the above
covenants and conditions in said Deed and the agreements and covenants in Articles IV and VI of the
Agreement (described in said Deed) have been performed by the Grantee therein, and the County
Recorder or the Registrar ofTitles in and for the County of Wright and State of Minnesota is hereby
authorized to accept for recording and to record, the filing of this instrument, to be a conclusive
determination of the satisfactory termination of the covenants and conditions of Articles IV and VI of
the Agreement referred to in said Deed, but the covenants created by Section 2(c) and Section 3 of
said Deed shall remain in full force and effect.
Dated: S~~ \ '"\
,2006.
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF MONTICELLO, MINNESOTA
By ~IR. l-Q/\.Q.\.I~
Its Vice Chair
By aCJ~:.. \-<..lJ\lJ f'~~
Its Executive Director '-
.
STATE OF MINNESOTA
ss.
COUNTY OF WRIGHT
On this ~ day of ~"--,,-\;- "rv0no A , 2006, before me, a Notary Public within and for said
County, personally appeared ~t.Jl n.L {\,,,A J\ 0' , ..,<., , to me personally known, who, being
by me duly sworn, did say that (s) he is the Vice Chair of the Authority named in the foregoing
instrument; that the seal .~ffixeA t9. s~id instFulIlel1t i~.th~ se~L~f.~iligAl!thority~tl1~Ls~id insJ1:UJ.flellt ','{a~
signed and sealed in behalf of said Authority by authority of its governing body; and said
'S~e.V02. [)."d ,.e.uJ S acknowledged said instrument to be the free act and deed of said Authori
ss.
STATE OF MINNESOTA
COUNTY OF WRIGHT
.
On this \ ",,""'" day of Se.l(l,. e"" b ev- ,2006, before me, a Notary Public within and for said
County, personally appeared <:::l\ \',,,-- \!...ov-o I?c\.,,,--L , to me personally known, who, being
by me duly sworn, did say that (s) he is the Executive Director of the Authority named in the foregoing
instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument was
signed and sealed in behalf of said Authority by authority of its governing body; and said
Cl\\~... v...c)'cOqc'k."--acknowledged said instrument to be the free act and deed of said Authority.
D~ {"f\. ~s~
Notary Public
DAWN M GROSSINGER
NOTARY PUBLIC . MINNESOTA
My Commission Expires Jan. 31. 2010
Kennedy & Graven, Chartered
Attorney at Law
470 US Bank Plaza
Mim1eapolis, MN 55402
.
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CERTIFICATE OF COMPLETION
6l ; "'0 ~ ~{)
\!'I'-J S ~Q-.J---'
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-z. <>- 'Q "
Q.. -I ' 0 y
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Monticello, Minnesota, a public body, corporate and politic (the "Grantor"), by a
Deed recorded in the Office of the County Recorder or the Registrar of Titles in and
for the County of Wright and State of Minnesota, as Deed Document Number(s)
583739 and , respectively, has conveyed to Vector Tool &
Manufacturing, Inc. , a Minnesota general partnership (the "Grantee") , the following
described land in County of Wright and State of Minnesota, to-wit:
Lot 5, Block 3, Oakwood Industrial Park, according to the recorded plat
thereof in Wright County, Minnesota.
and
WHEREAS, said Deed contained certain covenants and restrictions set forth
in Sections 1 and 2 of said Deed; and
WHEREAS, said Grantee has performed said covenants and conditions insofar
as it is able in a manner deemed sufficient by the Grantor to permit the execution and
recording of this certification j
.
NOW, THEREFORE, this is to certify that all building construction and other
physical improvements specified to be done and made by the Grantee have been
completed and the above covenants and conditions in said Deed and the agreements
and covenants in Articles IV and VI of the Agreement (as described in said Deed)
have been performed by the Grantee therein, and the County Recorder or the
Registrar of Titles in and for the County of Wright and State of Minnesota is hereby
authorized to accept for recording and to record, the filing of this instrument, to be
a conclusive determination of the satisfactory termination of the covenants and
conditions of Articles IV and VI of the Agreement referred to in said Deed, but the
covenants created by Section 2(c) and Section 3 of said Deed shall remain in full
force and effect.
Dated: December 4
, 199..2..,
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF MONTICELLO, MINNESOTA
BY(~
I t hair '--
.
By~~O)~il~-
Its Executive Director
DJG9Z439
MN190-50
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.
.
.
STATE OF MINNESOTA )
) ss.
COUNTY OF WRIGHT )
.On this~day of ./)or'cd~4/, 1991:, b.efore me, a Notary Public within and
for saId County, personally appeared $ ~7/5C''1 , to me personally
known, who, being by me duly sworn, did say that (s)he is the Chair of the
Authority named in the foregoing instrument; that the seal affixed to said instrument
is the seal of said Authority; that said instrument was signed and sealed in behalf
of said Authority by authority of its governing body; and said /.~7/'5(;~'~
acknowledged said instrument to be the free ac~!:nd)'leed ~f said /Au;~rity. .
/ /;;/4/// J ht/t:?1f;
ffiitary Public .
,.",.,'"A.i,,~1{,,\;') ':';:"-'-lJ : ',r'\"'v,,:;"-'k.i\J."i',::;S','
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"~'}!I.'~''+4!o\t'N',f~V '/i,/i-'~IJ.'.t\~'./i .,t,i';~(i,~\j,'..('o;y.~J;'if
STATE OF MINNESOTA )
) ss.
COUNTY OF WRIGHT )
~. '
On this4f 1Iay of ,2)r"'6:'N1k'/, 199k, befpJe me, a Notary Public within and
for said County, personally appeared (:/'///: /f1fJ/z!2",'!:h_7-/ , to me personally
known, who, being by me duly sworn, did say that (s)he is the Executive Director
of the Authority named in the foregoing instrument; that the seal affixed to said
instrument is the seal of said Authority; that said instrument was signed nd sealed /
in behalf of said Authority by authority of its governing body; and said r'&6;t?/;/..;;
acknowledged said instrument to be the free actan~deed,of said Aut orit "
/1ft(!(~75&/c:;1f
1\1 oIary Public
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RETURN TO:
City of Monticello
Ollie Koropchak
250 E Broadway
Monticello MN 55362
609079
~rFlCt: Of ChUNfY lifCUIW1P
WfHGIJ I CQUN r y, tl!NNESO IA
GU' mlCo 10 Pi Fllf [1
{1,iD/fJl i~:r::r:':~i-~' r~~
96 DEe I 9 AM 8: 44
MARCIA LANrra,CO RECORDER
BY~DEPUTY
DJG92439
MN190-50
C-2
$19.50 INVOICE
weR
.
