EDA Minutes 05-28-1997
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MINUTES
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Wednesday, May 28,1997 - 7:00 p.m.
City Hall
MEMBERS PRESENT:
Chairperson Ron Hoglund, Vice Chairperson Barb Schwientek,
Assistant Treasurer Ken Maus, Roger Carlson, Bill Demeules, and
Darrin Lahr.
MEMBERS ABSENT:
Clint Herbst.
STAFF PRESENT: Rick Wolfsteller and Ollie Koropchak.
GUEST:
Mayor Bill Fair
Rusty Fifield, Ehlers & Associates, Inc.
Rita Ulrich, MCP Project Manager
Doug and Karen Schneider
Judy Kruse
1.
Call to Order.
Chairperson Hoglund called the EDA meeting to order at 7:00 p.rn,
2.
Consideration to approve the April 29. 1997 EDA minutes.
Barb Schwientek made a motion to approve the Apri129, 1997 EDA minutes. Seconded
by Ken Maus and with no corrections or additions, the minutes were approved as written.
3. Consideration to hear of rehabilitation plans from downtown property owners.
Koropchak introduced Doug and Karen Schneider owners of downtown property leasing
to Monticello Carpets and Karen Kustom's Drapery and the unoccupied Stella's Cafe.
Also in attendance was Judy Kruse, owner ofthe property and former operator ofDino's
Deli. Invited but unable to attend the meeting was Keith Kjellberg, owner of the Walnut
Street property which formerly leased to Monticello Carpets.
Doug Schneider informed EDA members that he contacted the city inquiring to the
availability of improvement or replacement assistance. Additionally, he reported of an
interested office tenant for the cafe property; however, the building needs a new roof and
the inside gutted and brought up to code. The high cost for the improvements does not
provide a return on the investment. Doug gave this example: $10,000 for a new roof and
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EDA MINUTES
MAY 28,1997
$10,000 for interior. If the original property's worth is $30,000 plus $20,000
improvements, the shell is now at $50,000. Add an additional $15,000 for furnishings. It
just doesn't work. Lastly, the MCP-Design Committee talks about rehab ofthe building
exterior and the potential of back door entrances for parking accessibility. Schneider
indicated to redesign the roof line to eliminate the run-off and ice build-up at the back of
the stores would be cost prohibitive. The Schneider's felt the city should help the local
people with experience because if a building is fixed-up it creates a building for someone
to move into.
Judy Kruse informed members that she was opening a deli (take-out) and gift shop next
Tuesday. Additionally, she told members of the high costs associated with the application
for a commercial loan through the banks. Even with the number of years she'd been in
business, the bank still requires security or collateral making it difficult for a small business
or start-up business. Perhaps funding for administrative requirements could eliminate
some barriers. After securing a loan for the interior, one still has to deal with the exterior.
Some assistance to help established business operators as renters appear not to care
continued Kruse.
A grant could be used for financing costs or to write-down a loan for exterior design of
retail/office businesses. Funds could be used to purchase property, rehab property, or to
establish a business. Rehab loan tied to design guidelines.
Members discussed Bill Grassel's plan for Domino's Pizza and his purchase option on the
parcel destroyed by fIfe. One property owner expressed dis-satisfaction with the
Domino's delivery because it utilizes too many parking spaces and is a safety hazard.
Mayor Fair asked if the increased value or TIF caused by rehabilitation could be recycled
as seed money? As a general practice, do cities waive costs such as inspection fees?
Rusty responded to both questions as options for consideration.
EDA members expressed thanks and appreciation to property owners for taking the time
to appear before the EDA. Property owners were informed that the community is
interested in developing a program which meets the business community's need; however,
it doesn't happen over night. EDA members were pleased that business owners were
interested in making improvements and that some may have potential tenants.
4.
Consideration to review loan guidelines as provided by Rusty Fifield and to determine the
approach and the type oflocal commercial/retail funding program desired.
Schwientek felt any program developed should be kept simple and that the EOA and city
should realize or accept the risk. Other comments: Have phased development, matching
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MAY 28,1997
dollars as grant, create something that makes one want to go downtown, provide gap
financing, and utilize the new tax bill "tax abatement".
Chairperson HoglWId asked for input from EDA members and staff: Schwientek thought
enhancement of store fronts appeared to be a common thread. Demeules asked if the
EDA was the right committee? The EDA has broad powers and a sense of experience in
loan prohlfam administration; therefore, the EDA appears to be the best bang-for-the-
buck. Fifield expressed to provide collateral for a bank increases the complexity and
exposure.
EDA members asked "what do other communities do?" Fifield informed EDA members
he was not real successful in obtaining guidelines from other communities. Fifield was
more interested in knowing what the EDA or Monticello wants to do and what were the
EDA's or community's objectives? The EDA will be in the front-line as far as risk even
with a participating lender. The dollars put into a project could increase the tax value;
however, the dollars must be considered as a "city investment". HoglWId thought
perhaps gap financing for bankers fees and fWIding for exterior improvements which
supported the MCP's objectives would be appropriate.
Mayor Fair said the cOWIcil needs to understand for the city to be a partner in
redevelopment takes risk and the EDA needs to show leadership to the council though
marketing the program to parcel owners of interest. Draw a boundary line for focus.
Schwientek felt the size ofloan is best determined by the EDA rather than the Council and
staff can work with the developers and the banks to determine something that's general
and feasible. The MCP to draft the rehab or redevelopment plan. Fifield added it takes
"realization" to start a collection of small buildings or inventory which creates or
generates business or the starting of a domino effect. Ulrich informed members that the
revitalization plan is pretty general. The plan to be adopted into the comprehensive plan
and design guidelines to be developed into the comprehensive plan via performance zones.
Carlson felt the are EDA might apply dollars toward the bank loan fees and secondly to
develop a matching fund for exterior store fronts. Fifield added to do "gap financing" may
not make the project work as there may not be a sufficient amount of equity available.
The EDA must look for a program to remove the economic barriers, maybe a combination
of grant/loan which meets the public objective. Koropchak noted the importance of
developing a program as an "incentive" rather than "gap fmancing" to encourage a
developers to redevelop therebye creating activity in the downtown area.
Maus summarized some of the community objectives as:
I. To be used as an incentive to create redevelopment and increase business and
pedestrian activity in the downtown area.
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MAY 28,1997
2. To be used in a focus area (such as block).
3. To be used by property owners.
4. Funds for matching grant to improve the front and backs of buildings.
5. Project must meet design guidelines ofthe revitalization plan.
A commissioner added some downtown lots may require new construction. Fifield
responded perhaps those projects are best served by the use ofTIF as rehab results in
smaller market value gains. It was also mentioned if the city is committed to the
revitalization plan perhaps the EDA or HRA should consider being the developer or
owner of a facility.
Fifield told EDA members the community input from both the property owners and the
commissioners in attendance this evening was of value to him to begin drafting the
guidelines for a revitalization funding program.
5. Other Business
The commissioners set the next meeting of the EDA for Thursday, June 19, 1997, 7 :00
p.m. Guidelines to be submitted prior to the meeting.
6.
Adjournment.
The EDA meeting adjourned at 9:30 p.m.
(j~ \<~~
Ollie Koropchak, Executive Director
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