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HRA Minutes 02-06-2002 . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, February 6,2002 - 7:00 p.m. 505 Walnut Street - Bridge Room Commissioners Present: Chair Dan Frie, Vice Chair Brad Barger, Steve Andrews, Darrin Lahr and Council Liaison Brian Stumpf Stall Present: Rick Wolfsteller, Ollie Koropchak, and Lori Kraemer. Guest: Eric Bondhus, 'I'. J. Marti n, I nc. Mike CYL MLC Building and Remodeling 1 . Call to Order Chair Frie called the meeting to order at 7: 15 PM. 2. Consideration to approve the January 3, 2002 HRA minutes. A MOTION WAS MADE BY STEVE ANDREWS TO APPROVE TIlE MINUTES OF TI IE JANUARY 3. 2002 liRA MEETING. BRAD BARGER SECONDED THE MOTION. Motion carried unanimously. 3. Consideration of adding or removing items from the agenda. Koropchak added the consideration of amending the Private Redevelopment Contract between Masters fifth Ave. and the HRA. This was placed as item 12. 4. Consent AQenda. A. Consideration to approve the Certificate of Completion for IRTI. Recommendation: Approve the Certificate of Completion for Integrated Recycling Technologies, Inc. B. Consideration to adopt a resolution requesting the City Council call for a public hearing on the modification of the Redevelopment Plan of CMRP No.1, and establishment of the 'I'IF Plan for 'I'IF District No. 1-29 (Housing District). Recommendation: Adopt the resolution requesting City Council call fl)f public hearing on the modification of the Redevelopment Plan of CMRP No.1, and establishment ufthe 'I'IF Plan for TIF District No. 1-29 (Housing District). C. Consideration to recommend a candidate to the City Council for appointment of HRA ComnlissioneL Recommendation: Recommend Bill Fair to the City council for appointment as lIRA Commissioner, expiration of term December 2006. lIRA Minutes - 2/6/02 . A MOTION WAS MADE BY DARRIN LAHR TO APPROVE n IE CONSENT AGENDA. BRAD BARGER SECONDED THE MOTION. Motion carried unanimously. 5. Consideration to hear request relative to Tax Increment Defici~ncy rex T. .J. Martin, Inc. Eric l30ndhus was present and stated that 'r..T. Martin, Inc. had been dissolved and should be changed to Lake Tool. Koropchak advised that she had received a telephone call 1/:om Eric Bondhus relative to thc letter dated January 14,2002 which recapped the accumulated tax increment deficiency and the balancc due on January 25, 2002. Because the property taxes for one- half of payable year 2001 are delinquent and remain so as of./anuary 29, 2002 ($6,304.74 as of January 31, 2002 including penalties per Auditor's Ot1lce), the deficiency balance amount is $11,117. If the property taxes had been paid, it is estimated the deficiency balance amount would be $7.413. (riven the current income strewn and assuming taxes are current, the estimated deficiency balance on August I, 2005 would be approximately $17,000. Koropchak advised thc dates of all the letters written to T.J. Martin, Inc. . Bondhus had questioned Koropchak on how the TIF cstimates could be so far off and she explained that the class rates have continually decreased tu a rate in 2001 of 1.5~'() for the lirst $1 :;0,000 and 21% over $150,000, and that the tax rate has increased. Koropchak advised lhatthis is one of the last up-front TIF assistance in the amount of $37,900 It)!' land and site improvement costs. An Assessment Agreement has the estimated market val ue listed at least $240,000 which has not been a problem. The construction completion date was scheduled for October 1, 1997, per the Contract and the Certificate of Completion was issued December L 1997. The up-front TIF assistance was a loan {[om the HRA General [<'und at 8.25% interest rate, accrual datc was December 7, 1997. Per the Contract, the last TI F payment date is August 1,2005. The I IRA electcd to decertify the district as early as possible to avoid the LGA/HACA Match or Penalty. Legislators did away with the Match/Penalty effective 2002. The maximum life of the district is 11 years or November 2007. To be consistent with past tax increment deliciencies, the business was advised annually of the deficiency and within thc last year of tax increment due, the lIRA approved payments of the tax deficiency in three equal annual payments without interest. However, the difference with this district is the 1'1 r;- payments are due anothcr tl)ur years (August 2005) and the property tax payment at the County has been delinquent twice. In conversation with the HRA Attorney, amending the Contract may only add to more . 