.
.
HRA Agenda - 11/0112006
5.
Tabled - Consideration of a reauest from Karlsburl:er Foods. Inc. for comDensation of
over-run costs associated with earthwork on Lot 1. Block 1. Otter Creek Crossin!! 2nd
Addition. (Purchase and Redevelopment Contract between HRA and SL Real Estate
Holdings, LLC)
At the October meeting, the commissioners, developers, and contractors had a lengthy
discussion about the cost of the earthwork completed by Schluender beyond the general
grading, the stockpile of dirt placed on the city property, and the definition of the general
grading and HRA warranties on the condition of soils described within the executed Purchase
and Redevelopment Contract. All parties agreed it was an unfortunate discovery of the
unsuitable soils of which all parties were unaware. The commissioners felt the amounts
appeared excessive on the invoice and being both responsible and accountable for public
dollars, the HRA commissioners tabled the item to the November meeting requesting an
itemization of the Cost of Soil Corrections in the amount of $29,720, general grading invoice,
and copy ofthe industry standards.
Here is a summary of the issues or topics:
1.
Reimbursement for general grading ($.12 per sq ft or up to $11,102.57) per the
Purchase and Development Contract.
Costs associated with the unsuitable soils discovered in a vein which resulted in the
stockpile of black dirt placed on the city site.
2a) Now, who's responsible for removal and cost to remove stockpile from city site.
Cost of removing hill in rear Karlsburger lot to balance grade with city site. WSB, Inc.
states this material was used to fill in vein.
2.
3.
A. Reference and backl:round:
A meeting between the Mike Maher and Paul Cserpes, Karlsburger Foods, Inc.; Dave Panek
and Bill Trout, Keystone Design Build, Inc.; Schluender Construction Company; Shibani
Bisson and Roger, WSB, Inc.; and myself was held at the site on September 13, 2006. The
meeting was to discuss the over-run costs associated with the preparation of the site (2.124
developable acres.) The over-run costs total $29,720 according to the attached invoice. I
was informed this was in addition to the grading costs and I requested a copy of the general
grading invoice per the Contract. As of September 25, I have not received the general
grading invoice.
It appears when Schluender was preparing the site an area of black or unsuitable soil was
discovered and corrected. There was some discussion of disagreement between Schluender,
1
.
BRA Agenda - 11/01/2006
Keystone, and WSB, Inc. Shibani Bisson, WSB, Inc., and perhaps, someone from Keystone
will attend the HRA meeting.
I noted to them that the Purchase and Redevelopment Contract between the HRA and SL Real
Estate Holdings, Inc. dated April 12, 2006, clearly defines the HRA has no responsibility
beyond the General Grading costs of$.12 per square foot for the 2.124 acres upon receiving
an invoice or other reasonable evidence of the total general grading costs. [Section 3.6 (b).]
Section 3.6 (a) notes before the closing, the redeveloper has the right to enter the property for
environmental and soils testing ........ and (c) notes the redeveloper acknowledges the HRA
makes no representations or warranties as to the condition of the soils ............
Based on the fact that Schluender indicated the City forgave a portion of the replacement costs
for piping associated with the latest Blue Chip project and the HRA reimbursed Dahlheimer's
$27,300, in addition to the $.12 per square foot for general grading, for the removal of the
stockpile of black dirt placed on site prior to Dahlheimer's site selection; the redeveloper
requested to come before the HRA.
.
For purpose of lender financing: Soil borings, Independent Testing Tech, $800, and excavation,
backfill, and grading, Schluender, $29,630.
For your information, currently the remaining acres of Phase I acquisition (35 acres) and Phase
II acquisition (53 acres) are being graded which means in the future, the HRA will convey
property as is and the Contracts will not include any language relative to general grading or
general grading costs reimbursement.
B. Alternative Action:
1. A motion to re-affirm the terms and conditions of the executed Purchase and
Redevelopment Contract between the HRA and SL Real Estate Holdings LLC dated
April 12, 2006.
2. A motion to amend the Purchase and Redevelopment Contract between the HRA and
SL Real Estate Holdings LLC agreeing to compensate the redeveloper an additional
$ for earthwork.
3. A motion to table any action.
.
2
.
BRA Agenda - 11/0112006
c.
Recommendation.
The Executive Director and Treasurer agree that it is an unfortunate event and see some merit in
negotiation over the unsuitable soils correction; however, they do not see the HRA's
responsibility for removal of the existing stockpile on city property or removing the hill as this is
part of grading the site. Until the general grading invoice is received by the HRA, the
recommendation is not to agreed to a compensation amount.
D. SuPPortin~ Data:
Excerpt from the Contract, itemization of earthwork, general grading invoice, soil boring results,
and industry standards.
.
.
3
.
.
.
Page 1 of 1
Ollie Koropchak
From: Bill Trout [billt@keystonedb.com]
Sent: Monday, October 23, 2006 11 :46 AM
To: Shibani Bisson
Cc: Ollie Koropchak; Paul Cserpes; Mike Maher; Dave Panek Sr.; Lonnie Abrams
Subject: Karlsburger Foods Soil Corrections
Attachments: Soils Corrections Quantities & Costs.jpg; Schluender Bid Quantities.jpg
Shibani,
Attached is the original bid quantities from Schluender as well as a breakdown of the costs associated with the
soil corrections.
In addition, Lon Abrams, our jobsite superintendent, gave me the following information about Schluender's soil
correction times:
1. Dates work was done:
a. August 16, 17, 18 &21
2. Manpower:
a. (4) guys
3. Equipment, (not all used but was on-site):
a. (1) Scraper
b. (1) 08 dozer
c. (1) small dozer
d. (2) dump trucks
e. (1) backhoe
f. (1) compacter
I hope this helps. Please let me know if you have any questions regarding the above.
Thanks,
Bill Trout
Keystone Design Build, Inc.
#320-685-8054
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Version: 7.1.408 / Virus Database: 268.13.11/492 - Release Date: 10/23/2006
10/23/2006
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FRX t-(J. : 7632955544
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3331 " 90th Strut . Mmtic.eCCo, MiltllUOt4 55362
Ffwnt: (763) 295-5784 . FQ.X; (163) ~S44
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CHANGE ORDER
Keystone DesIgn Build . Inc.
