Loading...
HRA Minutes 06-05-2002 . . . MINUTES MONTICF:LLO HOUSING AND RF:DF:VF:LOPMENT AUTHORITY Wednesday, .June 5, 2002 - 6:00 p.m. 505 Walnut Street - Bridge Room Commissioners Present: Chair Brad Barger, Vice Chair Steve Andrews, Darrin Lahr, Dan Frie. and Bill Fair. Council Liaison Present: Brian Stumpf. StalTPresent: Rick Wolfsteller. Ollie Koropchak, and Lori Kraemer. Guest Present: HRA Attorney Dan Greensweig, Kennedy & Graven. I. Call to Order. Chair Harger called the lIRA meeting to order at 6:00 p.m. 2. Consideration to approve the May 1. 2002 HAA minutes. BILL FAIR MADE A MOTION TO APPROVE THE MA Y 1.2002. I IRA MINUTES. STEVE ANDREWS SECONDED THE MOTION AND WITlI NO CORRECTIONS OR ADDITIONS. THE MINUTES WERE APPROVED AS WRrrn,:N. YEAS: FAIR. ANDREWS, BARGER, AND LA HR. NAYS: NONF. ABSENT: FRIE. 3. Consideration of addin}!, or removing items from the agenda. Add under 8.5. Consideration ora request from the IDC for the lIRA to attend and make a presentation at the Planning Conunission Workshop, June 12. Add under 8.75. Consideration to authorize payment of residential moving costs and husincss relocation costs to Mike O'Connor. 4. Consent A!2:enda. STEVE ANDREWS MADE A MOTION TO APPROVE TIlE CONSENT AGENDA ITEMS: TO APPROVE ENTERING INTO AN ASSESSMENT AGREEMENT BETWEEN HANS HAGEN HOMES, INC. AND THE HRA; TO APPROVE ENTERING INTO A PRELIMINARY DEVELOPMENT AGRI'J':MENT BETWEEN TIlE liRA AND UMC AND AUTIIORIZING liRA CONSULTANTS TO Bl~GIN DRAFTING DOCUMENTS; AND TO ADOPT A RESOLUTION APPROVING AND RATIfYING THE TERMS Of INTERNAL LOANS FOR TIF DISTRICT NOS. 1-20. ]-2], and 1-22. DARRIN LAHR SECONDED THE MOTION AND WITH NO . . . HRA Minutes - 6/5/02 DISCUSSION. THE MOTION PASSED UNANIMOUSL Y. 5. Consideration to approve a resolution adopting a modi fication to the Redevelopment Plan f()l" Central Montieello Redevelopment Proiect No.1. establishing TIF No. I -30 with Ccntral Monticello Redevelopment Proiect No.1. and adopting a TIF Plan thercf()f. Koropchak noted a correction is the agenda narrative stating the main level living space area per home is 1,008 sq It not 1,200 sq It as reported. Additionally. the commissioners were inl"ormed that Sunny Frcsh, Cargill, and another source has committed $60.000 to cover increased acquisition costs including reimbursing the city for Kaufmann and Havel parcels and to enhance the quality of the finished product. With the corporate contribution, the estimated selling price is $118,875 per unit. The City's contribution is $42,750 for permits and fees. The lIRA's contribution rcmains at $125,000 up-front assistance. The commissioners were provided with a summary of TIF District No. 1-30, a I-lousing District. as prepared by Ehlers & Associates. The purpose of the 25-year district is to provide affordable housing. The 11 single fmnily, owner-occupied homes, must be sold to persons at 1 OOIYo of median income for a family of one or two ($74,700) and at II YYo of median incomc t()l" a family of3 or morc ($85,205). This to first time buyers only. Koropchak noted thc '1'1 F cashflow incrcased to $181,000 NPV using a 2% inflation t~lctor. The lIRA and City Council previously approvcd the concept for use ofTIF for this scattcrcd housing project. DARRIN LAHR MADE A MOTION TO APPROVE THE RESOLUTION ADOPTINC; THE MODIFICATION TO 'TilE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. I; AND ESTABLlSllINei TIF DISTRICT NO. 1-30 WITHIN CENTRAL MONTICFLLO REDEVELOPMENT PROJECT NO.1 AND ADOPTING THE '[IF PLAN THEREFOR. BILL FAIR SECONDI':!) TIlE MOTION AND WITH NO FURTIIER DISCUSSION. 'rl-IE MOTION PASSED UNANIMOUSL Y. Koropchak noted that the original targeted selling price for each home was $115.000. With the latest project costs and contributions, the selling price is at $118,875. Since TIF District No. 1-24 (St. Bens), a IIousing District, had a cash balance of $51.404 as of Decem bel' 3 I, 200 I, Koropchak presented these options for the BRA to consider: To transfer dollars fronl '1'1 F District No. 1-24 to: I. Reduce the selling price per home to $115,000. thc original target price ($42,625). 