Loading...
HRA Minutes 10-04-2006.7 • 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: Darrin Lahr, Vice Chair Steve Andrews Council Liaison: Wayne Mayer Staff: HRA Treasurer Rick Wolfsteller, Executive Director Ollie Koropchak, and Recorder Angela Shumann. Guest: Mike Maher, Karlsburger Foods, Inc.; Paul Cserpes, Karlsburger Foods, Inc.; Dave Panek, Keystone Builders, Bill Trout, Keystone Builders; Shibani Bisson, WSB & Associates 1. 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. 2. 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 a eg nda. Barger added re-consideration of criteria for incentive pricing in industrial park as item number 8. 4. Consent A eg nda. 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. 5. costs associated with f from ion of over-run _„~,,... (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 of the 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. Bison 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 Bison 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. Bison stated that if they had taken borings at each corner 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. Bison stated that the pile was then moved to the Chadwick site, with permission. 2 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 of this site. Bison confirmed. Maher referred to pile of dirt that was removed, and excavation of land 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. Bison stated that she had asked Panek to remove the hill to match into the balance of the City's property. Bison indicated that the material from the hill was used to make the site pad ready. Bison stated that Panek had agreed to that. Fair asked where the black dirt was going to go. Bison stated that it is now on the City's property. Fair asked if we needed it. Bison stated that the City currently had no designated 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. Bison 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. Bison 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 if the 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. 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. Bison 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. 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 4 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 1, 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. Bison asked for the original and then yardage calculations to go to grading plan. Bison 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 27a'. Barger asked for a snapshot of the 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, Conroy 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 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 of HRA bills. MOTION BY COMMISSIONER FAIR TO AUTHORIZE PAYMENT OF HRA BILLS. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0. 7. Consideration of HRA 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 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. 9. Committee Reports. NONE. 10. Next regular HRA meeting -Wednesday, November 1, 2006. 11. Adjournment. MOTION BY COMMISSIONER FAIR TO ADJOURN. MOTION SECONDED BY COMMISSIONER FRIE. MOTION CARRIED, 3-0. 7