22517 178th Ave. Suite 210
Cold Spring, MN 56320
32~ 0fIIce
320-685-8853 FlIX
0ct0b$r18,2006
Alln: Dave or Bill
Pro}ec:t: Karlsburger Food.. MonticellO, MN
1) T opsotI
A) Removal
B) Placement
C) Excess
2) Sand
A) cut
B) flU
C) Excess
1,800 yards
500 yards
1,300 Yards
2,700 yards
2.300 yards
400 yards
Robert Schluender
763-295-5784
~
FAXED
IO"I~~
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Commm:lDl lIM IMustrlDl ~lIva.torS ; Utilities
BldUi"5 Grat Wmlll9 lteCatiOMips Ewryt4y .
FRCM : SCH...~ C0'5TRlJCTI~
FAX I'll. : 7632955544
Oct. 20 20il6 11: 55R1 P1
" 14:f&~, - " .}~._.}~-." '.
ScfUueruUr Construction. Campa"
GAry and Rcl6ert SchCutndtr, Ownm ."
.ill1 - m Strut . MmttiulCo, MI1t1ltSOU 55362
Plione: (763) 29.H734 . F~ (763) .295-5544
.
CHANGE ORDEIt
Keystone De8lgn Build , Inc.
22517 178thAve. Suite 210
Cold SprIng, MN 56320
32Q.685.8054 Office
320-685-8853 Fax
AtIn: Dave or Bill
AiJgust ~; 2006
Project: Karlsburger FoodS- MontIcello, .~~
.
Son Corrections
Unsuitable Soli 6.396 yards @ $1.95
Price based on moving 284 yards per hour .
Excavator or 08 dozer $175 per hour
Scnlper $250 per hour
150 Dozer $130 per hour
Excavate & stockplIe Off site
Respread 500 yarde
Sand 6,460 yards
@
@
$1.95
$2.30
Excavate, place & compact
For placing sand, additional 35 cents per yan:!
for compacting material.
Robart Schluender
763-295-6784
.
CmImerWI! and In4lUtrlcC ~(l1Vator5 . UtilltiLs
llulL4lnlj GTUI wmii.n9 lltlaUortoup' EwTyU:y
. $12,472.20
~75.00
$14.858.00
$28.305.20
EYSTONE
DESIGN BUlLD,INC.
CHANGE AUTHORIZATION
22517178TH AVENUE
COLD SPRING, MN 56320
320,685.8054 320.685.8853 (fax)
DATE: 09105106
-
PROJECT: Karlsburger Foods
CHANGE AUTHORIZATION #
2
TO: S L Real Estate Holdings, LLC
12450 Fernbrook Lane
Dayton, MN 55327
AUn: Mike Maher
KEYSTONE PROJECT #
05003
CONTRACT DATE:
4/20/06
It is hereby mutually agneed that when this change authorization has been signed by the contracting parties the following described
changes in the work required by the contract shail be executed by the contractor without changing the terms of the contract except
as herein stipulated and agreed:
DESCRIPTION OF CHANGE:
Cost of soil corrections
Section
2200
.
Descriotion
EARTHWORK
Remove 6,396 cubic yards of unsuitable soils under building and parking lot
Excavate, stockpile and respread topsoil off of hill behind building
Excavate, place and compact sand from hili behmd buildrng
- *~y~\~
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$12,472
$975
$14,858
<J~
Subtotal
5% Contractor Fee
$28,305
$1,415
Total:
$29,720
All Prices include sales tax
CONTRACTOR:
OWNER
Keystone Design Build, Inc.
22517178th Avenue, Suite 210
COldS~~
BY: ~.
tillia1P. out, Prolect Manager
r -.s---t76
S L Real Estate Holdings, LLC
12450 Fernbrook Lane
Dayton, MN 55327
BY (\,1\ :...1,J., 14 M j"
/... -
DATE:
'1-7-U(."
INDEPENDENT TESTING TECHNOLOGIES, INC.
P.o. BOX 325, WAITE PARK, MN 56387
PH: (320) 253-4338 FAX: (320) 253-4547
www.independenttestingtech.com
Report Date: 10/9/2006
Client: Keystone Design Build
cc: City of Monticello
Cylinder #
Date Cast:
Time Cast:
Slump (Inches):
Air Content (%):
Concrete Temp. (F)
Air Temp.:
6
9/8/2006
Not Given
Not Given
Not Given
Not Given
Not Given
'mPle Location:
Project #:
Water Added:
Cyl. Cast by:
Mix Design #:
Supplier:
Office - Footings.
Cylinder #:
Date Cast:
Date Received:
Date Tested:
Days Field Cure:
Days Lab Cure:
Test Age Days:
Maximum Load Lbs.:
Area, Sq. In.:
Compressive Strength (PSI):
Specified Strength:
6B
9/812006
9/11/2006
10/6/2006
3
25
28
60000
12.57
4770
3000
6C
9/8/2006
9/11/2006
1 0/6/2006
3
25
28
56000
12.57
4460
3000
CONCRETE
COMPRESSION
RESULTS
06.356
Karlsburger Foods
3236 Chelsea Road West
Monticello, Minnesota
Not Given
Client
Footing
Not Given
Remarks: The average 28-day test result meets the required design strength.
.
d6356-6c
Res e ully
INDEPENDENT TESTING TECHNOLOGIES, INC.
P.o. BOX 325, WAITE PARK, MN 56387
PH: (320) 253-4338 FAX: (320) 253-4547
www.independenttestingtech.com
Report Date: 10/10/2006
Client: Keystone Design Build
cc: City of Monticello
Cylinder #
Date Cast:
Time Cast:
Slump (Inches):
Air Content ('!o):
Concrete Temp. (F)
Air Temp.:
4
9/11/2006
Not Given
Not Given
Not Given
Not Given
Not Given
t1tamPle Location:
Project #:
CONCRETE
COMPRESSION
RESULTS
06.356
Karlsburger Foods
3236 Chelsea Road West
Monticello, Minnesota
Water Added:
Cyt. Cast by:
Mix Design #:
Supplier:
Not Given
Client
3000
Not Given
Production - Footings.
Cylinder #:
Date Cast:
Date Received:
Date Tested:
Days Field Cure:
Days Lab Cure:
Test Age Days:
Maximum Load Lbs.:
Area, Sq. In.:
Compressive Strength (PSI):
Specified Strength:
4B
9/11/2006
9/18/2006
1 0/9/2006
7
21
28
54000
12.57
4300
3000
4C
9/11 /2006
9/18/2006
1 0/9/2006
7
21
28
55000
12.57
4380
3000
Remarks: The average 28-day test result meets the required design strength.
