HRA Minutes 03-26-2002
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MINIJTES
SPECIAL MEETING OF THE MONTICELLO HOUSING AND REDEVELOPMENT
AUTHORITY
Tuesday, March 26, 2002 - 6:30 p.m.
West Prairie Conference Room - City Hall, 505 Walnut Street
COMMISSIONERS PRESENT:
Vicc Chair Brad Barger. Steve Andrews, and Bill Fair and
Council Liaison Brian Stumpf.
COMMISSIONERS ABSENT:
Chair Dan Frie and Darrin Lahr.
STAFF PR.ESENT: Ollie Koropchak
GUEST:
Mike Cyr, Front Porch Associates
I. Call to Order.
Vice Chair Barger called the special HRA meeting to order at 6:30 p.m.
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Consideration to approve amending the Contract for Private Development among the
HRA the City, and Front Porch Associates. LTD.
Koropchak informed the commissioners that at the II RA meeting of March 6, 2002, the
commissioners approved authorization to enter into the Contract for Private Development
among the I-IRA, the City, and Front Porch. The motion included if the City is unable to
clear title with Randy Ruff, the I IRA will reconsider the level ofTIF assistance. On
March 6, the HRA agreed to a total TIF assistance of $163,000 ($105,000 flJr the Grubb
parcel and $58,000 toward the vacated public streets.) The TIF assistance is the pay-as-
you-go finance method at an annual interest rate of 7.25%. The semi-annual installments
shall commence August 1, 2004 and are subject to certification that developer has paid
for land, no debult has occurred, and a Certificate of Completion have been issued for at
least 12 townhouses. The installments shall conclude February I, 2020. Construction
shall commence May 1, 2002, with at least 6 townhouses completed by December 2002,
an additional 6 completed by December 2003, and an additional six completed by
December 2004, and the rell1aining R by December 2007. The minimum improvement
means square footage of approximately 1,320 sq ft main levclliving space at a initial
market value of $148,000. The developer must provide financial commitment for
acquisition and construction costs and evidence of initial purchaser's income.
Mike Cyr reviewed the increased costs to the project. Koropchak indicated Wolfsteller.
O'Neill and Koropchak met and agreed to recommend increasing the amount of TIF
assistance.
liRA Minutes - 3/26/02
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The liRA is asked to consider amending the Contract as follows: First the City agreed
to reduce the acquisition price of the vacated public streets from $83,574 to $75,000.
Secondly, the level ofT1F assistance for the vacated public strcet increased from $5R,000
to $75,000. The TIF assistance for the Grubb property remains the same at $105,000.
Lastly, TIF assistance is proposed to cover up to $27,700 of the sanitary sewer, water,
and storm sewer trunk fees and up to $12,300 for curb and gutter associated with the
development of the 18 units within the TIF district. The atl1cndnlent increases the level
of pay-as-you~go '1'1 F assistance from $163,000 to $220,000. Commence and
completion construction dates remain as originally approved.
Koropchak continued: Given the TI F Cash Flow projects a tax increment of $221,181
NPV over 15 years, there is no need to extend the ending installment date. In other
words, the district will decertify in 15 years from date of first tax increment collected as
suggested by Ehlers and the HRA still retains the first 20O/C) of the annual tax increment.
Secondly, the revised proforma includes the increased development costs and an
increased selling price from $164,900 to $169,900 per unit. The revised protl.)!'ma shows
a rate of return of R.5% with TIF and 3.5% without TIf. The acceptable return fl.)r
housing development is between 7.5% and 10%.
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The commissioners were updated on the action taken by the Planning Commission and
City Council the night bef()re. The Planning Commission and Council approved the
development stage planned unit development and preliminary plat subjeet to the City
selling the vacated Vine Street to the developer. The Council approved cstablishing TIF
District No. 1-29 and authorized cntcring into the Contract for Private Developmcnt
between the HRA, the City, and Front Porch Associates subject to the City selling the
vacated Vine Street to the developer. Within the Contract the City agrced to vacate and
convcya portion of Vine, Seventh, and Minnesota Street. The Contract requires title
insurance. The City is unable to guarantee clear title at this time and has started the
process of cviction fl.)!' the encroachment on public property against Randy RufT. The
process could take up to 6 to R months. Mr. Cyr inflmned the commissioners, Ron RufT
would not extend the Purchase Agrecment behind the scheduled closing date of March
29,2002. A meeting bctwcen Randy Ruff, Mike Cyr, Mayor Belsaas, and Wolfsteller is
scheduled fi)[ March 27 at 1 :00 p.m. to discuss and resolve the encroachmcnt issue.
STEVE ANDREWS MADE A MOTION TO APPROVE AMr~NDING THE
CONTRACT FOR PRIVATE DEVELOPMENT AMONG TIll,: lIRA, THE CITY, AND
FRONT PORCH ASSOCIATES. LlD AS OUTLINED ABOVE. TI-IE MGflON
SUBJECT TO TIlE CITY SELLING THE VACATED VINE STREET TO
DEVELOPER CYR. BILL FAIR SECONDED THE MOTION AND WITI I NO
FURTIIFR DISCUSSION, THE MOTION PASSED UNANIMOUSLY.
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HRA Minutes - 3/26/02
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Adiounllnent.
The special HRA lneeting adjourned at 6:55 p.m.
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liRA Vice Chair
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