2 . . . I-IRA Minutes - 2/6/02 expense and he didn't feel that was the answer. Bondhus stated that regarding the last payment he unsure if it had been made. He would check on that. Frie asked Bondhus if he was aware of the amount of the deficiency and hc statcd that he was a little unclear as to the amount. The HRA discussed the l~lct that J(oropchak does notify the businesses of the TIF deficiencies, along with a payment schedulc. They asked Bondhus ifhe would prefer to pay annually or at the end of the contract, and he stated he would prefer to pay annually. They also discussed that previously they have waited until the end of the term and allowed the applicant to pay in 3 years at no interest, which Mr. Bondhus stated he would prefer, although they did state that the HRA should collect f()r some of the deficiency now, due to the amount owed. Chair Frie suggested that possibly each year the lIRA could ask f(JI" 113 of the deficiency so that they are always within 3 years of being resolved, which would amount to $17,000 divided by 3 at this time. He also suggested that the HRA revisit the amount of the deficicncy each year. A MOTION WAS MADE BY DAN FRIE TO REQUEST TI-IREEEQUAL PA YMFNTS OF $2,500.00 EACH, DUE 4/1/02, 4/1/03 AND 4/1/04, AND REVISIT ANNUALLY WITH THE INTENTION OF BILLING FOR THE DEFICIENCY AT TIIAT TIME, EXTENDING TWO YEARS AFTER TIlE END OF TIlE TERM AT NO INTERES'r, BASED ON EVIDENCE OF PA YMENT' OF CURRENT DELINQUENT PROPERTY TAXES. BRAD BARGER SECONDED THE MOTION. Alter further discussion it was determined that the members preferred payment of delinquent taxes in full, along with one third of the deliciency, each year. Accumulated balancc of the dcficiency to date, 3 years interest free. DAN FRIE AMENDED HIS MOTION ADDING INTEREST TO NEW DEFICIENCY, IF DEFICIENCY EXISTS, AND THE NEW DEFICIENCY AT TilE CURRENT 8.2)1Yo RATI~. BRAD BARGER SECONDED TIlE AMENDED MOTION. Motion carried Unanil110usly. 6. Consideration to rccomlncnd a candidate to the Council f()r appointment as HRA Commissioner. This item was placed under the consent agenda. 3 . . . HRA Minutes - 2/6/02 7. Consideration to approve entering into the Contract for Private Development between Hans Hagen Hornes, lIRA and City of Monticello. This item was removed from the agenda. 8. Consideration to review returned non-binding letters of intent for Block 52. At thc HRA 111ccting of Deccmher 200] the commissioners elected to contact property owners fiJr Block 52 and request completion of a non-binding letter of intent. Thc return deadline was for the January 2002 meeting. However, we only received onc completed letter of intent from Kathy Froslie. I contacted some of the owners a second and third time. Both Steve Johnson and Biff Springhorg said they are returning the letters. Froslie called the other day asking of the I-IRA' s intent. Both Steve and l3iff said they would suhnlit the letters by the HRA February meeting. Koropchak advised that along with the letter of intent received from Kathy Froslie previously, she had also received a letter of intent from Biff Springhorg. In previous conversations with Steve Johnson, Koropchak was undcr the impression his letter of intent would he suhmitted as welL but as of to day's date she had not rcceived it. Koropchak reminded the members that the purpose of the letters of intents was to define the boundary lines for a project, as well as its feasibility. Koropchak advised that the HRA could purchase thcse properties without immediately starting a project. The attorney stated that if the HRA made an offer t()1' the building(s), including the relocation costs with the ofTer for Springborg, stating that thc Froslic building would be handled differently in regard to relocation costs. Mark Ruffs recomll1endation was to cnter into an agreement, not to exceed a determined amount set by the (I RA. Koropchak stating she was looking for direction from the liRA. A MOTION WAS MADE BY STEVE ANDREWS TO RECOMMEND CIIAIR FlUE, KOROPCIIAK, AND MARK RUFF CONTACT THE INTERESTED PROPERT'Y OWN[~RS AND DISCUSS OPTIONS. DARRIN LAHR SECONDED TilE MO'fION. Motion carried unanimously. 