.
d6356-4c
Res
Chu
INDEPENDENT TESTING TECHNOLOGIES, INC.
P.o. BOX 325, WAITE PARK, MN 56387
PH: (320) 253-4338 FAX: (320) 253-4547
www.independenttestingtech.com
Report Date: 10/10/2006
Client: Keystone Design Build
cc: City of Monticello
Cylinder #
Date Cast:
Time Cast:
Slump (Inches):
Air Content (%):
Concrete Temp. (F)
Air Temp.:
5
9/12/2006
Not Given
Not Given
Not Given
Not Given
Not Given
_amPle Location:
Project #:
Water Added:
Cyl. Cast by:
Mix Design #:
Supplier:
Center Line - Footings.
Cylinder #:
Date Cast:
Date Received:
Date Tested:
Days Field Cure:
Days Lab Cure:
Test Age Days:
Maximum Load Lbs.:
Area, Sq. In.:
Compressive Strength (PSI):
Specified Strength:
5B
9/12/2006
9/18/2006
1 0/1 0/2006
6
22
28
57000
12.57
4540
3000
5C
9/12/2006
9/18/2006
10/10/2006
6
22
28
60000
12.57
4770
3000
Remarks: The average 28-day test result meets the required design strength.
.
d6356-5c
CONCRETE
COMPRESSION
RESULTS
06.356
Karlsburger Foods
3236 Chelsea Road West
Monticello, Minnesota
Not Given
Client
3000
Not Given
ARTICLE III
.
Acquisition and Convevance of Property
Section 3. I. Convevance of the Property. As of the date of this Agreement, the City owns
the Redevelopment Property and has agreed to transfer title to the Authority. The Authority will
convey title to and possession of the Redevelopment Property to the Redeveloper, subject to all the
terms and conditions of this Agreement. The parties agree and understand that this Agreement
supersedes in all respects the Preliminary Agreement.
Section 3.2. Purchase Price: Provisions for Payment (a) The purchase price to be paid to
the Authority by the Redeve[oper in exchange for the conveyance of the Redeve[opment Property is
$[0[,433.82. TIle parties agree and understand the purchase price represents 87,[20 square feet]
(two acres) at a price of $ 1.00 per square foot, and 5401.44 square feet (. [24 acres) at a price of
$2.65 per square foot An additional 70,6[0.76 square feet (1.621 acres) shall be conveyed to the
Redeveloper for no additional consideration, but subject to an easement in favor of the City for
drainage and utility purposes, as described in Section 4.5. The purchase price shall be payable by
the Redeveloper as follows:
(i) earnest money in the amount of $ [0,000, receipt of which the Authority
acknowledges upon execution in full of this Agreement; and
.
(ii)
the balance payable in cash or certified check at Closing.
Section 3.3. Conditions of Convevance. (a) The Authority shall convey title to and
possession of the Redeve[opment Property to the Redeveloper by a deed substantially in the form of
the deed attached as Schedule B to tllis Agreement The Authority's obligation to convey the
Redevelopment Propeliy to the Redeveloper is subject to satisfaction of the following tenns and
conditions:
(I) The AuthOlity having approved Construction Plans for the Minimum
Improvements in accordance with Section 4.2.
(2) TIle Authority having approved financing for construction of the Minimum
Improvements in accordance with Article VII hereof, and the Redeveloper having closed on
such pennanent financing at or before Closing on transfer of title to the Redevelopment
Prope:iy to the Redeveloper.
(3) The Redeveloper having reviewed and approved (or waived objections to)
title to the Redevelopment Propeliy as set fOlih in Section 3.5.
(4) The Redeveloper baving reviewed and approved (or waived objections to)
soil and environmental conditions as set forth in Section 3.6.
.
(5)
No uncured Event of Default under this Agreement
281415....5 MNr ;o.,.rNl 90-[23
7
.
Conditions (1), (2), and (5) are solely for the benefit of the Authority, and may be waived by the
Authority Conditions (3) and (4) are solely for the benefit of the Redeveloper, and may be waived
by the Redeveloper
(0) The closing on conveyance of the Redevelopment Property from the Authority to the
Redeveloper shall occur upon satisfaction of the conditions specified in this Section, but no later
than June 30, 2006 or at such earlier date as the parties hereto agree in writing ("Closing"),
(c) If construction of the trunk sanitary sewer across the Redevelopment Property has
not been completed before Closing, the Redeveloper agrees to grant a temporary construction
easement in favor of the City for construction of said trunk sanitary sewer, encumbering that portion
of the Redevelopment Property legally described as follows:
The north 110,00 feet of the west 176,63 feet of Lot I, Block 1, Otter Creek 20d
Addition, according to said plat on file and of record in the office of the County
Recorder, Wright County, Minnesota, Except that part which lies within the
existing platted utility and drainage easements,
Section 3.4. Place of Document Execution. Delivery and Recording. Costs. (a) Unless
otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all
deeds, documents and the payment of any purchase price shall be made at the offices of the title
company selected by Redeveloper or such other location to which the parties may agree.
.
(b) The deed shall be in recordable form and shall be promptly recorded in the proper
office for the recordation of deeds and other instruments pertaining to the Redevelopment
Propelty. At Closing, the Redeveloper shall pay: recording costs for the deed (excluding state
deed tax), title insurance commitment fees and premiums, if any, and title company closing fees,
if any; and a portion of City tnmk fees in the amount of $1,635. The parties agree and
understand that the Redevelopment Propeliy is exempt from propelty taxes for taxes payable in
2006.
(c) At Closing the Authority shall payor cause to be paid the state deed tax, costs of
recording any instruments used to clear title encumbrances, all outstanding special assessments
against Redevelopment Propel1y, and all City tnmk fees in excess of the amount paid by
Redeveloper under paragraph (0) above. The parties agree and understand that all such costs are
included in the purchase price payable under Section 3.2, except to the extent otherwise desclibed in
Section 3.7.
Section 3.5. Title. (a) As soon as practicable after the date of this Agreement, the
Redeveloper shall obtain a commitment for the issuance of a policy of title for the Redevelopment
Property. The Redeveloper shall have thirty (30) days from the date of its receipt of such
commitment to review the state of title to the Development Property and to provide the Authority
with a list of wlitten objections to such title. Upon receipt of the Redeveloper's list of \vritten
objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the
ebjections made by the Redeveloper In the event that the Authority has failed to Clire objections
~s 1-1 [5\!5 ,ltlNI \rP..j i q()-123
8
.