2. Reducc the lIRA loan amount from $125.000 to $75,000 ($50,000). 3. Reimburse the City for its permit and fee contribution ($42,760) 4. Do not transfer dollars from TIF District No. I -24. The commissioners were also asked whethcr they wish to borrow the up-front dollars from the 2 . . . HRA Minutes - 6/5/02 lIRA (ieneral Fund or the City General Fund and at what interest rate. Wolfsteller was concerned with "who gets the extra dollars if the project costs are lower than estimated such as contingency and developer's fee?" Additionally, it was noted that the City can't continue to waive or forgive permits and fees. DARRIN LAHR MADE A MOTION AUTHORIZING TIlE TRANSFER OF $42,760 FROM TIF DISTRICT NO. 1-24 TO 'TIF DISTRICT NO. 1-30 FOR THE PURPOSE OF REIMBURSING TilE CITY FOR PERMrT' AND FEE COSTS ASSOCIATED WITII THE SCATTERED IIOLISING PROJECT AND TO BORROW $125,000 fROM THE (Try GENERAL FUND AT TERMS TO BE NEGOTIATED BETWEEN TilE CITY ADMINISTRATOR AND THE HRA EX[~CUTIVE DIRECTOR. STEVE ANDREWS SECONDED T'lr~ MOTION AND WITH NO FURTHER DISCUSSION. TIlE MOTION PASSED UNANIMOUSLY. 6. Consideration to review and discuss conf1ict of interest as defined by the Minnesota Statutory by the HRA AUornev. lIRA Attorney Dan Greensweig, Kennedy & Graven, infcmned commissioners that the conflict of interest can be more prevalent in small communities because lIRA commissioners are generally the most, or very. active individuals within the community. He noted the statutes dilfer for the HRA and the Council stating if conflict of interest arises for a Council member. they are done. For liRA conllnissioners, there are exceptions. In a worsc case scenario a commissioner can be f()und guilty of a gross misdcmcanor or an r-IRA Contract for Private Development bccomcs non-cnf()t"ceable. A conflict may result iLl commissioner's or employee's financial interest is affected or an organization a commissioner has association with is affected. 'fhe key word is "substantially" affected which can be subjective. Cireensweig said the best way to avoid any potcntial contlict is to submit a disclosure statement within a week for entry into the 'IRA minutes and do not be involved in any discussion (leave the room). Additionally. he stated a commissioner can only disclosc once or receive linancial gain or assistance once. He suggested when in doubt, talk to Koropchak and perhaps an opinion li'om the attorney is necessary. In a recent concern brought to the attention of the Executive Director, clearly there was not a confl ict of interest. In small communities. the swing vote ofa debated topic can provoke letters to the editor and become messy. Greensweig informed commissioners that some HRA's have adopted conflict of interest policies of their own. Again, he encouragcd if in doubt contact Koropchak. 7. Consideration to authorize placement of an economic development ad in the 2003 Community Guide. Discover Monticello, and/or American Legion Display Board. ., _1 . . . HRA Minutes - 6/5/02 Koropchak advised that she had been approached by 3 individuals selling advertisetnent in an upcoming journal or display board. The HRA is asked to review and consider authorizing the expenditure since the HRA originally requested dollars from the City Council on behalf of the Marking Subcommittee. The ad(s) would market the City of Monticello for economic development. Koropchak provided three proposals for their lTVlew. There was discussion that the previous ad in the Community Guide does not mention the HRA and Fair stated he would like to see the HRA's name in the new ad. Andrews and Lahr stated added that they tnay possibly want to put infcmnation regarding UMC in the next brochure with a eolorecl architeetural picture a well. A MCyrlON WAS MADE BY BRAD BARGER TO PLACE THIS ITEM BACK IN 'fHE I-lANDS OF 'llIE MARKETING COMMITTEE TO DECIDE WHICH OPTION TO CHOOSE. DARR[N LAIIR SECONDED THE MOTION. There