9. Consideration of authorizing payment of January HRA bills. A MOTION WAS MADE BY DARRIN LAHR TO AUTHORIZE PAYMENT OF THE JANUARY liRA BILLS. STEVE ANDREWS SECONDED TIlE MOTION. Motion carried unanimously. 4 . . . HRA Minutes - 2/6/02 10. Consideration of Executive Director's ReDort. Koropchak updated the HRA on the O'Connor property as well as the Amoco site which she stated Fluth had not yet executed the amendment to the Contract for additional parking dollars and also that the site was found to be contaminated and this has caused another delay. In regard to the scattered housing project, the City Council approved acquisition of the I Iavel parcel at $50,000 and Sheri JIarris is proceeding with counter-oITers. Provided copies of the TIF semi-annual payments. Advised that Ron Musich started a new business, RSM Industries, Inc., which is located in his vacated building along Chelsea. They refurbish Wagner spray-tech products and scll ncw products. I3uilding full - not hiring yet. Plan to employ 25 assemblers. Will run out of space, looking at St. Cloud and I3ig Lake. Told of Monticcllo vacant buildings. Pfeffer not intercsted in selling abutting property or at a reasonable price. Stated the Right Choice building has an interested buyer. Les Wurm, Production Stamping, Inc. Emmet Hanratty, Right Choice, was assigned the TIF Redevelopment Contract hom Midwest Graphics. I wrote letters and called Mr.Hanratty several times but ncvcr heard from him. It almost appears, Mr. Hanratty wasn't aware the TIf changed to up-front. I provided Les with a copy of the contract and the assignments for review. If assigned, the job creation would not apply but he'd have to agrec to pay taxes and tax deficiency clause. He should get the benefit of the $181,000 from [Ianratty. II-Window building still vacant. Provided copies of flyers received from C B Ellis Richardson regarding the Chadwick property. The Planning Commission approved concept stage PUD f()f a commercial condos in the I - I A district and called for a public hearing on the re-7.0ning of an 1-2 parcel (Lundsten) to I3-3 commercial zoning. Thc Planning Commission will hold an open house/workshop 1'<Jr comp plan update, no date at this time. Public hearing March 5, 2002. Thc lIRA should appoint or have representative at the open house and public hearing relativc to lIRA recommendation for development of an industrial parle Koropchak asked the BRA to establish goals for 2002. I,ahr asked Koropchak to put something together for them to review at thc March meeting. City Administrator Rick Wolfstel1cr updated them on the mediation regarding the Gold Nugget project, possibly 1/3 industrial and 2/3 residential, also might be supported by the township. Regarding annexation, apparently thcrc was a ruling and two parcels were anncxcd. undcr Statc Statutcs, with the City not operating under thc MOAA board. Koropchak stated there was a proposed 41,000 sq ft commcrcial condominium planned for Wcst Chelsca Road in arca of Olson Electric pond. On Planning Commission agcnda in March. Koropchak provided a revised concept plan from Hans 1 Iagen, changing hom 2 story to I 5 . . . I-IRA Minutes - 2/6/02 level homes - this due to input from their marketing people. HRA was looking f()l' family type housing, working professionals, larger square footage. They preferred the 2 story. 11. ConHnittee Rcports: Marketing - Barger Nothing to report. 12. Other Business. Koropchak asked the liRA to consider amending the Private Redevelopment Contract with Masters Fifth Avenue rcgarding the former Amoco site. Possibly extending for 60 days which gives them time for clean up and dcmolition of thc site. The HRA would also be extending the parking agreement. These would bc cxtended to 5/1 /02. Bjorklund is to demolish and cleanup the site. No funds havc becn expcndcd for this projcet at this time. A MOTION WAS MADE BY DARRIN LABR TO EXI'END THE DATES OF TIlE CONTRACTS TO MAY 1,2002. STEVE ANDREWS SECONDED 'llIE MCrnON. Motion carried unanimously. 13. Adjournment. A MOTION WAS MADE BY BRAD BARGER TO ADJOURN THE MEETING AT 9 PM. DARRIN LAHR SECONDED THE MOTION. Motion carried unanimously. Cj)aJ /i! 7L~___ liRA Chair d11::-~ 6