.
.
within sixty (60) days after its receipt of the Redeveloper's list of such objections, the Redeveloper
may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt
of which this Agreement shall be null and void and neither party shall have any liability hereunder,
or (ii) waive the objections and proceed to Closing. Upon termination, the Authority shall promptly
return to the Redeveloper any earnest money. The Authority shall have no obligation to take any
action to clear defects in the title to the Redevelopment Property, other than the good faith efforts
described above.
(b) The Authority shall take no actions to encumber title to the Redevelopment Property
between the date of this Agreement and the time the deed is delivered to the Redeveloper. The
Authority expressly agrees that it will not cause or pennit the attachment of any mechanics,
attorneys, or other liens to the Redevelopment Property prior to Closing. Upon Closing, the
Authority is obligated to pay all costs to discharge any encumbrances to the Redevelopment
Property attributable to actions of the Authority, its employees, officers, agents or consultants,
including without limitation any architect, contractor and or engineer.
(c) The Redeveloper shall take no actions to encumber title to the Redevelopment
Property between the date of this Agreement and the time the deed is delivered to the Redeveloper.
The Redeveloper expressly agrees that it will not cause or permit the attachment of any mechanics,
attorneys, or other liens to the Redevelopment Property prior to Closing. Notwithstanding
termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to
discharge any encumbrances to the Redevelopment Property attributable to actions of Redeveloper,
its employees, officers, agents or consultants, including without limitation any architect, contractor
and or engineer.
Section 3.6. Soils. Environmental Conditions. Grading. (a) Before closing on conveyancej
of the Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter
the Redevelopment Property and conduct any other' enVlromnental or SOlIs studIes deemed
necessary by the Redeveloper. If, at least 10 days before Closing the Redeveloper determines that
hazardous waste or other pollutants as defined under federal and state law exist on the propeIiy, or
that the soils are otherwise unsuitable for construction of the Minimum Improvements, the
Redeveloper may at its option terminate this Agreement by giving wIitten notice to the Authority,
Llpon receipt of which this AgI'eement shall be null and void and neither party shall have any
liability hereunder, except the Authority shall promptly return to the Redeveloper any earnest
money.
(b) The Redeveloper will undertake (or cause to be undertaken) General Grading of
the Buildable Redevelopment Propeliy (defined as all of the Redevelopment Property except for
the 1.62 I -acre portion subject to a drainage easement, as shown on the plat attached as Schedule
C) and the Authority will reimburse the Redeveloper for such grading at a rate of $.12/square 'f
foot. For purposes of this Section, the tenll "General Grading" means: stripping top soil off the
Buildable Redevelopment Propeliy to a maximum depth of two feet; saving all such top soil on
the Buildable Redevelopment Property; cutting existing high areas and filling low areas with
existing suitable matelial; applying and grading so much of the saved top soil as to have an
average thickness of four inches of top soil over the Buildable Redevelopment PropeIiy; all
according to plans approved by the City's consulting engineer, WSB & Associates, [nc.. If the
"\'1-0
~'\. "\~0-
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231415v5 MNI MN190-12J q, '\~. '). "..-y '-\ \ J
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total cost lncurTed by the Redeveloper to undertake General Grading exceeds S.12/square foot,
such excess cost is the Redeveloper's sole responsibility The Redeveloper must provide to the
Authority invoices due or payable or other reasonable evidence of the total General Grading cost.
(c) The Redeveloper acknowledges that the Authority makes no representations of]
warranties as to the condition of the soils on the Redevelopment Property or its fitness for
construction of the Minimum [mprovements or any other purpose for which the Redeveloper may
make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold
harmless the Authority, the City, and their governing body members, officers, and employees, from
any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the
Redevelopment Property.
Section 3.7. Advance of Land and other Costs: Tax Increment Interfund Loan. (a) The
Authority has determined that the fair market price of the Redevelopment Property is
$245,181.82, or $2.65 per square foot. This price represents the total invested or to be invested
by the Authority or City in making the Redevelopment Property available for commercial
development, including the value of the raw land and all costs of special assessments for
infrastlllcture, City trunk fees (except those paid by Redeveloper under Section 3.3), general
grading, platting, administrative and holding costs. As described in Section 3.2 hereof, the
purchase price for conveyance of the Redevelopment Property represents a reduction from the
fair market price from $2.65 per square foot to $1.00 per square foot for a two-acre portion of the
Redevelopment Property. Therefore, at Closing the Authority will forgo receipt of the full
market Plice of the Redevelopment Property, which represents an advance of Authority funds in
the amount of $143,748.00, less the amount paid by Redeveloper for City trunk fees in the
amount of$I,635.00, for a net advance of$142,113.00.
.
(b) The Authority will treat the advance described in paragraph (a) as an interfund
loan (the "Interfund Loan") within the meaning of Section 469.178, Subdivision 7 of the TIF
Act. The total original principal amount of the Interfund Loan is $142,113. The tenns of the
Interfund Loan are described in the resolution attached as Schedule C (the "Loan Resolution").
The Authority will pledge Available Tax Increment, as defined in the Loan Resolution, to
payment of the [nterfund Loan. The Redeveloper has no rights or interest in any Tax Increment.
Section 3.8. Business Subsidv Agreement. The provisions of this Section constitute the
"business subsidy agreement" for the purposes of the Business Subsidy Act.
(a) General Terms. The parties agree and represent to each other as follows:
(1) The subsidy provided to the Redeveloper consists of the principal amount of the
Interfund Loan described in Section 3.7. The [nterfund Loan is payable from a portion of
the Tax Increments from the TIF District, an economic development tax increment
financing district.
.
(2) The public purposes of the subsidy are to facilitate development of the
Authority's industrial park, increase net jobs in the City and the State, and increase the tax
base of the City and the State.
281415v5 i\<[N[ i'vINI90-l2J
10
S~P-26-2000 03:82
P.02/09
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337 31ST AVENue SOUTH. PO BOX 325' WAITE PARK, MN 56381
OFf#JC5: S2Cl-253-400B . FAX: 32Cl-2S3-4S4?
14,2006
K.arlsburger Foods
Moniicello. Minneoota
Re:
.