was further discussion by Fair to make sure to add "paid fix by the Monticello HRA", or something to that affect. HEARING NO FURTHER DISCUSSION, MOT[ON CARRIED UNANIMOUSL Y. 8. Consideration to authorize payment of May I-IRA bills. Koropchak advised of another bill hom Conworth [nc for $315 regarding relocation costs for Mr. O'Connor. Fair asked if there was anything out of the ordinary regarding relocation costs and Koropchak stated there was not. She also noted that there were further costs for actual relocation costs, this bill was for consulting only. A MOTION WAS MADE HY HRAD BARGER TO AUTHORIZE PA YMENT OF TilE MA Y HRA HILLS. DAN FRIE SECONDED THE MOTION. Motion carried unanimously. 8.5 Consideration of a request frotH the IDC for the HRA to attend and make a presentation at the Planning Commission Workshop, June 12. Brad Barger stated the IDC has asked for support from the I [RA regarding the comprehensive plan update meeting on 6/12/02. Koropchak reminded them oCtheir previous motion stating the HRA's requested for a completed industrial park by April of 2003. Fai l' asked about the uti I ity work al ready done on the Remmele property and Rick Wolfsteller advised that was for sewer line extension to the Kjellberg West mobile home 4 . . . HRA Minutes - 6/5/02 park. lie also stated there are no requirements on the commuter parking lot and that possibly that could be used for business parking if an industrial park were to be constructed in that area. The HRA also discussed buying land along Highway 25 for future use and stated that the City needs to purchase land now as the eosts are only going to increase. It was noted that the I DC wanted someone from the HRA to help make a presentation at this meeting. Rill Fair asked if it would be feasible for the HRA to look long range for industrial land by keeping a percentage of the land preserved for industrial. Koropehak advised that the IDe's reeommendation was for the City to sell the Remmele property for eommereiaJJand and use that money to purehase industrial land. Steve Andrews asked if it was appropriate to have industrial parks in separate areas, and Fair stated possibility an issue in regard to utilities. Barger also added that truck traffic could be an issue. Lahr stated he would check to see if he was available for that meeting and Fair stated he would be there as well. Koropchak also asked if the HRA would be promoting their previous motion. Fair added that he would like to have a current land use map at the meeting showing current industrial land available. The J-1RA also discussed the Gold Nugget property being used as industrial and to sell the Remmele property to help pay fl)!" it. Fair stated his feeling is that the City should preserve land flJr industrial. Brian Stumpf advised that land outside of the City limits is zoned AO and that the City cannot say that it will be industrial at this time. The melnbers stated again that they would like to purchased land now f(Jr future use. Koropehak advised that the City is the only one that can buy land outside of the city limits, HRA cannot. The liRA's consensus was that if the Remmele property was not going to be zoned industrial, find a parcel that can be. 8.75 Consideration to authorize payment of residential moving eosts and business relocation eosts to Mike O'Connor. Koropchak stated that the HRA definitely needs to pay the residential relocation cost which they agreed to, but that was all. She also added that the attorney asked if the business was a lawful business as this site was not zoned fl)!" that and what would the legality of that be. IJc did not know ifhaving a business in a zone not pennitted would be enough ll)!" grounds not to pay relocation costs. Greensweig also asked how much more did the HRA want to spend on legal fees with O'Connor. Lahr asked if the City 5 . . . HRA Minutes - 6/5/02 could subpoena tlJr receipts to prove he had an actual business at his residence, stating that if the City denies the relocation costs