Dear Mr. Panek,
I
I
"'"""I.l"" a site plan ahO'NiI1.\l what we believe to be !be approximate 1000000ns of
tho eoil . IP for the lIhove refereuced project. h we dIsw88ed prior to. our
iz:I . aD., it was difficult foI! us to locate ,precUely where tbe bUilding MIl to
be loe The difficu.lty came from l10t havina clearly reoognizable IAndmllrk! in
addition an im:gularly shaped lot and a building not !lltting 5()lJm to a ClU'Ved
roadWay. 1'!1tm: wac no propetty comer pins visible to 1.IS atuI the building
CQl'llfJl'S not ~ed.
at tiHI time that the lito had been pded lII1d there were vlaible
. of Il1C prcviOUJ earthwork. It appeared that the tOpsoil had been stripped
and possi ly same sand removed from the southern, lower portion of the site. It
aho . some topsoil bad been spread acrosa the nllrlhem, hlshcr portiOD of
the site.
it Willi oW' o,PWion that it would be more likely to find flll benelllh
!Ipf'CId topsoll, rather thlm booeath what appeared to be an area !hat
bAd been into native sands. Beawse oflhi! Mswnption IUId the difficulty in
precisely ocgrlng the building, our boriDgs appear to have ml4.lIl".d their intended
target, W dl was the building area.
!
.
SEP-25-2006 09:02
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:e. p we apolop for the difficulty this has caused during CQD!trUCtion aftet
ImCOY burled iIll i1l. the nouthem area of the site, whme vo borings were
It WIJS our ink:lltion to find any iill or uzwuitable iloUa by ~
our ~ on the higher stea of the !lito, which ~ believed wm: most likely to
~ fjIl balIetI on the condiiion ofthtl site at tho time of ow explllf8!ion.
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U7 alSf AVENUE SOlll'H' PO 1l0X 321>' WAITE PARK. MN liMB.,
OFFlOE: S20-l!5S-4SSS. FAX: ~'25lJ.4S47
.Mr. Dave PWk
~c Design Build, Inc.
%2517 1 '1lCll A venw:. Suit!: 21 0
. Cold SFms. MN 56320
R.: 06-237
KIl'lsburier Foods
MmItlccllo, Minncsot&
.
Doe: Mr. PBI1U,
AI fe!!WlSl8d lII14I ~ by you, we L'llGODtly con4Uated fbIlr IIplit-&poon q/lJl'
hnPIotp M the propasR( Kar'llbumr Pood. bv.UdlIla alto iIIl\6...m:i....11o. NJN. ':nIll
purpose of cur Ilarlllp WILl io as" ill ~ 1be aem:ral8Uitahi1ity fix
~pllEpClm.
. 'Ib6 All>> is lcaa:&d '0ll1t1 of Chelle& RDId bcnWIleII CcIm1y Roa4 39 cu1 ScbooJ
Str=t in the new C~ hdl.otrl.r PlIIk on the aoutbwott &ide oflh~ CiQ- of
Moo1lcella.. Tbllllilll hu tlem1!'tlC11(1!1y 8fR4ed IflIl. shows . ot Bame .Pf$'II1OUI
_lh...o.rk It ~JlCArI thlt l;bt Ulflsall have: been SI.tipped IlIIIi powbly lKlmll -.r.\
~ fioomlhc B~ Wwwportiou aftll; .' and acme topsoil_ becu .
sp=ad woes tho QIIntar, bight:r porlion ottho alto. .
an June 19, 200g, WI OOD.du8tJed foar(4).on 1lcritlaI1lt1ocl"lit'''t Ml'Ota 1he lot.
The barInaa pnmIJy ~ soma t:QJIIoD CO ~ of 16 to 24 iIlohea.
Below tbotoplol~ boM!III B-lllWl B-3 ~ IICIIl:IllIlllld,y f11I esP, SP-SM;l
to depths of 1.5 lUt S:ll1owed IIy Il&1ive. olllll1lGl11. BaJaw tho ILlpIl 011, beriD,p
B-2 atId B-4 ~IO l28liw, cJtlaIl ~ (SP) to ........inmon. Clroundwater
WAilnat W3OOlIDla'e<i in my of li:1c borinp.
Based an the IUlllli of ou: ~, the aite IlllPfiIlD to Dill well ~ far ~
~ llotl.l~ of It wue.Iuluia buildi=a.
.
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PIlr!.ck: A. J~ PE
GeoIl:chnJcal DivlaUm Mallqer
.
.
.
.
BRA Agenda - 11/01/06
6.
Presentation bv Mark Ruff: "What is Tax Abatement and is it a viable economic
development tool for the City of Monticello?"
At an economic development update to the City Council some months ago, the Council agreed
to "exploring Tax Abatement as an economic development tool': As part of that exploration,
I've invited Ehlers & Associates to give a presentation to the HRA and Council. A meeting
notice for Council has been posted. Liaison Mayer suggested candidates for council also be
invited. My reason for bringing this forward is not project driven but to determine if the City of
Monticello wants to offer Tax Abatement as an optional economic development financing tool?
Within Ehler's presentation, I'm sure a comparison ofTIF versus Tax Abatement will be
outlined.
The desired outcome of the presentation is to get direction from the HRA and Council: Move
forward and draft policy or guidelines for consideration to adopt. Or not interested in moving
forward. Or table for more information.
I
.
.
.
HRA Agenda - 11/01/06
7.
Consideration to hear a nel!otiation nrOl!ress report from Steve Conrov.
Attached is an update via email from Mr. Conroy on October 12, 2006. I did respond to
Steve telling him to move forward given this was the direction from the HRA commissioners
and a starting point. Although, if the HRA is serious about acquisition, the numbers need to be
real. Frie also responded to Conroy.
I have heard updates from Conroy via email on October 23 and 24, the updates will be
discussed and distributed at the meeting.
1
Ollie Koropchak
.rom:
ent:
To:
Subject:
erealty.com
Dear Ollie, Dan:
Just a brief update. I had meetings with Biff Springborg, and Kathy and Michael Froslie
on Monday. I did not give them a price that HRA was willing to offer. Instead I
discussed in more general terms how HRA would calculate its offer (i.e. the highest value
of commercial land recently sold in Monticello or, perhaps, a bit more. I did not
specifically mention 15%).
Biff is interested in selling. He said that he had recently listed the property for sale
for $275,000. No serious offers yet.
Kathy was pretty adamant that their building was worth a substantial sum. We discussed
that, from the HRA's viewpoint, the building is actually a detriment to future
redevelopment.
I told both Biff and Froslies
my calculations of the values
Per information received from
Calculating the values of the
that I would get back to them by the end of this week with
based upon the highest sale price of other commercial land.
Kris Schwickerath, this value is $13.31 square foot.
respective properties would yield the following results:
Springborg
5,014 sq.ft.
-~~;;~~;~
x 1.15
Froslie
18,730.8 sq. ft.
x $13.31
$249,306.94
x 1.15
$76,746.79
$286,702.98
Again, I would like to contact the parties by the end of this week, if possible, with some
hard figures. Before doing do so, I would like some feedback from you.
Sincerely I
Stephen R. Conroy
.
1
.
.
.
8.
Consideration to authorize oayment of HRA bills.
Recommendation is to authorize payment.
1
HRA Agenda - 11/01/06
.
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
Tax 10 No. 41-1225694
October 13, 2006
Throuah Auaust 31,2006
MN190-00123 Economic Development TIF 1-37 (Karlsburger Foods)
.
.
1,835,56
Total Current Billing:
1,835.56
I declare, under penalty of law, that this
account, claim or demand is just and correct
and that rt of it has be paid,
,
!! 1\'1
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.
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
October 13, 2006
Invoice # 73720
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
MN190-00123
Economic Development TIF 1-37 (Karlsburger Foods)
Through August 31,2006
For Ail Legal Services As Follows:
8/1/2006 NKE Emails with 0 Koropchak re closing; phone call with
Commercial Partners.
8/2/2006 NKE
8/4/2006 NKE
. 8/7/2006 NKE
8/8/2006 NKE
8/9/2006 NKE
8/11/2006 NKE
8/11/2006 MNI
Revise closing documents; email to 0 Koropchak.
Phone call with Commercial Partners re closing.
Email with 0 Koropchak regarding closing documents and
closing.
Review executed closing documents; schedule closing
with Commercial Partners.
8/12/2006
Email with 0 Koropchak; phone call with G Larson re
closing; email purchase agreement to G Larson.
Phone call with G Larson re closing and subordination
agreement; emails with M Ingram and 0 Koropchak.
Draft assessment agreement for Karlsburger; email to N
England regarding follow-up and voice mail to Ollie Kat
City regarding closing.
NKE Prepare suboringation agreement; emaii to M Ingram;
review closing statement; email to G Larson.
NKE Review revised closing statement; email and phone call
with with 0 Koropchak; email to G Larson and K Raw;
phone call with G Larson to reveiw closing documents;
phone call with G Larson re closing.
NKE Phone call with M Ingram re subordination agreement;
phone call with G Larson re dates of resolutinos; review
subordination agreement and revise.
8/14/2006
8/15/2006
.
8/15/2006
Review and revise subordination agreement for
Karlsburger.
NKE Letter to G Larson re subordination agreement; prepare
MNI
8/17/2006
Hours Amount
0.25 27.50
0.50 55.00
0.25 27.50
0.25 27.50
0.50 55.00
1.00 110.00
0.75 82.50
0.80 128.00
0.75
82.50
2.50
275.00
3.00
330.00
1.90
304.00
1.00
110.00
.
Page: 2
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
City of Monticello
August 31 , 2006
table of contents and closing book.
8/21/2006 MNI Follow-up with N England and S Bubul regarding 0.20 32.00
subordination agreement for Karlsburger.
8/22/2006 MNi Phone cali to Ollie K to request that HRA approve 0.20 32.00
subordination agreement on its consent agenda at next
HRA meeting; question from Ollie on right of first refusal
concept.
8/28/2006 NKE Look up statute for publication requirement; phone call 0.50 55.00
with 0 Koropchak; phone cali with M Ingram; email 0
Koropchak.
. 8/28/2006 MNI Call from Ollie regarding EDA loan to Karlsburger - will 0.30 48.00
constitute business subsidy, but EDA has not decided on
terms yet.
Total Services:
$
1,781.50
For All Disbursements As Follows:
Total Disbursements:
47.60
1.26
5.20
54.06
8/23/2006
Photocopies
Postage
American Office Products - Tabs
$
Total Services and Disbursements:$
1,835.56
.
.
.
.
i
L_",_: "
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
City of Monticeilo
Accounts Payable
505 Walnut Street, Suite 1
Monticelio, MN 55362
Throuoh Seotember 30.~
MN190-00~General H Malle
n(~T
-Jl:1
1 9 2U06
! 1 t ~
_--1
(612) 337-9300
Tax ID No. 41-1225694
October 17, 2006
128.00
Total Current Billing:
128.00
'-'L' ''f''.() C' '; 1\ Y'" I
',j,'~ : ". \ i'" (.....Q~
Cod : ._?~.'3 ..l\~"bE)I. :'040
~fijtin1 ~ \t>- ';l :,-(J~
~,-,."._----~.__._--
.
.
Kennedy & Graven, Chartered
200 South Sixth Street
Suite 470
Minneapolis, MN 55402
(612) 337-9300
41-1225694
October 17, 2006
Invoice # 73782
City of Monticello
Accounts Payable
505 Walnut Street, Suite 1
Monticello, MN 55362
MN190-00101
General HRA Matters
Through September 30, 2006
For All Legal Services As Follows:
9/29/2006 MNI Review TIF Certifications from county auditor and compare
to rates in TIF Plans.
Total Services:
Total Services and Disbursements:$
.
Hours
0.80
$
Amount
128.00
128.00
128.00
.
.
.
BRA Agenda - 11/01/06
9.
Consideration of BRA Executive Director's ReDort.
a) Leads: Arch Aluminum & Glass - the development team met with the company
representative on October II and did a great job providing information requested. Following
the meeting, the targeted site was toured. They requested a site map of the area with
easements and electrical rates. WSB has provided the map and Ken Stabler, Xcel, is working
on the electrical rates. I did not get a sense of Yes, Monticello, or No, Monticello. I detected
the statement: long drive. I'm fully aware that Monticello was definitely the farthest from the
metro they'd consider. I received an email on the 19'h, that stated internally Arch is reviewing
all their options over the next couple of weeks. Another source of mine, informed me that their
first option under consideration is to retrofit an existing building for lease in Rogers. They told
us they preferred owner-occupied. Proposed new construction 240 X 300 building or 72,000
sq ft.
b) 10.000 SQ ft Albertville 1;Jroiect - Based on the HRA agreement to offer this company a
platted developable parcel of 1.5 acres for the $1 per sq ft price, the offer was presented along
with the plat map identifYing A YR, Karlsburger, and Dahlheimer lots, A VR landscape plan,
and requested property tax information. In a conversation on Oct 17, the developer is
considering: what is the valuation impact of his investment long-term with the A VR Readi Mix
site near and whether the site presents the professional image he's looking for? I requested a
letter of such. The company is ready to move forward (financing in place) with a commitment.
c) BRE - At the IDC Luncheon, the Chamber bused about 180 students from area schools to
the community center. The students had a chance to see the products displayed by Monticello
manufacturers and to discuss career opportunities.