for his business he would have to come up with evidence to prove he had this business. Lahr also asked if they could subpoena someone that had work done by O'Connor to testify where the actual work occurred. Cireensweig stated that it was possible. Koropchak stated that the consultant did state he felt the II RA should pay the business relocation fce. A MOTION WAS MADE BY BILL FAIR TO PA Y RESIDENTIAL RELOCATION COSTS, IF O'CONNOR REHJTES, TIlE liRA WILL DEAL WITH THAT MATTER AI' 'rI-IAT 'rIMr~. DAN FRIE SECONDED TIlE MOTION. There was furthcr discussion whether the liRA should inform O'Connor that they will want proof of his business. Greensweig stated that the lIRA should authorize Koropchak to have Attorney Bob Lindall look into this matter further. Wolfsteller asked if there would be a way of asking O'Connor to provide some type of proof, could they ask for more evidence. Greensweig advised that if this is found to be an unlawful business the lIRA may not have to go any further. Lahr asked if the City could send O'Connor a letter stating they would pay residential only and Koropchak stated her understanding from Ken Helvey is that he felt this was a legal business. It was again stated that O'Connor was operating as a non-conforming use, and needed a CUP to operate and is asking to be paid for relocation of a business that should not have been there in the first place. There was no further discussion. MOTION CARRIED UNANIMOUSLY. (,reensweig advised Koropchak to have a short conversation with Bob Lindall, Attorney prior to paying relocation costs. Bill Fair asked to have an update regarding the progress of the old Amoco site and Koropchak advised this would bc in her Director's report. 9. Consideration of Executive Director's Report. Koropchak provided her report and there was discussion by the members that the majority of them could not attend the special lIRA meeting on June 17,2002 at 6 pnl. Attorney Cireenswieg stated that one person would need to show up to convene and then re-schedule llw either later that evening or another time. Barger added that he would call Koropchak and advise if he was able to attend the meeting at a later time, and Dan Frie and J)arJ"in Lahr stat cd they would not be in town that day. The HRA requested more inflJrmation on a company looking to build 40,000 sq n f(lOd processing building with 30 new jobs. There was not a lot of interest by the HRA members, they fclt thc water use was high, wages low. Koropehak advised of possible 6 . . . HRA Minutes - 6/5/02 TIF assistance to write down 3.5 acres of the 5 as well as the EDA loan. Koropchak also updated the rnembers on the former Amoco site stating there are still SOlne remaining environmental issues. Advised consultant of tbe nced to spend dollars prior to Junc 30, 2002, to meet 5-year rule for pay-as-you-go. Thereafter only 25% tax increment for pooling. Dan Greenswcig stated that by June 30, thc HRA either has to have Fluth spend the money and purchasc thc properly or enter into a contract directly with the Amoco people. Fluth is to provide a copy of agrecmcnt. If he spends the money after 6/30, the HRA cannot use TIF to reimburse him. The HRA could step in and buy the property but it was not advised as the site is contaminated. Other option was for Fluth to pay now. Possibly shifting costs was another option, but the money still would have 10 be spent. The lIRA directed Koropchak 10 call Fluth with a much morc detailcd message. The liRA also discussed the upgrades being madc at Steve Johnson's building and the new tenant going in, and would the !-IRA be liable to pay relocation costs if lhc project moved f(llWard. Attorney Greensweig statcd yes if HRA money was used tl)f demolition, or the like. 10. Committec Reports. None II. Other Business. None 12. Adjournment. A MOTION WAS MADE BY BRAD BARGER TO ADJOlJRN TI IE MEETING AT 8:30 PM. BILL FAIR SECONDED TI IE MOTION. Motion carried unanimously. HRA Chair D~9.:. \~CIlO (?.0~ -._"_.._,._'''-'''._.".~- Recorder 7