- November City Newsletter will feature one existing business (Tire Equipment Service Mfg,
Company, Ray showed me their product-line and latest expansion) and three new industrial
businesses. Precision Technologies is now in their new facility. The Washburn Computer
Group is behind their targeted moving date as contractors behind with renovation plans.
- WSI, Inc. ranked 38th in growth ofa list of 50 public companies in the recent Business
J oumal. Mailed note of acknowledgment.
- Maus Foods building for lease. 34,000 sq ft commercial space - CAM - $2.90 sf
- Modem Express (MultiTech Systems Distributer) - new company at 155 Thomas Drive.
Relocated from Plymouth. I stopped in but were just moving in so don't know details of
business. Mike Hanzlik, Technical Director.
d) TIF Administration notebook - Ehlers is now providing a notebook to assist ongoing
administration of each TIF District. The book includes sections to complete for annual
requirements as well as sections for documenting the ongoing district requirements.
- TIF State Auditor's Roundtable Training Session - Paula Mastey and myself are scheduled to
attend this session at the State Office Building in St. Paul on October 26, 9- 4:00 p.m. It was
mandatory to use the State Reporting forms in 2006.
- Transformation Home Loan Program - Continued interest - no takers.
I
.
BRA Agenda - 11/01/06
.
- The HRA mortgage on the Petersen Loan was executed at the closing by American Title
Company, Monticello, the end of June. The HRA mortgage was recorded at Wright County
and has not been returned to the HRA, I'm trying to locate it.
- The HRA has not disbursed the entire $20,000 on the Breiwick Loan as the new addition
looks complete from the outside; however, the new siding has not been installed on the old part
of the house as was shown on the elevation plans.
- EDA Loan with Tapper's Holding - Preferred Title called that the EDA mortgage was not
recorded and needed some revisions. The loan closed in June of 2005. EDA covered by title
insurance. Referred to EDA attorney at the expense of Tapper.
e) A VR Ready Mix - Otter Creek Crossing 3rd Addition Plat submitted for recording;
however, legal description on Chadwick conveyance to City not consistent with plat
description. Being resolved. Therefore, the land conveyance from the city to A VR has not
taken place as of October 24. Footing permit has been issued and picked-up by A YR.
- Otter Creek Crossing 3rd Addition with the exception of A VR site - Declaration of Covenants
prepared by City Attorney Tom Scott and ready for signatures and recording.
f) Fiber Optics - The marketing committee for the Fiber Optics has been working very hard to
prepare education and information flyers to be mailed to city residents. The goal is to have
residents sign-up for interest in fiber optics. After a successful sign-up campaign, the next step
is for the Council to authorize a design build RFP and authorize bonding process which is
scheduled to take place at their December II Council meeting.
g) Marketing Committee - Scheduled to meet November 3. Another 130 flyers have been
mailed. Koropchak featured in the Commercial Real Estate insert in the Minneapolis St. Paul
Business JournaL
h) Attended the Green Construction presentation by KKE sponsored by County Partnership,
the IDC Luncheon hosted by the Chamber (thanks to the Chamber and IDC for the bouquet of
roses), Home Depot Ribbon Cutting, Candidate's Forum, part of Governor Pawlenty visit.
i) Custom manufacturer of die cut and thermoformed components. As of October 20, 2006,
the company's relocation/expansion plans on in a holding-pattern.
j) In the September annual report to the State, the amount of principal and interest payback
from Twin City Die Castings was $287,292.84 and $89,896.71, respectively. Payback status
is current.
.
2
Re: Upcoming HRA meeting
Page 1 of2
C\ \0')
.
Ollie Koropchak
_...----------_._"--_..~--. .---..,.....--..--.--.-.- ...._--~.._.__.._---_.__._._--'._----+---_..._--_..._._-._-----_.~----+--------+-,.
From: B Walker [bwalker@walker-instore.com]
Sent: Wednesday, October 25,200611 :21 AM
To: Ollie Koropchak
Subject: Re: Upcoming HRA meeting
Ollie:
Following our conversation last week, we have revisited our plans and spent
thoughtful time considering your proposal.
We appreciate your offer, and the time and energy you have lent to this
process. We were excited and hopeful that we had completed our selection
process and were prepared to commit to Monticello, then learned the offer
was in fact for another lot location than we discussed and was included
within your original offer.
For two reasons we will not be able to agree to your current offer, and
unless another location can be made available, we will need to build
elsewhere. We cannot in good faith invest $750,000 or more into real estate
and a facility that boarders and is immediately adjacent to a ready-mix
concrete plant. All other things being equal, our investment would clearly
be impacted negatively over time when compared to other locations. It would
in fact limit market value and hence asset appreciation. Additionally, our
client base includes some of the country's largest packaged goods marketing
finns, who reasonably expect a more professional location and facility for
their marketing agencies to operate within. When compared to other
alternatives, we feel building in the proposed location would be a mistake
for our finn and clients.
.
Ollie, we had held hope out that our last request and proposal was agreeable
to the HRA and Monticello. We were very excited and prepared to move ahead
rapidly and make commitments prior to learning about the location change
proposed. We would still hold favorable feelings and be ready to move ahead
as rapidly with your group if an alternative lot, like the original
location, we to be made available in a revised proposal.
Please advise if your group is ready to move forward with this request. If
beneficial, I am prepared to meet with your group to present our finn's
business and operations to demonstrate our interest in finalizing our plans
as soon as possible. We'll need to determine your intentions quickly, as we
are prepared to make commitments in another location if the above is not
acceptable to your group.
Thanks,
Brian
bwalker@walker-instore.com
Walker In Store
763-497-8600
763-497-3232 Fax
800-892-0348 Free
763-238-9376 Mobile
.
This message is intended only for the listed recipients. All information
contained is strictly confidential. All included information is copyright
@WalkerIn-Store, 2006. If you receive this message in error. please
erase its content and notify the sender. Thank you for your assistance.
10/25/2006